MEXICO CITY Mexican President Andres Manuel Lopez Obrador said on Wednesday he does not rule out the possibility of the government stepping in to buy a part of U.S. bank Citigroup's local retail unit, adding the government would have up to $3 million at its disposal.

Citigroup announced earlier on Wednesday it will pursue an initial public offering of its Banamex unit instead of a sale, arguing it is the optimal path to maximizing value for shareholders.

(Reporting by Valentine Hilaire, Dave Graham and Ana Isabel Martinez; Editing by Anthony Esposito)