Bancolombia, Banco de Bogotá eye market opportunities, say CEOs
Amid an acquisition spree, Colombian banks consider debt, equity, and further M&A
Two of Colombia’s largest lenders have capital
market moves in their sights, although they will bide their
time ahead of execution, their chief executives told
Bancolombia is considering tapping capital markets in 2014,
chief executive Carlos Raúl Yepes told
LatinFinance in the September/October edition of the
magazine. But the bank, which agreed to buy
HSBC’s assets in Panama for $2.1 billion earlier
this year, would not tap debt or equity markets sooner than
that, he said.
"Grupo Bancolombia does not plan to issue shares this year,"
Yepes said. "Nor is a bond sale planned this year. We do think
that in the future, particularly next year, we might think
about issuing capital. But not in 2013."
Bancolombia’s HSBC Panamá acquisition
was the largest of a series of purchases by Colombian lenders
into Central America in the past 18 months.
Most recently, Banco de Bogotá bought two Central
American units. It
plans to sell $500 million in equity before the end of the
year, to support the acquisition of BBVA Panamá, it said
Wednesday. The transaction remains to be approved by the
Banco de Bogotá, which is owned by Grupo Aval, would
look at further opportunities that appear, the
bank’s chief executive told LatinFinance
in the September/October edition of the magazine, ahead of
Wednesday’s equity raise announcement.
"When an acquisition opportunity appears for sale, we
analyze it," Alejandro Figueroa said. "And if we think
it’s a good investment, we will go ahead. But at
the moment we have nothing in sight."
The expansion of Colombia’s banks has been
rapid. Five years ago, they had 42 subsidiaries and around
$11.2 billion worth of assets outside the country. Today, they
have 162 international subsidiaries, worth around $41.1
In June, Colombia’s regulator approved GNB
Sudameris’ purchase of HSBC assets in Paraguay,
Peru and Uruguay, totaling around $3.5 billion.
If the recent deals from Bancolombia and Banco de
Bogotá also go through as planned, Colombian lenders
will have as much as 22.8% of their assets offshore. In March,
that number was just 15.6%.
This overseas expansion has not been driven by a lack of
opportunities in their home market, where a strong economy and
still low banking penetration continue to offer good growth
Rather, the combination of increasing trade ties between
Colombia and Central America, and the retreat of European banks
from the region, proved too good to pass up.
"Despite a strong home market, Colombia’s banks
have decided to grow into natural regions for expansion," said
Diego Usme, analyst at Ultrabursátiles, a brokerage in
See full comments from Yepes and Figueroa in
Colombian bank M&A: Foreign
affairs", in the September/October edition