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Itaú eyes further Andean acquisitions, rules out capital increase

Jan 31, 2014

The Brazilian lender has ambitious expansion plans and will consider further acquisitions with the Saieh Group, its head of Latin American operations tells LatinFinance

Itaú Unibanco is targeting further acquisitions in Chile and Colombia, as well as elsewhere in the region, in an ambitious bid to expand its regional footprint, its head of Latin American operations told LatinFinance on Thursday.

The news follows the announcement Tuesday that the bank will merge its Chilean and Colombian operations with CorpBanca, partially owned by Alvaro Saieh’s CorpGroup, in a deal that will make Itaú the fourth largest bank in Chile, and give it a strong position in Colombia.

"We have the vision of becoming a global Latin American bank and with the partnership with the Saieh Group we can explore together opportunities of increasing market share, not only in Colombia and Chile, but also in Peru and Central America," Ricardo Marino, executive vice president and head of Itaú Latin America, told LatinFinance.

Once the merger deal is approved, Itaú would consider further acquisitions in Chile and Colombia, Marino said. "We want to increase market share in those strategic markets, and get more scale and be even more efficient and more competitive in those very interesting markets."

The Brazilian-headquartered lender said the deal offered a chance to expand further in Latin American, with Peru and Central America as possible targets. That would be through acquisition, said Marino: "It’s a tough market, but you never know. We’re going to be with our radar screens on. But the top priority will be to focus on the integration of the two banks after they are approved by authorities."

The comments expand on comments by the bank's chief executive, Roberto Setúbal, to LatinFinance in October, where he said the bank was looking to establish operations in Mexico and Peru.

Under the shareholders’ agreement which forms the basis of the merger between Itaú and CorpBanca in Chile and Colombia, the Saieh Group also has the option to take a stake in Itaú’s Paraguayan and Uruguayan operations. But Marino said a foray into Mexico would only take place under the domestic brand: "If we go to Mexico, we’ll go as Itaú Unibanco only."

He was clear that Itaú will not seek to raise capital from shareholders or the market as it advances its expansion plans. "Capital is not an issue right now, and parent company Itaú Unibanco is one of the most well-capitalized financial institutions in the world these days. We won’t have to go to the market to raise capital or in any hybrid form," Marino said.

The bank, which reported a tier one capital ratio of 11.8% at the end of the third quarter, will inject $652m of capital into its Chilean subsidiary ahead of the merger. It plans to run its subsidiaries with a buffer of 20% more capital than demanded by regulation. LF

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  • Anna Gil Jan 31, 2014

    Would like to know which countries are you going to expand and
    more information about Colombia.

    Thank you.

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