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Credicorp plots microfinance expansion with Mibanco acquisition

Feb 11, 2014

The Peruvian financial holdco will have nearly 20% share of microfinance market with purchase

Peruvian-headquartered Andean financial holding group Credicorp agreed on Saturday to buy 60.68% of Mibanco for $179.5m, a deal that will give it control over a new institution that will be the country’s largest microlender.

Credicorp is buying the business through its microlending subsidiary Edyficar, saying bringing the two operations together will generate extensive efficiencies and give the new operation a strong branch network.

The transaction follows Itaú-Unibanco’s agreement to buy Chilean lender CorpBanca last month. The Brazilian bank says it is now looking to expand through acquisition into Peru and other parts of Latin America.

Together, Edyficar and Mibanco account for 19.5% of the SME and micro-lending market in Peru, and a 3.7% share of the country’s total loan portfolio. The price equals 1.3x book value at the end of December, says Credicorp.

The deal is expected to close by March 28, although that can be extended by two months if the necessary regulatory approvals remain outstanding. Credicorp will launch a public tender for the remaining shares once the purchase from ACP is closed.

ACP, which is selling Mibanco, owns stakes in a number of microfinance businesses across Latin America. Mibanco has a PEN4.5bn ($1.6bn) loan portfolio and Edyficar, PEN2.6bn.

Credicorp reported operating profit of $965m in 2013, down 2% year on year, although its post-tax profit fell 28.1% over the same period, coming in at $567.1m. LF



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