Grupo Aval, one of the largest financial conglomerates in Colombia, has agreed to buy the Panamanian unit of Banco Bilbao Vizcaya Argentaria SA, BBVA, the latest example of the Spanish banking giant withdrawing from Latin American markets.
The Spanish bank is selling its operations in Panama for US$490 million to the Bogota-based Grupo Aval financial group reported in a filing to the Colombian securities regulator. The filing said that the Panamanian unit has about Us$2 billion in assets and that it registered a net profit of US$36 million last year.
The sale is the most recent example of European banks departing from some markets in Latin American to raise funds and offset the impact of a prolonged economic slump in Europe.
Colombian banks, meanwhile, have been taking advantage along with some of their Latin American rivals of the woes faced by some European financial firms.
The European banks like BBVA are moving out from countries that for the most part have solid economic fundamentals, a young population and an ascendant middle class hungry for more financial services.
Colombian banks have plenty of cash to spend on acquisitions, a stark contrast to the situation of some global financial firms that appear eager to sell some of their assets in Latin America to plug holes in their balance sheets.
A case in point is Bancolombia, Colombia’s largest bank by assets, which is spending US$2.1 billion to buy the Panamanian unit of HSBC.
And in April this year BBVA sold its Peruvian pension business for US$516 million to a Colombian financial conglomerate Grupo de Inversiones Suramericana SA GRUPOSURA and to Canada’s Bank of Nova Scotia (Scotiabank) .
BBVA has also agreed to sell its pension unit in Chile to MetLife Inc. for approximately US$2 billion. In Colombia it has already completed a US$514.4 million sale of its pension business to a local brokerage firm. And in Mexico the firm agreed to sell its pension unit to Grupo Financiero Banorte for US$1.74 billion.
With the latest sale BBVA is exiting a market that, while small, is a financial services and trading hub where many wealthy Latin Americans have long kept their money.
Panama has also been officially dollarized for more than a century, and has been a star economic performer for several years running. It’s expected to grow a whopping 9.5% in 2013.
Source: Wall Street Journal