Banistmo affirms intention to enter Guatemala by 2007
Monday, February 13 2006 @ 06:06 pm EST
Contributed by: Don Winner
Guatemala's fragmented financial sector, home to 26 banks, has been slow to consolidate given the high asking price demanded by bank owners. Talks between Central America's second largest financial group Grupo Cuscatlán and the third largest private bank Banco del Café in 2004 ended over price.
Guatemalan daily La Prensa Libre reported in January that the country's top banking group Corporación BI, Panama-based BAC International Bank and Banistmo are vying for a controlling stake in the fifth largest private bank, Banco de Occidente.
Occidente executives have declined to return repeated phone calls by BNamericas seeking comment. The bank reported 4.46bn quetzales (US$586mn) in assets and equity of 456mn quetzales at year-end 2005.
Market observers say Banistmo could still have some financial firepower left for another acquisition given it was prepared to pay up to US$146mn for 60% of Bancosal. Banistmo paid for that deal with a bridge loan from US-based Wachovia Corp (NYSE: WB), which will be replaced through capital increases and issuing debt, Fábrega stated.
Fitch ratings on February 9 affirmed Banistmo's ratings given it will be able to maintain its 15% capital ratio target following the Bancosal deal as well as the group's successful acquisition track-record in Costa Rica and Honduras.
By Ken Parks