SANTANDER (dpa-AFX) - Chile's CorpBanca (BCA) agreed Tuesday to acquire 95 percent of Banco Santander Colombia SA from its parent Spanish bank Banco Santander SA's (STD) for $1.155 billion. This is the maximum stake an individual shareholder is allowed according to the Colombian law. The deal, subject to Colombian and Chilean regulatory approvals, is expected to close during the first half of 2012.
Meanwhile, Corp Group Interhold S.A. also agreed to acquire 2.85 percent of the remaining stake in Banco Santander Colombia or BSC, from other affiliates of Banco Santander or BS, for about $70 million.
As of September 30, 2011, the BSC had $ 4 billion in total assets and more than $ 2.57 billion in loans, 70 percent of that in commercial loans and 30 percent in retail loans.
Corp Group is an holding company through which Chilean businessman Alvaro Saieh and his family, as Saieh Group, controls CorpBanca. Saieh Group took over its control of CorpBanca in 1996. Following the closure of the deal, the Saieh Group will maintain the control of CorpBanca as well as its ownership percentage.
Meanwhile, Santo Domingo Group, one of the largest economic groups in Colombia, has also agreed to make a long-term investment of $100 million in Corp Group.
CorpBanca is the fourth largest private bank in Chile in terms of loans and deposits, with market shares of 7.5 percent, offering a wide range of financial products to both businesses and individuals.
The proposed deal will see CorpBanca strengthens its growth strategy and become the first Chilean financial institution having a foreign bank subsidiary. CorpBanca intends to fund the deal using own resources and a new capital increase of about $450 million.
CorpBanca noted that the capital increase associated with the current deal will also enable it to strengthen its regulatory equity position, enhancing its capacity for growth in Chile.
Th deal will also enable Chilean companies to expand through Latin America and participate in the growing Colombian banking industry, which is one of the most attractive worldwide.
Separately, CorpBanca reported a marginal decline in net income for the third quarter to 35.31 billion Chilean pesos or $67.99 million, from 36.03 billion Chilean pesos in the year-ago quarter. Net interest income was 47.65 billion Chilean pesos or US$91.76 million, down from 53.42 billion Chilean pesos in the same quarter last year.
STD closed Tuesday's regular trading session at $7.96, up $0.12 or 1.53% on a volume of 3.02 million shares. Meanwhile, BCA closed at $20.21, up $0.50 or 2.54% on a volume of 15,738 shares. However, the stock pared the gains in after-hours trading and lost $0.59 or 2.90 percent.
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© 2011 AFX News
