Colombia to Sell Largest Bank

19.05.06

New York Times

BOGOTÁ, Colombia, May 16 (Reuters) — President Álvaro Uribe said on Tuesday that the government would sell the country’s largest state bank, Granbanco-Bancafé, with more than $3 billion in assets, in a public offering.

The decision was taken during a cabinet meeting presided over by Mr. Uribe, who also announced the creation of a low-cost credit program called Bank of Opportunities that would offer financial services to 300 municipalities lacking them in this Andean nation.

Analysts have said the sale is one of the last opportunities for foreign banks to move into Colombia, the third-most-populous country in Latin America, where BBVA of Spain and Citibank, a unit of Citigroup, compete for market share.

“The government will take advantage of the recovery of Bancafé, after securing the funding of pensions, debt payments, payments to employees, in order to sell it in a transparent way, in a public offering,” Mr. Uribe said. The privatization of Granbanco-Bancafé is being done during a period of growth in the financial sector, which has more than $68 billion in assets.

Mr. Uribe did not give further details of the sale of the bank, which has 235 branches and offices in the United States and Panama. He said government officials would give more details Wednesday morning.

Granbanco was created by the government in the first quarter of 2005 when a small investment portfolio from Granahorrar, another state-owned bank, was combined with the bulk of the assets held by Banco Cafetero, or Bancafé.

Granbanco-Bancafé is Colombia’s sixth-largest bank by assets and is 99 percent owned by Fogafin, the state-controlled deposit guarantee fund.

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