Thursday, December 15, 2005

A Major Movement in the Bolivian Financial Sector: Grupo BISA Takes Over Banco Santa Cruz.

Yesterday, the Bolivian financial sector was rattled by a major movement among its members: One of Bolivia’s largest private banks, (Banco BISA, a unit of Grupo BISA) acquired the majority stake -96.33 percent- of Banco Santa Cruz (BBV: BSC). Banco Santa Cruz, was controlled by Spanish Group Santander Central Hispano (Madrid: SAN, NYSE: STD) since 1998, the Group is one of the largest European financial entities.

The takeover bid reached € 31.7 million ($US 37.7 million), with this move, Santander Central Hispano continues its strategy of pulling out of most south American markets (it once operated in 12 American countries) and narrowing down its operations to countries such as Chile, Brazil, Mexico and Venezuela.

Financially speaking, Banco Santa Cruz (BSC) represents a 9.4 percent stake of total national banking system while, BISA represents 14.1 percent. BSC has 20 national offices and an agency in Miami, it’s geared towards consumer banking and has an outstanding account of $US 240 in credits and $US 433 million in deposits.

BISA is controlled by the Bolivian Grupo León Prado, an enterprise group invested in mining, oil and construction projects throughout South America. For the purpose of this particular acquisition the services of a financial group based in Panama -Angulo Abierto Internacional S.A were contracted. Banco BISA counts with the financial support of the World Bank, the International Finance Corporation, the Andean Development Corporation (CAF), the Nederland’s Development Finance Company (FMO) and Germany’s Investment and Development Company.

BISA, a bank traditionally geared towards corporate finance, insurance, and mutual fund administration has eight operating units, a patrimony -as of this writing- of $US 122 million, and assets of $US 813 million. BISA’s maverick President and CEO, Julio León Prado, seeks to consolidate BISA as the largest private bank in Bolivia. Mr. Prado’s prior activities include investments in Europe and the United States. In Bolivia, he is the founder of Banco Sol, a small-business lending institution; he was a pioneer in agribusiness and a promoter of free-trade zones and rural electrification.

Cited in this Post [external links]: Grupo BISA, Banco Santa Cruz, Grupo Santander Central Hispano, WB, IFC, CAF, FMO, DEG, Julio León Prado.

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