The banks – who are they? Banco de Bogotá was founded in 1870 and is the second largest in the Colombian financial sector due to its assets and utilities. The BAC-Credomatic Group was originally founded in Nicaragua in 1952 as the first credit card company in the country (it later became a regional organization). In the first half of 2010, the Banco de Bogota had almost $21,000 million in assets, while the BAC-Credomatic Group managed nearly $8,000 million.
Banco de Bogotá is looking to expand commercial credit to Central American customers after the purchase of Grupo BAC-Credomatic, which concluded Wednesday of last week.
Luis Carlos Sarmiento Angulo, president of the board of directors of Grupo Aval and owner of 75% of Banco de Bogotá, reported that Banco de Bogotá, through its subsidiary Leasing Bogotá, presented a check for $1,920 million, making them the owners of BAC-Credomatic. Of this amount, $1,300 million was derived from their own resources and the remainder from a loan.
BAC-Credomatic was controlled by General Electric (GE) prior to the sale. This is part of GE’s plan to reduce financial investments.
Grupo Aval is the largest financial conglomerate in Colombia, where they own three banks in addition to Bogotá: West, AV Villas and Popular. They also manage the pension fund Porvenir as well as businesses in leasing, trusts and insurance.
Alejandro Figueroa Jaramillo, president of Banco de Bogotá, said that their commercial loans represent 20% of the total granted in Colombia. Meanwhile, the BAC-Credomatic is more focused on consumer loans with it’s credit card business. Therefore, they plan to use the experience in commercial credit to expand their operations in this sector in Central America.
With the union, they also want to expand their services.
“We hope to expand the products that are already offered to include a new portfolio of services designed to meet Colombian clients established in Central America and Central Americans doing business in Colombia,” Sarmiento said in a statement.
The two companies have come up with a total of 42 projects for the future. One of these projects is to combine electronic branches so that customers of the Bank of Bogotá and Credomatic can utilize the infrastructure of both companies. Ernesto Castegnaro, president and CEO of BAC-Credomatic Network, chose not to reveal more of the current projects until customers begin to see the changes.