Grupo Cibest announced the sale of Banistmo, its subsidiary in Panama. The financial holding company assured that it reached an agreement with Inversiones Cuscatlán Centroamérica SA to sell 100% of the shares of the business. The sale price agreed between the parties is US$1,418 million.
There are several reasons that prompted the local financial conglomerate to make this sale, such as the consolidation of its other businesses in the region, new projects, increasing the Group’s profits and even a greater return of capital to shareholders.
The reasons for sale
The Cibest Group reported that the main reason for selling this company in Panama is the creation of value, the optimization of the Group’s portfolio and the strengthening of its regional financial services proposal for Latin America and Latin Americans.
Juan Carlos Mora, CEO of the Cibest Group, said that “we are convinced that this operation will bring clear advantages for clients. The experience and regional knowledge of Cuscatlán will allow us to add capabilities and generate value.”
Yovanny Conde, co-founder of Finxard, added that, in 2013, at the time Bancolombia, paid “dearly for Banistmo”, since it bet that Panama would be a great generator of value, something that did not come to fruition, which is why, according to the analyst, Its sale implies recognizing that this strategy did not work in that country, but they achieved a reasonable multiple, when considering the Panamanian environment and the banking entity.
Conde added that with this process they free up capital and they focus resources where they do have scale and clear advantages.
However, not only this made Grupo Cibest sell to Banistmothe focus and better management of the entity’s finances also influenced.
Juan Camilo Jiménez, head of Equities Regional, mentioned that the conglomerate It sought to maximize the company’s total profitability and free up capital that could possibly be used for other projects or to return to shareholders.
“The measure was not analyzed solely from the original purchase price, but from the current market context. In 2013, the financial environment was very different, with lower capital costs and higher valuations for this asset,” Jiménez explained. “Today’s transaction is carried out at multiples in line with current market conditions and is positive”said the expert.
Felipe Campos, strategy and investigations manager at Alianza Valores, emphasized that Cibest freed itself from an operation that was not the most profitable in the Group. In addition, he said that Banistmo was purchased at a time when assets in the region were overvalued, but that the shares have not returned to trading at those levels. “When doing the accounts in pesos, despite receiving fewer dollars, there is a gain of more than 40% in the local currency,” Campos concluded.
The details of the sale process of the Panamanian bank for Cuscatlán
The Cibest Group stressed that the purchase and sale promise includes the sale of 100% of the shares of Banistmo, and, therefore, The scope of the transaction includes all the bank’s subordinate companies, such as Leasing Banistmo and Banistmo Investment Corporation SA
The operation that will be completed in the coming months is subject to the corresponding regulatory authorizations in Panama. While this procedure is finalized, the Cibest Group will continue to provide permanent support to clients and collaborators.
