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Citi (NYSE: C) expects to finish the pending mergers of its units in Central America before the end of the year, Raúl Anaya, Citi head of operations in Central America and the Caribbean, told BNamericas.
"It has taken longer than we'd wished for, but we are finally at a stage where we have gained momentum," the executive said.
In 2007, Citi expanded its footprint in Central America - where it handled some US$1bn in banking assets at end-2006 - by snapping up the main units of two regional financial services groups with a combined client base of 2.25mn and combined assets of US$6.6bn at the time of purchase.
In March 2007, the US firm closed the acquisition of a number of companies from Grupo Financiero Uno for an undisclosed sum. And in May that year, the company completed the purchase for US$1.51bn of almost all the subsidiaries of Grupo Cuscatlán from Panama-based Corporación UBCI, the subsidiaries' holding company.
The three businesses - Citi, Cuscatlán, Uno - are complementary as each specializes in different business segments. While Citi's portfolios are filled with corporate clients, Uno's units focus on the credit card business and Cuscatlán has tapped the SME sector.
The New York-based financial group decided to merge and rebrand its Central American acquisitions under the Citibank name.
COUNTRY BY COUNTRY
Honduras, with GDP of US$14bn, was the first country where Citi completed the merger of the companies acquired from UBCI and Uno.
Citibank de Honduras launched operations in August with some US$400mn in assets and equity of US$40mn. In Honduras, the US group also owns credit card issuer Cititarjetas de Honduras, which changed its name from Aval Card. This company was part of Grupo Financiero Uno.
Banco Citibank de Honduras and Cititarjetas de Honduras have some 100,000 clients.
El Salvador, with GDP of US$22bn, was the second country after Honduras where Citi finished the UBCI-Uno merger.
Banco Citibank de El Salvador, which launched operations this month, has US$2.7bn in assets, equity of US$311mn and some 700,000 clients. The bank ranks as the country's second largest banking player, commanding 21% of total loans. Banco Agrícola controls 28% of the credit market, financial sector regulator SSF statistics shows.
After the merger, Banco Citibank de El Salvador has split roughly 50:50 between retail and corporate loans, SSF figures shows. Anaya said the bank will seek to maintain this current business mix.
As for Citi's insurance businesses, the executive said the idea is to bet on bancassurance.
The next country will be Costa Rica, where Citi will operate under Banco Citibank de Costa Rica name, according to a recent filing sent to local securities regulator Sugeval.
The merger of UBCI and Uno units in Guatemala, Panama and Nicaragua will be completed before the end of this year, Anaya said.