EscucharSAN JOSE- The financial sector suffered another jolt following the agreement between the private banks Banex and Continental on a possible merger. This is the third such deal to be announced in three months.
The letter of intent, according to the National Securities Commission (CNV in Spanish), considers that, following the signing of the deal, the resulting corporation would maintain the name Banex. The assets of Banex amount to about $29.3 million against the $12.5 million of Continental.
The resulting group, if a merger agreement is reached, could become the largest bank in the national financial sector in terms of assets, according to estimates from banking consultants who asked that their names be withheld.
Oscar Rodríguez, CEO of Banex Corporation, indicated that the current task is to verify the accounting figures for each institution and to analyze the combined position of both groups. He estimated that the process could take two or three more weeks.
After that, if the result is positive, ``as is hoped,'' they would seek authorization from the regulatory organizations and call a meeting of the shareholders of both companies to discuss the merger process, he indicated.
The banker said he was unable to specify whether the combined institution would be the largest in the financial market.
``It is sane and logical for the market that these processes continue,'' affirmed Rodríguez. Juan José Flores, CEO of Continental, could not be reached yesterday.
According to an agent tied to the negotiations, it is hoped that the process is finalized by the end of November or the early part of December.
The initiation of another similar merger was announced September 17 between Bancomer and Fincomer. On August 28 it was confirmed that BFA Corporation is interested in acquiring COFISA Corporation.
Exactly two days following the meeting of COFISA shareholders, the boards of directors presented the terms of the deal.
Guillermo Serrano, CEO of COFISA, said Thursday morning that there were irrevocable intentions to sell and that shares had been set aside for a majority interest and that ``the deal has been finalized.''
What is missing, he explained, is the delivery of the stocks as payment and the expected shareholders' meeting on October 31 for the majority interest -- BFA Corporation -- to assume control.
The explanation offered by the groups for these consolidating actions centers around the strong competition between banks and other entities that offer financial services.
The participation of at least seven foreign groups in the sector and the presence of three foreign banks also adds to the competition.
The recent events have to be seen in the light of the central bank's decision to progressively increase the minimum operating capital of banks and the expected application of rules to be applied to financial groups.
Among all of this change there is rumor of even more new movements.
The bankers mentioned the presence of representatives from the Spanish bank Bilbao Vizcaya who are having conversations with various entities in this country They also referred to talk from Banco Crédito Agrícola Comercial of El Salvador -- the largest in that country -- and the interests of one of the foreign banks operating here in acquiring some other bank.
