Medellin-based Colombian bank Bancolombia confirmed on Tuesday that it would expand beyond Colombia by purchasing $217 million in assets of Guatemalan financial institution Agromercantil BAM, according to a Reuters report.
“The operation consolidates Bancolombia Group’s presence and interest in Guatemala,” the bank reportedly said in a statement to regulators in Bogota.
Bancolombia’s purchase of 40% of the Guatemalan bank is the most recent in a series of acquisitions of foreign assets by Colombia’s leading banking companies.
Bancolombia has said that it will acquire assets in other Guatemalan enterprises, including Agromercantil’s insurance arm and Barbados-based Mercom Bank Ltd.
Regional Grabs, Regulatory Challenges
This is not the first time Bancolombia has expanded in the region.
Earlier this year Bancolombia made one of the largest acquisitions in Colombian banking history when it bought HSBC Panama for $2.1 billion. The deal was done in cash, according to the bank.
And others have followed suit. Just this month, Jaime Gilinski of Grupo Suramerica invested $362 million in Spanish bank Sabadell, marking another step in his interests abroad.
Now that Colombian banks are becoming truly multinational institutions, the international presence can be viewed as a double edged sword. Though the move abroad could mean more opportunities for a group like Bancolombia, expansion also signals new challenges for regulators in Bogota.
Just one example of these policy challenges showed when accusations were brought against some banking organizations over allegedly letting elaborate money laundering schemes course through their institutions.
Bancolombia’s expansion actually began in 1973 when it received a license to operate in Panama. Since then, Bancolombia has set up operations in El Salvador, Puerto Rico, the Cayman Islands, Peru, Guatemala, and Miami in an effort to internationalize its company.
Bancolombia amplia su presencia en Centroamerica (Portafolio)