Colombian bank Grupo Aval Acciones y Valores, the largest by assets in all of Spanish speaking Latin America, this week became the country’s 12th company to list on the NYSE.
Joining fellow Colombian companies Bancolombia, Avianca, Ecopetrol, Cementos Argos, ISA, Grupo Sura, Isagen, Corficolombiana, Nutresa, Éxito y Tecnoglass; Aval hopes to raise $1.1 billion in the world’s most liquid equity exchange to recapitalize itself after a series of acquisitions.
The move highlights the leaps and bounds that Colombia’s financial services community has come since 2000. Since that time, it has grown at an inflation-adjusted rate of 78%, becoming the single largest contributor to GDP, making up 18.78% of it in 2013.
This consistent long-term growth has enabled Colombian banks to capture nearly 75% of their domestic market, although bank participation rates remain low.
But that saturation has shaped a recent trend in the financial community: internationalization.
Since the 2008 financial crisis, Colombian firms have taken advantage of capital desperate European banks, picking up their assets and subsidiaries throughout Latin America.
Since 2007, over $11 billion has been spent in financial industry acquisitions. Colombian banks now have a presence in 21 countries in Latin America.
The majority share (29%) of those acquisitions was made by the country’s second largest bank, Bancolombia, spending over $3.2 billion in Central American acquisitions since 2010.
Speaking on the wave of international expansion by Colombian banks, Adam Kutas, portfolio manager at Fidelity Investments, said in an interview with Bloomberg:
“What they need to do now is show the profitability of all the acquisitions. They spent a lot of capital getting their footprint in there.”
Sources
- Colombia Billionaire Banker’s Acquisitions Extending Reach (Bloomberg)
- Semana Economica
- El Grupo Aval, de Luis Carlos Sarmiento Angulo, da el salto a la bolsa de Nueva York (La Republica)
