Five years after the constitution of the Bicentennial Group, this Wednesday will be formalized as the country’s eighth financial conglomerate.
(Read more: Colombian banking, with greater presence in Central America)
Linked to the Ministry of Finance and Public Credit, although it is not a state-owned industrial and commercial company, this organization It aims to serve as a matrix for 10 public financial services entities and related activities directly linked and three others indirectly.
The subordinated companies are Banco Agrario, Bancóldex, Enterritorio, Finagro, National Development Finance Company, Findeter, National Savings Fund, National Guarantee Fund, Positiva, Previsora and as indirect participants are Fiduprevisora, Fiduagraria and Fiducóldex.
In this way, Grupo Bicentenario joins the other conglomerates that operate in Colombia, which are Grupo Aval, Grupo Bolívar, Grupo Sura, Inversora Fundación Social, Cooperativa Médica del Valle and de Profesionales de Colombia Coomeva, Scotiabank and Banco BTG Pactual.
(More news: Which sectors received the most bank financing in 2023)
What it is and what it is used for
Colombian legislation establishes that a financial conglomerate is a group of entities with a common controlling entity that includes two or more national or foreign entities that carry out an activity typical of entities supervised by the Financial Superintendency, provided that at least one of them carries out such activities within the territory.
A former financial superintendent said that the formalization that will take place today should serve for the Government to manage it as a group, coordinate its activities and “It sets priorities and a clear direction for its activities to promote development and contribute to irrigating credit to the lower strata of the population. It is a step in the right direction, as long as it is more than just a label and is not used for politics.”
Arnoldo Casas, investment director at Credicorp Capital, says that from the organizational side, there are the synergies and regular practices that conglomerates carry in administrative practices and also the natural benefits of economies of scaleas negotiating power with suppliers and from the regulatory side it does bring other restrictions, especially on the side of the issuance of securities or limitations to invest in some instruments.
Andrés Giraldo, a Finance professor at the Universidad Javeriana, says that one advantage of this union of entities has to do with the management of risk that exists in all economic activity and in particular in a financial activity.
“The advantage is the much more efficient distribution and management of risk by grouping all the activities of those involved into a single conglomerate.”
(Read more: Why some consumers prefer to use cash)
Finance
(More news: President of Andi says new tax could lead to recession)
Even now that there is talk of forced investments, to force the financial system to allocate part of the public’s deposits to activities that require financing “What could be done is that the conglomerate manages the available resources more efficiently for what the government thinks with these forced investments, which in summary, is part of the reactivation plan”said.
David Pérez, a finance professor at the University of Los Andes, says that the plan with Grupo Bicentenario as a financial conglomerate makes sense, since there will be advantages to managing state assets in a more coordinated manner.
It is expected that an organization process begins to structure more agile credit policies.
A former Vice Minister of Finance commented that the controlling entity, Grupo Bicentenario, will be in charge of managing the other entities, appointing the boards of directors, consolidating the statutes, consolidating the financial statements, and although each one has its own financial statements, this will serve to extract resources and put them into the Agrarian Bank to give subsidized credit to different population groups in different regions.
(Read more: The banks that lead the ranking of market makers, prepared by Minhacienda)
HOLMAN RODRIGUEZ MARTINEZ
Portfolio
