Bci, the parent company of Bci Perú based in Chile, informed the Financial Market Commission (CMF) of that country that the bank’s board of directors agreed to begin a process of evolving its corporate structure.
Through a statement, the entity explained that the decision, approved in an extraordinary session today, proposes the creation of a parent company called Bci Group. This will have two independent banks under its control: on the one hand, Bci including Bci Miami, Bci Perú, Bci Securities and local subsidiaries and, on the other, City National Bank of Florida (CNB).
“This decision has been planned in detail. It responds to the natural evolution of Bci and is based on the level of maturity that the bank has reached,” said Ignacio Yarur, president of the board of directors of Bci.
“The new structure strengthens the group’s projection. Guided by the same purpose, the same business mission and the strategic vision that has always characterized us, through this evolution we will seek to enhance our growth in Chile, the United States and Peru. This will allow us to optimize the use of capital, maximize value for all our shareholders and diversify our sources of financing,” Yarur said.
“Our objective of continuing to create value, for shareholders, as well as for our collaborators, clients and the community, not only remains intact with this evolution, but is enhanced,” he added.
Strategy
This evolution will accompany the development of the group within the framework of current regulatory provisions. The General Banking Law establishes that a Chilean bank can invest up to 40% of its unconsolidated effective assets in a foreign country and, if it continues to grow as it has until now, Bci will reach that threshold in the medium term. The new corporate structure, with two independent banks, enables greater potential for future growth.
In the last 10 years, Bci has tripled its total assets and has consolidated itself as the largest bank in Chile in that dimension. As a result of sustained local growth and a successful internationalization strategy, today it has around US$90 billion in consolidated assets.
The structure, with Bci Group as the parent company, will allow for continued strengthening of the group’s presence in Chile, Peru and the United States, the latter one of the most dynamic markets in the world. For reference, Florida, where CNB operates, is equivalent to five times the GDP of Chile.
This step will also allow the results and indicators of each business to be presented more clearly and facilitate their comparison with other market benchmarks, along with allocating capital more efficiently and diversifying sources of financing, which will translate into greater potential for value creation for all shareholders.
In the first phase of the process, Empresas Juan Yarur, current controlling shareholder of Bci, will establish Bci Group as an investment company and will contribute its entire stake in the bank. Once Bci Group’s shares are listed on the Santiago Stock Exchange, all Bci shareholders will be invited to join Bci Group by exchanging their shares. The next step will be the division of the bank into two: Bci plus its subsidiaries, on the one hand, and CNB, on the other.
In accordance with regulations, the operation requires authorizations from the CMF and the United States Federal Reserve (FED). The process will be developed with the rigor and transparency that characterize the group, in strict accordance with the regulatory standards of Chile and the United States. The protection of the interests of minority shareholders will be a priority and they will have access to the same value and benefits as the controlling shareholder.
It should be noted that all Bci shareholders will be invited under the same conditions to subscribe to this operation, and will be able to obtain the benefits that this process represents in the same way.
Bci Group will maintain its strategic focus on all its business lines, which will preserve their normal course. There will be no changes in the relationship with clients, collaborators or communities, since each operation will continue with the same equipment, service standards and performance that have historically characterized Bci. Likewise, its Corporate Governance will continue to be guided by the same high standards that have always characterized Bci.
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