Washington, D.C., August 23, 2006—
The International Finance Corporation, the private sector arm of the World Bank Group, will invest up to $45 million in equity in Banco del Bajio, S.A., a regional bank in Mexico that focuses on small and medium enterprises, agribusiness, and commercial banking.
IFC’s investment, through the subscription of new common shares of Banco del Bajio, will help the bank expand its lending activities, allowing it to play a more effective role in the development of the private sector. This is especially important since smaller businesses’ access to credit in Mexico is limited. The investment is still subject to approval from the Mexican authorities.
Farida Khambata, IFC’s Vice President for Latin America and Asia, said, “IFC has a clear role in supporting second-tier banks, given their ability to reach out to SMEs and other market niches. Bajio’s strong track record and strategic focus on agribusiness and SMEs make it an excellent fit for IFC’s strategy and objectives.”
Banco del Bajio, based in the city of Leon, is the eighth-largest bank in Mexico and the largest regional bank in the country. It has significant presence in the northern, western, and central regions of Mexico.
“We are pleased to have IFC as a long-term partner at this critical stage of the bank’s growth,” said Salvador Oñate, Chairman of Banco del Bajio. “This new partnership will help further improve the bank’s corporate governance and risk management practices and will be instrumental to the bank’s listing in the future.”
About Banco del Bajio
Banco del Bajio is a regional bank with significant presence in several regions of Mexico. It provides retail and commercial banking services as well as pension fund management and factoring, with a focus on three principal markets: SMEs, agribusiness, and commercial banking. The bank has diversified into high-growth segments, including mortgages and consumer loans. Based in Leon, Bajio is majority owned by Mexican investors with Spanish bank Banco Sabadell holding a 20 percent stake. As of June 30, 2006, Banco del Bajio reached MXN 4,270 million in equity and MXN 40,808 million in total assets.
IFC in Mexico
Since 1956, IFC has invested $5.6 billion, including $2.2 billion in syndications, in sectors ranging from infrastructure and manufacturing to agribusiness and the financial sector in Mexico, making it the third-largest recipient of IFC financing in dollar value, after Brazil and Argentina. IFC committed $279.8 million in FY05 as new financing in Mexico, and it held a total portfolio of $1.6 billion, including syndications, as of May 2006.
IFC's strategy for Mexico focuses on enhancing the international competitiveness of the country’s private sector, especially by further deepening the financial sector, promoting investments where the private sector could play a larger role, and promoting sustainable social and environmental development and good corporate governance.
About IFC
The International Finance Corporation is the private sector arm of the World Bank Group and is headquartered in Washington, D.C. IFC coordinates its activities with the other institutions of the World Bank Group but is legally and financially independent. Its 178 member countries provide its share capital and collectively determine its policies.
The mission of IFC is to promote sustainable private sector investment in developing and transition countries, helping to reduce poverty and improve people’s lives. IFC finances private sector investments in the developing world, mobilizes capital in the international financial markets, helps clients improve social and environmental sustainability, and provides technical assistance and advice to governments and businesses. From its founding in 1956 through FY05, IFC has committed more than $49 billion of its own funds and arranged $24 billion in syndications for 3,319 companies in 140 developing countries. IFC’s worldwide committed portfolio as of FY05 was $19.3 billion for its own account and $5.3 billion held for participants in loan syndications. For more information, visit
www.ifc.org
.
