Helm Bank SA (PFBHELM), Colombia’s best- performing stock in the past month, said its controlling stakeholders have no intention of selling amid takeover speculation that’s driven the share up from a three-year low.
Helm shareholders, including Miami-based investor William Wilde, have declined approaches by prospective buyers, including Chilean and Brazilian groups, Helm’s President Carmina Ferro said in a telephone interview from Bogota. The bank is not holding any talks with potential investors, she said.
“We have seen interested buyers for five years and the interest has increased in the past year,” Ferro said yesterday. “But our shareholders have been resistant to sell the bank.”
Helm has jumped 22 percent in the past month, the biggest gain in Colombia’s main index. The stock is recovering from a 33 percent plunge last year as investors bet it will be targeted amid an unprecedented surge in acquisitions of Andean financial firms sparked by the region’s economic growth and capital market integration, according to Andres Jimenez, head of international sales at Interbolsa SA (INTBOL) and David Pelaez, an analyst at Bolsa y Renta in Medellin.
Even after the rally, Helm’s price-to-book ratio of 1.33 is the second lowest among 35 Chilean, Peruvian and Colombian banks covered by Bloomberg, helping fuel speculation a foreign company will buy it. Only Bank of Nova Scotia (BNS)’s Chilean unit has a lower valuation, the data show.
Helm gained 5.5 percent to an eight-month high of 366 pesos at 4 p.m. Bogota time.
Wilde didn’t immediately respond to a request for comment left with an assistant at Helm Holdings International in Miami.
Helm’s net income, which more than doubled in 2010, probably rose about 7 percent last year, limited by investments in new offices, branding and technology, Ferro said. Profit growth may accelerate to as much as 30 percent this year as the bank begins a plan to nearly double the retail sector’s share of total lending to about 25 percent over five years, Ferro said.
“We don’t want to lose the position we have in the corporate sector, where the bank has been doing a very good job,” she said. “But we do want more consumer participation in our total portfolio to have a bit more profitability.”
The Bogota-based lender has lower returns and less attractive growth prospects than Colombian peers and is limited by a niche focus on high-income individuals and corporations, said Rupert Stebbings, Colombia director for Celfin Capital.
“The problem with Helm is no one really knows where it’s going,” Stebbings said.
Acquisitions of Andean financial firms worth a record $7.56 billion were announced last year, five times the previous year’s total, while similar transactions in North America slumped 8.9 percent, according to data compiled by Bloomberg.
Helm may provide a low-cost entry point to Colombia for a foreign group that can overhaul management and widen margins, said Andres Jimenez at Interbolsa.
A Citigroup spokesman declined to comment in an e-mailed response. Itau, Bradesco and Corpbanca (CORPBANC) representatives didn’t respond to e-mail and telephone requests for comment.
Helm’s board has approved the issuance of as much as $1 billion worth of debt when the bank sees fit, Ferro said.
“At this point the bank is very liquid,” she said. “But taking into consideration our growth expectations for this year, we want to be ready to come out in the market.”
Corpbanca agreed in December to pay $1.16 billion for 95 percent of Banco Santander Colombia SA. (SANTAN) Bank of Nova Scotia bought Colombia’s Colpatria for $1 billion in October while Brazil’s Banco BTG Pactual SA agreed Feb. 8 to buy Chile’s Celfin Capital SA for $245 million in cash and 2.4 percent of BTG Pactual equity. Banco de Credito del Peru, the country’s biggest bank, agreed to buy 51 percent of Colombian financial services firm Correval SA in a deal announced Dec. 1.
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