May 24 (Bloomberg) -- Banco de Guayaquil SA, Ecuador’s second-biggest publicly traded bank, is seeking acquisitions in the Andean region after the sale of its insurance unit boosted cash holdings, Vice President of Finance Miguel Macias said.
The bank is looking for a lender to buy in Ecuador, Colombia or Peru after booking a profit from the asset sale that swelled its earnings more than two-fold last year, Macias said yesterday. Zurich-based Ace Ltd. paid $55 million for the insurance unit, which Banco de Guayaquil was forced to sell after a change in government regulations.
“We’d like to buy something, but we haven’t found any sellers,” Macias said in an interview at the bank’s headquarters in Guayaquil. “Last year we opened the doors to look in international markets.”
The bank joins Andean competitors seeking to expand regional operations after economic growth surged to an average 6.9 percent in Colombia, Peru and Ecuador last year. Acquisitions of Andean region financial firms worth $7.6 billion were announced last year, compared with $1.2 billion the previous year, according to data compiled by Bloomberg.
Banco de Guayaquil forecasts loans will increase 15 percent this year while earnings climb 10 percent after excluding last year’s extraordinary profits from the asset sale, Macias said. The bank is looking to provide deposit accounts to Ecuadoreans who have never kept their money at a bank before, a step toward giving them consumer loans, he said.
Consumer lending is the most profitable loan segment amid government-controlled interest rates, Macias said. Ecuador, which uses the U.S. dollar as its currency, stripped the central bank of its autonomy in a 2008 constitutional referendum.
Lenders are allowed to charge as much as 16.3 percent on consumer loans, 9.33 percent for corporate credit and 11.33 percent on mortgages, according to the central bank.
Windfall oil profits have allowed Ecuador, a member of the Organization of Petroleum Exporting Countries, to boost government spending on public works projects, helping create jobs and lift wages.
“The country has become an economy of consumption,” Macias, 31, said. “With the controlled rates, consumer loans have rates that are quite higher than the others.”
Banco de Guayaquil shares fell 0.6 percent to $1.54 at 12:08 p.m. local time, according to data from the Guayaquil securities exchange.
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