Colombia’s Sura Buys BBVA Peru Pension Unit With ScotiabankChristine Jenkins and John Quigley
Grupo de Inversiones Suramericana SA, the Colombian pension-fund manager trying to double assets by 2017, bought a 50 percent stake in Banco Bilbao Vizcaya Argentaria SA’s pension unit in Peru.
Sura made the $258 million purchase through its Peruvian pension unit, AFP Integra, it said in an e-mailed statement. Profuturo AFP SA, Bank of Nova Scotia’s pension unit in the country, bought the other 50 percent, according to a separate statement from Canadian bank. The total purchase price paid by the two companies was about $516 million, Sura said in the statement.
Chief Executive Officer David Bojanini is targeting 15 percent annual growth at Medellin-based Sura, with assets set to double through 2017. Peru is “very attractive for investment” because of its economic growth rate compared with other Latin American countries, Bojanini said in an interview in November.
Peru will grow 6.3 percent this year, the fastest in Latin America after Paraguay and Panama, according to the International Monetary Fund.
BBVA said in May it was seeking buyers for its pension-fund assets in Chile, Mexico, Peru and Colombia as it attempts to recover from Spain’s real estate slump. BBVA finalizes the sale process with this deal, the lender said in a filing.
The Spanish bank completed the $541 million sale of its Colombian pension fund to Grupo Aval Acciones y Valores SA last week.
BBVA will receive $544 million in total proceeds through the transaction, including a $28 million dividend, the lender said in an e-mailed statement.
Bank of Nova Scotia, Canada’s third-biggest bank by assets, has made more than 20 foreign acquisitions in the past five years, according to Bloomberg data. The Toronto-based bank, which operates in 55 countries, generates a quarter of its consumer-banking profit from outside Canada. Last year, the international banking unit had net income of C$1.73 billion and about C$7.2 billion in assets.
The company sees increased demand for pension management in Latin America as “the young populations in this region enter the workforce and participate in the formal economy,” said Carlos Gonzalez-Taboada, CEO of Scotiabank in Peru and President of Profuturo AFP.
Though the takeover of a pension fund by two rivals ’’is very unusual’’ for the industry, it will prevent any company from obtaining more than a 50 percent share of the local market, AFP Integra Chief Executive Officer Jorge Ramos said at a news conference in Lima.
The deal will leave Integra with 41.5 percent of the Peruvian pension industry’s assets under management, while Profuturo will have 27 percent, the companies said.
“I don’t see it restricting competition in the market,” Ramos said.