Citigroup Said to Lead IPO of Mexico Agriculture Bank BanBajio

Mexican lender Banco del Bajio SA hired Citigroup Inc., Bank of America Corp., Morgan Stanley and Banco Bilbao Vizcaya Argentaria SA for an initial public offering, two people with direct knowledge of the plans said.

The offering will probably take place next year, according to the people, who asked not to be identified because the deal is in the preliminary stages and the timing and size haven’t been set. Citigroup will serve as global coordinator on the transaction, one of the people said. Banco del Bajio, based in the central Mexican city of Leon, asked investment banks earlier this year to assemble proposals for the sale, people familiar with the matter said at the time.

A press official at BanBajio, as the bank is known, declined to comment on the hiring of investment bankers for an IPO. Angeles Meraz, a press official with Citigroup’s Banamex unit, declined to comment, as did Rodolfo Benitez, a press official for BBVA’s Bancomer unit, Kerrie McHugh, a spokeswoman for Bank of America, and Mary Claire Delaney, a spokeswoman for Morgan Stanley.

In March 2012, Banco Sabadell SA, Spain’s fifth-biggest bank, said it sold its 20 percent stake in BanBajio for 156.6 million euros ($216 million), valuing the company at about $1.1 billion. An investment unit of Temasek Holdings Ltd. bought 13.3 percent as part of the deal, while the rest went to existing shareholders.

The lender, founded in 1994, focuses on loans to small- and mid-sized businesses, as well as financing for the Mexican agriculture industry, according to an e-mailed report from the company dated August 2013. BanBajio has 284 locations in 28 Mexican states with almost 350,000 clients, according to the presentation, which cited data through June.

BanBajio’s net income rose 29 percent to 519.3 million pesos ($40 million) in the first half of 2013 from the same period last year.

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