Banco Colpatria Red Multibanca SA, Colombia’s seventh largest bank by assets, expects General Electric Co. to increase its stake in the bank to more than 75% by 2012 despite recent financial asset sales by GE, the bank’s chief executive, Santiago Perdomo, said Friday.
“There is an agreement that has been signed and we haven’t received any indications that it won’t be continued,” Perdomo said. GE Money, the financial unit of General Electric Co., bought a 49.7% stake in Colpatria in 2007 for about $286 million from controlling and minority shareholders. GE Money and the holding company Grupo Mercantil Colpatria delisted the shares of the bank on the Colombian stock market in January.
Under the agreement, GE Money is slated to increase its stake in the bank by 11% in 2011 and 15% by 2012, bringing GE Money’s total stake in the bank to more than 75%.
The financial arm of GE has moved to downsize after being hit hard by the financial crisis, forcing it to rely on cash injections from its parent company and U.S. government guarantees in the bond market during the past two years to shore up its lending business.
GE sold a bank in Central America for $1.9 billion in July. The company also sold for an undisclosed amount its GE Money operations in Argentina, which focused on consumer finance, including credit services for Wal-Mart Argentina.
Colpatria is focusing on its credit-card business to expand, Perdomo said. The bank now controls 12% of all credit cards in Colombia, he added. (Darcy Crowe / Dow Jones Newswires)
