Citigroup raises stake in Chilean bank to 50 per cent
17 Mar 2010
Citigroup Inc. has increased its stake in the controlling shareholder of Banco de Chile SA, Chile's second largest bank, by an additional 57 million shares to 50 per cent, the bank said on Monday.
In its filing with the Chilean securities regulator, the US the banking and financial services giant said it will pay $520 million (269.7 billion Chilean pesos) for the additional 8.52 per cent stake in the holding company LQ Inversiones Financieras SA.
Under the terms of the agreement, the Chilean bank took over all of Citibank's local clientele, while Citigroup retained control of Banco de Chile's operations in the US.
According to analysts, this shows a clear strategy by the bank to focus on profitable business.
Last week, Citigroup's CEO Vikram Pandit told an investor conference in New York that Citigroup was back on the path to success after losing billions of dollars during the past two years.
Pandit outlined an overhaul in the bank's operations, including shedding money-losing businesses in the US and shifting its focus abroad.