Banco Santander to sell Colombian unit to Chile’s CorpBanca for $1.16 bn

Spain's largest bank, Banco Santander today agreed to sell a 95-per cent stake in its Colombian unit to CorpBanca of Chile for $1.16 billion as part of the its efforts to raise capital to meet the demands of European banking regulators.

Corp Group Interhold SA, the holding company through which Chilean businessman Alvaro Saieh and his family control CorpBanca, will buy at least a 2.85-per cent of the remaining 5 per cent.

The sale includes the stock brokerage Santander Investment Securities Colombia S A, insurance agency Santander Insurance Agency Ltd and trustee company Santander Colombia S A Investment Trust.

The acquisition, which is expected to close during the first half of 2012, will strengthen CorpBanca's growth strategy and become the first Chilean financial institution having a foreign bank as a subsidiary.

Santiago-based CorpBanca will fund the acquisition from its own resources and a new capital increase of $450 million. Once this increase is executed, CorpBanca said that it would have received more than $830 million in fresh capital injections during the last six months.

Banco Santander Colombia held a 2.7-per cent and 4.7-per cent share of the total loans and deposits market respectively as of 30 September 2011. The Bank has $4 billion in assets and more than $2.57 billion in loans comprising of 70 per cent in commercial loans and 30 per cent in retail loans.