May 23, 2022

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Promoting its development and diversification of financing, the opportunities that BAC Credomatic sees in the Colombian stock market – El Financiero

The financial entity BAC Credomatic, which maintains a presence in several countries in the Central American region, announced Thursday morning that its holding company Leasing Bogotá SA will submit to the Colombian Financial Supervisory Authority an application to register its shares in the National Register of Securities and Issuers, to be subsequently traded in The National Stock Exchange of the South American country.

With final approval, the financial entity can enter to submit a quotation on the Colombian stock exchange.

However, the request and its approval by the Colombian regulator will bring about changes in the composition of the shares of the holding company of the entity, which currently belongs 100% to Banco de Bogotá, and therefore Grupo Aval.

EF Speak with Gisela Sanchez, Regional Director of Corporate Relations at BAC Credomatic, about what lies ahead regarding the announced transformations. The entity is committed to opening up new growth opportunities in the region.

This is an excerpt from the interview with Sanchez:

How does the shareholding composition of the BAC Credomatic holding company change if the application for registration is approved by the Colombian Supervisory Authority?

Something very significant about this opportunity is that the current majority shareholder of BAC Credomatic Group will remain the same after this transaction happens – if approved – which is Dr. Luis Carlos Sarmiento. In this sense, the situation of the majority of shareholders will not change completely.

The other element is that Banco de Bogotá will hold 25% of the company’s shares hold From BAC, allowing us to stay connected to the group by sharing best practices.

What will happen and which is a milestone in the history of BAC is that our holding company will be able to list on the stock exchange and thus trade its shares in Colombia.

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Why Colombia? It is the normal stock market considering that our majority shareholder is still Dr. Sarmiento and that the operations of Dr. Sarmiento and the Financial Group are in Colombia.

It is a pivotal decision, which will allow Grupo Aval and Banco de Bogotá to focus on their Colombia operations; They see it also as an opportunity to focus on their international operations, which in this case aligns with BAC and we can focus our efforts on growth and being able to take advantage of all the opportunities that the stock market offers.

Has the possibility of requesting registration in other stock exchanges in the region been dealt with?

The natural thing, since the biggest investor stays the same, is to start with the Colombian stock exchange, which is a mature stock exchange and gives us depth. But this does not exclude the opportunity that we may have in the future to be able to explore, for example, the Panama Stock Exchange or others. This opportunity is always open.

What happened yesterday and today is a request that we are still making to the FSA. We must wait for the approval of the supervisory body. It is a process that will probably take a few months and in the meantime we continue to work in the same way.

― If approval is granted, there will be an important change in relation to the relationship with Banco de Bogotá and Grupo Aval, can this be interpreted as a form of separation between the holding company and BAC from these two large entities?

No, I’d like to tell you that we reserve the best of both worlds. We continue to have the majority shareholder involved, and in this sense Grupo Aval and the holding company BAC will remain close.

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But as a complement, it will give us other benefits that are very relevant to our shareholders and stakeholders, such as allowing us to focus more on growth, increasing liquidity for our shareholders, and the fact that being able to list ourselves on the stock exchange will allow us to have more sources of funding from which we can diversify opportunities Our financing as well as raising standards of corporate governance that is already level one.

In addition, we will be able to receive permanent feedback from the stock market about the management of the company.

Will the changes give BAC Credomatic more autonomy? Does it generate any kind of freedom for the BAC in matters of acquisitions, operations, or new sales, for example?

It would allow us to get many more benefits than being a stock market company offering anyway. But BAC has always maintained its independence with regard to its management team, strategic vision and corporate governance policies.

While it is true that we will maintain the support of Banco de Bogotá, which still controls 25% of the operations of BAC and our largest shareholders, at the same time, BAC has a very relevant operation in Central America.

We are a very strong bank, so we see it as an opportunity to see the best of both worlds. We will continue to relate because our largest contributor is Dr. Sarmiento.

― What benefits will the approval of trading in the stock market bring to the company? Do you already have a layout for the types of tools you will access?

We see the benefits as opportunities we can explore, such as continuing to drive growth, shareholder liquidity, and the opportunity to diversify funding sources.

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Will BAC Credomatic’s funding strategy change if approval is granted? Will it be funded only in Colombia?

At the moment, we cannot give you an answer as to whether or not we will diversify these funding sources. It’s an opportunity we’ll have, and once we’re listed on the stock market we can explore it, but these issues are still being developed.

The issue of growth has been mentioned several times if approval is granted in Colombia and this can be of several types. What kind of growth are they betting on? Have equity and asset targets been set?

I would like to frame this growth not only on the economic issue but also on the fact that we can become a catalytic bank to create environmental and social value for Central America.

In terms of the economic aspect, we consider it multiple opportunities because we want to boost our digital growth much more. We see an opportunity to accelerate growth in terms of innovation and digitization, rather than the physical growth of space.

We also see it as an opportunity to positively impact more customers, not only 3.8 million existing customers but also to be able to expand however also a growth opportunity for our collaborators. We see an opportunity coming along with this growth in assets, our portfolio and therefore our stocks (…).

We don’t have a quantitative goal right now, but we do have a conceptual goal of continuing to grow with digitalization and sustainability.

How might this new change affect BAC’s operations in Costa Rica in the short to medium term?

We don’t see any impact in the short or even medium term. We are still subject to the regulatory authority approval process and in the coming months we do not see changes. It is another medium to long-term opportunity that will allow us to obtain benefits that we do not currently enjoy and which we will share with our shareholders, customers and the general public.