Originally published: August 8, 2008
Source: Forbes
Venezuelan President Hugo Chavez is reportedly ready to offer Banco Santander US$1.2 billion for its local unit Banco de Venezuela. As political uncertainty grows, Banco Santander is planning to sell its Venezuelan operations which represent 2.3% of its global portfolio. Banco Santander acquired Banco de Venezuela in 1996. The bank currently has nearly 3 million customers and US$11 billion in assets.
Chavez had announced earlier that he would nationalize Spanish-owned Banco Venezuela after the government learned the owner had plans to sell it. "There is still bargaining space for Santander. This price is very low; it is quite a profitable bank with strong growth. According to my estimates, it is worth US$2.5 billion but Santander should try at least to sell it for US$1.9 billion," said Pierre-Alexander Pechmeze, an analyst with Oddo Securities.
The Venezuelan government already exerts heavy control over the country's banking system, forcing banks to direct about 40 percent of all loans to agriculture, housing, tourism, and microfinance.
Related news: Venezuela Banking Outlook (Latin Business Chronicle, 21 Aug 2008)