Washington, D.C., August 23, 2006—
The International Finance Corporation, the private sector arm of the
World Bank Group, will invest up to $45 million in equity in Banco del
Bajio, S.A., a regional bank in Mexico that focuses on small and medium
enterprises, agribusiness, and commercial banking.
IFC’s investment, through the subscription of new common shares of Banco
del Bajio, will help the bank expand its lending activities, allowing it
to play a more effective role in the development of the private sector.
This is especially important since smaller businesses’ access to credit
in Mexico is limited. The investment is still subject to approval from
the Mexican authorities.
Farida Khambata, IFC’s Vice President for Latin America and Asia, said,
“IFC has a clear role in supporting second-tier banks, given their ability
to reach out to SMEs and other market niches. Bajio’s strong track record
and strategic focus on agribusiness and SMEs make it an excellent fit for
IFC’s strategy and objectives.”
Banco del Bajio, based in the city of Leon, is the eighth-largest bank
in Mexico and the largest regional bank in the country. It has significant
presence in the northern, western, and central regions of Mexico.
“We are pleased to have IFC as a long-term partner at this critical stage
of the bank’s growth,” said Salvador Oņate, Chairman of Banco del Bajio.
“This new partnership will help further improve the bank’s corporate
governance and risk management practices and will be instrumental to the
bank’s listing in the future.”
About Banco del Bajio
Banco del Bajio is a regional bank with
significant presence in several regions of Mexico. It provides retail and
commercial banking services as well as pension fund management and factoring,
with a focus on three principal markets: SMEs, agribusiness, and commercial
banking. The bank has diversified into high-growth segments, including
mortgages and consumer loans. Based in Leon, Bajio is majority owned by
Mexican investors with Spanish bank Banco Sabadell holding a 20 percent
stake. As of June 30, 2006, Banco del Bajio reached MXN 4,270 million in
equity and MXN 40,808 million in total assets.
IFC in Mexico
Since 1956, IFC has invested $5.6 billion,
including $2.2 billion in syndications, in sectors ranging from infrastructure
and manufacturing to agribusiness and the financial sector in Mexico, making
it the third-largest recipient of IFC financing in dollar value, after
Brazil and Argentina. IFC committed $279.8 million in FY05 as new financing
in Mexico, and it held a total portfolio of $1.6 billion, including syndications,
as of May 2006.
IFC's strategy for Mexico focuses on enhancing the international competitiveness
of the country’s private sector, especially by further deepening the financial
sector, promoting investments where the private sector could play a larger
role, and promoting sustainable social and environmental development and
good corporate governance.
The International Finance Corporation
is the private sector arm of the World Bank Group and is headquartered
in Washington, D.C. IFC coordinates its activities with the other institutions
of the World Bank Group but is legally and financially independent. Its
178 member countries provide its share capital and collectively determine
The mission of IFC is to promote sustainable private sector investment
in developing and transition countries, helping to reduce poverty and improve
people’s lives. IFC finances private sector investments in the developing
world, mobilizes capital in the international financial markets, helps
clients improve social and environmental sustainability, and provides technical
assistance and advice to governments and businesses. From its founding
in 1956 through FY05, IFC has committed more than $49 billion of its own
funds and arranged $24 billion in syndications for 3,319 companies in 140
developing countries. IFC’s worldwide committed portfolio as of FY05 was
$19.3 billion for its own account and $5.3 billion held for participants
in loan syndications. For more information, visit www.ifc.org.