Washington, D.C., April 11, 2006—In
a move designed to spur the development of the banking sector in Guatemala,
the International Finance Corporation has signed an agreement to provide
Banco Industrial, S.A., the country’s largest financial institution, with
a $30 million subordinated loan.
IFC’s financing will help support Banco Industrial’s plans to expand
its financing of large firms, the growing export sector, and small and
medium enterprises. It will also help deepen the bank’s successful
program for processing remittances from Guatemalans abroad. The loan
will qualify as tier-II capital for regulatory purposes.
Jyrki Koskelo, IFC’s director for Global Financial Markets, said, “By
strengthening the capital base of the leading bank in Guatemala, IFC will
promote the consolidation of the country’s financial sector, which will
further increase the stability of the banking system.”
IFC, the private sector arm of the World Bank Group, seeks to support Central
American countries as they work to increase their competitiveness in the
face of accelerating globalization. IFC’s financing is particularly timely
as the Central America Free Trade Agreement (CAFTA) creates new opportunities
and challenges for the private sector and the governments of the region.
In the financial sector, IFC has been providing leading banks in Central
America with investments tailored to strengthen their capital bases so
that they can take advantage of regional expansion opportunities.
Atul Mehta, IFC’s director for Latin America and the Caribbean, said,
“IFC’s investment will constitute a signal of approval in the international
market and help put Banco Industrial on a very competitive footing as CAFTA
is implemented in the region.”
Banco Industrial, founded in 1968, has consolidated assets of $3 billion
and more than a 20 percent market share of assets and deposits. Well established
in the large corporate market segment, it supports a client base, including
key exporters, of good credit quality with trade finance, working capital,
and financing for capital expansion. In recent years, it has increased
its services for small and medium companies and individual customers. It
is the largest processor of family remittances from Guatemalans abroad.
Diego Pulido, Banco Industrial’s CEO, said, “We very much welcome the
new relationship with IFC as its long-term financing will help diversify
the funding sources necessary to sustain growth.”
IFC 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 its policies.
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.