Washington D.C. November 27, 2001—The
International Finance Corporation, the private sector arm of the World
Bank, will invest US$18 million in Banco Montevideo, a leading Uruguayan
bank with long experience in retail banking. The investment – $9
million in equity and $9 million in the form of a subordinated convertible
loan – will help fund the bank’s expansion strategy through the acquisition
of Banco Caja Obrera, a public institution currently being privatized by
the Central Bank.
In addition to IFC’s $9 million equity investment, Banco Montevideo's
current share-holders have made a capital injection of $5 million to complete
the necessary funding for the acquisition of Banco Caja Obrera.
The IFC investment in Banco Montevideo’s planned expansion will support
an important private bank in a market still crowded out by the public sector.
Banco Montevideo’s expansion will also improve service to the retail
The investment fits in with IFC’s global policy of strengthening financial
institutions in developing countries and emerging markets in order to create
diversified sources of credit for the private sector. A vibrant and
strong private sector is a key element to economic growth and sustainable
“This investment will help strengthen Uruguay’s private banking sector,
which is critical to the further strengthening of the country’s private
sector,” said Bernard Pasquier, IFC’s Director of Latin America and the
Caribbean region. “We are also pleased to be involved in a project
that supports the government of Uruguay’s bank privatization efforts,”
“This investment will help us to be an active participant in the consolidation
of the Uruguayan financial system and become one of the country’s leading
banks once the consolidation process is completed. Our project will
help a higher percentage of the Uruguayan population to benefit from banking
services,” said Marcelo Guadalupe, General Manager of Banco Montevideo.
Banco Montevideo S.A is part of the Velox Organization (the Velox group),
a diversified commercial and financial services group that owns banks in
Argentina, Paraguay, and Uruguay, as well as finance and exchange houses
in all MERCOSUR (Southern Cone Common Market) countries. The bank
is headquartered in Montevideo, Uruguay and will have 38 branches across
the country following the acquisition.
“This investment will give Uruguayan lower-middle and middle class segments
of the population greater access to bank credit,” Pasquier said. “It
might also pave the way for future foreign direct investment in Uruguay’s
IFC’s mission is to promote sustainable private sector investment in developing
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, and provides technical
assistance and advice to governments and businesses. Since its founding
in 1956, IFC has committed more than $31 billion of its own funds and arranged
$20 billion in syndications for 2,636 companies in 140 developing countries.
IFC’s committed portfolio at the end of FY01 was $14.3 billion.