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BofA Securities sees Banorte as the best positioned to acquire Banamex, according to a new analysis in which he now estimates a valuation of the transaction of between 10,000 and 12,000 million dollars, against the 12,500 million and 15,500 million estimated a few days ago.

Based on your document, Banorte it is the most likely buyer of the business that the American Citigroup will divest, given that, it explains, it has a solid capital position; a successful history of consolidation; and has assumed a leadership role in the digital transformation of Mexico.

Likewise, he mentions as advantages for the Mexican bank, which could potentially derive in significant synergies from the overlapping of operations and a lower financing structure, in addition to the fact that it is likely to have the support of the government by accelerating regulatory approvals.

“The government of Andres Manuel Lopez Obrador he has stated that he would like to see Banamex in Mexican ownership again”, he highlights.

It would reach BBVA

BofA Securities’ analysis goes on to state that if Banorte were to prove to be the buyer, the combined entity would be similar in size to that of BBVA in the consumer and mortgage segments, and would overtake it as the largest player in credit cards.

“We see room for significant cost synergies to emerge, as BBVA operates with approximately 30% fewer employees and branches than the institutions combined,” he says.

He adds: “synergies are also likely to arise from a lower cost of financing for Banorte”.

However, he notes, the realization of cost synergies could be delayed as the government may restrict staff reductions in the early years.

For BofA, the administration of Banorte it would only pursue such a transaction if the price paid made sense to shareholders.

In his analysis he details that with only limited financial information about the businesses that are for sale, the valuation would be between 10,000 and 12,000 million dollars, which compares with his original estimate of between 12,500 and 15,500 million dollars for the entire franchise Citibanamex.

“A potential combination of Banamex would be transformative and consolidate Banorte among the two largest Mexican banks. But the financial merits of a potential transaction are still unclear,” he says.

The document highlights that Banorte has not commented and an offer for Banamex has not yet come up.


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