By Amy Guthrie
MEXICO CITY--Mexican bank Grupo Financiero Banorte SAB
(GFNORTE.MX, GBOOY) said Wednesday it plans to raise as much as $3
billion via a share offering to finance recently announced
acquisitions and strengthen its capital position.
Mexico's third-largest bank said the sale would take place as a
primary offering of ordinary shares on the Mexican Stock Exchange
and also with placements abroad. The sale is expected in July.
On Tuesday, Banorte announced plans to buy out minority stakes
in Mexican pension and insurance joint ventures from Italian
partner Assicurazioni Generali SpA (G.MI) for $857.5 million (643.5
million euros).
Banorte, which two decades ago was a small, regional bank, has
grown exponentially via acquisitions in recent years. The financial
group has more than tripled its assets under management over the
past five years, to roughly $140 billion.
Earlier this year, the bank bought, along with Mexico's Social
Security Institute, Banco Bilbao Vizcaya Argentaria SA's (BBVA.MC,
BBVA) Mexican pension-fund business. That acquisition cost Banorte
around $800 million. Afore XXI-Banorte is now Mexico's biggest
pension fund.
The buildup, though, has stretched the bank's capital
levels.
Alejandro Garcia, an analyst with Fitch Ratings based in
Monterrey, Mexico, said Tuesday that Banorte's "weakest link" is
its capital position, and he sees little room for the bank to raise
more debt.
Banorte's Tier 1 capital, a measure of high-quality capital, was
equivalent to around 13% of its assets at the end of March.
Wednesday, the local shares of Banorte were falling by 6.2% to
MXN76.51 ($5.96) after losing 3.9% in the previous session.
Write to Amy Guthrie at amy.guthrie@dowjones.com
