Re Agreement
Banco Santander Central Hispano SA
18 October 2000
BANCO SANTANDER CENTRAL HISPANO SIGNS
AGREEMENT TO BUY BANCO CARACAS
- Through its subsidiary Banco de Venezuela, it will acquire a 65.4% stake held
by a group of principal shareholders, prior to a public share offer for up to
100% of the shares in the same terms and conditions
- The transaction, which envisages merging the two banks, will create the
largest financial group in Venezuela with a market share both in deposits and
loans above 20%
- The new bank will have 376 offices, 783 ATMs and 7,500 employees serving more
than 2 million customers
MADRID, October 6, 2000 - Banco Santander Central Hispano, through its Banco de
Venezuela subsidiary, today signed an agreement to acquire a majority holding in
Banco Caracas, thus creating the largest financial group in Venezuela and
consolidating the Group's position as the leading financial services franchise
in Latin America.
The transaction brings together Venezuela's third and fourth largest banks, the
two soundest institutions in the financial sector with the longest history.
Through the agreement, subject to the corresponding authorizations, the group of
principal shareholders in Banco Caracas will sell their 65.386% stake to Banco
de Venezuela. The operation will consist of a public share offer for which all
Banco Caracas shareholders will be eligible under the same terms and conditions,
initially covering up to 85% of the bank's capital, with the intention of
subsequently raising the offer to 100% in accordance with demand from Banco
Caracas shareholders.
The offer will be priced at US$0.57 per share, from which US$0.11 per share will
be set aside and deposited by the vendors in a contingent guarantee fund to
cover any eventual liabilities. The final terms and conditions of the
transaction will be announced in the prospectus accompanying the share offer.
The total value of the operation comes to about US$340 million.
Once the share offer has been successfully completed, and the corresponding
authorizations obtained, it is envisaged that the two banks will merge under the
name Banco de Venezuela. The operation also includes the acquisition of Banco
Caracas Holding, N.V. Curacao.
The new bank will be the market leader in Venezuela, with US$4,397 million in
assets, US$3,537 million in deposits and a loan portfolio of US$2,151 million.
It will have a market share of 20.6% in deposits and 21.5% in loans.(1) It will
have more than 2 million customers served by a network of 376 offices, 783 ATMs
and around 7,500 employees.
The new bank's chairman will be Michel J. Goguikian, executive chairman of Banco
de Venezuela. Jose Maria Nogueroles, principal shareholder and chairman of Banco
Caracas, will be vice-chairman.
Additional Information:
Banco Caracas
Banco Caracas was founded in August 1890. In the past two years it has grown
aggressively and selectively through the opening of new offices and a new
corporate image aimed at high profile customers and corporate lending. The bank
merged in June 1999 with Banco Fivenez, and as a result now figures as the
fourth largest bank in Venezuela with US$1,800 million in assets and US$1,480
million in deposits and US$ in loans, giving a market share of 9% and at the end
of August 2000. It has more than 600,000 customers, 176 offices, and 199 ATMs.
Banco de Venezuela
Banco de Venezuela, subsidiary of Banco Santander Central Hispano, has 110 years
of experience in Venezuela and is currently the third largest bank with US$2.5
billion in assets and US$2 billion in deposits, giving a market share of 12.0%.
It has more than 1.5 million customers, 200 offices and 584 ATMs. The bank has a
high asset quality, with the lowest NPL ratio and the highest efficiency and
profitability among the larger banks.
Banco Santander Central Hispano
Banco Santander Central Hispano is Spain's leading financial group and among the
top three by market capitalization in the Euro zone. At June 30, 2000 it had
US$384 billion in managed funds and US$303 billion in assets. The Group has more
than 30 million customers in 38 countries, with 110,000 employees and 9,800
offices. It operates the leading financial services franchise in Latin America
with 16 banks in 12 countries.
(1)According to data at August 31, 2000
Principal aggregates Pro Forma
(million US dollars) BdV Caracas BdV+Caracas Ranking
Assets 2,514 1,883 4,397 1
- market share 11.0% 8.2% 19.2%
Net loan portfolio 1,198 953 2,151 1
- market share 12.0% 9.5% 21.5%
Deposits 2,056 1,481 3,537 1
- market share 12.0% 8.6% 20.6%
Customers 1,516,993 602,366 2,119,359 1
Exchange rate: 1 US$=689 bolivars
Principal performance ratios Pro Forma
BdV Caracas BdV+Caracas
Net income 1st half 2000* 45.6 17.3 62.9
Offices 200 176 376
Employees 4,050 3,450 7,500
NPL ratio 1.8% 6.1% 3.7%
Provision cover 171% 87.5% 110%
Net worth/assets 11.9% 10.2% 11.2%
Cost to Income 50.8% 62.5% 55.3%
ROE 30.5% 17.2% 25.5%
ROA 3.5% 1.7% 2.8%
*Figures in US$. Exchange rate: US$1=689 bolivars
Internet Addresses:
www.bancodevenezuela.com
www.banco-caracas.com