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BBVA sells AFP Horizonte business in Colombia

27 December 2012

(Financial Times) It was bound to happen, it seems. BBVA said earlier this week that it is to sell its Colombian pension fund management business, AFP Horizonte, for about $530m.
The buyer will be no other than the local AFP Porvenir, the retirement business leg of Colombia’s powerful banking group, Grupo Aval. This continues with the trend started last year by one of Grupo Aval’s main competitors, Colombia’s Grupo Sura, which paid $3.6n for the regional assets of Dutch bancassurer ING Groep.
The deal should be sealed in the first half of next year, and it will add 3.5m customers to Porvernir’s existing broad base of 5.3m clients.
Back in May, news came from Madrid that BBVA, Spain’s second-biggest bank by assets, was considering a full or partial sale of its regulated pension fund administrators in Colombia, Peru, Chile and Mexico.
It now looks like retirement investment management businesses in Chile and Peru could follow suit, at some point. Last month, it sold its Mexican retirement management business for $1.6bn to Grupo Financiero Banorte, which runs the country’s fourth bank by assets, in partnership with the Mexican Social Security Institute.
Some analysts believe the Spanish giant is doing this to strengthen its capital base. Yet, according to a BBVA spokesman, the decision was the result of a review of the Latin American pension fund business: it transpired that this particular unit was not a core operation.
BBVA’s pension business in Latin America generated net profits of about €180m, or $240m, last year.