BAC expected to add 29% to Banco de Bogotá's EPS in 2011.

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Fuente: BNAmericas.

The purchase of Central American banking groupBAC Credomatic by Colombia's Banco de Bogotáwill lift the latter's earnings per share (EPS) by 29% over the rest of 2011, local brokerage Bolsa y Renta analyst David Peláez told BNamericas.

The US$1.9bn acquisition of BAC, concluded in December 2010, was financed with a combination of a 2.2tn-peso (US$1.1bn) share issue, a US$1.2bn capital injection in the form of BOCEAS - bonds compulsorily convertible into shares - and US$443mn in cash.

"The effect [of the incorporation of BAC] will be very relevant to Banco de Bogotá's bottom line, since BAC represents about 50% of Banco de Bogotá's assets and that ratio should translate into earnings," Peláez wrote in a report.

"We are forecasting consolidated earnings of 1.2tn pesos for Banco de Bogotá for 2011, of which 360bn pesos will come from BAC," the report reads.

Banco de Bogotá's unconsolidated 1Q11 earnings of 253bn pesos were 2.6% lower than in the same period last year, but 2.5% above Bolsa y Renta's estimates.

BAC will keep operating as a unit of Banco de Bogotá's Panamanian leasing subsidiary, Javier Díaz, legal and IR VP of the Colombian bank's parent company, Grupo Aval, recently told BNamericas.

Grupo Aval commands roughly a third of the Colombian system's loans through its chain of four banks, and also owns the country's largest private pension fund manager.