The merger will create the 5th largest bank in Colombia in terms of total assets and loans with a significant presence in segments such as corporate clients and high and medium income individuals. The combined bank will become a larger-scale player across all product lines, with a balanced mix of businesses focused on commercial and retail operations. As of July 31, 2012, Banco CorpBanca Colombia and Helm Bank together had more than US$11.800 billion in assets, US$8.000 billion in loans and approximately US$7.850 billion in total deposits, which represented 7% market share in loans and 7.3% market share in total deposits. In addition, according to pro forma figures, the merged bank had one of the best indicators of credit quality in the industry, with a Return on Average Equity (RoAE) of approximately 15% for the 12 months trailing July 31, 2012.
Customers of both entities will be able to take advantage of a larger number of products given the different strengths of both banks. The integration of Banco CorpBanca Colombia's and Helm Bank's central systems will also reduce costs. CorpBanca estimates that the merger will result in cost savings around US$100 million per year after taxes. CorpBanca believes that the merger will be an important source of value creation via optimization of costs/expenses and income through net interest margin, generating attractive returns for shareholders after the merger costs are absorbed.
The merged bank will have an expected total pro forma solvency indicator of 17.0% by the end of 2012, which is higher than each of both banks has on an individual basis under current Colombian regulation. Meanwhile, CorpBanca estimates that it will continue to have adequate levels of capitalization in order to finance its growth in the near to medium term. CorpBanca estimates that its pro forma BIS ratio will be in the range of 12.5% to 13.0% by the end of 2012.
Simpson Thacher & Bartlett and Pose Herrera participated in this transaction as legal counselors in the US and Colombia, respectively.
CAUTION REGARDING FORWARD-LOOKING STATEMENTS
This press release contains forward-looking statements, including statements related to the planned acquisition of Helm Bank and the timing thereof. Forward-looking information is often, but not always, identified by the use of words such as "anticipate," "believe," "expect," "plan," "intend," "forecast," "target," "project," "may," "will," "should," "could," "estimate," "predict" or similar words suggesting future outcomes or language suggesting an outlook. Forward-looking statements and information are based on current beliefs as well as assumptions made by and information currently available to CorpBanca concerning anticipated financial performance, business prospects, strategies and regulatory developments. Although management considers these assumptions to be reasonable based on information currently available to it, they may prove to be incorrect. By their very nature, forward-looking statements involve inherent risks and uncertainties, both general and specific, and risks that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution readers not to place undue reliance on these statements as a number of important factors could cause the actual results to differ materially from the beliefs, plans, objectives, expectations and anticipations, estimates and intentions expressed in such forward-looking statements. Furthermore, the forward-looking statements contained in this press release are made as of the date of this press release and CorpBanca does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.
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Gerente Investor Relations
Tel: (562) 660-2699
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