MICROCAPITAL BRIEF: International Finance Corporation (IFC) Capitalization Fund Invests $170m in Banco CorpBanca Colombia

The International Finance Corporation (IFC) Capitalization Fund, an investment fund managed by an arm of the World Bank Group’s IFC, has announced a USD 170 million subordinated bond investment in Banco CorpBanca Colombia (CBC), a subsidiary of CorpBanca, a Chile-based commercial bank that is a subsidiary of Brazil’s Itau Unibanco. The investment is intended to “…strengthen the…bank’s capital structure and…support its capacity to lend to small and medium enterprises [SMEs].” The term of the bonds has not been released.

As of March 31, 2013, CBC operated 87 branches in 22 cities in Colombia and reported total assets of COP 9.6 trillion (USD 4.8 billion), return on assets of 2.5 percent and return on equity of 25.0 percent. IFC Asset Management Company has USD 6.1 billion in assets under management as of August 2013, including USD 3 billion in its IFC Capitalization Fund; USD 1 billion in its IFC African, Latin American, and Caribbean Fund; and USD 182 million in its Africa Capitalization Fund.

By A’kos Szebeni, Research Associate

About Banco CorpBanca Colombia (CBC)

Banco CorpBanca Colombia (CBC) is a commercial bank that operates a network of 87 branches in 22 cities in Colombia, providing lending, deposit taking, cash management, treasury and investment banking services to commercial and retail clients. It was formerly known as Banco Santander Colombia and in June 2012 was acquired by CorpBanca, a Chile-based commercial bank that is an operating subsidiary of Itau Unibanco, a commercial bank in Brazil. As of March 31, 2013, CBC reported total assets of COP 9.6 trillion (USD 4.8 billion), return on assets of 2.5 percent and return on equity of 25.0 percent.

About International Finance Corporation (IFC) Capitalization Fund

IFC Capitalization Fund is a global equity and subordinated debt fund that was founded in 2009. It aims to speed up economic recovery while reducing the impact of the financial downturn that began in 2007 by supporting banks considered vital to the financial markets of individual developing countries. IFC has contributed USD 1 billion for the IFC Capitalization Fund, while the Japanese government has invested USD 2 billion. IFC aims for the fund to have a total leveraged impact of around USD 75 billion as others co-invest with the fund. The fund is managed by the IFC Asset Management Company, which is a wholly-owned subsidiary of the World Bank Group’s IFC.

About International Finance Corporation (IFC) Asset Management Company

IFC Asset Management Company LLC, a wholly owned subsidiary of the World Bank Group’s International Finance Corporation, invests third-party capital with the intention of achieving strong equity returns as well as a positive development impact in the countries in which it invests. IFC Asset Management Company has USD 6.1 billion of assets under management as of August 2013, including USD 3 billion in its IFC Capitalization Fund; USD 1 billion in its IFC African, Latin American, and Caribbean Fund; and USD 182 million in its Africa Capitalization Fund.

About International Finance Corporation (IFC)

A US-based multilateral development bank and member of the US-based World Bank Group, the International Finance Corporation (IFC) offers loans, equity investments, advisory services and technical assistance to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of fiscal year-end 2013, IFC reported total assets of USD 77.5 billion.

Sources and Additional Resources:

International Finance Corporation Press Release, “IFC, IFC Asset Management Company Fund Invest $170 million in Banco Corpbanca Colombia,” https://ifcndd.ifc.org/ifcext/pressroom/ifcpressroom.nsf/0/D3502228BFBCCD2485257C59005ABB5C?OpenDocument

MicroCapital, March 18, 2014, “Netherlands’ Facility for Sustainable Entrepreneurship and Food Security (FDOV), Ecom Agroindustrial, Utz Certified, AZMJ Support Small-scale Coffee Farmers in Colombia,” https://www.microcapital.org/microcapital-brief-netherlands-facility-for-sustainable-entrepreneurship-and-food-security-fdov-ecom-agroindustrial-utz-certified-azmj-support-small-scale-coffee-farmers-in-colombia/

MicroCapital, February 18, 2014, “International Finance Corporation (IFC) Capitalization Fund Loans $65m to Bank of Georgia,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-capitalization-fund-loans-65m-to-bank-of-georgia/

MicroCapital, January 5, 2014, “International Finance Corporation (IFC) to Loan $1.5m to FINCA MDO for Microlending in Tajikistan,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-to-loan-1-5m-to-finca-mdo-for-microlending-in-tajikistan/

MicroCapital, November 21, 2013, “International Finance Corporation (IFC) Loans $31m to Fullerton Credit to Support Small, Medium-Sized Enterprises (SMEs) in China,”  https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-loans-31m-to-fullerton-credit-to-support-small-medium-sized-enterprises-smes-in-china/

MicroCapital, June 7, 2013, “International Finance Corporation (IFC) Arranges $470m in Loans for Itau Unibanco of Brazil for Women Entrepreneurs, Funded by Bank of America, Bank of Tokyo Mitsubishi, National Bank of Abu Dhabi, Development Bank of Japan,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-arranges-470m-in-loans-for-itau-unibanco-of-brazil-for-women-entrepreneurs-funded-by-bank-of-america-bank-of-tokyo-mitsubishi-national-b/

MicroCapital, March 11, 2013, “Itau Unibanco of Brazil Commits $167m to Microloans for Urban Entrepreneurs in Concert with Business Call to Action, UN Millennium Development Goals,” https://www.microcapital.org/microcapital-brief-itau-unibanco-of-brazil-commits-167m-to-microloans-for-urban-entrepreneurs-in-concert-with-business-call-to-action-un-millennium-development-goals/

MicroCapital, February 8, 2013, “International Finance Corporation (IFC), Yes Bank to Create Fund for Small Businesses in India,” https://www.microcapital.org/microcapital-brief-international-finance-corporation-ifc-yes-bank-to-create-fund-for-small-businesses-in-india/

MicroCapital Universe Profile: Banco CorpBanca Colombia (CBC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=corpbanca

MicroCapital Universe Profile: International Finance Corporation (IFC) Capitalization Fund, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=IFC+Capitalization+Fund

MicroCapital Universe Profile: International Finance Corporation (IFC) Asset Management Company, https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=IFC+Asset+Management+Company

MicroCapital Universe Profile: International Finance Corporation (IFC), https://www.microcapital.org/microfinanceuniverse/tiki-index.php?page=International+Finance+Corporation+%28IFC%29

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