Banex was founded in 1981 with the purpose of serving the agricultural and industrial sectors of Costa Rica with potential for exports. It is a wholly-owned subsidiary of Corporación Banex, a diversified financial services holding company based in Costa Rica. Today, Banex is a universal bank oriented towards corporate and retail banking. Currently, Banex’s loan portfolio is divided between approximately 70% corporate and 30% retail segments. The Bank’s expansion will come primarily from the retail side of the business where the Bank’s management believes there is stronger growth potential, while maintaining its leadership on the corporate side. Banex is rated AA- (cri) long-term and F1+(cri) short-term by Fitch locally. Corporacion Banex, the holding company of Banex, has operations in commercial banking, insurance, brokerage services, trust services and pension fund management . The company was authorized as a Financial Group by the Board of Supervision of the Financial System on April 15, 1998. In June 1999, Banistmo, the largest financial group in Central America and also an existing IFC client, acquired Corporacion Banex through a public tender.

The total project cost is up to $40 million representing IFC’s investment in the form of an A loan for its own account.

40.0 million (USD)

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	40.0
Equity

* These investment figures are indicative

Banex is headquartered in San Jose, Costa Rica and has 33 branches across the country. Investments can be made throughout the country.

The project will assist a strong banking group to expand its business, thus providing greater access to financing for corporations and individuals in the form of mortgages. In addition, it will support a strong private sector banking group in a country where the government still plays a significant role in providing banking services. Support for leading private sector banks can improve benchmark standards and competition while customers can derive benefits from efficiency and international experience (which state banks may not be equipped with). First, IFC has a role in supporting a local bank with a strong regional presence to continue its expansion strategy. By providing term funding for its expansion in the corporate and retail lending, IFC will enable Banex to continue to provide longer term financing to corporations and consumers, which would contribute to economic activity in Costa Rica. Second, IFC has a role in supporting the private sector presence in the country’s banking sector. Third, IFC would be providing the Company with much needed medium term funding that is necessary to better match the balance sheet structure of its assets and liabilities. Lastly, this project would allow the Bank to face stiff local competition in a banking sector still heavily influenced by state owned banks, which compete unfairly by receiving 100% government guarantee on deposits, a feature that private banks don’t benefit from.

This is a category FI type 1 project according to IFC''s Environmental and Social Review Procedure. Banco Banex will be required to designate individuals to have responsibility for environmental issues and who will attend environmental training; submit to IFC an environmental management plan; establish an environmental management system to ensure that activities financed under relevant operations are consistent with applicable environmental, health and safety standards of Costa Rica; and submit to IFC annual environmental performance reports
Location of environmental documents in locally affected community