24282 - Davivienda MTSF

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Summary of Proposed Investment

Project Number

24282

Company Name

BANCO DAVIVIENDA S A

Date SPI Disclosed

Sep 20, 2005

Country

Colombia

Industry

Financial Markets

Projected Board Date

Oct 25, 2005

Status

Completed

Sector

Commercial Banking - General

Department

Global Industry, Financial Markets

Environmental Category

Previous Events

Approved : Dec 27, 2005
Signed : Jan 4, 2006
Invested : Jun 15, 2006

Project Description

Banco Davivienda S.A. (Davivienda or the bank) is a longstanding IFC client and the fourth largest financial institution in Colombia, with approximately $3 billion of assets and $390 million of equity as of August 2005. Originally specialized in mortgage lending, Davivienda has since diversified its product offering to become a full service commercial bank in Colombia. Having consistently delivered strong financial results, Davivienda has currently a local long-term credit rating of “AAA” by Fitch Ratings.

The Bank is seeking to raise subordinated and medium-term senior debt to strengthen its balance sheet, diversify funding sources, maintain its strong liquidity position and improve the Bank’s capitalization levels. The project consists of a financing package of up to $120 million to support the expansion and consolidation of the Bank’s operations in Colombia. The project will help Davivienda continue to expand its retail business while maintaining a strong presence in the mortgage industry.

Sponsor / Cost / Location

Product Line	IFC Investment (million USD)
Risk Management
Guarantee
Loan	35.0
Equity	15.0

Development Impact

This project will strengthen the consolidation and long-term growth strategy of a longstanding IFC client and strategic partner in Colombia and further facilitate the consolidation and integration of the financial services industry in Colombia. The project will improve the financial fundamentals of the Bank by diversifying funding sources and reducing maturity mismatches, and would be the first international syndication undertaken by a Colombian bank since March 2000. As such, it will play an important role in re-introducing a Colombian bank name to the global financial markets.

IFC is expected to play a key role in the project as it will support Davivienda’s growth strategy in Colombia by providing attractively priced, long-term local currency financing. By providing Tier-2 capital to the Bank, IFC would provide an instrument under terms currently not available in Colombia. Finally, IFC will mobilize long-term funding from international banks and demonstrate a vote of confidence in a strong and well-managed domestic financial institution in Colombia.

This is a category FI Type 1 project according to IFC''s environmental and social review procedure. Davivienda will be required to designate individuals to have responsibility for the environment and who will attend IFC''s environmental management workshop or an approved equivalent, establish an environmental management system to ensure that activities financed under relevant operations (e.g., corporate, construction, and SME lending) are consistent with applicable Colombian environmental, occupational health and safety regulations and the relevant IFC Exclusion List, and submit to IFC an environmental management plan and annual environmental performance reports.
Location of environmental documents In locally affected community

Contacts

For Inquiries About the Project, Contact

Dra. Olga Martínez,
Vicepresidente de Finanzas
Banco Davivienda
Carrera 7 No.31-10 Piso 22
Bogotá, Colombia
Fax:+57-1-285 6817

This Summary of Project Information (SPI) is prepared and distributed to the public in advance of the IFC Board of Directors' consideration of the proposed transaction. Its purpose is to enhance the transparency of IFC's activities, and this document should not be construed as presuming the outcome of the Board decision. Board dates are estimates only. The following SPI is disclosed in accordance with IFC's Disclosure of Information Policy that went into effect September 1998.

The map is for illustrative purposes and does not imply the expression of any opinion on the part of the World Bank, concerning the legal status of any country or territory or concerning the delimitation of frontiers or boundaries. Country borders or names do not necessarily reflect the World Bank Group's official position. In some cases, available project location information is limited to the country of the project's activities. Locations are approximate.

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