Citigroup Buys Banco Cuscatlan
Citigroup Inc. said Wednesday it agreed to acquire Grupo Cuscatlan, a Central American commercial and retail bank, for us$1.51 billion in cash and stock, on the heels of its recent purchase of Nicaraguan-owned Grupo Financiero Uno.

Grupo Cuscatlan had about us$5.4 billion of assets, us$3.5 billion of loans and us$3.4 billion in deposits as of Sept. 30.

The deal is expected to close in early 2007.

Citigroup is focusing its acquisitions on emerging markets, where growth is fast and the bank can be more than a marginal player without paying excessively for assets.

Grupo Cuscatlan has operations in El Salvador, Guatemala, Costa Rica, Honduras and Panama.

In October, Citigroup said it was acquiring Grupo Financiero Uno, the largest credit card issuer in Central America.

Last month, Citigroup led a team of investors who bid 24.3 billion yuan (ys$3.1 billion) for China's Guangdong Development Bank.

Citigroup shares edged higher in Wednesday trading, as did shares of rivals Bank of America while JP Morgan Chase  also finished higher on the Big Board.

Banco Cuscatlan branches in Costa Rica is easily identified by its bright yellow signs and with its big yellow smile promotion on buses and billboards around the San José area.

Group Cuscatlan counts 1.2 million consumers and 45,000 companies as clients, and operates 202 branches and 263 automated teller machines. It employs about 5,000 people, Citigroup said.

Medina-Mora said Citigroup hasn't decided whether to use the Citi brand in the region or keep the Cuscatlan name, as it did with Grupo Financiero Banamex following its 2001 purchase of the Mexican bank.

"That is something we're going to evaluate,'' he said.

Citigroup has operated in Central America for more than 100 years with a strong corporate investment banking presence in Costa Rica, El Salvador, Guatemala, Honduras and Panama. The company also has a credit card business in Panama.

Citigroup is present in 24 Latin America countries and has a leading position in corporate banking in the region, along with a growing consumer banking presence and strong client recognition and brand loyalty.

The company operates more than 1,600 retail bank branches and 500 consumer finance branches in Mexico and Latin America, serving 13,000 corporate clients, 17 million retail bank clients and nine million credit card holders.

Citigroup expects to complete both its Cuscatlan and Uno acquisitions in early 2007.