Deliver Your News to the World

Citi and Quiñenco Establish Partnership in Holding Company of Banco de Chile


Citi Secures Rights to Acquire 50% of the Holding Company That Controls Banco de Chile

July 19, 2007 - New York/Santiago – Citi and Quiñenco announced today that they have reached a definitive agreement to establish a strategic partnership that gives Citi the option to acquire up to 50% of LQIF, the holding company through which Quiñenco controls Banco de Chile. Through this partnership, Citi operations in Chile will be combined with Banco de Chile’s leading local banking franchise to create a premier banking and financial services institution with about 20% market share of the Chilean banking industry.

“This partnership brings together two dynamic financial institutions that share a culture of dedicated client service and best-in-class financial products,” said Manuel Medina Mora, Chairman and Chief Executive Officer for Citi Latin America and Mexico. “As we did successfully with Banamex in Mexico, we will blend Citi’s global products and capabilities with Banco de Chile’s leading brand, local expertise and distribution platform. This transaction also underscores Citi’s long-term commitment to a key growth market in Latin America.”

“Our agreement and collaboration with Citi provides Quiñenco with the unique opportunity to leverage Banco de Chile’s strong local brand with Citi, the leading financial institution in the world. This partnership will allow us to be even more competitive by bringing world-class financial products and services to individuals and institutions throughout Chile,” said Andronico Luksic, Vice Chairman of the Board of Quiñenco.

Under the agreement, Citi will initially acquire an approximately 32.96 percent stake in LQIF, a wholly-owned subsidiary of Quiñenco that currently holds 52.2% of the voting rights and a 30.5% economic interest in Banco de Chile. Citi has the option to acquire up to 50% of LQIF within three years, at which time LQIF’s economic interest in Banco de Chile would be approximately 37.8%. The new partnership calls for active participation by Citi in management of Banco de Chile, including board representation at both LQIF and Banco de Chile.

Upon completion of the initial phase of the transaction, expected early in the first quarter of 2008, Citi Chile, valued at $701 million, will be combined with Banco de Chile. Citi will also contribute an additional $192 million worth of assets (in cash or other businesses) for a total investment valued at $893 million. As part of the overall transaction, Citi will also acquire the U.S. businesses of Banco de Chile for a consideration of $130 million. Citi has the option to acquire an additional 17.04% stake in LQIF for approximately $900 million.

Banco de Chile is a full-service financial institution and is the second-largest bank in Chile with a market share of 18% in loan originations and 18% in bank deposits. It had total assets of more than $23.9 billion, loans of $17.9 billion and deposits of $15.0 billion as of December 31, 2006, and generated earnings of $365 million in the year ended December 31, 2006. It serves more than one million clients, including credit card customers, corporate clients and individual consumers through its network of 293 branches, 1,456 ATMs and other electronic distribution channels.

The transaction is subject to regulatory approvals and is expected to be accretive to Citi’s earnings in 2008. Citi Markets and Banking was the sole financial advisor to Citi on this transaction.

Citi has operated in Chile since 1916 and has more than 4,000 employees serving corporate and consumer clients through its 106 branches (16 retail banking and 90 Atlas Consumer Finance offices). Citi is currently the tenth-largest bank in Chile based on assets, with approximately $3.47 billion in assets and $1.93 billion in deposits and $1.94 billion in loans as of December 31, 2006.

Citi has a presence in 25 countries throughout Latin America with a leading position in corporate banking in the region and a growing consumer banking presence with strong client recognition and brand loyalty. Citi operates more than 2,600 retail bank and consumer branches in Mexico and Latin America serving more than 23 million customers.

# # #

Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi’s major brand names include Citibank, CitiFinancial, Primerica, Citi Smith Barney and Banamex. Additional information may be found at or

Certain statements in this document are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors. More information about these factors is contained in Citigroup’s filings with the Securities and Exchange Commission.


This news content was configured by WebWire editorial staff. Linking is permitted.

News Release Distribution and Press Release Distribution Services Provided by WebWire.