Moody's Investors Service confirmed the Aa2/Prime-1/B+ ratings of Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) and the Baa3/NP/D ratings of Bancomer, following yesterday's announcement that BBVA will merge its Mexican unit Probursa (unrated) with Mexico's GF Bancomer, to create Mexico's largest bank with a 26% nationwide market share. According to Moody's, the confirmation of BBVA's ratings takes account of the fact that the higher geographic, strategic, and business risk for the group of acquiring Bancomer is more than offset by an announced equity capital boost of up to $3.18 billion (against the $1.2 billion total acquisition cost). The confirmation of GF Bancomer's ratings reflect the fact that the transaction is still subject to regulatory approval, and also subject to a due diligence that will be carried out by BBVA within the next two to three months. The rating agency also noted that while Bancomer had a premier franchise, it also had the greatest need for new capital among the remaining Mexican banks.MOODY'S CONFIRMS Aa2/P-1/B+ RATINGS OF BANCO BILBAO VIZCAYA ARGENTARIA (BBVA) AND Baa3/NP/D RATINGS OF BANCOMER
This, transaction, if implemented would create Mexico's leading financial group with over 5 million customers -- the most extensive bank and pension customer base -- and significantly enhance BBVA's Latin American franchise. Regarding BBVA, Moody's added that it continues to view the Spanish financial group as one of the strongest and better positioned in Europe, and that it expects its growth strategy to remain well balanced.
Banco Bilbao Vizcaya Argentaria, S.A., headquartered in Bilbao, Spain, had total assets of ¬ 239 billion at year-end 1999.
Bancomer, S.A., headquartered in Mexico City, Mexico, had total assets of approximately US$ 28 billion at year-end 1999.
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