Santander's Mexico Unit Raises $4 Billion in IPO: CEO
It was the right time for Spain’s Banco Santander to go public with its Mexican unit in both the U.S. and Mexico, Santander Mexico chief Marcos Martinez told CNBC’s“Squawk on the Street” after the IPO on Wednesday.
“It was the right time for this IPObecause the country is well received by investors and our bank is well received,” he said. Martinez also said that there appears to be a greater probability that Mexico will undertake necessary reforms, which has made “everyone very optimistic about the country.”
(Read More:Mexico: Surprising Land Of Opportunity.)
Spain’s Banco Santander raised more than $4 billion from sell shares in its Grupo Financiero Santander Mexico unit, with the initial public offering valuing the Mexican bank at $16.5 billion. The IPO was the largest ever of a Mexican company and was the second-largest U.S. IPO this year behind Facebook .
Selling 25 percent of Santander Mexico was just the latest listing of one of Banco Santander’s local units. The Spanish bank sold shares in its Brazilian unit Banco Santander Brasil in 2009 to help raise capital to provide a cushion against losses from Spain’s property market collapse and deepening recession.
Martinez also said that he doesn’t expect Banco Santander to flood the market with additional shares.
“They have decided to sell part of the bank because Mexico is a very good investment for the group and is one of their main sources of profits,” he said. Martinez added, it makes sense for Banco Santander to keep its existing 75 percent stake.
Santander Mexico also has total independence in terms of liquidity and equity on the local market, Martinez said.
The bank's underlying business is exclusively focused on the Mexican market where it is the fourth-largest bank by deposits. “Even though we have an investment bank, asset manager and insurer, retail banking is the most important,” he said.