BCI Group: Expansion in Peru, New Holding Company & Impact of Global Conflicts

Banco Bci, a Chilean financial group, is planning a significant expansion of its operations in Peru, aiming to triple its business there over the coming years. This growth will be accompanied by a substantial increase in hiring, with the bank intending to at least double its current workforce in the country within three years. The plans are unfolding alongside a broader corporate restructuring that will observe the creation of a new parent company, BCI Group.

A Turnaround in Peru

The bank’s ambitions in Peru represent a notable turnaround. Last year, Bci Peru quadrupled its earnings compared to 2024, following two years of annual losses in 2022 and 2023, its initial years of operation in the market. Ignacio Yarur, President of BCI Group, expressed confidence in the Peruvian market, stating that their initial assessment of the country’s potential has been validated. Despite global uncertainties, including the ongoing conflict in Iran and its potential impact on oil prices – both Peru and Chile being net importers of crude – Yarur affirmed that the projections for tripling the Peruvian business remain firmly in place.

Scaling Loan Portfolio and Investment

Currently, Bci Peru holds a loan portfolio of US$1.5 billion. The plan to reach US$4.5 billion will require significant investment, not only in existing product lines but as well in corporate and structured finance. The bank originated US$600 million in loans through these channels in Peru last year alone. Credit penetration in Peru has been declining, presenting both challenges and opportunities for lenders.

Investments will also extend to expanding treasury capabilities internationally and deploying technological platforms already successful in Chile, including 360 Connect and confirming platforms. The bank intends to invest in technology, talent acquisition, and new teams to increase its market share.

Workforce Expansion

Currently employing 90 people in Peru, Bci anticipates at least doubling its workforce over the next three years. This expansion reflects the bank’s commitment to supporting its growth plans and delivering enhanced services to its clients. The increase in personnel will be across all areas of the business, supporting both existing and new initiatives.

Focus on Corporate Clients, No Retail Expansion

Bci’s strategy in Peru is focused on serving corporate clients. Yarur explicitly stated that the bank has no plans to enter the retail banking segment in Peru. Instead, the focus will be on expanding the range of products and services offered to its existing corporate clientele and leveraging Bci’s international platform, particularly its presence in the United States. Mergers and acquisitions activity in Peru is expected to increase, potentially creating further opportunities for Bci’s corporate finance services.

The Creation of BCI Group

A key element of Bci’s strategy is the creation of a new parent company, BCI Group, a Chilean entity that will be listed on the Santiago Stock Exchange. BCI Group will hold two primary assets: Bci Chile and Bci Peru. City National Bank of Florida, currently a subsidiary of Bci Chile, will become a direct subsidiary of BCI Group. This restructuring is designed to unlock capital for further expansion in both Chile and Peru.

The rationale behind this move is to optimize capital utilization. Regulations in Chile limit the amount of capital that can be invested in a single foreign country. By creating BCI Group, the bank aims to overcome these limitations and facilitate continued growth in the United States, where City National Bank of Florida is located. Currently, Bci’s investment in the U.S. Represents approximately 30% of its total foreign investment, below the 40% regulatory limit, but the bank anticipates further growth in Florida.

The process will involve seeking authorization to list BCI Group on the Santiago Stock Exchange and obtaining approval from U.S. Regulators to designate BCI Group as a banking holding company. What we have is expected to seize approximately three months. Following regulatory approval, BCI Group will launch a tender offer to acquire any outstanding minority shares in Bci Chile, effectively taking full ownership of the Chilean bank.

Leadership and Expansion in the US

Ignacio Yarur, currently Chairman of Bci’s Board of Directors since January 2025, is leading this strategic shift. He holds a law degree from Pontificia Universidad Católica de Chile and an MBA from IESE Business School in Barcelona, Spain. Yarur’s experience includes a tenure at City National Bank of Florida, highlighting the importance of the U.S. Market to Bci’s overall strategy. He previously held roles leading retail, wholesale, and private banking, as well as driving digital transformation and innovation within Bci.

Resilience and Long-Term Commitment to Peru

Bci expresses confidence in the resilience of the Peruvian economy and its long-term potential, particularly in sectors such as mining, food production, and renewable energy. The bank’s commitment to Peru is underscored by its willingness to invest in growth despite global economic uncertainties. The creation of BCI Group and the planned expansion in Peru represent a significant strategic move for the Chilean financial group, positioning it for continued growth and success in the region.

The next steps involve securing regulatory approvals, completing the listing of BCI Group on the Santiago Stock Exchange, and launching the tender offer for Bci Chile shares. The successful execution of these steps will be crucial for unlocking the full potential of Bci’s expansion plans in both Peru and the United States.