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Forum List » Value Ideas and Strategies Share and discuss value investing ideas and investing strategies.  
A Safe Bank in Chile?
Posted by: matsandalex
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Date: October 8, 2012 11:13AM
Investors looking for a relatively conservative stock pick to capitalize on Latin America's growth may consider CorpBanca S.A. (BCA). BCA is a $3.5-billion bank that provides commercial and retail banking services in Chile. Dividend investors have gobbled up shares of the bank due to a dividend yield of 6.7% on a payout ratio of 82%. Over the past five years, the bank saw its EPS and dividends grow at average annual rates of 18.3% and 35%, respectively. Currently, the company sports a PE ratio of 12X. In the financial realm, CorpBanca is actually one of Chile's smaller banks. CorpBanca is Chile’s fifth largest bank by revenue and fourth by loan size. However, one of the key growth catalysts is the pain in Spain. As Spanish banks divest of assets in order to raise capital, banks like BCA can pick up the pieces at distressed prices. For example, the bank recently raised as much as $550 million through an equity offer to finance acquisition of the Colombian banking assets of Banco Santander (SAN). The real question is whether Chile's economy will continue to outperform. Chile is largely a copper-based economy and the price of copper has been strong in 2012. For technical analysts, the company recently broke through its 200-day moving average which is a bullish sign.
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