Grupo Security Forecasts Important Commercial and Operating Synergies After Purchase of Cruz Del Sur
In 2012, Grupo Security reported profit for the year of Ch$46,561 million, equivalent to approximately US$100 million.
For the year 2012, Grupo Security posted strong growth with profit Ch$46,561 million, equivalent to approximately US$ 100 million, which represents an increase of 12.2% over 2011. Return on average equity was 12%, as reported today at an ordinary shareholders' meeting.
After recapping the year for shareholders, the chairman of Grupo Security, Francisco Silva, highlighted the favorable results achieved in 2012 and confirmed that “we are in a positive position for taking on the new challenges that we have set for ourselves following the agreement to acquire Cruz del Sur.”
The transaction will be financed with a combination of debt, capital and cash. Silvia remarked, “We trust that the market will join us in this new capital increase. The company's historical shareholders—who own 70% of its capital—are committed to this project. More importantly, we believe that the growth opportunities that will arise for Grupo Security after purchasing Cruz del Sur will continue to make our stock an attractive investment with high returns in the long term.” Grupo Security's CEO, Renato Peñafiel, commented, “We want to continue to strengthen Grupo Security. Over the past ten years, our results have grown 20% per year, which has allowed earnings per share to grow 13.8% annually, considering the seven capital increases we have carried out. The acquisition of Cruz del Sur will enable us to continue to add value for our shareholders, without neglecting service quality and the close relationship we have with our customers.”
In terms of business scale, Peñafiel indicated that “this purchase is very important because it increases Grupo Security's size in insurance and asset management, positioning us as one of Chile's main financial conglomerates. In the insurance area, Grupo Security will double its financial investments, giving it a portfolio of US$3,120 billion. In terms of sales, integration with Cruz del Sur will position Security second in the insurance market by total direct premiums with a market share of 8.6%; third among local insurance companies by non-retirement insurance direct premiums with 8.6% of the market and fourth in individual insurance policies with 11.2%.”
At the meeting the following shareholders were elected to the board: Francisco Silva, Naoshi Matsumoto, Álvaro Vial, Ana Sainz de Vicuña, Juan Cristóbal Pavez, Horacio Pavez and Jorge Marín, all of whom have built extensive careers in business and are very connected to the financial world.
Bruno Philippi, who has held several positions in trade associations, was also elected to the board. He was the president of the Chilean Industry Federation (SOFOFA in Spanish) from 2005 to 2009 and has served on the boards of ICARE (1993-2000) and the Center for Public Studies (CEP in Spanish), among other entities. He is currently a member of the Conicyt Council (Chilean National Commission on Scientific and Technological Research), Fundación Chile's Educational Management Council, Fosis Council, the Fulbright Commission and AGCI.
Hernán de las Heras Marín was elected as an independent director. He has a degree in business administration from Universidad de Chile and has had a distinguished career in the financial sector, including serving as executive director of Santiago Leasing and Santiago Corredores de Bolsa between 1987 and 2001. From 1996 to 2002, he was an advisor to the chairman of Banco Santiago. Earlier in his career, he was the commercial manager and loan manager at Banco Colocadora Nacional de Valores (1976-1987), Banco Torquist (Argentina) and Banco Santiago. He currently devotes his time to his personal and family businesses, which are primarily engaged in asset management, real estate and textile imports.
At the ordinary shareholders' meeting, Grupo Security shareholders approved the distribution of a final dividend of Ch$7 per share. When added to the interim dividend of Ch$3.25 per share paid in October 2012, this gives a total dividend of Ch$10.25 per share charged to profit for the year 2012. This confirms Grupo Security as a high-yield dividend stock.
Grupo Security is a diversified financial services group employing approximately 3,000 people with a market capitalization of more than US$1.1 billion. As of December 2012, it boasts assets under management of US$11.0 billion (banking, insurance and asset management).