IXE And Banorte Announce Engagement

Mexican banks IXE Grupo Financiero and Grupo Financiero Banorte say they have reached a non-binding agreement to consider a merger. According to IXE, the 2 financial groups have significant synergies, with the combined institution becoming the third largest in the country by either assets or deposits, and the only bank of its size controlled by Mexican shareholders. A combination of the 2 could help fend off an acquisition by a larger foreign competitor, according to a Mexico-based banker, while IXE’s retail operation can give Banorte greater presence in DF and the southeast. Details of the merger are not disclosed, but bankers say IXE is unlikely to sell for less than 2x book. JPMorgan is rumored to be advising IXE, but declines comment. JPMorgan advised IXE on its bancassurance alliance with RSA Mexico earlier this year.