Federal regulators approved the sale of Miami-based City National Bank of Florida to a major Chilean bank on Monday — two years after the $882.8 million deal originally closed.
The buyer is Empresas Juan Yarur SpA, of Santiago, Chile, which is the county’s fourth largest banking organization and has $36.8 billion in assets. The Chilean holding company controls Banco de Credito e Inversiones, which has an office in Miami and will run City National.
$882.8 millionSales price for City National Bank of Florida
“This acquisition puts City National Bank in a unique and enviable position, making us a community bank with global reach backed by one of the strongest and most respected banks in Latin America,” Jorge Gonzalez, president and chief executive of City National, said in a statement.
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The Federal Reserve Board said that before it could approve the deal, it needed the Chilean holding company to restructure so that it would be more transparent to local banking regulators. Previously, the company was part of a “complex structure of family-affiliated nonbank companies,” meaning that it was not subject to direct supervision from Chile’s banking authorities, according to the Fed.
It has now reorganized to become a shell holding company for the bank and agreed to open its books to both local regulators and the Fed. The deal will be finalized within 30 days.
“We take great pride in being the first Chilean bank to acquire a bank in the U.S., as it signals a high level of confidence not only in our top-level management, but also in Chile’s financial system, especially given the extensive regulatory reform implemented on the heels of the Dodd-Frank Act,” Eugenio Von Chrismar, chairman of Banco Credito e Inversiones, said in a statement.
Ken Thomas, a local banking analyst, said that the Chilean bank was a strong institution likely to withstand future market turmoil.
City National had previously been owned by Bankia, Spain’s fourth biggest lender. Bankia was bailed out by the government of Spain and the European Union during the recession and as part of the deal had to sell its foreign and non-core assets. The bank was founded by Leonard Abess Sr. and sold in 2008 by his son philanthropist Leonard Abess Jr. for $927 million.
Abess Jr. made national headlines when he split $60 million of the proceeds among about 470 current and former bank employees. The move earned him an invitation to the State of the Union and shout-out during the speech from President Barack Obama.
Thomas also said City National has strong ratings from federal regulators for lending in less wealthy communities.
“They’ll serve Hialeah, they’ll serve Kendall, they’ll serve Overtown and Liberty City,” Thomas said. “They don’t just exclusively serve the rich.”
The Miami bank has $5.6 billion in assets and operates 26 branches in Miami-Dade, Broward, Palm Beach and Orange counties.