Banco Azul de El Salvador

Debt : April 2024

BIO has granted a USD 15 M loan to Banco Azul de El Salvador, a commercial bank in El Salvador.

Amount

$ 15,000,000.00

Type of investment

Debt

Development impacts

Local economic growth
Gender

Beneficiary locations

Latin America and Caribbean: El Salvador

Investment field

Financial Institutions

Activity

KK.64.190 Commercial banking

Organisation

Banco Azul de El Salvador

Website

https://www.bancoazul.com/

Domicile

El Salvador

Banco Azul is one of 12 commercial banks in El Salvador, founded in 2015 with the mission to create a Salvadorian-owned bank, after the last bank with Salvadorian shareholding had been acquired by Colombian investors. The bank offers loans to corporate, SME and retail clients, takes deposits and is regulated by the Salvadoran superintendence. It forms part of the bigger group “Inversiones Financieras Grupo Azul” which holds the bank, two insurance businesses, and a brokering business. In 2022, Grupo Azul acquired the Banco G&T Continental and integrated it into Banco Azul to strengthen the bank’s position in the market.

Development impacts

Local economic growth
Increase SMEs access to financial products and services by supporting Banco Azul to grow its SME portfolio.

Support the mobilization of local savings by offering a range of savings products and competitive interest rates, thereby diversifying BA's sources of funding, channelling these to local SMEs clients and potentially strengthening risk mitigation and financial security at their level.

Empower businesses with knowledge and expertise by offering non-financial services to SME clients - such as TA, training for entrepreneurs and other guidance, going beyond traditional banking with a holistic approach that contributes to overall businesses' growth and sustainability.
Gender
2X eligible based on fulfilment of 3 criteria: leadership (40% of senior management), employment (majority of women workers and several quality indicators) and consumption (with a women focused programme involving more than 700 clients with dedicated TA and training); while diversity and inclusion are essential aspects of Banco Azul's HR as well as Business management.

E&S Impact

Banco Azul will incorporate IFC Performance Standards assessment for big transactions (>USD 5 M and 36 months tenor) which will improve their E&S and reputational risk management. Banco Azul will also develop a Climate Change Strategy to better tackle the future climate change risk.

Situation at the time of investment

Banco Azul has an effective ESMS and sufficient E&S capacity to manage E&S risk in their portfolio. However, there is a need to improve the assessment of bigger clients in accordance with IFC PS. Banco Azul has excellent HR policies and practices.

Risk Category: B