Grupo Financiero Banorte SAB has started talks to merge its pension fund with Afore XXI, the fund half-owned by the Mexican Social Security Institute.
The combined assets of Banorte’s and Afore XXI’s pension funds totaled 270 billion pesos ($21.6 billion) at the end of July, according to data on the website of Consar, the government pension regulator. The combined entity would represent the fifth-largest AFORE, as pension funds in Mexico are known.
A merger of the pension funds “would allow for the creation of important cost synergies and income that would benefit the institutions and their clients,” according to a Banorte statement released after the close of trading on Mexico’s stock exchange Wednesday.
The combined AFORE would be Mexico’s largest by number of accounts, the Banorte statement said. The merger would be subject to approval from Prudential Financial, which owns the other 50% of Afore XXI, and Assicurazioni Generali, which holds a 49% stake in Banorte’s pension fund.
Mexico’s 15 AFOREs had 1.46 trillion pesos of total assets as of June 30, according to Consar.
A representative for Banorte could not be reached for comment after normal business hours.