UPDATE 1-Banorte to buy BBVA pension fund in $1.6 bln deal

MEXICO CITY Tue Nov 27, 2012 5:25pm EST

MEXICO CITY Nov 27 (Reuters) - Banorte, which runs one of Mexico's biggest financial groups, said on Tuesday it has reached a deal to buy a local pension fund owned by Spain's BBVA in a deal valued at $1.6 billion.

The cost of the acquisition of the Bancomer pension fund will be split in half between Banorte and the Mexican Social Security Institute, a state run health organization. The two co-own the Afore XXI Banorte pension fund in Mexico.

Earlier this year, Banorte's chairman and former head of Mexico's central bank, Guillermo Ortiz, told Reuters that the group was also looking at BBVA's pension funds in Colombia and Peru.

Banorte, Mexico's No. 4 bank by assets, has been actively strengthening its operations in the country. Last year, the group bought boutique bank Ixe, which gave it access to Ixe's portfolio of wealthy clients.

The group's chairman emeritus, Roberto Gonzalez Barrera, 81, died in August from complications related to pancreatic cancer. The bank said his heirs remain major shareholders after his passing.

Banorte shares ended up 0.14 percent at 74.11 pesos on Tuesday.