Colombia's Bancolombia to issue ADRs

MEDELLIN (Reuters) - Colombia largest bank, Bancolombia BICp1.CN(CIB.N) said on Thursday it plans to issue ADR shares on the New York Stock Exchange with a preferential dividend to provide more liquidity.

Bancolombia President Jorge Londono told Reuters Latin American Investment Summit in Colombia that the new issue would be for up to 60 million shares as part of its American Depositary Receipts or ADR shares.

"We still don't have the program defined, but we will issue shares as we have done in the past and they will be shares linked to our ADR program," Londono told Reuters in Medellin.

The shares will in part finance the purchase of Grupo Financiero Banagricola of El Salvador, which is one of the first steps in the Colombian bank's moves overseas.

Bancolombia is a leading unit of the country's largest conglomerate Grupo Empresarial Antioqueno or GEA. The bank's previously announced purchase of Banagricola will mean an investment of $900 million.

Londono said the Banagricola deal will serve as a platform for expansion into the Central American market to generate more earnings, which reached $270 million in 2006.

Colombian firms see Central America as a bridge into the Mexican market and the southern part of the United States as they look to benefit from a U.S.-Colombian free trade the government hopes will be ratified soon.

The executive dismissed rumors that a possible sale of Bancolombia to Citibank (C.N) and said its expansion would not require any partners.

"While we have executives with imagination, deeply involved in their work, who enjoy their work, then this bank will have opportunities to expand without looking for partners," Londono said.