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Guatemala’s 24-bank financial sector is undergoing a wave of consolidation as local banks prepare for foreign competition, vying for increased business under the Central American Free Trade Agreement. Leading that trend is the country’s top bank, Banco Industrial, which snapped up sixth-placed Banco de Occidente for $137 million in March to give it a 25% market share and a big lead over Banco G&T Continental, the second-largest bank in central America’s biggest economy. That purchase also made Industrial’s parent company, Corporación BI, the third-largest banking group in Central America, with over $3.7 billion in assets. Industrial now plans to buy out minority shareholders in Banco de Occidente with a share swap and Industrial’s international banking director, Luis Prado, has not ruled out another acquisition in 2006. Banco Industrial reported a 28% increase in 2005 earnings on the back of strong lending revenues, ahead of G&T’s flat results for the year.