It is not much fun being a banker in Argentina. But while it is pretty much universally tough for everyone, spare a thought for individuals like Juan Parma, HSBC’s chief executive Argentina and head of wealth and personal banking America. Because, while Parma’s peers in Argentine banks face many of the same challenges he does, at least for them the whole organization is still focused on the country. HSBC’s global leadership could be forgiven for skipping over the country in global strategy meetings.
While some leaders in a similar position might be tempted to mark time, Parma has implemented an impressive growth strategy in the small and medium-sized enterprise segment, which not only helps to build team effectiveness and morale but also places the bank in good stead when and if the country gives itself a chance to thrive.
SMEs play a big role in the Argentine economy, producing about 45% of GDP and employing about 70% of the working population. They also face many operational and financing challenges, given the weak economy and a strictly regulated financial sector.
In the past year, HSBC Argentina has reinvented its product suite for SMEs to improve the value proposition for the segment. The bank has launched a fusion product of personal and commercial services for sole traders that comes with individual relationship managers who can deliver customized advice. For merchants, the bank has designed an exclusive proposition for SMEs to maximize their monthly turnover – critical in a very high inflationary environment – with HSBC offering discount and instalments and (again) specialized relationship managers.
Perhaps as important as the improvement in products and services is the fact that HSBC Argentina is putting valuable hard-currency lending behind its SME expansion strategy. Rapid credit growth numbers are nothing new in Argentina given the impact of inflation on financial reporting, but HSBC Argentina’s SME lending shows impressive dollar-denominated growth. In 2022, the bank’s US dollar SME credit portfolio grew 15%, and is up 81.4% since the bank’s commitment to grow its SME business really began two years ago.
Perhaps as important as the improvement in products and services is the fact that HSBC Argentina is putting valuable hard-currency lending behind its SME expansion strategy
On the other side of the balance sheet, the bank has managed to grow its dollar deposits from the SME sector by 7.7% and 32.8% in 2022 and 2021 respectively. Meanwhile, over those two years, the number of the bank’s SME customers has grown by 47.7% to 65,000.
And it is not just credit that has been driving this growth. HSBC Argentina has been building its digital services, sustainability finance advisory capacity and cross-border assistance to the sector that the bank clearly thinks will differentiate its Argentine business in the years to come.
