LATAM: Foreign banks open a second front
Further consolidation in Latin America’s banking industry is expected on the back of strong economic growth and financial stability. Foreign banks, which were active acquirers in the 1990s, are expected to play a big part in this. Leticia Lozano reports.
THE NUMBER OF products on offer at Peru’s top bank, Banco de Crédito del Perú, is overwhelming, as are the queues of people eager to buy them. Bustling retail branches sell internet banking and small business loans, financing for auto purchase and university education, credit cards and mortgages, and life and health insurance.
With BCP’s customer base growing steadily, it is the kind of business that helped Peru’s 12-bank system double its profits in 2005 to $430 million, a small market but one that underscores Latin America’s huge potential. Unsurprisingly then, European and north American banks want more of the action. “This is a fast-developing market and what keeps us ahead is our client focus,” says Aida Klessman, BCP’s head of investor relations. “But you can never be certain we won’t be taken over by a foreign challenger.”
Canada’s Scotiabank was among the latest foreign banks to swoop in on the region, buying Peru’s profitable but debt-laden Banco Wiese Sudameris from Italy’s Banca Intesa late last year, adding to the banks in Mexico, the Dominican Republic and El Salvador already in its portfolio.