Foreign banks look for key in Guatemala
Next year a handful of top international banks might expand operations into Guatemala, according to analysts and bankers.
"The zero tolerance policy has definitely made Guatemala a lot more attractive"
The country is a key missing link in international banks’ plans for a pan-regional central American presence. A year after two Guatemalan banks closed, causing a meltdown in confidence in the banking system, it appears that the country’s financial institutions have finally learnt their lesson.
Alejandro Garcia of Fitch says: "The regulators realized, after the crisis, that they had to be more proactive than just reactive to give people the peace of mind they wanted in the banking system." Early last year the regulators issued new minimum deposit requirements and initiated a strict zero tolerance policy. These moves have not only set the stage for bank consolidation – which was long overdue – but have also improved transparency. "A few years ago the international banks were concerned about the regulatory environment in Guatemala but in the last year the zero tolerance policy has definitely made the country a lot more attractive to them," says Franco Uccelli, an emerging markets analyst at Bear Stearns.
With these changes afoot, leading global banks are taking a serious look at Guatemala.