Latin America: Banks get the measure of a regional presence
As Latin America’s local markets develop strongly, banks are still figuring how best to cover them. Should they buy a target, grow organically or even consider a local tie-up? And which markets should they be present in? Sudip Roy reports.
ASK ANY INVESTMENT bank how they view their strategy towards Latin America and the answer is usually the same: we are a pan-regional player, they say. Delve a bit deeper, though, and it’s clear that, with one or two exceptions, no bank has a critical mass across the entire region. Yet as the development of Latin America’s local markets kicks on apace, the leading houses are assessing how best to tackle that growth.
Over the past 12 months, there have been several examples of banks in the region trying to position themselves to take advantage of the budding financial opportunities.
Some have gone for the quick fix of an acquisition. Others are building organically in selected markets. And some are trying to serenade local niche players into some sort of tie-up or informal partnership. Whichever route banks are taking, the region is hitting their radar screens a lot more forcefully than before. "There’s a lot more conviction in boardrooms to invest in Latin America, especially given the growing importance of Brazil and Mexico," says Guillermo Jasson, Latin American regional head and head of investment banking at Morgan Stanley.
"Banks that are really committed to the region will have to set up locally, hire people locally and get local licences," says Pedro Chomnalez, head of Latin American investment banking at Credit Suisse.