Foreign banks in Latin America: HSBC builds as others suffer


Chloe Hayward
Published on:

Not so long ago, HSBC’s Latin American debt franchise could have been described as promising but limited. That’s no longer the case. As some of its rivals struggle to maintain their position in the region, the UK bank is growing new relationships fast. Unlike many competitors, HSBC is still able to offer a full range of services, including writing a cheque when needed. "In the last couple of months, a lot of new clients have been knocking on the door that weren’t before – our overall pipeline for 2009 is now stronger than it was in 2008," says Gerardo Mato, managing director, head of global capital markets and banking, Americas.

Even local bankers in Brazil acknowledge HSBC’s growing prominence. "HSBC is taking advantage of these tough times," says one. "Competitors are suffering and this is giving them the chance to position themselves among important corporate names." The bank was the lead for the last debenture issued in Brazil by water service provider Sabesp in early November. The bank has also helped to bring six-month commercial paper issues to market for telecoms company Embratel, for R$400 million ($166.6 million), and for ISA, an electrical company, for R$200 million in December.

The bank is reaping the rewards of growing its local team in Brazil earlier this year after it hired Antonio Oliveiro Neto from Société Générale, in July.

Other foreign banks are cutting their Latin teams, with JPMorgan among the most prominent. Cynthia Powell, head of emerging market syndicate; Mark Tuttle, head of Latin American debt capital markets; and Ricardo Rubio, head of Latin American loan syndication have all been axed, along with at least four other senior members of the regional team. In particular, Powell, a Chase Manhattan employee who came to JPMorgan following the two banks’ merger in 2000, is a well-known name in the region and rivals suggest that without her and Tuttle, JPMorgan will struggle.

In November, Credit Suisse cut at least four people from its team in Brazil.