Sunday, Apr 14, 2024
logo
Update At 14:00    USD/EUR 0,94  ↑+0.0074        USD/JPY 153,24  ↑+0.037        USD/KRW 1.379,70  ↑+13.38        EUR/JPY 163,14  ↓-1.196        Crude Oil 90,21  ↑+0.47        Asia Dow 3.813,65  ↓-21.71        TSE 1.798,50  ↓-21.5        Japan: Nikkei 225 39.523,55  ↑+80.92        S. Korea: KOSPI 2.681,82  ↓-25.14        China: Shanghai Composite 3.019,47  ↓-14.7729        Hong Kong: Hang Seng 16.721,69  ↓-373.34        Singapore: Straits Times 3,24  ↓-0.009        DJIA 22,29  ↓-0.29        Nasdaq Composite 16.175,09  ↓-267.103        S&P 500 5.123,41  ↓-75.65        Russell 2000 2.003,17  ↓-39.4296        Stoxx Euro 50 4.955,01  ↓-11.67        Stoxx Europe 600 505,25  ↑+0.7        Germany: DAX 17.930,32  ↓-24.16        UK: FTSE 100 7.995,58  ↑+71.78        Spain: IBEX 35 10.686,00  ↑+36.2        France: CAC 40 8.010,83  ↓-12.91        

A ripe market for banking and finance

Article - April 30, 2012
Colombia’s fast growing middle-class, sound politics, and low penetration of the banking industry makes it a preferred destination for international banks that are looking to expand their operations in Latin America
JOSÉ DARÍO URIBE, COLOMBIA’S CENTRAL BANK

José Darío Uribe, Colombia’s Central Bank (Banco de la República) Chief, is quite confident regarding the economic momentum the country is going through, specially considering the ratification of the FTA. “The Free Trade Agreement increases competition, opens a range of financial services, generates more stability in game rules, and even grants access not only from U.S. financial bodies to Colombia, but also from Colombia to the U.S.,” he says.

According to María Mercedes Cuéllar, President of the Colombian Banking Association, only six out of 10 Colombians have access to at least one banking product. This represents a great opportunity for the banking industry that is looking forward to offering innovative products and services that cater the needs of those Colombians that are still in the informal economy.

Colombia has some unique features that differentiate it from others in the region such as Mexico. In Colombia the biggest banks are owned and run by Colombians. Bancolombia is the largest one followed by Banco de Bogotá and Davivienda. All three banks have reached such a size that is making them look for opportunities beyond Colombia’s borders. “The Colombian economy is increasingly getting involved in the global economy; not only through trade, but also through investment,” says Mr. Uribe.

Proof of that is Davivienda, which shook the market when it announced the purchase of HSBC assets in Central America and when Bancolombia made one of the biggest placements of shares in the history of the country.

The local market is quite competitive, and those banks that don’t belong to a mayor financial group need to look for a profitable niche market that will allow them to grow sustainably.  This is the case of Helm Bank, led by Ms. Carmiña Ferro, which brought a breath of fresh air to the market. With an innovative concept and a focus on the corporate and high-end customers, Helm offers some of the best services in the industry. Helm Bank has a very strong brand perception and has been recognized as the bank with the highest customer satisfaction level.

In addition, Ms. Ferro is keen of preserving the environment while doing business. “Through concrete plans, we have focused on nursing environmental development mainly, thus reducing the carbon footprint we have generated ourselves as an organization,” she says.

The FTA and the investment grade achieved last year work as magnets for international investors. For instance, there are still quite solid rumors that indicate that Itau, Latin America’s most profitable bank, will soon make a move and come to compete in Colombia.  Ms. Cuéllar, the Banking Association Chief, supports the entrance of foreign banks and says that: “The idea is to eliminate barriers to facilitate the entrance of others, so that we reach more specialized banking.”

All in all, Colombia’s banking sector may become a role model to be followed by those economies that struggled through the 2007/08 recession. Furthermore, investors should really considering Colombian banks as a safe way to make a profit given the current situation and the internationalization process some of them are going through.

  1 COMMENT



Carolyn Mossman
03/09/2013  |  14:19
100% of 1

good to see theres new regulation for the asset management (fiduciary) industry - well needed!