Growth formula: foreign superbanks look for new opportunities as free trade kicks into high gear

Latin Trade, Sept, 2005 by Ricardo Castillo

Since 1998, the bank's strategies have been to take full advantage of expanding trade and investments that come to the region as a result of free trade deals signed with the United States. Banistmo also moved into Colombia, where it bought 17 branches of Lloyd's TSB Bank. These acquisitions, in addition to similar actions taken in Central America itself, have made the bank the regional leader in assets, which last year exceeded $4.85 billion. In the region, including Colombia, Banistmo has 141 branches and more than 3,000 employees.

Nevertheless, the big challenge for Banistmo will continue to be the battle to overcome a weak brand, since in each country it operates under different names. The bank's main job for the coming months will be consolidating the brand and integrating more fully its offerings. Local partners. For GE, whose emerging-markets investments generated just 10% of total business in the past decade, the choice of local partners is tremendously important. Much of the risk facing GE comes with understanding the consumer and operating dynamics in each country. That will be the task of BAC's executives, according to BAC CEO Ernesto Castegnaro. What has changed, he says, is that GE will have its own people on the board at BAC and will be able to provide technology and new services. Yet Castegnaro believes that he will be able to sustain the same success experienced by his organization of having grown organically, with investments in technology and human capital. "We have been here for 50 years, and we know how to handle ourselves," he says. "For example, we have one of the best-run back offices in the sector, and we have an impressive range of well-hired managers and executives. Our entire system is interconnected among the countries, which allows our range of products to be a single, solid platform."

Cuscatlan, which along with Banistmo is among the region's titans, as well as its most aggressive in terms of expansion, is ready to strengthen its brand through new acquisitions and alliances. The Salvadoran company recently unveiled its new partner, Grupo Popular, which it says will allow for an expansion into the Caribbean and the United States. It's part of a double offensive by Cuscatlan, says Mauricio Samayoa, the group's president. On the one hand, it provides a way to continue to position the bank in Central America, where, he says, "there's still much left to do," while at the same time attack the business of Salvadorans who send money home from the United States in the form of remittances.

Cuscatlan's regional structure has made it flexible enough to adapt a broad corporate vision to the specific market conditions in which it operates. "This allows the local groups to have their own strategic focus. But the capital moves with greater fluidity; many industries are consolidating," he says. "Everyone in the region is at this stage, and we want to be a part of that."

RICARDO CASTILLO * MANAGUA