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Rodrigo Zamora, head of corporate banking at Lafise in Nicaragua |
Banking in Central America is becoming a regional affair. The exit of Citi and HSBC has opened the door for the Colombian banks, which required little invitation to enter enthusiastically.
Locals report the Colombians are being more aggressive in engaging with the domestic competition than the internationals that preceded them. This, in turn, is pressurizing local franchises in the region – and the leading banks in the key Central American jurisdictions – to react.
With analysts predicting further consolidation to come – this time from below as money laundering regulations make small banks’ business models untenable – the search for scale and strength from improved profitability is on in earnest.
Colombian businesses have long viewed Central America as their backyard but it wasn’t until 2010, when GE sold the BAC-Credomatic franchise it had bought in stages – with the first 49.9% being acquired in 2005 from the Carlos Pella family – that the financial service industry began to acquire Central American banks.
The first step in what was to become a trend was established when GE sold to Grupo Aval, which owns the Banco de Bogotá retail bank in Colombia, in a signal of intent from Aval to expand throughout the region.
