"No-one is sure yet to what extent Latin America will be affected by the Asian crisis but so far it's resisted surprisingly well," says George Cardona, general manager, international, at Midland Bank. "Every time Asia takes a drop so do the Latin American markets, but the impact has not been as serious as in Asia. The majority of Latin American countries look set for GDP growth of about 5%. The governments in most countries are doing all the right things. They are privatizing, and this includes the sale of banks to the private sector. They are bringing government debt under control, reducing inflation and stabilizing their currencies."
It's an environment increasingly attractive to foreign banks and not just those that have been established there for decades. Foreign banks, notably Citibank, Chase and BankBoston, have been in Latin America since the early years of the century, but in the past three years an acquisition spree by Spain's big banks and then other foreign institutions has changed the competitive landscape. Just last year HSBC Holdings, Midland's parent company, spent nearly $2 billion in Latin America. It acquired 100% of Brazil's Bamerindus and the Roberts Group in Argentina, as well as minority stakes in banks in Peru, Mexico and Chile.