PRESIDENT, HSBC MÉXICO
2006 FINANCIER OF THE YEAR
The most important decision of the last 20 years in Latin America in the opinion of Luis Peña Kegel, president of HSBC Mexico, was the merger of the Brazilian Banks Itaú and Unibanco. He also thinks the purchase of Bancomer by BBVA in 2000 and of Banamex by Citi in 2001 are in that category too, he said in an interview with Latin Trade. The two latter transactions are a good example of the trend toward internationalization of the Latin American financial system. The effect was very profound and especially in Mexico, where most of the banks are in foreign hands.
Another very important element during that time was the design of financial policy to rescue savers during the crisis. “In 1994-95 they managed to defend the savers without letting the financial sector sink into bankruptcy,” he said. They rescued every one of the investors even though the banks’ shareholders at that time lost all of their capital. That strategy of intervention was learned and perfected in the rest of the region after the first Mexican problems. Over the last 25 years, Latin American had 31 financial crises.
One aspect, that in Luis Peña’s opinion has also changed drastically during the past two decades, has been risk management. Today, the difficulties associated with credit operations and the administration of liquidity are much better understood, and there are specialized areas in the banks. It’s substantially more sophisticated than it was at the beginning of the nineties.
Lastly, another great transformation in the banking system is on the customer side. On one hand, CRM programs enable financial entities to take a very sharp X-ray and have a more precise view of the customers to understand their needs and their behavior. On the other, there have been advances that make the payment system more efficient. “The check is being used less and less, and I like that,” he said. But in addition, the connection of payments to cellular telephones or through automatic tellers has meant that the bank branches are losing relevance.
With those transformations, the future of banking in the region would appear, as if it was seen from the office of Luis Peña, in a building close to the Monument of Independence in Mexico City: with a few clouds (and there always are some), but mostly clear and, why not say it? Sunny.
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