Bank consolidation in Central America

The process of consolidating banking services in Central America is linked to the entrance of international banks into the region and the potential for attracting new customers to use banking services.

Thursday, July 24, 2008

In the last two years, there's been a change in the way consolidation takes place.
Before 2006, mergers and acquisitions mainly took place within the region when a bank ran into financial problems. Banking groups also worked out special arrangements and local alliances that didn't necessarily involve a change of ownership.
Since 2007, several international banks have entered the marketplace, and these tend to buy the biggest banks in a market. In some countries international banks own up to 90 percent of the banking shares.
Once established in a country, the big internationals promote the entry of new customers into the banking system for the first time, a process known in Spanish as "bancarización."
One of the vehicles for this is to establish micro-credit systems to attract small businesses as new customers, sometimes on a regional scale.

More on this topic

Panama Leads Region in Banking

January 2011

Panama ranks second in Latin America in number of bank branches and ATMs per 100,000 people with 90.28, surpassed only by Brazil with 99.37.

"Banking, or access to banking services, plays an important role in economic development of countries and in reducing poverty while promoting income distribution."

Suggestion that remittances on the Isthmus be sent through the banking system.

August 2008

Manuel Orozco, coordinator for the Inter-American Dialogue Development and Remittances Program, recommended to lawmakers from Central America and the Dominican Republic that they encourage that the banking system be used to send family remittances.

Orozco pointed out that a Central American immigrant sends his family between $3,000 and $3,500 on average per year.

HSBC completes takeover of Banistmo in Panama

July 2008

HSBC Bank Panama has presented to regulatory authorities a solicitude for completion of a merger with Panama's Primer Banco del Istmo (Banismo).

HSBC began negotiations for a takeover of Banistmo in July 2006.
It has concluded, or is in process of concluding, arrangements with Banismo's operations in Colombia, Costa Rica, El Salvador, Honduras, Nicaragua, and the Bahamas.

Assets of Central American banks growing by US$9 billion a year

June 2008

The assets of Central America's banks are growing by more than US$9 billion a year and the presence of foreign capital is growing in the sector.

At the end of last year, the total assets of the region's 76 banks came to US$58.8 billion, a 16.4 percent increase on 2006, and 47 of them were foreign controlled or had foreign participation in their capital.

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