It has been announced that from March Costa Rican banks will be able to allow their customers access to the Central Interconnected System of Payments.
From a press release by the Central Bank of Costa Rica:
A new service has been developed called 'Pagos al Exterior (PEX)' (Foreign Payments), which will allow individuals and legal persons resident in the country, to send and receive transfers of funds to and from accounts in a financial institution located in El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic. The aim of the service is to provide a fast and secure technology platform for processing commercial payments and remittances in the region.
With amounts from $5 to over $50,000, people bought 1412 shares in Banco Azul which will begin operations in 2014.
This amount makes up the $60 million needed for the start of operations by the entity which was formed last September with a capital of $20 million. Of the 1,412 shareholders 97% are natural persons and 3% are companies.
"... When we announced the creation of Banco Azul El Salvador, on September 23rd, I said that one of our market differentiators, would be to convert ourselves into an attractive investment instrument for Salvadorans through the possibility of becoming shareholders," said Carlos Araujo, president of the institution.
The new bank, with a capital of $20 million, will begin operations in the second quarter of 2014 in the Salvadoran plaza.
On Monday September 23, a group of Salvadoran businessmen signed an act of constitution for Banco Azul de El Salvador, which is chaired by Carlos Enrique Araujo and consists of 100% of shareholders from that country.
During its first year of operations, Banco Azul intends to open 10 branches, 7 in San Salvador and another 3 in the interior of the country.
Procedures and requirements. Specifications, terms and bans on financial correspondents.
From a statement from the Central Reserve Bank:
Standards approved for providing services through financial correspondents
Banks, cooperative banks and savings and loan companies can now carry out operations and provide services through financial correspondents acting on their behalf, which has been approved by the Technical Rules for Making and Giving Services Operations by Means of Financial Correspondents Standards Committee of the Central Reserve Bank.
Banco Azul, which is to join the 10 other privately owned banks, is characterized by having Salvadorans shareholders.
The Superintendency of the Financial System is considering the application of a Salvadoran entity which, if there are no objections, will proceed to incorporate the company Banco Azul de El Salvador S.A. in August.
Eleconomista.net reports: "Among the founders of Banco Azul are: Carlos Enrique Araujo, Fernando Alfredo de la Cruz Pacas, Manuel Rodríguez Harrison, Raúl Navarrete Belismelis, Luis Álvarez Prunera and Óscar Armando Rodríguez, who make up 87.95% of the shareholding. "
The Federation of Credit Unions and Workers' Banks is to open 200 points of service in shops, pharmacies, and other retail areas.
With an investment of $5 million in technology, Fedecrédito next month will open 70 'Fede Punto Vecinos' (Fede Point Neighbors), out of a total of 200 non-banking correspondents which it plans to have by late 2013.
The aim of the Federation of Credit Unions and Workers' Banks (Fedecrédito) is to set up these Non-Banking Correspondents (CNB's by their initials in Spanish) in convenience stores, shops, pharmacies, hardware stores and other places where people can conduct transactions such as withdrawing money, collecting remittances and making loan payments, said Macario Armando Rosales, president of Fedecrédito.
HSBC Latin America Holdings Limited, a wholly owned subsidiary of HSBC Holdings plc, has entered into an agreement to sell HSBC Bank (Panama) SA to Bancolombia SA for a total consideration of US$2.1bn in cash.
HSBC Latin America Holdings (UK) Limited, a wholly owned subsidiary of HSBC Holdings plc (“HSBC”), has entered into an agreement to sell HSBC Bank (Panama) SA to Bancolombia SA (“Bancolombia”) for a total consideration of US$2.1bn in cash, based upon estimated net asset value at completion of US$700m. The transaction is subject to regulatory approvals and other conditions and is expected to complete by the third quarter of 2013.
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."
The article by Ricardo J. Gonzalez in Capital.com.pa discusses the results of the report of the Latin American Banking Federation, highlighting the causes for the high rate of banks in Panama, and "the important relationship between financial strength and economic growth."
Central American financial integration is progressing fast fueled by private sector belief that regionalization is the way to more profitable business.
Jorge Barboza, economist from the Executive Secretariat of the Central American Monetary Council (known as SECMCA in Spanish), analyzes progress and remaining actions to be taken toward Central American financial supervision and regulation.
Guatemala's "people's banks", that lend to the likes of small shopkeepers, aim to take their business model to the rest of Central America.
G&T Continental and Banco Industrial (BI) run mini-branches where low-income customers can cash cheques, open savings accounts and pay public-service bills.
Boosted by their success, each of the banks is aiming to reach 2,000 branches by the end of the year, some of them in Honduras, Nicaragua and El Salvador.
In an effort to expand their market, insurers in El Salvador are weighing the possibility of following the example of their counterparts in Mexico who offer micro-policies that provide benefits of as much as US$8,000 for a one-dollar premium.
"This type of insurance is very interesting because it brings our industry's benefits to poor people who don't figure on company payrolls," said Raúl Betancourt, executive director of the Salvadoran Insurers' Association (Ases).
El Salvador's banking system exhibited moderate growth in 2007, primarily aided by a continued increase in consumer loans and mortgages, as well as faster commercial loan growth, according to a Fitch special report published today, titled 'Salvadoran Banks: Annual Review and Outlook'.
In 2007, El Salvadoran banks' total assets expanded by 11.4% in nominal terms (5.8% in real terms), while overall net profits declined by 12.4%, due to higher provisions. Additionally, non-performing loans increased to 2.1% of total loans as of December 2007 (versus 1.9% in 2006), despite significant non-performing loans throughout 2007. However, loan loss reserves appear to be adequate and relatively stable in terms of both non-performing loans (120%) and total loans (2.5%).