Financial results

HSBC operations in Lat-Am see
profits fall

HSBC’s Latin American operations
recorded pre-tax profit of $1.1bn in 2009, down 33% on 2008 due to
tougher economic conditions and higher loan impairment charges
across the region.

In its personal financial services
business, loan impairment charges rose by 12% to $2bn, with
increased delinquencies in credit cards, mortgages, vehicle finance
and payroll loans due to higher unemployment.

Net loans and advances to customers
in the region were up 12.6% to $47.6bn as of 31 December 2009,
compared to the year-ago period.

HSBC said it continued to lower the
higher risk personal lending and credit card portfolios where it
had seen higher delinquency in 2008.

HSBC has also reduced the number of
consumer finance and retail branches in Mexico and Brazil and
focused on opportunities in its ‘Premier’ affluent segment, which
was particularly successful in Brazil.

 

Strategy and
trends

Cielo to launch deposit
programme

Visa-affiliated payment card
processor Cielo of Brazil is to launch an American
depositary receipt (ADR) programme
and has appointed Deutsche
Bank as the depositary bank.

Cielo has the largest domestic
coverage in the Brazilian merchant acquiring and payment processing
industry, with approximately 1.7m affiliated merchants, present in
almost 98 percent of Brazilian municipalities.

“The ADR programme represents yet
another alternative for investors and increases Cielo’s visibility
outside Brazil,” said Romulo De Mello Dias, CEO of Cielo.

Akbar Poonawala, head of global
equity services at Deutsche Bank said: “We are very pleased to
welcome Cielo as a Deutsche Bank depositary receipts client. We
will work with the company to ensure its ADR holders receive the
highest level of service.”

 

Strategy and
trends

Wal-Mart aims to expand in
Mexico

The Mexican
branch of US retail giant Wal-Mart is aiming to expand its bank
service offering in Mexico
to launch all-purpose credit cards,
having initially launched savings and current accounts. Wal-Mart
launched its bank in 2008 in a bid to offer basic financial
services to its customers, many of whom are unbanked.

Having launched 275 outlets in
Mexico last year, Wal-Mart is also planning to open 300 branches in
Mexico during 2010, 186 of which will be based on the express
supermarket model launched in 2009.

The small supermarkets will be
located in densely populated areas, and Wal-Mart will also open
more than 160 in-store bank branches. It also plans capital
expenditure of MXP12.5bn ($983m) as part of its expansion plan.

 

Strategy and
trends

Itaú Unibanco looks to expand
internationally

Brazil’s largest private bank, Itaú
Unibanco, formed from the merger of Itaú and Unibanco in 2009,
plans to expand internationally but will only do so after
completing its integration sometime in mid-2011.

It is also looking at organic
expansion within Brazil and expects to extend its credit portfolio
by around 20 percent in 2010 from BRL278.4bn ($155.7bn) at the end
of 2009.

According to the bank, it plans to
look at expansion in Latin America before looking at the overseas
markets for possible acquisitions.

Itaú Unibanco, with assets of
BRL608bn, already has limited operations in Argentina, Chile,
Uruguay and Paraguay.

 

Strategy and
trends

Majority of Chilean banks
operating after earthquake

According to Chile’s banking
regulator SBIF, most of the country’s bank branches are returning
to normal following the recent earthquake.

Due to disrupted power supplies and
structural damage in some parts of the country, many bank branches
remain closed, but the SBIF said that 73% of all bank branches are
open and 72% of ATMs are operational.

However, most operating ATMs are
only dispensing CLP10,000 ($19.40) in the smallest denomination
bills of CLP1,000. In the hardest-hit regions of Maule and Bio Bio,
only 43% and 30% of ATMs are operational.

Some banks have responded by
reducing minimum credit card payments to zero in March and offering
interest-free instalments for new credit card purchases to help
residents affected by the earthquake.

 

Strategy and
trends

RegaloCard expands in Guatemala

Mobile payment solution provider
and prepaid card specialist RegaloCard has announced that
Guatemalan toy retailer Jugeton has joined its growing mobile
payments network. Guatemala is one of the largest money transfer
markets in Latin America with more than $4.1bn sent in 2008.

“Jugeton is the Toys ‘R’ US of
Guatemala and is the only big-box toy retailer in the country. We
continue to see that the best brands in Latin America are joining
the RegaloCard mobile payments network, which is leading to the
rapid growth we are experiencing in the number of locations in
countries we serve”, said Gregory Keough chairman and CEO of
RegaloCard.

RegaloCard currently operates a
mobile payment platform that allows customers to purchase a prepaid
gift card that they can send to recipients instantly. The service
works with any mobile phone and through all carriers.

 

Strategy and
trends

Chilean credit card
transactions rose 19% in Q409

Chile’s banking regulator SBIF said
that in the fourth quarter of 2009, credit card transactions,
including cash advances, purchases and service fees, rose 19
percent to CLP1.07bn compared to the same period in 2008.

During the fourth quarter of 2009,
Visa was the most widely-used credit card in Chile, followed
closely by MasterCard, with American Express and Diners Club,
according to SBIF.

Transactions with MasterCard
totaled CLP529.64bn ($1.03bn), followed by Visa at CLP481.60bn,
American Express at CLP38.60bn and Diners Club with CLP18.40bn.

In 2009, Chile fell into its first
recession in more than a decade, with gross domestic product likely
contracting about 1.9 percent from 2008. GDP, however, is expected
to recover to grow 4.5% to 5.5% in 2010 as a result of aggressive
monetary policy, strong fiscal stimulus and recovering
international copper prices.

Credit cards from Chile’s biggest bank in terms of lending were
Banco Santander-Chile, used for CLP375.90bn in transactions,
followed Banco de Chile with CLP342.12bn in transactions.