BBVA Colombia

Luis Juango Fitero, Executive President

1. What makes your country attractive to investors?

Colombia has had a bad name due to its internal security problems and its association with drug trafficking, and so it has failed to attract much investor attention. However, there is much more to it than the common misconceptions. Colombia is a mid-size country, with a population (44 million people) larger than Spain’s and an enormous growth potential. Its institutions are among the most solid in Latin America. Democracy is respected and there is a friendly environment for business. Colombia is a firm ally of the US. The current president, Alvaro Uribe, is widely popular and is tackling security problems effectively, stimulating public confidence. This year, an impressive surge of foreign direct investment (FDI) has been seen. A recent ruling of the constitutional court has paved the way for the re-election of Mr Uribe, and the country is about to finish the negotiations of a free trade agreement (FTA) with the US.

2. What are the economic prospects for your country over the next three to five years?

By the end of the last century, Colombia had a drastic recession. Unemployment rose and there were serious effects on the financial system. However, inflation was drastically reduced and is 5% today. The economy has been recovering slowly and we expect it to grow near its potential, which we assume to be in the 4%-4.5% range. We still need to see how the Latin American economies cope with a period of reduced international liquidity, which many analysts are predicting. However, we are optimistic about economic prospects. The free trade agreement (FTA) with the US will be a spur to economic activity, and market-friendly rules of the game will be introduced.

3. How do you foresee the financial sector in your country changing?

The financial sector is changing fast. It suffered a lot during the recession, and many firms disappeared. The recession started a process of consolidation. Colombian banks are small, even by Latin American standards, and the quota of foreign banks is low.

There is a tendency towards universal banking – specialised banking (for example, mortgage banks or industry promotion banks) is disappearing. The level of banked population is low so I expect quite dramatic changes. The sector is poised for fast changes and growth.

4. What role will your bank play in your country’s future development?

I would like to think that BBVA Colombia is helping to modernise the financial system in the country. However, we do not underestimate our competition. Colombian bankers are very good and we are part of a fast-changing sector in a fast-changing economy.

We do not regard ourselves as a Spanish bank in Colombia; we regard ourselves as a Colombian bank with foreign capital. We are convinced that we will do well if our contribution to the country’s development is positive. Colombia has many fronts on which the financial system still has a positive role to play. Banking services for small and medium real sector firms and for people on a low income, pensions, insurance – to name just a few – are all areas in which the financial system can do more, and we want to be right in the middle of it.


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