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AmericasNovember 1 2012

Foreign-owned subsidiaries take root in Latin America

Latin America's buoyant economies are attracting a slew of foreign institutions, with banks from within Latin America itself and from further afield establishing substantial networks across the continent. Unsurprisingly, the largest foreign-owned subsidiary presence is in Brazil, but the large domestic market has quelled Brazilian banks' ambitions elsewhere and it is Colombian lenders that are forging ahead with cross-border acquisitions.
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Foreign-owned subsidiaries take root in Latin America

Latin America’s banks have not only been growing in their home markets, consolidating their competitive positions and improving their performance, but their presence across the whole of Latin America has also been increasing, as they seek to serve clients trading across the region and aim to reach a broader base of retail customers. While regional networks were traditionally the domain of large international banks, local lenders are becoming increasingly ambitious with their expansion strategies, which will undoubtedly lead to more competition in the Latin American markets.

The Banker sought to measure this trend of cross-border expansion into Latin America and has compared various figures and ratios related to banks’ foreign subsidiaries across the region – irrespective of where the bank is headquartered, be it North America, Europe, Asia or Latin America. So, for example, looking at Brazil, Santander and HSBC’s operations would be incorporated into the statistics but those of Brazilian groups Itaú Unibanco and Bradesco would not. Equally, in Argentina, Itaú's subsidiary would be included but Buenos Aires-based Banco Galicia would not.

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Silvia Pavoni is editor in chief of The Banker. Silvia also serves as an advisory board member for the Women of the Future Programme and for the European Risk Management Council, and is part of the London council of non-profit WILL, Women in Leadership in Latin America. In 2019, she was awarded an honorary fellowship by City University of London.
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