THE TICO TIMES /JUNE 3, 2005.
Recent alliances between large multinational banks are part of growing trend in the region, the daily La Nación reported this week.
GE consumer Finance, which recently bought 49.99% of the Banco America Central, or BAC (TT, May 27), and Canada-based Scotiabank, which recently bought the Salvadoran Banco de Comercio, are examples of the “big-league
players” entering the Central American market in increasing numbers.
Because these larger banks can offer a wider range of services at lower prices, they are providing fierce competition for their smaller rivals, the daily reported.
Central America is an attractive market for foreign banks, in large part because many of its 40 millions inhabitants lack access to formal bank services.
Banks are attempting to take advantage of this potential by expanding their existing service as well.
Some Costa Rican banks are expanding into neighboring countries as well.
Banco de Costa Rica already has alliances with regional banks including Agrícola (El Salvador), Mercantil (Honduras) and G&T Continental (Guatemala).
Grupo Interbolsa has created Interbolsa Panama as a means to enter the Panamanian market. Corporación Interfin has purchased 51% of the shares of Nicaragua-based Arrendadora Centroamericana S.A.
Alvaro Saborío, executive director of Banco Cuscatlán, said larger banks and bank mergers often create a more efficient organization, generating unemployment.
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