International Banks Get Comfortable with LatAm

The Citi-Banco de Chile deal is “. . .representative of the increased interest and commitment we are seeing from major international banks not only in Chile, but in the Latin American region as a whole,” says Moody’s. “This is due to the greater confidence on the part of international banks and the stability that improved country risk profiles and institutional frameworks suggest. There is also the promise of regional integration and more robust business environments generated by the proliferation of free trade agreements,” says the agency in an analysis of the Citi purchase. Moody’s speculates that other potential suitors might pursue larger investments in Chile and elsewhere. It says Scotiabank’s Chilean operation is looking to diversify and increase market share, while Santander may acquire ABN AMRO’s operations in Brazil and perhaps Chile. It also notes that HSBC has also been quite vocal about stepping up its presence in Chile and Peru, while BBVA is on the lookout for acquisitions and strategic partnerships with specialty lenders and retailers.