BMSC Frets Over Political Risk

Banco Mercantil Santa Cruz (BMSC), Bolivia’s biggest bank, says it is concerned about the local political environment in the medium to long term, including the threat of nationalization. “If there is a risk, it’s very far down the line. [The president] has got a lot of nationalizations to go through before us,” Darko Zuazo Batchelder, BMSC’s vice president, tells LatinFinance. He adds that he does not expect the bank to become a target of the government in 2009 or 2010. “We’ve got time to prepare . . . we just have to manage our risk,” adds the banker. BMSC is worried about increased economic instability undermining president Morales and forcing him to take more drastic measures to fortify his popularity. “That’s where we’re worried. Right now he’s popular, he doesn’t need to attack,” says Zuazo. “We do believe that times are going to get tougher for our president,” he adds. The Bolivian government shocked investors in May with the seizure of four energy companies and a telecom, amid a wider nationalization spree.