Asian banks invade Mexico’s financial market

Asian financial corporations are seeking to strengthen their countries’ companies by providing direct credit to their clients in Mexico
Asian banks invade Mexico’s financial market
A woman walks past a branch of Mizuho bank, belonging to Mizuho Financial Group, in Tokyo July 31, 2013 - Photo: Issei Kato/REUTERS
03/07/2018
15:40
Antonio Hernández
Mexico City
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Last Tuesday, the Bank of China was authorized to start operating in Mexico as one of the latest Asian firms to strategically sneak into the financial market.

With the operation of two Japanese banks, two Chinese ones, and a Korean one currently underway, Asian financial corporations are seeking to strengthen their countries’ companies by providing direct credit to their clients, especially in the automotive and electronic industries.

Thus, banks currently operating in Mexico, such as the Bank of Tokyo Mitsubishi and the Mizuho Bank, from Japan; the Industrial and Commercial Bank of China (ICBC), and the Shinhan Bank, from Korea, currently possess a MXN$33,044 million pool of assets, according to the National Banking and Securities Commission (CNBV).

Since their arrival in Mexico, the Asian firms have emphasized their discreet intervention strategy to provide corporate finance to private companies from their countries of origin. For the time being, the financial institutions are not interested in the personal banking segment for the Mexican market.

The Bank of Tokyo Mitsubishi has the most experience in the Mexican market. It first arrived in Mexico in 1958 with a representation office and in 1995, it opened a local subsidiary. It currently conducts operations from their headquarters in León, Guanajuato, strategically placed in the Japanese automotive industry cluster with brands located in Aguascalientes, Celaya, Salamanca, and network connectivity in Querétaro, Guanajuato, and Zacatecas.

 

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Since June 2016, the ICBC started operating in the country with a MXN$3,243 million credit portfolio. The firm’s strategic objective was to obtain 0.5% of bank market assets in Mexico by the end of a five year period.

“We are particularly interested in the potential of Mexico’s economy. During our first phase, we will support Chinese companies operating here. Our company is also a window of opportunity for other customers all over the world to do business with Mexico,” said Yaogang Chen, executive manager of ICBC Mexico.

As of December 2017, Shinhan Bank was authorized to begin operating in the Mexican market, with assets currently rising to MXN$1,478 million. The company has focused its operation in a variety of financial services for Korean companies established in Mexico.

“Shinhan Bank aims to offer financial products and services for value chains which have been generated and powered by Korean companies established in the country through financing and deposit accounts in both national and foreign currency, as well as national and international transfers, among others,” stated the spokesman of the CNBV.

Last March, Mizuho Bank obtained a license to operate in Mexico as well. Built in Tokyo, Japan in 2002 as a commercial bank, and currently ranked as one of the three largest banks in Japan’s financial system, the Mizuho Financial Group is one of the largest financial conglomerates in the world, with offices in over 30 countries.

Mexico’s financial authorities and even the heads of these banks haven’t ruled out the arrival of more foreign financial institutions in the Mexican market. Their strategies are focused on business niches through which they seek to finance specific production items for co-national companies.

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