Exec: Foreign banks on the offensive

Foreign-owned banks are no longer on the defensive in Argentina and have already begun implementing aggressive growth strategies, a high-ranking executive at a foreign bank in Argentina told BNamericas. Argentine press has reported in the last year and a half how locally owned banks have become the new movers and shakers in the local financial system, especially in terms of mergers and acquisitions, and that the foreign banks have been on the defensive. Several large foreign banks - such as Spanish Grupo Santander's subsidiary Banco Río - have been among the most aggressive banks in Argentina this year when it comes to loan offers and lending conditions, the executive pointed out. Foreign banks view Argentina's future as positive on the back of the ongoing economic and financial recovery and also because of the government's solid handling of economic and monetary affairs, he said. Many of the largest private banks in Argentina are foreign-controlled and they were the hardest hit by the country's devastating economic and financial crisis in late 2001 and 2002, he pointed out. Many locally owned banks were also financially affected by the crisis but not to the same degree as the large foreign banks. Therefore, the locally owned banks have had more room to once again engage in M&A while the foreign banks have opted for organic growth so far, he said. The great majority of foreign banks in Argentina have a strategic and long-term commitment to the country; the executive added that the exit of Canadian bank Scotiabank and France's Crédit Agricole during the crisis were rare exceptions.