Government To Discuss
Merger of State Banks
The Banco Nacional (BN),
the Banco de Costa Rica
(BCR) and the Bancredito
could all soon be one as
the government this week
will begin discussion on
a proposal of a fusion
of all three state
banks.
Costa Rican president,
Óscar Arias and the
ministro de la
Presidencia, Rodrigo
Arias, are expected to
meet on Wednesday with
the managers of the
three state banks to
discuss the merge.
At least that is the
information that was
sent out from the
president's press office
late Friday evening as
it detailed the
president's agenda for
the coming week.
Guillermo Quesada,
Bancredito's general
manager, said that the
merger discussions have
been going on for
months, explaining that
the proposal would
maintain each indivual
bank's autonomy,
however, creating
entities that would
provide services to
their operations.
The entities would
provide administration
of automated tellers,
security, supply and
other services, to the
three banks.
The proposal would
eliminate the
triplication of services
like individual computer
centres maintained by
the individual banks,
armoured vehicles, etc.,
grouping those services
into one, cutting down
on operating costs.
According to Quesada,
the Wednesday meeting is
to discuss the
governments ideas on the
merger.
For any such merger to
occur, the Legislative
Assembly would have to
discuss and approve a
specific law.
As of September 30,
2007, the combined
assets of the three
banks totalled us$9
billion dollars, which
is 50% of the market.
The Banco Nacional,
Banco de Costa Rica and
Bancredito also reported
a combined profit of
us$122 million dollars.
William Hayden, general
manager of the Banco
Nacional, added that the
fusion is important to
allow the state banks to
confront the mounting
competition from the
megabanks that are in
the region.
"The state banks have to
unite, forming strategic
alliances to reduce cost
by taking advantage of
economics of scale and
offer more efficient and
cheaper services", said
Hayden.
The president of the
Banco de Costa Rica,
Carlos Fernández, was
not available for
comment.
During the past three
years, Scotiabank bought
out Interfin, HSBC
bought out Banex,
Citigroup now has a
presence in Costa Rica
by way of Banco Uno and
Cuscatlan and GE
Financial bought BAC.
The growth of the
private banks through
merger or buy outs,
offering a multitude of
services, and their
aggressiveness to
attract new customers,
has put pressure on the
state banks for market
share.
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