Government and State
Banks Meet To Talk
Fusion
The meeting between the
government and the
president of the state
banks, Banco Nacional,
Banco de Costa Rica and
Bancredito, to discuss
the possible fusion of
the state banks took
place at Casa
Presidencial yesterday.
Costa Rica president,
Oscar Arias, along with
his brother, the
ministro de la
Presidencia, Rodrigo
Arias, met with Víctor
Herrera, president of
the Banco de Costa Rica,
William Hayden, of the
Nacional and Álvaro
Dengo of the Bancredito.
The meeting was to set
the groundworks for the
fusion of the three
state banks to face the
growing competition by
the private banks like
Scotiabank, HSBC and
Citibank, who through
merger and acquisition
have a strong presence
in the Costa Rican
market.
If the three state banks
are able to work
together they would
control 50% of the
financial market.
At yesterday's meeting
the government listened
to the proposal by the
banks which ended with
little result other than
the government
committing itself to
establishing a comission
to evaluate the
feasibility of the
fusion.
Minister Arias said that
there has been no naming
to the commission.
The fusion would mean
big savings to the banks
as they would fuse
mutual services to
better compete against
the giant private banks.
The fusion would allow
the state banks to share
technology and
resources, like merging
their automated tellers,
credit cards and
armoured services, for
instance.
As an example, the
private banks connect
their automated tellers
through the ATH network,
while the state banks
all use proprietary
systems, each on a
separate network.
The commission is to
study the feasibility of
the integration of the
three banks and what
savings can be expected.
Álvaro García, general
manager of the Banco
Nacional said that the
state banks cannot stay
as they are in the face
of competition by the
private banks and said
the creation of the
commission is worth it.
"We already have three
years sharing services
with the BCR and it has
been a success", said
Alvaro Dengo.
The Banco de Costa Rica
general manager, Carlos
Fernández, said that the
fusion is vital to
compete in the
marketplace against the
foreign megabanks who
are now just coming into
the country and their
effect is not yet
noticed.
Fernández added that
there is a negative side
to the fusion in that if
there is a problem it
affects all three bank
and dangerous that it
would reduce competition
in rural areas.
Fernández said that the
BCR proposal is to move
in stages, first to
formalize the ties and
then to start
integrating services,
only then to start
thinking in only one
bank. |
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