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 Business News | August 2006 
Wal-Mart's Mexico Unit Eyes Banking
 Associated Press
| | A shopper browses the aisles at a newly opened Wal-Mart. (AP/Mark Lennihan) |
Mexico City - The Mexican unit of Wal-Mart Stores Inc. has filed for a banking license with local regulators, the latest retailer to enter the realm of financial services in Mexico in recent years.
Wal-Mart de Mexico, or Walmex, said in a release Wednesday it will make an announcement "the moment that this process results in the granting of a banking license." The unit had 818 retail stores and restaurants at the end of June.
Little Rock, Ark.-based Wal-Mart Stores filed last year for an industrial loan charter, or ILC, in the U.S. to process credit cards. However, the Federal Deposit Insurance Corp. in July placed a six-month moratorium on all ILC applications because of concerns about the new risks posed by that type of bank license.
In recent years, Mexican retailers have moved into retail banking to sell financial products to their mainly low-income clients. Mexico's large retail banks have typically shunned this market, in favor of lending to middle and upper income individuals and corporations.
"A banking license would allow Walmex to further differentiate value for consumers, and would provide leverage against an oligopoly banking system reluctant to take spreads and fees lower," Merrill Lynch analyst Robert Ford said in a research note.
Walmex's announcement comes the same day local retailer Grupo Famsa said it received authorization from the Finance Ministry to open a bank, to be called Banco Ahorro Famsa.
In July, retailer Controladora Comercial Mexicana SA said it will partner with a unit of French banking group BNP Paribas SA to offer consumer and credit card loans in Mexico.
Grupo Elektra was the first Mexican retailer to enter banking when it opened its Banco Azteca unit in 2002, which had 17.32 billion pesos ($1.58 billion) in loans at the end of June. Elektra also operates insurance and pension-fund companies. |
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