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 Business News | February 2008 
Mexico Retail Venture Means New Clients for Banorte
 Noel Randewich - Reuters
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Mexico City - A Mexican consumer finance venture with retailer Comercial Mexicana will give Banorte bank extra geographic reach and access to millions of low income clients, the head of Banorte said this week.
No. 5 Mexican bank Banorte (GFNORTEO.MX), based in the northern city of Monterrey, is starting a company with Comercial Mexicana (COMEUBC.MX) to offer no-frills credit cards, savings accounts and insurance to the retailer's customers.
Comercial Mexicana's presence in central and southern Mexico will help widen Banorte's national footprint, Banorte chief executive Luis Pena told reporters.
"In Mexico City, the south and the southeast of our country, we're a bank that is just barely creating a competitive infrastructure and that's where Comercial Mexicana is an excellent fit," Pena said. "Comercial Mexicana is strong where we are weak."
Many Mexican retailers are in the midst of opening in-store bank operations, some in partnership with big financial groups and others, like Wal-Mart de Mexico (WALMEXV.MX), going it alone.
Comercial Mexicana will also give Banorte access to more clients.
Banorte and Comercial Mexicana said they plan to have 3 million credit accounts with low lending limits and 3 million deposit accounts open within five years.
Mexico's big banks, like Citigroup (C.N) and BBVA (BBVA.MC), have traditionally focused on middle- and upper-class clients. But in recent years, banks have turned their attention to untapped, potentially massive low-income Mexicans.
Half of Comercial Mexicana's customers have no experience with savings accounts or credit cards, Pena said, making the banking venture potentially big business.
The new in-store banks are expected to open in the second half of 2008 and begin turning a profit in two years.
(Additional reporting by Cyntia Barrera Diaz) |
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