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Santander's Mexico Unit Aims To Take Loan Market Share In 2010
 Ken Parks - Dow Jones
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Mexico City - Mexico's fourth-largest banking concern Grupo Financiero Santander SAB expects to take market share in lending in 2010 after shrinking its loan portfolio during last year's recession, a top executive said Wednesday.
Marcos Martinez, the group's chief executive, told reporters during a press conference the bank aims to grow its loan portfolio between 13% and 19% led by commercial, consumer and mortgage lending.
The National Banking and Securities Commission, or CNBV, has forecast growth in bank loans of 8%-12% during 2010 on the back of a recovery in the economy.
The Bank of Mexico expects gross domestic product to grow between 3.2% and 4.2% this year as Mexico benefits from an economic recovery in the U.S., its largest trading partner. Last year, Mexico experienced its worst recession since the 1995 peso crisis, with GDP falling close to 7%.
Santander, a unit of Spain's Banco Santander SA, reported net profit of 11.83 billion pesos ($902 million) last year, a 39% increase from 2008, as trading gains offset a decline in net interest income from lower lending and a drop in benchmark interest rates.
Santander should post "good" financial results this year as its lending business returns to growth and it keeps costs unchanged from 2009, Martinez said.
The executive said the bank doesn't plan to expand its network of about 1,000 branches.
"Our bet is to make our network much more profitable and our alternative distribution channels are going to be much more efficient and effective than [opening new branches]," he said.
Out of Mexico's top seven banks, Santander was the lender that reduced its loan portfolio the most during 2009 as the recession dented credit demand and made it harder for businesses and consumers to payback their loans.
Santander performing loan book fell 8.2% year-on-year to MXN204.17 billion at the end of December, led by declines in consumer and corporate loan balances, according to its fourth-quarter earnings report.
The banking industry grew its lending about 5% last year, according to preliminary data published last week by the CNBV.
As a result, Santander ceded the No. 3 spot in the industry by loans to locally owned Grupo Financiero Banorte SAB.
However, Santander's conservative management of its loan portfolio paid off in terms of asset quality, with its non performing loan ratio of 1.7% nearly half that of the sector.
Grupo Financiero Santander accounted for 5.5% of parent Banco Santander's net profit of EUR8.94 billion in 2009, and was the third-largest contributor in Latin America to the parent company's bottom line after Brazil and Chile.
Bank of America Corp. holds a 24.9% stake in Grupo Financiero Santander, whose thinly traded shares are listed on the Mexican Stock Exchange.
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