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 Introduction - Alliances & Investments - Expanding frontiers - Free market -
Telecom and transport - Banking - Energy sector - Tourism - States of Opportunities -
Agro Industry - Multinationals - Industrial States 
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Interview with
Enrique Vilatela,
General Director of BANCOMEXT
February 29, 2000
Website : www.bancomext.com.mx
| Could you give us a brief historical background of BANCOMEXT and a brief insight of what the developments of the banking system have been in the last couple of years here in Mexico?
BANCOMEXT is a development bank and is already 62 years old. It has passed through several transformations in the last years, in fact we are trying to make BANCOMEXT adapt itself to the ever changing conditions of the Mexican market and the needs of the Mexican companies. We try to provide a full range of products and activities in order to support them in everything they need. The two most important facts that validate us as a very unique organization are first of all that we receive no subsidy or budget appropriations from government and secondly that we combine the promotion of Mexican products with the financial support we give to Mexican companies, helping them to participate in export activities. In that way we are the Mexican trade board. We are then both a financial institution which operates in a profit bases and a trade board. By combining these two aspects we have a very good insight of what is going on with Mexican industries because we work with them from the very beginning establishing the directives of their exporting programs which may include both becoming an export company or a supplier for other larger export companies. We become their allies and when they require financial support, given that we know the companies’ programs it is easier for us to take decisions. We are the healthiest Mexican bank.
Can you tell us what are your different services and are you developing new services at the moment?
Constantly we are offering new services because we have to react to whatever new needs appear. Since the structuring of projects while working with medium size companies we motivate them to become part of the Mexican export community. Most of the small companies do not even think about export activities, so it is our job to motivate them showing them that even if it is not basically easy to start an export program in terms of the requirements and the strategies needed, it is always possible. We provide them the basic tools, we do a lot of training directly or through Mexican Universities, we give them a lot of information and we talk to them in order to make them know all the legal requirements. We have 38 offices abroad where we work identifying opportunities, and establishing the strategies to penetrate into certain markets, and all this information we give to the Mexican companies. We organize very professional trade missions and all types of events giving Mexican companies the opportunity to participate both externally and nationally. We also have a wide portfolio of financial services that includes credit negotiation, services through commercial banks, access to our own credit insurance company that we are about to open, and others. We try to be on top of things and we try to provide everything that the Mexican company needs.
Can you tell us how much credit you have allocated to small and medium size companies as opposed to larger companies?
We operate with all kinds of companies, but our aim is to support the small and medium size ones. From the credit point of view in terms of the number of firms 95% small size companies and the rest 5% medium and larger companies, in terms of the amount those rates change to 70 and 30 per cent respectively. In the promotional side we work more with small companies, which represent the 99% of our users (while in the financial side we supported about 3 thousand companies through credit).
Can you tell us what is your plan to recover the debt situation of the World Trade Center in Mexico City and is it filling the spaces now?
That has been an ongoing project for 35 years, it started in the mid sixties as an hotel planned for the 1968 Olympic Games but they never finished it, and in the late 80’s it was transformed into the World Trade Center. A couple of years ago when the project again was not able to repay its debt and it became part of the FOBAPROBA problem going back to the state’s hands, we decided to buy the project, with a discount of course and tried to re-establish and finish it and we are now in good stands. The project is divided into several parts, one is the tower which is one of the most important buildings in Mexico City in terms of office space. Another one is the Centro de Exposiciones which has been already working for three years as the most successful exposition center of the world; a big commercial mall and a hotel that will be functional very soon. We feel that the project will be totally concluded by the end of next year. This is not a very important project to the bank in terms of the amount of money involved or the role that the bank plays in Mexico, but from the image point of view it is in fact tremendously important.
Are you planning to sell it to the private sector?
Yes, in fact we are already selling it by pieces because it is eventually impossible to find an investor who would buy it all.
One of the big issues facing company expansion in Mexico is the recovery in credit. By when do you expect the recovery in credit?
We are just starting a recovery that for several reasons will take some time. Some of the most important problems have been dealt with already, one of which was the banking sector and its lack of equity and the great amount of bad loans. It was very painful to deal with it but at the end everything went right. Probably the most important issue that is still pending is the creation of the new laws regarding credit, the guaranty and bankruptcy laws. The executive branch sent some initiatives to congress last year and hopefully they will be approved very soon.
How optimistic are you about change?
I do not know because all of this involves politics and Congress would have to set their parties interest asides and realize of how important this is for our economy. Right now I am just waiting to see something good probably after the elections.
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What do you think is going to be the impact of the free-trade agreement with Europe on the Mexican export sector and specifically on Europe business?
NAFTA was very important in terms of putting Mexico in the map from many points of view. After that treaty people began to realize that Mexico was a good investment opportunity not just because of Mexico itself but mostly as a springboard to North America. We hope that by having the free-trade agreement with Europe everything will be expanding and that Mexico will be used as a springboard to Europe, and we will be getting more investments from Europe. In fact after the treaty was announced, a lot of European companies came just to take a look, and some are already planning the first stages of their establishing process. There are several sectors in which we are competitive enough to export to the United States, and I think we will be doing so to the other side of the Atlantic. Apart from investment the behavior of Mexican companies is very important. They were not export companies at the beginning, but being close to the United States helped us to take off and now there are many companies that are just about ready to take a step towards diversification and grow in terms of export figures. Europe has always been very difficult for Mexican companies not only because of the distance but mostly because of the requirements that were to be fulfilled in order to attain the European market, but now with the free-trade agreement everything will be much easier.
Where do you see the Mexican economy and the banking sector within three to five years?
The Mexican economy will continue growing. We certainly will have to deal with several issues like finding out the way to accommodate small companies into this drive we are having. We are conscious of the fact that economy from a certain point of view behaves as a divided cell, placing in one side the successful growing poles such as export activities and in the other side the small local activities that do not participate in the globalization process. That is why we are here, and hopefully in three years most of the companies will be participating in the export sector one way or another. The banking sector by that time will surely be very strong. We will have a very wide participation of foreign banks and by that time all the regulations regarding credit will be ready and at the end we will be providing the support that Mexican industries need to grow. As far as BANCOMEXT is concerned, as a development bank we are not supposed to compete with commercial ones, so we will have to find new ways to support the Mexican companies and take advantage of the new outcoming banking attitude. We will reinforce our presence in Mexican Universities establishing agreements with them, as we have done already with 85 Universities in Mexico, in order to teach the students a new culture based on the export activity. We have already 65 BANCOMEXT offices distributed in all of the most important Mexican Universities that provide support to young exporters and link the school knowledge to the region’s industry. We believe that in the future the Universities and the productive sector will be working closer to each other and we will be in the middle coordinating and advising both sides.
Could you tell us a little bit more about your background and about what you think has been your biggest achievement as General Director of BANCOMEXT?
I have always worked in the financial sector. I started in Nacional Financiera when I was still a student, then I moved into BANCOMEXT, then to the Secretaría de Hacienda as Director General of Public Credit and finally I came back to BANCOMEXT as General Director. I have been very fortunate being always in the right place at the right time because it has given me the opportunity to really implement new things. For my academic background I can say that I went to school here in Mexico and my mayor is in actuarial sciences, and then I got an MBA from Wharton.
What is the image the financial sector has within Mexico and abroad and what is the image you would like it to have?
Today the financial sector in Mexico is being blamed because of different mistakes we committed in the past. And it is very true that the financial sector is not up to the needs of the Mexican economy, so it does not have a very bright good image. But I do hope that because of the measures the government has taken and because of all the effort that the institutions have done, in a very short period of time banks will certainly become the important muscle the economy requires. It is very impressive that even if banks have not participated actively in supporting the economy, it has been able to grow very strong, mostly because of the export drive that has been able to get resources from outside. We need a strong financial sector in order to have a strong domestic economy and in three years time we will have that. So by that time I hope that people will look at the financial sector as a partner and as a supporter.
What is your final message to our readers?
Globalization is changing the way of doing business around the world, and Mexico is not only participating proudly but doing also a very great effort to do things fast and well. We have realized that the opportunities in Mexico are huge because of our geographical position, our natural resources, and the impressive human resources we can count on. And now that we know that we can not do everything by ourselves we are inviting potential partners to come to support us and to share with us all this opportunities and benefits.
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© World INvestment NEws, 2000.
This is the electronic edition of the special country report on Mexico published in Forbes Global.
July 3rd 2000 Issue.
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MEXICO
