Mr. Septien, would you give our readers a brief overview of BanCrecer's background and its position in the Mexican market?
BanCrecer was acquired with the reprivatization of the banking sector. It was a small bank in 1982 when the nationalization of the banking sector happened. It was until 1990 that a new decree from the government declared that the banks would be reprivatized and offered for sale. A group of shareholders led by Roberto Alcantara bought it in 1992. When it was acquired it had no more than 70 branches. It started a really big investment program. At that time, the country was in a very good economic position. There were very good perspectives, the NAFTA agreement was on the way. The Bank started the first mortgage loans and also credit cards. When the banks had to suffer from the Dec'94 crisis, we had the worst year in 50 years in 1995. BanCrecer had also invested in new branches and other facilities, by then they had 1300 branches so you can imagine the problem we were facing. The Bank lost control in credits and investments, people wouldn't pay the credits they had acquired. The banks could do nothing because of the economic situation and the lack of a legal framework to collect the credits. There was nothing to protect the banks and help them carry out their business. Finally, Fobaproa emerged and structured a program to help the banks to capitalize in time.
In 1997, BanCrecer invested in with the AFORE (retirement savings system) in which they went in to partnership with Dresdner Bank and Allianz Insurance Co. BanCrecer also started its business in Central America with Bancrecen.
I've had 23 years of banking experience, the first twelve with Banamex, then three years with Bancomer, another 3 years with Banco del Atlantico, and finally I worked as Chief Executive Officer for IXE Banco for four years.
You mentioned already the figure of 1300 branches in the year of 1995. What is the current number and how are they distributed?
760 branches throughout Mexico. They are distributed throughout the country. We have different divisions. BanCrecer is in all the regions and is present in all the main Mexican cities. We are number four and five in average throughout the country. In the northwestern part of the country (Baja California, Sonora and Sinaloa) we are in the second or third place because BanCrecer bought Banoro, a bank that had a very good presence in that area. We also have a very good presence in the southwestern region and the Peninsula of Yucatan. In Tuxtla, Chiapas, we're number one. The funny thing is that we're not very well positioned in Mexico City, BanCrecer has only 16 percent of its deposits in this City, while other banks concentrate between 40 and 50%. The image that BanCrecer has is very good. We are working on that, we have around 140 branches thoughout the city, and we have struggled to be in the fifth position.
BanCrecer currently owns 51% of its AFORE, while Dresdner Bank has 44% and Allianz has 5%. However, Dresdner Bank has an option to buy 3.5% of BanCrecer's portion. The IPAB has proposed that BanCrecer sells this percentage to Dresdner and remain in control considering that Allianz has 5%. What would this signify for BanCrecer?
We are not going to sale the 3.5% alone, we are going to sale all of our stock in the company because we think is the best way to maximize the value of the Bank, by selling the two companies apart, the AFORE and the Bank.
The IPAB agreed to suspend the decision over the BanCrecer sale in July 4th this year. When is the sale going to take place?
Some things have to be carried on and those are the things we need to work out. We really believe that the Bank has been doing all the efforts in order for the Bank to be sold in an excellent value. We don't know exactly the date but there was nothing prepared for July 4th, I don't know where you got this information. | Today we witnessed a very important change at the top of the IPAB from Vicente Corta, who resigned in July, to Julio Cesar Mendez Rubio, the current Finance Director of Bancomext. Could there be turnaround to sell the Bank as in the past he seemed to be opposed to this sale?
He is not opposed to this sale. I can assure you that it's not the case. BanCrecer has shown interest in selling and Vicente Corta was very keen on reaching this sale. He knew that the Bank had to be cleaned up in order not to face eventualities in the future. Our work is to place the best product in order to sell. We expect a very big interest from the market, both foreign and local. It's a very big presence. Our presence is bigger than Citibank's, Inverlat's, Serfin's. The only banks bigger than ours are Banamex, Bancomer, Bital and that's it.
Talking about those who might be interested, Banorte is the name that has risen.
Banorte is the only one that has shown an open interest. They are moving but they need a summon and my guess is that BanCrecer is going to be sold in a very clean way. It wasn't a question of timing, the problem was trying to obtain the best price. BanCrecer has a lot of value to offer, begining with its national branching coverage, its unique computing center and its complete line of traditional products and the new digital and electronic products through internet, telephone and ATM's, and finally BanCrecer has one of the lowest industry costs in the market.
For Banorte, BanCrecer would signify the final part of its growth strategy and would maintain the bank 100% Mexican. What other advantages do you see for Banorte?
As you know, Banorte has been acquiring many banks: Bancen, Banpais and Multibanco Mercantil de Monterrey. I think they haven't been able to put all the systems together. Some areas of the Bank are managed with different systems. One of the reasons they want BanCrecer, I imagine, is because of our computing center. Once they have it, they are going to be able to join their systems in a very short period of time.
As you said, BanCrecer's computing center, based on the Altamira platform, is one of your principal assets. According to several analysts the next phase in the banking market will be strategic alliances and the purchase of institutions with leading technology. How much will the Altamira system contribute to the bank's asking price?
The bank invested about 130 million dollars, if you wanted to do that now, I don't know how much it would cost. But right now, having the same platform for all your operations is a great advantage. As a matter of fact, BanCrecer is selling most of its new advances and changes in Altamira, to the owners of the Altamira platform, Andersen Consulting. Everything we do to enhance the value of the platform, we have to sell through them. Right now, we're not in Altamira, we're in BanCrecer's platform. I think that has a great value and I'm sure this will have its impact in the selling process.
Talking about the new technologies, how much business do you think is going to be done through Internet, is it going to substitute your branch network?
No, Internet will be working jointly with our branching network and in time will take a higher percentage of the daily operations, but we see them as complementary. We are already there. We just launched our internet interactive website where you can do all your operations currently done in one of our branches. With this we are updated in comparison with other banks. This is something in which we are going to be present in the future. People are increasingly trying to get away from the branch network, especially in the cities in which traffic is a problem. That again is a big asset for BanCrecer because of BanCrecer's 800 branches, of which 300 are very small branches. With the help of internet and ATM's and telephones, BanCrecer's operations will be less costly than other banks'. |
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