Banco Multiva on the strength of Mexico’s banking industry

Transcript

Mexico’s banking industry is strong, with private banks being mostly profitable and well capitalised. One institution that has tuned into this success is Banco Multiva. World Finance speaks to its representative Carlos Soto Manzo to find out what the bank is doing to promote, and exploit, growth.

World Finance: Well Carlos if you could start by telling me about Mexico’s banking industry, and how it’s changed of late? 

Carlos Soto Manzo: Well the Mexican banking industry has become solid and competitive over the last few years. There has been a transformation to financial groups, which offer all kinds of services and solutions to their clients.

We also can tell you that the Mexican banking capitalisation index ratio is about 15.6 percent right now: it’s very strong and healthy. We have had a very important increase in strength regulatory terms.

We also can tell you that the Mexican banking capitalisation index ratio is about 15.6 percent right now

There are changes on the long portfolio ratings. Also we have a new brand financial reform and a secondary legislation. These changes are generating important needs for the bank’s capital and research.

World Finance: Well Banco Multiva has over 30 years experience in the Mexican financial market. How has your company adapted to the recent changes to the industry?

Carlos Soto Manzo: We are looking at new opportunities. For example we have gone into government banking, private banking and also agricultural banking. The consequence of these actions is that in just seven years, we have become the 12th largest bank in Mexico, out of more than 40 domestic banks.

There is a proliferation generation of new banks in Mexico, but also 80 percent of the market is concentrated in global banks. We see an opportunity to compete by creating different business models, including personalised customer service.

We also have traditional banking lines, but we have developed strong technological channels. We have secure access to ATMs, electronic banking via PCs and laptops, and mobile devices. One product is called ‘Multiva touch’, which was the first software in the market.

World Finance: How is technology transforming Mexico’s banking environment, and why is it important for banks to embrace new technologies?

Carlos Soto Manzo: It’s very important because the market is changing a lot. Multiva has progressed to being a highly technological bank. Our core system has been implemented in over 1,800 banks worldwide. And actually we are running the latest version of this solution.

We want to be a bank with open and full services, with no limitations. It’s more than just checking balance accounts; it is about the possibility to trade, work and have a very strong banking platform.

World Finance: How important are small and medium sized enterprises for the country moving forward?

Carlos Soto Manzo: In Mexico the small and medium enterprises are very important. I can tell you that they provide more than 72 percent of employment in Mexico. And probably of the four million enterprises in Mexico, almost 99 percent are small and medium enterprises: so it’s a very important sector to us.

I can tell you that we are receiving funding from development banks to tend these sectors. Right now we are in some IT solution enterprises, and I think it’s a very good opportunity to be in that market.

World Finance: How does Banco Multiva cater to SMEs?

Carlos Soto Manzo: Well as I have told you, we have tried to get funding guaranteed for all these enterprises, through the development banking in Mexico. It’s a very liquid structure column for our economy, so it’s very important to be in that sector.

We also can tell you that the Mexican banking capitalisation index ratio is about 15.6 percent right now

World Finance: Well finally, how do you see Mexico’s banking industry developing, and what are Banco Multiva’s ambitions for the future?

Carlos Soto Manzo: We have got a lot of opportunities in Mexico. What we are seeking is to be in the top 10 banks in the near future. Over the next two years we would like to become within the top 10 banks. We want to strengthen our growth in products and channels.

We are open to mergers and acquisitions, in order to increase our market share. And also, it’s very important to strengthen our technological innovations. We are really into increasing our profit levels, market share and margins. And also it’s very important for us to maintain our capitalisation index above 15 percent.

World Finance: Carlos, thank you.

Carlos Soto Manzo: You are welcome – thank you very much.