NationsBank plans to follow its clients into Argentina with the opening of a corporate finance office in Buenos Aires in the second quarter of this year, said Lori Clos-Fisher, senior vice president and trade finance manager at NationsBank, Atlanta, at a Feb. 20 seminar.
The bank already has an office in Brazil, Ms. Clos-Fisher told attendees at the seminar on Mercosur, and plans to open the office in Argentina to accommodate the growing number of clients doing business there.
This is an important market for the Southeast, she said, adding, “It’s very expensive to open a local office overseas, so the fact that we’re doing it should be an indication of how much business is there.”
Although the “tequila effect” of the Mexican peso crisis is over, said Ms. Clos-Fisher, the banking system in Argentina has changed tremendously in the last few years.
There has been a process of consolidation through mergers and acquisitions, bringing the number of banking institutions down from to 140, compared to more than 12,000 in the U.S., she said.
Deposits have been concentrated into just a few banks, with the top five institutions holding 42% of total deposits.
The Argentine government has also made a few changes to hedge against another crisis, she added. Deposit guarantee funds have been established, and reserve requirements are being increased, which could raise the cost of borrowing, she said.
However, these measures should reduce the risk of a financial crisis while helping Argentina with its external borrowing and increasing confidence in the economy and banking system, Ms. Clos-Fisher added.