Motor City Original Banks on Foreign InvestmentThu, 09/01/2016 - 16:11
Comerica Bank started its operations in Detroit, the hometown of the US automotive industry. It is now banking on the relationships developed there to help it thrive in the Mexican auto sector. The arrival of massive investments from automotive OEMs to the country presents several attractive opportunities.
Many of the bank’s clients in the US established subsidiaries and manufacturing facilities in Mexico. This enabled Comerica to widen its reach and develop close relationships with other key industry figures here. “We have initiated relationships with new customers, as well as expanded our relationship with existing clients,” says Josef Koberl, Senior Vice President and Country Manager Mexico of Comerica Bank. “We are confident Comerica’s industry experience has generated value as they go through the process of establishing themselves here.”
With 167 years of experience in its vaults, Comerica is among the top 25 financial holding companies in the US, according to its website. It is an active supporter of the manufacturing sector in the US Midwest, so establishing a presence in Mexico was a natural progression. The bank established a representative office in Monterrey to support its Mexican-based customers, including several automotive clients, with corporate banking and trade finance services. “Over the years, we have developed long-term relationships and cooperated closely with manufacturing companies in the automotive space by providing a wide array of credit and noncredit financial products and services,” says Koberl. “We have grown together with our customers and have helped them take advantage of the favorable conditions Mexico offers to expand their businesses.”
Comerica Bank has clients in the most important economic regions of Mexico: Monterrey and Saltillo in the north; centrally in Mexico City, Toluca and Puebla; and in the Bajio region, which covers Queretaro, Aguascalientes, San Luis Potosi and Leon. The accelerated investment and growth of the Bajio area has made it even more attractive for financial institutions and particularly for Comerica Bank, whose executives are actively approaching new market participants to increase the bank’s customer base in the region.
The bank boosted its technology outlay to enhance its platforms, infrastructure and capabilities in 2015 and upgraded its transaction processing systems, ensuring its clients have access to leading payment processing capabilities. Comerica Web Banking was completely redesigned with added features and functionality. These make it more user-friendly while also increasing security measures to better protect customers and their financial information. The bank’s commercial card program is gaining traction and is an important component of its integrated payables offering, as clients seek efficient, paperless solutions to meet their cash management needs. “The cornerstone of our success is our relationship banking strategy. We want to be trusted advisors to our clients. It is how we raise expectations of what a bank can be,” says Koberl. In collaboration with colleagues from its International Department serving European, Asian and US clients, Comerica Bank identified customers who planned to invest in Mexico. Its proactive approach enabled the company to address their financial requirements. “Our expertise in the industry and knowledge of automotive lending gives us a competitive edge,” explains Koberl.
Automotive lending encompasses loans to OEMs and loans to smaller borrowers involved in auto production. Comerica Bank backs Tier 1 and Tier 2 suppliers whose primary revenue source is automotive-related. Its customer base in Mexico is primarily large corporations but it has been actively promoting business relationships with middle-market companies. “We are positioned to provide a wide variety of financial products and services, including US-dollar financing, foreign-exchange services, treasury management services, which include modern payments capabilities such as same-day automated clearing house, trade financing, such as supply chain financing, letters of credit and standbys, as well as improved commercial cash management systems focused on automation and effectiveness,” says Koberl.
Foreign customers generally expect conditions similar to their experience at home but the legal system in Mexico limits the availability of financial offerings and certain loan structures. Comerica Bank believes it has addressed those challenges by maintaining its commitment to provide high-quality financial services and delivering the level of service that consumers demand.