Francisco N. González
View from the Top

Providing Financial Access with Good Rates, Accesible Payments

Fri, 06/30/2017 - 13:30

Q: Bancomext is present in a number of sectors. What determines the bank’s involvement and what opportunities does it look for?
A: The bank is an important player in sectors where currencies play a central role and in those that involve foreign trade and the global chaining of production processes. In this sense, Bancomext’s main areas of opportunity are tourism, industrial warehousing and the energy sector. However, this does not mean that we neglect the transportation sector, which includes the automotive and aerospace industries and other segments such as metal-mechanics, electronics and telecoms.
Q: Part of the bank’s mandate is to help SMEs integrate into global production chains. How do you help them improve processes and comply with international standards?
A: Around 88 percent of the companies that we work with are SMEs and the only way to integrate them into the global production chain is through financial intermediaries, either leasing companies or banks. In this regard, we are boosting the financial sector as well as SMEs, providing them the ability to access financial products at good interest rates and accessible payment schedules.
Q: How does the bank view the frequent increases in Mexican interest rates?
A: The interesting part of Bancomext’s portfolio is that we can access external financing. In 2015, we placed debt certificates totaling US$1 billion. In 2016, we placed certificates worth US$700 million, which earned the recognition of “Deal of the Year” by the World Finance magazine. We just placed certificates in Mexico totaling MX$7 billion in three and seven-year periods.
Interest rates have risen but margins have narrowed. We operate efficiently and translate this efficiency to the client. We are enjoying better international rates and opportunities and because of this, a significant number of the rates we offer have not been affected.
Q: What opportunities does the creation of ZEEs offer Bancomext?
A: We see a significant degree of interest in these projects and we are leaders when it comes to the financing of industrial warehouses. We also see opportunities to support the importation of needed machinery. Since we work with export trading agencies we can provide structured support in this regard all around the world.
Q: What efforts are being made to boost agribusiness in Mexico?
A: We have a substantial relationship with several companies in the export and international trade of agricultural products as well as in the internationalization of the operations of Mexican companies. The idea is to have Mexican technology and know-how with production abroad. A significant number of Mexican companies in the agribusiness industry are expanding their operations to Central America and the US, although we do not work with operations that entail the growing of root crops and fruits, which falls under the jurisdiction of Agricultural Trust Funds (FIRA) and the National Agricultural, Rural, Forestry and Fisheries Development Fund (FND).
Q: Bancomext also targets the tourism sector. What has been the reception and impact of the Mejora tu Hotel program?
A: Mejora tu Hotel encompasses the entire spectrum of the tourism industry. This means that we can provide loans to small hotels that have two or three stars. As a result, some hotels have transformed from traditional small brands to establishments that comply with international standards, which helps them increase their occupancy rates from 30-40 percent to 70 percent. However, our offering is not restricted to small hotels. We support large hotels that want to expand their operations and we also participate in large complexes with as many as 6,000 rooms.
Tourism is not only about hotels. It also includes the airlines and infrastructure that support the growth of this sector, such as the Cross Border Xpress in Tijuana (CBX).
Q: How is Bancomext collaborating with Mexican companies to reap the benefits and opportunities related to I4.0?
A: It is important to note that Mexico will be the first country with the capacity to fully insert itself into the I4.0 trend. We will be the first country to have a shared network that will provide a substantial percentage of the population with access to the 4G network and with enough spectrum to allow communication in a more efficient and economical manner.
IoT will allow for a more dynamic communication than what we are used to. In industries, either through Radio Frequency Identification (RFID) or through the use of specific communication tools, we will see containers located at different ports communicating, arranging to be delivered at the same time, and the buyer will be able to access all this information with just one click.
We already have the hardware and the software components but this is all useless if we do not have the know-how to produce. In this regard, we already have clusters with the necessary manufacturing knowledge. Ricardo Hausmann, Director of the Harvard Center for International Development, says that Mexico has the possibilities and processes to assemble cars, planes and medical devices. We only need to connect the talent. We are seeing that education and the training of human resources are constantly improving in quality.
Q: How can Mexico become a global export hub?
A: The first step is to develop a solid foundation. A solid value chain, which is a Bancomext goal, implies that the country has solid companies exporting at a global level. If we are already managing all the metal-mechanics and electronics components, then we need to take that extra step and improve our management of materials.
We also need to internationalize Mexican companies, which is something we are also working toward. When a company expands its production to other countries it needs a supplier network, so it invites its known suppliers to expand with it. It becomes a virtuous cycle of having more international trade and a greater number of Mexican companies abroad. Anchor companies such as Bimbo, Gruma, Cinépolis and KidZania generate a global chaining of other Mexican companies.
Q: Following the digitalization trend, what opportunities does Bancomext see to participate in the fintech sector?
A: Congress is set to approve a fintech law and Bancomext expects to participate in three aspects of the regulation. The first is the use of information technologies in the financial market. Another area of importance is related to crowdfunding; in this sense, we are going to play an important role particularly for creative industries. The third element is the use of bitcoins. We believe bitcoins will play an interesting role in the future, perhaps in obtaining savings in letters of credit or other requirements for export and import operations.
Q: 2017 is a year of consolidation for Bancomext. In what other sectors do you expect the bank to participate?
A: Diversification is one of the bank’s pillars, especially toward Latin America. We are also trying to expand and develop our portfolio of financial products and we want to support the development of creative industries and services, while also exploring opportunities offered by e-commerce. Through export credit agencies, we are looking for ways to not only import machinery to Mexico but also to export Mexican machinery. We want to maintain the highest possible level of competitiveness and be a benchmark.
When talking about where we are going we must not only consider the where, but the how. The bank places a great deal of importance on the management of social and environmental dangers. Both the bank’s employees and our borrowers must be ecologically and socially conscious every step of the way.