Development of Banking in Colombia
Banking in Colombia has witnessed significant growth and transformation since the 1950s, evolving from specialized entities to a solid and efficient system dominated by key players. The sector's history, trends, and contributions to the economy are explored in this insightful analysis.
Uploaded on | 0 Views
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
Banking and the parallel development in Colombia Jornada Colombiana, University of St. Gallen March 28, 2017 Andr s Felipe Mar n Salazar Vice-President Head, Private Banking Colombia & CA, Credit Suisse
Agenda I. Development of banking in Colombia II. Banking today and its main trends III. Peace process, tax reform and banking in Colombia IV. Final remarks 1
Overview of banking in Colombia Financial system started to grow in the 1950s with specialized entities, e.g. Banco Cafetero, Banco Ganadero Sector adapted strong AML regulations in the 1980s In the 1990s, the banking system took a turn to an universal banking system centred in commercial banks Foreign investment in the financial sector and the financial crises in the 1980s and late 1990s (La Crisis de Fin de Siglo) led to closures and M&A that facilitated the consolidation of today s banking system Banking today: solid and efficient with less entities, regulated and supervised, gaining public trust
Banking today and its main trends 4 financial institutions dominate the sector Grupo AVAL (ca. 29%) Bancolombia (ca. 21%) Davivienda (ca. 12%) BBVA (ca. 11%) ( ) coverage in Colombia and abroad LATAM (El Salvador, Panama, Costa Rica, Peru) and North America ( ) number of players entering of foreign financial institutions Banco Itau, Banco de Cr dito del Peru, Citibank Banking and financial sector contributed the most to the GDP s growth in 2016 5% growth
Banking today and its main trends ( ) wealth more HNWI / UHNWI leading to higher demand of PB services Consolidation of the industry s main players ( ) private consumption / lending Household consumption will likely continue to provide the biggest support for real GDP growth ( ) opportunities for M&A
Source: DANE, Central Bank, Credit Suisse Source: DANE, Central Bank, Credit Suisse
Figure 4: Source: DANE, Central Bank, Credit Suisse Source: DANE, Central Bank, Credit Suisse
Strengthening the future of the banking system in Colombia? Peace process ? Tax reform
Peace process, tax reform and banking in Colombia Tax reform Peace process Reallocation of resources (governmental and private expenditures) Structural tax reform (OECD recommended) Contributes the funding of current fiscal deficit of 4% Increase of private foreign investments Tax benefits for foreign investments Increase of involvement of international financial institutions (e.g. WB, IDB, IMF) Financial sector directly involved in the implementation of tax reform More lending opportunities for rural development and post- conflict agreements Less foreign debt in terms of GDP for this and next year Robust labour dynamics
Final remarks A successful implementation of both processes could foster the continuous development of the banking system in Colombia and its expansion within Latin America At the same time, the banking system will be an important channel for the implementation of both processes The banking industry in Colombia will work closely with the government in order to offer a more democratized process for lending to low-income households and desmovilizados . With the implementation of the tax reform in 2017, it is expected that the government meets its target fiscal deficits of 3.3% of GDP this year and 2.7% of GDP in 2018.
Thank you for your attention Andr s Felipe Mar n Salazar Vice-President Head, Private Banking Colombia & CA, Credit Suisse
