* Bank eyes growth in consumer, mortgage sectors
* Looking at regional opportunities, sees competition
* Banking investments pouring into Colombia
By Helen Murphy and Nelson Bocanegra
BOGOTA, May 24 Colombia will remain a hot spot
for foreign banks in the coming years as low credit penetration
provides ample room for growth, the head of its second-biggest
bank said on Friday, while he explores regional opportunities
with special attention in Peru.
"There's a lot of interest. Every day there's another bank
announcing that they have arrived," Alejandro Figueroa, head of
Banco de Bogota, told the Reuters Latin America
As the financial sectors of some developed nations are in
turmoil, Colombia has entered its heyday, attracting big-name
foreign banks like Canada's Scotia Bank and Chile's Corp Banca,
while robust local players try their hand at expanding across
Colombia is emerging from almost a half-century of war,
attracting foreign investors to its financial sector to tap into
its newly won stability, growing banking clientele and high
That new stability helped bring in about $16.7 billion in
foreign direct investment last year, with more than $1.7 billion
to the financial sector.
Drawn by Colombia's low banking penetration and strong
regulatory framework, foreign financial entities hope to attract
new clients from the millions that still keep their cash under
the mattress or live in remote areas where there are few banks.
Just 40 percent of Colombians residents and companies have
any sort of loans, Figueroa said, which prompted Banco de Bogota
to enter the mortgage business last year.
"Colombia has a lot of opportunities because it has levels
of bank penetration below other similar countries, with credit
penetration around 40 percent of GDP," said Figueroa, who has a
master's in economics from Harvard University and has been head
of the bank since 1988. "It's one of the big challenges we face
as a sector, deepening the financial sector."
"About 75 percent of our credit is in the business sector
and we want to grow on the consumer and mortgage end too, become
a universal bank," said Figueroa in a rare interview at his
Banco de Bogota, the oldest bank in Colombia at about 143
years, has assets worth 49 trillion pesos ($26.48 billion) and
liabilities of 39.5 trillion pesos. Its net income in the first
quarter increased 26 percent to 385 billion pesos versus a year
While the United States and many European countries struggle
to shore up their fiscal accounts, Colombia's financial
management and security advances have been awarded with an
investment grade from three major Wall Street agencies.
Colombia lost its investment grade more than a decade ago
after a financial crisis in 1999 shuttered banks and left many
Colombians laden with debt.
Banco de Bogota is conservative when it comes to taking
risks, Figueroa said.
"The accumulation of past experiences and past crises have
made us very careful in terms of managing risk."
Even as foreign investors make efforts to enter the rapidly
growing nation of 46 million people, Colombia's biggest banks
are seeking investment opportunities abroad as they outgrow the
Figueroa is also keeping an eye on possibilities outside of
Colombia following the 2010 purchase in Central America of BAC
Credomatic - which was worth $1.9 billion and was the second
biggest in the region.
"We continue to look for opportunities. The problem is that
every time there's an opportunity, there are many competitors
who want to participate as well, so it's not easy. The
competition is hard."
"Among the countries that are really interesting is Peru; in
countries like Chile and Brazil the banks are already very big
and so it becomes more difficult."
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(Additional reporting by Eduardo Garcia; Editing by Lisa