MEXICO CITY Jan 31 HSBC is giving its
Mexican unit a $500 million capital injection to increase
lending in Latin America's second-biggest economy, the bank said
The Mexican unit, whose London-based parent was slapped with
a $1.9 billion fine in December for money laundering lapses, has
lagged behind other foreign banks that dominate lending in
Mexico, despite a $700 million injection from its parent in
The capital raise, which will be completed by next Monday at
the latest, is aimed at boosting consumer lending and expanding
financing of production chains for import/export companies,
something the bank has succeeded with over the past year,
according to Jaime Pena, the CEO of the Mexican subsidiary.
Mexican manufactured exports rose to an all time high in
December on strong U.S demand, helping the country to notch its
first annual trade surplus in 15 years.
HSBC's expansion in Mexico comes as the company scales back
its operations elsewhere. According to Pena, the bank has
"divested" from 44 different countries in the last 2 years, but
sees a bright future in Mexico.
"Mexico is a great destination for investment," said Pena,
pointing to Mexico's exporting strength. It has "public finances
that I think are enviable, (and) macroeconomic policy managed
with great orthodoxy."
He added that HSBC has its second largest network of
branches, and largest network of ATMs, in Mexico.
HSBC is Mexico's fifth largest bank with assets of 495.6
billion Mexican pesos ($38.91 billion). BBVA Bancomer
and Citigroup's Banamex unit are Mexico's two biggest
HSBC has a 7 percent share of bank lending in Mexico, with a
loan portfolio of 195.8 billion pesos but has lost market share
in the last year.
Lending has lagged in Mexico behind other Latin American
countries, with outstanding commercial bank loans as a percent
of GDP below 19 percent in 2011, according to the IMF.
On Wednesday, London-based HSBC announced it was hiring a
former U.S. deputy attorney general to avoid a repeat of lapses
in its anti-money-laundering controls that led to the fine.