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Mexico
Citi
Something Mexico has in common with central and eastern
Europe – or at least did – is that all its major banking groups
are controlled by foreign banks. Custody market leader Citi
bought Banco Nacional de México (Banamex) way back in
2001, as the Mexican economy emerged from its now-forgotten
financial crisis of 1994. As in 2017, no provider of clearing and
custody services in Mexico had attracted more responses this
year than Citi.
The overall average scores are lower than last year, and all the
familiar tendencies of the bank in this industry can be found
in the details. Citi can settle trades in Mexico efficiently, but
it is less admired for its ability to manage corporate actions
processing, proxy voting and income collection. Short-term
borrowing is available when it is needed, but the bank could
do better on cash and collateral. The technology does the job,
and work-arounds are readily found, but the contribution of
the bank to cost and capital savings could be more substan-
tial. Clients feel that their assets are safe and that the bank is
creditworthy, but the fees and the spreads are not competitive.
A major client grumbles that it is “unclear who is our local
relationship manager.”
Santander Securities Services Mexico
For Santander, Mexico is one of four Latin American markets
where it provides securities services. This is an excellent set of
results, albeit derived from a relatively small cluster of clients
that use its services in Mexico City. In all the core services – set-
tlement, income collection, tax reclaims and corporate actions,
the average scores are impressive. In fact, it is hard to find any
conspicuous weaknesses at all in the detailed scoring.
The only real signs of vulnerability lie in a client concern that
Santander will not develop its securities services fast enough to
keep up with changing customer needs, particularly in terms of
investing in digital technology and using data to help clients be
more efficient.
But there is one sense in which Santander Mexico is impreg-
nable: The Spanish bank is deeply entrenched in the Mexican
banking markets, having controlled Serfín – then the third-larg-
est bank in Mexico – since 2000. It has used the acquisition to
build a powerful domestic business that is outshone only by
Banamex and Bancomer.
BBVA Bancomer
The Spanish parent bank steadily took full control of Bancomer
at the turn of the century, and it now owns the largest bank in
the country. Bancomer accounts for a sizeable portion of the
total revenues of BBVA, which has effectively placed a bet on
the long-term development of the Mexican economy, which is
already the 15th largest in the world.
In the last year, Mexico has also acquired a second stock mar-
ket, the Bolsa Institucional de Valores (BIVA), which broke the
monopoly of the Bolsa Mexicana de Valores when it opened for
trading of the same securities in July this year. So it is surprising
that BBVA Bancomer has attracted so few responses this year.
WEIGHTED AVERAGE SCORES
Santander
Citi
BBVA Bancomer
Market Average Global Average
Share of validated responses (%) 29% 62% 10% Relationship management 5.19 4.63 n/a 4.74 5.30
Client service 5.69 4.97 n/a 5.32 5.56
Account management 5.20 4.60 n/a 4.81 5.14
Asset safety 5.13 3.95 n/a 4.52 4.60
Risk management 5.41 4.77 n/a 4.96 5.50
Liquidity management 4.74 4.56 n/a 4.66 5.14
Regulation and compliance 5.20 4.40 n/a 4.77 4.84
Innovation 4.68 4.13 n/a 4.36 4.75
Asset servicing 5.96 4.92 n/a 5.37 5.52
Pricing 5.35 4.42 n/a 4.84 5.28
Technology 5.78 4.70 n/a 5.12 5.41
Cash management and FX 5.59 5.16 n/a 5.33 5.42
Total 5.28 4.60 n/a 4.87 5.23
Winter 2018
globalcustodian.com
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