Markets & Distribution Channels Research Report Series Latin America Markets: Selective Opportunities & Continuing Risks December 2010
TABLE OF CONTENTS INTRODUCTION, KEY FINDINGS, & EXECUTIVE SUMMARY...15 A SYNOPSIS OF FINANCIAL SERVICES INDUSTRY MARKETS & DISTRIBUTION CHANNELS...30 EVOLUTION OF THE LATIN AMERICA MARKETS...77 Market History...77 Early Phase...77 Middle Phase...77 Modern Phase...77 Market Definition...78 Brazil...79 Mexico...79 Argentina...79 Venezuela...79 Colombia...79 Chile...79 Other Latin American Countries...79 Market Growth...80 Population...80 Geographical Area...80 Gross Domestic Product...80 Financial Services Firms...80 Financial Services Firms Employees...80 Financial Services Firms Branches...80 Financial Services Firms Clients...80 Financial Services Firms Assets Under Administration...81 Financial Services Firms Assets Under Management...81 Financial Services Firms Revenues...81 Financial Services Firms Net Profits...81 Leading Latin America Markets...81 Population...81 Geographical Area...81 Gross Domestic Product...82 Financial Services Firms...82 Financial Services Firms Employees...82 Financial Services Firms Branches...82 Financial Services Firms Assets Under Administration...82 Financial Services Firms Assets Under Management...82 Financial Services Firms Revenues...82 Financial Services Firms Net Profits...83 Leading Latin America Markets Financial Services Firms...83 Employees...83 Branches...83 Clients...83 Assets Under Administration...83 Assets Under Management...83 Revenues...84 Net Profits...84
MARKET SEGMENTATION...85 Brazil...86 Market History...87 Portuguese Rule Phase...87 Independent Rule Phase...87 Market Definition...87 Rio De Janeiro...87 San Paolo...87 Rest of Brazil...87 Market Growth...87 Population...87 Geographical Area...88 Gross Domestic Product...88 Financial Services Firms...88 Financial Services Firms Employees...88 Financial Services Firms Branches...88 Financial Services Firms Clients...88 Financial Services Firms Assets Under Administration...88 Financial Services Firms Assets Under Management...88 Financial Services Firms Revenues...88 Financial Services Firms Net Profits...88 Leading Brazilian Financial Services Firms...93 Employees...93 Branches...93 Clients...93 Assets Under Administration...93 Assets Under Management...93 Revenues...93 Net Profits...93 Mexico...93 Market History...93 Spanish Rule Phase...93 Independence Phase...93 Market Definition...94 Mexico City...94 Rest of Mexico...94 Market Growth...94 Population...94 Geographical Area...95 Gross Domestic Product...95 Financial Services Firms...95 Financial Services Firms Employees...95 Financial Services Firms Branches...95 Financial Services Firms Clients...95 Financial Services Firms Assets Under Administration...95 Financial Services Firms Assets Under Management...95 Financial Services Firms Revenues...95 Financial Services Firms Net Profits...95 Leading Mexican Financial Services Firms...97 Employees...97 Branches...97 3
Clients...97 Assets Under Administration...97 Assets Under Management...97 Revenues...97 Net Income...98 Argentina...98 Market History...98 Spanish Rule Phase...98 Independence Phase...98 Market Definition...98 Buenos Aires...98 Rest of Argentina...98 Market Growth...98 Population...99 Geographical Area...99 Gross Domestic Product...99 Financial Services Firms...99 Financial Services Firms Branches...99 Financial Services Firms Employees...99 Financial Services Firms Clients...99 Financial Services Firms Assets Under Administration...99 Financial Services Firms Assets Under Management...99 Financial Services Firms Revenues...100 Financial Services Firms Net Profits...100 Leading Argentine Financial Services Firms...101 Employees...101 Branches...101 Clients...101 Assets Under Administration...101 Assets Under Management...101 Revenues...101 Net Profits...101 Venezuela...101 Market History...101 Gran Colombia State Phase...102 Independent State Phase...102 Market Definition...102 Caracas...102 Rest of Venezuela...102 Market Growth...102 Population...102 Geographical Area...102 Gross Domestic Product...103 Financial Services Firms...103 Financial Services Firms Employees...103 Financial Services Firms Branches...103 Financial Services Firms Clients...103 Financial Services Firms Assets Under Administration...103 Financial Services Firms Assets Under Management...103 Financial Services Firms Revenues...103 Financial Services Firms Net Profits...103 4
Leading Venezuelan Financial Services Firms...104 Employees...104 Branches...104 Clients...104 Assets Under Administration...104 Assets Under Management...105 Revenues...105 Net Income...105 Colombia...105 Market History...105 Gran Colombia Phase...105 Not Gran Colombia Phase...105 Market Definition...105 Bogata...105 Rest of Columbia...105 Market Growth...105 Population...105 Geographical Area...106 Gross Domestic Product...106 Financial Services Firms...106 Financial Services Firms Employees...106 Financial Services Firms Branches...106 Financial Services Firms Clients...106 Financial Services Firms Assets Under Administration...106 Financial Services Firms Assets Under Management...106 Financial Services Firms Revenues...106 Financial Services Firms Net Profits...107 Leading Columbian Financial Services Firms...107 Employees...107 Branches...107 Clients...107 Assets Under Administration...107 Assets Under Management...107 Revenues...107 Net Income...108 Chile...108 Market History...108 Spanish Rule Phase...108 Independence Phase...108 Market Definition...108 Santiago de Chile...108 Rest of Chile...109 Market Growth...109 Population...109 Geographical Area...109 Gross Domestic Product...109 Financial Services Firms...109 Financial Services Firms Employees...109 Financial Services Firms Branches...109 Financial Services Firms Clients...109 Financial Services Firms Assets Under Administration...109 5
Financial Services Firms Assets Under Management...110 Financial Services Firms Revenues...110 Financial Services Firms Net Profits...110 Leading Chilean Financial Services Firms...112 Employees...112 Branches...112 Clients...112 Assets Under Administration...112 Assets Under Management...112 Revenues...113 Net Profits...113 Other Latin American Countries...113 Market History...113 Early Phase...113 Middle Phase...113 Recent Phase...113 Market Definition...113 Peru...113 Ecuador...113 Guatemala...113 Bolivia...113 Honduras...113 Paraguay...113 El Salvador...113 Nicaragua...114 Costa Rica...114 Uruguay...114 Panama...114 Market Growth...114 Population...114 Geographical Area...114 Gross Domestic Product...114 Financial Services Firms...114 Financial Services Firms Employees...114 Financial Services Firms Branches...114 Financial Services Firms Clients...114 Financial Services Firms Assets Under Administration...114 Financial Services Firms Assets Under Management...114 Financial Services Firms Revenues...114 Financial Services Firms Net Profits...114 Leading Other Latin American Countries Financial Services Firms...115 Employees...115 Branches...116 Clients...116 Assets Under Administration...116 Assets Under Management...116 Revenues...116 Net Income...116 KEY SERVICE PROVIDERS TO LATIN AMERICA MARKETS...117 Custodians, Clearing Brokers, & Independent Broker/Dealers...117 6
Custodians...117 Clearing Brokers...117 Independent Broker/Dealers...117 Mutual Fund Companies & Other Traditional Product Companies...117 Mutual Fund Companies...117 Other Traditional Product Companies...117 Fee-Accounts, TAMPs, & Separate Account Managers...117 Fee-Accounts...117 TAMPs...118 Separate Account Managers...118 Exchange Traded Funds, Hedge Funds, & Other Investment Product Companies..118 Exchange Traded Funds...118 Hedge Funds...118 Other Investment Product Companies...118 Wealth Management & Family Office Service Product Companies...118 Wealth Management...118 Family Office Service Product Companies...118 Technology Companies & Other Key Service Providers...118 Technology Companies...119 Other Key Services Providers...119 FUTURE PREDICTIONS FOR THE LATIN AMERICA MARKETS...120 Continuing Highly Pronounced Wealth Divide...120 Unique Risks Including Drug Trade Induced Risks, Faltering Democracy & the Threat of Nationalization of Companies, & Currency Fluctuations...121 Drug Trade Induced Risks...121 Faltering Democracy & the Threat of Nationalization of Companies...121 Currency Fluctuations...124 Increasing Online Financial Services Potential...124 Growing Emphasis on Brazil & Mexico...130 Opportunities in Brazil...132 Opportunities in Mexico...132 Attractive Build & Buy Opportunities...134 Increasing Venture Capital & Private Equity Opportunities...135 Growing Potential of Brazil & Mexico as Venture Capital Hubs...135 APPENDIX...137 Profiles of Latin America Markets Financial Services Firms...137 Banco Bradesco...137 History...137 Early Phase...137 Middle Phase...137 Recent Phase...137 Statistics...137 Businesses...137 Commercial Banking...138 Organization & Ownership...138 Banco Comafi...138 History...138 Early Phase...138 Middle Phase...138 Recent Phase...138 7
Statistics...138 Businesses...138 Commerical Banking...139 Organization & Ownership...139 Banco de Chile...139 History...139 Early Phase...139 Middle Phase...139 Recent Phase...139 Statistics...139 Businesses...140 Commercial Banking...140 Organization & Ownership...140 Banco de Credito del Peru...140 History...140 Early Phase...140 Middle Phase...140 Recent Phase...140 Statistics...140 Businesses...141 Commercial Banking...141 Organization & Ownership...141 Banco do Brasil...141 History...141 Early Phase...141 Middle Phase...141 Recent Phase...141 Statistics...141 Businesses...142 Commercial Banking...142 Organization & Ownership...142 Banco Edwards...142 History...142 Early Phase...142 Middle Phase...142 Recent Phase...142 Statistics...142 Businesses...142 Commercial Banking...142 Organization & Ownership...143 Banco Itau...143 History...143 Early Phase...143 Middle Phase...143 Recent Phase...143 Statistics...143 Businesses...144 Commercial Banking...144 Organization & Ownership...144 Banco Mercantil...144 History...144 8
Early Phase...144 Middle Phase...144 Recent Phase...144 Statistics...144 Businesses...144 Commercial Banking...144 Organization & Ownership...145 Banco Patrimonio...145 History...145 Early Phase...145 Middle Phase...145 Recent Phase...145 Statistics...145 Businesses...145 Commercial Banking...145 Organization & Ownership...145 Banco Popular...146 History...146 Early Phase...146 Middle Phase...146 Recent Phase...146 Statistics...146 Businesses...146 Commercial Banking...146 Organization & Ownership...146 Banco Rio de la Plata...146 History...147 Early Phase...147 Middle Phase...147 Recent Phase...147 Statistics...147 Businesses...147 Commercial Banking...147 Organization & Ownership...147 Banco Santander...148 History...148 Businesses...148 Banco Santander Mexicano...148 Organization & Ownership...148 Banorte...148 History...148 Early Phase...149 Middle Phase...149 Recent Phase...149 Statistics...149 Businesses...149 Commercial Banking...149 Organization & Ownership...149 BBVA...149 History...149 Businesses...150 9
Bancomer...150 Banco, Bilbao, Vizcaya...150 Organization & Ownership...151 Belize Bank...151 History...151 Early Phase...151 Middle Phase...151 Recent Phase...151 Statistics...151 Businesses...152 Commercial Banking...152 Organization & Ownership...152 Citigroup...152 History...152 Businesses...152 Banamex...153 Organization & Ownership...153 Compartamos Banco...154 History...154 Early Phase...154 Middle Phase...154 Recent Phase...154 Statistics...154 Businesses...154 Commercial Banking...154 Organization & Ownership...154 Copernico Capital Management...155 History...155 Early Phase...155 Middle Phase...155 Recent Phase...155 Statistics...155 Businesses...155 Hedge Funds...155 Organization & Ownership...156 Explorador Capital Group...156 History...156 Early Phase...156 Middle Phase...156 Recent Phase...156 Statistics...156 Businesses...156 Hedge Funds...157 Organization & Ownership...157 FAMA Investimentos...157 History...157 Early Phase...157 Middle Phase...157 Recent Phase...157 Statistics...158 Businesses...158 10
Hedge Funds...158 Organization & Ownership...158 First BanCorp...158 History...158 Early Phase...159 Middle Phase...159 Recent Phase...159 Statistics...159 Businesses...159 Commercial Banking...159 Organization & Ownership...159 Grupo Elektra...159 History...159 Early Phase...160 Middle Phase...160 Recent Phase...160 Statistics...160 Businesses...160 Financial Services...160 Retail...160 Organization & Ownership...160 HSBC...160 History...160 Businesses...161 HSBC Mexico...161 Organization & Ownership...161 Interpacific Investor Services...161 History...161 Early Phase...161 Middle Phase...161 Recent Phase...161 Statistics...161 Businesses...161 Independent Broker/Dealer...162 Organization & Ownership...165 Metropolitan Life (Met Life)...166 History...166 Businesses...166 Met Life Mexico...166 Organization & Ownership...166 Moneda Asset Management...167 History...167 Early Phase...167 Middle Phase...167 Recent Phase...167 Statistics...167 Businesses...167 Research...167 Investment Funds...167 Fund Distribution...168 Wealth Management...168 11
Organization & Ownership...168 News Corporation...168 History...169 Businesses...169 Businesses...169 Filmed Entertainment...169 Television...169 Cable Network Programming...170 Direct Broadcast Satellite Television...170 Integrated Marketing Services...170 Newspapers & Information Services...170 Dow Jones & Company...170 The Wall Street Journal...170 Barron s...170 Smart Money...171 Dow Jones Information Services...172 Venture Edge...172 Venture Capital & Healthcare...172 Venture Capital & Information Technology...173 Books...173 Other Assets...173 Organization & Ownership...173 New York Life...174 History...174 Businesses...174 New York Life International...174 Argentina...174 Mexico...175 Organization & Ownership...175 Opportunity Asset Management...175 History...175 Early Phase...175 Middle Phase...175 Recent Phase...176 Statistics...176 Businesses...176 Hedge Funds...176 Organization & Ownership...176 Royal Bank of Canada...176 History...177 Businesses...177 International Banking...177 Organization & Ownership...177 Royal Bank of Scotland...178 History...178 Businesses...178 ABN Amro Inversiones Argentina...178 Organization & Ownership...178 Spinnaker...179 History...179 Early Phase...179 12
Middle Phase...179 Recent Phase...179 Statistics...179 Businesses...179 Hedge Funds...179 Organization & Ownership...179 Sudameris...180 History...180 Early Phase...180 Middle Phase...180 Recent Phase...180 Statistics...180 Businesses...180 Commercial Banking...180 Organization & Ownership...180 Tarpon Investment Group...180 History...181 Early Phase...181 Middle Phase...181 Recent Phase...181 Statistics...181 Businesses...181 Hedge Funds...181 Organization & Ownership...182 Unibanco...182 History...182 Early Phase...182 Middle Phase...182 Recent Phase...182 Statistics...182 Businesses...182 Commercial Banking...183 Organization & Ownership...183 Profiles of Latin America Markets Service Providers...183 Instituto Brasileiro de Certificacao de Professionais Financerios (IBCPF)...183 History...183 Early Phase...183 Middle Phase...183 Recent Phase...183 Statistics...183 Services...184 Education...184 Organization & Ownership...184 Instituto de Planificacion (IFP)...184 History...184 Early Phase...184 Middle Phase...184 Recent Phase...184 Statistics...184 Services...184 Education...185 13
Organization & Ownership...185 Duplication or distribution of this report, and/or the data in this report, is strictly prohibited without the written consent of Tiburon Strategic Advisors, LLC 14