Mexicans revile few institutions with as much vigor as the nation's banks, which according to industry insiders, are highly profitable. Not surprisingly then, Wal-Mart plans on entering the fray with bank branches inside its more than 700 Mexican outlets that would cater to lower-income clients.
Wal-Mart brings a track record of upsetting the genteel status quo in Mexican business. It burst on to the nation's retail scene by opening a single Sam's Club in 1991. Fifteen years later, it became the Mexico's largest employer and now dwarfs its competitors.
Like the retailers Wal-Mart put the boots to - Soriana, Comercial Mexicana and Gigante - Mexico's six big banks, five of which are foreign owned, are in need of a shake up. An article in yesterday's Miami Herald Mexico, noted that earnings at Spanish-owned BBVA's Bancomer operations, "Constituted the biggest contributor to (BBVA's) profits," and that paradoxically, "(BBVA) would use those profits to expand their services in Spain." (Bancomer is Mexico's second-largest bank.)
Walmex, Wal-Mart's Mexican subsidiary, conquered Mexico's retail market for a reason. It's poised to do the same in banking, although it will most likely succeed by expanding the market - approximately 80 percent of Mexican's don't use banks - than pummelling the competition.