Brits Out - Chinese Move In

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Two interesting stories last week in the Tico Times, "HSBC sells Central America banks for $801 million" and "Cathay opens branch in San José’s Chinatown". Putting two and two together to make 5, it seems to be a microcosm of what is happening to the worldwide balance of power.

Last Thursday, Europe's biggest bank, HSBC announced that it would pull out of Costa Rica, El Salvador and Honduras. The cash deal was valued at $801 million according to the participants.  “The transaction demonstrates our commitment to driving growth and improving returns in Latin America by divesting of businesses that do not meet our investment criteria,” said Antonio Losada, CEO-designate of HSBC Latin America. London-headquartered HSBC said it hoped to complete the deal in the final quarter of 2012. Colombian bank Davivienda will get 136 bank branches with total assets of $4.3 billion and $2.5 billion in loans.

At the same time, Chinese-U.S. bank Cathay celebrated the Year of the Dragon by opening a location in what promises to become San José’s new Chinatown. Located 200 meters south of La Soledad Church, the bank opened its doors Monday, winning friends downtown by serving up 300 kilos of fried-rice courtesy of the Chinese Embassy. “Cathay is an entity with an important connection to the Chinese community, in that our offices offer a better approach and better business opportunities, as much for the client as for the bank,” said Jimmy Hernández, general manager of Cathay.