BOGOTA - If Latin America were a game of Monopoly, we would be watching as one player put all his chips in the bank. That is the big offensive of Colombian banks, which have expanded from 35 international branches in 2007 to 175 last March.
In 2007, Bancolombia bought the Banco Agricola conglomerate in El Salvador, becoming the leading bank in that country and gaining a million clients. “Our most important contribution was to create a sense of confidence in our goal of becoming a regional bank,” explains Carlos Alberto Rodriguez, the bank’s international vice-president.
Then, in 2010 a series of other acquisitions by other Colombian banks and brokerage firms gave them an increased presence throughout Central America and in the United States.
The Colombian banks have taken advantage of the European debt crisis and the withdrawal of financial institutions from markets where the profit margins are not very high. “It opened a space in the market that allowed banks from emerging countries to enter the market,” explains Javier Galan, director of the Economic, Financial and Business Observatory at the University of Sergio Arboleda in Colombia.
Statistics show how Central America has been the primary stage for this shopping spree – 77.36% of Colombian banks’ international assets are located there.
For analysts, the concentration of growth in this region in consistent with the fact that legislation is relatively open, while there are low levels of banking accessibility and financial education, which means there is a real niche to conquer. “There are a lot of needs in terms of personal banking,” says Juan Carlos Gutierrez, a finance professor.
For Rodrigues, from Bancolombia, the idea is to look for scenarios where they can implement a successful model. “The financial sector has evolved a lot in the past 10 years, and we see that it is possible to participate in the process and add value.”
The Colombian financial crisis at the end of the 1990s left the country with some important impacts, including new banking regulation with high standards. The regulations, which resemble closely the global regulatory standards of Basel III, include provisions to protect against economic fluctuations and safeguard against model risk while promoting high standards for corporate governance. They also required banks to be well capitalized, and to manage risks prudently.
“That made the Colombian banks immune to the international banking crisis, allowing them to attain an important international position. Among the 500 most important banks in the world there are three Colombian banks,” Galan says.
The international expansion has allowed the banks to diversify their risks in terms of income, and to increase their client base by almost five million clients as well as defend themselves from competition for foreign banks operating in Colombia, a country with low levels of banking access.
Of the South American banks, the most aggressive is the Grupo Sura, which has looked to expand internationally because it is already a key player in Colombia. “This non-organic growth, through acquisitions, has to be done outside of Colombia, because we’ve reached a limit of what we can do here,” explains the company’s president, David Bojanini. Around 75% of the mutual funds and pensions managed by Sura are outside of Colombia.
The strict controls designed to prevent money laundering is another major advantage that Colombian banks can bring to other countries, along with the banks’ experience managing accounts in times crisis as well as microcredit.
“There are some things that Colombian banks do very well, like the management of risks and investments, technology and human resources,” Bojanini explains.
For Bancolombia, its experience with using Banking Correspondents, which are agreements that allow customers to do simple banking at stores that have an agreement with the bank, is something that it plans to replicate in El Salvador to increase banking access.
“In this market full of fusions, acquisitions and liquidations, there are still many opportunities for Colombian banks looking to expand in Latin America. They could maximize those opportunities by taking advantage of the synergies with financial institutions from other countries, such as those in Chile.
According to Gutierrez, Colombian banks should also look to the south more often, and take more risks to increase their potential competitive advantages. They should also innovate more in their mortgage offerings and infrastructure, he believes.
Now, these new actors in the region know that it is not just about putting the pedal to the medal. “International development has to fit well with the business model that we have and that we know well, with additional factors such as differences in the market, cultural differences and different business practices,” Bancolombia’s Rodriguez emphasizes. “Right now everyone wants to expand internationally, but you have to do it carefully.”
Once meant to protect the royal family, the century-old law has become a tool for the military-led government in Bangkok to stamp out all dissent. A new report outlines the abuses.
"We need to reform the institution of the monarchy in Thailand. It is the root of the problem." Those words, from Thai student activist Juthatip Sirikan, are a clear expression of the growing youth-led movement that is challenging the legitimacy of the government and demanding deep political changes in the Southeast Asian nation. Yet those very same words could also send Sirikan to jail.
Thailand's Criminal Code 'Lèse-Majesté' Article 112 imposes jail terms for defaming, insulting, or threatening the monarchy, with sentences of three to 15 years. This law has been present in Thai politics since 1908, though applied sparingly, only when direct verbal or written attacks against members of the royal family.
But after the May 2014 military coup d'état, Thailand experienced the first wave of lèse-majesté arrests, prosecutions, and detentions of at least 127 individuals arrested in a much wider interpretation of the law.
The recent report 'Second Wave: The Return of Lèse-Majesté in Thailand', documents how the Thai government has "used and abused Article 112 of the Criminal Code to target pro-democracy activists and protesters in relation to their online political expression and participation in peaceful pro-democracy demonstrations."
Criticism of any 'royal project'
The investigation shows 124 individuals, including at least eight minors, have been charged with lèse-majesté between November 2020 and August 2021. Nineteen of them served jail time. The new wave of charges is cited as a response to the rising pro-democracy protests across Thailand over the past year.
Juthatip Sirikan explains that the law is now being applied in such a broad way that people are not allowed to question government budgets and expenditure if they have any relationship with the royal family, which stifles criticism of the most basic government decision-making since there are an estimated 5,000 ongoing "royal" projects. "Article 112 of lèse-majesté could be the key (factor) in Thailand's political problems" the young activist argues.
In 2020 the Move Forward opposition party questioned royal spending paid by government departments, including nearly 3 billion baht (89,874,174 USD) from the Defense Ministry and Thai police for royal security, and 7 billion baht budgeted for royal development projects, as well as 38 planes and helicopters for the monarchy. Previously, on June 16, 2018, it was revealed that Thailand's Crown Property Bureau transferred its entire portfolio to the new King Maha Vajiralongkorn.
Protestors In Bangkok Call For Political Prisoner Release
Freedom of speech at stake
"Article 112 shuts down all freedom of speech in this country", says Sirikan. "Even the political parties fear to touch the subject, so it blocks most things. This country cannot move anywhere if we still have this law."
The student activist herself was charged with lèse-majesté in September 2020, after simply citing a list of public documents that refer to royal family expenditure. Sirikan comes from a family that has faced the consequences of decades of political repression. Her grandfather, Tiang Sirikhan was a journalist and politician who openly protested against Thailand's involvement in World War II. He was accused of being a Communist and abducted in 1952. According to Sirikhan's family, he was killed by the state.
The new report was conducted by The International Federation for Human Rights (FIDH), Thai Lawyer for Human Rights (TLHR), and Internet Law Reform Dialogue (iLaw). It accuses Thai authorities of an increasingly broad interpretation of Article 112, to the point of "absurdity," including charges against people for criticizing the government's COVID-19 vaccine management, wearing crop tops, insulting the previous monarch, or quoting a United Nations statement about Article 112.
Juthatip Sirikan speaks in front of democracy monument.
Shift to social media
While in the past the Article was only used against people who spoke about the royals, it's now being used as an alibi for more general political repression — which has also spurred more open campaigning to abolish it. Sirikan recounts recent cases of police charging people for spreading paint near the picture of the king during a protest, or even just for having a picture of the king as phone wallpaper.
The more than a century-old law is now largely playing out online, where much of today's protest takes place in Thailand. Sirikan says people are willing to go further on social media to expose information such as how the king intervenes in politics and the monarchy's accumulation of wealth, information the mainstream media rarely reports on them.
Not surprisingly, however, social media is heavily monitored and the military is involved in Intelligence operations and cyber attacks against human rights defenders and critics of any kind. In October 2020, Twitter took down 926 accounts, linked to the army and the government, which promoted themselves and attacked political opposition, and this June, Google removed two Maps with pictures, names, and addresses, of more than 400 people who were accused of insulting the Thai monarchy. "They are trying to control the internet as well," Sirikan says. "They are trying to censor every content that they find a threat".
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