In our Business Brief series, we take a closer look at a firm to find what makes it tick.
We chat with Cristian Garces Contador, director of transactions at Banco de Crédito e Inversiones (BCI)’s broker-dealer, who tells us how the Chilean business is expanding and gaining market share.
Since this article was initally published in the April issue of Citywire Americas, it has been reported that BCI is in talks to acquire the American subsidiary of Banco Popular, Florida-based TotalBank.
What differentiates your business?
Our mission is always to make clients our principal focus. For this reason, BCI Corredor de Bolsa has implemented a number of changes over the past three years as we are focused on providing not only the best investment experience on the market to our clients, but also to be as accessible as possible to them.
We are in a very commoditized market where closeness and accessibility is an important asset that we want to promote. At moments when we see that many market players are leaving certain regions, we want our customers feel confident that they are under the wing of a financial group committed to their business.
We are focused on providing a comprehensive experience, starting with the recommendations we deliver. We have strengthened our equity research and strategy team, covering more assets and products for our clients. In addition, we have increased the number of investment advisors we have on both the trading desk and in our branches.
BCI is also involved in a digital transformation project, which we expect to change the entire web experience for our customers in the medium term.
What is your goal over the next 12 months?
We want to expand carefully in the different businesses we are developing. In the local market the idea is to continue with the growth that we have achieved during recent years, where we have systematically increased market share, both in equities and fixed income.
We have achieved this through segmenting out clients, which allows us to offer them specific solutions to match their needs. In the international market, we must continue to evolve the products we distribute to our customers.
From 2012 to date we have consistently grown our results through our brokerage business. We have experienced 68% growth in this period, while the industry in this period has grown by about 15%.
Our profits rose 57% last year, while profits in the sector as a whole grew by only 10%. This is explained by our greater number of customers, greater number of products offered and greater number of transactions.
What are your main concerns for your business?
We have an upcoming presidential election in Chile. As we have seen lately, not only in Chile but worldwide, polls are no longer a very good tool for predicting results.
This generates a lot of uncertainty in the market whenever there are surprises from the candidates.
We hope that as we get to know the different candidates’ policy agendas we can create more accurate scenarios. As a company we are working to provide the best service to our customers on all available platforms.
Separately, trying to bring the best service to clients across platforms means significant changes as clients, especially younger clients, are accustomed to living in a mobile world. We have to adapt to their needs. That is why our group is very involved in innovation projects.
BCI’s big Miami move By Michelle Abrego
The acquisition of City National Bank of Florida back in 2015 was not a straightforward one for BCI.
The Chilean bank and Spain’s Bankia, the previous owners who had to sell City National in a bailout deal with the Spanish government, had agreed to the sale in May 2013.
However, back in the US the Federal Reserve Board insisted that the BCI’s holding company be restructured so that it would be more transparent to banking regulators.
The Fed finally approved the deal nearly two and a half years later in September 2015, finally making BCI the first Chilean bank to buy a US bank.
In its 2016 financial report, BCI said the acquisition was an important step in the internationalization strategy of BCI, which aims to generate new sources of income and geographically diversify its business.
Though it now has a more locally recognized footprint in Florida, BCI has actually been operating in Miami since 1999 when it first opened retail operations for its Chilean clients. In 2011 it launched BCI Securities, its US offshore unit.
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