BofA’s Romano Sees Mexico Paying Off Beyond Immediate ‘Pain’
(Bloomberg) -- Bank of America Corp. is bolstering its ranks in Mexico to lend more to corporate clients, even as it sees bumps ahead for the economy.
The company is hiring bankers for its transactional, corporate and client-coverage businesses in the country, said Emilio Romano, chief executive officer of Bank of America’s local unit. After the economic collapse of 2020, the recovery from the Covid-19 pandemic will allow the bank to lend more and expand its base of corporate clients this year. But first the country is going to see a shake-out between winners and losers.
“There is going to be pain,” Romano said in an interview. “There will be businesses that will thrive, and the ones that struggle will be the ones that were already struggling.”
President Andres Manuel Lopez Obrador eschewed the heavy fiscal stimulus that governments of other countries enacted, and has backed nationalist, populist policies that largely paralyzed investment by Mexico’s elite. While rival JPMorgan Chase & Co. began shuttering its private-wealth business in the nation this year, Romano said Bank of America believes that “Mexico is a very interesting long-term play.”
Despite a drought of initial public offerings in Mexico, the bank is keeping its equity bankers in place, Romano said, and recently promoted its first female managing director in the country, Maria Cerro, to lead the team.
“We don’t want to scale down our equity business because we know there is going to be a turning point where Mexican companies are going to go again to the market,” Romano said. He doesn’t blame Lopez Obrador for the lack of new listings, but said a confluence of factors has hampered Mexican entrepreneurs.
“Democratizing capital is a big thing, and making companies more transparent,” said Romano, 55, a former television and airline executive who took over Bank of America’s local unit in 2014. “It is still a mission for Mexico.”
Romano said there’s room for consolidation among Mexico’s 52 banks. Smaller firms may have difficulty keeping up with increased regulation, while some larger lenders may see opportunities to combine.
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