Billionaire Eyes Millennials for Argentina's First Digital Bank

(Bloomberg) -- Eduardo Eurnekian, owner of the world’s largest airport operator, plans to open Argentina’s first online-only bank to draw millennials frustrated with the paperwork existing lenders demand.

The bank is a partnership between Eurnekian, former Banco de la Provincia President Guillermo Francos and Juan Carlos Ozcoidi, Francos said in an interview Monday. The group applied for a license late last year and is waiting for approval from the central bank, Francos said. Walap, as the start will be known, will start with capital of $10 million and would aim to increase that to $100 million of deposits within a year with a base of about 50,000 customers, he said.

Eurnekian’s plans dovetail with the vision of central bank President Federico Sturzenegger, who is trying to wean Argentines off cash and into banks using technology. Memories of repeated banking crises, including the world’s biggest sovereign default in 2001, and high levels of tax avoidance means only 50 percent of Argentines owned a bank account in 2014, according to a World Bank report. That compares with 68 percent in Brazil and 63 percent in Chile.

“You’ve got low levels of bank usage, high operating costs in traditional banks and the emergence of smartphones,” said Francos, adding it won’t have any branches. “When you mix all that together what you get is a bank on a phone.”

To contact the reporter on this story: Charlie Devereux in Buenos Aires at cdevereux3@bloomberg.net.

To contact the editors responsible for this story: Vivianne Rodrigues at vrodrigues3@bloomberg.net, Andres R. Martinez, Robert Jameson