Amongst the banks, it was interesting to note the distinct difference between a state-owned Banco De Brazil and Citibank (presented by Marcio Castro, Director1, Internet Business). Whilst the first clearly had the advantage of being a local giant, the second (a foreign bank) had to be very conscious about marketing and creating brand awareness. Both banks rightly focused on different segments of the markets. Whilst Banco De Brazil identified its role as the bank of the masses, Citibank quite rightly positioned itself to serve the affluent clients. Perhaps Citibank realized that it did not have the network nor the scale to compete with the local giants in the more remote areas of the country. –Douglas Choo
As much as
local and global offices work hand in hand so do politics and economy. Nowhere
it was more obvious than in Argentina. The shaky political situation is the
first obstacle to be cleared away before any real economic progress can be made.
Trite as it sounds it is one of the most challenging issues that face emerging
markets. It is like a vicious circle with no way out. Juggling short-term
interest rates to boost middle and small size enterprises while curbing
inflation is often the subject of political rather than market forces. Before
any long-term fixes gather momentum social conditions deteriorate. All three
countries are in this transitional phase. Privatization and deregulation are new
factors. The resulting ownership structure of Banco do Brasil and Petrobras are
the example of companies that are both state owned and commercial. – Eva
Our visit to Banco do Brasil was an interesting example of a once state owned institutions that has experienced the growing pains of becoming private. It is stated that the privately owned bank should be more profitably, but our hosts indicated that this is not necessarily true. Since they were once state owned, they still maintain the tradition of balancing profits with social responsibility. Most privately owned banks will not enter into the poorer less developed regions of Brazil, so while you will not find a Citibank in these areas, you will find a Banco do Brasil. – Mary McNally
Banco
Do Brasil, on the other hand, is a lot more local vs. multinational Citibank.
Banco Do Brasil’s strength hinges on its distinctive, Brazilian image,
personality, and cultural heritage. It
also has wider reach, mass appeal, and distribution vs. Citibank.
As a result, both companies target different segments of the market.
Although Banco Do Brasil already has wide consumer reach in Brazil vs. Citibank,
there is still an untapped segment - - the
lower income, mass population of 45 million people who have no access to a bank
account. I wonder how these people
manage their finances or if they have access to credit facilities?
In the Philippines, an alternative source of credit for the low-income
groups are local, nationwide chains of family-owned pawn shops.
I wonder if such a phenomenon also exists in Brazil?
I did not notice if such an industry also thrives in Brazil.
- Diane Obias