On the Kindness of Strangers? The impact of Foreign Entry on Domestic Banks in Argentina

GEORGE CLARKE; ROBERT CULL; LAURA DAMATO; ANDREA MOLINARI

The internationalization of Financial Services: Issues and Lessons for Developing Countries

Kluwer Law International

Lugar: The Hague; Año: 2000; p. 331 - 354

The chapter by Clarke, Cull, D´Amato and Molinari shows that foreign banks in Argentina also differ in several ways from domestic banks. Foreign banks tend to be larger and have better quality loan portfolios, higher net worth and higher ratios of operating income to costs. Once established, foreign banks also specialize in different activities. Foreign banks have a slightly smaller share of income from services than domestic banks. Foreign banks also tend to be less involved in consumer lending, and focus their portfolios rather on the manufacturing sector. Foreign banks thus differ in their operations from domestic banks, and their reasons for entering Argentina tend to be quite specific in order to exploit their comparative advantages.