Banking - Mexico - Banco Compartamos to invest US$31.8mn in IT, opening 75 new branches

By Jorge Porter?/?Business News Americas

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Mexico's largest microlender, Banco Compartamos, will invest 443mn pesos (US$31.8mn) this year to improve its IT system, as well as open 75 new branches throughout the country to reach 495 by year-end, head of external relations Alejandro Puente told BNamericas.

These initiatives will have an impact on the bank's earnings this year, which will grow 2-5% compared to 2011, Puente said.

Last year, Banco Compartamos' net earnings rose 9.8% to 500mn pesos.

The bank also started a pilot program called "Ya Est?s" to raise deposits in Veracruz.

The low percentage of funding through deposits is one of the bank's main weaknesses, as only 60,000 of its 2.5mn customers have a savings account.

The bank will replicate the initiative in other areas to increase the percentage of deposits over total liabilities, Puente said.

Banco Compartamos' main product - working capital loans to groups of women, known as "Cr?dito Mujer" - represents 80% of its total loan portfolio.

While Puente believes there is still room to grow in this segment, the bank has begun targeting men - who are a riskier segment than women - through individual loans to maintain growth and keep its dominant 40% market share.

Banco Compartamos is expecting loans to increase 18-21% this year and for the nonperforming loan (NPL) ratio to stabilize at around 3% by year-end, Puente said.

The lender's NPL ratio deteriorated to 2.6% as of December 31, 2011, compared to the 2.0% registered at end-2010.

Banco Compartamos also operates in Guatemala and Peru.

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