November 30, 2024, 4:00 AM
November 30, 2024, 4:00 AM
On November 14, the Bolivian Stock Exchange reported the resignation of the vice president of the board of Banco Mercantil Santa Cruz (BMSC), Juan Carlos Salaues Almaraz, after four decades at the financial entity. The BMSC has more than $us 6,094 million in assets and deposits of more than $us 5,085 million, which places it as the largest bank in the system.
_What factors motivated your decision to resign from your executive position at one of the country’s largest banks, especially at a time of significant economic challenges?
My resignation was from the functions of vice president of the board of directors of the BMSC, presidency of SAFI Mercantil Santa Cruz, presidency of MIBSA and Vice President of the Mercantil Insurance Company. It’s not easy to walk away from the bank after 40 uninterrupted years of work.
There have always been significant economic challenges, today’s situation has characteristics of a unique crisis, however the risks inherent to banking are permanent at all times and due to this characteristic, Mercantil Santa Cruz has historically maintained a vision of the future based on prudence and adoption. of customer protection policies, with adequate levels of liquidity and portfolio quality.
Today, Banco Mercantil Santa Cruz, despite the acute and chronic economic, political and social situation that the country is going through, is characterized by registering high levels of solidity and solvency. Of course, the balance of payments crisis and non-existence of foreign exchange at all levels has also caused difficulties for the entire financial system and therefore for the BMSC.
Most of my professional life has been in banking and in only one bank: BMSC, which gave me the opportunity to apply and fully develop my profession. Institutions are not the name, title or brand, but thousands of people who work in the organizational structure; directors, executives and officials at all levels.
I feel very honored and proud to have been part of all the management teams in the evolution and growth of the bank. I am a banking professional, a technician in itself, and the profession and the knowledge that it entails cannot be renounced.
_However, it is a change after so long…
Of course, it saddens me to leave the positions I held at the bank after so many years; However, the time has come to undertake and apply in other areas and specialties inherent to the profession of economist, such as sustainable finance, an exciting challenge with important social impact. It is time to advise on solving difficulties inherent to the crisis and deepen the analysis of critical variables specific to each business institution.
_During your management, what strategies did Banco Mercantil Santa Cruz implement to strengthen its position in the market?
I was very young Financial Manager, La Paz manager and Commercial Vice President together with Javier Zuazo and Emilio Unzueta, whom I remember with great affection and admiration, with whom the fundamental principles of solidity and solvency of today’s Banco Mercantil Santa Cruz were cultivated.
As executive vice president, along with Darko Zuazo as president and an extraordinary team of executives and directors, I actively participated in the most important financial event in the history of Bolivia: the purchase and merger with Banco Santa Cruz in 2006, among other events.
In recent years, I have been honored by entrusting me with positions of vice president of the board of Banco Mercantil Santa Cruz, vice president of the board of the Compañía de Seguros Mercantil Santa Cruz, president of the board of directors of SAFI and MIBSA.
And as president of the Association of Private Banks of Bolivia (Asoban) in 2010 I had to articulate and build bridges with government authorities that had adverse political approaches and contrary to the important role of banking in the economy.
_From your perspective, how do you evaluate the current situation of the Bolivian financial system in the face of the liquidity crisis and the challenges in the provision of dollars?
The undeniable deterioration of economic macro variables shows a singular and profound crisis in the productive structure. All economic/political analysts, experts, international institutions and risk raters agree that the acute shortage of foreign currency is a product of the breakdown of the balance of trade in the main dollar-generating sector.
It would take many hours and hours of critical analysis to explain the reasons, in my opinion – in abstraction – there are two: as is known to many, the reserves were spent from 15,000 million dollars in 2014 to 1,900 million in 2024 (includes gold) . And when I say that they were spent, that includes the banking assets, a product of the public’s dollar deposits.
The context is aggravated by the decline in exportable volumes of gas due to the depletion of reserves due to the irresponsible investment policy in exploration. The fateful formula is reflected in the drop in exports due to depletion from 6.5 billion dollars to 1.8 billion dollars, while our hydrocarbon imports increased to the levels of generating a substantial negative gap of around 3 billion dollars annually.
The current circumstances go from the situation to a new type of economic life, there are no dollars in the system and the juggling of banking in the best of senses and intentions are and will be insufficient to overcome this State crisis. Serious situation that ends up affecting dollar savers who trusted the bank.
The situation is so complicated that the lack of dollars is reflected in the real increase in the price of the currency for all economic segments that demand it at new exchange rates, whose price is far from the non-existent official exchange rate. There are the queues for fuel, inflation, food shortages, etc.
_This week a claim occurred from a client who requested the return of her savings in dollars, what do you think about it? Who is to blame that banks do not have dollars to respond to their clients?
Sad and unfortunate event after my resignation, so I do not have the elements to comment.
_What do you consider to be the main challenges that Bolivian banking will face in the coming years and what recommendations would you leave for the sector?
Despite the deterioration of economic variables, Bolivian banking is still solid, as stated by the main solvency indicators that are permanently monitored by the Financial System Supervision Authority (ASFI) and risk raters.
The main challenge is to stay solvent in this tremendous and strong storm, the important thing is to stay afloat. It is difficult not to be affected by the administration and professional management of late payments, especially the hidden toxic ones. It is a goal and objective to avoid the most fearsome disease that a bank can acquire, bad debt.
I have no doubt in prioritizing high levels of liquidity that in times of crisis and low cycle, the volatility of deposits together with the uncertainty of inflation and exchange rates can trigger massive distrust.
Faced with the onslaught of computer crime, it will be important for banks to prioritize investments in cybersecurity, protecting their own institutions and their clients.
_After your departure, what are your future professional plans? Will you remain linked to the financial sector or will you explore other economic or business areas?
My profession – with several mentions and a doctorate in Economics and Finance – allows me to venture into several transversal sectors that excite me.
A few days ago I got engaged with an important consulting firm made up of professional friends with various specialties. This company called Green Works is based on Bolivian human capital and other countries with important international relations.
Furthermore, of course I will be along the paths of financial economic analysis and especially in what motivates me a lot: green and sustainable finance in search of real added value in the face of the fatal deterioration of the environment.
I believe that our country has great potential to attract many economic resources for responsible investments without deteriorating quality of life while protecting the environment.
