The migration of Argentines to Uruguay ended up deciding the Patagonia Bank to lift its operations in the neighboring country, since, as an off-shore bank, its main clients became residents and could no longer do business with the entity.
As reported on March 31 to the Argentine Stock Exchange, Juan Trejo, head of Investor Relations of the entity, Banco Patagonia (Uruguay) began the process of withdrawing operations from that market, for which submitted the request to the Central Bank of Uruguay (BCU).
Banco Patagonia (Uruguay) is a public limited company established and located in Uruguay, 100% controlled by Banco Patagonia, which is also owned by Banco do Brasil.
offshore
El Patagonia (Uruguay), based in Punta del Este since November 2001had the license of external financial institution (IFE), since it exclusively carried out intermediation operations between the supply and demand of securities located outside the country (commonly called “off-shore” banking activity).
The IFEs can operate exclusively with non-resident clients, with whom they have the possibility of developing all financial intermediation activities and related services, including the receipt of deposits at sight and in current accounts, in foreign currency and authorize the drawing against them by using the check, but they cannot give loans.
non-residents
He had almost all Argentines as clients, but many went to live in Uruguay, with which they became residents, so they could no longer do business with the bank.
For Patagonia, the operation was insignificant, and they had been discussing what to do for a long time: they wanted to transform it into a bank, but they did not have the time.
The IFE has 100% liquidity to return its deposits and all holdings of securities and shares of clients. Immediately, or when required. In any case, the BCU will resolve only in 4 or 5 months.
As it was not a critical operation, but rather a minimal portion (to the point that, with the sale of its percentage in Prisma, Banco Patagonia earned six times more than what this IFE represented), they decided to liquidate it, a process that will take about six months.
The deposit portfolio could go to Banco do Brasil, the controller of Patagonia, which is in Uruguay.
Source: The Chronicler
