Aug. 17, 2016

Juan Carlos Corrales Salas

Costa Rica

Juan Carlos Corrales Salas

General Manager, Banco Nacional

"Our main focus has been on clean energy generation projects."


Juan Carlos Corrales Salas is currently the General Manager of Banco Nacional, a position he has arrived at following an outstanding four-decade career. He has an agricultural background in agricultural engineering and also has an MBA with a specialization in finance. He began his career at Banco Nacional at just 17 and has served in many positions in the organization.

What are some key milestones that the company has achieved over its 102 years of activity, particularly during the past year since its incorporation?

Banco Nacional is a century-old bank, created with a vision of supporting the sector of micro and small businesses at the time, particularly those of the agricultural sector and the key activity of coffee plantations. President Alfredo Gonzalez Flores, who was the founder of the bank, visualized the bank taking workers and turning them into small entrepreneurs. The bank's mission was always to assist in the economic and social development of the country by focusing on micro and small enterprises. However, by the movement of the economies and changes in the global environment, the bank has prospered in encouraging the development of other activities, namely industry, trade, services, and the financial sector. In the last decade the focus has been keen on the part of services, which has led the country level for companies, mainly services (call centers and others), as they come to set up here in Costa Rica. The strong performances boosted GDP, thanks to the weight of its impact, to an expected growth of 4.2%. In 2000-2001, we returned to a successful program approaching micro and small business. Around 20% of our portfolio is focused on these micro and small businesses, and within that 20% there is an arm that specifically for the women bank that we give a lot of emphasis to, as it involves 25,000 women. We have a sales force of 300 people dedicated to those micro and small businesses. We have not neglected the agricultural sector, but today it represents just a small part of our economy. We nonetheless remain a country with an agricultural vocation, and our bank is actively involved in traditional products such as bananas and coffee as well as others like pineapple and similarly sophisticated products.

What areas is Banco Nacional investing in most at the moment?

Our main focus has been on clean energy generation projects, specifically hydroelectric and wind projects, as these both require large investments. We began in the early 2000s with some important projects, and we have moved out a bit from traditional credit into generating investment banking. Two important projects were the Peñas Blancas and Cariblanco hydroelectric plants, which were both made with a figure of securitization that was delivered to the ICE, where it won 15 years of funding, all of which was paid to investors at that time. These were both successful projects; however, in the last four to five years we have had a strong evolution using conventional credit even in the portfolio of mainly wind and hydroelectric projects in the country. The Reventazón project is the largest project at the moment in Central America. After the Panama Canal it is probably one of the greatest undertakings to come online, and the bank actively participated in it. That was incidentally what has allowed us to issue green credits worth about $500 million, not only for the sustainability of our portfolio of ongoing projects, but also of other projects in the pipeline, which are all environmentally friendly.

How has the bank succeeded in decreasing the cost of its credit and what opportunities does this bring to the economy?

Rates have dropped. A number of important factors came together during 2015 in the country's economy that helped us including oil and the decrease of imports like corn or soybeans. These greatly helped stabilize the economy, but the Central Bank also took a number of good measures that leveled the exchange rate and inflation while transferring a positive effect in the form of reduced taxes, which fell on average by 3.71%. Some sectors were down more than others, but we were one of the institutions that lowered them the most. These fundamental factors that helped at that time are perhaps now more stable; hence, we do not foresee economic growth in the country exceeding the projected 4.2%. Costa Rica needs an economic growth of closer to 6-6.5% in order to move the economy to where we need to be. We want to play a more dynamic role in the economy.

How would you rate the bank's overall performance in 2016 compared with the results achieved in 2015, and what are your expectations for next year?

In 1H2016, we have been far superior to what we had projected. We have been working on a strategic plan that we started in February of 2015. We made a proposal to the board, and this served to take a quick action in 2015. There were no serious concerns that we addressed, but rather many smaller corrective actions, mainly at the level of organizational climate due to the momentum of the bank's growth. In addition to slightly changing the organizational structure of our institution, we hired McKinsey to make a three-point consultation, which gave good results since being put into practice in January 2016. The approach we had was to improve productivity with the same resources that we had. We reactivated all parts of the organization, and we focused on some important aspects aimed at increasing our productivity and efficiency.