The Business Year

Diego Fernando Prieto Rivera

COLOMBIA - Finance

Network Ahead

President, Banco Caja Social


Fernando Prieto Diego Rivera is an economist who graduated from the Pontificia Universidad Javeriana. He has a history of achievement throughout his career at Banco Caja Social, beginning with his role as Assistant Manager in 1989. He then went on to become Economic Research Analyst, Regional Manager, Vice-President of Human Development, and Vice-President of Business Enterprise. After 23 years with the bank, he assumed the position of President in July 2012.

"We have implemented new services in mobile banking and strengthened our presence in the online world through various products."

Since you were appointed President of Banco Caja Social, what are your main strategic goals?

I was appointed President of the Bank in July 2012, and my objective is to ensure compliance with the strategic guidelines defined for the bank. This is a solid, robust institution, which for more than 100 years has focused on working for the masses through savings as a source of development and growth. In this vein of ideas, the activities for 2012 will be directed primarily toward facilitating access to banking, achieving greater penetration in the low-income segments, and providing financial solutions for SMEs.

What were the core reasons for the rebranding exercise the bank underwent in 2011? How has this move changed your activities?

Beyond a simple rebranding, the exercise conducted in 4Q2011 was intended to introduce to the market and clients a bank that has established itself as an indisputable leader in our country in terms of servicing its target markets, without losing its essence resulting from over 100 years of development. Hence, this change gives greater value to the defined brand attributes: the bank is friendlier; it respects and values clients; it is a good communicator; clear, consistent, transparent, and veracious; it is creative and bold; and furthermore, it makes things easier for everyone.

“We have implemented new services in mobile banking and strengthened our presence in the online world through various products.”

How has Banco Caja Social’s product portfolio evolved over the past five years, and what are your future targets?

Our strategy is focused on consolidating our leadership in the low-income market as well as increasing our participation in housing loans, in addition to strengthening our brand attributes. In terms of products, the bank has made great efforts in the micro-enterprise and mass-client segments. We believe that savings are a driving factor in generating development. For this reason, we are experts in promoting individual savings, and we have a broad portfolio of products to meet the different needs of the Colombian people. We are focused on offering access and opportunities for growth to low-income people. Furthermore, we believe that innovation is a key element in our business.

What role does financial inclusion play in your overall business strategy?

Financial inclusion is the basis of all our activities, and we are always looking at how to provide better services within this approach. We constantly strive to better understand the social and economic dynamics of the Colombian low-income segment, and believe that thanks to innovation, we can provide the social and financial tools necessary for that process. Recent studies show that only 24.6% of the adult population has a bank account in Colombia, and only 52% of them have an active bank account in urban areas. Therefore, our intent is always to provide savings tools that will promote the growth of the working class. We also have a significant presence in the housing finance business, where we have a market share of 11.5%. Finally, we focus on the SME and micro-enterprise segments, in which our interest is to increasingly expand our value proposition, not only in terms of recruitment and placement of resources, but also in offering products and financial services such as foreign trade and cash management.

What are you targeting in terms of loans?

Today, housing is the most important sector of our loan portfolio, accounting for more than Ps2 trillion. SME-oriented commercial loans, as well as consumer and micro credit lines, are fundamental elements within the portfolio of financing products.

How would you assess the evolution of e-banking in Colombia?

Banco Caja Social has increased its participation in the internet banking segment in recent years, and I believe this is a common trend within the market. E-banking contributes to reducing costs and increasing levels of so-called financial inclusion, which is very important in Colombia. For this reason, we have implemented new products and services in mobile banking and strengthened our presence in the online world through various products. Finally, banking correspondents play a key role in the penetration rates of banks in Colombia and the use of new technologies. At present, we have about 2,300 “Amigo Points,” or banking correspondents, across the country, and hope to have 3,000 by the end of 2012. Nevertheless, our main objective in the medium term, in this sense, is to build a network of more than 20,000 banking correspondents.

What are some of the key figures of your audited financials?

In 2011, the bank’s profits were around Ps160 billion. Overall, 2012 has been very positive so far. By October 2012, we were close to Ps166 billion in profits, and we believe we can end the year with overall profits of Ps190 billion, which would represent an increase of about 15% to 20% compared to 2011. In addition, our portfolio is growing at an average rate of 24%. Currently, Banco Caja Social has about 4 million clients.

What is your general outlook for the banking sector over the medium term?

The development and stability of the country clearly play a key role in our development, and Colombia is among the top four countries in the region. Furthermore, the penetration of banking services in the country still holds great opportunities. That on its own provides a unique context for our industry, which has grown stronger since the last financial crisis. Currently, the Colombian banking sector is very attractive for international players, and I believe we will see an increase in the arrival of foreign banks.

© The Business Year – November 2012



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