MASTER OF ALL

Mexico 2016 | FINANCE | VIP INTERVIEW

TBY talks to Luis Barroso, Director General of UNIFIN, on supporting the economy through its financial services, the growth of multiple-purpose financial companies, and encouraging investment in Mexico.

How has UNIFIN grown over the past two decades?

UNIFIN was established in 1993, prior to the Tequila Crisis, and this set the mark for the first stage of our history. The crisis of 1994-95 affected both the people and companies, and UNIFIN was no exception, as the banking sector was hit severely. This period, nevertheless, allowed Mexico to build a future that would set in motion important changes from the year 2000 onwards. It was then that UNIFIN entered its second evolutionary stage; we institutionalized the company and provided it with formality to propel its success. We entered the stock market in 2002, issuing bonds for Ps20 million. In 2006, we created the securities based on our lease contracts—the first time leases had been securitized in Mexico. Today, we have issued a total of Ps30 billion in bonds, which represents a growth of 1,500%. We have three main products: leasing, which is our core product and accounts for 80% of our business; factoring; and automotive credit. In 2015, we were voted as the best place to work in Mexico, as a socially responsible company and as the largest leasing company in Latin America.

To what do you attribute the remarkable growth of UNIFIN?

To achieve a strong level of growth in this business there are a series of necessary factors such as capital, financial flexibility, a capable technological and human resource structure, and most importantly, a high level of risk analysis and portfolio management. UNIFIN has all of these factors and that is the key to our formula. Mexico has a low level of banking penetration compared to its Latin American peers and this also contributes to our success, because there are still big spaces to fill. Our business model allows us to move Ps2 billion monthly, by far the largest such figure amongst leasing companies in Mexico.

Has UNIFIN's growth contributed more generally to the growth of Sociedades Financieras de Objeto Múltiple (SOFOMs) in Mexico's financial system?

We were one of the first SOFOMs when the system was created in 2006. This system has strengthened the country's economy and plays a strategic role in the financial system today that is distinct from that of traditional entities such as banks or brokerage houses. We have focused instead on SMEs, providing them with capital and pushing them to grow. This is particularly important, given that SMEs represent a significant part of the Mexican economy. In May 2015, UNIFIN was publicly traded, and people across North America, South America, and Europe all became familiar with us. Six out of the world's 10 major institutional investors hold UNIFIN shares.

What makes the Mexican financial sector attractive to foreign investors?

At the macroeconomic level, the banking sector in Mexico is perfectly capitalized and its non-performing loan portfolio is low. In the particular case of UNIFIN, which serves smaller clients, we are a specialized player in the economy; we have maintained our business model year after year and it has remained successful. Foreign investors come to us because we know the market and we guarantee profits for our clients, we know how Mexico works, and we contribute to the country's financial strengths through our good practices. Mexico has a diversified economy, a large manufacturing sector, and a vast export base that incentivizes investors to establish a presence here. This country faces significant challenges, yet it also offers comparative advantages that render it attractive for people abroad.

Do you think the challenges that Mexico faces will dissuade investors from coming to Mexico?

There are many types of foreign investors and they all see the country's challenges differently, according to their specific needs. Those who come with noteworthy investments aim to stay here for a long time and they are less perturbed by the current situations in Mexico. The country is indeed interesting, and we have important problems to solve, yet investors see beyond that.

What are your plans for the future of UNIFIN?

We want to keep growing in Mexico. We have 11 offices in the national territory and our goal is to reach 20 in the next two years. We have strong growth targets and we are confident in our future success because we leverage our experience and know-how. We will maintain our business line and our future lies there.