It's no wonder Gerardo Mato is enthusiastic about emerging economies. As CEO of HSBC's Global Banking for the Americas- a region that comprises all of Latin America and Canada- he believes that over the next twenty years a crucial part of HSBC's business will be associated with these new global growth centers.
Developing efficient mechanisms at the local or international level to finance corporations, and even at times to help governments get financing, is one of the tasks that has occupied Mato since he began leading this area of HSBC a little more than two years ago. "The only way to develop the corporate sector is through low-interest loans and medium- to long-term financing," said this United States-based Argentine, who in the past has also worked with Merrill Lynch. "This can be done locally with some limitations," he said, "but if it's a question of financing large corporations as Brazil did, corporations with global penetration, outside financing is needed."
The results don't lie: between 2010 and 2011 before-tax profit of HSBC Global Banking for the region grew by almost 30 percent, from $1.8 billion to $2.3 billion. The growth is even more dramatic if you consider that in 2009 the sector generated barely $1.1 billion, less than half of the 2011 result.
"HSBC's business of global banking, corporate banking and investment banking was very limited in 2002," Mato explains. "We began to focus our efforts on developing key relationships, which helped us develop these areas, starting with focusing more on the debt issue. But our approach is to build lasting relationships. When you build long-term relationships, business follows naturally."
Innovation was key to many of the businesses Mato is referring to, especially as relates to consolidating the "south-to-south" axis-that is, the commercial and financial relationships between Asia and Latin America.
"We opened the Asian market using perpetual bonds," he says. "We reopened the pound sterling market, and recently we were first with a "dim sum" bond for America Movil, which became the first renminbi bond in the history of the region." Through HSBC, America Movil became the first company ever to issue debt in the local currency...