HSBC 2005 Annual Report Download - page 21

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segment, payroll and pension-linked advances
emerged in 2005 as a significant source of lending.
Banks also developed ‘virtual’ banking networks
known as correspondentes bancários. These are
typically small retail establishments offering basic
payment and banking services on behalf of
established banks on a commission basis. By the
end of 2005, HSBC had developed a network of
1,824 correspondentes generating close to one
million monthly transactions.
In Argentina, HSBC’s competition comes from
international financial groups which, in most cases,
provide an equivalent range of banking, insurance,
pension and annuity products and services.
The completion of Argentina’s international debt
swap negotiation eliminated a major concern that
had overshadowed the country and the financial
system. This had a significantly favourable impact
upon the pensions and life insurance business, which
also benefited from increasing contributions as more
people returned to employment in the formal
economy.
Consequently, the banking industry showed
improved profitability with many of the larger
foreign-owned banks re-capitalising their domestic
operations. Continued growth and increased
confidence in the economy were reflected in
increased deposit levels and a 38 per cent growth in
demand for loan products compared with 2004.
HSBC sees the return to a more normal business
environment continuing and intends to monitor
opportunities within the financial services industry in
Argentina with a view to growing core retail and
commercial banking franchises.