Retail Giant Wal-Mart to Open Banking Operations in Mexico

October 5, 2007
Mexico City

No matter how you feel about Wal-Mart, you have to admire their persistence. Now this: Mexico banking authorities have approved Wal-Mart's request to operate as a bank in Mexico, the company announced Tuesday. Its bank will operate under the name Banco Wal-Mart de Mexico Adelante.

Wal-Mart plans to open its first bank branches as early as next month. According to company sources, Wal-Mart's target market is poorer segments of the population that traditionally have not had bank relationships or access to bank credit. In addition, the company plans to offer loans in rural areas that have previously lacked this service.

The global retail giant has 964 outlets in Mexico, including Sam's Club warehouses and restaurants, and employs nearly 150,000 people nationwide. It is already a major presence in the Mexican retail market. Wal-Mart will be the second retail chain in Mexico to move into banking-rival Grupo Elektra was the first, launching Banco Azteca in 2002.

Approval for the Mexico banking license comes eight months after Wal-Mart gave up its battle to launch a bank in the U.S. The company withdrew its banking license application before the Federal Insurance Deposit Corporation (FDIC) last February in the face of fierce opposition from consumer groups and unions. Opponents at the time argued that Wal-Mart would threaten state banks and local businesses.
Wal-Mart's size and scale of operations have earned it criticism in many markets for driving local businesses, which often have strong roots to the community, out of business. In Mexico, however, reaction to Wal-Mart has been largely positive. Its large scale enables it to offer low prices that are welcomed in a country where so many live on tight budgets.

Best regards,

Suzan Haskins
Latin America Editorial Director
International Living