SAN JOSE – The acquisition of HSBC retail banking operations in Costa Rica earlier this week was reported in several news media outlets, including the Wall Street Journal and La Nacion. The latter newspaper approached the corporate offices of HSBC on January 23rd regarding the impending sale, which at that time the bank chose to label as a rumor that would later be confirmed by Efrain Forero Fonseca, president of Banco Davivienda, the Colombian financial entity that acquired HSBC here and in El Salvador and Honduras as well. Banco Davivienda is known for its marked interest in residential mortgage lending, something that makes it a good fit for Costa Rica and its nascent real estate bubble.
The HSBC Costa Rica attainment by Banco Davivienda marks the second time in recent years that a Colombian financial entity makes inroads in the lucrative banking industry in Costa Rica. Not long ago, the prominent BAC San Jose and Credomatic operations were purchased by a Colombian financial consortium.
A possible reason why HSBC declined to confirm the acquisition rumor to La Nacion may be related to a Yahoo! News and Reuters article published on the same day the transaction was formally announced in Costa Rica. According to that article, the United States Senate announced the investigation of HSBC Holdings PLC, which is the parent of the HSBC brand worldwide, for alleged money laundering irregularities. Over the last few years, HSBC has been trying to position itself as a truly international bank, an effort that has brought great convenience to account holders, but it has also come under scrutiny by the United States.
Now that HSBC in Costa Rica has been acquired by a Colombian bank, it may actually stand less of a chance of being investigated for money laundering. Colombia is one of the remaining partners of the United States in the War on Drugs, a policy that has lost favor in Latin America, and this may have played a part in the suspension of a past money laundering investigation against BAC San Jose. When Credomatic and BAC were acquired a couple of years ago by the Colombian financial powerhouse Grupo Aval, the money laundering inquiry fizzled. At the time of Credomatic’s acquisition, US-based GE Capital Global Banking owned 100 percent of BAC San Jose. If there’s something to be learned from that transaction is that HSBC account holders in Costa Rica have little to worry about now. Colombia is catching up to Mexico in Latin American finance, and acquiring regional banks is an excellent way to expand and build stability.
The practice of looking into the banking records of Americans abroad is something that the United States routinely performs for different reasons. Possible tax evasion, money laundering and ties to online gambling are the usual motives behind such inquiries. The latest effort by the United States to look into the accounts of its citizens banking abroad is known as the Report of Foreign Bank and Financial Accounts (FBAR), and applies to all Americans -including those banking with HSBC Costa Rica. The FBAR lead to a string of individuals who renounced American citizenship last year.