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The deal between Colombian holding Grupo Aval's group of banks and local retailer Almacenes Exito will contribute to increased banking penetration in the country, as non-banking customers will be able to pay utility bills, make tax payments and pay into social security program PILA at Exito stores, David Pelaez, analyst at local brokerage Bolsa y Renta, told BNamericas.
"Besides the fact that a large chunk of Colombians make purchases at Exito's chain of stores, the Exito store card ranks number three in the Colombian financial system in terms of number of issued plastics. So, this alliance has a very large potential of attracting non-banking consumers," he said.
Exito has more than 1.3mn cards issued, only trailing market leaders Davivienda and Colpatria, and close to 700bn pesos (US$390mn) in receivables as of end-May. In comparison, Grupo Aval's largest bank, Banco de Bogota, has a 7% market share in credit cards.
LOTS OF BANKS, LOTS OF LOCATIONS
"If we add our current branch and ATM network to the 3,235 cash registers in 261 Exito stores around the country our customers now have 6,900 places to withdraw money," Sergio Restrepo, Banco Popular's commercial VP, said in a press release.
Through the alliance, the banks will strengthen their ATM network, which is already the country's largest, Pelaez of Bolsa y Renta said.
Grupo Aval banks represent about a third of the banking system and share the "A Toda Hora" (ATH) banking network, with more than 2,000 ATMs nationwide.
"I think it is positive for both companies, as it could increase the volume of people going to Almacenes Exito stores and it could even broaden Grupo Aval banks' customer base by making transactions easier," Felipe Sanchez Quevedo, senior equity analyst at local brokerage Serfinco, told BNamericas.
Almacenes Exito's retail stores comprise hypermarkets, supermarkets, and discount and other stores. The company is controlled by French multinational food retailer Casino Guichard Perrachon.