Cencosud becomes third Chilean retailer to open Peruvian bank

Wednesday, March 16, 2011

Chilean retail conglomerate Grupo Cencosud was given the green light by Peruvian bank regulator SBS to open a bank in that country to be called Banco Cencosud, in another indication of the attractiveness of Peru's consumer lending potential.

Chilean retailers Ripley and Falabella already have banks operating in Peru. Grupo Cencosud owns the Jumbo and Paris retail chains in Chile, which includes Banco Paris. The group has been operating for some time in Argentina, and starting in 2007, it entered Colombia, Peru and Brazil through acquisitions.

Through the end of January, the Peruvian banking sector's consumer credit portfolio expanded by 14.5%, to 18.8bn soles (US$6.78bn). While that's below the market's average credit growth of around 20%, commercial lending still makes up only about 17% of the total market.

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Some commercial lenders like Banco Falabella emerged as the biggest winners in Peru out of what was a good 2010 across the board for banks (though competitor Banco Ripley did not do so well).

With Banco Cencosud's entry, the Peruvian market now hosts 16 banks, five of them focused on consumer lending.