BBV-Probursa / Bancomer

MEXICO, 2000


The merger involved the creation of Grupo Financiero BBVA-Bancomer, an association between Grupo Financiero BBV-Probursa, SA de CV and Grupo Financiero Bancomer, SA de CV, the country� second largest group. The analysis was originated because of the dimension of one of the banks and because the merger had integrated the two financial groups in their entirety; that is, banking services and others such as brokering, insurance and afores (retirement saving funds administrators). The services evaluated were: demand deposits, term deposits, bank bonds, inter-bank loans, saving accounts, commercial credit, credit for financial intermediaries, credit for housing, credit for consumption (by means of credit cards), government credit, fiduciary services and purchase and sale of foreign exchange.

The analysis, considered whether that different financial companies are empowered to have national coverage. The number of branches that a banking institution has in order to cover specific geographical areas was adopted as a measure to calculate the concentration indices. The Herfindahl and dominance indices in each of the above-mentioned markets indicated that the resulting merger was situated within the thresholds that the FCC has established as a reference to identify situations where a transaction has few probabilities of affecting competition. The results reflected the presence of important competitors such as Grupo Financiero Banamex, SA de CV and Grupo Financiero Santander Serfin, SA de CV.

In addition, the importance of bank branches to attend to specific geographical areas was evaluated. The FCC concluded that the supply provided by other competitors in the different localities would prevent the emergence of an agent with substantial power. In regulatory aspects, barriers to entry are generally limited to compliance with basic requirements established by the financial authorities, although it is worth emphasizing, among the regulatory aspects that have a bearing on markets, that foreign investors can participate in financial institutions only through affiliated companies. Nevertheless, this regulation does not prevent foreign institutions from acquiring control of Mexican institutions. Markets for complementary services where the parties notifying participated were also considered. In these markets it is common to find companies participating whose shareholders are various financial enterprises that at the same time make use of the services generated. The complementary services analyzed were: transport of securities, clearing and liquidation of securities, data processing, processing of operations for credit cards and automatic teller machines, and also for credit information services. The merger would not affect control or decision-making in the corresponding companies.

The FCC authorized the transaction notified by virtue of the fact that it does not place the process of free competition at risk.