Bladex: Back to Basics
An ill-starred diversification plan at Bladex put it in the cross hairs of Argentina's collapse. But today the trade finance bank is recapitalized and focusing on traditional lending.
Bladex, the trade finance bank, realized it was in trouble
in Argentina well before the country's default in December
2001. Unlike institutional investors that had begun bailing out
of Argentina, banks could not cut and run overnight. Bladex had
a billion dollar in loans and credit lines at stake, and
long-standing client relationships to think about. Bladex
executives knew that the country and the bank's clients were in
trouble, but reckoned it could make it through, managing risk
as best it could. When the government dismantled Argentina's
currency board in January 2002 and allowed the peso to float,
Bladex really began to feel the heat. The peso quickly lost 75%
of its value and clients of Bladex, which lends in dollars,
faced the impossible task of repaying their loans with a
massively depreciated currency. "[It was] the perfect financial
storm and combined everything that could go wrong," says Jaime
Rivera, Bladex's recently appointed chief executive officer.
"Bladex found itself with over $1 billion [in Argentina] when
the situation exploded." The bank is only now recovering from
its worst year ever....
Already have an account?
Subscribe now for unlimited access to all current and archive news, data and market analysis.
Take a free two-week trial now for the latest news, data and market analysis.