Wal-Mart to Open Bank in Mexico

Wal-Mart de Mexico said its new bank will open in the second half of 2007, the first such venture by Bentonville, Ark.-based Wal-Mart Stores Inc. anywhere in the world, according to Reuters.com. Wal-Mart de Mexico received final authorization to operate a bank that will offer basic savings and loan services to low-income earners with limited access to credit. Wal-Mart de Mexico, which is controlled by Wal-Mart Stores Inc., is one of five new consumer banks that will launch operations soon, as the government expands lending beyond traditional institutions, which are often criticized for charging high transaction fees and interest rates. In the United States, Wal-Mart faced congressional opposition when seeking to set up a similar banking-retail venture. Analysts predict that Wal-Mart de Mexico's broad reach, which includes 872 outlets from supermarkets to restaurants, will force the Mexican banking industry to lower charges and prevent clients from switching to new banks. "A high percentage of our clients are in sectors with no access to banking," the company said in a statement to the stock exchange. Julio Gomez was appointed as head of the bank. Banks run by retailers have become attractive to investors in Mexico since Elektra, which sells everything from stereos to plasma screens, launched Banco Azteca in 2002. Famsa, another low-price retailer, also has received its bank license mid-year.