How do i industry sign banking new mexico business plan template
[Music] good morning everyone and thank you for joining us today it's officially 11 not too um so we're gonna go ahead and start the discussion um first of all I would like to thank all of our viewers and our listeners for joining us today and our lovely panelists I hope you're all well and safe I am Alejandra gomez country director in Mexico for the business year and it is my pleasure to welcome you to the new rules thank you for a post pandemic Mexico this is part of our digital events that the business here is organizing around the world to help our c-level audience stay informed during these times of great change to see the next event so we are organizing please make sure to check out our website events dot the business year com I'd also like to thank be back for collaborating with us to make this event possible and today we have a very exciting program that spotlights the Mexican finance industry and the challenges it is facing during this pandemic along with opportunities like Kobe 19 represents to create better solutions for underserved markets and of the Mexican population the program will start with welcome remarks from the talented and Finance extraordinaire Murray is a CEO kiba followed by a discussion that I will be moderating with Francis Nora director-general of Banco Sabadell the VP Carlos what is a head of Finance and after dose eval president of Nexus Capital which will conclude with a brief question-and-answer segment so please make sure to share with the business year in our question-and-answer segment below any of your questions that you would like to ask our panelists during the events we would also like to invite all of our attendees and listeners to share your thoughts and comments on our Twitter throughout the events and so please check our accounts TDY underscore laptop tvy on their sport laptop to share your thoughts on Twitter and so without further ado I present to her audience maryadas a CEO FIBA an institution which launched on July 2008 with the objective of boosting the Mexican stock markets she was previously CEO of the Mexican private equity Association also known as Amex cap and she has a master's degree in management from Harvard University Thank You Maria thank you very much for the invitation business year thank you all it is my pleasure to be here Kovach 19 it's one of those rare events in history that would completely reshape geopolitics societies labor and consumption trends and markets key global stock exchanges suffered the worst intraday Falls since 2008 in March 2000 20 limiting a positive start to the quarter in terms of IPO and further offer activity although we seen a typical recovery on American indicators as a consequence of national emergency plans announced or white and central bank measures there are still relevant issues that will need to be addressed at an international scope Cobie 19 it is likely to be a catalyst for further tectonic shifts in the US and China of the coping and increasing commercial and geopolitical suits a big for their supply chains globalization and currencies volatility with harder applications to worry emerging markets coming into our national scenario we are not only facing Kovach but we have also diverse factors turning to this crisis before in all prices had a direct effect on panics income resulting in a downgrade for the company and our sovereign we've recently faced a rapid currency devaluation reached an historic 25 pesos dollar range while incentivizing foreign capital historic outflows from sovereign debt vehicles even with our interest rate continuing continuing to be very competitive this in addition to the not well-received inclusive government decisions such as the cancellation of border fine for foreign investments and finally the persistent to carry with large investment projects through federal budget which have not yet been demonstrated feasibility or economic economic viability this is making it very difficult for Mexico to remain competitive people before investors who constantly opportunities and risks throughout international markets in this sense private investment system state is the state he mated to fall by the end of 2020 in fifteen point three percent of GDP down from the already 18.2% downsizing experience in 2019 the lowest proportion since 2014 what public invested ended the year at 2.7 percent GDP the lowest proportion since 1999 since market dynamism depend animism depends on company's ability earnings both primary and secondary markets have suffered as well new listings are facing an important contraction in the Darren equity capital markets March 2020 ended with a reduction of 22 percent capital raced against 2019 and 70% reduction against 18 April was partially compensated by the issue of a 25 billion Mexican pesos Libre a a typical because of his connection with one of the greatest Mexican companies grupo Carso nevertheless in terms of long term debt for example according to man Norte and Bibi's data there was a 97 reduction in terms of capital raised when compared to April 2000 2002 Viva which is bebas main national index has registered an average 17 percent decrease so far this year with company's quarterly reports expected to underperform for this second year period therefore possessions flows of non-residents on equities have been decreasing since 2019 continuing this year to reach a minimum balance we all know this we know that we are facing we know to what extent our government can and will support the economy and the fact of the matter is I think right now the most important thing we can do is to put a safety net in place of last resort for employees for the health system for shareholders and for businesses integrate that social benefit that we can so that we can manage our way through an unprecedent crisis and I'm talking we us finding a balance between business and government is critical so how do we try to take this into our hands and move to a solution not for 10 but for 2050 a hundred million paratus that's a question how do we scale this how can we help each other to democratize this solution I think it's what we should be all focusing on tackling for entrepreneurship and innovation to thrive for companies to grow and survive not only credit meets needs to be accessible but there needs to be a different that maybe need to be a different types of financing capital markets are an important source of long term finance especially since SMEs have been primarily dependent on banks for financing and with very low penetration so far a financial system that is built on the two pillars banking and capital markets is stronger than a system that is built solely on traditional banking they are both crucial components of an economy and it is impossible to say unequivocally which of the two systems is better for the economic growth the capital market can can and should compete head-to-head with banks in the supply of debt financing to business including those to SMEs capital markets should be part of the long-term solution of equity and debt financing for SMEs we have a panel today that comprises in sum for financing alternatives for Mexican companies at different stages with different profiles and risks Bank was data focused mainly on the base of the pyramid working to close a Mexican financial inclusion death for those under served and with poor financial culture Banco Sabadell facilitating financial mainly towards SMEs with a digital approach Nexus capital one of the most recognized funds in a 58 billion assets under management industry which through private equity and management tools is helping companies to scale to the next level and us Biba completely committed to provide efficient financing for fast-growing companies and to create a broad and liquid capital market for our investors that could lead to faster rates of capital accumulation and general productivity gains in order to reach the full potential of our financial system we need to work together to complement each other to continue to provide improved services and products and invest in technology and infrastructure to make sure we tackle the problem to be sure we include everybody to remain focused on closing gaps and making our financial system and an economy stronger beyond all this crisis will prevail and has been the case in the past there will be relevant opportunities for those of us who are ready who were capable to adapt who were agile flexible and resilient and of course lucky historic global crisis often feel like they put history and fast forward processes that normally take the Becket's or longer to play on fall in a couple of months today for example a rapid digitalization is taking place worldwide data is being created at the fastest rate ever with 50% increase versus precoded in math in parts of the West while tools such as Big Data artificial intelligence film tax and the optimization of processes acquiring 9% president relevance Mexico has great opportunities if we can hold it together and get ready we are country number one in Latin in FinTech ecommerce is currently worrying growing at a twenty four percent scale per year plus M&A activity is also increasing leading us to believe that big companies are eager to acquire new business models and technology opportunities in healthcare digital consumer AG staples industrial real like following our USMC a technology infrastructure all of there for us the funding will be required that will be required will be huge and that brings us all and then brings me back to the collaboration among players and the way we can play together to attract capital to our country when reading in Chinese the word Christ of two characters one represents danger and the other represents opportunity it is up to us to make the best of any change that occurs in our families in our sector in our countries in a world thank you thank you my dear for that lovely message and a powerful reminder of the importance of collaboration during these challenging times particularly for all the players within the finance sector and thank you for also giving us an update on the advances of the capital markets here in Mexico thank you and just to I reminded for the audience maybe unfortunately has to leave for an important commitment that she has during this channel but maybe she will be able to join us for a conversation and to continue with the panel first of all I like to think again the listeners are here today we almost have 1,000 listeners here today during this event and also don't forget to keep in mind your questions for the question and answer segment and to stay in touch in our Twitter TV why underscore at that time is the mix in our program is the discussion with our lovely panelists first of all we have Frances Nogueira CEO of Banco Sabadell in Mexico it is a subsidiary of the Spanish bank that he founded in 2014 and it is currently already among the top 10 banks in the country throughout his 20-year career at Banco Sabadell he has held international executive positions such as deputy general manager of business at Banco de Bahia and senior VP and general manager of Sabadell banking operations in the u.s. Thank You francisc and we also have arturo Saval he's the president of mexico one of the main private capital fund managers in Mexico he has over 37 years of experience in private capital investment banking and commercial banking before joining Nexus capital he held directed positions as panthan dead and grupo GBM and currently serves on the board of numerous companies that cater to the mexican middle income markets thank you and we also have W Carlos wadis whom is head of finance IT marketing HR product and digital transformation of a corporate conglomerate that consists of over 20 Mexican companies including CBS Decker group Elektra and Bank Corsica he was previously head of retail banking in panco Seca and CFO for Norfolk and has a master's of International Affairs from Columbia University so thank you all of you and today Thursday May 14th is definitely an interesting timing for the panel as the government just recently announced its three-step program for the reactivation of the Mexican economy yesterday David I would like to start with you and take advantage of your experience managing different markets in Latin what is your perspective on the reactivation plan that was announced by the government's and how would you compare this plans capacity to efficiently reactivate the government in comparison to what other governments and that time are doing well first of all thank you thank you for the invitation Alexandra thank you Francis and Arturo for for being in this panel wouldn't eat together and thank you for everyone in the audience to for listening now I think that there's been different degrees of of government interventions in in each one of the countries in Latin America there's a sign of of total isolation of the population and we believe that I mean we have a producer in Peru and that has been very complicated and then you have the side of Mexico in which various isolation but it's it's more flexible and which one is better really there's no answer because we've seen for example in Peru that the rate of conduct of contagion or of the population is it's actually at the same pace as Texaco so I think it's actually people in this type of pandemic is good in terms of a health issue but not economical so in Mexico the the measures that have been taken to preserve health are adequate but still there's there's a lot more things that need to be done in terms of the economy it's another it's actually another odd story Dede piece is contracted it has been contracting since last year and it's probably gonna continue this year at a very very rapid pace I would say that it's probably gonna contract double the average rate of Latin America we were facing the perfect storm in terms of the virus oil prices collapsing we also have the the trends of the contraction 2019 business confidence has been dropping significantly and there's really a lot of stimulus by the government we've seen other countries you know that one merica that have provided stimulus of between four to seven percent GDP in med schools less than 1% of GDP and really the measures that have been implemented by the government are ultra marginal VA ATVs were reimbursements more subsidies to gas that around two billion dollars for SME loans which is really around less than 1% GP the only the only real message that you see that that could have some impact comes from the central bank the central bank is providing more liquidity to banks around 3 percent of GDP but the issue there is that this money has to flow for the banks to SMEs and to to people that are very mean of a refinancing or in need of liquidity for for a cash flow generation so I'm here I think the challenge for the banking's season is to actually make those ones available in the u.s. what you saw and I think that's a really good model in New Mexico you're not seeing it you saw that for very small companies there's loans that are actually for for paying employees so that they're they're not fired and and those loans could become grants within a year if that company continues employing those those people and for SMEs those loans are permanent but they're their payment schedules and their conditions are actually more flexible than in normal types so really Mexico we need to see more this more money being injected by the government more government more money going into infrastructure projects really to think about the Maya train or to think about a refinery when oil prices have collapsed and when we do have social distancing and they're not really the projects that you need right now next when they were already in a budget anyway so what you need is something that will provide stimulus to smaller companies infrastructure and especially health infrastructure the Mexican health infrastructure is is very deficient and we need to invest so that when we have another pandemic which this program happen or we have a recurring current a virus isolation or a new a new wave of contagion we have the health facilities that will provide these services to people that are getting sick so estimation I think and in summary we are we have not reall
attacked the problem the way we should in Mexico in terms of fiscal stimulus in terms of helping gdpr recover Thank You W for your remarks and yes definitely the reinvesting in the Mexican infrastructure industry is gonna be one of the key pillars of reactivating the economy as a whole and to continue francisc considering the Banco Sabadell in Mexico specializes in corporate and investment banking as well as commercial banking from your experience in what way has Kovac 19 impacted this area of the banking sector in Mexico and what are you main concerns for this segments well yeah well we actually we as you said we target medium large and corporate companies and also we are very active at project finance as well and I would say that the most vulnerable segments given these crises are especially SMEs and individuals some is because they usually don't have much cash and therefore they can not afford many moons without an income and and also usually they don't have strong shareholders I can support them during the crisis so that's why it's very important that they get facilities not only from from banks but also from from the government and also from from their clients most of these of these SMEs are suppliers of larger companies and what they supply must be critical for for these large companies so so these companies must be a word that if they don't support them now they may lose this this this sort of supply and this will this will be something very difficult when when it comes to the recovery to to resume all all the activity so so it's it's paramount that we all support them in a collaborative manner and we ensure that they managed to survive the disc Rises in our case as I said we we target more larger companies and in general terms they have Treasury they can they can support these disguises for for for many months we have been restructuring the the credits we have been granting them a grace period in capital in principle repayment for for up to 12 months so they have enough time to to recover because when it comes to the recovery we think it's going to be very asymmetric there will be a recovery for sure because this has a technical solution once there's a cure something that works people will resume during the the former activities but the recovery will be gradual and especially will take longer in some in some industries such as tourism or or or transportation and so on so we need to support them definitely and especially when it comes to us a Miss because they are very very vulnerable I guess princess thanks for sharing what Banco Sabadell is doing to help this important pillar of the Mexican economy it's definitely a deep concern that a large percentage of the labor force and make it go depends on enemies and so training center coming together to supporting this pillar is very important and to continue on judo Nexus capital has one of the longest and most successful track records in alternative assets in Latin and it has successfully listed six companies in the public markets and in what ways are you changing your investment strategy in Mexico to adapt to the context of Kobe 19 yeah well things will thank you first Alejandra - tby for inviting me to this panel of a person and they're the tiny ace impeccable as I think was mentioned first of all I think that I will there will be a lot of forensic analysis on the things that we are living these days of course worldwide but also in Mexico I have been said that the lack of collaboration if not super bad for a government so cases these states have a support but the lack of support or coordination is is a big if what I want to focus on the future you mentioned you asked me if how we have changed the destroyer year well we have gone through the through the stages of surviving the containing the costs and expenses as he prepared for the next steps well we do operate that inequity France in Mexico and also with operate the private equity fund in Spain so the comparison is is there in this very dramatic the size tranche F will not allow me to lie because the size and depth of the support by the Spanish government or the US government as that we did mention as well is tremendously high the Mexican us again even to the GMP well there's some countries German is and the extent of more than thirty percent of GNP employees that has to be companies and most of this support is going to be s East so which is our our main goal here our main goal today once again we have passed to you know be ready for this contingency sustain the pace but the next words are guess the real plane stage how they are you going to think your industries your companies which one are going to thrive which one are gonna be suffering as Frances's notice a longer recovery for instance tourism transportation those are gonna hit our restaurants we have investments in those sectors so we know what we are happening there but the play here is how do we prepare from the next station and this is the most the most important thing what does the Mexican economy needs and it has been said in thousand different words its funding funding funding equity equity equity as in addition to that yes we have a lot of doubts about the you know the attitude of the person administration's to empower investment a lot of things have been said about now we note no you know it's loading large companies I don't know if that's the issue the issues that we have as Maria will say immediately to function two million people with the focus on a hundred twenty million people so the changes that we are applying in our strategies right nowadays are preparing the company so this new economy the new normal they call it are gonna call the new normal but we have to think is which sectors are not right which sectors gonna be surpassing others in their world wheel economy okay I don't want to listen to all the other speeches in the US or Europe very Mexico the problem we have right now in addition to the Pat vania is the fact that we're gonna have a very long recession the only discussion we're having this day we use the Economist data is how deep these position is gonna be nobody has a doubt about that and we come from a year in a recession aleena in a reduction of unity so the main main is changed in Australia is to prepare for the next step and with this I would say that the country cannot move on unless we are ready to you know put a lot of work put a lot of effort ad and all the collaboration that we did mentioned something is there only the banking system friendship was talking also and Murray and his intervention were sort of talking about the pillars of the financial system well the banking system is going to have a huge special in this capitalisation relation mr. white because of this deferral of payments of course this restriction of course there would be some some paths Newsome some PL and as the obligations and we serve there will have to be accumulated and everybody will be pressurization of the banking system huge we need to move in order to you know attract private investors domestic first institutional elevator into financing mechanism through the stock markets a loss be possible at the largest possible stand gain the correlation of both domestic and international development institutions in such a way that again the name of the game is gonna be funding funding funding everything else will not help I mean people do not eat speeches and nobody cares about GNP until they lose their jobs so the things we must keep Gary very delicately taking care of our jobs and after that we'll look at rebuild that's the the turbo we're having of course focusing on keeping the the teams and the client the customer safe and then cash flow because I mean if cash is always King now is more king than ever and after just to continue a little bit what you were saying you were saying there are a lot of analysts focus on how deep the recession is the non how long a for Nexus capital what are you preparing for how long do you think this recession will last well it depends on the industry we are a pretty diversified firm in terms of equity investment we have 11 different investors nowadays that to do acting seven different industries of course we have something in tourism because twenty three months ago was you know one of the largest place and the most interesting ones but I do believe that the leisure industries in general travel tourism Westerners bars are gonna suffer the longer recovery because of a couple of associates one would be the regulations that we have to get how they apply in Mexico even in different states are different measures a the appeal of people who consume to go to this place is forty you know going to a plane and it's like to Cancun or to Europe those are those ingredients are not there and any projections you might assume rightly proud because the world has never gone through this so those are going to be longer of course there would be some some industries will have an area more vicinity arena like the one cap in transportation which is taxi on the largest transportation road transportation company in Mexico and for personnel and those are going to be there actually you know doing very high volumes because those are strategic however and the other set of companies we do have are in different stages they might you and these years gonna be very hard again because you can be ready but you don't know you're a business I can have a you know a captain sitting at the door of the restaurant or no mice are gonna come in through the door we have enough investors in construction but it's a world that's two district oh the troubles were an asteroid week and yesterday it's all know they're gonna start three weeks from today so that's kind of a miss coordination is also it's also damaging but I do believe that the general this year is gonna be I don't want to use the word where I have to used a last year and this is a vial and readiness year again we have to think what comes ahead and and as leaders in our role as managers we need to think a year or two years ahead and that's the hardest part where do we focus our our goals a how do we reshape and rethink some of the businesses worrying is not thinking out of the box is like is thinking that like there is no box we frankly speaking there is no but nowadays noodle and to continue with Rupa Salinas as Midea was mentioning I has a financial empire stick and I so should focuses on the bottom of the economic pyramid here in Mexico immediately it had to close thousand two hundred of his point of sales when it comes to guru boy Elektra what are some of the challenges that the group has faced providing services to this segment in the market during the pandemic and what are your expectations for the company during the reopening of the economy yeah well we had to close actually the points that sell merchandise electa but the bank continues operating because it's an essential activity that actually has happened not only Amex could happen in all the countries that we operate and it's to varying degrees but the bank has been almost steadily operating and you know it's it is it makes a lot of sense because people need cash I mean the worst that you can do is you know people not have access to to basic goods and also not have access to cash so on that assault but really what are the challenges I mean the first thing is of course we need to have and it's gonna sound counterintuitive we have city to our clients I know there's social distancing policies right hand place but this similar to clients allows to have a good reading on how they're doing even though we provide as you know long personal loans and loans to finance the purchase the purchasing of merchandise at La most of the clients around at least half of them use those loan services working capital there are micro loans but they use them to buy you know maybe a blender or some type of tool that will allow them to have some businesses so with this proximity we know how their activity is doing we know if their needs they need some type of solution so some type of no payment holiday or or new conditions from their loans or even liquidity to continue businesses of course with with all the isolation policies many of them are not doing their activities on a regular basis but what this allows us to have a feeling of how they're doing is you know our clients pay on a weekly basis so we need to be very close to them to see they're gonna have enough liquidity to pay for their next their next payment so that's one second we need to provide them with financing to rebuild their working capital many of them are strong are struggling we still don't know to what extent there [Music] I'll be affected but they're gonna need working capital and that's circulation right now cash flow is king and so if they have this money to continually as the economy opens it's actually going to allow them to face this new reality much better um what do we do well we need to be more stringent in our in our loan policies yes so we need to provide more verification points when we on the right alone and before we used to have some clients that had automatic loans right away now we we are having a step back and we're gonna have we have to go to see you know where they live to be to know that they're gonna be able to serve as a loan so we were a little more stringent than how we we approach this on ready process and we also have to provide them with more digital solutions so that they can were so long that they can do up with patients and also they can make their payments we have a bank Rustica has actually a very advanced it's actually and I know France isn't gonna like this but it's the one that's most download in Google and and it's it's very very tell you advanced app in terms of being able to transact with clients and we need to provide more facilities for our client because one thing is having yeah the other thing is having clients in the base of the pyramid using we need to educate them so so we need to be more more proactive in helping them know how to use this this solution the third thing that I would say is we need to intensify from nursing education that's a big challenge we have a big financial education program at Banco sticker where we we teach our clients how to manage the finances and also how to build up their businesses with the loans that we provide to them so here we need to intensify it we need to show them how stress they can they can use their cash flows and and and use them to continue with their business activity and especially because those cash flows are can be more reduced so those are the three challenges I would say for Bank like us that we have to face and to continue with the topic of digital banking digital banking services and even has personal services completely how has this focus on the digital transformation prepared to Bank for the time so social distancing that we are currently living and have you noticed to search for the Manatee services in the past couple of weeks yeah definitely well we were born as a digital bank the bank was founded five years ago and and at that time we decided not to develop a branch network because it would have take it would have taken a lot of time for us to develop that that that network to compete with incumbents and and it's also a infrastructure which is very costly so in the end you have to charge what to translate this cost to the customers so we decided to go digital from from the outset and and this crisis is a great opportunity for us I give you some some songs some examples of things that we have that show that we have managed to adapt very fast to that we deployed Home Office full Home Office the food bank in in in less than one week in mid-march and and this way we have managed to avoid infections in our in our staff so we had no infections whatsoever and people feel very protected by by the bank and we have been able to cooperate without any any problem doing the remote operation with with our customers and we see a lot of opportunities why because the digital appetite is more than ever many people that never experienced purchase ecommerce are doing so the number of space of banking transfers in Mexico is growing exponentially many people that were usi
g only cash now are starting to open a banking account and I'm getting money transfer and also something very very very interesting for us is that the regulator the government and also the central bank are becoming more and more aware that all banking products must be you must must offer the possibility to be on boarded and period online it's something that doesn't happen presently but we expect that by the end of this year most if not all of the banking products will be will offer the the 100 online that's something that's going to be a game-changer for for the industry bangs new bangs challenge such as our case we'll be able to compete face to face with incumbents we will be able to scale to the whole country and I'm able to offer good conditions for our customers lower costs because the infrastructure is cheaper than the infrastructure and also a better user experience so in the end I think that the whole thing will will help in advancing into financial inclusion in Mexico the more people the more Mexicans use banking products the more Mexicans that will be eligible for a for a credit in in the future and therefore the possibility to grow their business or to grow them personally so all in all I think that it's a great opportunity these crises is an accelerator for some trends and especially for the digital wall you know in our case as a bank we are very prepared to take advantage of these opportunities for sure Thank You Francis and just a quick reminder to our listeners so we have one more question before a Q&A section so please make sure to submit your last questions before we enter that part and to close up this discussion why should businesses be focusing on investing in during this pandemic I thought this discussion considering your experience in value creation within the Mexican markets yeah - well first of all it makes you you have to think it half you have to think a couple of years ahead you have to see where your company is going to move over the tendency will be of course again we do not know where it's gonna be headed you just want to point out for instance a couple of examples FinTech franchise just made us a great explanation of solidarity Mexico and I'm frankly speaking that's that's a game-changer I totally agree look things occurring in Mexico not only because granting access to people that actually are not being served by the bank with some exceptions as precisely when cos theta but because the digitalization of the actually some must not only for practical reasons also for fiscal reasons one of the main issues we'll have in this country the level of informality and that's why all the taxpayers are the one that frankly do end up carrying on the burden for a second the areas where we believe that there still is going to be a lot of room are again given certain basics are those related to the digitalization to technology to the inclusion of the lower tiers of the economy into a more formal are more practical area 8b let's consider this country has a 27 year age as an average it's a very young country I want to say millennial is a really gentle country and again so 20 million people and place where we can do a lot of business and something very important I wanna keep talking about coordination between the private and public sector what I do want to talk is there are three three groups of people don't you see things happening those are not aware that things are happening and the ones that make things happen so I believe as answering your your direct question that's a business leader we need we have the obligation of looking forward and pulling the water if the government is there or not okay it would allow me to have it but it don't you need to move and of course again we cannot rely only on the banking system we cannot put the pressure only on the banking system I mean a banker I was a bank for a number of years and the capital has its own the capitalization ratio has its limits and of course that's what we need to open new avenues that's why what I do see in particular for ourselves is we see a lot of opportunities in debt in the place instructor debt in messing in that we don't be necessarily quiddity and the necessary waste periods and instructors as for granting those our business that you appear to have opportunity from the future to move on to go to the next stage something very important for us as Nexus capital is not saving a company it is preparing it for the next stage I cannot think for any longer than a crisis could be that our companies will not find that comedy's will not survive something very important and very dramatic is the fact that a secret mentioned the US government the European governments the Spanish government have done a lot of support for the companies and let me just point this out when you to the Mayan Riviera and using the composition of the industry there which with Spanish American and European hotels all of these guys are having a lot of support the domestic ones are not having okay so nevertheless they will have to survive and prepare for the next stage that is the attitude that the leadership in the private sector should maintain yes you can claim and you need to point in [Music] coordination between the public and private sector for the case of SMEs if this lack of adequate action from the government continues what is the capacity of the private finance sector to ease their burden how prepared or willing or Mexico's private finance financial institutions for this well yeah the banks are doing all the companies as well as I told you before they are supporting their suppliers that most of them are SM is but that's not enough definitely I can give you the example of Spain because our head office is based on on that country in Spain the government is giving a guarantee on new credits to SMEs it's a partial warranty but it's enough for banks to be confident to learn more money to as a reason and to ensure this flow of money to do a segment which is very in Mexico we don't have this capability and that's quite a challenge so what will we see in the market are some initiatives such as the one of concert hall Mexican bank to give support to SMEs and all sorts of collaboration will be necessary to support this this this vulnerable companies I hope that the government will give some facilities we don't know that but in the meantime we we all have to collaborate to support them for sure Thank You Francis and another question that we received that I'm going to direct to W as you're also head of IT for what about cyber security differently the bargain Lopez I'm here to talk some fishing or rising dramatically during this pandemic with bank employees in association with sophisticated hacker paths yeah well the thing is with this social distancing people are using more payment platforms and other types of digital solutions to interact and and of course that that is good territory for hackers and for people that want to do frauds and and here I mean there's banks have been investing heavily in cyber security so there are only I will tell you necessary firewalls protocols in order to to avoid you know massive attacks but that doesn't mean that fraud is is going to be eliminated it actually can never be eliminated and what happens is that most banks just actually set aside a portion of the P and now to be able to observe this and I think that what's gonna happen now is there's gonna be a new reality and the new reality is that this type of digital interactions are gonna be more intensive going forward I think that there's gonna be more protocols that are going to be put in place in order to avoid you know some of these massive frauds and in order to be ahead ahead of all the people that are trying to do all of this harm now they're really here there's and that's that's that's the thing that that's most worrisome there is trade off because you're gonna have to invest more but you're gonna have less resources to invest and so you're gonna have to prioritize and do your prior ties servicing your clients in a much more efficient manner or do you prioritize biosecurity cyber security sorry and so therefore here it really depends on what the strategy of each bank is following if you want to become a full-fledged at your bank then you do make a lot of these investments and that means you're gonna have to reduce expenses somewhere else and just going to continue with with their systems as they are and that's that's gonna be of all the realities so I will tell you that really in the end what matters here is that clients actually know how to use these tools because most of this type of hacks and phishing etc are originated by by a mistake buying clients of you know response I think to an email or responding to some type of an of communication that is not with the institution so I thought that banks I overall need to be more intensive in educating their other clients in what not to do in order to avoid all of this and that that is not something that needs heavy investments that is just something that you need to do an ongoing campaign and you're gonna see that this is asking for most of the foreign investors certain actions from the current government of Mexico basic concern for example red alerts like the new airport being canceled over the recent directive energy what's your take on the overall risk for foreign investment under the current Mexican government's yeah yeah glad to we having did this for 22 years most of our mix of investors it's actually 4e of course we have some investor from the Mexican pension funds their forest but most of them is foreign and of course we do go out you compete with all the other countries and regions of the world for this equity having said that there is the - and the process the - are yes these activities that do racin about the state of law in Mexico that's something very delicate and of course as a Mexican I cannot but criticize those acts and I hope that in the end this would be corrected somehow we just got a show in the in the Supreme Court decision of bringing back the the governorship of extension in the Baja California which is a good I would think on the polls you have again a very young country very large country are very reaching in natural resources and close to the largest market in the world so again these are advantages that we have been fostering for the last 22 years when we have done fundraising abroad and and I believe that the the balance is still very very positive very positive but stop complaining let's move on let's go ahead and me of course we'll have to show why the opportunities here are better or will be better than then another con regions of the world in particular I believe that the depth place are gonna be the most relevant in in private with the arena a private markets in this coming months if not years because of this crisis again but in essence what I do believe I'm positive is the fact that we need to move on we need to again pull the wagon and and show to the foreign and global investors we have a lot of having some global investors that the opportunities and there are there and I also cannot forget about comparison with the phone we have in Spain or by the way back Assad Ellis who is one of our sponsors and of course the situation is very different but something very important is the attitude of all the people of Spain is very different because the alias went through a very deep crisis just ten years ago so they know what it takes they need knew what to do earlier than some countries in the rest of the world so we should capitalize and they say that you learn from your mistake be lucky enough us to learn from other people's experiences and that's what we have been able to apply going forward again a huge things to show but most important is yes as a private sector of this country we need to show the road to point ahead and to rather than just criticizing without abandoning the efforts of collaboration Thank You actor and son says this question I'm gonna direct to you it's a question from Jorge Camacho do you believe that the banking and financial institutions have the responsibility over and above restarting growth to address some of the issues that underlie this crisis such as inequality well yeah for sure that that the banking system will have a very important role in the recovery and must support the economy so that we achieve this recovery as soon as possible that that's for sure and we assume our part of this of this transition so when it comes to to most Mexicans not being banked already not having access to to banking credits or banking facilities I think again it's it's a matter of of giving more tools to challenge our banks to compete challenger banks fintax although all the financial asians that are rising in in these years so that they can compete face to face with with incumbents and with traditional banks with branch networks and this as I said before it has to do with the regulator allowing us to offer all our products online on boardings operations everything else so that everyone in this country whatever it is that person can connects is a banking service now it doesn't depend anymore on having a branch in your town or where you live because that's a very large country and that's impossible it's impossible to have a branch network that covers the full country the only way to ensure that is the digital way and again this crisis offers this great opportunity and I think it's about time that all Mexicans have the capability to to interact with a bang or a FinTech or whatever it is and have access to credit which is critical for them to to achieve a better life [Music] Thank You princess and we know to conclude our Q&A segment I'm gonna be asking this question open to all panelists whoever would like to start it is from big palooka what could happen or what could be done in the following years to improve the position of Mexico for international investments whoever would like to start if you want I can take that such a challenging one but is very easy to say very hard to show which is by example the country needs to show that things can be done here the right way of course the country has its history we have this actual administration because the country decided to go that way and you can agree or not about the trial is that the country yes has a lot of inequalities again using a Maria resis closing statement on the crisis the danger and the opportunities and and also using the Francesca faces this crisis has a ton of opportunities and a country is not given opportunities such as this very frequently I do believe that the country has the necessary strength and at least some of us who have the attitude to move on and convert this crisis into huge opportunities this has to be shown again we compete against a lot of regions our countries with a more level playing field than the one we have right now but this has to be shown by example I mean the money has no flags money has no nationality and money flies and most worldwide even if we like it or not the fact is we need to show by example me as Nexus capital are proud to have they'd have been able to take see companies publics and of course that's our idea to leave companies better than the ones who invested and I believe that's the ideas behind become like huasteca be handsome the relation for the company or appointed they expect the company to do better after they have collaborated with that and that's ago that's the objective not to complain again not to stop the collaborating efforts but to move on and that's something that nobody is gonna do on our behalf as a country and as a business let me let me compliment what what r2 is saying which I agree with with artery for sure and remember that first of July the new free trade agreement with Canada and the US will come into force as our true sir before we share our border with the largest economy in the world and we are very certain that Mexico will benefit a lot from from this from this agreement a lot of relocation of supply chains presently in China in Asia are expected to to get hearing in Mexico also the government is supporting a lot these these treaties so that's something that we have also take into account and an overall Mexico retains
all the appeal in the medium long term for investment we have more than certain of that well yeah compliment what our two entrances has said first of all capital markets are not evil and unfortunate school that has been over the past year few here in the hatch that has been the impression Mexico has has been for many many decades actually trying to re-establish which relationship with capital markets and it's been disrupted and I think that needs to be we need to once again establish that relationship have investors believe in Mexico and in order to do that first of all you need policies sound policies which really right now in Mexico some of them continue they haven't been disrupted for example keeping public finances in check not increasing from dead keeping inflation inflation down economic growth is in order in order ticket but at least you know that continues and if you if that you know something that market see that Mexico is going to being disciplined with also policies I think that what's you know one one check then second you need to correct imbalances and the main imbalance that right now is affecting Mexico's payment situation and you cannot think of of trying to make Pemex of our house of energy supply in Mexico because it's just not going to happen it I mean we were going on the renewable path I think that was that was a correct call and also privatizing you know least the supplier and going back those all those type of decisions it's just gonna weaken limits and limits weakens and Mexico sublimating we cancel then everything else goes down and then I will tell you a third thing is to have to provide investors with long-term perspective to show them as we we were showing them for many years that Mexico is going to continue the right path fostering investment trying to build confidence and and actually making maximum companies access international capital markets that's something that investors were very used to they saw Mexican assets that's very valuable assets and now they don't so we don't have that long-term commitment to sound policies and to are correctly balances and to have you know some economic policy then it's going to be very tough for Mexico to compete we compete against giants and it's only Latin America it's not only Brazil you know and this type of country we also we also compete with emerging markets in in Asia and Europe and if we don't show and we don't prove that we can have better policies than they do and the capital is just gonna go somewhere else thank you and I would actually like to ask one more final question that several of our viewers asked and I think a lot of our our audience would like to hear the answers analysts from this question what would you consider to be your biggest lesson from this pandemic if you could start sure look I think that the the most important lesson is that we need to take care of of our people and that means we need to protect our staff we need to protect them to to take care of them take care of our of our clients take care of our suppliers we are we are in the same ship all together and and the only way to recover faster is that we take care each one of us of the rest and something that has to do with that is that we also do take care a lot of the internal talent of the company we can not manage to lose this distal and if we lose this talent the recovery will be harder for us so a lot of communication over communication if necessary a lot of transparency and taking care of everyone involved in our in our community evolving our network if you could share with us your biggest listen and a final statement well it's to focus on on really what's a priority and and get get done with with things that were prevalent really here we've been focusing on keeping business continuity that is very important because without business continuity then the company will is actually in risk of extinction second preserving cash flow you know in all respects reducing expenses managing accounts payable accounts accounts receivable being able to stretch that in order for the for you know to have the business continuity also on the financial side and then the third thing is our peoples keeping our people safe having them as you know grupo Salinas continuous activities we've been implementing all the protocols so that our people do not get infected or at least you know reduce the risk of being infected but also being able to continue working and actually many many even though of course yes they're nervous they're grateful that they they have a job and I think they can continue with our activities so we've also been focusing a lot on how we manage our human capital afterward or anything else you would like to say just a couple of whole phrases in lessons first and all one expect for the best but prepare for the worst you should always have a plan B always always because unthinkable things can happen nobody think thought that the world will shut down for a couple of months nobody did and he has happened and be also using a both the beta and tranche asks the comments yes charity starts at home first things first you need to protect your team your suppliers customers relationships and that's the only way we can move on I've spoken about the need to move on we need to be exemplar in the in the way of moving and there is a single French with this attitude there is no way with which we will go out of this situation without the necessary attitude and and I believe that's what we need to actually move on and be part of those groups those group of people that do things coming make things happen that we might find out common Alejandra and know Thank You Francis dahveed Arturo I'm here at the business here very thankful that you're offered your time and I think also our audience is very happy to hear all of your comments and you have received a lot of comments throughout the interview saying thank you very much people are happy to finally hear from community leaders the urgency of unity and so I would also like to thank my di D so I got to leave for her welcome remarks and in our almost 1000 listeners and viewers I registered for this panel stays tuned for more digital events that the business year is going to be releasing in the following weeks and don't forget to share your thoughts and opinions on the comments that were shared during this panel on our Twitter maybe Y underscore let them thank you everybody have a good day thank you same to you Arturo and abhi say my total container thank you
