Argentina Banks Zero In on Tax Evaders’ $7 Billion, Zarich Saysby and
Banco Frances CEO says lenders to offer investment options
Argentina government unveiled tax amnesty plan in May
One of the biggest priorities for Argentina’s banks will be convincing tax evaders who accepted an amnesty deal and declared $7 billion of cash to keep their money in the country, said BBVA Banco Frances SA Chief Executive Officer Martin Zarich.
Argentines can choose to either pay a 10 percent fine, or buy into government bonds and closed-end mutual funds to finance investment in the local economy. They’re required to keep their money frozen in Argentina for six months unless they make certain capital purchases.
“Now it’s the banks’ turn to retain them beyond that initial period and make sure they become part of our lending capacity,” Zarich, who has worked at the bank for nearly 30 years, said in an interview. "That means offering more investment options to clients and focusing on more advising for retail clients, especially for premium ones. We expect to see more depth in the mutual-funds market and in corporate bonds."
President Mauricio Macri’s amnesty plan seeks to capture revenue from an estimated $500 billion in offshore assets held by Argentines to boost government revenue and local investment amid a recession. Zarich said the cash from tax dodgers may result in greater demand for corporate bonds and help boost lending for small and medium-size companies.
Argentine companies have sold $6 billion of bonds this year as they tapped into soaring demand for the nation’s debt after Macri ended a decade-long battle with creditors.
“The rise in corporate issuance, which we’ve started seeing this year, is beneficial for the country’s productive sector, and it’s also beneficial for its retail investors looking for options,” Zarich, 52, said. “Today, in every lunch I have with businesspeople, the option of going to the markets is always present.”
He also expects mortgage issuance to pick up in 2017 if inflation continues to slow.
Banco Frances has invested in a new 33-story office building in Buenos Aires’ business district that will open in April. The lender, which will have capital expenditures of as much as $100 million next year, is focusing on expanding its digital banking operations and hiring people with technology and sales backgrounds, Zarich said.