Citi Turns 200: Business blooms in Latin America
May 11, 2012 09:00 AM
In celebration of Citigroup's 200th Anniversary, we are sharing stories from our rich history here on this blog. The eighth installation below covers how the opening of National City Bank's first foreign branch in Buenos Aires lead to a larger expansion throughout Latin America. Read the seventh installment on how the bank presidents set about improving staff education levels, here.
Business blooms in Latin America
National City Bank's first big push overseas reflects the growth in international trade as war breaks out in continental Europe
As World War I was breaking out in Europe, Argentina was enjoying a trade boom. National City Bank's first foreign outpost, the Buenos Aires branch, which opened in late 1914, was almost immediately profitable thanks in part to a large foreign-exchange business.
National City Bank established ties with Banco de la Nación Argentina, the largest bank in Argentina, and opened accounts with both U.S. corporate clients and local companies. A second foreign branch was established in Rio de Janeiro, Brazil, in April 1915, with a sub-branch in Santos, the coffee-trading center. A second Brazilian branch came a few months later, in São Paulo. It was followed by a branch in Montevideo, Uruguay, and another in Havana, Cuba, which acquired Banco de Habana, partly owned by National City Bank chairman James Stillman.
In 1916, branches were opened in the Brazilian city of Salvador (Bahia), the country's sugar-trading center, and the Cuban city of Santiago. National City Bank then entered Chile, its fifth country in Latin America, with a branch in Valparaiso, the country's main port, linked by railroad to Buenos Aires in Argentina on the Atlantic coast. The sailing time from Valparaiso to New York by steamer had just been almost halved by the completion of the Panama Canal in 1914.
National City Bank gradually expanded its regional footprint to include branches in Venezuela in 1917 (where the oil boom had attracted many international companies which required financial services), and Peru in 1920. Its affiliate from 1915, International Banking Corporation (IBC), meanwhile established its own branches in Colombia in 1916 and the Dominican Republic in 1917.
In 1922, National City Bank also acquired a controlling interest in Banque Nationale de la République Haiti.