ECUADOR - Finance
CEO, Ecuadorian Institute of Social Security Bank (BIESS)
Iván Tobar is an economist from the Catholic University of Ecuador with a major in finance. He also has an MBA from Southern Oregon University, a diploma in innovation programs from the Harvard Business Institute, and a diploma in financial risk from the Technological University of Monterrey. A professional with extensive experience in the field of finance and economics, Tobar has served as general manager of Banco Finca, general manager of the Cooprogreso Savings and Credit Cooperative, and manager of the Quito Branch of Banco de Machala. At Banco Pichincha, he served as national manager of foreign trade and general manager of corporate business.
One of the largest institutions in the Ecuadorian financial market, BIESS works to meet all the needs of its affiliates and pensioners through mortgages and other financial solutions.
As a public bank, how is BIESS getting involved in the mortgage market to address the housing deficit in Ecuador?
BIESS has always been an active participant in the mortgage market, representing 36-40% of the Ecuadorian market. In 2022, we expect to provide around USD752 million in mortgage loans, USD150 million more than in 2021. The real estate and construction sectors are some of the most dynamic and contribute to job creation, financing, and meeting the social and human need to have a roof over people’s heads. These multiplier effects have committed the bank to fulfilling this mission to provide long-term financing. BIESS manages unemployment and retirement funds, which are long-term funds and allow us to finance credit operations for up to 25 years. This gives us an advantage over other financial institutions that have more of a short-term operational focus. BIESS generates profit for retirement products while simultaneously using those funds for financing. Our potential clients include 3.5 million affiliates and almost 500,000 retirees and pensioners. Our goal of USD750 million in 2022 represents a growth of more than 25% over 2021. This will help generate liquidity in the market and promote economic development. Given the size of BIESS, with an investment portfolio that exceeds USD21 billion, the company is extremely important to the economy of Ecuador.
How do BIESS’ current plans contribute to the economic reactivation of Ecuador?
BIESS works mainly in two areas: the growth of mortgage credit and the provision of so-called unsecured loans to our members and pensioners, which are short-term loans of four or five years that cover immediate consumption needs, such as education, health, travel, and debt payment. The objective is for said credit to total USD3.9 billion in 2022. One of the advantages for the bank is that these credits are guaranteed by reserves and unemployment funds; therefore, it is completely safe for the bank. In 2022, to aid members, retirees, and pensioners, interest rates were temporarily reduced in the first semester from 14% to 11%. With this, we hope to support the revitalization of the economy.
What is BIESS’ position on digitalization?
The nature of our clientele, a significant portion of which consists of retirees and pensioners, led us to seek another approach to digitalization. Under our new management, BIESS is initiating a process of technological transformation that will be better suited to its customers. The pandemic has showed us the need for digital channels, especially for retirees. This target needs a tool that will improve access and allow consumers to use financial services from the comfort of their own homes. We want to offer many more services to our market and streamline our processes. Technology and automation make these processes more transparent and efficient, and now it is up to us to be competitive and use this technology to provide more developed access channels for our users.
As one of the largest institutions in the Ecuadorian financial market, what is your vision for BIESS?
Our most important goal is to satisfy the needs of our affiliates and pensioners through mortgages and other financial solutions. A key advantage is the bank’s ability to invest in the stock market. Part of the plan for 2022 is to grow. For that reason, we plan to invest USD400 million in the stock market in different ways, while always participating in profitable projects transparently and responsibly. This will allow us to contribute to economic development in industrial production, finance, construction, and services. As a bank, we have a significant number of resources, and we need to invest intelligently with due observance of the country’s social and economic conditions. The bank seeks securitization by generating obligations for the international market, and USD500-1,500 million can be invested in international securities. Access to these markets and resources at a low price will allow us to reinvest in credit banking operations. In addition, it will also allow us to bring resources into the economy and create a virtuous circle.
ECUADOR - Real Estate & Construction
General Manager, Uribe & Schwarzkopf (US)
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