The Business Year

Paola Mora Tumminelli

COSTA RICA - Finance

Up and Up

President, Banco de Costa Rica (BCR)


Paola Mora Tumminelli has a law degree and is a registered public notary, and also holds an MBA with an emphasis on finance. In addition, she is responsible for providing consultancy services for domestic and international companies in civil, environmental, business, and municipal matters.

"BCR completed a pioneering launch with Kristal Banking, which offers financial services exclusively for women."

BCR has registered the highest growth among all financial institutions in Costa Rica, growing from CRC9.575 million in 2015 to CRC25.031 million in 2016, an increase of 161%. What strategy is the bank following to maintain this growth rate?

One of the important strategic focuses of the bank and an issue that we have commented on publicly is that of improving efficiency. The bank is focused on the topic of expenditure containment, and we want to use this model to deal with the fiscal deficit in the country. Expenditure containment is a policy that BCR has implemented from the outset. The BCR has achieved a net quarterly profit higher than CRC12,000 million for the third consecutive quarter, reaching a cumulative net at the end of 1H2016 of CRC25.031 million, 161% more than a year ago. In turn, income before income taxes and mandatory contributions amounted to CRC40,863 million, 204% more than in 1H2015. An audit for all expenses for advertising, salary, fixed costs, overheads, and the business review also looked at whether the offices were profitable or not, and at the possibility of renewing brands. After the analysis, the high administration of the bank made a proposal calling for important reductions in the first and second years. Regarding administrative expenses, actions and decisions taken in 4Q2015, including voluntary labor mobility and the elimination of two layers of management, have led to a 9% reduction in staff costs in 1H2016, saving more than CRC4,400 million in expenses during that period. The change in the business model of BCR to one in which we promote the philosophy of maximum regional autonomy with maximum responsibility, measuring the results through the relative profit contribution of each office and region, has converted the bank into a mainly retail bank. We are focused on individuals and small businesses, and have implemented our new model successfully across the country in the first half of this year.

BCR has a wide portfolio of services for individual and corporate clients. In which areas is the bank currently focusing most?

Historically, it has been a corporate bank. Nevertheless, with the new administration and with the new General Manager, Mario Barrenechea, we are mainly focusing on the retail business which is leading to the development of different brands. There are also surprise brands that can more effectively promote the growth of retail banking. We are strengthening the whole managerial and corporate system that BCR has traditionally had with particularly robust companies, and we have improved the overall service level. We are making progress and growing. This year we did an interesting project regarding financial inclusiveness. BCR completed a pioneering launch with Kristal Banking, which offers financial services exclusively for women. This was key and a top priority plan for myself as a woman as well as for my female companions on the Board of Directors. There was polemic around it, as is the case with any pioneering topic, but ultimately it was an interesting process that enriched us. We continue to move forward with the brand, and it is continuously growing and becoming more inclusive. Nearly 50% of women in Costa Rica had never used banking services at the time we started the brand.

Banking revenues increased by 48% in the first half of 2016. How do you foresee the second half of the year closing, and where do you see BCR within this outlook?

We are continuing to grow as bank. It is necessary for the growth and the permanence of the public banking that exists to make possible some legislative changes that allow us to strengthen and compete on a wider scale. The major challenge in the next five years will be maintaining our growth levels. To remain on the same trajectory BCR has followed for 139 years we need political support and legislative changes that will eventually allow us to compete equally with the private banking sector without restriction. Public banking offers a few services that the private banking does not offer for the more vulnerable sectors of the country.

In general what advantages and benefits does Costa Rica offer for investment, and how is BCR working to attract FDI?

As a bank we offer services. The whole issue of external trade in the country has been doing good work in attracting foreign investment. The Ministry of Exterior Trade (CINDE) and PROCOMER have been doing an excellent job. Independent of the minister in charge, they have a consistent agenda and we get feedback from government institutions thanks to our good relations with them. We have been working together to attract investments to our bank, and obviously corporate banking is important to us. This specific situation requires a strengthening of retail banking to lower the cumulative risk of credit portfolios and to keep balance. We have concentrated credit in the corporate segment.

What are some of your main priorities for 2017?

We have five directions on which the Board of Directors has been working hard. We know that the BCR has to improve upon every day in the services that it offers, but digital banking topic is a great challenge and interesting topic for us. If we do not have the digital platform, then our future customer growth would be limited to only our existing important costumers. The millennials and many corporate banking customers are coming less often to the banks and use different modern services with efficient and highly competitive platforms. In that sense, this bank has an enormous challenge, and we have to focus on these tasks as a Board of Directors and get creative in re the limitations that today we have in agreement with the law, and advance without breaking the legal infringing on any laws. We are working at this, as it is part of our aim for growing next year. There exists a global consensus that Costa Rica will peacefully maintain economic stability in the coming years. Education has been fundamental to our country, and the current government is also determined to strengthen education plans from the schools up to the universities. The BCR has come from the hand in this way and give more support to public institutions than nearly any other bank. BCR has throughout its history been a pioneer in economic and social development throughout the entire country.



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