60-second interview

HSH Nordbank’s David Lopez Menendez, senior vice president and head of commodity finance in New York.

Q: You are responsible for Latin America, among other duties. What is happening in that region now?

A: There is a lot of competition in the market now. Many banks have re-launched their soft commodity business in the region. Other new players are entering and trying to gain market share by either lowering margins or loosening structures.

Q: What do you mean by looser structures? The latest concession I’ve heard bankers making to borrowers concerns the loosening of documentation requirements.

A: I meant overall that the collateral package is not as tight. But yes, documentation is part of it.

Q: How do you remain competitive in this environment?

A: We’ve never been a bank looking for short-term opportunities. We focus on long-term relationships. We wouldn’t, for instance, finance one transaction and then get out of [the relationship with the client]. There are many companies out there that reward our type of approach and in fact if you think about the history of our bank, we have been financing commodities for decades. The city of Hamburg – the second largest port in Europe – has been a trading place for centuries.

Q: Do you see these trends in Latin America – the new levels of liquidity available to companies, the growing competition – continuing for the foreseeable
future?

A: A lot depends on the elections in Brazil [editor’s note: this interview took place before the presidential run-off elections on 29 October]. No matter what though, I don’t think there will be significant changes in the next six to nine months.

Q: Could Brazil go into crisis?

A: Brazil has a surplus in its budget and it is difficult to go into crisis with a budget surplus. And Lula [president Luiz Inácio Lula Da Silva] has proven he can maintain stability.

Q: What markets do you like right now in Latin America?

A: The main economies of Brazil, Argentina, Mexico and Chile.

Q: So it is back to business with Argentina then?

A: Yes, it is amazing to see the level of liquidity there. There are many companies in Argentina that are well managed and have good track records.