The president of the Mortgage Bank of Uruguay (BHU), Casilda Echeverria, criticized the project that intends to merge the financial institution with the Bank of the Republic (BROU) since it was assured that it has been working very well for several administrations and that it is a solid bank with good profitability.
During the ADM Breakfast where they were present, in addition to the BHU, the National Housing Agency (ANV) and the Insurance Bank (BSE), the president of the financial institution, Casilda Echeverria He criticized the project that intends to merge the BHU with the BROU. “The BHU has already been in office for several administrations and it is working very well. It is a solid bank, with good profitability and equity 10 times greater than what the Central Bank requires of us, ”he remarked.
On the other hand, he explained that the BHU in the mortgage credit market has six banks inside Uruguay that they are competition. However, it concentrates “practically a third of the mortgage loans that are given in the market.”
In addition, he announced that the BHU will be able to mortgage new land so that it can then build and make disbursements as construction progresses. “We’re even going to offer a credit for those who want to buy a piece of land, perhaps mortgaging the property of a family member to later release that guarantee and replace it with that of the land to build”, he detailed.
A longstanding debate
The project generated controversy within Uruguayan politics with various voices for and against. The first to speak in favor was President of Banco República, Salvador Ferrer, who assured that the merger between the banking entities it is not a bilge measure” and even described it as an initiative that will promote “the development of the real estate market”.
For the BROU holder, this “synergy” will allow Uruguay have “a much more active player in the mortgage sector”, which will help the development of the market. When evaluating the data from the bank, he assured that private banking grew considerably more than the BHU during the last 10 years in the granting of mortgage loans. “The BHU placed 60% of the volume of the mortgage loan; today it is around 25% ”, he detailed.
Coinciding with Ferrer, Senator Sergio Botana also justified the merger by ensuring that “it is not justified to have state structures that do not fulfill functions” and criticized the existence “270 officials to give four credits per day.”
For Botana, workers must have “higher productivity” and questioned that the BHU requires “double what is charged for a mortgage loan in the private market” and sentenced: “It’s a real murder of the people.”
Regarding the voices against, the director for the Broad Front of the BHU stands out, Gabriel Frugoni, considered before the legislators that a merger with BROU would take years and would imply a “loss of credibility”. In addition, he alerted for a “contagion effect” that could encourage other debtors not included in the project to try to achieve write-offs through the courts.
In addition, various personalities from the political sphere also came out against the merger of these banks, including the Minister of Housing and Territorial Planning (MVOT), Raul Lozano. Despite having been one of the senators who participated in the elaboration of the project in question, along with the nationalists Sergio Botana and Carlos Camy, and the colorado German CoutinhoLozano rejected the fact that the idea of the merger or absorption of the BHU was included since, from its political force, Town meetingIt is not in the plans for the state bank to disappear.
Source: Ambito
