Wal-Mart will start banking business in Mexico

Mexico’s market leader Wal-Mart Mexico will open its own bank in the second half of 2007. Executives confirmed this to Associated Press. Wal-Mart’s efforts to start a banking business in the U.S. meets opposition, but in neighbouring mexico Wal-Mart will have the opportunity to offer financial services especially to low-income clients.

According to Wal-Mart, low-income clients are largely ignored by Mexico’s large retail banks, so there is an opportunity. Banco Wal-Mart de Mexico Adelante SA will start operations in the second half of 2007, offering savings accounts, debit cards and credit lines to its individual and small-business customers. The bank will operate in Wal-Mart’s 558 stores and the retailer hopes this new service will also benefit instore traffic. Wal-Mart however doesn’t expect its new banking unit to be profitable before 2011.