[ S U R V E Y
|
A G E N T
B A N K S
I N
F R O N T I E R
M A R K E T S ]
Americas
I
n the ABFM 2020 survey, respons-
es were received for the Americas
region from investors or their inter-
mediaries with activity in Argentina,
Bermuda, Costa Rica, Ecuador, Panama
and Uruguay. While all these results
were taken into account in creating the
regional average score, it is fair to say
that only Argentina, accounting for over
60% of total responses for the region,
has amassed sufficient responses for any
robust conclusions to be drawn.
Taken as a whole, service in frontier
markets in the Americas is seen as
broadly satisfactory, with only relation-
ship management presenting any cause
for concern. The situation is mitigated
somewhat when scores are considered
on an unweighted basis, in which case
the average pushes into Satisfactory
territory (4.00-4.99). In the area of
regulation and compliance, the region
does better, beating the global average
by 16%.
Argentina
Looking at Argentina specifically, de-
spite accounting for the bulk of respons-
es in the region, it has registered weak
scores in the areas of asset servicing and
relationship management, below the
regional average by 16% and 7% respec-
tively. Other scores, however, are either
Satisfactory (4.00-4.99) or Good (5.00-
5.99) with the impressive exception of
regulation and compliance, which is
rated Very Good (6.00-6.99)
Citi, which has recorded 40% of the re-
sponses for Argentina and is a dominant
service provider across the region, has
mixed scores at a regional level, with
well above average results for client
service and pricing, but, surprisingly,
underscoring for asset servicing and
relationship management. Although
scores for asset safety and – again
surprisingly – technology are below the
regional average, they are nevertheless
in Good range (5.00-5.99). At a market
level for Argentina, the story is – not
surprisingly – similar, though Citi’s
score for technology is above the market
average.
74
Global Custodian
Spring 2020
COUNTRY SCORES Americas Argentina
Account Management 5.16 5.05
Asset Safety 5.68 5.27
Asset Servicing 4.37 3.68
Cash Management and FX n/a n/a
Client Service 4.44 4.35
Innovation 4.04 3.36
Liquidity Management n/a n/a
Pricing 4.98 5.00
Regulation and Compliance 6.23 6.36
Relationship Management 3.90 3.63
Risk Management 5.11 5.12
Technology 5.63 4.80
At a macro level, the global market
turmoil evident in the second half of
Q1 is likely to complicate Argentina’s
foreign debt restructuring plans. The
country’s economy is already projected
by Barclays Capital to contract by 2.1%
this year.
The New York Times recently pointed
out that Argentina was in peril before
the coronavirus pandemic. Its currency,
the peso, lost more than two-thirds of
its value in 2018 and 2019, as inflation
exceeded 50%. Its economy contracted
by 2% in 2019.
Confirming the challenge, IMF man-
aging director Kristalina Georgieva
declared in late March that, “A substan-
tial debt relief from Argentina’s private
creditors will be needed to restore debt
sustainability with high probability.”
Addressing the coronavirus specifical-
ly, she stated that, “Our objective is to
pave the way for a stable and prosperous
economy that can create jobs and raise
living standards for the benefit of all Ar-
gentines.” In other words, the country is
not out of the woods.
PROVIDER SCORES
(REGIONAL) Americas Citi Versus regional average
Account Management 5.16 4.88 -0.28
Asset Safety 5.68 5.08 -0.60
Asset Servicing 4.37 3.80 -0.57
Cash Management and FX n/a n/a n/a
Client Service 4.44 5.00 0.56
Innovation 4.04 4.11 0.07
Liquidity Management n/a n/a n/a
Pricing 4.98 5.29 0.30
Regulation and Compliance 6.23 6.42 0.19
Relationship Management 3.90 3.64 -0.26
Risk Management 5.11 4.83 -0.28
Technology 5.63 5.00 -0.63