Wal-Mart Stores, Inc. (NYSE: WMT) has a winner in its Wal-Mart de Mexico operations, as sales growth in that country has outshined that of U.S. operations for quite a while now. Indeed, the world's largest retailer said that it expects the banking unit of Wal-Mart de Mexico to become profitable by the fourth year of operations.Wal-Mart de Mexico, or Walmex as it is affectionately known, launched its Banco Wal-Mart during November with one location in Mexico City and three other locations in Toluca. Since Wal-Mart did not have much luck opening a retail banking operation in the U.S., perhaps it has closed down efforts domestically to concentrate on foreign banking operations? That would certainly be an obvious interpretation here.
Wal-Mart's combination of retail commerce and consumer banking could be seen by some as a pair that just does not belong together. From one angle, it gives too much power to a single entity over consumer spending and saving. But then again, the environments and government regulations change per country, so why shouldn't Wal-Mart have retail banking operations in Mexico? Is Wal-Mart trying to shore up revenues from the non-retail side of things outside the U.S.? Of course, and with Walmex's banking hours of evenings and weekends, it may just have the moxie to do well there.
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Reader Comments (Page 1 of 1)
12-16-2007 @ 8:55AM
madmilker said...
4 years......dang! with charging 86% interest to the people of Mexico....just maybe they don't pay and there be no profit.....a loan shark has a better rate.
http://www.businessweek.com/magazine/content/07_52/b4064042918153.htm