The state-owned Banco del Bienestar (Bank of Well-Being) will be financially self-sufficient, President López Obrador said on Wednesday.
Speaking at his regular news conference, López Obrador said that the annual operating costs of the bank – of which the government intends to build 2,700 new branches by the end of next year – will be 6 billion pesos (US $319.1 million) but that amount will be covered by small commissions paid on each transaction by customers, most of whom are welfare recipients.
The bank will distribute 300 billion pesos in welfare payments annually to the nation’s elderly, disabled and scholarship holders, among others.
“The bank is self-sufficient, it doesn’t need subsidies,” López Obrador said.
The president’s remarks came after the newspaper Reforma published a report that said the Banco del Bienestar operated at a net loss of 233 million pesos (US $12.4 million) in the first nine months of 2019, and that the construction of an additional 2,700 branches will place even greater pressure on its finances.
But López Obrador defended the ambitious construction plans and accused past governments of not promoting financial inclusion because they got rid of many state-owned bank branches, ceding the market to private banks whose services are concentrated in cities rather than rural areas.
“There are more than 1,000 municipalities that don’t have a bank branch. We’re dispersing [welfare] resources but we don’t have a way to do it . . . People have to go to branches that are two, three hours away. If we don’t bring these services close to the people, we’re not going to bring development to the people,” he said.
“There’s no reason to be complaining about us building these branches. Besides, if private banks want to build branches they have every right to go to the towns and build their branches but as they won’t because they believe that it’s not [good] business, we have to do it . . . it’s our social responsibility, the state can’t shirk its social responsibility,” López Obrador added.
The president said the 10 billion pesos to build the new branches of the so-called “bank of the poor” will come from government savings, explaining that 5 million has already been transferred to the Banco del Bienestar which in turn will pass the resources on to the Secretariat of Defense, whose engineers have been given responsibility for construction.
“. . . They’re already building, I’ll invite you within two months, three at the most, to the inauguration of the first branches because they’re already working, they’re getting the land . . . because we have to do it quickly,” López Obrador said.
He also said the government will speak to central bank officials to ensure that there is no obstacle to the operation of the new bank branches.
“We’re going to speak with those from the Bank of México, respecting the autonomy of the Bank of México we have to educate them because for them this is an anachronism, even sacrilege because they have other ideas. But we’ve arrived here [in government] after telling the people that the neoliberal economic policy was going to change,” López Obrador said.
“There shouldn’t be obstacles. How is the Bank of México going to stop us from having a [bank] branch that disperses resources in favor of the people? What damage does that do? Whom does it harm?”