The internationalization of the state-owned Banco de Reservas (Banreservas) will be a reality as of October this year, with the opening of its first Representation Office in Spain, and will continue during the first quarter of 2023 with the installation of another two in Miami and New York.
The purpose of this expansion is to facilitate banking services to the Dominican diaspora, which numbers some two million emigrants, not counting their foreign-born descendants, who have strong ties to the country of origin of their parents and grandparents, in addition to supporting export management of large, small and medium-sized companies, indicated Banreservas.
He specified that the representative offices will replicate all the bank’s services from the place where they operate, but the financial operations will be carried out in the Dominican Republic, which will speed up and carry out the banking procedures of Dominicans in their country, without having to travel to Quisqueya.
Samuel Pereyra, general administrator of the financial institution, explained that, although Banreservas will not be able to carry out financial intermediation operations abroad, as is the case of receiving money in accounts, it will refer the procedures to its local offices in the Dominican Republic.
In a first stage, Banreservas provides Dominicans the opportunity to request mortgage loans and buy homes and other properties in the Dominican Republic, open remittance accounts and financial instruments, as well as carry out insurance management. In these latter cases, Banreservas will act as a second-tier bank for client procedures with other subsidiaries of the Reservas family, such as Inversiones y Reservas, and Seguros Banreservas.
“This is the first time that a Dominican bank appears before the Board of Governors of the Federal Reserves (Central Bank) of the United States to request its approval in the banking system of that country,” Pereyra said.
“With this initiative -he added- we will achieve the internationalization and positioning of Banreservas in other markets in order to offer a portfolio of international solutions, taking advantage of the maturity and current capabilities of the bank”.
Madrid in October; New York and Miami in January
To start the process of opening Representation Offices abroad, Banreservas previously obtained the approval of the Superintendence of Banks and the Monetary Board of the Central Bank of the Dominican Republic in January 2022, he reported.
He specified that he met in Madrid with the authorities of the Central Bank of Spain and the Federal Reserve in the United States.
In the case of Spain, the approval of the Representative Office in Madrid is expected to be ready in mid-August this year. While in October it will begin to offer a service to the public, coinciding with the celebration of the 81st anniversary of the founding of the financial institution, to be formally inaugurated in January, within the framework of the International Tourism Fair (Fitur) 2023. It will work in the central avenue De la Castellana, in front of the Dominican Consulate in the Spanish capital.
In turn, the Miami Office will operate on Brickell Avenue, also located in front of the Dominican Consulate. The one in New York will work in Washington Heights, Upper Manhattan, where the majority of Dominicans live. Both will open in the first quarter of 2023.
The intention is that these services are available close to where the largest number of Dominicans reside in those cities.
The bank highlighted that the internationalization of Banreservas comes to satisfy a demand raised by the Dominican community that resides outside the country and that wishes to maintain investment links or send remittances, as residents in Spain have expressed in various scenarios, as well as community leaders, commercial and business established in the United States, where 1.4 million Dominicans reside.
Another desire of the diaspora is to have the possibility of a home in the Dominican Republic, where many wish to return for their retirement. “To carry out these efforts, the diaspora will henceforth have the support of the Reserve Bank, through the Representative Offices”, said the financial institution.
It will also enable the country to promote in Spain the benefits of investment and establishment of summer houses on beaches and cities. The European country is the second recipient of Dominican immigrants, and currently has a population of approximately 325,000 Dominicans.
In the case of the United States, the Dominican diaspora represents one of the main groups of immigrants, concentrated in the region known as New England (New York, New Jersey, Pennsylvania, Connecticut, Massachusetts and Rhode Island), being the fifth largest Hispanic population in that country.
According to figures from the PEW Research Center, there are 747,000 people of Dominican origin living in New York, who added to those who reside in the neighboring state of New Jersey, total more than one million inhabitants, almost equal to the population of the city of Santiago, which demonstrates the importance of this market for the commercial development of Banreservas in the United States.
According to data released by Banreservas, only 27% of Dominicans in New York have their own home in that country, with an average income of $40,000 (in 2017). The average age of Dominican immigrants is 43 years.
The Reserve Bank indicated that it has set itself the challenge of carrying out a process of international expansion that allows it to expand its commercial presence to other geographies.
“Ultimately, the purpose of the bank is to promote the prosperity and interests of Dominicans in the world, while supporting exports and the international relations of our large, medium and small companies; while supporting the diaspora and bringing them closer to Banreservas, both those who reside inside or outside the Dominican Republic,” the institution said.