At its most basic, the Costa Rican banking system can be separated into public and private banks. Public banks, owned by the government, have dominated Costa Rican consumer banking until relatively recently. There are three. Banco Nacional and Banco de Costa Rica are the two you would deal with in the unlikely event that you end up seeking financing from a public bank. A third bank – Banco Agrícola de Cartago, or Bancrédito – is small and not worth mentioning. A fourth bank that you will probably hear mentioned in the context of state banks is Banco Popular. This bank, however, is under its own legal regimen and something of a public-private hybrid. Once again, because of its legal character, it concentrates on lending to nationals.

The other side of the coin, and the side you will probably be dealing with should you decide to seek local financing, is the private banking sector. Private banking didn’t have a chance in Costa Rica until a change in the law in 1996 that allowed private banks to accept consumer deposits – the lifeblood of banking. It’s just in the last three years that the effect of that change has really started to be felt on the consumer level. High-profile acquisitions and subsequent PR pushes for the consumer banking dollar by global big-shots like HSBC and Scotiabank (not recommended) actually have the public banks so nervous that they’ve begun talking about a merger to help compete.

These local, private banks are the ones that have begun aggressively targeting mortgages toward foreigners in the last few years. (As a quick side note, though these banks are part of foreign conglomerates, they operate as local banks: domiciled in Costa Rica, regulated by the Superintendencia General de Entidades Financieras(General Superintendence of Financial Entities, SUGEF), and with all operating capital in country. In this chapter, “foreign banks” refers to banks not domiciled in-country or regulated by the Costa Rican government, and whose capital is not located in country.) In particular, there are three major, private players on the local scene:

BAC San Jose - The largest private bank operating in Costa Rica, BAC San José is a division of BAC International. The bank originated in Nicaragua and now has a presence throughout Central and North America. GE Capital acquired a 49.99% stake in the bank’s parent holding company in 2005. BAC does not have a program that specifically targets foreigners. However, it does grant mortgages to foreigners at competitive local rates.

Scotiabank – A division of the Canadian Bank of Nova Scotia, Scotiabank has been in Costa Rica since before the change in the banking laws in the 1990s that allowed private banks to hold deposits. Scotiabank recently expanded through an acquisition of a local Costa Rican bank called Interfin and began to aggressively market its consumer banking. Since the acquisition, Scotiabank has been actively marketing mortgages to foreigners. NOTE: A lot of foreigners have complained about the poor service and high costs of borrowing money from this bank.

HSBC – A bank holding company incorporated in London, HSBC recently acquired Panamanian bank Banex, giving it a presence in Costa Rica. It rebranded the Banex bank branches and began a nation-wide marketing campaign in 2007.

Citi Bank - Originally called Banco Cuzcatlán in Central America, Citi Bank came in and merged with the latter and Banco Uno.

Since the global economic slowdown, banks in Costa Rica have scaled back their attempts to market to foreigners, yet those efforts are sure to pick up once markets start moving and credit flows again.