Banco Internacional del Salvador, founded on August 20, 1880, was the first formal banking institution in the country, established by a contract signed on April 5, 1880 between the Minister of Finance Pedro Meléndez and José Francisco Medina, representative of an international conglomerate of shareholders. The creation of the bank was a major national event and had a high economic and social impact in El Salvador.
The financial support and technical know-how behind the bank was provided by the Medina family, Nicaraguans of Argentine origin with experience in financial activities in Costa Rica, Nicaragua and Guatemala. The institution was run by a board of investors and directors, a supervisory committee, executive directors, an interim manager and a cashier at its headquarters in San Salvador, and had branches in other cities in the country.
The Salvadoran government granted Banco Internacional large concessions to promote its activities and obtain quick results. These included tax exemptions, the use of national railroads and telegraphs, and the import or export of precious metals. In addition, support was guaranteed in case of war and its partners, directors and employees were exempt from compulsory military service and from the selection of juries.
The International Bank was granted the exclusive right to issue banknotes for 25 years, until the founding of other private banks that also acquired the power to issue national currency. The bank's services were limited and aimed primarily at merchants and farmers dedicated to export, who required financial instruments for long-term credit operations and international transactions.
Despite the bank's usefulness, the exclusivity of private banknote issues was rejected by the public, as it was considered bad for the national economy and only benefited a few capitalists. However, the founding of the Banco Internacional represented an innovation in the financial field and had a significant economic and social impact in El Salvador.
On May 11, 1898, Banco Internacional del Salvador was acquired by Banco Salvadoreño, which subsequently became part of the international financial conglomerate HSBC Holdings in 2007. In 2012, the Colombian financial institution Davivienda acquired Banco Salvadoreño-HSBC, along with other HSBC representations in Central America.
