World's Best Banks 2013: Latin America

By Thomas Clouse, Jonathan Gregson, Antonio Guerrero & Gordon Platt

 

LOCAL BANKS INCREASE MARKET SHARE

While European banks have dominated Latin America’s banking sector for more than a decade, their stronghold has recently weakened. Some have sold local assets to balance their books amid a debt crisis at home, giving US, Asian and UK banks room to enter the region. Local competitors are also increasing market share. Although banks continue to pursue the region’s unbanked population, a Gallup/World Bank study last year showed only 39% of Latin Americans maintain accounts with formal financial institutions, leaving substantial room for growth. Meanwhile, small and medium enterprises (SMEs) have moved into the spotlight, with 77% of banks in Latin America, responding to a survey by the Inter-American Development Bank and the Latin American Banking Federation (Felaban), indicating plans to increase lending to the sector this year. 

 

REGIONAL WINNER

Banco Santander

Santander continues to deal with challenges from the eurozone debt crisis, but it remained in the black despite a 58.8% year-on-year drop in net attributable profit in 2012. Latin American banking operations were mixed but encouraging; though profits declined in Brazil and Chile, they rose 16.1% and 6.2%, respectively, in Argentina and Mexico (in local currency). Amid the storm, the bank listed shares of Santander Mexico, with demand coming in at five times the supply, making it the world’s third-largest deal of its kind in 2012. The bank kept its branch network in the region nearly unchanged at 6,044 branches, and total employees were down only 1.5%, to 90,576. Santander was ranked by the Best Place to Work Institute as the best bank to work for in Latin America. Customer loyalty also remains high.

 

Emilio Botín, chairman/www.santander.com

COUNTRY WINNERS—LATIN AMERICA

ARGENTINA

Banco Macro

Some banks are enticed by Argentina’s bustling capital city, but Macro has succeeded by looking elsewhere. Of its 428 branches, 79% are situated outside Buenos Aires. The bank is the exclusive financial agent for four provinces and focuses on low- and middle-income customers, as well as SMEs. The vision has paid off handsomely: Macro remains the only bank in Argentina with 44 consecutive profitable quarters. Return on equity was 27.8% in the fourth quarter 2012, a 28% increase over Q4 in 2011. Corporate social responsibility (CSR) initiatives include education, nutrition and social medicine.

 

Jorge Horacio Brito, chairman and CEO/www.macro.com.ar

 

BARBADOS

Scotiabank Barbados

Scotiabank remains the leading financial institution on the island, with a nearly 40% share of the credit card market and 36% of total bank loans in 2012. The bank grew its market share of loans by 2.8% in 2011 to 2012. Assets rose 16.9% during the period. Scotiabank won the Best Employer award (large company category) for the second year in a row in 2012, in a survey conducted by Caribbean Catalyst. It also unveiled an upgraded website for the Barbados market, while also enhancing its mobile-banking platform.

 

Sean Albert, managing director (Caribbean East)/www.scotiabank.com/bb

 

BELIZE

Belize Bank

As Belize’s oldest financial institution (incorporated in 1902), Belize Bank remains the country’s largest full-service commercial bank. It maintains a 41% share of the loan market and a 37% share of depositsfar above its nearest competitors. With 12 branches, it is the only bank with a nationwide network. In 2012 it underwent a rebranding effort. Corporate social responsibility initiatives have included a computer equipment donation to the Belize Red Cross Society.

 

Lyndon Guiseppi, executive chairman/www.belizebank.com

 

BOLIVIA

Banco de Crédito de Bolivia

Though new tax regulations in 2012 lowered Banco de Crédito’s net income by $2 million year-on-year, to $20.5 million, total assets grew 18.1%, to $1.2 billion. This marked the highest asset growth in four years. BCP grew its corporate and retail loan portfolios by 11% and 25%, respectively, in 2012. The bank launched a successful trial to offer microfinance services. 

 

Jorge Mujica Gianoli, general manager/www.bcp.com.bo

 

BRAZIL

Banco Bradesco

Long considered an innovator, Banco Bradesco became one of the world’s first banks to offer access to checking accounts via Facebook in 2012. This was followed by the ability to request personal loans using the social media platform. Its more than 72 million customers are serviced through a nationwide branch network that accounts for 21.4% of the financial system’s total. Profitability (ROAE) topped 19% in 2012, when net interest income rose 11.4% to $21.4 billion. 

 

Luiz Carlos Trabuco Cappi, CEO/www.bradesco.com.br

 

CHILE

Banco Santander Chile

Santander’s Chilean operation is the country’s largest bank in terms of assets and shareholders’ equity. Total assets were $51.7 billion in 2012. The bank’s return on equity (ROE) was one of the highest among banks in Chile, at 18.9%. Its 40% efficiency ratio was also among the sector’s best. The bank operates 503 branches nationwide—Chile’s largest private branch network—to serve its 3.5 million customers. It has been increasing loans to SMEs and middle-market companies. The bank has a 19.2% share of the credit market and 17.4% of deposits.

 

Claudio Melandri, CEO/www.santander.cl

 

COLOMBIA

Bancolombia

Bancolombia gained a spot for the first time on the Dow Jones Sustainability Index in 2012. Its environmental sustainability credit line, structured with the World Bank’s International Finance Corp and the Inter-American Development Bank, finances energy efficiency and cleaner production projects. It is the largest provider of financing to builders working on a government plan to give 100,000 free housing units to underprivileged families. Bancolombia also supports 57% of banked SMEs. Assets rose by 20.8% in 2012, the strongest growth rate among its peers.

 

Carlos Raúl Yepes Jimenez, CEO and president/www.grupobancolombia.com

 

COSTA RICA

Banco BAC San José

BAC San José is Costa Rica’s largest private bank and has been owned by Colombia’s Banco de Bogotá since 2010. When granting the bank an AAA long-term national rating in early 2013, S&P highlighted the parent company’s soundness, as well as the bank’s own adequate capitalization, quality loan portfolio and solid regional brand. ROAE was 15.7% (September 2012). The Mexican Philanthropy Institute deemed the bank a model for CSR best practices in Latin America, and its financial education program was awarded by the Inter-American Development Bank.

 

Gerardo Corrales Brenes, CEO/www.bac.net/bacsanjose

 

DOMINICAN REPUBLIC

Banco Popular Dominicano

Incorporated in 1963, Banco Popular Dominicano is the Dominican Republic’s largest private-sector bank. In 2012 the bank continued to open new branches and launch new products, as total assets grew by 8.7% year-on-year. Loans increased by 14% and deposits, by 8%. The bank took initial steps to create a fiduciary market, introduced a new credit card tailored to SMEs and became the first Dominican bank to include smart chips in its debit cards. It serves more than 1.6 million clients via 187 branches and 500 ATMs.

 

Manuel Grullon, president/www.bpd.com.do

 

ECUADOR

Banco Pichincha

Banco Pichincha is not only the largest private-sector bank in Ecuador but also operates subsidiaries in Peru, Colombia and Panama, as well as an agency in Miami and representative offices in Spain. In 2010 it became the first Latin American bank to receive a license to offer commercial banking services in Spain. The bank operates 307 branches and 721 ATMs throughout all Ecuadorian provinces, servicing 1.8 million customers. Its CSR efforts are channeled through the Crisfe Foundation, with a strong focus on education. 

 

Fidel Egas Grijalva, president/www.pichincha.com

 

EL SALVADOR

Banco Agrícola

While higher tax rates and administrative expenses reduced Banco Agrícola’s 2012 net income to $89.1 million, profitability ratios remained strong. ROE was 17.3% and ROA was 2.4%. The bank, owned by Colombia’s Bancolombia Group, remained a market leader in El Salvador, holding a 30.1% share of loans, 28.8% of deposits and 43.9% of net income. It maintains the country’s largest distribution network, with 799 service points, including branches, mini branches, ATMs and kiosks. The bank added new features to its ATMs to provide greater functionality.

 

Rafael Barraza Dominguez, CEO/www.bancoagricola.com

 

GUATEMALA

Banco Industrial

With Banco Industrial focused on the business sector, its list of more than 300,000 corporate clients is a Who’s Who of multinationals, including Walmart, Unilever and Nestlé. It also serves more than two million retail customers. Industrial is Guatemala’s main check-clearing institution and exclusive custodian for bonds traded on the local stock exchange. It handles a 45% share of government tax collections. Assets rose from $6.4 billion in 2011 to $6.9 billion in 2012, while nonperforming loans were 0.6% compared with a local average of 1.3%. 

 

Diego Pulido, CEO/www.bi.com.gt

 

HONDURAS

Banco Atlántida

As the oldest bank in Honduras, founded in 1913, Banco Atlántida has had time to cultivate strong customer loyalty and brand recognition. Much of that time has been dedicated to reaching customers wherever they are located throughout the Central American nation, as the bank developed the country’s largest branch network. It operates 270 points of service throughout Honduras’s 18 departments. It also offers specialized banking products for SMEs. Grupo Atlántida, the bank’s holding company, includes insurance, pension fund management, leasing and warehousing subsidiaries.

 

Guillermo Bueso Anduray, CEO/www.bancatlan.com

 

JAMAICA

Scotiabank Jamaica

Scotiabank has operated in Jamaica for 124 years and continues to consolidate its business on the island. The bank serves clients through a network of 49 offices and more than 2,300 employees. Despite a competitive mortgage market, its mortgage division posted the highest volume in mortgage sales in its 18-year history in 2012. Scotiabank Jamaica completed a project to install more than 200 environmentally friendly ATMs that require less energy and are expected to reduce their greenhouse gas emissions by at least 15% over the next five years.

 

Bruce Bowen, president and CEO/www.jamaica.scotiabank.com

 

MEXICO

Banamex

Banamex’s history dates back to 1884, but it was its acquisition by Citigroup in 2001 that made it part of a global business that includes 200 million customers in more than 100 countries. The bank is one of Mexico’s leading CSR investors, supporting activities focused on culture, social development, the environment and financial education. Fomento Social Banamex, a program created to support vulnerable and alienated communities, celebrated its 20th anniversary in 2012. S&P affirmed the bank’s global issuer rating of BBB, the highest of any Mexican bank.

 

Javier Arrigunaga, CEO – Mexico/www.banamex.com

 

NICARAGUA

Banco Lafise Bancentro

Lafise Bancentro posted a 33% jump in net income in 2012, to $28.7 million, marking the highest rise in its history. The bank’s loan portfolio grew 25.5%, remaining the most important credit provider to the agriculture and livestock sectors. Its performance led Fitch to upgrade the bank’s national long-term rating to A+. Lafise Bancentro was recognized by the Central American Bank for Economic Integration as an ambassador for biodiversity, having granted $3 million in loans to support sustainable industries. It also provides computers to schoolchildren throughout Nicaragua.

 

Roberto Zamora Llanes, president/www.bancentro.com.ni

 

PANAMA

Banco General

Founded in 1955 as Panama’s first privately owned bank, Banco General remains the country’s largest locally controlled financial institution. It holds a 25.2% share of total local private-sector deposits and 18% of total local loans. The bank’s market capitalization rose 15.4% year-on-year in 2012, to $4.8 billion, while net income grew 12.9% to $261.7 million. Nonperforming loans were 0.5%. Banco General has maintained investment-grade ratings from both Fitch (BBB+) and S&P (BBB) since 1997. Its Sus Buenos Vecinos Foundation contributed $3.9 million to support 251 community projects in 2012.

 

Raúl Alemán Zubieta, CEO/www.bgeneral.com

 

PARAGUAY

Banco Itaú Paraguay

Itaú Paraguay continues to gain customer loyalty, with a 2012 Ibope poll showing it was “top of mind” for the second year in a row. It also led the country’s banking sector in terms of net profits for the ninth consecutive year. Adding to its corporate and retail banking divisions, in 2012 the bank launched a treasury unit to expand its product offerings. Itaú serves clients through 27 branches and 250 ATMs. As part of a sustainability program, the bank is in an experimental phase to operate solar-powered ATMs.

 

Viviana Celia Varas, CEO/www.itau.com.py

 

PERU

BBVA Continental

BBVA Continental’s 2012 ad campaign slogan of “New Peru, New Bank” reflects the country’s economic boom that has favored the banking sector through increased demand for both corporate and consumer loans. While the bank’s total assets grew by 17.7% in 2012, its net loan portfolio accounted for 63.4% of those assets. Nonperforming loans were 1.2%, versus a system average of 1.8%. ROE was 33.1% and ROA was 2.6%. Among new products launched in 2012 was “Hipotecario Joven,” which allows younger customers to obtain mortgages.

 

Eduardo Torres-Llosa Villacorta, CEO/www.bbvabancontinental.com

 

PUERTO RICO

Banco Santander Puerto Rico

As Puerto Rico’s economy begins to emerge from a six-year recession, Santander executives are encouraged and poised for growth. After posting $90 million in net profits in 2012, the bank now aims to boost this figure to $100 million within three years. Prudent policies and the fact that it is the only bank in the market active in all customer segments, means it is well positioned to reach its goal. The bank operates 118 branches throughout the island. In keeping with Santander’s global CSR initiatives, Santander Puerto Rico supports higher education programs.

 

Román Blanco Reinosa, president/www.santandernet.com

 

TRINIDAD & TOBAGO

Scotiabank Trinidad & Tobago

Despite a challenging local and global economic environment, Scotiabank managed to produce another round of positive results in Trinidad & Tobago. In 2012, profits before taxes grew by 1.5% year-on-year. Return on equity was 18.5% and return on assets was 3.1%. The bank, which has been active in the country for nearly six decades, operates 24 branches and five sales centers, offering retail and corporate banking, wealth management services and special products for SMEs. Its corporate social responsibility efforts involve a variety of activities, though financial literacy is one of its strongest pillars.

 

Anya Schnoor, managing director/www.tt.scotiabank.com

 

TURKS & CAICOS

Scotiabank Turks & Caicos

Operating in the Turks & Caicos since 1982, Scotiabank has become the number-one lender on the islands, with a 40% share of the retail loan market. A leading financial institution, it is also recognized as an employer of choice and for its active community involvement, including support for education campaigns, HIV/AIDS awareness programs and initiatives to create future business leaders. In 2012 it launched CMS Life, a free online banking service for small and medium size enterprises. Assets rose 2.8% year-on-year in 2012, despite a sharp drop in net profits. 

 

Cecil Arnold, managing director/www.turksandcaicos.scotiabank.com

 

URUGUAY

Banco Santander Uruguay

Despite market rumors that Santander may soon be scaling back its local operations, the Spanish banking group’s local division continued to consolidate its market position in 2012. Regarded as Uruguay’s leading private-sector bank, Banco Santander operates the country’s largest branch network, with 84 branches. It serves 266,000 customers. Santander has been present in the Uruguayan market since 1979. Since then it has positioned itself among Uruguay’s most respected brands. In addition to retail banking, it also operates separate consumer finance, pension fund and insurance units.

 

Jorge Jourdan Peyronel, president and CEO/www.santander.com.uy

 

US VIRGIN ISLANDS

Scotiabank USVI

As Scotiabank celebrates its 50th anniversary in the USVI, it remains the only international bank on the islands. It maintains five branches and 16 ATMs across the three islands. Although demand for commercial and retail loans remains weak, there is growing demand from SMEs. ROE was 1.8% in 2012. Scotiabank was the first to offer EcoLoans for energy-efficient projects on the islands. The bank makes $125,000 in annual contributions to community organizations, including a $20,000 annual scholarship donation to the University of the Virgin Islands.

 

Lawrence Aqui, vice president and country head/www.scotiabank.com/vi

 

VENEZUELA

BBVA Banco Provincial

Despite negative political and economic headlines emanating from Venezuela, a strong customer focus produced positive results for Spanish banking giant BBVA’s local operations. Total assets soared 58.4%, to $26.2 billion, in 2012. Consumer lending remained strong, with the bank taking a 30.8% share of the auto loan market and 19.8% of the credit card market. At $5 billion, BBVA also held a 13.2% share of commercial loans. The bank serves more than three million customers through 318 offices. In 2012 it completed an ATM overhaul, involving 1,800 machines.

 

Pedro Rodriguez Serrano, CEO/www.provincial.com

 

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