SEEKING HIGHER YIELD
While Latin American banks continued to expand their client base and footprints, the sector still faced important challenges. The Inter-American Development Bank (IADB) warns that increased government spending and higher corporate debt loads to fuel growth make the region’s banking sector even more vulnerable than it was before the 2008 crisis, particularly as government fiscal balances deteriorate. The IADB predicts regional GDP growth could be impacted by an accelerated unwinding of US monetary stimulus and extended Chinese slowdown. Meanwhile, Latin American banks, which have worked to attract unbanked populations, last year redirected much of the focus toward higher-yielding premium clients.
Despite a substantial decline in profitability in three of the bank’s key Latin American markets—Brazil, Mexico and Chile—the region still contributed more than half of Banco Santander’s 2013 profits of €4.37 billion, representing a 90.5% year-on-year increase. Volumes and profits grew by double digits in other markets throughout the region, driven primarily by net interest and fee income. Santander continues to hold important leadership positions in all of the Latin American markets in which it operates, serving 44 million customers through a network of more than 6,000 branches. The bank’s chairman says it is poised for further growth.
Emilio Botín, chairman
Banco Macro has managed to remain profitable within a strained economic environment, with its success driven by prudent management and a strong focus on key provincial markets. Its nationwide network of 408 branches is present mainly outside of the Buenos Aires metropolitan area and the bank is the exclusive financial agent for four provinces. It also focuses on the low- and middle-income segments, as well as SMEs, giving it a competitive edge over other sector players. Stock prices for the second-largest locally owned private bank gained strongly in 2013.
Jorge Horacio Brito, chairman and CEO
Despite significant market changes, including the growing strength of credit unions and a sector consolidation drive, Scotiabank has remained the financial system’s dominant player. The bank holds the sector’s largest overall market share, at 32%. A 2013 consumer survey by the Fair Trading Commission in Barbados showed that 26.3% of respondents saw Scotiabank as their primary bank of choice on the island. In 2013 it completed migration of its deposit suite to maximize operational efficiency and optimize returns from new products. The bank also launched premium banking services.
David Noel, managing director (Caribbean East)
Belize Bank remains the largest full-service financial institution in the Central American country, with a 41% market share of loans and 37% of deposits. It is also favored by international companies doing business in Belize, partly due to the fact that being part of the broader Belize Bank Group gives clients access to both a domestic and international banking network. Belize Bank International offers services in both Central and South America. The bank has 12 branches throughout Belize, making it the only financial network covering the entire country.
Philip Johnson, president and CEO
Banco de Crédito de Bolivia
Posting another banner year, Banco de Crédito de Bolivia saw an 18.5% increase in assets in 2013, following an 18.1% rise the previous year and marking its highest growth rate in four years. The bank maintained the market’s lowest ratio of non-performing loans, at 1.3%, with nearly 300% coverage. ROE was 12.1% and ROA 1.1%. In 2013 the bank modernized many of its 51 branches and upgraded 30% of its 246 ATMs nationwide. It also launched mini branches that helped expand its network to Bolivia’s more rural areas.
Jorge Alberto Mujica Gianoli, general manager
Already ranked as the largest bank in Brazil and Latin America, with total assets of $500.3 billion and a $67.3 billion market cap in 2013, Itaú Unibanco continued to expand successfully. In 2013 the bank acquired Credicard, a Brazilian credit card issuer that increased its card portfolio by nearly 26%. It also acquired Citibank’s operations in Uruguay, as it continued to increase its international footprint. The bank operates in 7 countries beyond Brazil. Itaú Unibanco’s risk-adjusted efficiency ratio improved by 470 basis points. Net income was $7.3 billion.
Roberto Egydio Setúbal, president and CEO
Banco de Chile
In 2013, Banco de Chile consolidated its leadership in both net income and profitability, with 28% market share of net income and ROAE of 21.3%. The positive results were due partly to investors’ flight to quality after the 2009 economic downturn. Among the sector’s top players, the bank had the best cost-to-income ratio, at 42.8%. According to the Adimark GFK market research firm, Banco de Chile remained the most recognized brand among banks operating in the country, while other studies recognized its leadership in terms of corporate reputation.
Arturo Tagle, CEO
Grupo Bancolombia posted 33.6% growth in assets in 2013, to $16.2 billion, marking the financial group’s strongest growth since taking control of Banco Agrícola in El Salvador in 2007. The Colombian group holds an 11.3% market share of bank assets in Central America. In its home market, the bank posted a 27% growth in assets, giving it a 22.7% market share and 11.1% ROE. The bank is an important lender to the construction sector in Colombia (46% market share) and saw 24% growth in financial services to SMEs.
Carlos Raul Yepes Jimenez, CEO and president
Banco de Costa Rica
State-owned Banco de Costa Rica offers a wide range of banking and nonbanking services, gaining high customer loyalty. Founded as the country’s first currency issuer and tax collector, the bank’s clients now use its branches to renew passports and driver’s licenses, pay taxes and order auto tags. The bank operates 250 branches in Costa Rica, as well as a Panamanian division focused on trade finance and wholesale banking. In affirming its BB+ long-term issuer default rating in 2013, Fitch highlighted the bank’s diversified loan portfolio and moderate exchange risk exposure.
Mario Rivera Turcios, CEO
For more than 50 years, Citi has been the bank of choice for many multinational companies operating in the Dominican Republic, while other financial institutions and the government have also been traditional clients. The bank is a pioneer in the country’s trade finance and debt issuance markets. In 2013 it launched Citi Mobile Collect in the Dominican Republic as a secure payment solution that uses mobile phones and gives small-scale merchants a safe and low-cost method to pay suppliers. It is an important contributor to community development projects.
Máximo Vidal, general manager
Already the largest private bank in Ecuador in terms of capitalization and customers, Banco Pichincha continues to gain market share, launching “Mi Vecino” in 2013 to offer banking services through neighborhood stores. The bank services 2.5 million customers through Ecuador’s largest branch network, with 309 branches and more than 820 ATMs nationwide, in addition to operations in Colombia, Peru and Spain. The bank joined forces with the IADB’s Multilateral Investment Fund to increase lending to SMEs owned by women. In 2013 it also issued $660 million in microcredits.
Fidel Egas Grijalva, president and CEO
In 2013, Banco Agrícola’s strategy focused on expanding its distribution channels, increasing its service points to 106 Salvadorian municipalities and creating the country’s first financial correspondents network to reach unbanked communities. Total assets grew 4.3%, to $3.9 billion, while net income rose 2.1%, to $91 million. ROE was 17.4%. The bank continued to post one of the market’s lowest nonperforming loan ratios, at 1.6%, with 230.2% coverage. In 2013 it launched a mobile banking platform, as well as three new credit cards under the MasterCard and Visa brands.
Rafael Barraza, CEO
In 2013, Visa recognized Banco Industrial for the third consecutive year, for having the highest non-fraud chargeback effectiveness among consumer debt issuers worldwide. Its non-performing loan ratio improved from 0.6% in 2012 to 0.5% in 2013. ROAE was 20% and ROAA was 1.4%. The bank remains the country’s largest check clearing institution, main foreign exchange provider ($10.8 billion in transactions in 2013) and a major tax collector on behalf of the government (45% market share of tax collections). It is preparing to enter the Panamanian market in 2014.
L. Juan Miguel Torrebiarte, chairman
Banco Atlántida is recognized for its focus on innovation, becoming a pioneer in banking technology and fiduciary services in Honduras. Part of the broader Grupo Atlántida financial sector consortium, the bank offers commercial clients a variety of services, including payroll management, receivables handling and commercial loans. Founded in 1913, Banco Atlántida was the country’s first currency issuer until the Central Bank was founded in 1950. The bank operates Honduras’ only nationwide branch network, with 183 locations and more than 600 points of service.
Guillermo Bueso Anduray, CEO
Scotiabank Jamaica reached several important milestones in 2013. The bank appointed Jacqueline Sharp as its first-ever female CEO, while its Scotia Jamaica Life Insurance sister company celebrated its 15th anniversary with a 25% market share. The bank expanded its overall market share from 16.6% in 2012 to 17.4% in 2013. It also launched premium banking services for top-tier customers, and upgraded its retail and corporate Internet banking platforms. Customers have access to Scotiabank’s global network, making it the bank of choice for many international companies operating in Jamaica.
Jacqueline Sharp, president and CEO
One of Mexico’s top multi-purpose banks, BBVA Bancomer has a leading market share of assets, loans, deposits and infrastructure (branches and ATMs). While its 1,794 branches and 7,749 ATMs are present in every one of Mexico’s 32 states, it maintains a leadership position in 22 of them, particularly due to its role as a provider of low-cost funding. In 2013 the bank underwent an internal restructuring drive to increase efficiency, while launching a $3.5 billion investment plan through 2016—reportedly the largest banking investment program in Latin America.
Vicente Rodero Rodero, CEO
Banco Lafise Bancentro
Banco Lafise Bancentro posted the highest annual growth rates among banks in Nicaragua in 2013, including 39.8% in consumer banking, 15.3% in assets and 25.3% in funding. Its $831 million net loan portfolio, which grew 19.2% year-on-year, was the largest in the bank’s history. Its $32.7 million net income was also its highest ever. ROA was 2.37% and ROE 26.1%. The bank is committed to contributing to Nicaragua’s economic growth, with 70% of its loans targeted to productive sectors. Fitch confirmed the bank’s A+ rating in 2013.
Roberto Zamora Llanes, president and CEO
Banco General, the country’s largest locally controlled private bank, has retained an investment-grade rating since 1997; its current rating is the highest of any Panamanian bank. In 2013, its total assets grew 9.35%, to $11.8 billion, while net income grew 4.17%, to $272.6 million. The bank holds a leading 25.2% market share of total local private-sector deposits and 17.6% of total loans (at November 30, 2013). Banco General continued with its 2012–2014 strategic plan, including launching mobile banking and planning a Latin American regional expansion.
Raúl Alemán Zubieta, CEO
Banco Itaú Paraguay
The Paraguayan banking unit of Brazilian financial giant Itaú Unibanco’s vision is to be the leading bank in “sustainable performance and customer satisfaction.” Ongoing customer satisfaction surveys indicate it is achieving its goals, as both the corporate and consumer banking segments gave it an 82.5% satisfaction index in 2013. In 2013 it redesigned its corporate website to add greater functionality and provide a more user-friendly experience. ROA was 4.3% and ROE was 48%.
Viviana Celia Varas, CEO
BBVA Banco Continental
Peru’s booming economy positively impacted the country’s banking sector in 2013, during which BBVA Banco Continental consolidated its market leadership. Total assets rose 13.8%, while its net loan portfolio grew 20.5%. Strict lending practices, coupled with an efficient monitoring process to ensure asset quality, gave the bank a 1.7% nonperforming loan ratio, compared with a sector average of 2.14%. Its coverage ratio was 258.8%. In 2013 BBVA Banco Continental opened new branches for premium clients and launched investment banking advisory services. ROA was 2.42% and ROE was 29.79%.
Eduardo Torres Llosa Villacorta, CEO
Banco Santander Puerto Rico
Having first entered the Puerto Rican market through an acquisition in 1976, Santander has maintained its commitment to the island territory through boom and bust years. Despite a difficult economic environment in recent years, Banco Santander remains the only financial group with a strong presence in all market segments, including banking, insurance, securities and asset management. The bank’s plan calls for achieving net profit of $100 million over the next three years by focusing on core business areas: high-value customers, commercial clients, wealth management, customer accounts and insurance.
Román Blanco-Reinosa, president and CEO
TRINIDAD & TOBAGO
Scotiabank Trinidad & Tobago
In 2013 Scotiabank Trinidad & Tobago won the Canadian parent company’s Country of the Year Award, an internal recognition, beating out operations in other Caribbean territories. The local banking unit shifted gears and launched premium banking services. Scotiabank Trinidad & Tobago upgraded its telephony platform at all 29 retail locations in 2013, as well as enhanced Internet and mobile banking services. ROE was 17.31% and ROA was 3.01%.
Anya Schnoor, managing director
TURKS & CAICOS
Scotiabank Turks & Caicos
Scotiabank Turks & Caicos remains the island territory’s most international bank. The local banking unit of Canada’s Scotiabank has been operating in Turks & Caicos since 1982 and today continues to offer a full and varied range of retail and commercial banking services, including online banking, cash management products, and customized services for SMEs. The bank operates three branches across the islands. As a strong global corporate citizen, Scotiabank supports a wide range of local activities, from sports programs and educational initiatives to cultural activities and HIV/AIDS causes.
Cecil Arnold, managing director
The local banking operation of Spain’s BBVA financial group is Uruguay’s second-largest private bank by lending volume, holding a 20.3% market share. While the South American country’s economy slowed slightly in 2013, the bank’s profitability and market share expansion were supported by ongoing growth in consumption and investment levels, though inflation remained at a worrisome rate of 9%. BBVA Uruguay posted a 34.6% annualized growth rate in performing loans. In 2013 the bank carried out a full re-segmentation of its customer portfolio, while improving cross-selling and productivity levels.
Antonio Alonso, country manager
US VIRGIN ISLANDS
As part of Scotiabank, one of Canada’s strongest banking franchises, the bank’s clients in the US territory continue to favor the bank’s local business unit. Growing demand from SME clients has helped to offset weakness on the commercial and retail loan side, amid an overall slow US economic rebound. As with everywhere that it operates across 55 countries, Scotiabank is a major contributor to CSR activities in the US Virgin Islands, with a particular focus on community organizations.
Lawrence Aqui, vice president and country manager
BBVA Banco Provincial
Despite operating in one of the most complex sociopolitical environments in Latin America, BBVA Banco Provincial remains the sector’s most consistently profitable bank. Net income (after taxes) rose 78.5% in 2013, to $1.4 billion. Total assets grew by 74.9%, making it the second-largest bank by assets. Its gross loan portfolio grew 64.2%, to $14.7 billion, marking the highest growth rate among its peers. Despite its credit expansion, BBVA’s credit quality remained strong, with its non-performing loan ratio improving 0.25 percentage points, to 0.40%—the market’s best performer.
Pedro Rodriguez Serrano, CEO