Central American Awards for Excellence 2013: By country

Costa Rica

Best Bank: Banco de Costa Rica

Banks in Costa Rica are still digesting new regulations that limit the growth of their credit portfolios to curb the recent rapid expansion in dollar-denominated lending that has been fuelled by the large spreads in local and US interest rates.

Total loan growth has been capped by the central bank at 12% a year (9% for dollar-denominated loans). This will affect all the banks, including Banco de Costa Rica, which grew total loans by 15.5% in 2012, taking its market share to 20.4%.

The bank delivered across the board: revenues rose by 28.6% to $518 million; net income grew by 25.5% to $63.3 million. Deposits grew by 20.4% and now account for 21.9% of Costa Rica’s financial system. The bank’s return on equity grew from 8.45% to 9.56% and return on assets also rose, reaching 1.03% in 2012, compared with 0.97% in 2011. Banco de Costa Rica’s tier 1 capital ratio is 12.72%.

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El Salavador

Best Bank: Banco Agrícola Comercial de El Salvador

In 2012 El Salvador experienced the lowest growth in central America, with GDP up just 1.3%. The economy slowed, with a sluggish recovery in exports and a low internal rate of investments, but increased remittances from citizens abroad – crucial to the third-largest economy in the region – fed into growth in domestic consumption.

Banco Agrícola Comercial de El Salvador consolidated its market-leading position during the past 12 months, outperforming the banking system by growing its loan portfolio by 6.3% and taking its market share to 30.1%. At the same time the quality of the loan portfolio was improved, with the non-performing loan ratio falling to 2.05% – lower than the industry average of 2.9%.

The bank also grew customer deposits (by 3%) and market share (by 28.8%). Banco Agrícola’s net profits of $89.1 million, although lower than in 2012, now account for 43.9% of total profit in the country’s financial system. Return on equity is also the highest of all the main banks, at 17.2%, and return on assets is 2.4%. An increase in administration expenses, combined with lower profit, led to a deterioration in the efficiency ratio, which increased to 42.9% in 2013, compared with 38.7% in 2012, but is still well below the market average of 56.9%.

Best Bank: Banco Industrial

Guatemala is the most populous country in central America and is heavily dependent on remittances from its expatriate community in the US and on agriculture, which accounts for 13% of GDP and 38% of the labour force. GDP per capita is about half the average for Latin America and grew at 3.1% in 2012.

Banco Industrial maintained – and in many cases extended – its leadership position in the Guatemalan banking sector. Its total assets grew by 27.7%, loans by 25.9% and deposits by 25.4%. Despite growing more rapidly than the competition, the bank improved the quality of its loan portfolio, reducing its non-performing loan ratio to 0.3%, compared with an average of 0.8%.

The bank’s total revenue increased by 3.7%, but net profit slipped by 1.1% to $93 million. Return on equity was 19.9% and return on assets 1.34%.

Best Bank: Banco de la Producción

Nicaragua’s economy grew by 4% in 2012, but from a very low base. GDP per capita is $3,300. The country is the poorest in central America and the second poorest in the western hemisphere.

The country’s financial industry grew at 2.5% by total assets, a slower rate than 2011’s 9.4%. However, credit growth remained buoyant, at 23%, and Banco de la Producción (Banpro) was the central player in this development, increasing loans by 26.9%. The non-performing loan ratio fell by 10 basis points to 1%. The bank is the leader in total assets and deposits – with a 32% market share in both. Its investment portfolio market share is 55%.

Banpro grew revenues by 12.6% to $122.5 million in 2012 and net income grew 28% to $42.1 million. The bank’s return on equity was 21.6% and return on assets 1.68%.

Panama’s economy kept pace with its impressive 2011 growth of 10.6%, turning in another double-digit performance in 2012: 10.5%.

Banco General, the leading Panamanian bank, has been capitalizing on this economic boom – driven largely by the expansion to the Panama Canal (due to be completed in 2015 at a cost of about 15% of current GDP) and other logistic and infrastructure projects. The bank, one of the few in the region to be rated higher than its sovereign (triple-B plus and triple B by Fitch respectively), has consolidated its leading market share of loans (18%) and private deposits. Total assets increased by 13.8% to $10.8 billion, mainly driven by an 11.5% growth in its loan portfolio, which now stands at $7.1 billion.

Banco General increased total revenues by 6.5% and net income rose by 12.9% to $261.7 million. The bank’s efficiency ratio is an enviable 36.5%, its return on equity is 20.33% and return on assets 2.61%.