|
|
|
|
|
|
||||
|
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
Costa Rica Best bank: Scotiabank Costa Rica |
Uncertainty around the elections in 2014 led to a steep devaluation in the currency in the first half of 2014, which created a challenging environment for the Costa Rican banks as investment and consumption tailed off, creating a terrible macroeconomic environment for credit growth within the economy. Scotiabank Costa Rica navigated these choppy waters better than others, helped by a boost to its results from maintaining a long-dollar position that generated considerable earnings from the local devaluation. Scotiabank Costa Rica’s CEO, Jean-Luc Rich, implemented a growth strategy that was focused on building from the bank’s leading position in mortgages and car loans and boosting its market share in unsecured lending and credit cards. Total lending grew 9.25%, while the deposit base held steady at a 7.2% market share (growing by 2.6%).
|
Dominican Republic Best bank: Banco Popular Dominicano |
The Dominican Republic has one of the region’s strongest economies. The government is attempting to diversify the economy by facilitating investment in a range of industries to further spur growth rates that have been hovering around 5% for the past couple of years – and last year grew 7.3%, the strongest in the region – while inflation remains low, at 1.58% last year. The numerous and successful international DCM transactions from the sovereign have illustrated international investors’ favourable view of the economy, as well as tapping funds at historic low rates with which to drive investment for growth. Since a banking crisis in 2003 sparked a flight to quality in the retail market Banco Popular Dominicano has enjoyed a competitive advantage through its cheaper cost of funding from its very large deposit base (it has a 27.8% share of the system’s total deposits). Recently the government has re-energized Banreservas, which is finally giving Popular some serious competition in the domestic market. Last year the privately held group nevertheless enjoyed a very solid performance: it increased total assets by 9.9%, increased deposits by 6.0% and increased its loan portfolio by 9.0%.
Popular’s loan portfolio remains very high quality – NPLs were 1.04% – with a coverage ratio of 227%. The bank’s net income increased 8.5% and its return on equity went up from 20.2% to 21.3%. Fitch Ratings reflected the bank’s position in the economy by raising its rating to AA+ (domestic).
|
El Salvador Best bank: Banco Agrícola Comercial de El Salvador |
Economic growth in El Salvador has remained stubbornly low in recent years. In 2014, it was 1.7% (the same as in 2013); economists say that the high income disparity and low levels of poverty (the country has a Gini coefficient of 0.485) are holding down GDP growth. Last year the banking system again faced the challenges of economic inertia but Banco Agrícola Comercial de El Salvador maintained its dominant position. Agrícola has the leading market share of loans (28.7%) and deposits (28.1%) The bank’s net income of $86.3 million was equivalent to 47.8% of the system’s total in 2014. Revenues grew slowly – in line with the system – at just 0.9% year on year, while its efficiency programme is now into its fifth year and can boast a ratio of 46.2% – a great competitive advantage.
|
Guatemala Best bank: Banco Industrial |
Low fiscal deficits and prudent macroeconomic management of the Guatemalan economy have enabled the country to shrug off the negative effects of a drought in 2014. Remittances also set a new high last year, helping drive GDP growth that is projected to grow at an even faster rate than 2014’s 4.2%. As a leading bank in the country, Banco Industrial was well positioned to take advantage of this benign environment – and did. The bank increased net income by 28% – well above the system average of 12.6%. The growth in profits was driven by the bank’s strategy of diversifying its loan portfolio to higher-margin retail segments, such as credit cards and microfinance, as well as from growing non-financial income from commissions and fees. During 2014 the bank also structured the largest syndicated loan in the history of central America – worth $450 million – from a leading sugar producer. Return on equity hit 22.81% (up 279 basis points) and return on assets was 1.60% (up 22bps).
|
|
General manager Carlos Briceno Rios. Banco Lafise is challenging the status quo in Nicaragua with greater growth |
|
Nicaragua Best bank: Banco Lafise |
Some economists predict that a controversial new canal project – being developed by a Chinese billionaire – could double the size of its economy. However, for now slow growth is putting pressure on the current and fiscal accounts. Within this mixed and uncertain context Banco Lafise is challenging the status quo in the banking industry, especially the country’s largest bank, Banco de la Producción, in what is a fascinating momentum story. Lafise, led by Carlos Briceno Rios, grew total revenues by 18.5%, net income by 28.2% and return on equity reached 23.8%, while is has an efficiency ratio of 47%. Such a rate of growth is unsurprisingly greater than the system average – as was the bank’s 17.3% growth in its loan portfolio and its 20% increase in new deposit accounts.
|
Panama Best bank: Banco General |
Panama remains central America’s fastest growing economy – propelled by a services sector that accounts for 80% of GDP. GDP growth was 7.5% last year and the financial services industry is a big driver of that. Such strong growth has fostered a highly competitive environment for retail banks. Banco General wins the award for best bank due to its ability to merge strong financial results with a robust balance sheet and a high-quality dollar-denominated pool of assets. The bank also has a highly diversified loan portfolio, strong loan-loss reserves, a stable retail base and solid levels of capital. Last year the bank increased net income by 14.8% to $312.8 million, helped by its improving efficiency ratio – an impressively low 37.08%. Return on equity and assets registered 20.57% and 2.46% respectively.
|
Puerto Rico Best bank: Santander Bancorp (Puerto Rico) |
Puerto Rico’s debt-laden economy is struggling and is leading to a population exodus that is compounding its problem by shrinking its tax revenue base: the country’s debt is comparable to that of New York State while its population is now the size of Connecticut: $73 billion for 3.6 million people. There are now estimated to be more Puerto Ricans living in Florida than in the country. In May, Moody’s downgraded the country’s debt to junk and a default is widely anticipated. The parlous state of the economy makes it a difficult operating environment for the banks. Santander Bancorp (Puerto Rico)’s solidity makes it the best bank – it is the only investment-grade bank in the country. In recent years the bank has had to shrink its balance sheet and it hasn’t paid dividends since 2008 to bolster the capital position. The retrenchment was a success: the bank was profitable last year – increasing net profits by 39%, while its focus on higher quality loans led to a NPL ratio of 4.5% – 510 basis points better than the system average.
