Country Awards for Excellence 2021: Latin America (including Central America & Caribbean)

COUNTRY INDEX

LATIN AMERICA

CENTRAL AMERICA AND CARIBBEAN

LATIN AMERICA

	ARGENTINA
Best Bank: Santander Argentina
Best Investment Bank: JPMorgan

After three years of recession, compounded by a global pandemic during the past twelve months, Argentine banks would be forgiven for feeling stuck at the bottom of the credit cycle. Credit in real terms is shrinking, particularly in the consumer sector and banks aren’t able to offset loan portfolio growth with high returning government securities under this administration’s monetary policy, which eschews positive real interest rates.

In short, it’s a struggle. Santander Argentina fared better than the rest – its large market share diversifies the risks of struggling returns across segments. The bank has the highest market share of private-sector deposits (10.9%) and maintained its leadership in consumer loans, with a 13.4% share. It’s also a leading corporate lender.

The bank, headed since 2019 by chief executive Sergio Lew, also continues to leverage its global network to improve competitiveness – a particularly important attribute for operating in such a harsh environment. Last year Santander rolled out its merchant acquirer product Getnet, which has been successful in spearheading growth across corporate, small and medium-sized enterprise, payroll and consumer banking in Brazil.

The same applies to the bank’s roll out of its global tech platform; its app is the top rated in the market. It has introduced full digital onboarding of clients and in 2021 Santander was awarded a licence for Openbank Argentina, its fully digital subsidiary.

Given these operating challenges, its reported net income of $174 million in 2020, was impressive, at just 3% lower than in 2019 – particularly when considering the weak performance of the Argentine peso. The bank reported a ROE of 11.0%

If you’re going to be a successful investment bank in Argentina, you need to have the few world class companies that are based in the country on your client list – and JPMorgan does. It led the inaugural bond offering from the online retail sensation MercardoLibre in January 2021. The company is expanding quickly throughout the region and staying close to companies like this is a critical way to offset the volatility in capital markets activity during fallow years.

MercardoLibre’s transaction, a dual tranche deal that comprised $1.1 billion of the total $1.5 billion raised by Argentine issuers last year, helped JPMorgan top the rankings for international debt capital markets. The bank also led Telecom Argentina’s bond issuance in August 2020.

JPMorgan, led in Argentina by senior country officer Facundo Gómez Minujin, also managed to claim leading roles in the rest of the sparse deal offerings from the country. It was mandated by Globant for its June 2020 follow-on transaction, for example.

The bank also claimed top spot in the Argentine M&A rankings, with two deals for a 36.7% market share.

JPMorgan was sole adviser to Schlumberger in the company’s sale of 49% of its oil and gas assets in the Vaca Meurta oil fields to a consortium comprised of Equinor and Shell. It also advised Standard Bank on its sale of $1.2 billion in financial assets to Chinese bank ICBC. These deals were the two largest M&A transactions in Argentina last year.

	BOLIVIA		[index]
Best Bank: Banco Mercantil Santa Cruz

The political chaos in Bolivia since the military coup in 2019 has had a direct and deep impact on the economy. Uncertainty hit investment, particularly public investment programmes that drive so much of the Bolivian economy and in 2020 GDP fell by nearly 8%. Mismanagement of the Covid pandemic has exacerbated the economic decline.

In this environment there was a natural flight to quality in the banking sector and the country’s biggest and strongest bank, Banco Mercantil Santa Cruz, which has 112 branches and 430 ATMs, saw this boost its relative performance once again. Led by Alberto Valdés Andreatta, it increased its loan portfolio by 4.8% to $3.5 billion, although its deposit base fell by 4.3% to $3.8 billion. It was able to source financing from the local markets even through pockets of volatility.

Banco Mercantil Santa Cruz also focused on digitization and in 2021 saw the percentage of digital transactions hit 80%, with more than two million such transactions per month and the bank’s mobile app becoming the main transactional channel.

	BRAZIL		[index]
Best Bank: Nubank
Best Investment Bank: BTG Pactual

The importance of timing in life is hard to overstate. Take Nubank. It started as a credit card company in 2013 and grew quickly in a sector that had for years been milked by the existing providers through exorbitant interest rates.

After hitting more than 10 million customers and having created a well known and well perceived brand, the bank – led by chief executive and co-founder David Vélez – decided it was time to expand. Deposits and current accounts were added and in September 2020 the bank added an investment portfolio to round out a full-service digital platform for its growing customer base.

Turbocharged by the pandemic-driven adoption of digital banking seen throughout Brazil since March 2020, that customer base keeps swelling: from 20 million in 2019 to 36 million by the end of 2020. Deposits have more than doubled to $29 billion and Nubank is also a leader in the new digital payment system, PIX, launched by the central bank.

Vélez told Euromoney in January this year that the pandemic created a potential flight to quality within the banking sector, which was a new test for Nubank but one it more than just passed. He says that Nubank saw: “An avalanche of deposits, worth tens of billions of reais during 2020 that came from the big banks.”

Meanwhile, the previous core segment, credit cards, continues to power forward, with its total loan portfolio growing 49% to $95 billion in 2020, a period when some banks saw customers paying down card debt.

And it’s not just customers who are flocking to Nubank, investors are beating a path to the bank and in June 2021 the latest funding round included a $500 million investment from Warren Buffett’s Berkshire Hathaway that valued the fintech at $30 billion – up 20% from the previous funding round in January 2021.

Other banks bemoan Nubank’s lack of legacy issues, both in terms of costs and outstanding credit portfolios that had to be nursed through economic collapse and repayment extensions. That’s true of course, but in business you play the cards you’re holding and Nubank had a perfect hand for the last 12 months.

The pandemic hit Brazil late, but it hit the country’s corporates hard. There was a huge demand for liquidity in the early months and the local banks with big balance sheets saw a flood of bank debt drawn down. Much of this was subsequently transformed into bonds in the local markets so it is something of a surprise that BTG Pactual, which wins the award for the Brazil’s best investment bank, topped the local DCM tables.

Competitors point out that the rapidly growing portfolio of its own companies explains some of this volume. The bank has built up a larger balance sheet in recent years, but it’s not what it’s known for. So to have booked a 34.9% market share on 32 deals shows the bank has been successful in building out its debt capabilities for clients in Brazil.

However, BTG Pactual, led by chief executive Roberto Sallouti, continues to win where it really counts for investment banks: it scooped the biggest share of equity capital markets fees, according to Dealogic, and was third in terms of volumes and first in terms of number of deals.

In total the investment bank led 53 equity deals throughout the qualification period spread across industries, IPOs and follow-ons, and for companies of different sizes and maturity. Importantly and reflecting the bank’s ability to generate more fees than anyone else, BTG was a junior bookrunner on just six of these deals.

BTG also maintained its presence near the top of the M&A league tables and claimed mandates in some of the most transformational transactions in the market. It advised B2W in its merger with Lojas Americanas – a R$15.2 billion ($3.01 billion) deal – and was also involved in GPA’s R$19 billion spin-off of Assaí Atacadista. BTG Pactual was also adviser to Globenet in the protracted negotiations over Oi, with BTG’s client ultimately buying 55% of Oi’s fibre network business for R$11.4 billion.

	CHILE		[index]
Best Bank: Santander Chile
Best Investment Bank: Goldman Sachs

Santander Chile had a good 2020. The leading private-sector bank closed the year with more than 3.6 million customers and is ranked first or second in every segment of the market. The bank enjoys an 18.3% market share in loans, 18.1% in deposits (with demand deposits at 21.4%).

Such domination should bring operational advantages and it did. Santander outperformed its competitors in terms of net interest margin (NIM), recording a result of 4%, and a return on equity (ROE) of 15.4% – easily ahead of its nearest rivals.

Much of Santander’s outperformance in Chile is derived from its digital strategy: the launch of its Superdigital pre-paid debit card brought the bank nearly 130,000 new customers. Other digital innovations, such as a fully digital insurance broker and Santander Life – a new digital account with 100% digital onboarding – grew revenues amid strict cost control.

The bank’s efficiency ratio reflects these two trends. As of March 2021 its cost-to-income ratio had fallen to an unrivalled 39%. Chief executive Claudio Melandri isn’t resting on his laurels. In November 2020 he outlined a digital strategy for 2021 to 2023 that aims to keep clear digital daylight between Santander Chile and the rest of the market.

Goldman Sachs wins the award for Chile’s best investment bank. In a quiet year for capital markets activity no bank was able to build a book of business that dominated the competition, but the breadth of Goldman Sachs’ mandates across product areas was notable.

As well as leading the M&A deal rankings, the bank, led by country head Timothy Kingston, was involved in the most important and transformational deals in the awards period. It was exclusive financial adviser to the State Grid Corporation of China in its $2.23 billion acquisition of Sempra Energy’s power distribution and transmission business (the biggest M&A deal of the year); adviser to Mitsubishi in its $108 million sale of its 6.77% stake in CAP; and exclusive adviser to Laureate Education in the sale of its Chile operations for a total transaction value of $218 million.

Goldman Sachs was also involved in the landmark debt deals for the region. It led – as global coordinator – the first UN Sustainable Development Goal-linked bond issued by a Chilean entity, CMPC’s $500 million 10-year deal. It was also structuring agent on the $1.5 billion, dual-listed transaction for the Chilean government – its first sustainable Formosa and only the second Formosa bond by a sovereign in Latin America.

Goldman also achieved the lowest 30-year coupon for a Latin American issuer with Empresa de los Ferrocarriles del Estado’s inaugural $500 million senior unsecured bond due in 2050 setting a 3.068% coupon, surpassing the 3.5% achieved by the Republic of Chile in January 2020.

	COLOMBIA		[index]
Best Bank: Banco de Bogotá
Best Investment Bank: JPMorgan

According to Banco de Bogotá’s chief executive, Alejandro Figueroa, last year was the toughest in the bank’s 150-year history. However, his firm proved itself up to the task.

In the midst of the economic challenges of the Covid-19 pandemic the bank grew aggressively. Assets increased by 19%, loans by 16.6% and deposits by a mighty 25%. These results consolidate its position at the top of the consumer banking industry, with a market share of 53.2% and a ROE of 10.7% – compared with Bancolombia’s 3.4% and Davivienda’s 1.9%. A return on assets (ROA) of 2.1% confirms the bank as the most profitable in Colombia. It also reported a NIM of 5.4% and its efficiency ratio dipped under 50% by 20 basis points.

Banco de Bogotá is also focusing on the future with twin strategies in digitization and sustainability.

In the former, it introduced initiatives to drive purely online sales, with new products in payroll, micro loans and debt consolidation added to the bank’s digital suite in 2020. It also increased digital penetration. Around 66% of new saving accounts are generated digitally and the numbers are even better for new loans (70%) and credit cards (80%). In the year to December 2020 it increased the number of digital users by 24.3%.

Meanwhile, 2020 saw it issue its first Ps300 billion ($82.1 million) green bond, which was three times oversubscribed. It says the bond will facilitate the absorption of sustainability goals throughout the organization.

Also – outside Colombia but an important transaction for the bank nonetheless – Banco de Bogotá closed its acquisition of Multibank Panama, but not before renegotiating the agreed 2019 sale price down 39% to reflect the new financial reality created by the pandemic.

JPMorgan wins the award for Colombia’s best investment bank this year thanks to its twin performances in M&A and DCM.

The investment bank, led by country head Ángela Hurtado, captured a market share of 16.1% of the $11 billion of Colombian debt issued in the international markets, chalking up five deals during the awards period.

JPMorgan also led on the landmark transactions, including the biggest, when Ecopetrol raised $2 billion in 10-year bonds, which were oversubscribed more than 2.5 times.

JPMorgan was also the sole adviser to Administradora de Fondos de Pensiones Habitat on its 100% acquisition of Colfondos SA for $172 million. It was also part of the group of six banks advising the target company in the deal of the year, Companhia Brasileira de Distribuição’s acquisition of retail company Almacenes Exito for $6.8 billion.

	ECUADOR		[index]
Best Bank: Banco Pichincha

The Ecuadorian economy contracted by 8.9% in 2020, but it could have been worse. The country’s agreement with the IMF, allowing it to carry out an external debt swap and obtain fresh resources under favourable conditions, prevented a crisis from becoming a catastrophe. However, Ecuador remains on a fiscal precipice.

With disaster averted, the financial system showed signs of resilience. Total liabilities in the banking system rose by 11.4% – an increase of $3.8 billion – driven by a positive trade balance and remittances from abroad. The biggest bank in the country, Banco Pichincha, benefited from the flight to quality in the banking system. The bank, led by president Antonio Acosta Espinosa, grew deposits by 12.8% in the year, taking the bank above $10 billion for the first time.

However, no bank is immune to such a negative operating environment and Pichincha saw its loan portfolio fall by 1.4%. When coupled with a decision to increase provisions (coverage rose to 8.1% of the portfolio in 2020 from 6.8% in 2019 and $115 million in 8,000 transactions were deferred), the bank’s profitability fell. Net profit was down 62.2% in 2020 at $233 million, with ROE down to 3.1% and ROA 0.3%.

	MEXICO		[index]
Best Bank: BBVA Mexico
Best Investment Bank: Santander Mexico

When a bank is number one in a market there is only one way to go. Well, not necessarily. BBVA Mexico has long been the dominant private-sector bank in Mexico, but in 2020 it also took the top market share in public-sector loans – the one market segment that it previously didn’t dominate.

And so – perhaps to the chagrin of BBVA Mexico’s competitors – the bank became an even stronger competitive force. The successful rollout of its digital platforms throughout the region helped the bank’s efficiency during the year. It completed more than 1.7 billion transactions, representing 45% of all banking transactions in 2020 (up from 31% in 2019). The bank also increased its digital client base to 12.1 million, up 25% on the previous year, and 53.7% of all customers now operate digitally. This improves costs (62.8% of new loans are originated online) and the efficiency ratio stood at 40% at the end of 2020.

Although the bank, led by chief executive Eduardo Osuna, is clearly still the benchmark in Mexico, it’s not immune to the negative forces that swept through the country’s economy in 2020. Net profits fell 24.8% to Ps42.86 billion ($2.15 billion), reflecting subdued loan growth and reduced fees, as well as greater provisioning in expectation of higher non-performing loans (NPLs) to come.

While the best bank award in Mexico went to the same recipient as last year, the best investment bank title this year goes to a relative newcomer in this category, Santander Mexico. The Spanish bank has been threatening to turn its heft in corporate lending into greater market share in investment banking in Mexico and Brazil in recent years but has been unable to put together a sufficiently broad and deep book of business in a single year. That changed in 2020.

Santander was clearly a force across fixed income. The bank was ranked fifth in terms of leading local debt deals and second for international DCM mandates. It led the way in structured finance transactions, closing 15 for a market share of 64%. Given the scramble for liquidity that occurred among Mexican companies in the first half of 2020, this performance represents a significant success for Santander.

However, head of Santander CIB Mexico, Felipe García Ascencio, wasn’t satisfied with the improvement in debt financing. In a breakthrough year for its M&A practice the bank notched second place, according to Dealogic, with six deals and a market share of 50.7% in terms of volume, behind Morgan Stanley.

The bank closed the largest M&A deal of the year – and one of the largest deals seen in the country over the last five years – when it advised Goldman Sachs Infrastructure Partners on its sale of toll road operator Red de Carreteras de Occidente to Spain’s Abertis and Singapore’s sovereign wealth fund GIC. The deal was valued at $5.5 billion.

Santander also notched up a credible fifth place in the ECM bookrunning table, including the global coordinator mandate for Volaris’ $173 follow-on and, in February 2021, it was lead coordinator in the $329 million IPO of Fibra Soma, the first Mexican equity transaction of the year.

	PARAGUAY		[index]
Best Bank: Banco Basa

The decision to name Banco Basa Paraguay’s best bank wasn’t based just on its outperformance – with credit growth of 11.7% in 2020 and up a further 8.7% in March this year – but also because it is targeting the sector that helped the country perform strongly through the pandemic.

The bank is a leading lender to the construction industry and grew its loan portfolio to the housing sector by 23%, helping the economy maintain its dynamism.

Basa is also increasing its exposure to the micro, small and medium-sized companies that have also been another prominent story in recent Paraguayan GDP growth. The bank has now financed more than 2,500 companies – a big number in a relatively small country – and much of this is focused in the critical agricultural sector.

Importantly, Basa continues to grow profitably. Its return on capital was 21%, ahead of its peers and, although down from 2019 levels, it suffered relatively less erosion. The loan book is growing fast but continues to run with strict risk controls; and the bank’s NPL rate stood at 2.26% in March 2021, nearly 50bp better than the banking system average of 2.73%.

	PERU		[index]
Best Bank: Banco de Crédito del Peru
Best Investment Bank: JPMorgan

Not only is Banco de Crédito del Peru (BCP) the strongest and most diversified bank in Peru, it is also increasingly generating benefits by being part of the wider Credicorp Group, which offers microfinance, insurance, wealth management and corporate and investment banking. The bank is led by CEO Gianfranco Ferrari.

BCP on a standalone basis pulled off a remarkable feat over the past year. By the end of March 2021, its performance had already returned to pre-pandemic levels. In the first quarter of 2021 the bank reported ROE of 18.4%, while in the fourth quarter of 2020 it reported ROE of 18.2%.

The bank’s strategy is simple but difficult: dominate all segments. BCP has a leading market share in wholesale banking (37%), mortgages (33%) and SMEs (33%); and it’s in a virtual tie for first place for consumer (18%) and credit cards (22%). It also has more deposits than its competitors, providing a natural cost of funding advantage.

It is working hard to advance its digital banking operations and in 2021 the bank’s digital customer base is now larger than its traditional one. The bank’s efficiency ratio stands at 40%.

The bank has rebounded impressively and was well positioned for a strong recovery in Peru. The recent presidential election throws the nature and pace of that recovery into question. But even if BCP is entering unchartered political and economic waters, it is doing so from a position of strength.

JPMorgan was the outstanding investment bank in Peru over the past year, albeit in a period of relatively little capital markets activity. It topped the international DCM league table by some margin, claiming 10 deals and a 55.1% share of total volume, according to Dealogic. JPMorgan won mandates for the biggest deals, including the $2 billion bond from the sovereign, as well as the more interesting deals, such as the $500 million bond for BCP and a $500 million inaugural bond for that bank’s holding company, Credicorp.

JPMorgan also took the only ECM mandate during the awards period – a $166 million follow-on for Hochschild Mining. It also notched an M&A mandate to round out its investment banking footprint in the country. The bank advised Korea’s SK Innovation in its $1.05 billion sale of oil and gas assets in Peru to Argentine energy company Pluspetrol.

	URUGUAY		[index]
Best Bank: Banco Itaú Uruguay

While Banco Itaú Uruguay differs very much in scale from the Itaú that operates in its home market of Brazil, the subsidiary is even more profitable.

The bank in Uruguay uses efficiency rather than scale and it’s just as effective. In the past year it generated net income of $112 million – the highest among private-sector banks – thanks to an efficiency ratio of 54%. That might not be so impressive in other banking markets, but it’s an outlier in Uruguay, where the average for the private banks is 62%.

Greater digitization, helped by importing platforms from Brazil, drove this outperformance, with Itaú achieving 83% of all transactions through digital channels by the end of 2020. It can now offer prospective customers complete digital onboarding of accounts and products.

Itaú does use scale in Uruguay where it can and new chief executive Andre Gailey, appointed in March 2021, will seek to maintain recent growth momentum. The bank is the second-biggest private bank in the country and increased its customer base by 6.7% in 2020. Deposits grew 15% in the year, compared with a system average of 9%.

ROE fell to 4% as a consequence of high provisioning amid pandemic uncertainty, but watch for next year’s results as much of this allocated capital may return to the positive side of the balance sheet. At the end of 2020 NPLs remained low, at just 1.6% and the bank’s liquidity coverage ratio and net stability funding ratio were above 300% and 140% respectively.

CENTRAL AMERICA & CARIBBEAN

	COSTA RICA		[index]
Best Bank: BAC Credomatic Costa Rica

Costa Rica’s acceptance into the OECD in the past year was validation of the country’s position as the most developed in the region. The economic contraction of 4.6% in 2020 was very much out of the historical pattern of steady growth and the country is a trailblazer for sustainable development. It has a perennial fiscal challenge, however, that needs tackling sooner rather than later.

The banking market is solid and has weathered the downturn well. However, BAC Credomatic Costa Rica’s performance stood out in the past year and the bank is the momentum player in the market, led by country manager Federico Odio. It continues to grow and had increased its market share in total assets to 14.6% by the end of the first quarter of 2021. Its share of deposits also grew 70bp to 15.9%. The bank enjoys a good portfolio mix, with 62% of total loans in the retail space and the remaining 38% in commercial lending.

This growth is generating operational leverage: in the first quarter of 2021 the bank generated $44.5 million in net income and an ROE of 18.3% and ROA of 2.4%.

Best Bank: Banreservas

Banreservas is not only an example of how a state-owned bank can play a major role in the economic development of a country, it is also an unparalleled example of how a state-run bank can match – and in many ways exceed – the levels of service and profitability of private-sector peers.

The bank, now led by chief executive Samuel Pereyra Rojas, has been an outlier in this respect for many years and it continues to innovate. Against a tough economic backdrop, with the country’s GDP falling by 8.1% in 2020, the bank stepped in to stem the collapse.

Between April 2020 and March 2021, Banreservas’ growing investment banking division structured loans of $280 million to support the country’s critical tourism industry. It also extended a further $118 million to the retail sector, providing much needed liquidity and employment as visitor numbers slumped.

This credit support also flowed from the bank’s main loan portfolios. Private-sector loans grew by 5.7% and, despite the recession, the bank managed its risk, reporting NPLs of just 1.6%, below the system average of 1.9%.

Innovation in the consumer banking business was equally important. The bank launched a new digital finance tool, in combination with the Dominican Republic’s governmental assistance programme, that allowed more than 70,000 individuals to access grocery outlets, supermarkets and pharmacies – fighting both poverty and the pandemic.

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	EL SALVADOR		[index]
Best Bank: Banco Agrícola

None of the El Salvadorian banks submitted pitches denominated in bitcoin this year, although it will be interesting to see how the country’s official adoption of the digital currency will be reflected next year.

For 2020 the banks had a more mundane challenge: managing the economic and financial fallout from the Covid pandemic. Banco Agrícola, led by chief executive Rafael Barraza, did so in a manner that belied the size of the challenge: the country’s biggest private-sector bank grew even bigger.

Not only did it increase its deposits by 12.2%, with $556 million more in demand deposits, it also grew net interest income and managed to report a level of profit similar to 2019 at $306 million. It generated more than 50% of the financial system’s total profit in 2020, with a market share in loans and deposits of 27.9% and 29.6% respectively.

Best Bank: Banco Industrial

The Guatemalan economy was one of the least affected in the region by the pandemic – GDP in 2020 fell by just 1.5%. The country’s biggest and best bank, Banco Industrial, led by chief executive Luis Rolando Lara Grojec, had a very strong 2020. It grew total assets by 11.4% in the year, with its loan portfolio rising by 9.9%, deposits by 13.6% and revenues by 4.2%.

Its net income increased by 2.4% compared with 2019, as the bank shrugged off the impact of the pandemic. NPLs remained static at 0.8% and the bank’s coverage ratio was 271%, compared with the system’s average of 2% and 178% respectively. There was no deterioration in asset quality even with continued loan growth and the bank reported an ROE of 19.6% and ROA of 1.7% in December 2020.

	HONDURAS		[index]
Best Bank: BAC Credomatic Honduras

In recent years Honduras has registered the second highest growth rate in central America – lagging behind only Panama – with an average GDP growth in the past three years of well above 3%.

However, this masks the reality that the country still has a high level of poverty, with nearly half the population living on less than $5.50 a day. This is the second highest poverty rate in central America and the Caribbean after Haiti. Last year also broke the country’s recent good economic run. The pandemic and two devastating hurricanes led to a fall in GDP of around 9%.

However, even in this very difficult macroeconomic environment, BAC Credomatic Honduras, led by country manager Jacobo Atala, kept up its recent strong performance and is the momentum story in the Honduran financial system.

In 2020 the bank grew market share in terms of total assets (up 50bp to 15.4%), net loans (up 30bp to 15.2%) and deposits (up 100bp to 16.2%). BAC Credomatic generated $34 million in profit in 2020, with a strong ROE of 10.6%, and is already demonstrating signs of recovery in 2021, with a first quarter net profit of $15.8 million and an ROE of 13.7%.

Best Bank: Banco de la Producción

Last year didn’t bring about the disruption to positive growth in Nicaragua that it did in many of the country’s neighbours. The economy has been stuck in a downward spiral for three years in a row, with contractions in GDP of 4%, 3.9% and 2.5% between 2018 and 2020.

In the face of such a severe stress test, only the strongest banks will perform the best and that has certainly been the case in Nicaragua. Banco de la Producción has the leading market share in terms of assets (with 31.9%) and deposits (31.8%). It has also maintained the size of its loan portfolio in nominal terms during these years, while the other banks have seen large contractions.

This has been achieved by the bank’s sheer presence – digital banking is less a driver in the country than in some other regional markets – and its leading physical network of 138 branches provides it with an inbuilt advantage over the competition.

However, the bank, which is led by chief executive Ricardo Cuesta Delgado, realizes the digital future is just delayed in the country not missing. It continues to invest in digitization to maintain its leadership. In March 2021 it launched a new mobile app together with retail web banking and it will be interesting to see the effect this has on the bank’s growth and efficiency in the coming years.

	PANAMA		[index]
Best Bank: BAC Credomatic Panama

The irony of the Panamanian banking system is that, for a country that is almost synonymous with banking, there has been very little change in the domestic industry. BAC Credomatic Panama, led by Ramón Chiari, threatens to disrupt that. In 2020 it increased its market share in assets and deposits, as well as local receivables.

BAC appears to be targeting the country as one of the key drivers of growth for its expanding regional network. Panama now represents 23% of its regional loan portfolio and 27% of all its regional deposits. Within the country it has a diversified mix of retail, at 65% of the loan portfolio, and commercial, the remaining 35%. BAC grew its market share by 50bp to 19% in 2020 and the strong growth in deposits provides a low-cost funding strategy.

At end of 2020 the bank reported stable and solid results for a financial year that was complicated by the pandemic. Net income was $315 million and it achieved an ROE of 11.6% and ROA of 3.4%.

The first three months of 2021 has already seen an improvement, with first quarter income of $107 million, ROE climbing to 15% and ROA a very respectable 4.4%.