Best bank: Bancoagrícola
El Salvador’s economy is performing poorly considering that its president Nayib Bukele recently won a landslide presidential election. His popularity belies an economy that has been blighted by high inflation, rising poverty and low growth.
However, Bukele’s success was down to his dramatic approach to the country’s organized crime problem – the cost of extortion topped at 3% of GDP according to some estimates. Now, his administration argues, the focus is to build on the social stability that his law-and-order programme has created. There are plans for investment in education to improve the country’s workforce – a laudable but long-term objective – and foreign direct investment has been slowly improving in recent years. The biggest issue is agreeing a debt deal with the IMF, but the country’s official adoption of bitcoin is proving to be a sticking point to these negotiations – and the cryptocurrency’s rise won’t encourage the government to change this policy.
The coming years are going to be interesting for the country’s banks. El Salvador’s best bank, Bancoagrícola, is well placed to take advantage of any upswing as it already dominates the sector – illustrated by its 27.2% and 28.1% market shares of total loans and deposits at the end of 2023. Bancoagrícola, led by chief executive Rafael Barraza Domínguez, also knows how to make this scale work for it. It generates 42.9% of all the profit in the banking system, thanks in large part to a market-leading efficiency ratio of 49.1%. Return on equity grew 70 basis points to 20.3%.
During the awards period Bancoagrícola continued its digitization strategies focused on both the retail and corporate sectors. Its consumer loan business originated 32.4% more of total loans via its digital channels, while digital deposits grew by 127% in the year. Meanwhile, Bancoagrícola’s corporate segment pushed its Wompi digital payment service, which includes functionality enabling users to process contactless Visa and Mastercard payments via their smartphones.
Best digital bank: Bancoagrícola
In 2023, Bancoagrícola demonstrated robust growth and enhanced user engagement across its digital platforms.
The number of digital users on its channels topped 557,000, a 25.4% increase from the previous year. Mobile banking users, in particular, saw a substantial increase, with downloads nearly doubling compared with 2022.
The introduction of a new digital account opening process proved pivotal to the bank’s user growth, driving a 41.7% surge in monthly average account openings in the second half of the year. Digital term deposits also registered a 127.1% increase compared with December 2022.
Investments in payment infrastructure also paid off. The introduction of convenient transfers significantly boosted transaction efficiency and by year-end, the bank processed over 300,000 transactions and generated $10.7 million in revenue from these streamlined payment solutions.
Best bank for SMEs: Banco Cuscatlán
Banco Cuscatlán has grown its small and medium-sized enterprise loan book and advanced its digital offering to customers in the segment. The SME loan portfolio grew by $4 million to approximately $68 million by the end of the awards period.
It introduced Credi Express, a digital revolving credit facility accessible through the lender’s business banking app. By December 2023, this product had successfully lent $7.4 million in instalments. Banco Cuscatlán has also introduced Credi POS, a revolving credit facility integrated with the bank’s merchant billing processes and managed digitally through the newly launched Net Banking app.
The introduction of the bank’s Net Banking app for SME related transactions further strengthened its digital offering. Launched on December 15, the app had facilitated over 9,785 transactions and attracted more than 2,000 new users by February 2024.
In a notable collaboration with IDB Lab, Banco Cuscatlán launched Let’s Digital PYME – the first open innovation programme in El Salvador. This initiative allowed fintechs from across Latin America to submit propositions for new digital solutions in SME banking.
Best bank for corporate responsibility: Banco Cuscatlán
Over the awards period, Banco Cuscatlán contributed to youth development, financial education and employee welfare in El Salvador through effective initiatives and philanthropic giving.
It invested over $300,000 to promote sports in the country, allowing young talent to access sports scholarships or pursue professional careers abroad.
Delivering training in financial education was another key focus for the bank. Its financial education content, including Tito tu Chero Financiero and Traducímelo, reached 1.8 million people via social media and podcasts. The bank also hosted over 200 high school students for Route to Success visits to its branches, providing insights into banking careers and personal finance training.
Banco Cuscatlán has also focused on supporting its staff. In addition to running its annual development programme, which benefited 200 employees, the bank invested in cultural transformation, training 400 employees in management 3.0 principles. The bank also implemented a physical wellness and mental health programme, offering psychological talks, family counselling, sports and team cooking activities.
