Best bank: Banco Lafise
Nicaragua’s economy suffered a rapid deceleration from the 10% growth rate it experienced in the immediate post-pandemic reopening. Political and economic volatility impacted the financial system and there was distinct evidence of a risk-off attitude to loan growth from most of the country’s main banks.
Banco Lafise wins the award as Nicaragua’s best bank because it was able to steer a successful course between taking advantage of competitors’ reluctance to build market share and ensuring that new business was profitable.
The bank grew its client base to over three-quarters of a million Nicaraguans – a record for the bank – and can now claim 22% of the country’s working population as clients. The bank’s growth was managed through automation, with 61% of transactions now conducted online or via ATMs.
Deposit growth has also been strong at 13.9%, which is something the bank’s chief executive, Roberto Zamora, attributes to the benefits of the population’s growing trust in the bank. Lafise now has a 25.8% market share in deposits, while total assets grew 5.6% to a 25.5% market share. Loans closed 2023 12% higher than the bank’s pre-pandemic level and 14.4% higher year on year, even though Lafise tightened its credit risk policies. The loan portfolio’s average probability of default rate fell to 2.1% in 2023, and the highest quality loans (‘A’ loans) increased to 92.9% of the portfolio, up slightly from 92.3% over the year.
Lafise delivered very strong financial results in 2023, with a substantial increase in financial income, net profit generation and a higher return on equity, while also maintaining the bank’s leading efficiency ratio of 49%. Net profits hit a five-year high up 20% on the previous year. Return on equity and return on assets were similarly at five-year highs, at 12.8% and 2.0% respectively.
Best digital bank: Banco de la Producción
Banco de la Producción has enhanced its digital offering with investments in advanced remote onboarding capabilities. These efforts have correlated with impressive growth in the bank’s digital channels.
To achieve its target of selling 50% of its products digitally by 2027, the lender has prioritized its self-service capabilities. It has enabled the remote procurement of products, including pre-approved credit cards.
It has also begun developing digital onboarding, which entered the controlled testing phase over the awards period.
The bank’s digital customer base grew to 460,546 in 2023, up 24% year on year. Digital transactions increased by 56%, reaching a total of 24.96 million.
Best bank for SMEs: Banco Lafise
Banco Lafise demonstrated a strong focus on the small and medium-sized enterprise segment over the review period, growing its loan book and securing substantial funding to support businesses across the country.
The bank achieved a growth rate of 14.4% in its loan book. This was largely driven by its strong performance in the SME segment, which makes up nearly 70% of its overall loan portfolio.
The bank secured a $84.2 million credit line renewal from the Central American Bank for Economic Integration. This funding is intended to provide critical support to micro, small and medium-sized enterprises in Nicaragua, contributing to economic growth, job creation and poverty reduction in the country.
Best bank for ESG: Banco de la Producción
Banco de la Producción (Banpro) demonstrated a strong commitment to ESG during the awards period. The bank funded renewable energy projects, integrated sustainable practices and launched important products and initiatives.
The bank financed photovoltaic, hydroelectric, wind and biomass energy projects with a combined installed capacity of 122 megawatts and an annual energy generation of 462 million megawatt hours. Overall, funding for renewable energy constituted 52% of the bank’s sustainable portfolio, amounting to $117 million.
The bank also conducted a series of training sessions dubbed Banpro Green Talks, which engaged over 100 employees during the review period. The topics covered in these sessions ranged from carbon markets and the circular economy to business opportunities in sustainability.
The bank also undertook considerable efforts to improve sustainability in its operations. This included installing solar panels in its branches, launching paperless campaigns and implementing energy-efficient equipment.
Banpro also worked to promote sustainability in the wider society. This involved introducing green products such as hybrid vehicle credit and forming strategic partnerships with real estate developers and photovoltaic panel companies. The bank also launched technical assistance programmes with suppliers to help them develop climate change strategies, including an action plan to support agricultural clients in implementing regenerative energy practices.
