Best bank: Interbank
Peruvian banks had a difficult time in 2023, with zero GDP growth and a material contraction in domestic demand. However, inflation did begin to subside during the second half of the year, which led the central bank to reduce the reference interest rate for Peruvian soles by 100 basis points, ending the year at 6.25%. This reduction had a mixed impact for banks, lowering the average net interest margin but improving the country’s economic outlook.
Against this challenging backdrop, Interbank delivered strong growth in its customer base. The bank was able to grow clients and revenues; and continued to consolidate its financial results thanks to its digital strategy. In particular, the bank grew its market share in retail deposits – improving its funding cost and mix – and continues to be the leading banking presence outside the capital Lima.
The bank grew its total customers by 11% in 2023, reaching 6.1 million (from 5.5 million in 2022) and increased its market share of total loans by 60 basis points over the year to 13.3%. And, despite falling interest rates in the second part of the year, Interbank managed to report an annual net interest margin of 5.3% for 2023, up from 4.8% in 2022.
Meanwhile, the migration of customer interaction from physical channels to digital continued at pace in 2023. By December the bank had grown the share of digital transactions to 75%, up from 71%. The bank also launched its enhanced banking app, with new functionality such as enabling payments via QR codes, which drove higher customer satisfaction. The bank also relaunched its P2P wallet aimed at micro-merchants, enabling users to send and receive digital payments. Growth in this segment was 35% over the year, with the total customer base reaching 750,000 and transaction volumes rising by 107%.
The successful digital strategy contributed to a strong improvement in Interbank’s efficiency ratio, closing the year at 39.2%, which was a markedly better than the 42.4% the bank achieved in 2022.
Best investment bank: BofA Securities
BofA Securities wins the award for Peru’s best investment bank and among the bank’s three wins in the Andean region its performance in Peru is the most dominant. Antero Carrillo, managing director and head of investment banking for Peru, leads a team of 10 corporate and investment banking professionals based in Lima and in 2023 the group achieved by far the highest fee income. According to Dealogic, BofA generated $11.0 million of fees from six deals while its nearest competitor, BNP Paribas, saw fees of $3.4 million from two deals. Two of those six deals were M&A transactions and four were in the debt capital markets.
BofA was exclusive financial adviser to Grupo Romero in its sale of a 50% stake in Tramarsa to Global Infrastructure Partners – the total value of the deal wasn’t disclosed. The bank helped its client navigate complex regional markets during the sale process, made more difficult by the political volatility in the country. BofA was also the exclusive financial adviser to Hortifruti in its sale of a 49.9% stake to Public Sector Pension Investments, following the execution of a definitive investment agreement to launch a public tender offer.
In DCM, BofA was the sole global coordinator, joint bookrunner, billing and delivery agent and deal manager for Hunt Oil Company’s $450 million, 10-year notes. The transaction was the first from a Peruvian corporate issuer since Fondo Mivivienda’s issue in April 2022 (also a BofA deal), thereby re-opening the dollar market for Peruvian corporates.
The bank also followed up this new primary issuance in September with a $50 million re-tap of the same company’s outstanding 2033s; an opportunistic trade that took advantage of secondary market tightening and investor demand created by the earlier bond sale.
Elsewhere, BofA was the sole global coordinator and bookrunner for the Metropolitan Municipality of Lima’s global local currency bond transaction. It was also lead arranger on Alicorp’s $500 million syndicated supply chain facility, which included one of the first such structures issued in Latin America. The facility incorporated two outstanding tranches into a single facility, while incorporating new counterparties.
Best digital bank: Interbank
In 2023, Interbank enhanced many of its core digital services, which led to a significant growth in adoption.
The bank launched an upgraded Interbank app with an integrated QR code reader.
The rebranded digital payment app, Izipay Ya, saw a 35% year-on-year increase in merchant adoption, expanding its reach to 747,000 clients. Transaction volumes increased by 107% increase over the period.
The bank has integrated Google Pay and Garmin Pay for its Visa and American Express credit cards. The PLIN peer-to-peer payment system reached over 14 million users by the end of the year.
Best bank for SMEs: BBVA
In 2023, BBVA prioritized business banking for small and medium-sized enterprises by launching new fully digital products. These include a revolving digital loan and point-of-sale advance. It has added 10% to its SME executive headcount and is running an initiative to identify internal clients with SME potential.
Best bank for ESG: BBVA
BBVA had exceeded its 2023 sustainable finance target by the end of the year. Its sustainable portfolio stood at $1.3 billion, after issuance of $323 million.
The bank expanded its sustainability initiatives across sectors like agribusiness, textiles, manufacturing, transportation and inclusive infrastructure. It also introduced retail products promoting sustainability, such as credit cards for social inclusion, investments in sustainable mutual funds, sustainable vehicle loans and green mortgages.
BBVA worked on several sustainable financing deals, including a $40 million transaction with Supermercados Peruanos to boost its sustainability and achieve 73.5% waste recycling by the end of 2024.
The bank also worked on Peru’s first sustainable corporate loan for a mining company, a $200 million deal with Hochschild Mining and Amarillo Mineracao Do Brasil.
Additionally, it provided Perales Huancaruna with a $14 million credit line to enhance sustainable coffee production and conservation efforts, supporting over 10,000 producers across 33,000 hectares.
Best bank for corporate responsibility: Interbank
Interbank expanded its social initiatives in 2023, with a particular emphasis on education, financial literacy and inclusion.
Under its Iberoamerica Programme, the bank awarded more than 540 scholarships to students and supported entrepreneurship centres in several universities. This initiative benefitted over 2,991 students during the year.
The bank’s volunteers conducted financial education workshops targeting organizations in critical areas. These workshops covered topics such as savings, credit management, microenterprise planning, home budgeting and accessing job markets. They were held in educational centres attended by children and young people at risk of social exclusion, directly benefiting 592 participants.
The bank’s digital security campaign, #LaFormaCorrecta, has been educating both employees and customers about safe online practices since its inception in 2019. In 2023, the campaign introduced an interactive game to raise awareness.
Best bank for corporates: BBVA
BBVA saw significant growth in lending volume in Peru in 2023. It signed several financing agreements with large domestic corporations in environmental, social and governance-related fields. Nettalco Industries received $1.8 million to install a new wastewater treatment plant, enabling the textile company to reuse up to 70% of its water.
The bank also signed a $40 million financing agreement with Supermercados Peruanos to support its sustainability policy. The funding aims to raise the company’s recycled waste percentage to 73.5% by 2024 and 76% by 2027.
Hochschild Mining and BBVA also worked on the first sustainable corporate loan for a mining company in Peru. This $200 million club deal for Hochschild’s subsidiaries, Compañía Minera Ares and Amarillo Mineracao Do Brasil, saw the bank coordinate the interest rate adjustment mechanism and review the legal documentation to certify the loan’s sustainability.
