Latin Finance - November/December 2011 - 48

2011

o ering a new way of transferring money BBVA Continental (Billions of soles) between accounts, using the Internet. Capturing market share in performing loans It now has two million customers in Argentina, 800,000 using its internet 30 product, he says. It also recently relaunched its mobile banking system, which lets users check balances and 25 manage their investments. With regard to the funding side of its business, the bank has been able 20 to maintain stable and inexpensivelypriced funding from local deposits, adds 15 Guillermo Glattstein, head of strategic planning for the Buenos-Aires-based bank. The most proﬁtable banks in Argentina 10 are those that are able to maintain the lowest cost of funding, and Santander Río has one of the highest proportions 5 of demand deposits in its funding base, made possible by its relationships with its 0 clients. Though its proﬁts are expected to be lower than 2010’s $400 million as government bond prices decreased with market volatility, the bank maintains a Source: BBVA Continental high level of proﬁt, he says, and a betterthan-average e ciency ratio in the range has been outperforming BCP in terms of of 45%. As of the ﬁrst half 2011, the bank’s return on equity (ROE) and return proﬁt and asset quality,” says one analyst. It is number one in terms of e ciency, on assets (ROA) were 36.4% and 3.85%, and asset quality, and one of the country’s respectively. LF most proﬁtable banks. Deposits have also swelled 20.7% from June 2010 to June 2011. “We have an accelerated growth Best Bank - BBVA Continental Peru rate,” says Eduardo Torres Llosa, CEO of BBVA Continental. He says the bank has increased its volume of business in addition to generating a better rate of e ciency of 36% and having one of the highest ROEs in the banking system at 34%. ew banks could wish for a better During 2010 and 2011, the bank market to work in than Peru’s ﬁnancial increased its market share in performing sector, and BBVA Continental has proven loans by 12.3% or to 27.8 billion soles itself to be one of the top players in an ($10.3 billion) in June 2011 compared economy than has enjoyed GDP growth with 24.8 billion soles as of December of 8% plus and an inﬂation rate of just 2010—representing a gain in both retail 2.1%–one of the region’s lowest. and business customers. The bank faces some formidable In Peru, BBVA Continental has a competitors including BCP, but it 23.73% market share in terms of loans managed to maintain a lead in several categories by expanding quickly into new and 21.69% in terms of deposits as of June 2011. The bank o ers credit cards, sectors such as small and medium-sized consumer loans, mortgage loans, vehicle enterprises (SME). loans, saving deposits, demand and term “BCP and Continental are both good deposits, as well as funds and investments banks, but Continental has the edge and
June-2011 Dec-2007 Dec-2008 Dec-2009 Dec-2010

for individuals. The bank plans to continue its customer-centric approach, maintaining its high ROE, while at the same time growing its infrastructure. Over the past 12 months, BBVA Continental has added o ces and ATMs— which fall in line with its strategy of becoming a user friendly bank. The bank has also sought a higherproﬁle in the international capital markets, most recently mandating BBVA, Goldman Sachs and JPMorgan to hold ﬁxed-income investor meetings in the US and Europe. Llosa says the bank doesn’t need the capital, but an international bond transaction would be one way to diversify its funding base. Meanwhile, it is keeping close tabs on possible windows, Llosa adds. It last visited the international bond market in November 2010, when it priced a $300 million 2020 bond at 99.220 with a 5.500% coupon to yield 5.603%. BBVA Continental is also looking to issue a diversiﬁed payment rights (DPR) o ering in 2012. It is still evaluating a ﬁnal size for the transaction. LF

Bolivia
Best Bank – Banco Mercantil Santa Cruz

Peru

Tackling Tough Times

Banking on Success

t’s been a tough environment for Bolivian banks, where strong competition and increased liquidity in the ﬁnancial system have resulted in a decrease in ﬁnancial spreads and weaker results. But Banco Mercantil Santa Cruz (BMSC) has remained proﬁtable despite these di culties, maintaining its position as the country’s largest bank and expanding into di erent product sectors. The bank ended the last ﬁscal year with deposits of $1.54 billion and a 20.69% market share. Going into 2011, BMSC decided to prioritize proﬁtability over gaining market share through deposits. This meant relinquishing some large institutional deposits to save on interest expenses.

48 LATINFINANCE

November/December 2011

Latin Finance - November/December 2011

Table of Contents for the Digital Edition of Latin Finance - November/December 2011