Latin Finance - November/December 2011 - 58

2011

and medium enterprises, we’re expecting to see that area grow,” he says. Cohen also notes shifts toward internet and electronic banking, which will have implications on the ﬁnancial sector down the road. “I think we’ll also have to change the way we view ﬁnancial services locally,” he says. NCB is now taking steps to improve sales e ectiveness and is investing in its employees. There has been a greater focus on operating e ciencies especially following the 2010 debt exchange program, which converted local currency debt to new instruments with lower interest and longer maturity, e ectively reducing spreads for banks. Personal loans, credit cards and commercial real estate have been negatively impacted by the global economic situation as well, he says, clarifying that NCB does not have a signiﬁcant residential portfolio. To address these problems, NCB has upped the amount of resources it puts toward its collection process and has been working with customers to restructure where possible. LF

Meanwhile, consumer mortgages are growing at a fast clip, between 5%-7% a year. This has allowed the bank to shift its focus away from retail loans – a segment that has seen a slowdown in growth. There are currently eight commercial banks on the island, six foreign owned, one government owned and Republic, which has been focused on introducing new technology for payment systems, with mobile on the horizon, he says. “Like most banking systems, we’ve had a signiﬁcant liquidity hangover, and that has caused margins to decline,” Dulal-Whiteway says, adding that loan competition has increased because of the slowdown. Because of the amount of liquidity in the banking system, it has seen interest rates and deposits decline, but it has also been able to reduce expenses.

Today, given its relatively strong balance sheet, Dulal-Whiteway says he believes Republic Bank is poised for growth, which could include the Caribbean and banking institutions in such places as Panama and Costa Rica as trade improves between the region and Central America. Though the bank is not currently in discussions for such activity, down the road it could make sense toward building a bigger bank in the region. “Next year seems to be a brighter year, all things being equal, than the last 12 months,” he says. LF

Microﬁnance Institution
Best Bank - Banco Compartamos

Regional Ambitions
ew if any microlenders can boast of Banco Compartamos’s reach in Latin America after recent expansions both in Peru and Guatemala. More are on the way as the bank looks to grow its operations throughout the region. After Compartamos last year transferred its Mexico listing to its ﬁnancial holding company to facilitate its ﬁrst international acquisitions, the bank proceeded to make its ﬁrst purchase abroad. This year, the bank acquired 88.7% of Financiera Créditos Arequita (Crear), a Peruvian microlender with a loan portfolio of $130m and market potential of 1.2m women The acquisition ﬁts nicely with the Compartamos’ strategy, as 98% of its clients are women. Banco Compartamos has also expanded its operations organically through the opening of Compartamos SA Guatemala. “We have an eye towards consolidating Compartamos as a strong regional player. We are open to further organic and M&A growth, but ﬁrst we want to digest what we ﬁrst started,” says Patricio Diez de Bonilla, chief ﬁnancial o cer. As of June 2011, Compartamos’ client base hit 2.1 million, up from 1.62

Trinidad & Tobago
Best Bank – Republic Bank

In Good Shape
rinidad & Tobago’s Republic Bank ended the third quarter in good shape, with net proﬁts increasing 8% over the last year, says managing director David Dulal-Whiteway. The bank’s loan portfolio is strong, while delinquency rates and non-performing loans are low, he explains. This is all good news in a banking system that has seen increased competition and low interest rates due to increased liquidity. With a healthy balance sheet, Republic is prepared for future growth. Though the commercial side of the business has seen a slowdown, Republic Bank has been able to continue lending because of strong liquidity and capital ratios that far exceed regulatory requirements.

Poised for growth: Dulal-Whiteway The mid-2010 change in government also a ected the economy over the past year and a half, he says. Following recent budget presentations and an anticipated increase in projects, loan demand is expected to increase next year. The island nation is “fortunate to have a relatively low debt to GDP ratio” says Dulal-Whiteway. Inﬂation is down below 5%, from double digits up until just over a year ago as a result of food pricing tied to weather and production issues. “People basically pulled back a bit, spending fell when the inﬂation rates went up signiﬁcantly,” he explains.

58 LATINFINANCE

November/December 2011

Latin Finance - November/December 2011

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