Latin Finance - November/December 2010 - 58

CentAm Return on Average Equity (%)
Costa Rica below average Jun 10 Guatemala Honduras El Salvador Nicaragua Costa Rica Panama
Source: Fitch

Dec 09 17.80 11.40 2.80 4.90 8.50 11.60

Dec 08 20.60 17.10 8.70 18.20 11.10 17.50

18.80 12.80 6.90 1.90 7.30 13.60

But even in times of crisis Banco de Costa Rica has stayed afloat. “[In the last 12 months] we saw that the economy was basically flat, which a ected the demand for credit. However, we were able to gain market share,” Rivera notes. Growth is seen in other areas as well. The bank’s assets increased to $4.3 billion equivalent in June, up from $3.6 billion in June 2009 and deposits rose to $3.2 billion from $2.9 billion in the same time period. Also, according to Fitch, return on average assets (ROAA) increased to 1.0% from 0.8% and return on average equity (ROAE) jumped to 8.5% from 6.8%. According to data from the local central bank, the average ROAA in the system is 1.1% and ROAE is 8.7%. The ratio of non-performing loans (NPL) to total loans did increase, however. NPLs increased to 2.4% in June from 2.2% a year earlier, according to the bank’s financial reports. Still, Fitch says that this rate is in line with the national average of 2.0%. The agency has a BB rating for the bank with a stable outlook. LF

DOMINICAN REPUBLIC
Best Bank – Banco de Reservas

anco de Reservas has shrugged o macroeconomic weakness in the Dominican Republic caused by the global financial crisis and continues to grow. The state-run bank known as Banreservas is now looking to grow financing. Helping Banreservas is its reputation

Constant Growth B

as a safe haven bank, Fitch analyst Franklin Santarelli tells LatinFinance. “The bank is highly regarded by the Dominicans. The institution has been one of the few safe havens in the country in times of systemic economic stress.” In fact, contrary to what happened with many large banks in the US and Europe, Banreservas did not require any capital injections during the financial crisis, Santarelli adds. The government did, however, take steps to strengthen the economy during the crisis. Among those steps were an expansion in public spending and reduction in central bank rates, says Banreservas’ general manager Daniel Toribio. This helped drive a 5% increase in public and private consumption, and a considerable expansion of the main sectors of the economy, he adds. In addition, Banreservas is an important lender to the government. “Since 2007, the bank’s credit portfolio has been more focused on covering the needs of the public sector, a trend that should continue in the short term,” Fitch says. It notes that Banreservas is the largest provider of credit to the public sector. The bank’s assets increased to 185.2 billion Dominican pesos ($5.0 billion) in August from 156.3 billion Dominican pesos ($4.2 billion) in August 2009, an 18.5% increase. Banreservas, the country’s largest bank, has a 31.4% market share based on assets, according to Toribio. Also in the same period, deposits grew 18.2% to 160.8 billion Dominican pesos ($4.3 billion), he says, adding that net profit rose 38.6% to 2.03 billion Dominican pesos ($54.8 million) in August. In addition, return on assets (ROA) reached 1.68% in the second quarter of 2010, which is basically flat in comparison to 1.67% a year earlier. Return on equity (ROE), meanwhile, eased to 7.3% from 8.0% a year before. The system average ROA is 2.3% and average ROE is 27.2%, according to the central bank. The bank increased its credit portfolio by 21.4% to 122.8 billion Dominican pesos ($3.3 billion) in August versus 12 months earlier. According to Fitch, public debt makes up about half of the bank’s

loan portfolio. While the loan portfolio has grown, non-performing loans (NPLs) also rose. According to Fitch, in the second quarter of 2010 NPLs increased to 5.01% of total loans from 4.76% a year before. It adds that the bank’s NPL ratio had fallen for three consecutive years between 2006 and 2009.

Private consumption rebounds: Toribio Fitch says that the still weak economic environment could continue to pressure the performance of the credit portfolio in the short term. However, it expects the NPL ratio to stay at a moderate level of around 4.5%. Toribio says that as the global and Dominican economy both improve, so should the bank’s performance. The IMF, which provided the country a 28-month stand-by arrangement worth $1.7 billion in November 2009, says the Dominican economy will expand 5.5%-6.0% in 2011. Its previous forecast pointed to growth of 5.0%-5.5%. Toribio says the bank is working on strengthening the quality of its portfolio and maximizing the e ciency of operations. “In 2011, we will focus on strategies to steadily increase lending.” He believes loan demand will strengthen as the economy improves. He also aims to continue expanding the bank organically by opening more branches in the Dominican Republic and installing ATMs to reach more clients. LF

58 LATINFINANCE

November/December 2010



Latin Finance - November/December 2010

Table of Contents for the Digital Edition of Latin Finance - November/December 2010

Latin Finance - November/December 2010
Contents
Latam-China Flows
Boutique Investment Banking
Infrastructure Investment
Banks of the Year 2010
Sustainable Banking
Central America
Mezzanine Financing
Petrobras Equity Jumbo
Xstrata Interview
Latin Finance - November/December 2010 - Latin Finance - November/December 2010
Latin Finance - November/December 2010 - Cover2
Latin Finance - November/December 2010 - Contents
Latin Finance - November/December 2010 - 2
Latin Finance - November/December 2010 - 3
Latin Finance - November/December 2010 - 4
Latin Finance - November/December 2010 - 5
Latin Finance - November/December 2010 - 6
Latin Finance - November/December 2010 - 7
Latin Finance - November/December 2010 - 8
Latin Finance - November/December 2010 - 9
Latin Finance - November/December 2010 - 10
Latin Finance - November/December 2010 - 11
Latin Finance - November/December 2010 - Latam-China Flows
Latin Finance - November/December 2010 - 13
Latin Finance - November/December 2010 - 14
Latin Finance - November/December 2010 - 15
Latin Finance - November/December 2010 - 16
Latin Finance - November/December 2010 - 17
Latin Finance - November/December 2010 - Boutique Investment Banking
Latin Finance - November/December 2010 - 19
Latin Finance - November/December 2010 - 20
Latin Finance - November/December 2010 - 21
Latin Finance - November/December 2010 - 22
Latin Finance - November/December 2010 - 23
Latin Finance - November/December 2010 - 24
Latin Finance - November/December 2010 - 25
Latin Finance - November/December 2010 - Infrastructure Investment
Latin Finance - November/December 2010 - 27
Latin Finance - November/December 2010 - 28
Latin Finance - November/December 2010 - 29
Latin Finance - November/December 2010 - 30
Latin Finance - November/December 2010 - 31
Latin Finance - November/December 2010 - 32
Latin Finance - November/December 2010 - 33
Latin Finance - November/December 2010 - 34
Latin Finance - November/December 2010 - 35
Latin Finance - November/December 2010 - Banks of the Year 2010
Latin Finance - November/December 2010 - 37
Latin Finance - November/December 2010 - 38
Latin Finance - November/December 2010 - 39
Latin Finance - November/December 2010 - 40
Latin Finance - November/December 2010 - 41
Latin Finance - November/December 2010 - 42
Latin Finance - November/December 2010 - 43
Latin Finance - November/December 2010 - 44
Latin Finance - November/December 2010 - 45
Latin Finance - November/December 2010 - 46
Latin Finance - November/December 2010 - 47
Latin Finance - November/December 2010 - 48
Latin Finance - November/December 2010 - 49
Latin Finance - November/December 2010 - 50
Latin Finance - November/December 2010 - 51
Latin Finance - November/December 2010 - 52
Latin Finance - November/December 2010 - 53
Latin Finance - November/December 2010 - 54
Latin Finance - November/December 2010 - 55
Latin Finance - November/December 2010 - 56
Latin Finance - November/December 2010 - 57
Latin Finance - November/December 2010 - 58
Latin Finance - November/December 2010 - 59
Latin Finance - November/December 2010 - 60
Latin Finance - November/December 2010 - 61
Latin Finance - November/December 2010 - 62
Latin Finance - November/December 2010 - 63
Latin Finance - November/December 2010 - 64
Latin Finance - November/December 2010 - 65
Latin Finance - November/December 2010 - 66
Latin Finance - November/December 2010 - 67
Latin Finance - November/December 2010 - Sustainable Banking
Latin Finance - November/December 2010 - 69
Latin Finance - November/December 2010 - Central America
Latin Finance - November/December 2010 - 71
Latin Finance - November/December 2010 - 72
Latin Finance - November/December 2010 - 73
Latin Finance - November/December 2010 - 74
Latin Finance - November/December 2010 - 75
Latin Finance - November/December 2010 - 76
Latin Finance - November/December 2010 - 77
Latin Finance - November/December 2010 - 78
Latin Finance - November/December 2010 - Mezzanine Financing
Latin Finance - November/December 2010 - 80
Latin Finance - November/December 2010 - 81
Latin Finance - November/December 2010 - Petrobras Equity Jumbo
Latin Finance - November/December 2010 - 83
Latin Finance - November/December 2010 - 84
Latin Finance - November/December 2010 - 85
Latin Finance - November/December 2010 - Xstrata Interview
Latin Finance - November/December 2010 - 87
Latin Finance - November/December 2010 - 88
Latin Finance - November/December 2010 - Cover3
Latin Finance - November/December 2010 - Cover4
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