Latin Finance - November/December 2010 - 59

ECUADOR
Best Bank – Banco Pichincha

cuador’s Banco Pichincha has been busy expanding within and beyond the country’s borders. At the same time, it has been able to keep its ﬁnancial indicators in line with or better than that of the banking system as a whole. The trend is expected to continue. “In 2010 we expect Ecuador’s GDP to grow between 2%-3% and in 2011 it should expand around 4%, which will certainly help Pichincha grow,” says vice president Jorge Chiriboga. He adds that higher GDP growth could also translate into more demand for credit. Ecuador’s biggest bank is also spreading its wings. In 2010, Pichincha closed the acquisition of Inversora Pichincha and Interdinco, which comprised troubled insurance conglomerate AIG’s consumer ﬁnance operations in Colombia. Inversora Pichincha and Interdinco provide consumer ﬁnance products in Colombia, including vehicle ﬁnancing, personal loans, student loans, insurance premium ﬁnancing, commercial loans, credit cards and retail banking. Pichincha also obtained authorization from regulators in Spain to begin operating in that European country, where it says it plans to o er ﬁnancial services to Andean migrants. It has nine branches, three in Madrid, two in Barcelona and one each in Valencia, Murcia, Lorca and Alicante. “In Spain we intend to serve the Ecuadorean immigrant population,” Chiriboga says, adding that growth in this new market will be slow, but steady. The bank, which expects to expand to Italy in 2012 and the UK in 2015, also has operations in Peru, Panama and the US. In addition to growing its international presence, Pichincha has been able to maintain a leadership position in Ecuador. As of June, Pichincha had 27% market share by assets, which

Expansion Mode E

totaled $5.13 billion, according to the local bank superintendent. In June 2009, total assets were $4.34 billion. Meanwhile, Banco Guayaquil, with 17% of the market, reported $2.42 billion in assets in June, up from $2.21 billion a year earlier. The bank also claims to have 30% loans market share. Data from the banking superintendent show that as of June, the value of Pichincha’s total loan portfolio had grown to $2.77 billion from $2.46 billion in June 2009. About 28% of the bank’s loans go to the corporate sector and 72% to retail, Pichincha says. Speciﬁcally, in commercial loans, data from the banking superintendent show that Pichincha has $1.08 billion, or a 24%

from 1.37% in June 2009, the bank says. Pichincha’s ROE rose to 12.36% in June 2010 from 11.57% in the same month of the previous year. The system average ROE as of June was 12.32%, down from 12.77% in June 2009. Pichincha is rated AA+ by local Fitch a liate Bank Watch Rating and AAA- by Paciﬁc Credit Rating. The latter describes the bank as one with an outstanding trajectory of proﬁtability and a clear and stable outlook. LF

GUATEMALA
Best Bank – Banco Industrial

Pichincha In Numbers
Year-on-year improvement Pichincha 2010 Return on equity Return on assets NPLs Total assets 2009 Return on equity Return on assets NPLs Total assets 11.57% 1.20% 3.70% $4.34bn 12.77% 1.37% 3.50% $17.98bn 12.36% 1.24% 3.00% $5.13bn 12.32% 1.250% 2.99% $18.72bn System Average

Source: Pichincha, Ecuador Central Bank

market share, followed by Produbanco with $687 million, or a 15% share. Pichincha also has a 44% market share, or $655 million, in mortgage loans, followed by Banco de Guayaquil, which has 21% of the market, or $126 million. Meanwhile, non-performing loans (NPL) have dropped to 3.0% of the total loan portfolio as of June 2010 from 3.7% in June 2009, the bank says. This is in line with the system average of 2.9% in June 2010 and 3.5% a year earlier. Return on assets (ROA) and return on equity (ROE) are also in line with the system averages. As of June, Pichincha’s reported ROA increased slightly to 1.24% from 1.20% in June 2009. The system average is ROA of 1.25%, down slightly

ith economic growth returning to Guatemala after a relatively shallow crisis, its banks can return to plans being made prior to 2008. Banco Industrial, the country’s largest ﬁnancial institution, has perhaps the most far-reaching strategy. In addition to defending its local lead in assets, loans and deposits, the bank is again working to expand throughout Central America and list on Mexico’s stock exchange, says Luis Fernando Prado, director of the international division. “Our goal is to expand through Central America,” Prado tells LatinFinance. Already operating in Honduras, the bank opens in December in El Salvador, after receiving the appropriate licensing this year. Panama and Costa Rica are more distant possibilities for organic or acquisition-based expansion. Industrial is also considering several options to raise funds for the expansion, as well as organic growth to keep it competitive in an intensifying domestic credit market battle, which involves other large lenders such as G&T Continental and Banco de Desarrollo Rural. Industrial could again seek to ﬂoat 20%-25% on Mexico’s Bolsa, says Prado, as it had aimed to do prior to the crisis. Fresh cross-border debt issuance, including DPR securitizations, which it last raised in 2005 for $200 million could also be an option. Industrial remains the country’s

Dusting off Playbook W

November/December 2010

LATINFINANCE 59

Latin Finance - November/December 2010

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