LatinFinance - November/December 2014 - 50

mid-2014, Scotiabank El Salvador's tier
one capital increased by 75 basis points,
to 17.52%, while non-performing loans
dropped by 53 basis points to 3.16%.
Looking forward, the executive is
optimistic. "We do have the opportunity to
grow here in the country," Cruz says.
The consumer credit market, where its
market share today is around 9%, is one
opportunity for expansion, he says. This is
a segment that generates higher costs but
also higher revenues, and the bank has put
renewed focus on auto loans, credit cards
and personal loans. Potential also exists
in expanding lending to small businesses,
Cruz says. Here, the bank's share is about
8.5%, and "there is an opportunity to serve
it better," he adds.
Transaction banking also remains a focus
for Scotiabank's Salvadorian subsidiary,
particularly in remittances. A quarter of all
citizens live abroad, mainly in the US, and
what they wire to their families at home
accounts for between 15% and 17% of the
country's GDP, he says.
The bank has teamed up with Wells
Fargo to widen the net of US locations
from which remittances can be sent.
The partnership is another way in which
Scotiabank works to better serve its more
than 450,000 customers, Cruz says. The
bank aims to develop a relationship that
lasts as a clients' needs shift throughout
their lives. The recently launched program
"Scotiabank@Work" offers employees
financial education, for example, and the
higher-income demographic can benefit
from new premium services.
When it comes to interacting with
its customers, Scotiabank has shown

innovation beyond the norm. A number
of its branches now feature electronic
kiosks that let customers take care of
basic transactions themselves, and allow
them to videoconference with a banker if
needed. LF

BANK OF THE YEAR HONDURAS

BANCO DEL PAÍS

Falling bad debt and
increasing capital levels
give this firm an edge over
rivals, but the sale of Citi's
local subsidiary will make
for a worthy rival

Like many of its peers in Central America,
LatinFinance's Bank of the Year Honduras
is increasingly betting on online banking to
make transactions more convenient for its
customers.
Users of Banco del País' "Banpaís x
Internet" online platform can go beyond
basic account function: they can, for
example, purchase foreign currency or
transfer money internationally without
setting foot in a branch.
This is critical in a country like
Honduras, many of whose citizens live in
other countries, primarily in the US, and
whose economy is partially dependent
on remittances from those abroad. In that
spirit, Banpaís is also using electronic
communications to bring its customers
into compliance with the
Varied region
US Foreign Account Tax
Compliance Act, which
Central America loan growth, June 2014 vs June 2013
applies to many Hondurans
$bn
%
with ties to the US.
15.8 16
2.5
$ bn (bars, left axis)
% (points, right axis)
What really makes
14
Banpaís stand out,
2
12.5
however, is the basic
12
business of growing capital
10
(which grew 45 basis
9.1
1.5
9.2
points in the period) and
8
7.7
reducing bad debt (which
1
6
dropped 43.75% over the
period). Its assets rose
3.5
4
9.44% year-on-year from
0.5
2
mid-2013 to mid-2014. That
growth was outpaced by
0
0
larger competitor Banco
Guatemala* Costa Rica
Panama
Honduras El Salvador Nicaragua
Atlántida, whose loan
*Guatemala includes offshore banks and credit card FIs.
Source: Fitch Ratings
growth during the same

50 LATINFINANCE.COM - November/December 2014

period was 15%. But it came at a price:
Atlántida's non-performing loans grew by
more than 50%.
Going forward, Banpaís will likely face
strong competition from another local
player: Banco Ficohsa, which recently
took over Citi's Honduras unit and is now
the third-largest bank in the country,
already posted impressive numbers in
assets, capital and bad loans. But as a Fitch
upgrade of Banpaís in early June 2013
shows, Banpaís will surely remain a worthy
competitor. LF

BANK OF THE YEAR NICARAGUA

BANCO LAFISE BANCENTRO

Growth in capital and
profitability outpaced
rivals, and the winner's bad
debt fell, despite fast loan
growth
This bank would make an excellent
candidate for a LatinFinance Bank of the
Year award just about anywhere in Central
America. The efficient, profitable yet
responsible way it does business stands
out even more, however, when one takes
into account the sometimes politically
difficult Nicaraguan environment in which
it operates.
Banco Lafise Bancentro saw an
impressive 33.6% growth in profits from mid2013 to mid-2014, reaching $32 million for
the year to June 2014. Even while solvency
levels dipped at rival banks, Bancentro's
capital rose from 11.75% to 13.01% in the
year to June 2014, according to regulatory
data. Bancentro also outperformed peers in
return on equity, which went up from 22.9%
to 25.49% during the period, while its return
on assets rose from 1.9% to 2.25%.
Bancentro grew its loan book by 39.1%,
reaching $908 million at June 2014. The
bank takes pride in its highly diversified
portfolio, which in turn ensures low credit
risk: its bad debt ratio fell 51 basis points to
0.72% during the period.
Some 70% of its loan portfolio is made up
of corporate and small and medium-sized
businesses in a variety of sectors; only 30%
is retail. Bancentro points out that 94% of
its lending is backed with collateral. A solid
fee base - almost a quarter of revenues -
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