Latin Finance - November/December 2009 - 45

2009 Best Bank – GyT Continental Guatemala Caution Prevails D espite the economic downturn, Guatemala’s GyT Continental could see profits jump by 25% by the end of this year compared to 2008, CEO Flavio Montenegro tells LatinFinance. The positive trend is already noticeable. “In the first quarter of this year profits grew 24% compared to the same period in 2008,” he says, adding that return on assets increased to 1.6% in June 2009 from 1.4% in June 2008 and return on equity increased to 17.3% from 16.0% in the same period. GyT also has bragging rights when it comes to asset growth, as it beat the other major banks in the country. As of June 2009 the bank’s assets total $3.5 billion, up from $2.9 billion, a 21% increase from June 2008. Meanwhile, Banco Industrial, Guatemala’s largest bank, saw its assets grow only 7% to $4.5 billion. Banrural, the third largest bank after GyT, saw assets rise 11% to $3.0 billion. Deposits as of June 2009 total $2.5 billion, up 25% from $2.0 billion the same month in 2008, Montenegro says, adding that the increase in deposits was largely responsible for the jump in profit. He explains that the bank has been opening new branches, of which it almost has 1,000, and adding online banking capabilities to attract new depositors. Nevertheless, GyT trails when it comes to non-performing loans (NPLs). As of June, NPLs made up 2.93% of the total, up from 2.44% in June 2008. By comparison, Industrial’s NPLs dropped to 0.7% from 1.1% in the same period and Banrural’s stayed the same at 1.0%. GyT’s loan portfolio is more focused on the corporate sector, while Industrial focuses more on retail. But the banker explains that keeping NPLs in check is one of GyT’s priorities. “We have been improving our monitoring of credit risk and reinforcing our collections area to lower NPLs,” he says. S&P, which has a BB- rating for GyT with a stable outlook, believes the bank will continue to benefit from a diversified and stable deposit base and from its strong brand recognition. It also says the institution will focus on consolidating its business model and controlling nonperforming assets instead of embarking on aggressive growth strategies such as pursuing acquisitions. Montenegro agrees, saying that in 2010 the bank will look to improve its operations before it does M&A. “I don’t foresee making acquisitions, but we would not discard a good opportunity. Until the global economy stabilizes, we will continue to be conservative with investments. We would only invest in assets where we see strategic value,” he says. GyT Continental was established after the merger of Granai & Townson and Banco Continental. It began operations in June 2001. LF Jamaican dollars, up from 126.1 billion the previous year. “We have survived through periods when banks in Jamaica were failing. We are seen as a safe haven and when people are nervous they move their deposits to Scotia,” Bowen tells LatinFinance, adding that in terms of deposits, Scotia has a 35% market share. He also says that the acquisition of more deposits also improves the bank’s capacity to make loans. And apparently, the state turns to Scotia when it needs to borrow. “The public sector led our growth in loans while lending to the private sector dropped,” Bowen says, adding that Scotia’s loan portfolio grew by Best Bank – Scotia Jamaica amaica may have been hard hit by the global recession, but that probably ended up benefitting Scotia’s operations on the tropical island. According to CEO Bruce Bowen, when the going gets tough and people start looking for a safe haven where to park their money, they turn to his bank, which has a market share of about 30% by assets, which increased to 308 billion Jamaican dollars in June 2009 from 286 billion Jamaican dollars in June 2008. In terms of assets, Scotia is Jamaica’s second largest bank after National Commercial Bank (NCB), but in terms of deposits, it is the largest player. Bowen says that most of the growth in deposits came from customers shifting their money from other banks to Scotia. As of June 2009, Scotia says deposits totaled 151.0 billion Jamaican dollars, up from 148.6 billion Jamaican dollars the previous year. By comparison, as of June 2009, NCB’s deposits added up to 132.8 billion Safe Deposits Haven J Lending more to the government: Bowen 2% or 3% in June 2009 compared to a year before and that about 80% of that growth came from loans taken by the government. “About 30% or 40% of our loan portfolio represents loans to the public sector,” the CEO explains. “The government sees Scotia as a stable bank and we can lend to it when no other local bank can. In February the government needed financing and we provided it a $100 million loan,” Bowen says. Since the government is facing a tight financial situation, Scotia’s loan portfolio has seen an increase in non-performing loans (NPL), to 3.80% in June 2009 from 3.14% a year before. Scotia does trail NCB in this segment. NCB’s NPLs as of June 2009 were 2.4%, up from 2.3% a year before. Offsetting the growth in Scotia’s November/December 2009 LatinFinance 45

Latin Finance - November/December 2009

Table of Contents for the Digital Edition of Latin Finance - November/December 2009

Latin Finance - November/December 2009
Contents
Latam-China Flows
Petrobras Interview
Best Boutiques
Banks of the Year 2009
Itau Unibanco Interview
Mexico: How to Capitalize on Crisis
Colombia: Local Shop Repels Foreign Pretenders
Chile: Pefecting the Art of Retail
El Salvador: A Foreign-owned Bank Dominates
Infrastructure & Energy Awards
Private Equity Fundraising
Latin Finance - November/December 2009 - Latin Finance - November/December 2009
Latin Finance - November/December 2009 - Cover2
Latin Finance - November/December 2009 - Contents
Latin Finance - November/December 2009 - 2
Latin Finance - November/December 2009 - 3
Latin Finance - November/December 2009 - 4
Latin Finance - November/December 2009 - 5
Latin Finance - November/December 2009 - 6
Latin Finance - November/December 2009 - 7
Latin Finance - November/December 2009 - 8
Latin Finance - November/December 2009 - 9
Latin Finance - November/December 2009 - 10
Latin Finance - November/December 2009 - 11
Latin Finance - November/December 2009 - 12
Latin Finance - November/December 2009 - 13
Latin Finance - November/December 2009 - 14
Latin Finance - November/December 2009 - 15
Latin Finance - November/December 2009 - 16
Latin Finance - November/December 2009 - 17
Latin Finance - November/December 2009 - Latam-China Flows
Latin Finance - November/December 2009 - 19
Latin Finance - November/December 2009 - 20
Latin Finance - November/December 2009 - 21
Latin Finance - November/December 2009 - 22
Latin Finance - November/December 2009 - 23
Latin Finance - November/December 2009 - Petrobras Interview
Latin Finance - November/December 2009 - 25
Latin Finance - November/December 2009 - 26
Latin Finance - November/December 2009 - 27
Latin Finance - November/December 2009 - Best Boutiques
Latin Finance - November/December 2009 - 29
Latin Finance - November/December 2009 - 30
Latin Finance - November/December 2009 - 31
Latin Finance - November/December 2009 - Banks of the Year 2009
Latin Finance - November/December 2009 - 33
Latin Finance - November/December 2009 - 34
Latin Finance - November/December 2009 - Mexico: How to Capitalize on Crisis
Latin Finance - November/December 2009 - 36
Latin Finance - November/December 2009 - 37
Latin Finance - November/December 2009 - 38
Latin Finance - November/December 2009 - Colombia: Local Shop Repels Foreign Pretenders
Latin Finance - November/December 2009 - Chile: Pefecting the Art of Retail
Latin Finance - November/December 2009 - 41
Latin Finance - November/December 2009 - 42
Latin Finance - November/December 2009 - El Salvador: A Foreign-owned Bank Dominates
Latin Finance - November/December 2009 - 44
Latin Finance - November/December 2009 - 45
Latin Finance - November/December 2009 - 46
Latin Finance - November/December 2009 - 47
Latin Finance - November/December 2009 - 48
Latin Finance - November/December 2009 - 49
Latin Finance - November/December 2009 - Infrastructure & Energy Awards
Latin Finance - November/December 2009 - 51
Latin Finance - November/December 2009 - 52
Latin Finance - November/December 2009 - 53
Latin Finance - November/December 2009 - 54
Latin Finance - November/December 2009 - Private Equity Fundraising
Latin Finance - November/December 2009 - 56
Latin Finance - November/December 2009 - Cover3
Latin Finance - November/December 2009 - Cover4
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