Latin Finance - November/December 2012 - 56

2012
Davivienda bought HSBC’s assets in Costa Rica El Salvador and Honduras, and so could be in a better position to grow more strongly than HSBC. That said, little has happened in recent years to disturb the dominant hold that BCR, Banco Nacional de Costa Rica and Banco Crédito Agrícola have on the sector. Turcios says credit has been BCR’s greatest growth area, in both business and personal banking. The bank’s credit portfolio grew 18% in 2011, thanks to growth in segments including debit and credit card services, internet banking and mobile banking. BCR’s main focus is to increase its loan portfolio. This includes a focus on growth in residential mortgages and consumer loans, while also striving to increase its lending to small and mediumsized enterprises. The bank is also planning to diversify its funding sources. Turcios says it plans to issue an international bond early next year. As of late October, Costa Rica’s government – benefitting from ratings upgrades as BCR has – was planning its first sovereign international bond since 2004, which should help set a benchmark. LF ___________________________________ have been driven by declining credit costs, gradually rising margins and a slight growth in its loan portfolio. Banco Agrícola’s market share in terms of assets at year end was 28.2% and deposits 27.2%. Its business, as of mid-year, is split between its commercial operations, accounting for 46% of its business, consumer banking, 40%, and mortgage lending 14%. The bank represents a strategic presence for Bancolombia, which acquired the bank in 2007, in the country as well as in Central America. El Salvador has seen little other foreign competition since then. As with the dominant banks in many of Latin America’s smaller economies, Banco Agrícola’s size leaves it in the safest position to withstand an economic downturn that might threaten asset quality. This is particularly important in El Salvador this year. The economy, closely tied to that of the US, continues to slow while fiscal pressures and increasing public debt leave it vulnerable to external shocks. Fitch forecasts GDP growth of 2% for 2012 and 2.3% for 2013. Foreign competitors, such as Citi, HSBC, Banco G&T Continental and Scotia have yet to match Agrícola’s numbers, and should find it difficult to do so given the prospect of continued slow growth. LF

Catching up
60

Guatemalan banks by assets (bn quetzales)

50

40

30

20

10

0

2009

2010

2011

2012

Figures for each year at June 30 Source: Superintendencia de Bancos de Guatemala

El Salvador

Best bank: Banco Agrícola

___________________________________

espite an uptick in GDP growth, the competitive balance between El Salvador’s banks is little changed from 2011. Banco Agrícola remains the largest and strongest bank in the country. Its $3.07 billion in assets at mid-year are up from $3.54 billion 12 months earlier, according to the bank, and are nearly double the second place bank, according to regulatory data. Banco Agrícola is also the most profitable. It posted a return on average assets of 2.54% as of mid-year, as head of the banking system, and its return on average equity of 17.64% was second highest. The bank’s financial performance

D

has nearly caught up to second-placed G&T Continental’s 35.91 billion quetzals, and has become the second largest by deposits. That said, catching Banco Industrial’s 50.11 billion quetzals of assets is still a tall order. A focus on consumers and micro and small enterprises has served Banrural well. Its profitability compares favorably with the country’s two largest banks. And it posted a return on equity of 23.9% as of mid-year, second only to Continental, which it bested in terms of return on ____________________________________ assets of 2.7% to 1.95%. Banrural efficiency ratio dipped over the awards period – a concern for analysts Best bank: Banco de Desarollo Rural given the bank’s size and consumer (Banrural) lending concentration – from 40.1% ____________________________________ to 39%. Yet despite “weak” efficiency metrics, the bank “compensates with high ergers in the past decade have margins,” says Edgar Cartagena, an analyst seen Guatemala’s banking system at Fitch Ratings. come to be dominated by its two largest Still, the focus of its lending, and a banks, Banco Industrial and Banco G&T more limited revenue diversification than Continental. Against this backdrop the big banks, could leave it vulnerable however, well managed Banco Rural to any economic downturns. The bank (Banrural) has grown – quietly, but with is mainly geared towards financing vigor. consumption, as well as micro, small and Banrural’s assets stood at 35.48 billion medium companies, with a smaller share quetzals ($4.53 billion) at mid-year, up in corporate lending. from 30.35 billion quetzals the year before Guatemala’s economy grew at 3.9% in and just 24.31 billion quetzals three years 2011, and the growth rate should average ago, according to central bank data. It 3.3% between 2012 and 2014, according

Guatemala

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56 LatinFinance

November/December 2012
Latin Finance - November/December 2012

Table of Contents for the Digital Edition of Latin Finance - November/December 2012
