Latin Finance - November/December 2012 - 60

2012
more diversified,” Paiz-Fredel says. While NCB’s loan portfolio has been highly concentrated, it is diversifying as corporate lending declines, Paiz-Fredel says. The bank has also invested in technology and IT, so its efficiency should improve down the line. NCB says it plans to continue focusing on deposit portfolio growth. For the year ahead, it highlights strategic initiatives that include centralizing underwriting and delinquency management functions. LF ____________________________________ But compared to historical standards, overall credit growth is weak, at 2.9% in August on an annual basis. This has led banks to remain conservative in terms of their approach to new and existing business. “Most of the concern over the economy is due to the fact that prices in the energy sector are still going down,” says Albuquerque. Trinidad and Tobago is seeking to expand its oil and gas output to take advantage of strong demand for gas in South America, Europe and Asia. Albuquerque predicts GDP growth forecasts ranging from 0.9% to 1.2% for the year ahead following a 1.4% contraction in 2011. But he says that on the positive side, banks are well capitalized, have quality assets and so are cushioned against the worst effects of potential losses. LF ___________________________________ complete, should have resulted in the IPOs of all of its units in the region that have not yet gone public. In December 2011, the bank raised Santander $949 million by floating an additional ____________________________________ 7.8% of its Chilean bank. The sale drew more than $1.95 billion in orders, and uch talk has been made of was buoyed by a decision to extend European, and particularly Spanish, the lock-up period for the shares to banks’ troubles in recent years. But the one year. About 70% of the buyers effects of the European crisis have yet were international, up from the oneto have any major impact on their Latin third foreign participation often seen assets. in Chilean equity deals. The bank, For international banks such as BBVA considered one of Chile’s two strongest and Santander, these regional operations along with Banco de Chile, has a 33% free represent their crown jewels. The float. name of the game has been monetizing On the same day of the flotation, assets without pulling out of the region Santander made perhaps a bolder move, completely. exiting completely from Colombia. Santander found itself needing The Spanish bank was unlikely to do to address a €6.47 billion ($10.08 anything in the Colombian market, with billion) capital shortfall to meet new its unit there holding $4 billion in total requirements imposed by European assets, and representing a 2.7% market regulators last year. Its profits were share in loans and 4.7% in deposits. sagging as well, falling from €8.18 billion Financial assets in Colombia have been in 2010 to €5.35 billion in 2011. Profits going for pricey multiples in the past at the Latin American units have held up year, so Santander was able to raise $1.23 well, declining only from €4.73 billion to €4.66 billion. > UPDATE Santander has raised a large chunk of capital through the sale of parts of its For daily news of local market transactions, best operating assets in the region. The see www.latinfinance.com strategy is still underway, and, when

Trinidad & Tobago
Best bank: Republic Bank
____________________________________ rinidad and Tobago, home to four large commercial banks and four smaller institutions, boasts a competitive financial sector. But size and stability give Republic Bank an edge not just over its domestic rivals but over most other Caribbean markets as well. The bank has the largest market share in terms of deposits and loans, and – in an environment of excess liquidity and low interest rates – profited from increases in credit demand. Assets at the bank have risen to about $47 billion, from approximately $46 billion in 2010, and net profit after taxes of $1.2 billion is up from approximately $1.1 billion in 2010. Its return on average assets climbed to 2.51% from 2.43% while its return on average equity stands at 16.0%, compared to 15.3% in 2010. Growth has come from its real estate and vehicle market lending as well as credit card-related technology developments. Banks able to improve their informational systems and curb operational costs can make up for revenues from private operations, says Moody’s analyst Alexandre Albuquerque – a fact that’s also positive for margins. Mortgage lending continues to thrive, he says , and is the only market segment where the outlook remains solid. The credit system grew 3.1% nationally to March, driven by the real estate market, which went up by 9.8% first quarter. Business lending, by contrast, was 5.7% in June, and was down to 5.1% in July.

Santander: raising capital

Best regional strategy

60 LatinFinance

November/December 2012

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Latin Finance - November/December 2012

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