Brazilian institutions retain the top places in this year's Latin American rankings, but competition is getting fiercer as the region's banks increase in confidence and muscle.

Latin American banks have enjoyed an exceptional year. The region's banks entered 2010 in stronger shape than ever and are profiting from the growth in trade flows between the region's countries and buoyant economic prospects across Latin America.

The top five positions in Latin America are occupied by Brazilian lenders that have been consolidating their domestic positions and expanding abroad. Grupo Santander Banespa climbed from last year's sixth place to third thanks to the $8bn initial public offering of its Brazilian operations and its previous merger with ABN Amro's Banco Real as part of the Dutch bank's break-up in 2007.

Banco do Brasil, now in fourth place in the ranking, was the third strongest lender in the region last year. However, its acquisition in April 2010 of a majority stake in Argentina's Banco Patagonia and its plans to expand operations in the US to support corporate clients' foreign business will strengthen further its position and may push the bank up in next year's ranking.

Improved capital position

If Itaú Unibanco is still indisputably the largest Latin bank by Tier 1 capital, it has also done the most to strengthen its capital position among Brazilian banks. Banco do Nordeste do Brasil has doubled its Tier 1 capital to $1.5bn. With relatively small assets of $11bn, which have grown by 58% since last year, the Fortaleza-based institution serves as development bank for the north-east region of the country and is the fourth fastest mover in terms of asset expansion.

Big improvements have been achieved by larger institutions too. Banco del Estado de Chile has pushed its Tier 1 capital up by 94% to $1.8bn on total assets worth $33bn, while significantly larger Grupo Santander Banespa also scores highly in this ranking. Its $24bn Tier 1 capital grew 87% from last year.

Citi's Banamex and BBVA Bancomer continue to be the top two lenders in Mexico but while the latter retains seventh position in the regional ranking, the former lost ground to the Brazilians' expansion and, despite having grown its Tier 1 figure, has now been pushed down to sixth position, from fourth in last year's rankings.

Overall, capital-to-assets ratios have improved in the majority of our top 100 Latin banks. And it is not just the size and strength of lenders that have grown. Pre-tax profit figures have also gone up for most of the banks, with profits-on-average-capital ratios as high as 83% for Peru's BBVA Banco Continental, the third largest bank in the country by Tier 1 capital after Banco de Crédito de Peru and Scotiabank Peru.

Top 10 by return on assets

Top 10 by return on assets

Top 10 fastest movers

Top 10 fastest movers

Top 10 banks by profits ($m)

Top 10 banks by profits ($m)

Top 10 by assets growth ($m)

Top 10 by assets growth ($m)

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