While Brazil’s Banco Bradesco knocked Mexico’s Grupo Financiero BBVA Bancomer off the top of the pile, Mexico has boosted its tally in the top 10. The battle between Mexican and Brazilian banks to occupy the top spots in the Top 100 Latin American bank listings continued in earnest this year. While Mexico’s Grupo Financiero BBVA Bancomer lost the number one position to Brazil’s largest private bank, Banco Bradesco, Mexico as a country increased its number of slots in the top 10 from three to four.

Grupo Financiero Inbursa was the newcomer and took the 10th spot with a Tier 1 capital ratio of $1.805bn. The other Mexican high fliers are Banamex, which held fourth place, with a Tier 1 capital increase from $3.096bn to $3.469bn, and Grupo Financiero Santander Serfin held eighth place with a rise in capital from $1.527bn to $1.924bn. Grupo Financiero BBVA Bancomer itself slipped to fifth place on a capital contraction of $3.742bn to $3.206bn.

On the Brazilian front, the usual suspects are riding high: Bradesco, Itaú, Banco do Brasil. Banco Bradesco, Brazil’s largest private bank, has arrived at number one, easing out not only BBVA Bancomer but its compatriot, Itaú, which held second position in the 2003 listing to Bradesco’s third place.

But both Brazilian banks increased their capital strength. Bradesco’s Tier 1 capital ratio rose by 23.5% from $3.108bn to $4.695bn while Itau’s grew 12.3% from $3.189bn to $4.383bn.

Other Brazilian banks enjoyed even more spectacular gains. State-owned Banco do Brasil notched up a 32.4% gain with a rise from $2.596bn to $4.206bn, while Banco ABN AMRO Real grew its Tier 1 capital by 39.3% from $2.212bn to $2.906bn.

Fresh entrants

New in the top 10 from Brazil is state-owned savings bank Caixa Economica Federal, holding the ninth spot, while another savings bank – the Sao Paulo headquartered Nossa Caixa made its first appearance at 25th position. Detailed figures from Brazilian savings banks have not always been forthcoming in the past, which has tended to keep them out of the ranking.

The loser in the battle for the top 10 is, predictably enough, Argentina. Banco de la Nación Argentina, which held ninth place in 2003, slipped to 14 on a capital fall of 23.3% from $1.510bn to $1.056bn. But not all Argentine banks went backwards. Even if it did not improve its ranking, Banco de la Provincia de Buenos Aires bolstered its capital strength by 99.4%, while falling four places to number 19.

Argentina’s leading private sector banks continued their decline, however. BBVA Banco Frances contracted 15% and fell from 14th to 26th following a 20.8% shrinkage in 2003. Banco de Galicia y Buenos Aires’ Tier 1 capital fell 10.5% and took the bank down from 25th to 36th in the ranking, following a 52.2% fall in 2003. In 2002, the bank had held 11th position.

Growing profits

In pre-tax profits terms there have been some dramatic improvements with Banco de Chile gaining 321.9% to produce $241m in profits; HSBC Bank Brasil squeezed out a 207.2% increase bringing in $73m; and Banco de Pernambuco notched up 263.7% growth to $32m.

On the negative side, non-performing loans to total loans saw highs at HSBC Bank Argentina with 28.72%; Banco Patagonia Sudameris, also from Argentina, with 24.60%; Panama’s Banco Latinoamericano de Exportaciones (BLADEX), with 19.59% and Banco Río de la Plata from Argentina, with 19.30%.

With the prospect of rising US interest rates and high oil prices, it will be interesting to see how the fortunes of Latin American banks fare next year.

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