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Top 1000 World Banks – Brazilian banks take profitability hit

Brazilian lenders still monopolise the top of the Latin American and Caribbean table, while banks from Panama, Argentina, the Dominican Republic and Mexico benefit from instability in the Venezuelan economy.
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Brazilian banks remain the largest in the Latin American and Caribbean region by Tier 1 capital, but the economic recession that has affected the country for the past couple of years has taken its toll on lenders’ capital strength and profitability.

Brazil

Nonetheless, Itaú Unibanco continues to lead the region with $25.9bn in Tier 1 capital. As was the case in the 2015 rankings, it is followed by Banco do Brasil, Banco Bradesco and Caixa Economica Federal. BTG Pactual, formerly in fifth place, has now slipped to eighth and is the only Brazilian bank that closed the 2015 financial year in the red, with a loss of $693m.

Venezuela’s Banesco Banco Universal, Banco de Venezuela and Mercantil Servicios Financieros occupy fifth, sixth and seventh positions, respectively. Tormented by dire economic conditions and spiralling inflation, the country nevertheless has a banking sector that looks strong and lucrative but which is hard to read. The presence of different official exchange rates and the yawning differences among them as well as with the unofficial rate makes analysis almost impossible. (The Banker uses the exchange rate reported by the International Monetary Fund at the end of December 2015, which is 6.28 bolivars to the US dollar.) This is why The Banker has decided that, while Venezuelan lenders should continue to appear in the regional table, their higher capital values may distort the picture and obscure the achievements of others in the region. Venezuelan banks have therefore been removed from the highest climbers and return on capital (ROC) analysis.

The population of these two tables is now more diverse. Panama’s Global Bank Corporation, Argentina’s Banco Macro and the Dominican Republic’s Banco Popular Dominicano lead the highest climbers. The most profitable banks in the region are again two Argentine lenders, Banco de la Nacion Argentina and Banco de Galicia, followed by Mexico’s microfinance lender Banco Compartamos. 

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Silvia Pavoni is editor in chief of The Banker. Silvia also serves as an advisory board member for the Women of the Future Programme and for the European Risk Management Council, and is part of the London council of non-profit WILL, Women in Leadership in Latin America. In 2019, she was awarded an honorary fellowship by City University of London.
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