Looking at the top of The Banker’s 2012 Latin America ranking, one may be forgiven for wondering if any of the smaller banks will ever manage to overtake the region’s giants. There has been no change in the top 10 places since 2011's ranking, with Itaú Unibanco still sitting firmly at the top of the list and prime spots occupied by Brazilian and Mexican lenders, with Santander’s Chilean operations closing the pack.
Big shifts
There has been some movement outside of the top 10, however. Thanks to an astute expansion strategy, Banco de Bogotá has expanded its Tier 1 capital by more than 60% compared with 2011, with asset growth of nearly 20% allowing the Colombian bank to leapfrog to 11th place from 18th in 2011. Such growth was made possible by the acquisition of BAC Credomatic, Central America's leading credit card specialist.
Another notable jump was made by Banco de Chile, which moved from 20th position in 2011 to 16th. Bancolombia and Citibank Brazil have also climbed up the list, although more modestly, and now sit in 12th and 13th place, respectively, up from 13th and 15th in 2011.
Making money
Looking at profitability, Mexico’s microfinance specialist Banco Compartamos tops both the return on capital (ROC) and return on assets (ROA) tables, with ratios of more than 75% and 22%, respectively. Compartamos sits in 113th place in the regional ranking by Tier 1.
The banks with the highest ROC and ROA are, for the most part, in the lower half of the overall regional rankings, which would suggest that Latin America's smaller institutions are performing better, in relative terms, than its larger ones. There is also a trend of higher profitability among specific markets and regions. For instance, banks specialising in the microfinance sector are performing strongly, while the Argentinian lenders Banco Santander Rio and Banco de Galicia occupy third and fourth place in the ROC ranking, respectively.
Mexican banks top the most improved Tier 1 capital and assets tables. Bank of Tokyo Mitsubishi Mexico recorded capital growth of nearly 300% and Credit Suisse Mexico witnessed asset expansion of nearly 240%. The Brazilian operations of Canada’s Scotiabank have displayed the best capital on assets ratio, at 84.24%, followed by Bank of America Argentina with 75.27% and DNB Bank Chile with 62.33%.
Thanks to extensive research efforts, our Latin America ranking has expanded to include an additional 50 lenders and now ranks 200 institutions.
