Colombian-owned banks contributed a mixed performance in this year’s Top 100 Central American ranking. On the one hand, BAC Panama, owned by Colombia’s Grupo Aval, remained on top as its Tier 1 capital increased by almost 9% and its balance sheet expanded considerably, with a 33.02% increase in assets. The bank also boasts an impressive return on capital – at 34.54% – which sets it apart from similarly sized banks in the region.
Other Colombian operations retained their positions in the region as some of its best capitalised banks. And their ranks have been added to with former regional leader HSBC completing its exit from Central America with the sale of its last local subsidiary, HSBC Panama, to Bancolombia. This deal adds another bank to provide a 15-strong Colombian presence in the region’s Top 100.
However, Colombian banks overall appear to be losing their foothold in the region as many slide in the ranking – including Banistmo, as HSBC Panama was renamed, which lost nearly 12% of its Tier 1 capital in the transition, placing it sixth in the ranking. A notable exception is Bancolombia Panama, which advanced two spots into third place, due to a 21.24% capital increase.
Home advantage
Domestic banks from most other Central American countries are performing well. Banco General from Panama kept pace with BAC and retained second position with a Tier 1 capital of $1.03bn. The fourth and fifth places of the ranking are taken by Panama’s Bladex and Costa Rica’s Banco Popular, which hold a respective $868m and $753m in Tier 1 capital.
Positions seven and eight switched from last year, as Banco Nacional de Costa Rica’s Tier 1 capital dropped nearly 15%, which pushed it back one spot, from number seven. This enabled Banco Nacional de Panama to inch forward one slot, in spite of minimal Tier 1 capital growth of 2.22%. Additionally, Banrural from Guatemala jettisoned Colombian-owned Banco Agricola from the 10th spot, as it grew its capital base by 16.41%, confirming its position as Guatemala’s largest lender.
International groups have also performed well in the ranking. This year’s biggest mover is the Bank of China Panama, which entered the ranking in 84th position thanks to its massive 197.85% Tier 1 capital expansion. The bank also recorded a 103.81% rise in asset growth, although its returns are below average among the region's top banks.
Interestingly, although the overall profits in the region have fallen, some banks have been able to buck the trend – in particular Citibank Costa Rica and Panamanian GNB Sudameris Bank, which have achieved profit increases of 190% and 165.57%, respectively. GNB Sudameris also managed to earn the highest return on assets in the region in 2013, at 10.09%, while its 73.17% return on capital (ROC) was the highest in the region, topped only by Canadian-owned Scotiabank Panama – which dwarfed the competition by earning a staggering 179.86% ROC.
These stellar figures are perhaps down to these banks being located in Central America’s major financial sectors – Costa Rica is the home to $36.3bn of bank assets, second only to Panama, which boasts almost triple that amount at $103.5bn.
Despite such impressive figures, these two countries are not the most profitable in the region in terms of average return on capital – that accolade belongs to Nicaragua and Guatemala, which are comfortably out in front with returns of 35.87% and 27.5%, respectively.
The Banker's Top 100 central American banks ranking, 2015 originally appeared in the March 2015 issue of the magazine. The full results of the ranking are available on The Banker Database. Find out more about the database, register for a free trial or subscribe today.
