The leading banks over the past 12 months from the Americas.

 

Argentina, Santander Rio (Argentina)

Argentina’s recent public and foreign policy turnaround is of historical importance. A new government, which took office at the end of 2015, replaced the long-lasting Peronist rule with macroeconomic orthodoxy and was quick to dismantle market distortions such as foreign exchange controls and allow the release of credible inflation data. 

In the light of this, Santander Rio’s excellent performance for 2015 is all the more exciting. The lender expanded its market share even during the previous heavy-handed administrations; now, Argentina’s new pro-business attitude and improved economic prospects bode well for the growth of banking services in the country. 

In 2015, Santander Rio confirmed its dominant position in private sector deposits, loans and consumer credit, achieving market share of about 10% in each. It also continued to lead in the cash management and foreign trade businesses, expanded its physical network and invested more heavily in technology. 

The year ended with a 30% net profit growth and a 60.5% assets growth. Tier 1 capital also grew, by about 40%, and return on equity was a large 35.2%.

“The bank [believes in] the high growth potential for the banking industry in Argentina for the medium and long term,” says Santander Rio chief executive Enrique Cristofani. “During 2016, we acquired the retail banking business of Citibank in Argentina. This operation will consolidate our position as the leading franchise in the country in terms of network, with more than 465 branches, and the leading private sector bank in terms of loans and deposits.

“We also reached an agreement with American Airlines to offer our customers the AAdvantage programme for our credit and debit card users. This will increase our positioning and revenues in this high-income segment. Our plans for 2017 will focus on the integration of Citi and the opening of approximately 20 new branches,” adds Mr Cristofani.

Bahamas, CIBC FirstCaribbean International Bank (Bahamas)

A simpler structure, more prudent risk management and greater focus on fee-generating businesses such as wealth management allowed CIBC FirstCaribbean to close 2015 in profit during a period of ongoing tough economic conditions in the Bahamas. 

The bank went from an annual loss of almost Bh$150m ($150m) in 2014 to a net profit of over $66m last year. Furthermore, although still relatively high, CIBC succeeded in reducing non-performing loans from 15.6% to 12.9%, while also expanding its loan book. 

Other factors helped achieve these results. CIBC improved its digital offering and introduced chip-and-pin card solutions for merchants, updated its automated banking machines (ABMs) with the same technology and launched the CIBC FirstCaribbean mobile banking app. It also introduced a new banking application for small businesses, which they can use when applying for loans and which provide faster responses. 

The focus on small and medium-sized enterprises was noticeable, both online and on the high street. The bank offered them advice on financial management and reporting through a series of roadshows organised in association with local accounting firms. It was also quick to provide assistance with VAT requirements recently introduced in the country. Thanks to partnerships with larger corporates and real estate developers, CIBC created tailored employee services and addressed the needs of larger clients too.

Commenting on the award, managing director Marie Rodland-Allen says: “We are still impacted by the anaemic growth of the economy. The bank will continue to [work on] improving the overall customer experience and we intend to have a very focused sales approach. 

“Our technology will be leveraged to increase efficiency and convenience for our clients. Our ABM footprint will be expanded to other strategic locations in the country.”

Barbados, Republic Bank (Barbados)

Barbados’s banking sector has been hit by a sluggish economy in recent years. Low private and public sector investments have resulted in lower demand for credit, driving down lenders’ profitability. 

In this environment, Republic Bank’s efforts are laudable. Although slowly, net profits began to grow from 2014 and, in 2015, so did assets and Tier 1 capital. The bank focused on fine-tuning its most successful products such as mortgages, where it made great efforts to offer competitive prices. Furthermore, it was quick to lower interest rates paid on deposit accounts in response to the central bank’s removal of mandatory savings rates. This resulted in higher profit margins. 

The bank also worked on quality of service, particularly for small and medium-sized enterprises, which it says are more sensitive to personal interaction. It can now provide advice through a variety of channels, including video calls, and has developed a training and coaching programme for small entrepreneurs. This increases client loyalty as well as improving the bank’s insights into clients’ skills and performance, therefore helping to forecast their future success. Of note is also the introduction of chip-and-pin technology to Republic Bank’s credit cards, following its growing application in Latin America and the Caribbean, to offer a better service and, -crucially, reduce losses caused by fraud. 

Chief executive officer Ian R De Souza says: “The general economic environment was characterised by the government’s fiscal constraints, low private sector and foreign investment and consequently low gross domestic product growth prospects. In the banking -sector, this translated into high liquidity and low loan demand, leading to reduced opportunities for loan portfolio growth.” 

During such tough times, focusing on better customer service to retain and attract new business was key to boosting profitability, he says – something he plans on doing in the coming year too.

Belize, Scotiabank (Belize)

Belize is slowly recovering from an economic downturn, and the contraction of its gross domestic product (GDP) in 2015 aggravated a banking market already characterised by excess liquidity and limited foreign currency. 

Despite such challenges, Scotiabank’s Belize operations performed well, notes managing director Michael Shaw. Indeed, the lender’s 2015 net profits grew by 19% while non-performing loans shrank to 3.13%. “Consistency in our marketing strategies, competitive interest rates and increased efforts to promote our alternate delivery channels contributed to [last] year’s productivity and successes,” says Mr Shaw. 

Among the highlights are Scotiabank’s inroads in the residential mortgages and auto financing markets, thanks to competitive rates, new products and a series of -promotional activities. 

The lender also simplified its credit approval process by introducing a scoring system based on past loan history and account activity, which customers can use within branches through their credit cards. This had the double benefit of enhancing the customer experience and improving risk management thanks to a better use of -customer data. 

Furthermore, Scotia served customers through both its physical network and growing internet banking options, ramping up efforts to integrate its various channels and reduce the number of required steps for each transaction. The use of alternative channels was supported by a multi-media marketing campaign and the training of branch staff.

Mr Shaw is confident these measures will help Scotiabank grew into a more profitable, modern and leaner business. “As our bank grows, we will continue to improve our strong risk culture through a steadfast focus on customers, strong leadership, ongoing structural cost and digital transformation, and better alignment of our business mix to remain competitive,” he says.

Bermuda, The Bank of NT Butterfield & Son

As the world of banking continues to evolve, shaped by international regulation and global economic conditions, so has the Bank of NT Butterfield & Son. The lender has expanded in markets and areas that better complement its business and abandoned territories that no longer did. 

This resulted in the purchase of HSBC’s corporate banking operations in the Cayman Islands and the trust and fiduciary services business of Legis Group in Guernsey in 2014, and of HSBC Bermuda’s private bank and the Bermuda Trust Company earlier this year. It also led to the wind-down of the bank’s private banking operations in the highly competitive London market at the beginning of 2016. 

This strategy has set Butterfield on a path of more sustainable growth, says chief executive Michael Collins, who is proud of management’s efforts to smoothly integrate the earlier acquired operations while also planning future deals and providing an unchanged level of customer care. 

Certain products have also been improved. All retail customers can now benefit from chip-and-pin technology on their credit cards, which previously was available only to premium customers. Meanwhile, small businesses such as retailers, tour operators and taxi drivers gained access to wireless point-of-sale devices enabling them to accept and process payments safely and easily.

As for the future, Mr Collins is keen to continue on the bank’s expansion path, reassured by the fresh capital it raised through its initial public offering (IPO) on the New York Stock Exchange in September.

“Our growth strategy is centred on acquiring trust and wealth management businesses in core markets that we know well and in which we can realise economies of scale. [The IPO allows us to] pursue growth opportunities and continue to bring value to our clients, shareholders and communities,” he says.

Bolivia, Banco de Credito BCP

What is impressive about Banco de Credito BCP, besides the good financial results and prudent risk management, is its commitment to modernising banking products and services. In 2015, an impressive 9.3 million online retail transactions went through its network, which was revamped and enhanced to improve ease of use and, crucially, safety. 

Similarly, it upgraded the portal for business clients, who can now use improved online billing and payments tools. Greater focus was paid to mobile channels too, resulting in the launch of a mobile wallet.

The lender also focused on bringing banking products to wider parts of the population. Being part of Banco de Credito del Peru (BCP), it could rely on the expertise of the wider group’s microfinance specialist, Mibanco, in addition to its own solutions. This led to the opening of dedicated branches in the capital La Paz, as well as El Alto, which have grown over the course of past year. 

Finally, continuous attention was paid to small businesses through a roadshow aimed at providing training and networking opportunities to entrepreneurs across eight Bolivian towns. 

Since the programme was launched four years ago, more than 6000 small and medium-sized enterprises joined. 

Further investments are in the pipeline, according to Banco de Credito BCP chief executive Marcelo Trigo, who says: “We will keep on improving our products and services. We will work on a broad range of client services including mobile banking to give the [local] growing market the banking tools it needs. [We strive to be] financial consumers’ first choice.” 

The 2015 financial year ended with a good 12.5% return on equity and despite fast loan growth, a small 1.6% non-performing loans ratio. 

Brazil, Itaú Unibanco 

During some of the most troubled times of Brazil’s recent economic history, Itaú Unibanco remained solid and profitable. The country’s biggest lender closed 2015 with larger net profits, assets and Tier 1 capital than a year earlier. Wisely, it began to reduce its loan portfolio risk and boost its non-interest income long before Brazil began registering negative growth rates two years ago. 

Prescient and cautious management translated into growing income and size, as well as in declining cost-to-income and non-performing loan ratios. Being prepared also meant that the integration of recently purchased operations in Chile and Colombia, where the lender now operates as Itaú Corpbanca, was as smooth as possible.

With the first glimpse of economic growth on the horizon, Itaú can think about business expansion again, particularly as Brazil’s interest rates have begun to decline, says outgoing chief executive Roberto Setubal, who will assume the role of co-chairman in April 2017. “Next year, we’ll see economic growth, probably just between 1% and 2% but at least it will be growth. I believe that over time, as the economy recovers and as a result of lower interest rates, this will benefit loans in terms of better delinquency ratios but also in terms of volumes,” he says.

Business will also be driven by technology. Itaú has traditionally been a leader in financial technology, and this places it in a solid position to deal with banking challenges that go beyond macroeconomic conditions. “We have a very strong technology agenda – especially in retail, where digital banking is taking over [the business],” says Mr Setubal. 

“In the future we’ll have many more digital clients, much fewer branches. We have already started to close branches and we’ll see more and more of this trend in the market. We have to reduce margins to compete with fintechs. [Banks] need to be more efficient, have much lower levels of cost. Banking in the future will be completely different.”

British Virgin Islands, Scotiabank British Virgin Islands

Thanks to a wide-reaching restructuring, profits at Scotiabank’s British Virgin Islands (BVI) operations have expanded by a considerably larger margin than in recent years. At the end of 2015, the lender secured net profits 14% higher than it did a year earlier (no progression was registered in 2014 and 2013). This was coupled with a 20% Tier 1 capital expansion and a lower 47.6% cost-to-income ratio. 

Scotia’s enhanced profitability, strength and efficiency were achieved thanks to more streamlined processes, the internalisation of checks and reporting imposed by international regulation – which had previously soaked up extra efforts by the compliance function but are now fully integrated – and by a more forceful technology push. 

Of note was the automation of more than 500,000 payroll and wire transactions and the larger take-up of online bill payments solutions.

Looking back at the past 12 months and towards the future, managing director Sarah Hobbs says: “In 2016, Scotiabank BVI implemented significant improvements in our processes, structure and use of technology to remain competitive and meet -customers’ needs. 

“Managing teams through change while remaining focused on the customer was one of the main challenges faced by the bank. However, this change represented an opportunity for us to build an even stronger bank for the future. 

“One of Scotiabank BVI’s major accomplishments for 2016 was our Express Banking initiative, which focused on educating and encouraging our customers to use our more convenient banking channels. As a result, the use of our alternate channels increased by 16% and our internet banking penetration rose to 34%. For 2017, Scotiabank will continue in its effort to provide a superior client experience to make our -clients financially better off.”

Canada, Royal Bank of Canada

For Canada’s largest lender, Royal Bank of Canada (RBC), the name of the game is -balanced growth. Not only has it managed to improve all significant indicators of strength, profitability and efficiency, it solidified its leadership at home, across product segments, and expanded parts of the business abroad, laying the groundwork for future revenue streams.

RBC closed 2015 with record net profits of more than $10bn, almost 20% Tier 1 capital growth and a 52.8% cost-to-income ratio. 

In the same year, it beefed up its international presence with the acquisition of US private bank City National Bank for $5.5bn and gained access to a new, attractive pool of high-net-worth and corporate clients across a number of generally prosperous areas, including New York, Los Angeles, the San Francisco Bay area and Orange County. This is among the largest acquisitions of a US bank since the 2008 financial crisis, and the largest in RBC’s near 150-year history. 

At home in Canada, it has retained its dominance in consumer and corporate deposits, while also showing well-diversified sources of revenue, with about 42% from interest rate products and 58% from fee income. Furthermore, commercial and wholesale banking contributed to just over half total revenues in 2015, with other -segments filling in the rest. 

In the small and medium-sized enterprise segment, it simplified loan application processes, extended more credit and provided customers with round-the-clock access to advisers.

Also notable was its investment in technology, which resulted in a range of smart solutions deployed in wealth management, customer service and payments, and in initiatives to foster the growth of financial technology start-ups.

Cayman Islands, Cayman National Bank

A proudly local lender, Cayman National Bank has taken many of banking’s daunting hurdles in its stride, whether heavy international regulation, a low interest rate environment or competition from larger players. 

Indeed, Cayman National successfully balanced out the larger resources needed by the risk and compliance functions with a proactive business development. 

It invested in systems and staff training to ensure anti-money laundering, international taxation and payments rules are respected, while also building up a client-facing workforce that is as focused on sales results as it is on customer service. 

The launch of new products and a digital marketing campaign helped secure higher income. So too did a granular knowledge of the local market and a fast decision-making process, says the bank’s president, Ormond A Williams. 

He is also keen to highlight how sharp execution and reputation determine the success of a lender, irrespective of its size and international reach – something that he feels strongly applies to Cayman National.  

“Our experience has shown that all organisations can have a path to success with effective execution and a culture that is trusted by its clients. These are the areas that we have focused on, and they are and will continue to be the bedrock of our success,” says Mr Williams.

The lender closed 2015 with a 34% net profit growth and decreasing cost-to-income and non-performing loan ratios. Its support to the local community had a similar impact, delivered through programmes dedicated to education, sport, the young and the elderly. 

It supported the construction of a new farmers and artisans’ retail market of Grand Cayman to help revitalise the area and the Small Business Expo, which fosters local entrepreneurship.

Chile, Banco de Chile

Over the past few years, Chile has experienced a surge in digital payments. These went from 47 million in 2004 to 280 million in 2014, with electronic fund transfers being more frequently used to pay for services ranging from anything from expensive medical bills to plumbing jobs. Banco de Chile has embraced this trend and mobilised resources to create a strong digital programme. 

This has resulted, in particular, in the launch of a revolutionary app, Mi Pago, which the bank proudly defines as the closest substitute for cash in the Chilean market and which can be used to pay for services as well as products. 

The app is particularly relevant for small entrepreneurs for whom traditional credit or debit card payment systems have proved too pricey, or for whom holding cash would create a security hazard making them susceptible to opportunistic criminal activity. Furthermore, using ATM networks for cash withdrawals had also become more expensive as lenders have had to compensate for increased security at tellers that had been the object of repeated robberies, according to the bank.

Digital payments are providing an effective solution, with the additional benefit that they open up business opportunities. With Mi Pago, small businesses can offer easy bill payments to customers as they are able to integrate the app with other applications, such as Banco de Chile’s Digital Menu app, for example, where restaurants can scan their menus and offer bill payment using Mi Pago as an integrated functionality. This can easily be replicated at petrol stations or cinemas.

Mi Pago’s simple interface and ease of use is provided without compromising security. Customers go through a thorough enrolment process aimed at securely and smoothly authenticating users before they launch the app, thus skipping the need to enter any further passwords at the check-out. After only nine months, it was downloaded by 90,000 users of which 70% were active users. 

Colombia, Banco de Bogotá

Now a 146-year-old institution, Banco de Bogotá has been tackling Colombia’s volatile economic fortunes with caution and skill. In 2015, in particular, as persistently low oil prices and a depreciating peso hit oil exporters and the wider economy, the lender smoothly and effectively focused on the quality of its portfolio. 

However, its strategy was not only to play defence. It also expanded its credit card offering, gained market share in the mortgage segment and products, expanded its payroll and banking insurance businesses, and strengthened its presence in corporate banking and services to public authorities. 

The bank ramped up its efforts in providing financial training to small entrepreneurs and improved its rural penetration, bringing its microfinance and savings products to wider parts of the population.

While gross loans and deposit grew by 14.1% and 9.3%, respectively, the non--performing loan ratio was an impressively low 1.5% and the loan coverage ratio a generous 154.3%. 

The effectiveness of Banco de Bogotá’s risk management and overall business strategy were ultimately proved by the net profits recorded for the year, 22.1% higher than the previous period, and by its ability to mirror assets growth (27.3%) with an even larger Tier 1 capital expansion (41.5%). 

“Banco de Bogotá did what many banks in Latin America have done in the past 12 months: it reacted to slowing economic growth and to concerns over credit quality by concentrating on risk management. While this strategy did not [necessarily] set the bank apart from its peers, its ability to execute did,” says chief executive Alejandro Figueroa Jaramillo. “[As we did last year], we will continue to develop new products and new services in order to satisfy our constantly evolving clients.”

Costa Rica, Banco Nacional de Costa Rica

As in other markets in Latin America and the Caribbean, slower economic growth and declining interest rates framed banking sector expectations for 2015 in Costa Rica. In this environment, it would be reasonable to expect a slowdown in lending and other activities. Not at Banco Nacional de Costa Rica, however, where the loan portfolio expanded by a surprising 11.1%, as general manager Juan Carlos Corrales points out. 

He also highlights the bank’s comprehensive restructuring, which helped it to deal with the low interest rates environment. 

“During 2015, Banco Nacional faced declining local interest rates that severely affected [banks’] net interest margin. That situation placed strong pressure on administrative expenses, which had to be contained in order to improve the efficiency ratio. The bank went through an important change in the organisational arrangement in order to achieve those objectives [and obtained] excellent financial results,” he says. 

Despite the rough environment, Banco Nacional secured a good 36.8bn colons ($65m) net profit and kept non-performing loans at bay, with a 2.4% ratio.

Banco Nacional also confirmed its commitment to financial inclusion. Services to small and medium-sized enterprises (SMEs) include specific solutions for women-led businesses, while the bank has also boosted its online and mobile banking offering and now sees 70% of all transactions going through its alternative channels. 

“We will continue [to channel] increasing amounts of loans to SMEs throughout the country,” says Mr Corrales. 

“Updates to our platforms will support the digital banking efforts that we have been offering to customers.” The bank is proud to be one of the leading banks in introducing mobile banking as an important tool to promote financial inclusion.

Dominican Republic, Banco de Reservas de la República Dominicana

A state-owned lender that has traditionally financed public sector activity, Banco de Reservas de la República Dominicana (Banreservas) has undergone a radical and significant change in the way it serves the local economy. As the Dominican Republic continued to expand at an exceptional growth rate, with gross domestic product (GDP) rising by 7% in both 2014 and 2015, so did the financial needs of the private sector. Banreservas swiftly adjusted the composition of its loan portfolio and, in just three years its lending activity was mainly focused on local businesses. 

At the end of 2015, the loan portfolio was 80% engaged in private sector activities with the remainder at the disposal of public bodies – a split diametrically opposite to the one at the beginning of 2013, where private sector loans comprised only 20% of total. 

In those three years, the bank has added 350,000 new clients across corporate, -consumer and retail segments. It has also grown its investment banking and capital markets operations and invested in online banking and more efficient back- and front-office systems.

Banreservas’s modernisation programme was accomplished without impacting profitability. The bank closed 2015 with the largest net profit of the banking sector, 6.1bn pesos ($130m) while expanding assets and Tier 1 capital by 13% and 14%, respectively.

Chief executive Simon Lizardo Mézquita says: “Since 2013, Banreservas has been working on improving its business strategy, processes and maximising returns while consolidating its leadership within the Dominican banking system. A sound strategy of penetrating the private sector through value-added products has yielded results. 

“Banreservas plans on maintaining its focus on servicing small and medium-sized enterprises and productive sectors of the economy.”

Ecuador, Banco Internacional 

Good customer segmentation, investment in technology and efficient operations underpinned Banco Internacional’s success in 2015. Its performance shows clearly in the figures, with the bank achieving domestic market shares of 71% for large companies, 64% for medium-sized enterprises and 49% for small businesses.

Its commitment to commerce was also evident when looking at the loan portfolio composition: commercial loans were about 80% of the total, while the foreign trade business grew by 18.47%. Prudential risk management resulted in a low level of defaults, with a modest 1.63% non-performing loan ratio. 

Furthermore, in 2015 the bank began to upgrade its ATM network, on which 2 million transactions ran every month, and modernised 20 tellers across the country. About 80% of all transactions were carried out through electronic channels, providing a more efficient service to customers and a more effective solution to the bank. By the end of 2015, the cost-to-income ratio decreased to 50.45%. 

Against an average single-digit return-on-equity ratio for the Ecuadorian market, Banco Internacional notched up 13%. 

“Being recognised as the Ecuadorian Bank of the Year by The Banker fills us with pride,” says executive president Francisco Naranjo Martínez. “Banco Internacional is based on principles of prudence and efficiency. The bank has [increased] provisions while continuing to generate profits for shareholders, which led it to become the top bank for profitability and coverage of portfolio in Ecuador.” 

As for the future, Mr Naranjo Martínez says: “[We want to] extend the commercial loan portfolio, increase the scope of effective management and continue to strengthen e-banking services to get closer to customers. The bank will continue to contribute to the economic development of the country and seek to increase its penetration in the small and medium-sized enterprise segment.”

El Salvador, Banco Agricola

Thanks to its strong products and efficient operations, Banco Agricola made significant inroads in El Salvador’s increasingly competitive banking market during a time of sluggish economic growth. 

The bank fine-tuned some key products, resulting in considerable fee income growth for remittances, insurance products and credit and debit cards. 

It was particularly active in remittances, where it sought new partners and a better transaction platform, which allowed customers abroad to disburse remittances as well as making payments on deposit accounts through the bank’s international correspondents, ATMs and online banking. 

Furthermore, it launched a new credit card for younger customers, an electronic card to settle online purchases and a mobile app that lets customers search and download promotions from partnering businesses. As a result, Banco Agricola generated a net income of $72.2m, and a return on equity of 13.8% and 1.8% on assets. 

“El Salvador’s weak economic growth created a business environment of challenges and high competition in the financial system, which Banco Agricola confronted outstandingly,” says chief executive Rafael Barraza Dominguez. 

“This is evident in our results: in 2015, our net income was $72.2m, return on equity was 13.98%, market share in net loans portfolio was 28.4%, and 27.8% in total deposits. 

“Our purpose lies in improving the lives of people as well as connecting companies with opportunities. We will continue working to deliver exceptional service and solutions aligned to the needs of our customers, along with strengthening and expanding the portfolio of products and channels for personalised and digital services.”

Grenada, Scotiabank Grenada

As the Grenadian economy began to recover, displaying 3% gross domestic product growth in 2015 after years of stagnation, local banks breathed a sigh of relief. While consumer demand remained muted, both individuals and businesses were able to improve their cashflow and find ways to restructure debt. 

Scotiabank’s work with struggling customers was notable. A relatively simple practice, the success of any debt restructuring relies on trust between debtor and creditor, and commitment to the process. 

This was true of Scotiabank, which offered realistic new terms to customers, rewarded willingness to pay and allowed some level of debt relief when necessary. It also focused on diversifying the loan book and captured growth opportunities by successfully targeting lower risk customers and competing on price and quality of service. For example, after noticing that auto loans had the lowest levels of delinquencies in the portfolio, Scotiabank extended the length of the loan available to new customers and reduced the rate of interest attached to the product. 

Early in 2015 the bank extended the offer to other products. Coupled with clever marketing activities and a digital push to encourage more customers to move transactions on to the more cost-effective online and mobile banking platforms, Scotiabank closed 2015 with a 63% net profit growth and kept its non-performing loan ratio to about 10%. 

Country head Roger Archer says: “Many customers were deleveraging, which made asset growth very difficult. This, however, allowed us to further reduce our non-performing assets by working with customers committed to repay. We significantly reduced non-performing portfolios in a manner that added value for the bank, [bearing in mind the needs of our] customers. Internally, we have made a number of changes as part of our ongoing efforts to reduce structural costs and improve our efficiency.”

Guatemala, Banco Industrial

Last year was a testing time for Guatemala’s banks. The country went to the polls to vote for a new president, vice-president, members of congress and parliament, mayors and municipal councils, creating a climate of widespread uncertainty in the economy. 

While lenders were bracing themselves for potentially lower demand for credit, they also had to contend with each other’s increasingly aggressive attempts to gain market share. 

Banco Industrial decided to focus on the creation of new products and technology and launched a number of tools for both retail and corporate clients. These included cash management solutions, savings products and the ability to pay tax online. 

As a result, the bank retained its leading position in loans and deposits in 2015, with market shares of 27.1% and 25% respectively, and closed the year with an impressive Q$1.23bn ($160m) in net profits and a 21.2% return on equity. Encouraging more customers to use alternative channels helped reduce the cost-to-income ratio to 53.1%.

“Guatemala had an electoral year in 2015, which is always a challenge as there is political uncertainty and the economy can stall, as well as new competitors coming into the market with aggressive strategies, meaning having to adjust margins,” says international division manager Luis Fernando Prado Ortiz. “But we were able to overcome those situations, showing consistent growth in our loan portfolio and net income.”

As for the future, Mr Prado Ortiz adds: “[We will] continue to make efforts to grow in the retail and microcredit segment, -capitalising on Guatemala’s low banking penetration. We plan to pursue this by benefiting from the increase in loan demand from emerging middle-income individuals, focusing on rural areas and microfinance to increase bancarisation, and further -penetrating our product offering to recipients of remittances.”

Guyana, Scotiabank

Operating in relatively small markets has its own challenges as economies of scale are harder to reach and increased regulatory costs can unduly weigh on smaller operations. Scotiabank made the most of its five-branch presence in Guyana’s market of 800,000 people. 

It promoted the use of alternative channels while reducing waiting times for services carried out at the branch, added one automated banking machine (ABM) in the country, bringing the total to 19, and removed ABM transaction fees. 

Online kiosks in banking halls reduced dependency on staff and resulted in about 60% of transactions being conducted through ABMs, with the remainder split between online and branch channels.

The bank continued to foster entrepreneurship by launching a competition, LivePitch, in partnership with the Georgetown Chamber of Commerce and Industry. The six finalists received free business -coaching in preparation for launching their own ventures. 

Scotiabank Guyana closed 2015 with G$2.14bn ($9.8m) net profit and a healthy 47% cost-to-income ratio. 

“The main challenge over the past years was the increasingly stringent regulatory environment in which we have to operate. This has negatively impacted employee workload, costs and customer acquisition and retention due to the increasing amount of due diligence and reporting that is required,” says country manager Raymond Smith. “Our ongoing digital transformation has been our main success. 

“Moving customers to our alternative channels has positively impacted operational cost and customer convenience.”

Honduras, Banco del Pais

International monetary policy and market conditions have affected Honduran banks in unexpected ways. Investors around the world have become more readily available sources of capital for emerging markets corporates, including in Honduras, as they look for higher yields in a generally flat interest rate environment. 

At the same time, a reduction in economic growth in the Central American country has dampened credit demand and impaired customers’ ability to repay loans, all of which has posed a significant challenge to Banco del Pais, which serves both large corporates and small retail customers, according to chief executive María del Rosario Selman-Housein. The bank responded by fine-tuning its corporate products, strengthening its risk management function and focusing on costs. 

It also leveraged on its current corporate products to reach retail clients. For example, it used its business cashflow management solution to provide individuals with a tool to better manage their personal finances. 

Greater attention was also paid to online and mobile banking and to the payments network, which was boosted by the installation of more point-of-sale terminals. The credit card network was updated to ensure cards could be used more easily across the country and internationally. The network is now protected by chip-and-pin technology. As a result, corporate banking income remained strong, retail loans and deposits grew, and credit and debit cards usage shot up. 

More investment in technology will guarantee a strong performance in the future, says Ms del Rosario Selman-Housein. “We will continue to develop our electronic channels until our clients can operate all their banking transactions through their mobile devices. Technological innovation will be the name of the game for the local banking system.” 

Banco del Pais closed 2015 with a strong 21% return on equity and a low 1.25% non-performing loan ratio.

Jamaica, National Commercial Bank Jamaica

The growth strategy of National Commercial Bank (NCB) Jamaica is paying off. While the Caribbean economy is still convalescing from past lows, NCB Jamaica has focused on technology and expansion in key markets abroad, resulting in strong profitability and asset qualities.

The bank’s digitalisation programme is aimed at upgrading products and systems to improve customer satisfaction and security. The bank has also launched a new online banking feature that allows customers to open accounts and apply for loans remotely, rather than visiting a branch. 

It created events to group together technology entrepreneurs and find solutions to smooth its customer experience and address issues affecting the banking sector in general, and upgraded systems to increase security for both the bank and customers. 

The lender also launched operations in Barbados, aiming to serve the eastern -Caribbean region, and purchased a 29.9% stake in insurer Guardian Holdings in Trinidad and Tobago. 

“Two of our biggest challenges are operating in a tough macroeconomic climate in Jamaica and the rise of cyber attacks globally. In response, we are transforming our operating model to a more digital, efficient and nimble one, and strengthening our already robust cyber security infrastructure and monitoring capabilities,” says group managing director Patrick Hylton.

More is to come, as NCB Jamaica pushes ahead with its growth strategy and new opportunities arise. “We have a 2020 strategic plan focused on three business priorities: building world-class digital capabilities, accelerating regional expansion and [boosting] our core business. [Next] year, we will make significant improvements to our branch models and expand our digital channel and product offering,” says Mr Hylton. “As for opportunities, the payments landscape is one we are quite excited about.” 

Mexico, Grupo Financiero Banorte

Already a strong presence in the Mexican banking market, Grupo Financiero Banorte has had another excellent year. While in 2015 both gross domestic growth and -interest rates were worryingly low in Mexico, threatening banks’ activity, the country’s largest domestically owned lender grew net profits by 12%, diversified its source of -funding further and improved the quality of its assets. 

At a time of uncertainty and intensified competition, Banorte was particularly -successful in government loans, mortgages, payroll loans and credit cards, where it strengthened its already substantial market share. It also focused on improving corporate governance – resulting in a larger proportion of independent members on the board – and on its data analysis. 

Furthermore, with the ultimate goal of creating a razor-sharp cross-selling tool, Banorte launched Sumando, which links up the architecture behind all banking channels to give a better view on customers’ needs and interaction with the lender, so it can offer more personalised products. 

The bank continued its financial -inclusion efforts by increasing its correspondent network to more than 7000 contact points, while also renewing support to the struggling small and medium-sized enterprise segment.

Carlos Hank González, chairman of the bank, says: “Banorte is focusing on enhancing the relationships with its existing 12 million clients through the continuous offering of innovative products, increasing its service standards and modernising its operations and [technology systems]. 

“As part of these efforts, Banorte has been transforming itself from a product-driven institution to a customer-centric organisation. This is already delivering impressive results; Banorte’s revenue is solid, diversified, and efficient.”

Nicaragua, Banco de la Producción 

Heavier regulation and more demanding relations with correspondent banks were the biggest challenges Banco de la Producción (Banpro) faced in 2015. These are the kind of pressures that can seriously erode profitability, so it is remarkable the bank did not just repeat its past performance, but grew net profits by an impressive 25.1% year on year to 1.13bn cordobas ($38m). 

This was achieved thanks to the growth of retail loans, which are particularly profitable to Banpro because of the larger cross-selling opportunities they offer compared with other products. The creation of a new credit product with an exceptionally low risk profile also helped and contributed to keep overall non-performing loans well below 1% of total portfolio.

The new product allowed Nicaraguans whose salary is paid through the Banpro network to receive a fast response on loan applications (15 minutes) and have repayments taken straight from their salaries at due dates. Furthermore, Banpro increased market share in credit cards and mortgages and boosted the number of transactions being carried out through alternative channels including merchants around the country, ATMs and its e-wallet. Of particular note, users of Banpro’s e-wallet grew sevenfold to more than 21,000 in 2015.

Chief executive Luis Rivas says: “More local and regional regulatory requirements, along with more demanding correspondent banks, added pressure to our [efforts to boost profitability]. We were able to do so and exceed stakeholders’ expectations while also outperforming our peers.” 

Banpro is keen to repeat such performance, particularly in loans and online and mobile banking. Mr Rivas adds: “We plan to increase our retail portfolio’s market share. We see opportunities in increasing the share of non-traditional channels versus the branch-based banking model. We will also continue to invest in product innovation.”

Panama, Banistmo

Banistmo has continued to grow since its acquisition by Bancolombia in 2013. In particular, in 2015 assets and Tier 1 capital expanded by 7.3% and 15.3%, respectively, net profits by 23.3%, and efficiency improved too, with a cost-to-income of 61.39%. 

But the bank’s most important achievements have arguably been becoming a more socially inclusive and environmentally -committed bank. This is crucial in a country that is often criticised for its social inequality and the environmental risks associated to the Panama Canal, a key source of revenue for Panamanians.

Banistmo expanded its network to reach 106 new locations through new correspondent agent relations, and revised its risk policies to become more inclusive. It has sought partnerships with international organisations to support female entrepreneurship and launched a new credit card, Visa Natura, in 2015, where first-year membership fees are devolved to support water conservation and biodiversity projects in river basins of the Panama Canal. 

The bank initiated a strategy of sustainable construction, where it seeks specific environmental certification when building new premises. It has also invested in technology and has reduced the amount of transactions going through branches to 7% of total, boosting efficiency and its ability to reach more customers across the country.

Chief executive Aimee Sentmat de Grimaldo says: “We have consolidated our presence across Panama and have increased the efficiency and effectiveness of our transactions through new technologies. We are innovating with new channels such as a cardless withdrawal service, banking correspondent agents and mobile banking. We have also established alliances with international organisations such as ONU Women. Lastly, we have been recognised by the ministry of environment with the Sustainable Panama Award.”

Paraguay, Sudameris Bank

After years of exceptional growth, Paraguay’s economy stalled in 2015, because of a huge drop in commodity prices and a devaluation of the guarani. During the course of 2015, the local currency devalued by almost 22% against the US dollar, a major shift for local banks that trade in both currencies in almost equal measure. 

Banks also had to contend with major regulatory changes. Towards the end of the year, legislators passed a banking law assigning the regulator much wider powers, including the ability provided to the central bank to increase minimum capital requirements by up to 1% annually, as well as the ability to vet board members, corporate structure and governance among others. 

The credit card law was also approved, lowering the maximum interest rate financial institutions can charge from an average of 54% to as low as 16%. 

Sudameris Bank’s strong risk management, solid capital position and low exposure to the consumer credit market helped absorb such changes. 

Early in 2015, it issued $10m US dollar-denominated contingent convertible bonds, safeguarding its capital despite the guarani’s sharp devaluation. This supported Sudameris’ high-quality loan book, and demonstrated an ability to anticipate client’s struggles, particularly in the agriculture sector, and work around them. 

Furthermore, while small and medium-sized enterprises are not the lender’s core market, its online payroll tool contributed to solve a key management issue for them. Investment in technology resulted in growing usage of online banking in general, with now more than half of clients accessing the bank’s ElO platform daily.

Thanks to prescient measures and an ability to navigate market trends, Sudameris closed 2015 with Tier 1 capital and assets of about 25% higher than in 2014, and a healthy 18% return on equity.

Peru, Interbank

In Peru’s underbanked market, Interbank has long focused on retail operations, rather than the more established corporate segment. It has managed to do so with great risk management skill and placed itself in a prime position to benefit from future growth and sophistication of the local banking sector. 

While increasing assets by more than one-quarter in 2015, after years of continuous growth, Interbank kept non-performing loans in check, resulting in just 2.3% of its total, below the sector average. The largest growth has been in products such as credit cards and other consumer loans. 

To widen operations more efficiently and effectively, it was essential to invest in -alternative channels. Interbank could count on its mobile banking application and on new software that allows for more accurate credit decisions, as well as on its extensive ATM network. 

The bank also sought to improve the customer experience at its branches and redesigned how customers wait to be served. Rather than lining up, they can wait in a lounge area where they are notified when their turn is approaching, or else choose to be alerted via text message.  

“We have strengthened our omni-channel and digital platforms and our customer-centric strategy, we continue to be recognised as a leader in customer service and are among the best companies to work for in Peru and Latin America,” says chief executive Luis Felipe Castellanos. 

“Our centre of attention continues to be related to people. We search for the best talent in order to continue the transformation of our platform towards digital services. The emerging middle class in Peru will demand more financial services and our market will continue to grow. 

“But the way our customers would like us to deliver our services will definitely be different and we need to be prepared for new ways of doing banking.”

Puerto Rico, Banco Popular de Puerto Rico

Trapped in a decade-long recession with no immediate hope in sight, Puerto Rico found itself unable to meet a number of bond repayments earlier in 2016. Being a US federal district (rather than a city administration or a sovereign), bankruptcy or International Monetary Fund assistance are not available options. The debt moratorium it was allowed to declare opened the door to US courts litigation attempts by the most aggressive investors. This is not a market any lender would wish to operate in. 

Yet as the situation worsened, Banco Popular de Puerto Rico closed 2015 with not only good results, but some that showed a notable improvement on the previous year. The lender identified and focused on the few segments with growth potential, and was supported by its US operations’ growing commercial loan business. 

As larger numbers of transactions flowed through alternative channels, the bank continued to improve user experience of its ATM service, mobile banking and e-wallet product. It also focused on small businesses. It launched a start-up programme providing beneficial financing terms, coaching and access to networking events to participants. 

At the end of the year, net profits as well as Tier 1 capital had grown by a commendable 14.7% and 21.47%, respectively, while cost-to-income and non-performing loan ratios reduced by a few basis points to 60.7% and 3.27%, respectively.

“Puerto Rico’s fiscal and economic situation, which has involved a 10-year recession, is undoubtedly the strongest headwind we face,” says Banco Popular de Puerto Rico chairman and chief executive officer Richard L Carrión. 

“Yet the strength of our franchise, sound risk management practices and robust capital levels have allowed us to successfully navigate through the challenging environment. We will continue to serve our extensive customer base in Puerto Rico and identify areas [of growth locally and in the US].”

St Kitts and Nevis, Scotiabank

General elections in 2015 induced a degree of uncertainty that lenders in St Kitts and Nevis could have done without. Serving the 55,000 population split between the two islands, local banks were already contending with heavier compliance and operating costs and slimming interest rate margins. 

For example, catering for both locals and foreign clients, including US citizens, subjected the Caribbean country’s lenders to the burdensome demands of the US Foreign Account Tax Compliance Act. This added to the perennial challenges of serving customers in small island economies, which tend to rely on imports and are greatly affected by regional economic conditions.

Scotiabank achieved good results for the year focusing, in particular, on products for the local community, rather than its international clientele. It devised a system of special rates and rewards to win over new retail customers, recording a near 60% increase in mortgages as a result. Credit card sales were supported by its partnership with American Airlines to grant air miles as well as by a cash-back programme for premium credit card holders. 

Furthermore, Scotiabank created a unit dedicated to small companies that grants deserving applicants special rates and -lending conditions with the goal of stimulating employment as well as the use of energy--efficient technology, increasing exports and reducing the country’s dependency on imports.

Devanand Ramsumair, general manager and country head, says: “We plan to [continue] improving our customer service. We are also committed to giving back to the communities in which we work and live through our fund-raising and philanthropic events. We are very proud of our work through our corporate social responsibility programmes, which included raising funds for breast cancer [and supporting children and the poor].”

Trinidad and Tobago, Scotiabank Trinidad and Tobago

The oil price drop hit Trinidad and Tobago badly. The oil and gas producer experienced a second year of recession in 2015 as a result of this, which sank revenue flows and drastically slashed government expenditure. 

Scotiabank worked closely with corporate clients to combat the challenges, as well as with retail customers to improve digital channels and provide a better and more cost-efficient service. 

Investment in technology, in particular, was a key component of Scotiabank’s growth strategy in Trinidad and Tobago. As bank profitability is threatened by more volatile macroeconomic conditions, running efficient operations and retaining customers becomes increasingly important. Scotiabank focused on alternative channels to ensure both cost reduction and customer satisfaction. 

While it already had an extensive network of ATMs and good online and mobile banking services, the lender upgraded its systems, provided specific training to staff to deal with digital channels customers, and added internet banking kiosks and iPads in key branches to demonstrate the benefits of such channels to reticent customers.

Anya M Schnoor, senior vice-president and head of east and south Caribbean, says that such efforts feed into Scotiabank’s goals to become Trinidad and Tobago’s leading digital bank, and the bank of reference to navigate through the current uncertain times.

“We launched our new mobile and online banking platform; we also made investments in new initiatives promoting thought leadership through the Scotiabank Insights and Vision Achiever series,” she says. “We are excited about the future and the continued confidence that customers have in Scotiabank. Our number one priority remains customers, and simplifying, digitising and enhancing their experience. We are committed to the communities we serve and remain focused on undertaking initiatives that help young people become better off.”

Uruguay, Banco de la República Oriental del Uruguay

By far Uruguay’s largest bank, Banco de la República Oriental del Uruguay (Banco República) has not only proved once again to be a highly profitable institution, it has also renewed its commitment to bringing financial services to wider parts of the population.

This comes on the back of the government’s new financial inclusion impetus, which includes legislation that prohibits lenders from charging for certain services – something that had contributed to pricing poorer parts of the population out of the financial system. Being state-owned, it was natural to assume Banco República would have taken the new rules in its stride. More impressive is the extent of its commitment to financial inclusion and the results it achieved.

As of the end of 2015, the lender served more than one-third of the country’s population and over half of total bank customers; customer numbers have risen by about 130% in the decade to 2015. 

Banco República expanded its physical presence with micro branches, increased the number of ATMs available through agreements with new correspondent agents and improved its phone, online and mobile banking services. Despite the new rules, and thanks also to its digital strategy, the bank’s net profits grew by an exceptional 43.2%.

Jorge Polgar, president of Banco República, says: “New rules say that banks should not charge for the payment of salaries and pensions, as opposed to the past. This is a challenge that Banco República sees as a growth opportunity. The bank has successfully promoted the larger use of its digital channels, which allows us to provide better services to a growing number of customers. 

“It managed to obtain high levels of profitability, unique in the local banking market; [and plans to boost] family savings and financial inclusion of small and medium-sized businesses, a sector that is currently not served by the Uruguayan banking system.”

US, Bank of America

Having apparently put financial crisis-related litigation behind it, Bank of America – the US’s second largest lender by Tier 1 capital – has spent the past few years rebuilding its capital base and simplifying its structure. 

Bank of America has shed much of the physical space it occupied, favouring the -digital delivery instead. 

Its real estate footprint has shrunk by 34% over the past few years, the equivalent of more than 44 million square metres, which the bank likes to visualise by comparing it to the equivalent of almost 15 Empire State Buildings. 

It is now deploying a new system of infrastructure based on cloud technologies that has helped move from nearly 500 different models of computer servers in the bank’s data centres to just six standard models.

The bank has simplified the process of capturing customer signatures for retail banking customers, replacing the previous entirely paper-based process with a digital one. The residential mortgage portfolio was simplified and the number of products available streamlined from 130 to a more reasonable 34, promoting easier interaction between customer and bank representatives. 

Bank of America has placed more focus on improving customer service, both in branch and online, by providing easy contact with a specialist adviser. 

In addition to its e-wallets, it rolled out cardless technology to 2400 ATMs across the country, where customers can withdraw cash, make transfers and check balances using a digital wallet stored on their -smartphones.

Such efforts and initiatives have paid off. Not only did Bank of America close 2015 with a 7% Tier 1 capital growth, its $15.89bn net profit was three times that of the previous year’s. 

Furthermore, the cost-to-income and non-performing loan ratios reassuringly dropped to 68.56% and 1.05%, respectively.

Venezuela, Banesco Banco Universal

Watching Venezuela’s economy crumble has not been easy for onlookers. The country sits on the world’s largest oil reserves, yet cannot provide basic goods to its population in what has become a fully fledged humanitarian crisis. Overstating the challenges banks face in this market would be hard. 

The economy has been caught in a downward spiral, criminality is high, foreign exchange controlled and running at various official rates, and inflation unmanageable (with estimates as high as 1000%). Runaway inflation unduly boosts interest rate fees while eroding assets. Multiple exchange rates obfuscate the picture further, making any face-value analysis of bank annual statements almost meaningless. 

In this environment, what truly set Banesco Banco Universal apart from its peers is its ability to push ahead with a forward-thinking digital strategy as well as its commitment in supporting entrepreneurship and small businesses. 

The bank already possessed an impressive series of online and mobile banking tools serving retail and corporate clients, as well as correspondent agencies’ customers, which can transact on Banesco’s social community online banking tool. 

In 2015, it upgraded its online banking and correspondent agencies platforms to provide better service and gain customer data that can be used as a basis for the creation of loyalty programmes. It also boosted its microcredit programme, designing loans around the needs of deserving entrepreneurs.

Chief executive Miguel Angel Marcano Cartea has a long list of goals for the future. Perhaps the most pertinent to Venezuela’s current situation is to preserve “our human capital and guaranteeing its wellbeing”. 

He adds: “Several opportunities have been identified in new initiatives by entrepreneurs, [stemming from] this current recession, as well as in the proactive support to our current clients.”

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