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

 
     

Argentina, Banco Galicia

Argentina’s transformation to a more orthodox, open economy that is re-engaging with foreign investors and adopting international standards is having a positive impact on the country’s banking sector. This has seen it make key economic reforms, alter specific financial sector rules, and work on reinstating the credibility of the national statistics, particularly when it comes to inflation figures. But with any changes, lenders will have to manage the transition and adapt to new market rules. 

While until now the local financial system has been characterised by low volumes and high margins – Argentina remains one of the most profitable banking markets in Latin America – it is likely that banks will soon need to adapt to higher volumes and lower spreads. Local lender Banco Galicia is readying itself to take advantage of such changes. Most notably it has kick-started its mortgage business, which had been dormant for years, and has launched inflation-adjusted mortgage lines. 

Furthermore, after the removal of regulation that inhibited the opening of new branches, and encouraged by a more optimistic economic outlook, the bank has begun to increase its physical presence and is working both internally and in partnership with a number of fintech companies to improve its digital positioning as well. 

The results of the country’s mid-term elections, confirming the popularity of the current pro-business president, have further reinvigorated Banco Galicia’s prospects for the future, says chief executive Fabián Kon, after it closed 2016 with an already impressive 30.2% net profit growth. 

Mr Kon adds that Banco Galicia will now continue “to consolidate our leadership in the still small but [highly promising] Argentine financial system. We will keep on investing in the development of our branch network and our digital banking capabilities.”

The Bahamas, CIBC First Caribbean

In 2016, CIBC First Caribbean consolidated its recovery, even as the Bahamian economy continued to underperform, with high levels of unemployment. It also made further progress in reducing an abnormally high non-performing loan (NPL) ratio.

A decrease in the prime rate early in 2016 resulted in a decline in loan interest and securities income, which impacted the bank’s interest yields. Nonetheless, it grew net profits by 6.6% to Bh$70.6m ($70.6m), putting the losses of 2014 firmly behind it.

External consultants were hired in 2015 to review the bank’s debt collection and delinquency management process. The consequent restructuring of the credit collections unit was followed by a reduction in the NPL ratio from 15.6% in 2014 to 12.9% in 2015, and to 8.9% in 2016. 

The bank’s strategic priority is to cultivate deeper client relationships by improving the overall customer experience. “To achieve this, we are improving our technology platform to increase efficiencies and improve the product offering for our clients,” says managing director Marie Rodland-Allen. “In addition, more emphasis has been placed on learning and development opportunities for our employees.”

CIBC First Caribbean launched its new mobile banking app in 2016, and says this has been well received. It continues to expand its ATM network, including dual-currency machines for the many visitors to the Bahamas. The ATMs have been upgraded with chip-and-PIN technology to reduce fraud. Chip-and-PIN technology is also incorporated in the bank’s new cash-back Visa credit card. 

As part of a more detailed business segmentation, a new private wealth management unit has been launched. The bank also opened a mortgage and loan centre, with specially trained business bankers on hand to focus on small business clients. And a new office has been opened in Hong Kong to promote the bank’s fund management services across Asia.

Barbados, Republic Bank

Republic Bank sets itself targets in three strategic areas – cost containment, employee engagement and customer service delivery. In 2016 it registered improvements in all three, while growing net profits by 10% to Ba$38.3m ($19.2m).

The bank aims to cut costs by a minimum of 2% annually. It does this by reviewing contracted services and bulk purchases, improving efficiencies and reducing wastages great and small. In 2016, this included more electronic payments, which eliminated the printing of cheques, and discontinuing the purchase of printed newspapers for the bank’s network.

The bank continues to invest heavily in employee engagement, supporting a management diploma programme and courses in mentorship and management development, with financial assistance for staff on approved external courses.

“For the past four years the bank has remained the leader in customer service delivery and satisfaction,” says CEO Anthony Clerk. “Our employee engagement score is at the highest it has even been and is even higher than the Republic Bank group benchmark.”

Mr Clerk notes that the bank’s overall financial performance was again satisfactory. One of 2016’s particular successes was the annual Christmas Loan campaign. Barbadians have a Christmas tradition of home makeovers and, in some instances, buying new cars, consolidating debt and travelling. 

After the application and approval process was simplified and accelerated, the portfolio acquired during the October-to-December Christmas campaign more than doubled compared with the year before. 

Republic is the only commercial bank in Barbados to offer up to 100% financing for low- to middle-income housing construction. Other banks will only finance completed homes. To further encourage low-income customers to consider home ownership, the bank also offers the lowest interest rate in the market, with tiered financing available.

Bermuda, The Bank of NT Butterfield & Son

The Bank of NT Butterfield & Son has a bold vision to be the leading independent offshore bank and trust company. Within that, its growth strategy is to develop its core banking and wealth management businesses in jurisdictions where it understands the market and can build economies of scale.

That has led to acquisitions in Guernsey and the Cayman Islands, as well as in Bermuda itself, where it has doubled the size of its wealth management business. In 2017, it established Butterfield Mortgages in the UK. As the bank puts it, this is a service “not easily replicated” by its local competitors.

The bank was listed on the New York Stock Exchange in 2016, since when it has seen its share price rise by 70%. Net profits in 2016 almost doubled to $115.9m, while assets increased 8.1% to $11.1bn. It has been paying special attention to expense management, improving its core efficiency ratio from 78.4% in 2012 to 63.8% in 2016.

In one of the highlights of 2017, Butterfield was the Official Bermuda Bank of the 2017 America’s Cup, held in Bermuda. This proved to be a highly beneficial sponsorship, providing the bank with business development opportunities and a significant amount of local goodwill. 

The event increased awareness of the island as a travel destination and sailing venue, and improved prospects for tourism, international investment and economic growth. More than 800 clients and guests enjoyed Butterfield hospitality, which the bank anticipates will have a positive impact on business retention and growth.

So that customers can bank wherever, whenever and however they wish, Butterfield offers 30 ATMs, online and mobile banking, online brokerage services, as well as four full-service branches.

In 2017, it partnered with MasterCard and the Bermuda Tourism Authority to outfit taxis with card payment/contactless payment technology, enhancing convenience for local users and tourists, and safety for drivers, who now have to carry less cash.

Bolivia, Banco National de Bolivia

Since Banco National de Bolivia (BNB) declared itself to be the “first digital bank of Bolivia”, digitalisation and innovation have been leading strategic priorities. However, the bank says it is determined to remain thoroughly traditional in its quality of service and in financial prudence and control.

“Adapting to the new global financial services landscape, where competition from fintech companies is on the rise, has been a challenge,” says BNB executive vice-president Pablo Bedoya Sáenz. 

Having hired an international consultancy to help it devise its Digital Transformation roadmap and long-term plan, BNB’s first step was to create an innovation centre with experienced people from its IT department.

 It then organised Bolivia’s first two-day ‘hackathon’, bringing together 120 young IT developers to create apps and solutions for its digital banking proposition. As well as receiving monetary prizes, the winners were invited to join the innovation centre team.

Puntos Digitales BNB – the bank’s digital points – have now been established at four major branches. These allow customers to open accounts that use facial biometric recognition, without having to queue at the branch counter. 

A chatbot called Carlitos, available through Facebook Messenger, helps customers with queries about products, locations, foreign exchange rates and account details. Carlitos keeps on learning and adapting its recommendations.

BNB has launched the BNB Bus, a mobile financial education unit designed to reach distant regions of the country, where it helps people understand financial products, services and channels. 

“We will continue to pursue vigorous loan portfolio growth while maintaining firm credit and risk controls,” says Mr Sáenz. At the same time, the bank intends to keep non-performing loans to a minimum, while maximising efficiency and productivity.

Brazil, Santander Brasil

Improving profitability during an economic downturn would be remarkable for any bank, even more so if the company in question had previously struggled and the market it serves was, rather than in a slowdown, in a major recession. Santander Brasil achieved just that in 2016, and turned its previous operational loss into a pre-tax profit, resulting in net profits 10.3% higher than a year earlier and a growing return-on-equity ratio of 13.3%. Thanks to a tax rebate, even with its 2015 operational loss, Santander Brasil still closed the year in the black.

Equally impressive are the digital initiatives that the bank has brought to the market. Superdigital, for example, has become not only a local success story but also an inspiration for the whole Santander Group, which is testing its introduction in other countries. 

A digital payment platform based on pre-paid cards, Superdigital was launched under the Santander group of products this year after the 2016 acquisition of the fintech company ContaSuper. Progress made in auto loans, payroll lending and biometric identification are also noteworthy, as is the bank’s commitment to improve customer satisfaction and loyalty through the introduction of metrics to identify points of pressure and excellence.

“When 46,000 people take on a common purpose, they are able to challenge the market and find ways through any scenario,” says Santander Brasil chief executive Sergio Rial. “In our case, this [united front] has been translated into a better quality of products and services, the best customer experience and a greater return both to shareholders and society. We still have a lot to do, and we are only just beginning.”

British Virgin Islands, Scotiabank

Scotiabank has been named Bank of the Year in the British Virgin Islands (BVI) for the fourth consecutive year. It ascribes its continuing profitability to customer focus, organisation and digital transformation.

“We continuously strive to provide the highest level of service while focusing on helping our customers become better off,” says Sarah Hobbs, managing director of Scotiabank (BVI).

As part of its commitment to educate clients, the bank holds advisory sessions on topics such as budgeting, saving, home and auto finance, planning for retirement, and investing in mutual funds. 

Scotiabank’s non-performing loan ratio was 2.6% in 2016 (in 2015 it was 2.9%). Efforts to rehabilitate and restructure troubled loans mitigate loan loss provisions at the same time as helping customers. 

The retail lending services unit and the business support centre have now been consolidated in Scotiabank’s shared services hub in Trinidad. As well as strengthening processes and efficiency, this allows local relationship officers to focus more on customers and financial advice.

The bank reports that the Foreign Account Tax Compliance Act is “well anchored” and that it has launched the Common Reporting Standard process. The bank notes it is the only one in the BVI with deposits that are Basel III compliant; and that it is also the first bank in the BVI to introduce an in-branch online banking kiosk, to help customers avoid queues. A customer relations representative now promotes ‘Banking on the GO!’ in the banking hall, introducing them to self-service channels and encouraging them to register for online and mobile banking.

One priority has been to show businesses how automating transactions can build efficiency, capacity and savings. As a result, more than 500,000 payroll and wire transactions have been automated in the past year.

Canada, RBC

RBC aims to be Canada’s undisputed financial services leader, with an institutional, corporate and high-net-worth franchise in the US and other parts of the globe. But it knows that what worked in the past will not necessarily work in the future. 

The bank again delivered record earnings in 2016, up 4.3% to C$10.5bn ($8.21bn). Today, having redefined its ‘collective ambition’, RBC champions Canadian innovation by working with leading universities and organisations to support the wider tech ecosystem. It has established the Borealis AI to push the boundaries of the science around machine learning, and has invested in initiatives such as NextAI and the Vector Institute.

In similar vein, the bank has launched a C$3m start-up accelerator at the University of Toronto and is collaborating with innovation hub OneEleven to help tech start-ups scale their operations. 

Since technology is redefining how customers consume almost everything, the bank is reimagining its role in their lives and how it can use technology to help them achieve their financial goals. In Canada, more than 82% of its transactions are now performed in self-service channels, including digital and mobile.

RBC has more than 6 million active digital users, including nearly 3 million mobile users in Canada, and one in 10 Canadians use its mobile banking app. It was the first Canadian bank to launch Interac e-Transfer using Siri voice commands. It also launched MyAdvisor, an online platform where customers can interact with a financial adviser by video.

Alongside these initiatives, RBC is reshaping its culture and its approach to recruitment and retention. Recruiting from online developer communities and social media, it has introduced internships as a launchpad for early talent. 

Its innovation labs are looking into artificial intelligence, blockchain and big data, as well as working on cybersecurity, fraud management and biometric authentication technology. And it has almost 100 global patents either pending or issued.

The Cayman Islands, Butterfield Bank (Cayman)

Butterfield Bank (Cayman) is celebrating 50 years of operation since its foundation in 1967. Today, as one of six full-service banks serving the Cayman Islands, it has seen profits rise by well into double-digit figures in each of the past few years.

Last year’s net profits rose by 32.6% to $62.4m, while assets grew by 4.3% to $3.4bn. The bank’s efficiency ratio has tightened from 63.3% in 2014 to 49.3% in 2016, thanks to increased market share, acquisition-related revenue growth and cost reductions from improved processes and staff cuts.

As part of a group management restructure in 2016, the bank’s private banking division was amalgamated with the wider wealth management offering in the Cayman Islands. This has brought greater consistency to Butterfield’s wealth products and services and, it believes, has ultimately led to benefits for its high-net-worth clients.

Butterfield has continued to maintain its affiliation with American Airlines and has an exclusive rewards programme with national carrier Cayman Airways to serve the local market. Credit card customers earn loyalty rewards for airline travel, creating a unique benefit that has helped foster customer acquisition and retention.

The conversion of its debit card portfolio from Visa to MasterCard, with the latter brand’s fee structure, has provided Butterfield with improved revenue opportunities, it says.

Within the local community, the bank participates in a government-guaranteed mortgage scheme, available to lower-income Caymanians who have never owned a property and are unable to provide the necessary down payment for a conventional mortgage. It also works on the account opening process with unbanked citizens recently released from Cayman prisons, thereby helping their reintegration back into the community.

The Butterfield Undergraduate Scholarship recently celebrated its 25th anniversary. This gives financial support to local young people for further educational development. Past recipients include some of today’s teachers, lawyers and architects in the country.

Chile, Santander Chile

The most effective ideas are usually the simplest, and Santander Chile’s new branches are a case in point. Having realised its city centre branches were not nearly as frequently visited as their prime locations would suggest, the bank turned them into coffee shops, offering free wifi and co-working areas, while still offering access to branch staff. Given the success of the initial Work/Cafe branches, chief executive Claudio Melandri plans to open a total of 140 by 2020. 

Other initiatives, such at the bank’s first fully digital consumer loan app platform, 1-2-3 Click, have improved customer satisfaction, a key metric to Santander Chile as it had been lagging behind other banks in the country by this measure. 

“Closing the historical customer satisfaction gap with our peers – measured independently by a client satisfaction benchmark done by Adimark Chile – is our greatest achievement; 77% of clients rated us as good or excellent, matching our peers,” says Mr Melandri. “Santander also became the most recommended bank by its clients [in Chile], advancing from fourth to first place in a study by Millward Brown.”

Shareholder satisfaction must have improved too, as net profits grew by 5% in 2016 after a double-digit decline the previous year, and all while the Chilean economy was experiencing low growth rates. 

As future economic growth rates are expected to improve only marginally, Santander plans to ramp up its digital investment to retain existing customers and more easily acquire new ones Mr Melandri says: “We will continue our leadership in digital transformation. This year [2017] we launched our 100% digital onboarding app for non-clients, and we will also continue to expand our innovative Work/Café network – our new branch model that merges the best of digital with bricks-and-mortar banking.” 

Colombia, Banco de Bogotá

As with most Latin American economies, Colombia experienced slower growth in 2016, with no sign of significant improvement this year or next. This has had a negative impact on bank asset quality and added pressure on risk management. It is heartening to see, therefore, that Banco de Bogotá, one the country’s largest lenders, contained its non-performing loans that are more than 90 days overdue to a mere 1.7% of the bank’s total in 2016. 

At the same time, thanks to cost controls in both the domestic market and in its Central American operations, its cost-to-income ratio improved to 48.8%. Even more impressively, the bank launched several new products, both in Colombia and through its BAC Credomatic brand across Central America, ranging from new credit cards to payroll loans to banking insurance products, and added features to its wide digital offering, including new security filters. 

The number of transactions through Banca Movil, the lender’s mobile bank, continued to grow, as did use of its personal banking website, which supported over one-quarter more transactions than the previous year. All such initiatives contributed to Banco de Bogotá more than doubling its net profits in 2016, and lay the basis for future growth.

 “We see great opportunities and great potential in our digital transformation; this is why, since last year, we have decided to accelerate this process,” says chief executive Alejandro Figueroa. 

“Our goal is to be the digital benchmark bank in Colombia and Central America. The digital strategy will have a positive impact on Banco de Bogotá’s efficiency performance [as we] continue to increase our penetration in the Colombian and Central American market, preserving our robust asset quality and pursuing diversified sources of income.”

Costa Rica, BAC Credomatic

Operational efficiency has been the key to BAC Credomatic’s recent performance, building on its 14% rise in net profits for 2016. Continued strides in digitalisation mean that 80% of customer transactions now take place via electronic or mobile banking.

“Revenues have been affected by incremental regulatory loan loss reserves,” says BAC Credomatic country manager Federico Odio González. “But higher digitalisation for customer service and sales, together with more efficient and productive processes, have positively improved our expense management.”

BAC Credomatic is the largest private sector bank in Costa Rica, where the government’s deposit guarantee only applies to state-owned banks. In spite of that handicap, it has maintained double-digit deposit growth in each of the past three years and it describes itself as the country’s “most efficient bank”, as of December 2016.

It is the only Costa Rican bank that processes all the major card brands, thanks to an exclusive alliance with American Express. It has also had success with its Payment Chain strategy, which integrates and maintains customer treasury management alongside its full range of corporate and consumer products. 

“We foresee higher penetration in two important areas,” says Mr González. “One is with small and medium entities, where we will support their development into more competitive operations. We also intend to grow current accounts across the business segment.”

BAC Credomatic is focusing its efforts on digitalising the customer experience, doing away in many instances with the need to visit a branch. One goal is for customers to be able to pay in any store with a mobile phone, as they now do with a card.

Mr González adds that, in order to become the bank of choice, BAC Credomatic has implemented its ‘BAC + Simple’ strategy, simplifying customer services and internal processes to make the bank simpler, more agile and more efficient.

Dominican Republic, Banreservas

The largest bank in the Dominican Republic, state-owned Banreservas plays an important development role in the country, focusing on the financing of key economic sectors as well as on bringing banking services to wider parts of the population. 

Having the public sector as a client certainly helps sustain its dominance of the loan market, where it has more than one-third of the market share, but it is the work with small private-sector businesses that is more impressive. During 2016, the bank grew its small and medium-sized enterprise (SME) loan portfolio by 16% and deposits by 15%, while also supporting these companies with financial education and management programmes. It also opened new branches, created new mobile banking services that include non-smartphone users, and launched a financial education platform for young adults.

Furthermore, the lender embarked on a comprehensive update of its core banking system to improve efficiency within its large operations – with $9.65bn in 2016, Banreservas’ assets add up to more than one-eighth of the local economy. This resulted in the slowdown of the bank’s recent growth in its cost-to-income ratio. The bank’s management is equally keen to improve efficiency and expand its financial inclusion drive, digital banking offering and profitability.

“Banreservas’ strategy for the past year focused on the change of [its core banking system] as well as the improvement of its efficiency ratio and financial margins,” says chief executive Simon Lizardo. 

“Plans for the upcoming year are to increase revenues, expand our financial inclusion effort, and grow our support for SMEs and sectors of the Dominican Republic such as tourism and agriculture and export activities. Banreservas is committed to expanding its portfolio of products and is creating the conditions to be able to develop digital banking.”

Ecuador, Produbanco

After a recession that lasted for much of 2016, the current year in Ecuador has not been much easier, with both political and economic turbulence. Produbanco has nonetheless grown its assets and deposits, as well as expanding its presence in the vital small and medium-sized enterprise (SME) sector.

The bank is already the undisputed leader in Ecuador’s corporate market, and maintaining this dominance is one of the four pillars of its long-term strategy. The other three pillars are responsible risk management; being at the cutting-edge of omnichannel banking; and expanding in personal banking, cards, the commercial middle market and SMEs.

Among these potential growth areas, SMEs have been earmarked as the main target, not least because they are a growth engine for the overall economy. Produbanco’s SME banking unit provides a fast and flexible service to its customers, with integrated advice and appropriately tailored products. 

It is also making progress in retail banking, launching products to suit customer needs, including a range of different savings accounts that provide term, monthly deposit and certificate of deposit options. 

Innovation is a strategic priority and a new digital account, ‘be Produbanco’, allows customers to manage their personal finances without visiting a branch, 24 hours a day.

Produbanco’s omnichannel project provides a consistent format for services across all devices, and 2016 saw 134 million transactions processed via IT channels. This confirms the bank’s position as a regional leader in electronic banking solutions, it believes.

“Our digital transformation plan focuses on short-term digital enhancements for our customer base, with medium- and long-term flexibility aimed at achieving the best user experience possible,” says Produbanco CEO Ricardo Cuesta. “Our recently improved mobile app has helped to increase customer transactions by 84%, year on year.”

El Salvador, Banco Agricola

Banco Agricola has maintained its leadership in El Salvador’s loan and deposit markets. The past year’s highlights include the completion of a new operations centre and the launch of an innovative website to help customers find, buy and finance property.

It was a testing year for El Salvador’s banking sector generally, with a highly competitive market and economic growth that was moderate at best. Internal liquidity pressures led to a downgrading of the country’s international risk rating, with a consequent rise in the cost of funds. In spite of a rise in its own interest charges and operating costs, Banco Agricola was able to post a 4.6% increase in net operating income, even as net income declined.

Disciplined management resulted in improving expense and efficiency ratios which, at 2.9% and 48.1%, respectively, compared favourably with 3.6% and 59.3% for the industry as a whole. “Despite facing a challenging economic and political climate, Banco Agricola has maintained its leadership in the sector,” says CEO Rafael Barraza Dominguez. “By the end of 2016, our market share in net loans was 27.2%, with 26.9% of total deposits.”

The bank’s new operations centre is a sustainable modern structure which allows the entrance of natural light. It complies with Tier 3 data centre standards and has Gold Leadership in Energy and Environmental Design certification.

The bank also launched its new LifeMiles credit card, alongside simultaneous launches by sister banks in Colombia, Guatemala and Panama. It also created the ‘Mi Casa Banco Agricola’ website to help customers find residential or business properties and calculate the monthly cost of acquisition.

To speed up the collateral subscription required for disbursement of housing loans, the government’s National Registration Centre has opened an office on the bank’s premises. This has reduced processing time from an average of 10 days to three.

Guatemala, Banco Industrial

Growth in the generally buoyant Guatemalan economy slowed down in 2016, from 4.1% in 2015 to 3.1%. Banco Industrial’s net profits fell with it, by 1.7% to Q1.2bn ($163.7m). But the bank grew its net loans faster than the industry average and remained the market leader in assets, net loans and deposits.

Net loans grew 7.7% in 2016 to Q44.7bn, ahead of the 5.9% posted by the banking system as a whole. Banco Industrial has a market-leading 35.5% share of the market in corporate loans, which account for 83.6% of its total portfolio. It continues to look for growth in the retail segment, where its share is 12%, partly by cross-selling to existing clients.

While the number of products per customer has grown as a result, from 4.2 in 2013 to 4.8 in 2016, the bank is also growing its client base. Since 2013 it has added 200,000 new customers, bringing the total to 1.4 million. It is the country’s main provider of foreign exchange and the second largest recipient of family remittances, growing its share of this important market to 27% in 2016.

The year saw a number of product and service launches, aimed at satisfying customer needs and making their transactions more efficient. A ‘motorised executive’ service guarantees that a sales executive will visit the client within 24 hours, making loan approvals more efficient. A new mobile unit visits customers such as payroll companies no matter where they are.

The bank’s mobile app employs facial recognition, allowing customers access to online banking from mobiles or tablets without passwords. And its website has been comprehensively updated to allow direct contact with sales executives, user profiles with preferences and detailed information on all products. 

Bi-Check Vision is a new debit card aimed at millennials, and designed by an artist of that generation. It offers appropriate lifestyle benefits, including travel and insurance and a points-based loyalty programme.

Honduras, Banco Ficohsa

The economy of Honduras has outperformed the Latin American average in recent years, growing by 3.6% in 2016. The financial services sector expanded by 8.7% over the same period, though the pace has slowed in 2017 as the banking system’s loan portfolio has contracted.

In 2016, Banco Ficohsa retained profitability and size and, crucially, launched its new omnichannel platform.

Ficohsa continues to consolidate the ‘transformational’ acquisition, in 2015, of Citi Honduras. Non-performing loans grew rapidly in 2016 as a direct result of this. Ficohsa’s response has been to adopt more cautious lending practices and to raise total lending provisions by more than one-third. Net profits for 2016 fell by 3.4% to 1.15bn lempiras ($48.76m) as a consequence. However, the bank’s 1.5% return on assets and 15.8% return on equity remained comfortably ahead of its closest competitors.

The omnichannel launch was a particular milestone. “We have proactively worked to keep up with the demands of the younger generation, providing various mechanisms through which we’ve digitally transformed our clients’ banking experience,” says Camilo Atala, CEO of Grupo Financiero Ficohsa. 

“Our new omnichannel platform uses state-of-the-art technologies to provide digital access to our many products and services.” It makes Ficohsa’s digital experience “unique” in the country, Mr Atala adds.

For the ninth year in a row, the Great Place to Work Institute has reaffirmed Ficohsa’s position as the best financial institution to work for in Honduras.

The bank is sanguine about the region’s future. “We have seen great progress in Central America and are confident of its potential for further development,” says Mr Atala.

Jamaica, National Commercial Bank

In 2016, National Commercial Bank (NCB) successfully completed its five-year strategic plan – ‘5 in 5’ – to become one of the top five financial institutions in the English- and Spanish-speaking Caribbean. Now it is working on a new plan, called ‘NCB 2.0 by 2020’.

This involves ‘setting the BAR’ in the financial services industry, where BAR is an acronym for three themes: building a world-class digital experience; accelerating regional expansion; and reinventing NCB’s core business.

NCB is Jamaica’s leading financial institution by assets and net profits, and made record profits in 2016. Last year it acquired a near-30% stake in Trinidadian insurer Guardian Holdings, and this year NCB Financial Group was listed on the Jamaica and Trinidad and Tobago stock exchanges.

At the core of its 2020 strategy is the creation of fully digital end-to-end customer experiences across their chosen channels. These include online account opening, cross-bank transfers, remote deposit capture and mobile payments via Quisk, the bank’s mobile money solution.

This year, NCB has taken another step towards developing distinct digital capabilities. “We launched our ‘agile laboratory’ in April 2017, a first for Jamaica, and the only one of its kind in the English-speaking Caribbean,” says Patrick Hylton, NCB’s president and group CEO. “The aim is to deliver banking solutions through the collaborative effort of cross-functional teams.” The first of these will focus on digital sales and on reducing the time taken for customers to open an account. 

The bank recently achieved compliance with the Payment Card Industry Data Security Standard, which reduces the risk of payment card data loss. “These initiatives have improved customer confidence in our ability to secure information, safely negotiate payments and provide efficient online and 24-hour banking services,” says Mr Hylton.

Mexico, BBVA Bancomer

With the country’s economy suffering from plummeting oil prices and uncertainty over the renegotiation of the North American Free Trade Agreement with Canada and a seemingly hostile US, Mexico has not proved an easy market for banks of late. Yet the sector remained solid and profitable in 2016. 

Out of all participants, BBVA Bancomer stood out for the sustained growth of its net profits and return on equity (a ratio standing at an impressive 22.2% in 2016), for its expansion of both loans and deposits, and for its digital efforts, which resulted in a $3bn investment in technology in 2016 and a further (and more recently announced) $1.5bn. The bank’s work with fintech companies should also be noted, as should its efforts to change the organisation’s culture to provide digital products and services that respond better to customers’ evolving needs and habits.

There are still multiple challenges affecting Mexico, says chief executive Eduardo Osuna, but he is keen to highlight BBVA Bancomer’s commitment to the country and its confidence in its future. 

“The US presidential election and a fall in oil prices were factors that impacted the devaluation of the Mexican currency in just a few months,” he says. 

“In addition, rising interest rates created a certain level of uncertainty in the market. Nevertheless, we have already twice increased our expectations for gross domestic product growth. Even with a challenging political picture for the coming year, we will continue to bet on Mexico, increase credit for families and reduce costs, while we create a new standard of customer experience.”

Nicaragua, Banco Lafise Bancentro

Banco Lafise Bancentro attributes its high returns to efficiency and productivity, loan portfolio quality, technology investment, human capital and solid risk management. It also has a good record in promoting financial inclusion.

In July 2017, Lafise Bancentro was able to post a 27.5% return on equity and 3.1% return on assets, compared with industry averages of 21.1% and 2.4% respectively. It says it has the highest administrative efficiency metric and the lowest ratio of overdue loans in Nicaraguan banking.

The bank’s technical innovation has put it ahead of the competition in customer satisfaction, particularly as it has improved response times in processes such as loan approvals. Business intelligence improvements have allowed it to increase the cross-selling of products and services, to the point where fees now account for 32% of total income. 

Lafise Bancentro says its people are its most valuable asset, an attitude borne out this year when it was named the best large employer in Nicaragua by a Great Place to Work survey.

The bank has been exploiting the virtues of social media and mobile apps to improve response times, and has increased online transactions by 2 5% year on year. 

In its efforts to promote financial inclusion, Lafise Bancentro maintains a policy of continued geographic expansion in remote areas via branches or ATMs.

 It has launched a payroll saving scheme called ‘Ahorro Programado’, targeted at those who are paid through a debit card and usually spend their entire salary. It has also launched a prepaid card aimed at the unbanked, a product which has been very popular among Nicaraguan youth.

 “We continue to embrace innovation as this is where our success lies,” says CEO Roberto Zamora. “Pioneering ideas, new product designs and forward thinking mark the difference in the way we do business.”

Panama, Banco General

Banco General had a good 2016, posting strong financial results while maintaining a sound balance sheet and high liquidity levels. It was also able to achieve above-market growth in loans and deposits.

The bank’s loan portfolio grew by 10.4% in 2016 and deposits by 7.3%, against overall market growth of 7.7% and 3.6%, respectively. It grew its Tier 1 capital by 13.8% to $1.77bn, its assets by 10.8% to $16.42bn, and net profits by 11.2% to $365.4m. Return on equity was stable at 20.6%, while cost-to-income ratio tightened from 37.4% to 35.6%. The bank’s non-performing loans remained steady at 0.74%.

At the same time, Banco General completed the second year of a three-year strategic plan. The plan’s targets include more client segmentation and differentiated product offerings, together with improved IT and operational excellence. It reports “significant progress”  achieved in a more challenging environment, with new regulations and slower regional economic growth.

The bank invested more than $16m in IT initiatives focused on infrastructure, modernising operations and the development of new systems. These include a system to improve retail loan origination, as well as improvements to the online banking platform that should be launched at the end of 2017.

With 71 branches, Banco General has the second largest branch network in Panama. Its 592 ATMs make up 29% of the national network, but account for a market-leading 47% of all ATM transactions. It has expanded its corporate and private banking business regionally via its Costa Rican subsidiary and representative offices in  Mexico, Guatemala, El Salvador, Colombia and Peru.

BG Express is a non-bank correspondent network aimed at low-income neighbourhoods and rural parts of Panama, where traditional bank branches are scarce. With a simplified no-balance-required savings account, the BG Express network increased in 2016 by 154% from 71 to 180 affiliate relationships. A new service called ‘Clave Giro’ allows money transfers to people with no bank accounts, requiring only a mobile phone.

Paraguay, Sudameris Bank

Managing growth is crucial, as is dealing with challenging economic times. Paraguay has thrown up both challenges to its banking sector in recent years, by expanding its gross domestic product at rates faster than most in Latin America, and by exposing businesses to the downturn in commodities prices, which the economy largely relies upon for its exports. 

It would be tempting to drastically reduce client support as things get tough. Instead, Sudameris Bank focused on sharpening its risk analysis and strengthened its managerial structure. This laid the foundations to deal with the evolving nature of Paraguay’s economy too, where sectors other than agriculture are growing. 

“Sudameris Bank has managed to navigate the challenges of a significant drop in soft commodity prices in agriculture and its impact on our clients over the past two years. Rapidly adapting our structure to become more efficient while diversifying our client portfolio has allowed us to stir the bank towards new growth potential,” says vice-chairman Sebastien Lahaie. 

“Paraguay’s economy is rapidly diversifying from an agriculture-based [activity] to a wider range of sectors. We see a lot of potential in supporting these new ventures, from industrial projects to infrastructure investments. We are also adapting the bank to be more efficient in its internal operations, resulting in increased response speed to our clients’ requests.”

Crucially, as Paraguayans begin to favour digital channels over traditional ones, Sudameris continues to push ahead with its online and mobile offering, adding payments and local transfer functionalities as well as the creation of a new credit card management tool for customers.

Peru, BCP

Banco de Credito del Peru’s (BCP’s) digital efforts in 2016 were impressive. The country’s biggest lender has been transforming the way it reaches and serves customers in the highly underbanked local market. 

In 2016, the lender reduced its number of branches, favouring alternative and more cost-effective channels; increased the number of agents across the country; strengthened the security of its online channel while also revamping the website to provide a more user-friendly service; and pushed ahead with its newly created innovation centre for mobile banking customers. 

BCP is particularly proud of the latter, as it aims to offer the kind of customer experience that Peruvians are growing accustomed to through online retailers and service suppliers. 

Among the products created through the innovation centre are an app that enables simple and easy money transfers and a bot that lets customers interact with the bank through the Facebook chat system in an informal way. 

“Over the past two years, BCP has been immersed in a comprehensive digital transformation process to substantially improve each of our clients’ experiences. Our goal is to be the company that offers the best experience to our clients,” says chief executive Walter Bayly. 

“We know that clients today compare their bank experiences with the [customer] experience they have with [companies like] Amazon or Uber. 

“For this reason, Banco de Credito del Peru is developing a series of products to satisfy clients’ needs in a simple and completely digital environment.”

Together with initiatives to reduce costs and improve risk management, BCP’s digital efforts also translated into good financial results: the bank closed 2016 with a healthy 22.7% return on equity.

Puerto Rico, Banco Popular de Puerto Rico

On top of a debt-burdened economy that has struggled for many years, Puerto Rico recently had to face not one but two catastrophic hurricanes in quick succession. Banco Popular de Puerto Rico, however, has continued to strengthen its balance sheet, improve its risk profile and drive business growth.

Hurricanes Irma and Maria, which struck Puerto Rico and the US Virgin Islands in late 2017, caused extensive damage and led to the collapse of the electric, water and telecommunications systems. “We worked relentlessly to restore our operations and provide access to cash and other essential banking services,” says Ignacio Alvarez, president and CEO of Popular Inc.

The bank consolidated its leading market position in 2016, growing deposits by 10%, helped partly by an increase in government deposits. It has offset limited organic loan growth through selective loan portfolio purchases over the past few years. 

Banco Popular has remained an active lender throughout 2016, and it grew loans in its US business by 17%. The bank has been successfully managed in a troubled environment for the past 10 years, completing several troubled loan sales, refocusing its loan books, raising approximately $2bn of common equity and completing two in-market Federal Deposit Insurance Corporation-assisted acquisitions.

The bank continues to push the digital boundaries. It has been helped here by the national ATM network’s launch of ATH Móvil which, Banco Popular says, has completely changed Puerto Rico’s financial landscape.

ATH Móvil allows people to send money to any customer of the participating banks using only their phone number. In its second year of operation, Banco Popular has processed more than 15 million transactions, a volume that took 10 years to reach in online banking.

“As the leading financial institution on the island, Popular will play an important role in efforts to build a stronger and more sustainable Puerto Rico,” Mr Alvarez concludes.

Saint Kitts and Nevis, Scotiabank Saint Kitts and Nevis

Scotiabank Saint Kitts and Nevis likes to put its customers first and to do what is right for them. One manifestation of this has been a series of successful educational initiatives, resulting in more online and ATM banking.

Each Scotiabank Saint Kitts and Nevis branch now has a customer relationship representative, armed with a tablet, to educate customers on electronic banking options, sign them up as online banking customers, and offer ATM and drop-safe deposit tutorials. 

It launched a ‘digital transformation day’ on which each of its three branches was bedecked with images of mobile phones, tablets and ATMs dangling from the ceiling. A mascot dressed as an ATM greeted customers and explained how electronic banking could save them time and money.

ATMs themselves have been upgraded to offer dual-currency options and increased withdrawal limits. Customers can now top up their mobile phones via Scotiabank ATMs or internet banking, an initiative that has generated additional ATM usage and, ultimately, increased profitability.

Scotiabank Saint Kitts and Nevis has also devoted a week to showcasing some of its small and medium-sized enterprise customers inside the branch. They were invited to display their goods and services to branch customers, while bank staff provided Scotiabank marketing material to interested parties. The event yielded many opportunities to increase portfolio and revenue growth, the bank reports.  

 The bank was able to report a 10.6% increase in net profits to $23m in 2016, even as assets declined 5.8% to $1.5bn.

“We will continue to place the customer at the apex of our interactions,” says Scotiabank country manager V Gordon Julien. “Our global, shared focus is on digitisation, efficiency, leadership and cyber security and we will consistently create opportunities to align with this.”

Trinidad and Tobago, First Citizens Bank

Trinidad and Tobago’s economy continues to suffer as a result of low oil and gas prices and a decline in tourism. 

Navigating such a climate has been a tough undertaking for the country’s banks, especially operating in an environment of persistently low interest rates. 

First Citizens Bank, however, closed 2016 in good shape and focused on initiatives to improve efficiency and customer service. These will pave the way for higher customer retention, better run operations and, ultimately, higher profits. They include the upgrade of the credit card technology and of the software and hardware of the ATM network, and the introduction of new layers of customer authentication to improve online security. 

First Citizens also rationalised its governance, risk management and compliance systems to allow different functions to more easily and comprehensively access relevant data and provide better analysis.

As Trinidad and Tobago’s economy remains precarious, the bank is keen to diversify its operations abroad, after benefiting from its presence in Costa Rica.

“Our ability to differentiate ourselves [from the financial competition] will require continuing our focus on a robust sales culture, capitalising on the strength of our most important asset: our people,” says First Citizens Bank chief executive Karen Darbasie. 

“Continued innovation in the digital space and an emphasis on our electronic banking platform will improve the service to our clients while reducing risk, thanks to the transition to Europay, MasterCard and Visa cards and ATMs. 

“In addition, we will focus on balance sheet diversification by continuing to explore opportunities in Latin America.” 

Uruguay, Itaú Uruguay

Some of the most important recent initiatives at Itaú Uruguay have been digital. In 2016 it upgraded its self-service terminals, improved its electronic banking tools and launched a new banking app.

Last year its total assets grew by 5%, for example, and its deposits by 6%, compared with industry averages of 1% and 1%, respectively, notes the bank. Loans to non-financial institutions grew by 11% (against an industry average of 3%), while revenues were up by 3% (industry average: -2%). At 63%, Itaú’s efficiency ratio was the tightest among private sector banks in Uruguay – the legal and regulatory privileges enjoyed by state banks typically make them more cost-efficient.

The bank also leads in the credit card market by total spending, a position bolstered by its 36% share of the leading brand, Visa.

Itaú Uruguay has identified internet, mobile and self-service banking as key drivers for long-term success.

In 2016 it rolled out a new version of its self-service terminals. More advanced technology provides customers with an experience that is ‘unique’ in the local banking industry, particularly for those making deposits, at the same time as improving bank efficiency.

More functionality has been added to the bank’s internet and mobile banking tools. A new banking app, Pagocuentas, allows customers to pay utility bills by scanning barcodes. They can also use it to manage their services, set alerts or schedule future payments. Mobile banking access grew from 29% for premier customers in 2015 to 41% in 2016. 

“We have redefined our bank strategy with more focus on digital, while maintaining leadership in performance and customer satisfaction,” says Itaú Uruguay CEO Horacio Vilaro. “Digital channels are growing at exponential rates, accounting for almost 70% of all customer transactions. More than 60% of personal loans are now being granted through an end-to-end digital experience.”

US, Bank of America

Bank of America’s mantra is ‘responsible growth’ and it certainly delivered on the growth side of the equation in 2016. Its $17.9bn in profits, up 13% from 2015, were the second highest in the bank’s history. They were exceeded only in 2006, the year before the credit crunch.

At the same time as growing revenue and profits, it reduced expenses, managed risks and, as it points out, continued to invest in its workforce and its capabilities. Expenses were cut by $3bn, and are now down $22bn from the 2011 peak of $77bn.

Chairman and CEO Brian Moynihan explains what it is that constitutes “responsible” growth. “It means to grow – no excuses – focused on the customer, with the right risk controls, and sustained over time,” he says.

The bank continues to combine clicks with bricks as it connects with its market. It added 3 million new mobile customers in 2016, and mobile devices now account for 19% of all deposit transactions. But it is also making ‘significant’ investments in advanced new financial centres, which include a virtual concierge and a learning wall, and allow customers to have private conversations with client professionals.

It recently introduced its first community-focused financial centre, with 25 more planned by the end of 2017. These are designed to help the bank better serve its customers in low- to moderate-income communities by providing the services and connections they need most, such as increased access to financial coaching and education that will help them stay financially on track.

“Our team works hard to ensure that we share success with customers and clients, with shareholders and with the communities we serve,” says Mr Moynihan. “We are closing in on our long-term goals of a 1% return on assets [actual 0.82% in 2016] and 12% return on tangible common equity [9.5%]. We’ve done this by attracting more deposits and making more loans, with strong asset quality.”

Venezuela, Mercantil Banco Universal

Venezuela, where hyperinflation now rages, is not anyone’s idea of the dream banking market. Yet Mercantil Banco Universal has been able to maintain a balance between its capital, profits, risk, compliance and cost control.

“Our main challenge has been to ensure its operational continuity by anticipating, facing and adapting to the constant economic, market and regulatory challenges posed by the operating environment, without relinquishing [on] its culture and commitment, which have remained unchanged over the past 92 years,” says CEO Nelson Pinto Alves.

Having been in business for the best part of a century, Mercantil has seen a few ups and downs. In 2016, in spite of an adverse operating environment, it was able to grow its loan portfolio and to improve its net interest margin (NIM) from 13.8% at the end of 2015 to 16.1%.

Loan portfolio growth was enjoyed across the commercial, consumer and agricultural sectors. Mercantil is the largest lender to Venezuelan agriculture, with 24.2% of the market. More than one-quarter of the total existing loan portfolio is subject to price controls and preferential interest rates. To offset this, the bank has targeted more profitable segments of the loan market, which has helped to boost its NIM.

Over the past year, the bank has been stricter about risk concentration levels, with its eyes on higher long-term profitability. Given the highly inflationary pressures on costs, it has also maintained a stringent cost control policy, making use of new technology.

Mercantil has made various changes to its products and services, as it attempts to anticipate and satisfy customer needs. One of the most significant is the expansion of the mobile service offer, enabling continuous access to a wider range of solutions. 

The mobile app’s business and retail user base has been growing rapidly, and it has now carried out more than 139 million transactions. In a first for Venezuela, businesses can use the app to apply online for fast loans.

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