Brazilian banks continue to dominate the region, but Mexico is putting up a fight for places in the top 10.
Brazilian banks dominate the 2005 listing of the Top 100 Latin American banks both in numbers (26) but also in shares in the aggregate figures for Tier 1 capital, (50.5%); assets (50.3%); and pre-tax profits (55.1%). The continued growth of the Brazilian economy, allied to high interest rate levels, has further increased the profitability of the banking sector.
Mexico’s eight banks in the listing contributed 19.9%, 19.5% and 21.7% of the same aggregates while the numerically stronger countries, Chile (13 banks), Argentina (12) and Venezuela (9), had significantly lower shares of the aggregates.
The aggregate total for the Top 100 listing for Tier 1 capital was $75.1bn; for assets $881.1bn; and for pre-tax profits $19.9bn. For comparison, at year-end 2004, Citigroup had a consolidated Tier 1 capital of $74.4bn, assets of $1484.1bn and pre-tax profit of $24.2bn, in what was considered a below-par year for them.
The battle between the Brazilian and Mexican banks for Top 10 positions continues this year with seven banks from Brazil and three from Mexico. The big gainer this year was Grupo Santander Banespa (Brazil), which moved from 12th last year to seventh this year, to the detriment of Grupo Financiero Inbursa, of Mexico, which was knocked down to 11th place.
Meanwhile, Banco Itaú Holdings moves to the top ahead of Banco Bradesco and Banco do Brasil. Banamex is the highest ranked Mexican bank at four.
Argentines struggle
Argentine banks continue to struggle, although Banco de la Nación Argentina moved up two places to 12th, on the back of a 56.5% increase in local currency Tier 1 capital, and Banco Hipotecario improved one place to 26 on a 15.8% increase in capital.
BBVA Banco Francés continued its decline, falling to 30th place, even though its capital rose by a modest 2.3%. Banco Galicia y Buenos Aires fell by one place although its capital rose by 9.1%. Banco de la Provincia de Buenos Aires tumbled 20 places from 19 to 39 following a 60.6% decline in capital during fiscal 2003 – when its pre-tax loss was $571m – offset only slightly by a 16.5% recovery in capital and a return to profit, albeit small, in fiscal 2004.
New entrants
There are 10 new entrants to the list this year with Banco Votorantim, a large multiple bank with a corporate focus, the highest new entry at 15. The next highest is BAC International Bank, at 46. This year, for the first time, it published consolidated accounts for its group, which includes Banco do America and Credomatic banking subsidiaries in other Central American countries and a banking subsidiary in the Cayman Islands. Banco Azteca from Mexico at 83 is a new bank that only commenced operations in October 2002 and has already doubled its capital, assets and pre-tax profits in the second of its two full operating years.
Twenty-one banks out of the 100 saw a downturn in pre-tax profits while five recorded losses. Elsewhere, the highest percentage increases in pre-tax profits were recorded by those banks that had seen a severe profit dip the previous year. The two leading Brazilian banks, however, recorded pre-tax profit growth of more than 30%.
