sogebank caricom

In a troubled year, Haiti’s Sogebank was the best Caribbean performer of 2020.

With many economies depending on tourism, 2020 proved particularly difficult for the Caribbean as international travel all but came to a halt because of the Covid-19 pandemic. The region’s gross domestic product contracted by 8.6% in 2020, according to the World Bank. This, naturally, put local banks to the test. Most of the largest Caribbean lenders suffered financially, with pre-tax profits shrinking rapidly and a few names incurring a loss. The region’s top two banks by Tier 1 capital, Puerto Rico’s Popular and First BanCorp, saw a drop of nearly a quarter and more than half of their pre-tax profits values of the previous year, respectively; while RBC Financial Caribbean, the region’s third-largest lender, went into the red. 

On the other hand, Caribbean banks held Tier 1 capital generally steady; some even expanded this measure and at a faster rate than the one at which assets grew. OFG BanCorp in Puerto Rico and National Commercial Bank Jamaica are the two largest examples.

Overall, considering not only profitability and year-on-year growth, but also asset quality, operational efficiency and other performance indicators, smaller names take the lead. 

Haiti’s Sogebank is the best overall performer of 2020, according to The Banker’s research. The bank is among the smallest in the region, with $103m in Tier 1 capital and assets worth $1.6bn. It is also one of the few to have expanded its pre-tax profits last year, at a rate of more than 40%.

In the overall performance ranking, Sogebank is followed by Jamaica’s Victoria Mutual Building Bank and Banco Santa Cruz in the Dominican Republic. Victoria Mutual Building Bank also has the best profitability score, while Banco Santa Cruz is the most efficient and has the best return on risk valuation. 

Jamaican and Dominican lenders performed well last year based on other indicators too. JN Bank shows the best asset quality in the region, while Scotiabank’s Jamaican and Dominican banks outperformed Caribbean peers by leverage and soundness measures. Banco de Reservas de la Republica Dominicana did best in terms of liquidity indicators.

Most of the largest Caribbean lenders suffered financially, with pre-tax profits shrinking rapidly and a few names incurring a loss

In spite of its 51.33% drop in pre-tax profits, First BanCorp grew the most based on the aggregate change in assets, loans, deposits and operating income.

Puerto Rico remains the region’s largest banking sector. This is largely thanks to Popular’s $65.9bn assets and $5bn Tier 1 capital. Right up to last year’s macroeconomic troubles, Popular had been expanding its activities with the 2018 acquisition of Wells Fargo’s local auto finance business, which it fully integrated into its operations in 2019, and the 2019 purchase of a local credit card portfolio and of the rights to issue credit cards under the Jet Blue loyalty programme on the island. (Although based in a Caribbean island, Puerto Rico’s banks are under the jurisdiction of the US Federal Reserve system.)

The second largest Caribbean banking sector is Trinidad and Tobago’s – Canada’s RBC groups its regional operations under the holding headquartered in Port of Spain, while the Dominican Republic is the region’s third largest. Banco Popular Dominicano, the country’s leading bank, is the Caribbean’s fourth largest lender. In a region that is not only dependent on tourism but also exposed to increasingly destructive hurricanes, the Dominican lender was one of the earliest in the Caribbean to commit to financing solutions aimed at reducing the impact of climate change. It was the first in the Dominican Republic to launch a green leasing financing product for companies purchasing solar panels and electric vehicles, for example, and has installed photovoltaic charging stations for customers’ eclectic and hybrid vehicles. Although also taking a profitability hit last year, Banco Popular Dominicano has one of the lowest non-performing loans ratios in the region, and is its fifth best-performing bank overall.

Cuban banks could not be included in The Banker’s analysis because of lack of 2020 data.


We have developed a model that scores and ranks banks in eight key performance categories, using 17 ratios, and assigns an overall best-performing bank score and ranking. 

The key requirement of the model was that it could be used to identify the best performers in any sample group, be it an existing global, regional or country ranking, or custom peer group such as global systemically important banks, or G-SIBS. 

The model only uses performance ratios, year-on-year percentages and basis points (bps) changes, so the size of a bank has no influence on its best bank ranking position.

The performance categories and indicators are: 

  • Growth — annual percentage growth in assets, loans, deposits and operating income
  • Profitability — return on assets, return on equity, profit margin, asset utilisation (and annual bps change in these ratios)
  • Operational efficiency — cost-to-income ratio (and annual bps change in these ratios)
  • Asset quality — allowance for loan losses to gross total loans, non-performing loans, impairment charges to total operating income (and annual bps change in these ratios)
  • Return on risk — return on risk-weighted assets (and annual bps change in this ratio)
  • Liquidity — loans-to-assets ratio, loans-to-deposits ratio (and annual bps change in these ratios)
  • Soundness — capital assets ratio (and annual bps change in this ratio)
  • Leverage — total liabilities to total assets (and annual bps change in this ratio)

When the peer group data is imported, the model assigns a score for each indicator based on the relative distribution of values. Thus a bank which significantly outperforms on a particular indicator will receive a proportionately higher score. The maximum possible score for each category is 10 points and the maximum overall score is 80 points.

The model is neutrally weighted so that the underlying ratios and annual bps changes are of equal significance. Each performance category receives equal weighting. We plan to produce an online version of the benchmarking tool which will allow users to assign data point and category weights according to their own preferences.


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