The Banker's Top 100 Central American Banks 2020
The Banker's Top 100 Central American Banks ranking once again sees Panama take the title of being home to the region’s top lenders.
Panama is home to the largest banking sector in Central America by far, accounting for more than half of the region’s Tier 1 capital and 43 of The Banker’s Top 100 Central American Banks.
In an effort to tackle ongoing issues around Panama’s status as an offshore tax haven, the country’s government has begun implementing a more robust regulatory regime and tightening operational supervision, while moving banks to IFRS9 and the eventual adoption of Basal III capital ratio standards. The costs associated with stricter regulations have contributed to reduced bank profits and it remains to be seen whether these measures will improve the country’s reputation for transparency.
The regional ranking is led by Banco General, which reported Tier 1 capital of $2.6bn in 2019, an increase of 12.9% over the previous year. Two more Panamanian names follow: BAC Panama and Bancolombia Panama, reporting increases in Tier 1 capital of 8.9% and 11.1% respectively. Guatemala’s Banco Industrial maintains fourth position, while Costa Rica’s Banco Popular climbs by one place to reach fifth, owing to an 11.6% increase in its Tier 1 capital position.
Beyond the main ranking, The Banker has applied its best-performing methodology to the five (or less) largest bank holding companies (BHCs) in each country. In Panama, the largest lender, Banco General, achieves the country’s highest overall performance score of 7.49. It clinches first place for profitability, return on risk, soundness and leverage. Local trade finance lender Bladex came second, thanks to its leading performance in operational efficiency and asset quality.
Guatemela’s best-performing bank, Banco de los Trabajadores, scores an impressive 8.55, the highest overall score in the region. It tops the table in six out of eight metrics, with only its growth and liquidity scores missing out on the number-one spot. The country’s largest lender, Banco Industrial, trails behind in second place, with an overall score of 4.55.
Abank, formerly called Banco Azteca El Salvador and purchased by Grupo Perinversiones in 2019, beat off competition from much larger banks to achieve the highest overall performance score of 6.46. The lender ranks first in profitability, return on risk, soundness and leverage. State-owned Banco Hipotecario de El Salvador secures second place, helped by its strong performance in operational efficiency.
In Honduras, Banco Popular scoops first place among four BHCs with an overall performance score of 6.27, thanks to excellent results in growth, profitability and return on risk. The country’s largest lender, Banco Atlantida, achieves a close second place with a score of 6.15.
Among the top three Nicaraguan BHCs, Banco de Fomento a la Producción delivers strong performances in five of eight metrics and achieves the country’s highest overall performance score of 6.67.
