The Banker’s Top 30 Caribbean Banks 2023

Economic growth in Caribbean economies averaged 10.3% at the end of last year following increased energy production in Guyana and Trinidad and Tobago, higher global oil prices and economic growth in countries dependent on tourism, according to the Caribbean Development Bank. 

The 10 biggest lenders in the region had a good year in 2022, with the majority increasing their Tier 1 capital base and profits. 

However, the biggest Puerto Rican banks, Popular, First BanCorp and OFG Bancorp, saw total assets decrease, albeit by less than 1% in the latter’s case. Popular, the largest regional lender, also recorded a 0.72% fall in pre-tax profits. 

Puerto Rico’s economic growth has weakened over the past few years as the country has struggled with a large public debt as well as a declining population. It has also been hit by natural disasters ranging from earthquakes to major hurricanes. The economy expanded 1.8% in 2022, the year in which the government formally exited bankruptcy. 

Of the top 30 Caribbean banks, 11 saw a decrease in Tier 1 capital in 2022, including the three Haitian institutions, Unibank, Sogebank and Banque Nationale de Credit. One third of the banks in the ranking saw pre-tax profits fall, with St Kitts Nevis Anguilla National Bank and Belize’s Atlantic Bank reporting a loss. The two lenders also underperformed in terms of return on capital and return on assets.

St Kitts Nevis Anguilla National Bank’s Tier 1 capital fell 42.89%. In the year to June 2022, it also saw an increase in interest expense due primarily to the continued increases in fixed-deposit balances. Atlantic Bank recorded a 3.04% decrease in Tier 1 capital to $75m. 

In Belize, risks to financial stability remain elevated due to the legacy of the Covid-19 pandemic, according to the International Monetary Fund. The proportion of non-performing loans increased from 5% of gross loans in 2021 to 7% in 2022.

Bancolombia Puerto Rico recorded the greatest rise in pre-tax profits, at 596.31% to $9m. Bank of the Bahamas recorded the second greatest with 216.44%, in part due to lower impairment losses. 

Trinidad and Tobago’s RBC Financial Caribbean managed to increase pre-tax profits by 117.89% to $180m. Scotiabank Dominican Republic went from a loss in 2021 to a $21m pre-tax profit. 

Of the top 10 best-performing banks overall, half are from the Dominican Republic. The country, one of the fastest-growing economies in Latin America and the Caribbean in the past decade, recorded a 4.9% real gross domestic product growth in 2022, driven by the services sector.

The country’s Banco Santa Cruz tops the best-performing ranking and boasts an increase in assets of 19.36% and a 37.14% jump in Tier 1 capital. Following the increase, it moved from 24th position to 18th in the top 30 ranking. Pre-tax profits also increased 48.84% to $56m.

Banco Popular Dominicano placed second in the overall best-performing bank table with top marks in profitability and leverage. 

State-owned Banco de Reservas de la Republica Dominicana (Banreservas) placed sixth overall, followed by Scotiabank Dominican Republic. Banreservas recorded a 29.59% increase in Tier 1 capital and a 30.05% increase in pre-tax profits to $413m. 

Scotiabank Jamaica is the third best-performing lender, scoring third in operational efficiency, leverage and return on risk. The lender recorded a 23.18% return on capital last year.

Trinidad and Tobago’s First Citizens Bank places fourth and proved the best in class with regards to soundness with a 15.04% capital assets ratio. 

This year the Caribbean economy as a whole is forecast to expand by 5.7%, supported by the continuing revival of tourism and investments in the energy sector. The region is expected to record average surpluses in the next few years, mainly driven by commodity exporters. However, building resilience to climate change and natural disasters will be needed to help reduce volatility and increase long-term growth.