Share the article
twitter-iconcopy-link-iconprint-icon
share-icon
Rankings & dataNovember 3 2014

Top 200 Latin American banks: big size in Brazil, big profits in Argentina

This year’s Top 200 Latin American banks ranking sees Brazil’s behemoth banks reducing in size, while Argentine and Venezuelan lenders continue to show jaw-dropping profitability ratios.
Share the article
twitter-iconcopy-link-iconprint-icon
share-icon
Top 200 Latin American banks: big size in Brazil, big profits in Argentina

Latin American economies are expected to grow on average by only 1.3% this year, the second lowest growth rate of the past 12 years, according to the International Monetary Fund’s (IMF’s) most recent forecast. This includes data for the Caribbean region, but the worst-affected countries are in the south: Argentina, Brazil, Chile, Peru and Venezuela, where the IMF’s downward revision since an earlier prediction has been even more severe. Other analyses confirm the unappealing picture of the region, as weakening commodity prices and uncertainty around domestic policies in certain countries depress investor outlook.

Bank results across the board are likely to reflect this. Brazil’s stagnant economy, for example, has already affected the strength and performance of local lenders, as highlighted in The Banker’s list of Top 200 Latin American banks, which ranks lenders according to the size of their Tier 1 capital from their most recent annual financial statements.

Top Latam banks ranking

Brazil downsizes

All top four Brazilian banks that dominate the regional list have reduced their asset size – Caixa Econômica Federal, in fifth place, changed accounting standards last year, so a comparison with previous data would not be meaningful. Two of these lenders, Bradesco and Santander Brasil, also downsized their Tier 1 capital from the previous year. Smaller banks in the country, however, seem to have followed a different path and have grown. These tend to be either local banks with a specific territorial focus or foreign-owned lenders that tend to serve large corporate clients.

Banco Sumitomo Mitsui Brasileiro and Goldman Sachs Brasil, for example, raised their assets by more than 85% and 60%, respectively, making them the second and third most improved banks in the country by asset growth. Meanwhile the Brazilian unit of Morgan Stanley displayed the largest percentage growth in Tier 1 capital in the country, with a jump of almost 56%  – the fifth largest in the Latin America region. Banco Cooperativo Sicredi, the mutual lender that operates in a number of Brazilian states, also grew its Tier 1 capital significantly by just over 45%.

Brazil and Mexico remain the largest banking markets in Latin America, although Brazil is still by far the region’s heavyweight. Total assets of Brazilian banks are $2231bn, more than four times the aggregate figure of their Mexican peers.

Mexican heavyweights

Mexican banks occupy four of the remaining top 10 places in the Top 200 Latin American banks ranking by Tier 1 capital. The highest scoring is Grupo Financiero BBVA Bancomer, with Tier 1 capital of just under $1bn in sixth place; immediately followed by Citi’s Banamex and Santander’s operations in the country. Banorte, the largest locally owned lender, sits in 10th place.

Banco Inbursa, which occupies 13th place in the Top 200 ranking, is the highest scoring bank by profit growth. The Mexico City-based lender closed 2013 with a $1.26bn pre-tax profit, a jump of just under 190% from the previous annual results.

When it comes to profitability, rather than size, the much smaller and distinctive markets of Argentina and Venezuela stand out. Citibank Argentina displays the highest return on capital (ROC), at 70%, followed by BBVA’s Venezuelan operations, with a 65% ratio. In fact, the whole top 10 banks by ROC ranking is occupied by banks from either country. Another Argentine bank, Banco de San Juan, shows the highest return on assets at 8.77%, followed by Citibank Argentina and Banco Patagonia. High inflation, and therefore higher interest rate margins, in both markets helps to explain such returns.

Looking at the growth in strength and size, the picture seems more diverse, with a variety of countries being represented in the list, from Chile to Colombia to Panama. Chile’s Banco Ripley leads the rankings for growth in both Tier 1 capital and assets. Part of a retail conglomerate best known for its department stores, the bank’s Tier 1 capital jumped by 381%, while its assets rose 153% to $1.39bn. Ripley has expanded from a relatively low position, as have most of the other lenders in these tables.

The largest bank, however, to have improved both figures is from Venezuela. Mercantil Servicios Financieros has assets of $38.1bn, which it expanded by more than 56%, and a Tier 1 capital of $3.51bn, 68% larger than the previous year.

The Banker's Top Latam banks ranking, 2014 originally appeared in the November 2014 issue of the magazine. The full results of the ranking are available on The Banker Database. Find out more about the database, register for a free trial or subscribe today.

Was this article helpful?

Thank you for your feedback!

Silvia Pavoni is editor in chief of The Banker. Silvia also serves as an advisory board member for the Women of the Future Programme and for the European Risk Management Council, and is part of the London council of non-profit WILL, Women in Leadership in Latin America. In 2019, she was awarded an honorary fellowship by City University of London.
Read more articles from this author