Latam's lenders entered 2020 in relatively good shape.

While Latin America braces itself for the economic impact of Covid-19 in the second half of 2020, its banks entered the year in relatively good shape. Top lenders across the region are well capitalised, as shown by their capital adequacy ratios as observed by The Banker Database. This is set to help them absorb the inevitable souring of corporate and retail loans and lower activity in other divisions.

In terms of size, the Brazilian names that traditionally lead the Tier 1 capital regional ranking are still firmly at the top: Itau Unibanco, Banco Bradesco, Banco do Brasil and Caixa Economica Federal. After a 30.89% Tier 1 capital expansion, BTG Pactual has jumped three positions to ninth place in the regional ranking.

Other Brazilian banks have grown noticeably: smaller lenders Banco BMG, which has more than doubled its Tier 1 capital – the largest expansion in the region – and Banco do Nordeste do Brasil, which has boosted its Tier 1 capital by over a third.

Mexico’s BanCoppel is the third most improved by this metric and is the only new Latin American name in the global Top 1000 ranking.

Mexico’s largest bank, Grupo Financiero Banorte, has also expanded its Tier 1 capital by a good margin, moving up one place in the regional ranking to replace Bancolombia in fifth position.

Among the highest movers is Banco Popular Dominicano, from the Dominican Republic, the only Caribbean bank present in that table.


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