Panama retains its position as one of the best markets for banking in Central America, but success stories can also be found in Nicaragua and Guatemala.


This year’s Top 100 Central American banks ranking sees little movement among the top lenders in the region. Most of the top institutions come from Panama, the undisputed financial centre of the region that is home to 52.36% of total banking assets in the ranking and many of the best performing banks. 

The Colombian-owned institutions maintain their dominance in the Panamanian market, with BAC Panama topping the ranking, while two other Colombian operations, Bancolombia Panama and Banistmo, retain their respective positions of third and sixth.

However, Panama, which with 6.4% gross domestic product growth in 2014 is the fastest growing economy in Central America, also had plenty to offer to other, smaller foreign-owned subsidiaries (FOS) who can boast some of the best numbers in other categories.

Land of opportunity

The largest build-up in Tier 1 capital, 153.23%, comes from Banco Santander in Panama, propelling the bank into the ranking and earning it the 52nd spot. The bank also won the accolade for the largest increase in assets, showing growth of 159.1% in 2014.

Bank of China Panama is another FOS to show intrepid growth in this year’s ranking. While the bank boasted the largest asset growth in last year’s ranking, this year it came in second, with a 154.15% growth. Also, the bank’s profitability improved dramatically; while it was middling in the 2015’s ranking, this year it soared by 488.83%.

Notably, BAC Panama cemented its position in the region by increasing its Tier 1 capital by 65.13%, the third highest increase in the ranking.

Banks in Panama also garner some of the highest returns on capital (ROC) in the ranking. The highest scorer in this category is the Canadian-owned Scotiabank Panama, with a 137.7% ROC, followed by the Bank of China Panama with 59.92%. These results may have enticed the Canadian lender to expand further into the local market; in February of this year it acquired the retail and commercial operations of Citigroup in Panama and Costa Rica.  

Foreign operations in Panama also happen to be among the most cost efficient. The Panamanian arm of the Peruvian Banco de Credito del Peru spends only $4.19 on every $100 of its revenue. One Guatemalan operation also scores high in this category – the Colombian-owned BAC Guatemala has a cost-to-income ratio of 22.84%. 

Out of Panama

Cent Americas table 2

But not all triumphs happen in Panama. The quiet success stories of this year’s ranking are Nicaragua and Guatemala. While the lenders from these countries cannot compete with Panama in terms of bulk, they are punching above their weight when it comes to profitability.

Nicaragua has five lenders present in the ranking, who can boast a 3.38% return on assets (ROA) and a 37.29% ROC, higher than any other country. Guatemala comes second, as its 12 banks in the ranking have an aggregate ROA of 1.94% and ROC of 27.59%.

The Colombian BAC is present in both countries and both operations make stellar contributions. In Nicaragua, the bank closed 2014 with an impressive 3.9% ROA, sixth highest in the ranking. The Guatemalan operation is not far behind, with an ROA of 3.54%. BAC has recognised this performance by enlarging the Guatemalan business with an acquisition of another large local bank, Banco Reformador, which it completed in December 2015.

The Banker’s Top Central American banks ranking, 2016 originally appeared in the March 2016 issue of the magazine. The full results of the ranking are available on The Banker DatabaseFind out more about the database, register for a free trial or subscribe today.


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