Brazil’s top five lenders take up the first five places in The Banker’s latest ranking of Latin American banks by Tier 1 capital. Itaú Unibanco leads the way with a nearly $37bn in Tier 1 capital (a small increase on its previous figure). It is followed by Banco do Brasil, Bradesco, Caixa Econômica Federal and Santander Brasil, in that order.
Brazil's banking sector makes up more than half of the Latin America's Tier 1 capital, assets and pre-tax profits, based on the Top 200 ranking.
Mexico is the second largest banking market in the region, and Mexico’s BBVA Bancomer sits in sixth place. Citibanamex, Banorte and Santander’s local operations are Mexico’s other highest ranking names.
Bancolombia, in seventh position, is the fastest growing lender by Tier 1 capital in the top 10, with a rise of over 21% to more than $6bn. The next Colombian lender is Banco de Bogotá, in 18th place. Chile’s top names, Itaú Corpbanca, Banco de Chile and Banco Santander Chile, occupy ninth, 10th and 11th positions, respectively.
Small and sleek
While the regional rankings highlight Latin America’s larger players, it is the smaller lenders that are growing the fastest. Banco Davivienda Panama tops the ranking for biggest growth in Tier 1 capital as well as assets. CCB Brasil and BTG Pactual Chile are a respective second and third in the Tier 1 capital growth table, while BTG Pactual Chile and China Construction Bank Chile occupy the same positions, respectively, in the assets growth list.
Similarly, smaller banks top the profitability rankings. Banco Hipotecario del Uruguay leads by pre-tax profit growth (though Brazil's Caixa Econômica Federal is also well placed, in third position, in that table), while Argentina’s Bancor and JPMorgan Chase Bank Argentina – among the smaller lenders in the regional table – top the return on capital (ROC) and return on assets (ROA) tables, respectively. Argentina’s banks tend to display high profitability ratios and are prevalent in both ROC and ROA tables.
Finally, as Venezuela plunges deeper into economic and humanitarian crises, its banks are doubtless struggling to serve their customers. The banks that can retain capital strength and profitability warrant recognition. But the challenges of analysing banks’ financial data in a context of spiralling hyperinflation and largely diverging official and unofficial exchange rates runs the risk of presenting an unrealistic picture of the local market. For this reason, Venezuelan banks have been excluded from the rankings.
