The best banks in the world 2024 – Latin America

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Banks are showing solid performance, but regional economies fared less well.

Overall, it was a solid year for Latin American economies. The tailwinds that helped push economic activity in the region to better-than-expected levels included the reduction in interest rates in some of the region’s largest economies – such as Brazil, Mexico and Chile – and increased trade due to the near future. wave of support from the US.

However, lower commodity prices during the year; persistent inflation in Argentina, Colombia and other key regions; continued political uncertainty; and a strong base effect from 2023 offset things somewhat negatively on the GDP front.

According to the International Monetary Fund (IMF), the region (including the Caribbean) grew by an estimated 2.5% last year, underperforming the 3.1% of the global economy in 2023.

Despite the volatile backdrop, the region’s banking sector held up and showed above-average growth. This was mainly due to the improvement in non-performing loans in the second half of the year, driven by lower interest rates and solid activity across the investment banking spectrum.

According to data from the Banco de Mexico, Mexican banks posted another year of record profits, reaching nearly $13.33 billion, an annual increase of 10%.

In the region’s largest market, Brazil, the country’s five largest banks saw solid profitability growth of 1.9% year-over-year, for a staggering profit of approximately $19.35 billion. However, a decline in revenues from historic powerhouses such as Bradesco and Santander led to a mixed outlook. Elsewhere in the region, results were mixed, with above-average profitability in Argentina helping to offset sharp declines in Chile and Colombia.

Best banks in Latin America
Argentina Banco de Galicia
Bolivia Banco Mercantil Santa Cruz
Brazil BTG Pactueel
Chili Banco de Chile
Colombia Banco de Bogotá
Ecuador Produbanco
Mexico Banorte
Paraguay Banco Itau Paraguay
Peru Banco de Credito del Peru
Uruguay Banco Itaú Uruguay
Venezuela Mercantil, CA, Banco Universal
Roberto Sallouti CEO BTG Pactual
Roberto Sallouti, BTG Pactual

Regional Leader

Despite the challenges of a volatile year, BTG Pactueel, our winning bank for the region and in its home country of Brazil, performed exceptionally well. The giant achieved robust profitability growth of 25% year-on-year, putting it above average. The bank reported best-in-breed growth in key business areas during the year, with new customer acquisition in corporate and retail, new product lines and record investment banking revenues helping pave the way.

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Amid this progress, BTG’s Corporate & SME Lending division jumped, reaching a total of approximately $1 billion in the fourth quarter, an increase of 88% year over year. The loan portfolio amounted to approximately $34 billion, of which $4 billion was in loans to small and medium-sized enterprises (SMEs).

In the investment banking spectrum – the bank’s historic cornerstone – BTG ranked first in the number of mergers and acquisitions in Brazil and Latin America. It was also the top bank in the region this year in terms of volume generated in equity capital markets.

The bank achieved a return on average equity (ROAE) of 22.7%, with adjusted net income of approximately $2.8 billion, reflecting growth of 61% compared to the previous period. As a result of the impressive year, the Brazilian giant’s assets under management amounted to approximately $288 billion, with strong net inflows of $36.9 billion in 2023.

Major economies

Amid an impressive year for Mexico’s banks, Banorte outperformed its competition and achieved growth in almost all of its loan portfolios. As a result, 2023 profits exceeded $9.5 billion, up 15% from 2022. Meanwhile, net interest income rose 18% year-over-year to $6.4 billion, and non-financial income rose 19% to $895 million.

Strong loan demand from the near-shoring boom added to Banorte’s performance. The bank’s mortgage loans grew 12% annually to $14.6 billion; while auto loans rose 32%, with a balance of about $2.4 billion.

banorte ceo jose marcos ramirez miguel 1507665234 scaled 1
Jose Marcos Ramirez, Banorte

Furthermore, the bank strengthened its digital leadership by closing the year with 8.7 million digital customers. As a result, product sales through the bank’s digital channels increased from 7% of the total in 2020 to 44% in 2023.

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In Argentina, amid the country’s inflation nightmare and political instability, the role of commercial banks could not have been more critical to the functioning of the economy.

By offering stability to its customers during this period, Banco Galicia has achieved impressive growth in all key aspects of its operation.

At the end of the year, the bank reported a 25% increase in net profitability, compared to the 5% increase in the previous quarter. This resulted in an annual return on average assets of 3.5% and a ROAE of 17%.

The above-average figures were also driven by Grupo Financiero Galicia’s fintech and digital payments subsidiary, which posted four-digit year-on-year growth in net profit.

Due to Chile’s moderate economic growth and deteriorating labor market, Banco de Chile takes the award for demonstrating the best resilience in its class. While the country’s overall average profits for the sector fell 20.7% in the year, Banco de Chile secured a leading position with best-in-class financial planning while posting a net profit of $1.4 billion.

In Colombia, banks found it even more difficult to maintain profitability, with revenues falling by almost 50% year-on-year. The trend was mainly caused by the economic slowdown and an increase in non-performing loans. Against this background, Banco de Bogotá, winner as Best Bank in Colombia, achieved solid revenue of $248 million. At the same time, the bank’s assets and consolidated loan portfolio grew by 5.4% and 10.8% respectively in the year.

Developing economies

Banco Itaú Uruguay And Banco Itau Paraguay take our accolades as the best banks in those countries. Both are our winners for the second consecutive year, demonstrating their continued drive to gain market share in Brazil’s neighboring economies.

In Paraguay, the bank’s total profitability represented 36.2% of the total market, an impressive jump from 26.9% in 2021. One of the bank’s key initiatives last year was the introduction of PIK, a payment solution serving SMEs, independent professionals and entrepreneurs, a simplified digital payment method.

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In Uruguay, Itaú took advantage of the country’s solid growth in the banking sector to further expand its leadership, with a 15% increase in its client portfolio for the year.

In Bolivia, the banks’ loan portfolio decreased by 2.5% compared to 2022, mainly due to the increasing default rate, which rose from 2.1% in 2022 to 2.8% in 2023. Nevertheless, Bolivian banks were able to achieve an increase in solvency, profitability and liquidity percentages.

Against this background, Banco Mercantil Santa Cruz maintained its leadership in the country and grew its total assets to $6.1 billion, an increase of $2.2 million since 2022. This represents a dominant gross portfolio market share of 14.4% and 15.5% of deposits in the country.

According to the head of Peru’s Banks, Insurance and Private Pension Funds, the 17 banks operating in the country recorded an 8.8% decline in profits at the end of 2023 compared to the previous year. Despite, Banco de Credito del Peruthe winner as Best Bank in Peru, this year achieved record profitability with a solid return on assets of 2.6%.

Venezuelan banks were able to achieve an impressive profitability growth of 8.9% this year. Amid the hot market, Mercantil Banco Universal has increased its performance in the savings account segment by the end of the second half of 2023, increasing its market share in the country from 13% to 16.1%. Moreover, according to its latest financial report, the institution stood out during the same period by almost doubling its loan portfolio, achieving an eye-popping growth of 98.1%.

In Ecuador, increased political unrest resulted in a challenging year for economic activity, with GDP falling short of expectations, although increasing by 1.3% annually. Against this backdrop, the best bank in the country, Produbanco, managed to leverage its penetration into the commercial credit spectrum to expand its offering. As a result, Produbanco’s total assets increased by an above-average 7.1% compared to the previous year.

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