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Industry Report - Banking - March 2014 ???????????????Adding


Value to Information Since 1900Latin AmericaBanking Sectors??CONTENTSCurrent
Environment? Sector Overview ? Sector Performance? Leading Companies?
MergersandAcquisitionsIndustry Profile? IndustrySizeandValue ? Sector Investment?
Policy and RegulatoryEnvironmentMarket Trends and Outlook? Bancassurance to
Experience Strong Grow th? MobileBankingSlow lyTakes Off? ITSpendingAmongLatin
American Banks Sprints Ahead? Market OutlookCountry Profiles? Argentina ? Brazil?
Chile? Colombia ? MexicoCurrency Conversion Table The Scope of this Report Key
References Comparative DataReports CoverageCurrent Environment -- Key Points? Some
banks in Latin America still struggled w hile some remained buoyant and w ere on
solid footing over the last six months. ? The region's banking system remained
resilient and continued to show expansion in its loan portfolio despite grappling
w ith currency w oes and w eaker credit conditions. ? In the six months to January 3,
2014 , Latin American banking stocks w ere still attractive and continued to perform
w ell despite negative headlines of an erratic market and countries in the region
suffering from w eak currencies. ? The key players in the banking industry reported
encouraging results during the first nine months of 2013, mainly driven by
expansion of business and improved cost control. ?
Overthepastsixmonths,banksinLatinAmerica,inparticularBrazil,continuedtogenerateafai
r amount of M&A deals. Industry Profile -- Key Points? Many of the banks in the
region have grow n their market shares over the last few years, grow ing their
lending and expanding their deposit bases as strength in the regulatory environment
has placed the industry back on track. ? Brazil has the largest banking market in
Latin America, w ith most of the banks in the region from Brazil. State-run bank
Banco do Brasil (BVSPA: BBAS3) tops the rank w ith assets of US$524 . 4 8 billion.
Itau? Unibanco is in second place w ith US$4 50. 99 billion in assets. ? In recent
months, local Latin American bankers, particularly investment bankers, have begun
to shift their focus tow ards domestic expansion and are seen to be accelerating
their investment strategies. ? In a bid to boost grow th and jump-start lending in
Mexico, President Enrique Pena Nieto signed banking reforms into law on January 9,
2014 . The legislation also aims to enhance competition betw een banks. Market Trends
and Outlook -- Key Points? Bancassurance or the sale of retail insurance products
to a commercial bank's client base is a significant distribution channel, w ith the
grow th in this business expected to remain strong in the coming years. ? Latin
America's high mobile phones penetration and the below average proportion of adults
w ith bank accounts make it a particularly interesting prospect for the region's
mobile banking grow th. ? In the hope of grow ing their business through business
intelligence applications and analytics technology, banks of all sizes are focusing
on investing in IT. ? According to Mergent, the outlook for the Latin American
banking industry w ill be mixed in the coming quarters. While the outlook for banks
in Chile, Mexico, Colombia and Brazil remains stable, Argentine banks are negative
and are follow ing diverging paths. A Company and Industry AnalysisMarch 2014 ??1
http://w ebreports. mergent. com????????????Industry Report - Banking - March 2014
????????PublisherJonathan WorrallDirectorJohn PedernalesManaging EditorPeter O'Shea
Research AnalystAngelina Ho Li NaWebsite:http://w ebreports. mergent. comCustomer
Service:1800 34 2 564 7 or 704 559 7601 email: customerservice@mergent. comSales
Enquiries:Fred Jenkins - Executive Vice President, Sales 704 559 6897email:
fred. jenkins@mergent. com???????????????????Copyright StatementCopyright 2014 by
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consent from Mergent. http://w w w . mergent. com DisclaimerAll information contained
herein is obtained by Mergent, from sources believed by it to be accurate and
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of, or inability to use, any such information. The Latin America Industry Reports
are published by Mergent, Inc. , headquartered in Fort Mill, South Carolina, USA.
Each industry sector report is updated every six months. Mergent, Inc. , a leading
provider of global business and financial information on publicly traded companies,
operates sales offices in key North American cities as w ell as London, Tokyo and
Melbourne. ?2http://w ebreports. mergent. com???????????Industry Report - Banking -
March 2014 ???????Current Environment?Sector Overview The year 2013 w as an average
one for Latin American banks w here performances among them added up to be a mixed
bag. While some still struggled, some banks remained buoyant and w ere on strong
footing throughout the year. Despite facing continuing adverse risks, including
inflation, heightening competition and fresh challenges from new regulations,
several banks in the region enjoyed high margins and return on equity (ROE). Banco
do Brasil (BVSPA: BBAS3), the largest Latin American bank by assets, reported a
54 . 5% profit increase to R$12. 73 billion (US$5. 30 billion) for the first nine
months of 2013, driven by grow th of business and efficient cost control. Banco
Bradesco SA's (BVSPA: BBDC3) profit rose 4 . 6% year-over-year. Itau? Unibanco's
(BVSPA: ITAU3), the largest private bank in the region, also benefited from its
diversified business and its 9. 4 % profit gain, thanks to expense cuts and low er
provisions for bad credit. Banks in Latin America typically had substantially low er
leverage levels than their counterparts in the developed countries but remained
focused on the traditional intermediation business. Despite the global slow dow n
that affected the banks and competition in the international markets, most banks
w ere profitable and w ell-capitalized, raising capital any w ay they could, w hether
through medium-term bonds, subordinated debt, rights issues and equity sales.
According to Latin America's banking federation FELABAN, the total assets of Latin
American banks rose by 5. 7% as of June 2013, w hile the sector's total loan grew
8. 7% and total deposits climbed 3. 4 %. Going through fundamental changes in recent
years, the region has developed a comparatively stable and enticing banking,
uniquely different from its European and North American peers. This stable
environment, w hich has led to a fairly healthy system a grow ing market, has
attracted a flock of foreign companies to build-up their substantial netw orks
across the region. HSBC (LSE: HSBA), w hich generated about 15% of its revenue from
Latin America in 2012, focused on commercial banking in particular markets in
Mexico, Brazil and Argentina this year. With total assets amounting to R$163. 1
billion (US$67. 93 billion) as of September2013, total equity w orth R$9. 97 billion
(US$4 . 15 billion) and 29,830 employees in Brazil, the London-based bank w as the
seventh-biggest lender in the country. In the first half of last year, Spain's BBVA
(BM: BBVA) came close to doubling its profit on the back of another solid
performance by the bank's operation in the region, particularly Mexico. Its net
earnings rose 95% to ?2. 88 billion (US$3. 94 billion) in the January to June period.
Despite grappling w ith currency w oes and w eaker credit conditions as global capital
market volatility increased and the region's economic grow th moderated, its banking
system remained resilient and continued to show expansion in its loan portfolio.
According to World Economic Situation and Prospects 2014 (WESP), a report produced
by the United Nations, economic grow th slow ed four-tenths of a percent to a pace of
2. 6% in 2013 but w as optimistic that the region w ill see grow th rates of 3. 6% this
year. Three countries in the region -- Argentina, Brazil and Venezuela-- had the
w orst performing currencies in the region last year. Argentina, w hich saw its peso
fall 32% against the dollar at official rates, w as also faced w ith reserves that
plunged more than US$12 to US$31 billion, dow n from the 2011's record of US$50
billion. The currency suffered the fall after the central bank w ithdrew the support
for the currency in an attempt to protect the foreign exchange reserves that fell
by almost a third over the past year. Sector PerformanceDespite negative headlines
of an erratic market and countries in Latin America suffering from w eak currencies,
Latin American banking stocks w ere still attractive in the six months to January 3,
2014 . Although the region w as plagued w ith economic challenges
that piled on further misery over the past six months, Latin American stock
valuations in certain sectors including banking remained attractive. For months,
the region's currencies lost ground against the dollar, w ith the Brazilian real
w eakening 15. 2% in 2013 and the Peruvian sol losing 9. 7%. With the exception of
Bancolombia (BVC: BCOLOMBIA), all other banks under review w itnessed positive
grow th in their stock prices throughout the period, w hile some even enjoyed double-
digit grow th. ????????????????????3http://w ebreports. mergent. com??????????Industry
Report - Banking - March 2014 ???????Current EnvironmentThe average stock price of
selected banks in the region jumped 17. 4 % over the six-month period, according to a
Mergent analysis. Except Bancolombia, the banks under assessment -- Banco Macro SA
(BUE: BMA), Banco Bradesco SA, Grupo Financiero Banorte SA (BMV: GFNORTE), Banco de
Chile (BSAN: CHILE), Banco do Brasil (BB), Itau? Unibanco (BVSPA: ITAU3) and
Santander Chile (BSAN: BSANTANDER) -- all registered encouraging grow th in their
stock prices. The tw o biggest gainers w ere Argentina's largest lender by market
value Banco Macro and Mexico's Banorte, w hich recorded increases at 84 . 8% and 23. 2%
respectively. BB follow ed closely w ith 19. 1% rise. Despite a slightly low er third
quarter's profit, the overall share prices of BB show ed surprise gains and edged
higher from R$20. 30 (US$8. 4 5) to R$24 . 18 (US$10. 07) on January 3, 2014 . The bank's
focus on low er risk segments of the market has rew arded BB w ith default rates that
w ere below the national average. Apart from solid stock performances, Banco Macro's
strengths w ere in multiple areas such as its revenue grow th (higher than the
average of 3. 1%), good cash flow from operations (vastly surpassed the industry
average cash flow grow th rate of 75. 5%) and notable return on equity. Argentina's
benchmark stock index, the Merval, rose 5. 4 % in November 5 after the central bank
announced its plan to boost foreign reserves to in order to provide significant
dollar inflow s in the country. Meanw hile, Banorte, recognized for its rapid grow th
and strong fundamentals of ample liquidity, good asset quality and sound capital
levels, performed really w ell over theTable 1: Stock Performance of Latin America's
Leading Bankssix-month period. In the past four years, the Mexican bank has nearly
doubled its loan portfolio around US$32 billion w hile becoming the country's
largest pension fund manager. That gave Banorte a boost in its stock performance. In
Brazil, investors still felt confident about stocks as only 12% of Brazilian GDP
came from exports, making it less dependent on w orld events. Meanw hile, Brazil's
strong and grow ing middle class drove greater demand for banking, financial and
investment services. Despite tougher oversight of the banking industry, including
cutting the central bank's reference rate know n as SELIC, the share prices of Banco
Bradesco and Itau? Unibanco climbed 3. 9% and 6. 2% respectively in the July through
January 2014 period. On the other hand, the once-star performer of Bancolombia fell
on hard times lately. Medellin-based Bancolombia, the largest commercial bank in
Colombia, surged in the aftermath of the financial crisis as demand for emerging
markets w ere strong, w ith share prices of the bank US$60 in mid-2010. Since then
Bancolombia's share prices have had trouble maintaining that tow ering level. Its
shares declined by 8. 2% in the past six months. Leading CompaniesBanco do Brasil
(BB)A bank w ith large, diversified, stable and low cost funding base, state-run
Banco do Brasil is the largest financial franchise in Latin America in terms of
assets. As at September 2013, the bank had a total distribution netw ork?Banks??
Country???Ticker?Exchange??Share Price on??Rise/Fall (%)?July 3, 2013??January 3,
2013?Banco Macro SA?Argentina?BMA?BUE??AR$11. 20?AR$20. 70?84 . 8?Banco Bradesco??
Brazil??BBDC3??BVSPA???R$29. 71??R$30. 86??3. 9??Banco de Chile??ChileCHILE??BSAN?
CLP$70. 53CLP$74 . 60??5. 8?Bancolombia SA?Colombia?BCOLOMBIA?BVC??COL$25,600?
COL$23,500?-8. 2?Grupo Financiero Banorte SA?Mexico?GFNORTE?BMV??MEX$74 . 86?MEX$92. 25
?23. 2?Banco do Brasil??Brazil??BBAS3??BVSPA???R$20. 30??R$24 . 18??19. 1??Itau?
Unibanco??BrazilITAU3??BVSPA?R$27. 4 5R$29. 15??6. 2?Santander Chile??Chile??BSANTANDER
??BSAN???CLP$29. 20??CLP$30. 56??4 . 6?Average Rise/Fall (%)??17. 4 ??Source: Mergent
analysis?4 http://w ebreports. mergent. com??????????Industry Report - Banking - March
2014 ???????Current Environmentof 65,269, including total branches of 5,4 16 to serve
its more than 55 million customers. The bank's total assets reached R$1,259. 26
billion (US$524 . 4 8 billion) at the end of September -- 14 % higher than in the
corresponding period of 2012 and 9. 6% higher than in December 2012. BB posted net
income of R$12. 73 billion (US$5. 30 billion) for the first nine months, up 54 . 5%
from the same period in 2012 driven mainly by expansion of business, improved
efficiency, cost control and the impact of the disposal of 675 million common
shares valued at R$17 (US$7. 08) each of BB Seguridade, w hich controls all BB's
insurance business. How ever, BB's net income during the third quarter of 2013 w as
dow n slightly by 0. 9% to R$2. 73 billion (US$1. 14 billion) due to higher provisions
for bad loans. During the January-September period, its net interest income rose
2. 3% to close at R$34 . 4 7 billion (US$14 . 36 billion), mainly impacted by the
increase in the interest income from loans and treasury income. The bank maintains
rapid credit grow th w ith stable asset quality. BB registered a 22. 5% in its loan
portfolio to R$652. 3 billion (US$271. 68 billion) as lending in Brazil rose,
particularly driven by loans to companies and agribusiness. BB, the leader in
agribusiness loans, had a market share of 65. 2% w hile loans to companies reached
R$307. 3 billion (US$127. 99 billion). Even w ithout considering its overseas
operations, private securities and guarantees, BB maintained a market share of its
overall loan portfolio at about 20. 7%. Meanw hile, the company's total deposits
represented 23. 9% of the market share, reaching the total of R$4 70. 91 billion
(US$196. 13 billion) at the end of September. To jump-start w eak economic grow th,
President Dilma Rousseff pressured government lenders including BB to extend more
loans. Itau? Unibanco Holding SAItau?, w hich w as created as a result of the merger
of Banco Itau? and Unibanco in 2008, is the largest private bank in Brazil and
Latin America. Today the bank is one of the ten largest banks in the w orld in terms
of market value at US$74 . 4 6 billion as of April 19, 2013. Itau? currently is
operating a netw ork of 3,855 full service branches located in 22 Brazilian states
and 100 Brazilian cities, 27,4 10 ATMs and a w orkforce that consists of about 98,000
people w orldw ide. The bank, once dubbed as the country's most profitable bank,
accounts for about 11% of the Brazilian market for retail banking services. As of
September 2013, Itau?'s had total assets of R$1. 08 trillion(US$4 4 9. 82 billion)
compared w ith R$960. 22 billion (US$399. 93 billion) in September 2012. With very
capable staffs, a track record of solid performance and robust risk controls, the
bank managed to once again netted a higher net income for the January-September
2013 period at R$11,050 million (US$4 . 60 billion) versus R$10,102 million (US$4 . 21
billion) in the same period of 2012. The bank continued to gain from diversified
revenue and strong cost controls despite grow ing loan loss reserves in the earlier
part of the year. Other factors -- the increase of 15. 8% in banking service fees and
income from banking charges, the higher (by 24 . 9%) in income from insurance,
pension plan and capitalization operations and low er expenses for loan losses
allow ance -- contributed to the rise in net income. According to the bank's
financial statement, the balance of loan portfolio reached R$4 56. 56 billion
(US$190. 15 billion) as of September 2013, an increase of 9. 3% compared w ith
September 2012. Banco BradescoFounded in 194 3, Osasco-based Bradesco is Brazil's
second largest private by asset-base w ith assets totaling R$907. 69 billion
(US$378. 05 billion) and market capitalization of R$136. 13 billion (US$56. 70
billion) as of September 2013. Bradesco has the most extensive private- sector
branch and service netw ork consists of 71,724 service points, a w orkforce of
101,4 10 people to serve its more than 66 million clients. Bradesco's revenue, w hich
has historically focused on the retail segment, w as even more diversified. A larger
share of revenue derived from insurance operations and financial services,
particularly investment funds and portfolio management services. Bradesco Seguros,
the bank's insurance arm, provides a w ide array of insurance products such as life,
health, accident and auto insurance. For the first nine months of 2013, Bradesco
posted, in comparison to the first nine months of 2012, a 4 . 6% increase in net
income to R$9. 003 billion (US$3. 75 billion). This w as driven by greater financial
margin revenue, higher insurance, pension plan and capitalization bond operating
income and low er allow ance for loan loss expenses. As the main revenue engine for
Bradesco, banking services, including loans, contributed over 59% of revenue. A
total of 26. 4 million checking accounts w ere opened by the end of September 2013
and 4 8. 3 million?5http://w ebreports. mergent. com??????????Industry Report - Banking
- March 2014 ???????Current Environmentsaving accounts w ere active among Bradesco's
clients. Its loan portfolio grew 2. 5% to R$4 12. 6 billion (US$171. 85 billion) in
September 2013, driven by rise in loan volumes in SMEs, individuals and
corporations. Although real estate services only hold a 7. 7% stake in the bank's
total loan portfolio, the division is Brazil's leader in mortgage
lending w ith a market share of 35. 1%. Mergers and AcquisitionsUnlike Western Europe
that continued to be plagued w ith a debt crisis and North America that still saw
slow grow th, Latin America w as not as affected and continued to generate M&A deals.
Over the past six months, banks in Latin America w ere financially w ell positioned
and took the opportunity to selectively choose valued assets, portfolios and
businesses w hile w eaker banks sold more assets to boost additional capital. Although
deal-making in Brazil got off to a slow start late last year, M&A activity started
to pick-up in the latter part of the year and remained the region's most
significant banking market. While Brazilian smaller banks w ere encouraged to boost
industry efficiency and consolidate, the bigger, w ell-capitalized banks follow ed
their multinational clients by expanding cautiously across the region and abroad.
Brazilian banks w ere careful not to lose their business to global players and
extended out global services. Another major catalyst for overseas expansion w as
diversification. The same appetite to follow trade flow s prompted the banks to
establish new offices in the Middle East and the Asia-Pacific. To help drum up
business for Brazilian companies in Africa and finance large projects, BNDES
expanded its footprint and opened its international office in Johannesburg, its
third overseas location after Montevideo and London. Follow ing the opening, BNDES
is expected to dispense US$500 million to Brazilian companies for investment in
Africa. After several w eeks of negotiations, Chile's Corpbanca (BSAN: CORPBANCA),
the Chilean fifth largest bank, finally confirmed its merger offers from Itau?
Unibanco in December. The talks remained in preliminary stages as issue of control
still looms. It w as reported that Itau? w ould buy 50. 1% stake in the Chilean bank,
w hich include a percentage of Alvaro Saieh ow ns and other minority shares. The key
selling point for this deal w ould be the creation of Colombia's second largest
lender through this tie-up. Tw o other banks, Spain's BBVA (BM: BBVA)and Canada's
Scotiabank (TSX: BNS) w ere earlier also involved in the pursuit of Corpbanca.
Itau?, the most internationally focused among the Brazilian banks, ow ns retail
operations in Argentina, Chile and Uruguay. Another Chilean bank, Banco Credito e
Inversiones (BCI) (BSAN: BCI), eyed on grow th in the US and continued w ith its
foray w ith the purchase of Miami-based City National Bank in August 2013. The
acquisition of nearly US$883 million w as the biggest ever investment in the US by a
Chilean company and the first time a Chilean bank had purchased a US bank. While
the acquisition w ill help BCI diversify its income and loan portfolio, the purchase
w ill allow City National to keep grow ing. ?6http://w ebreports. mergent. com???????????
Industry Report - Banking - March 2014 ???????Industry ProfileIndustry Size and
ValueAfter many years beleaguered by an underdeveloped banking industry and turmoil
experienced during the debt crisis in the 1980s and currency crisis in the 1990s,
Latin America has emerged as a highly promising banking market. Follow ing more
traditional methods of banking, most importantly w here there is a separation of
traditional banking institutions and other investment houses, the region has slow ly
battled its w ay out of serious economic difficulties. The creation of stronger and
resilient banks, strengthened by robust regulatory environments, has helped put the
industry back on track. Many banks in the region have aggressively grow n their
market shares, grow ing lending, leasing and credit portfolios, as w ell as expanding
their deposit bases. As a result, banks' net income, revenue streams and value have
also grow n. Other factors -- greater industry efficiency, a grow ing middle-class
and access to banks to cater for the unbanked population -- have contributed to
grow th. According to a 2013 study from the World Bank, only 39% of Latin Americans
maintain accounts w ith formal banking institutions, leaving ample room for grow th.
In a joint survey done by the Inter-American Development Bank and FELABAN, SMEs
have moved into the spotlight, w ith 77% of banks in the region indicating plans to
increase lending to the sector starting last year. While Mexico has
???????????????????Table 2: Top Ten Mexican Banks (Ranked by Assets as of End of
November 2013)the largest penetration of global banks among large Latin countries,
Argentina, Chile and Peru have significant presence among global banks. In the rest
of the region, local and state-ow ned banks on the other hand, dominate the share of
the overall banking market. Brazilian banks lead the w ay in the ranking of the
region's top banks by Tier 1 capital, occupying the top five slots w ith BB being
the largest bank in Brazil w ith Tier 1 capital of US$36. 30 billion. According to
the Central Bank of Brazil, the country's banking system consists of 604 authorized
banking institutions w hich include 132 multiple banks, 22 commercial banks, four
development banks, one saving bank, 14 investment banks and three exchange banks.
In addition to these sophisticated structure, the banking sector had about 22,811
branches as at November 2013 compared w ith 21,278 branches in March 2013.
Practically all Brazilian cities have the presence of one of the major banks and
medium cities (w ith more than 100,000 habitants), usually have a few full service
branches. According to the central bank, the Brazilian banking financial
institutions' total assets amounted to R$4 . 61 trillion (US$1. 92 trillion) at the
end of September 2013. The tw o main private sector banks, Itau? Unibanco and Banco
Bradesco, and tw o state-ow ned banks, Bb and Caixa Econo^mica Federal, hold almost
70% of the financial system's assets. Meanw hile, Mexico's banking sector is the??
Bank???Assets (MEX$ bn)???Market Share (%)???BBVA Bancomer?1,355. 63?21. 2?Banamex??
1,200. 64 ??18. 8?Santander??792. 10??12. 4 ?Banorte??779. 97??12. 2?HSBC??4 86. 4 2??7. 6?
Inbursa??268. 17??4 . 2?Scotiabank??226. 24 ??3. 5?Deutsche Bank??219. 70??3. 4 ?
Interacciones??122. 64 ??1. 9?Banco del Bajio??115. 91??1. 8?Total???5,567. 4 2???87. 0??
Source: Mexico's National Banking and Securities Commission?7
http://w ebreports. mergent. com??????????second largest in Latin America. According
to the National Banking and Securities Commission (CNBV), assets of the Mexican
totaled MEX$6. 39 trillion (US$4 75. 4 2 billion) at the end of November 2013 compared
w ith MEX$6. 12 trillion (US$4 55. 33 billion) at the end of November 2012. At the end
of the period, commercial banking represented around 4 8% of the total assets of the
banking system. In Mexico, there are 22 financial groups, 4 4 multiple banks and six
development banks operating in the country on top of ten financial companies w ith
limited operations and 58 representative offices of foreign banks. Three banking
leaders in the country -- BBVA Bancomer, Banamex and Banorte -- account for 58. 8%
of the country's loan portfolio. The Chilean banking system is highly sophisticated
and its banks reflect relative strength in the economic environment. With a
significant presence of foreign-ow ned subsidiaries, its banking system is largely
privately-ow ned. Its five largest players -- Banco Santander Chile, Banco de Chile,
Banco del Estado, BCI and Corpbanca --accounting for 70. 9% of the banking system
assets and 74 . 1% of the total loan portfolio at the end of September. According to
the Superintendencia de Bancos e Instituciones Financieras (SBIF), there w ere 24
commercial banks in operation, of w hich 18 banks are established in Chile, five are
branches of foreign banks w hile one is state-Source: Superintendencia de Bancos e
Instituciones Financierasow ned (Banco del Estado). These banks manage a total of
CLP$157. 12 trillion in assets. The banking sector is the largest financial group
that provides total equivalent to 76% of GDP. Meanw hile, in Colombia, there are
currently 24 private banks operating in the country. According to the
Superintendencia Financiera de Colombia (SFC), the banking sector had assets of
approximately COL$953. 4 8 billion (US$4 76. 74 million) at the end of October 2013
versus COL$84 1. 04 billion (US$4 20. 52 million) during the corresponding period of
2012. Colombia's top five banks -- Bancolombia, Banco de Bogota, Banco Davivienda
(BVC: PFDAVVND), BBVA Colombia and Banco de Occidente -- together account for 61%
of the consolidated banking system's gross loans and 64 % of total deposits as of
June 2013. Its banking expansion is also remarkable w here subsidiaries have been
turned from 35 in 2007 to 195 in 2013. Sector InvestmentLatin American Banks Focus
on Domestic ExpansionIn recent months, the Latin American markets' erratic
performance has led some global giants to turn their back aw ay from volatile
countries for the meantime w hile rethink their alternative strategies for
expansion. This hasIndustry Report - Banking - March 2014 ???????Industry Profile
Table 3: Leading Banks' Market Share in the Chilean Banking System??Others, 16. 3%
Scotiabank Chile, 4 . 6% Corpbanca, 11. 4 %Banco Stander Chile, 17. 2%BBVA Chile, 6. 5%
Banco de Chile, 16. 1%Banco de Credito e Inversioners, 12. 7%Banco del Estado de
Chile, 15. 2%?????????????????8http://w ebreports. mergent. com??????????Industry
Report - Banking - March 2014 ???????Industry Profilegiven local Latin American
bankers particularly investment bankers, more space to grow as global banks scaled
back their operations in the region. The drive for grow th has propelled banks to
accelerate their investment strategies, w hich means penetrating into new markets,
searching for alternative investments and w idening distribution channels. Although
most companies w ould prefer a foreign bank as lead underw riter for bigger
offerings, w hich have offices and relationships all over the w orld, they still
w ould
go to local banks for smaller deals or those that target investors in Latin
America. Itau? BBA and BTG Pactual (BVSPA: BBTG11), w hich have been competing for
stock listings, merger advice or bond offerings, enjoyed stock market offerings
amounting to US$2. 96 billion and US$2. 91 billion respectively last year. Although
majority of the business of the Brazilian investment banks came from Brazil, the
banks are increasingly w inning business elsew here like in Chile and Colombia. Itau?
recently obtained a brokerage license in Mexico and w ill continue to expand its
existing operation in Peru, Colombia and Mexico w ith an emphasis on organic grow th.
With an aim for South American market, Chilean Corpbanca has demonstrated that
cross-border expansion can improve a company's income potential. The bank, w hich
boasts a compound annual grow th rate of 15% from 2007 to 21% in 2012 alone, remains
the fastest grow ing bank in Chile in terms of loans. CorpBanca ow ns total assets of
US$28 billion and recently acquired a 51. 6% stake in Helm Bank, Colombia's seventh
largest lender for about US$1. 32 billion to expand its footprint in the region. Tw o
other Chilean banks, Banco de Chile and Santander Chile, w hich already have
extensive foreign links, also have room to grow in domestic markets. Foreign
stakeholders in the tw o banks are already active in Latin America w ith Banco de
Chile, through its Citi connection w hile Santander Chile w ill continue to focus on
home market. Policy and Regulatory EnvironmentMexico Introduces a Banking Reform
Mexico has embarked on a series of w ide-ranging structural reforms in areas
including the country's banking industry since President Enrique Pena Nieto took
office in December 2012. In a bid to boost grow th and jump-start lending in the
region's second largest economy, President Nieto has signed a banking reform into
law on January 9, 2014 . The legislation, among a series of major structural reforms
that are pushed through, aims to improve competition betw eenbanks and encourage
them to improve access to credit, extend low er rates and create new incentives and
greater flexibility. The country's financially conservative banks, boast high
capital levels but extend much less loans than their foreign peers. The sector also
lacks healthy competition, w ith five big banks dominating more than 90% of the
credit market. According to Bank of Mexico, commercial bank lending to the private
sector has slow ed after a rapid expansion in the w ake of the 2008-209 global
financial crisis. The data from the central bank also indicate that borrow ing fees
in Mexico is high w ith median credit card interest rates around 29% annually. The
bill w ould make it easier for banks particularly development banks to collect
guarantees for bad loan and granting more loans under favorable condition in terms
of interest rates, duration and amounts. Government development banks aims to boost
lending this year by 15% and they w ill be given more scope for lending to SMEs,
w hich often lack access to credit. The implementation of the new law makes it
easier for banks to seize assets put up as collateral in cases of defaults.
Previously, banks have been reluctant to lend to SMEs that generate nearly three-
quarters of Mexico's jobs, as they cannot reclaim their guarantees. The overhaul
also seeks to prompt Mexican banks to lend more of the money they obtained in
deposits from the public, rather than placing it although safe, but redundantly in
less productive financial investments. Banks in Mexico w ill expand their credit
penetration for the private sector w hich is now equivalent to only 26% of Mexico's
GDP, below the Latin American average of more than 50%. The Mexican Government
plans to double it to 52%, w hich w ould add 0. 5 percentage points to economic
grow th. ?9http://w ebreports. mergent. com???????????Industry Report - Banking - March
2014 ???????Market Trends & Outlook?Bancassurance to Experience Strong Grow th
Although bancassurance is nothing new , its importance as a grow ing channel for
insurance distribution in Latin America still remains. Bancassurance or defined as
the sale of retail insurance products to a commercial bank's client base, can w iden
access to a prospective customer base by making use of a bank's extensive
distribution netw orks through w hich insurance can be channeled. Over the past
several years, the role of bancassurance in the region has been grow ing and
becoming as a significant distribution channel, it still has good prospects because
of banks' branch netw orks and potential customers. It is a w in-w in situation for
banks and insurers, w ith both gaining from commercial agreements that allow
customers to have a full financial services suite. Driven by minimal penetration,
low interest rates, product innovation, leveraging of multiple distribution
channels and a favorable economic and regulatory environment, bancassurance
business grow th in Latin America is expected to remain strong in the coming years.
The grow th trend of insurance premium in emerging markets such as Latin America
w ill continue as global insurers eye the region for profitable grow th beyond the
more saturated and mature markets in industrialized countries. The presence of
foreign players that have successfully garnered large customer bases through
bancassurance ventures aided by a combination of low insurance penetration and high
bank penetration presents great potential. In Brazil, many insurers have been draw n
in to explore the possibility of selling through bank branches, w ith an example the
merger deal betw een BB and Mapfre (BM: MAP) in 2010. In the region, pension products
and simple savings-oriented life insurance products are frequently purchased from
the banks and have historically attracted the majority of all medium or long-term
savings particularly in Argentina, Brazil, Chile and Mexico. According to an online
home to life and health group, Life Health Pro, around 80% of life insurance is
secured through the bancassurance channel in Brazil, w hile over 50% of banks in
Chile promote some form of life insurance and Colombian banks account for 15% of
life insurance premiums. According to Fasecolda, the Colombian federation of life
insurers back, 4 1% of Mexican life insurance is distributed through banks and its
grow th w as at an annual rate of 10% betw een 2008 and 2012. Mobile Banking Slow ly
Takes OffAccording to data from World Bank, Latin America has surpassed 100% mobile
penetration and today adoption is still strong. The high mobile phones penetration
and the below average proportion of adults w ith bank accounts make the region a
particularly lucrative prospect and favorable climate for Latin American mobile
banking grow th. The surge in tablets, smartphones and applications w ill create new
opportunities for banks to enhance their customer service and bring dow n banking
services costs. With mobile culture already rooted in the region, the large number
of unbanked customers represents a large body of potential new segments for banks
particularly in savings accounts, simple transactions, credit, insurance and
remittances. Throughout the years, Latin American banks have embraced mobility,
released feature-rich mobile apps and also updated online banking offerings in
order to reach current and future customers. Last year smartphone apps w ere the
preferred channel even as most of the population still depended on feature phones
w ith limited data capabilities. Telco operators actively market and advertise
Android and iOS devices w ith offers and competitive monthly plans. Rural banks also
provide basic banking services through SMS. Many banks are becoming ambitious and
using mobile to boost their revenue by cross-selling new products, creating
innovative business models and allow ing customers to apply for and receive on-the-
spot credit line increases. According to a provider of mobile and online banking
platforms Kony Solutions, Banco Itau Unibanco w ill build its next generation of
retail banking apps and a series of new apps for both internal and external
stakeholders on their platform. Through a deal w ith Brazil's Prote?ge? Sistemas,
Portland-based Tyfone is expanding into Latin America to bring its solution for
mobile banking into Brazil. In May 2013, HSBC Brazil deployed DIGIPASS for mobile
technology, a cost efficient solution, on a large scale for its enhanced group of
retail and corporate customers. IT Spending Among Latin American Banks Sprints Ahead
After dipping to a slow grow th since the 2008-2009 financial crisis, global IT
spending among banks, including????????????????????10http://w ebreports. mergent. com
??????????Industry Report - Banking - March 2014 ???????Market Trends & Outlook
bright spots in Latin America is sw inging, tow ard a rebound. Although some banks
are on a costs trimming mission, investment w ill continue to be made to address
compliance and in IT that is required to run the bank. Changes in regulations, cost
reduction strategies, back- office consolidation and customer centricity continued
to spur IT spending in the banking industry this year. Banks of all sizes that are
focusing on investing in IT w ill be able to grow their business through business
intelligence applications and analytics technology. Based on a recent report
entitled "Worldw ide IT Spending 2010-2015" from Framingham-based IDC Financial
Insights, w orldw ide bank IT spending continues to grow at 5. 2% compound annual
grow th rate (CAGR) and could surpass US$4 30 billion in 2014 . Banking, w hich is
expected to account for half of the w orldw ide total during the year w ith IT
spending, is estimated to be at US$215 billion. IDC, the financial division of
technology research firm IDC, also found that Latin America along w ith the Middle
East are fastest grow ing bank IT spending regions, w ith IT spending estimated to
rise 10% in these areas. The continued momentum
in Latin American banks IT spending is not only to counter cyber threats but
follow ing the result of technology updates and re-installations of capacity. While
satisfying the need to reduce costs and improve efficiency by allow ing customers to
make payments, deposit funds and engage their finances, banks continue to be
selective w ith IT initiatives and give priority to those that can bring value to
their customers and the company. This year, many major new IT projects are
projected to involve business intelligence engines and data management that can
manage risks better and improve profitability. Mexico's Grupo Financiero Banorte is
spending US$1 billion over the next ten years on master data management softw are
from IBM to obtain customer insight and aggregate all customer information by
customer, rather than by product. Market OutlookThe coming quarters suggest a mixed
outlook for Latin American banks, according to Mergent. While the outlook for
Chilean, Mexican, Colombian and Brazilian banks remain stable as they gain from
economic expansion, Argentine banks are negative and are follow ing diverging paths.
The operating environment for Argentine banks continues to w orsen after the
Government imposed a series of controls and policies that limit activity in the
sector. In Brazil, lending spreads should remain strong due to less aggressive
lending by public banks. Nevertheless, the overall Latin American banking system
across the board appears stable and faces comfortable prospects, despite an
expected deterioration in credit conditions, rising real interest rates and an
ensuing rise in asset quality pressures this year. For 2014 banks' financial
fundamentals such as solid profitability and capitalization levels w ill ensure
stability for banks across the region even under an adverse scenario. How ever,
banks w ill be challenged to ease the impact of rising fund costs and make
efficiency gains to maintain their relatively high returns. As a more favorable
global outlook lifts demand for Latin America's exports, grow th in the economies of
the region w ill gather pace this year. According to ECLAC, the UN economic body for
Latin America, the region is expected to grow by 3. 2% this year, an improvement
from an earlier projection of 2. 6% grow th. The greater spending pow er of the
emerging middle class in Latin America countries is being hailed as the great hope
for the economy and presents opportunities for sustainable premium grow th in the
banking industry. Currently, the middle class already accounts for around 30% of
the region's population. ?11http://w ebreports. mergent. com???????????Industry Report
- Banking - March 2014 ???????Country ProfileArgentinaSector Overview After
experiencing many cycles of spectacular economic grow th and also enduring
challenges of economic turmoil years ago, Argentina and its banks had to face
renew ed economic trouble under President Cristina Ferna?ndez. Pressing issues such
as the likelihood of the Argentine crisis spreading, w hich can create contagion
throughout other emerging markets, high inflation and the level of exposure of US
and other banks to the country's debt posed w orries for the banking industry. The
inflation rate as reported by Instituto Nacional de Estadi?stica y Census (INDEC)
w as 10. 5% in October 2013 and has devalued the peso. The Argentine peso lost over
20% of its value betw een July and December 2013, causing investors and businesses
to be w atchful of investing due to financial uncertainty. Bad economic decision-
making under the current government has dented loyalty and confidence in the
currency. According to the Bank for International Settlements (BIS), US bank
exposure to Argentina reached US$11. 2 billion at the end of 2012 w hile Spanish
banks had exposures of some US$19 billion in the same period. Looking at the
problems that seemed to be getting w orse, the market remains extremely nervous that
Argentina may default on its debt of US$128 billion. Sector DevelopmentThe Argentine
central bank (BCRA) has been losing reserves at a fast pace despite implementing
the "dollar clamping" that can reduce the outflow of capital by limiting operations
in the US dollar. The country's international reserves, w hich w ere used to trade
w ith other central banks, to shore up debt and pay off bondholders, have dropped
beneath US$33 billion to the current US$32. 7 billion (the low est in almost six
years). Argentina's dollar reserves w ere w ell above US$50 billion at the beginning
of 2011. While international reserves continued to drop, the central bank just
managed to recover US$700 million. Through the end of 2013, Argentina spent another
US$8 billion of its reserves to pay off more debts and this w ill leave very little
room for the central bank to finance the country's fiscal affairs. Nevertheless,
despite the w orrisome dw indling reserves, the Argentine banking???????????????????
system performed adequately in the first nine months of 2013, thanks to a w ider
financial margin from solid grow th in loans particularly lending to the private
sector. According to the BCRA, outstanding banking system loans to private sector
rose 14 . 5% to AR$4 7. 29 billion (US$6. 60 billion) from June 3 to November 22, 2013
w hile the sector's combined earnings w ere AR$18. 9 billion (US$2. 64 billion) for
January-September 2013, up 31% from the previous period as private lending gained
pace. Leading PlayersBanco Macro SAFounded in 1976, Buenos Aires-based Banco Macro
has grow n to be the private local bank w ith the largest branch netw ork in the
country, w ith a netw ork of 4 28 branches nationw ide, 1,088 ATMs and 838 TAS (Self-
service terminals). The bank, formerly know n as Banco Macro Bansud SA, is the only
bank that can show 4 7 consecutive quarters w ith profits. Banco Macro continued its
stellar performance and displayed net income that totaled AR$571. 9 million
(US$79. 84 million) in the third quarter of 2013, up 24 % from AR$4 60. 4 million
(US$64 . 27 million) posted in the second quarter of 2012 and 39% higher than the
AR$4 11. 9 million (US$57. 50 million) registered in the third quarter of 2012. During
the quarter, Banco Macro's total deposits grew 6% quarter-on-quarter, amounting to
AR$4 1. 8 billion (US$5. 83 billion), led by private sector deposits, w hich rose 9%. At
the end of September, loans to the private sector grew 8% or AR$2. 6 billion
(US$362. 96 million) w hile other loans including commercial loans and consumer
loans, also continued to show strength. Meanw hile, credit cards and personal loans
rose 8% and 6% respectively. Among commercial loans, overdrafts and loans to SMEs
grew 26% and 5% quarter-on-quarter respectively. One of the most impressive traits
w as the company's ability to maintain asset quality and high solvency levels. Banco
Macro reported a 1. 9% NPL ratio in the third quarter, w hich w as under its average
NPL of 2. 1% since 2006. It has excess capital of AR$3 billion (US$4 18. 8 million),
w hich amounted to 69% more than its total capital requirement. ??12
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???????Country Profile - Argentina BBVA Banco Frances SA (BUE: BFR)As one of
Argentina's leading banks, BBVA Banco Frances w as founded in 1886 and is the oldest
private bank in the country. With a deposit base of AR$39. 6 billion (US$5. 53
billion) at the end of September 2013 and AR$54 . 88 billion (US$7. 66 billion) in
total assets, the Buenos Aires bank is engaged in the provision of financial and
non-financial services, through a netw ork of 24 4 consumer branch offices and 29
branch offices specializing in the middle- market segment w ith employees totaling
5,200 people. For the third quarter of 2013, BBVA Banco Frances reported net income
of AR$560. 69 million (US$78. 27 million), up 34 . 3% on the year thanks to an increase
in the value of its bond portfolio. Driven mainly by the expansion in consumer loans
to SMEs, its private sector loan portfolio grew 31. 1% to AR$33. 5 billion (US$4 . 68
billion) compared to the same quarter of the previous year. While consumer loans
and loans to SMEs grew 4 1. 8% and 31. 1% respectively, financings to large
corporations rose 27. 3% during the third quarter. The increase in credit cards,
personal loans and auto loans also contributed to an outstanding performance in the
retail segment. Banco Frances continued to maintain a leading position in terms of
asset quality. As of end of the third quarter, the NPL ratio w as 0. 74 % w hile the
coverage ratio reached 258. 08%. Market OutlookAfter thriving during a nearly nine-
year economic boom and bust, the outlook for the Argentine banking system is
expected to turn negative. The outlook is clouded by serious structural problems
such as a, increased pace of government spending that can expand the deficit,
fallen reserves and surging inflation that is expected to chew into real incomes
and put burdens on household spending. The country's economic-policy decisions and
unpredictable policy mix w ill continue to w eigh on banks fundamentals in 2014 . The
range of policies is negatively affecting business conditions and banks' financial
strength including tight restriction on foreign exchange, caps on lending rates and
fees. Banks are also required to lend to targeted sectors including to SMEs, w hich
w ill have a tougher time coming up w ith collateral. Although economic grow th
bounced back somew hat in 2013, economists expect to see thecountry fall into
recession by 2014 . Slow ing economic grow th and high inflation w ill low er borrow ers'
purchasing pow er and the capability of paying back, leading to higher delinquency
rates and thus, further deterioration in the Argentine banks' asset quality. ?13
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???????Country ProfileBrazilSector Overview After going through a period of success
and a decade of encouraging economic grow th, Brazil used
to have reputation for its solid banking system and yet remained mired w ith a
string of problems and challenges. The once sophisticated banking system faced
economic slow dow n and inflation w orries that w eighed on sector fundamentals. As
Brazil stagnated, the country's banks struggled w ith slow ing loan grow th and
margins that continued to be under pressure. To revive grow th and boost the poor
economic performance, state-controlled banks stepped up disbursements to assist the
Brazilian Government to kick start consumption and investment. How ever, the
strategy has not proved to be that effective, w ith the country's economic shrinking
in the third quarter of 2013, the first such contraction since early 2009.
According to the Brazilian Institute of Geography and Statistics, the economy
contracted 0. 5% betw een July and September as investment continued to drop steeply.
Sector DevelopmentAlthough the w orst in loan delinquencies in the Brazilian banking
system are over and asset quality somew hat improved, loan grow th slow ed. According
to figures released by the central bank, loan grow th in Brazil slow ed to 14 . 7% in
the 12 months ending October 2013 compared w ith 15. 7% in the year ended September.
While loans to individuals rose lightly by 1. 2% month-on-month during the month,
corporate credit w ent dow n by 0. 1% in October. Brazil's largest bank, Banco do
Brasil, expects a slow er pace of consumer loan for the next coming quarters due to
competition and w eak demand for credit among households. The bank low ered its
forecast for consumer loan grow th to betw een 14 % and 18% from an earlier estimate
of 16% to 20%. Nevertheless, despite the slow er pace of new loan disbursements and
the w orrisome current account deficit that Brazil is facing, its fiscal
fundamentals and monetary policy remained pretty sound. Its banking sector still
has sufficient liquidity and resilience to confront macroeconomic conditions that
have significantly deteriorated. According to the central bank, the Brazilian
banking system's solvency stayed at comfortable levels at???????????????????an
average 16. 9% in the first half of 2013, w ell above the required minimum of 11%.
Brazil's top three private sector banks -- Santander Brasil, Itau? Unibanco and
Bradesco SA -- posted profits that w ere higher at R$24 . 34 billion (US$10. 14
billion) in the January-September 2013 period compared w ith R$23. 4 6 billion
(US$9. 77 billion) recorded in 2012. Leading PlayersBanco do Brasil SAFounded in
1808, Brasi?lia-based Banco do Brasil is the largest bank in Brazil and Latin
America in terms of assets. The bank is also one of the oldest financial
institutions in the w orld and has been expanding its international presence. It has
4 5 offices in 23 other countries including the US. In addition, it has one of the
largest ATM netw orks in the region, w ith over 4 5,500 ATMs and about 110,000
employees that serve more than 55 million customers through its 17,800 service
points. How ever, the state-run bank reported financial performance w as considered
rather w eak in the third quarter of 2013. As the bank made more provisions -- up to
R$3. 9 billion (US$1. 62 billion) from R$3. 76 billion (US$1. 57 billion) due to
aggressive lending -- its third quarter net profit dropped slightly by 0. 9% to
R$2. 7 billion (US$1. 12 billion) from R$2. 73 billion (US$1. 14 billion). During the
period, provisions for bad loans w ere up to R$3. 9 billion (US$1. 62 billion) from
R$3. 76 billion (US$1. 57 billion) w hile total outstanding loans rose to R$652
billion (US$271. 56 billion), up 22. 5% from R$532 billion (US$221. 58 billion). Banco
do Brasil's outstanding consumer loans and corporate loans w ent up 14 % and 24 . 7%
respectively. In the coming quarters, the bank expects further deterioration in
NPLs along w ith a slow dow n in credit expansion. According to Vice President Ivan
Monteiro, the bank is learning to be more cautious and w ill shift its attention to
business customers from consumer loans. Banco Bradesco SAHeadquartered in Osasco,
BancoBradesco is Brazil's second biggest private sector bank in terms of total??14
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???????Country Profile - Barzilassets. Its extensive private sector branch and
service consists of 4 ,697 branches, 3,760 service branches and 4 5,614
"BradescoExpresso" units (the correspondent banking unit of Bradesco). The bank
provides a w ide range of banking and financial products and services in Brazil and
abroad to individuals, SMEs and major local and foreign corporations. On top of its
extensive branch netw ork, its 33,933 BradescoDia&Noite ATMs and 14 ,036 Banco24 Horas
ATMs have enabled Bradesco to reach a diverse customer base. Despite the overall
difficult operating environment, Bradesco remained one of Brazil's consistently
strongest performing banks and managed to report an increase in profit during the
third quarter of 2013. Since late 2011, the bank, along w ith its rivals, struggled
w ith stiff competition from state-controlled banks that led to low er borrow ing
costs across the banking system. Due mainly to Bradesco's healthier top line and as
default rates eased and provisioning against bad loans declined, the Brazilian
giant's third quarter results rose to R$3. 08 billion (US$1. 28 billion) from R$2. 89
billion (US$1. 20 billion) a year earlier. Loans delinquencies fell particularly in
consumer lending and enabled the company to cut provisions on bad loans for the
fifth straight quarter, dow n 13%. The smaller provisions directly boosted earnings
by freeing up capital. Meanw hile, its loan portfolio grew 11% to R$4 12. 6 billion
(US$171. 85 billion) and loan defaults for 90 days or more slipped to 3. 6% from 3. 7%
in the second quarter and 4 . 1% the previous year. To protect profits, Bradesco w ill
continue to rein in lending to riskier segments such as auto loans and focus on
mortgages and paycheck-deductible credit, a type of loan that can be repaid through
an auto deduction of the person's paycheck every tw o w eeks. Market OutlookDespite
rising interest rates that w ill dampen domestic private consumption and challenges
that the banking system faces throughout its business cycles, the outlook for the
Brazilian banking system remains stable in the near- term. The country's economy
might seemed less dynamic and the burdensome and complex tax regime continue to be
w eak points in the Brazilian business environment, good liquidity, diversified
operations and broad funding bases is expected to provide the large banks a very
solid financial position. How ever, despite recent improvements in early delinquency
indicators reported by private banks, rising funding costs w ill w eigh on bank
profitability over the next 12 to 18 months. Still, Brazilian banks manage to
maintain solid capital and reserve levels to w ithstand any deterioration in asset
quality. The cutbacks on the incentives given to the state- run banks by the
Brazilian Government to cut credit costs could spell a brighter outlook for private
sector banks in the coming quarters. As fierce competition betw een the tw o lessens,
it w ill help lending margins in the banking system to regain some of the losses
suffered since late 2011. ?15http://w ebreports. mergent. com???????????Industry Report
- Banking - March 2014 ???????Country ProfileChileSector Overview The Chilean banking
system remained w ell capitalized and liquid w hile its NPL continued to be low and
fully provisioned over the last six months. One of the most modern and dynamic
sectors in Latin America, Chilean banks are stable and efficient and even the
country's mid- sized banks continued their fast expansion w ith relatively high
reliance on w holesale funding. With the economy grow ing strongly over the past few
years, there w as a marked increase in loans grow th and lending conditions remained
stable. According to a report from the central bank, Chile's economic grow th
accelerated and expanded by 4 . 7% in the third quarter of 2013 as household spending
continued its robustness and unemployment rate still at low level. The healthy
grow th over the past years w as lifted by the frantic restoration after Chile's vast
earthquake in 2010 as w ell as remarkably high copper prices. Sector DevelopmentIn
the first eight months of 2013, increased loans and falling costs linked to
provisions pulled up banks' earnings. According to figures from SBIF, the combined
profit for the Chilean banking sector w as up 15. 76% in the January-August period to
a consolidated CLP$1. 163 trillion (US$2. 09 billion) w hile the sector's profit in
August rose 0. 35% from July. Total loans in the Chilean banking system rose by 12%
in the first eight months of 2013, based on figures from banking regulator SBIF.
Over the first eight months, the consolidated net profit at the country's largest
bank in terms of assets, Santander Chile w as CLP$24 3. 72 billion (US$4 38. 70 million)
w hile Banco de Chile earned CLP$34 8. 57 billion (US$627. 4 3 billion) during the
period. Leading PlayersBanco Santander ChileSantiago-based Banco Santander Chile is
the largest bank in Chile in terms of assets and equity. With a branch netw ork of
4 88 branches, 11,626 employees and 1,915 ATMs, the bank is a subsidiary of the
Santander Group, w hich controls 67% of Banco Santander. The bank, w ith a market
capitalization of US$10. 2 billion, operates through???????????????????tw o segments,
namely Commercial Banking and Global Banking and Markets. For the third quarter of
2013, Banco Santander Chile posted a 99. 8% surge in profit at CLP$101. 17 billion
(US$182. 11 million) compared w ith CLP$50. 64 billion (US$91. 15 million) during the
same period of 2012 w hile comparing quarter-over-quarter, net income rose 17. 8% to
CLP$85. 89 billion (US$154 . 60 million) in the second quarter of 2013. The
achievement w as mainly due to solid loan and core deposits grow th and a higher net
interest margin that lifted
earnings. The grow th of Banco Santander Chile's core deposits and loans remained
solid, w ith deposits up 6. 1% to CLP$14 . 95 trillion (US$26. 91 billion) w hile its
loans increased 2. 8% quarter-on-quarter and 9. 8% year-on-year, driven by grow th in
high-income individuals, SMEs and middle- market of companies, a segment that
continues to show healthy loan demand given the relatively high investment rate
seen in the Chilean economy. During the quarter, loans in these combined markets
rose by 14 . 4 % in line w ith the bank's strategy of expanding loan volumes w ith a
focus on increasing net of provisions. Banco de ChileFounded in 1893 as a result of
the merger of three banks -- BancoNacional de Chile, Banco Agricola and Banco de
Valparaiso, Banco de Chile has since become the second largest and most profitable
Chilean banks in terms of return on assets and shareholders' equity. The bank,
w hich has a market capitalization of US$14 . 5 billion, boasts a national netw ork of
4 34 branches and 1,915 ATMs to serve its more than half a million customers. Despite
having to deal w ith w eaker economic grow th, the year 2013 w as a relatively good
year for Banco de Chile. The bank, w hich maintains its position as the most
profitable in the country, achieved a return on average equity (ROAE) of 23%,
driven by a grow ing loan book and higher lending spreads and steady income from
fees and commission. The percentage has beaten the average return recorded by its
peers (18. 1%) and the industry (13. 7%) in the same period. ??16
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???????Country Profile - Chile Table 4 : Chile's Top Five Banks (CLP$ billion, as of
September 2013)Meanw hile, it ranked first in operating revenues and net income w ith
market shares of 20% and 28%, respectively. Driven by income from loans that
continued to be strong, a recovered inflation, the bank's strong cost control
policy and an increasing business scale that resulted in higher efficiencies, Banco
de Chile attained an outstanding net income for the third quarter of 2013. During
the period, its bottom line w as CLP$137 billion (US$24 6. 6 million), w hich w as 37. 7%
and 12. 7% higher than the results in the third quarter of 2012 and in the second
quarter of 2013. As a result of grow ing volumes of loans (particularly in retail and
w holesale loans) and deposits, its revenue- generating capacity continued to be
solid. Operating revenues amounted to a record figure of CLP$380 billion (US$684
million) during the period, higher by 25. 6% the figure in the third quarter of
2012. Market OutlookAccording to Chile's central bank, Chile w ill experience a
subdued economic outlook as the central bank fears the possibility of a deeper loss
of real business cycle momentum in emerging markets in the coming months. The
central bank expects 2014 GDP grow th to be at the range of 4 % to 5% w hile the
w eakening inflation pressures may impel the bank to continue w ith its monetary
easing policy. The central, w hich already cut the main interest rate by a 25 basis
points to 4 . 5% in November 2013, is likely to low er the rate further by 50 basis
points to 4 % by mid- 2014 . How ever, the pace of rate-cuts over the next six to nine
months w ill probably be fairly gradual. Chilean banks w ill face greater regulatory
pressures that put a limit on bank fees, low er operating revenues and lending rates
on consumer products. While grow th in unsecured consumer credit can diversify and
help bolster the banks' overall earnings, delinquency levels might rise driven by
theSource: Respective bank dataincrease of this type of exposure. Nevertheless,
banks w ill remain stable as the financial fundamentals continue to be resilient.
The Chilean banking system still has sufficient capital levels needed in times of
deteriorating financing conditions and economic grow th. ?Bank??Total Assets??Credit
Portfolio???Deposits??Banco Santander Chile?26,04 5??19,736?14 ,94 7?Banco Estado??
23,34 1??14 ,720???16,350??Banco de Chile?22,739??20,4 14 ?14 ,256?Banco de Cre?dito e
Inversiones?19,219?13,782??7,700?Banco Bilbao Vizcaya Argentaria Chile??8,552??
6,015???4 ,957???17http://w ebreports. mergent. com???????????Industry Report - Banking
- March 2014 ???????Country ProfileColombiaSector Overview After experiencing a w eak
economy that w as hurt by poor performances in the manufacturing and construction
sector in 2012, Colombia enjoyed a remarkable transformation in its economy in
2013. According to Colombia's national statistics agency, the country's economic
output during the third quarter of 2013 expanded 4 . 17% from the same period in
2012, w ith similarly strong grow th forecasts over the coming years. Its banking
sector follow ed suit and remained stable as the strong economic grow th, stable
inflation and declining unemployment continued to support the Colombian banks. The
banks' solid asset quality, efficient operations, sufficient reserves and robust
profitability managed to protect them against losses, although provisioning costs
are expected to grow . Banks in Colombia have gained from burgeoning middle class
customers and more Colombians have been lifted out of poverty, stimulating demand
for consumer loans, mortgages and credit cards. In a bid to attract foreign
investment by having s middle class w ith greater consumer potential, the Colombian
Government has committed not to raise taxes, strengthen relations w ith Venezuela
and open up investment from South Korea and Panama. Sector DevelopmentColombian bank
earnings remained healthy and continued to attract foreign investment, w ith the
country's buoyant economy attracting a series of foreign institutions from w ithin
Latin America and from overseas. Led by strong loan grow th, SFC figures show banks
generated an encouraging net income w ith a year-on-year grow th rate of 5. 9% in the
first ten months of 2013, w ith earnings reaching COL$6. 4 1 trillion (US$32. 05
billion). This w as also due to improvements in the banks' net interest margins and
reduced operating expenses. While vibrant economic grow th quickly resumed, the
Colombian banking sector capitalization and liquidity also improved. Colombian
banks enjoyed a solid loan grow th w here it rose to COL$264 . 26 trillion (US$132. 13
billion) in the first 12 months to November 2013 from COL$203. 17 trillion
(US$101. 58 billion) in the year before. Leading PlayersBancolombia SAWith over 1,002
branches, 1,639 banking agents and 3,94 9 ATMs throughout the country to serve more
than seven million customers, Medelli?n-based Bancolombia is the largest commercial
bank in Colombia. The bank is also one of the largest in Latin America and has a
20% market share in the country's banking sector and a strong presence in the
corporate, retail, government, mortgage and middle market segments. For the third
quarter of 2013, the bank reported net income of COL$324 billion (US$162 billion),
representing a drop of 25. 4 % versus the same period in 2012 and a rise of 54 . 5%
compared to the second quarter on the back of strong lending. Bancolombia, w hose
shares trade in Bogota and in the US, registered a rise of 21. 2% in its net loans
compared w ith the same quarter a year ago. The grow th in the bank's loan portfolio
indicated sustained credit demand, particularly for consumer and commercial loans.
Meanw hile, the dynamic performance of mortgage loans w as driven by the low er long-
term interest rates as w ell as by the Colombian Government's interest rate subsidy
programs. Nevertheless, Bancolombia's net interest income w as 0. 7% low er at
COL$1. 22 trillion (US$0. 61 billion) as returns in the securities portfolio fell
w hile fees and income from services for the quarter w ere up 2. 5% to COL$4 61 billion
(US$230. 5 million), boosted by the higher volume transactions. Banco de Bogota?
(BVC: BOGOTA)Founded in 1970 and w ith 138 years of operating experience, Banco de
Bogota? is the oldest commercial banking institution in Colombia and is the second
biggest bank in the country in terms of assets. The bank has 734 service points for
its customers, more than 2,000 ATMs and operates through 274 branches. In the third
quarter of 2013, the bank reported total consolidated assets of COL$88,368 billion
(US$4 4 . 18 billion), representing an annual rise of 12. 2%. Banco de Bogota?, w hich
is part of Grupo Aval (BVC: GRUPOAVAL), one of the largest and most influential
financial entities in the country, did w ell?????????????????????18
http://w ebreports. mergent. com??????????Industry Report - Banking - March 2014
???????Country Profile - Colombia in terms of clients. It has ten million account
holders andusers portfolio lender. During the third quarter, the bank's consolidated
gross loan portfolio rose at an annual rate of 18. 3% to a total of COL$51,535
billion (US$25. 76 billion). The commercial loan portfolio still has the highest
share at 63% in Banco de Bogota?'s loan portfolio distribution by business unit and
us follow ed closely by consumer lending (23. 7%), mortgage lending (8. 3%) and
leasing operations (4 . 5%). Net income for the period w as COL$322. 24 billion
(US$161. 12 million), a rise of 28% from COL$251. 74 billion (US$125. 87 million) in
the same period in 2013, thanks to the dynamic performance of loan and fixed-
income investment portfolios. Meanw hile, the bank's net investment portfolio, w hich
comprised mainly of fixed income investments, came to COL$17,998 billion (US$8. 99
billion). This represents a rise of 15. 6% year-on- year. Market OutlookThe outlook
for the Colombian banking system remains stable for 2014 , given its sound deposit
base, favorable domestic operating conditions and access to capital markets. On top
of this, the banks' ongoing geographic expansion w ill benefit their funding
profiles. Colombian banks are expected to have more sustainable profitability.
Coupled w ith sufficient loan loss reserves and sufficient capitalization,
this should form a cushion against unexpected losses. According to the country's
central bank, Colombia's economy w ill grow betw een 3% and 5% in 2014 w hile
inflation is expected to remain below 3%. The interest rate, w hich is currently
3. 25%, w ill continue to stimulate the economy and is expansive. How ever, after the
strong double-digit percentage figures in recent years, loan grow th is expected to
trend tow ards moderation and lending margins may narrow somew hat from current
substantial levels. In the next 12 to 18 months, lending income w ill moderate as
loan grow th slow s, integration and credit costs rise and competition among banks
heightens. ?19http://w ebreports. mergent. com???????????Industry Report - Banking -
March 2014 ???????Country ProfileMexicoSector Overview Despite facing rising credit
costs and low er interest rates, Mexican banks remained rather healthy as they
maintained sound earnings and improved margins driven by improving funding costs
and higher spreads. While capital adequacy and reserves w ere solid, the banks' NPLs
as a percentage stood at 2. 5% across the banking system, according to credit data
from banking regulator CNBV. This compared favorably to the 2. 8% historic average
over the past ten years and w as significantly low er than the highs seen in 2000 at
9%. A number of factors such as more cautious policies and banks' greater prevalence
tow ards disposing of consumer NPLs as a method to clean up their balance sheets
helped reduced the NPLs among banks. Mexico's banking sector also thrived in the
country's favorable economy, characterized by stable inflation, rising GDP and
low er public debt. According to figures from the country's national statistics
institute, GDP in the third quarter grew 0. 84 % compared w ith the second quarter.
The grow th w as the fastest pace in more than a year. Sector DevelopmentThe first ten
months in 2013 saw Mexican banks flourishing w ith significant expansion in their
credit portfolio. Banks, particularly the private sector banks, had greater
incentives to lend in a low -interest rate environment. The banks continued to
generate solid margins and profitability w ith net income reaching MEX$84 . 15 billion
(US$6. 26 billion) in the January to October 2013 period from MEX$72. 28 billion
(US$5. 38 billion) during the same period in 2012. The favorable results w ere mainly
due to low er provisions, higher trading profit and the above average loan grow th as
the banks boosting more loans to consumers and government entities. Meanw hile,
loans w ere up 11. 3% year-on-year in October to MEX$2. 96 trillion (US$220. 22
billion) as corporate loans and mortgages saw grow th accelerate to 10. 5% and 10. 6%
respectively. The Mexican Government proposed an overhaul on a big scale of the
banking sector to make credit cheaper and more available. Leading PlayersGrupo
Financiero BBVA Bancomer (BM: BBVA)With roots going back 150 years, Grupo
Financiero BBVA Bancomer is Mexico's largest bank in terms of deposits and loan
portfolio. Mexico City-based Grupo Financiero BBVA Bancomer ow ns BBVA Bancomer, the
largest financial institution in the country. As of September 2013, the group's
total assets stood at MEX$1. 4 2 trillion (US$105. 65 billion), w ith deposits of
MEX$686. 24 billion (US$51. 06 billion) and 38,14 6 employees. The bank operates some
1,800 branches and 6,800 ATMs and holds about one-fifth of Mexico's retail banking
market. The bank is a major source of profit for its Spanish parent BBVA and
generates 4 2. 5% of its total revenues of BBVA w orldw ide. For the first nine months
of 2013, the bank's solid results w ere driven by high recurrent income that w as
generated by a positive evolution of loans and a profitable funding mix. Its profit
from January to September 2013 surged to MEX$24 . 35 billion (US$1. 81 billion) from
MEX$16. 86 billion (US$12. 54 billion) including profits from the sale of Afore
Bancomer in early 2013. Afore XXI Banorte, the pension-fund manager jointly-ow ned
by Grupo Financiero Banorte and the Mexican Social Security Institute, bought Afore
Bancomer for US$1. 74 billion. The bank has the largest volume of credit granted in
Mexico, w ith a MEX$572. 88 billion (US$4 2. 62 billion) portfolio. BBVA Bancomer's
consumer credit and credit cards rose 8. 7% to reach MEX$175. 52 million (US$13. 06
million) w hile commercial lending grew 3. 4 %. The bank revealed its ambitious
investment plan of US$1. 9 billion that w ill be used to complete the building of tw o
new corporate offices in Paseo de la Reforma and Parques Polanco and transform its
branch netw ork into a new banking model based on innovation and technology. Grupo
Financiero BanamexGrupo Financiero Banamex, the local arm of US-based Citigroup
(NYSE: C) and the ow ner of Banco Nacional de Mexico, is the second largest banking
group in?????????????????????20http://w ebreports. mergent. com??????????Industry
Report - Banking - March 2014 ???????Country Profile - MexicoMexico. The banking
giant w as formed in August 2001 follow ing the purchase of Grupo Financiero Banamex-
Accival by Citigroup. Through its distribution netw ork almost 1,700 branches, 6,800
ATMs and more than 4 ,000 correspondence points nationw ide, the group provides
complementary or auxiliary services to various financial entities in Mexico and
internationally. Banamex w as one of the top performers in Mexico and currently
accounts for 15% of Citigroup's global profits. Its strong capitalization level of
22. 5% boosted by the high level of reinvestment reflects Citigroup's confidence in
Mexico and the bank's improved financial strength. During the first nine months of
2013, the bank's net income came in at MEX$15. 14 billion (US$1. 13 billion), 10. 5%
higher from the same corresponding period of 2012. These encouraging results
largely reflect on the higher income derived from higher business volumes, higher
credit provisions and an efficient operating expenses control. During the period,
the bank's loan portfolio reached MEX$4 68 billion (US$34 . 82 billion), w ith an
annual grow th of 12%. Mortgages, credit cards and payroll loans w ere the credit
segments that drove much of the grow th, grow ing 14 %, 15% and 11% respectively
during the July- September period. Meanw hile, Banamex's deposits rose 11% to
MEX$1. 5 billion (US$111. 6 million), representing almost 20% of financial savings in
Mexico. Market OutlookMergent expects the Mexican banking sector to remain stable
and maintain strong fundamentals over the next 12- 18 months, lifted by some
recovery of profitability and asset quality. The levels of profitability and
capitalization manage to provide sufficient resources that support the stable
outlook for the banking system. Although banks' margin could decline in 2014 along
w ith trading income, how ever, this is expected to be offset by low er loan loss
provisions. While the banks are aggressively solving problem loans, loans to
deposits ratio w ill continue to rise driven by loan grow th and stronger economic
prospects. According to Mexico's national statistics institute, GDP grow th w ill
reach 3. 1% in 2014 , supporting bank lending. Rising domestic demand and personal
income along w ith excellent export levels are also positive credit factors that can
sustain bank activity over the quarters to come. ?21http://w ebreports. mergent. com
??????????Industry Report - Banking - March 2014 ???????Currency Conversion Table
Currency exchange rates of January 27, 2014 ?Currency Unit??Units per US$??US$ per
Unit?Argentinean Peso (ARS$)??7. 164 0??0. 1396?Brazilian Reals (R$)???2. 4 012???0. 4 165
???Chilean Peso (CLP$)?54 9. 80?0. 0018?Colombian Peso (COL$)???1,998. 4 8???0. 0005???
Euro (?)?0. 7308?1. 3683?Mexican Peso (MEX$)???13. 4 381???0. 074 4 ??Sources: Central
Bank of the Republic of Argentina, Central Bank of Brazil, Central Bank of Chile,
Central Bank of the Republic of Colombia, Bank of Mexico, Central Bank of Venezuela
?22 http://w ebreports. mergent. com??????????Industry Report - Banking - March 2014
???????The Scope Of This ReportThis report looks at the banking industry in Latin
America, w ith a special focus on Argentina, Brazil, Chile, Colombia and Mexico. The
report aims to paint a picture of the environment and industry development in a
number of segments, using available data and examining key public companies in each
segment w hose core services fall into the above categories. Key financial results
are presented in the comparative data tables on proceeding pages. Research analysts
draw on a range of credible industry and company data sources as w ell as new s and
information services to research and analyze the current trading environment,
industry landscape and market trends and outlook for a particular sector. Primary
sources are used, unless otherw ise indicated, and include company data, e. g. annual
reports and company financial results; macroeconomic and trade data; data and
information from global and country regulatory, industry and trade bodies;
government data; and reports from industry organizations and private research
organizations. Industries covered by the industry reports are defined by standard
industry classification systems and leading companies are identified on this basis.
The follow ing are the relevant SIC codes to the industry: 6021 (National Commercial
Banks), 6022 (State Commercial Banks) and 6029 (Commercial Banks). ?23
http://w ebreports. mergent. com??????????Industry Report - Banking - March 2014
???????Key ReferencesGlobal and RegionalInter-American Development Bank (IADB)The
IADB w as established in 1959 as an institution w ith a mandate to assist developing
Latin American economies. It conducts lending and technical programs for economic
and social development. http://w w w . iadb. orgInternational Monetary Fund (IMF)The IMF
is an organization w hose shareholders include 187 countries, w orking to foster
global monetary cooperation, secure financial stability, facilitate
international trade, promote high employment and sustainable economic grow th, and
reduce poverty around the w orld. http://w w w . imf. orgUnited Nations Economic
Commission for Latin America and the Caribbean (UNECLAC)A regional commission of
the United Nations founded in 194 8 to contribute to the economic development of
Latin America and the Caribbean and to reinforce economic ties among countries and
w ith other nations of the w orld. http://w w w . eclac. orgWorld BankThe World Bank is a
vital source of financial and technical assistance to developing countries around
the w orld. http://w w w . w orldbank. orgArgentinaAsociacio?n de Bancos de la Argentina
(ABA)The Argentine banking association w as founded to foster the steady development
of Argentina's banking sector. It comprises of commissions specialized in various
areas, including bank examination, bancassurance, taxes, trusts, securities
transactions, credit risk and bank security. http://w w w . aba-argentina. comCentral
Bank of ArgentinaThe country's central bank. http://w w w . bera. gov. arBrazilCentral
Bank of BrazilBrazil's central bank. http://w w w . bcb. gov. brMinistry of FinanceThe
government agency responsible for formulating and implementing Brazil's economic
policy. http://w w w . fazenda. gov. brNational Association of Financial Market
Institutions (ANDIMA)ANDIMA is a Brazilian non-profit civil entity that represents
the sector and brings together several financial institutions ranging from
commercial, multiple and investment banks to stockbrokers and securities
distributors. http://w w w . andima. com. br?24 http://w ebreports. mergent. com??????????
Industry Report - Banking - March 2014 ???????The Development Bank -- BNDESThe
Brazilian Development Bank is a federal public company associated to the Ministry
of Development, Industry and Foreign Trade, and aims to achieve long-term financing
that contributes tow ards the development of the country. http://w w w . bndes. gov. br
ChileAssociation of Banks and Financial Institutions of Chile (ABIF)The association
represents local privately ow ned banks and financial institutions, as w ell as
foreign banks operating in the country. http://abif. clCentral Bank of ChileChile's
central bank. http://w w w . bcentral. clSuperintendence of Banks and Financial
Institutions (SBIF)The SBIF is the chief banking and financial industry regulator.
http://w w w . sbif. clColombiaAsociacio?n Bancaria y Entidades Financeiras de Colombia
(ASOBANCARIA)ASOBANCARIA is the Colombian banking association that focuses on
internal management service provision and manages political relations betw een the
state and the financial sector. http://w w w . asobancaria. comBank of the Republic
Colombia's central bank. http://w w w . banrep. gov. coMexicoAsociacio?n de Banqueros de
Me?xico (ABM)ABM is the Mexican Bankers Association, founded in 1928, and
representing Mexico's banking Industry. http://w w w . abm. org. mxComisio?n Nacional
Bancaria y de Valores (CNBV)CNBV is the National Banking and Securities Commission
that supervises and regulates financial organizations that operate in Mexico.
http://w w w . cnbv. gov. mxPeruSuperintendence of Banking and Insurance of Peru (SBS)The
SBS is the chief banking and financial industry regulator. http://w w w . sbs. gob. pe?25
http://w ebreports. mergent. com???????Comparative Company Data| LATIN AMERICAIndustry
Report - Banking - March 2014 ?????????????????????????CompanyBanco Santander SAItau
Unibanco Holding SABanco do Brasil SABanco Bilbao Vizcaya Argenta Banco Bradesco SA
Itausa Investimentos Itau SSACI FalabellaGrupo Financiero BBVA Bancome Grupo
Financiero Banorte SA Banco de ChileCompanyBanco Santander SAItau Unibanco Holding
SABanco do Brasil SABanco Bilbao Vizcaya Argenta Banco Bradesco SAItausa
Investimentos Itau SSACI FalabellaGrupo Financiero BBVA Bancome Grupo Financiero
Banorte SA Banco de ChileCompanyBanco Santander SAItau Unibanco Holding SABanco do
Brasil SABanco Bilbao Vizcaya Argenta Banco Bradesco SAItausa Investimentos Itau S
SACI FalabellaGrupo Financiero BBVA Bancome Grupo Financiero Banorte SA Banco de
ChileCompanyBanco Santander SAItau Unibanco Holding SABanco do Brasil SABanco
Bilbao Vizcaya Argenta Banco Bradesco SAItausa Investimentos Itau SSACI Falabella
Grupo Financiero BBVA Bancome Grupo Financiero Banorte SA Banco de ChileCompany
Banco Santander SAItau Unibanco Holding SABanco do Brasil SABanco Bilbao Vizcaya
Argenta Banco Bradesco SAItausa Investimentos Itau SSACI FalabellaGrupo Financiero
BBVA Bancome Grupo Financiero Banorte SA Banco de ChileNotes to Comparative Data-
All figures are in United States dollars. - All figures are as reported by the
company. DefinitionsCountrySpain Brazil Brazil Spain Brazil Brazil Chile Mexico
Mexico ChileTotal Revenue - FYE - 1$108,4 70,201,24 0 $74 ,282,088,264 $72,399,566,923
$50,986,108,615 $4 9,127,4 72,901 $28,609,637,075 $11,4 50,676,156 $11,033,4 01,833
$6,079,4 84 ,94 6 $3,987,533,4 96Net Income - FYE - 1$3,910,652,852 $6,4 51,84 7,782
$6,829,4 4 3,397 $3,067,101,175 $5,552,225,135 $3,019,879,362 $851,84 6,721
$1,983,685,74 1 $609,709,54 4 $994 ,950,682Total Current Assets - FYE - 1
$156,173,04 8,563 $37,988,182,360 $60,312,266,717 $4 9,339,864 ,796 $29,34 3,057,024
$19,356,625,506 $9,4 25,283,776 $91,64 7,068,682 $54 ,166,933,74 7 $4 0,399,882,553
TickerSAN ITAU3 BBAS3 BBVA BBDC3 ITSA3 FALABELLA GFBBB GFNORTE0 CHILETotal Revenue
- FYE - 2$109,797,268,102 $79,175,870,910 $65,661,570,100 $4 5,501,057,84 5
$52,919,357,907 $26,018,917,761 $9,269,613,521 $11,735,360,766 $4 ,604 ,961,889
$3,4 72,232,692Net Income - FYE - 2$7,94 0,502,4 19 $7,833,780,121 $6,825,508,683
$4 ,507,680,556 $5,94 6,081,4 71 $2,722,270,113 $899,370,033 $2,153,332,708
$54 0,853,935 $84 2,667,308Total Current Assets - FYE - 2$124 ,84 9,170,14 7
$58,295,4 4 2,062 $64 ,376,338,84 1 $4 0,018,114 ,4 09 $50,282,882,854 $3,84 2,361,880
$7,583,328,962 $92,710,027,632 $4 4 ,4 12,295,519 $35,24 3,311,538ExchangeBMV BVSPA
BVSPA BMV BVSPA BVSPA BSAN BMV BMV BSANTotal Revenue - FYE - 3$100,791,4 80,097
$72,04 3,972,180 $53,34 8,94 5,928 $4 2,067,718,366 $4 7,021,4 34 ,919 $35,720,4 54 ,661
$8,856,006,785 $9,981,367,988 $4 ,274 ,957,4 57 $2,815,082,735Net Income - FYE - 3
$12,181,864 ,74 2 $7,526,505,635 $7,726,793,124 $6,685,169,675 $6,055,537,639
$1,157,915,4 78 $968,64 6,569 $1,650,830,514 $4 4 7,157,220 $892,4 35,066Total Current
Assets - FYE - 3$104 ,106,628,303 $57,799,997,013 $22,64 3,011,620 $26,74 2,017,074
$4 8,771,158,323 $210,381,4 4 3,4 79 $6,4 4 2,661,065 $81,663,863,185 $4 0,629,282,4 4 6
$32,639,629,4 51Primary SIC6029 6029 6021 6029 6029 6029 5311 6029 6029 6029EBITDA -
FYE - 1$7,000,160,868 $9,503,893,128 $10,130,713,085 $2,570,196,515 $8,397,932,651
$4 ,893,373,24 1 $672,764 ,831 N/AN/A $1,201,177,982EPS - FYE - 1$0. 30 $1. 37 $2. 38
$0. 4 2 $1. 26 $0. 61 N/A N/A $0. 27 $0. 01Long-Term Debt - FYE - 1Date FYE - 131-Dec-
2012 31-Dec-2012 31-Dec-2011 31-Dec-2012 31-Dec-2012 31-Dec-2010 31-Dec-2012 31-
Dec-2011 31-Dec-2011 31-Dec-2012Other SICs???????6211??6082???6211??6726??64 11
??????????6371?6082??64 11??6311???24 99??3261??3572?6111??6029??6531?64 11??6712???
6153???6371???6399?????????6282 6022 9311 6211 6211 64 11 5039 614 1 6211EBITDA - FYE
- 2$12,922,879,895 $11,009,115,225 $10,580,650,658 $4 ,783,185,852 $8,64 4 ,333,4 68
$5,019,203,4 35 $775,805,24 0 N/AN/A $1,030,203,84 6EPS - FYE - 2$0. 78 $1. 64 $2. 51
$0. 80 $1. 34 $0. 59 N/A N/A $0. 27 $0. 01Long-Term Debt - FYE - 22899 4 724 6712EBITDA -
FYE - 3$18,703,752,996 $11,94 2,168,057 $11,74 6,34 5,611 $8,684 ,697,903
$10,068,371,166 $51,782,113 $852,585,707 N/AN/A $1,063,111,4 16EPS - FYE - 3$1. 26
$1. 55 $3. 00 $1. 4 7 $1. 38 $0. 30 N/A N/A $0. 22 $0. 01Long-Term Debt - FYE - 3
???????????????????????????????????????????????????????????????????????????????????
???????????????????????????????????????????????????????????????????????????????????
?????????????????????????????????????????????????????????????????????????
$274 ,34 3,776,537$77,911,527,753N/A$125,916,268,126$36,751,238,4 19N/A$4 ,122,94 3,556
$3,678,4 29,385 $3,306,222,598 $4 ,4 70,630,621 $3,330,385,74 7 $2,839,608,753
$2,135,164 ,594 $2,4 26,139,271 $1,965,383,54 3 $9,120,04 4 ,4 87 $7,84 4 ,769,231
$6,508,252,84 9$289,050,890,352 $82,708,961,54 4 N/A $130,54 3,576,133 $4 2,260,951,4 4 6
N/A$292,707,377,116 $64 ,525,297,870 N/A $137,315,660,366 $26,581,14 9,831
$292,986,4 82??????????????????????????????????????????????????????????????????????
Return on Equity (Most Recent Yr)3. 97 17. 38 20. 36 5. 62 15. 96 19. 06 14 . 19 20. 77
12. 02 20. 30Profit Margin (Most Recent Yr)3. 61 8. 69 9. 4 3 6. 02 11. 30 10. 56 7. 4 4 17. 98
10. 03 24 . 95Date FYE - 231-Dec-2011 31-Dec-2011 31-Dec-2010 31-Dec-2011 31-Dec-2011
31-Dec-2009 31-Dec-2011 31-Dec-2010 31-Dec-2010 31-Dec-2011Date FYE - 331-Dec-2010
31-Dec-2010 31-Dec-2009 31-Dec-2010 31-Dec-2010 31-Dec-2008 31-Dec-2010 31-Dec-2009
31-Dec-2009 31-Dec-2010????????????????????????????????????????????????????- N/A =
Data Not Available. - N/L = Not listed. - Companies ranked by total revenue for the
full year most recently reported. ?- Total Revenue = All revenues, including net
sales, operating revenues, interest income, royalties, excise taxes etc. - EBITDA =
Earnings before interest, taxes, depreciation and amortization. - EPS Cont
Operations = Earnings Per Share as reported by company excluding extraordinary
items. - Total Current Assets = All assets expected to be realized w ithin the next
year, includes cash, accounts receivable and inventories. - Long Term Debt = Debt
due to be paid at a date more than one year in the future. - Return on Equity = The
company's earnings divided by its equity (book value). - Profit Margin = The
company's net income as a percent of revenues. ?26http://w ebreports. mergent. com
???????Notes Industry Report - Banking - March 2014 ???????????27
http://w ebreports. mergent. com???????Notes Industry Report - Banking - March 2014
???????????28 http://w ebreports. mergent. com???????Notes
Industry Report - Banking - March 2014 ???????????29 http://w ebreports. mergent. com
???????????Industry Report - Banking - March 2014 ?????????????????????????Industry
Reports Coverage 2014 ?Regional ReportsNorth America? Automotive? Aviation? Banking?
Biotechnology ? Chemicals? Electricity? Food & Beverage ? HealthcareEurope?
Automotive? Aviation? Banking? Biotechnology ? ChemicalsAsia-Pacific? Automotive?
Aviation? Banking? Biotechnology ? ChemicalsLatin America? Automotive? Banking?
Chemicals? Food and Beverage? Heavy Construction? Hospitality & Tourism ? Insurance
? IT & Technology? Media? Medical Instruments &Equipment ? Metal Works? Food &
Beverage ? Insurance? IT & Technology ? Media? Food & Beverage? Heavy
Construction ? Insurance? IT & Technology? Media? Insurance? Metal Works - Iron and
Steel ? Miningw w w . mergent. com? Mining? Oil & Gas? Pharmaceuticals? Precious Metals?
Property & Development ? Retailing? Telecommunications? Oil & Gas? Pharmaceuticals?
Property & Development ? Telecommunications? Oil & Gas? Pharmaceuticals? Property &
Development ? Telecommunications? Oil & Gas? Property? Telecommunications???34 04
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http://w ebreports. mergent. com???????????Industry Report - Banking - March 2014
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