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
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????????PublisherJonathan WorrallDirectorJohn PedernalesManaging EditorPeter O'Shea Research AnalystAngelina Ho Li NaWebsite:http://w
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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 Mergent, Inc.
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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.
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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.
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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
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???????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
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???????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.
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???????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
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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.
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???????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.
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???????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
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???????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.
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???????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.
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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.
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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.
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???????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$14
.
5 billion, boasts a national netw
ork of 4
34
branches and 1,915 ATMs to serve its more than half a million customers.
Despite having to deal w
ith w
eaker economic grow
th, the year 2013 w
as a relatively good year for Banco de Chile.
The bank, w
hich maintains its position as the most profitable in the country, achieved a return on average equity (ROAE) of 23%, driven by a grow
ing loan book and higher lending spreads and steady income from fees and commission.
The percentage has beaten the average return recorded by its peers (18.
1%) and the industry (13.
7%) in the same period.
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???????Country Profile - Chile Table 4
: Chile's Top Five Banks (CLP$ 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
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???????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
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???????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.
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???????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
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???????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$111.
6 million), representing almost 20% of financial savings in Mexico.
Market OutlookMergent expects the Mexican banking sector to remain stable and maintain strong fundamentals over the next 12- 18 months, lifted by some recovery of profitability and asset quality.
The levels of profitability and capitalization manage to provide sufficient resources that support the stable outlook for the banking system.
Although banks' margin could decline in 2014
along w
ith trading income, how
ever, this is expected to be offset by low
er loan loss provisions.
While the banks are aggressively solving problem loans, loans to deposits ratio w
ill continue to rise driven by loan grow
th and stronger economic prospects.
According to Mexico's national statistics institute, GDP grow
th w
ill reach 3.
1% in 2014
, supporting bank lending.
Rising domestic demand and personal income along w
ith excellent export levels are also positive credit factors that can sustain bank activity over the quarters to come.
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???????Currency Conversion Table Currency exchange rates of January 27, 2014
?Currency Unit??Units per US$??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
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???????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).
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???????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
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???????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
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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
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