Central America and Caribbean's best bank 2019: BAC International Bank
Awards for Excellence 2019
Economic growth is strengthening in central American and the Caribbean. The IMF expects the region to grow at about 2% this year and 2.5% next year.
However, while that’s certainly an improvement on last year’s result of a little over 1%, it still lags behind the 3%+ of the emerging market average.
Fiscal constraints have been pushing down economic growth rates, while global headwinds in the form of trade concerns have added uncertainty to what are mostly export-led models of growth.
Lower oil prices, if sustained, should help the majority of the fuel-importing countries. However, attempts to develop a greater focus on the region’s internal market – combined GDP of more than $250 billion and population of around 50 million – have been fitful.
Integration of these fragmented economies continues to be frustrated by political systems that are more than lightly sprinkled by populism, while the great gravitational weight of the US economy to the north is understandably a greater prize for politicians and business.
Against this backdrop, some forward-looking banks are leading the way in regional integration. BAC International Bank (BIB), led by president and chief executive Rodolfo Tabash, is at the head of this small group of innovators – it is part of Colombia’s Grupo Aval – and has been able to make the weight of its financial backing pay off.
The bank now has a presence in all six central American countries: with a loan market share in the fourth quarter of 2018 of 23.4% in Nicaragua; 14.9% in Costa Rica; 14.4% in Honduras; 14.1% in El Salvador; 11.5% in Guatemala; and 6.9% in Panama.
The bank’s risk managers have set a 28% limit for any single country’s share of total deposits and credits to minimise concentrations within the region. Also, in 2017 the bank began consolidating its legacy acquisition banks under the brand of BAC Credomatic.
BIB’s greater size translates into greater profits: the group made $405 million in net profit across the region in 2018 – up an impressive 27% in a flattish economy (and a compound annual growth rate of 11.6% over the last 18 years). The bank enjoyed a return on equity of 15.4% and a return on assets of 1.8% (and is well above the regional average of 12.6% and 1.3% respectively).