Regional Winner: Banco Santander Central Hispano

Global Finance, May 2006 by Bamrud, Joachim

LATIN AMERICA

The war over the Latin American banking sector is over, and the conqueror is Banco Santander Central Hispano (SCH). Once seen as part of a duopoly that would dominate the region-with its rival BBVA taking the other half-SCH now stands alone at the top, way ahead of BBVA, Citigroup and other competitors. Its challenge now is to make sure its properties are profitable and healthy. And last year it did just that. Net attributable income from Latin America grew by 21% to $2.2 billion. Measured in euros, operating income for Latin America grew by 31.6% and revenues by 20.9%. Assets in the region grew by 38.5%, deposits by 42.3% and loans and credits by 46.7%). All in all, it manages more than $190 billion in Latin America business (credits, deposits and investment and pension funds). And nonperforming loans fell from 2.9%) in 2004 to 1.9% last year, while NPL coverage grew from 155% to 183%. Although it is increasingly focusing on Europe (after the acquisition of UK based Abbey), SCH is still heavily dependent on Latin America-and vice versa.

Emilio Botin, chairman

www.gruposantander.com

ARGENTINA

Macro Bansud

Although it is not the largest bank measured by assets, it is the most profitable to emerge after the Argentine default. It is also the only one that can boast 16 consecutive quarters of profit. Net income grew by 36% to 263 million pesos ($86 million) last year, while loans to the private sector more than doubled. And a March 2006 IPO through the New York Stock Exchange-the first by an Argentine company since the 2001-2002 crisis-raised $192 million. Much of the growth is due to acquisitions, and today Macro Bansud is the largest private bank in terms of branch numbers.

Jorge Horatio Brito, chairman, president

www.bansud.com.ar

BARBADOS

FirstCaribbean International

FirstCaribbean can boast a fantastic year, with net income growing a whopping 191.3% to $257.9 million in 2005. Assets grew by 23.8%. Part of the growth was due to the sale of shares in Republic Bank in Trinidad, which netted $117.4 million, but also to growth in business and keeping costs at the same level as in 2004. Loans in 2005 grew by 17%, while deposits expanded by 5%. FirstCaribbean, which was formed four years ago as a result of a merger of the West Indies holdings of Canada-based CIBC and the Caribbean holdings of UK-based Barclays Bank, operates in 16 Caribbean territories apart from its home base of Barbados. The operations in Barbados, Bahamas and Cayman Islands had particularly strong net income growth, while Jamaica expanded at lower rates. The strong financial performance earned the bank an A- stable credit rating from Standard & Poor's.

Charles Pink, CEO

www.firstcaribbeanbank.com

BOLIVIA

Banco de Crédite

Despite volatility at home, Banco de Crédito managed to achieve a good year. Its net income in the first nine months of 2005 ended up at $6.3 million, which was better than the full-year 2004 results of $4.8 million (which itself was a dramatic increase from the year before). Assets stood at $505.7 million at the end of September 2005, an increase of almost $50 million over the year before. According to ratings agency Fitch, which awarded the bank an AA rating in December 2005, Banco de Crédito has benefited from improved efficiency, reduced costs and a favorable competitive position in the Bolivian banking market.

Dionisio Romero Seminario, chairman

www.bancodecredito.com.bo

BRAZIL

Bradesco

Bradesco, Brazil's top private bank, has had a good year. Net income last year ballooned by 80% to 5.5 billion reals, while assets grew by 12.8% to 209 biUion reals ($2.6 billion). Much of the increase in profitability comes from a higher loan volume and more clients. Loans were up by 29.2%, while deposits grew 9.9%. Bradesco is expected to see stronger net income growth than its top rival Itau this year and stronger loan growth than any of its rivals, according to Bear Stearns. The bank, which has the highest market capitalization of any Brazilian bank, will solidify its position further through the $490 million acquisition of the Brazil business of American Express, announced in March.

Lazaro de Mello Brandao, chairman

www.bradesco.com.br

CHILE

Santander Santiago

Santander Santiago posted record profits last year, helped by rising fee income. At the same time the rate of nonperforming loans is falling. All in all, the bank did better than the market expected. Net income grew by 21% to 240 billion pesos ($470 million). Total loans grew by 4%, thanks to strong growth in consumer loans, mortgage loans and commercial loans. Santander, the top bank in Chile in assets, deposits and loans, can boast an A rating from Standard and Poor's, A by Fitch and a Baal rating from Moody s.

Mauricio Larrain Garces, chairman

www.santandersantiago.cl

COLOMBIA

Bancolombia

Thanks to the three-way merger of Bancolombia, Corfinsura and Conavi, the new entity-known as Bancolombia-is the undisputed top financial institution in Colombia. It now accounts for more than 20% of Colombian bank assets, almost twice as much as its closest rival BBVA. Assets grew by 12.5% last year, while net income grew 18.2% to 947 billion pesos ($400 million). Net loans were up 14.8%. Last year Bancolombia also expanded its international operations by creating a brokerage in Panama and a leasing company in Brazil.