The banking industry in Latin America is solid and growing steadily. In fact, for the purpose of this study, I think is helpful for me to distinguish between an emerging banking industry and a matured banking industry. Accordingly, an emerging banking industry is one where banking assets in a country comprise less than 80% of the country’s GDP or in the same fashion, outstanding loans in the banking system comprise less than 60% of the country’s GDP. Likewise, a matured banking industry is one where banking assets in a country comprise more than 80% of the country’s GDP or in the same fashion, outstanding loans in the banking system comprise more than 60% of the country’s GDP. Altogether, the banking industry in Latin America stands at close to $ 5 trillion worth of assets or just over 100% of GDP according to Latin Finance. As a consequence, the region has just recently reached maturity as a whole but currently with room for expansion except for Brazil, Chile, Colombia and Panama. Moreover, the banking industry in Latin America is fairly fragmented meaning that there are several important players rather than just a few. Indeed, out of nearly $ 5 trillion in banking assets and roughly $ 3 trillion worth of retail deposits throughout the subcontinent, a colossal total of 100 of the top banks in the region contain around $ 3.5 trillion in assets. Similarly, the asset portfolio of the banking industry as a whole in Latin America includes around $ 2 trillion worth of existing business loans, approximately $ 800 billion worth of sovereign bond and note holdings, roughly $ 1 trillion of home mortgages outstanding and just over $ 1 trillion worth of other assets like reserves and cash in vaults. In addition, approximately half of all adults in the region are bancarized meaning they have bank accounts in their names. By the same token, it is also helpful for me to go over major countries in Latin America and detail the industry in terms of assets, players and whether the country has an emerging or matured banking industry as follows:
Brazil: the country has a matured banking industry reaching close to $ 1.8 trillion worth of assets. Major players representing over 90% of the market include Banco Itaú Unibanco S.A., Banco do Brasil S.A., Bradesco S.A., Caixa Econômica Federal S.A., Banco Santander Brasil S.A., HSBC Bank Brasil S.A., Banco Safra S.A., Banco Votorantim S.A., BTG Pactual S.A., Barinsul S.A., Deutsche Bank Brasil S.A., Citibank Brasil S.A., JP Morgan Brasil S.A., Banco Volkswagen S.A., Banco do Nordeste S.A., Banco BMG S.A., BNP Paribas Brasil S.A., Banco Panamericano S.A., Banco Industrial e Comercial S.A. and Banco Alfa S.A. Moreover, although fairly fragmented, Banco Itaú Unibanco, Banco do Brasil, Bradesco, Caixa Econômica Federal and Banco Santander Brasil alone by themselves comprise close to 80% of the market in Brazil. Caixa Econômica Federal is solely a state-owned development and residential mortgage bank whereas BTG Pactual is solely an investment bank and broker-dealer. In addition, Banco do Brasil is a commercial bank that trades in Brazil and controlled by the Brazilian state.
Chile: the country has a matured banking industry at around $ 300 billion worth of assets. Major players comprising roughly 80% of the market include Banco Santander Chile S.A., Banco de Chile S.A., Banco del Estado de Chile S.A., Banco de Crédito e Inversiones S.A., Itaú Corpbanca S.A., BBVA Banco Bhif S.A., Scotiabank S.A., Banco Bice S.A., Banco Falabella S.A. and Banco París S.A. Moreover, the Chilean banking industry is fairly fragmented. On the other hand, Banco del Estado de Chile is a state-owned commercial bank. In addition, both Banco Falabella and Banco París are extensions of services the two best known retail groups in the country provide to facilitate credit and enhance consumption at their stores.
Colombia: the country has a matured banking industry. Mayor players constituting around 80% of the market include entities related to Grupo Aval Acciones y Valores S.A., Grupo Bancolombia S.A., Banco Davivienda S.A., BBVA Banco Ganadero S.A., Banco Colpatria S.A., Banco Agrario de Colombia S.A., Itaú Colombia S.A. and GNB Sudameris S.A. The industry in Colombia is fairly concentrated. In fact, Grupo Bancolombia and the four entities belonging to and/or controlled by Grupo Aval which are Banco de Bogotá S.A., Banco de Occidente S.A., Banco Popular S.A. and Banco de Ahorro y Vivienda Las Villas S.A. alone by themselves comprise at least half the market in Colombia which stands at approximately $ 250 billion worth of assets nowadays. Banco de Ahorro y Vivienda Las Villas is solely a residential mortgage bank whereas Banco Agrario de Colombia is state-owned by the Colombian government.
Panama: the country has a matured banking industry where assets exceed the country’s GDP approaching $ 100 billion today versus a GDP reaching $ 50 billion nowadays thanks to its status as a tax haven and where the currency in circulation happens to be the American dollar. Although heavily fragmented, the banks Banistmo S.A., BLADEX S.A., Banco General S.A., BAC International Bank Corporation, Global Bank Corporation, Saint Georges Bank & Company Corporation, Capital Bank S.A., Popular Bank Limitada, Banco Mercantil S.A., Banesco (Panamá) S.A., Scotiabank (Panamá) S.A., Banco Citibank (Panamá) S.A., Itaú (Panamá) S.A. and Credicorp Bank S.A. constitute over two thirds of the market in Panama. Moreover, other banking institutions worth mentioning in Panama include Banco Nacional de Panamá S.A. and Caja de Ahorros de Panamá S.A., both of them are entirely owned by the Panamanian state. Likewise, the latter one mentioned is solely a residential mortgage lender. In addition, the country enjoys a financial account surplus from foreign portfolio investment where private banking is at the forefront of services the country provides attracting capital while enhancing its preservation and steady growth.
Mexico: the country has an emerging banking industry containing close to $ 600 billion worth of assets. Institutions representing around 80% of the market include BBVA Bancomer S.A., Grupo Financiero Banamex S.A. de C.V., Grupo Financiero HSBC S.A. de C.V., Grupo Financiero Santander México S.A. de C.V., Grupo Financiero Banorte S.A., Scotiabank Inverlat S.A., Grupo Financiero Inbursa S.A.B. de C.V., Grupo Financiero Interacciones S.A. de C.V., Grupo Financiero Multiva S.A.B. de C.V., Banco Azteca S.A. and Bancoppel S.A. Both Banco Azteca and Bancoppel are extension of services two of the most important retail groups in the country provide in order to facilitate consumption at their stores. Moreover, the industry in Mexico is fairly fragmented.
Argentina: the country has an emerging banking industry. Major players comprising over half the market include Banco de la Nación Argentina S.A., Banco de la Provincia de Buenos Aires S.A., Banco Santander Río S.A., BBVA Banco Francés S.A., Grupo Financiero Galicia S.A., Banco Macro S.A., Banco Supervielle S.A. Banco HSBC Argentina S.A. and Banco Hipotecario S.A. Moreover, Banco de la Nación Argentina is a state-owned commercial bank whereas Banco de la Provincia de Buenos Aires is also a commercial bank completely owned by the municipal government of the Province of Buenos Aires. In addition, Banco Hipotecario is solely a residential mortgage bank controlled by the biggest listed agricultural group operating out of the fertile Pampas Region inside the republic known as CRESUD S.A.C.I.F. y A. The latter is in turn controlled by the nationally important and low-profile Elsztain brothers. Moreover, the control of the bank in question is exercised through super-voting common stock held by Inversiones y Representaciones S.A., better known by its acronym as IRSA, the listed real estate arm of the brothers. Furthermore, the industry in Argentina is heavily fragmented and holds about $ 200 billion worth of assets.
Venezuela: the country has an emerging banking industry. Major players constituting around 90% of the market include Banesco Banco Universal S.A., Banco de Venezuela S.A., BBVA Banco Provincial S.A., Mercantil Servicios Financieros C.A., Banco Bicentenario S.A., Grupo Financiero BOD S.A., Banco del Tesoro C.A., Banco Nacional de Crédito C.A., Bancaribe S.A., Banco Exterior C.A., Banco Venezolano de Crédito S.A. and Banco Fondo Común S.A. On the other hand, Banco de Venezuela and Banco Bicentenario are both commercial banks fully owned by the Venezuelan state. Moreover, the industry in Venezuela stands at roughly $ 200 billion worth of assets and is fairly fragmented.
Peru: the country has an emerging banking industry. Three entities alone constitute over half the market which are Banco de la Nación S.A., Credicorp Limitada and BBVA Banco Continental S.A. Other players that are expanding aggressively are Scotiabank S.A., Interbank S.A. and Banco Santander Perú S.A. In addition, Banco de la Nación is a commercial bank completely owned by the Peruvian state. Moreover, the industry in Peru stands at close to $ 150 billion worth of assets and is fairly concentrated.