More than five years since the onset of the financial crisis
and the global banking industry remains a pale shadow of its
former self. News at the end of October that Swiss bank UBS was
to shed 10,000 jobs underscored just how much has changed
and what is yet to come.
Bank of the Year 2012: Rates of change
Latin banks have come a long way – and today, the contrast with Western lenders could hardly be more stark
Yet while Western lenders struggle with the legacy of the
crisis and effects of a tightening regulatory screw, the
picture in the southern hemisphere could hardly be more
For countries in Latin America that have achieved enviable
growth numbers while keeping inflation in check, their banks
today are a source of pride and strength. Banks from Chile,
Colombia and Peru plan ‹ and are achieving ‹
regional expansion. Mexican companies shine as the star assets
of multinational groups whose parents (outside the region)
continue to show signs of fragility.
Banks from outside the region that shed assets find they
have been quickly scooped up by growing and aggressive
Despite more onerous capital requirements, Latin American
banks have never had better access to funds domestically and
internationally. Tier- two issuance flies off the shelves to
international buyers at tight pricing. The region¹s banks
have led the way in debt capital market innovation as well,
with innovations including Euroyen issuance and a tier one
perpetual non-cumulative junior subordinated bond.
And those that needed it have also found the equity capital
markets wide open.
This is not to say that life has been easy for all. Domestic
markets are still susceptible to bad news from abroad. And some
governments continue to make life more challenging for
Caution is once more a theme, and indeed a virtue, this
year. In markets large and small the biggest banks have the
stability and resources to withstand all manner of government
The LatinFinance Banks of the Year Awards seek to identify
standout institutions in the region¹s diverse markets. In
addition to examining size, growth, profitability and other
quantifiable aspects, the process takes into account strategic
moves and other less tangible variables.
In more challenging environments, safety and conservatism
Where governments and other factors make life difficult, the
top banks face these challenges in the most prudent ways. In
safer, and in some cases booming, markets, more opportunistic
factors may be considered in addition to size and strength.
In all cases the winners point to the very best about each
country¹s banking system and indeed their economies and
the region¹s strengths on the whole.
What¹s clear is that this year there has been much for
Latin banks to celebrate. LF