Bolivia¹s financial system has advanced steadily this past
year. A healthy pickup in GDP growth to 5.1% in 2011 from
4.1% in 2010 has lifted the economy and allowed total
assets in the system to increase by 16.4% in that time, while
profits have grown 36%.
The scale of the market¹s largest bank, Banco Mercantil
Santa Cruz has meant it has no peer in terms of strength and
³The country is going through a positive economic
performance which is tied to the performance of the financial
system,² Darko Zuazo BMSC¹s president, tells
The bank has hit two important milestones, he says: its loan
portfolio reached $1 billion in the first semester of 2011, and
BMSC now has over $2 billion in assets.
The bank has $1.79 billion in deposits a growth of
17.2% in the second half of 2011, easily maintaining its
position as the largest in the country.
Profitability for BMSC on an ROE basis was 23.4% in 2011
year-end versus 26.8% as of the same period last year.
Its return on assets increased slightly to 1.53% as of
year-end 2011, versus 1.31% at the end of 2010. The increase
was in part thanks to a new cash processing area, which the
bank says has reduced operating costs.
The bank has reduced its non-performing loans through its
special operations division and decreased non-performing loan
assets as a percentage of the loans from a NPL ratio of 6% in
2010 to 3.42%.
With its position well established, BMSC¹s main
strategy is to continue to modernize its technology: this
includes implementing the first self-service electronic
platform in Bolivia, and new services for customers through
ATMs and internet banking.
Its 2013 strategic plan includes increasing the number of
branches and ATMs while leveraging technology to grow its
assets and loan portfolio, Zuazo adds. The bank has also
initiated operations of Empresa de Transporte de Valores, a new
company that transports cash and valuables.
One channel for growth in Bolivian banking could be through
the country¹s growing and profitable microfinance segment.
BMSC would like to increase its presence in microfinance,
although Zuazo says the bank does not expect a substantial
expansion in this area in the short to medium term.
³There is talk there could be entities for sale, but it
is not a buyer¹s market with only four to five known
microfinance entities in the country,² says Zuazo.