Bank of the Year 2018 -- Ecuador: Banco Pichincha
November 8, 2018
As external events intervene, the nation’s largest bank maintains a steady course
Many within the center-left Alianza País political coalition once considered President Lenín Moreno a placeholder until Rafael Correa ran again in 2021. But a year into his administration, Moreno has taken a different tact than anticipated.
After the results of a referendum in February 2018 set presidential term limits and effectively barred Correa from running again, Moreno has reversed much of the previous administration’s economic policies.
The economy has yet to take off, however, and Fitch Ratings downgraded the country to B- from B in August, citing rising government debt and tepid economic growth forecasts.
Banco Pichincha, the largest financial services conglomerate in Ecuador, with 28% of loans and 32% of deposits, felt the financial reverberations. The bank’s total assets have declined 14.5% since the third quarter of last year, but they still make up 27% of assets in the country’s banking system.
Fitch downgraded Pichincha and its local rival Produbanco to B- from B in October, but Pichincha has righted the ship in turbulent times and wins the award for Bank of the Year in Ecuador.
Pichincha increased net income 7.8% from to $55.4 million from $51.4 million over the past year. It also lowered funding costs, with net interest margins rising in the first six months of 2018. LF