Bank of the Year 2018 -- Guatemala: Banco Industrial
November 8, 2018
Careful lending practices and consumer-friendly technology laid a blueprint for the bank to pursue growth amid uncertainty
According to Luis Sifontes, vice president of finance at Banco Industrial, political strife in Guatemala and the drop in prices for the nation’s main exports, sugar and coffee, have affected every participant in the local banking sector in one way or another.
GDP has risen just 2.8% this year and is expected to increase at a similarly lackadaisical pace in 2019, but Banco Industrial has grown its total assets by 6% year-over-year to nearly $14 billion. The bank’s continued growth and its dominant position in the local loans market make it the winner of the award for Bank of the Year in Guatemala.
Sifontes credits Banco Industrial’s 28% market share to conservative lending practices, adopting new technology for mobile banking apps and keeping a tight rein on spending.
“We are the biggest bank in Guatemala,” he says, estimating Banco Industrial’s deposits at $860 million, capital at $1.2 billion and a gross income for the year of $125 million.
“The bank has always been very focused on having the latest tech for both mobile and online banking,” he adds. “This has led to our operational costs remaining relatively flat, while our gross income continues to grow.”
Through its conservative lending practices, Banco Industrial’s current low performing loans comprise a mere 1.2% of its $7.4 billion credit profile, Sifontes says.
With elections scheduled for July 2019, the bank is in an advantageous position, he says. Building on its reputation for financing energy and renewables projects, the bank is eager to engage the private sector in financing public-private partnerships, or PPPs.
The government awarded the first contract this year under the new PPP framework – a highway to Puerto Quetzal, a major port on the Pacific coast. In 2019, “the bank will continue focusing on technology,” Sifontes says. “However, I think there will be more opportunities in the infrastructure investment sector and other projects.
Banco Industrial also wants to grow its remittances business next year. The bank has increased its market share in the sector to 29% from 7% five years ago, he says. LF