As challenges and opportunities roll out this year, some banks are better positioned than others in certain areas to expand their leadership across the region. These are the institutions that stood out in 2014 in four different areas: retail, investment banking, cash and treasury and mobile banking.
Itau Unibanco has shown an impressive resilience to Brazil's economic cycle. Itau has been able to achieve strong returns on equity because of its market leadership in several categories and a determination to reduce costs. It's long-term prospects look bright, especially if their increasing leadership in credit cards is taken into consideration. Itau will be the bank that benefits the most from growing payment card usage in Brazil. It controls major credit card brands Hipercard and Itaucard, and is the market leader in Brazil with 58 million accounts.
HSBC expects Latin America to have increased around fourfold in size by 2050. That's why markets in Brazil, Mexico and Argentina are a main priority for the bank. In the first half of 2014, the region generated a profit, before taxes, of $374 million. In Brazil, term lending and mortgages grew during the first half of last year, and HSBC implemented several initiatives to achieve higher revenue momentum and grow high quality business. Secured lending was 29 percent of its loan book in LatAm's biggest economy in June 2014, compared with 22 percent a year earlier. HSBC has introduced, in Brazil, the MasterCard Black credit card for Premier customers, and also improved the bank's personal loan offering features.
The subsidiary of BBVA in Mexico remains the poster child of the region, as it contributes to 43 percent of the group's profit. The profits in Mexico could experience an annual growth close to 10 percent at the end of 2014, according to forecasts by BBVA's Bancomer CEO, Vicente Rodero.
Banco Itau BBA
Even if fees for advising on investment banking in Latin America tumbled in 2014, Banco Itau BBA continued to outshine its competitors in the region. Revenue from advising on takeovers, bond and stock sales, and syndicated loans reached $1.83 billion through December. The current year should be more constructive for some markets and some areas like initial public offerings. Also, debt capital markets activity should improve, especially in Brazil.
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