Banesco profits expand by 48% in 2010 on rapidly rising NIM

Thursday, April 7, 2011

Banesco, Venezuela's largest bank, saw its earnings expand by 48% in 2010, thanks entirely to even more rapid growth in its net interest margin (NIM).

According to numbers in its recently released 2H11 report to investors, the bank earned 906mn bolívares (US$211mn) in 2010, bumping its ROAE up to 23.6%, from 19.2% a year prior.

The bank owes the earnings bump almost entirely to a significant decline in the cost of deposits, which dropped 29.3% to 1.67bn bolívares.

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Its financial income, on the other hand, increased by 10.2%, leaving the bank with a NIM of 3.14bn bolívares, up 56.6% from the previous year.

Earnings expanded significantly faster than annual inflation, which finished 2010 at around 27%.

However, Banesco's credit portfolio has not kept up pace, expanding by only 21.6% in 2010, to 27.6bn bolívares, according to the numbers released by the bank.

Banesco recently announced an expansion into the Dominican Republic, and its president, Juan Carlos Escotet, was just elected to a second two-year term as head of banking association ABV.