Uruguay is a country with a stable, open and diversified economy, which has achieved sustained growth in recent years. The financial sector is one of the pillars of this development, with the participation of more than 20 banking, financial and cooperative entities. Among them, there are five banks that stand out for their size, solvency and track record: BROU, Banco Santander, Scotiabank, Itaú and BBVA. These five banks represent more than 80% of the total assets of the Uruguayan banking system, and have a wide range of products and services for their customers. In this article, we will analyze the characteristics, results and challenges of each of these banks.
BROU
BROU is Uruguay’s public bank, and the largest in the country, with assets of US$ 12.8 billion at the end of 2020. Founded in 1896, BROU’s mission is to contribute to the country’s economic and social development by providing quality and accessible financial services to all sectors of the population. BROU has more than 2.5 million customers, both individuals and corporations, and a network of more than 300 points of service, including branches, ATMs, and banking correspondents.
BROU had a positive result in 2020, despite the crisis caused by the Covid-19 pandemic. The bank posted a net profit of $140 million, down 18% from 2019, but above the industry average. The bank managed to maintain its interest income, increase its fee income and control its operating expenses. The bank’s loan portfolio grew 9% in the year, reaching US$ 6.9 billion. The bank’s return on equity (ROE) was 9% in 2020, the second highest in the industry.
BROU’s challenges for the future include continuing to support the country’s productive and social sectors, especially those most affected by the crisis; accelerating its digital transformation to improve its clients’ experience and compete with fintechs; and strengthening its risk management to preserve its solvency and reputation.
Banco Santander
Banco Santander is the second largest bank in Uruguay, and the first among private banks, with assets of US$ 5.1 billion at the end of 2020. It is a subsidiary of the Spanish Santander Group, which is present in more than 20 countries. Banco Santander began operations in Uruguay in 1982, and consolidated its position as one of the country’s leading banks after acquiring Banco Comercial in 2006. Banco Santander focuses on offering integrated financial solutions to its customers, with a value proposition based on simplicity, agility and efficiency. The bank has more than 1.1 million customers, including individuals and corporations, and a network of more than 100 points of service, including branches, ATMs, and banking correspondents.
Banco Santander had a solid result in 2020, despite the crisis caused by the Covid-19 pandemic. The bank posted a net profit of US$100 million, down 8% from 2019, but in line with market expectations. The bank managed to increase its fee income, control its credit provisions and improve its operating efficiency, which reached 40%, the best level in the sector. The bank’s loan portfolio grew 7% during the year, reaching US$ 3.2 billion. The bank’s return on equity (ROE) was 19% in 2020, the highest in the sector.
Banco Santander’s challenges for the future include continuing to grow in the retail banking segment, where it has gained market share in recent years; strengthening its position in the wholesale banking segment, where it has a large portfolio of corporate clients; and continuing with its sustainability strategy, which includes a commitment to allocate US$5 billion to renewable energy projects in Uruguay by 2025.
Scotiabank
Scotiabank is the third largest bank in Uruguay, and the second largest among private banks, with assets of US$4.9 billion at year-end 2020. It is a subsidiary of the Canadian group Scotiabank, which has a presence in more than 50 countries. Scotiabank began operations in Uruguay in 1979, and consolidated its position as one of the country’s leading banks following the acquisition of Discount Bank in 2015. Scotiabank is characterized by its customer focus, technological innovation and support for the country’s development. The bank has more than 900 thousand customers, including individuals and corporations, and a network of more than 100 points of service, including branches, ATMs and banking correspondents.
Scotiabank had a negative result in 2020, due to the crisis caused by the Covid-19 pandemic. The bank posted a net loss of US$10 million, a 113% drop from 2019, and below market expectations. The bank came under severe pressure on its financial margins, due to lower interest rates and increased competition. In addition, it had to increase its credit provisions, to cope with the increase in non-performing loans. The bank’s loan portfolio grew 5% during the year, reaching US$ 2.8 billion. The bank’s return on equity (ROE) was -2% in 2020, the lowest in the industry.
Scotiabank’s challenges for the future include recovering its profitability, which has been eroded by the crisis and the merger; accelerating its digital transformation to improve the customer experience and compete with fintechs; and consolidating its position as a close, reliable bank committed to the country’s development.
Itaú
Itaú is the fourth largest bank in Uruguay, and the third largest among private banks, with assets of US$ 4.6 billion at year-end 2020. It is a subsidiary of the Brazilian group Itaú Unibanco, which is present in more than 20 countries. Itaú began operations in Uruguay in 1996, and consolidated its position as one of the country’s leading banks after acquiring BankBoston in 2007. Itaú focuses on offering personalized financial solutions to its customers, with a value proposition based on quality, innovation and social responsibility. The bank has more than 800 thousand customers, including individuals and corporations, and a network of more than 100 points of service, including branches, ATMs and banking correspondents.
Itaú had a positive result in 2020, despite the crisis caused by the Covid-19 pandemic. The bank posted a net profit of US$ 90 million, a 10% drop compared to 2019, but above the industry average. The bank managed to maintain its interest income, increase its fee income and control its operating expenses. The bank’s loan portfolio grew 8% in the year, reaching US$ 3.1 billion. The bank’s return on equity (ROE) was 17% in 2020, the second highest in the industry.
BBVA Uruguay
The fifth largest bank in the country, and the fourth among private banks, with assets of US$ 3.4 billion at the end of 2020. It is a subsidiary of the Spanish group BBVA, which is present in more than 30 countries. BBVA began operations in Uruguay in 1996, and has stood out for its solvency, profitability, and leadership in the Uruguayan financial market. The bank has more than 700 thousand customers, including individuals and legal entities, and a network of more than 80 points of service, including branches, ATMs, and banking correspondents.
BBVA had a stable result in 2020, despite the crisis caused by the Covid-19 pandemic. The bank posted a net profit of US$60 million, a 4% drop compared to 2019, but in line with market expectations. The bank managed to maintain its interest income, increase its fee income and control its credit provisions. The bank’s loan portfolio grew 6% in the year, reaching US$ 2.6 billion. The bank’s return on equity (ROE) was 15% in 2020, the third highest in the sector.
BBVA’s challenges for the future include continuing to grow in the retail banking segment, where it has a strong presence in the mortgage sector; strengthening its position in the wholesale banking segment, where it has a diversified portfolio of corporate clients; and continuing with its social responsibility strategy, which includes support for education, health and the environment
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