Post-pandemic growth meets soaring remittances.
Central American economies have flourished in the pandemic’s aftermath due to the region’s lower-than-average inflation, allowing central banks to impose more-accommodative policies than larger economies worldwide.
However, the region received a further boost in 2023 owing to record-breaking remittances and an improving labor market, buoyed mainly by the near-shoring boom, thriving tourism and continued profitability across the commodity spectrum. As a result, Central America’s combined GDP is estimated to have grown 3.5% year-over-year (YoY) in 2023, significantly above the global average of 3.1%, according to the UN Economic Commission for Latin America and the Caribbean (Eclac).
Panama stood out as the primary winner among the region’s leaders, boasting impressive 6.1% GDP growth last year. Costa Rica followed with 4.9% growth, according to Eclac estimates.
In the banking sector, continued efforts toward further digitalization—one area in which the region still lags—and commercial loan portfolio growth were the main drivers of profitability among the more prominent players.
| Best Banks in Central America | |
|---|---|
| Belize | Belize Bank Limited |
| Costa Rica | BAC Credomatic |
| El Salvador | Banco Cuscatlan |
| Guatemala | Banco Industrial |
| Honduras | Ficohsa |
| Nicaragua | Banco LAFISE |
| Panama | Banco General |
With a strong presence in Panama and Costa Rica, BAC Credomatic is our Best Bank in Central America for the fourth year in a row and in its home country of Costa Rica for the sixth year running.
The bank rode macroeconomic tailwinds to deepen its leadership and post significant growth in all its operation. It posted solid 27.2% YoY net profit growth for its regional operation, driven mainly by increasing loan profitability and investment-bankings trength in Costa Rica and Panama.
These figures were boosted by BAC’s focus on small and midsize enterprises (SMEs), where the bank notched impressive 22% growth last year. Increased digital banking integration drove these remarkable numbers, which jumped 50% that year. BAC’s personal banking sector also grew, to 4.7 million customers at the end of 2023.
The numbers received a significant push from the bank’s money-transfer app, Kash, which helped propel a 340% jump in new digital accounts. This was driven mainly by increased activity in BAC’s home country, Costa Rica, where the bank tested pioneering features such as Apple Pay and the integration of artificial intelligence into its financial services.
Improving digital integration and growth on the SME-loan front was also the secret behind a fantastic year for the Best Bank in Guatemala, Banco Industrial. Amid high political challenges, the bank increased its market share in the country to 29.2% in total assets, 29.1% in total net loans, 27.6% in total deposits, 23.6% in shareholder equity, and 28.4% in net income.
Amid the tightly disputed Salvadoran market, the 2024 winner, Banco Cuscatlán, focused its growth operation on corporate and mortgage loans, where it posted the highest growth rate in the country over the past three years.
In Belize, the winner, Belize Bank, grew its investment and loan portfolio to maintain its position as the country’s largest bank in assets and profitability. It held a commanding 1.9 billion Belizean dollars (approximately $939 million) in assets as of July 2023, according to the Central Bank of Belize.
By leveraging its position as the leading bank in Honduras in terms of assets and profitability, Banco Ficohsa was able to grow its asset base by 13.5% YoY, the best in the nation.
The secret behind Ficohsa’s above-average performance is continued investment in its digital offerings. Moreover, by partnering with more than 30 remittance companies, Ficohsa took advantage of booming remittances.
In Nicaragua, Banco LAFISE Bancentro met and surpassed several key milestones, demonstrating continued growth and resilience. Among the bank’s main achievements has been a double-digit growth rate (14.4%) in its loan portfolio, significantly surpassing the estimated real GDP growth rate for 2023. These numbers were mainly buoyed by the bank’s above-average penetration into its country’s SME sector, which makes up nearly 70% of LAFISE’s loan portfolio.
Finally, Banco General returned as the Best Bank of Panama after an absence riding high on its digital offerings and expanded client base.