The success of BCT throughout the years is based on the design and catering of financial solutions for two specific market segments: corporate and commercial banking, with a client base of medium and large-sized companies; and private banking, focused on serving high net worth individuals.
With it’s current credit allocations, BCT has a 10.4 percent of the market share in wholesale and retail sales, 7.1 percent of services, 9.7 percent of manufacturing and 12.5 percent share of agriculture loan placing in Costa Rica. Notably, its total deposits have risen 103.11 percent over the last four years.
A strong loyalty bond has been built over the years with key customers on the basis of superior service delivered consistently. The core client base of BCT consists primarily of repeat customers.
During the past four years, backed with an annual income growth rate of 32.50 percent, an average return on assets of 1.43 percent, and a return on equity of 14.02 percent. Corporación BCT has been able to build a solid infrastructure. The group now has 13 strategically located branches in Costa Rica and two in Panama. The key driver to open new branches has been to focus on the need to be close to where their client’s businesses are located. This effort now has the financial group present in all the major productive areas of Costa Rica. An aggressive branch development is also in place for Panama, where two more locations are scheduled to open in the near future.
Throughout the financial crisis, Costa Rica’s economy, highly dependant on exports to the US and Europe took an important downturn, falling at an annual rate of 4.5 percent during the last quarter of the year 2009. The economy’s main sectors all suffered significant corrections during this period, including agriculture (-6.8 percent), tourism (-3.9 percent), manufacturing (-14.4 percent) and construction (-4.4 percent).
In December 2008, many of the country’s financial institutions stalled, most of them stopped funding new projects, and even in some cases halted already approved disbursements altogether.
BCT took advantage of the market’s juncture and consolidated its position with the productive sectors. While most banks were closing their client’s credits, BCT was keen on keeping their lines and flow of funding, and even managed to widen its client base.
In spite of the financial turmoil, Corporación BCT remained unscathed. Mr Leonel Baruch, one of its founders and Chairman of the board explains:
“During those difficult times, BCT’s approach proved to be very successful in protecting the quality of its assets and, at the same time, supporting the clients whose business wellbeing and loyalty are key to the corporation’s long term success.
Our strategy was based on three basic elements that reinforced BCT’s already strict and consistent underwriting policies: An important increase in liquidity; an even more cautious approach towards risk management, close monitoring of asset quality; and the voluntary strengthening of it’s capital reserves in order to face eventual loan loses.”
The strategy paid off for BCT’s more than 400 shareholders. The net profit versus shareholder’s equity ratio is 33.5 percent, and the Corporation’s rate of past due loans is virtually 0.0 percent.
Over the years Corporación BCT has preferred quality over quantity, and excellence over size. With its 15 branches, and 258 highly qualified employees, it has the lowest administrative expenses versus profit (before tax) in the region and a remarkable efficiency ratio of 53.4 percent.
With its actual capital adequacy ratio, BCT can leverage the balance sheet to double its size with no additional capital requirements; so further growth should be expected. If the bank is able to maintain its efficiency ratios, this will contribute more to the bottom line.
A look at its capital base shows an increase of 70.8 percent, over the last fours years which demonstrates the commitment of the shareholders towards BCT, and also towards its clients.
Well positioned for growth, in countries that are developing fast in infrastructure, and have new free trade agreements with many counterparts all over the world; among them Latin American nations, the US, the EU and even China. BCT is well positioned to become a banking oasis for its clients in a region where big, multinational and mostly impersonal banks are becoming the norm.
