Last year was a momentous time for Banco Mercantil, which purchased Bolivia’s fourth largest bank, Banco Santa Cruz. This transaction catapulted Banco Mercantil into the number one spot in the Bolivian market, yielding an entity with more than $1bn in assets. The new bank, Banco Mercantil Santa Cruz, increased its asset base by 82%, while the loan portfolio grew by 68%, net profits by 108% and RoE by 35%. This enhanced performance resulted in an $18m dividend payout to shareholders, nearly a 124% increase compared with the previous year.
The merger has given the bank a huge market advantage. Its market share in loans increased to 22% from 14%, deposits to 25% from 16% and assets to 23% from 14%. In the past 15 months, Banco Mercantil has grown its market share to a quarter of the country’s financial services industry.
Bolivia has a good and stable macroeconomic framework, but the political, social and institutional environment is weak and therefore acts as a barrier to foreign investment. Despite this handicap, Banco Mercantil’s shareholders were determined to press ahead with the merger, demonstrating their long-term commitment to the country, the bank’s customers and staff. The merger was one of the 20 largest transactions in South America last year, and was the biggest ever undertaken in Bolivia’s financial sector.
“It is truly an honour and a privilege for our bank to have been chosen for this award,” says chief executive Juan Carlos Salaues. “This prize represents all of our employees’ hard work and dedication throughout the past years, and especially last year after the merger between Banco Mercantil and Banco Santa Cruz, which represents the largest operation in the history of the Bolivian financial sector. As for the future, the bank plans to continue working on improving the efficiency of operations to achieve the maximum benefits from the merger.”
