World’s Best Banks 2022: Caribbean

Digital inclusion offsets volatile times.

The benefits of the global recovery didn’t fully reach the Caribbean in 2021. As new strains of Covid-19 and prolonged health restrictions halted a more significant rebound in international travel, tourist-dependent economies struggled to recover pre-pandemic levels.

On the other hand, soaring commodities took a hefty toll on most of the region’s economies. As a result, inflation jumped well over 8% for the year in the Dominican Republic and 5.9% in Jamaica. Barbados witnessed a 3% rise in prices while the Bahamas and Trinidad and Tobago fared slightly better, averaging a 3.2%  and 1.1% annual inflation rate respectively.

The region’s banking panorama also remained volatile as significant players such as the Royal Bank of Canada (RBC), Scotiabank and CIBC FirstCaribbean completed the long-awaited sale of some of their smaller branches as part of a broader, ongoing financial derisking strategy.

The upside comes from growing investments in digitalization. Although still lagging behind their neighboring Latin American banks, Caribbean banks showed notable improvement in the industry, focusing on local clientele and facilitating credit offerings.

Banco Popular Dominicano takes the awards for Best Bank in the Caribbean and Best Bank in the Dominican Republic for providing its clients with reliability and innovation amid a challenging regional scenario. “We have been part of the solution during this period of high complexity, reaffirming our support for people, companies and entrepreneurs,” explains Christopher Paniagua, the bank’s CEO.

Indeed, Paniagua’s strategy seems to be paying off. Last year, the bank increased its market share in the Dominican Republic to 24.9%, with a 40% jump in earnings.

“Global Finance’s distinction recognizes our 58-year commitment to economic, social and human development in the Dominican Republic, reaffirming our positioning alongside the most vulnerable sectors, with socially responsible actions and a clear vision for sustainability,” adds the CEO.

Banco Popular’s significant investments in digital inclusion also helped its economy thrive, by democratizing the country’s credit offerings. The bank created the Cuenta Digital Libre, an initiative that allows any Dominican citizen to settle transactions through Popular’s digital channels, regardless of their income. 

Furthermore, the bank’s App Popular exceeded 1 million affiliated clients in 2021, a growth of 52% compared to the same period in 2020 and a milestone in a country with a population of over 11 million.

Scotiabank takes the honor as the Best Bank in the Bahamas for a 157% jump in year-on-year (YoY) net profits. Propelled by recovering economic activity and growing digitalization, the bank recorded a 9.3% return on equity.

The Canadian-based bank also received multiple other awards in the region, displaying its resilience and long-term leadership.

Scotiabank’s approach to sustainability and technology was the leading factor behind its award-wining performance in the Cayman Islands. Similarly, digital transformation was the main factor propelling Scotiabank’s dominance in Turks and Caicos, as the bank increased its digital operations by 36% over the last 18 months.

Scotiabank also won the award for Trinidad and Tobago for leading the market in return on assets and return on equity, recording a YoY rise in returns of 1.95% and 14.14%, respectively.

Bank of Butterfield took home the award for the Best Bank in Bermuda. After maintaining solid levels of profitability in 2020, the bank managed another 10% gain in net profitability, comfortably recovering pre-pandemic figures. According to the bank’s CEO, Michael Collins, the strategy behind Butterfield’s resilience also lies in digitalization. “We continued to navigate the very low interest rate environment by improving efficiencies, leveraging technology and enhancing the client experience,” he says.

In Barbados, the Royal Bank of Canada won the Best Bank for the domestic market. Once a regional leader, the bank reduced its Caribbean operations in the last few years. However, the bank’s push in Barbados’ capital market in 2021 shows that it is still highly profitable in its remaining locations. 

The undisputed winner in Jamaica is the National Commercial Bank. Through a 15.9% rise in revenue in 2021, the bank reached an astonishing 37% of its country’s market share by total assets. The bank also led the Jamaican post-pandemic rebound in multiple other key performance indicators, such as net income, total deposits and loans.

In Puerto Rico and the US Virign Islands, our winner is FirstBank, which reported a net income of $281 million in 2021, an astonishing 175% YoY jump. The profit comes mainly as a long-term consequence of the bank’s acquisition of Santander’s Puerto Rican operations in 2020.