After several years with low returns, Mario Barrenechea, manager of the State Bank of Costa Rica, announced on Wednesday that the institution finally managed to recover.
In addition, the bank managed to improve its funding by the public and reduce its need for Stock Exchange.
The manager said that excluding the bank from the consolidated accounts and excluding subsidiaries of securities, pensions and insurance, showed negative or very low returns in the last five years.
The bank, by itself, represents 80% of the conglomerate Banco de Costa Rica (BCR), the second largest bank by asset amount.
The return on equity is the single best measure of efficiency. A poor performance means that it is inefficient,”
said Barrenechea.
For example, the conglomerate as such showed a yield of 9.41% in 2014, while the bank’s was 3.64%.
We were very far from having a necessary minimum efficiency. The management team had to develop reforms to attack those causes. The bank needed urgent measures,”
added the manager.
To this date, the annualized return for the first half is only 9.7% for the bank and 18.44% for the entire conglomerate.
Barrenechea said another reform to which the bank had to resort to was to improve deposits by the public, because it had gradually abandoned this activity.
Uptake with the public grew by 12% reaching 3 billion colones.
The funds from capital markets are highly sensitive to different economic situations and there is no loyalty. Instead, the funds of the public are the healthiest in commercial banking,”
said the manager.
The reform program that the bank has implemented aims to further improve profitability in the shortest possible time.
For the first half of the year, net income of the bank rose 161% to 25,000 million colones, almost all of the profits of the entire 2015.