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Net interest margins generally improve for LatAm bank majors in Q2

The majority of Latin America's largest banks posted increases in their net interest margins in the second quarter of 2019 compared to a year earlier, with two Argentine banks taking the lead.

A bank's NIM is a key profitability metric that measures the difference between interest income generated and the amount of interest paid, relative to the amount of its interest-earning assets.

Among a sample of 15 banks analyzed by S&P Global Market Intelligence, nine saw their NIMs increase compared to a year ago, while the remaining six lenders booked declines in their ratios.

Two of the largest banks in Argentina ended the period with the highest NIMs. Banco Macro SA took the lead with a NIM of 17.58%, up from 15.34% a year ago, while Banco Santander Río SA's NIM rose to 10.69% from 8.45%. The Argentine central bank's monetary policy rate remained above 60% during the second quarter before the regulator lowered the benchmark rate's floor to 58.0% at the end of the three-month period.

Although the top lenders in Brazil booked some of the lowest NIMs in the second quarter, the figures increased significantly compared to a year earlier. São Paulo-based Itaú Unibanco Holding SA recorded the lowest NIM among the group at 1.76%, still an improvement from a negative ratio of -1.44% a year ago.

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