Digital transformation is nothing new for banks around the region, but Banco Nacional de Costa Rica has found a way to give it a new twist.
Over the past year, the bank has launched one new product tailored to an overlooked segment of the population when it comes to technology – senior citizens – and another aimed at protecting the country’s aquifers.
The debit card for seniors is linked to both the bank and the country’s social security institute, providing a double layer of benefits for customers. Senior citizens already with an account at the bank can switch over and new clients can open an account physically or digitally.
“This card will make life easier for senior citizens and is part of the bank’s initiatives to increase financial inclusion,” says María Brenes, head of institutional relations, at the card’s launch.
The “water debit card” is a novel effort that will set aside a percentage of commissions charged for each use to protect water resources in the Río Grade and Río Virilla basins that provide water for nearly 60% of the Costa Rica’s population. The card builds on the existing “green debit card” that has transferred more than $3.7 million for forest conservation. It transferred $550,000 in 2022 to protect more than 110 hectares of forests and related ecosystems.
The new products add to an already solid performance, with loans and deposits increasing year-on-year through June 2023. Loans increased by 3.8% to $9 billion, while deposits increased by 4.14% to $11.8 billion.
According to an August 2023 report from Fitch, Banco Nacional “is characterized by its historically leading market position as the largest player in the Costa Rican banking system, with the top market shares by loans and customer deposits. As of May of 2023, BNCR market share was 25.3% by loan portfolio and 27.4% by deposits.”
The report adds that the bank’s viability rating reflects its high income-generation capacity, reflected in a four-year average total operating income of $564 million, the highest among its local peers.
Banco Nacional is also benefitting from a turnaround in the country’s economy. “Growth has been resilient despite global headwinds and inflation is on a strong downward trend. The easing of external pressures has allowed the authorities to rebuild reserves, while the ongoing fiscal consolidation has strengthened debt sustainability and contributed to upgraded sovereign ratings,” stated the International Monetary Fund (IMF) in a June 2023 review.
The IMF forecasts 3% GDP growth this year and inflation at 2.1%. Inflation peaked at 12.1% in August 2022 and has been coming down since. The debt-to-GDP ratio is 63.8%, down from 68% the previous year. The IMF forecasts it falling gradually to 56% over the coming four years.