Year: 2020

Winner: Banco Itaú Uruguay

Itaú Uruguay keeps an eye on the future

Itaú Uruguay kept its leadership role in the country’s banking system on a number of fronts in the past year.

It had the highest return on equity, at 32%, as of June 2020. That marked a 19-point increase over the previous year. Total income was $147 million, up 18% and the best growth among private banks. Deposits were up 5%, compared to 2% for the system, and loans grew by 2%, while the overall banking system witnesses a 4% decrease. It is far and away the system leader for credit cards.

Itaú Uruguay would have won Bank of the Year on the numbers alone, but it continued to go the extra mile during the pandemic, as well as with new products that will ensure it a strong future.

CEO Horacio Vilaró said the bank’s response has revolved around a simple principle – provide solutions to customers.

“Income fell drastically for individuals, small businesses and corporations. The bank needed to adopt extraordinary financial relief measures for customers,” he said.

The bank responded to the pandemic by allowing customers to reschedule personal loans and mortgages, offering deferrals of up to 180 days. Customers were allowed to split credit card payments into 12 installments with an interest rate pegged to inflation. The option was used by 20% of cardholders.

Vilaró said that more than new products, “the most radical change has been in processes and channels. With people unable to be physically present, we had to transform so transactions could be remote. Digital banking became more functional.”

This allowed Itaú Uruguay to further cement its role as digital leader. Through its “Digital Bank,” it is the only bank in the country that has a fully digital service that allows for all transactions to be done remotely. After the pandemic hit, the bank doubled to 12,000 the number of customers using the service.

Itaú Uruguay also has an eye on the future, launching in 2020 a new banking account for university students under the age of 25. The U25 has no service charges and is available only through digital channels. The account is opened using a mobile phone and does not require physical presence in a branch at any time. Vilaró said the account is easy to use, provides benefits highly prized by young clients and has the Itaú brand behind it.

The bank was hoping for around 5,500 new accounts in the first year but was already at 17,000 and counting in the first few months after the launch.