When the government of Bolivian President Evo Morales announced a new financial services law two years ago, the country’s banks braced for a less profitable operating environment.

The new law capped interest rates on loans to corporates at 6% and on small- and medium-sized enterprises at 7% — well below market levels. It also set minimum rates for savings accounts and term deposits, and directed banks to provide more lending to housing and other sectors. 

Banco de Crédito de Bolivia, winner of this year’s LatinFinance Bank of the Year Bolivia award, took the challenge of the new restrictive regulatory environment head on, growing net profit and firmly establishing itself as one of the country’s pioneering banks in a market dominated by domestic institutions.

“It’s been a challenge for the entire banking system to adjust to these regulations,” says Marcelo Trigo, Banco de Crédito de Bolivia’s chief executive officer. “But I would say that 2016 is shaping up to be a very good year for us.” 

The bank’s loan book grew 20.7% from mid-2015 to mid-2016, compared to system-wide growth of around 18%. Its operations remained healthy in other metrics, too, with return on equity growing to 16% in the first eight months of 2016, up from 12.5% in 2015. The lender recorded $21.8 million in profit in the 12 months to the end of June, a 5.9% increase from the same period a year earlier. 

Trigo says the bank has expanded its offerings for home loans and credit cards, moves that have helped boost profitability. 

Bolivia’s steady economic growth has also provided a boon to Banco de Crédito de Bolivia. The economy has expanded more than 5% on average in recent years, and is forecast to grow close to that again in 2016, according to Economy Minister Luis Arce. 

Over the last year, Banco de Crédito de Bolivia has upgraded its branches and worked to expand its digital banking services.

“Moving forward, we want to focus on two things,” says Trigo. “First. we want to be known for the quality of our service. And second, we want to keep working intensely to be able to reach our clients through digital channels.” LF

WINNER: Banco de Crédito de Bolivia