Banco Cathay de Costa Rica S.A.

What it is

Banco Cathay was born in 1998 to prove that trade and commercial development between Costa Rica and the Asian economies was more than a dream. It is a fully licensed private commercial bank regulated by SUGEF, the Costa Rican banking supervisor, and it remains the only bank in Costa Rica with a close connection to the resident community of Asian origin, staffing all its branches with personnel fluent in the language and culture.

The bank is part of Grupo Financiero Cathay, whose holding company is Grupo de Finanzas Cathay S.A., which also encompasses Fiduciaria Cathay, Cathay Leasing S.A. and Administradora de Bienes Cathay, S.A. On the Bolsa Nacional de Valores, it trades as an issuer of preferred shares and commercial paper, with correspondent banking ties to Bank of China and China Development Bank.

The bank has consolidated itself as one of the leaders in factoring services and counts more than 140 staff across 10 branches and mini-agencies around the country, focusing primarily on small, medium, and large enterprises.

Who owns it

Incorporated on 22 January 1998, Banco Cathay is controlled through the holding company Grupo de Finanzas Cathay S.A., which sits atop the broader Grupo Financiero Cathay. It was founded by a group of respected Costa Rican business people who believed in the project of giving the Costa Rican Chinese community its own financial representation.

The precise ownership percentages of individual shareholders are not disclosed in available sources.

The bank’s listed instruments are preferred Class “C” shares and commercial paper; a SUGEF rule change that came into force in January 2024 required the bank to build a counter-cyclical loan-loss reserve before distributing dividends to preferred shareholders, briefly pausing payouts on 2023 profits.

Who runs it

Godwin Tang serves as Gerente General (Chief Executive) of Banco Cathay. Dannel Huang is the bank’s Gerente Financiero (Chief Financial Officer).

The board elected at the extraordinary shareholders’ meeting of 11 March 2024 is chaired by Jorge Walter Bolaños Rojas as President, with Raymond Huiping Tang Lee as Vice-president, Luis Esteban Hernández Brenes as Secretary, Adrián Chinchilla Miranda as Treasurer, Federico Ruzicka Tarragò as Vocal, and Jorge Fernando Salgado Portuguez as Fiscal.

The money, in plain words

The bank made about ₡771 million (US$1.71m) in 2024 — roughly one-third less than the ₡1,215 million (US$2.70m) it earned in 2023, making it the bank with the largest proportional earnings decline in the Costa Rican system last year, down 36.5%. Put plainly: it earned less from every loan and transaction because the especially profitable conditions of 2023 did not repeat.

The bank itself said it met its own budget targets, but that 2023 had exceeded expectations in ways that 2024 simply could not match.

The balance sheet (mid-2023, most recent public filing) shows total assets of ₡186,033m (US$413.1m) — the pool of loans, investments and cash the bank manages. Against that, owners’ equity stands at ₡18,913m (US$42.0m), meaning roughly 10 cents of every asset-colón is financed by the owners’ own money, which is standard for a regulated bank.

Capital adequacy improved on an 8% annual growth in the capital base, giving the regulator comfort that the bank can absorb losses.

On a return-on-equity basis — how many colones the bank earns for every colón its owners have put in — the 2024 figure works out to roughly 4.1% (our calculation: ₡771m net profit ÷ ₡18,913m equity), a soft year by any measure. For context, well-run regional banks typically target a return on equity above 10%.

What it is doing now

In early April 2024, Cathay received a SUGEF letter restricting dividend distributions pending compliance with a new counter-cyclical credit-reserve rule that came into force on 1 January 2024; the general manager Godwin Tang confirmed this was a sector-wide regulatory requirement, not a supervisory concern specific to Cathay. The bank set a target of full compliance by early 2024 and reported to SUGEF that it had met the requirement in full by end of Q1 2024.

Cathay has signalled a “conservative” outlook for 2025, projecting a performance similar to 2024. The bank’s niche — bridging Costa Rica’s SMEs to Asian trade finance, with factoring as a flagship product — remains structurally intact even if a quieter year has trimmed headline profits.

What to watch

• Dividend restoration. Whether SUGEF’s clearance for preferred-share dividends becomes routine or gets complicated by further reserve-building requirements is a key signal for preferred shareholders.
• Earnings recovery. A return to the ₡1.2bn+ profit level of 2023 — and with it a return on equity above 6–7% — would confirm that last year’s drop was cyclical, not structural.
• Asian trade flows. The bank was built on Costa Rica–Asia commercial ties; any shift in that bilateral trade (tourism, manufacturing, lending) directly moves its core business volume.
• Governance transparency. Full-year audited financials and ownership percentages remain hard to find in public sources; broader disclosure would help investors price the preferred shares more confidently.

This is news, not investment advice.