Central American Banks: Annual Results and Perspectives

Fitch Ratings reported that the risks to regional banks during the current crisis are growing and represent a major challenge for 2009.

Wednesday, April 15, 2009

The combination of reduced credit expansion, fund restrictions and increasing loan provisions have limited the profits of most banks and it is expected for these factors to continue to pressure the results in the coming months.

The pace of credit growth exhibited by Central American Banks in recent years slowed in 2008 as a result of tightening credit policies and a greater preference for liquidity given the greater difficulties in accessing funding sources. The scenario that Fitch envisages for this year anticipates significantly lower growth rates than those recorded in 2008 with a resulting lower credit quality.

The report was prepared based on information published by the Superintendent of Banks and the central banks of each country. It analyzed the operational environment of Central American Banking, outlined the main challenges and reviewed the individual performance of each bank in the region.

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Central American Banking: Results and 2010 Perspectives

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According to Fitch Ratings, even though the economic scenario has improved, Central American banks face challenges related to the quality of their assets.

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