Guatemala's hard times spur 24 percent growth in bad debt
Bad debts are growing and a credit boom is losing steam within the Guatemalan banking system, reflecting the nation's economic problems, according to a report by the regulator, the Bank Superintendent's Office.
Friday, July 18, 2008
The banks' bad-debt portfolio rose from 2.1 billion quetzals (US$286 million) on January 1 to 2.77 quetzals (US$374 million) on July 13, an increase of 24 percent. Over the same period, bad debt as a proportion of the total credit portfolio rose from 2.5 percent to 3.1 percent.
El Salvador's banks have had to increase their provision for bad debt by 15.2 percent, according to the latest report from the El Salvador Bankers' Association (ABANSA).
From January 2008 to January 2009, the banking system’s unrecoverable portfolio grew by 36.9%.
Since the fourth quarter of 2008, credit extended by banks has been declining consistently.
In the month of June of 2008, past due accounts and defaults represented 2.4% of the credit accounts receivable; in September, 2.7%; and in December, 3.4%.
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