Because of decreasing demand for credit since April last year, banks in the Nicaraguan plaza are filling up with money they can not place in the market.
According to estimates by the Nicaraguan Foundation for Economic and Social Development (Funides) based on official figures, so far this crisis has boosted the liquidity of banks, increasing the proportion of available money that financial institutions have with respect to their obligations to the public, going from 31.76% reported in March 2018 to 46.73% recorded in May this year.
The loan portfolio grew by 23% in December 2015, up from 19.4% a year earlier, confirming the momentum of the Nicaraguan banking sector.
From the Monetary and Financial Report by the Central Bank of Nicaragua (BCN):
In 2015 the National Financial System (SFN) continued to perform favorably in most of its indicators, with the most noteworthy being the dynamism of the loan portfolio and deposits.
The banks that have granted loans to companies in the Colon Free Zone will have to increase their levels of reserves as a contingency.
The Superintendency of Banks of Panama (SBP) has asked banks who have made loans to companies in the Colon Free Zone (CFZ) to increase their levels of reserves as a contingency measure.
"The contingency measure requested of the banks brings to the forefront the risk that is probably anticipated by the regulator on loans granted to companies in the free zone. The tariff protection in Colombia and Venezuelan currency restrictions have caused an imbalance for many of the companies with which they are linked. "
According to Fitch Ratings, even though the economic scenario has improved, Central American banks face challenges related to the quality of their assets.
Central American banking systems have weathered the financial crisis relatively well. Even though profits fell considerably during 2009, industry solvency levels remain good. Profits fall mostly because banks opted for liquid assets and increased their expenses in provisions.
According to Fitch Ratings, even though the economic scenario has improved, Central American banks face challenges related to the quality of their assets.
Central American banking systems have weathered the financial crisis relatively well. Even though profits fell considerably during 2009, industry solvency levels remain good. Profits fall mostly because banks opted for liquid assets and increased their expenses in provisions.
Summa Financial Special: Presenting the classification and analysis of the regional financial system.
In the April edition, Revista Summa will present its bank, insurer and stock exchange rankings. On the whole, it shows a healthy sector with the capacity to face the challenges ahead. Regional banking groups have gained greater importance and the magazine identified ten that represented 33% of the assets for 2008.
Tomorrow the Superintendence of Banks (SIB) will request that the Monetary Board approve a modification of the Regulations for Credit Risk Management.
Even though bank portfolios in arrears are not at a critical level, the SIB will request that the Monetary Board make the changes to the rules in order for banks to increase their reserves for bad debts (loans).