The coronavirus has left an economic impact in several countries. For this reason, some governments are developing exceptional measures to mitigate its effects. For example, the suspension of tax and mortgage payments to lessen the economic pressure on small businesses and households.
In the United States, interest rates were reduced to almost zero and a US$700 billion stimulus program was launched in a bid to protect its economy, says Mario Miranda, director of finance at MonederoSMART.
Managers of Costa Rica's financial institutions predict that due to the health crisis the country is going through, the demand for credit from companies and families will continue to fall in the coming months.
Figures from the Central Bank of Costa Rica state that between March 2019 and the same month in 2020, the balance of money lent by public and private banks to companies and families decreased by 2.3%, from $28,559 million to $27,908 million.
In Costa Rica, the Basic Passive Rate dropped from 4.95% to 4.80%, a drop that was influenced by the behavior of public bank rates.
The Central Bank of Costa Rica published on the afternoon of Wednesday, February 26 that after registering a considerable drop the previous week, the Basic Liable Rate fell again, in this case by 0.15% and will remain at 4.80% until next Wednesday, March 4.
Favorable financing conditions for the purchase of this type of vehicle and lower rates for freight services are part of the actions proposed by the government of Costa Rica to boost sales of electric vehicles.
The state-owned Banco Popular, Banco Nacional and Banco de Costa Rica are the financial entities that will offer attractive conditions in their credit lines for the purchase of electric transportation units.
Not considering the costs of the collection process, nor market conditions, are some of the failures that banks identify in the bill being discussed in the Legislative Assembly of Costa Rica.
After last week in Costa Rica the rate rose to 6.65%, a level that had not been recorded since August 2015, on July 10 abruptly decreased to 6%.
Data published by the Central Bank of Costa Rica on Wednesday afternoon, July 10, show that the Basic Passive Rate (PBS) decreased by 0.65%, and will remain at 6% until next July 17.
The basic passive rate is an average of the collection rates in colones of financial institutions with terms of 150 to 210 days.
Because savers in Costa Rica have moved their resources to longer terms, to avoid an increase in income tax, the Basic Passive Rate rose to 6.65%, a level not recorded since August 2015.
According to data published by the Central Bank of Costa Rica on Wednesday afternoon, July 3, the Basic Passive Rate (BPR) reports levels not reached since August 26, 2015, and will remain at 6.65% until next July 10.
Because of the slowdown in the issuance of loans, in 2018 the profits of banks in Costa Rica grew just 3% over what was recorded in 2017.
Figures from the Central Bank of Costa Rica show the deceleration reported in loans granted during the first nine months of last year, detailing that up to December 2017 the credit portfolio to the private sector registered an 8% year-on-year increase, while the indicator concerned up to September 2018 dropped to 5%.
In 2017, profits of Banco de Costa Rica fell by 30% compared to 2016, and those of the Banco Nacional fell by 22% in the same period.
The reduction in profits was due to a decrease in the margin of financial intermediation, due to an increase in interest rates in both dollars and colones, as explained by the authorities of the entities to Nacion.com.
A wastewater treatment system in Panama, apartment towers in Guatemala and an education center in Costa Rica are some of the projects planned for the coming months in the region.
The interactive platform "Construction in Central America", compiled by the Business Intelligence Unit at CentralAmericaData, includes an up to date list of public and private construction projects for which environmental impact studies (EIA) were submitted to the respective institutions of each country in October 2017.
Consumption by private companies and households went up by 4.6% in the first half of the year, exceeding the average growth rate of 2% of its main trading partners.
An example of the pace at which private consumption has been growing in the country is the relevance it has taken on in the bank's loan portfolios. Deputy general manager of Banco Nacional de Costa Rica, Bernardo Alfaro, explained that"... These kinds of operations rose from 28% of total credit seven years ago to 32% today."
In Costa Rica the index of activity in the construction sector has had 4 consecutive months of downturn, and now faces the threat of new financial rules which will make access to credit more costly.
The construction sector's main concern is the impact that interest rates will have on the new standards which financial institutions will need to comply with.They are predicting an increase in credit costs primarily because of the new rules already in force and which determine that for institutions that lend money"... The minimum percentage level of the countercyclical estimate required is 0.33%. Each entity must register on a monthly basis expenditure equivalent to a minimum of 7% of its profits, until it reaches an optimum level defined by the Sugef. "
It is difficult to understand - especially because it has been made public - how a major state bank has described the International Bank of Costa Rica as "high risk" while another main state bank has stated the opposite.
EDITORIAL
The banks involved are Banco de Costa Rica (BCR) and Banco Nacional (BN). Between them they are the owners of Banco Internacional de Costa Rica (BICSA), with 51% of the shares the first and 49% of the second.
The issue was made on the international market, for a term of 5 years with a coupon of 5.875% per annum.
According to financial sector sources consulted by Elfinancierocr.com, "... the demand for this bond was five times the issue, ie purchase requests were received for a total of $2.5 billion. EF understood that the placement price was 99.98%, which would increase the rate of yield to maturity to 5.95%."
The process of selecting trustees for the construction and operation of a major road work is running out of participants.
In February, when the law enabled the use of a trust to finance and build the road from San Ramon to San Jose, seven banks expressed interest in participating in the process, but now, following Banco Nacional´s decision to withdraw a few months ago, two other private banks have also decided to step aside.