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.

More on this topic

Central American Banks: Review and 2010 Outlook

March 2010

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.

Central American Banks: Special Report

September 2009

Fitch Ratings issued a special report: "Central American Banking: Evolution of the Crisis and Learnt Lessons".

In Fitch's opinion, the negative impact the international crisis had on Central American banks was very evident in 2009. The current economic context poses growing risks for the sector, as well as an important challenge for this year.

Central American Banks: Annual Results and Perspectives

April 2009

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

Central America: External Vulnerabilities in Focus

October 2008

This special report examines the channels through which Fitch-rated sovereigns in this sub-region could be impacted by external shocks, the robustness of their various policy frameworks and the implications for creditworthiness of increasingly challenging international conditions.

The US financial crisis has spread across the international financial system.

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