Costa Rica: Financial Cooperatives up to June 2017

In the second quarter of 2017, three entities accounted for 61% of the assets of the cooperative system, which represents 11% of the assets of the Costa Rican financial system.

Friday, August 25, 2017

From a report by Fitch Ratings :

Concentration of Business Model: The cooperative sector has moderate participation and accounts for 11% of assets in the national financial system. The participation of entities rated by Fitch Ratings (Coopenae, Coopeservidores and Coopeande No.1) has remained high and relatively stable in relation to the regulated cooperative system, accounting for 61.3% of the sector's assets. The business model continues to focus on consumer credit for its associates, mostly low- and middle-income public sector employees. Fitch believes that cooperatives face the challenge of diversifying products in their portfolio to reduce concentration risk in the consumer segment, which is typically more vulnerable to the business cycle. 

Provisioned Performance: The profitability of cooperatives has a downward trend. The results have been constrained by higher expenses for provisions, initially due to increases in delinquencies and recently due to additional regulatory requirements that absorbed a higher portion of earnings before provisions (March 2017: 59.7%, December 2014: 39 , 7%).  However, profitability is still higher than that of Costa Rican banks (ROAA Cooperativas: 1.4%, ROAA banks: 0.9%, both in March 2017).  

¿Busca soluciones de inteligencia comercial para su empresa?

More on this topic

Financial Cooperatives in Costa Rica

August 2016

In the second quarter of 2016 three entities accounted for 63% of the assets of the cooperative system, which accounts for 10% of the Costa Rican financial system.  

From a report by Fitch Ratings:

Cooperatives in Costa Rica: Defaults and Pressured Profitability

Concentration of Business Model: The cooperatives rated by Fitch Ratings (Coopenae, Coopeservidores and Coopeande 1) are the three largest in Costa Rica and account for 63.3% of the assets of the cooperative system, a sector that still has a low participation in the national financial system (10.6%). These entities have a business model focused on consumer finance for its members, which makes them dependent on the behavior of a single segment.

More Profits for Banks in 2013

December 2012

Fitch Ratings has projected higher profit margins for Central American banks.

The outlook on the ratings of banks in Central America and the Dominican Republic in 2013 is Stable. Strong balance sheets and ample liquidity levels that allow them to face external risks, continue to characterize most banking systems, according to Fitch Ratings.

Financial Cooperatives in Costa Rica

October 2012

For the volume of assets and loan portfolios they manage, cooperatives together make up the fourth largest financial operator ivn the country.

In Costa Rica, the 30 cooperatives under the supervision of the Superintendent of Financial Institutions (Sugef) exceed in value the assets and loan portfolio of the "private bank BAC San José and are below the banks, Banco Nacional, Banco de Costa Rica and Banco Popular which are funded by public capital. "

Where are the Best Interest Rates?

March 2012

Costa Rican credit unions pay up to 4.25% more than banks on term deposits in local currency.

After two years of low rates, return on certificates of term deposits (CDP in Spanish) is rising and the best deals are with savings and credit unions (CAC in Spanish), which exceed those of the banks by 4.25 percentage points.