Financial System Still with Negative Outlook

According to Fitch Ratings, banks in Nicaragua will continue to be pressured by the remaining effects of an economic contraction for the second consecutive year, a situation derived from the political crisis affecting the country.

Friday, December 6, 2019

The operating environment of the Nicaraguan financial system continues to be negative, despite the agency's recognition that macroeconomic pressures have decreased significantly in recent months, as indicated by the recent review of the Sovereign to Stable Rating Outlook from Negative, reported Fitch.

In the opinion of the rating agency, the recovery of credit growth and financial indicators in general will be delayed.

The report explains that the agency "... will continue to monitor the performance of banks, mainly regarding growth and loan quality, capital position, profitability and financing of customer deposits. The high deterioration of the loan portfolio during 2019 (delinquency rate of 3.41% as of June 2019) and higher net cancellations, restructured loans and loan impairment charges will be the main constraints for the rapid recovery of the banking industry's profitability.

This despite modest deposit growth that could moderately boost loan portfolio growth

See full report.

Do you need information about the financial sector?

Request more information:

this site is protected by reCAPTCHA and Google's privacy policy and terms of service.
Need assistance? Contact us
(506) 4001-6423

More on this topic

Central America: Negative Outlook for the Banking Sector

March 2020

Fitch Ratings agreed to change the perspective of the region's banks from stable to negative, arguing that the current health crisis will affect financial institutions in all countries.

Considering the measures that countries have adopted in the last 15 days in economic matters, following the spread of covid-19, Fitch expects that there will be a decrease in the issuance of loans.

Central American Banks: Special Report

September 2011

Fitch Ratings has issued a special report entitled, "Central American Banking: After the Crisis, a Disparate Evolution"

In Fitch's opinion the banks have shown a mixed performance in Central America during the period of the global financial crisis. At the same time, banking systems have dissimilar perspectives on future performance, reflecting different economic growth prospects in the region.

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.

Honduran Banks Outlook

August 2009

Fitch Ratings Central America commented on the state of the Honduran banking system, in the light of recent political developments.

Risks faced by Honduran banks due to the adverse economic environment have increased as a result of recent political events in the country. A Fitch report on April 2009 reported that Honduran banks were sensibly affected by the adverse local and regional economic environment.