Guatemala: Financiera de Occidente Suspended

Arguing that management practices were detected that put at risk its solvency and soundness, the Monetary Board decided to suspend the operations of Financiera de Occidente, S.A., an entity that represents 0.35% of the total assets of the local banking system.

Monday, December 16, 2019

Erick Vargas Sierra, head of the Superintendence of Banks (SIB), told Prensalibre.com that "... management practices were detected that put at risk its solvency and soundness. Faced with this scenario, the SIB ordered a regularization plan, which failed to comply with the legal deadline of three months, so proceeded the management to the Monetary Board."

From the Monetary Board statement:

On December 13, in order to preserve the stability of the national banking system, and based on the report and the request of the Superintendence of Banks, unanimously resolved to suspend the operations of Financiera de Occidente, Sociedad Anónima, an entity that represents only 0.35% of the total assets of the national banking system.

The decision includes the appointment of both the board of exclusion of assets and liabilities, as well as the legal representative of the referred institution, to carry out, in an orderly and timely manner, the exit of that entity from the national banking system. The Superintendence of Banks has been instructed to communicate to the public the mechanism to be used to operationalize the management of the investments constituted in Financiera de Occidente, Sociedad Anónima, as well as the details of the adoption of this measure.

The national financial system operates under conditions of complete normality.

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More on this topic

Guatemala: Legal Dispute over Financial Suspension

March 2020

Arguing that there were arbitrariness and that due process had not been complied with, former representatives of Financiera de Occidente S.A. decided to file a legal appeal following the suspension of the entity.

On December 13, 2019, the Monetary Board decided to suspend the operations of Financiera de Occidente, S.A., since according to the authorities, management practices were detected that put its solvency and solidity at risk.

Western Financials Changes Hands

January 2020

In Guatemala, Banco de Inversión S.A. acquired 60% of the asset portfolio of Financiera de Occidente S.A., which was suspended in December 2019.

On December 13, 2019, the Monetary Board reported that because management practices were detected that put its solvency and soundness at risk, it decided to suspend the operations of Financiera Occidente S.A., an entity that at that time represented 0.35% of the total assets of the local banking system.

Guatemala: Banco de Credito Suspended

December 2019

In order to preserve savings and the stability of the national banking system, the Monetary Board decided to suspend the operations of Banco de Credito, an entity that represents 0.2% of the total assets of the local banking system.

The Superintendence of Banks will have to communicate to the general public the mechanism to be used to make operative the management of the deposits constituted in the Banco de Credito, informed the Central Bank.

Guatemala: More Controls On Banks

September 2016

A bill being promoted by the executive branch seeks to authorize the Bank of Guatemala to finance the capitalization of a bank when it faces problems affecting financial stability.

The aim of this initiative is to adapt the rules on financial supervision and risk control to international standards, to prevent the stability of the domestic financial system from being affected when a bank has liquidity or solvency problems.

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