Guatemala's hard times spur 24 percent growth in bad debt

Bad debts are growing and a credit boom is losing steam within the Guatemalan banking system, reflecting the nation's economic problems, according to a report by the regulator, the Bank Superintendent's Office.

Friday, July 18, 2008

The banks' bad-debt portfolio rose from 2.1 billion quetzals (US$286 million) on January 1 to 2.77 quetzals (US$374 million) on July 13, an increase of 24 percent. Over the same period, bad debt as a proportion of the total credit portfolio rose from 2.5 percent to 3.1 percent.
Credit to the private sector, which had been growing at about 30 percent a year, slowed to only 4 percent in the first half of 2008. Antonieta de Bonilla, president of the Bank of Guatemala, said banks were running out of resources and will need fresh capital if the growth in credit is to be maintained.

More on this topic

Banking Delinquency Grows 24% in Guatemala

March 2010

Late loans summed $278 million in January 31, 24% more than the same date of 2009, when they stood at $224 million.

The situation is more pronounced for loans in dollars: in 2009 late loans accounted for $33 million, having now climbed to $68 million, a 108% increase.

Sigloxxi.com reports that “the variation has been subtler for loans in domestic currency: +9.7%".

Irrecoverable Receivables Grow 37% in El Salvador

March 2009

From January 2008 to January 2009, the banking system’s unrecoverable portfolio grew by 36.9%.

The portfolio with the riskiest loans, known as "E" and classified as "irrecoverable," reached $246 million in January 2009, while $179.7 million were recorded in January 2008, a variation of $66.3 million.

Guatemala: Overdue loan portfolio increases to 86%

January 2009

As of November 2008 overdue loans in the banking system rose to $264 million, 85% more than in December 2007 when it was at $142 million.

According to sigloxxi.com, "In September the percentage was at 73.4% compared to the end of 2007.

Similarly, the Banking Superintendence pointed out that the overdue portfolio for credit cards owned by the banks was at 4.7% last November while it was at 5.9% during the same month in 2007."

Banks in El Salvador under pressure from bad debts

July 2008

El Salvador's banks have had to increase their provision for bad debt by 15.2 percent, according to the latest report from the El Salvador Bankers' Association (ABANSA).

In May alone, the bad-debt portfolio grew by 4 percent, and the increase over the last year has been 25 percent.

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