Margins for Financial Intermediation in Costa Rica

Private banks operate with margins between interest rates which are considerably lower than state banks.

Thursday, May 2, 2013

An article in points out that "the five banks with the lowest margins in the country are private ones, as is clear from a study by EF based on data reported to the Superintendent of Financial Institutions (Sugef) for December, 2012 ". Private banks have a margin of financial intermediation of 6%, while for state banks it is 8%.

The figures include margins in colones and dollars, favoring private banks, "because public banks have sought to grant loans in dollars, with payments made in colones, the net interest margin in the U.S. currency tends to be high," said economist Juan Muñoz.

The Bank of Costa Rica (BCR), is a public institution with a lower net interest margin (6.46%), while in the industry, the Banco General is top of the table with 3.22%.

More on this topic

Costa Rica: Financial Intermediation Margin Decreases

March 2017

The difference between interest rates and deposit rates in local currency went down from 13.5% in 2005 to 6.8% in 2016.

From a statement issued by the Costa Rican Banking Association:

March, 2017. A comparative analysis by the Costa Rican Banking Association (ABC), between 2005 and 2016, with data from the Superintendent of Financial Institutions (SUGEF) shows that the Financial Intermediation Margin (MIF) in colones, has maintained a downward trend, going from 13.5% to 6.8% in that period.

Financial Intermediation Margin in Costa Rica

April 2016

The margin of financial intermediation in colones fell by 1.3% and stood at 7.1%, while a rate of 3.5% was recorded dollars.

From a statement issued by the Costa Rican Banking Association:

31 March, 2016. The Costa Rican Banking Association (ABC by its initials in Spanish) presents data on the performance of the Financial Intermediation Margin (MIF by its initials in Spanish) between 2008 and 2015, showing that this was reduced at the end of last year, both in colones and dollars.

Exchange Spread Increases in Costa Rica

February 2014

The escalation and volatility of the dollar in recent days raised the spread over 3%.

The volatility that has been seen in the exchange rate in Costa Rica in recent days has increased the spread between buying and selling dollars at the counters of financial institutions.

Costa Rica: High Financial Intermediation Margins

August 2010

The difference in the interest paid by banks on deposits and loans can be as much as 22%.

Intermediation margins are a measure how a financial sector performs its mediation role and is one indicator of efficiency. Though there are various ways to calculate the figure, Costa Rica's margin is higher than in other economies.

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