Fitch notes a high level of competition in the segment of medium-sized banks, limiting the power of price and putting pressure on margins despite specialization in niche markets.
From the report "Panorama of Mid Sized Panama Banks":
Mid Sized Panamanian Banks: Concentrations and Limited Capacity for Absorption of Losses
Fitch Ratings notes that the Guatemalan banking system reports one of the lowest rates of delinquency in the region.
From the report 'Panorama of Guatemalan Banks' by Fitch Ratings:
Local Majority Banking System: The largest banks (70% of loans in the system) belong to local shareholders. At the same time, foreign-owned banks increased their share after Bancolombia acquired the controlling stake in Banco Agromercantil de Guatemala, S.A. (BAM).
The company Financiera de Inversión has received authorization to start operating as a private bank in the country.
With capital of $15 million, the company which has so far only operated in the financial segment will start providing banking services under the brand Banco INV, and will be subject to the regulation required of participants of the banking system.
The bank acquired 70% of the shares of Universal Bank and annulled the license which it had been granted to operate in the microfinance segment.
The Superintendency of Banks authorised CANAL BANK, SA (BMF) General Banking License, to change its name from CANAL BANK, SA (BMF) to CANAL BANK, SA and canceled and annulled the banking license for Microfinancing granted to CANAL BANK, SA (BMF).
With the purchase of another 20% stake, Bancolombia Group now holds 60% of the shares of the Group Agromercantil de Guatemala.
Two years after the acquisition of a 40% stake of Argomercantil Holding Group, Grupo Bancolombia has decided to consolidate its presence in the country by acquiring a further 20%. The Colombian company said the acquisition is part of a consolidation strategy in Guatemala and Central America.
Six new institutions want to join the 94 that make up the banking center which operates in the country, whose assets grew by 35% in the last three years.
Data from the Superintendency of Banks indicates that "... the banking center currently has 94 entities: 2 official banks, 18 Panamanian banks with a general license; 29 foreign banks with a general license, 29 internationally licensed and 16 representative offices.
The banks Banco de Costa Rica, Banco Nacional and the Banco Industrial de Guatemala "will have to reduce the growth rate of their loans, since their core capital levels remain modest."
From Moody's press release:
Mexico, July 21, 2015 -- Central America's leading banks will need to slow the pace of their loan growth as their core capital levels remain modest, said Moody's Investors Service in a new report.
"While low growth rates of GDP restrict credit growth and earnings, expansion in consumer loans could weaken credit quality."
From a report by Fitch Ratings:
Fitch Ratings - San Salvador - (July 16, 2015): The largest Salvadoran banks have a strong ability to absorb losses, which protects them from the weak operating environment and asset quality pressures, according to Fitch Ratings' special report .
The five largest banks account for 82% of total assets in the system, three of them focusing on the corporate credit segment and the other two on retail banking.
From the report by Fitch Ratings "Panorama of Banks and Guatemala"
Largest banks of Guatemala: Related to the Sovereign Ratings
Banking System Concentrated in Five Largest Banks: The five largest banks account for 82% of the system's assets.
Limitations on control of casinos and gambling, and the inability to legally access banking information, limit the chances of success in the fight against money laundering.
Passing laws that favor combating money laundering have stalled in Congress, impeding the implementation of effective measures against the problem. This situation affects the results of the evaluation currently being carried out by representatives from the Financial Action Task Force group (FATF).
A reorganization process has begun to verify the entity's assets and its real value, and leave it in condition for its eventual sale.
As part of the reorganization process ordered by the Superintendency of Banks which will take 120 days, bank customers with accounts up to $2,500 will be allowed to make withdrawals. When the reorganization process is complete, one of the possible scenarios is the eventual sale of the entity in which local market banks could be interested, according comments made by industry sources to Prensa.com.
Since July 1 Ficohsa has had effective control over the operations of credit cards and consumer banking which belonged to Citibank in Nicaragua.
Within days Citibank's image will change to Banco Ficohsa Nicaragua, modifications which will include ATM, POS and banking agencies.
Elnuevodiario.com.ni reports that "... 'customers can continue to make transactions and negotiations in the same way that they had been doing, and through the same channels normally used'."
Having obtained authorization to operate from the Superintendence of the Financial System, the new bank has announced that it will start operations on July 20.
The bank will start with nine agencies in different parts of El Salvador, credit card services, online banking and 26 of its own ATMs. This will be the first proposal from a bank founded on fully Salvadoran capital, after sales of local banks in previous years.
Analysis by Fitch Ratings projects that banks in the region will maintain strong balance sheets and have stable profitability in 2014.
Excerpted from Fitch Ratings:
Differential Growth and Opportunities: Low financial depth, in most systems, continues to provide significant opportunities for expansion of bank balance sheets; although this is limited by low average income levels.
The group has announced that as part of its long-term strategy it will withdraw from the consumer banking business in Costa Rica, El Salvador, Panama, Guatemala and Nicaragua.
Extract from a statement issued by Citigroup:
Citigroup today announced strategic actions to accelerate the transformation of its Global Consumer Banking (GCB) to focusing on those markets where it has the largest scale and growth potential.