The coronavirus has left an economic impact in several countries. For this reason, some governments are developing exceptional measures to mitigate its effects. For example, the suspension of tax and mortgage payments to lessen the economic pressure on small businesses and households.
In the United States, interest rates were reduced to almost zero and a US$700 billion stimulus program was launched in a bid to protect its economy, says Mario Miranda, director of finance at MonederoSMART.
The Honduran Banco Atlántida has received authorization to operate in the Nicaraguan financial market.
As of November 15, the Honduran bank will have 180 days to comply with the requirements in the law for banks and financial institutions.
"...Through a resolution published in La Gaceta on November 15, the board of directors of the Siboif made official the authorization for the constitution of a banking corporation under the name: `Banco Atlántida de Nicaragua S.A. or simply Banco Atlántida Nicaragua or Banco Atlántida'."
The portfolio of loans granted by the banking system recorded growth of 18.4% in December 2016, while deposits grew by 9%.
Financial Report up to December 2016 by the Central Bank of Nicaragua:
By December, the National Financial System (SFN by its initials in Spanish) continued to record growth in both credit and deposits, although at decelerated rates.Risk indicators remain stable and indicators of profitability, capital and solvency are at levels above the average observed in 2016.Therefore, the loan portfolio of the financial system showed an annual increase of 18.4 percent (growth of credit of 23.0% in December 2015), with stable risk indicators, being the lowest in the region.
In response to rumors of more interventions into financial institutions, the Superintendency of Banks in Panama says that they are unfounded, highlighting the strength of the banking system.
From a statement issued by the Superintendency of Banks of Panama:
The Superintendency of Banks in Panama made public knowledge, that as a result of taking operational and administrative control of Balboa Bank & Trust and its subsidiaries a number of comments and news stories have arisen which do not have any foundation regarding future actions that may be taken by this institution on other banks, or conditions of vulnerability of some institutions in our banking system.
Fitch Ratings predicts headwinds and higher risks for banks in Central American countries in 2016, resulting in lower credit growth.
From a report by Fitch Ratings Central America:
Headwind: Central American Banking systems face greater risks in 2016. A slowdown in growth of gross domestic product (GDP) in the region and, consequently, lower credit growth is anticipated.
As the region gets ready to start complying with the US law FATCA, OECD countries are already working on a Single Global Standard for automatic exchange of information.
FATCA could now be joined by the European OECD countries Single Global Standard for Automatic Clearing of CRS Information (Gatca), "... allowing tax information on their residents to be shared between them."
Many of the officials working in Central American governments are annoyed at the idea of the information they handle being accessible to citizens, and one way or another, they are impeding its availability.
EDITORIAL
"- Send a letter to Mrs Fulana, the person in charge of authorizing the release of information you have requested, stating the reasons for your request".
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.
A bill that would infringe the privacy of information relating to citizens and business has risen alarms in the Superior Council of Private Enterprise.
The future Financial Analysis Unit (UAF in Spanish) would have excessive discretion to request information from public and private entities, said President of the Superior Council of Private Enterprise (COSEP), Jose Adan Aguerri.
A Fitch Special Report indicates better positioning in the face of external uncertainty.
SUMMARY
Strengthened Financial Performance:
The banking systems of Central America and the Dominican Republic (hereinafter the region) will continue to strengthen their financial performance as the region continues to recover its rate of GDP growth, estimated at about 4% by 2012 under Fitch’s baseline scenario.
Bankers say they are prepared for the tests due to be carried out on entities.
The Nicaragua banking system has strengthened in recent years and should easily pass the financial stress tests it will be submitted to, with the technical assistance of the International Monetary Fund.
So say the banks’ managers, who trust that these tests will allow them to verify the degree of soundness of certain financial indicators and the stability of the system as a whole.