Following the approval of the Bitcoin Law in El Salvador by the members of the Legislative Assembly, which creates a legal framework that recognizes this digital currency as legal tender in the country, the IMF warns that financial and legal risks have arisen.
If the reforms to the Banking Law that are being discussed in the Congress are approved, cooperatives will have to start reporting information in their loan portfolios.
Legal initiative number 5157which is pending final approval, proposes, among other changes, including in the Credit Registration Information System (SIRC by its initials in Spanish) information from financial institutions that are not yet sending reports.
In 2017, bank deposits totaled $11,715 million, 10% more than the figure registered at the end of 2016.
The "Financial Bulletin of the Banking System up to December 2017", prepared by the Salvadoran Banking Association, states that "... in the last five years, deposits have had average growth of 4.3%."
Almost a year after the liquidation of the bank was ordered, depositors have not yet received their funds, and in order to complete the settlement, the parent company will have to turn over $60 million.
Of the $100 million that Banca Privada de Andorra had registered as deposits in Panama, $60 million is abroad and the rest in Panama, reports Prensa.com.
The Superintendency of Banks has granted the banking group BCT approval to acquire Balboa Bank & Trust, putting an end to the reorganization process that began a year ago.
From a statement issued by the Superintendency of Banks in Panama:
Reorganization of Balboa Bank & Trust enters its final phase
Between 2015 and 2016, transactions via electronic banking grew by 22%, while the issue of checks continues to decline.
From a statement issued by the Costa Rican Banking Association:
9 May 2017. The ease of making secure transactions with just one click, from the house, office or even cell phone,therby avoiding having to go anywhere or queue up, is making more and more users of banking entities, along with the Costa Rican Banking Association (ABC), prefer electronic banking.
In 2016 entities in the banking system managed to increase their assets by 4% and their loan portfolios by 8% compared to 2015.
The annual report by the Superintendency of Banks in Panama includes the main results for the banking center and the banking system during 2016.
The report states that"...Credit to the private sector remains favorable in the retail banking segment and corporate credit in the interim construction segments.Trade credit has a lower growth rate due to reductions in the Colon Free Zone. "
The reorganization process and subsequent sale of the Panamanian bank has been extended for 90 days, and eleven local and two foreign banking groups are interested in the process.
From a statement issued by the Superintendency of Banks in Panama:
Through Resolution SBP-0198-2016 of October 27, 2016, the Superintendency of Banks ordered an extension to the Reorganization of Balboa Bank & Trust Corp., which must be completed within a period of ninety (90) days, which may be brought forward or extended, based on a reasoned request by the reorganizer, as provided in paragraph 3 of Article 142 of the Banking Law.This measure is effective from Tuesday the first (1) of November two thousand and sixteen (2016) from 2:30 pm.
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.
Small and medium-sized customers of the institution which is under intervention can not access funds in their accounts.
Substantial losses are some of the effects produced by the suspension of Banco Universal, product of retention of financial assets. This situation could worsen, if immediate action is not taken to help overcome the difficulties.
Slow growth is projected in El Salvador, very good performance in Nicaragua, stability in Panama, more competition in Guatemala and moderate growth in Costa Rica.
From a report by Fitch Ratings entitled "2015 Perspectives: Central American Banks":
Costa Rica:
Fitch Ratings has revised the outlook for the sector from positive to stable, because the agency does not anticipate substantial improvements in respect to the previous year.
Retention of 1.77% on card payments, as advance income tax, was scheduled to take effect on December 1, but has been suspended by a court order.
From a statement from the Chamber of Commerce of Costa Rica reads:
The Chamber of Commerce of Costa Rica has received the decision of the Administrative Court which puts a halt to the entry into force of the retention of 2% of transactions made using credit or debit cards, a measure that would principally affect companies in the commercial sector.
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.
Market actors in El Salvador claim that transactions are being subjected to double retention, both by brokerage firms and the bank related to it.
Because of the speed with which the financial sector has been forced to comply with the withholding tax on financial transactions, effective from September 1st this year, the same market participants are claiming that investors are suffering because they are being billed the tax twice on each transaction.