Based on the argument that there is no significant fiscal consolidation and sustained economic recovery, the rating agency decided to downgrade the government's long-term issuer rating perspective from stable to negative.
Although the outlook was modified, Moody's decided to maintain the long-term issuer and senior unsecured debt ratings at Baa1.
The National Assembly of Panama approved in third debate a bill that regulates the service of information on the credit history of consumers.
The legislative plenary approved in third debate initiative 424, which modifies Law 24 of 2002 related to this registration system in the Panamanian Credit Association (APC), in order to create a data model or credit information that is fair and balanced between financial agents and credit clients, the Assembly informed.
Fitch Ratings agreed to change the perspective of the region's banks from stable to negative, arguing that the current health crisis will affect financial institutions in all countries.
Considering the measures that countries have adopted in the last 15 days in economic matters, following the spread of covid-19, Fitch expects that there will be a decrease in the issuance of loans.
In Costa Rica, a law initiative under discussion seeks to set caps on interest rates on loans, a measure that could lead to a reduction in the offer of credit for debtors classified as higher risk.
As part of a bill being discussed in the Legislative Assembly, the heads of the Central Bank of Costa Rica (BCCR) and the General Superintendence of Financial Entities (Sugef) were asked to give their views on the content of the proposal.
Arguing that management practices were detected that put at risk its solvency and soundness, the Monetary Board decided to suspend the operations of Financiera de Occidente, S.A., an entity that represents 0.35% of the total assets of the local banking system.
Erick Vargas Sierra, head of the Superintendence of Banks (SIB), told Prensalibre.com that "...
According to Fitch Ratings, banks in Nicaragua will continue to be pressured by the remaining effects of an economic contraction for the second consecutive year, a situation derived from the political crisis affecting the country.
Moodys confirmed that the country's investment grade is Baa1 with a stable outlook, arguing that the economy has a solid performance and that it reflects stability at the macro level.
In 2020, Moody's expects the growth of the Panamanian economy to recover to 4.5%, boosted mainly by a full year of production in the copper mine, according to the forecasts of the international agency.
Up to June 2019, the gross portfolio of the financial system totaled $4.047 million, 20% less than in the same month in 2018, partly explained by the performance of commercial and personal credit.
In terms of composition, the current loan portfolio represented 89.2% of the gross portfolio (89.7% in May 2019), while the portfolio at risk represented 10.8% (10.3% in May 2019).
Late loans granted by public banks to small companies amounted to 5.5% in May, 3.8% in the case of medium-size companies and 3.3% in the case of large companies, a situation attributed to the economic slowdown.
The percentage of credits reported by the General Superintendence of Financial Entities (Sugef), refers to loans that went into default for more than 90 days and judicial collection, granted by public entities such as the National Bank, Banco de Costa Rica and Banco Popular.
With the aim of making the classification of debtors more flexible and reducing the risk of non-payment, in a context where delinquent loans keep on rising, Costa Rica authorized the modification of two regulations that apply to entities in the financial system.
The General Superintendence of Financial Entities (Sugef) and the National Council of Supervision of the Financial System (Conassif), informed that changes were made to the "Regulation for the qualification of debtors" and the "Regulation on management and evaluation of credit risk for the development banking system", which ultimately aim to give access to new credits to about 63 thousand people.
In Costa Rica, low economic activity and rising unemployment explain the 25% increase reported between February 2018 and the same month of 2019 in the value of assets acquired by banks to recover loans.
Figures from the General Superintendence of Financial Entities (Sugef) specify that between February 2018 and the same month of this year, the amount of goods and securities acquired by financial entities because people and companies did not pay their loans increased from $425 million to $533 million.
After Nicaragua Financia Capital S.A. declared that no funds were available to meet its obligations, the entity announced that it will propose to investors to renegotiate the terms.
On February 8, the Superintendence of Banks and Other Financial Institutions (Siboif) decided to revoke the authorization granted to Financia Capital, S.A. to make a public offering of fixed income securities.
Because Financia Capital S.A. does not have the funds available to meet its obligations, it was revoked the authorization to make a public offering of fixed income securities.
The Superintendence of Banks and Other Financial Institutions (Siboif) informed that its authorization was revoked because "... the representatives of the issuer Financia Capital S.A.
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.
Due to an increase in commercial credit and personal loans, the gross portfolio totaled $5.480 billion up to November 2017, 15% more than in the same month in 2016.
According to a Report on the Performance of the National Financial System, published by the Central Bank of Nicaragua in November 2017, the financial system increased its financial assets by 16%, while the credit portfolio grew by 15%, both in year-on-year terms.