More and more companies are turning to predictive analytics to optimize their processes, achieve better business results and increase their market share.
Organizations use internal predictive analytics to forecast trends, understand and predict customer behavior, improve performance and drive strategic decision making.
Arguing that a lower economic growth and a higher fiscal deficit are expected due to the effects of the covid-19, the agency decided to modify from BB to BB- the country risk rating.
The situation of the tax burden in the country is another factor affecting Fitch's decision, which was communicated to the Banco de Guatemala through the preliminary bulletin that the agency sent to the authorities.
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.
Arguing that continuity in economic policies is expected after the change of administration in January 2020, Standard & Poor's maintained the country's credit risk rating at BB-.
From S&P report:
S&P Global Ratings confirmed its long-term sovereign credit ratings of "BB-" in long-term foreign currency and "BB" in Guatemala. The outlook for our long-term ratings remains stable.
Institutional problems and lower levels of economic growth compared to other countries with the same risk rating, could cause in the future a degradation of Guatemala's debt rating.
Arguing that the economy reports stable growth, and that a prudent management of monetary and fiscal policy has been made, the agency decided to maintain in Ba1, with a stable perspective, the country's credit rating.
The low fiscal deficit caused by strict controls on public spending and reduced indexes of public indebtedness, as well as a demonstrated economic resilience to extra-economic events, are other of Moody's arguments.
Guatemalan businessmen assure that the change from Stable to Negative made by Fitch Ratings in the country's risk perspective should be taken seriously, since investments could stagnate.
On April 11, Fitch announced that it maintained its "BB" rating for long-term foreign currency debt default, but decided to modify the outlook because the country reflects political tension and greater uncertainty in agents, as well as a constant erosion in the government's low tax collection.
Fitch Ratings confirmed the long-term foreign currency debt default rating of "BB", but changed the outlook from stable to negative.
The review of Guatemala's negative outlook reflects political tension and greater uncertainty in agents, as well as a constant erosion in the government's low tax collection, the rating agency argued.
Although poor social indicators and a low tax burden are a threat to the country's progress, for Fitch the Guatemalan economy has the capacity to overcome external adversities.
After the last visit of Fitch Ratings to Guatemala, representatives of the rating agency expressed the opinion that health, education and security indicators, together with the tax situation, are issues that should concern the country.
The governments of Costa Rica and Nicaragua will face greater challenges in obtaining financing in external markets, because of the lowering of their risk ratings by international agencies.
Arguing that Costa Rica reflects consistently large fiscal deficits, short-term financing needs because of a strong repayment schedule and budget financing constraints, Fitch Ratings reported on January 15 that the country's long-term foreign currency issuer default rating was downgraded from BB to B+.
Panama and Nicaragua are among the ten countries in Latin America with the highest risk of money laundering, according to the Basel Institute of Governance.
The anti-money laundering index (AML) prepared by the Basel Institute of Governance places Panama in fourth place in the list of countries with the highest risk of money laundering and financing of terrorist activities in Latin America and the Caribbean.
...and I will tell you who you are. In their quest to reduce exposure to risk, banking correspondents have started to restrict the services they provide to gambling companies, remittance companies, and brokerage firms that are not related to banking groups in the region.
In order to reduce risk exposure, some international banks with correspondents in Panama and other countries in the region are failing to open accounts for or provide services for companies whose income comes from activities such as remittances and gambling.The banks' argument is that they are more likely to be used for money laundering. Even non-banking brokerage firms claim to have difficulty offering their customers products and services,"... since banks wont open accounts in which customers can deposit their funds and receive a return on their investment."
The Superintendency of Banks is working on an update of the regulation on credit risk management and a new regulation of corporate governance for insurers.
Jose Alejandro Arevalo, head of the Superintendency of Banks (SIB), told Dca.gob.gt that"... in the case of regulation 93-2005 they want to ensure that the valuation of assets which is presented every 4 months by banks reflects economic reality and the quality of the goods."
A bill being promoted by the executive branch seeks to authorize the Bank of Guatemala to finance the capitalization of a bank when it faces problems affecting financial stability.
The aim of this initiative is to adapt the rules on financial supervision and risk control to international standards, to prevent the stability of the domestic financial system from being affected when a bank has liquidity or solvency problems.
Noting uncertainty and political instability in the country as the main risk factor for the economy, the rating remains at BB with a stable outlook.
From the press release by Fitch Ratings:
Fitch Ratings-New York-19 June 2015: Fitch Ratings has affirmed Guatemala's long-term foreign- and local-currency Issuer Default Ratings (IDRs) at 'BB' with a Stable Outlook.