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).
Excess dollars due to higher income from remittances and foreign credit lines account for the 18% increase in the loan portfolio in that currency.
The reporting period is the year between June 2014 and March this year.
The increase in remittances and credit lines that banks have externally has generated a surplus which the banking system captures and re-enters the market through loans.
Insurers in the country are extending their range of products with services such as coverage for vehicles over 20 years old, accidental death, unemployment and others.
According to Christian Wolck, manager of the insurance division of G & T, there is a tendency to open up the market to all kinds of people, "because so far companies have been very efficient in providing solutions to businesses, but today we have to focus on people. "
$4.5 billion a year comes from the U.S., generating a fierce battle between 22 banks and transfer companies that compete for the market.
The stiff competition for larger pieces of the cake that makes up remittances is leading banks and financial companies to sign alliances and join forces.
For example the company AirPak / Western Union this week signed an alliance with Banco de los Trabajadores (Bantrab) in order to increase their participation in the remittance business through the promotion "Remesa del Norte” (Remittance from the North). Customers participate in a draw for a car, motorcycles and appliances with each consignment.
In recent years, electronic transfers have been growing at a rapid pace.
Bank managers agree that the use of electronic banking operations reduces transaction costs, being this the main reason for its growth.
Luis Lara, manager of the Banco Industrial (BI) told Prensalibre.com that the institution expects amount of electronic transactions made by the end of 2011 to exceed those of 2010 when they totaled $1,377 million.
Banks are offering rates of up to 7.5% for mortgage loans, both consumer and corporate.
Mauricio Alvarez, manager of the Banco de los Trabajadores (Bantrab) noted that low interest rates abroad has meant that much "capital is returning to the country because the rates are better."
"Erasmo Velasquez, president of National Mortgage (CHN), noted that there are now market rates of between 8 and 10 percent annually, compared to a year ago when they were 11 and 12. From an article in Elperiodico.com.gt
In Guatemala, 10% of banking operations are currently handled by banking agents.
Fernando Quiñónez interviewed Herbert Hernández from G&T Continental for Siglo21.com.gt on the importance of banking agents to the Guatemalan economy, which have handled transactions worth more than $700 million since their inception in 2003.
Hernández comments that, "we began with three (agents), and there were no more than three or four for a while.
Guatemala’s sixth largest bank, Bantrab (Spanish acronym for Worker’s Bank), landed a credit line from the German Development Bank (DEG).
Mauricio Álvarez, Bantrab’s head of strategic planning, explained that the funds will be loaned to small and medium enterprises from rural and urban areas.
The bank has granted loans between $131 and $653 for small enterprises and up to $26,132 for medium sized ones.
DEG, the German Investment Corporation granted local bank "Banco de Los Trabajadores" (Bantrab) a credit line to lend to Small and Medium Enterprises.
Mauricio Álvarez, strategic planner at Bantrab, explained they had also negotiated credit lines with Dresdner Bank, Wells Fargo and the Central American Bank for Economic Integration.
"These funds are earmarked for productive loans for individuals and small and medium enterprises.
Until September there was a reported growth of 6.87%, less than the 12% of 2009 and the 25% of 2008.
According to the Superintendence of Banks, from January to September 2010 total mortgage loans totaled $ 2.07 billion.
Mauricio Alvarez, strategic planning manager of Banco de los Trabajadores, told Prensalibre.com, "The economy has barely recovered and the most affected sector has been construction, so one of the reasons for this behavior is a lower housing demand."
Bantrab Group obtained approval from the Monetary Board to operate as a financial group.
After the purchase of Banco de la República, Seguros Tikal and Latin Finance, the Monetary Board approved the establishment of the group through resolution JM 99-2010.
"Sergio Hernandez, president the Bantrab Group, explained that one of the objectives of the strategic plan 2010-2014 is to position the group within the top five financial entities in the country." Says an article in Elperiodico.com.gt.
Four banks compete with a wide range of small credits under $20 thousand Dollars.
Industrial Bank (BI), Rural Development (Banrural), G & T Continental and Bantrab offer term, conditions and personalized service in order to fill this market niche.
Sigloxxi.com writes "The president of the Central American Microfinance Network (Redcamif), Reynold Walter, said that loans of this type represent 70% in rural areas, while in metropolitan areas account for 30%. Out of the total, two-thirds are managed by women. "
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