From January 2008 to January 2009, the banking system’s unrecoverable portfolio grew by 36.9%.
The portfolio with the riskiest loans, known as "E" and classified as "irrecoverable," reached $246 million in January 2009, while $179.7 million were recorded in January 2008, a variation of $66.3 million.
In percentage terms, this portfolio rose to 2.7% of total loans, while in 2008, it accounted for 2.0% of the total.
Bad debts are growing and a credit boom is losing steam within the Guatemalan banking system, reflecting the nation's economic problems, according to a report by the regulator, the Bank Superintendent's Office.
The banks' bad-debt portfolio rose from 2.1 billion quetzals (US$286 million) on January 1 to 2.77 quetzals (US$374 million) on July 13, an increase of 24 percent.
El Salvador's banks have had to increase their provision for bad debt by 15.2 percent, according to the latest report from the El Salvador Bankers' Association (ABANSA).
In May alone, the bad-debt portfolio grew by 4 percent, and the increase over the last year has been 25 percent.
Carlos Cáceres, executive director of ABANSA, blamed high world food and fuel prices.