News
Central American Banking Analysis
Source: Fitch Ratings Centroamerica
Thursday, September 16, 2010
A report from Fitch indicates that only in 2011 the Banks of Central America will reach profitabilitye levels that could be compared to those before the crisis.
Fitch thinks that the majority of Central America's banking systems will earn more profits than in 2009, but it will not be until 2011 when they reach profitability levels comparable to the ones they had before the crisis. The perspectives of financial performance for the Nicaraguan Banking System are less favorable than the rest of the region; meanwhile the possibility that results in Costa Rica surpass the ones in 2009'will depend basically on the evolution of the currency exchange rate.
Credit growth recovery is still limited, however, some countries show signals of improvement, but they are still weak. Panama is the country with the highest loan growth level during 2010, and in the meantime, in El Salvador and Nicaragua this is still decreasing. Fitch thinks that loans will increase progressively when economic activity recovery consolidates. It is important to say that the normalization in the micro finances industry will happen afterward, as their portfolios are more sensible to the economic cycle.