Effects of recession: three banks in Peru report losses of up to S/29 million at the beginning of 2024

The performance of the banking sector is marked by the fall in loans and profits, which fell to S/810 million at the end of January.

The lingering effects of the recession (increased last year) continue to be felt in banking . At the end of January 2024, 17 entities in the financial sector in Peru achieved a total of S/810 million in profits , a result that implies a decline of 16.4% compared to the profits of January 2023.

Of the 17 banks that operate in the country, 14 have been achieving positive results, while three of them ( Pichincha, Ripley and Falabella) are registering losses of up to S/29 million, according to data from the Superintendency of Banking, Insurance and AFP (SBS). ). Below is the detail:

• Banco Pichincha Peru (-S/23 million 705,000)
• Ripley Peru Bank (-S/5 million 702,000)
• Banco Falabella Peru (-S/425,000)

Economist Ronald Casana, CEO of Equilibrium Financiero , explains that these results presented reflect the current situation of the financial system, which still show the lagged effects of the economic recession that occurred in 2023 and the impacts suffered by companies and the banking sector.

“We observed a decline in the placement of 

credits and therefore a reduction in profits, added to the increase in provisions, an increase in the financial expenses that the banks have been carrying out,” he explained.

Banks

During 2023, banks increased their interest rates in line with the decision of the Central Reserve Bank of Peru (BCRP), which raised the governing rate due to the increase in inflation recorded in much of the previous year.

“We hope that from the second quarter onwards these indicators will begin to improve, but not before having a moderate El Niño phenomenon and an improvement in economic indicators, such as the reduction of inflation and a prompt economic reactivation, as a result of the rebound,” he indicated.

Credit drop to a greater extent to microenterprises

This result is attributed to the reduction in business loans (-6.2%), especially in loans intended for micro-businesses (-13.8%), medium-sized businesses (-12%), and large companies (-10.2% ). In addition, factors such as high financial expenses (21.1%), and a slow placement of loans at the beginning of the year, said economist César Antúnez.

If you save in dollars, check these rates for fixed-term deposits in dollars in banks and savings banks in Peru. What mistakes should you avoid? – Credit Shutterstock

Another factor that influenced is the accelerated growth of provisions (59.4%), compared to financial income (11.8%) and income from financial services (10.6%), which only increased by 11.6%. %. “In addition, there is an increase in the ratio of financial expenses to financial income, which went from 29.6% to 31.1% year-on-year in January,” he says.

Banks that recorded profits at the end of January 2024

Among the banks that obtained the highest profits , Banco de Crédito del Perú (BCP) stands out with S/483 million (+0.2%) and a 33.5% share of the bank’s total loans. BBVA follows with S/117 million (-33.4%) and a 21.3% stake.

In third place, Scotiabank recorded S/82 million (-21.1%) with a market position of 15.1% and Interbank , with a greater market share (13.4%) and a profit of S/27 million ( -74.9%). On the other hand, the bank’s equity solvency had a Global Capital Ratio (GCR) of 16.4% in December 2023.

Among the banks that obtained the highest profits, Banco de Crédito del Perú (BCP) stands out with S/483 million | Photo composition: Infobae Peru.

The bank that obtained the lowest Global Capital Ratio was Banco Pichincha with 12.5%, a figure higher than 9%. It is followed by Alfin (12.6%), Bancom (13.0%) and Banbif (14.7%).

For the development of 2024, a downward correction in term deposit rates is projected. “In the event that El Niño dissipates quickly, delinquencies are expected to remain at moderate levels through May – June 2024,” Antúnez mentioned.

How did banks close profits in 2023?

According to statistics from the Superintendency of Banking, Insurance and AFP (SBS) , the 17 private banks operating in Peru recorded a reduction of 8.8% in their profits, obtaining S/9,226 million at the end of 2023, compared to the year 2022 (S/10,119 million). From the other side, Scotiabank, Interbank and BBVA recorded considerable losses of S/1,000 million.

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