Latin American banks have solvency levels that make it possible to manage a scenario of high legal fees and an economic slowdown that will probably last until 2024, a senior Fitch executive told “Reuters.”
Latin American banks will show high resilience in the face of shocks seen in the last three years, according to “Fitch.”
These factors are causing the margins of the two banks to be squeezed, making it more difficult for smaller institutions to grant loans, in addition to affecting overall profit.
“The average bank is in good condition to face these challenges,” said Alejandro Garcia, head of Fitch’s Latin America financial institutions group.
“Banks are facing milder conditions in Mexico, Brazil, Panama, and Chile,” Garcia said, citing expectations of improved economic performance in these countries.
“The conditions are unfavorable in Colombia, Peru, and Argentina, which are also affected by political uncertainty,” he noted.
Garcia highlighted the stability of two Latin American banks in terms of finance and credit, especially in terms of solvency, as well as their profile in acquisitions and liquidity, alerting them to the deterioration of loan portfolios and an increase in defaults.
