Banking
From The Report: Peru 2018
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Despite the deceleration of the Peruvian economy in 2017, driven in large part by the simultaneous impacts of the El Niño climate cycle and the corruption scandals related to Brazilian construction giant Odebrecht, the banking sector has remained stable. According to international credit ratings agency Moody’s, at the close of 2017 the sector was exhibiting sustained profitability, diverse earning sources and improved operating efficiency, with the annual report from the Peruvian Association of Banks recording a 4.7% increase in system-wide net income to PEN2.46bn ($757.4m). In 2018 the banking sector is expected to continue to act as an economic bellwether, maintaining positive indicators in terms of liquidity, solvency and efficiency. This chapter contains interviews with Julio Velarde Flores, President, Central Reserve Bank of Peru; Wilber Dongo, Central Business Director, Caja Arequipa; and Eduardo Torres-Llosa, General Manager, BBVA Continental.

 

 

Articles from this Chapter

Overview

Back on track: Monetary policy and renewed infrastructure spending help to bolster performance of banks
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Despite the deceleration of the Peruvian economy in 2017, driven in large part by the simultaneous impacts of the El Niño climate cycle and the corruption scandal at Brazilian construction giant Odebrecht, the banking sector has remained stable. According to international credit ratings agency Moody’s, at the close of 2017 the sector was exhibiting sustained profitability, diverse earning sources and improved operating efficiency, with the annual report from the Peruvian Association of Banks (Asociación…

Analysis

If you build it: Credit activity in the construction sector begins to rebound
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Following project delays caused by a high-profile corruption scandal at Brazil’s construction giant Odebrecht, which rippled across Latin America, the construction sector is at last refinding its financial footing. After nine consecutive months in negative territory, credit to the sector posted 0.56% year-on-year growth in March 2018, to PEN4.94bn ($1.5bn), according to the Peruvian Association of Banks (Asociación de Bancos del Perú, ASBANC). This renewed dynamism of credit activity was expected…

Interview

Prudent planning: Julio Velarde Flores, President, Central Reserve Bank of Peru (Banco Central de Reserva del Perú, BCRP), on interest rate changes, the budget deficit and the trade balance
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Interview :Julio Velarde Flores Are interest rates likely to change in the near term? JULIO VELARDE FLORES: Most market participants do not expect additional cuts in the BCRP’s benchmark interest rate. Between May 2017 and March 2018 the bank decreased its policy rate six times, from 4.25 % to 2.75% – or 0.5% in real terms. The current real interest rate level implies an expansionary monetary stance consistent with inflation convergence towards the middle point of the BCRP’s target…

Interview

Cooperative competition: Eduardo Torres-Llosa, General Manager, BBVA Continental, on infrastructure development and digitalisation
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Interview :Eduardo Torres-Llosa What role can syndicated loans play in bridging the country’s infrastructure gap? EDUARDO TORRES-LLOSA: The year 2017 was marked by political and climatological circumstances that had a negative impact on business conditions. Since then, two aspects have remained the same, namely the need to bridge the infrastructure gap and the fact that sufficient funds exist to achieve this objective. The government began to tackle many of the obstacles facing infrastructure…

Analysis

Opening channels: Technological developments enable more Peruvians to join the formal financial sector
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Like many other emerging economies, financial inclusion is one of the greatest challenges facing Peru. Findings of the World Bank’s 2017 Global Findex, which measures the progress of financial inclusion in 140 countries, highlighted a number of areas that need to be improved if the country’s banking sector is to be successful in penetrating a larger proportion of the population. Although the percentage of adults in Peru with a bank account is below the regional average, at 43% against 51%, this…

Interview

Digital breakthrough: Wilber Dongo, Central Business Director, Caja Arequipa, on financial technology (fintech) and the digitalisation of banks
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Interview :Wilber Dongo What challenges could be addressed through the digitalisation of Peruvian banks? WILBER DONGO: The common denominator that we see across the financial sector is that fintech companies are innovating at a faster pace than traditional financial institutions. The success stories of many of these companies have opened the eyes of traditional financial institutions and pushed them to enhance their digitalisation and innovation efforts, even changing their organisational…

Overview

Fintech revolution: Tech solutions are driving the evolution of the sector landscape – Peru 2018
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Once reserved for ambitious start-ups and industry-leading tech operators, financial technology (fintech) has more recently caught the attention of major private sector firms and government planners alike, becoming a regular feature in budget speeches and strategic development plans. As fintech progressively plays a larger part in the lives of consumers, investors have quickly come to recognise its potential as a growth industry. The tech-focused Janus Henderson Global Technology Fund, for example, has expanded by more than 160% since February 2013, and grew by some 30% over the course of 2017. Fintech is rapidly advancing across an array of…