Link to Fitch Ratings' Report: 2014 Outlook: Central America and the Dominican
RepublicSAN SALVADOR, December 16 (Fitch) The rating outlook for banks in Central
America and Dominican Republic is stable, according to a new Fitch Ratings
'The sector outlook is stable in all countries except Costa Rica, where it is
positive. Fitch anticipates that the Costa Rican banking sector will resume its
growth and profitability in 2014, after underperforming expectations in 2013 due
to government interventionist measures that constrained industry performance,'
said Rene Medrano, Senior Director.
Banks will continue to finance their operations with domestic deposits, which
have proven to be stable. In addition, the banks' funding diversification and
maturity profile could continue to improve should the banks continue to raise
funds in both domestic and international capital markets, although less
frequently than in 2013.
Most banking systems will continue to enjoy a strong and stable capital
position, fuelled by steady accumulation of profits. The Guatemalan banking
system will keep lagging behind its regional peers, while capital ratios are
expected to continue narrowing in Panama over 2014.
Credit growth will remain stable across the region, except in Costa Rica and the
Dominican Republic where Fitch expects more dynamism compared to 2013. The
Dominican Republic and Panama will exhibit the highest nominal growth rate in
the region, while El Salvador will continue as one of the lowest at less than 10
percent. Asset quality will remain strong and the banks' loss absorption
The Nicaraguan and Dominican banking systems will remain the most profitable
across the region, supported by comparatively high margins. Their return on
assets (ROAA) is expected to remain slightly above 2 percent, while those of the
other countries remain around 1.5 percent. The banks' performance will continue
to rely heavily on interest revenues.
For more information, a special report titled '2014 Outlook: Central America and
the Dominican Republic' is available on the Fitch Ratings web site at
Media Relations: Elizabeth Fogerty, New York, Tel: +1 (212) 908 0526, Email:
Additional information is available at 'www.fitchratings.com'.
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