The rating agency Moody’s considered the outlook for 2024 of the banks of Latin Americabased on profitability, low delinquency and high liquidity, which would allow them to correctly absorb global contingencies.
In the latest report of Moody’s Investors Servicesto which he agreed Ambitprofitability is pointed out as one of the main factors for the stability of the banking system next year.
Higher business volumes, lower supply needs and high capitalization are factors that offset the interest rate reduction initiated by several central banks in the region, including that of Uruguay.
“Margins will remain wide, with loan growth offsetting portfolio interest rate adjustments and higher financing costs. The investments “Innovation and more stable sources of income, such as fees and commissions, will continue to support earnings,” Moody’s predicts for next year.
Likewise, the qualified person highlighted the high liquidity at the local level, which allows Latin American banks to have low dependence on international capital markets, limiting the impact of the volatility global. “Large stable deposit volumes and strong demand from local capital markets are key strengths,” he states in the report.
However, there is a call for attention as a result of the low growth of GDP despite expectations of a relative acceleration until 2024.
About UruguayMoody’s analysis considers that “the intensive use of dollar “The US will continue to expose banks to greater risks” and will expose the Uruguayan economy to the US monetary cycle.
The stable outlook for Latin America contrasts with the negative scenario that the agency projects for global banks.
“The hardening of monetary policies of central banks has translated into lower growth in gross domestic product. Low liquidity and payment capacity will reduce the quality of the portfolio and generate greater asset risk. Profitability could decrease due to higher financing costs, lower loan growth and reserve accumulation,” the report diagnoses.
Felipe Carvallovice president and senior credit officer at Moody’s Investors Service, said that “financing and liquidity will be more difficult to obtain, although capitalization will remain stable and will benefit from both organic capital generation and moderate loan growth, as some of the main banks USA accumulate capital.”
Source: Ambito
