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Latin America Investment News on Viva Tropical

Ecuador Squeezes Banking Sector

Article Summary:

Since President Rafael Correa took office, he has tightened controls on private banking which have affected the sector’s growth and profitability.

Photo Credit: Guardian UK

Original Article Text From NASDAQ:

Ecuador Banks’ January-September Net Profit Fell 26% to $198.5 Million

Combined net profit for 26 Ecuadorean banks fell about 26% for the January-to-September period to $198.5 million, from a year earlier, the country’s banking regulator said Wednesday.

The data include profits for 25 private banks operating in Ecuador, plus state-run Banco del Pacifico.

Since taking office in 2007, President Rafael Correa has tightened controls on private banks, setting interest rates and increasing the services that banks must provide to clients free, which according to economist have affected the sector’s growth and profitability.

Banco del Pichincha (PCH.GU), Banco del Pacifico and Banco de Guayaquil (BGYQY) topped the list, with $41.7 million, $ 29.9 million and $28.5 million in profits, respectively, according to the report.

The three banks accounted for 50% of the reported combined income and 53% of Ecuador’s banking assets.
About 7% of the profits came from foreign banks operating in Ecuador, which includes the U.S.-based Citigroup Inc. ( C ), Dutch-German Procredit Bank and Panama’s Promerica.

According to official data, assets in the banking system totaled $28.6 billion for the January-to-September period, while liabilities were $25.7 billion.

Sight deposits totaled $16.4 billion, term deposits $6.4 billion and investments $4.1 billion.

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Latin America Investment News on Viva Tropical