Venezuela’s credit portfolio continues to grow

The credit portfolio of the Venezuelan banks maintained a significant upward trend, with expansions of 3.5 % compared to December

In January 2024, the credit portfolio of Venezuelan banks experienced a slowdown in its growth. However, it maintained a significant upward trend, with expansions of 3.5 % compared to December and an impressive 215.5 % year-on-year, reaching a total of 54,651.69 million bolivars.

In terms of foreign exchange, the loan portfolio stood at $1,507.22 million at the month-end official exchange rate. This represents an increase of 2.66 % compared to the $1,468.10 million with which it closed December, and an impressive 94.56 % compared to the 774.72 million in January 2023.

In addition, the financial intermediation margin experienced a relative increase of 25.09%, from 30.73 % in January 2023 to 38.44 % in the first month of this year. This represents a significant acceleration compared to the annualised increase of 33.08 % recorded last December.

These indicators of portfolio growth and the intermediation index are commendable, especially considering that the banking sector has faced challenges.

For 28 weeks, since the August 4 cut, the bank has not managed to cover the legal requirements, which has resulted in a deficit that exceeds 10 billion bolivars per week in the last six closures reported by the Central Bank of Venezuela (BCV).

The legal deposit requirement has exceeded 35 billion bolivars in each of the last six weeks, while the consolidated bank current account balance has remained at the order of 25 billion.

It is important to note that the intermediation margin does not fully reflect the effort that banks have been making to increase their loan portfolios. In the case of foreign currency deposits, banks have not intermediated more than 10 % of such funds because of the risks associated with foreign currency replenishment in the event of default by debtors.

K. Tovar

Source: Bancaynegocios

(Reference image source: @QPEV_, X)

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