Fitch Publishes Peer Review of Large Peruvian Banks

NEW YORK--(BUSINESS WIRE)-- Fitch Ratings has published a peer review of large Peruvian banks that covers the top five names in the country, comprising approximately 89% of Peru's banking system's assets. Their business volumes -- largely concentrated in Peru -- ranked between USD39 billion and USD3.1 billion at second quarter 2015 (2Q15).

Peru's top five banks - Banco de Credito del Peru (BCP), BBVA Continental (BC), Scotiabank Peru (SBP), Banco Internacional del Peru (IBK) and Banco Interamericano de Finanzas (BIF) - have continued their healthy growth albeit a slower pace than in prior years. Peruvian banks maintained their performance, sound asset quality, adequate capital and generally stable funding. While some differences persist, these banks boast strong credit metrics that compare very well to those of their regional and global peers. In addition, the top four enjoy strong competitive positions in an open yet concentrated market.

Following slower economic growth, banks have adjusted their risk appetite and focused on secured retail products and lower risk segments. As expected, some performance metrics have declined but large Peruvian banks maintain a healthy profitability. Asset quality should continue to decline but remain moderate and adequately covered by reserves.

For Peruvian banks, the main challenge has been on the funding side, where they generally enjoy adequate liquidity but, when broken down by currency, liquidity is abundant in USD and scarce in local currency. A sustained drive to reduce USD lending and currency swap/repo facilities from the central bank have contributed to reduce loan dollarization. Deposit dollarization has yet to return to its declining trend and should do so in 2016-2017, once depreciation expectations recede. In the meantime, local currency liquidity injections from the central banks should suffice to sustain growth.

During the last peer review, Fitch affirmed all Peruvian banks' ratings with a Stable Outlook.

Additional information is available at 'www.fitchratings.com'.

Peer Review: Large Peruvian Banks (Facing Headwinds)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=871040

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View source version on businesswire.com: http://www.businesswire.com/news/home/20151110006857/en/

Fitch Ratings
Diego Alcazar, +1-212-908-0396
Director
Fitch Ratings, Inc.
33 Whitehall St
New York, NY 10004
or
Media Relations
Alyssa Castelli, New York, +1-212-0908-0540
[email protected]

Source: Fitch Ratings

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