Net Credit and Deposit Portfolios are Still Growing in October 2023

Monday, 04 December 2023

The net credit portfolio of the International Banking Center (CBI) reached a total of USD 87.096 billion, reflecting a 4.3% or USD 3.60 billion increase in October 2023 compared to October 2022 when it totaled USD 83.49 billion, as revealed by the Banking Activity Report (IAB) for October 2023.

This growth is attributed to the performance of the external component of the net credit portfolio, indicating that the banking sector continues to expand credit issuance despite adjustments in interest rates. It is important to highlight the heterogeneity in this growth, with notable differences between the local and external components of the credit portfolio.

On the other hand, new loans amounted to USD 1.98 billion, representing a 4.9% decline compared to the same period a year ago. This slight difference may be influenced by events at the end of October, particularly affecting the placement of new loans due to mobility restrictions.

In this context, it is expected that financial entities will intensify their credit risk management and monitoring approaches to safeguard the quality of their credit portfolios.

Bank deposits totaled USD 101.46 billion, which is 4.7% or USD 4.54 billion more than that of October 2022 when it amounted to USD 96.92 billion.

CBI total assets reached USD 142.56 billion, indicating a 3.7% or USD 5.13 billion increase compared to October 2022. This increase is the result of the expansion of the credit portfolio and the securities component.

It is important to emphasize that, given a favorable performance in profitability and in a context of rising risks, banks need to adopt a cautious strategy in provisioning planning and capital management. This measure will provide a foundation to address potential losses in case the risks identified by the Superintendency of Banks in Financial Stability assessments materialize.

This will allow banks to be better prepared to mitigate impacts stemming from a potential slowdown in growth and an adverse external scenario. The current environment underscores the importance of adopting a dynamic and proactive risk management approach to adapt to unforeseen events, such as those presented by the current situation. These strategies will help mitigate potential negative impacts, which are fundamental to preserving financial stability and the long-term sustainability of banking institutions.

For more information about the variables that further explain this report, please visit our website at Statistics.

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