Feedback Elisabetta Bevacqua, Dirk Heylen,, Catherine Pelachaud, Isabella Poggi, Marc Schröder.
Javier poggi
description
Transcript of Javier poggi
Peruvian Financial System: Liquidity & Solvency to sustain growth
Javier Poggi
Chief Economist,
Superintendence of Banks, Insurance Companies and Pension Funds Administrators (SBS)
Agenda
1. Very positive financial stability outlook within a strict regulatory framework
2. Good prospects for growth and business opportunities
1. Very positive financial stability outlook within a strict regulatory framework
Banking institutions represent almost 90% of total assets of the Financial System
(US$ 85 billion in assets)
Assets as of 29 February 2012
Number of
institutions
Assets
(US$ Million)
Size
(%)
Banking Institutions 15 75 447 89,0
Finance Companies 10 3 149 3,7
Microfinance Institutions 34 6 205 7,3
Municipal Non-Banking Institutions 13 4 711 5,6
Rural Non-Banking Institutions 11 1 024 1,2
Micro & Small Enterprise Development Entities 10 470 0,6
FINANCIAL SYSTEM 59 84 801 100
Financial System Regulatory Environment
Same regulatory framework for all supervised institutions
Balance between qualitative risk management requirements and basic rules (provisions, capital, liquidity ratios, etc)
Financial System Regulatory Environment
Basel II fully implemented and adapted to local conditions:
Parameters recalibrated to reflect local risk environment (i.e. stricter)
Addressed relevant local risks:
Foreign exchange induced credit risk
Over indebtedness
Financial System Regulatory Environment
Significant implementation of Basel III framework:
Countercyclical capital requirements (also countercyclical provisioning)
Capital surcharges for systemic institutions
Additional buffer (Peruvian version of conservation buffer: Interest rate risk for banking book and individual, sectoral and geographic credit risk concentration)
Liquidity standards Under public consultation
Some Banking System Indicators
Banking System: Liquid assets / short - term liabilities
(% )
0
8
16
24
32
40
48
56
64
Feb
-09
Apr
-09
Jun-
09
Aug
-09
Oct
-09
Dec
-09
Feb
-10
Apr
-10
Jun-
10
Aug
-10
Oct
-10
Dec
-10
Feb
-11
Apr
-11
Jun-
11
Aug
-11
Oct
-11
Dec
-11
Feb
-12
Domestic Currency Foreign Currency
Minimum Ratio (Foreign currency )
Minimum Ratio (Domestic currency )
Liquidity of the Banking System largely exceeds the minimum requirement
43,1
47,8
Banking System shows good quality of assets: 1.6% of non performing loans
Banking System: Loan quality indicators
(as a percentage of total loans)
0,0
0,5
1,0
1,5
2,0
2,5
Feb
-09
Apr
-09
Jun-
09
Aug
-09
Oct
-09
Dec
-09
Feb
-10
Apr
-10
Jun-
10
Aug
-10
Oct
-10
Dec
-10
Feb
-11
Apr
-11
Jun-
11
Aug
-11
Oct
-11
Dec
-11
Feb
-12
Past - due loans Refinanced and restructured loans
Banking System holds a 36% buffer on top of required loan provisions
Banking System: Coverage Indicators
(% )
100
130
160
190
220
250
280
Feb
-09
Apr
-09
Jun-
09
Aug
-09
Oct
-09
Dec
-09
Feb
-10
Apr
-10
Jun-
10
Aug
-10
Oct
-10
Dec
-10
Feb
-11
Apr
-11
Jun-
11
Aug
-11
Oct
-11
Dec
-11
Feb
-12
Provisions / Past-due loans
Provisions / Past-due, refinanced and restructured loans
Banking System: Provisions
(US$ Million)
9011 123
1 349 1 409
266
128
184
239247
183
202
264
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
Aug-2009 Dec-2010 Dec-2011 Feb-2012
Required provisions Cyclical provisions Voluntary provisions
Banking System: Capital ratio
(% )
7
8
9
10
11
12
13
14
15
16
Feb
-09
Apr
-09
Jun-
09
Aug
-09
Oct
-09
Dec
-09
Feb
-10
Apr
-10
Jun-
10
Aug
-10
Oct
-10
Dec
-10
Feb
-11
Apr
-11
Jun-
11
Aug
-11
Oct
-11
Dec
-11
Feb
-12
Banking
Law
International Standard
Banking System holds 33% of capital buffer
13,52
10,0
8,0
Banking System: Capital
(US$ Million)
3 4274 254
5 476 5 521
1 432
1 662
1 849 1 942
0
1 000
2 000
3 000
4 000
5 000
6 000
7 000
8 000
Dec-2009 Dec-2010 Dec-2011 Feb-2012
Regulatory capital Capital buffer
Tier 1 Capital: 78% of regulatory capital
Large buffers of loan provisions and capital would allow banks to remain solvent under a
stressed adverse scenario
Variables
Stress
scenario
GDP Peru (YoY %) 0,50
Inflation (%) 4,52
Unemployment (%) 11,50
Copper price (US$/lb) 125,00
Fishmeal Price (US$/MT) 800,00
Exchange rate (PEN/US$) 2,72
EMBIG Latin America (bps) 650,00
GDP China (YoY %) 5,50
GDP US (YoY %) -1,00
Banking System
Minimum regulatory capital
requirement
0
2
4
6
8
10
12
14
Banking System
13,5%
11,7%
Current capital ratio
Capital ratio after stress
Profitability of the Banking System remains high
Banking System: Annualized ROE and ROA
(% )
24,29
2,35 2,34
24,59
0
5
10
15
20
25
30
35
ROE ROA
Feb-2011
Feb-2012
2. Good outlook for growth and business opportunities
Retail banking will continue to grow, creating business opportunities
During the last decade, retail loans have increased, on average, 20% annually
Mortgage loans represent less than 4% of GDP
3 1503 508
4 023 4 2444 598
5 015
18,3
20,1
22,723,6
25,127,0
Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11
N° debtors (in thousands) N° debtors / Adults (%)
Peru is the world leader in Microfinance, being regarded as the best microfinance business
environment according to The Economist
It is estimated that only 40% of micro entrepreneurs are funded by the Financial System 394
459 508 610
745
898
1 093 1 190
1 355
1 510
Dec
-02
Dec
-03
Dec
-04
Dec
-05
Dec
-06
Dec
-07
Dec
-08
Dec
-09
Dec
-10
Dec
-11
Financial System: Number of Micro Enterprise Debtors
(In thousands)
Large infrastructure deficit in the country opens interesting opportunities for both investment and
provision of financial services
Main sectors
Transport (roads, railroads, airports, ports)
Energy
Telecom
Water
Agriculture
Tourism
We expect the Financial System will continue growing around 15% per year
-10,0
-5,0
-
5,0
10,0
15,0
20,0
25,0
30,0
35,0
40,0
Feb
-02
Aug
-02
Feb
-03
Aug
-03
Feb
-04
Aug
-04
Feb
-05
Aug
-05
Feb
-06
Aug
-06
Feb
-07
Aug
-07
Feb
-08
Aug
-08
Feb
-09
Aug
-09
Feb
-10
Aug
-10
Feb
-11
Aug
-11
Feb
-12
Loans of Financial System
(Annual Growth %)
Thanks
For detailed information about the Peruvian Financial System
Visit
WWW.SBS.GOB.PE