Peru builds on sounder foundations

PERU’S RICHES HAVE always been something to marvel at. The Incas built palaces of gold and the Spanish found treasure troves of silver, spices and precious stones. Now bankers are having their day, as the Andean nation’s unprecedented economic growth and low inflation attract global institutions such as HSBC, and home-grown successes such as Banco de Crédito are harvesting impressive profits.

Peru’s private sector banks reported a 56% increase in net profits to $382 million in the first half of this year, led by a surge in demand for consumer and private sector loans. Profits at Scotiabank’s Peruvian unit alone jumped 135% in the second quarter. Indeed, credit granted by Peru’s banks and financial institutions to the private sector grew 22.3% in the past 12 months to June, and bank loans rose by 19% to a record $18.7 billion at the end of June....