Today, the ratio of non-performing loans stands at just 2.3% and the 12-bank market has become attractive enough to entice such players as Canada’s Scotiabank and the UK’s HSBC.
Scotiabank, Canada’s number three bank by assets, late last year paid about $330 million to take over profitable but debt-laden Banco Wiese Sudameris from Italy’s Banca Intesa and to increase its minority stake in Banco Sudamericano to a controlling share. Scotiabank plans to merge the two as part of its Latin American expansion plan.
According to Peru’s central bank, HSBC has registered a request to set up shop in Peru and could begin operations in the first quarter. Mexico’s low-income financier Banco Azteca, which is owned by retailer Elektra, also plans to move into retail banking.
Stellar profits
Peru’s strong fiscal accounts and a drive to obtain an investment-grade rating in the next few years have boosted the banking system’s attractiveness. But the stellar profits on offer are the main driving force. Banks’ combined book loans grew 15% last year to $12.5 billion, the highest level since 1999, according to the Peruvian banking association Asbanc. Backed by Peru’s strong economic growth of about 6.5%