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Fitch announces volume of IBA gross loans


The banking sector has become extremely vulnerable following the devaluations and slowdown in the economy, with a Fitch Banking System Indicator of 'ccc', says Fitch Ratings, APA-Economics reported.

 

The newly created bank regulator FMSA closed 10 banks in 2016 and continued to restructure the largest bank IBA (holding 30% of total assets), which Fitch deems as having failed in 2016.

 

However, with NPLs high at 21% of gross loans at end-2016 (and likely under-reported in Fitch's opinion), and a sector-wide capital adequacy ratio of 7.6%, the sector is likely to need further support in 2017. The bulk of it will be provided by the budgeted Sofaz transfer but the state will provide additional support to IBA during the year, which will add to the 21% of GDP guarantees already extended over the past two years.

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