THE BANKER: Peru’s economic boom fuels banking progress

An economic boom coupled with new technologies is allowing Peruvian banks to tap consumer bases that have long been overlooked in the country. But, as the banking market advances at a breakneck speed, there are vulnerabilities to look out for – not least dollarisation.

Banco de Crédito del Peru’s headquarters, in the country's capital Lima, oozes wealth. Outside of the building, in the desert climate of the city, an artificial waterfall cascades into pools bordered by tropical flowers. Inside, the walls are dotted with pre-Columbian art, just a small part of a much larger collection.

Banks throughout the country are riding Peru's buoyant economy, trying to catch up with their counterparts in the rest of Latin America. A number of factors are in their favour: a strong gross domestic product (GDP) and investment outlook, a woefully underbanked population, a small number of large banks, and fast-growing capital markets.

Low interest rates and record employment underpin strong GDP growth, which came in at 8.8% in 2010 and has been a steady 6% to 7% since then, according to Jeanne Del Casino, group credit officer of Latin American banks at Moody's.

Standard & Poor’s also has a positive outlook on the BBB rated sovereign. According to Sergio Garibian, the senior director of banks in Latin America at Standard & Poor’s in Buenos Aires, the Peruvian economy has become substantially more diversified and the country is starting to tackle institutional weaknesses.

This is the start to an article on banking in Peru. If you would like to read the full article, please go to www.thebanker.com.

About admin

I've been researching and writing on Brazilian financial markets, industry and economy since 2006 for a wide range of specialist media, consultancies and investors. Before that I spent over 10 years in London and New York writing for and editing magazines and journals dedicated to finance, investment and economics in developing markets, mostly for the Euromoney Institutional Investor group and Thomson Financial. Areas of coverage Below are samples of areas that I cover and some of the common themes that I investigate. Capital markets BM&FBovespa markets *capital raising trends: via equities (IPOs and secondary issuance), debt and loans *the asset management industry: legislation and coverage of the key hedge, pension and investment funds * corporate governance: how the regulator is seeking to strengthen best practice and limitations * debt markets: the nascent corporate markets, attempts to boost liquidity and new insturments. * private equity market: why this market has been so successful, who’s involved. *electronic, high frequency trading and alternative trading platforms: what does the future hold? Banking *credit: the growth of consumer and business credit and competition between banks and models *Public versus private: the role and market share of public and private sector banks and the politicization of the industry * internationalization: which Brazilian banks are expanding overseas and where * investment banking: the growth of the domestic market and who’s winning which mandates *regional banks and development banks: what role they play in the industry and how they compete Mining *licensing: the complex process of obtaining environmental, water, land and operating licenses at a state and federal level. * capacity: the feasibility and sustainability of capacity increases * financing: how miners are raising finance in Brazil and abroad *competition: the interplay Vale, MMX and junior miners *logistics: rail, road and port connections Oil and gas: the fund raising issues related to the massive of pre-salt (link) Multilatinas: Who are they and how and where they are expanding Meatpacking: Are debt burdens sustainable, what are the different business models for areas such as branding and distrbution Agriculture: How are farms consolidating, what are environmental risks, how can foreign investors be involved. IT and software: Can Brazil take on India and build a viable long-term IT industry? For more information on clients and work, please see the media and consultancy sections.
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