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Colombian banks will enjoy higher net interest margins (NIMs) in 2012, as the central bank's successive increases in the benchmark interest rate so far this year begin to affect loans more visibly, Juan Camilo Domínguez, analyst at local brokerage Corredores Asociados, told BNamericas.
The banking system's NIM has remained stable so far this year, hitting 7.2% for the first seven months of 2011, as higher interest rates have had a faster effect on funding costs than on rates charged on loans.
The central bank has hiked the overnight lending rate six times so far this year, to 4.5%. Domínguez said he expects two additional increases, to end the year at 5.0%.
Also as a result of the central bank's contractionary monetary policy, loan growth has been slowing over the last few months, expanding 27.5% as of end-July compared to the same time in 2010.
Domínguez said he is expecting the system's net loan portfolio to end this year with a 24% increase, mainly because the booming growth in the consumer segment will begin to ease.