Deposit growth led to strong loan performance in 2010 - analyst

- Monday, February 14, 2011

Deposit growth led to strong loan performance in 2010 - analyst

Ecuador's banking sector was able to accelerate loan growth in 2010 partly thanks to a recovery in its ability to attract deposits, according to a report from local ratings agency PCR.

"Obligations to the public remained the main source of funding for the sector," PCR economist Daniel Delgado wrote in the report, adding that "people's greater confidence in the financial system is one of the factors that determine the availability of more resources to be placed as loans."

Delgado noted that after dropping in 2009, deposits recovered in 2010 to post 17.9% growth, to US$16.6bn.

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Partly as a consequence, private sector banks' collective lending portfolio grew by 21.1% in 2010, to US$10.7bn, the report said.