Lending in Latin America's banking systems will likely grow above 15% this year and in 2012, led by the consumer, mining, manufacturing, retail and export sectors, Oscar Rivera, president of the Latin American banking federation (Felaban), told BNamericas.
Rivera said he does not see any signs of a credit bubble in Latin America, despite that Felaban's loan growth forecast is about four times that of what IMF and Morgan Stanley (NYSE: MS) expect the region to grow this year and next.
"Bankers know that they must be prudent, and current regulations and Basel recommendations remind us of that," he said. "We don't see evidence that credit is being granted to individuals that cannot pay back."
The federation recently said the region's banking systems are well prepared to withstand a possible deterioration of the global economy, thanks to reforms implemented over the last decade such as the adoption of prudent macroeconomic measures, as well as increased supervision and banks' adequate risk management.
Latin America's financial systems currently show solid risk-weighted asset ratios and a low level of defaulted loans, as well as good coverage and profitability indicators, Rivera said, adding that the systems' pending challenge is better banking penetration indices.
The full interview with Rivera will be published in this week's Banking Perspectives, for subscribers only.