Rise in Compartamos expenses in Q4 worrisome for future - Barclays

- Thursday, February 24, 2011

Rise in Compartamos expenses in Q4 worrisome for future - Barclays

Mexican microfinance bank Compartamos posted a surprising increase in its expense ratio in the fourth quarter of 2010, according to a Barclays analyst who called the quarter "mixed" for the bank.

The bank's efficiency ratio - important for profitability in the high-volume microfinance business - deteriorated to 55% in the quarter, from 51% in 3Q10.

"Going forward, we would monitor closely the evolution of expense at Compartamos, key in our view so the bank can manage to continue to expand revenues in 2011," Barclays analyst Roberto Attuch wrote in a note to investors.

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Barclays rates the bank 2-Equal Weight.