SANTO DOMINGO – In reviewing the year that is ending, the Dominican Republic's Association of Multiple Banks (ABA) assessed the effectiveness of monetary and fiscal policies, as well as the contribution of bank credit to boosting the economy, while considering that 2023 will be a challenging year due to the international situation, although with expectations that local progress will be made in economic and social terms.
The ABA noted that 2022 has been marked by a challenging and complex international landscape, yet the Dominican economy is projected to end the year with growth of around 5% and inflation close to 7%. It attributed these remarkable results to the effectiveness of monetary and fiscal policies, as well as the dynamism fostered by bank lending to productive sectors and households.
In a press release, the association highlighted that commercial banks reduced their financial intermediation margin from 7.8% in November 2021 to 3.6% in November 2022, due to a more significant increase in deposit rates, that is, the rates paid to depositors. It noted that, more gradually and in order to mitigate the impact on borrowers, lending rates were increased following the rises in the monetary policy rate, measures aimed at counteracting inflationary pressures.
He specified that the performance indicators of multiple banks in the year ending continue to occupy top positions in the region, in terms of liquidity, profitability, equity strengthening, efficiency and asset quality, with a delinquency rate of only 0.89.
He highlighted that, from October 2019 to October 2022, the net worth of multiple banks accumulated a growth of 50%, some RD$90 billion, of which substantial investments have been made in technology, cybersecurity, prevention of money laundering and other areas, with the purpose of advancing to an increasingly digital, inclusive and sustainable model.
For its part, the entity that brings together the country's multiple banks stated that it foresees a year of fewer monetary restrictions in 2023, which will facilitate a favorable scenario for resuming the path of sustained growth with macroeconomic stability.
“We are committed to a more efficient banking system focused on continuing the path of greater proximity and social responsibility, mitigating risks through the implementation of comprehensive management and a positive experience for those already banked and those we will reach through strategic synergies,” the ABA stated.
The association estimated that 2023 will be a challenging year due to the global environment, but "with local expectations that we will be able to advance in consolidating economic and social achievements, with effort and public-private vision to promote pending reforms and maximize our comparative and competitive advantages.".
