In a press release, he highlighted that in 2021 the recovery of mortgage credit accelerated, a segment that is directly related to construction, associated with greater economic activity and employment.
SANTO DOMINGO. – Bank financing, under the protection of monetary liquidity stimuli of around 5% of GDP, was one of the determining factors to boost the economic recovery of the productive sectors in the Dominican Republic during 2021, said the Dominican Republic Banking Association (ABA), in reviewing the year that is ending.
The ABA highlighted that credit to the private sector in national currency has continued to grow at an annual rate close to 10%, in all credit segments (households and companies), in a context of notable improvement in the profile and quality of the loan portfolio.
In a press release, he highlighted that in 2021 the recovery of mortgage credit accelerated, a segment that is directly related to construction, associated with greater economic activity and employment.
Similarly, the ABA noted that, as of November 2021, the loan portfolio for MSMEs increased by more than RD$16 billion compared to December 2020, now representing 44% of the commercial portfolio.
Added to all this is an environment of low interest rates, whose weighted average active rate registered a reduction of 340 basis points since March 2020, the date on which the pandemic began in the country, the association explained.
The ABA indicated that the expansion of credit has occurred within the framework of proper managerial management that results in liquid, efficient, solvent and profitable banks with good asset quality, according to the statistics of local authorities and international organizations, showing a sustained strengthening of equity.
In short, this is a banking sector with better access to credit and a stronger position with correspondent banks and international credit rating agencies, the ABA noted.
Local banking in the regional context
The Association of Multiple Banks highlighted that the excellent results in performance indicators place Dominican banks in a leading position in Latin America and are also reflected in greater competitiveness in global markets.
He stated that the banking sector operating in the Dominican Republic leads the region in terms of liquidity, solvency ratio, and asset profitability, and is among the countries with the lowest levels of non-performing loans, according to figures from the Superintendency of Banks and the World Economic Forum (WEF).
The ABA also highlighted that, between 2008 and 2019, the Dominican financial system climbed 36 positions in the World Economic Forum's Global Competitiveness Ranking, demonstrating the efficient performance of the national banking sector.
Challenges for the sector in the near future
With a view to taking advantage of business opportunities, fulfilling its social responsibility to society and contributing to a more inclusive and sustainable economy, multiple banks face different challenges in the coming year, 2022, the ABA indicated.
The association detailed that commercial banks will continue accelerating their digital transformation, technological and process optimization, and financial innovation, while also continuing to support SMEs. It also stated that it will continue promoting green finance, financial education and inclusion, cybersecurity, gender equality, and contributing to reducing the housing deficit, among other vital aspects for the nation's economic and comprehensive development.
Similarly, the ABA stated that multiple banks will take action to strengthen the prevention of money laundering and terrorist financing by strengthening inter-institutional relationships with competent authorities and other obligated entities for the purpose of collaboration and training in regulation and best practices.
