SANTO DOMINGO.- In a context of slowdown and uncertainty in the global economic outlook, the Dominican banking sector has continued to show good results, standing out for its resilience, maintaining a leading position at the Latin American level, said the Association of Multiple Banks of the Dominican Republic (ABA).
The ABA stated that the main indicators confirm that Dominican multiple banks closed the first half of 2022 exhibiting strong results in all areas of performance: liquidity, asset quality, loan portfolio growth, public deposits, equity solvency and profitability.
In that order, net assets (12.7%) showed balanced growth in relation to liabilities (12.4%) and equity (15.0%), according to an analysis prepared by the association.
In a press release, the bank noted that its liquidity ratio remained robust at 46.1%, the second highest in Latin America. It explained that, in economic and financial terms, liquidity is defined as an entity's ability, in this case a bank, to have cash on hand to meet its short-term obligations without having to resort to alternative sources of funding or sell assets under unfavorable conditions.
Regarding the gross loan portfolio, it highlighted the 13.7% growth as of June 2022, showing a sustained recovery trend over the last 12 months, supported by credit to households and businesses.
The ABA highlighted the positive performance of the non-performing loan portfolio (loans that do not generate financial income for the bank), comprised of past-due loans, defined as those with payments more than 30 days overdue, and loans in legal collection, consisting of loans being collected through the courts. In this regard, it specified that the non-performing loan portfolio experienced a year-on-year contraction of 41.1%.
Similarly, he noted that the delinquency rate reached 1.0% in June 2022 and was the lowest in Latin America, confirming, once again, the excellent payment behavior of financial users in the Dominican Republic.
Meanwhile, banks' capacity to cover non-performing loans reached 535.6 in June 2022 (compared to 268.2 in June 2021), the highest in Latin America and at an all-time high, according to the ABA. In other words, for every peso in non-performing loans, there are 535.6 pesos in provisions.
Regarding liabilities, a growth of 12.4% was recorded compared to June 2021, highlighting the growth in public deposits, supported by an increase in long-term deposits.
He also stated that the solvency ratio (which measures the degree of robustness of capital) registered, at the end of May 2022, an amount of RD$75,995 million, well above what is required by the Monetary and Financial Law.
