NewsWhore
08-16-2012, 04:00 PM
In today's Diario Libre, Alejandro Fernandez writes about the poor yield of government banks that compete in the market with private banks.
He comments that the worst case involves Banco Nacional de la Vivienda. The bank reports profits that have declined on average 32% from June 2004 to 2012, or from RD$372 million at the start of the Fernandez administration in 2004 to only RD$17 million in 2012. At a time when its competitors in the private sector grew on average by 17% a year since 2004, the BNV only could show an increase in capital of 1.8% each year since 2004.
In the case of Banreservas, in the first six months of 2004, it had profits of RD$706 million, but eight years later, it was showing only RD$830 million in earnings. He makes the point that while the Banreservas as of June 2012 only had 27% of the loan portfolio in commercial banking, it had RD$6.8 billion in bad loans, more than the RD$6.1 billion total for the 14 private banks with which they compete in the market.
Fernandez says that President Danilo Medina should look into this situation as part of his finance strategy. Medina has announced he will create specialized banks to lend to women and poor people, promote development and export, and will merge the Agriculture Bank with the Bank for Housing and Production.
www.diariolibre.com/argentarium/2012/08/16/i348122_los-bancos-del-presidente.html (http://www.diariolibre.com/argentarium/2012/08/16/i348122_los-bancos-del-presidente.html)
More... (http://www.dr1.com/index.html#12)
He comments that the worst case involves Banco Nacional de la Vivienda. The bank reports profits that have declined on average 32% from June 2004 to 2012, or from RD$372 million at the start of the Fernandez administration in 2004 to only RD$17 million in 2012. At a time when its competitors in the private sector grew on average by 17% a year since 2004, the BNV only could show an increase in capital of 1.8% each year since 2004.
In the case of Banreservas, in the first six months of 2004, it had profits of RD$706 million, but eight years later, it was showing only RD$830 million in earnings. He makes the point that while the Banreservas as of June 2012 only had 27% of the loan portfolio in commercial banking, it had RD$6.8 billion in bad loans, more than the RD$6.1 billion total for the 14 private banks with which they compete in the market.
Fernandez says that President Danilo Medina should look into this situation as part of his finance strategy. Medina has announced he will create specialized banks to lend to women and poor people, promote development and export, and will merge the Agriculture Bank with the Bank for Housing and Production.
www.diariolibre.com/argentarium/2012/08/16/i348122_los-bancos-del-presidente.html (http://www.diariolibre.com/argentarium/2012/08/16/i348122_los-bancos-del-presidente.html)
More... (http://www.dr1.com/index.html#12)