The Quarterly report on financial system performance,published by the Superintendence of Banks (SB) shows that the total assets of the system, between January and March 2022, amounted to RD$2.76 billion, 51% of GDP, which reflects a nominal interannual growth of 14.3%.
The solvency ratio is 17.4%, 7.4 percentage points higher than the minimum requirement of 10% established in the Monetary and Financial Law. As of March 31, the technical heritage shows a healthy trajectory, with an increase of RD$310,000 million, for an increase of 12.3% in relation to the same period of the previous year.
Whilethe uptakesthey totaled RD$2.12 billion (39.3% of GDP), presenting a year-on-year growth rate of 15.3%.
credit portfolio
As of March, thecredit portfolioamounted to RD$1.45 billion (26.8% of GDP), showing a growth of RD$189,709 million compared to the same period in 2021. The year-on-year increase was 15.1%, higher than the average of the last five years (9.2%).
Within this category, the portfolio to the private sector experienced a year-on-year growth of 12.6%. Loans directed to the public sector showed a growth of 0.6% compared to the previous quarter.
Depending on the type of currency, it is observed that the participation of the portfolio to the private sector in Dominican pesos was placed at 80.9%decreasing 0.8 percentage points compared to March 2021. Instead, the share of the portfolio in foreign currency increases by 1.5 percentage points in year-on-year terms, going from 17.7% to 19.2% of the total portfolio.
At the end of the quarter, theinterest ratesbanking assets and liabilities stood at 10.3% and 4.8%, respectively, showing an upward adjustment in line with international markets. The consumer loan rates registered an increase for the third consecutive month, reaching 16.2% annually.
While the commercial rate increased by 1.2 percentage points in the first quarter, reaching 9.3% annually. Interest on mortgage loans also increased by 1.3 points, ending the first quarter of the year at 10.2%..
Provisions
Multiple banks and savings and loan associations significantly increased their provisions to reach RD$66.3 billion, equivalent to a coverage of 375% of the total amount of the overdue portfolio and 4.7% of the total portfolio.
During the first three months of 2022 alone, financial intermediation entities accumulated RD$5.2 billion for this purpose. This shows that the financial system has enough provisions to absorb expected losses.
Delinquencies and restructurings
According to the report, the delinquency rate of the private sector decreases to 1.13%, while the stressed delinquency of the system continues its decrease reaching 9.29%, mostly thanks to the restructurings, which accumulated 6.88 percentage points.
Of these, 2.41 percentage points are due to the Temporary Restructuring (RT) corresponding to the relaxed regime in response to COVID-19. The written-off loans of the last 12 months contributed 1.20 percentage points, while the other components represented 1.21 percentage points.
The stressed delinquency indicator is used to provide a more complete view of the credit risk management process at EIFs, as well as the situation of their loan portfolio.
It is constructed by combining different indicators that capture the impact of debtors who are not current with their obligations. Said indicator includes, in addition to the overdue portfolio, the one in judicial collection, credit cards with arrears of 31 to 60 days, restructured loans and write-offs and adjudications of the last 12 months.
The balance due of the portfolio with temporary restructured loans went from RD$39,983 million in December 2021 to RD$36,114 million for a reduction of RD$3,869 million as of March 2022.
Utilities
Gross profits amounted to RD$16,950 million, for a year-on-year variation of 27.4%. After income taxes, they stood at RD$14,246 million.
The return on equity (ROE) indicator increased 1.8 points, going from 20.2% in March 2021 to 22.0% in March 2022, while the return on assets (ROA) stood at 2.52%, with slight year-on-year variation (0.3 percentage points).
The profitability of financial intermediation entities has been positively impacted by the increase in operating efficiency, which stood at 58.67%, measured by the cost/income indicator, the lowest level in the last 15 years.