January-September 2013


Macro and industry trends

Recent economic performance in South America has slowed on previous quarters, though in general the figures remain positive. However, from the start of the previous quarter the region has been affected by the increased volatility and uncertainty in international financial markets.

This situation has led to widening sovereign spreads, stock market losses and additional depreciation in the exchange rates of the region’s currencies against the euro, which has had a negative impact on the financial statements in the area. However, it is also worth pointing out that currently most countries in the region are better prepared than in the past to deal with the more volatile environment described above. As usual, and in order to provide a better understanding of trends in business and earnings in the franchise, all figures below on percentage changes refer to constant exchange rates, unless indicated otherwise.

The financial systems of most of the countries in South America remain sound. Lending continues to grow at a fast pace, boosted by economic policies focused on encouraging domestic activity and by the structural changes observed in recent years, which support sustainable growth in most of these countries. The strength of the economies in the region has had a positive effect on its financial industry, which has high levels of profitability and moderate NPA ratios. Finally, with respect to the regulatory framework, various countries are making progress toward implementing international regulations.