As stated by El Mercurio newspaper on January 13, BancoEstado was the state-owned entity that gave more loans during the height of the crisis.
In fact, it was at that point that the state-owned bank recorded more progress over the institutions in the region.
Based on the figures reported by the Economic Commission for Latin America and the Caribbean (ECLAC), the Chilean state-owned bank increased its loans by 20%, between December 2008 and September 2009, highest figure recorded compared to countries such as Colombia and Brazil, which also underwent significant increases during the period, 18.6% and 17.1%, respectively.
This important progress for BancoEstado is due to several reasons, such as its proactive and anti-cyclical credit policy during the year, which set out important interest rate cuts for all its products, in order to help reactivate the Chilean economy.
During 2009, loans at the state-owned bank increased by 21.7%, equivalent to MMUS$ 3,000,000, while the rest of the banks in the region recorded cuts in this area. Therefore, the state-owned bank increased its market share by 3 points.
State-owned Bank grows in All Areas
BancoEstado’s positive results during the fiscal year 2009 are due to its credit policies, more dynamism in giving loans and, of course, the strong impetus it gave its banks to help Chileans.
Its profitability totaled 22.2%, which exceeds the 2008 figures. While the efficiency ratio also improved, reaching 45.5%.
Furthermore, the increase in BancoEstado loans by segment was 32% for business loans, 12.8% for personal loans; 12.7% for mortgage loans and 13.3% for consumer loans.
Leadership in debit cards and in giving higher education loans in addition to mortgage loans; housing was a segment that during 2009 was affected by the crisis, however it strived forward, partly because of the alliances between real estate developers and BancoEstado in order to boost the market and reactive the industry.
It also increased other products and services. More than 2.2 million active CuentaRUT accounts and 3,300 CajaVecina POS terminals across Chile endorse BancoEstado’s excellent results, included in its public accounts and as mentioned in the above report issued by ECLAC.
Private Banking in 2009
In contrast to BancoEstado and other state-owned banks in the region, Chilean private banking reduced lending by 3.6%. While in the rest of Latin America, the sharpest decline was recorded in Uruguay between December 2008 and September 2009, with -7.6% followed by Chile with -6.3%.
In other countries, such as Costa Rica, Mexico or Colombia, declines were 4.1%, 3.8% and 3.3%, respectively. Bank loan declines are due to the increase in risk exposure of customers given the rise in unemployment and the uncertainty about how the economy would evolve.
While for this 2010, the Association of Banks and Financial Institutions (ABIF) expects a 10% growth for the local industry.