State Banks Making Bank on Exchange Rate
The appreciation of the colon against the dollar benefited the state banks (Banco Nacional, Banco de Costa Rica, Bancrédito) for 2012.Those entities as a whole won a total of 7.556 billion colones, representing an increase of 14% compared with 2011.
Banks must make monthly valuations of credit portfolios and the portfolios of foreign currency collection and depending on the type of change that is reflected in the monthly period which gives an income or a loss.
Equity is the difference between assets and holdings of banks (eg loans) less liabilities, which are debts (eg, public deposits). If the dollar drops in a month compared to the previous, the assets are less and these should include that difference as a loss.
In the case of the National Bank is the one with a higher gain with an increase of 13%, due to the exchange gains increased from 4.720 Billion to 5.440 Billion colones colones. In the case of the Bank of Costa Rica, the profit of 1.508 Billion representing an increase of 18% compared with 2011 when earnings from this sector totaled 1.231 Billion colones.
Overall losses due to the exchange as a whole totaled 2.174 Billion colones, when the year before losses amounted to 422 million colones, ie there was a variation of 80.6%.
The private entity more accumulated exchange difference losses in 2012 was 675 million Scotiabank colones, a year before the bank had reported to the Superintendent of Financial Institutions (SUGEF) a total of 175 million colones.
Exchange rates hit private entities hardest because more than 80% of its assets are in dollars, in the vast majority of cases is the parent company that decides to keep the foreign currency assets.
The Costa Rica News (TCRN)
San Jose Costa Rica