Interbank has enough capital to maintain credit growth for four years - VP - Peru

Peru's Interbank will be able to grow its loan portfolio at the current rate for the next four years before the bank will need to seek new capital, VP for finance Jose Antonio Rosas said during a conference call on the Q2 earnings of parent company Intergroup Financial Services (IFS).
"Given our expectations for growth, considering how much capital we have now, how much we expect to capitalize our earnings and how much available cash we have at our holding company, we expect to grow for at least four years before we need any more new capital at interbank," Rosas said.
Interbank had a loan portfolio worth 10.7bn soles (US$3.78bn) through the end of the second quarter, up 14.8% since end-2Q09. Rosas mentioned further in the conference call that the bank is aiming for 20% portfolio growth this year.
The bank portfolio remains almost evenly split between commercial and retail lending. Rosas added in the conference call that the bank is seeing its net interest margin on commercial lending tighten as economic growth heats up and banks vie to attract corporate clients.
BANK FLAT, IFS EARNINGS DOWN
Interbank saw its earnings nudge upwards by only 0.6% in the second quarter compared to the year-ago quarter to 102mn soles. Group-wide, IFS earnings dropped 3.6% compared to 2Q09 to 123mn soles. In a release on its earnings, IFS said that with one-time financial earnings taken out of the totals, recurring income increased 4.6%Chilean investment bank Celfin Capital noted that the earnings were below its forecast of 134mn soles for the quarter, partly due to an unexpected stability in provisions - the investment bank had expected them to fall by 11% year-on-year, rather than the slight 0.8% decline reported.
Celfin said it maintains its projection that the bank's loan portfolio will grow 19% in 2010.
By Peter Krupa