November 10, 2016
The financial statements of Venezuela’s banks paint a curious picture. Net profits are up and loan books are expanding rapidly — not what one might expect from lenders in such a difficult economy. But dig a little deeper and there is little mystery: the numbers reflect Venezuela’s galloping inflation, which the IMF expects to reach 500% this year. The country’s economic meltdown, triggered by a drop in oil prices and rampant government overspending, shows few signs of easing. The IMF forecasts the economy will contract by 10% in 2016.
Venezuela’s larger banks are navigating the crisis and accompanying volatility, although triple-digit inflation makes it extremely difficult to gauge banks’ o
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