Bank profits are down by $ 11 million

Since October last year, the condition of the private financial sector in Ecuador is on the decline.

Bankers warned that their numbers could fall by government regulations. Accounts data show that in January they were right. Its profits fell 34.93% compared with January 2012.

According to bankers, the fall of 11 million is due to legislation that transfers some of the profits of banks to finance the increase in the Human Development Bond (BDH for its Spanish acronym).

Rafael Correa proposed to increase the BDH using profits of private banks.

Due to the increase of BDH, the balance sheets of the financial system declined on comparison to December 2012. An example of this was a balance of $ 27,292,000, which, when compared to December last year, presents a reduction of 2.09%. That is, a drop of $ 583 million.

Within the Association of Private Banks of Ecuador, the concern is important. While their representatives considered that the seasons influenced in the figures (January, regularly, is a month with declines in bank accounts), the laws are not supporting the sector.

Private Banks representatives are worried about the decline in their financial status.

Financial sector representatives warn that January is just the first indicator and February accounts will confirm that profitability, earnings and savings continue to have an unfavorable rate.