Fitch: El Salvador has growth

Fitch Ratings said in a report that El Salvador's banking system exhibited moderate growth in 2007, primarily aided by a continued increase in consumer loans and mortgages, as well as faster commercial loan growth.

In 2007, El Salvadoran banks' total assets expanded by 11.4% in nominal terms (5.8% in real terms), while overall net profits declined by 12.4%, due to higher provisions, the agency said.

Additionally, non-performing loans increased to 2.1% of total loans as of December 2007, versus 1.9% in 2006, despite significant write-offs throughout 2007, the agency noted.

However, Fitch said that loan loss reserves appear to be adequate and relatively stable in terms of both non-performing loans (120%) and total loans (2.5%).

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