S&P lowers five Peru banks to negative view

Standard & Poor’s said it revised the outlook to negative from stable and affirmed the ratings on five Peru banks.

The revised outlooks were on Banco de Credito del Peru, BBVA Banco Continental, Banco Internacional del Peru – Interbank, Banco Agropecuario SA and Banco Interamericano de Finanzas SA.

The outlook revision reflects a view of rising economic risk for banks operating in Peru, given the rapid growth in credit and private-sector leverage in the past few years, which already have begun to weaken the Peruvian banks’ credit quality, S&P said.

The negative outlook recognizes the potential for rapid deterioration in the banks’ asset quality, profitability and capitalization if the private-sector debt burden becomes excessive and economic conditions worsen, the agency said.

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