Mexico With interest rates, inflation, and foreign exchange all moving in a favorable direction, a stable economy in Mexico should present financial institutions with business opportunities. Yet banks have found themselves unable to benefit from these positive factors. Part of the low lending activity is explained by the numerous debt reschedulings of old loan portfolios, but the main reason has been the poor payment culture prevailing in the country. However, more stringent loan-loss provisions, resulting from recently implemented requirements, could require further allocations. Uruguay Well-supervised and with a solid set of regulations, Uruguay's financial system is considered a plus by analysts.
Concentration is a significant factor.
While most banks are posting hefty profits, they have low reserves. The banking system in Colombia is still under pressure. Between 1998 and 1999, the system's aggregate net losses doubled. Government-owned institutions accounted for most of the losses. High levels of nonperforming assets and growing loan-loss reserves drove down profitability.