Banking

The Peruvian banking system continued to grow throughout 2015, with total bank credits rising by 15.26% year-on-year (y-o-y), to PEN250.8bn ($80bn) in September. The increase in bank credits in August 2015 reflected strong expansion in local currency lending, offset by a contraction in US dollar lending. Total outstanding local currency lending rose to PEN140.71bn ($44.9bn), at the end of August, up 35.2% y-o-y, while foreign currency lending was $23.67bn, down 18.6% y-o-y. Non-performing loans stood at 2.7%, representing an increase of 0.24 percentage points y-o-y, according to the Peruvian Banking Association. The upcoming national election, the risk of disruption because of the El Niño weather pattern and the possibility of a further slowdown in China are all factors to be monitored as potential downside risks to an otherwise solid and healthy outlook for the banking and financial sector. This chapter contains an interview with Julio Velarde, Governor, Central Reserve Bank of Peru.