RPT-UPDATE 1-Peru's top bank sees boom in mortgage market
(Repeats to widen distribution)
(For other news from the Reuters Latin American Investment Summit, click here)
* Top bank sees interest rate more than doubling year-end
* Banker sees 12 pct growth in corporate loan portfolio
* Banco de Credito could seek funds abroad in Q3
(Adds quotes, background, bylines)
By Teresa Cespedes and Eduardo Garcia
LIMA, May 4 (Reuters) - Peru's mortgage market should grow more than 20 percent this year and the benchmark interest rate could more than double by the end of the year from 1.25 percent, the chief executive of the Banco de Credito (CRE.LM) said.
Walter Bayly, at the Reuters Latin American Investment Summit in Lima, said Peru's central bank is likely to tighten monetary policy in the short term and raise deposit requirements in the next 90 days.
"We should get to between 3 and 3.5 toward the end of the year," Bayly said, referring to the benchmark interest rate, which has been steady at 1.25 percent since last August.
Bayly also told Reuters that he sees the mortgage market growing between 20 percent and 24 percent this year in the Andean country, driven by low prices, strong demand for houses and solid economic growth in the next five years.
"We're convinced that after the (2011) elections there'll be four or five years with (GDP) growth at 5 percent annually and ... the financial market could more than double in that period," he said.
The banker sees the financial market in Peru growing between 15 and 18 percent this year on the back of strong economic growth in the South American country.
Peru's economy grew nearly 10 percent in both 2007 and 2008, although growth slowed down sharply last year as the global economic downturn slammed prices for Peru's metals exports and cooled domestic demand.
The pro-business government of President Alan Garcia forecasts that the economy will expand 5.5 percent this year.
Bayly also said that economic growth will boost credit growth among large borrowers.
"Our (corporate credit) portfolio is going to grow 12 percent more or less this year. Almost all the credits will be for investments. In hydroelectric damns roads, gas (projects), investments in farming ... infrastructure," he said.
The banking executive said the Banco de Credito is likely to seek funds abroad in the third quarter, but has yet to decide where and how much.
The bank placed $107 million worth of bonds with a yield of 3.97 percent in the Chilean domestic market in November.
Banco de Credito is controlled by Peru's largest financial holding company Credicorp (BAP.N) (BAP.LM), which also runs an insurance unit, a pension management fund and has assets in neighboring Bolivia.
(Writing by Eduardo Garcia; Editing by Leslie Gevirtz and Richard Chang)
((email@example.com; +511 221 2111; Reuters Messaging firstname.lastname@example.org)) Keywords: LATAM SUMMIT/BCP
(C) Reuters 2010. All rights reserved. Republication or redistribution ofReuters content, including by caching, framing or similar means, is expresslyprohibited without the prior written consent of Reuters. Reuters and the Reuterssphere logo are registered trademarks and trademarks of the Reuters group ofcompanies around the world.nN04141953
- Tweet this
- Share this
- Digg this