Financial Services Advisor

Alberto Bernal, chief emerging market and global strategist at XP Investments: “Colombia suffered its worst economic contraction in modern history last year. However, official data shows that the stock of the country’s nonperforming loans (NPLs) increased by only 11 percent since the beginning of the pandemic and that it now amounts to just 4.9 percent of the banking system’s aggregate loan portfolio. During the ‘good growth years’ of the mid-2000s and around 2012-2013, when the Colombian economy consistently expanded more than 5 percent annually, the NPL ratio stood at about 2.5 percent of the total stock of loans. If someone had asked me in April 2020 where Colombia’s nonperforming loan portfolio would be in the aftermath of the pandemic and the subsequent lockdowns, I would have argued that it would easily be more than 16 or 18 percent. The country’s…”