Credit risk - Special Financial Stability Reports - Second Half 2021
The main purpose of these reports is to monitor the vulnerabilities and risks of the financial system. Opinions and potential errors are the sole responsibility of the authors, and their contents do not compromise the Board of Directors of Banco de la República (the Central Bank of Colombia).
The Financial Stability Special Reports accompany the publication of the Financial Stability Report and provide a more detailed analysis of some aspects and risks relevant to the stability of the Colombian financial system: market liquidity risk, market risk, credit risk, financial burden, loan portfolio, and housing market in Colombia, international indicators, concentration, and competition in the deposit and credit markets, corporate sector surveys, and financial inclusion.
This report analyzes the credit risk exposure and performance of credit institutions as of September 2021. After nearly two years of the health emergency, in which a high materialization of credit risk and reductions in the profitability of establishments were recorded, the Financial Stability Report for the second half of 2021 shows that these indicators have begun to recover in recent months. This report also mentions the beginning of a new stage in the dynamics of credit in Colombia, consisting of greater disbursement dynamics and lower credit granting requirements. In this context, it is crucial to continue the detailed monitoring of the evolution of delinquency, risk perception, and credit conditions with the latest available information for each type of loan. The indicators presented in this report confirm that credit risk vulnerability is declining. In line with the observed economic recovery, credit conditions show more dynamic behavior across the board for all types of loans. The recovery of the mortgage portfolio has occurred in a context in which disbursements, the number of new borrowers, and balance growth have surpassed historical highs. Looking ahead, the evolution of the mortgage portfolio will continue to be monitored.
