The Covid-19 pandemic led to Colombia’s biggest recession on record. In 2020, its economy contracted by 7% in response to lockdowns and the collapse of global growth. However, last year the country grew by 10.6%, driven by a rebound in consumer demand after pandemic curbs were eased, according to the National Administrative Department of Statistics.
As a result, the performance of Colombia’s banking system largely outpaced Fitch Ratings’ expectations for 2021. Lenders focused on rebuilding profitability and net interest margins that were badly hit during the Covid-19 pandemic. Operating profit, net income and capital levels were higher than the rating agency projected, with both asset and loan growth exceeding 2019 levels.
