Peru, like most countries around the world, is starting to come out of the massive economic downturn created by the pandemic. The economy contracted by 11.1% in 2020, the steepest drop for a large economy in Latin America. The International Monetary Fund forecasts Peru will grow by 9% this year, which is more than its peers, but still not enough to get back to pre-pandemic levels.
The economic decline, the worst since 1989, slammed banks. The banking regulator, SBS, reported net income for the 16 full-service banks fell by 76.8% compared to the previous year. Return on assets came in at 4%, compared to 18.3% the previous year. The 11 municipal savings and loans banks had it even tougher, with net income dropping by 81.3% and return on assets down from 12.4% to 2.2%.
