...Sustained Growth and Controlled Asset Quality: Uruguayan banks are in a time of sustained growth and have been able to maintain sound loan quality. Nonperforming loans (NPLs) remained at low levels, below 1.5% of total loans in the last four years. Loan loss reserve coverage is ample and stood at 2.5x of NPLs. Fitch Ratings expects a slight deterioration of the portfolio quality due to the negative effect of the depreciation of the Uruguayan peso versus the U.S. dollar and the natural seasoning of the recently expanded retail portfolio. Weak Profitability: Uruguayan banks have benefited from the Uruguay's positive environment, although profitability has been vulnerable to global economic upheavals. In general, 2014 showed a decline in revenues. Fitch expects a challenging environment in 2015 where the recent individual loan expansion, possible peso depreciation and an increase in global interest rates may result in an increase of loan loss provisions, with operating revenues growing more...
