Published on Thursday, February 9, 2023

Uruguay | The recent dynamics of the financial system

The financial system remains strong in Uruguay. Financial intermediation, the core business of the banking sector, is expanding without losing quality. The current situation provides a good starting point to face the pending challenges.

Key points

  • Key points:
  • In the last two months of 2022, corporate loans showed greater dynamism. 52% of the stock of loans to the resident private sector in November was in local currency. Sectoral share of credit has remained stable in recent years.
  • Non-performing loans remain at low levels throughout the banking system, with better quality in the corporate sector portfolio than in loans granted to households.
  • Low dynamism of deposits, although with a slow advance in the participation of time deposits. The private sector loans/deposits ratio is at 48%, well above the 37% average of the last 60 months; however, the share of foreign currency deposits remains very high.
  • There is still work to be done to further deepen the financial system and increase the participation of local currency operations. In the same vein, the digitalization drive imposed by the pandemic should be leveraged.

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