OREANDA-NEWS. Fitch Ratings has published a dashboard report for Chilean retail lenders.

Fitch expects Chilean retail banks and non-bank financial institutions' profitability to suffer due to deterioration in asset quality and slower growth.

While the banking system's consumer loans quality remains solid, that of the payroll lenders has markedly deteriorated since 2012. Credit cards non-performing loans (NPLs) have remained relatively stable since 2010, although with higher charge-offs. Banks and credit card issuers have generally been more focused on medium- and higher income segments, and this has led to stronger loan demand for retail oriented non-bank financial institutions (especially the Cajas de Compensacion de Asignacion Familiar [CCAFs]), resulting in higher credit risks. Fitch expects further pressure on credit costs throughout 2015 and 2016 for retail lending as the economic recovery is delayed and unemployment is set to rise.

CCAFs performance has been under great pressure since 2011, mainly due to the effect of new regulations, which affected their lending capacity and higher provisioning requirements. In addition, higher cost bases in most entities due to different reasons and their business orientation of not maximizing profitability have also weighed down on their profits. While most CCAFs have resumed growth since 2014, Fitch expects recovery of their results will be gradual and will not reach the high levels shown up to 2010.

The 'Chilean Retail Lenders Dashboard' is available on Fitch's website at www.fitchratings.com.