Earnings in the financial system shoot up 93%
Buy of bonds, fees from Sitme and credits raise the profit
The profit mostly comes from investments in public bonds, fees in US dollars from the Transaction System for Foreign Currency Securities (Sitme) and rising credits.
Immersed in a key election year, the Venezuelan government triggered public spending to levels higher than the oil income and tax collection. As a result, it sells banks bonds which yield tax-free dividends.
The Banks Superintendence reports that in a 12-month term, the bond portfolio has surged by 39.80%.
Experts estimate that President Hugo Chávez's administration will keep on getting into debt in 2013 to cope with the fiscal deficit.
Consider also the Sitme, a system through which businesses use financial institutions as middlemen to buy bonds in foreign currency from the Central Bank of Venezuela (BCV). Shortly after, such bonds are resold abroad to get US dollars.
Between December 2011 and November 2012, a total amount of USD 9 billion has been traded through Sitme, and banks get fees up to 3% per operation.
The injection in public spending succeeded in enlivening the domestic economy, and the demand of credits has soared during the year.
Official numbers specify that relative to November 2011, total loans grew 50.19%.
Bad debts are at their trough. Financial institutions have troubles only to recover 99% out of their loans, a historically low ratio.
Note, further, that term deposits, with the highest interest rates, have been virtually erased, accounting for 0.5% out of deposit taking.
Translated by Conchita Delgado
"Cocoa is to Venezuelans what wine is to the French," says Alejandro Prosperi, head of the Venezuelan Chamber of Cocoa, using this simile to express the paramount importance or the cocoa industry for the country. Often times heralded as "the best cocoa in the world," a passion for quality dating back to the sixteenth century has made Venezuelan cocoa growers to enjoy high prestige at international level and their product to be among the most sought-after in the world.