Moody's lifts Latin America banks view to stable

Moody's Investors Service said the Latin American banking system outlook should return to stable this year, reflecting the return to more normal credit conditions in most markets and the resilience of bank fundamentals during the financial crisis.

Improving macroeconomic conditions, still-low interest rates and more diversified funding access are all helping to kick-start investment and credit growth, the agency said in a new report. That should lead to better profits and asset quality for the banks in 2010, Moody's added.

As the economic recovery takes hold, the outlooks should revert to stable from negative for most of the large banking systems, particularly for Brazil, Chile and Colombia, the agency said.

The outlooks for the Argentinean and Peruvian banking systems are currently stable. For Mexico, Moody's said the banking system outlook remains negative because of still-challenging economic and credit conditions in that market.

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