Banking Sector: Venezuela's Banks In Dire Shape As Reforms Appear Highly Unlikely

• The outlook for Venezuela’s banking sector remains bleak, as numerous structural headwinds and the impact of Covid-19 will keep the sector effectively unable to function.
• At end-2020, Fitch Solutions expects total asset growth of 1,993.7% y-o-y to VES5,887.95Mn, led by bond purchases, reflecting high inflation amid increases in government spending.
• Should a new government come into power, it is expected that the sector’s outlook would improve dramatically, though nominal growth in banking indicators would slow as inflation is reined in.

(Source: Fitch Solutions)