The initiative that two days ago launched the Bancolombiathe largest financial institution in the country, to lower interest rates for credit cards credit that have a quota of up to $3.9 million, it has been cascadingly followed by some banks that do not want to miss the opportunity to ease this burden on their users.
Davivienda, Banco de Bogotá, Banco de Occidente, BBVA and Scotiabank Colpatria, announced a reduction in plastic interest under certain conditions.
The president of the Banking Association and Financial Institutions of Colombia (Asobancaria), Jonathan Malagón, through his Twitter account expressed his support for President Gustavo Petro’s call to lower bank interest rates for users.
“Despite the increase in liquidity and the high monetary policy rates, banks reduce rates for their users and from Asobancaria we subscribe to the government’s goals in terms of financing to the popular economy,” said Malagón.
The reaction comes after several financial entities made the decision to reduce interest rates on some consumer productscontrary to the decision of the Bank of the Republic to toughen the monetary policy of Colombia.
To which President Petro reacted, on the same social network, “a good measure of lowering interest rates by private banks. This will keep the financial system solid and the chances of stopping the economic stagnation will increase.”
Policies
On the other hand, the co-director of Banco de la República, Roberto Steiner, said that “monetary policy operates with lags, so it is feasible that the monetary policy interest rate reaches its ceiling before inflation begins to drop. The evolution of economic activity is, of course, one of the factors taken into consideration when evaluating how far to raise the interest rate”.
In this sense, and in order to alleviate the pocket of 40% of its customers who have a credit card and seek to improve their flow of money on a day-to-day basis, Davivienda announced that it will lower interest rates on purchases are made with the classic credit card and reduces them from 46% to 20%.
Western Bank
In this apparent decision by the banks to alleviate the cost of money for their clients, given the direction the market is taking and that the banks want to take advantage of, Banco de Occidente also announced a 57% reduction in the interest rate of all your credit cards, when shopping for groceries and supermarkets.
Likewise, the financial entity reminded its clients of the additional benefits it offers, such as the alternate minimum payment that allows purchases to be deferred to 48 months, respecting the agreed rate and avoiding delays.
On the other hand, Banco de Occidente, a subsidiary of Grupo Aval, announces that, as of March 15, it will reduce interest rates by 57% for food and supermarket purchases made by all its customers, with any credit card. credit. With this measure, the interest rate for these categories will be 1.53% month in arrears (mv), that is, 20% effective per year (ea).
According to the bank, “this decision is made with the objective of supporting Colombians in an environment of significant increases in the prices of the family basketand concentrate this benefit in one of the most sensitive categories for households, such as food and non-alcoholic beverages, which, in the last year, had an increase of more than 24%, according to DANE figures”.
In this regard, César Prado, president of Banco de Occidente, stated that “part of our organizational purpose is focused on making people’s development a reality. We materialize this today with the decision to reduce rates in these categories, understanding that the measure benefits many Colombian households and alleviates people’s cash flow.”
Likewise, the Bank informs its clients that for the payment of taxes it offers differential interest rates, from 1.31% mv (16.85% ea). Similarly, during one Saturday a month, it offers zero interest for purchases of more than $500,000 in airlines, hotels and travel agencies, to support the tourism sector and offset the increase in VAT on the purchase of air tickets.
Finally, Banco de Occidente, according to special dates or seasons, offers discounts of up to 50% on interest rates for business categories relevant to families. such as education, footwear, clothing, sporting goods and restaurants.
These relief decisions for users come at a time when the usury rate is at 46.26%, an all-time high as a result of the Bank of the Republic’s monetary policy to control high inflation, which In turn, credit has become more expensive and banks have been raising the rates of their financial products.
Customers
The most recent figures from the Financial Superintendence, as of November 2022, indicate that in Colombia there were 16.09 million credit cards in force. The king of that market is Bancolombia with 2.61 million plastics; followed by Scotiabank Colpatria, with 2.25 million; and Banco Falabella, with 2.24 million.
For Édgar Jiménez, professor of Finance at the Jorge Tadeo Lozano University, “the announcement is interesting because the rates are set by the market with supply and demand and although it is the decision of a banker, other entities will replicate that or proceed with similar measures.
In addition, he considered it novel since clients could move between entities through portfolio purchases in the face of competition for favorable rates.
He clarified that the relief is for a segment, but it is important because of the magnitude that represents more than one million customers.
the BBVA
Mario Pardo Bayona, president of BBVA Colombia, said on March 9 that there is a decrease in the demand for credit and the slowdown in the economy is healthy so that there is a reasonable growth since the one that occurred in 2021 and 2022 was unsustainable. “Interest rates are going to start to drop in the following months,” he said.
In effect, BBVA reduced to 20%. the interest rate for your low-value credit cards, for pensioners and the Public Force. This benefit will apply to existing customers and new customers with Visa Clásica, MasterCard Standard, MasterCard Senior and Pensional Senior credit cards (for retirees) and Mastercard Héroes (for the Military and Police Forces) with a limit of up to $4 million in purchases in the categories of supermarkets, clothing and footwear, gas stations, education, health services, taxes and public services. The benefit applies automatically from March 15.
Under this same scenario, Scotiabank Colpatria also announced that it will reduce interest rates on credit cards.
The portfolio of the financial system
The gross portfolio of the financial system grows in positive terms, but continues to slow down in all modalities. The gross balance of the portfolio amounted to $664.3 trillion, consequently, the depth indicator stood at 47.8% of GDP. In real terms, the gross portfolio registered an annual variation of 3.7%, behavior that reflects: (i) the increase in the balance in inter-monthly terms ($8.5 trillion); (ii) disbursements to households and companies for $36.3 billion ($30.2 billion in 2021); (iii) the effect of inflation, since the nominal growth rate is higher (16.7%); and (iv) the lower relative importance of the write-offs, which totaled $12.2 trillion in the last twelve months compared to the $14.2 trillion accumulated as of November 2021. It should be noted that of the total written off in the month was $1.5b, 67% corresponds to consumer portfolio and 23% to commercial.