Banking

As of March 2025, Bolivia's banking system shows clear signs of a short-term-oriented strategy in response to a challenging macroeconomic environment. Balance sheet expansion has focused on temporary investments, particularly in instruments issued by the Central Bank (BCB), reflecting increased liquidity channeled to that institution. Meanwhile, credit portfolio growth has slowed (5.4% annually), and banks face challenges in attracting time deposits, relying increasingly on current and savings accounts, which are more volatile and sensitive to confidence shocks. Delinquency remains high and is concentrated in rescheduled loans, still representing around 15% of the total. While system profitability has improved, it has done so by leveraging low-risk, highly liquid placements, suggesting reduced financial intermediation to the real economy. Overall, the system is protecting itself, prioritizing liquidity, but sacrificing credit depth in a context of structural fragility and growing dependence on the BCB.

May 2, 2025