Report No. PID11184 Project Name Guatemala-Guatemala Financial (@) ... Sector Technical Assistance Loan Region Latin America and Caribbean Region Sector Financial Sector Development Public Disclosure Authorized Project ID GTPE76853 Borrower(s) GOVERNMENT OF GUATEMALA Implementing Agency CENTRAL BANK AND SUPERINTENDENCY OF BANKS Banco de Guatemala Address: 7a. Avenida 22-01 Zona 1, Guatemala, Guatemala Contact Person: Mr. Jose Alfredo Blanco, Subgerente, erea Econ6mica Tel: 502-238 1546 Fax: 502-232 8509 Public Disclosure Authorized Email:
[email protected] Superintendency of Banks Address: 9a. Avenida 22-00 Zona 1, Guatemala. C.A. 01001 Contact Person: Mr. Hugo Daniel Figueroa Estrada Tel: 502-232-0001 Fax: 502-2325301 Email:
[email protected] Environment Category C Date PID Prepared June 3, 2002 Public Disclosure Authorized Auth Appr/Negs Date May 3, 2002 Bank Approval Date July 2, 2002 1. Country and Sector Background The Guatemalan financial system is in a vulnerable situation. A number of banks suffer from liquidity and solvency problems and remain in operation thanks to continuous assistance from the Central Bank of Guatemala (BANGUAT). The real situation of the financial system is obscured by the fact that a large number of institutions, representing approximately 50t of the system in terms of assets, is not regulated. Even in the regulated sector, information is not adequate due to poor accounting practices. Official figures show that non-performing loans (NPLs) in the banking system amounted to 14.9w of all loans by mid-2000. It is presumed that the Public Disclosure Authorized real level of NPLs in the financial system is larger since NPLs may have been transferred to the unregulated off-shore segment.