Some $ 600 million more in unsecured expects to deliver the Biess, thanks to a lower rate, which will be 11%

The Bank of the IESS (Biess) calculates to have a growth of $ 600 million in the delivery of unsecured loans in 2022, product of the reduction of interest rate, which was announced yesterday and which drops from 14% to 11%.

This morning, the president of the IESS and Biess, Francisco Cepeda, and the manager of this same bank, Iván Tobar, confirmed the reduction of the interest rate of the unsecured, which will take effect from the first week of January.

The interest reduction will apply to:

New credits requested by affiliates and retirees with terms of 13 to 48 months that are generated during the first semester of 2022.

However, the interest for unsecured loans with terms between one and twelve months will remain between 6.5 and 8.5%.

The Bank also expects to deliver more mortgage loans (about $ 750 million, depending on demand). In this sense, their authorities also commented that the funds exist for this, however, they explained that they are thinking of carrying out an important operation to obtain resources abroad, through the collateralization of their portfolio or their bonds.

According to the president of Biess, Fracisco Cepeda, this will be done through the monetization of bank assets that are, for example, the portfolio of mortgage and unsecured loans and even government bonds, which can serve as collateral to obtain resources, he said.

These resources could reach lower rates and the Bank could deliver the loans with a benefit for the entity. The operation could be between $ 500 and $ 1,500 million, said Cepeda.

According to Francisco Cepeda, the loan figures were worked on with the Board of Directors for some time and it is gratifying that they can be specified in the administration of the new manager, Iván Tobar.

The idea is that affiliates and retirees who access these resources can start a business, refinance debts, and that these types of measures help the financial system also reduce its rates and in this way the economy reactivates.

When asked about how the Bank will compensate for the reduction in this profitability, the manager explained that the Bank is entering a process of efficiency and modernization that will allow you to sustain this 11%. It is expected to work on improving mortgage delinquencies and even review investments in the stock market, in order to seek greater profitability. He also clarified that this measure of lowering the rate will be for six months and that, later, the decision could be reviewed or continue, after an analysis of the results.

Bank executives explained that they will provide mortgage loans for an additional $ 750 million, depending on the demand for these resources. Cepeda also commented that the Bank’s credit manual will be reviewed, since at the moment there is a high default rate of 12%. In this matter, it will seek to refinance and collect the debts from the beneficiaries of the credits. Tobar, for his part, commented that the problem of mortgage delinquency, which affects a total portfolio of $ 900 million, has been generated by the problem of the pandemic and the loss of employment.

When asked about how they expect to deliver more mortgages, if at the same time they are going to adjust the delivery conditions, to avoid delinquency, he explained that this expected increase is explained by a greater demand for the economic reactivation, especially in construction.

Figures

• The Biess recalled that unsecured loans are managed 100% online.
• From January 1 to November 20, 2021, $ 2,869 million were placed in unsecured loans in more than 2.3 million credit operations.