Honduras's National Commission of Banks and Insurance (CNBS) amended its credit portfolio evaluation and classification rules to make the collateral-discounted formula for calculating the past-due provisioning coverage indicator part of the standard framework, while retaining the minimum coverage requirement of 110%. The formula had previously been authorised as an exceptional measure linked to COVID-19 and Tropical Storms Eta and Iota and was set to expire on 31 December 2025. Revised paragraph 13.2 sets the indicator as loan-loss provisions divided by loans in arrears, overdue and in judicial collection after applying discount factors by collateral type: 0% for fiduciary guarantees, 50% for mortgages on real estate, 80% for guarantees from the COVID-19 micro, small and medium-sized enterprise reactivation guarantee fund, 50% for guarantees from the large-company reactivation guarantee fund, and 20% for other guarantees. For this purpose, loans are treated as past due from 90 days in arrears, except for private financial development organisations (OPDFs) at 30 days, and for small and medium agricultural borrowers at more than 120 days. The CNBS ratified the remainder of the January 2025 credit portfolio rules and set the reform to enter into force upon publication in the Official Gazette La Gaceta.
Comisión Nacional de Bancos y Seguros de Honduras 2025-12-12
Honduras National Commission of Banks and Insurance embeds collateral discounts in the 110% past-due coverage requirement
Honduras's National Commission of Banks and Insurance (CNBS) has amended its credit portfolio evaluation rules to include the collateral-discounted formula for calculating the past-due provisioning coverage indicator, maintaining a minimum coverage requirement of 110%. Initially an exceptional measure due to COVID-19 and Tropical Storms Eta and Iota, this formula was set to expire at the end of 2025. The revised rules specify discount factors by collateral type and adjust the definition of past-due loans based on borrower type.