Peru's Superintendence of Banking, Insurance and Private Pension Funds (SBS) has published its Financial System Stability Report to May 2025, reporting a recovery in credit growth and an improvement in portfolio quality alongside robust solvency in the Peruvian financial system. As of March 2025, the total loan portfolio grew 1.2%, with corporate and large enterprise lending up 6.9% and mortgages up 5.4%. The system’s average capital ratio stood at 16.8%, while provisions amounted to PEN 4,208 million, covering 108.8% of the high-risk portfolio. High-risk portfolio indicators have improved since June 2024, and the high-risk ratio for total loans excluding government programmes fell to 5.9% from 6.9% in March 2024, although it remains above the 5.0% recorded in February 2020. Annualised profits increased to PEN 12,318 million, attributed mainly to lower provisioning expense and lower financial expenses, and the average instalment-to-income ratio declined to 27.0% in December 2024 from 29.4% in December 2023. Solvency stress tests indicate that under adverse macroeconomic shocks the system-wide capital ratio would decline from 16.8% in March 2025 to 13.9% in March 2027, remaining above the 10% regulatory requirement. A one-year liquidity stress test shows institutions can generally meet stressed outflows in mild and adverse scenarios, while in a severely adverse scenario the liquidity shortfall would be 0.6% of system liabilities.

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