The risk rating agency Moody’s presented this week its projections and expectations for the financial market in Latin America and the world, in which it warns that although growth will be a constant in 2025, various risks on the horizon require urgent attention from the authorities and those responsible for fiscal stability.
Aspects such as the fall in inflation, the moderation of economic policy in several countries and the growth of consumption in several countries that are the engine of global growth, will be key factors for the dynamism that these experts expect, even for countries like Colombia, where they maintain that there is room to rebound.
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“Falling inflation will support lowering interest rates closer to a neutral stance, which will improve the ability of companies to issue debt in public and private markets. Another key support for the stable outlook is the strength of the global economy, which should support the performance of financial companies in the next 12 months,” they noted.
Expensive credit
In the case of Colombia, Moody’s warns that what will be strengthened the most in the financial sector is retail banking, which will help profits to be greater throughout this period, thanks to less risky products for the market that will impact a lower cost of credit, which, however, will continue to be expensive.
Moody’s.
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“In Colombia, Iris Financial Services (Iris, B2 stable) is likely to focus on strengthening its financing structure through a shift toward lower-cost deposits through its subsidiary Excelcredit,” they initially explained.
Simply put, the risk agency maintains that it is implementing a strategy focused on strengthening its financing structure, reducing dependence on costly short-term wholesale financing. This objective will be achieved through Excelcredit, its subsidiary specialized in payroll loans, which will focus on capturing lower-cost deposits.
Despite the projected economic recovery and low interest rates expected in 2025, credit costs will continue to be a significant challenge for Iris. However, the company benefits from a less risky core product: payroll loans. This feature could partially mitigate the effects of high credit costs, allowing Iris to advance its long-term strategy.
“Credit costs will continue to be an issue in 2025, despite low interest rates and the expected economic recovery in Colombia, as well as its main payroll loan product comparatively less risky,” they warned.
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Wind in favor
After several years of modest growth and alerts from fronts such as recession and the cost of living, Moody’s assures that this year a better growth dynamic can be expected, in which its indicators show a promising future for asset management, both in powers like the United States, as well as in Latin America.

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“Eleven of the 14 subsector outlooks are stable; one is positivein the case of aircraft leasing companies; and two are negative, in the case of US commercial real estate lenders (CRE) and Chinese asset management companies (AMC) under financial stress,” they highlighted. in the report.
Separately, analysts say strong economic activity and comparatively low unemployment will support profitability and reduce asset risks, as the global economy has remained resilient following a period of rapidly rising interest rates and continued volatility. geopolitics.
“In the United States, where most rated financial companies are based, we expect continued strong real GDP growth of 2% through 2025. The outlook in emerging markets is equally strong, with India, Indonesia and some countries of Latin America has robust, although moderate, economic growth,” they explained.
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Headwinds
While things are looking good for markets like the US, Moody’s maintains that in China, slowing growth poses risks for financial companies and that as Donald Trump’s administration takes power, political uncertainty, including potentially protectionist policies, , could begin to slow economic growth.
“High inflation in 2023-2024 increased borrowing costs and reduced the profits of financial companies. However, inflation is now approaching central banks’ targets in most economies around the world, supporting a reduction in interest rates toward a neutral stance and improved market access. Lower inflation should also favor the payment capacity of financial companies’ borrowers and support asset quality,” they explained.

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The bad time in particular would be for commercial property lenders in the United States, who face great challenges due to offices that remain empty due to the rise of remote work after the pandemic, which has seriously weakened this market and affects the profitability of these companies. .
On the Chinese side, the alert is for asset management companies (AMC) to face difficulties due to the fall in the real estate market, given that this collapse limits economic growth and complicates the management of its debts related to the sector.
Latin America
In its analysis, Moody’s also reviewed what it expects for the market in Latin America and said it expects financial companies in this part of the world to remain on stable ground through 2025 and that macroeconomic conditions should support financial performance in the entire region, despite the important differences in business models between financial companies from one country to another.
“We foresee only marginal changes in GDP growth among Latin American countries, accompanied by moderate demand for credit, supported by relatively strong labor markets and consumer confidence. Interest rates will remain elevated throughout 2025, and rate cuts in the region are likely to slow given the increase in geopolitical risks and possible protectionist measures at a global level,” the report concludes.
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