Bank loans to increase by only 2% in 2009

SANTIAGO.- According to the Association of Banks and Financial Institutions (ABIF), total loans within the Chilean bank system may increase by only 2% in 2009. The figure is far below the average in recent years, amid a show-down in consumption and hike in provisions to cover loans.

According to the association's calculations, bank loans increased by 10% in 2008 and were principally backed by the high dynamism of employment during the first half of the year.

"In 2009, we estimate that employment will grow by 2%", stated the president of ABIF, Hernán Somerville.

The association leader also said that business positions would increase by 3% due to the expectation that large companies that had been financed abroad before the crisis will return to the country.

Somerville added that consumption loans would remain stable, while housing loans would climb by 4%.