Late Payment of Credits and Profitability of Private Banks in Ecuador


  • Carla Jaramillo, Miguel Peñarreta, Nuria Galarraga, Marta Navarete, Silvia Cevallos


The purpose of this study is to analyze the relationship between late payment and profitability of private banking in Ecuador. The data used corresponds to the data of the Superintendencyof Banks between the period 2012 and 2016. Correlations were calculated for five scenes with the studyvariables:Banklatepayment-ROA;Banklatepayment-ROE,Banklatepayment-gross portfolio,grossportfolio-ROAandgrossportfolio-ROE.Pearson'scorrelationcoefficientwas calculated with the described variables. Profitability data reflects the use of the Dupont system (ROAandROE).Asaresult,correlationcoefficientsareobtainedforeachanalysissceneswith values less than zero, determining a perfect negative correlation between the variables for each case; A total dependency between the two variables is also established through an inverse relationship in a constant proportion, understanding that if late payment decreases profitability would increase and if late payment increases, the gross portfolio will also increase. According to the Ecuadorian superintendency of banks, the most of late payment loans are in the order of consumption, commercial andhousing.