AVAL - Colombian Banks: Which Is Safest?
In my previous article, I explained why Colombian banks can be very interesting for long-term investors. But which one do you pick?
Banks are tricky. They are black boxes and you never know exactly what’s on their books. On top of that, it is very easy for management to make the (short-term) numbers look great: write loans to non-creditworthy counterparties at high interest rates, be optimistic about non-performing loan provisions, and only maintain the lowest capitalization requirements forced by law. By doing so, the figures of the bank will be best in class (for