COUNTRY PROFILE
Total land area:..................... 111,890 sq. km.
Official language:................... Spanish
Administrative divisions:........ 18 departments
Legal system:........................ Roman and Spanish civil law,
with some influence of English
Common Law. Accepts ICJ jurisdiction, with reservations.
Executive branch:.................. President is chief of state and
head of government.
Legislative branch:................. Unicameral National Congress
Judicial branch:...................... Supreme Court of Justice
ECONOMIC PROFILE
GDP: US$4 billion (1997)
Real GDP growth (at market prices; sector of origin at factor cost):
4.9 (1997p)
GDP (average annual growth rate): 3.5 (1988-1997)
GDP per capita (1990 US$): 669.8 (1997)
Consumer price index (average annual growth rate): 20.2 (1997)
Nonfinancial public sector fiscal balance (% of current GDP): -1.5
(1997)
Money supply (M1) (% of current GDP): 11.2 (1997)
Interest rate (weighted nominal lending rate): 33.1 (1997p)
Current account balance: -US$0.0364 billion (1997)
Trade balance: -US$0.3813 billion (1997)
Main exports: Coffee, bananas, shrimp and lobster, zinc.
Main imports: Machinery, chemicals, petroleum and petroleum products,
food, road vehicles, paper, other metals, iron and steel, clothing, textiles.
Nominal exchange rate (L/US$) end of period: 13.1 (1997)
Real effective exchange rate (Index 1990=100): 100.7 (1997)
BANKING INSTITUTIONS
I. Banking Supervision
1. The Comisión
Nacional de Banca y Seguros is responsible for banking
supervision.
2. This organization
is a part of the Central Bank of Honduras.
3. The supervisory
authority reports to the Central Bank of Honduras.
4. The Comisión
Nacional de Banca y Seguros examines banks at least
once a year.
5. Banks are rated
as one of the following: outstanding, approved, satisfactory,
normal or deficient.
6. The CAMEL system
is used at the present time. This system was implemented
with the technical support of the International Monetary Fund.
II. Consolidated Supervision
1. Honduras performs
consolidated supervision.
2. Home country consent
is not required to open a banking institution in a foreign
country.
3. Neither is consent
required from the home country of a foreign bank to open or
close an entity of a foreign bank in Honduras.
4. Honduras does not
request information from foreign countries concerning the
activities of Honduran banks operating abroad.
III. Interest Rates
1. Interest rates
on loans are determined by the market.
2. Interest rates
on deposits are determined by the market.
IV. Deposit Insurance
1. Honduras has no
system of deposit insurance.
2. Insurance limits
are not applicable.
V. Trade Finance
1. Honduras has no
official definition of trade finance.
2. Banks bear the
risk of trade finance vehicles.
3. In bank liquidation
cases, trade finance vehicles are not given any special
treatment. Payments are dispersed depending on the type of asset.
4. No special provisions
or reserves are required for treatment of trade finance
obligations during bank liquidations.
VI. Capital Adequacy
1. The minimum capital
required to open a bank is US$3.5 million.
2. The minimum capital
required to maintain a bank in operation is determined
according to the risk-weighted assets.
3. Adequate capital
is 9.5% of risk-weighted assets.
VII. Asset Quality
1. Loan portfolios
are classified as follows:
Loan
classification
% of Reserves
Good
0-10%
Special Mention
25-50%
Doubtful
50-75%
Loss
100%
2. Honduras places
no minimum reserve requirements on bank assets.
3. The legal lending
limit is 20% of capital, with or without collateral.
4. Loan portfolios
are not categorized according to criteria such as hold-to-maturity
portfolio , available-for-sale portfolio or trade portfolio.
5. Loan portfolios
are classified only according to risk.
6. The valuation of
the investment portfolio requirement does not affect the
profit and loss statement.
VIII. Liabilities
1. The minimum reserve
requirement on bank liabilities is 12%.
2. Banks can offer
demand deposits, savings deposits and time deposits in local or
foreign currency.
3. There is no limit
on the amount of deposits that a bank may accept.
4. There is no limit
on the level of concentration for specific types of deposits.