Chile's banks will come under increased stress from their loan portfolios after a massive earthquake rocked the nation in February, according to Moody's Investors Service.
An 8.8-magnitude earthquake — the strongest to hit Chile in 50 years — left estimated damages of $30 billion across the country, which could in turn put portions of its banking industry under pressure.
"Given the heightened challenges and potential for asset-quality stress on banks, we have revised our scenario estimates to include further stress on the loan portfolios exposed to the affected regions," Moody's Vice President Jeanne Del Casino said in a report Tuesday.
Moody's said even though "realized losses could still be substantial," impairments could be contained "relative to the banking system's present capitalization and reserve position."
