Honduras
Banking Systems

Includes special features of this country’s banking system and rules/laws that might impact U.S. business.

Last published date: 2019-10-13

The Honduran banking system, currently comprised of seven financial groups and 15 private banks authorized by the National Banking and Insurance Commission (CNBS), includes financial intermediaries, one securities exchange, brokerages, credit operators, and foreign exchange houses. In recent years, it has experienced significant growth, consolidation, and regional expansion.

Total assets in the Honduran financial system in 2018 were $22,828 billion. Banks account for 95 percent of total assets in the financial system. The minimal capital requirement to operate a bank is  500 million L/ $21 million per CNBS Circular 034/2016.. Average interest rates for local currency in the banking system were 13 percent for 2018.  Average interest rates in U.S. dollars were 6.9 percent in 2018.  The Honduran banking system maintains 50.2 percent of its deposits in U.S. banks and financial institutions.

Bank operations are governed by a Central Bank reform law revised in 2004. The law also provides for stronger capitalization of the Central Bank by the central government. The Banking Commission reform law and the Deposit Insurance Fund (FOSEDE in Spanish) reform law transfer the responsibility for the restitution of troubled banks from FOSEDE to the Banking Commission. The Financial System law (Decree No. 129-2004) delineates the responsibilities of the Banking Commission and the Central Bank to supervise and regulate the country's financial sector. The overriding objective of the law is to bring the Honduran financial sector regulation into compliance with the internationally recognized Basel core principles for effective banking supervision. The law also strengthens the previously ineffective national credit bureau and imposes new restrictions on bank ownership and management. In 2016 through Decree No. 160-2016, Congress updated the Financial Law  adjusting its legal framework to international best practices. Also in 2016 the regulations for the Money Laundering Law were approved.

There are few legal barriers to entry in the banking sector, but the small size of the market has meant that most foreign investment has been in regional, rather than Honduran-only, banks. Several banks have majority foreign ownership including Banco Citibank de Honduras, S.A., Davivienda Bank S.A., BAC/Honduras, LAFISE, Azteca, Promerica, ProCredit, and BanPais. In April 2015 FICOHSA Bank acquired 100 percent of Citibank’s credit card portfolio, and with this transaction FICOHSA became the biggest holder of the credit card market in Honduras.