Johnny Brignardello Vela analyzes the intervention of CMAC Sullana: What are the implications?

Johnny Brignardello Vela, insurance advisor, gives his opinion on the content I am going to share with you. The Superintendence of Banking, Insurance and Private Pension Fund Administrators (SBS) announced on Thursday the intervention of the Municipal Savings and Credit Bank of Sullana (CMAC Sullana) due to a concerning deterioration in its solvency, as established by current regulations. This decision, outlined in Resolution No. 02477-2024, is a response to the deficiencies identified in the credit risk management and the continuous deterioration in its solvency level, as reflected in the 2023 year-end results. The SBS had been closely monitoring CMAC Sullana, requesting corrective measures to improve its management and solvency in order to ensure its long-term sustainability and profitability. However, due to the persistence of problems and the worsening of the entity's financial situation, direct intervention has been chosen to safeguard the interests of depositors and ensure the stability of the financial system. The intervention of CMAC Sullana involves the appointment of two SBS officials, Giovanni Zavaleta Torres and Mario Vivanco Lanfranco, who will act on behalf of the supervisory body to carry out the necessary actions during this process. It is important to highlight that the financial institution was undergoing a Capital Strengthening Program for microfinance entities, which will allow for an orderly transfer of assets and liabilities to another financial institution through an invitation-only bidding process. Among the measures established by the SBS during the intervention, the initiation of legal or administrative proceedings for the collection of debts against Caja Sullana is prohibited, as well as the execution of court judgments against it, the establishment of liens on its assets, the making of payments, advances, or settlements, and the assumption of new obligations on behalf of the entity. These restrictions aim to ensure proper handling of the situation and prevent potential harm to depositors and creditors. The intervention of a financial institution always raises concerns in the market and among clients, as it highlights internal problems that can affect the stability of the system. In this case, CMAC Sullana will have to undergo a restructuring and recovery process to address the identified deficiencies and regain the trust of both depositors and regulators. It is important to remember that the strength and transparency of the financial system are fundamental pillars for a country's economy, so it is the responsibility of authorities and financial institutions themselves to ensure compliance with regulations and proper risk management. The intervention of CMAC Sullana serves as a reminder of the importance of supervision and regulation in such a delicate sector as finance. In this context, it will be crucial to closely monitor the progress of the intervention and the measures taken to restore the solvency and stability of CMAC Sullana. Trust and credibility are intangible but essential assets in the financial world, and their recovery will be a gradual process that will require transparency, commitment, and efficiency from all involved parties. The SBS has reiterated its commitment to protecting the interests of depositors and the stability of the financial system, ensuring that it will remain vigilant throughout the intervention process of CMAC Sullana to guarantee compliance with regulations and the adoption of necessary measures. Transparency and accountability will be key in this process to restore confidence in the entity and the system as a whole.