17 By the end of 1995, non-performing loans in the banking system amounted to about 98 billion new pesos, about 12.2% of the loan portfolio. Adding the 38 billion new pesos of loans acquired by FOBAPROA in the last half of 1995, the amount of non-performings would have been 17 percent of the portfolio. Six banks have been intervened--five of them from the reprivatized banks of 1992; five banks had made use of PROCAPTE; and 13 banks had undertaken loan sales to FOBAPROA. The total fiscal cost of these programs was put at about 84 billion new pesos, about the dollar value of the proceeds from the reprivatization, or 5.5 22 percent of GDP by the end of 1995. In the face of this as yet unresolved problem, it is difficult to impose radical restructurings of the financial safety net to address the failings that emerged in the crisis. Nevertheless, even as the programs to restore the capital of the banks have been implemented, some efforts to restructure the banking system have been launched. It is clear that the banking will have to be consolidated, so that within a few years only six to 23 nine of the eighteen reprivatized banks will remain.
22
See Hacienda, "Consideraciones sobre la Evolucion del Sistema Bancario Comercial durante 1995", July 1996.
23
The real value of loans in the portfolios of the commercial banks to the private sector fell by about 40 percent from December 1994 to April 1996. The banks basically are in the business of trying to collect on old loans, and there has been a disintermediation as commerce has resorted to an expansion of trade credit.