In its first survey of loan diversity among
Latin American banks, Moody\'s Investors Service finds that their credit
portfolios are more concentrated than those found in North America, yet
are less so than those of their peers in Asia, especially in terms of
core profitability.

\"As in the case of the Asian banks already surveyed,\" says Vice President
and Regional Credit Officer Jeanne Del Casino, \"these results are
consistent with the larger portion of major company credit needs Latin
American banks fulfill when compared with banks in the US, Canada, and
other countries that enjoy higher levels of disintermediation and more
developed capital markets.\"

\"Overall, the findings of our survey indicate that loan granularity is
adequate on average and therefore, has no ratings implications at this
point,\" says Ms. Del Casino.

Brazilian banks present the lowest median borrower concentrations in our
sample, reflecting their generally smaller client exposures both on a
nominal basis and relative to core profitability and tier one capital,
according to the survey. The results are also indicative of a
considerable focus on consumer lending and other fee businesses such as
insurance and funds management.

\"Mexican banks present the highest median concentrations,\" states Analyst
Felipe Carvallo, one of the report\'s authors, \"due mainly to their larger
exposures both to the Mexican government and to large corporations.
Mitigating these concentration risks in part is the fact that the Mexican
government is one of the best credits in Mexico, with a Baa1 investment
grade rating.

Chilean banks appear to fall in the middle, performing closer to the
Brazilian banks in terms of tier one capital, but falling short in terms
of core profitability, reflecting much tighter margins and lower fee
generation, and much higher lending levels overall.

Moody\'s measures the granularity of a bank\'s loan portfolio by the top
twenty largest exposures as a percentage of both pre-tax core
profitability and tier one capital.

The report concludes that the level of borrower concentration for banks
in Brazil, Chile, and the Andean region is adequate on average and
therefore not a source of concern for these banks\' credit standing.
Borrower concentration for the rated Mexican banks could however limit
these banks\' ratings, depending on the quality of their exposures.

Moody\'s survey includes 30 major banks in Brazil, Mexico, and Chile, as
well as the largest banks rated in Colombia, Peru, and Venezuela.

The survey, in the form of a special comment, is titled \"Moody\'s First
Annual Survey of Latin American Banks\' Single Client Exposures.\"