MEXICO CITY: Latin American banks will see second quarter gains despite the economic crisis due to a greater dependency on deposits rather than loans, Standard & Poor's ratings agency said.

Most Latin American banks "will end the period (second quarter) with gains, despite the fact that the economic base contracted, which caused a reduction in activities and in the rhythm of growth," said a study released in Mexico.

Standard & Poor's analyst Angelica Bala told AFP that "in the banks that we rate, we don't see problems in any banking systems as seen in the United States, Europe and Asia."

Latin American banks escaped the same liquidity crisis because they did not operate sophisticated lending instruments such as credit derivatives, Bala added.

The private credit sector across Latin America represents an average 20 percent of GDP, compared with around 80 percent of the Spanish economy and around 100 percent in the United States.

Latin American banks would, however, suffer a more severe drop in activity between 2009 and 2010, the agency warned.

Capitalization and liquidity in banks in Brazil, the region's largest economy, would help protect the impact of a drop in assets and investments, it added.

Latin America's economy is predicted to drop 1.9 percent this year, although positive signs for the year end could result in a 1.5 percent overall shrinkage, according to the United Nations Economic Commission for Latin America and the Caribbean (ECLAC).