Report on Banks, May 2024
• In May, financial intermediation with the private sector exhibited a positive performance, with increases in the real stocks of credits and deposits both in domestic and foreign currency. The financial system continued to sustain robust liquidity and solvency levels.
• The stock of financing in pesos to the private sector increased 8.5% in real terms in May (after declining for six months in a row), with increases in all credit lines and groups of financial institutions. The stock of financing in foreign currency grew 9.8% (+54.7% y.o.y.), mainly boosted by business credit lines.
• The non-performance ratio of financing to the private sector stood at 1.9% in May, remaining virtually unchanged against April. The delinquency rate of financing to companies totaled 1.1% (-0.1 p.p. monthly, with slight falls in all economic sectors), while that of households accounted for 2.8% (+0.2 p.p. monthly, a change driven mostly by pledge-backed loans and financing through credit cards). Within the segment of financing to households, the non-performance ratio of lending in Units of Purchasing Power (Unidad de Valor Adquisitivo, UVA) (mortgages amounting to 90%) remained low in the period (1.1%, +0.1 p.p. monthly). Loan provisioning accounted for 161.4% of the private sector non-performing portfolio.
• Regulatory capital (RC) compliance for the ensemble of financial institutions stood at 38.6% of risk-weighted assets (RWAs) in May (-1.7 p.p. monthly, or +8.2 p.p. y.o.y.). The RC surplus (RC minus the minimum regulatory requirement) represented 383% of the regulatory requirement at systemic level, and 75.2% of the stock of loans to the private sector net of provisions.
• In the past 12 months up to May, the total comprehensive income in constant currency was equal to 7.2% of assets (return on assets, ROA) and 31.7% of the net worth (return on equity, ROE), posting higher values than those from one year ago.
• In May, the liquidity indicator that considers liquid assets (cash and current account at the BCRA) in terms of total deposits stood at 23.4% (11.2% in domestic currency and 72.2% in foreign currency), down 0.2 p.p. vis-à-vis April, and up 4.1 p.p. in year-on-year terms. In turn, the broad liquidity ratio totaled 55.4% at a systemic level.
• In May, payments made through electronic means increased compared to April. The real amount of instant transfers posted a monthly increase of 24.7%; that of payments with transfers, 20.4%; and that of the clearing of e-checks, 7.3%. As a result, greater importance in the economy is perceived when considering the main electronic means of payment as a whole: up to May, they totaled 106.8% of GDP, +8.6 p.p. in year-on-year terms.
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July 17, 2024
