Report on Banks, June 2024
• Financial intermediation with the private sector grew significantly in June, both in domestic and foreign currency. This performance was marked by the limited levels of credit risk faced by the financial system and the extensive coverage in terms of provisions, capital and liquidity.
• The stock of loans in real terms channeled to the private sector in domestic currency increased 10.2%, exhibiting rises across all groups of financial institution, while the stock of financing to the private sector in foreign currency climbed 2.5% in June. Thus, the total stock of loans in real terms to the private sector (in domestic and foreign currency) increased 8.5% in June. The analysis of credit segments shows that the stock of loans to companies grew 10.5% in real terms in June, with financing channeled to service providers and primary production posting greater relative dynamism. In June, financing to households increased 5.3% in real terms, which was mainly explained by the performance of personal loans.
• The non-performance ratio of financing to the private sector stood at 1.8% in mid-2024, remaining virtually unchanged in June (-1.3 p.p. y.o.y.). The delinquency rate of loans to companies totaled 1% (-1.9% p.p. y.o.y.), while the delinquency rate of financing to households reached 2.8% (-0.5% p.p. y.o.y.). At the end of the first half of 2024, the provisioning of the financial system stood high: the stock of provisions for the ensemble of financial institutions was 162.1% of the non-performing portfolio, higher than the average figure observed in other financial systems of the region.
• The real stock of private sector deposits in pesos improved 3.7% in June. The monthly performance was explained by sight accounts, in part, as a result of the payment of the semi-annual complementary wage. The stock of private sector deposits in foreign currency increased 1.1% in June.
• The liquidity indicator that considers liquid assets (cash and current account at the BCRA) in terms of deposits totaled 23.6% in June (+0.3p.p. monthly). In turn, the broad liquidity ratio reached 52.1% in June (-3.3% against May) in line with the average of the last 15 years.
• The regulatory capital (RC) of the aggregate financial system amounted to 37.1% of risk-weighted assets (RWAs), up 7.5 p.p. against mid-2023. In this period, the excess RC (RC minus the minimum capital requirement) represented 365.4% of the regulatory requirement at systemic level. The leverage ratio (according to the international standards set by the Basel Committee) stood at 22.2% by the end of the first half of the year (growing 6.3 p.p. over the last 12 months). This indicator was above the minimum regulatory capital (3%) for all financial institutions.
• In the past 12 months to June 2024, the ensemble of financial institutions accrued a total income—measured in constant currency and including other comprehensive income (OCI)—equal to 7% of assets (ROA) and 30% of the net worth (ROE). These levels increased in y.o.y. terms.
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August 21, 2024
