Report on Banks, November 2023

• In November, financial intermediation in the private sector decreased as evidenced by the information of different monthly reporting systems. Within this context, the liquidity and solvency aggregate indicators remained high.

• Transactions carried out through the main retail electronic means of payment exhibited a heterogeneous performance against October. The volume of instant fund transfers increased 5.3% in spite of lower traded amounts (-5.8% in real terms). Payments by Transfer grew significantly (11.6% in volume and 7.3% in value in real terms). In turn, the clearing of checks in paper and electronic form was lower (-10% in volume and -18% in value in real terms).

• The stock of loans channeled to the private sector in domestic currency decreased 4.1% (+8.2% in nominal terms), which proves to be heterogeneous across groups of financial institutions and credit lines. In year-on-year terms, financing to the private sector in pesos fell 8.8% in real terms. The rate for non-performing loans to the private sector slightly dropped to 2.7% (-0.4 p.p. y.o.y.). This performance was observed in loans to both households and companies. The total provisions of the financial system stood at 3.4% of total credit to the private sector and 128.6% of the non-performing loan portfolio.

• The stock of private-sector deposits in pesos decreased 16.5% in real terms (-5.8% in nominal terms). The performance was observed in sight accounts and in time deposits as well (which was, in turn, replicated across all groups of deposits sorted out by amount). Thus, the stock of private sector deposits in pesos fell 24.6% y.o.y. in real terms.

• Broad liquid assets in the financial system reached 84.1% of total deposits in November, up 2.4 p.p. against October, and up 9.6 p.p. in year-on-year terms. The indicator for items denominated in pesos stood at 83.5%, and for those in foreign currency, 87.2%.

• The solvency indicators of the financial system remained high. Financial institutions' regulatory capital (RC) compliance stood at 30.8% of risk-weighted assets (RWAs) remaining virtually unchanged against October, and increasing 1.3 p.p. y.o.y. The excess regulatory capital position (RC minus the minimum capital requirement) totaled 285.6% of the capital requirement at systemic level (-1.3 p.p. monthly and +18.5 p.p. y.o.y.).

• In the past 12 months, the financial system's total income in constant currency amounted to 4.5% of assets (ROA) (+2.8 p.p. y.o.y.) and 23.2% of the net worth (ROE) (+13.3 p.p. y.o.y.).

Report (full text) - in Spanish -

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January 17, 2024