Informe Sobre Bancos

Thisreport analyzes the situation of the Argentine financial system on a monthly basis.

Summary

• The balance of total financing (including domestic and foreign currency) from the financial system to the private sector grew 1.6% in April (23.9% year-on-year), with a greater relative increase in foreign currency lines for companies (pre-financing for exports and documents) and in loans in pesos for household consumption (personal and cards). So far this year, credit to companies and households registered a higher nominal growth rate than in the same period of the previous year, a performance that was reflected in a greater share of bank financing in the total assets of all financial institutions.
• In April, the BCRA expanded the implementation of the sixth tranche of the Credit Line for Productive Investment (LCIP) in order to generate greater benefits and stimulate bank financing for micro, medium and small enterprises. It was provided that the financial institutions reached may apply a proportion of the financing provided to: discount of public works certificates and invoices made up of MSMEs; financing disbursed as local pre-financing of exports to companies that are not large exporters; and new local financing of imports of inputs and/or capital goods that are funded with lines of credit from foreign banks. Partially considering the sixth stage of the LCIP, it is estimated that in the set of the six stages, credits have been agreed for a gross amount that would exceed $120,000 million.
• In April, the balance of deposits in pesos in the private sector increased 4.5% (35.8% YoY) due to the significant monthly increase of 8.9% in time placements and, to a lesser extent, due to the 1.7% growth in demand accounts. Since the acceleration in its growth rate, in recent months term placements in pesos have increased their relevance in the composition of private sector deposits. Foreign currency deposits of the private sector also increased in the month (6.8% or 26.1% YoY). For their part, public sector placements were reduced compared to March. Thus, total deposits in the financial system grew nominally 0.7% in the month (30% YoY).
• The liquidity (considering liquid assets in national and foreign currency, without LEBAC holdings) of the financial system stood at 23% of total deposits in April, decreasing slightly compared to March, mainly due to fewer passes with the BCRA. The broad liquidity ratio (including LEBAC holdings) for banks as a whole fell 0.4 p.p. of deposits in April, to 44.8%. This reduction was mainly explained by the performance of public banks, although the indicator for this group of financial institutions continued to exceed that corresponding to the financial system. The broad liquidity indicator at the aggregate level was 2.6 p.p. higher than the figure for the same month in 2014.
• The irregularity ratio of credit to the private sector stood at 2.1% in the month. Loans to households did not present any major changes in their delinquency in April, remaining at 2.9% of this portfolio. On the other hand, the non-performing loan on loans to companies increased slightly in the period, to 1.3%. The forecasting of the financial system continued to be comfortable, representing 136% of total financing to the private sector in an irregular situation.
• In April, the profitability of the financial system reached 3.8% of assets, falling compared to the previous month mainly due to lower gains from securities. The monthly ROA was in line with the level accumulated in the last twelve months and above that corresponding to March 2014.
• The net worth of financial institutions as a whole increased 0.9% in April (31.9% YoY), mainly due to accounting gains for the period. The integration of regulatory capital in the financial system totaled 14.9% of total risk-weighted assets (RWA) in the month (13.9% in the case of Tier 1). The excess integration of regulatory capital for all entities stood at 95% of the regulatory requirement in April, increasing slightly compared to March. All bank groups continued to show a surplus capital position.