Informe Sobre Bancos

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

Summary

• In August, banks maintained the dynamics of their intermediation activity. The persistence of a scenario of high volatility in international financial markets did not prevent local banks from continuing to carry out their operations normally, with slight increases in lending and passive interest rates. The level of non-performing loans remained at low values, with ample coverage with forecasts. The profits obtained in the month, combined with new capitalizations, contributed to maintaining the solvency of the sector.
• Credit to the private sector grew 3.8% in August. In the last twelve months, financing to the private sector increased by 51.4%, more than doubling the variation of the same month in 2010. The year-on-year increase (y.a.) in financing to companies (54.8%) exceeds that of loans to households since July 2010, and is even higher than that corresponding to consumer loans since September 2010. In the last 12 months, financing to the corporate sector accounted for more than 60% of the growth in total credit to the private sector, 4 p.p. more than in the same month of 2010.
• The irregularity ratio of financing to the private sector remained stable in the month, standing at 1.6%, presenting a year-on-year drop of 1.1 p.p.. Both loans to households and companies reduced their non-performing loans in the last 12 months. The coverage ratio with forecasts of irregular financing to the private sector stood at 164%, 37 p.p. above what was observed a year ago.
• The balance sheet of total deposits of the banks as a whole increased 2.1% in August, accumulating a growth of 32.6% y.o.y. This performance was led by private sector placements (34.6% YoY), which were boosted by both demand accounts and term deposits. In a context of increased lending to the private sector, the broad liquidity indicator of the banks as a whole decreased by 0.3 p.p. in terms of total deposits in August to 41.3% (with a year-on-year reduction of 4.3 p.p.). For its part, the liquidity indicator of the financial system, which includes only items denominated in pesos (excluding the position in Lebac and Nobac), increased slightly in the month to 19%, although it presented a decrease of 1 p.p. in deposits in the last 12 months.
• The net worth of the financial system expanded 2.2% in August (22.5% YoY), an increase explained by accounting gains and, to a lesser extent, by capital contributions. Given the growth in lending, the system’s capital integration ratio declined slightly in the month, to 16% of risk-weighted assets (RWA). The excess of capital integration reached 69% of the requirement, slightly below last month’s record.
• In August, the profitability of the financial system stood at 2.7% of assets, in line with last month’s record. Over the course of the year, the ROA accrued by the aggregate of the entities was 2.5%y, being similar to that evidenced in the same period of 2010, offsetting a fall in the results of securities with lower expenses in terms of administrative expenses and charges for uncollectibility.
• The universalization of access to financial services occupies a central place in the BCRA’s current agenda. In this framework, this Institution created the Universal Free Account (CGU) a year ago and relaunched the Cancelling Check (ChC), instruments that make it possible for operations to be carried out with greater security. The use of these tools has been growing gradually. The amount of UGC reached 81,800 by mid-October 2011. At the end of September, the amount of operations in pesos with ChC accumulated $145 million (2,070 checks), while that corresponding to ChC in foreign currency reached US$215 million (3,800).
• In addition, the BCRA has been promoting the use of bank transfers. On the one hand, a substantial reduction in costs was implemented, especially in transfers of smaller amounts. In the period between the entry into force of the measure ordered by the BCRA (October 2010) and September 2011, there was a 33% increase in the number of monthly transfers for amounts of less than $10,000 (below this limit, transfers are free). On the other hand, since the end of April 2011, the possibility of making immediate transfers was arranged. In September 2011, the number of immediate transfers reached 1.1 million (for a total amount of $4,600 million), registering an increase of 38% since May 2011.
• Within the framework of the Bicentennial Productive Financing Program, the BCRA has awarded through 8 auctions a total amount of almost $2,920 million, distributed among 12 financial institutions. By the end of September, the participating banks had already assisted 97 companies, effectively crediting them with $1.375 billion (three-quarters of which corresponds to the industrial sector) out of a total committed between the entities and their customers of almost $1.775 billion.