Report on Banks

Executive summary

– In February, financial intermediation between banks and the private sector decreased in the peso segment and increased in foreign currency operations. In the month, financial institutions as a whole continued to present high indicators of solidity in terms of liquidity coverage, forecasts, and capital.

– In February, the real balance of financing in pesos to the private sector fell by 1.5% (+17.6% YoY), with a heterogeneous monthly dynamic among credit assistance: loans with real collateral grew, while commercial and consumer loans decreased. For its part, the balance of credit to the private sector in foreign currency increased 2.9% in the period – in currency of origin – (+48.4% YoY).

– The real balance of deposits in pesos in the private sector decreased 1.4% in February (+1.1% YoY). In the month, demand accounts and time deposits decreased by 0.4% in real terms and 2.4% in real terms, respectively. As for the foreign currency segment, the balance of private sector deposits increased by 0.9% in February (+26.2% YoY).

– The liquidity indicator in national currency for the financial system, which considers only availabilities, fell by 1.4 p.p. of deposits in pesos in February, reaching 12.7%. When incorporating the public securities used for the integration of minimum cash and net short-term active operations remunerated with the BCRA, this indicator amounted to 35.2% of deposits in national currency, 1.5 p.p. more than in January. On the other hand, liquidity at the systemic level in foreign currency decreased by 0.7 p.p. of deposits in this denomination in the period, to 60%.

– In February, the irregularity ratio of credit to the private sector stood at 6.7% (0.3 p.p. above the January figure). When distinguishing by type of debtor, the indicator corresponding to households reached 11.2%, while that of companies stood at 2.9%.

– In the month, the financial system continued to exhibit high levels of coverage with forecasts. The balance of total forecasts represented 90% of the portfolio in an irregular situation (+0.9 p.p. compared to January) and 6% of total financing to the private sector (+0.4 p.p. monthly). In addition, in February, the institutions as a whole maintained high coverage against the credit risk assumed. In particular, the balance of irregular credit net of the forecasts in terms of regulatory capital (RPC) stood at 1.4% in the month, slightly below the January figure.

– In the month, solvency indicators rose slightly. In February, capital integration (CPR) in the financial system increased by 1.2 p.p. of risk-weighted assets (RWA), to 30.3%. Excess capital integration (above what is required by regulations) totaled 274% of the regulatory requirement (+15.7 p.p. monthly) and 36.7% of credit to the private sector net of forecasts (+2.2 p.p. monthly).

– The financial institutions as a whole accumulated profits (comprehensive totals in homogeneous currency) equivalent to 0.8% of assets (ROA) for the last 12 months, reducing in a year-on-year comparison.