Informe Sobre Bancos

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

Summary of the month

• In January 2010, the financial system registered a moderation in the growth rate of its activity levels. In this period, the progress of both financial intermediation with the private sector and the provision of means of payment were influenced by seasonal factors. With regard to the payment system, it should be noted that the downward trend in the ratio of rejected documents due to lack of funds continues. The financial system begins 2010 with relatively high levels of its soundness indicators.
• The balance sheet of total deposits for all financial institutions increased by 1.6% in January (14.5% YoY), mainly due to the performance of public sector placements. Total contributions from households and companies were maintained in the month, with increases in time deposits offset by the decrease in demand accounts. Total private sector deposits show a year-on-year variation of 17%, channeled to both public banks (21.9% YoY) and private entities (14.6% YoY).
• Banks increase their liquidity levels in January. The liquidity ratio (considering items denominated in domestic and foreign currency) rose in the month to 31% of total deposits, increasing by more than 2 p.p. compared to the end of December and January 2009. The broad liquidity indicator (which includes the holding of Lebac and Nobac not linked to pass operations with the BCRA) stood at 44% of deposits, 2.5 p.p. higher than the value at the beginning of 2009. These liquidity buffers reflect the potential of the financial system to increase credit to the private sector once the uncertainty caused by the international financial crisis has been overcome.
• Credit to the private sector on the balance sheet of the financial system contracted slightly in the month, mainly due to the seasonal decline in the balance of trade lines. Public banks slightly increased their balance sheet of loans to companies and households in January, while private banks and EFNBs saw reductions. In year-on-year terms, loans to the private sector grew 8%. In the last 12 months, national and public private banks have gained a slight relative share of the total balance of credit to the private sector.
• The financial system begins 2010 facing limited credit risk from the private sector. As a sign of this, the irregularity ratio of financing to companies and families remained stable at 3.5% in the month, while the coverage ratio of the irregular portfolio with forecasts stood at 129%, above the record of a year ago.
• The banks as a whole maintain robust solvency indicators. The consolidated net worth of the financial system increased 1.4% in January, thus accumulating a year-on-year expansion of 20%. The integration of capital in the financial system doubled the regulatory requirement in January, with an excess of integration in all homogeneous groups of financial institutions. The accounting return in January for all financial institutions stood at 2.3% of assets, driven mainly by private banks. In the last 12 months, accrued earnings accumulated 2.4% of assets, 0.8 p.p. more than in the same period of the previous year, in part due to the increase in the gain on securities, within the framework of the recomposition of the main quotations. If the items linked to instruments that come from the effects of the 2001-2002 crisis are netted (mainly the valuation adjustments of loans to the public sector and, to a lesser extent, the amortization of amparos), the cumulative annual profitability would be at levels similar to those observed 12 months ago.