This report analyzes the situation of the Argentine financial system on a monthly basis.
Summary of the month
Banking activity, both in terms of the intermediation of savings by economic agents and in the provision of payment services, continued to grow at the end of 2009. Within the framework of the policies implemented by the BCRA, adequate levels of liquidity and solvency persist, and the pattern of reducing equity mismatches is maintained. Improvements continue to be made in the geographical coverage of the infrastructure for the provision of financial services between the different jurisdictions of the country, highlighting the progress in the number of ATMs per capita in the areas of less access.
Total deposits in the financial system grew in November (0.2% or 10.1% YoY). Private sector deposits increased by $2,100 million (1.1% or 12.7% YoY) in November, mainly due to demand placements and, to a lesser extent, term deposits. • The liquid assets of all financial institutions fell slightly in the month (including items in domestic and foreign currency), reaching 28.5% of total deposits in November. The broad liquidity indicator, which incorporates the holding of Lebac and Nobac not linked to passes with the BCRA, stood at 42.4% of total deposits.
In November, following the behavior of the last 3 months, bank financing to the private sector was boosted by lines destined for consumption. Between August and November, credit to companies and households registered a higher annualized growth than in the first part of the year. The expansion of credit to the private sector in recent months was also verified in the dynamism of financing channeled through cards of the closed system. The maturity terms of bank loans granted in a context of lower lending rates than in previous months were extended.
The expansion of financing to the private sector is taking place in a context of limited credit risk. As a sign of this, irregularity fell 0.1 p.p. in financing to the private sector to 3.6% in November, both due to the performance of private and public banks. The level of delinquency of families stood at 5% and that of companies at 2.6%. The degree of coverage of the irregular portfolio with forecasts reached 123%.
The consolidated net worth of the financial system expanded 2% in November (20.1% YoY), mainly due to accrued gains and, to a lesser extent, the receipt of new capital contributions. The capital integration of the financial system remained stable at 18.6% of risk-weighted assets. At the aggregate level, the integration of capital in the financial system is almost double the regulatory requirement. The position of slack is widespread among financial institutions. The monthly accounting profits of the financial institutions as a whole decreased in the month, mainly due to the fall in profitability recorded by private banks from a reduction in the financial margin. So far in 2
