Report on Banks

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

Summary

• During September, the upward trend of financial intermediation in pesos with the private sector continued. Both loans and deposits in national currency in the financial system increased their growth rate in relation to recent months and the same period in 2012. In terms of the payment system, as a result of the modifications introduced by the BCRA, as of September a greater proportion of electronic transfers made in it (operations of up to $20,000) are free for users of financial services.
• Credit in pesos to the private sector increased 3.4% in the month (38.1% YoY), with a notable dynamism of commercial lines (documents and advances) and personal loans. As a result of the positive performance of the lines in pesos and a fall in loans in foreign currency, total financing (in pesos and dollars) to companies and households grew 3% in September (33.3% YoY). In this period, credit to companies increased 3.5% (35.5% YoY), exceeding the variation in financing to families (2.4% in September and 31.3% YoY).
• The non-performing loan ratio for private sector loans decreased slightly in September to 1.8%. The NPL indicator for loans to households fell in the month (to 2.9%), while that of loans to companies remained stable (at 1.0%). The coverage with accounting forecasts of the portfolio in an irregular situation stood at 136% in the month.
• The balance sheet of total deposits in national currency in the financial system expanded 3% in September (30.2% YoY), with an increase of 3.7% (22.7% YoY) in public sector deposits and 2.7% (33.4% YoY) in those of the private sector. In the latter segment, demand loans increased in monthly terms by 2.7% and those that are term loans, by 1.9%. For their part, private sector deposits in dollars, driven by the payment of BONAR VII, registered a monthly increase of 1.2%. The balance sheet of total deposits (including pesos and dollars) increased by 3.1% (28.9% YoY) in the period.
• The broad liquidity indicator of the financial system (including items in domestic and foreign currency and holdings of LEBAC and NOBAC) stood at 38.1% of total deposits after increasing 0.6 p.p. in September. In the same sense, the liquidity indicator (with items in domestic and foreign currency) stood at 24.7% of total deposits, observing a slight increase (0.2 p.p.) in the month.
• The net worth of the consolidated financial system expanded 3% in September (30.5% YoY), mainly due to earned earnings. The integration of regulatory capital from the group of banks totaled 13.3% of total risk-weighted assets (RWA) in the month and Tier 1 capital represented 12% of RWAs. On the other hand, at the aggregate level, the excess of capital integration in terms of the regulatory requirement (capital position) stood at 71.1% in the period. All groups of entities continued to present a situation of slack in terms of their regulatory capital.
• In September, the accounting profits of the financial system represented 4% y/y of assets. The accumulated ROA in the first 9 months of 2013 stood at 3.1% YoY, slightly above the level of the same period in 2012. All bank groups improved their cumulative profitability compared to the same period last year.