Report on Banks

Executive summary

• – In July, financial intermediation by the banking system with the private sector showed differentiated behavior across currencies: a slight reduction in the peso segment, while foreign currency operations continued to grow. The financial system maintained a solid equity position, preserving its liquidity, provisioning, and capital coverage.- The real balance of financing to the private sector in pesos decreased 0.9% in July, with heterogeneous monthly performance across different credit facilities: loans with real guarantees increased, commercial lines showed no significant changes, while consumer credit decreased. The balance of credit to the private sector in foreign currency grew 0.6% between month-end points—in original currency—. The real balance of total credit (in domestic and foreign currency) to the private sector decreased 1% in July (+4.7% y.o.y.).

• – The real balance of private sector deposits in pesos decreased 3.4% during the month, mainly due to the performance of demand accounts. The balance of private sector deposits in foreign currency increased 2.5% in July—in original currency—.

• – In July, the non-performing loan ratio for credit to the private sector stood at 7.7% at the system level, slightly above the June figure, though similar to the value observed in May 2026. A monthly deceleration continued in the real balance growth of the non-performing portfolio (numerator of the ratio). When distinguishing by type of debtor, the delinquency indicator for households totaled 12.9%, while that for companies reached 3.6%. The estimated probability of default (PD) for the total credit balance to the private sector decreased during the period, to 2.4%.

• – Financial institutions as a whole maintained high coverage levels with provisions in July. The total provisions balance represented 87.6% of the non-performing portfolio at the system level and 6.7% of total credit to the private sector. When jointly considering delinquency, provisions constituted, and available capital, in July the balance of non-performing credit net of provisions stood at 2.1% of regulatory capital at the aggregate level (-0.1 pp monthly), reflecting the broad degree of resilience of the financial system against potential credit losses associated with credit risk.

• – In July, the liquidity ratio considering only peso-denominated cash holdings stood at 12.2% of deposits in the same denomination, slightly below last month. The system-wide indicator that also includes government securities allocated to minimum cash requirements and net short-term active operations in pesos remunerated with the BCRA represented 31.3% of peso deposits (-2.7 pp monthly). Aggregate liquidity in foreign currency increased during the month, to 49.2% of these deposits in that denomination (+0.6 pp monthly).

• – The financial system’s solvency indicators continued to be at high levels. In July, capital integration (regulatory capital) reached 30.5% of risk-weighted assets (+0.6 pp monthly). The excess capital integration over the regulatory requirement stood at 276.7% of the regulatory requirement (+7.1 pp monthly) and at 36.2% of credit to the private sector net of provisions (+0.8 pp monthly).

• – The financial system’s profitability remained at positive levels in July, with an annualized ROA of 2% for the accumulated last three months. The ROA for the last 12 months was 1.3% at the aggregate level (ROE of 5.7%), being slightly higher than that verified in July 2025.