Report on Banks

Executive Summary

• – In July, financial intermediation with the private sector exhibited a heterogeneous performance: peso‑denominated transactions declined, while those in foreign currency increased. The financial system remained sound, sustaining adequate coverage in terms of liquidity, provisions, and capital.

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  -The real stock of financing in pesos to the private sector decreased by 0.9% in July, with heterogeneous monthly performance across all credit lines: secured loans expanded, business lines showed no significant changes, and consumer loans contracted. The stock of loans to the private sector in foreign currency grew by 0.6% month-on-month in original currency. The total stock of loans in real terms to the private sector (in domestic and foreign currency) fell by 1% in July (+4.7% y.o.y.).

• – The real stock of private sector deposits in pesos dropped by 3.4% in July, mainly explained by sight accounts. The stock of private sector deposits in foreign currency rose by 2.5% in July—in original currency.

• – The non-performing loan ratio for the private sector reached 7.7% at a systemic level, slightly above the level recorded in June, though similar to the value observed in May 2026. The monthly slowdown in the real growth of the non-performing portfolio (numerator of the ratio) persisted. Sorted out 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 stock of loans to the private sector decreased to reach 2.4% in the period.

• – Financial institutions as a whole posted high coverage indicators of provisions in July. The total provisions accounted for 87.6% of the non-performing portfolio at a systemic level, and 6.7% of the total stock of loans to the private sector. Taking into account delinquency, provisions, and available capital, in July the stock of non-performing loans net of provisions stood at 2.1% of regulatory capital (RC) at the aggregate level (-0.1 pp monthly), underscoring the financial system’s strong resilience against potential credit losses

• – 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 solvency indicators of the financial system remained high. Regulatory capital compliance reached 30.5% of risk-weighted assets in July (+0.6 p.p. monthly). The surplus of RC above regulatory requirements stood at 276.7% (+7.1p.p. monthly), and 36.2% of financing to the private sector net of provisions (+0.8 p.p. monthly).

• – Profitability of the financial system maintained positive levels in July, recording 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 of July 2025.