Informe Sobre Bancos

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

Summary of the month

• In September, banks showed a solid position in the face of the turbulence in the international financial markets. In this context of greater volatility, the BCRA’s prudential monetary and financial policies contributed to the continued expansion of credit to the private sector, avoiding a negative impact on the real economy. In the month, the banking sector obtained positive results, allowing it to close the third quarter with profits. These results, added to the new capitalizations, strengthen the solvency of the sector.
• In September, financing to the private sector registered an increase of 3.1% (41% y/y in the first 9 months of the year). Personal and mortgage documents were the main credit lines that explained the increase in financing in the month. In the context of the measures established by the BCRA, the growth of mortgage credit so far this year (40% yr.) reached the rate of expansion of total financing to the private sector. Given a limited credit risk framework, this evolution took place together with a decrease in irregularity: the level of this indicator for financing to the private sector reached 3.5% in the month, accumulating a decrease of 1 p.p. in 2007.
• The growth of financing to companies reached 34% in the last 12 months, being generalized and more homogeneous among all tranches by financing balances. In the last year, the segments with the highest relative growth were those with lower current balances, as there was an acceleration in their rate of expansion. The greater dynamism of financing in smaller tranches occurred in a context of lower concentration in the group of participating financial institutions. The fall in the total irregularity ratio of financing to companies (from 1.6 p.p. so far in 2007 to a level of 3.6% in September) reflected the effects of the decrease in irregularity for all tranches by balance of financing.
• Deposits in the non-financial sector expanded again in September. Driven by fixed-term deposits and, to a lesser extent, demand placements, deposits in the non-financial sector grew by $1,700 million in the month. Liquidity ratios remained at high levels. Liquid assets accounted for 21.9% of total deposits at the end of September, while the liquidity indicator that includes the holding of Lebac and Nobac stood at about 39.6% of total deposits.
• In the month, the mismatch in foreign currency of the banks was reduced. Mainly associated with a reduction in liquid assets in foreign currency, the foreign currency mismatch of the financial system in terms of net worth fell 4.9 p.p. in September, reaching 21.6% (3.9 p.p. less than at the end of 2006).
• The net worth of the financial system continues to grow: 2.1% in September, accumulating an increase of 15.4% in the last 12 months. The monthly increase was led by gains and, to a lesser extent, by capital contributions from two private financial institutions. Unlike what happened in the previous two months, during September the banks obtained positive results. In particular, the financial system recorded an ROA of 2.5% y/y and an ROE of 18.8% y/y in the month. The accounting profits of the financial system in September improved 2.6 p.p. of the asset compared to the previous month. This recovery was mainly driven by the increase in equity results. Finally, the ROA of the financial system for the third quarter of 2007 stood at 0.5%yra., while the ROE amounted to 4.1%y.o.y. The profitability accrued in the first 9 months of the year amounts to $2,600 million.