Economic uncertainty, the rise in interest rates and the collapse of purchasing power are being felt on consumption and financing. In real terms, discounting the effect of inflation, personal loans have dropped 14% so far this year.
“Pesos loans continue to show a negative performance over the year, piling up a drop of 14.6% in real terms from December. The accumulated decline since the last peak (May 2018) reaches 45%, “says consulting firm LCG.
Those that have lost the least in the last year are business loans that contracted only 2.6% real, while loans with collateral, which include pledges and mortgages, fell by 8.5%. In the case of mortgages, the collapse is 25%,
For credit card transactions, the drop was 12.6%. Several factors play behind this retraction: on the one hand, the amount of plastic in use they were reduced from 41.5 million to 38.5 million so far in the management of Alberto Fernández.
Added to this is that the cards that continue to operate do so with lower financing amounts, both because the banks do not update the limits of each user, and because salaries are losing the price race by 3.6 percentage points in the first. eight months of 2022, according to official data.
“The loan portfolio in real terms continues to shrink. We will have to wait for the update of the salary values and we will see a decline in interest rates on loans to see a recovery of the balances in real terms”, explained Guillermo Barbero, Partner of First Capital Group.
“A scenario of declining activity, such as the one we expect for the rest of the year, will have a direct correlation on credit dynamics. Added to this is a higher financing cost that can hardly be offset by the attractiveness of the new Now 30 installment plan, “said LCG.
deposits rise
As loans go down, pesos deposits are picking up. Private deposits in pesos have accumulated so far this year a real increase of 1.6%. This growth is driven by term deposits, which increased by 5.4% in the first ten months of the year, while sight deposits, such as savings and current accounts, remain stable.
The jump in fixed terms is given by the rise in interest rates which today stands at 75% per annum and allows for a monthly return of 6.5%, based on inflation. The stability of the gearbox gives new air to the financial speculation on the interest rate, the operation by which investors exploit the high rate in pesos without losing purchasing power in hard currency.
The economist Martín Polo underlines this today For every peso deposited in banks, only 46 cents are lent to the private sector. Four years ago, the relationship was practically one to one.
What banks do not lend to private individuals will finance the public sector through required reserves, public bonds and instruments such as the Leliq or the Letes. “This discrepancy between private deposits and private loans is an indicator of banks’ exposure to public sector risk. And it shows that banking as a financial intermediary is far from ideal, “Polo said.
“Financing the public sector is risky by definition, which is why bonds are worth what they are worth,” warns the economist. “This marks Argentina’s economic fragility, with a public sector that appropriates private savings “.
In October, private fixed-rate deposits increased by 9.4%, while transactional deposits increased by only 3.4%. to the financial system the financing is becoming more expensivebecause what increases the most is the share of private term financing that has to be paid, “Polo said.
“The rise in interest rates explains the increase in fixed terms; with inflation this high, a lot of money is lost. In a context where the expectation is that rates will go hand in hand with devaluation and inflation , people take advantage of these deadlines set for fly it month by month“, He explained.
The rate hike that attracts depositors ends up being an additional restriction for those seeking finance. “For the private sector, going out to take credit at these rates is very risky”, Polo condemned.
AQ
Source: Clarin
