In the last year, the financial intermediation activity carried out by banks – taking pesos from savers and companies and then lending them to other people and other companies – has a significant contractiona product of inflation, loss of purchasing power of wages, high interest rates and the loans that banking institutions granted to the State National.
A report carried out by the Association of Argentine Banks (ADEBA) shows that during 2023 the peso deposits in entities decreased by 30% in real termsThat is, discounting the inflation of 211.4% accumulated in the last twelve months. On the other side of the equation, Peso credits ended last year down 26% even in real terms.
If we analyze the first point, we see how the increase in the interest rate throughout last year, which ultimately proved to be negative compared to the rest of the prices of the economy, did not allow an increase in the desire to save in pesos. Term deposits represent only 41% of the total deposits with institutions, taking into account both “traditional” fixed maturities and those linked to inflation.
In fact, although the UVA fixed terms the stock of pesos associated with this instrument has become relevant in the last two months They represent just 1.1% of the stock total and grew by 3% in real terms in December compared to what was seen a year ago.
The electoral ups and downs and the fear of a new devaluation meant this Dollar deposits also decreasedN. The ADEBA report uses data from November last year, reported by the Central Bank, to illustrate that: at that time, dollars in banks were 7.5% less compared to twelve months earlier.
What happened to the loans
On the lending side, the Banking Chamber report highlights a strong contractionespecially regarding the financing that these institutions offer to families.
THE Credit cardsthe financing method most used by families, represent just 32% of total loans to the private sector and personal loans only 13%. In any case, the work has made it clear that this structure remains stable compared to what was seen in 2022.
In this context, despite the escalation of inflation, banks have managed to keep the level of insolvencies, i.e. the level of missed payments by families, low. In November, according to the latest data reported by the Central Bank, private sector insolvencies fell by 2.7%. “Public banks lowered their default level by 0.3 percentage points to 4.5%, its lowest level in more than five years“, they underlined in ADEBA.
The banks underlined this in this context. “The liquidity of the financial system increased by 5 percentage points in November and also significantly changed its composition,” the ADEBA reads.
Source: Clarin
