And he added that in annual terms they contracted at a real rate of 4.2%, led by Current Accounts (-7.6% real year-on-year). Meanwhile, in contrast, Time deposits grew by 1.7% real month-on-month (+4.1% real year-on-year).
“Given the expectation of a greater devaluation accompanied by an additional increase in the interest rate, it could be assumed that part of the dismantling of sight accounts was destined to the creation of fixed terms or the purchase of savings dollars.”, analyzed the consultant.
Likewise, he highlighted that, within fixed terms, “a change in dynamics was observed that derives from what was stated in the previous point, as a real contraction of 5.1% month-on-month was observed in adjustable UVA, the first being down so far this year.”
While, in the average growth of total fixed terms during August, the adjustable UVA contributed less than 0.5%.
At this point, LCG highlighted that the slight recovery during the month of June (+1.2 real month-on-month) failed to consolidate a trend and loans in pesos contracted again in August: 1% real month-on-month.
He added that in annual terms they continue to position themselves in positive territory due to the low comparison bases (+1.2% real).
In another order, he pointed out that Loans to companies fell again for the second consecutive month (-0.3% real month-on-month; +10.4% real year-on-year), mainly due to a drop in Overdrafts (-1.2% real m/m).
The consultant pointed out that Consumer Loans fell again, although moderating their contraction compared to July (-1.6% real month-on-month, against -3% real month-on-month in July).
“Inside, negative dynamics were observed both in Personal Loans and credit card financing (-1.7% real month-on-month and -1.6% real month-on-month, respectively).”, he detailed.
Likewise, it stated that Loans with Real Guarantee contracted a real 1.2% month-on-month. “In this case, the dynamic was once again driven by mortgage loans, which fell by 3.4% in real terms, while pledges saw marginal growth of 0.9% in real terms,” he added.
“After the sharp contraction of deposits in dollars during the month of July (US$901 M), a fall was observed again in August, although to a lesser extent (US$-114 M), representing a variation -0.8% compared to the end of July”, considered the consultant.
Regarding the future, the LCG report highlighted: “The validation of expectations of new interest rate increases will continue to motivate greater demands for traditional time deposits, implying a greater contraction of sight accounts. However, if private sector demand for public securities recovers, as a result of a better fiscal outlook, there could be a contraction in demand for time deposits. For its part, the outflow of deposits in dollars will depend on the political stability that can be achieved with the policies of the new cabinet”.
In relation to loans, he affirmed that a scenario of falling activity, such as the one expected for the second half of the year, will have a direct correlation on the dynamics of credits, added to this to the new scenario of rising interest rates that will end up depress the demand side.
“We expect a retraction of the stock and an increase in non-performing loans”, concluded the consultant.
Source: Ambito
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