Between private and public banks, it was observed that the largest increase in the month in premiums received for passive repos with the BCRA was recorded by private banks.
The banks showed growth in their operating results in July and liquidity remains at high levels. According to the Central Bank’s Bank Report, the total comprehensive income accumulated in the first 7 months of the year reached 18.1% of net equity (ROE). These levels are above those of the same period in 2022.
Between private and public banks, It was observed that the greatest increase in the month of premiums received for passive repos with the BCRA was recorded bys private, with a rise of 122.6% real year-on-yeareven higher than the real 81.2% observed in the price differences on its bonds and other financial securities.
Here the ROA showed an improvement from 1.6% of netted assets in July last year to 5.9% in the same month this year, slightly below the 7.5% in June, the best monthly result since the end of 2019 . In the public banksMeanwhile, the difference in prices of more than 137% in real terms explained the bulk of the recovery in operating results, which went from being negative by 0.2% of netted assets in July of last year to 3.4% in the same month of 2023 to close the accumulated value of the last twelve months at 3.6%.
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At the same time, it is highlighted that the increase in banks’ assets is explained by the “price difference” with a real advance of 108.3%. It was followed as an explanatory factor by the increase in bonuses for passes, that is, by the placements of weights in the instruments of pmonetary policy of the BCRA shorter term. Thus, the banks’ profit, measured through the total comprehensive income, grew 191.9%. If it is represented on the net assets of the financial system, the result went from 0.8% to 4.9% between July 2022 and the same month of this year, leaving an accumulated ROA in the last twelve months of 3.3% .
As the document itself also explains, the banks experienced a increase in financial margin (higher results from securities, interest income and price differences, all partially offset by increased interest expenses) tempered by higher exposure losses to monetary items and tax burdens, among other factors.
Banks at high levels of liquidity
For its part, at the beginning of the second half of the year, the liquidity of the Finance system remained at relatively high levels. In July the liquid assets In a broad sense, they totaled 81.3% of total deposits at the systemic level (80.1% for items in pesos and 88% for the segment in foreign currency), 0.2 pp below last month, although 12.3 pp higher than in the same period of 2022 and 26.2 pp higher than the average of the last 10 years.
Meanwhile, the sector liquidity remains at high levels, both from a historical perspective as in an international comparison. In July the broad liquidity ratio totaled 81.3% of deposits to systemic level (80.1% for the segment in national currency and 88% for that in foreign currency), 0.2 pp below last month’s record.
Regarding the composition of the liquidity in pesosbetween the ends of the month the share of net passes to the detriment of the holding of BCRA instruments and the National Treasury species admissible for integration of Minimum Cash. In year-on-year terms, liquid assets in the broad sense grew 12.3 pp of total deposits.
Source: Ambito
