In the first quarter of the year, the total number of financial entities accumulated profits of $2.42 trillion. With this result, it was the best first quarter for banks at least since 2010.
Argentine banks had the best quarter in at least 14 years
Banks had a very good first quarter in terms of profits, revealed the consulting firm Econviews. In the first quarter of the year, the total number of financial entities accumulated profits of $2.42 trillion. With this result, It was the best first quarter for banks since at least 2010.
“With the deregulation of the minimum fixed-term rates, its spread improved and the banking business itself recovered,” he said. Econviewsand added that “the public sector continues to have a very large place in the banks’ assets. We hope that it begins to reduce and that credit gains ground again“.
Breaking down the total result, there were improvements in almost all areas compared to the same period last year. First of all, The financial margin increased by 105.8% in real termsan increase of $7.74 billion.
Within this issue, the report highlights several things to analyze. “Net interest income is starting to improve. Although it is still negative, this red has already been cut almost in half. That is why we say that the banking business is being reborn, although it still has a long way to go. The elimination of minimum rates for fixed terms played a very important role here. This allowed the banks to lower their funding costs, which more than compensated for the drop in the lending rate. This is how interest income fell, but less than expenses, causing an improvement in the net,” said the bank. consultant.
From Econviews they also mentioned that It may positively influence that banks are collecting loans that were agreed upon at higher rates than the current ones., while they take shorter deposits incorporating lower rates. “Given that the evolution of net interest income shows a lag with respect to the rate spread, we can infer that in the following months this account continued to improve,” they explained.
“The result for securities was lower. This is explained because this account included the Leliqs, whose stock was finished being dismantled at the beginning of the year. That is, it is not due to a decrease in the holding of public securities,” they explained and closed: “Repo premiums had a very strong growth. Here we see the other side of the coin of the disarmament of Leliqs, given that these pesos mostly went to passes. “As the data available is up to March, not yet.”
Source: Ambito
