Slowdown in credit continues with slow deterioration

At the pace of the economic slowdown, there are lower bank profits, the slowdown in credit due to high interest rates and its further deterioration, particularly in consumer credit.

(They launch a new line of credit for small businesses).

Bank profits reached $3.08 trillion and fell 37.7% at the end of March, compared to the same month of 2022 when they were $4.95 trillion, according to statistics from the Financial Superintendence.

In particular, during March a slowdown in the gross portfolio was reported in real terms, registering an annual variation of 0.11%.. The gross balance of the portfolio amounted to $673.9 trillion and the depth indicator stood at 44.6% of GDP when a year ago it was 48% of GDP.

According to the Superfinanciera, the balance that reports arrears of more than 30 days continues to grow in intermonthly terms, as well as in real annual terms and separating by modality, consumption completed six months of positive annual variations.

The overdue portfolio reached $29 billion. In intermonthly terms, an increase in the overdue balance of $1.4 trillion was reported.

The current portfolio corresponded to $644.9 trillion, this represents 95.7% of the total balance.
For its part, the portfolio quality indicator due to arrears for the total portfolio, that is, the ratio between the overdue and gross balance is 4.3% and shows an increase of 46 basis points compared to the same month of 2022 when this reached 3.85%.

(Personal finances: when it is appropriate to ask for credits).

For the Superfinanciera, the consumer portfolio reported the highest indicator with 6.7%, which shows a greater deterioration and when a year ago it was 4.4%, followed by microcredit that stood at 6.2%, commercial at 3.2% and housing at 2.7%.

Given the increase in impairment, in March provisions grew mainly due to the procyclical component. Total provisions, or impairment under IFRS (International Financial Reporting Standards), closed the month with a real annual contraction of 4.2%, with a balance of $40.4 trillion ($39.9 trillion excluding Additional General Provisions).

Likewise, the additional provisions due to internal policies of credit establishments totaled $1.6 trillion. The balance of provisions for the countercyclical component reached $5 trillion.

(Banks continue to lower interest rates on loans).

For its part, the default coverage indicator, calculated as the relationship between the balance of provisions and the overdue portfolio, stood at 139.3%.

For the Financial Superintendence, This translates into that for each peso of the portfolio that is more than 30 days past due, credit institutions have close to $1.4 to cover it.

Finally, the capital levels make it possible to mitigate the risks inherent in the development of the activities of credit institutions. Total solvency was 17.87%, 8.87 percentage points higher than the minimum required (9%).

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