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Slight drop in loan interest after the Central Bank's rate cut: when will credit rebound

2024-04-18T22:14:41.124Z

Highlights: Some banks have already lowered rates for the second month in a row. The entities do not yet see a reactivation of demand, but they are optimistic for the coming months. The decline in credit demand has not yet been seen, according to Clarn's survey of the entities surveyed by Clarn. The entity reduced personal loan rates to 69% annually and 52% annually for retirees and pensioners.


Some banks have already lowered rates for the second month in a row. The entities do not yet see a reactivation of demand, but they are optimistic for the coming months


Almost a week after the Central Bank lowered, for the second time in a row, the reference rate of the economy, Argentine banks began to adjust the interest they charge for loans to families and companies. Although this is the second downward adjustment so far this year,

most of the entities surveyed by Clarín stated that a rebound in credit demand has not yet been seen.

After last Thursday, the BCRA lowered the economy's reference rate by another 10 percentage points, banks

quickly came out to cut the yield they offer on fixed-term deposits.

This week we also see the other side of the coin: some entities

also began to lower the rate they charge for loans.

The declines are in

line with the drop in the pass rate, which went from 80% annually to 70% annually.

At Banco Nación they announced this Wednesday

a new reduction of around 14%

in the interest rates on loans for MSMEs and large companies. This cut also applies to agricultural producers, who will be able to finance the purchase of nationally produced machines at 51.6% annually.

Meanwhile, the entity reduced personal loan rates to

69% annually

for what they call

"open portfolio", to 52% annually

for those who

collect salaries at the bank and to 50% annually for retirees and pensioners.

Public banks usually take the pike with these cuts as a way to establish a new scheme for the entire financial system. "In order to strengthen the positioning as market leaders and improve participation,

long-term rates were substantially reduced, bringing them into line with short-term rates, which

will increase the average term of financing and the duration of capital balances. in line with the commercial objectives set for this year," they explained in the Nación.

At Banco Provincia, meanwhile, they lowered rates and took out special loans for

people without previous debts in the financial system with a rate of 55% per year.

For their part, the City explained that the reduction in rates on average is in line with the reduction in the reference rate. Starting this Friday, the entity will announce the reduction of its special line for students,

which will reach 47%.

Meanwhile, in private banks the adjustments began on Friday, although not in all entities and with different magnitudes. At

Banco Santander, the rate reduction was between 15 and 19 percentage points.

Meanwhile, at Banco Macro, the personal loan rate was around 88%. In another entity, they stated that loans from the individual sector went from having a rate of 137% annually to 85% on average these days.

Where a reduction in rates was seen was in the

Cuota Simple plan, the state program that replaced Ahora 12.

The rate for purchases of 3 and 6 installments fell from 80% to 70% annually, in line with the rate of passes, which implies a monthly rate of 5.83%.

Credit to the private sector is in clear decline. According to the latest Report on Banks presented by the BCRA this Wednesday, with data as of February of this year, financial intermediation, that is, the business that entities do of taking deposits and then lending them, was once again in decline.

"The real balance of credit in pesos to the private sector decreased in January, with declines in all groups of financial entities and in most financing lines. In year-on-year terms, the real balance of financing in pesos to the private sector accumulated a drop of 30.1%," highlighted the official report.

Despite the two consecutive rate cuts, banks have not yet seen a rebound in credit demand

, a symptom of the cooling of the economy. However, they remain optimistically cautious about what can be seen in the coming months.

"We believe that in the coming weeks, we should start to see a small jump in loan placements," they said at one bank.

In another private entity they stated: "Eventually, if macroeconomic stabilization is consolidated and the negative cycle in the level of activity is reversed, we anticipate a moderate return of the consumer mortgage credit market, for which we are in the process of redesigning our commercial process and credit to participate in it".

S.N.

Source: clarin

All business articles on 2024-04-18

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