Uneven impact of restrictions: money grew in banks but there were fewer loans

Juan Manuel Barca

05/10/2021 7:49 AM

• Clarín.com

• Economy

Updated 05/10/2021 7:59 AM

The restrictions

resulting

from the coronavirus pandemic had a

different

impact

on the financial system in 2020

, causing an

increase in private deposits

per inhabitant of 19.3% and a contraction of

private credit of 5.2% compared to inflation

, according to a report from the Argentine Institute of Fiscal Analysis (IARAF).

This was due to the fact that, on the one hand,

higher-income employees increased their savings

and, on the other hand,

banks saw less incentive to lend

in a context of regulated rates, official programs with subsidized rates and an aggravated fall in activity due to the closure of the main economic activities.

“The Covid-19 pandemic had a strong negative impact

on the

loan / deposit

ratio

.

It is partly explained by an accentuation of the real fall in loans.

And in part due to the rise in deposits as a consequence of the large increase in the amount of money that the policies implied to face the pandemic, ”said Iaraf.

The director of the institute, Nadin Argañaraz, explained to Clarín that "from the employees' side,

a portion received income that they could not spend

due to the restrictions,

so it went to savings

." Thus, the paralysis of the economy created a

“liquidity dam”

. In the case of companies,

"some borrowed to pay salaries, while others made use of their deposits,"

said the economist.

Another of the data highlighted in the report is the growing

inequality in the financial system between CABA and the provinces

. In 2020, private deposits per inhabitant

in the City increased a real 32.8% in CABA and 8.4% in the interior of the country

, while

total loans per inhabitant decreased 8.5% and 1.8%, in each case

. Thus, the Buenos Aires district concentrated 9 out of 10 pesos deposited and loaned.

"Although it is not the object of this document to explain the reasons for such a high difference, surely

the different levels of per capita income between CABA and the interior of the country affect

,

and also the fact that

many companies with operations throughout the country have their legal domicile. / fiscal in CABA

and from the latter they operate with the banking system ”, explained the IARAF.

In 2020, the five provinces with the highest level of deposits per inhabitant were Tierra del Fuego ($ 158,297), Chubut ($ 131,281), Santa Cruz ($ 116,680), La Pampa ($ 116,235) and Neuquén ($ 111,725).

At the other extreme, the five provinces with the lowest level of deposits per capita were Corrientes ($ 39,944), La Rioja ($ 36,384), Misiones ($ 35,016), San Luis ($ 34,493) and Formosa ($ 28,636).

Although the City is the richest district in the country, Tierra del Fuego is a province with high incomes and a smaller population

, which means that the amount of pesos deposited and loaned per inhabitant is higher in southern territory in relative terms. All in all, the highest real growth in deposits occurred in Mendoza (35.9%), followed by CABA, Santa Cruz, Santiago del Estero and La Pampa.

On the other hand, the loan / deposit ratio by jurisdiction is a key indicator because it reflects how many of every $ 100 deposited in the province are turned into loans in the same district. According to the IARAF ranking, Tucumán

led it in 2020 with 88%

, followed by Salta with 83%, Misiones and Neuquén with 79%, while at the other extreme were Santa Cruz with 35%, Río Negro and San Juan with 40%, Chubut and Mendoza with 42%.

Regardless,

the index in question had a real 6.9% drop across the country

.

Thus, in recent years, banks went from lending to the private sector and families to allocating part of their funds to the Central Bank, which captures them with Leliq and passes to reduce working capital and finances the Treasury.

"The loan / deposit ratio has been declining due to the presence of the treasury in financing the deficit and its subsequent sterilization with liquidity instruments

," Argañaraz explained.

YN

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