Banking Delinquency Stabilizes Overall in Argentina, but Personal Loans Rise

Argentina's banking delinquency rate halted its 19-month upward trend in June, showing a slight decrease from 7.7% to 7.6% of the total private sector loan portfolio. This marks a marginal relief for the financial system.

Despite the overall dip, delinquency levels remained stable for households at 12.8% and businesses at 3.5%. Notably, personal loans continued their climb, increasing from 15.9% in May to 16.3% in June. This persistent rise in personal loan defaults highlights ongoing financial strain for individuals.

The Central Bank (BCRA) confirmed these figures in its official Banking Report. The slight decrease was attributed to a slower real growth rate in irregular loans and an increase in total credit. However, when considering peso-denominated loans, which constitute about 77% of the total, individual consumption loans stagnated. This suggests that the stabilization is partly driven by a constrained supply of credit, particularly in pesos.

While delinquency on credit cards eased in June, it increased for personal and vehicle loans, remaining largely unchanged for mortgages. For businesses, the delinquency rate held steady at 3.5%, though the BCRA noted slight monthly increases in the construction, commerce, and industry sectors, which are most affected by the current economic model. The bank emphasized that the overall probability of default for the total credit portfolio decreased to 2.6%, with banks maintaining high coverage against credit risk.