Jun
11
Argentine banks fell in New York
trading after the central bank capped consumer interest rates
yesterday, potentially damping profits for lenders.
Grupo Financiero Galicia SA’s American depositary receipts
sank 7.2 percent to $13.97 at 1:55 p.m. in New York, the biggest
decline since January, while Banco Macro SA retreated 5.2
percent and BBVA Banco Frances SA lost 5.1 percent. The
benchmark Argentine Merval fell 0.2 percent.
After calls from Argentina’s Economy Minister Axel Kicillof
and Cabinet Chief Jorge Capitanich to end “usury” by lenders,
the central bank led by Juan Carlos Fabrega decided to regulate
rates on personal loans and credit cards. The government is
trying to reactivate lending amid sluggish growth in South
America’s second-largest economy, which is forecast to expand at
the slowest pace in the hemisphere after Venezuela, according to
the International Monetary Fund.
“The new rules are negative for the profitability of banks
under coverage, particularly in a recessive economic
environment, in which delinquency rates are poised to
increase,” Raymond James Argentina analysts Federico Rey-Marino
and Santiago Ruiz Guinazu wrote in a report today.
Galicia and Macro may see profit eroded the most, since
credit lines targeted under the new rules account for about 60
percent of their loan portfolios, according to Raymond James.
The figure is 50 percent for Banco Frances.
Peso Slide
Bank loans to the private sector rose 29 percent in April
from a year earlier, a slower pace than the 42 percent increase
from in the same period a year ago. Banco Macro’s first-quarter
profit quadrupled to 1.19 billion pesos from a year earlier,
after a devaluation of the peso in January boosted the value of
its foreign-exchange holdings.
Interest on personal loans can’t exceed 1.25 to 2 times the
rate of the central bank’s 90-day notes, known as Lebacs,
according to resolutions published yesterday. Lebacs yield about
26.9 percent. Caps will result in rates of 34 percent for car
loans, 39 percent for personal loans and 49 percent for credit
cards, Raymond James said.
To contact the reporter on this story:
Camila Russo in Buenos Aires at
crusso15@bloomberg.net
To contact the editors responsible for this story:
Brendan Walsh at
bwalsh8@bloomberg.net
Rita Nazareth
Argentine banks fell in New York
trading after the central bank capped consumer interest rates
yesterday, potentially damping profits for lenders.
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