The failure of corporate banks has reached its highest level in 12 years

Business bank failure reaches 4.6% total lending to the sector in July, an increase of 3.3 percentage points in twelve months which illustrates the difficulties of the productive sector even before the triggering of the benchmark rate to 85% after the STEP elections. This is the highest figure since 2007. In addition, total defaults reached 4.7%, more than double what it was a year ago.

Bank financing for businesses is down sharply, down 24.4% in real terms (that is, taking into account the effect of inflation). This is with the July data, when the government had achieved some financial stability and exchange, and then broke through the crack following the open, simultaneous and mandatory primaries of August 11th.

Thanks to the decline in corporate financing, the quality of the banks' portfolio has deteriorated. In fact, the contraction of credit is for many. In other words, if firms that had difficulty making payments remained stable and the stock of credit decreased, the weight of the irregular portfolio would increase.

But beyond this effect, more and more companies are having difficulty meeting their obligations. July is the highest level since 2007 and even exceeds the crisis of 2008-2009, the previous peak.

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And it is expected that when the August data arrives – the month when the benchmark rate jumped to 85% – a more pronounced effect is observed.

"It is expected that deteriorating economic and financial conditions will be combined to create an unfavorable environment for the fulfillment of financial obligations. The persistence of high rates combined with tightening conditions imposed by banks and an expected further contraction of real wages and employment play in this regard, "said economist Santiago Romero Manoukian. The chronicler.

According to data from the Central Bank's bank report, in July, the irregularity of private sector financing rose to 4.7% of the total portfolio. It increased by 0.1 percentage point over the month and 2.4 points over one year.

Family arrears increased 1.3 percentage points year-over-year, although they declined from June to 4.8%. Consumer credit (staff and cards), which stands at 5.4% but declines in July, remains the largest, while in terms of mortgage credit, it remains at 0.7%.