Argentina Pressures Banks To Lower Rates As Economy Slows
16 Dezember 2011 - 3:53PM
Dow Jones News
Argentina's biggest private and public sector banks have pledged
to lower the interest rates they charge businesses and consumers
after meeting with the head of the central bank.
President Cristina Kirchner is leaning on banks to keep
affordable credit flowing to an economy that private sector
forecasters and the government say will grow at a more subdued pace
next year.
Executives from Banco Santander Rio SA (BRPBF, BRIO.BA), Banco
de La Nacion, Banco Ciudad de Buenos Aires, Banco Galicia SA, Banco
Macro SA (BMA, BMA.BA), BBVA Banco Frances SA (BFR, FRAN.BA),
Credicoop and HSBC Argentina met with Central Bank of Argentina
President Marco del Pont on Thursday to discuss interest rates,
according to a statement posted on the presidency's website.
Bankers agreed to gradually lower rates on loans starting
Friday.
"There is no justification for the current level of rates,
especially for the productive sector, which means concrete actions
are needed to reduce it," Marco del Pont was quoted as saying.
A central bank spokesman declined to comment about the statement
and Thursday's meeting.
The central bank appears to be taking aim at what it sees as an
excessive spread between the rates that banks charge on loans and
what they pay on deposits.
While the rate banks paid on 30 day certificates of deposit for
up to 100,000 Argentine pesos ($23,360) fell to 14.5% on Dec. 2
from 15.2% a month earlier, the rate banks charge businesses for
one-week loans rose to 23.6% from 21.9% during the same period,
according to central bank data.
"There is a risk that banks repeat the same behaviour they had
during the 2008-09 crisis, when they increased spreads and
profitability," Marco del Pont said in the statement.
Banks have profited handsomely from Kirchner's high-growth,
high-inflation policies that have stoked demand for consumer
credit.
The central bank's most recent data put the financial system's
annualized return on equity, a measure of profitability, at a hefty
22.5% in September.
Argentina's booming economy is set to slow next year, with Marco
del Pont last week forecasting 6% growth in 2012.
Demand for goods from Brazil, Argentina's top trade partner, is
already showing signs of cooling, while galloping inflation at home
is expected to weigh on an economy that will likely grow about 9%
for a second straight year in 2011.
Further complicating the economic outlook, Kirchner has started
to cut generous energy subsidies to consumers and is thought to be
crafting an inflation-fighting plan that would seek to limit annual
wage hikes at around 18% next year.
The government's heavily criticized statistics agency put annual
inflation at nearly 10% at the end of October, while most
private-sector estimates say it was between 20% and 25%.
Both measures, while necessary to stabilize the economy and
public finances, could further depress growth through a reduction
in consumers' disposable income.
-By Ken Parks, Dow Jones Newswires; 54-11-4103-6740;
ken.parks@dowjones.com