Finance Prof
Well-known member
Rising credit card defaults put Argentine bank stocks on alert
The increase in credit card defaults recorded in Argentina in April, which continued in May and June, not only casts doubt on the continued consumption in the coming months, but could also affect the stock market of the financial sector.
This is what the consulting firm Labor, Capital and Growth (LCG) warns in its latest report, in which it warns that the problem, which was recorded according to official data up to the fourth month of 2025, tends to worsen.
“The default on household financing, based on the calculation of expected credit losses (according to international standards), will negatively impact banks’ bottom lines,” the LCG report states.
You may also be interested in: Peso weakens after Economy Minister ironically urges critics to buy dollars
For financial sector stocks, 2025 is a negative year. So far in 2025, Grupo Supervielle’s stock has plunged 25%; Banco Macro’s, 24.3%; Grupo Financiero Galicia, 15%; and BBVA, 11.5% on the S&P Merval. While the market declines are due to macroeconomic issues, the increase in household delinquency could have an even greater impact.
Both banks and companies that provide financial services are beginning to analyze with concern the data on payment delays.
According to the consulting firm LCG, “public data on defaults (until April 2025) show that it rose to 4.6% for personal loans and 2.9% for credit cards.”
“These are not alarming levels, but various banks report that default rates continued to rise in May and June, affecting families across various economic segments,” says LCG.
The report details that “a pattern was seen in cards: first, more and more cancellations of amounts just above the minimum, and then, not even reaching the minimum (late payments).”
The report argues that among the possible factors behind the default are, first, that family loans, essential for sustaining consumption, began to weigh heavily when compared to wages that are struggling to grow, and second, the interest rate.
“Regarding wages, personal loans showed an accelerated increase compared to the April 2024 minimum, while credit card financing is already at its highest level. In this context, it seems reasonable that families are having difficulty paying their debts,” the report adds.
The survey indicates that “these issues may herald a further slowdown in the growth of household loans and begin to raise doubts about the ability to continue sustaining the increase in consumption in the coming months.”
Financial services companies also report defaults
According to a study conducted by the Argentine Chamber of Financial Services Companies (CAEFPI), “an increase in defaults has been observed during the first half of the year compared to last year.”According to data from one of the Chamber’s member companies, the rate of late payments exceeding 30 days is at 13.50% at 60 days, 10.40% at 60 days, and drops to 8.30% at 90 days. Compared to the previous year, the sources consulted indicate that the increase in late payments in the short term has ranged from 5% to 10%.
In this regard, the credit rating agency Moody’s has joined the list of organizations beginning to warn about a significant increase in Argentine debt levels. “In recent quarters, a sharp deterioration has been observed in the performance of loan portfolios originated by Non-Financial Credit Providers (NFCs),” they warned.
In its latest report, the rating agency stated that “the average debt-to-salary ratio has increased sharply since the second half of 2024,” rising 72% between June of last year and January 2025. It compared this to “levels similar to those of 2018.”
Rising credit card defaults put Argentine bank stocks on alert - Buenos Aires Herald
International financial regulations require accounting for potential credit losses. The problem was reported in April and continued in May and June
buenosairesherald.com
