Cash-flush Argentine banks position for anticipated credit boom
(Refiles to fix typo in paragraph 2)
By Richard Lough
BUENOS AIRES Feb 10 (Reuters) - Argentine banks are gearing up for a potential lending boom that could push depressed private credit demand to a 16-year high, bolstered by the reforms undertaken by newly-elected President Mauricio Macri.
A recovery in Argentine banking also depends on whether Macri can seal a deal with U.S. creditors over defaulted bonds but talks with these debt holders have lately shown signs of progress.
An end to the 14-year standoff between Argentina and the lenders who refused to participate in the earlier debt restructuring could pave the way for Argentina's return to global credit markets and help revive investment flows into the South American country's economy.
Macri has fueled confidence by installing a more free market central bank chief, floating the currency and unwinding capital controls, leading banks to maneuver to take advantage of the reforms.
Banco Santander Rio S.A., one of the country's largest foreign-owned banks, has recently started offering a 4.0 percent annualized interest rate on 30-day U.S. dollar deposits. The move is aimed at winning business from Argentines who, scarred by past crises, often hide an estimated $200 billion under their mattress, in a safe deposit box or abroad.
Moreover, the bank plans to expand its retail network to 500 branches nationwide from 390, part of 6 billion pesos in annual spending planned through 2018, said Sergio Galvan, the bank's chief economist.
"We're very upbeat about credit demand," Galvan said, referring to the sector overall. "But we'll have to see how the capitalization of banks evolves and whether it can keep apace with this appetite for credit." Continuación...