The numbers of the financing of the banking sector show that the Cordovan companies, like those of the rest of the country, faced the beginning of the quarantine in a complicated situation after two years of crisis and devaluations.
The latest data from the Central Bank’s quarterly balance, as of the last day of March 2020 (with only 10 days of strict isolation), show a significant increase in late payments and a sharp drop in access to loans from financial institutions. .
This scenario most likely worsened in the second quarter, with the full impact of the Covid-19 pandemic on productive activities and on families.
More delinquency
At the close of the first quarter of 2020, the proportion of loans from financial institutions granted to debtors in the province of Córdoba that are not in a normal situation (out of the total) more than doubled from the level of two years ago.
On the last day of March 2018, before the devaluation saga and the subsequent crisis were unleashed, 3.3 percent of loans were granted to debtors with arrears of more than 31 days; a year later, that percentage had risen to 5.9 percent, and, on the same date in 2020, it reached 7.5 percent for the entire provincial economy.
This deterioration occurred, above all, in the productive sectors, because the families (individuals in relation to dependency) from Cordoba only saw their delinquencies rise from 5.4% to 5.9% in these two years (there was a rebound of two points in March 2019 that later fell this year).
In contrast, non-family economic activities had greater problems keeping up with their financial commitments.
The items that least increased the loan portfolio in an abnormal situation between March 2018 and the same month of 2020 were construction, which went from 3.7% to 6.4%, and services, up from 2.9% at 4.6%.
The latter has a wide range of activities, ranging from leisure and tourism, to financial intermediation, through education, health, social services and professionals.
On the contrary, within the relevant activities in Córdoba, the worst performance was shown by the industry (it went from 0.9% to 8.6% of non-performing loans); trade (from 3.4% to 18.1%), and primary production (especially agricultural), which increased from 1.4% to 5.1%.
The electricity, water and gas sector also worsened (from 4.4% to 25% of arrears), the item with the highest delinquencies, but with the lowest participation in the amounts.
Less credit
The increase in banks’ irregular portfolio was combined with a very significant drop in credit assistance.
In the two years analyzed, the total loan balances of financial institutions in the province fell 37.9% in real terms and ended March 2020 at 279,553.36 million pesos (there was a nominal rise of only 40.6%, when inflation exceeded 120% in this period).
The main item is that of loans to families, with more than a third of the total, which had a drop similar to the average, which was similarly divided between the two years.
Among the economic activities, the only one that improved the level of credit was construction, always before the start of the pandemic.
This sector, which represents 4.9% of total loans, had a very important rebound between the first quarter of 2018 and the same period in 2019. Although it has dropped almost 25% since then, the balance in the biennium is positive with a up 20.5% in real terms.
The rest did not suffer the same fate, since it showed year-on-year falls since 2018. The one that stumbled the most was electricity, gas and water, with 72.3%.
Meanwhile, in the most relevant sectors, the losses were agricultural (40.6%), industry (44.3%), commerce (36.6%) and services (39.1%).
Despite the fall, between the four they concentrate 55% of the total stock bank financing.
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