Moody's projects that private credit will grow up to 50% by 2025

Moody's estimates that loans to the private sector could grow up to 50% in real terms this year, driven by increased banking competition, rate compression, and the advancement of the capital market.

In its latest report on the Argentine financial system, the international agency highlighted that the new economic scheme implemented by Javier Milei's government has begun to generate substantial changes in the credit dynamics, particularly in the realm of financing in pesos and dollars.

The portfolio in pesos leads the growth

Moody's indicates that the main driver of this expansion will be consumer-related loans and new mortgages. The rating agency also foresees an increase in dollar loans, mainly aimed at exporting companies in the agricultural and energy sectors.

The participation of private credit within the banking system grew significantly: it went from 23% in 2023 to 40% in the first months of 2025. This rise contrasts with the decline in public sector financing, which in April 2024 represented 51.3% of the system's assets.

More credit in 2025

The report indicates that credit penetration reached 10.9% of GDP in 2024 and could climb to 13% in 2025. Although the ratio remains below regional averages, it represents an improvement compared to the historical lows of 2023.

However, the growth will not be without risks. Moody's anticipates a moderate increase in delinquency, from 2% to 3%, due to the increase in loans to more vulnerable or unbanked sectors.

Banking competition and capital market

With a lower supply of deposits compared to credit growth, competition among banks intensifies, generating pressure on passive rates and reducing profit margins. "Banks are struggling to retain their market share," the report describes.

In this scenario, financial entities are turning more frequently to the capital market. Since the end of 2024, more than 40 Negotiable Obligations have been placed for over USD 1.5 billion. According to Moody's, this trend will deepen in 2025, making the capital market a key source of funding.

Liquidity and capitalization under control

Despite credit growth, liquidity levels will remain stable, between 30% and 40% in pesos and around 65% in dollars. Regarding capital, a slight decrease in indicators is expected due to the increase in risk-weighted assets, although no deterioration in the financial system's solvency is anticipated.

"The solidity of the Argentine banking system remains adequate to face the challenge of a higher volume of credit," concludes Moody's.