State Banks Pose NPL Risk

Despite rapid growth in recent years, total assets of the Argentine banking sector remain very small relative to GDP, and a low client loans to deposit ratio shows the potential for further growth. While private banks have begun to reduce their risk exposure in the face of the downturn, we believe that the continued expansion of state banks' loan portfolio's could see non-performing loans spike over the coming months, which poses the largest risk to the banking sector.

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