Country Awards for Excellence 2020: Latin America (including Central America & Caribbean)
It is an understatement to say that the operating environment for Argentine banks has been deteriorating during the past year. The sovereign is heading towards default, and the economy was firmly in a deep recession before Covid-19 emerged.
In past crises the banks that fared best were those that could rely on the income that they generated from taking the cheap funding from deposits and earning high returns from government securities.
However, in this particular crisis the government is eschewing old-fashioned notions such as positive real interest rates, so this isn’t the reliable approach it was.