Banco Hipotecario’s (BYMA:BHIP) 2Q 2019 result confirmed a declining profitability trend and lower activity, initiated in previous quarters. Although the period’s net income (ARS 616 million) lies above 1Q19 figures (ARS 36.5 million), it is only 20% higher than the profit obtained in 2Q18, well below the annual inflation rate.
Net interest income plummeted 77% in annual terms, and grew only 5% over the previous three months, which had already been a bad quarter. In a context of a stagnant commercial banking business, loan interest income showed no growth in the quarter (2% QoQ) and rose only 27% in the year, again below inflation.
Different was the case with securities income, which, due to a larger position in Central Bank Leliqs and higher yields paid by these bonds, rose 35% between quarters and 141% in the last 12 months. Similar to what has been the case in recent quarters, the bank posted a material loss of close to ARS 1 billion in terms of FX result.
Deposits grew only 2% in the last quarter and 10% year-on-year. Private-sector credit, in turn, dropped both in quarterly and annual terms (-5% QoQ; -13% YoY), deepening the activity slowdown witnessed in this and in previous quarters.