Argentina Banks Are An Oportunity But Patiencie is Needed

  • Argentina’s new pro business government has taken decisive action to reinsert the country in the financial world.
  • Argentina’s banking sector accounts for 15% of GDP compared to 40% in other LatAm countries and 160% in developed economies.
  • The sector needs to grow only 4x to catch up with neighboring developing economies. The new government has already signaled it wants credit to grow.
  • With a small number of medium and large banks accounting for most of the credit business and limited new competition, incumbents stand to gain the most.

Slowly but surely Argentina’s road to “economic normality” seems to be on track. A fifteen-year long sovereign bond default and financial isolation have left plenty of potential opportunities for the enterprising (and shrewd) investor. The banking sector stands to gain the most if the new government achieves its goal of macroeconomic stability, with only 4x credit growth needed to catch up with neighboring Brazil and 7x to catch up with Chile. This makes for an incredible long-term growth opportunity in a country that ranks 24th in the world in GDP terms. The potential is overwhelming, but growth will not come overnight. For those investors gifted with the virtue of patience, we introduce the four Argentinean banks trading in the US markets.

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