Río chair sees private sector lending picking up this year

Bank lending to Argentina's private sector is expected to take off in 2005, Banco Río chairman Enrique Cristofani said in a press release. "This recovery started in 2004, where we saw a steady increase in the demand for loans. Both approved applications and credit operations have doubled compared to the beginning of the year," he said. Argentine banks increased their lending to the private sector by 25.6% in 2004 to 38.5bn pesos (US$13bn), according to local research center CEFID. "As for commercial lending, we focus on SMEs. About 70% of the loans to this sector are to acquire machinery and finance investments of up to five years," Cristofani said. "Argentina is gaining trust abroad and the international situation favors us. The basis of current growth is based on a fiscal surplus, low inflation and a competitive peso. We expect Argentina to grow around 6-8% in 2005," he said. Banco Río saw its losses widen in the first quarter to 307mn pesos compared to a 26.7mn-peso loss in 1Q04. Río is one of Argentina's top three private banks and is a subsidiary of Spanish financial group Grupo Santander (NYSE: STD).