At a glance: The loan portfolio of Argentine banks in May

Loans to households and companies in Argentina grew by double digits in the 12 months through May.

In a report, the central bank said loans to households grew 13.1% in real terms, while loans to companies were up 7.9%.

Loans to the private sector grew 10.7%, but in nominal terms they expanded 37.9%, state news agency Télam reported.

Compared with April, the portfolio of loans to the private sector was 2.1% bigger in real terms.

In June, 2.621bn pesos (US$155mn) in inflation-adjusted mortgage loans were awarded, compared with 1.642bn pesos in May and 1.249bn pesos in April.

In a financial stability report covering January-June, the central bank said: "Loans are expected to continue to accelerate resulting from a rebound in demand, given the improvements in employment, real wages and economic activity."

Last month, Aaron Freedman, associate managing director for Latin American banks at rating agency Moody's, said Argentina's banking sector has the most growth potential in the region.

"We do expect that we'll start seeing loan growth at rates above inflation even if the nominal rate is lower than it was. Adjusted for inflation, we are going to see some expansion of the portfolio this year," he said at the time.

The IMF forecasts the country's economy, after contracting last year, will expand 2.2% this year and 2.3% next.

Inflation was 1.2% in June, bringing the annual figure to 21.9%. While still steep, the figure reflects continued deceleration and is well below the 40.5% recorded in April 2016.

Cumulative inflation for 2017 hit 11.8% in June according to the country's statistics agency Indec, where prices rose most rapidly for housing, utilities and fuel (21.6%), education (21.9%) and communication (20.1%).

NPLs

The NPL ratio for the overall financial system was 2.0% in May, up from 1.9% in the same month last year. The ratio for state-owned banks was 2.1%, down from 2.2%, and the ratio for domestic private banks was flat at 2.0%. Meanwhile, the ratio for branches and subsidiaries of foreign banks was 1.7%, up from 1.3%, and that of non-bank financial institutions was 3.9%, down from 4.8%.

DEPOSITS

Overall private sector deposits, in real terms, grew 14.4% in May compared with 5.8% growth registered in May last year. Local currency deposits increased 2.7%.

ROA

Return on assets was 3.8% in May, up from 2.7% in April.