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ECONOMY | Yesterday 13:15

Milei opens up Argentina's largest bank to private capital

Before travelling to the United States, Milei signs decree transforming Banco Nación into a public limited company; Privatisation had been previously proposed by the government, but Congress rejected it.

President Javier Milei has issued a decree transforming Argentina’s largest bank into a private company, paving the way for an injection of capital into Banco Nación.

Through the move, Banco Nación has been turned into a joint stock company. The news was confirmed by Presidential Spokesperson Manuel Adorni, who wrote on social media: ‘The President of the Nation has just signed the decree that transforms Banco de la Nación Argentina into a public limited company. God bless the Argentine Republic. End.”

Milei, 54, issued the decree before flying to the United States, where he will hold a series of key meetings and deliver a speech at a gathering of conservative leaders in Washington DC.

Banco Nación, as it is most commonly known, is Argentina’s largest bank and was tasked with providing social assistance to the population. Previously state-owned, the Milei administration had initially included it in a list of companies to be privatised that was sent to Congress in a sweeping reform bill.

During negotiations, the government eventually agreed to remove the bank from the list, in order to smooth the bill’s passage.

The same bill, which subsequently became law, also granted Milei extraordinary powers to declare an economic, financial, energy and administrative emergency for a period of one year, hence the framework for this latest move.

“The transformation of Banco de la Nación Argentina into a public limited company will contribute to modernising its legal and operational structure, allowing greater flexibility in its management and adaptation to the best practices of the financial market,” Milei wrote in the decree. 

In a statement issued last year, the bank’s authorities described the transformation into a “sociedad anónima” or public limited company as “essential,” stating it would allow Banco Nación to “increase lending to PyMES (small and medium sized businesses) and families.”

“To sustain growth, the institution will need to increase its funding, which it will be able to do by opening up its capital, for which it is essential that it becomes a public limited company and that it has the approval of Congress,” it said in a statement.

The conversion into a public limited company could allow the entry of capital without necessarily implying privatisation and changes in the internal structure as well as in financial products, credit policies and utility billing, aimed at maximising profitability.

Banking unions reacted angrily to the decree, stressing the success of Banco Nación.

It is “contradictory to want to sell what works, unless the only objective is a spurious negotiation and a new scam,” said a number of groups in a statement.

The La Bancaria union stressed that Banco Nación “has the best profitability figures in the financial system, concentrates the largest number of clients, deposits, credits and assistance to companies and individuals.” It said it had called a “state of alert and mobilisation” against the decree.

Official data released by the bank corroborate its strong performance.

During 2024, the bank's disbursements registered “an extraordinary growth of more than 600 percent,” the institution said at the end of January, noting that it has “the best collectability rate in recent history.”

As a result, it “increased its market share by more than 600 basis points to 17.5 per cent of the total,” the bank said, “reaffirming its leadership in the financial system by any measure: assets, deposits, loans and equity.”

According to the decree, the shareholders of the transformed state will be the Argentine state, which will hold 99.9 percent “and will exercise all its rights through the Economy Ministry,” and the Fundación Banco Nación, with 0.1 percent of shares.


– TIMES/AFP/NA

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