FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

 

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

 

 

For the month of October, 2024

 

Commission File Number: 001-12568

 

 

Banco BBVA Argentina S.A.

(Exact name of Registrant as specified in its charter)

BBVA Argentina Bank S.A.

(Translation of registrant’s name into English)

 

111 Córdoba Av., C1054AAA

Buenos Aires, Argentina

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

 

Form 20-F

X

  Form 40-F
 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

 

Yes
 
  No

X

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

 

Yes
 
  No

X

 

Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

 

Yes
 
  No

X

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

 
 
 


Banco BBVA Argentina S.A.

 

 

TABLE OF CONTENTS

 

 

Item

 
   
1. Financial Statements as of June 30, 2024.
   
   

 

 
 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    Banco BBVA Argentina S.A.
Date:      October 18, 2024   By: /s/ Carmen Morillo Arroyo
        Name: Carmen Morillo Arroyo
        Title: Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

BANCO BBVA ARGENTINA S.A.

CONDENSED INTERIM FINANCIAL STATEMENTS

FOR THE SIX-MONTH PERIOD ENDED

JUNE 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 
 

 

 

 

Banco BBVA Argentina S.A.

 

 

TABLE OF CONTENTS

 

 

Condensed Interim Financial Statements for the six-month period ended June 30, 2024, comparatively presented.

 

Consolidated Condensed Statement of Financial Position

Consolidated Condensed Statement of Income

Consolidated Condensed Statement of Other Comprehensive Income

Consolidated Condensed Statement of Changes in Shareholders’ Equity

Consolidated Condensed Statement of Cash Flows

Notes

Exhibits

 

Separate Condensed Statement of Financial Position

Separate Condensed Statement of Income

Separate Condensed Statement of Other Comprehensive Income

Separate Condensed Statement of Changes in Shareholders’ Equity

Separate Condensed Statement of Cash Flows

Notes

Exhibits

 

Reporting Summary

 

Independent auditors’ report on the review of interim condensed consolidated financial statements

 

Independent auditors’ report on the review of interim condensed separate financial statements

 

Supervisory Committee’s Report

 

 
 
 -1-
 

CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish – See Note 54)

 

  Notes and Exhibits   06.30.24   12.31.23
   
ASSETS          
           
Cash and deposits in banks 3   1,450,661,054   2,054,707,627
           
  Cash     713,253,005   1,307,432,378
  Financial institutions and correspondents     730,024,702   747,275,249
    B.C.R.A.     658,515,447   646,918,071
    Other in the country and abroad     71,509,255   100,357,178
   Other     7,383,347   -
           
Debt securities at fair value through profit or loss 4 and A   252,224,389   406,434,452
           
Derivative instruments 5   5,681,863   17,980,649
           
Repo transactions 6   278,874,103   2,161,621,693
           
Other financial assets 7   154,311,173   163,797,445
           
Loans and other financing 8   3,814,900,149   3,551,397,712
           
     Non-financial government sector     1,701,146   261,043
     Other financial institutions     21,887,738   27,777,421
     Non-financial Private sector and Residents Abroad     3,791,311,265   3,523,359,248
           
Other debt securities 9 and A   2,256,515,996   1,362,264,706
           
Financial assets pledged as collateral 10   462,225,699   470,346,876
           
Current income tax assets 11.1   45,324,125   288,251
           
Investments in equity instruments 12 and A   9,399,258   9,367,810
           
Investments in associates 13   18,162,260   22,231,064
           
Property and equipment 14   554,898,771   536,113,034
           
Intangible assets 15   57,777,269   59,572,046
           
Deferred income tax assets 11.3   25,150,781   5,115,984
           
Other non-financial assets 16   153,678,877   187,402,842
           
 Non-current assets held for sale 17   1,532,012   1,532,012
           
TOTAL ASSETS     9,541,317,779   11,010,174,203
           
Notes and exhibits are an integral part of these consolidated financial statements.

 

 

 

 
 
 -2-
 

 

CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish – See Note 54)

 

  Notes and Exhibits   06.30.24   12.31.23
   
LIABILITIES          
           
Deposits 18 and H   5,810,545,000   6,542,466,427
           
     Non-financial Government sector     180,351,308   61,182,871
     Financial sector     1,925,622   4,625,783
     Non-financial Private sector and Residents Abroad     5,628,268,070   6,476,657,773
           
Liabilities at fair value through profit or loss 19   194,844   18,571,084
           
Derivative instruments 5   514,103   3,856,508
           
Repo transactions and surety bonds 6   177,505,000   -
           
Other financial liabilities 20   889,478,741   805,844,664
           
Financing received from the BCRA and other financial institutions 21   47,157,561   50,677,760
           
Corporate bonds issued 22   11,051,664   23,040,898
           
Current income tax liabilities 11.2   4,135,887   345,462,804
           
Provisions 23 and J   32,339,921   37,255,593
           
Deferred income tax liabilities 11.3   -   42,095,813
           
Other non-financial liabilities 24   459,888,920   580,697,267
           
TOTAL LIABILITIES     7,432,811,641   8,449,968,818
           
           
           
EQUITY          
           
Share capital 26   612,710   612,710
Non-capitalized contributions     6,744,974   6,744,974
Capital adjustments     743,873,408   743,873,408
Reserves     1,045,631,444   1,168,794,372
Other accumulated comprehensive income     126,486,164   312,077,435
Income for the period / year     152,242,891   295,800,788
Equity attributable to owners of the parent     2,075,591,591   2,527,903,687
Equity attributable to non-controlling interests     32,914,547   32,301,698
           
TOTAL EQUITY     2,108,506,138   2,560,205,385
           
TOTAL LIABILITIES AND EQUITY     9,541,317,779   11,010,174,203

 

Notes and exhibits are an integral part of these consolidated financial statements.

 
 
 -3-
 

CONSOLIDATED CONDENSED STATEMENT OF INCOME

FOR THE THREE AND SIX-MONTH INTERIM PERIODS ENDED JUNE 30, 2024 AND 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish – See Note 54)

  Notes and Exhibits     Quater ended 06.30.24   Accumulated as of 06.30.24 Quarter ended 06.30.23   Accumulated as of 06.30.23
                   
Interest income 27     973,314,484   2,486,856,397 1,379,197,247   2,525,211,868
Interest expense 28     (294,749,323)   (874,263,141) (689,993,240)   (1,232,694,905)
                   
Net interest income       678,565,161   1,612,593,256 689,204,007   1,292,516,963
                   
Commission income 29     117,733,414   225,732,247 122,715,108   223,787,885
Commission expense 30     (58,933,679)   (107,051,659) (35,732,805)   (84,716,223)
                   
Net commission income       58,799,735   118,680,588 86,982,303   139,071,662
                   
Net income from measurement of financial instruments at fair value through profit or loss 31     30,997,335   64,043,542 27,545,543   59,635,439
Net income from write-down of assets at amortized cost and at fair value through OCI 32     13,669,176   88,276,385 8,509,238   8,685,492
Foreign exchange and gold gains 33     20,336,351   32,465,093 12,005,311   16,855,876
Other operating income 34     28,662,886   62,315,361 27,271,353   52,528,102
Loan loss allowance 35     (41,551,067)   (73,421,769) (41,229,186)   (78,837,366)
                   
Net operating income       789,479,577   1,904,952,456 810,288,569   1,490,456,168
                   
Personnel benefits 36     (109,656,130)   (216,137,933) (107,774,113)   (209,189,752)
Administrative expenses 37     (117,128,698)   (239,566,515) (115,754,705)   (226,031,786)
Asset depreciation and impairment 38     (17,939,329)   (30,128,337) (12,975,250)   (25,945,328)
Other operating expenses 39     (98,073,858)   (224,066,806) (108,091,932)   (201,408,645)
                   
Operating income       446,681,562   1,195,052,865 465,692,569   827,880,657
                   
Loss from associates and joint ventures       2,489,620   (931,519) 2,203,228   1,926,550
Loss on net monetary position 2.1.5.     (270,818,086)   (946,920,630) (287,901,415)   (549,094,385)
                   
Income before income tax       178,353,096   247,200,716 179,994,382   280,712,822
                   
Income tax 11.4     (65,464,681)   (93,820,642) (67,191,817)   (98,839,475)
                   
Net income for the period       112,888,415   153,380,074 112,802,565   181,873,347
                   
Net income for the period attributable to:                  
Owners of the Parent       111,009,440   152,242,891 111,674,051   180,788,503
Non-controlling interests       1,878,975   1,137,183 1,128,514   1,084,844
                   
Notes and exhibits are an integral part of these consolidated financial statements.
 
 
 -4-
 

 

 

CONSOLIDATED CONDENSED STATEMENT OF INCOME

FOR THE SIX-MONTH INTERIM PERIODS ENDED JUNE 30, 2024 AND 2023

EARNINGS PER SHARE

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish – See Note 54)

 

Accounts   06.30.24   06.30.23
   
         
Numerator:        
         
Net income attributable to owners of the Parent   152,242,891   180,788,503
Net income attributable to owners of the Parent adjusted to reflect to the effect of dilution   152,242,891   180,788,503
         
Denominator:        
         
Weighted average of outstanding common shares for the period   612,710,079   612,710,079
Weighted average of outstanding common shares for the period adjusted to reflect the effect of dilution   612,710,079   612,710,079
         
Basic earnings per share (stated in pesos)   248.4746   295.0637
Diluted earnings per share (stated in pesos) (1)   248.4746   295.0637

 

(1) As Banco BBVA Argentina S.A. has not issued financial instruments with dilution effects on earnings per share, basic earnings and diluted earnings per share are equal.

 

 
 
 -5-
 

CONSOLIDATED CONDENSED STATEMENT OF OTHER COMPREHENSIVE INCOME

FOR THE THREE AND SIX-MONTH INTERIM PERIODS ENDED JUNE 30, 2024 AND 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish – See Note 54)

 

 

  Note   Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                   
Net income for the period     112,888,415   153,380,074   112,802,565   181,873,347
                   
Other comprehensive income components to be reclassified to income/(loss) for the period:                  
                   
Profit or losses from financial instruments at fair value through OCI                  
                   
Income / (loss) for the period from financial instruments at fair value through OCI     (154,623,441)   (265,051,924)   33,371,399   23,411,673
Reclassification adjustment for the period     (12,602,482)   (86,750,307)   (4,593,717)   5,216,014
Income tax 11.4   62,672,505   165,835,965   (11,972,661)   (14,744,138)
                   
      (104,553,418)   (185,966,266)   16,805,021   13,883,549
Other comprehensive income components not to be reclassified to income/(loss) for the period:                  
                   
Income or loss on equity instruments at fair value through OCI (IFRS 9, paragraph 5.7.5)                  
                   
Income / (loss) for the period from equity instruments at fair value through OCI     (203,127)   (149,339)   2,611,395   2,570,397
                   
      (203,127)   (149,339)   2,611,395   2,570,397
                   
Total Other Comprehensive Income/ (Loss) for the period     (104,756,545)   (186,115,605)   19,416,416   16,453,946
                   
Total comprehensive income / (loss)     8,131,870   (32,735,531)   132,218,981   198,327,293
                   
                   
Total Comprehensive income / (loss):                  
Attributable to owners of the Parent     6,548,832   (33,348,380)   131,090,496   197,242,525
Attributable to non-controlling interests     1,583,038   612,849   1,128,485   1,084,768
                   
                   

Notes and exhibits are an integral part of these consolidated financial statements.

 

 

 
 
 -6-
 

CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE SIX-MONTH INTERIM PERIOD ENDED JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish – See Note 54)

 

  2024
  Share   Non-capitalized       Other Comprehensive                  
  Capital   contributions       Income/(Loss)   Reserves              
  Outstanding shares   Share premium       Income/(loss) on financial instruments at fair value through OCI           Total equity attributable to controlling interests   Total equity attributable to non-controlling interests   Total
                       
      Equity adjustments         Retained earnings      
Transactions         Legal Other      
                                   
Restated balances at the beginning of the year 612,710   6,744,974   743,873,408   312,077,435   479,577,622 689,216,750 295,800,788   2,527,903,687   32,301,698   2,560,205,385
                                   
Total comprehensive income for the period                                  
 - Net income for the period -   -   -   -   - - 152,242,891   152,242,891   1,137,183   153,380,074
 - Other comprehensive loss for the period -   -   -   (185,591,271)   - - -   (185,591,271)   (524,334)   (186,115,605)
 -  Distribution of retained earnings approved by the Shareholders’ Meeting held on April 26., 2024 (Note 44 to the consolidated financial statements)                                  
     Legal reserve -   -   -   -   59,160,158 - (59,160,158)   -   -   -
     Other -   -   -   -   - 236,640,630 (236,640,630)   -   -   -
                                   
 -  Distribution of dividends approved by the Shareholders’ Meeting held on April 26, by the BCRA on May 3 and by the Board of Directors at its meeting held on  May 6, 2024 (Note 44):                                  
Dividends in kind and in cash (1) -   -   -   -   - (418,963,716) -   (418,963,716)   -   (418,963,716)
                                   
Balances at fiscal period-end 612,710   6,744,974   743,873,408   126,486,164   538,737,780 506,893,664 152,242,891   2,075,591,591   32,914,547   2,108,506,138
                                   
 (1)    Corresponds to $ 431.24 (in nominal values) per share.
                                   
Notes and exhibits are an integral part of these consolidated financial statements.

 

 
 
 -7-
 

CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

FOR THE SIX-MONTH INTERIM PERIOD ENDED JUNE 30, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish – See Note 54)

 

    2023
    Share   Non-capitalized       Other Comprehensive                  
    Capital   contributions       Income/(Loss)   Reserves              
    Outstanding shares   Share premium       Income/(loss) on financial instruments at fair value through OCI           Total equity attributable to controlling interests   Total equity attributable to non-controlling interests   Outstanding shares
                  Retained earnings      
        Equity adjustments              
Transactions           Legal Other      
                                     
Restated balances at the beginning of the year   612,710   6,744,974   743,873,408   (41,978,749)   413,713,753 565,762,961 329,319,391   2,018,048,448   30,248,697   2,048,297,145
                                     
Total comprehensive income for the period                                    
 - Net income for the period   -   -   -   -   - - 180,788,503   180,788,503   1,084,844   181,873,347
 - Other comprehensive income /(loss) for the period   -   -   -   16,454,022   - - -   16,454,022   (76)   16,453,946
                                     
 -  Distribution of retained earnings approved by the Shareholders’ Meeting held on April 28. 2023 (Note 44):                                  
     Legal reserve   -   -   -   -   65,863,878 - (65,863,878)   -   -   -
     Other   -   -   -   -   - 263,455,513 (263,455,513)   -   -   -
                                     
 -  Distribution of dividends approved by the Superintendence of Financial and Exchange Institutions of the Argentine Central Bank on May 31 and by the Board of Directors at its meeting held on June 7, 2023 (Note 44 to the consolidated financial statements):                                  
Dividends in kind and in cash (1)   -   -   -   -   - (140,001,722) -   (140,001,722)   -   (140,001,722)
                                     
Balances at fiscal period-end   612,710   6,744,974   743,873,408   (25,524,727)   479,577,631 689,216,752 180,788,503   2,075,289,251   31,333,465   2,106,622,716
                                     
                                     
 (1)    Corresponds to $ 58.05 (in nominal values) per share.
                                     
Notes and exhibits are an integral part of these consolidated financial statements.

 

 
 
 -8-
 

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

FOR THE SIX-MONTH INTERIM PERIODS ENDED JUNE 30, 2024 AND 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish – See Note 54)

 

Accounts   06.30.24   06.30.23
         
Cash flows from operating activities        
         
Income before income tax   247,200,716   280,712,822
         
Adjustment for total monetary income for the period   946,920,630   549,094,385
         
Adjustments to obtain cash flows from operating activities:   505,687,400   56,050,713
Depreciation and amortization   30,128,337   25,945,328
Loan loss allowance   73,421,769   78,837,366
Effect of foreign exchange changes on cash and cash equivalents   399,979,230   (66,522,678)
Other adjustments   2,158,064   17,790,697
         
Net decreases from operating assets:   (3,862,446,234)   (4,241,788,308)
 Debt securities at fair value through profit or loss   (38,941,012)   (212,891,130)
 Derivative instruments   4,756,251   (2,255,739)
 Repo transactions   614,710,430   (551,418,849)
 Loans and other financing   (2,160,706,358)   (1,524,547,689)
    Non-financial Government sector   (1,539,320)   (11,436)
    Other financial institutions   (5,174,866)   (13,585,135)
    Non-financial Private sector and Residents Abroad   (2,153,992,172)   (1,510,951,118)
 Other debt securities   (1,958,614,591)   (1,512,033,925)
 Financial assets pledged as collateral   (168,415,589)   (144,912,145)
 Investments in equity instruments   (93,770,834)   (3,324,167)
 Other assets   (61,464,531)   (290,404,664)
         
Net increases from operating liabilities:   3,294,142,596   3,936,611,236
Deposits   2,729,541,915   2,993,903,657
    Non-financial Government sector   214,417,838   5,786,342
    Financial sector   (1,166,240)   6,488,277
    Non-financial Private sector and Residents Abroad   2,516,290,317   2,981,629,038
Liabilities at fair value through profit or loss   (13,535,739)   191,664
Derivative instruments   (1,737,097)   635,836
Repo transactions and surety bonds   177,505,000   -
Other liabilities   402,368,517   941,880,079
         
Income tax paid   (225,634,159)   (6,070,806)
         
Total cash flows generated by operating activities   905,870,949   574,610,042

 

 

 
 
 -9-
 

CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS

FOR THE SIX-MONTH INTERIM PERIODS ENDED JUNE 30, 2024 AND 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish – See Note 54)

 

Accounts   06.30.24   06.30.23
         
Cash flows from investing activities        
         
Payments:   (46,153,821)   (20,180,279)
  Purchase of property and equipment, intangible assets and other assets   (46,153,821)   (18,219,232)
  Other payments related to investing activities   -   (1,961,047)
         
Collections:   3,000,000   1,789,475
  Other collections related to investing activities   3,000,000   1,789,475
         
Total cash flows used in investing activities   (43,153,821)   (18,390,804)
         
Cash flows from financing activities        
         
Payments:   (72,155,409)   (19,705,146)
Dividends   (48,872,362)   (85,336)
Non-subordinated corporate bonds   (7,707,056)   (1,016,463)
 Financing from local financial institutions   (9,909,927)   (13,104,326)
 Leases   (5,666,064)   (5,499,021)
         
Collections:   6,432,242   4,982,185
 Other collections related to financing activities   6,432,242   4,982,185
         
Total cash flows used in financing activities   (65,723,167)   (14,722,961)
         
Effect of foreign exchange changes on cash and cash equivalents   (399,979,230)   66,522,678
Effect of net monetary income/(loss) of cash and cash equivalents   (1,001,061,304)   (689,203,860)
         
Total changes in cash flows   (604,046,573)   (81,184,905)
Restated cash and cash equivalents at the beginning of the year (Note 3)   2,054,707,627   1,658,707,997
Cash and cash equivalents at fiscal period-end (Note 3)     1,450,661,054   1,577,523,092
         
         
Notes and exhibits are an integral part of these consolidated financial statements.

 

 
 
 -10-
 

 

NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish – See Note 54)

 

 

1. General Information

1.1. Information on Banco BBVA Argentina S.A.

 

Banco BBVA Argentina S.A. (hereinafter, either “BBVA Argentina”, the “Entity” or the “Bank”) is a corporation (“sociedad anónima”) incorporated under the laws of Argentina, operating as a universal bank with a network of 242 national branches.

Since December 1996, BBVA Argentina is part of the global strategy of Banco Bilbao Vizcaya Argentaria S.A. (hereinafter, either “BBVA” or the “Parent”), which directly and indirectly controls the Entity, by holding 66.55% of the share capital as of June 30, 2024.

These consolidated condensed interim financial statements include the Entity and its subsidiaries (collectively referred to as the “Group”). Basis of consolidation is described in Note 2.2.

Part of the Entity's capital stock is publicly traded and has been registered with the Buenos Aires Stock Exchange, the New York Stock Exchange, and the Madrid Stock Exchange.

 

 

1.2 Evolution of the macroeconomic situation and the financial and capital systems

Over the past few years, the Argentine financial market has been subject to a prolonged volatility period in the market value of government and private financial instruments including a high country risk premium, an increase in the official exchange rate of the Argentine peso to the US dollar, an increase in interest rates and a significant acceleration of the pace of inflation (see note 2.1.5 “Measurement unit”).

 

Particularly, as regards the U.S. dollar price, since the end of 2019 the gap between the official U.S. dollar price -mainly used for foreign trade- and the market alternative values, reaching caps of around 200%. As of the date of these financial statements, the referred gap is approximately 35%.

 

In terms of the national public debt management, a restructuring process has been observed, including various voluntary swaps and agreements reached regarding claims with the Paris Club and the International Monetary Fund. In addition, in recent months, the authorities in charge of the Ministry of National Economy and the BCRA (Central Bank of Argentina) have implemented restrictive monetary policy measures, along with a process of debt transfer from the BCRA to the National Treasury. This included the repurchase by the BCRA of a large portion of the put options on public securities held by financial institutions.

 

In this context, on December 10, 2023, the new Argentine administration took office, and issued a series of emergency measures. Some of the main goals entail, among other relevant issues, softening economic regulations, reducing the fiscal deficit mainly through a decrease in expenditure, including lowering different types of subsidies. Likewise, the Argentine peso devalued by about 55% with respect to the US dollar, which has sped up the pace of inflation, being the interannual inflation measured based on the INDEC’s CPI 272% as of the date of issuance of these financial statements.

 

The comprehensive program pursued by the new Administration includes economic, legal, foreign relations, infrastructure and other reforms. On December 20, 2023, Emergency Decree No. 70/2023 was issued establishing a significant number of reforms regarding which different players filed constitutional protection actions in Court in order to stop them from being implemented. In addition, on July 8, 2024, Law 27,742, as enacted by the Federal Executive through Executive Decree No. 592/2024, was published on the Official Gazette, which law includes issues such as delegated powers to the Federal Executive, and tax, labor, and social security reforms, among others, is under discussion. As of the date of these financial statements, the referred law is pending regulation.

 
 
 -11-
 

In addition, the domestic and international macroeconomic context gives rise to a certain degree of uncertainty regarding the future as regards its global economic recovery.

 

In view of the above, the Entity's Management permanently monitors the evolution of the abovementioned situations in the international and local markets, in order to determine the possible actions to be taken and identify possible impacts on its equity and financial position, which may require disclosure in the financial statements of future periods.

 

2. Basis for the preparation of these financial statements and applicable accounting standards

 

2.1. Presentation basis

 

2.1.1. Applicable Accounting Standards

 

 

These consolidated condensed interim financial statements of the Bank were prepared in accordance with the financial reporting framework set forth by the BCRA. (Communication “A” 6114 as supplemented by the BCRA). Except for the exceptions established by the BCRA which are explained in the following paragraph, such framework is based on International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and adopted by the Argentine Federation of Professionals Councils in Economic Sciences (FACPCE, for its acronym in Spanish). The abovementioned international standards include the IFRS, the International Accounting Standards (IAS) and the interpretations developed by the IFRS Interpretations Committee (IFRIC) or former IFRIC (SIC).

 

Out of the exceptions set forth by the BCRA to the application of current IFRS, the following affects the preparation of these consolidated condensed interim financial statements:

 

Within the framework of the convergence process to IFRS established by Communication “A” 6114, as amended and supplemented, the BCRA provided that for fiscal years starting on or after January 1, 2020, financial institutions defined as “Group A” according to BCRA regulations, as such is the case of the Entity, are required to start to apply paragraph 5.5 “Impairment” of IFRS 9 “Financial Instruments” (paragraphs B5.5.1 through B5.5.55) except for exposures to the public sector, considering the exclusion set forth by Communication “A” 6847.

 

Had the abovementioned paragraph 5.5. “Impairment” been applied in full, according to an estimate made by the Entity, as of June 30, 2024 and December 31, 2023, its shareholders’ equity would have been reduced by 9,509,597 and 16,828,304, respectively.

 

Except for what was mentioned in the previous paragraphs, the accounting policies applied by the Entity comply with the IFRS that have been currently approved and are applicable in the preparation of these consolidated condensed interim financial statements in accordance with the IFRS as adopted by the BCRA as per Communication “A” 7899. In general, the BCRA does not allow the early application of any IFRS, unless otherwise specified.

 

These financial statements have been approved by the Board of Directors of Banco BBVA Argentina S.A. on August 21, 2024.

 
 
 -12-
 

2.1.2. Figures stated in thousands of pesos

 

These consolidated condensed interim financial statements expose figures stated in thousands of Argentine pesos in terms of purchasing power as of June 30, 2024 and are rounded to the nearest amount in thousands of pesos.

 

The Entity and its subsidiaries consider the Argentine peso as their functional and presentation currency.

 

2.1.3. Presentation of Statement of Financial Position

 

The Entity presents its Statement of Financial Position in order of liquidity, according to the model set forth in Communication “A” 6324 of the BCRA.

 

Financial assets and financial liabilities are generally reported in gross figures in the Statement of Financial Position. They are offset and reported on a net basis only if there is a legal and unconditional right to offset them and Management has the intention to settle them on a net basis or to realize assets and settle liabilities simultaneously.

 

These consolidated condensed interim financial statements were prepared on the basis of historical amounts, except for certain species which were valued at Fair value through Other Comprehensive Income (OCI) or at Fair Value through Profit or Loss. In addition, in the case of derivatives, both assets and liabilities were valued at Fair Value through profit or loss.

 

2.1.4. Comparative information

 

The consolidated statement of financial position as of June 30, 2024 is comparatively presented with the year-end, while the statements of income and other comprehensive income for the three and six-month periods ended June 30, 2024, and the statements of changes in shareholders' equity, and cash flows for the six-month period then ended, are comparatively presented with the balances of the same period of the previous year.

 

The figures of comparative information have been restated in order to consider the changes in the general purchasing power of the currency and, as a result, are stated in the measuring unit current as of the end of the reporting period (see “Measuring unit” below).

 

2.1.5. Measuring Unit

 

These consolidated condensed interim financial statements as of June 30, 2024 have been restated to be expressed in the purchasing power currency as of that date, as set forth in IAS 29 “Financial Reporting in Hyperinflationary Economies” and considering, in addition, the particular rules issued by the BCRA in Communications “A” 6651, 6849, as amended and supplemented, which established that such method should be applied to financial statements for fiscal years starting on, and after January 1, 2020 and defined December 31, 2018 as transition date.

 

IFRS requires that the financial statements of an entity whose functional currency is that of a hyperinflationary economy be restated in constant currency. In order to achieve uniformity in the identification of such an economic environment, IAS 29 establishes (i) certain non-exclusive qualitative indicators consisting of analyzing the behavior of the population, prices, interest rates and salaries in view of the evolution of price indexes and the loss of purchasing power of the currency, and (ii) as a quantitative characteristic, which is the condition most commonly considered in practice, to verify whether the cumulative inflation rate in three years approaches or exceeds 100%. Due to several macroeconomic factors, three-year inflation was above this figure, while the national government's targets and other available projections indicate that this trend will not be reversed in the short term.

 
 
 -13-
 

Such restatement should be made as if the economy has always been hyperinflationary, using a general price index that reflects the changes in the purchasing power of currency. In order to make such restatements, a series of indexes prepared and published on a monthly basis by the Argentine Federation of Professional Councils of Economic Sciences (“FACPCE”), which combines the consumer price index (CPI) as from January 2017 (base month: December 2016) with the domestic wholesale price index (IPIM, as per its Spanish acronym) published by INDEC until such date, computing for November and December 2015, for which the INDEC did not published any information on the variation of the IPIIM, the variation of the CPI in the City of Buenos Aires.

 

Considering the index referred to above, inflation for the six-month periods ended June 30, 2024 and 2023 was 79.77% and 50.68%, respectively, and for the fiscal year ended December 31, 2023, was 211.41%.

 

Below is a description of the main impacts of applying IAS 29 and the restatement process of financial statements set forth by Communication “A” 6849, as supplemented, of the BCRA:

 

a)Description of the main aspects of the restatement process of the statement of financial position:

 

i.Monetary items (those with a fixed nominal value in local currency) are not restated, as they are already expressed in the measuring unit current as of the end of the reporting period. In an inflationary period, holding monetary assets generates a loss of purchasing power and holding monetary liabilities generates a gain in purchasing power, provided that such items are not subject to an adjustment mechanism that may offset these effects to some extent. Net monetary gain or loss is included in income/loss for the reporting period.
ii.Assets and liabilities subject to adjustments pursuant to specific agreements are adjusted according to such agreements.
iii.Non-monetary items measured at their current values at the end of the reporting period are not restated for their presentation in the statement of financial position, but the adjustment process must be completed in order to determine in terms of constant measuring unit, the gain or loss generated for holding those non-monetary items.
iv.Non-monetary items measured at historical cost or at a value current as of a date prior to the end of the reporting period are restated at indexes that reflect the variation occurred in the general price index as from the date of acquisition or restatement until the closing date, and then the restated amounts of said assets are compared with the relevant recoverable values. Charges to income or loss for the period of depreciation of property and equipment and amortization of intangible assets, as well as any other consumption of non-monetary assets are determined based on the new restated amounts.
v.The restatement of non-monetary assets in terms of a measuring unit current at the end of the reporting period without an equivalent adjustment for tax purposes results in a taxable temporary difference and the recognition of deferred tax liabilities, whose balancing entry is recognized in income or loss for the period.

 

b)Description of the main aspects of the restatement process of the statements of income and other comprehensive income:

 

i.Expenses and income are restated as from the date of their booking, except those income or loss items that reflect or include in their determination the consumption of assets in purchasing power currency of a date prior to the booking of the consumption, which are restated taking as basis the date of origination of the asset with which the item is related; and also except for income or loss arising from comparing two measurements expressed in purchasing power currency of different dates, for which it is necessary to identify the amounts compared, restate them separately, and make the comparison again, but with the amounts already restated.
ii.Gain or loss on net monetary position will be classified according to the item that originated it, and is presented in a separate line reflecting the effect of inflation on monetary items.

 

 
 
 -14-
 
c)Description of the main aspects of the restatement process of the statement of changes in shareholders’ equity:

 

i.As of the transition date (December 31, 2018), the Entity has applied the following procedures:
a)Equity items, except those stated below, are restated as from the date on which they were subscribed for or paid-in, as set forth in Communication “A” 6849 for each particular item.
b)Reserves, including the reserve for first time application of IFRS, were maintained at their nominal value as of the transition date (non-restated legal amount).
c)Restated retained earnings are determined according to the difference between restated net assets as of the transition date and the rest of the components of initial equity restated as described above.
d)Balances of other accumulated comprehensive income were restated as of the transition date.

 

ii.After the restatement as of the transition date stated in (i) above, all the shareholders’ equity components are restated by applying the general price index from the beginning of the fiscal year and each variation of those components is restated from the date of contribution or from the moment such variation occurred by other means, restating the balances of other accumulated comprehensive income according to the items that give rise to it. Under BCRA requirements, the restatement of share capital and additional paid-in capital is disclosed under “Capital adjustments” account.

 

d)Description of the main aspects of the restatement process of the statement of cash flows:

 

i.All items are restated in terms of the measuring unit current as of the end of the reporting period.
ii.Monetary gain or loss on the components of cash and cash equivalents are disclosed in the statement of cash flows after operating, investing and financing activities, in a separate line and independent from them, under “Gain/loss on net monetary position of cash and cash equivalents”.

 

 

2.2. Basis of consolidation

 

The consolidated condensed interim financial statements comprise the Entity’s and its subsidiaries’ financial statements (the “Group”) as of June 30, 2024 and December 31, 2023.

 

Subsidiaries are all entities controlled by the Bank. The Bank controls an entity when it is exposed to, or has rights to, variable returns from its continued involvement with the entity and has the ability to manage the operating and financial policies of that entity, in order to affect those returns.

 

This is generally observed in the case of an ownership interest representing more than 50% of its shares entitled to vote.

 

However, under particular circumstances, the Entity may exercise control with an ownership interest below 50% or may not exercise control even with an ownership interest above 50% in the shares of an investee.

 

When assessing if an Entity has power over an investee and therefore, whether it controls the variability of its yields, the Entity considers all the relevant events and circumstances, including:

 

The purpose and design of the investee.
The relevant activities, the decision-making process on these activities and whether the Entity and its subsidiaries can manage those activities.
Contractual agreements such as call options, put options and settlement rights.
If the Entity and its subsidiaries are exposed to, or entitled to, variable yields arising from their interest in the investee, and are empowered to affect their variability.

 

 
 
 -15-
 

Subsidiaries are fully consolidated as from the date on which effective control thereof is transferred to the Entity and they are no longer consolidated as from the date on which such control ceases. These consolidated condensed interim financial statements include the Entity’s and its subsidiaries’ assets, liabilities, profit or loss and each component of other comprehensive income. Transactions among consolidated entities are fully eliminated.

 

Any change in the ownership interest in a subsidiary, without loss of control, is booked as an equity transaction. Conversely, if the Entity loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non-controlling interest and other equity components, while any resulting gain or loss is recognized in profit or loss, and any retained investment is recognized at fair value at the date of loss of control.

 

The financial statements of subsidiaries have been prepared as of the same date and for the same accounting periods as those of the Entity, using the related accounting policies consistently with those applied by the Entity. If necessary, the relevant adjustments are made to the financial statements of subsidiaries so that the accounting policies used by the Group are uniform.

 

Besides, non-controlling interests represent the portion of income or loss and shareholders’ equity that does not belong, either directly or indirectly, to the Entity. Non-controlling interests are exposed in these financial statements in a separate line in the Statements of Financial Position, of Income, Other Comprehensive Income and Changes in Shareholders’ Equity.

 

As of June 30, 2024 and December 31, 2023, the Entity has consolidated its financial statements with the financial statements of the following companies:

 

Subsidiaries Registered Office Province Country Main Business Activity
Volkswagen Financial Services Cía. Financiera S.A. Av. Córdoba 111, 30th Floor City of Buenos Aires Argentina Financing
PSA Finance Arg. Cía. Financiera S.A. Carlos María Della Paolera 265, 22nd Floor City of Buenos Aires Argentina Financing
Consolidar Administradora de  Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings)   (1) Av. Córdoba 111, 22nd Floor City of Buenos Aires Argentina Retirement and Pension Fund Manager
BBVA Asset Management Argentina S.A.U. Sociedad Gerente de Fondos Comunes de Inversión Av. Córdoba 111, 30th Floor City of Buenos Aires Argentina Mutual Funds Manager

 

(1)Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings) “Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings)”: a corporation incorporated under the laws of Argentina undergoing liquidation proceedings. On December 4, 2008, Law No. 26425 was enacted, providing for the elimination and replacement of the capitalization regime that was part of the Integrated Retirement and Pension System, with a single pay-as-you go system named the Argentine Integrated Retirement and Pensions System (SIPA). Consequently, Consolidar A.F.J.P. S.A. ceased to manage the resources that were part of the individual capitalization accounts of affiliates and beneficiaries of the capitalization regime of the Integrated Retirement and Pension System, which were transferred to the Guarantee Fund for the Sustainability of the Argentine Retirement and Pension Regime as they were already invested, and the Argentine Social Security Office (ANSES) is now the sole and exclusive owner of those assets and rights. Likewise, on October 29, 2009, the ANSES issued Resolution No. 290/2009, whereby retirement and pension fund managers interested in reconverting their corporate purpose to manage the funds for voluntary contributions and deposits held by participants in their capitalization accounts had 30 business days to express their intention to that end. On December 28, 2009, based on the foregoing and taking into consideration that it is impossible for Consolidar A.F.J.P. S.A. to comply with the corporate purpose for which it was incorporated, it was resolved, at a Unanimous General and Extraordinary Shareholders’ Meeting to approve the dissolution and subsequent liquidation of that company effective as of December 31, 2009.

 

On December 7, 2010, Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings) filed a lawsuit for damages against the Argentine government under case No. 40.437/2010. The lawsuit was ratified by BBVA Banco Francés in its capacity as the Company’s majority shareholder. On July 1, 2021, a decision rejecting the claim was issued. On August 9, 2022, Room I of the Federal Court of Appeals in Contentious and Administrative Matters ratified the trial court decision. On August 25, 2022, a federal extraordinary appeal was filed against the abovementioned resolution, which was partially accepted in regard to the federal issue at stake and rejected the request concerning the grounds of arbitrariness through the court decision dated September 15, 2022. Considering the partial rejection, an appeal was filed with the Argentine Supreme Court of Justice on September 21, 2022. As of the date of issuance of the accompanying financial statements, neither the outcome of the legal process referred to nor the final assessment of the case by the Argentine Supreme Court of Justice can be estimated. Moreover, in the hypothetical case that there was an unfavorable outcome and legal costs were to be paid by Consolidar AFJP S.A. (in liquidation) and that its equity was not sufficient to do so, the Bank would bear such costs, reserving its right to claim that the portion related to the remaining shareholder be reimbursed.

 
 
 -16-
 

As of June 30, 2024 and December 31, 2023, the Entity’s interest in consolidated companies is as follows:

 

Subsidiaries Shares Interest held by the Company Non-controlling interest 
Type Number Total share capital Votes Total share capital Votes
Volkswagen Financial Services Cía. Financiera S.A. Common 897,000,000 51.00 % 51.00 % 49.00 % 49.00 %
PSA Finance Arg. Cía. Financiera S.A.  (1) Common 52,178 50.00 % 50.00 % 50.00 % 50.00 %
Consolidar Administradora de  Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings)   (2) Common 235,738,503 53.89 % 53.89 % 46.11 % 46.11 %
BBVA Asset Management Argentina S.A.U. Sociedad Gerente de Fondos Comunes de Inversión Common 242,524 100.00 % 100.00 % - % - %

 

(1) According to the Shareholders' Agreement, the Bank controls the entity because it is exposed to, or entitled to, variable yields due to its continued involvement in the entity and has the capacity to manage the activities relevant to affect those returns, such as financial and risk management activities, among others.

(2) On November 28, 2023, a contribution in cash was made for 120,000 (270,663 in restated values). The Entity subscribed 64,667 (145,858 in restated values) and BBVA subscribed 55,333 (124,805 in restated values).

 

The Entity’s and its subsidiaries’ total assets, liabilities and equity as of June 30, 2024 and December 31, 2023, are as follows:

 

Entity Balances as of 06/30/2024
Assets Liabilities Equity attributable to owners of the Parent Equity attributable to non-controlling interests Income / (loss) attributable to owners of the Parent Income / (loss) attributable to non-controlling interests
Volkswagen Financial Services Cía. Financiera S.A. 137,385,560 92,564,432 22,858,775 21,962,353 2,094,665 2,012,523
PSA Finance Arg. Cía. Financiera S.A. 83,735,751 62,094,765 10,820,493 10,820,493 (778,970) (778,970)
Consolidar Administradora de  Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings)   365,862 80,239 153,922 131,701 (112,631) (96,370)
BBVA Asset Management Argentina S.A.U. Sociedad Gerente de Fondos Comunes de Inversión 15,864,778 1,661,376 14,203,402 - 5,223,596 -
Banco BBVA Argentina S.A. 9,455,592,860 7,380,001,269 2,075,591,591 - 152,242,891 -
Withdrawals (151,627,032) (103,590,440) (48,036,592) - (6,426,660) -
Consolidated 9,541,317,779 7,432,811,641 2,075,591,591 32,914,547 152,242,891 1,137,183

 

 
 
 -17-
 

 

Entity Balances as of 12/31/2023
Assets Liabilities Equity attributable to owners of the Parent Equity attributable to non-controlling interests Income / (loss) attributable to owners of the Parent Income / (loss) attributable to non-controlling interests
Volkswagen Financial Services Cía. Financiera S.A. 127,012,847 86,298,912 20,764,107 19,949,828 1,450,244 1,393,377
PSA Finance Arg. Cía. Financiera S.A. 82,918,993 58,671,407 12,123,793 12,123,793 (716,155) (716,153)
Consolidar Administradora de  Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings)   538,027 43,399 266,551 228,077 43,115 36,890
BBVA Asset Management Argentina S.A.U. Sociedad Gerente de Fondos Comunes de Inversión 24,752,641 4,269,383 20,483,258 - 13,550,767 -
Banco BBVA Argentina S.A. 10,894,096,553 8,366,192,866 2,527,903,687 - 295,800,788 -
Withdrawals (119,144,858) (65,507,149) (53,637,709) - (14,327,971) -
Consolidated 11,010,174,203 8,449,968,818 2,527,903,687 32,301,698 295,800,788 714,114

 

The Board of Directors of Banco BBVA Argentina S.A. considers that there are no other companies or structured entities that should be included in the consolidated condensed interim financial statements as of June 30, 2024.

 

Trusts

 

The Group acts as a trustee for financial, management and guarantee trusts (see Note 50). Upon determining if the Group controls the trusts, the Group has analyzed the existence of control, under the terms of IFRS 10. Consequently, how power is configured on the relevant activities of the vehicle, the impact of changes in returns over those Structured Entities on the Group, and the relation of both have been evaluated on a case-by-case basis. In all cases, it has been concluded that the Group acts as an agent and therefore does not consolidate those trusts.

Mutual funds

The Group acts as fund manager in various mutual funds (see Note 51). To determine whether the Group controls a mutual fund, the aggregate economic interest of the Group in such mutual fund (comprising any carried interests and expected management fees) is usually assessed, and it is considered that investors have no right to remove the fund manager without cause. The Group has concluded that it has no control over any of these mutual funds.

 

 

2.3. Summary of significant accounting policies

 

These consolidated condensed interim financial statements as of June 30, 2024 have been prepared in accordance with the financial reporting framework set forth by the BCRA mentioned in Note 2.1.1 “Applied accounting policies”, which in particular for consolidated condensed interim financial statements is based on IAS 34 “Interim Financial Reporting”.

 

In preparing these consolidated condensed interim financial statements, in addition to what is explained in Notes 2.1.5 “Measuring Unit" and 2.5 "Regulatory changes made this year", the Entity has consistently applied the basis of presentation and consolidation, significant accounting policies and judgments, estimates and accounting assumptions described in the consolidated financial statements for the fiscal year ended December 31, 2023, already issued, except as indicated in Note 2.1.1.

 
 
 -18-
 

These consolidated condensed interim financial statements include all the information necessary for an appropriate understanding by the users thereof, of the basis for preparation and presentation used, as well as the relevant events and transactions occurred after the issuance of the latest annual consolidated financial statements for the fiscal year ended December 31, 2023. However, these consolidated condensed interim financial statements do not include all the information or all the disclosures required for annual consolidated financial statements prepared in accordance with IAS 1 “Presentation of Financial Statements”. Therefore, these consolidated condensed interim financial statements should be read in conjunction with the annual consolidated financial statements for the fiscal year ended December 31, 2023, already issued.

 

2.3.1. Going concern

 

Bank Management assessed its capacity to continue as a going concern and concluded that it has the resources to continue in the business in the near future. Management is not aware of any material uncertainty that could compromise the Bank’s capacity to continue as a going concern. Therefore, these consolidated financial statements were prepared on a going concern basis.

 

2.4. Accounting judgments, estimates and assumptions

 

The preparation of these consolidated condensed financial statements in accordance with IFRS requires the preparation and consideration, by the Entity’s and its subsidiaries’ Management, of significant accounting judgments, estimates and assumptions that impact in the reported balances of assets and liabilities, income and expenses, as well as in the determination and disclosure of contingent assets and liabilities as of the end of the reporting period.

 

The entries made are based on the best estimate of the probability of occurrence of different future events. In this sense, the uncertainties associated with the estimates and assumptions adopted may result in the future in final results that would differ from such estimates and require significant adjustments to the reported balances of the assets and liabilities affected. Accounting judgments, estimates and assumptions are reviewed on an ongoing basis and their effect is recognized prospectively.

 

The most significant accounting judgments, estimates and assumptions included in these financial statements were the same as those described in Notes 2.4.1, 2.4.2 and 2.4.3 to the consolidated financial statements as of December 31, 2023, already issued.

 

2.5. Regulatory changes introduced during this fiscal year

 

In the fiscal year beginning January 1, 2024, the following amendments to IFRS became effective, which have not had a significant impact on these consolidated condensed interim financial statements taken as a whole:

 

Amendments to IAS 1: Classification of current and noncurrent liabilities with covenants

 

In January 2020 and October 2022, the IASB issued amendments to IAS 1 Presentation of Financial Statements specifying the requirements to classify liabilities as current or non-current. The amendments clarify: (i) what it mean by a right to defer settlement; (ii) That a right to defer must exist at the end of the reporting period; (iii) that such classification is unaffected by the likelihood that an entity will exercise its right to defer; (iv) that only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability do not affect its classification; and (v) disclosures.

 

The IASB decided that if an entity's right to defer payment of a liability is subject to an entity’s compliance with the required covenants only at a date subsequent to the reporting period ("future covenants"), the entity has the right to defer payment of the liability even if the entity had not been compliant at the end of the reporting period.

 
 
 -19-
 

The amendments also clarify that the requirement of the right to exist at the end of the reporting period applies to covenants that the entity must comply with at the reporting date or earlier, regardless of whether compliance is evidenced at that date or at a later date.

 

Amendment to IFRS 16 – Lease liability in a sale and leaseback:

 

In September 2022, the IASB issued amendments to IFRS 16, specifically on the requirements that a lessee-seller uses to measure the lease liability arising in a sale and leaseback transaction, to ensure that the lessee-seller does not recognize any amount of gain or loss that relates to the right-of-use. The application of these requirements will not prevent the lessee-seller from recognizing, in profit or loss, any gain or loss related to the partial or total termination of a lease. The amendment does not prescribe specific measurement requirements for lease liabilities arising from a subsequent lease. The initial measurement of lease liabilities arising from a subsequent lease may result in the seller-lessee determining 'lease payments' that are different from the general definition of lease payments. The seller-lessee should develop and apply an accounting policy that results in information that is relevant and reliable in accordance with IAS 8.

 

Amendments to IAS 7 and IFRS 7 - Disclosures: Supplier Finance Arrangements

 

In May 2023, the IASB issued amendments to IAS 7 “Statement of Cash Flows” and IFRS 7 “Financial Instruments: Disclosures”, which specify the information requirements to be disclosed to enhance the current requirements, the purpose of which is helping financial statement users to understand the effects of supplier finance agreements on the entity’s liabilities, cash flows and exposure to liquidity risk.

 

These amendments require an entity to provide information about the impact of supplier finance arrangements on liabilities and cash flows, including the terms and conditions of those arrangements, the quantitative information on liabilities related to those arrangements at the beginning and end of the reporting period and the type and effect of non-cash changes in the carrying amounts of those arrangements. The information on those arrangements is required to be aggregated unless the individual arrangements have dissimilar or unique terms and conditions. In the context of the quantitative liquidity risk disclosures required by IFRS 7, supplier finance arrangements are included as an example of other factors that might be relevant to disclose.

 

 

2.6. New pronouncements

 

Pursuant to Communication “A” 6114 issued by the BCRA, as the new IFRS are approved, or the current IFRS are modified or repealed and, once such changes are adopted by the Argentine Federation of Professional Councils of Economic Sciences (FACPCE) by means of Notices of Adoption, the BCRA shall issue a statement announcing its approval for financial institutions. In general, the early application of any IFRS is not permitted, unless specifically permitted at the time of adoption.

 

The standards and interpretations applicable to the Entity, issued but ineffective as of the date of these consolidated condensed interim financial statements are disclosed below. The Entity will adopt these standards, if applicable, when they are effective:

 

Amendments to IAS 21 - Lack of exchangeability

 

In August 2023, the IASB issued amendments to IAS 21 relating to the “Lack of exchangeability”. The amendment to IAS 21 specifies how an entity should assess whether a currency is exchangeable and how it should determine a spot exchange rate when interchangeability is lacking. A currency is considered to be exchangeable for another currency when an entity is able to obtain the other currency without undue delay and through markets or exchange mechanisms that create enforceable rights and obligations. If a currency is not exchangeable for another currency, an entity is required to estimate the spot exchange rate at the measurement date. An entity's purpose in estimating the spot rate is to reflect the rate at which an orderly exchange transaction would take place at the measurement date between market participants under prevailing economic conditions. The amendments state that an entity may use an unadjusted observable exchange rate or other estimation technique.

 
 
 -20-
 

When an entity estimates a spot exchange rate because a currency is not exchangeable for another currency, it should disclose information that enables users of the financial statements to understand how the fact of that currency not being interchangeable affects, the entity's performance, financial position and cash flows. These amendments will be effective from January 1, 2025. The Entity is evaluating the effects that this amendment would have on the Financial Statements.

 

IFRS 18 - Presentation and Disclosure in Financial Statements

 

In April 2024, the IASB issued IFRS 18 “Presentation and Disclosures in Financial Statements”, addressing the disclosure format for profit or loss in the financial statements, the performance measures defined by management and the aggregation/breakdown of information in disclosures. This regulation will replace IAS 1 and is effective as from January 1, 2027. The Bank is assessing the effects that this regulation would have on the financial statements.

 

Amendments to IFRS 9 and IFRS 7 – Classification and Measurement of Financial Instruments

 

In May 2024, the IASB issued amendments to the classification and measurement of financial instruments, which:

 

·Clarify that a financial liability is derecognized on the “settlement date,” that is, when the related obligation is fulfilled, canceled, expires, or the liability otherwise qualifies for derecognition. It also introduces an accounting policy option to derecognize financial liabilities settled through an electronic payment system before the settlement date if certain conditions are met.

 

·Clarify how to assess the contractual cash flow characteristics of financial assets that include environmental, social, and governance (ESG) and other similar contingent characteristics.

 

·Clarify the treatment of non-recourse assets and contractually linked instruments.

 

·Require additional disclosures for financial assets and liabilities with contractual terms that make reference to a contingent event (including those linked to ESG) and equity instruments classified at fair value through other comprehensive income.

 

These amendments will become effective on January 1, 2026. The Entity is currently evaluating the effects these amendments may have on the financial statements.

 

 

2.7. Transcription to the books

As of the date of these consolidated condensed interim financial statements, they are in the process of being transcribed to the Book of Balance Sheets for Publication and result. In addition, the accounting entries are in the process of being transcribed to the relevant books and records, in accordance with applicable laws in force.

 
 
 -21-
 

3. Cash and deposits in banks

The breakdown in the Consolidated Condensed Statement of Financial Position and the balance of cash and cash equivalents calculated for the purposes of the preparation of the Consolidated Condensed Statement of Cash Flows is as follows:

 

    06.30.24   12.31.23
         
Cash   713,253,005   1,307,432,378
B.C.R.A. - Current account   658,515,447   646,918,071
Balances with other local and foreign financial institutions   71,509,255   100,357,178
Cash and cash equivalents for spot purchases or sales pending settlement   7,383,347   -
         
                                                        TOTAL   1,450,661,054   2,054,707,627

 

The balances of Cash and deposits in banks as of June 30, 2023 and as of December 31, 2022, amounted to 1,577,523,092 and 1,658,707,997, respectively.

 

4. Debt securities at fair value through profit or loss

 

Breakdown is as follows:

    06.30.24   12.31.23
         
Government securities   251,882,671   402,568,806
Private securities – Corporate bonds   341,718   3,865,646
         
                                                        TOTAL   252,224,389   406,434,452

 

A breakdown of this information is provided in Exhibit A.

 

 

5. Derivative instruments

In the ordinary course of business, the group carried out foreign currency forward transactions with daily or upon-maturity settlement of differences, with no delivery of the underlying asset, interest rates swaps and options. These transactions do not qualify as hedging pursuant to IFRS 9 - “Financial Instruments”.

 

The aforementioned instruments are measured at fair value and were recognized in the Consolidated Condensed Statement of Financial Position in the item “Derivative instruments”. Changes in fair values were recognized in the Consolidated Condensed Statement of Income in “Net income from measurement of financial instruments at fair value through profit or loss”.

 

 
 
 -22-
 

Breakdown is as follows:

Assets

    06.30.24   12.31.23
         
Debit balances linked to foreign currency forwards pending settlement in pesos   3,850,285   15,345,737
Income from put options taken (1)   1,480,831   2,634,912
Debit balances linked to interest rate swaps (floating rate for fixed rate)   350,747   -
         
                                                        TOTAL   5,681,863   17,980,649
(1)The Entity subscribed for options as set forth in Communication “A” 7546 issued by the BCRA (See Note 53 – Subsequent events – Termination of liquidity options with the BCRA).

 

Liabilities

    06.30.24   12.31.23
         
Credit balances linked to foreign currency forwards pending settlement in pesos   514,103   3,856,508
         
                                                        TOTAL   514,103   3,856,508

 

 

The notional amounts of the forward transactions and foreign currency forwards, stated in US Dollars (US$) and in Euros as applicable, as well as the base value of interest rate swaps and put options taken are reported below:

 

    06.30.24   12.31.23
         
Foreign currency forwards        
         
   Foreign currency forward purchases - US$   326,971   169,836
   Foreign currency forward sales - US$   298,956   119,093
   Foreign currency forward sales - Euros   6,888   5,500
         
Interest rate swaps        
         
   Fixed rate for floating rate (1)   2,044,000   -
         
Put options        
         
   Put options taken (2)   552,080,875   142,183,107

 

(1) Floating rate: Badlar rate, interest rate for deposits over one million pesos, for a term of 30 to 35 days.

(2)See Note 9.2.

 
 
 -23-
 

6. Repo transactions

 

Breakdown is as follows:

 

Reverse repurchase transactions

 

    06.30.24   12.31.23
         
Amounts receivable for reverse repurchase transactions of BCRA Notes/Liquidity Bills with the BCRA  (1)   278,874,103   2,161,621,693
         
                                                        TOTAL   278,874,103   2,161,621,693

 

(1)As of June 30, 2024 and December 31, 2023, repurchase transactions involving BCRA Notes/Liquidity Bills fall due on July 1, 2024 and January 2, 2024, respectively.

 

Repo transactions and surety bonds

 

    06.30.24   12.31.23
         
Amounts payable for borrowing surety bond transactions   177,505,000   -
         
                                                        TOTAL   177,505,000   -

 

 

7. Other financial assets

 

Breakdown is as follows:

    06.30.24   12.31.23
Measured at amortized cost        
         
Other receivables   79,824,870   88,794,612
Receivables from sale of ownership interest in Prisma Medios de Pago S.A. (1)   42,629,978   72,762,067
Financial debtors from spot transactions pending settlement   22,857,000   1,657,321
Non-financial debtors from spot transactions pending settlement   5,830,364   1,572,262
Other   4,329,204   228,478
         
    155,471,416   165,014,740
         
Measured at fair value through profit or loss        
         
Mutual funds   399,884   1,333,573
         
    399,884   1,333,573
         
Allowance for loan losses (Exhibit R)   (1,560,127)   (2,550,868)
         
                                                        TOTAL   154,311,173   163,797,445

 

(1)On October 1, 2021, the Bank, together with the other Class B Shareholders, gave notice of the exercise of the put option and therefore initiated the procedure to sell 49% of the capital stock in the company Prisma Medios de Pago S.A.
 
 
 -24-
 

On March 18, 2022, the transfer of all the remaining shareholding of the Bank in Prisma Medios de Pago S.A. was consummated for a price of US$ 40,038,122. Such amount will be paid as follows: (i) 30% in Pesos adjustable by CER (UVA) at an annual nominal rate of 15% and (ii) 70% in US Dollars at an annual nominal rate of 10% within a term of six years.

 

 

8. Loans and other financing

 

The Group holds loans and other financing under a business model intended to collect contractual cash flows. Therefore, the Group measures loans and other financing at amortized cost. Breakdown is as follows:

 

    06.30.24   12.31.23
         
Credit cards   1,196,872,037   1,263,184,017
Overdrafts   526,657,332   317,326,589
Unsecured instruments   490,913,703   571,800,241
Loans for the prefinancing and financing of exports   395,491,145   275,412,661
Consumer loans   344,345,512   272,930,097
Discounted instruments   300,898,087   261,051,064
Mortgage loans   160,874,649   142,747,432
Pledge loans   52,515,046   79,702,419
Other financial institutions   22,453,954   29,540,343
Loans to personnel   20,592,013   18,460,037
Receivables from finance leases   15,449,181   22,866,560
Instruments purchased   2,498,662   5,421,155
Non-financial Government sector   1,701,146   261,043
Other financing   363,301,444   372,349,484
         
    3,894,563,911   3,633,053,142
         
Allowance for loan losses (Exhibit R)   (79,663,762)   (81,655,430)
         
                                                        TOTAL   3,814,900,149   3,551,397,712

 

The Group as lessor entered into finance lease agreements related to vehicles and machinery and equipment. The following table shows the total gross investment in the finance leases (lease-purchase agreement) and the current value of the minimum collections to be received thereunder:

    06.30.24   12.31.23
   

Total

investment

Current value of minimum payments  

Total

investment

Current value of minimum payments
Term            
             
Up to 1 year   10,345,827 3,769,940   16,162,836 4,673,338
From 1 to 2 years   9,338,086 3,981,094   16,673,776 6,567,703
From 2 to 3 years   7,422,684 4,088,294   12,200,922 5,539,422
From 3 to 4 years   2,679,436 1,719,702   6,582,042 3,945,489
From 4 to 5 years   1,928,016 1,890,151   2,351,411 2,140,608
             
TOTAL   31,714,049 15,449,181   53,970,987 22,866,560
             
Share capital     14,992,531     21,705,500
Accrued interest     456,650                      1,161,060
             
TOTAL     15,449,181     22,866,560

 

 
 
 -25-
 

The breakdown of loans and other financing according to credit performance (determined as per the criteria set forth by the BCRA in the debtor classification regulations) and guarantees received are presented in Exhibit B. The information on concentration of loans and other financing is presented in Exhibit C. The reconciliation of the information included in that Exhibit to the carrying amounts is shown below:

 

    06.30.24   12.31.23
         
Total Exhibits B and C   4,094,554,897   3,840,739,444
Plus:        
Loans to personnel   20,592,013   18,460,037
Interest and other items accrued receivable from financial assets with credit value impairment   1,680,394   1,461,128
Less:        
Allowance for loan losses (Exhibit R)   (79,663,762)   (81,655,430)
Adjustments for effective interest rate   (24,849,223)   (24,577,532)
Corporate bonds and other private securities   (24,298,004)   (16,883,150)
Loan commitments   (173,116,166)   (186,146,785)
         
Total loans and other financing   3,814,900,149   3,551,397,712

 

Note 43.2 to the consolidated condensed interim financial statements contains information on credit risk associated with loans and other financing and allowances measured using the expected credit loss model.

 

 

As of June 30, 2024 and December 31, 2023, the Group holds the following loan commitments booked in off- balance sheet accounts according to the financial reporting framework set forth by the BCRA:

 

    06.30.24   12.31.23
         
Liabilities related to foreign trade transactions   56,162,123   68,678,044
Guarantees granted   44,842,444   4,907,628
Secured loans   36,600,376   79,886,340
Overdrafts and receivables not used   35,511,223   32,674,773
         
                                                        TOTAL   173,116,166   186,146,785

 

 

Risks related to the aforementioned loan commitments are assessed and controlled within the framework of the Group's credit risks policy (Note 42.1. Financial instruments risk policies to the consolidated financial statements as of December 31, 2023).

 

Financing line for productive investment

 

The BCRA established a financing line for productive investments of MSMEs (MiPyMEs, as per its Spanish acronym) aimed at financing CAPEX and/or the construction of the facilities needed for the production and/or marketing of goods and/or services, financing working capital and discounting deferred checks and other instruments, and other special eligible facilities allowed by applicable laws.

 

The facilities should be granted as part of the 2021/2022, 2022, 2022/2023, 2023, 2023/2024 Quotas and MiPyME Mínimo, pursuant to the following conditions for the quotas in force during fiscal year 2023 and 2024:

 

 
 
 -26-
 

 

Account 2022/2023 Quota 2023 Quota 2023/2024 Quota MiPyME Mínimo Quota
Applicable law “B” 12413 –    “A” 7612 “B” 12544 –    “A” 7720 "B" 12667 - “A” 7848 “A” 7983
Amount to be allocated At least, the equivalent to 7.5% of the monthly average of daily balances of non-financial private sector deposits in pesos of the previous month at the beginning of the period.
Calculation of application Between 10.1.2022 and 03.31.2023 Between 04.1.2023 and 09.30.2023 Between 10.1.2023 and 03.31.2024 As from 04.1.2024
Maximum interest rate Capped at an annual nominal fixed rate of 64.50% for investment projects, and at an annual nominal fixed rate of 75.50% for other purposes. Capped at an annual nominal fixed rate of 97% for investment projects, and at an annual nominal fixed rate of 109% for other purposes. The interest rate to be agreed upon by the parties.
Currency Pesos
Minimum term At the time of disbursement, the credit facilities shall have an average term of at least 24 months, but the total term shall not be of less than 36 months.  No minimum term will apply to credit facilities aimed at financing working capital and discounting deferred checks and other instruments.

 

 

As of June 30, 2024, the total amount disbursed by the Entity meets the BCRA requirement. Disbursements are reported below:

 

 

Quota Minimum Amount to be Allocated (1) Simple Average of Daily Balances (1) Amount Disbursed (1)
2021/2022 Quota 32,447,048 43,434,402 62,449,414
2022 Quota 42,867,291 63,022,460 98,200,990
2022/2023 Quota 58,558,806 86,880,132 127,355,598
2023 Quota 84,764,223 148,263,325 234,048,314
2023/2024 Quota 135,740,381 129,484,282 220,930,680
MiPyME Mínimo Quota (*) (*) (*)

 

(*) As of the date of these financial statements, the term reported by Communication “A” 7983 has not expired.

 

(1) The amounts are exposed in nominal values.

 

 

9. Other debt securities

 

9.1. Financial assets measured at amortized cost

 

Breakdown is as follows:

    06.30.24   12.31.23
         
Argentine Treasury Bonds in pesos. Maturity 08-23-2025   114,599,443   88,992,145
Argentine Treasury Bonds in pesos. Maturity 05-23-2027   24,305,153   58,258,587
Argentine Treasury Bonds in pesos at 0.7% Badlar Private Rate. Maturity 11-23-2027   13,838,418   26,555,747
         
                                                        TOTAL   152,743,014   173,806,479

 

 
 
 -27-
 

9.2. Financial assets measured at fair value through OCI

 

Breakdown is as follows:

 

    06.30.24   12.31.23
         
Government securities (1)   2,065,693,355   938,185,848
Private securities – Corporate bonds   23,719,564   16,106,145
Local BCRA Bills in foreign currency   14,360,063   125,430,947
BCRA Liquidity Bills in pesos   -   108,735,287
         
                                                        TOTAL   2,103,772,982   1,188,458,227

 

(1)In March 2023, the Bank launched a voluntary debt swap under Section 11, Presidential Decree No. 331/2022 issued by the Ministry of Economy. The securities delivered/received under such swap were as follows:

 

Securities Delivered
Species Nominal values
Argentine Treasury Bill in pesos at discount. Maturity April 28, 2023 (LEDES S28A3) 19,027,714,460
Argentine Treasury Bill in pesos adjusted by CER at discount. Maturity May 19, 2023 (LECER X19XY3) 7,000,000,000
Argentine Treasury Bill in pesos at discount. Maturity May 31, 2023 (LEDES S31Y3) 6,840,800,244
Argentine Treasury Bill in pesos at discount. Maturity June 30, 2023 (LEDES S30J3) 5,532,343,136

 

Securities Received
Species Nominal values
Argentine Treasury Bond in pesos adjusted by CER at 3.75%. Maturity April 14, 2024 (T3X4P) 13,237,176,685
Argentine Treasury Bond in pesos adjusted by CER 4%. Maturity October 14, 2024 (T4X4P) 17,649,568,913
Argentine Treasury Bond in pesos adjusted by CER 4.25%. Maturity February 14, 2025 (T2X5P) 13,237,176,685

 

In June 2023, the Bank launched a new voluntary debt swap under Section 11, Presidential Decree No. 331/2022 issued by the Ministry of Economy. The securities delivered/received under such swap were as follows:

 

Securities Delivered
Species Nominal values
Argentine Treasury Bill in pesos adjusted by CER at discount. Maturity June 16, 2023 (LECER X16J3) 2,159,998,000
Argentine Treasury Bill in pesos adjusted by CER at discount. Maturity July 18, 2023 (LECER X18L3) 35,863,500,000
Argentine Treasury Bonds in pesos adjusted by CER 1.45%. Maturity August 13, 2023 (T2X3) 3,622,490,577

 

Securities Received
Species Nominal values
Argentine Treasury Bond in pesos adjusted by CER 4.25%. Maturity December 13, 2024 (T5X4P) 71,442,000,014

 

In addition, the Bank purchased put options from the BCRA. These options grant the Bank an opportunity to sell (put option) the underlying asset at a price determined by BCRA applicable regulations. In this transaction, options may be exercised up to the day prior to the maturity date of the underlying asset. As of June 30, 2024, their notional value stood at 552,080,874,862 (see Exhibit A and O to the separate condensed interim financial statements).

 
 
 -28-
 

Debt Swap - August 2024

 

During August 2024, the Bank participated in a voluntary debt swap under Section 11, Presidential Decree No. 331/2022 of the Ministry of Economy. The securities delivered/received under such swap were as follows:

 

Securities Delivered
Type Nominal values
Treasury Bonds in Pesos adjusted by Cer 4.25%. Maturity February 14, 2025 (BOND T2X5) 4,730,000,000
Treasury Bonds in Pesos adjusted by Cer 4%. Maturity October 14, 2024 (BOND T4X4) 14,420,000,000

 

Securities Received
Type Nominal values
Argentine Treasury Bills Capitalizable in Pesos. Maturity March 31, 2025 (LT S31M5) 21,939,229,119
Argentine Treasury Bonds in Pesos adjusted by CER. Maturity December 15, 2025 (BOND TZXD5) 56,422,237,648

 

 

 

10. Financial assets pledged as collateral

 

Breakdown is as follows:

    06.30.24   12.31.23
         
Deposits as collateral (1) 243,824,496   50,271,975
BCRA - Special guarantee accounts (Note 47.1) (2) 142,061,706   174,246,598
Guarantee trust - Government securities at fair value through OCI (3) 76,312,647   234,777,376
Guarantee trust - USD - Government and Private Securities at fair value through OCI (4) 26,850   11,050,927
         
                                                        TOTAL   462,225,699   470,346,876

 

(1)Deposits pledged as collateral for activities related to credit card transactions in the country and abroad, leases and surety bond transactions.
(2)Special guarantee current accounts opened at the BCRA for transactions related to the automated clearing houses and other similar entities.
(3)Set up as collateral to operate with Rosario Futuros Exchange (ROFEX), Bolsas y Mercados Argentinos S.A. (BYMA) and Mercado Abierto Electrónico S.A. (MAE) on foreign currency forward transactions and futures contracts. The trust is composed of Treasury Bonds in pesos adjusted by Cer due 2024 and 2025 (Species T2X4 and T2X5). As of December 31, 2023, the trust was composed of species T2X4, T2X5 and TX26.
(4)The trust is composed of dollars in cash. As of December 31, 2023, the trust was composed of dollars in cash, Treasury Bonds (TV24D) and Private Securities (LUC4O, PQCOO and PQCHO).

 

 

11. Income tax

 

This tax should be booked using the liability method, recognizing (as credit or debt) the tax effect of temporary differences between the accounting valuation and the tax valuation of assets and liabilities, and its subsequent allocation to income or loss for the year in which its reversion occurs, also considering the possibility of taking advantage of tax losses in the future.

 

 
 
 -29-
 

11.1. Current income tax assets

 

Breakdown is as follows:

    06.30.24   12.31.23
         
Advances   45,324,125   288,251
    45,324,125   288,251

 

11.2. Current income tax liabilities

Breakdown is as follows:

    06.30.24   12.31.23
         
Income tax provision   5,267,313   352,185,329
Advances   (774,099)   (6,102,718)
Collections and withholdings   (357,327)   (619,807)
         
    4,135,887   345,462,804

 

 

11.3. Deferred income tax

The composition and evolution of deferred income tax assets and liabilities is as follows:

Account   Changes recognized through 06.30.24
As of 12.31.23 Profit or loss   OCI   Deferred tax asset Deferred tax liability
               
Allowance for loan losses 24,736,619 (3,855,161)   -   20,881,458 -
Provisions 64,008,438 (25,344,820)   -   38,663,618 -
Loans and cards commissions 6,489,821 1,332,567   -   7,822,388 -
Organizational expenses and others (30,468,557) (3,740,376)   -   - (34,208,933)
Property and equipment and miscellaneous assets (75,051,594) (509,781)   -   - (75,561,375)
Debt securities and investments in equity instruments (31,249,490) (148,281,621)   165,835,965   - (13,695,146)
Tax inflation adjustment 2,292,106 (1,621,186)   -   670,920 -
Tax losses 2,262,735 78,315,064   -   80,577,799 -
Other 93 (41)   -   52 -
               
Balance (36,979,829) (103,705,355)   165,835,965   148,616,235 (123,465,454)
               
Offsettings           (123,465,454) 123,465,454
               
Net deferred asset           25,150,781 -

 

 
 
 -30-
 

 

Account   Changes recognized through   As of 12.31.23
As of 12.31.22 Profit or loss   OCI   Deferred tax asset Deferred tax liability
               
Allowance for loan losses 28,172,230 (3,435,611)   -   24,736,619 -
Provisions 70,618,478 (6,610,040)   -   64,008,438 -
Loans and cards commissions 6,835,611 (345,790)   -   6,489,821 -
Organizational expenses and others (27,281,028) (3,187,529)   -   - (30,468,557)
Property and equipment and miscellaneous assets (72,842,830) (2,208,764)   -   - (75,051,594)
Debt securities and investments in equity instruments (53,303,384) 204,396,440   (182,342,546)   - (31,249,490)
Tax inflation adjustment 14,365,424 (12,073,318)   -   2,292,106 -
Other 4,484,563 (2,221,828)   -   2,262,735 -
Tax losses 241 (148)   -   93 -
               
Balance (28,950,695) 174,313,412   (182,342,546)   99,789,812 (136,769,641)
               
Offsettings           (94,673,828) 94,673,828
               
Balance           5,115,984 (42,095,813)

 

In the consolidated financial statements, the (current and deferred) income tax assets of a Group entity will not be offset with the (current and deferred) income tax liabilities of another Group entity because they are related to income tax amounts borne by different taxpayers and also because they do not have legal rights before tax authorities to pay or receive any amounts to settle the net position.

 

 

11.4. Income tax

 

Below are the main components of the income tax expense:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Current income tax expense   8,155,931   9,884,713   (54,289,007)   (98,653,817)
Income / (loss) from deferred income tax   (73,620,612)   (103,705,355)   (12,902,810)   (185,658)
                 
Income tax recognized through profit or loss   (65,464,681)   (93,820,642)   (67,191,817)   (98,839,475)
                 
Income tax recognized through OCI   62,672,505   165,835,965   (11,972,661)   (14,744,138)
                 
Total income tax   (2,792,176)   72,015,323   (79,164,478)   (113,583,613)

 

 

The Group's effective tax rate calculated on the income tax recognized in the income statement for the period ended June 30, 2024 and 2023 was 38% and 35%, respectively.

 

The income tax, pursuant to IAS 34, is recognized in interim periods over the best estimate of the weighted tax rate that the Entity expects for the fiscal year.

 
 
 -31-
 

11.5. Inflation adjustment for tax purposes

 

Law No. 27,430 of Tax Reform, as amended by Laws 27,468 and 27,541, sets forth the following as regards the inflation adjustment for tax purposes, effective for fiscal years started on or after January 1, 2018:

 

i.Such adjustment will be applicable in the fiscal year in which the percentage variation of the general consumer price index at national level (CPI) exceeds 100% in the thirty-six months prior to the closing of the fiscal year being settled;

 

ii.Regarding the first, second and third fiscal years as from January 1, 2018, the procedure will be applicable in the event that the variation of such index, calculated from the beginning and until the closing of each of those fiscal years, exceeds 55%, 30% and 15% for the first, second and third year of application, respectively;

 

iii.The effect of the positive or negative tax inflation adjustment, as the case may be, related to the first, second and third fiscal years beginning on January 1, 2018, is allocated one-third in that fiscal year and the remaining two-thirds, equally, in the two subsequent fiscal years;

 

iv.The effect of the positive or negative inflation adjustment corresponding to the first and second tax years starting on or after January 1, 2019, one-sixth must be imputed to the tax year in which the adjustment is determined and the remaining five-sixths in the immediately following tax periods; and

 

v.For tax years beginning on or after January 1, 2021, 100% of the adjustment may be deducted in the year in which it is determined.

 

As of June 30, 2024, the parameters established by the income tax law to apply the inflation adjustment for tax purposes are met and the effects arising from the application of such adjustment as provided by law have been included when booking current and deferred income tax.

 

11.6. Income tax corporate rate:

 

Law No. 27,630, enacted on June 16, 2021 through Decree No. 387/2021, set forth for fiscal years starting on or after January 1, 2021, a tax rate scale scheme of 25%, 30% and 35% to be progressively applied according to the level of taxable net income accumulated as of each fiscal year end. In these financial statements, the Entity and its subsidiaries have determined current income tax using the tax rate applicable to the total expected income for the year, while deferred income tax balances were measured using the progressive tax rate that is expected to be in effect when the temporary differences are reversed.

 

11.7. Other tax matters

 

- Inflation adjustment for tax purposes. Fiscal years 2016, 2017 and 2018.

On May 10, 2017, May 10, 2018 and May 13, 2019, and based on related case law, the Entity’s Board of Directors approved the filing of actions for declaratory judgment of unconstitutionality of section 39 of Law No. 24,073, section 4 of Law No. 25,561, section 5 of Decree No. 214/02 issued by the Argentine Executive, Law No. 27,468 and any other regulation whereby the inflation adjustment mechanism provided for under Law No. 20,628, as amended, is considered not applicable due to the confiscatory effect in the specific case, for fiscal years 2016, 2017 and 2018. Consequently, the Entity filed its income tax returns for those fiscal years taking into consideration the effect of those restatement mechanisms.

 
 
 -32-
 

The net impact of this measure on nominal values was an adjustment to the income tax assessed for the fiscal year ended December 31, 2016 in the amount of 1,185,800 (in nominal values), for fiscal year ended December 31, 2017, in the amount of 1,021,519 (in nominal values), and for fiscal year ended December 31, 2018, in the amount of 3,239,760 (in nominal values).

 

Through Memorandum No. 6/2017 dated May 29, 2017, the BCRA, without resolving on the decisions adopted by the Entity's authorities or the Entity's right regarding the action filed, in its capacity as issuer of accounting standards, requested the Entity to record a provision for contingencies included in “Liabilities” in an amount equivalent to the income recorded, as it considers that “a reassessment of the income tax by applying the inflation adjustment is not contemplated by the BCRA regulations”.

 

In response to this Memorandum, the Entity filed the related answer and confirmed its position by providing the relevant supporting documentation. Notwithstanding the foregoing, the Entity recorded the requested provision, pursuant to the accounting standards prescribed by the regulator for this case.

 

On June 8, 2020, the Federal Court on Administrative Matters (JCAF 12-23) ruled upon the action for declaratory judgment filed on May 12, 2017, upholding the complaint and thus declaring that the prohibition to apply the inflation adjustment mechanism for the purposes of the income tax return filed by the Bank for fiscal year 2016 is not applicable to the instant case.

 

The appeals filed against the judgment were granted on August 6, 2020, and the case was submitted to the Appellate Court for consideration. On December 9, 2020, the Federal Appellate Court on Administrative Matters (Courtroom II) dismissed the appeals, thus confirming the judgment rendered by the court of original jurisdiction. The tax authority Administración Federal de Ingresos Públicos (“AFIP” or the “Tax Authority” or the “National Tax Authority”) filed an extraordinary appeal against the judgment, but then withdrew it through a motion filed on February 1, 2021.

 

In addition, the Bank reversed the provision set up for fiscal year 2016 at the request of the BCRA, recognizing a benefit in the first quarter of 2021 in the amount of 1,185,800 in nominal values (17,280,094 in values restated as of June 30, 2024).

 

On June 14, 2021, the Court of First Instance rendered judgment in respect of the action for declaratory judgment of unconstitutionality for fiscal year 2017 in favor of the Bank’s position. After appealing the judgment to the Appellate Court, the Bank filed the basis for the appeal but on September 3, 2021 the tax authority filed a brief withdrawing the appeal filed. Although the Appellate Court did not accept the withdrawal because the documentation submitted did not fulfill the necessary conditions, since no basis for the appeal was finally filed, we understand that the appeal will be declared void.

 

On September 30, 2021, the Court determined that the proceedings were set for the agreement to be entered. On November 2, 2021, AFIP filed a motion ratifying the withdrawal of the appeal filed with respect to the merits of the case. On November 3, 2021 the Court ordered to proceed with the case for an agreement to be entered. Finally, on May 10, 2022, the Appellate Court considered that AFIP had withdrawn its appeal with respect to the judgment on the merits.

 

On June 25, 2021, the Bank notified the BCRA about the reversal of the provision set up pursuant to Memorandum No. 6/2017 issued by the BCRA concerning the income tax reassessment due to the inflation adjustment for tax purposes for fiscal years 2017 and 2018 for a total amount of 4,261,279 in nominal values (55,967,587 in values restated as of June 30, 2024), since, based on the assessment made and on its legal and tax advisors’ opinion, the Entity believes that it is more probable than not that it will obtain a favorable final judgment in respect of these fiscal years. The Entity notified the BCRA of the criteria adopted, to which the BCRA gave its consent.

 

 
 
 -33-
 

On October 5, 2022, the Federal Contentious Administrative Trial Court No. 2 issued a favorable decision on the unconstitutionality action filed with respect to the regulations banning the application of title VI of the adjustment for inflation in the 2018 income tax return. After appealing the judgment, on November 17, 2022, we filed a brief stating grievances in connection with legal costs, and on November 27, 2022, AFIP filed its brief.

 

On July 11, 2023, the decision issued by Room I of the Federal Court of Appeals in Contentious and Administrative Matters confirming the trial court decision in favor of the Bank was notified. On August 8, 2023, AFIP filed an extraordinary appeal, which was partially granted.

 

On September 19, 2023, the Court of Appeals partially accepted the extraordinary appeal submitted to the Argentine Supreme Court of Justice. At present, it is awaiting for the Argentine Supreme Court of Justice to decide on the appeals filed by the AFIP (Federal Public Revenue Agency).

 

Based on the foregoing, as of June 30, 2024, the Entity has no liabilities for the items referred to above.

 

- Inflation adjustment for tax purposes. Fiscal year 2019

As concerns fiscal year 2019, the Entity assessed its income tax liability applying the inflation adjustment for tax purposes according to the terms of the Public Emergency Law, which maintains the inflation adjustment mechanism set out under Title VI of the Income Tax Law. Nevertheless, one sixth of the resulting inflation adjustment amount should be recognized during that fiscal year, with the remaining five sixths being computed, in equal parts, over the five immediately following fiscal years. Such deferral has been recognized as a deferred tax asset.

 

On August 21, 2020, the Bank filed a request for refund at the administrative stage pursuant to the provisions of the first paragraph of section 81 of Law No. 11,683 (as compiled in 1998 and as amended) to recover the amount of 4,528,453 (in nominal values).

 

Upon no response from the tax authorities, on June 17, 2021 the Entity filed a motion for expedited proceedings and on November 18, 2021 a legal action was filed before National Court on Federal Administrative Matters No. 10 (Court Clerk’s Office No. 24).

 

Pursuant to the financial reporting framework set forth by the BCRA, the Entity does not record assets in relation to contingent assets derived from the action filed.

 

- Inflation adjustment for tax purposes. Fiscal year 2020

In relation to fiscal year 2020, the Entity determined the income tax as of December 31, 2020 by applying the inflation adjustment for tax purposes in accordance with the provisions of the Public Emergency Law.

 

On May 26, 2021, and based on related case law, the Entity’s Board of Directors approved the filing of an action against the AFIP for declaratory judgment of unconstitutionality of section 194 of the Income Tax Law (as compiled in 2019) and/or of such rules that prohibit the full application of the inflation adjustment for tax purposes, on the grounds that they would lead to the assessment of a confiscatory income tax liability for fiscal year 2020; therefore allowing the full application of the mechanism set forth in section 106, paragraphs a) through e), Title VI of the Income Tax Law in that fiscal year.

 

Consequently, as of December 31, 2021, the Entity accounted for an adjustment in nominal values to the income tax liability assessed for the fiscal year ended December 31, 2020 in the amount of 5,817,000 (93,465,638 in restated values), with the ensuing impact on deferred tax assets by 5,033,000 (decrease) (82,844,235 in restated values) and on the income tax expense of 784,000 (10,621,410 in restated values).

 

On August 15, 2023, a trial court decision sustaining the claim filed by the Bank was issued. On August 22, 2023, the Bank appealed the decision by which the Bank should bear the costs and requested that they be borne by the losing party. On August 23, 2023, the AFIP appeals the subject matter of the case requesting that the decision be revoked.

 
 
 -34-
 

On July 1, 2024, the Appellate Court rejected AFIP’s claims regarding the substance of the case and also resolved to impose legal costs according to each party to the case in both instances. The AFIP filed an extraordinary appeal against the decision in favor of the Bank.

 

- Inflation adjustment for tax purposes. Fiscal year 2021

On June 30, 2022, the Bank filed a prior administrative claim before the AFIP in order to obtain the recognition of the corrective tax return in less filed on June 30, 2022 with respect to the Income Tax for the 2021 tax year for 309,000 (in nominal values), on the grounds that the partial application of the correction mechanisms of the inflation adjustment under the provisions of Section 93 of the Income Tax Law is unconstitutional, since it affects the principle of reasonableness, equality, contributive capacity and confiscatory nature.

 

On June 6, 2023, a prompt resolution was requested. In view of the AFIP's silence, on September 20, 2023, a claim was filed before the Federal Court on Contentious Administrative Matters No. 1, Clerks’ Office No. 1.

 

- Inflation adjustment for tax purposes. Fiscal year 2022

On June 2, 2023, the Bank filed an unconstitutionality action against the AFIP to obtain a ruling declaring the unconstitutionality of section 93 of Income Tax Law (as revised in 2019) or other regulations preventing the comprehensive application of the tax adjustment for inflation, as it leads to a confiscatory income tax assessment for 2022 and, consequently, allows for the comprehensive adoption of the cost and amortization adjustment method provided for by sections 62 through 66, 71, 87 and 88 of Income Tax Law.

 

On June 6, 2023, Court No. 9 forwarded the proceedings to the prosecutor's office to rule on jurisdiction. Once the prosecutor's opinion was submitted on June 8, the Court declared its jurisdiction.

 

- Requests for refund. Fiscal years 2013, 2014 and 2015

Regarding fiscal years 2013, 2014 and 2015, the Entity assessed income tax without applying the inflation adjustment for tax purposes, consequently a higher tax was paid in the amounts of 264,257, 647,945 and 555,002, respectively, in nominal values.

 

Based on grounds similar to those stated in the first paragraph “Inflation Adjustment for Tax Purposes. Fiscal Years 2016, 2017 and 2018,” on November 19, 2015, an administrative action requesting a refund for fiscal years 2013 and 2014 was filed, and the related judicial action was filed on September 23, 2016 for both fiscal years, given that no answer was received from AFIP.

 

In turn, on April 4, 2017, a request for refund was filed in relation to the higher amount of tax paid for fiscal year 2015. Likewise, on December 29, 2017, the related judicial action was filed for this fiscal year.

 

On October 21, 2020, the Entity was notified that Court of First Instance on Administrative Matters No. 1 rendered judgment upholding the request for refund for fiscal year 2014. AFIP filed an appeal against such judgment before the Appellate Court.

 

On November 10, 2020, the Court of First Instance rendered judgment sustaining BBVA Argentina's complaint, thereby ordering the tax authorities to refund the amount of 264,257 (nominal values) paid in excess of the income tax liability for fiscal year 2013, plus accrued interest. The National Tax Authority filed an appeal against the judgment. Finally, on May 6, 2021, the Federal Appellate Court on Administrative Matters (Courtroom I) confirmed the appealed judgment on the merits, therefore dismissing the appeal brought by the national tax authorities.

 

 
 
 -35-
 

On April 27, 2021, the Appellate Court rendered judgment in favor of the Bank concerning the refund of income tax for fiscal year 2014. In its judgment, the Appellate Court substantially confirmed the judgment rendered by the Court of First Instance on the merits, upholding the confiscatory nature of the tax.

 

The National Tax Authority brought extraordinary appeals against both judgments, and the Appellate Court has rejected such appeal with respect to the claims of arbitrariness and serious institutional implications.

 

On June 28, 2022, the Federal Appellate Court on Administrative Matters (Courtroom VII) rendered judgment in favor of the Bank as regards the recovery of the income tax for tax period 2015 and AFIP appealed such judgment.

 

On July 12, 2023, the Bank was notified of the decision issued by the Argentine Supreme Court of Justice with respect to the 2014 tax period rejecting the extraordinary appeal and the appeal filed by Tax Authorities. Thus, the favorable decisions issued by previous courts recognizing a 647,946 reimbursement (in nominal values) for such period plus the interest calculated in accordance with the weighted average deposit interest rate published by the BCRA became final. Such calculation was filed.

 

On August 7, 2023, we were notified of the decision issued by the Argentine Supreme Court of Justice with respect to the 2013 tax period rejecting the extraordinary appeal and the appeal filed by Tax Authorities, thus rendering the decisions issued by previous court instances final. Those decisions recognized that the Bank should be reimbursed 264,257 (in nominal values) for such period plus interest, and determined that the BCRA weighted average deposit interest rate should be applied until July 31, 2019, and the monthly effective rate published by the AFIP in compliance with Ministry of Finance 598/19, as from August 1, 2019, and until the actual payment is made. The calculation was filed.

 

As to the 2013 tax period, on December 27, 2023, the AFIP deposited on the bank account in the Bank’s name the amount of 1,037,484 (in nominal terms), comprising 264,257 (in nominal terms) as principal and 773,227 (in nominal terms) as principal and interest.

 

As a result of the abovementioned favorable decisions by the Argentine Supreme Court of Justice and the collection of one of such cases, the Bank booked a receivable of 10,636,060 restated as of June 30, 2024.

 

On October 25, 2023, the Appellate Court rendered favorable judgment in the case relating to the request for refund of the Income Tax due to the application of the tax inflation adjustment in 2015, confirming the first instance judgment.

 

The AFIP and the Entity filed extraordinary appeals. At present, the appeals filed are pending resolution.

 

 

12. Investments in equity instruments

 

12.1. Investments in equity instruments through profit or loss

 

Breakdown is as follows:

    06.30.24   12.31.23
         
Private securities - Shares of other non-controlled companies   6,023,682   5,799,340
         
                                                        TOTAL   6,023,682   5,799,340

 

 
 
 -36-
 

12.2. Investments in equity instruments through other comprehensive income

 

Breakdown is as follows:

    06.30.24   12.31.23
         
Compensadora Electrónica S.A.   1,603,181   1,603,181
Mercado Abierto Electrónico S.A.   955,719   920,103
Banco Latinoamericano de Exportaciones S.A.   547,025   727,122
Seguro de Depósitos S.A.   229,384   259,329
Other   40,267   58,735
         
                                                        TOTAL   3,375,576   3,568,470

 

 

13. Investments in associates

 

Breakdown is as follows:

    06.30.24   12.31.23
         
BBVA Seguros Argentina S.A.   6,763,044   8,467,393
Rombo Compañía Financiera S.A.                                                   6,277,091   5,532,413
Interbanking S.A.   2,786,797   3,793,848
Play Digital S.A.(1)   1,805,697   3,511,006
Openpay Argentina S.A.(2)   529,631   926,404
         
TOTAL   18,162,260   22,231,064
(1)In order to determine the value of this investment, the accounting information of Play Digital S.A. as of March 31, 2024 has been used. In addition, the significant transactions made or events occurred between April 1 and June 30, 2024 were considered.
(2)On April 19, 2023, 29,205 (in nominal values) shares were subscribed for and paid in in cash. See also note 53.

 

 

14. Property and equipment

 

Breakdown is as follows:

    06.30.24   12.31.23
         
Real estate   394,960,058   400,008,290
Furniture and facilities   68,028,851   68,925,768
Right of use of leased real estate   47,950,511   43,757,439
Machinery and equipment   29,803,924   14,177,214
Construction in progress   12,337,521   7,334,307
Vehicles   1,817,906   1,910,016
         
TOTAL   554,898,771   536,113,034

 

The breakdown of lease assets and liabilities as well as interest and foreign exchange differences recognized in profit or loss is disclosed in Note 25 to these consolidated condensed interim financial statements.

 

Based on the reports prepared by the independent appraiser relied upon by the Bank to assess the impairment of its property, the carrying amount of certain pieces of real estate exceeds its recoverable value. Therefore, such amount should be written down to the recoverable value.

 

 
 
 -37-
 

The impairment of assets recorded under the item “Property and equipment” is reported below:

 

Account   Impairment
    06.30.2024   12.31.2023
         
Real estate - Balvanera   (1,285,550)   (1,285,550)
Real estate - Libertador   (1,045,997)   (1,045,997)
Real estate - Store 1 Puerto Madero   (539,144)   (539,144)
Real estate - Store 5 Puerto Madero   (395,803)   (395,803)
Real estate - Cerro Las Rosas   (130,416)   (130,416)
Real estate - Mar del Plata   (127,200)   (127,200)
Real estate - Lavallol   (82,427)   (82,427)
Real estate - La Plata   (74,625)   (74,625)
Real estate - Monte Grande   (70,519)   (70,519)
Real estate - Bahía Blanca   (26,516)   (26,516)
         
TOTAL   (3,778,197)   (3,778,197)

 

 

 

15. Intangible assets

Breakdown is as follows:

 

    06.30.24   12.31.23
         
Own systems development expenses   57,777,269   59,572,046
         
TOTAL   57,777,269   59,572,046

 

16. Other non-financial assets

 

Breakdown is as follows:

    06.30.24   12.31.23
         
Investment properties   107,177,247   108,138,204
Prepayments   19,735,565   22,167,881
Advances to suppliers of goods   12,993,622   11,869,312
Tax advances   6,667,210   13,571,640
Other miscellaneous assets   3,309,783   2,065,136
Advances to personnel   341,608   15,293,719
Assets acquired as security for loans   137,631   142,096
Other   3,316,211   14,154,854
         
TOTAL   153,678,877   187,402,842

 

 

Investment properties include pieces of real estate leased to third parties. The average term of lease agreements is 6 years. Subsequent renewals are negotiated with the lessee. The Group has classified these leases as operating leases, since these arrangements do not substantially transfer all risks and benefits inherent to the ownership of the assets. The rental income is recognized under “Other operating income” on a straight-line basis during the term of the lease.

 

 
 
 -38-
 

The impairment of assets booked in Investment properties under non-financial assets is as follows:

 

Account   Impairment
    06.30.24   12.31.23
         
Leased real estate - Viamonte   (428,422)   (428,422)
         
                                                        TOTAL   (428,422)   (428,422)
         

 

17. Non-current assets held for sale

 

It includes pieces of real estate located in the Argentine Republic, which the Bank’s Board of Directors agreed to sell in the short term.

 

Breakdown is as follows:

 

    06.30.24   12.31.23
         
Real estate held for sale - Fisherton   860,168   860,168
Real estate held for sale – Mendoza   280,292   280,292
Real estate held for sale – Villa Lynch   225,257   225,257
Real estate held for sale - Bernal   166,295   166,295
         
                                                        TOTAL   1,532,012   1,532,012

 

 

 

Based on the reports prepared by the independent appraiser relied upon by the Bank to assess the impairment of its property as of the end of the previous fiscal year, the carrying amount of certain pieces of real estate exceeds its recoverable value. Therefore, such amount should be written down to the recoverable value.

 

 

 

The impairment of non-current assets held for sale is as follows:

 

Account   Impairment
    06.30.2024   12.31.2023
         
Real estate held for sale - Fisherton   (445,285)   (445,285)
         
                                                        TOTAL   (445,285)   (445,285)

 

 
 
 -39-
 

18. Deposits

 

The information on concentration of deposits is disclosed in Exhibit H. Breakdown is as follows:

    06.30.24   12.31.23
         
Non-financial Government sector   180,351,308   61,182,871
Financial Sector   1,925,622   4,625,783
Non-financial Private Sector and Residents Abroad   5,628,268,070   6,476,657,773
                   Savings accounts   2,447,177,375   3,092,363,929
                   Time deposits   1,645,259,098   1,366,130,993
                   Checking accounts   1,223,649,686   1,642,511,397
                   Investment accounts   274,051,001   327,413,795
                   Other   38,130,910   48,237,659
         
TOTAL   5,810,545,000   6,542,466,427

 

 

19. Liabilities at fair value through profit or loss

 

Breakdown is as follows:

 

    06.30.24   12.31.23
         
Liabilities for transactions with government securities   194,844   18,571,084
         
TOTAL   194,844   18,571,084

 

 

 

20. Other financial liabilities

 

Breakdown is as follows:

 

    06.30.24   12.31.23
         
Obligations from financing of purchases   598,988,296   505,531,443
Credit balance for spot purchases or sales pending settlement   121,374,652   1,381,802
Collections and other transactions on behalf of third parties   51,095,922   73,352,352
Lease liabilities (Note 25)   28,913,894   42,262,371
Funds collected on behalf of AFIP   27,355,286   132,811,097
Payment orders pending credit   25,019,688   25,708,482
Receivables from spot purchases pending settlement   19,498,878   611,801
Commissions accrued payable   11,093   23,104
Other   17,221,032   24,162,212
         
TOTAL   889,478,741   805,844,664

 

 
 
 -40-
 

21. Financing received from the BCRA and other financial institutions

 

Breakdown is as follows:

 

    06.30.24   12.31.23
         
Financing received from local financial institutions   35,886,028   45,677,583
Financing received from foreign financial institutions   11,130,548   4,803,637
Financing received from BCRA   140,985   196,540
         
TOTAL   47,157,561   50,677,760

 

 

22. Corporate bonds issued

 

As of June 30, 2024 and December 31, 2023, the balances related to corporate bonds of the Bank and its subsidiaries were as follows:

 

Detail   Issuance date   Nominal value     Maturity   Rate   Payment of interest   Outstanding securities as of 06.30.24   Outstanding securities as of 12.31.23
                             
                             
Class 10 Volkswagen Financial Services   10/12/2023   10,000,000   10/12/2024   Badlar + 4.5 (class 10)   Quarterly   10,000,000   17,977,233
                             
                Total Consolidated Principal   10,000,000   17,977,233
                Consolidated Interest accrued payable   1,051,664   5,063,665
                Total Consolidated Principal and Interest accrued   11,051,664   23,040,898

 

Definitions

 

BADLAR RATE: Interest rate for deposits over 1 (one) million pesos, for a term of 30 to 35 days.

 

 
 
 -41-
 

23.        Provisions

 

Breakdown is as follows:

    06.30.24   12.31.23
         
Provision for contingent commitments (Exhibits J and R)   12,186,518   10,736,669
Provisions for termination plans (Exhibit J)   1,477,582   1,384,429
For administrative, disciplinary and criminal penalties (Note 52 and Exhibit J)   5,000   8,989
Other contingencies   18,670,821   25,125,506
Provision for commercial lawsuits   12,811,111   16,270,737
Provision for labor lawsuits   1,296,334   3,470,088
Provision for tax lawsuits   1,286,433   1,641,124
Other   3,276,943   3,743,557
         
TOTAL   32,339,921   37,255,593

 

It includes the estimated amounts to pay highly likely liabilities which, in case of occurrence, would generate a loss for the Entity.

 

The breakdown of and changes in provisions recognized for accounting purposes are included in Exhibit J. However, below is a brief description:

 

-Contingent commitments: it reflects the credit risk arising from the assessment of the degree of compliance of the beneficiaries of unused overdrafts, unused credit card balances, guarantees, sureties and other contingent commitments for the benefit of third parties on behalf of customers, and of their financial position and the counter guarantees supporting those transactions.

 

-Termination benefit plans: for certain terminated employees, the Bank (fully or partially) bears the cost of private health care plans for a certain period after termination. The Bank does not cover any situations requiring medical assistance, but it only makes the related health care plan payments.

 

-Administrative, disciplinary and criminal penalties: administrative penalties imposed by the Financial Information Unit, even if there were court or administrative measures to suspend payment and regardless of the status of the disciplinary proceedings.

 

-Other: it reflects the estimated amounts to pay tax, labor and commercial claims and miscellaneous complaints.

 

In the opinion of the Group’s Management and its legal advisors, there are no significant effects other than those stated in these consolidated financial statements, the amounts and repayment terms of which have been recorded based on the current value of those estimates, considering the probable date of their final resolution.

 

Contingent liabilities have not been recognized in these consolidated condensed interim financial statements and are related to 147 claims brought against the Bank, including civil and commercial claims, all of which have arisen in the ordinary course of business. The estimated amount of such claims is 34,627, out of which a cash disbursement of approximately 21,066 is expected for the next 6 months. These claims are primarily related to lease-purchase agreements and petitions to secure evidence. The Group's Management and legal advisors consider that the probability that these cases involve cash disbursements is possible but not probable and that the potential cash disbursements are not material.

 

 
 
 -42-
 

24. Other non-financial liabilities

 

Breakdown is as follows:

    06.30.24   12.31.23
         
Miscellaneous creditors   170,071,076   230,219,176
Short-term personnel benefits   81,162,286   109,697,916
Other collections and withholdings   67,401,369   75,476,551
Dividends payable (Note 44)   50,638,718   -
Advances collected   47,055,690   88,630,853
Other taxes payable   29,829,996   61,311,708
Long-term personnel benefits   6,053,337   5,743,057
For contract liabilities   3,970,951   3,061,721
Social security payment orders pending settlement   719,580   666,842
Termination benefits payable   41,603   2,088,122
Other   2,944,314   3,801,321
         
TOTAL   459,888,920   580,697,267

 

 

25. Leases

 

The Group as lessee

 

Below is a detail of the amounts related to the rights of use under leases and lease liabilities in force as of June 30, 2024:

 

Rights of use under leases

 

 

    Original           Amortization   Residual
    value as of           Accumulated           Accumulated as of   value as of
Account   01.01.24   Additions   Derecognitions   as of 01.01.24   Derecognitions   For the Period (1)   fiscal period end   06.30.24
                                 
Leased real estate   88,288,931   6,872,461   3,298,774   44,531,492   1,966,358   1,346,973   43,912,107   47,950,511
                                 
(1) See note 38                                

 

    Original           Amortization   Residual
    value as of           Accumulated           Accumulated as of   value as of
Account   01.01.23   Additions   Derecognitions   as of 01.01.23   Derecognitions   For the Period   fiscal year end   12.31.23
                                 
Leased real estate   77,543,176   17,040,393   6,294,638   44,761,668   4,548,280   4,318,104   44,531,492   43,757,439
                                 

 

 

 
 
 -43-
 

Lease liabilities

 

Future minimum payments for lease agreements are as follows:

 

    In foreign currency   In local currency   06.30.24   12.31.23
                 
Up to 1 year   1,549,556   293,210   1,842,766   2,198,218
From 1 to 5 years   20,199,937   1,675,041   21,874,978   31,600,936
More than 5 years   5,196,150   -   5,196,150   8,463,217
                 
            28,913,894   42,262,371

 

 

Interest and exchange rate difference recognized in profit or loss

 

    06.30.24   06.30.23
         
Other operating expenses        
Interest on lease liabilities (Note 39)   (1,698,838)   (1,442,795)
         
Exchange rate difference        
Exchange rate difference for finance lease   (3,524,454)   (17,154,014)

 

 

26. Share capital

 

Breakdown is as follows:

Share capital
Shares   Share capital
Class Quantity Par value per share Votes per share   Outstanding shares   Paid-in (1)
Common 612,710,079 1 1   612,710   612,710

(1)Registered with the Public Registry of Commerce.

 

 

Banco BBVA Argentina S.A. is a corporation (sociedad anónima) incorporated under the laws of Argentina. The shareholders limit their liability to the shares subscribed and paid in, pursuant to the Argentine Companies Law (Law No. 19,550). Therefore, and pursuant to Law No. 25,738, it is reported that neither foreign capital majority shareholders nor local or foreign shareholders shall be liable in excess of the above-mentioned capital contribution for obligations arising from transactions carried out by the Bank.

 

-Additional paid-in capital

The additional paid-in capital account represents the difference between the nominal value of the shares issued and the subscription price.

-Inflation adjustment to share capital

Includes the cumulative monetary inflation adjustment to share capital and additional paid-in capital.

 
 
 -44-
 
-Other comprehensive income/(loss) (OCI)
Income/(loss) from financial assets measured at fair value through OCI: It comprises the accumulated net change in the fair value of financial assets measured at fair value through OCI, net of the related income tax.
Other: This item represents the Bank’s participation in its associates’ and joint ventures’ OCI.
-Legal reserve

BCRA regulations establish that 20% of net income determined in accordance with BCRA Generally Accepted Accounting Principles must be allocated to the legal reserve (see note 44 a)).

-Other reserves

Set up to comply with the CNV requirement whereby all the retained earnings assessed under BCRA regulations must be allocated by the stockholders' meeting to cash dividends, stock dividends, the constitution of reserves other than the legal reserve, or a combination thereof. This item is composed of the following:

Optional reserve: it includes all the other reserves that may be created by express corporate will.
IFRS first time adoption reserve: arising from the valuation differences of assets and liabilities based on international financial reporting standards upon initial adoption.

 

 

 

27. Interest income

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated 06.30.23
                 
Premiums on reverse repurchase   147,555,394   689,878,406   117,575,604   198,155,028
Stabilization Coefficient (CER) clause   254,076,949   588,079,200   169,065,736   270,092,925
Interest on instruments   102,237,009   266,852,883   120,529,859   209,230,415
Interest on government securities   139,403,670   206,044,925   565,223,471   1,050,049,450
Interest on credit card loans   93,400,322   201,502,886   122,587,374   243,369,038
Interest on overdrafts   63,606,083   146,433,833   75,161,846   154,666,471
Acquisition Value Unit (UVA) clause   56,117,353   135,904,122   51,735,074   91,643,129
Interest on other loans   39,425,982   103,300,620   69,672,972   134,848,092
Interest on consumer loans   52,435,576   99,797,725   59,161,101   114,925,177
Interest on pledge loans   9,987,201   21,233,468   16,385,573   32,168,803
Interest on loans to the financial sector   2,730,700   6,560,119   2,375,430   4,746,339
Interest on mortgage loans   4,833,564   6,054,713   2,355,893   7,257,087
Interest on finance leases   2,664,160   5,904,855   3,908,534   7,954,715
Interest on loans for the prefinancing and financing of exports   2,462,780   3,979,004   721,117   1,431,240
Interest on private securities   912,383   2,582,517   1,658,258   2,669,120
Other interest   1,465,358   2,747,121   1,079,405   2,004,839
                 
TOTAL   973,314,484   2,486,856,397   1,379,197,247   2,525,211,868

 

 
 
 -45-
 

28. Interest expense

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Time deposits   190,411,847   462,521,942   535,840,236   985,377,388
Checking accounts deposits   48,625,473   285,618,162   114,194,007   172,555,767
Acquisition Value Unit (UVA) clause   37,303,493   87,375,549   24,961,615   46,960,195
Other liabilities from financial transaction   11,119,854   15,219,115   430,995   1,286,983
Interfinancial loans received   2,480,937   12,485,830   11,400,561   21,009,978
Savings accounts deposits   4,774,066   11,008,866   3,156,011   5,491,026
Premiums on reverse repurchase transactions   29,620   29,620   256   256
Other interest   4,033   4,057   9,559   13,312
                 
TOTAL   294,749,323   874,263,141   689,993,240   1,232,694,905

 

29. Commission income

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
From credit cards   61,602,914   116,765,270   59,355,209   96,902,625
Linked to liabilities   30,599,978   58,018,489   40,095,163   81,533,532
Linked to loans   12,734,191   24,134,621   11,118,056   22,312,618
From foreign trade and foreign currency transactions   5,203,403   11,267,803   5,268,976   9,913,589
From insurance   4,053,451   7,966,135   4,428,698   8,881,265
Linked to securities   3,290,643   7,194,586   2,092,410   3,857,993
Linked to loan commitments   162,168   223,058   310,590   310,590
From guarantees granted   86,666   162,285   46,006   75,673
                 
TOTAL   117,733,414   225,732,247   122,715,108   223,787,885

 

 
 
 -46-
 

30. Commission expenses

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24 Quarter ended 06.30.23   Accumulated as of 06.30.23
               
From credit and debit cards   34,192,976   56,812,439 15,699,980   52,447,532
For foreign trade transactions   14,031,108   27,690,305 7,890,891   9,382,717
For payment of salaries   4,155,842   8,633,250 3,835,868   6,757,387
For new channels   3,413,351   6,431,007 2,590,923   4,675,753
For data processing   2,627,296   4,789,967 1,979,751   3,763,801
For advertising campaigns   54,020   274,268 247,441   453,427
Linked to transactions with securities   26,561   61,958 23,362   47,979
Other commission expenses   432,525   2,358,465 3,464,589   7,187,627
               
TOTAL   58,933,679   107,051,659 35,732,805   84,716,223

 

 

31. Net income from measurement of financial instruments at fair value through profit or loss

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Income from government securities   31,851,350   73,236,703   27,419,949   53,689,716
Income from private securities   1,003,014   1,310,265   1,767,531   4,718,292
Income from corporate bonds   729,609   843,211   743   743
Income from interest rate swaps   385,823   385,823   (220,061)   (119,361)
Loss from put options taken   (441,711)   (1,165,864)   (315,648)   (439,737)
Income from foreign currency forward transactions   (2,530,750)   (10,568,970)   (1,106,524)   1,786,247
Other   -   2,374   (447)   (461)
                 
TOTAL   30,997,335   64,043,542   27,545,543   59,635,439

 

 

32. Net income from write-down of assets at amortized cost and at fair value through OCI

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24 Quarter ended 06.30.23   Accumulated as of 06.30.23
               
Income from sale of government securities   9,698,105   84,371,890 8,504,568   8,680,822
Loss from sale of private securities   3,971,071   3,904,495 4,670   4,670
               
TOTAL   13,669,176   88,276,385 8,509,238   8,685,492

 

 
 
 -47-
 

33. Foreign exchange and gold gains/(losses)

Breakdown is as follows:

    Quarter ended 06.30.24   Accumulated as of 06.30.24 Quarter ended 06.30.23   Accumulated as of 06.30.23
               
Income from purchase-sale of foreign currency   11,610,752   19,531,721 18,182,044   33,631,229
Conversion of foreign currency assets and liabilities into pesos   8,725,599   12,933,372 (6,176,733)   (16,775,353)
               
TOTAL   20,336,351   32,465,093 12,005,311   16,855,876

 

34. Other operating income

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Adjustments and interest on miscellaneous receivables   9,014,239   25,290,607   10,612,830   20,096,254
Rental of safe deposit boxes   4,497,910   7,777,748   3,882,212   7,026,758
Debit and credit card commissions   2,571,480   4,859,669   2,011,984   4,202,835
Loans recovered   3,076,046   4,823,466   2,098,952   5,097,919
Punitive interest   1,510,698   2,649,338   1,170,435   2,185,283
Rent   1,122,872   2,458,376   1,077,763   2,206,247
Allowances reversed   1,734,438   2,022,372   660,755   1,031,428
Fees expenses recovered   823,148   1,663,411   1,008,311   2,016,043
Commission from syndicated transactions   289,910   613,634   351,132   811,943
Other operating income   4,022,145   10,156,740   4,396,979   7,853,392
                 
TOTAL   28,662,886   62,315,361   27,271,353   52,528,102

 

 

 

 

35. Loan loss allowance

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Financial assets measured at amortized cost                
Loan loss allowance in pesos   41,592,258   71,260,858   40,384,032   77,254,445
Loan loss allowance in foreign currency   (71,877)   2,149,423   823,545   1,534,243
                 
Financial assets measured at fair value through OCI                
Value adjustment due to credit losses   30,686   11,488   21,609   48,678
                 
                                                        TOTAL   41,551,067   73,421,769   41,229,186   78,837,366

 

 
 
 -48-
 

36. Personnel benefits

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Salaries   57,466,727   114,910,798   55,681,312   114,880,895
Other short-term personnel benefits   13,423,090   40,589,503   24,881,087   45,859,443
Social security withholdings and collections   15,939,918   34,606,223   16,876,247   34,101,963
Personnel compensation and bonuses   16,606,189   18,014,513   4,340,759   6,749,773
Personnel services   2,660,906   4,457,596   2,404,760   4,007,730
Termination personnel benefits (Exhibit J)   707,481   707,481   563,415   563,415
Other long-term personnel benefits   2,851,819   2,851,819   3,026,533   3,026,533
                 
TOTAL   109,656,130   216,137,933   107,774,113   209,189,752

 

 

37. Administrative expenses

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24 Quarter ended 06.30.23   Accumulated as of 06.30.23
               
Taxes   28,125,223   56,650,720 22,151,839   44,364,765
Rent   15,075,984   33,041,352 17,973,771   34,052,685
Contracted administrative expenses   16,968,248   32,044,919 13,830,038   26,037,172
Maintenance and repair costs   9,291,970   19,098,335 8,671,661   18,379,865
Armored transportation services   9,846,824   18,680,495 9,361,792   18,686,750
IT   7,844,379   15,935,509 17,495,369   30,042,372
Advertising   7,502,473   15,889,427 6,306,308   13,425,776
Documents distribution   3,833,341   9,603,377 2,874,623   6,056,752
Electricity and communications   3,952,360   7,943,727 3,593,350   7,335,298
Other fees   3,590,729   6,911,041 3,817,823   6,811,547
Security services   3,203,624   6,537,392 2,635,137   5,156,762
Trade reports   2,029,502   4,291,653 1,103,674   4,588,420
Insurance   709,464   1,552,437 774,373   1,648,599
Representation and travel expenses   609,703   1,390,880 709,175   1,258,814
Stationery and supplies   314,713   488,097 149,704   261,500
Fees to Bank Directors and Supervisory Committee   130,479   258,281 137,614   248,031
Other administrative expenses   4,099,682   9,248,873 4,168,454   7,676,678
               
TOTAL   117,128,698   239,566,515 115,754,705   226,031,786

 

 

 
 
 -49-
 

 

 

38. Asset depreciation and impairment

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24 Quarter ended 06.30.23   Accumulated as of 06.30.23
               
Property and equipment (Note 14)   10,753,316   20,897,487 9,575,620   19,440,960
Intangible assets (Note 15)   5,639,247   6,918,402 1,529,016   3,047,966
Right of use of leased real estate (Note 14)   860,760   1,346,973 1,194,238   2,487,584
Depreciation of other assets   686,006   965,475 676,376   968,818
               
TOTAL   17,939,329   30,128,337 12,975,250   25,945,328

 

 

39. Other operating expenses

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24 Quarter ended 06.30.23   Accumulated as of 06.30.23
               
Turnover tax   92,540,470   164,412,112 84,406,560   156,329,331
Other allowances (Exhibit J)   (17,489,725)   23,499,765 8,019,007   15,206,887
Initial recognition of loans   2,757,114   6,424,359 3,922,343   8,507,237
Contribution to the Deposit Guarantee Fund (Note 46)   2,058,766   4,009,223 2,671,687   5,365,279
Adjustment for restatement of dividends in constant currency   10,280,527   10,280,527 -   -
Claims   683,453   1,289,244 1,058,434   2,324,928
Interest on liabilities from leases (Note 25)   822,456   1,698,838 653,320   1,442,795
Other operating expenses   6,420,797   12,452,738 7,360,581   12,232,188
               
TOTAL   98,073,858   224,066,806 108,091,932   201,408,645

 

 
 
 -50-
 

40. Fair values of financial instruments

 

40.1. Assets and liabilities measured at fair value

 

The fair value hierarchy of assets and liabilities measured at fair value as of June 30, 2024 is detailed below:

 

    Accounting balance   Level 1 fair value   Level 2 fair value   Level 3 fair value
                 
Financial assets                
                 
Debt securities at fair value through profit or loss   252,224,389   251,882,671   129,344   212,374
Derivative instruments   5,681,863   -   5,681,863   -
Other financial assets   399,884   399,884   -   -
Other debt securities   2,103,772,982   1,665,054,823   437,856,247   861,912
Financial assets pledged as collateral   269,169,814   269,169,814   -   -
Investments in equity instruments   9,399,258   6,023,682   578,440   2,797,136
                 
                 
Financial liabilities                
                 
Liabilities at fair value through profit or loss   194,844   194,844   -   -
Derivative instruments   514,103   -   514,103   -

 

 

The fair value hierarchy of assets and liabilities measured at fair value as of December 31, 2023 is detailed below:

 

    Accounting balance   Level 1 fair value   Level 2 fair value   Level 3 fair value
                 
Financial assets                
                 
Debt securities at fair value through profit or loss   406,434,452   402,568,806   2,969,105   896,541
Derivative instruments   17,980,649   -   17,980,649   -
Other financial assets   1,333,573   1,333,573   -   -
Other debt securities   1,188,458,227   938,185,848   241,839,660   8,432,719
Financial assets pledged as collateral   245,785,501   240,008,751   5,776,750   -
Investments in equity instruments   9,367,810   5,799,340   777,005   2,791,465
                 
                 
Financial liabilities                
                 
Liabilities at fair value through profit or loss   18,571,084   18,561,838   9,246   -
Derivative instruments   3,856,508   -   3,856,508   -

 

Financial assets at fair value mainly consist of Argentine Bonds, Argentine Treasury Bills, Ledivs (BCRA Local Bills), private debt securities (corporate bonds). Likewise, financial derivatives are classified at fair value. Such derivatives include futures measured at the price of the market where they are traded (Rofex and MAE) and foreign currency NDF (non-delivery forwards), put options, and interest rate swaps.

 

40.2. Transfers between hierarchy levels

The Entity monitors the availability of market information in order to assess the category of financial instruments in the different hierarchies at fair value, as well as the resulting determination of inter-level transfers at each closing, considering the comparison of hierarchy levels of the current period versus previous year levels.

 

 
 
 -51-
 

40.2.1. Transfers from Level 1 to Level 2

The following instruments measured at fair value through profit or loss or through OCI were transferred from Level 1 to Level 2 of the fair value hierarchy:

 

    06.30.24   12.31.23
         
Treasury Bonds in pesos adjusted by Cer 4.25% due 12-13-2024   280,284,727   -
         

 

40.2.2. Transfers from Level 2 to Level 1

The following instruments measured at fair value through profit or loss or through OCI were transferred from Level 2 to Level 1 of the fair value hierarchy:

 

    06.30.24   12.31.23
         
Treasury bonds in pesos adjusted by Cer 1.55%. Maturity 07-26-2024   -   92,371,641
Treasury bonds in pesos adjusted by Cer 2%. Maturity 11-9-2026   -   61,094

The hierarchy level of the instruments detailed above was compared with the previous year levels.

The transfer is due to the fact that the bonds were listed on the market the number of days necessary to be considered Level 1.

 

40.3. Valuation techniques for Levels 2 and 3

 

The valuation techniques used for Level 2 securities require observable market data: the spot discount curve in pesos, US dollars, USD curves of corporate bonds (one of the energy sector and the other of several industries), CER discount curve, the yield curve in pesos arising from ROFEX futures, the yield curve in pesos arising from futures traded by ICAP Broker, Badlar rate, UVA index, CER index and the spot selling exchange rates published by Banco de la Nación Argentina (BNA) and the 3500 dollar. Below is a detail of valuation techniques for each financial product:

 

Fixed Income

 

The assessment of prices at fair value established by the Bank for fixed income consists in considering MAE’s representative prices.

 

In the case of Argentine Treasury bonds and bills, MAE’s prices are used; if the bonds are not listed within the last 10 business days, then a theoretical valuation is made discounting cash flows using the related discount curve. BCRA internal bills in US dollars to be settled in Argentine pesos at the benchmark exchange rate (LEDIV) are valued at their latest subscription price plus interest accrued since they cannot be transferred and do not accrue any interest.

 

In the case of Corporate Bonds in Dollars, they were valued by determining the present value of future flow of funds with an interest rate curve with comparable corporate bonds, while corporate bonds in pesos are valued at their latest price plus accrued interest.

 

 
 
 -52-
 

 

SWAPS

 

For swaps, the theoretical valuation consists in discounting future cash flows based on the interest rate, according to the estimated curve using bonds in Argentine pesos at a fixed rate and bills issued by the Argentine government.

 

Non-Delivery Forwards

 

The theoretical valuation of NDFs consists in discounting the future cash flows to be exchanged pursuant to the contract, using a discount curve that will depend on the currency of each cash flow. The result is then calculated by subtracting the present values in pesos, estimating the value in pesos based on the applicable spot exchange rate, depending on whether the contract is local or offshore.

 

For local peso-dollar swap contracts, cash flows in pesos are discounted using the yield curve in pesos resulting from the prices of ROFEX futures and the wire transfer US dollar (dólar divisa) selling exchange rate published by BNA. Cash flows in US dollars are discounted using the Overnight Index Swap (OIS) international dollar yield curve. Then, the present value of cash flows in dollars is netted by converting such cash flows into pesos using the wire transfers dollar selling exchange rate published by BNA.

 

For local peso-euro swap contracts, cash flows in pesos are discounted using the yield curve in pesos resulting from the prices of ROFEX futures and the wire transfer Euro selling exchange rate published by BNA. Cash flows in euros are discounted using the yield curve in euros. Then, the present value of cash flows in euros is netted by converting such cash flows into pesos using the wire transfer euro selling exchange rate published by BNA.

 

For offshore peso-dollar swap contracts, cash flows in pesos are discounted using the yield curve in pesos resulting from market quoted forward prices sourced from ICAP and the wire transfer US dollar selling exchange rate published by BNA. Cash flows in dollars are discounted using the OIS yield curve. Then, the present value of cash flows in dollars is netted by converting such cash flows into pesos using the Emerging Markets Traders Association (EMTA) US dollar spot exchange rate.

 

The valuation techniques used for Level 3 financial assets require the use of variables that are not based on observable market inputs. Below is a detail of the valuation techniques used for each financial asset:

 

Investments in equity instruments

 

Investments in equity instruments for which the Group has no control, joint control or a significant influence are measured at fair value through profit or loss and at fair value through other comprehensive income according to the latest available information of such companies.

 

Corporate bonds

 

The valuation of corporate bonds classified as Level 3 has been determined by the Entity on the basis of the latest available market price (or subscription price, if the security had not been listed in a market since the date of issuance) plus interest accrued to date. If the security has paid coupon, then the “clean” price is calculated. If principal was repaid, then repayment amount is deducted and the “dirty” price is recalculated, with interest being accrued until year-end.

 

ON Banco de Servicios Financieros (ON BSCPO)
Refi Pampa (ON REF2B)
Newsan S.A (ON WNCMO)
Newsan S.A. (ON WNCKO)
 
 
 -53-
 
Newsan S.A (ON WNCLO)

 

The most relevant unobservable inputs include:

 

Latest market price
Projected UVA
Projected BADLAR rates

 

The tables below show a sensitivity analysis for each of the above-mentioned securities:

 

Latest market price scenarios Changes in final price  
 
 
ON REF2B ON BSCPO ON WNCMO ON WNCKO ON WNCLO  
+2% 2.000 % 1.897 % 1.928 % 1.983 % 1.972 %  
+5% 5.000 % 4.744 % 4.820 % 4.959 % 4.929 %  
+10% 10.000 % 9.487 % 9.640 % 9.917 % 9.859 %  

 

UVA Scenarios Changes in final price  
 
 
ON REF2B  
+5% 5.000 %  
+10% 10.000 %  
+15% 15.000 %  

 

Badlar Rate Scenarios Changes in final price
ON BSCPO ON WNCMO ON WNCKO ON WNCLO
5 % -0.0064 % -0.0179 % -0.0064 % -0.1207 %
10 % -0.0128 % -0.0359 % -0.0128 % -0.2414 %
15 % -0.0192 % -0.0538 % -0.0192 % -0.3622 %

 

 
 
 -54-
 

 

Put options:

 

Below is a sensitivity analysis of the put (options) held by BBVA. The input variable used in the sensitivity analysis is the underlying asset’s price.

The put options and the related underlying assets are as follows:

 

Underlying Asset
2X5N2D001 BOND T2X5
4X4NOB001 BOND T4X4
4X4N9P001 BOND T4X4
4X4NOB001 BOND T4X4
4X4NOE001 BOND T4X4
T5XNDD001 BOND T5X4
T5XNDD001 BOND T5X4
BONDN7001 BOND TX25
BOND6T001 BOND TZX26
TZDNDC001 BONO TZXD5
TZXN3U002 BONO TZXM6
TZXN3U002 BONO TZXM6
S28N2R001 LT S28F5
S31N3S001 LT S31M5

 

Scenarios of sensitivity to the price of the underlying asset:

 

Scenarios: Changes in final price
Changes in Underlying Price T2X5 T4X4 T5X4 TX25* TZX26 TZXD5** TZXM6
-6 % 0.30% 0.30% 0.24 % 0.30 % 0.10 % 0.06 % 0.06 %
-4 % 0.20% 0.20 % 0.16 % 0.20 % 0.07 % 0.04 % 0.04 %
-2 % 0.10% 0.10 % 0.08 % 0.10 % 0.03 % 0.02 % 0.02 %
-0.01 % 0.00% 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 %
0 % 0.00% 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 %
0.01 % 0.00% 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 %
2 % 0.00% 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 %
4 % 0.00% 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 %
6 % 0.00% 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % 0.00 %

 

 
 
 -55-
 

 

Scenarios: Changes in final price

Changes in Underlying Price

 

LT S28F5 LT S31M5
-6 % 0.07 % 0.06 %
-4 % 0.04 % 0.04 %
-2 % 0.02 % 0.02 %
-0.01 % 0.00 % 0.00 %
0 % 0.00 % 0.00 %
0.01 % 0.00 % 0.00 %
2 % 0.00 % 0.00 %
4 % 0.00 % 0.00 %
6 % 0.00 % 0.00 %

 

* Based on the price of the T2X5P bond. According to the Central Bank’s regulations, in the absence of a price for the security, the purchase price will be calculated based on traded values for similar instruments and different trading terms using linear interpolation. We considered CER-linked bonds maturing in 2025 as reference.

** Based on the price of the TZXM6 bond. According to the Central Bank’s regulations, in the absence of a price for the security, the purchase price will be calculated based on traded values for similar instruments and different trading terms using linear interpolation. We considered discount CER-linked bonds with close maturity as reference.

 

40.4. Reconciliation of balances at beginning of year and at year-end of Level 3 assets and liabilities at fair value

The following table shows a reconciliation between balances at beginning of year and at year-end of Level 3 fair values:

 

    06.30.24   12.31.23
         
Balance at the beginning of the fiscal year   12,120,725   3,640,514
         
Other debt securities - Private securities – Corporate bonds (3,828,865)   7,263,661
Debt securities at fair value through profit or loss - Private securities – Corporate bonds (286,335)   896,541
Equity instruments 1,244,358   2,791,465
Monetary loss from assets at fair value (5,378,461)   (2,471,456)
         
Balances at fiscal period end   3,871,422   12,120,725

 

40.5. Fair value of assets and liabilities not measured at fair value

Below is a description of methodologies and assumptions used to assess the fair value of the main financial instruments not measured at fair value, when the instrument does not have a quoted price in a known market.

Assets and liabilities with fair value similar to their accounting balance: For financial assets and financial liabilities maturing in less than three months, it is considered that the accounting balance is similar to fair value.
Fixed rate financial instruments: The fair value of financial assets was assessed by discounting future cash flows from market rates at each measurement date for financial instruments with similar characteristics, adding a liquidity premium (un-observable input) that expresses the added value or additional cost necessary to dispose of the asset.
 
 
 -56-
 
Variable rate financial instruments: For financial assets and financial liabilities accruing a floating rate, it is considered that the accounting balance is similar to the fair value.

The fair value hierarchy of assets and liabilities measured at fair value as of June 30, 2024 is detailed below:

 

   

Accounting

balance

  Total fair value   Level 1 fair value   Level 2 fair value   Level 3 fair value
                     
Financial assets                    
                     
Cash and deposits in banks   1,450,661,054   (a)   -   -   -
Repo transactions   278,874,103   (a)   -   -   -
Other financial assets   153,911,289   (a)   -   -   -
Loans and other financing                    
   Non-financial Government Sector   1,701,146   (a)   -   -   -
   Other financial institutions   21,887,738   24,746,182   -   24,746,182   -
  Non-financial Private sector and Residents Abroad   3,791,311,265   3,815,655,238   -   -   3,815,655,238
Other debt securities   152,743,014   154,001,698   -   154,001,698   -
Financial assets pledged as collateral   193,055,885   (a)   -   -   -
                     
Financial liabilities                    
Deposits   5,810,545,000   5,787,608,244   -   -   5,787,608,244
Repo transactions and surety bonds   177,505,000   (a)   -   -   -
Other financial liabilities   889,478,741   (a)   -   -   -
Financing received from the BCRA and other financial institutions   47,157,561   42,079,290   -   42,079,290   -
Corporate bonds issued   11,051,664   11,049,631   -   11,049,631   -
(a)The fair value is not reported as it is considered similar to its accounting balance.

 

 
 
 -57-
 

The fair value hierarchy of assets and liabilities not measured at fair value as of December 31, 2023 is detailed below:

 

   

Accounting

balance

  Total fair value   Level 1 fair value   Level 2 fair value   Level 3 fair value
                     
Financial assets                    
                     
Cash and deposits in banks   2,054,707,627   (a)   -   -   -
Repo transactions   2,161,621,693   (a)   -   -   -
Other financial assets   162,463,872   (a)   -   -   -
Loans and other financing                    
   Non-financial Government sector   261,043   (a)   -   -   -
   Other financial institutions   27,777,421   18,871,478 (b) -   -   18,871,478
     Non-financial Private sector and Residents Abroad   3,523,359,248   3,349,049,444 (b) -   -   3,349,049,444
Other debt securities   173,806,479   174,679,946   -   174,679,946   -
Financial assets pledged as collateral   224,561,375   (a)   -   -   -
                     
Financial liabilities                    
                     
Deposits   6,542,466,427   6,469,433,059   -   6,469,433,059   -
Other financial liabilities   805,844,664   (a)   -   -   -
Financing received from the BCRA and other financial institutions   50,677,760   49,654,924   -   49,654,924   -
Corporate bonds issued   23,040,898   23,448,712   -   23,448,712   -

 

(a)The fair value is not reported as it is considered similar to its accounting balance.
(b)The Bank’s Management has not identified additional impairment indicators of its financial assets as a result of the differences in the fair value thereof.

 

41. Segment reporting

 

Basis for segmentation

 

As of June 30, 2024 and December 31, 2023, the Group determined that it has only one reportable segment related to banking activities, based on information reviewed by the chief operating decision maker. Most of the transactions, properties and customers of the Group are located in Argentina. No client has generated more than 10% of the Group's total revenues.

 
 
 -58-
 

The following table shows relevant information on loans and deposits by business line as of June 30, 2024 and December 31, 2023:

 

Group (banking activity) (1)   06.30.24   12.31.23
           
           
Loans and other financing     3,814,900,149   3,551,397,712
Corporate banking (2)     667,095,229   247,860,077
Small and medium companies (3)     1,348,984,935   1,585,378,051
Retail banking     1,798,819,985   1,718,159,584
           
Other assets     5,726,417,630   7,458,776,491
TOTAL ASSETS     9,541,317,779   11,010,174,203
           
Deposits     5,810,545,000   6,542,466,427
Corporate banking (2) (3)     1,969,772,125   1,777,259,071
Small and medium companies (2) (3)     919,336,675   1,118,589,066
Retail banking     2,921,436,200   3,646,618,290
           
Other liabilities     1,622,266,641   1,907,502,391
TOTAL LIABILITIES     7,432,811,641   8,449,968,818

 

(1)It includes BBVA Asset Management Argentina S.A.U. Sociedad Gerente de Fondos Comunes de Inversión, Consolidar A.F.J.P. (undergoing liquidation proceedings), PSA Finance Argentina Cía. Financiera S.A. and Volkswagen Financial Services Compañía Financiera S.A.
(2)It includes the Financial Sector.
(3)It includes Government Sector.

 

The information related to the operating segment (the Group's banking activity) is the same as that presented in the Consolidated Statement of Income, considering that it is the measure used by the Entity's chief operating decision marker for the allocation of resources and performance evaluation.

 

 

42. Related parties

 

42.1. Parent

The Bank's parent is Banco Bilbao Vizcaya Argentaria.

42.2. Key management personnel

 

Pursuant to IAS 24, key management personnel are those having the authority and responsibility for planning, managing and controlling the Group’s activities, whether directly or indirectly.

Based on that definition, the Group considers the members of the Board of Directors as key personnel.

 
 
 -59-
 

42.2.1. Remuneration of key management personnel

The Group's key management personnel received the following compensations:

 

 

  06.30.24   06.30.23
       
Fees 192,557   188,299
       
Total 192,557   188,299

 

42.2.2. Profit or loss from transactions and balances with key management personnel

 

  Balances as of
 
  06.30.24   12.31.23
       
Loans      
Overdrafts 6   -
Credit cards 36,484   67,424
Consumer loans 1,290   2,571
       
Deposits      
Deposits 117,922   159,350

 

  Profit or loss from transactions
 
  06.30.24   06.30.23
       
Profit or loss      
Interest income 89,014   69,078
Interest expense 13,795   1,631
Commission income 2,816   3,009
Commission expense 648   539
Other operating income 840   1,037

Loans are granted on an arm’s length basis. As of June 30, 2024 and December 31, 2023, balances of loans granted are classified under normal performance according to the debtor classification rules issued by the BCRA.

 
 
 -60-
 

42.2.3. Profit or loss and balances with related parties (except for key management personnel)

 

Parent                           Balances as of
06.30.24   12.31.23
       
Assets      
       
Cash and deposits in banks 6,026,746   19,635,577
Other financial assets 112,646   204,221
       
Liabilities      
       
Other non-financial liabilities 43,112,844   81,436,075
       
Off-balance sheet balances      
       
Securities in custody 1,903,764,111   1,548,675,217
Guarantees received 98,134,336   35,779,107
Sureties granted 85,690,123   28,298,403
Secured loans 8,843,975   -
       
  Profit or loss from transactions
  06.30.24   06.30.23
       
Profit or loss      
       
Interest income -   1,586
Commission income 95,587   14,961
Net income from measurement of financial instruments at fair value through profit or loss -   (342,809)
Other operating income 15,334   25,479
Administrative expenses (8,907,686)   (59,856,892)

 

Subsidiaries (1)                           Balances as of
06.30.24   12.31.23
       
Assets      
       
Loans and other financing 88,931,243   40,144,772
       
Liabilities      
       
Deposits 13,939,468   23,193,735
Other non-financial liabilities 878,694   2,380,477
       
Off-balance sheet balances      
       
Securities in custody 644,323   1,653,711
       
  Profit or loss from transactions
  06.30.24   06.30.23
       
Profit or loss      
       
Interest income 18,540,761   22,856,906
Interest expense (2,354,418)   (2,340,952)
Commission income 5,009   338,733
Commission expense (3,881,686)   -
Foreign exchange and gold gains/(losses) 8   -
Other operating income 1,133,716   595,128
Administrative expenses (190,045)   (215,810)

(1) The transactions between BBVA and its subsidiaries detailed in the preceding table were eliminated for consolidation purposes in the Consolidated Financial Statements as of June 30, 2024 and 2023 and as of December 31, 2023, respectively.

 
 
 -61-
 
Associates Balances as of
06.30.24   12.31.23
       
Assets      
       
Loans and other financing 11,100,498   9,381,647
Derivatives 350,747   -
Other financial assets 1,299,170   787,710
       
Liabilities      
       
Deposits 2,465,538   2,516,487
       
Off-balance sheet balances      
       
Securities in custody 21,577,026   36,597,009
Secured loans 22,361   504,261
       
  Profit or loss from transactions
  06.30.24   06.30.23
       
Profit or loss      
       
Interest income 3,505,564   2,555,424
Interest expense (295,226)   (1,320,122)
Commission income 4,843,891   1,121,717
Commission expense (6,355)   (8,155)
Net income from measurement of financial instruments at fair value through profit or loss 388,103   81,353
Foreign exchange and gold gains/(losses) 11,662   -
Other operating income 701,440   370,872
Administrative expenses 21,438   29,042

 

Transactions have been agreed upon on an arm’s length basis. As of June 30, 2024 and December 31, 2023, balances of loans granted are classified under normal performance according to the debtor classification rules issued by the BCRA.

 

 

43. Financial instruments risks

 

43.1. Risk policies of financial instruments

 

In these consolidated condensed interim financial statements, the Entity applied the same financial instrument risk policies as in the preparation of its financial statements as of December 31, 2023.

 

 
 
 -62-
 

43.2. Exposure to credit risk and allowances

 

Below is the exposure to credit risks and allowances, measured in accordance with IFRS 9 as per BCRA (expected loss model, except for non-financial government sector's financial assets), as of June 30, 2024 and December 31, 2023:

 

Default exposure -

Credit investment

Stage 1 Stage 2 Stage 3   Total
  Collective Individual Collective Individual  
Balances as of 12.31.23 3,417,485,036 359,227,785 12,461,807 56,421,837 6,868,610   3,852,465,075
               
Inter-stage Transfers:              
    From stage 1 to stage 2 (315,102,832) 300,929,127 - - -   (14,173,705)
    From stage 2 to stage 1 257,840,329 (216,729,522) (809,733) - -   40,301,074
    From stage 1 or 2 to stage 3 (5,250,634) (51,383,446) (105,317) 59,233,279 100,451   2,594,333
    From stage 3 to stage 1 or 2 909,218 2,830,722 - (5,103,226) (33,445)   (1,396,731)
Changes without inter-stage transfers 912,952,396 39,269,323 5,295,073 2,961,838 483,731   960,962,361
Newly originated financial assets 3,335,876,929 24,259,722 5,337,402 5,942,955 195,318   3,371,612,326
Reimbursements (2,046,339,079) (37,564,727) (6,212,031) (9,063,548) (236,938)   (2,099,416,323)
Decreases - - - (21,351,995) (881,413)   (22,233,408)
Foreign exchange difference 42,650,110 642,987 884,407 6,012 417,971   44,601,487
Inflation adjustment (1,780,235,694) (169,113,461) (6,273,654) (28,726,790) (3,138,651)   (1,987,488,250)
               
Balances as of 06.30.24 3,820,785,779 252,368,510 10,577,954 60,320,362 3,775,634   4,147,828,239

 

 

Default exposure -

Credit investment

Stage 1 Stage 2 Stage 3   Total
  Collective Individual Collective Individual  
Balances as of 12.31.22 3,960,505,119 342,926,397 24,787,142 61,746,189 8,683,789   4,398,648,636
               
Inter-stage Transfers:              
    From stage 1 to stage 2 (816,533,278) 805,000,577 47 - -   (11,532,654)
    From stage 2 to stage 1 548,741,017 (485,823,241) (2,803,181) - -   60,114,595
    From stage 1 or 2 to stage 3 (16,450,249) (131,219,905) (4,059,027) 150,023,272 4,156,203   2,450,294
    From stage 3 to stage 1 or 2 3,700,551 8,204,755 3,031,628 (15,143,721) (3,378,025)   (3,584,812)
Changes without inter-stage transfers 1,065,449,264 149,316,358 4,778,731 (8,648,714) 2,657,136   1,213,552,775
Newly originated financial assets 6,597,220,606 123,687,279 60,626,335 13,419,652 3,397,501   6,798,351,373
Reimbursements (4,242,608,090) (94,016,503) (61,086,277) (22,055,946) (4,743,013)   (4,424,509,829)
Decreases - - - (48,423,986) (1,832,085)   (50,256,071)
Foreign exchange difference 377,384,240 12,101,840 8,569,625 132,379 5,581,854   403,769,938
Inflation adjustment (4,059,924,144) (370,949,772) (21,383,216) (74,627,288) (7,654,750)   (4,534,539,170)
               
Balances as of 12.31.23 3,417,485,036 359,227,785 12,461,807 56,421,837 6,868,610   3,852,465,075

 

Default exposure -

Contingent

Stage 1 Stage 2 Stage 3   Total
  Collective Individual Collective Individual  
Balances as of 12.31.23 1,052,413,868 110,061,977 323,682 372,393 622   1,163,172,542
               
Inter-stage Transfers:              
    From stage 1 to stage 2 (88,699,077) 80,211,082 - - -   (8,487,995)
    From stage 2 to stage 1 101,397,131 (77,333,137) (159,092) - -   23,904,902
    From stage 1 or 2 to stage 3 (498,497) (163,726) (234) 654,029 172   (8,256)
    From stage 3 to stage 1 or 2 718,958 198,557 235 (628,653) (235)   288,862
Changes without inter-stage transfers 639,226,094 57,782,185 999,394 286,829 85,082   698,379,584
Newly originated financial commitments 442,771,560 26,859,686 2,078,670 78,009 -   471,787,925
Reimbursements (167,475,592) (24,475,444) (44,486) (131,496) (57)   (192,127,075)
Decreases - - - (167) -   (167)
Foreign exchange difference 16,072,962 937,277 43,811 - -   17,054,050
Inflation adjustment (614,919,961) (56,533,591) (274,255) (226,228) (232)   (671,954,267)
               
Balances as of 06.30.24 1,381,007,446 117,544,866 2,967,725 404,716 85,352   1,502,010,105

 

 
 
 -63-
 

 

Default exposure -

Contingent

Stage 1 Stage 2 Stage 3   Total
  Collective Individual Collective Individual  
Balances as of 12.31.22 1,091,105,359 102,711,884 344,861 374,773 879   1,194,537,756
               
Inter-stage Transfers:              
    From stage 1 to stage 2 (210,393,118) 195,823,050 13,751 - -   (14,556,317)
    From stage 2 to stage 1 180,662,210 (146,262,468) (55,433) - -   34,344,309
    From stage 1 or 2 to stage 3 (1,275,814) (930,122) (203) 1,207,313 266   (998,560)
    From stage 3 to stage 1 or 2 377,288 447,070 221 (869,864) (17,754)   (63,039)
Changes without inter-stage transfers 488,233,426 54,852,229 167,884 314,465 22,042   543,590,046
Newly originated financial commitments 812,399,415 29,424,743 267,334 273,385 -   842,364,877
Reimbursements (347,662,182) (43,365,077) (115,799) (450,180) (1,174)   (391,594,412)
Decreases - - - (953) -   (953)
Foreign exchange difference 195,195,289 16,935,420 80,793 - -   212,211,502
Inflation adjustment (1,156,228,005) (99,574,752) (379,727) (476,546) (3,637)   (1,256,662,667)
               
Balances as of 12.31.23 1,052,413,868 110,061,977 323,682 372,393 622   1,163,172,542

 

Allowances - Credit investment Stage 1 Stage 2 Stage 3   Total
  Collective Individual Collective Individual  
Balances as of 12.31.23 24,916,879 13,624,092 190,589 40,713,949 4,937,016   84,382,525
               
Inter-stage Transfers:              
    From stage 1 to stage 2 (5,421,583) 16,009,994 - - -   10,588,411
    From stage 2 to stage 1 1,976,243 (7,121,411) (16,228) - -   (5,161,396)
    From stage 1 or 2 to stage 3 (299,542) (8,453,523) (3,390) 33,701,443 2,336   24,947,324
    From stage 3 to stage 1 or 2 55,133 218,198 - (3,510,497) (24,743)   (3,261,909)
Changes without inter-stage transfers 1,743,020 5,189,367 67,144 11,776,485 761,577   19,537,593
Newly originated financial assets 31,959,069 754,975 61,675 3,122,066 195,318   36,093,103
Reimbursements (18,349,010) (1,649,977) (79,415) (5,759,570) (221,069)   (26,059,041)
Decreases - - - (17,009,990) (860,458)   (17,870,448)
Foreign exchange difference 469,474 14,946 21,980 2,402 286,440   795,242
Inflation adjustment (12,601,921) (6,964,241) (99,201) (20,582,271) (2,332,166)   (42,579,800)
               
Balances as of 06.30.24 24,447,762 11,622,420 143,154 42,454,017 2,744,251   81,411,604

 

Allowances - Credit investment Stage 1 Stage 2 Stage 3   Total
  Collective Individual Collective Individual  
Balances as of 12.31.22 30,426,754 31,699,917 673,017 50,652,710 6,258,955   119,711,353
               
Inter-stage Transfers:              
    From stage 1 to stage 2 (18,800,918) 73,417,923 13 - -   54,617,018
    From stage 2 to stage 1 8,272,416 (33,631,116) (37,096) - -   (25,395,796)
    From stage 1 or 2 to stage 3 (1,007,624) (38,900,065) (136,237) 89,912,973 2,660,648   52,529,695
    From stage 3 to stage 1 or 2 310,974 766,348 (30,157) (12,311,918) (2,278,932)   (13,543,685)
Changes without inter-stage transfers 15,123,333 7,449,481 (34,385) 27,010,142 3,380,207   52,928,778
Newly originated financial assets 52,879,983 2,234,469 1,624,340 8,542,697 2,314,430   67,595,919
Reimbursements (36,892,563) (3,060,658) (1,590,703) (16,106,060) (3,548,163)   (61,198,147)
Decreases - (2) - (46,404,598) (1,764,746)   (48,169,346)
Foreign exchange difference 3,787,188 324,642 316,660 16,733 3,786,823   8,232,046
Inflation adjustment (29,182,664) (26,676,847) (594,863) (60,598,730) (5,872,206)   (122,925,310)
               
Balances as of 12.31.23 24,916,879 13,624,092 190,589 40,713,949 4,937,016   84,382,525

 

Allowances - Contingent Stage 1 Stage 2 Stage 3   Total
  Collective Individual Collective Individual  
Balances as of 12.31.23 8,434,830 2,062,278 5,244 233,862 455   10,736,669
               
Inter-stage Transfers:              
    From stage 1 to stage 2 (786,540) 1,859,542 - - -   1,073,002
    From stage 2 to stage 1 603,338 (1,766,709) (2,564) - -   (1,165,935)
    From stage 1 or 2 to stage 3 (6,060) (12,440) (9) 347,181 67   328,739
    From stage 3 to stage 1 or 2 10,660 7,779 5 (359,129) (1,214)   (341,899)
Changes without inter-stage transfers (2,568,267) 1,699,719 22,140 208,168 87,666   (550,574)
Newly originated financial commitments 9,496,217 344,511 42,686 50,827 -   9,934,241
Reimbursements (1,821,336) (569,760) (711) (75,752) (42)   (2,467,601)
Decreases - - - (142) -   (142)
Foreign exchange difference 240,590 9,424 708 - -   250,722
Inflation adjustment (4,432,744) (1,033,977) (5,177) (138,542) (264)   (5,610,704)
               
Balances as of 06.30.24 9,170,688 2,600,367 62,322 266,473 86,668   12,186,518
 
 
 -64-
 

 

Allowances - Contingent Stage 1 Stage 2 Stage 3   Total
  Collective Individual Collective Individual  
Balances as of 12.31.22 9,838,893 4,940,385 24,084 278,757 582   15,082,701
               
Inter-stage Transfers:              
    From stage 1 to stage 2 (2,971,962) 10,322,389 448 - -   7,350,875
    From stage 2 to stage 1 2,240,179 (7,771,394) (16,728) - -   (5,547,943)
    From stage 1 or 2 to stage 3 (27,805) (162,784) (50) 708,190 99   517,650
    From stage 3 to stage 1 or 2 62,528 48,717 3,612 (696,309) (47,073)   (628,525)
Changes without inter-stage transfers (3,692,504) (1,865,789) 12,189 382,523 54,998   (5,108,583)
Newly originated financial commitments 13,801,314 615,582 10,682 188,202 -   14,615,780
Reimbursements (3,084,012) (848,225) (8,492) (278,919) (5,001)   (4,224,649)
Decreases - - - (732) -   (732)
Foreign exchange difference 1,651,279 91,382 2,031 - -   1,744,692
Inflation adjustment (9,383,080) (3,307,985) (22,532) (347,850) (3,150)   (13,064,597)
               
Balances as of 12.31.23 8,434,830 2,062,278 5,244 233,862 455   10,736,669

 

44. Restrictions to the distribution of earnings

 

a)In accordance with the regulations of the BCRA, 20% of the income for the year plus/less adjustments of prior years' results, transfers from other comprehensive income to retained earnings and less the accumulated loss at the end of the previous year, if any, must be allocated to the legal reserve.
b)The mechanism to be followed by financial to assess distributable balances is defined by the BCRA by means of the regulations in force on “Distribution of earnings” provided that certain situations are not verified, namely: to receive financial assistance from such entity due to illiquidity, shortfalls as regards minimum capital requirements or minimum cash requirements, to fall under the scope of the provisions of Sections 34 and 35 bis of the Financial Institutions Law (sections referred to regularization and correction plans and restructuring of the Entity), among other conditions detailed in the referred communication to be complied with. Furthermore, the distribution of earnings as approved by the Entity’s Shareholders’ Meeting shall not be effective unless approved by the Superintendency of Financial and Foreign Exchange Institutions of the BCRA.

In addition, no distributions of earnings shall be made with the profit resulting from the first time application of IFRS, which shall be included as a special reserve, and the balance of which as of June 30, 2024 amounts to 132,935,962.

 

Besides, the Entity shall verify that, once the proposed distribution of earnings is made, capital conservation margin equivalent to 2.5% of the risk-weighted assets is kept, which is additional to the minimum capital requirement set forth by law, and shall be paid in with level 1 ordinary capital (COn1), net of deductible concepts (CDC0n1).

 

Pursuant to Communication "A" 7984, the BCRA provided that until December 31, 2024, financial institutions that have the BCRA's prior authorization may distribute earnings for up to 60% of the amount that would have corresponded to them in six equal, monthly and consecutive installments. In addition, it established that the items used in determining the distributable earnings, and the amounts of the abovementioned installments should be computed in constant pesos as of the date of the Shareholders’ Meeting and as of the payment date of each installment, as applicable.

 

Subsequently, by means of Communication "A" 7997, the BCRA established that financial institutions that resolve or have resolved to distribute earnings within the framework of the provisions of Communication "A" 7984, may do so in three equal, monthly and consecutive installments for up to the corresponding amount according to the aforementioned communication. The Communication also established that financial institutions should grant nonresident shareholders the option to collect their dividends –in full or in part– in a single installment in cash, provided that such funds be directly used for the primary subscription of Bonds for the reconstruction of a free Argentina (BOPREAL, for its acronym in Spanish) in accordance with current exchange regulations.

 
 
 -65-
 
c)Pursuant to the provisions of General Resolution No. 622 of the CNV, the Shareholders’ Meeting that considers the annual financial statements shall resolve upon the specific use of accumulated earnings of the Entity.

 

On April 28, 2023, the General Ordinary and Extraordinary Shareholders’ Meeting was held and the following was approved:

 

Allocate 11,765,158 (65,863,878 in restated amounts) out of Unappropriated retained earnings for fiscal year 2022 to the Legal Reserve.
Allocate 47,060,630 (263,455,513 in restated amounts) to Unappropriated retained earnings for fiscal year 2022 to the Optional Reserve for future distribution of earnings.
Allocate 35,566,224 (140,001,722 in restated amounts) to the payment of dividends by partially reversing the Optional Reserve for future distribution of earnings.
Request the BCRA authorization to pay dividends for 50,401,015 (in nominal values).

On May 31, 2023, the BCRA approved the distribution of 50,401,015 as dividends which were paid in kind through the delivery of 49,524,433,015 Argentine Treasury Bills (in nominal values), adjusted by CER at discount and maturing on November 23, 2023 (X23N3).

On April 26, 2024, the General Ordinary and Extraordinary Shareholders’ Meeting was held and approved as follows:

 

To earmark 32,908,378 (59,160,158 in restated amounts) out of Unappropriated retained earnings for fiscal year 2023 to the Legal Reserve.
To earmark 131,633,510 (236,640,630 in restated amounts) to Unappropriated retained earnings for fiscal year 2023 to the Optional Reserve for future distribution of earnings.
To earmark 264,227,685 (418,963,716 in restated amounts) to the payment of dividends by partially reversing the Optional Reserve for future distribution of earnings.
Request the BCRA authorization for paying dividends amounting to 264,227,685 (418,963,716 in restated values).

 

On May 3, 2024, the BCRA approved the distribution of 264,227,685 (418,963,716 in restated values) which were be paid as follows as established by Communications “A” 7997 and “A” 7999:

 

Non-resident shareholders: they may opt to collect their dividends in a single installment in cash, provided that such funds be directly used for the primary subscription of BOPREAL. The payment in BOPREAL will be made on the date of the calculation of the bid made by the BCRA. In the event that they did not opt for the subscription of BOPREAL, the payment will be made in Argentine pesos unless they state their intention to receive payment through the delivery of Argentine Treasury bonds in Argentine pesos adjusted by CER (benchmark stabilization coefficient) at 4.25% maturing on December 13, 2024 (“T5X4”).
Resident shareholders: it will be paid in Argentine pesos unless they state their intention to receive the T5X4 bond. Resident shareholders are not allowed to subscribe BOPREAL.

 

Both the payment in T5X4 and in Argentine pesos were made in three installments on May 14, June 11 and July 11, 2024.

 

As of the date of these financial statements, the payment of dividends for fiscal year 2023 was completed.

 

 
 
 -66-
 

45. Restricted assets

 

As of June 30, 2024 and December 31, 2023, the Group has the following restricted assets:

a)The Entity applied the following assets as security for loans agreed under the Global Credit Program for micro, small and medium-sized enterprises granted by the Inter-American Development Bank (IDB).

 

    06.30.24   12.31.23
         
Argentine Treasury Bonds adjusted by CER due 2026   6,003   -
Argentine Treasury Bonds adjusted by CER due 2024   -   23,009
         
Total   6,003   23,009

 

b)Also, the Entity has accounts, deposits, repo transactions and trusts applied as guarantee for activities related to credit card transactions, with automated clearing houses, forward transactions, foreign currency futures, court proceedings and leases in the amount of 462,225,699 and 470,346,876 as of June 30, 2024 and December 31, 2023, respectively (see Note 10).

 

46. Banking deposits guarantee insurance system

 

Law No. 24,485 and Decree No. 540/95 provided for the creation of the Deposit Guarantee Insurance System, which was assigned the characteristics of being limited, mandatory and onerous, with the purpose of covering the risks of bank deposits, in a subsidiary and complementary manner to the system of privileges and protection of deposits established by the Financial Institutions Law.

That law provided for the incorporation of the company “Seguros de Depósitos Sociedad Anónima” (SEDESA) for the exclusive purpose of managing the Deposits Guarantee Fund, the shareholders of which, pursuant to the changes introduced by Decree No. 1292/96, will be the BCRA with at least one share and the trustees of the trust with financial institutions in the proportion determined by the BCRA for each, based on their contributions to the Deposit Guarantee Fund.

Deposits in pesos and foreign currency made with the participating entities under the form of checking accounts, savings accounts, time deposits or otherwise as determined by the BCRA up to the amount of 25,000 and which meet the requirements of Decree No. 540/95 and those to be set forth by the enforcement authority shall fall within the scope of said decree.

In August 1995, that company was incorporated, and the Entity has an 8.3672% share of the corporate stock as of December 31, 2023 (BCRA Communication “B” 12755).

 

As of June 30, 2024 and 2023, the contributions to the Fund have been recorded in the item “Other operating expenses - Contributions to the deposits guarantee fund” in the amounts of 4,009,223 and 5,365,279, respectively.

 

 

 
 
 -67-
 

 

47. Minimum cash and minimum capital requirements

 

47.1. Minimum cash requirements

The BCRA establishes different prudential regulations to be observed by financial institutions, mainly regarding solvency levels, liquidity and credit assistance levels.

Minimum cash regulations set forth an obligation to keep liquid assets in relation to deposits and other obligations recorded for each period. The items included for the purpose of meeting that requirement are detailed below:

Accounts   06.30.24   12.31.23
         
Balances at the BCRA        
         
BCRA – Current account not restricted   653,967,875   645,203,968
BCRA - Special guarantee accounts  - restricted (Note 10)   142,061,706   174,246,598
BCRA - Special pension accounts - restricted   104,095   -
         
    796,133,676   819,450,566
         
Argentine Treasury Bills Capitalizable in Pesos. Maturity 08-30-2024   332,955,000   -
Treasury Bonds in pesos adjusted by Cer 4.25%. Maturity 12-13-2024   280,284,727   393,566,679
Argentine Treasury Bills Capitalizable in Pesos. Maturity 07-26-2024   265,819,939   -
Argentine Bond in dual currency. Maturity 06-30-2024   251,497,757   388,708,861
Argentine Treasury Bills Capitalizable in Pesos. Maturity 10-14-2024   230,100,000   -
Treasury Bonds in pesos adjusted by Cer. Maturity 03-31-2026   138,841,455   -
Treasury Bonds in pesos adjusted by Cer 4%. Maturity 10-14-2024   138,096,475   341,038,074
Argentine Treasury Bonds in pesos. Maturity 08-23-2025   114,599,443   88,992,145
Treasury Bonds in pesos adjusted by Cer 4,25% Maturity 02-14-2025   93,953,316   100,806,292
Argentine Treasury Bills Capitalizable in Pesos. Maturity 03-31-2025   77,930,833   -
Argentine Treasury Bills Capitalizable in Pesos. Maturity 11-29-2024   54,103,500   -
Argentine Treasury Bills Capitalizable in Pesos. Maturity 02-28-2025   51,665,600   -
Argentine Treasury Bills Capitalizable in Pesos. Maturity 07-01-2024   48,313,974   -
Argentine Treasury Bonds in Pesos. Maturity 05-23-2027   24,305,153   58,258,587
Argentine Treasury Bonds in Pesos at Private Badlar Rate 0.7%. Maturity 11-23-2027   13,838,418   26,555,747
Treasury Bonds in pesos adjusted by Cer 3.75% Maturity 04-14-2024   -   1,422,344
BCRA Liquidity Bills   -   108,645,647
         
TOTAL   2,912,439,266   2,327,444,942

The balances disclosed are consistent with those reported by the Bank.

 

 
 
 -68-
 

47.2. Minimum cash requirements

The regulatory breakdown of minimum capital requirements is as follows at the above-mentioned dates:

 

Minimum capital requirement   06.30.24   12.31.23
         
Credit risk   (404,516,283)   (399,260,622)
Operational risk   (186,913,639)   (162,708,530)
Market risk   (2,147,004)   (11,753,179)
Non-compliance (1)   -   (31,470,249)
         
Paid-in   1,782,999,676   2,050,569,280
         
Surplus   1,189,422,750   1,445,376,700

 

(1) The increase arising from the credit risk related to minimum capital requirements arises from the noncompliance of the maximum limit established by the BCRA for financing the non-financial public sector over 15 days of December 2023. According to the regulation, this noncompliance gives rise to the increase in the minimum capital requirement due to the credit risk for an amount equivalent to 100% of the amount exceeding such ratio as from the month in which the noncompliances have been made and while they remain. As to credit ratios, departures will be assessed on the basis of the monthly average of the daily exceeding amounts.

 

 

48. Compliance with the provisions to act in the different categories of agent defined by the Argentine Securities Commission

 

Considering the transactions carried out by Banco BBVA Argentina S.A. and according to the different categories of agent set forth by General Resolution No. 622-13 of the CNV, on September 9 and 19, 2014, the Entity was registered as Custodian Agent of Collective Investment Products of Mutual Funds under No. 4 and Settlement and Clearing Agent – Comprehensive (ALyC) under No. 42, respectively.

 

Section 8 of General Resolution No. 821 of the CNV sets forth that the minimum shareholders’ equity required to operate as ALyC shall be equal to 470,350 UVAs adjusted by CER, Law No. 25827. As of June 30, 2024, it amounts to 490,453. The Entity’s shareholders’ equity exceeds the minimum shareholders’ equity required by said resolution.

 

Besides, the required minimum contra-account of 245,226, fifty percent (50%) of the minimum shareholders’ equity amount, includes Argentine Treasury Bonds in pesos adjusted by CER due 2024 as of June 30, 2024 deposited with the account opened at Caja de Valores S.A., named “Depositor 1647 Brokerage Account 5446483 BBVA Banco Francés minimum cash contra-account”.

 

Furthermore, pursuant to the requirements of General Resolution No. 792 issued by the CNV on April 30, 2019, mutual fund management companies’ minimum shareholders’ equity will be comprised of 150,000 UVAs plus 20,000 UVAs, per each additional mutual fund under management. As concerns the cash contra-account, the amount to be paid shall be equal to no less than fifty per cent (50%) of minimum shareholders' equity.

 

The subsidiary BBVA Asset Management Argentina S.A.U. Sociedad Gerente de Fondos Comunes de Inversión, as Mutual Funds Management Agent, registered on August 7, 2014 under No. 3, met the CNV minimum cash contra-account requirements with 2,792,293 shares of FBA Renta Pesos Fondo Común de Inversión, in the amount of 296,413, through custody account No. 493-0005459481 held at BBVA Banco Francés S.A. As of June 30, 2024, the company's Shareholders’ Equity exceeds the minimum amount imposed by the CNV.

 

 
 
 -69-
 

 

49. Compliance with the provisions of the Argentine Securities Commission – Documentation

 

The CNV issued General Resolution No. 629 to introduce changes to its own rules governing the maintenance and safekeeping of corporate books, accounting records and business documentation. In this respect, it is reported that the Bank has delivered the documentation that supports its operations for the periods still open to audit for safekeeping in Administradora de Archivos S.A. (AdeA), domiciled at Ruta 36 Km. 31.5, district of Florencio Varela, Province of Buenos Aires.

 

In addition, it is informed that a detail of the documentation delivered for safekeeping, as well as the documentation referred to in Art. 5. a.3), Section I of Chapter V of Title II of the CNV rules is available at the Bank’s registered office. (2013 consolidated text and amendments).

 

 

50. Trust activities

 

On January 5, 2001, the Board of Directors of BCRA issued Resolution No. 19/2001, providing for the exclusion of Mercobank S.A.’s senior liabilities under the terms of section 35 bis of the Financial Institutions Law, the authorization to transfer the excluded assets to the Bank as a trustee of the Diagonal Trust, and the authorization to transfer the excluded liabilities to beneficiary banks. On the same date, Mercobank S.A., as Settler, and the Bank, as Trustee, entered into the agreement to set up the Diagonal Trust in relation to the exclusion of assets as provided in the above-mentioned resolution. As of June 30, 2024 and December 31, 2023, the assets of Diagonal Trust amount to 2,427 and 4,364, respectively, considering their recoverable values.

 

In addition, the Entity, in its capacity as Trustee in the Corp Banca Trust, recorded the selected assets on account of the redemption in kind of participation certificates in the amount of 4,177 and 7,510 as of June 30, 2024 and December 31, 2023, respectively.

 

In addition, the Entity acts as a Trustee in 12 non-financial trusts, in no case as personally liable for the liabilities assumed in the performance of the contract obligations. Such liabilities will be settled with and up to the full amount of the trust assets and the proceeds therefrom. The non-financial trusts concerned were set up to manage assets and/or secure the receivables of several creditors (beneficiaries) and the trustee was entrusted with the management, care, preservation and custody of the corpus assets until (i) noncompliance with the obligations by the debtor (settler) vis-a-vis the creditors (beneficiaries) is verified, when such assets are sold and the proceeds therefrom are distributed (net of expenses) among all beneficiaries, the remainder (if any) shall be delivered to the settler, or (ii) all contract terms and conditions are complied with, in which case all the trust assets will be returned to the settler or to whom it may indicate. The trust assets totaled 2,219,081 and 3,571,563 as of June 30, 2024 and December 31, 2023, respectively, and consist of cash, creditors' rights, real estate and shares.

 
 
 -70-
 

51. Mutual funds

As of June 30, 2024 and December 31, 2023, the Entity holds in custody, as Custodian Agent of Mutual Funds managed by BBVA Asset Management Argentina S.A.U. Sociedad Gerente de Fondos Comunes de Inversión, time deposit certificates, shares, corporate bonds, government securities, mutual funds, deferred payment checks, BCRA instruments, Buenos Aires City Government Bills, ADRS, Buenos Aires Province Government Bills and repos for 682,517,158 and 204,749,471, which are part of the mutual fund portfolio and are recorded in debit balance memorandum accounts “Control – Other.”

 

The Mutual Fund assets are as follows:

 

Mutual Funds 06.30.24   12.31.23
       
FBA Renta Pesos 1,731,076,691   2,219,688,193
FBA Acciones Argentinas 76,929,343   36,602,749
FBA Ahorro Pesos 40,971,090   8,759,824
FBA Bonos Argentina 14,181,297   2,169,395
FBA Renta Fija Plus 13,121,250   7,171,183
FBA Renta Mixta 7,120,629   3,586,070
FBA Acciones Latinoamericanas 6,598,570   7,753,582
FBA Horizonte 5,377,533   872,606
FBA Renta Publica I 4,796,023   1,003,867
FBA Gestión I 73,560   116,288
FBA Bonos Globales 15,075   29,310
FBA Horizonte Plus 10,523   20,293
FBA Retorno Total I 10,089   23,239
FBA Renta Fija Local 4,352   6,880
FBA Calificado -   28,596,960
FBA Renta Fija Dólar I -   -
  1,900,286,025   2,316,400,439

 

52. Penalties and administrative proceedings instituted by the BCRA

According to the requirements of Communication “A” 5689, as amended, issued by the BCRA, below is a detail of the administrative and/or disciplinary penalties as well as the judgments issued by courts of original jurisdiction in criminal matters, enforced or brought by the BCRA of which the Entity has been notified:

 

Administrative proceedings commenced by the BCRA

 

“Banco Francés S.A. over breach of Law 19,359.” Administrative Proceedings for Foreign Exchange Offense initiated by the BCRA, notified on February 22, 2008 and identified under No. 3511, File No. 100194/05, on grounds of a breach of the Criminal Foreign Exchange Regime as a result of the purchase and sale of US Dollars through the BCRA in excess of the authorized amounts. They totaled 44 transactions involving the Bank's branches 099, 342, 999 and 320. The individuals/entities subject to these proceedings were Banco BBVA Argentina S.A. and the following Bank officers: Julio Lopez, Marcelo Canestri, Humberto Daniel De Luca, Mario Daniel Breno, Agustín Garicia, Gustavo Pedro Vitale, Eduardo Carlos Hombre, Ana Mercedes Pacheco, Carlos Alberto Klapproth, Ernesto Salgado, Adriana Lilian Olmedo, Estrella Blanca Fernandez, Francisco Meringolo, Daniela Vanesa Guevara, Marcelo Mozillo, Cintia Tamara Ortiz, Maria Elena Fridman, Maria Antonia Cejo Rial, Carlos Alberto Gonzalez, Johana Andrea Frezza, Haroldo Daniel Gramajo and Andrea Patricia Ramirez, who served in the capacities described below at the date when the breaches were committed: (i) two Territory Managers, (ii) four Branch Managers, (iii) four Heads of Back-Office Management and (iv) twelve cashiers. On August 21, 2014, the court acquitted the individuals/entities above from all charges. The General Attorney’s Office filed an appeal and Room A of the Appellate Court with jurisdiction over Criminal and Economic Matters confirmed the Bank’s and the involved officers’ acquittal from all charges. The General Attorney’s Office filed an Extraordinary Appeal, which was granted and as of the date of these financial statements is being heard by the Argentine Supreme Court of Justice. The case has been called for resolution. The case has been called for resolution.

 
 
 -71-
 

“Banco Francés S.A. over breach of Law 19,359.” Administrative Proceedings for Foreign Exchange Offense initiated by the BCRA, notified on December 1, 2010 and identified under No. 4539, File No. 18398/05 where charges focus on fake foreign exchange transactions, through false statements upon processing thereof, carried out by personnel from five branches in Mar del Plata, which would entail failure to comply with the costumer identification requirements imposed by foreign exchange rules and regulations through Communication “A” 3471, paragraph 6. The individuals/entities subject to these proceedings were Banco BBVA Argentina S.A., the five regular members of the Board of Directors and the following Bank officers who served in the capacities described below at the date when the breaches were committed: (i) the Retail Bank Manager, (ii) the Territory Manager, (iii) the Area Manager, (iv) a commercial aide to the Area Manager, (v) five Branch Managers, (vi) four Heads of Back-Office Management, (vii) five Main Cashiers and (viii) one cashier. To date, the case is being heard by Federal Court No. 3, Criminal Division of the City of Mar del Plata, under File No. 16377/2016. On June 21, 2017, the court sought to obtain further evidence on its own initiative ordering that an official letter should be sent to the BCRA for it to ascertain if the rules governing the charges brought in the Case File No. 18398/05 Proceedings No. 4539 have been subject to any change. The BCRA answered the request from the Court, stating that noncompliance with the provisions of Communication “A” 3471 would not currently be subject to any change that may imply a lesser offense. On September 30, 2019, the court of original jurisdiction rendered judgment against the Bank for its involvement in the transaction imposing a fine of US$ 592,000, while imposing fines to the individuals involved for the aggregate amount of US$ 518,766 and Euro 48,500. The Bank is jointly and severally liable for the aforementioned fines. The Bank's Directors Jorge Carlos Bledel, Javier D. Ornella, Marcelo Canestri and Oscar Castro and Territory Managers Oscar Fantacone and Jorge Allen were acquitted from all charges. An appeal was filed on behalf of Banco BBVA Argentina S.A. and its employees asking for the reversal of the decision or otherwise significant reductions of the amounts involved. On August 24, 2021, the Federal Appellate Court of Mar de Plata resolved to declare the action extinguished based on the grounds of violation of the reasonable term and consequently acquit Banco BBVA Argentina S.A., Pablo Bistacco, Graciela Alonso, Néstor O. Baquer, Hugo Benzan, Mariela Espinosa, Jorge Fioritti, Liliana Paz, Alberto Giménez, Jorge Elizalde, Elizabeth Mosquera, Carlos Barcellini, Carlos O. Alfonzo, Samuel Alanis, Julián Gabriel Burgos, for the facts that were condemned in the present case for violation of Law No. 19.359, and the relevant regulations. In view of this ruling, the Federal Prosecutor filed an extraordinary federal appeal. On February 21, 2024, we were notified that the Argentine Supreme Court of Justice rejected the extraordinary appeal filed, declaring its inadmissibility. Therefore, the decision made by the Federal Court is final and is considered to be res judicata.

 

“Banco Francés S.A. over breach of Law 19,359.” Administrative Proceedings for Foreign Exchange Offense initiated by the BCRA, notified on July 26, 2013 and identified under No. 5406, File No. 100443/12 where charges are concerned with fake foreign exchange transactions through false statements upon processing thereof incurred by personnel in Branch 087 - Salta -, which would entail a failure to comply with the costumer identification requirements imposed by foreign exchange rules and regulations through Communication “A” 3471, Paragraph 6. The individuals/entities subject to these proceedings were Banco BBVA Argentina S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were committed: (i) the Branch Manager (ii) the Back Office Management Head, (iii) the Main Cashier and (iv) two cashiers. The trial period came to a close and the BCRA must send the file to Salta’s Federal Court. As of the date hereof, the case file has not been sent to court.

 

“Banco Francés S.A. over breach of Law 19,359.” Administrative Proceedings for Foreign Exchange Offense initiated by the BCRA, notified on December 23, 2015 and identified under No. 6684, File No. 100068/13. The proceedings were brought for allegedly having completed operations under Code 631 “Professional and technical business services” for ROCA ARGENTINA S.A. against the applicable exchange regulations (Communications “A” 3471, “A” 3826 and “A” 5264), involving the incomplete verification of the services provided. The individuals/entities subject to these proceedings were Banco BBVA Argentina S.A. and two Bank officers holding the positions described below at the date when the breaches were committed: (i) the Foreign Trade Manager (Alejandro Chiaradía) and (ii) an officer of the Area (Horacio Perotti). The BCRA has decided that the trial period has come to an end. The case is being heard by Federal Court No. 2, Criminal Division of Lomas de Zamora, Province of Buenos Aires, under File No. 39,130/2017. On October 26, 2017, the Entity filed a request for retroactive application of the most favorable criminal law, as through Communication “A” 5264, whereby the restriction on foreign trade transactions was removed, the payment of services abroad was reinstated.

 

 
 
 -72-
 

Banco BBVA ARGENTINA S.A. Financial summary proceedings initiated by the B.C.R.A. Notified on June 28, 2021 and identified under No. 1587, file No. 388/55/21. The charge consists of the alleged breach of paragraph 7.2 of Communication "A" 6981 by assisting (without prior approval of the BCRA) Cargill S.A. through a checking account overdraft amounting to $ 167 million from April 29, 2020 to May 3, 2020, since as it had bonds taken as of April 22, 2020, it should have waited 90 calendar days without executing repo transactions and/or surety bonds, before being assisted. Likewise, during May and June 2020, Cargill’s checking account disclosed credit balances, which were generally covered at the end of the day. In this regard, it should be noted that Banco BBVA Argentina S.A. violated paragraph 7.2 of the revised text of the rules on "Credit Policy", which strictly includes the restriction on the granting of intraday (within the same day) assistance. The individuals/entities subject to these proceedings were Banco BBVA Argentina S.A. (30-50000319-3); María Isabel Goiri Lartitegui; Jorge Delfín Luna; Alfredo Castillo Triguero; Juan Manuel Ballesteros Castellano; Oscar Miguel Castro; Gabriel Eugenio Milstein; Adriana María Fernandez De Melero; José Santiago Fornieles; Darío Javier Berkman; Carlos Eduardo Elizalde and Nicolás Herbert Bohtligk. The relevant answers to the charges were filed on August 4, 2021. On September 14, 2023, the Resolution of the BCRA was notified, confirming the initial charges and rejecting the defenses regarding the interpretation of the regulation and the inexistence of intraday financing due to the way the proceeds from collections operate. Therefore, the breach of the regulations was considered to be proven and a fine was imposed. The amount in pesos of the fines applied is detailed below. Banco BBVA Argentina S.A. $24,000,000. Board of Directors: Oscar Castro $2,591,589 Gabriel Milstein $ 2,591,589, Isabel Goiri $2,565,930 Adriana Melero $ 2,565,930, Jorge Luna $2,565,930, Alfredo Castillo $ 2,565,930, Juan Manuel Ballesteros $2,565,930. Employees: Carlos Elizalde $1,710,620, Nicolás Bohtlingk $1,710,620, Darío Berkman $1,710,620, José Fornieles $855,310. TOTAL $47,999,998. The resolution is appealed.

 

BBVA ARGENTINA S.A. Financial summary proceedings for Foreign Exchange Offence brought by the B.C.R.A. Notified on October 25, 2022, and identified under No. 7835, related to foreign exchange transactions performed in alleged noncompliance with the provisions established by point 9-A16 of BCRA Communiqué “A” No. 6770 referring to notes related to transactions performed between residents and import prepayments. Due to the link between cases and procedural economy, five cases have been filed with the oversight agency. The infringement stands at USD 1,414, 526.28. The defendants are Banco BBVA Argentina S.A. (Argentine tax identification No. 30-50000319-3) and the following officials and employees: Ruben Lauriente, Noelia Sorbello, Juan Manuel Olives, Santiago Alejandro Gonzales, Mario Gustavo Dellamea, Maria Teresa Palacios, Mirtha Susana Monteleone and Gustavo Cara. The procedural status of the case is with the presentation of pleadings.

The Group and its legal advisors estimate that a reasonable interpretation of the applicable regulations in force was made and do not expect an adverse financial impact from these cases.

 

53. Subsequent events

 

Openpay Argentina S.A. - Capital Contribution

 

On July 4, 2024, the Bank made a capital contribution of 250,377 to Openpay Argentina S.A. for working capital purposes. Additionally, at the Shareholders’ Meeting held on the same date, 250,377,305 common, non-transferable, registered shares, with a nominal value of $1 and one vote each, were issued in favor of the Bank.

 

The Bank’s interest in that company has remained unchanged at 12.51% as of the date of contribution.

 

Payment of Dividends

 

On July 11, 2024, the dividends approved by the BCRA for fiscal year 2023 were fully paid. Dividends in the amount of 264,227,685 (418,963,716 in restated values) were paid in accordance with the terms of Communication “A” 7997 and Communication "A" 7999 (See Note 44 - Restrictions on profit distribution).

 

Termination of Liquidity Options with the BCRA

 

On July 18, 2024, an auction was carried out to terminate liquidity options of government securities issued by the BCRA held in the Bank’s portfolio (Communication "B" 12847).

 
 
 -73-
 

As a result of this process, put options for a face value of 546,974,473,392 were delivered, receiving as compensation 2,104,741, generating 655,702 income (see Note 5. Derivative instruments. Assets).

 

Debt Swap - August 2024

 

In August 2024, the Bank launched a voluntary debt swap under Section 11, Presidential Decree No. 331/2022 of the Ministry of Economy See Note 9.2. - Other debt securities).

 

No other events or transactions have occurred between period-end and the date of these consolidated condensed interim financial statements which may significantly affect the Entity's financial position or results of operations as of June 30, 2024.

 

54. Accounting principles – Explanation added for translations into English

These consolidated financial statements are presented in accordance with the financial reporting framework set forth by the BCRA, as mentioned in note 2. These accounting standards may not conform to accounting principles generally accepted in other countries.

 
 
 -74-
 

 

EXHIBIT A

 

BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES

CONSOLIDATED WITH SUBSIDIARIES

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

 

        HOLDING   POSITION
        Fair Fair value Accounting   Accounting   Position without    
Account   Identification   value level Balance   Balance   options Options Final Position
            06.30.24   12.31.23        
                         
DEBT SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS                        
                         
Local:                        
Government Securities - In pesos                        
                         
Treasury Bonds in pesos adjusted by Cer 4%. Maturity 10-14-2024   9179   244,896 1 244,896   321,864   244,896 - 244,896
Argentine Treasury Bills Capitalizable in pesos. Maturity 07-01-2024   9260   84,228 1 84,228   -   84,228 - 84,228
Treasury Bills adjusted by Cer. Maturity 01-18-2024   9221   - 1 -   368,851   - - -
                         
Subtotal Government Securities - In pesos       329,124   329,124   690,715   329,124 - 329,124
                         
Government Securities - In foreign currency                        
                         
Argentine Bond in dual currency. Maturity 06-30-2024   9230   251,497,757 1 251,497,757   388,708,861   251,497,757 - 251,497,757
AL30 Bond Local Law USD Step Up. Maturity 07-09-2030   5921   55,790 1 55,790   49,143   55,790 - 55,790
Argentine Bond in dual currency. Maturity 02-28-2024   9156   - 1 -   13,068,972   - - -
GD30 Bond Foreign Law USC Step Up. Maturity 07-09-2030   81086   - 1 -   51,115   - - -
                         
Subtotal Government Securities - In foreign currency       251,553,547   251,553,547   401,878,091   251,553,547 - 251,553,547
                         
                         
Private Securities - In pesos                        
                         
Corporate Bond New San S.A.  Series 21 in Pesos Private BADLAR. Maturity 05-09-2025   57750   212,374 3 212,374   -   212,374 - 212,374
Corporate Bond New San S.A. Series 18 in Pesos Private BADLAR + 300 bps. Maturity 10-17-2024   57449   - 3 -   474,211   - - -
Corporate Bond New San S.A. Series 19 in Pesos Monetary Policy Rate. Maturity 10-17-2024   57450   - 3 -   422,008   - - -
Corporate Bond Toyota Cia Financiera Series 32 in Pesos. Maturity 02-09-2025   57287   - 3 -   322   - - -
                         
Subtotal Private Securities - In pesos       212,374   212,374   896,541   212,374 - 212,374
                         
Private Securities - In foreign currency                        
                         
Corporate Bond YPF Series 30 in USD. Maturity 07-01-2026   57855   129,344 2 129,344   -   129,344 - 129,344
Corporate Bond Central Puerto Series A in USD. Maturity 03-14-2026   57363   - 2 -   2,969,105   - - -
                         
Subtotal Private Securities - In foreign currency       129,344   129,344   2,969,105   129,344 - 129,344
                         
TOTAL DEBT SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS       252,224,389   252,224,389   406,434,452   252,224,389 - 252,224,389
                         

 

 
 
 -75-
 

EXHIBIT A

(Continued)

 

BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES

CONSOLIDATED WITH SUBSIDIARIES

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

        HOLDING   POSITION
        Fair Fair value Accounting   Accounting   Position without    
Account   Identification   value level Balance   Balance   options Options Final Position
            06.30.24   12.31.23        
                         
OTHER DEBT SECURITIES                        
                         
MEASURED AT FAIR VALUE THROUGH OCI                        
                         
Local:                        
Government Securities - In pesos                        
                         
Argentine Treasury Bills Capitalizable in pesos. Maturity 08-30-2024   9262   332,955,000 1 332,955,000   -   332,955,000 - 332,955,000
Treasury Bonds in pesos adjusted by Cer 4.25%. Maturity 12-13-2024   9.200   280,284,727 2 280,284,727   393,566,679   280,284,727 (436,548) 279,848,179
Argentine Treasury Bills Capitalizable in pesos. Maturity 07-26-2024   9261   265,819,939 1 265,819,939   -   265,819,939 - 265,819,939
Argentine Treasury Bills Capitalizable in pesos. Maturity 10-14-2024   9252   230,100,000 1 230,100,000   -   230,100,000 - 230,100,000
Treasury Bonds in pesos adjusted by Cer 4%. Maturity 10-14-2024   9179   144,637,901 1 144,637,901   349,605,259   144,637,901 (202,310) 144,435,591
Treasury Bonds in pesos adjusted by Cer. Maturity 03-31-2024   9257   138,841,455 1 138,841,455   -   138,841,455 (59,002) 138,782,453
Treasury Bonds in pesos adjusted by Cer 1.55%. Maturity 07-26-2024   5405   110,048,047 1 110,048,047   92,371,641   110,048,047 - 110,048,047
Treasury Bonds in pesos adjusted by Cer 4.25%. Maturity 02-14-2025   9180   93,953,316 1 93,953,316   100,806,292   93,953,316 (105,801) 93,847,515
Argentine Treasury Bills Capitalizable in pesos. Maturity 09-30-2024   9268   93,802,089 2 93,802,089   -   93,802,089 - 93,802,089
Argentine Treasury Bills Capitalizable in pesos. Maturity 03-31-2025   9256   77,930,833 1 77,930,833   -   77,930,833 (98,036) 77,832,797
Treasury Bonds in pesos adjusted by Cer 2%. Maturity 11-09-2026   5925   58,964,720 1 58,964,720   61,094   58,964,720 - 58,964,720
Argentine Treasury Bills Capitalizable in pesos. Maturity 11-29-2024   9255   54,103,500 1 54,103,500   -   54,103,500 - 54,103,500
Argentine Treasury Bills Capitalizable in pesos. Maturity 02-28-2025   9253   51,665,600 1 51,665,600   -   51,665,600 (83,247) 51,582,353
Argentine Treasury Bills Capitalizable in pesos. Maturity 07-01-2024   9260   48,313,974 1 48,313,974   -   48,313,974 - 48,313,974
Treasury Bonds in pesos adjusted by Cer 0%. Maturity 06-30-2026   9240   47,002,960 1 47,002,960   -   47,002,960 (495,887) 46,507,073
Argentine Treasury Bills Capitalizable in pesos. Maturity 01-31-2025   9251   634,500 1 634,500   -   634,500 - 634,500
Treasury Bonds in pesos adjusted by Cer 3.75%. Maturity 04-14-2024   9178   - 1 -   1,422,344   - - -
Treasury Bonds in pesos adjusted by Cer 1.50%. Maturity 03-25-2024   5493   - 1 -   299,109   - - -
                         
Subtotal Government Securities - In pesos       2,029,058,561   2,029,058,561   938,132,418   2,029,058,561 (1,480,831) 2,027,577,730
                         
Government Securities - In foreign currency                        
                         
Bonds for the Reconstruction of a Free Argentina - TRANCHE 1 - Maturity 10-31-2027 (Series C)   9236   10,241,451 2 10,241,451   -   10,241,451 - 10,241,451
Bonds for the Reconstruction of a Free Argentina - TRANCHE 1 - Maturity 10-31-2027 (Series D)   9237   10,083,078 1 10,083,078   -   10,083,078 - 10,083,078
Bonds for the Reconstruction of a Free Argentina - TRANCHE 1 - Maturity 10-31-2027 (Series A)   9234   8,644,140 2 8,644,140   -   8,644,140 - 8,644,140
Bonds for the Reconstruction of a Free Argentina - TRANCHE 1 - Maturity 10-31-2027 (Series B)   9235   7,666,125 2 7,666,125   -   7,666,125 - 7,666,125
Dollar-linked Argentine Treasury Bond 0.40%. Maturity 04-30-2024   9120   - 1 -   53,430   - - -
                         
Subtotal Government Securities - In foreign currency       36,634,794   36,634,794   53,430   36,634,794 - 36,634,794
                         
BCRA Bills - In pesos                        
                         
BCRA Liquidity Bills in pesos. Maturity 01-11-2024   14085   - 2 -   100,656,178   - - -
BCRA Liquidity Bills in pesos. Maturity 01-09-2024   14084   - 2 -   7,989,469   - - -
        - 2 -   100,656,178   - - -
Subtotal BCRA Bills - In pesos       -   -   108,735,287   - - -
                         

 

 
 
 -76-
 

EXHIBIT A

(Continued)

BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES

CONSOLIDATED WITH SUBSIDIARIES

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

        HOLDING   POSITION
        Fair Fair value Accounting   Accounting   Position without    
Account   Identification   value level Balance   Balance   options Options Final Position
            06.30.24   12.31.23        
                         
OTHER DEBT SECURITIES (Continued)                        
                         
BCRA Bills - In foreign currency                        
                         
Local BCRA Bills in USD. Maturity 11-23-2024   12093   7,294,000 2 7,294,000   11,627,434   7,294,000 - 7,294,000
Local BCRA Bills in USD. Maturity 11-20-2024   12090   5,242,563 2 5,242,563   30,522,014   5,242,563 - 5,242,563
Local BCRA Bills in USD. Maturity 11-27-2024   12095   1,823,500 2 1,823,500   2,906,859   1,823,500 - 1,823,500
Local BCRA Bills in USD. Maturity 11-16-2024   12089   - 2 -   80,374,640   - - -
                         
Subtotal BCRA Bills - In foreign currency       14,360,063   14,360,063 - 125,430,947   14,360,063 - 14,360,063
                         
                         
Private Securities - In pesos                        
                         
Corporate Bond New San S.A. in Pesos Series 20 Private BADLAR. Maturity 02-01-2025   57557   270,496 3 270,496   -   270,496 - 270,496
Corporate Bond New San S.A. in Pesos Series 19. Maturity 10-17-2024   57450   236,374 3 236,374   -   236,374 - 236,374
Corporate Bond Bco de Serv. Financieros Series 24 in Pesos at Floating rate. Maturity 02-02-2025   57560   213,173 2 213,173   -   213,173 - 213,173
Corporate Bond Refi Pampa Series 2 in Pesos adjusted by Uva. Maturity 05-06-2025   56123   182,661 3 182,661   156,769   182,661 - 182,661
Corporate Bond New San S.A in Pesos Private BADLAR. Maturity 05-09-2025   57750   172,381 3 172,381   -   172,381 - 172,381
Corporate Bond New San S.A. in Pesos Private BADLAR + 440 bps. Maturity 02-14-2024   56847   - 3 -   405,965   - - -
Corporate Bond Bco de Serv. Financieros Series 22 in Pesos at Floating rate. Maturity 03-03-2024   56886   - 3 -   389,261   - - -
Corporate Bond Petroquimica Com. Rivadavia S.A. in Pesos at Floating rate. Maturity 08-15-2024   56855   - 3 -   310,528   - - -
Corporate Bond New San S.A. in Pesos Private BADLAR + 575 bps. Maturity 05-19-2024   57044   - 3 -   273,824   - - -
Corporate Bond Arcor Series 17 in Pesos adjusted by Uva. Maturity 10-20-2025   55692   - 3 -   6,896,372   - - -
                         
Subtotal Private Securities - In pesos       1,075,085   1,075,085   8,432,719   1,075,085 - 1,075,085
                         
Private Securities - In foreign currency                        
                         
Corporate Bond Vista Energy Series 23 in USD. Maturity 03-06-2027   57636   3,756,410 2 3,756,410   -   3,756,410 - 3,756,410
Corporate Bond Pampa Energia S.A. Series 20 in USC. Maturity 03-26-2026   57682   2,770,808 2 2,770,808   -   2,770,808 - 2,770,808
Corporate Bonds Tecpetrol S.A. Series 7 in USD. Maturity 04-22-2026   57709   2,688,158 2 2,688,158   -   2,688,158 - 2,688,158
Corporate Bond Luz De Tres Picos 4 in USD. Maturity 09-29-2026   56467   2,476,735 2 2,476,735   624   2,476,735 - 2,476,735
Corporate Bonds YPF. Series 29 in USD. Maturity 05-28-2026   57774   1,827,147 2 1,827,147   -   1,827,147 - 1,827,147
Corporate Bond Pampa Energia S.A. Series 18 in USD. Maturity 09-08-2025   57326   1,818,941 2 1,818,941   2,880,884   1,818,941 - 1,818,941
Corporate Bond Empresa de Gas del Sur (EMGASUD) S.A. Series 39 in USD. Maturity 03-08-2027   57644   1,784,831 2 1,784,831   -   1,784,831 - 1,784,831
Corporate Bond Empresa de Gas del Sur (EMGASUD) S.A. Series 39 in USD. Maturity 07-14-2028   57194   1,569,449 2 1,569,449   2,406,537   1,569,449 - 1,569,449
Corporate Bond Vista Energy Series 20 in USD. Maturity 07-20-2025   57081   1,509,496 2 1,509,496   2,385,169   1,509,496 - 1,509,496
Corporate Bond Petroquimica Comodoro Rivadavia Series O in USD. Maturity 09-22-2027   57379   1,112,514 2 1,112,514   212   1,112,514 - 1,112,514
Corporate Bond John Deere Credit Cia Financiera S.A. Series X in USD. Maturity 03-08-2026   57639   927,488 2 927,488   -   927,488 - 927,488
Corporate Bond Petroquimica Comodoro Rivadavia Series H in USD. Maturity 12-17-2024   55849   402,502 2 402,502   -   402,502 - 402,502
                         
Subtotal Private Securities - In foreign currency       22,644,479   22,644,479   7,673,426   22,644,479 - 22,644,479
                         
TOTAL SECURITIES AT FAIR VALUE THROUGH OCI       2,103,772,982   2,103,772,982   1,188,458,227   2,103,772,982 (1,480,831) 2,102,292,151
                         
 
 
 -77-
 

EXHIBIT A

(Continued)

BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES

CONSOLIDATED WITH SUBSIDIARIES

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

        HOLDING   POSITION
        Fair Fair value Accounting   Accounting   Position without    
Account   Identification   value level Balance   Balance   options Options Final Position
          value 06.30.24   12.31.23        
                         
OTHER DEBT SECURITIES (Continued)                        
                         
MEASURED AT AMORTIZED COST                        
                         
Government Securities - In pesos                        
                         
Argentine Treasury Bonds in pesos. Maturity 08-23-2025   9196   115,855,982 2 114,599,443   88,992,145   114,599,443 - 114,599,443
Argentine Treasury Bonds in pesos. Maturity 05-23-2027   9132   24,305,166 2 24,305,153   58,258,587   24,305,153 - 24,305,153
Argentine Treasury Bonds in pesos at 0.7% Badlar Private Rate. Maturity 11-23-2027   9166   13,840,550 2 13,838,418   26,555,747   13,838,418 - 13,838,418
                         
Subtotal Government Securities - In pesos       154,001,698   152,743,014   173,806,479   152,743,014 - 152,743,014
                         
TOTAL SECURITIES AT AMORTIZED COST       154,001,698   152,743,014   173,806,479   152,743,014 - 152,743,014
                         
TOTAL OTHER DEBT SECURITIES       2,257,774,680   2,256,515,996   1,362,264,706   2,256,515,996 (1,480,831) 2,255,035,165
                         
                         
EQUITY INSTRUMENTS                        
                         
MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS                        
                         
Local:                        
Private Securities - In pesos                        
                         
Share BYMA- Bolsas y Mercados Argentina       4,417,014 1 4,417,014   3,899,779   4,417,014 - 4,417,014
Share Banco de Valores de Bs. As.       1,606,668 1 1,606,668   1,899,561   1,606,668 - 1,606,668
                         
Subtotal Private Securities - In pesos       6,023,682   6,023,682   5,799,340   6,023,682 - 6,023,682
                         
TOTAL EQUITY INSTRUMENTS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS       6,023,682   6,023,682   5,799,340   6,023,682 - 6,023,682
                         
MEASURED AT FAIR VALUE THROUGH OCI                        
                         
Local:                        
Private Securities - In pesos                        
                         
Compensadora Electrónica S.A.       1,603,181 3 1,603,181   1,603,181   1,603,181 - 1,603,181
Mercado Abierto Electrónico S.A.       955,719 3 955,719   920,103   955,719 - 955,719
Seguro de Depósitos S.A.       229,384 3 229,384   259,329   229,384 - 229,384
Other       8,852 3 8,852   8,852   8,852 - 8,852
                         
Subtotal Private Securities - In pesos       2,797,136   2,797,136   2,791,465   2,797,136 - 2,797,136
                         
                         
Foreign:                        
Private Securities - In foreign currency                        
                         
Banco Latinoamericano de Exportaciones S.A.       547,025 2 547,025   727,122   547,025 - 547,025
Other       31,415 2 31,415   49,883   31,415 - 31,415
                         
Subtotal Private Securities - In foreign currency       578,440   578,440   777,005   578,440 - 578,440
                         
Subtotal Private Securities - In foreign currency       578,440   578,440   777,005   578,440 - 578,440
                         
TOTAL EQUITY INSTRUMENTS MEASURED AT FAIR VALUE THROUGH OCI       3,375,576   3,375,576   3,568,470   3,375,576 - 3,375,576
                         
TOTAL EQUITY INSTRUMENTS       9,399,258   9,399,258   9,367,810   9,399,258 - 9,399,258

 

 
 
 -78-
 

EXHIBIT B

 

CLASSIFICATION OF LOANS AND OTHER FINANCING ACCORDING TO FINANCIAL PERFORMANCE AND GUARANTEES RECEIVED

CONSOLIDATED WITH SUBSIDIARIES

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

Account   06.30.24   12.31.23
           
COMMERCIAL PORTFOLIO        
           
Normal performance   1,794,117,364   1.621.416.323
  Preferred collaterals and counter-guarantees “A”   14,095,333   8,564,613
  Preferred collaterals and counter-guarantees “B”   4,335,740   8,933,133
  No preferred guarantees or counter guarantees   1,775,686,291   1,603,918,577
           
With special follow-up   -   530,736
         
Under observation   -   530,736
  Preferred collaterals and counter-guarantees “B”   -   530,736
           
Troubled   3,108,351   5,037,751
  No preferred guarantees or counter guarantees   3,108,351   5,037,751
           
With high risk of insolvency   27,030   45,966
  No preferred guarantees or counter guarantees   27,030   45,966
           
Uncollectible   27,191   58,769
  No preferred guarantees or counter guarantees   27,191   58,769
           
           
           
TOTAL 1,797,279,936   1,627,089,545

 

 
 
 -79-
 

EXHIBIT B

 

(Continued)

 

 

CLASSIFICATION OF LOANS AND OTHER FINANCING ACCORDING TO FINANCIAL PERFORMANCE AND GUARANTEES RECEIVED

CONSOLIDATED WITH SUBSIDIARIES

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

 

Account   06.30.24   12.31.23
           
CONSUMER AND HOUSING PORTFOLIO        
           
Normal performance   2,215,668,700   2,144,790,231
  Preferred collaterals and counter-guarantees “A”   1,047,051   726,512
  Preferred collaterals and counter-guarantees “B”   209,540,341   176,234,049
  No preferred guarantees or counter guarantees   2,005,081,308   1,967,829,670
           
Low risk   34,910,849   23,764,275
  Preferred collaterals and counter-guarantees “B”   2,170,693   1,425,620
  No preferred guarantees or counter guarantees   32,740,156   22,338,655
           
Low risk - With special follow-up   1,721,938   841,376
  No preferred guarantees or counter guarantees   1,721,938   841,376
           
Medium risk   26,194,266   23,264,577
  Preferred collaterals and counter-guarantees “A”   -   137
  Preferred collaterals and counter-guarantees “B”   405,001   366,009
  No preferred guarantees or counter guarantees   25,789,265   22,898,431
           
High risk   15,439,495   17,685,378
  Preferred collaterals and counter-guarantees “A”   108   -
  Preferred collaterals and counter-guarantees “B”   528,389   373,635
  No preferred guarantees or counter guarantees   14,910,998   17,311,743
           
Uncollectible   3,339,713   3,304,062
  Preferred collaterals and counter-guarantees “B”   550,273   790,702
  No preferred guarantees or counter guarantees   2,789,440   2,513,360
           
           
TOTAL 2,297,274,961   2,213,649,899
           
           
TOTAL GENERAL 4,094,554,897   3,840,739,444
           

 

 
 
 -80-
 

EXHIBIT C

 

 

CONCENTRATION OF LOANS AND OTHER FINANCING

CONSOLIDATED WITH SUBSIDIARIES

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

 

    06.30.24   12.31.23
        %  over       %  over
Number of customers    Debt   total    Debt   total
    balance   portfolio   balance   portfolio
                 
10 largest customers   491,451,198   12.00 %   436,238,516   11.36 %
50 following largest customers   552,913,265   13.50 %   437,748,864   11.40 %
100 following largest customers   342,133,002   8.36 %   308,649,214   8.04 %
All other customers   2,708,057,432   66.14 %   2,658,102,850   69.20 %
                 
   TOTAL 4,094,554,897   100.00 %   3,840,739,444   100.00 %

 

 
 
 -81-
 

EXHIBIT D

 

 

BREAKDOWN BY TERM OF LOANS AND OTHER FINANCING

CONSOLIDATED WITH SUBSIDIARIES

AS OF JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

 

      Terms remaining to maturity
                   
    Portfolio 1 3 6 12 24 more than  
   ACCOUNT         due month months months months months 24 TOTAL
                   
                   
Non-financial Government sector   - 1,655,508 8,516 12,774 25,548 51,096 55,354 1,808,76
                   
                   
Financial sector   - 9,980,791 7,305,445 8,539,530 9,739,375 14,673,483 - 50,238,624
                   
Non-financial Private sector and Residents Abroad   42,992,724 1,580,103,282 863,843,150 538,650,418 525,027,142 370,643,983 607,582,659 4,528,843,358
                   
                   
   TOTAL       42,992,724 1,591,739,581 871,157,111 547,202,722 534,792,065 385,368,562 607,638,013 4,580,890,778
                   
(1) These balances are total contractual flows and, therefore, include principal, accrued and to be accrued interest and charges.

 

 

 

BREAKDOWN BY TERM OF LOANS AND OTHER FINANCING

CONSOLIDATED WITH SUBSIDIARIES

AS OF DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

 

 

    Terms remaining to maturity
  Portfolio 1 3 6 12 24 more than  
   ACCOUNT       due month months months months months 24 TOTAL
                 
                 
Non-financial Government sector - 87,371 120,296 32,560 45,928 91,856 145,439 523,450
                 
Financial sector - 15,193,940 1,611,454 6,838,719 29,951,938 9,464,409 19,964,107 83,024,567
                 
Non-financial Private sector and Residents Abroad 40,704,596 1,648,305,637 668,754,554 625,790,809 530,403,648 368,620,850 607,781,923 4,490,362,017
                 
   TOTAL     40,704,596 1,663,586,948 670,486,304 632,662,088 560,401,514 378,177,115 627,891,469 4,573,910,034
                 
                 
(1) These balances are total contractual flows and, therefore, include principal, accrued and to be accrued interest and charges.

 

 
 
 -82-
 

EXHIBIT H

 

 

DEPOSITS CONCENTRATION

CONSOLIDATED WITH SUBSIDIARIES

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

 

      06.30.24   12.31.23  
        %  over     %  over  
  Number of customers  Debt total    Debt total  
      balance portfolio   balance portfolio  
                 
                 
  10 largest customers   1,308,635,430 22.52 %   990,291,976 15.14 %  
                 
  50 following largest customers   631,446,232 10.87 %   705,637,032 10.79 %  
                 
  100 following largest customers   212,032,779 3.65 %   335,494,073 5.13 %  
                 
  All other customers   3,658,430,559 62.96 %   4,511,043,346 68.94 %  
                 
                 
     TOTAL     5,810,545,000 100.00 %   6,542,466,427 100.00 %  
                 

 

 
 
 -83-
 

EXHIBIT I

BREAKDOWN OF FINANCIAL LIABILITIES BY REMAINING TERMS

CONSOLIDATED WITH SUBSIDIARIES

AS OF JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.) (1)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

 

    Terms remaining to maturity
                 
    1 3 6 12 24 more than  
     ACCOUNTS       month months months months months 24 TOTAL
              months  
                 
  Deposits 4,995,590,020 877,359,303 31,844,408 1,877,814 4,053 - 5,906,675,598
        Non-financial Government sector 180,365,256 24,614 - - - - 180,389,870
        Financial sector 1,925,622 - - - - - 1,925,622
        Non-financial Private sector and Residents Abroad 4,813,299,142 877,334,689 31,844,408 1,877,814 4,053 - 5,724,360,106
 

Liabilities at fair value through

profit or loss

194,844 - - - - - 194,844
  Derivative instruments 514,103 - - - - - 514,103
  Repo transactions and surety bonds 177,991,936 - - - - - 177,991,936
  Other financial institutions 177,991,936 - - - - - 177,991,936
  Other financial liabilities 889,478,011 871,317 1,211,008 2,110,404 3,283,676 19,524,089 916,478,505
 

Financing received from the BCRA and

other financial institutions

32,429,994 2,172,492 8,619,296 10,065,146 703,320 1,313 53,991,561
  Corporate bonds issued 1,226,012 - 10,981,045 - - - 12,207,057
                 
  TOTAL 6,097,424,920 880,403,112 52,655,757 14,053,364 3,991,049 19,525,402 7,068,053,604
                 
  (1) These balances are total contractual flows and, therefore, include principal, accrued and to be accrued interest and charges.

 

 

 

BREAKDOWN OF FINANCIAL LIABILITIES BY REMAINING TERMS

CONSOLIDATED WITH SUBSIDIARIES

AS OF DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.) (1)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

 

    Terms remaining to maturity
                 
    1 3 6 12 24 more than  
     ACCOUNTS       month months months months months 24 TOTAL
              months  
                 
  Deposits 6,099,071,955 510,892,997 170,761,443 4,086,245 520,160 - 6,785,332,800
        Non-financial Government sector 61,162,899 231,743 - - - - 61,394,642
        Financial sector 4,625,783 - - - - - 4,625,783
        Non-financial Private sector and Residents Abroad 6,033,283,273 510,661,254 170,761,443 4,086,245 520,160 - 6,719,312,375
 

Liabilities at fair value through

profit or loss

18,571,084 - - - - - 18,571,084
  Derivative instruments 3,856,508 - - - - - 3,856,508
  Other financial liabilities 798,500,579 1,503,066 2,150,251 4,016,513 6,143,642 33,585,831 845,899,882
 

Financing received from the BCRA and

other financial institutions

38,338,918 5,603,698 7,582,454 24,297,784 14,396,300 16,836 90,235,990
  Corporate bonds issued - - - 28,228,389 - - 28,228,389
                 
  TOTAL 6,958,339,044 517,999,761 180,494,148 60,628,931 21,060,102 33,602,667 7,772,124,653
                 
  (1) These balances are total contractual flows and, therefore, include principal, accrued and to be accrued interest and charges.

 

 
 
 -84-
 

EXHIBIT J

 

PROVISIONS

CONSOLIDATED WITH SUBSIDIARIES

AS OF JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

 

                   
           Decreases      
  Accounts Balances at the beginning of the year Increases   Reversals Uses Monetary (loss) generated by provisions   Balances as of 06.30.24
                   
                   
   INCLUDED IN LIABILITIES                
    - Provisions for contingent commitments 10,736,669 7,060,553 (1)(3) - - (5,610,704)   12,186,518
                   
   - For administrative, disciplinary and criminal penalties 8,989 -   - - (3,989)   5,000
                   
    - Provisions for termination plans 1,384,429 707,481   - - (614,328)   1,477,582
                   
   - Other 25,125,506 16,365,159 (2) 619,178 2,421,980 (19,778,686)   18,670,821
                   
  TOTAL PROVISIONS 37,255,593 24,133,193   619,178 2,421,980 (26,007,707)   32,339,921
                   
                   
(1) Set up in compliance with the provisions of Communication “A” 6868 of the BCRA.
(2) Set up to cover contingent events not considered in other items (civil, commercial, labor lawsuits and other).
(3) Includes an increase of 16,256 for exchange differences in foreign currency for contingent commitments

 

 

PROVISIONS

CONSOLIDATED WITH SUBSIDIARIES

AS OF DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

                   
           Decreases      
  Accounts Balances at the beginning of the year Increases   Reversals Uses Monetary (loss) generated by provisions   Balances as of 12.31.23
                   
                   
   INCLUDED IN LIABILITIES                
    - Provisions for contingent commitments 15,082,701 8,718,564 (1)(3) - - (13,064,596)   10,736,669
                   
   - For administrative, disciplinary and criminal penalties 27,991 -   - - (19,002)   8,989
                   
    - Provisions for termination plans 2,541,684 859,024   - - (2,016,279)   1,384,429
                   
   - Other 30,881,041 28,785,892 (2) 187,161 8,823,411 (25,530,855)   25,125,506
                   
  TOTAL PROVISIONS 48,533,417 38,363,480   187,161 8,823,411 (40,630,732)   37,255,593
                   
   
(1) Set up in compliance with the provisions of Communication “A” 6868 of the BCRA.
(2) Set up to cover contingent events not considered in other items (civil, commercial, labor lawsuits and other).
(3) Includes an increase of 205,886 for exchange differences in foreign currency for contingent commitments

 

 

 
 
 -85-
 

EXHIBIT R

ADJUSTMENT TO IMPAIRMENT LOSS - ALLOWANCES FOR LOAN LOSSES

CONSOLIDATED WITH SUBSIDIARIES

AS OF JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

 

      ECL of remaining life of the financial asset      
Accounts Balances as of ECL for the     Monetary   Balances as of
  12.31.23 following FI with significant FI with credit  (loss)   06.30.24
    12 months increases of impairment generated by    
      credit risk   allowances    
               
Other financial assets 2,550,868 46,785 - 129,032 (1,166,558)   1,560,127
               
Loans and other financing 81,655,430 11,976,418 5,014,335 22,332,708 (41,315,129)   79,663,762
       Other financial institutions 1,762,922 225,898 272,427 2,992 (1,698,023)   566,216
       Non-financial Private sector and Residents Abroad 79,892,508 11,750,520 4,741,908 22,329,716 (39,617,106)   79,097,546
Overdrafts 6,175,018 2,295,457 (586,398) 1,634,656 (3,454,540)   6,064,193
Instruments 6,911,653 2,603,842 (155,405) (287,072) (3,126,786)   5,946,232
Mortgage loans 5,946,090 113,159 1,071,867 3,050,726 (3,311,532)   6,870,310
Pledge loans 1,193,592 18,158 (22,612) 164,948 (560,493)   793,593
Consumer loans 17,367,405 1,119,340 1,011,265 5,345,428 (8,369,755)   16,473,683
Credit cards 34,346,813 3,861,520 3,401,562 10,833,702 (17,438,168)   35,005,429
Finance leases 854,622 8,866 65,119 212,897 (433,605)   707,899
Other 7,097,315 1,730,178 (43,490) 1,374,431 (2,922,227)   7,236,207
               
Other debt securities 176,227 109,601 - - (98,113)   187,715
               
Contingent commitments 10,736,669 5,168,602 1,634,321 257,630 (5,610,704)   12,186,518
               
TOTAL ALLOWANCES 95,119,194 17,301,406 6,648,656 22,719,370 (48,190,504)   93,598,122

 

ADJUSTMENT TO IMPAIRMENT LOSS - ALLOWANCES FOR LOAN LOSSES

CONSOLIDATED WITH SUBSIDIARIES

AS OF DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

 

      ECL of remaining life of the financial asset      
Accounts Balances as of ECL for the     Monetary   Balances as of
  12.31.22 following FI with significant FI with credit (loss)   12.31.23
    12 months increases of impairment generated by    
      credit risk   allowances    
               
Other financial assets 2,586,571 923,230 - 1,235,395 (2,194,328)   2,550,868
               
Loans and other financing 116,945,152 22,563,092 8,713,457 53,974,841 (120,541,112)   81,655,430
       Other financial institutions 1,304,692 4,248,554 686,071 (4,484) (4,471,911)   1,762,922
       Non-financial Private sector and Residents Abroad 115,640,460 18,314,538 8,027,386 53,979,325 (116,069,201)   79,892,508
Overdrafts 5,835,904 2,439,408 1,617,685 1,880,314 (5,598,293)   6,175,018
Instruments 4,272,049 7,731,794 573,698 865,082 (6,530,970)   6,911,653
Mortgage loans 9,601,620 412,498 1,850,314 4,074,815 (9,993,157)   5,946,090
Pledge loans 4,271,703 345,406 76,427 (178,564) (3,321,380)   1,193,592
Consumer loans 22,946,976 2,588,743 2,255,600 17,107,716 (27,531,630)   17,367,405
Credit cards 56,518,075 8,136,929 970,729 24,397,261 (55,676,181)   34,346,813
Finance leases 1,086,402 325,809 206,754 353,733 (1,118,076)   854,622
Other 11,107,731 (3,666,049) 476,179 5,478,968 (6,299,514)   7,097,315
               
Other debt securities 179,630 186,467 - - (189,870)   176,227
               
Contingent commitments 15,082,701 7,979,017 433,570 305,978 (13,064,597)   10,736,669
               
TOTAL ALLOWANCES 134,794,054 31,651,806 9,147,027 55,516,214 (135,989,907)   95,119,194

 

 
 
 -86-
 

SEPARATE CONDENSED STATEMENT OF FINANCIAL POSITION

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41)

 

 

  Notes and Exhibits   06.30.24   12.31.23
   
ASSETS            
             
Cash and deposits in banks 4   1,446,214,153   2,052,661,497
             
  Cash     713,253,000   1,307,432,369
  Financial institutions and correspondents     725,577,806   745,229,128
    BCRA     654,071,970   645,203,968
    Other in the country and abroad     71,505,836   100,025,160
Other     7,383,347   -
             
Debt securities at fair value through profit or loss 5 and A   251,979,493   406,112,588
             
Derivative instruments 6   5,681,863   17,980,649
             
Repo transactions 7   278,874,103   2,161,621,693
             
Other financial assets 8   152,958,906   161,717,204
             
Loans and other financing 9   3,702,198,586   3,402,197,964
             
  Non-financial Government sector     1,701,146   261,043
  Other financial institutions     109,952,531   66,968,631
  Non-financial Private sector and Residents Abroad     3,590,544,909   3,334,968,290
             
Other debt securities 10 and A   2,249,974,570   1,353,607,881
             
Financial assets pledged as collateral 11   462,222,738   470,341,553
             
 Current income tax assets   12.1   45.107.421   -
             
Investments in equity instruments 13 and A   9,399,258   9,367,810
             
Investments in subsidiaries and associates 14   66,198,852   75,868,773
             
Property and equipment 15   554,422,335   535,826,437
             
Intangible assets 16   57,358,013   59,178,846
             
Deferred income tax assets 12.3   19,382,056   -
             
Other non-financial assets 17   152,088,501   186,081,646
             
 Non-current assets held for sale 18   1,532,012   1,532,012
             
TOTAL ASSETS     9,455,592,860   10,894,096,553
Notes and exhibits are an integral part of these separate financial statements.

 

 
 
 -87-
 

SEPARATE CONDENSED STATEMENT OF FINANCIAL POSITION

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41)

 

 

  Notes and Exhibits   06.30.24   12.31.23
   
LIABILITIES            
             
Deposits 19 and H   5,824,182,374   6,551,239,117
             
  Non-financial Government sector     180,351,308   61,182,871
  Financial sector     15,456,946   27,169,050
  Non-financial Private sector and Residents Abroad     5,628,374,120   6,462,887,196
             
Liabilities at fair value through profit or loss 20   194,844   18,571,084
Derivative instruments 6   514,103   3,856,508
             
 Repo transactions and surety bonds   7   177,505,000   -
             
Other financial liabilities 21   884,138,016   797,735,982
             
Financing received from the BCRA and other financial institutions 22   13,879,083   6,525,382
             
Current income tax liabilities 12.2   -   342,484,322
             
Provisions J   32,091,423   37,022,383
             
Deferred income tax liabilities 12.3   -   42,095,813
             
Other non-financial liabilities 24   447,496,426   566,662,275
             
TOTAL LIABILITIES     7,380,001,269   8,366,192,866
             
EQUITY          
     
Share capital 2   612,710   612,710
Non-capitalized contributions     6,744,974   6,744,974
Capital adjustments     743,873,408   743,873,408
Reserves     1,045,631,444   1,168,794,372
Other accumulated comprehensive income     126,486,164   312,077,435
Income for the period / year     152,242,891   295,800,788
             
TOTAL EQUITY     2,075,591,591   2,527,903,687
             
TOTAL LIABILITIES AND EQUITY     9,455,592,860   10,894,096,553
             
Notes and exhibits are an integral part of these separate financial statements.
 
 
 -88-
 

SEPARATE CONDENSED STATEMENT OF INCOME

FOR THE THREE-MONTH INTERIM PERIODS ENDED JUNE 30, 2024 AND 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41)

 

    Notes and Exhibits   Quarter ended 06.30.24  

Accumulated as of

06.30.24

  Quarter ended 06.30.23   Accumulated as of 06.30.23  
                       
Interest income   26   947,368,920   2,417,718,429   1,339,500,937   2,452,275,302  
Interest expense   27   (291,190,582)   (858,605,104)   (673,454,523)   (1,202,485,129)  
                       
Net interest income       656,178,338   1,559,113,325   666,046,414   1,249,790,173  
                       
Commission income   28   108,930,621   207,985,863   113,204,196   204,685,335  
Commission expense   29   (59,627,659)   (109,880,696)   (36,217,856)   (84,656,087)  
                       
Net commission income       49,302,962   98,105,167   76,986,340   120,029,248  
                       
Net income from measurement of financial instruments at fair value through profit or loss 30   30.608.428   63,042,978   26,221,872   55,682,780  
Net income from write-down of assets at amortized cost and at fair value through OCI 31   13.669.176   88,276,385   8,509,238   8,685,492  
Foreign exchange and gold gains/(losses)   32   20,447,898   32,901,590   11,900,088   17,073,581  
Other operating income   33   27,846,726   61,526,352   26,549,321   51,004,012  
Loan loss allowance   34   (40,282,142)   (71,909,738)   (40,526,913)   (77,636,510)  
                       
Net operating income       757,771,386   1,831,056,059   775,686,360   1,424,628,776  
                       
Personnel benefits   35   (107,843,806)   (212,605,219)   (106,066,520)   (205,572,262)  
Administrative expenses   36   (115,478,952)   (236,331,586)   (114,448,109)   (223,053,297)  
Asset depreciation and impairment   37   (17,784,799)   (29,816,833)   (12,824,308)   (25,643,532)  
Other operating expenses   38   (94,012,996)   (214,520,680)   (102,793,004)   (191,490,165)  
                       
Operating income       422,650833   1,137,781,741   439,554,419   778,869,520  
                       
Income from associates and joint ventures       8,033,946   5,495,141   8,474,427   12,882,873  
Loss on net monetary position       (257,990,558)   (903,685,276)   (272,139,274)   (518,985,543)  
                       
Income before income tax       172,694,221   239,591,606   175,889,572   272,766,850  
                       
Income tax   12.4   (61,684,781)   (87,348,715)   (64,215,521)   (91,978,347)  
                       
Net income for the period       111,009,440   152,242,891   111,674,051   180,788,503  
    Notes and exhibits are an integral part of these separate financial statements.
                             

 

 
 
 -89-
 

SEPARATE CONDENSED STATEMENT OF INCOME

FOR THE THREE AND SIX-MONTH INTERIM PERIODS ENDED JUNE 30, 2024 AND 2023

EARNINGS PER SHARE

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41)

 

         
Accounts   06.30.24   06.30.23
         
         
Numerator:        
         
Net income attributable to owners of the Parent   152,242,891   180,788,503
Net income attributable to owners of the Parent adjusted to reflect to the effect of dilution   152,242,891   180,788,503
         
Denominator:        
         
Weighted average of outstanding common shares for the period   612,710,079   612,710,079
Weighted average of outstanding common shares for the period adjusted to reflect the effect of dilution   612,710,079   612,710,079
         
Basic earnings per share (stated in pesos)   248.4746   295.0637
Diluted earnings per share (stated in pesos) (1)   248.4746   295.0637

 

(1) As Banco BBVA Argentina S.A. has not issued financial instruments with dilution effects on earnings per share, basic earnings and diluted earnings per share are equal.

 
 
 -90-
 

SEPARATE CONDENSED STATEMENT OF OTHER COMPREHENSIVE INCOME

FOR THE THREE-MONTH INTERIM PERIODS ENDED JUNE 30, 2024 AND 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41)

 

  Note   Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                   
Net income for the period     111,009,440   152,242,891   111,674,051   180,788,503
                   
Other comprehensive income components to be reclassified to income/(loss) for the period:                  
                   
Share in Other Comprehensive Income from associates and joint ventures at equity method                  
                   
Loss for the period on the Share in OCI from associates and joint ventures at equity method-     (295,950)   (524,334)   (36)   (82)
                   
      (295,950)   (524,334)   (36)   (82)
                   
Profit or losses from financial instruments at fair value through OCI                  
                   
Loss for the period from financial instruments at fair value through OCI     (153,619,137)   (262,791,451)   33,371,267   23,411,891
Reclassification adjustment for the period     (12,602,482)   (86,750,307)   (4,593,718)   5,215,876
Income tax 12.4   62,260,088   164,624,160   (11,972,463)   (14,744,060)
                   
      (103,961,531)   (184,917,598)   16,805,086   13,883,707
                   
                   
Income or loss on equity instruments at fair value through OCI (IFRS 9, paragraph 5.7.5)                  
                   
Income / (loss) from equity instruments at fair value through OCI     (203,127)   (149,339)   2,611,395   2,570,397
                   
      (203,127)   (149,339)   2,611,395   2,570,397
                   
Total Other Comprehensive Income / (Loss) for the period     (104,460,608)   (185,591,271)   19,416,445   16,454,022
                   
Total Comprehensive Income / (Loss)     6,548,832   (33,348,380)   131,090,496   197,242,525
Notes and exhibits are an integral part of these separate financial statements.
                   

 

 
 
 -91-
 

SEPARATE CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY.

FOR THE SIX-MONTH INTERIM PERIOD ENDED JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41)

 

  2024
     Share   Non-capitalized         Other Comprehensive   Reserves      
     Capital   contributions       Income          
Transactions Outstanding shares   Share premium   Equity adjustments   Income/(loss) on financial instruments at fair value through OCI Other   Legal Other  Retained earnings   Total
         
         
                             
Restated balances at the beginning of the year 612,710   6,744,974   743,873,408   310,863,578 1,213,857   479,577,622 689,216,750 295,800,788   2,527,903,687
                             
Total comprehensive income for the period                            
 - Net income for the period -   -   -   - -   - - 152,242,891   152,242,891
  - Other comprehensive loss for the period -   -   -   (185,066,937) (524,334)   - - -   (185,591,271)
 -  Distribution of retained earnings approved by the Shareholders’ Meeting held on April 26., 2023 (Note 44 to the consolidated financial statements)                            
     Legal reserve -   -   -   - -   59,160,158 - (59,160,158)   -
     Other -   -   -   - -   - 236,640,630 (236,640,630)   -
 -  Distribution of dividends approved by the Shareholders’ Meeting held on April 26. the Argentine Central Bank on May 3 and by the Board of Directors at its meeting held on May 6, 2024 (Note 44 to the consolidated financial statements):                            
Dividends in kind and in cash (1) -   -   -   - -   - (418,963,716) -   (418,963,716)
                             
                             
Balances at fiscal period end 612,710   6,744,974   743,873,408   125,796,641 689,523   538,737,780 506,893,664 152,242,891   2,075,591,591
(1)    Corresponds to $ 431.24 (in nominal values) per share.                            
Notes and exhibits are an integral part of these separate financial statements.              

 

 
 
 -92-
 

SEPARATE CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY.

FOR THE SIX-MONTH INTERIM PERIOD ENDED JUNE 30, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41)

 

  2023
     Share   Non-capitalized         Other Comprehensive   Reserves      
     Capital   contributions       Income          
Transactions Outstanding shares   Share premium   Equity adjustments   Income/(loss) on financial instruments at fair value through OCI Other   Legal Other  Retained earnings   Total
         
         
                             
Restated balances at the beginning of the year 612,710   6,744,974   743,873,408   (41,978,673) (76)   413,713,753 565,762,961 329,319,391   2,018,048,448
                             
                             
Total comprehensive income for the period                            
 - Net income for the period -   -   -   - -   - - 180,788,503   180,788,503
  - Other comprehensive loss for the period -   -   -   16,454,104 (82)   - - -   16,454,022
 -  Distribution of retained earnings approved by the Shareholders’ Meeting held on April 28. 2023 (Note 44 to the consolidated financial statements)                            
     Legal reserve -   -   -   - -   65,863,878 - (65,863,878)   -
     Other -   -   -   - -   - 263,455,513 (263,455,513)   -
 -  Distribution of dividends approved by the Superintendence of Financial and Exchange Institutions of the Argentine Central Bank on May 31 and by the Board of Directors at its meeting held on June 7, 2023 (Note 44 to the consolidated financial statements):                            
Dividends in kind (1) -   -   -   - -   - (140,001,722) -   (140,001,722)
                            -
                             
Balances at fiscal period end 612,710   6,744,974   743,873,408   (25,524,569) (158)   479,577,631 689,216,752 180,788,503   2,075,289,251
(1)    Corresponds to $ 58.05 (in nominal values) per share.                            
Notes and exhibits are an integral part of these separate financial statements.        

 

 
 
 -93-
 

SEPARATE STATEMENT OF CASH FLOWS

FOR THE SIX-MONTH INTERIM PERIODS ENDED JUNE 30, 2024 AND 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41)

 

Accounts   06.30.24   06.30.23
       
Cash flows from operating activities      
         
Income before income tax 239,591,606   272,766,850
         
Adjustment for total monetary income for the period   903,685,276   518,985,543
         
Adjustments to obtain cash flows from operating activities: 501,668,457   43,813,845
         
Depreciation and amortization 29,816,833   25,643,532
Loan loss allowance 71,909,738   77,636,510
Effect of foreign exchange changes on cash and cash equivalents   399,935,231   (66,356,118)
Other adjustments 6,655   6,889,921
         
Net decreases from operating assets: (3,774,285,262)   (4,187,870,397)
         
 Debt securities at fair value through profit or loss (38,864,669)   (212,480,231)
 Derivative instruments 4,756,251   (2,255,739)
 Repo transactions 614,710,430   (551,418,849)
 Loans and other financing (2,123,060,673)   (1,456,848,435)
    Non-financial Government sector (1,539,320)   (11,436)
    Other financial institutions (73,174,257)   (20,220,916)
    Non-financial Private sector and Residents Abroad (2,048,347,096)   (1,436,616,083)
 Other debt securities (1,954,369,963)   (1,510,581,474)
 Financial assets pledged as collateral (168,415,589)   (144,912,145)
 Investments in equity instruments (3,699,086)   (3,160,814)
 Other assets (105,341,963)   (306,212,710)
         
Net increases from operating liabilities: 3,224,178,048   3,900,925,949
         
Deposits 2,742,681,445   2,984,780,218
    Non-financial Government sector 214,417,838   5,786,342
    Financial sector 1,424,439   28,313,431
    Non-financial Private sector and Residents Abroad 2,526,839,168   2,950,680,445
Liabilities at fair value through profit or loss (13,535,739)   191,664
Derivative instruments (1,737,097)   635,836
Repo transactions and surety bonds 177,505,000   -
Other liabilities 319,264,439   915,318,231
         
Income tax paid (223,031,477)   (1,914,907)
         
Total cash flows generated by operating activities   871,806,648   546,706,883

 

 
 
 -94-
 

SEPARATE STATEMENT OF CASH FLOWS

FOR THE SIX-MONTH INTERIM PERIODS ENDED JUNE 30, 2024 AND 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41)

         
Accounts   06.30.24   06.30.23
         
Cash flows from investing activities      
         
Payments: (45,626,423)   (19,841,118)
         
  Purchase of property and equipment, intangible assets and other assets (45,626,423)   (17,880,071)
  Other payments related to investing activities -   (1,961,047)
         
Collections:   14,503,470   15,566,760
         
 Other collections related to investing activities   14,503,470   15,566,760
Total cash flows used in investing activities (31,122,953)   (4,274,358)
         
Cash flows from financing activities      
         
Payments: (54,531,525)   (16,583,186)
         
Dividends   (48,872,362)   (85,336)
 Financing from local financial institutions   -   (10,996,912)
 Leases   (5,659,163)   (5,500,938)
         
Collections: 7,396,217   4,982,185
         
Financing from local financial institutions   963,975   -
 Other collections related to financing activities 6,432,242   4,982,185
         
Total cash flows used in financing activities (47,135,308)   (11,601,001)
         
Effect of foreign exchange changes on cash and cash equivalents   (399,935,231)   66,356,118
Effect of net monetary income/(loss) of cash and cash equivalents   (1,000,060,500)   (688,665,010)
         
Total changes in cash flows (606,447,344)   (91,477,368)
Restated cash and cash equivalents at the beginning of the year (Note 4)   2,052,661,497   1,656,351,289
Cash and cash equivalents at fiscal period-end (Note 4)     1,446,214,153   1,564,873,921
         
Notes and exhibits are an integral part of these separate financial statements.
         

 

 
 
 -95-
 

NOTES TO THE CONDENSED SEPARATE INTERIM FINANCIAL STATEMENTS

AS OF JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

1. Basis for the preparation of separate financial statements

As mentioned in Note 2 to the consolidated condensed interim financial statements, the Bank presents consolidated financial statements in accordance with the financial reporting framework set forth by the Argentine Central Bank (BCRA).

These financial statements of the Bank are supplementary to the consolidated condensed interim financial statements mentioned above and are intended for the purposes of complying with legal and regulatory requirements.

 

2. Basis for the preparation of these financial statements and applicable accounting standards

These separate condensed interim financial statements of the Bank were prepared in accordance with the financial reporting framework set forth by the BCRA. (Communication “A” 6114 as supplemented by the BCRA). Except for the exceptions established by the BCRA which are explained in the following paragraph, such framework is based on International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and adopted by the Argentine Federation of Professionals Councils in Economic Sciences (FACPCE, for its acronym in Spanish). The abovementioned international standards include the IFRS, the International Accounting Standards (IAS) and the interpretations developed by the IFRS Interpretations Committee (IFRIC) or former IFRIC (SIC).

 

Out of the exceptions set forth by the BCRA to the application of current IFRS, the following affects the preparation of these separate condensed interim financial statements:

 

Within the framework of the convergence process to IFRS established by Communication “A” 6114, as amended and supplemented, the BCRA provided that for fiscal years starting on or after January 1, 2020, financial institutions defined as “Group A” according to BCRA regulations, as such is the case of the Entity, are required to start to apply paragraph 5.5 “Impairment” of IFRS 9 “Financial Instruments” (paragraphs B5.5.1 through B5.5.55) except for exposures to the public sector, considering the exclusion set forth by Communication “A” 6847.

 

Had the abovementioned paragraph 5.5. “Impairment” been applied in full, according to an estimate made by the Entity, as of June 30, 2024 and December 31, 2023, its shareholders’ equity would have been reduced by 9,509,597 and 16,828,304, respectively.

 

Except for what was mentioned in the previous paragraphs, the accounting policies applied by the Entity comply with the IFRS that have been currently approved and are applicable in the preparation of these separate condensed interim financial statements in accordance with the IFRS as adopted by the BCRA as per Communication “A” 7411. In general, the BCRA does not allow the early application of any IFRS, unless otherwise specified.

 

Furthermore, the BCRA, through Communications “A” 6323 and 6324, set forth guidelines for the preparation and presentation of the financial statements of financial institutions for fiscal years beginning on or after January 1, 2018, including the additional reporting requirements as well as the information to be submitted as Exhibits.

 

 
 
 -96-
 

As this is an interim period, the Entity has opted to present condensed information, pursuant to the guidelines of IAS 34 “Interim Financial Information”; therefore, not all the information required for the preparation of complete financial statements under IFRS is included. Therefore, these financial statements should be read in conjunction with the financial statements as of December 31, 2023. However, explanatory notes of events and transactions that are material for understanding any changes in the financial position as from December 31, 2023 are included.

 

To avoid duplication of information already provided, we refer to the consolidated condensed interim financial statements regarding:

 

General information (Note 1 to the consolidated condensed interim financial statements)

 

Figures stated in thousands of pesos (Note 2.1.2. to the consolidated condensed interim financial statements)

 

Presentation of Statement of Financial Position (Note 2.1.3 to the consolidated condensed interim financial statements)

 

Comparative information (Nota 2.1.4. to the consolidated condensed interim financial statements)

 

Measuring unit (Nota 2.1.5. to the consolidated condensed interim financial statements)
Summary of significant accounting policies (Note 2.3 to the consolidated condensed interim financial statements), except for the measurement of ownership interests in subsidiaries.
Accounting judgments, estimates and assumptions (Note 2.4. to the consolidated condensed interim financial statements)
Regulatory changes introduced during this fiscal year y New pronouncements (Note 2.5. and 2.6. respectively, to the consolidated condensed interim financial statements)
Transcription to the books (Nota 2.7. to the consolidated condensed interim financial statements)
Provisions (Note 23 to the consolidated condensed interim financial statements)
Share capital (Note 26 to the consolidated condensed interim financial statements)
Fair values of financial instruments (Note 40 to the consolidated condensed interim financial statements)
Segment reporting (Note 41 to the consolidated condensed interim financial statements)
Related parties (Note 42 to the consolidated condensed interim financial statements)
Financial instruments risks (Note 43 to the consolidated financial statements)
Restrictions to the distributions of earnings (Note 44 to the consolidated condensed interim financial statements)
Banking deposits guarantee insurance system (Note 46 to the consolidated condensed interim financial statements)
Compliance with the provisions to act in the different categories of agent defined by the Argentine Securities Commission (Note 48 to the consolidated condensed interim financial statements)
Compliance with the provisions of the Argentine Securities Commission – Documentation (Note 49 to the consolidated condensed interim financial statements)
Trust activities (Note 50 to the consolidated condensed interim financial statements)
Mutual funds (Note 51 to the consolidated condensed interim financial statements)
 
 
 -97-
 
Penalties and administrative proceedings instituted by the BCRA (Note 52 to the consolidated condensed interim financial statements)
Subsequent events (Note 53 to the consolidated condensed interim financial statements)

 

3. Significant accounting policies

 

Investments in subsidiaries

Subsidiaries are all entities controlled by the Bank. The Bank controls an entity if it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The Bank reassesses whether it has control when there are changes to one or more of the elements of control.

Ownership interests in subsidiaries are accounted for using the equity method. They are initially recognized at cost, which includes transaction costs. After initial recognition, the financial statements include the Bank's share in the profit or loss and OCI of investments accounted for using the equity method, until the date when the control, significant influence or joint control cease.

The interim financial statements as of June 30, 2024 of the subsidiaries BBVA Asset Management Argentina S.A.U. and Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (under liquidation proceedings) were adjusted considering the financial reporting framework set forth by the BCRA in order to present financial information in constant terms.

 

 

4. Cash and deposits in banks

 

Breakdown is as follows:

 

    06.30.24   12.31.23
         
Cash   713,253,000   1,307,432,369
BCRA - Current account   654,071,970   645,203,968
Local and foreign financial institutions   71,505,836   100,025,160
Cash and cash equivalents for spot purchases or sales pending settlement   7,383,347   -
         
                                                        TOTAL   1,446,214,153   2,052,661,497

 

The balances of Cash and deposits in banks as of June 30, 2023 and as of December 31, 2022, amounted to 1,564,873,921 and 1,656,351,289.

 

 

5. Debt securities at fair value through profit or loss

 

Breakdown is as follows:

    06.30.24   12.31.23
         
Government securities   251,637,775   402,246,942
Private securities – Corporate bonds   341,718   3,865,646
         
                                                        TOTAL   251,979,493   406,112,588

 

A breakdown of this information is provided in Exhibit A.

 
 
 -98-
 

6. Derivative instruments

 

In the ordinary course of business, the Bank carried out foreign currency forward transactions with daily or upon-maturity settlement of differences, with no delivery of the underlying asset, interest rate swaps and options. These transactions do not qualify as hedging pursuant to IFRS 9 - “Financial Instruments”.

 

The aforementioned instruments are measured at fair value and were recognized in the Consolidated Statement of Financial Position in the item “Derivative instruments”. Changes in fair values were recognized in the Consolidated Statement of Income in “Net income from measurement of financial instruments at fair value through profit or loss”.

 

Breakdown is as follows:

 

Assets

    06.30.24   12.31.23
         
Debit balances linked to foreign currency forwards pending settlement in pesos   3,850,285   15,345,737
Income from put options taken (1)   1,480,831   2,634,912
Debit balances linked to interest rate swaps (floating rate for fixed rate)   350,747   -
         
                                                        TOTAL   5,681,863   17,980,649

 

(1)The Entity subscribed for options as set forth in Communication “A” 7546 issued by the BCRA.

 

 

Liabilities

 

    06.30.24   12.31.23
         
Credit balances linked to foreign currency forwards pending settlement in pesos   514,103   3,856,508
         
                                                        TOTAL   514,103   3,856,508

 

 

The notional amounts of the forward transactions and foreign currency forwards, stated in US Dollars (US$) and in Euros as applicable, as well as the base value of interest rate swaps and put options taken are reported below:

 

    06.30.24   12.31.23
         
Foreign currency forwards        
         
   Foreign currency forward purchases - US$   326,971   169,836
   Foreign currency forward sales - US$   298,956   119,093
   Foreign currency forward sales - Euros   6,888   5,500
         
Interest rate swaps        
         
   Fixed rate for floating rate (1)   2,044,000   -
         
Put options        
         
   Put options taken (2)   552,080,875   142,183,107

 

(1)Floating rate: Badlar rate, interest rate for deposits over one million pesos, for a term of 30 to 35 days.
(2)See Note 10.2.
 
 
 -99-
 

7. Repo transactions

Breakdown is as follows:

 

Reverse repurchase transactions

    06.30.24   12.31.23
         
Amounts receivable for reverse repurchase transactions of BCRA Notes/Liquidity Bills with the BCRA  (1)   278,874,103   2,161,621,693
         
                                                        TOTAL   278,874,103   2,161,621,693
(1)As of June 30, 2024 and December 31, 2023, repurchase transactions involving BCRA liquidity bills fall due on July 1, 2024 and January 2, 2024, respectively.

 

 

Repo transactions and surety bonds

 

    06.30.24   12.31.23
         
Amounts payable for deposit-taking repurchase agreements   177,505,000   -
         
                                                        TOTAL   177,505,000   -

 

8. Other financial assets

 

Breakdown is as follows:

 

    06.30.24   12.31.23
         
Measured at amortized cost        
         
Other receivables   78,670,066   87,724,361
Receivables from sale of ownership interest in Prisma Medios de Pago S.A. (1)   42,629,978   72,762,067
Financial debtors from spot transactions pending settlement   22,857,000   1,657,321
Non-financial debtors from spot transactions pending settlement   5,830,364   1,572,262
Other   4,329,204   228,478
         
    154,316,612   163,944,489
         
Allowance for loan losses (Exhibit R)   (1,357,706)   (2,227,285)
         
                                                        TOTAL   152,958,906   161,717,204

 

(1)On October 1, 2021, the Bank, together with the other Class B Shareholders, gave notice of the exercise of the put option and therefore initiated the procedure to sell 49% of the capital stock in the company Prisma Medios de Pago S.A.

On March 18, 2022, the transfer of all the remaining shareholding of the Bank in Prisma Medios de Pago S.A. was consummated for a price of US$ 40,038,122. Such amount will be paid as follows: (i) 30% in Pesos adjustable by CER (UVA) at an annual nominal rate of 15% and (ii) 70% in US Dollars at an annual nominal rate of 10% within a term of six years.

 
 
 -100-
 

9. Loans and other financing

 

The Bank holds loans and other financing under a business model intended to collect contractual cash flows. Therefore, the Bank measures loans and other financing at amortized cost. Breakdown is as follows:

 

    06.30.24   12.31.23
         
Credit cards   1,196,872,037   1,263,184,017
Overdrafts   526,657,332   317,326,589
Unsecured instruments   490,913,703   571,800,241
Loans for the prefinancing and financing of exports   395,491,145   275,412,661
Consumer loans   337,894,059   272,285,014
Discounted instruments   300,898,087   261,051,064
Mortgage loans   160,874,649   142,747,432
Other financial institutions   119,794,014   73,795,241
Pledge loans   26,549,382   35,694,157
Loans to personnel   20,592,013   18,343,936
Receivables from finance leases   13,278,337   19,002,708
Instruments purchased   2,498,662   5,421,155
Non-financial Government sector   1,701,146   261,043
Other financing   196,553,917   231,761,849
         
    3,790,568,483   3,488,087,107
         
Allowance for loan losses (Exhibit R)   (88,369,897)   (85,889,143)
         
                                                        TOTAL   3,702,198,586   3,402,197,964

 

 

The Bank entered into finance lease agreements related to vehicles and machinery and equipment. The following table shows the total gross investment in the finance leases (lease-purchase agreement) and the current value of the minimum collections to be received thereunder:

 

    06.30.24   12.31.23
Term  

Total

investment

Current value of minimum payments  

Total

investment

Current value of minimum payments
             
Up to 1 year   10,202,870 3,626,983   16,020,943 4,531,445
From 1 to 2 years   9,130,490 3,773,498   14,742,376 4,636,303
From 2 to 3 years   7,422,684 4,088,294   12,200,922 5,539,422
From 3 to 4 years   2,679,436 1,719,702   6,582,042 3,945,489
From 4 to 5 years   107,725 69,860   560,852 350,049
             
TOTAL   29,543,205 13,278,337   50,107,135 19,002,708
             
Share capital     12,956,298     18,111,420
Accrued interest     322,039     891,288
             
TOTAL     13,278,337     19,002,708

The breakdown of loans and other financing according to credit performance as per the criteria set forth by the BCRA are presented in Exhibit B. The information on concentration of loans and other financing is presented in Exhibit C to these separate financial statements. The reconciliation of the information included in those Exhibits to the carrying amounts is shown below:

 
 
 -101-
 
    06.30.24   12.31.23
         
Total Exhibits B and C   3,979,120,604   3,691,362,538
Plus:        
     Loans to personnel   20,592,013   18,343,936

Interest and other items accrued receivable from financial assets with credit value impairment

 

  1,619,761   1,362,329
         
Less:        
Allowance for loan losses (Exhibit R)   (88,369,897)   (85,889,143)
Adjustments for effective interest rate   (13,349,725)   (19,951,761)
Corporate bonds and other private securities   (24,298,004)   (16,883,150)
Loan commitments   (173,116,166)   (186,146,785)
         
Total loans and other financing   3,702,198,586   3,402,197,964

 

 

Note 43.2 to the consolidated condensed interim financial statements contains information on credit risk associated with loans and other financing and allowances measured using the expected credit loss model.

As of June 30, 2024 and December 31, 2023, the Bank holds the loan commitments booked in off- balance sheet accounts according to the financial reporting framework set forth by the BCRA:

 

    06.30.24   12.31.23
         
Liabilities related to foreign trade transactions   56,162,123   68,678,044
Guarantees granted   44,842,444   4,907,628
Secured loans   36,600,376   79,886,340
Overdrafts and receivables not used   35,511,223   32,674,773
         
                                                        TOTAL   173,116,166   186,146,785

 

Risks related to the aforementioned loan commitments are assessed and controlled within the framework of the Bank's credit risks policy.

 

See information on the Financing line for productive investment described in Note 8 to the consolidated condensed interim financial statements.

 
 
 -102-
 

10. Other debt securities

 

Breakdown is as follows:

 

 

10.1. Financial assets measured at amortized cost

 

    06.30.24   12.31.23
         
Argentine Treasury Bonds in pesos. Maturity 08-23-2025   114,599,443   88,992,145
Argentine Treasury Bonds in pesos. Maturity 05-23-2027   24,305,153   58,258,587
Argentine Treasury Bonds in pesos at 0.7% Badlar Private Rate. Maturity 11-23-2027   13,838,418   26,555,747
         
                                                        TOTAL   152,743,014   173,806,479

 

 

 

10.2. Financial assets measured at fair value through OCI

 

    06.30.24   12.31.23
         
Government securities (1)   2,059,151,929   929,618,663
Private securities – Corporate bonds   23,719,564   16,106,145
Local BCRA Bills   14,360,063   125,430,947
BCRA Liquidity Bills   -   108,645,647
         
TOTAL   2,097,231,556   1,179,801,402

 

(1)In March 2023, the Bank launched a voluntary debt swap under Section 11, Presidential Decree No. 331/2022 issued by the Ministry of Economy. The securities delivered/received under such swap were as follows:

 

Securities Delivered
Species Nominal values
Argentine Treasury Bill in pesos at discount. Maturity April 28, 2023 (LEDES S28A3) 19,027,714,460
Argentine Treasury Bill in pesos adjusted by CER at discount. Maturity May 19, 2023 (LECER X19XY3) 7,000,000,000
Argentine Treasury Bill in pesos at discount. Maturity May 31, 2023 (LEDES S31Y3) 6,840,800,244
Argentine Treasury Bill in pesos at discount. Maturity June 30, 2023 (LEDES S30J3) 5,532,343,136

 

 

 
 
 -103-
 

 

Securities Received
Species Nominal values
Argentine Treasury Bond in pesos adjusted by CER at 3.75%. Maturity April 14, 2024 (T3X4P) 13,237,176,685
Argentine Treasury Bond in pesos adjusted by CER 4%. Maturity October 14, 2024 (T4X4P) 17,649,568,913
Argentine Treasury Bond in pesos adjusted by CER 4.25%. Maturity February 14, 2025 (T2X5P) 13,237,176,685

 

 

In June 2023, the Bank launched a new voluntary debt swap under Section 11, Presidential Decree No. 331/2022 issued by the Ministry of Economy. The securities delivered/received under such swap were as follows:

 

Securities Delivered
Species Nominal values
Argentine Treasury Bill in pesos adjusted by CER at discount. Maturity June 16, 2023 (LECER X16J3) 2,159,998,000
Argentine Treasury Bill in pesos adjusted by CER at discount. Maturity July 18, 2023 (LECER X18L3) 35,863,500,000
Argentine Treasury Bonds in pesos adjusted by CER 1.45%. Maturity August 13, 2023 (T2X3) 3,622,490,577

 

 

Securities Received
Species Nominal values
Argentine Treasury Bond in pesos adjusted by CER 4.25%. Maturity December 13, 2024 (T5X4P) 71,442,000,014

 

In addition, the Bank purchased put options from the BCRA. These options grant the Bank an opportunity to sell (put option) the underlying asset at a price determined by BCRA applicable regulations. In this transaction, options may be exercised up to the day prior to the maturity date of the underlying asset. As of June 30, 2024, their notional value stood at 552,080,874,862 (see Exhibit A and O).

 

Debt Swap - August 2024

 

In August 2024, the Bank launched a voluntary debt swap under Section 11, Presidential Decree No. 331/2022 issued by the Ministry of Economy. The securities delivered/received under such swap were as follows:

 

Securities Delivered
Species Nominal values
Treasury Bonds in Pesos adjusted by Cer 4.25%. Maturity February 14, 2025 (BOND T2X5) 4,730,000,000
Treasury Bonds in Pesos adjusted by Cer 4%. Maturity October 14, 2024 (BOND T4X4) 14,420,000,000

 

Securities Received
Species Nominal values
Argentine Treasury Bills Capitalizable in Pesos. Maturity March 31, 2025 (LT S31M5) 21,939,229,119
Argentine Treasury Bonds in Pesos adjusted by CER. Maturity December 15, 2025 (BOND TZXD5) 56,422,237,648

 

 
 
 -104-
 

11. Financial assets pledged as collateral

As of June 30, 2024 and December 31, 2023, the Bank pledged as collateral the following financial assets:

    06.30.24   12.31.23
         
Guarantee trust - Government securities at fair value through OCI (3) 76,312,647   234,777,376
Deposits as collateral (1) 243,821,535   50,266,652
BCRA - Special guarantee accounts (Note 40.1) (2) 142,061,706   174,246,598
Guarantee trust - USD - Government and Private Securities at fair value through OCI (4) 26,850   11,050,927
         
                                                        TOTAL   462,222,738   470,341,553

 

(1)Deposits pledged as collateral for activities related to credit card transactions in the country and abroad and leases and surety bonds transactions.
(2)Special guarantee current accounts opened at the BCRA for transactions related to the automated clearing houses and other similar entities.
(3)Set up as collateral to operate with Rosario Futuros Exchange (ROFEX), Bolsas y Mercados Argentinos S.A. (BYMA) and Mercado Abierto Electrónico S.A. (MAE) on foreign currency forward transactions and futures contracts. The trust is composed of Treasury Bonds in pesos adjusted by Cer due 2024 and 2025 (Species T2X4 and T2X5). As of December 31, 2023, the trust was composed of species T2X4, T2X5 and TX26.
(4)The trust is composed of dollars in cash. As of December 31, 2023, the trust was composed of dollars in cash, Treasury Bonds (TV24D) and Private Securities (LUC4O, PQCOO and PQCHO).

 

 

 

 

 

12. Income tax

 

This tax should be booked using the liability method, recognizing (as credit or debt) the tax effect of temporary differences between the accounting valuation and the tax valuation of assets and liabilities, and its subsequent allocation to income or loss for the year in which its reversion occurs, also considering the possibility of taking advantage of tax losses in the future.

 

12.1. Current income tax assets

 

Breakdown is as follows:

 

    06.30.24   12.31.23
         
Advances   45,107,421   -
         
    45,107,421   -

 

 
 
 -105-
 

12.2. Current income tax liabilities

 

Below is a breakdown of the current income tax liabilities disclosed in the Separate Condensed Statement of Financial Position:

 

    06.30.24   12.31.23
         
Income tax provision   -   346,149,888
Advances   -   (3,550,469)
Collections and withholdings   -   (115,097)
         
    -   342,484,322

 

 

12.3. Deferred income tax

 

The composition and evolution of deferred income tax assets and liabilities is as follows:

 

Account   Changes recognized through 06.30.24
As of 12.31.23 Profit or loss   OCI   Deferred tax asset Deferred tax liability
               
Allowance for loan losses 22,166,541 (2,014,305)   -   20,152,236 -
Provisions 64,008,438 (25,344,820)   -   38,663,618 -
Loans and cards commissions 6,489,821 (2,740,753)   -   3,749,068 -
Organizational expenses and others (30,320,626) (3,740,694)   -   - (34,061,320)
Property and equipment and miscellaneous assets (74,986,728) (467,060)   -   - (75,453,788)
Debt securities and investments in equity instruments (31,352,897) (147,152,693)   164,624,160   - (13,881,430)
Tax inflation adjustment 1,899,544 (1,371,224)   -   528,320 -
Tax losses - 79,685,300   -   79,685,300 -
Other 94 (42)   -   52 -
               
Debt (42,095,813) (103,146,291)   164,624,160   142,778,594 (123,396,538)
               
Offsettings           (123,396,538) 123,396,538
               
Net deferred asset           19,382,056 -

 

 
 
 -106-
 

 

Account   Changes recognized through As of 12.31.23
As of 12.31.22 Profit or loss   OCI   Deferred tax asset Deferred tax liability
               
Allowance for loan losses 26,365,464 (4,198,923)   -   22,166,541 -
Provisions 70,618,478 (6,610,040)   -   64,008,438 -
Loans and cards commissions 6,835,611 (345,790)   -   6,489,821 -
Organizational expenses and others (27,087,421) (3,233,205)   -   - (30,320,626)
Property and equipment and miscellaneous assets (72,688,659) (2,298,069)   -   - (74,986,728)
Debt securities and investments in equity instruments (53,335,204) 203,068,370   (181,086,063)   - (31,352,897)
Tax inflation adjustment 11,830,583 (9,931,039)   -   1,899,544 -
Other 241 (147)   -   94 -
               
Debt (37,460,907) 176,451,157   (181,086,063)   94,564,438 (136,660,251)
               
Offsettings           (94,564,438) 94,564,438
               
Net deferred liabilities           - (42,095,813)

 

 

12.4. Income tax

 

Below are the main components of the income tax expense in the separate condensed financial statements:

    Quarter ended 06.30.24 Accumulated as of 06.30.24 Quarter ended 06.30.23 Accumulated as of 06.30.23
           
Current income tax expense   13,578,895 15,797,576 (48,969,505) (90,885,915)
Income / (loss) from deferred income tax   (75,263,676) (103,146,291) (15,246,016) (1,092,432)
           
Income tax recognized through profit or loss   (61,684,781) (87,348,715) (64,215,521) (91,978,347)
           
Income tax recognized through OCI   62,260,088 164,624,160 (11,972,463) (14,744,060)
           
Total income tax   575,307 77,275,445 (76,187,984) (106,722,407)

 

The Bank's effective tax rate calculated on the income tax recognized in the income statement for the interim periods ended June 30, 2024 and 2023 was 36% and 34%, respectively.

 

The income tax, pursuant to IAS 34, is recognized in interim periods over the best estimate of the weighted tax rate that the Entity expects for the fiscal year.

 
 
 -107-
 

13. Investments in equity instruments

 

Breakdown is as follows:

 

13.1. Investments in equity instruments through profit or loss

 

 

    06.30.24   12.31.23
         
Private securities - Shares of other non-controlled companies (1)   6,023,682   5,799,340
         
                                                        TOTAL   6,023,682   5,799,340

(1) See Exhibit A to the consolidated financial statements.

 

13.2. Investments in equity instruments through other comprehensive income

 

    06.30.24   12.31.23
         
Compensadora Electrónica S.A.   1,603,181   1,603,181
Mercado Abierto Electrónico S.A.   955,719   920,103
Banco Latinoamericano de Exportaciones S.A.   547,025   727,122
Seguro de Depósitos S.A.   229,384   259,329
Other   40,267   58,735
         
                                                        TOTAL   3,375,576   3,568,470

 

14. Investments in subsidiaries and associates

The Bank has investments in the following entities over which it has a control or significant influence which are measured by applying the equity method:

 

    06.30.24   12.31.23
Subsidiaries        
  Volkswagen Financial Services Compañía Financiera S.A.   22,858,775   20,764,107
BBVA Asset Management Argentina S.A.U. Sociedad Gerente de Fondos Comunes de Inversión      14,203,402   20,483,258
PSA Finance Arg. Cía. Financiera S.A.   10,820,493   12,123,793
Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings) (3)   153,922   266,551
Associates        
BBVA Seguros Argentina S.A.   6,763,044   8,467,393
Rombo Compañía Financiera S.A.                                                   6,277,091   5,532,413
Interbanking S.A.   2,786,797   3,793,848
Play Digital S.A.(1)   1,805,697   3,511,006
Openpay Argentina S.A.(2)   529,631   926,404
         
                                                        TOTAL   66,198,852   75,868,773
(1)In order to determine the value of this investment, the accounting information of Play Digital S.A. as of March 31, 2024 has been used. In addition, the significant transactions made or events occurred between April 1 and June 30, 2024 were considered.
(2)On April 19, 2023, 29,205 (123,897 in restated values) shares were subscribed for and paid in in cash. See also note 53.
(3)On November 28, 2023, a contribution in cash was made for 120,000 (270,663 in restated values). The Bank subscribed 64,667 (145,858 in restated values) and BBVA subscribed 55,333 (124,805 in restated values).
 
 
 -108-
 

15. Property and equipment

 

Breakdown is as follows:

 

    06.30.24   12.31.23
         
Real estate   394,960,058   400,008,290
Furniture and facilities   67,910,851   68,781,609
Right of use of leased real estate   47,837,877   43,739,176
Machinery and equipment   29,791,458   14,161,704
Construction in progress   12,337,521   7,334,307
Vehicles   1,584,570   1,801,351
         
                                                        TOTAL   554,422,335   535,826,437

 

The breakdown of lease assets and liabilities as well as interest and foreign exchange differences recognized in profit or loss is disclosed in Note 25 to these separate condensed interim financial statements.

 

Based on the reports prepared by the independent appraiser relied upon by the Bank to assess the impairment of its property as of the end of the previous fiscal year, the carrying amount of one piece of real estate exceeds its recoverable value. Therefore, such amount should be written down to the recoverable value.

 

The impairment of assets recorded under the item “Property and equipment” is reported below:

 

Account   Impairment
    06.30.2024   12.31.2023
         
Real estate - Balvanera   (1,285,550)   (1,285,550)
Real estate - Libertador   (1,045,997)   (1,045,997)
Real estate - Local 1 Puerto Madero   (539,144)   (539,144)
Real estate - Local 5 Puerto Madero   (395,803)   (395,803)
Real estate - Cerro Las Rosas   (130,416)   (130,416)
Real estate - Mar del Plata   (127,200)   (127,200)
Real estate - Lavallol   (82,427)   (82,427)
Real estate - La Plata   (74,625)   (74,625)
Real estate - Monte Grande   (70,519)   (70,519)
Real estate - Bahía Blanca   (26,516)   (26,516)
         
TOTAL   (3,778,197)   (3,778,197)
 
 
 -109-
 

16. Intangible assets

 

Breakdown is as follows:

    06.30.24   12.31.23
         
Own systems development expenses   57,358,013   59,178,846
         
                                                        TOTAL   57,358,013   59,178,846

 

17. Other non-financial assets

 

Breakdown is as follows:

 

    06.30.24   12.31.23
         
Investment properties   107,177,247   108,138,204
Prepayments   19,128,929   21,810,722
Advances to suppliers of goods   12,993,622   11,869,312
Tax advances   6,587,418   13,501,334
Other miscellaneous assets   2,557,917   1,347,821
Advances to personnel   341,608   15,293,719
Assets acquired as security for loans   96,526   100,991
Other   3,205,234   14,019,543
         
                                                        TOTAL   152,088,501   186,081,646

 

Investment properties include pieces of real estate leased to third parties. The average term of lease agreements is 6 years. Subsequent renewals are negotiated with the lessee. The Group has classified these leases as operating leases, since these arrangements do not substantially transfer all risks and benefits inherent to the ownership of the assets. The rental income is recognized under “Other operating income” on a straight-line basis during the term of the lease.

 

The impairment of assets booked in Investment properties under non-financial assets is as follows:

 

Account   Impairment
    06.30.2024   12.31.2023
         
Leased real estate - Viamonte   (428,422)   (428,422)
         
                                                        TOTAL   (428,422)   (428,422)
         

 

 
 
 -110-
 

18. Non-current assets held for sale

 

It includes pieces of real estate located in the Argentine Republic, which the Bank’s Board of Directors agreed to sell in the short term. Breakdown is as follows:

 

 

    06.30.24   12.31.23
         
Real estate held for sale - Fisherton   860,168   860,168
Real estate held for sale - Mendoza   280,292   280,292
Real estate held for sale - Villa Lynch   225,257   225,257
Real estate held for sale - Bernal   166,295   166,295
         
                                                        TOTAL   1,532,012   1,532,012

 

Based on the reports prepared by the independent appraiser relied upon by the Bank to assess the impairment of its property, the carrying amount of certain pieces of real estate exceeds its recoverable value. Therefore, such amount should be written down to the recoverable value.

 

The impairment of non-current assets held for sale is as follows:

 

Account   Impairment
    06.30.2024   12.31.2023
         
Real estate held for sale - Fisherton   (445,285)   (445,285)
         
                                                        TOTAL   (445,285)   (445,285)
 
 
 -111-
 

19. Deposits

 

The information on concentration of deposits is disclosed in Exhibit H. Breakdown is as follows:

 

    06.30.24   12.31.23
         
Non-financial Government sector   180,351,308   61,182,871
Financial sector   15,456,946   27,169,050
Non-financial Private sector and Residents Abroad   5,628,374,120   6,462,887,196
       Savings accounts   2,447,576,934   3,092,999,935
       Time deposits   1,644,964,994   1,351,722,307
       Checking accounts   1,223,650,281   1,642,513,500
       Investment accounts   274,051,001   327,413,795
       Other   38,130,910   48,237,659
         
                                                        TOTAL   5,824,182,374   6,551,239,117

 

20. Liabilities at fair value through profit or loss

 

Breakdown is as follows:

         
    06.30.24   12.31.23
         
Liabilities for transactions with government securities   194,844   18,571,084
         
                                                        TOTAL   194,844   18,571,084

 

21. Other financial liabilities

 

Breakdown is as follows:

 

    06.30.24   12.31.23
         
Obligations from financing of purchases   598,988,296   505,531,443
Receivables from spot purchases pending settlement   121,374,652   1,381,802
Collections and other transactions on behalf of third parties   51,095,922   73,352,352
Lease liabilities (Note 25)   28,826,794   42,251,281
Funds collected on behalf of AFIP   27,355,286   132,811,097
Payment orders pending credit   25,019,688   25,708,482
Credit balance for spot sales pending settlement   19,498,878   611,801
Commissions accrued payable   11,093   23,104
Other   11,967,407   16,064,620
         
                                                        TOTAL   884,138,016   797,735,982
 
 
 -112-
 

22. Financing received from the BCRA and other financial institutions

 

Breakdown is as follows:

 

    06.30.24   12.31.23
         
Foreign financial institutions   11,130,548   4,803,637
Local financial institutions   2,607,550   1,525,205
BCRA   140,985   196,540
         
                                                        TOTAL   13,879,083   6,525,382

 

23. Corporate bonds issued

 

No transactions were accounted for the six-month periods ended June 30, 2024 and December 31, 2023, respectively.

 

 

 

24. Other non-financial liabilities

 

Breakdown is as follows:

    06.30.24   12.31.23
         
Miscellaneous creditors   162,926,849   223,787,696
Short-term personnel benefits   79,918,732   108,062,169
Other collections and withholdings   67,185,275   75,348,164
Dividends payable (1)   50,638,718   -
Advances collected   47,055,690   88,630,853
Other taxes payable   27,902,940   58,131,961
For contract liabilities   6,040,640   5,732,618
Long-term personnel benefits   3,970,951   3,061,721
Social security payment orders pending settlement   719,580   666,842
Termination benefits payable   41,603   2,088,122
Other   1,095,448   1,152,129
         
                                                        TOTAL   447,496,426   566,662,275

 

(1) See note 44 to the consolidated financial statements

 

25. Leases

 

The Bank as lessee

Below is a detail of the amounts related to the rights of use under leases and lease liabilities in force as of June 30, 2024 and December 31, 2023:

 
 
 -113-
 

Rights of use under leases

 

    Original           Amortization       Residual
    value as of           Accumulated       For the     Accumulated as of   value as of
Account   01.01.24   Additions   Derecognitions   as of 01.01.24   Derecognitions   period (1)     06.30.24   06.30.24
                                   
Leased real estate   88,048,790   6,826,464   3,298,774   44,309,614   1,799,263   1,228,252     43,738,603   47,837,877
                                   
(1) See note 37                                  

 

    Original           Amortization       Residual
    value as of           Accumulated       For the     Accumulated as of   value as of
Account   01.01.23   Additions   Derecognitions   as of 01.01.23   Derecognitions   fiscal year     fiscal year-end   12.31.23
                                   
Leased real estate   76,929,630   17,040,393   5,921,233   44,190,729   4,007,778   4,126,663     44,309,614   43,739,176
                                   

 

 

Lease liabilities

 

Future minimum payments for lease agreements are as follows:

 

    In foreign currency   In local currency   06.30.24   12.31.23
                 
Up to 1 year   1,467,655   288,011   1,755,666   2,187,128
                 
From 1 to 5 years   20,199,937   1,675,041   21,874,978   31,600,935
                 
More than 5 years   5,196,150       5,196,150   8,463,218
                 
            28,826,794   42,251,281

 

Interest and exchange rate difference recognized in profit or loss

 

    06.30.24   06.30.23
         
Other operating expenses        
         
Interest on lease liabilities (Note 38)   (1,691,936)   (1,438,210)
         
Exchange rate difference        
         
Exchange rate difference for financial lease   (3,507,262)   (17,199,355)
 
 
 -114-
 

26. Interest income

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Premiums on reverse repurchase   147,555,394   689,878,406   117,575,604   198,155,028
Stabilization Coefficient (CER) clause   252,289,277   583,804,224   169,065,736   270,092,925
Interest on instruments   102,237,009   266,852,883   120,529,859   209,230,415
Interest on government securities   139,335,122   205,893,931   565,000,244   1,049,692,798
Interest on credit card loans   93,400,322   201,502,886   122,587,374   243,369,038
Interest on overdrafts   63,626,192   146,460,834   75,165,536   154,670,888
Acquisition Value Unit (UVA) clause   55,071,941   133,757,051   51,274,715   90,729,237
Interest on consumer loans   52,435,576   99,797,725   59,161,101   114,925,177
Interest on other loans   12,217,317   34,804,248   28,967,484   65,461,086
Interest on loans to the financial sector   12,795,290   24,921,186   15,100,332   24,657,029
Interest on pledge loans   4,602,620   9,964,548   6,000,489   11,199,358
Interest on mortgage loans   4,833,564   6,054,713   2,355,893   7,257,087
Interest on lease liabilities   2,148,446   4,756,284   3,288,319   6,796,459
Interest on loans for the prefinancing and financing of exports   2,462,780   3,979,004   721,117   1,431,240
Interest on private securities   912,383   2,582,517   1,658,258   2,669,120
Other interest   1,445,687   2,707,989   1,048,876   1,938,417
                 
                                                        TOTAL   947,368,920   2,417,718,429   1,339,500,937   2,452,275,302

 

27. Interest expense

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Time deposits   189,882,712   461,055,950   528,439,340   972,799,577
Checking accounts deposits   49,357,873   287,938,972   115,759,387   174,872,540
Acquisition Value Unit (UVA) clause   37,303,493   87,375,549   24,961,615   46,960,195
Savings accounts deposits   4,774,066   11,008,866   3,156,011   5,491,026
Other liabilities from financial transactions   9,590,508   9,770,277   344,542   964,690
Interfinancial loans received   248,277   1,421,813   783,813   1,383,533
Premiums on reverse repurchase transactions   29,620   29,620   256   256
Other interest   4,033   4,057   9,559   13,312
                 
                                                        TOTAL   291,190,582   858,605,104   673,454,523   1,202,485,129
 
 
 -115-
 

28. Commission income

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
From credit cards   61,602,914   116,765,270   59,355,209   96,902,625
Linked to liabilities   30,611,723   58,044,777   40,127,919   81,582,485
From foreign trade and foreign currency transactions   5,203,542   11,267,966   5,269,114   9,913,860
From insurance   4,053,451   7,966,135   4,428,698   8,881,265
Linked to securities   3,290,643   7,194,586   2,092,410   3,857,993
Linked to loans   3,919,514   6,361,786   1,574,250   3,160,844
Linked to loan commitments   162,168   223,058   310,590   310,590
From guarantees granted   86,666   162,285   46,006   75,673
                 
                                                        TOTAL   108,930,621   207,985,863   113,204,196   204,685,335

 

 

 

29. Commission expenses

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
From credit and debit cards   34,174,264   56,772,839   15,674,499   52,401,316
For foreign trade transactions   14,031,108   27,690,305   7,890,891   9,382,717
For payment of salaries   4,155,842   8,633,250   3,835,868   6,757,387
For new channels   3,413,351   6,431,007   2,590,923   4,675,753
For data processing   2,627,296   4,789,967   1,979,751   3,763,801
For advertising campaigns   54,020   274,268   247,441   453,427
Linked to transactions with securities   26,561   61,958   23,362   47,979
Other commission expenses   1,145,217   5,227,102   3,975,121   7,173,707
                 
                                                        TOTAL   59,627,659   109,880,696   36,217,856   84,656,087
 
 
 -116-
 

30. Net income from measurement of financial instruments at fair value through profit or loss

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Income from government securities   31,826,291   73,156,368   27,419,949   53,689,716
Income from corporate bonds   729,609   843,211   743   743
Income from private securities   639,166   390,036   443,860   765,633
Income from interest rate swaps   385,823   385,823   (220,061)   (119,361)
Loss from put options taken   (441,711)   (1,165,864)   (315,648)   (439,737)
Income from foreign currency forward transactions   (2,530,750)   (10,568,970)   (1,106,524)   1,786,247
Other   -   2,374   (447)   (461)
                 
                                                        TOTAL   30,608,428   63,042,978   26,221,872   55,682,780

 

31. Net income from write-down of assets at amortized cost and at fair value through OCI

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Income from sale of government securities   9,698,105   84,371,890   8,504,568   8,680,822
Income from sale of private securities   3,971,071   3,904,495   4,670   4,670.00
                 
                                                        TOTAL   13,669,176   88,276,385   8,509,238   8,685,492

 

 

 

32. Foreign exchange and gold gains/(losses)

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Income from purchase-sale of foreign currency   11,610,752   19,531,721   18,182,044   33,631,229
Conversion of foreign currency assets and liabilities into pesos   8,837,146   13,369,869   (6,281,956)   (16,557,648)
                 
                                                        TOTAL   20,447,898   32,901,590   11,900,088   17,073,581
 
 
 -117-
 

33. Other operating income

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Adjustments and interest on miscellaneous receivables   9,014,239   25,290,607   10,612,830   20,096,254
Rental of safe deposit boxes   4,497,910   7,777,748   3,882,212   7,026,758
Debit and credit card commissions   2,571,480   4,859,669   2,011,984   4,202,835
Loans recovered   3,068,310   4,804,609   1,976,013   4,946,306
Punitive interest   1,479,748   2,589,436   1,117,425   2,077,506
Rent   1,137,305   2,491,938   1,096,521   2,247,383
Fees expenses recovered   823,148   1,663,411   1,008,311   2,016,043
Allowances reversed   617,725   617,725   (11,085)   2,638
Commission from syndicated transactions   289,910   613,634   351,132   811,943
Other operating income   4,346,951   10,817,575   4,503,978   7,576,346
                 
                                                        TOTAL   27,846,726   61,526,352   26,549,321   51,004,012

 

 

 

34. Loan loss allowance

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Financial assets measured at amortized cost                
Loan loss allowance in pesos   40,361,729   69,748,827   39,681,759   76,053,589
Loan loss allowance in foreign currency   (71,877)   2,149,423   823,545   1,534,243
                 
Financial assets measured at fair value through OCI                
Value adjustment due to credit losses   (7,710)   11,488   21,609   48,678
                 
                                                        TOTAL   40,282,142   71,909,738   40,526,913   77,636,510
 
 
 -118-
 

35. Personnel benefits

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Salaries   56,055,493   112,177,093   54,438,238   112,278,725
Other short-term personnel benefits   13,423,090   40,589,503   24,881,087   45,859,443
Social security withholdings and collections   15,705,888   34,163,060   16,677,147   33,627,911
Personnel compensation and bonuses   16,492,722   17,747,050   4,168,951   6,354,519
Personnel services   2,607,313   4,369,213   2,311,149   3,861,716
Termination personnel benefits (Exhibit J)   707,481   707,481   563,415   563,415
Other long-term benefits   2,851,819   2,851,819   3,026,533   3,026,533
                 
                                                        TOTAL   107,843,806   212,605,219   106,066,520   205,572,262
                 

 

 

36. Administrative expenses

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Taxes   27,558,038   55,427,132   21,295,370   43,056,147
Rent   15,072,954   33,036,517   17,964,557   34,027,054
Contracted administrative services   16,337,438   31,453,920   13,614,371   25,446,161
Maintenance and repair costs   9,264,765   19,051,216   8,621,713   18,313,692
Armored transportation services   9,846,824   18,680,495   9,361,792   18,686,750
IT   7,844,379   15,935,509   17,495,369   30,042,372
Advertising   7,439,212   15,785,803   6,234,255   13,269,032
Documents distribution   3,833,341   9,603,377   2,874,623   6,056,752
Electricity and communications   3,933,207   7,903,234   3,574,963   7,299,527
Security services   3,203,624   6,537,392   2,635,137   5,156,762
Other fees   3,149,248   5,909,417   3,380,088   5,902,693
Trade reports   2,029,502   4,291,653   1,103,674   4,588,420
Insurance   703,717   1,541,605   771,848   1,638,817
Representation and travel expenses   582,153   1,344,205   804,042   1,349,597
Stationery and supplies   225,912   398,995   149,404   260,653
Fees to Bank Directors and Supervisory Committee   114,691   210,394   116,837   206,012
Other administrative expenses   4,339,947   9,220,722   4,450,066   7,752,856
                 
                                                        TOTAL   115,478,952   236,331,586   114,448,109   223,053,297

 

 
 
 -119-
 

37. Asset depreciation and impairment

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Property and equipment   10,726,201   20,846,014   9,544,901   19,372,963
Intangible assets   5,571,193   6,777,092   1,461,458   2,920,127
Right of use of leased real estate   801,399   1,228,252   1,141,573   2,381,624
Depreciation of other assets   686,006   965,475   676,376   968,818
                 
                                                        TOTAL   17,784,799   29,816,833   12,824,308   25,643,532

 

 

38. Other operating expenses

 

Breakdown is as follows:

 

    Quarter ended 06.30.24   Accumulated as of 06.30.24   Quarter ended 06.30.23   Accumulated as of 06.30.23
                 
Turnover tax   89,084,860   156,075,122   79,538,457   147,328,916
Other allowances (Exhibit J)   (17,638,940)   23,277,948   7,997,164   15,153,276
Initial recognition of loans   2,757,113   6,424,352   3,922,298   8,507,118
Contribution to the Deposit Guarantee Fund   2,057,746   4,005,391   2,660,129   5,342,909
Adjustment for restatement of dividends in constant currency   10,280,527   10,280,527   -   -
Claims   683,453   1,289,244   1,058,434   2,324,928
Interest on lease liabilities (Note 25)   819,686   1,691,936   651,517   1,438,210
Other operating expenses   5,968,551   11,476,160   6,965,005   11,394,808
                 
                                                        TOTAL   94,012,996   214,520,680   102,793,004   191,490,165

 

 

39. Restricted assets

 

As of June 30, 2024 and December 31, 2023, the Group has the following restricted assets:

a)The Entity applied the following assets as security for loans agreed under the Global Credit Program for micro, small and medium-sized enterprises granted by the Inter-American Development Bank (IDB).
    06.30.24   12.31.23
         
Argentine Treasury Bonds adjusted by CER due 2026   6,003   -
Argentine Treasury Bonds adjusted by CER due 2024   -   23,009
         
Total   6,003   23,009

 

 
 
 -120-
 
b)Also, the Entity has accounts, deposits, repo transactions and trusts applied as guarantee for activities related to credit card transactions, with automated clearing houses, forward transactions, foreign currency futures, court proceedings and leases in the amount of 462,222,738 and 470,341,553 as of June 30, 2024 and December 31, 2023, respectively (see Note 11 to these separate condensed interim financial statements).

 

 

40. Minimum cash and minimum capital requirements

 

40.1. Minimum cash requirements

The BCRA establishes different prudential regulations to be observed by financial institutions, mainly regarding solvency levels, liquidity and credit assistance levels.

Minimum cash regulations set forth an obligation to keep liquid assets in relation to deposits and other obligations recorded for each period. The items included for the purpose of meeting that requirement are detailed below:

Accounts   06.30.24   12.31.23
         
Balances at the BCRA        
         
BCRA – Current account not restricted   653,967,875   645,203,968
BCRA - Special guarantee accounts  - restricted (Note 11)   142,061,706   174,246,598
BCRA - Special pension accounts - restricted   104,095   -
         
    796,133,676   819,450,566
         
Argentine Treasury Bills Capitalizable in Pesos. Maturity 08-30-2024   332,955,000   -
Treasury Bonds in pesos adjusted by Cer 4.25%. Maturity 12-13-2024   280,284,727   393,566,679
Argentine Treasury Bills Capitalizable in Pesos. Maturity 07-26-2024   265,819,939   -
Argentine Bond in dual currency. Maturity 06-30-2024   251,497,757   388,708,861
Argentine Treasury Bills Capitalizable in Pesos. Maturity 10-14-2024   230,100,000   -
Treasury Bonds in pesos adjusted by Cer. Maturity 03-31-2026   138,841,455   -
Treasury Bonds in pesos adjusted by Cer 4%. Maturity 10-14-2024   138,096,475   341,038,074
Argentine Treasury Bonds in pesos. Maturity 08-23-2025   114,599,443   88,992,145
Treasury Bonds in pesos adjusted by Cer 4,25% Maturity 02-14-2025   93,953,316   100,806,292
Argentine Treasury Bills Capitalizable in Pesos. Maturity 03-31-2025   77,930,833   -
Argentine Treasury Bills Capitalizable in Pesos. Maturity 11-29-2024   54,103,500   -
Argentine Treasury Bills Capitalizable in Pesos. Maturity 02-28-2025   51,665,600   -
Argentine Treasury Bills Capitalizable in Pesos. Maturity 07-01-2024   48,313,974   -
Argentine Treasury Bonds in Pesos. Maturity 05-23-2027   24,305,153   58,258,587
Argentine Treasury Bonds in Pesos at Private Badlar Rate 0.7%. Maturity 11-23-2027   13,838,418   26,555,747
Treasury Bonds in pesos adjusted by Cer 3.75% Maturity 04-14-2024   -   1,422,344
BCRA Liquidity Bills   -   108,645,647
         
TOTAL   2,912,439,266   2,327,444,942

 

 
 
 -121-
 

40.2. Minimum capital requirement

The regulatory breakdown of minimum capital requirements is as follows at the above-mentioned dates:

Minimum capital requirement   06.30.24   12.31.23
         
Credit risk   (393,528,561)   (389,645,670)
Operational risk   (180,521,715)   (157,323,459)
Market risk   (2,114,235)   (11,700,941)
Non-compliance (1)   -   (38,083,932)
         
Paid-in   1,751,351,498   2,018,239,608
         
Surplus   1,175,186,987   1,421,485,606

 

(1) The increase observed in the minimum capital requirement for credit risk is due to the non-compliance with the maximum limit established by the BCRA for the financing to the non-financial government sector during 15 days of December 2023. According to the provisions of the regulations, this non-compliance causes an increase in the minimum capital requirement for credit risk for an amount equivalent to 100% of the surplus, as from the month in which the non-compliance occurs and for as long as it continues. In the case of credit ratios, the computation of the deviation will be made on the basis of the monthly average of daily surpluses.

 

41. Accounting principles – Explanation added for translations into English

These separate financial statements are presented in accordance with the financial reporting framework set forth by the BCRA, as mentioned in note 2. These accounting standards may not conform to accounting principles generally accepted in other countries.

 
 
 -122-
 

EXHIBIT A

 

BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

 

        HOLDING   POSITION
        Fair Fair value Accounting   Accounting   Position without    
Account   Identification   value level Balance   Balance   options Options Final Position
         

 

 

06.30.24   12.31.23        
                         
DEBT SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS                        
                         
Local:                        
Government Securities - In pesos                        
                         
Argentine Treasury Bills Capitalizable in Pesos. Maturity 07-01-2024   9260   84,228 1 84,228   -   84,228 - 84,228
Treasury Bills adjusted by Cer. Maturity 01-18-2024   9221   - 1 -   368,851   - - -
                         
Subtotal Government Securities - In pesos       84,228   84,228   368,851   84,228 - 84,228
                         
Government Securities - In foreign currency                        
                         
Argentine Bond in dual currency. Maturity 06-30-2024   9230   251,497,757 1 251,497,757   388,708,861   251,497,757 - 251,497,757
AL30 Bond Local Law USD Step Up. Maturity 07-09-2030   5921   55,790 1 55,790   49,143   55,790 - 55,790
Argentine Bond in dual currency. Maturity 02-28-2024   9156   - 1 -   13,068,972   - - -
GD30 Bond Foreign Law USC Step Up. Maturity 07-09-2030   81086   - 1 -   51,115   - - -
                         
Subtotal Government Securities - In foreign currency       251,553,547   251,553,547   401,878,091   251,553,547 - 251,553,547
                         
Private Securities - In pesos                        
                         
Corporate Bond New San S.A. Series 21 in Pesos Private BADLAR. Maturity 05-09-2025   57750   212,374 3 212,374   -   212,374 - 212,374
Corporate Bond New San S.A. Series 18 in Pesos Private BADLAR + 300 bps. Maturity 10-17-2024   57449   - 3 -   474,211   - - -
Corporate Bond New San S.A. Series 19 in Pesos Monetary Policy Rate. Maturity 10-17-2024   57450   - 3 -   422,008   - - -
Corporate Bond Toyota Cia Financiera Series 32 in Pesos. Maturity 02-09-2025   57287   - 3 -   322   - - -
                         
Subtotal Private Securities - In pesos       212,374   212,374   896,541   212,374 - 212,374
                         
Private Securities - In foreign currency                        
                         
Corporate Bond YPF Series 30 in USD. Maturity 07-01-2026   57855   129,344 2 129,344   -   129,344 - 129,344
Corporate Bond Central Puerto Series A in USD. Maturity 03-14-2026   57363   - 2 -   2,969,105   - - -
                         
Subtotal Private Securities - In foreign currency       129,344   129,344   2,969,105   129,344 - 129,344
                         
TOTAL DEBT SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS       251,979,493   251,979,493   406,112,588   251,979,493 - 251,979,493
                         
 
 
 -123-
 

EXHIBIT A

(Continued)

 

BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

        HOLDING   POSITION
        Fair Fair value Accounting   Accounting   Position without    
Account   Identification   value level Balance   Balance   options Options Final Position
            06.30.24   12.31.23        
                         
OTHER DEBT SECURITIES                        
                         
MEASURED AT FAIR VALUE THROUGH OCI                        
                         
Local:                        
Government Securities - In pesos                        
                         
Argentine Treasury Bills Capitalizable in pesos. Maturity 08-30-2024   9262   332,955,000 1 332,955,000   -   332,955,000 - 332,955,000
Treasury Bonds in pesos adjusted by Cer 4.25%. Maturity 12-13-2024   9200   280,284,727 2 280,284,727   393,566,679   280,284,727 (436,548) 279,848,179
Argentine Treasury Bills Capitalizable in pesos. Maturity 07-26-2024   9261   265,819,939 1 265,819,939   -   265,819,939 - 265,819,939
Argentine Treasury Bills Capitalizable in pesos. Maturity 10-14-2024   9252   230,100,000 1 230,100,000   -   230,100,000 - 230,100,000
Treasury Bonds in pesos adjusted by Cer. Maturity 03-31-2026   9257   138,841,455 1 138,841,455   -   138,841,455 (59,002) 138,782,453
Treasury Bonds in pesos adjusted by Cer 4%. Maturity 10-14-2024   9179   138,096,475 1 138,096,475   341,038,074   138,096,475 (202,310) 137,894,165
Treasury Bonds in pesos adjusted by Cer 1.55%. Maturity 07-26-2024   5405   110,048,047 1 110,048,047   92,371,641   110,048,047 - 110,048,047
Treasury Bonds in pesos adjusted by Cer 4.25%. Maturity 02-14-2025   9180   93,953,316 1 93,953,316   100,806,292   93,953,316 (105,801) 93,847,515
Argentine Treasury Bills Capitalizable in pesos. Maturity 09-30-2024   9268   93,802,089 2 93,802,089   -   93,802,089 - 93,802,089
Argentine Treasury Bills Capitalizable in pesos. Maturity 03-31-2025   9256   77,930,833 1 77,930,833   -   77,930,833 (98,036) 77,832,797
Treasury Bonds in pesos adjusted by Cer 2% due 11-09-2026   5925   58,964,720 1 58,964,720   61,094   58,964,720 - 58,964,720
Argentine Treasury Bills Capitalizable in pesos. Maturity 11-29-2024   9255   54,103,500 1 54,103,500   -   54,103,500 - 54,103,500
Argentine Treasury Bills Capitalizable in pesos. Maturity 02-28-2025   9253   51,665,600 1 51,665,600   -   51,665,600 (83,247) 51,582,353
Argentine Treasury Bills Capitalizable in pesos. Maturity 07-01-2024   9260   48,313,974 1 48,313,974   -   48,313,974 - 48,313,974
Treasury Bonds in pesos adjusted by Cer 0%. Maturity 06-30-2026   9240   47,002,960 1 47,002,960   -   47,002,960 (495,887) 46,507,073
Argentine Treasury Bills Capitalizable in pesos. Maturity 01-31-2025   9251   634,500 1 634,500   -   634,500 - 634,500
Treasury Bonds in pesos adjusted by Cer 3.75% due 04-14-2024   9178   - 1 -   1,422,344   - - -
Treasury Bonds in pesos adjusted by Cer 1.50%. Maturity 03-25-2024   5493   - 1 -   299,109   - - -
                         
Subtotal Government Securities - In pesos       2,022,517,135   2,022,517,135   929,565,233   2,022,517,135 (1,480,831) 2,021,036,304
                         
Government Securities - In foreign currency                        
                         
Bonds for the Reconstruction of a Free Argentina - TRANCHE 1 - Maturity 10-31-2027 (Series C)   9236   10,241,451 2 10,241,451   -   10,241,451 - 10,241,451
Bonds for the Reconstruction of a Free Argentina - TRANCHE 1 - Maturity 10-31-2027 (Series D)   9237   10,083,078 1 10,083,078   -   10,083,078 - 10,083,078
Bonds for the Reconstruction of a Free Argentina - TRANCHE 1 - Maturity 10-31-2027 (Series A)   9234   8,644,140 2 8,644,140   -   8,644,140 - 8,644,140
Bonds for the Reconstruction of a Free Argentina - TRANCHE 1 - Maturity 10-31-2027 (Series B)   9235   7,666,125 2 7,666,125   -   7,666,125 - 7,666,125
Dollar-linked Argentine Treasury Bond 0.40%. Maturity 04-30-2024   9120   - 1 -   53,430   - - -
                         
Subtotal Government Securities - In foreign currency       36,634,794   36,634,794   53,430   36,634,794 - 36,634,794
                         
BCRA Bills - In pesos                        
                         
BCRA Liquidity Bills in pesos. Maturity 01-11-2024   14085   - 2 -   100,656,178   - - -
BCRA Liquidity Bills in pesos. Maturity 01-09-2024   14084   - 2 -   7,989,469   - - -
                         
Subtotal BCRA Bills - In pesos       -   -   108,645,647   - - -
                         
 
 
 -124-
 

EXHIBIT A

(Continued)

 

BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

        HOLDING           POSITION
        Fair Fair value Accounting   Accounting   Position without    
Account   Identification   value level Balance   Balance   options Options Final Position
            06.30.24   12.31.23        
                         
OTHER DEBT SECURITIES (Continued)                        
                         
BCRA Bills - In foreign currency                        
                         
Local BCRA Bills in USD. Maturity 11-23-2024   12093   7,294,000 2 7,294,000   11,627,434   7,294,000 - 7,294,000
Local BCRA Bills in USD. Maturity 11-20-2024   12090   5,242,563 2 5,242,563   30,522,014   5,242,563 - 5,242,563
Local BCRA Bills in USD. Maturity 11-27-2024   12095   1,823,500 2 1,823,500   2,906,859   1,823,500 - 1,823,500
Local BCRA Bills in USD. Maturity 11-16-2024   12089   - 2 -   80,374,640   - - -
                         
Subtotal BCRA Bills - In foreign currency       14,360,063   14,360,063   125,430,947   14,360,063 - 14,360,063
                         
Private Securities - In pesos                        
                         
                         
Corporate Bond New San S.A. in Pesos Series 20 Private BADLAR. Maturity 02-01-2025   57557   270,496 3 270,496   -   270,496 - 270,496
Corporate Bond New San S.A. in Pesos Series 19. Maturity 10-17-2024   57450   236,374 3 236,374   -   236,374 - 236,374
Corporate Bond Bco de Serv. Financieros Series 24 in Pesos at Floating rate. Maturity 02-02-2025   57560   213,173 2 213,173   -   213,173 - 213,173
Corporate Bond Refi Pampa Series 2 in Pesos adjusted by Uva. Maturity 05-06-2025   56123   182,661 3 182,661   156,769   182,661 - 182,661
Corporate Bond New San S.A. in Pesos Series 21 Private BADLAR. Maturity 05-09-2025   57750   172,381 3 172,381   -   172,381 - 172,381
Corporate Bond New San S.A. in Pesos Private BADLAR + 440 bps. Maturity 02-14-2024   56847   - 3 -   405,965   - - -
Corporate Bond Bco de Serv. Financieros Series 22 in Pesos at Floating rate. Maturity 03-03-2024   56886   - 3 -   389,261   - - -
Corporate Bond Petroquimica Com. Rivadavia S.A. in Pesos at Floating rate. Maturity 08-15-2024   56855   - 3 -   310,528   - - -
Corporate Bond New San S.A. in Pesos Private BADLAR + 575 bps. Maturity 05-19-2024   57044   - 3 -   273,824   - - -
Corporate Bond Arcor Series 17 in Pesos adjusted by Uva. Maturity 10-20-2025   55692   - 3 -   6,896,372   - - -
                         
Subtotal Private Securities - In pesos       1,075,085   1,075,085   8,432,719   1,075,085 - 1,075,085
                         
Private Securities - In foreign currency                        
                         
Corporate Bond Luz De Tres Picos 4 in USD. Maturity 09-29-2026   56467   2,476,735 2 2,476,735   624   2,476,735 - 2,476,735
Corporate Bond Pampa Energia S.A. Series 18 in USD. Maturity 09-08-2025   57326   1,818,941 2 1,818,941   2,880,884   1,818,941 - 1,818,941
Corporate Bond Vista Energy Series 23 in USD. Maturity 03-06-2027   57636   3,756,410 2 3,756,410   -   3,756,410 - 3,756,410
Corporate Bond Empresa de Gas del Sur (EMGASUD) S.A. Series 39 in USD. Maturity 03-08-2027   57644   1,784,831 2 1,784,831   -   1,784,831 - 1,784,831
Corporate Bond Empresa de Gas del Sur (EMGASUD) S.A. Series 39 in USD. Maturity 07-14-2028   57194   1,569,449 2 1,569,449   2,406,537   1,569,449 - 1,569,449
Corporate Bond Vista Energy Series 20 in USD. Maturity 07-20-2025   57081   1,509,496 2 1,509,496   2,385,169   1,509,496 - 1,509,496
Corporate Bond John Deere Credit Cia Financiera S.A. Series X in USD. Maturity 03-08-2026   57639   927,488 2 927,488   -   927,488 - 927,488
Corporate Bond Petroquimica Comodoro Rivadavia Series O in USD. Maturity 09-22-2027   57379   1,112,514 2 1,112,514   212   1,112,514 - 1,112,514
Corporate Bond Petroquimica Comodoro Rivadavia Series H in USD. Maturity 12-17-2024   55849   402,502 2 402,502   -   402,502 - 402,502
Corporate Bond Tecpetrol S.A. Series 7 in USD. Maturity 04-22-2026   57709   2,688,158 2 2,688,158   -   2,688,158 - 2,688,158
Corporate Bond YPF Series 29 in USD. Maturity 05-28-2026   57774   1,827,147 2 1,827,147   -   1,827,147 - 1,827,147
Corporate Bond Pampa Energia S.A. Series 20 in USC. Maturity 03-26-2026   57682   2,770,808 2 2,770,808   -   2,770,808 - 2,770,808
                         
Subtotal Private Securities - In foreign currency       22,644,479   22,644,479   7,673,426   22,644,479 - 22,644,479
                         
TOTAL SECURITIES AT FAIR VALUE THROUGH OCI       2,097,231,556   2,097,231,556   1,179,801,402   2,097,231,556 (1,480,831) 2,095,750,725
 
 
 -125-
 

EXHIBIT A

(Continued)

BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

        HOLDING   POSITION
        Fair Fair value Accounting   Accounting   Position without    
Account   Identification   value level Balance   Balance   options Options Final Position
            06.30.24   12.31.23        
                         
OTHER DEBT SECURITIES (Continued)                        
                         
MEASURED AT AMORTIZED COST                        
                         
Government Securities - In pesos                        
                         
Argentine Treasury Bonds in pesos. Maturity 08-23-2025   9196   115,855,982 2 114,599,443   88,992,145   114,599,443 - 114,599,443
Argentine Treasury Bonds in pesos. Maturity 05-23-2027   9132   24,305,166 2 24,305,153   58,258,587   24,305,153 - 24,305,153
Argentine Treasury Bonds in pesos at 0.7% Badlar Private Rate. Maturity 11-23-2027   9166   13,840,550 2 13,838,418   26,555,747   13,838,418 - 13,838,418
                         
Subtotal Government Securities - In pesos       154,001,698   152,743,014   173,806,479   152,743,014 - 152,743,014
                         
TOTAL SECURITIES AT AMORTIZED COST       154,001,698   152,743,014   173,806,479   152,743,014 - 152,743,014
                         
TOTAL OTHER DEBT SECURITIES       2,251,233,254   2,249,974,570   1,353,607,881   2,249,974,570 (1,480,831) 2,248,493,739
                         
EQUITY INSTRUMENTS                        
                         
MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS                        
                         
Local:                        
Private Securities - In pesos                        
                         
Share BYMA- Bolsas y Mercados Argentina       4,417,014 1 4,417,014   3,899,779   4,417,014 - 4,417,014
Share Banco de Valores de Bs. As.       1,606,668 1 1,606,668   1,899,561   1,606,668 - 1,606,668
Yacimientos Petrolíferos Fiscales S. A.       - 1 -   -   - - -
                         
Subtotal Private Securities - In pesos       6,023,682   6,023,682   5,799,340   6,023,682 - 6,023,682
                         
TOTAL EQUITY INSTRUMENTS MEASURED AT FAIR VALUE THROUGH PROFIT OR LOSS       6,023,682   6,023,682   5,799,340   6,023,682 - 6,023,682
                         
MEASURED AT FAIR VALUE THROUGH OCI                        
                         
Local:                        
Private Securities - In pesos                        
                         
Compensadora Electrónica S.A.       1,603,181 3 1,603,181   1,603,181   1,603,181 - 1,603,181
Mercado Abierto Electrónico S.A.       955,719 3 955,719   920,103   955,719 - 955,719
Seguro de Depósitos S.A.       229,384 3 229,384   259,329   229,384 - 229,384
Other       8,852 3 8,852   8,852   8,852 - 8,852
                         
Subtotal Private Securities - In pesos       2,797,136   2,797,136   2,791,465   2,797,136 - 2,797,136
                         
Subtotal Private Securities - In pesos                        
                         
Foreign:                        
Private Securities - In foreign currency                        
                         
Banco Latinoamericano de Exportaciones S.A.       547,025 2 547,025   727,122   547,025 - 547,025
Other       31,415 2 31,415   49,883   31,415 - 31,415
                         
Subtotal Private Securities - In foreign currency       578,440   578,440   777,005   578,440 - 578,440
                         
TOTAL EQUITY INSTRUMENTS MEASURED AT FAIR VALUE THROUGH OCI       3,375,576   3,375,576   3,568,470   3,375,576 - 3,375,576
                         
TOTAL EQUITY INSTRUMENTS       9,399,258   9,399,258   9,367,810   9,399,258 - 9,399,258

 

 
 
 -126-
 

EXHIBIT B

 

 

CLASSIFICATION OF LOANS AND OTHER FINANCING ACCORDING TO FINANCIAL PERFORMANCE

AND GUARANTEES RECEIVED

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

           
           
Account   06.30.24   12.31.23
           
COMMERCIAL PORTFOLIO        
           
Normal performance   1,768,809,255   1,546,138,335
  Preferred collaterals and counter-guarantees “A”   14,095,333   8,564,613
  Preferred collaterals and counter-guarantees “B”   3,369,736   6,923,448
  No preferred guarantees or counter guarantees   1,751,344,186   1,530,650,274
           
With special follow-up   -   530,736
           
Under observation   -   530,736
  Preferred collaterals and counter-guarantees “B”   -   530,736
           
Troubled   3,108,351   5,037,751
  No preferred guarantees or counter guarantees   3,108,351   5,037,751
           
With high risk of insolvency   27,030   45,966
  No preferred guarantees or counter guarantees   27,030   45,966
           
Uncollectible   27,191   58,769
  No preferred guarantees or counter guarantees   27,191   58,769
           
           
  TOTAL 1,771,971,827   1,551,811,557
           
 
 
 -127-
 

EXHIBIT B

(Continued)

 

CLASSIFICATION OF LOANS AND OTHER FINANCING ACCORDING TO FINANCIAL PERFORMANCE

AND GUARANTEES RECEIVED

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

Account   06.30.24   12.31.23
           
CONSUMER AND HOUSING PORTFOLIO        
           
Normal performance   2,126,171,123   2,071,766,090
  Preferred collaterals and counter-guarantees “A”   1,047,051   726,512
  Preferred collaterals and counter-guarantees “B”   173,433,604   130,360,349
  No preferred guarantees or counter guarantees   1,951,690,468   1,940,679,229
           
Low risk   34,725,702   23,335,409
  Preferred collaterals and counter-guarantees “B”   2,040,245   1,055,323
  No preferred guarantees or counter guarantees   32,685,457   22,280,086
           
Low risk - With special follow-up   1,721,938   841,376
  No preferred guarantees or counter guarantees   1,721,938   841,376
           
Medium risk   26,120,918   23,103,813
  Preferred collaterals and counter-guarantees “A”   -   137
  Preferred collaterals and counter-guarantees “B”   346,800   224,237
  No preferred guarantees or counter guarantees   25,774,118   22,879,439
           
High risk   15,369,917   17,581,646
  Preferred collaterals and counter-guarantees “A”   108   -
  Preferred collaterals and counter-guarantees “B”   472,812   297,777
  No preferred guarantees or counter guarantees   14,896,997   17,283,869
           
Uncollectible   3,039,179   2,922,647
  Preferred collaterals and counter-guarantees “B”   358,595   495,176
  No preferred guarantees or counter guarantees   2,680,584   2,427,471
           
           
TOTAL   2,207,148,777   2,139,550,981
           
           
TOTAL GENERAL   3,979,120,604   3,691,362,538
           
           
 
 
 -128-
 

EXHIBIT C

 

 

CONCENTRATION OF LOANS AND OTHER FINANCING

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

 

 

      06.30.24   12.31.23
          %  over       %  over
  Number of customers    Debt   total   Debt   total
      balance   portfolio   balance   portfolio
                   
  10 largest customers   526,150,332   13.22 %   446,394,326   12.09 %
  50 following largest customers   604,291,175   15.19 %   451,584,508   12.23 %
  100 following largest customers   321,559,729   8.08 %   273,047,394   7.40 %
  All other customers   2,527,119,368   63.51 %   2,520,336,310   68.28 %
                   
     TOTAL   3,979,120,604   100.00 %   3,691,362,538   100.00 %
 
 
 -129-
 

EXHIBIT D

 

BREAKDOWN BY TERM OF LOANS AND OTHER FINANCING

AS OF JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements) (1)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

                   
                   
      Terms remaining to maturity
                   
    Portfolio 1 3 6 12 24 more than  
     ACCOUNT       due month months months months months 24 TOTAL
                months  
                   
                   
  Non-financial Government sector - 1,655,508 8,516 12,774 25,548 51,096 55,354 1,808,796
                   
                   
  Financial sector - 74,980,259 18,033,958 15,413,393 13,167,018 18,239,670 - 139,834,298
                   
  Non-financial Private sector and Residents Abroad 42,406,795 1,571,317,930 740,175,312 495,703,986 495,600,041 353,304,693 600,413,858 4,298,922,615
                   
                   
     TOTAL     42,406,795 1,647,953,697 758,217,786 511,130,153 508,792,607 371,595,459 600,469,212 4,440,565,709
                   
                   
                   
  (1) These balances are total contractual flows and, therefore, include principal, accrued and to be accrued interest and charges.

 

 

 

 

BREAKDOWN BY TERM OF LOANS AND OTHER FINANCING

AS OF DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements) (1)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

 

      Terms remaining to maturity
                   
    Portfolio 1 3 6 12 24 more than  
     ACCOUNT       due month months months months months 24 TOTAL
                months  
                   
                   
  Non-financial Government sector - 87,371 120,296 32,560 45,928 91,856 145,439 523,450
                   
  Financial sector - 34,762,957 3,159,860 12,277,206 42,214,159 12,697,814 20,037,672 125,149,668
                   
  Non-financial Private sector and Residents Abroad 39,642,458 1,638,174,454 542,708,778 587,952,379 507,945,424 353,252,457 598,089,603 4,267,765,553
                   
                   
     TOTAL     39,642,458 1,673,024,782 545,988,934 600,262,145 550,205,511 366,042,127 618,272,714 4,393,438,671
                   
                   
                   
  (1) These balances are total contractual flows and, therefore, include principal, accrued and to be accrued interest and charges.
 
 
 -130-
 

EXHIBIT H

 

 

DEPOSITS CONCENTRATION

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

 

               
      06.30.24 12.31.23
        %  over     %  over
  Number of customers  Debt total    Debt total
      balance portfolio   balance portfolio
               
               
  10 largest customers   1,308,635,430 22.47 %   990,291,976 15.12 %
               
  50 following largest customers   640,049,242 10.99 %   718,626,958 10.97 %
               
  100 following largest customers   214,396,524 3.68 %   334,874,826 5.11 %
               
  All other customers   3,661,101,178 62.86 %   4,507,445,357 68.80 %
               
               
     TOTAL     5,824,182,374 100.00 %   6,551,239,117 100.00 %
               
 
 
 -131-
 

EXHIBIT I

 

BREAKDOWN OF FINANCIAL LIABILITIES BY REMAINING TERMS

AS OF JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements) (1)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

  Terms remaining to maturity
               
  1 3 6 12 24 more than  
   ACCOUNTS       month months months months months 24 months TOTAL
               
               
Deposits 5,009,222,406 877,359,303 31,844,408 1,877,814 4,053 - 5,920,307,984
Non-financial Government sector 180,365,256 24,614 - - - - 180,389,870
Financial sector 15,456,946 - - - - - 15,456,946
Non-financial Private sector and Residents Abroad 4,813,400,204 877,334,689 31,844,408 1,877,814 4,053 - 5,724,461,168

Liabilities at fair value through

profit or loss

194,844 - - - - - 194,844
Derivative instruments 514,103 - - - - - 514,103
Repo transactions and surety bonds 177,991,936 - - - - - 177,991,936
Other financial institutions 177,991,936 - - - - - 177,991,936
Other financial liabilities 889,455,914 867,838 1,211,008 2,110,404 3,283,676 19,524,090 916,452,930

Financing received from the BCRA and

other financial institutions

5,444,077 7,055,721 1,554,307 - - - 14,054,105
               
TOTAL 6,082,823,280 885,282,862 34,609,723 3,988,218 3,287,729 19,524,090 7,029,515,902
               
(1) These balances are total contractual flows and, therefore, include principal, accrued and to be accrued interest and charges.

 

 

BREAKDOWN OF FINANCIAL LIABILITIES BY REMAINING TERMS

AS OF DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements) (1)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

               
               
  Terms remaining to maturity
               
  1 3 6 12 24 more than  
   ACCOUNTS       month months months months months 24 months TOTAL
               
               
Deposits 6,107,368,742 510,892,997 170,761,443 4,086,245 520,160 - 6,793,629,587
Non-financial Government sector 61,162,899 231,743 - - - - 61,394,642
Financial sector 27,169,050 - - - - - 27,169,050
Non-financial Private sector and Residents Abroad 6,019,036,793 510,661,254 170,761,443 4,086,245 520,160 - 6,705,065,895

Liabilities at fair value through

profit or loss

18,571,084 - - - - - 18,571,084
Derivative instruments 3,856,508 - - - - - 3,856,508
Other financial liabilities 798,495,670 1,500,646 2,146,555 4,012,736 6,143,642 33,585,831 845,885,080

Financing received from the BCRA and

other financial institutions

5,900,606 753,516 - - - - 6,654,122
               
TOTAL 6,934,192,610 513,147,159 172,907,998 8,098,981 6,663,802 33,585,831 7,668,596,381
               
(1) These balances are total contractual flows and, therefore, include principal, accrued and to be accrued interest and charges.

 

 
 
 -132-
 

EXHIBIT J

 

PROVISIONS

AS OF JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

 

                         
                         
               Decreases        
  Accounts   Balances at the beginning of the year   Increases   Reversals Uses   Monetary (loss) generated by provisions   Balances as of 06.30.24
                         
                         
   INCLUDED IN LIABILITIES                      
                         
    - Provisions for contingent commitments   10,736,669   7,060,553 (1)(3) - -   (5,610,704)   12,186,518
                         
   - For administrative, disciplinary and criminal penalties   8,989   -   - -   (3,989)   5,000
                         
    - Provisions for termination plans   1,384,429   707,481   - -   (614,328)   1,477,582
                         
   - Other   24,892,296   16,233,651 (2) 617,725 2,421,980   (19,663,919)   18,422,323
                         
  TOTAL PROVISIONS   37,022,383   24,001,685   617,725 2,421,980   (25,892,940)   32,091,423
                         
                         
                         
(1) Set up in compliance with the provisions of Communication “A” 2950 of the BCRA.
(2) Set up to cover contingent events not considered in other items (civil, commercial, labor lawsuits and other).
(3) Includes an increase of 16,256 for exchange differences in foreign currency for contingent commitments    
                         

 

PROVISIONS

AS OF DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

 

                           
               Decreases   Monetary (loss) generated by provisions    
  Accounts   Balances at the beginning of the year   Increases   Reversals   Uses     Balances as of 12.31.23
                           
                           
   INCLUDED IN LIABILITIES                        
                           
    - Provisions for contingent commitments   15,082,701   8,718,564 (1)(3) -   -   (13,064,596)   10,736,669
                           
   - For administrative, disciplinary and criminal penalties   27,991   -   -   -   (19,002)   8,989
                           
    - Provisions for termination plans   2,541,684   859,024   -   -   (2,016,279)   1,384,429
                           
   - Other   30,075,250   28,532,294 (2) 2,637   8,545,480   (25,167,131)   24,892,296
                           
  TOTAL PROVISIONS   47,727,626   38,109,882   2,637   8,545,480   (40,267,008)   37,022,383
                           
                           
                           
                           
(1) Set up in compliance with the provisions of Communication “A” 2950 of the BCRA.
(2) Set up to cover contingent events not considered in other items (civil, commercial, labor lawsuits and other).
(3) Includes an increase of 205,886 for exchange differences in foreign currency for contingent commitments    

 

 
 
 -133-
 

EXHIBIT L

 

BALANCES IN FOREIGN CURRENCY

AS OF JUNE 30, 2024 AND DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

                     
                     
                     
ACCOUNTS     TOTAL AS OF 06.30.24    (per currency)   TOTAL
        AS OF           AS OF
ASSETS     06.30.24 Dollar Euro Real Other   12.31.23
                     
Cash and deposits in banks       1,221,120,772 1,182,180,848 34,080,938 637,876 4,221,110   1,935,644,273
Debt securities at fair value through profit or loss       251,682,891 251,682,891 - - -   404,847,196
Other financial assets       35,959,312 35,391,458 567,854 - -   68,744,363
Loans and other financing       492,389,967 488,901,623 3,488,344 - -   354,075,694
Non-financial Government sector       7,254 7,254 - - -   3,196
Other financial institutions       27,582 27,582 - - -   7,439
Non-financial Private sector and Residents Abroad       492,355,131 488,866,787 3,488,344 - -   354,065,059
Other debt securities       73,639,336 73,639,336 - - -   133,157,803
Financial assets pledged as collateral       37,065,386 37,065,386 - - -   76,256,401
Investments in equity instruments       578,440 547,025 31,415 - -   777,005
                     
TOTAL ASSETS       2,112,436,104 2,069,408,567 38,168,551 637,876 4,221,110   2,973,502,735
                     
                     
        TOTAL AS OF 06.30.24    (per currency)   TOTAL
        AS OF           AS OF
LIABILITIES     06.30.24 Dollar Euro Real Other   12.31.23
                     
Deposits       1,719,832,707 1,699,133,515 20,699,192 - -   2,305,045,229
Non-financial Government sector       166,329,241 166,328,769 472 - -   39,791,592
Financial sector       701,292 693,728 7,564 - -   1,136,334
Non-financial Private sector and Residents Abroad       1,552,802,174 1,532,111,018 20,691,156 - -   2,264,117,303
Other financial liabilities       121,899,038 112,671,491 9,173,433 - 54,114   143,692,313
Financing received from the BCRA and other financial institutions       11,243,118 6,903,500 4,339,618 - -   5,607,272
Other non-financial liabilities       53,387,153 34,500,083 18,887,070 - -   108,285,856
                     
TOTAL LIABILITIES       1,906,362,016 1,853,208,589 53,099,313 - 54,114   2,562,630,670

 

 
 
 -134-
 

EXHIBIT O

 

DERIVATIVES

AS OF JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

                                   
                                   
  Type of
Contract
  Purpose of the Transactions   Underlying
Asset
  Type of
Settlement
  Scope of Negotiation or Counterparty   Weighted Average Term Originally Agreed   Residual Weighted Average Term   Weighted Average Term of Differences Settlement   Amount (1)
                                   
                                   
                                   
  SWAPS   Financial Transactions Own account   Other   Upon maturity of differences   OTC - Residents Abroad - Financial sector   12   10   81   2,044,000
  REPO TRANSACTIONS   (2)   Financial Transactions Own account   Other   Upon maturity of differences   OTC - Residents Abroad - Financial sector   1   1   3   262,310,799
                                   
                                   
  FUTURES   Financial Transactions Own account   Foreign Currency   Daily differences   ROFEX   3   2   1   399,902,668
                                   
  FUTURES   Financial Transactions Own account   Foreign Currency   Upon maturity of differences   OTC - Residents in the country - Non-financial sector   3   2   88   174,780,660
                                   
                                   
  OPTIONS (3)   Financial Transactions Own account  

Local government securities

 

 

With delivery of

underlying asset

  OTC - Residents in the country - Financial sector   16   12   474   552,080,875
                                   
                                   
(1) Sum of the absolute values in thousands of pesos of the traded notional values.
(2) Although these transactions do not correspond to derivate financial instruments, they are included in this exhibit upon request of the BCRA.
(3) The notional value of these options amounts to 552,080,874,862. See Notes 5, 9 and 53 to the Consolidated Condensed Interim Financial Statements.

 

 

 

DERIVATIVES

AS OF DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

                                   
 

Type of

Contract

  Purpose of the Transactions   Underlying
Asset
  Type of
Settlement
  Scope of Negotiation or Counterparty   Weighted Average Term Originally Agreed   Residual Weighted Average Term   Weighted Average Term of Differences Settlement   Amount (1)
                                   
  REPO TRANSACTIONS   (2)   Financial Transactions Own account   Other   Upon maturity of differences   OTC - Residents in the country - Financial sector   1   1   4   2,416,536,796
   
  FUTURES   Financial Transactions Own account   Foreign Currency   Daily differences   ROFEX   3   2   1   289,569,622
   
                                   
  FUTURES   Financial Transactions Own account   Foreign Currency   Upon maturity of differences   OTC - Residents in the country - Non-financial sector   5   2   138   139,207,347
                                   
  OPTIONS (3)   Financial Transactions Own account   Government securities  

With delivery of

underlying asset

  OTC - Residents in the country - Financial sector   16   11   483   255,605,887
                                   
(1) Sum of the absolute values in thousands of pesos of the traded notional values.
(2) Although these transactions do not correspond to derivate financial instruments, they are included in this exhibit upon request of the BCRA.
(3) The notional value of these options amounts to 142,183,107,297. See Notes 5 and 9 to the Consolidated Financial Statements.

 

 
 
 -135-
 

EXHIBIT R

 

ADJUSTMENT TO IMPAIRMENT LOSS - ALLOWANCES FOR LOAN LOSSES

AS OF JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

               
      ECL of remaining life of the financial asset      
Accounts Balances as of ECL for the     Monetary   Balances as of
  12.31.23 following FI with significant FI with (loss)   06.30.24
    12 months increases of impairment generated by    
      credit risk   allowances    
               
               
Other financial assets 2,227,285 46,785 - 106,607 (1,022,971)   1,357,706
               
Loans and other financing 85,889,143 17,643,612 5,026,853 22,221,819 (42,411,530)   88,369,897
       Other financial institutions 6,826,610 5,902,161 272,427 2,992 (3,162,707)   9,841,483
       Non-financial Private sector and Residents Abroad 79,062,533 11,741,451 4,754,426 22,218,827 (39,248,823)   78,528,414
Overdrafts 6,175,018 2,295,457 (586,398) 1,634,656 (3,454,540)   6,064,193
Instruments 6,911,653 2,603,842 (155,405) (287,072) (3,126,786)   5,946,232
Mortgage loans 5,946,090 113,159 1,071,867 3,050,726 (3,311,532)   6,870,310
Pledge loans 473,501 4,667 (10,139) 50,362 (208,998)   309,393
Consumer loans 17,341,902 1,111,343 1,011,324 5,349,125 (8,359,248)   16,454,446
Credit cards 34,346,813 3,861,520 3,401,562 10,833,702 (17,438,168)   35,005,429
Finance leases 844,623 15,502 64,983 212,897 (431,132)   706,873
Other 7,022,933 1,735,961 (43,368) 1,374,431 (2,918,419)   7,171,538
               
Other debt securities 176,227 109,601 - - (98,113)   187,715
               
Contingent commitments 10,736,669 5,168,602 1,634,321 257,630 (5,610,704)   12,186,518
               
TOTAL ALLOWANCES 99,029,324 22,968,600 6,661,174 22,586,056 (49,143,318)   102,101,836
 
 
 -136-
 

ADJUSTMENT TO IMPAIRMENT LOSS - ALLOWANCES FOR LOAN LOSSES

AS OF DECEMBER 31, 2023

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 41 to the separate financial statements)

 

               
      ECL of remaining life of the financial asset      
Accounts Balances as of ECL for the     Monetary   Balances as of
  31.12.22 following FI with significant FI with credit (loss)   12.31.23
    12 months increases of impairment generated by    
      credit risk   allowances    
               
               
Other financial assets 2,331,523 923,230 - 993,715 (2,021,183)   2,227,285
               
Loans and other financing 117,040,916 25,357,897 8,703,135 54,187,094 (119,399,899)   85,889,143
       Other financial institutions 5,043,684 7,225,837 686,071 (4,484) (6,124,498)   6,826,610
       Non-financial Private sector and Residents Abroad 111,997,232 18,132,060 8,017,064 54,191,578 (113,275,401)   79,062,533
Overdrafts 5,835,904 2,439,408 1,617,685 1,880,314 (5,598,293)   6,175,018
Instruments 4,272,049 7,731,794 573,698 865,082 (6,530,970)   6,911,653
Mortgage loans 9,601,620 412,498 1,850,314 4,074,815 (9,993,157)   5,946,090
Pledge loans 831,368 385,585 66,243 95,438 (905,133)   473,501
Consumer loans 22,946,976 2,587,851 2,254,575 17,050,090 (27,497,590)   17,341,902
Credit cards 56,518,075 8,136,929 970,729 24,397,261 (55,676,181)   34,346,813
Finance leases 1,066,057 310,564 208,011 349,610 (1,089,619)   844,623
Other 10,925,183 (3,872,569) 475,809 5,478,968 (5,984,458)   7,022,933
               
Other debt securities 179,630 186,467 - - (189,870)   176,227
               
Contingent commitments 15,082,701 7,979,017 433,570 305,978 (13,064,597)   10,736,669
               
TOTAL ALLOWANCES 134,634,770 34,446,611 9,136,705 55,486,787 (134,675,549)   99,029,324

 

 
 
 -137-
 

 

REPORTING SUMMARY FOR

THE PERIOD ENDED JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

This reporting summary was prepared on the basis of the consolidated condensed interim financial statements of the Bank were prepared in accordance with the financial reporting framework set forth by the BCRA. (Communication “A” 6114 as supplemented by the BCRA). Except for the exceptions established by the BCRA which are explained in the following paragraph, such framework is based on International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and adopted by the Argentine Federation of Professionals Councils in Economic Sciences (FACPCE, for its acronym in Spanish). The abovementioned international standards include the IFRS, the International Accounting Standards (IAS) and the interpretations developed by the IFRS Interpretations Committee (IFRIC) or former IFRIC (SIC).

Out of the exceptions set forth by the BCRA to the application of current IFRS, the following affects the preparation of these Reporting Summary:

Within the framework of the convergence process to IFRS established by Communication “A” 6114, as amended and supplemented, the BCRA provided that for fiscal years starting on or after January 1, 2020, financial institutions defined as “Group A” according to BCRA regulations, as such is the case of the Entity, are required to start to apply paragraph 5.5 “Impairment” of IFRS 9 “Financial Instruments” (paragraphs B5.5.1 through B5.5.55) except for exposures to the public sector, considering the exclusion set forth by Communication “A” 6847.

Had the abovementioned paragraph 5.5. “Impairment” been applied in full, according to a global estimate made by the Entity, as of June 30, 2024 and December 31, 2023, its shareholders’ equity would have been reduced by 9,509,597 and 16,828,304, respectively.

Except for what was mentioned in the previous paragraphs, the accounting policies applied by the Entity comply with the IFRS that have been currently approved and are applicable in the preparation of these consolidated condensed interim financial statements in accordance with the IFRS as adopted by the BCRA as per Communication “A” 7899. In general, the BCRA does not allow the early application of any IFRS, unless otherwise specified.

These financial statements as of June 30, 2024 have been approved by the Board of Directors of Banco BBVA Argentina S.A. on August 21, 2024.

Furthermore, the BCRA, through Communications “A” 6323 and 6324, set forth guidelines for the preparation and presentation of the financial statements of financial institutions for fiscal years beginning on or after January 1, 2018, including the additional reporting requirements as well as the information to be submitted as Exhibits.

As a consequence of the application of those standards, the Bank prepares its financial statements according to the new financial reporting framework set forth by the BCRA as of June 30, 2024 and December 31, 2023.

Banco BBVA Argentina S.A. (NYSE; MAE; BYMA: BBAR; Latibex: XBBAR) is a subsidiary of the BBVA Group, its majority shareholder since 1996. In Argentina, it has been one of the major financial institutions since 1886. BBVA Argentina offers retail and corporate banking services to a broad customer base, including individuals, small-to-medium sized companies, and large corporations. As of June 30, 2024, the Entity's total assets, liabilities and shareholders' equity attributable to owners of the Parent amounted to 9,541,317,779; 7,432,811,641; and 2,075,591,591; respectively.

The Entity offers its products and services through a wide multi-channel distribution network with presence in all the provinces in Argentina and the City of Buenos Aires, with more than 4.1 million active customers as of June 30, 2024. That network includes 242 branches providing services to the retail segment and also to small and medium sized-enterprises and organizations.

 
 
 -138-
 

 

REPORTING SUMMARY FOR

THE PERIOD ENDED JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

Corporate Banking is divided by industry sector: Consumers, Heavy Industries and Energy, providing customized services for large companies. To supplement the distribution network, the Entity has 884 ATMs, 849 self-service terminals, 15 in-company banks, one point of Customer service booths. Moreover, it has a telephone banking service, a modern, safe and functional Internet banking platform and a mobile banking app. As regards payroll, Banco BBVA Argentina SA. has 6,101 employees, including 92 employees of BBVA Asset Management Argentina S.A.U., PSA Finance Argentina Compañía Financiera S.A. and Volkswagen Financial Services Compañía Financiera S.A. (active employees at the end of the month, including structural, temporary and expatriate employees).

The loans portfolio net of allowance for loan losses totaled $ 3,814,900,149 as of June 30, 2024, reflecting a 2.40% decrease as compared to the previous year.

As it relates to consumer loans, including pledge loans, credit cards, consumer loans and mortgage loans, the latter jointly with consumer loans decreased the least, by 17.42% in the case of mortgage loans and 12.50% in consumer loans, compared with June 30, 2023.

Banco BBVA Argentina S.A.'s consolidated market share in private-sector financing was 10.54% at period- end, based on the BCRA's daily information (principal balance as of the last day of each consolidated quarter).

In terms of portfolio quality, the Bank managed to obtain very good ratios. As for the nonperforming portfolio (nonperforming financing/total financing) stood at 1.18%, with a 165.50% hedge level (total allowances/nonperforming financing) as of June 30, 2024.

The exposure for securities as of June 30, 2024 totaled $ 2,787,614,488, including repos.

In terms of liabilities, customers’ resources totaled $ 5,810,545,000, with a 22.18% decrease over the last twelve months.

Banco BBVA Argentina S.A.'s consolidated market share in private-sector financing was 7.50% at period- end, based on the information provided by the BCRA on a daily basis (principal amount as of the last day of each quarter).

Breakdown of changes in the main income/loss items

Banco BBVA Argentina S.A. recorded an accumulated profit of 153,380,074 as of June 30, 2024, representing a return on average shareholders' equity of 13.26%, a return on average assets of 2.97%, and a return on average liabilities of 1.93%.

Accumulated net interest income totaled 1,612,593,256, up by 24.76% compared to June 2023. Such increase was driven by increased premiums on reverse repurchase agreements and interest on Cer clause adjustments, offset by interest expenses for checking accounts and UVA clause adjustments.

Accumulated net commission income totaled 118,680,588, decreasing by 14.66% compared to June 2023. This decrease was generated by lower commission income linked to liabilities and insurance. This decrease was offset by lower commission expenses for foreign trade transactions.

As concerns accumulated administrative expenses and personnel benefits totaled 455,704,448, up by 4.71% vis-a-vis June 2023. This increase was due to higher expenses for personnel services, taxes and administrative services hired.

Prospects

In recent months, significant fiscal consolidation and relative exchange stability, combined with a sharp decline in economic activity, have led to a progressive slowdown in inflation. Despite the prevailing uncertainty and related risks, according to BBVA Research, the ongoing adjustments, together with additional measures that could be adopted in the future, could lay the foundation for annual inflation to continue slowing throughout the year. On the other hand, while the economic downturn could start to improve as from mid-year, GDP is expected to fall by around 4.0% in 2024 (remaining unchanged from previous forecasts) after having declined 1.6% in 2023. Year-end inflation for 2024 is projected at 135% (with a downward bias), compared to 211% at the end of 2023.

 
 
 -139-
 

 

REPORTING SUMMARY FOR

THE PERIOD ENDED JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

As of June 2024, private credit in Argentine pesos grew 176% on y-o-y terms, whereas BBVA Argentina increased its loans portfolio in Argentine pesos by 230%1. Neither the financial system nor BBVA managed to outgrow inflation on y-o-y terms (which reached 272% p.a. in June 2024). However, starting in April 2024, BBVA Argentina began to grow above inflation month after month, with the banking system following suit since May. The Bank’s consolidated market share in total private loans rose 153 basis points, from 9.01% in June 2023 to 10.54% in June 2024, maintaining a two digit share.

As to total private deposits, the financial system grew 167%, whereas the Bank’s portfolio rose 185%, without exceeding the inflation level in any case. BBVA Argentina’s consolidated market share in private deposits stood at 7.50%, 46 basis points higher than in the prior year, which stood at 7.03%.

BBVA Argentina continues to monitor actively its businesses, financial conditions and results of operations and considers itself to be in a competitive position to continue facing the challenges posed by the context. The Bank has a low cost of funding due to the appropriate structure of its deposits, a strong capital and liquidity position and the optimal portfolio quality in relation to the financial system.

Regarding ESG, BBVA Argentina has a corporate responsibility with society, inherent to the Bank's business model, which promotes financial inclusion and education and supports scientific research and culture. In this context and as part of its sustainable real estate refurbishment plan, aimed at improving the experience of both employees and customers, BBVA has invested over ARS 3.5 billion in Argentina in the refurbishment of 10 branches. The sustainability criteria being adopted at the several branches include reduced water consumption, storage and collection of recyclable products, implementation of solar energy for electricity generation and water heating, and the installation of highly efficient carpentry and micro-perforated textile facades for solar control.

Regarding digitization, our service offer has evolved in such a way that by the end of June 2024, mobile monetary transactions grew by 60% YoY. During the quarter, the acquisition of new customers through digital channels exceeded traditional channels by 84%, whereas in June 2023 it was approximately 81%.

Finally, BBVA Argentina continues to actively monitor its businesses, the financial conditions, and results of its operations to maintain a competitive position and face the challenges of a pivotal year for Argentina.

The Bank’s goal for 2024 will be to maintain its current strength built all over the years, within the framework of a decisive year for Argentina.

 


1 Source: BCRA Reporting regime siscen as of June 30, 2024. Capital balances as of the last day of each period, in nominal terms.

 
 
 -140-
 

 

REPORTING SUMMARY FOR

THE PERIOD ENDED JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

CONSOLIDATED BALANCE SHEET STRUCTURE COMPARATIVE
 WITH THE SAME PERIODS OF PREVIOUS FISCAL YEARS
(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)
         
                     
                     
    06.30.24   06.30.23   06.30.22   06.30.21   06.30.20
                     
                     
Total assets   9,541,317,779   11,641,077,987   11,255,723,248   11,352,869,313   10,693,716,164
                     
Total liabilities   7,432,811,641   9,534,455,271   9,381,875,133   9,607,357,721   8,820,638,966
                     
Shareholders' Equity Parent   2,075,591,591   2,075,289,251   1,841,115,783   1,710,907,492   1,836,149,325
                     
Shareholders’ Equity Minority interest   32,914,547   31,333,465   32,732,332   34,604,100   36,927,873
                     
Total liabilities + Shareholders' Equity Parent + Minority interest   9,541,317,779   11,641,077,987   11,255,723,248   11,352,869,313   10,693,716,164
                     
 
 
 -141-
 

 

REPORTING SUMMARY FOR

THE PERIOD ENDED JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

CONSOLIDATED STATEMENT OF INCOME STRUCTURE
 WITH THE SAME PERIODS OF PREVIOUS FISCAL YEARS
(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)
     
                   
  06.30.24   06.30.23   06.30.22   06.30.21   06.30.20
                   
                   
Net interest income 1,612,593,256   1,292,516,963   803,550,713   633,240,861   654,964,191
                   
Net commission income 118,680,588   139,071,662   144,879,387   120,192,495   100,317,193
                   
Net income from measurement of financial instruments at fair value through profit or loss 64,043,542   59,635,439   49,143,605   39,771,889   45,693,363
Net income (loss) from write-down of assets at amortized cost and at fair value through OCI 88,276,385   8,685,492   4,221,433   (695,534)   (19,298,758)
Foreign exchange and gold gains/(losses) 32,465,093   16,855,876   28,548,516   28,567,497   55,201,767
Other operating income 62,315,361   52,528,102   58,271,260   46,333,223   44,122,383
Loan loss allowance (73,421,769)   (78,837,366)   (40,985,039)   (55,807,837)   (85,941,294)
                   
Net operating income 1,904,952,456   1,490,456,168   1,047,629,875   811,602,594   795,058,845
                   
                   
Personnel benefits (216,137,933)   (209,189,752)   (186,938,788)   (168,624,924)   (170,513,408)
Administrative expenses (239,566,515)   (226,031,786)   (187,589,392)   (154,899,062)   (150,210,492)
Asset depreciation and impairment (30,128,337)   (25,945,328)   (29,147,883)   (31,192,297)   (33,729,694)
Other operating expenses (224,066,806)   (201,408,645)   (154,978,655)   (140,792,246)   (120,536,024)
                   
Operating income 1,195,052,865   827,880,657   488,975,157   316,094,065   320,069,227
                   
Income/(loss) from associates and joint ventures (931,519)   1,926,550   (765,169)   1,860,400   4,301,293
                   
Loss on net monetary position (946,920,630)   (549,094,385)   (366,493,281)   (224,739,499)   (127,143,334)
                   
Subtotal Subsidiaries 247,200,716   280,712,822   121,716,707   93,214,966   197,227,186
                   
Income before income tax from continuing activities (93,820,642)   (98,839,475)   43,432,304   44,856,511   (85,587,908)
                   
Net income from continuing activities 153,380,074   181,873,347   165,149,011   138,071,477   111,639,278
                   
Net income for the period 153,380,074   181,873,347   165,149,011   138,071,477   111,639,278
 
 
 -142-
 

 

REPORTING SUMMARY FOR

THE PERIOD ENDED JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME STRUCTURE COMPARATIVE
 WITH THE SAME PERIODS OF PREVIOUS FISCAL YEARS
(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)
                     
    06.30.24   06.30.23   06.30.22   06.30.21   06.30.20
                     
Net income for the period   153,380,074   181,873,347   165,149,011   138,071,477   111,639,278
                     
Other comprehensive income components to be reclassified to income/(loss) for the period:                    
                     
Share in Other Comprehensive Income from associates and joint ventures at equity method                    
                     
Income for the period on the Share in OCI from associates and joint ventures at equity method-   -   -   610,298   (85,437)   (745,872)
                     
    -   -   610,298   (85,437)   (745,872)
                     
                     
Profit or losses from financial instruments at fair value through OCI                    
                     
Income / (Loss) for the period from financial instruments at fair value through OCI   (265,051,924)   23,411,673   (98,837,022)   (5,147,418)   74,037,051
Reclassification adjustment for the period   (86,750,307)   5,216,014   (4,221,433)   528,729   19,298,635
Income tax   165,835,965   (14,744,138)   37,770,546   2,439,924   (25,211,909)
                     
    (185,966,266)   13,883,549   (65,287,909)   (2,178,765)   68,123,777
                     
Other comprehensive income components not to be reclassified to income/(loss) for the period:                    
                     
Income or loss on equity instruments at fair value through OCI (IFRS 9, paragraph 5.7.5)                    
                     
Income from financial instruments at fair value through OCI   (149,339)   2,570,397   (168,789)   (100,253)   (318,429)
Income tax   -   -   -   -   73,774
                     
    (149,339)   2,570,397   (168,789)   (100,253)   (244,655)
                     
Total Other Comprehensive Income / (Loss) for the period   (186,115,605)   16,453,946   (64,846,400)   (2,364,455)   67,133,250
                     
Total comprehensive income / (loss)   (32,735,531)   198,327,293   100,302,611   135,707,022   178,772,528
                     
Total Comprehensive income / (loss):                    
Attributable to owners of the Parent   (33,348,380)   197,242,525   102,750,745   136,297,335   177,248,446
Attributable to non-controlling interests   612,849   1,084,768   (2,448,134)   (590,313)   1,524,082

 

 
 
 -143-
 

 

REPORTING SUMMARY FOR

THE PERIOD ENDED JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

CONSOLIDATED CASH FLOW STRUCTURE COMPARATIVE
 WITH THE SAME PERIODS OF PREVIOUS FISCAL YEARS
(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5.)
         
                     
                     
                     
    06.30.24   06.30.23   06.30.22   06.30.21   06.30.20
                     
Total de cash flows generated by / (used in) operating activities   905,870,949   574,610,042   (173,181,799)   736,518,013   (949,660,678)
                     
Total cash flows used in investing activities   (43,153,821)   (18,390,804)   (32,142,238)   (18,221,123)   (6,476,381)
                     
Total cash flows (used in) / generated by financing activities   (65,723,167)   (14,722,961)   28,116,325   (55,971,588)   (71,122,887)
                     
Effect of exchange rate changes   (399,979,230)   66,522,678   (91,813,585)   10,276,438   108,343,795
                     
Effect of net monetary income/(loss) of cash and cash equivalents   (1,001,061,304)   (689,203,860)   (627,248,385)   (571,465,990)   (362,870,833)
                     
                     
Total cash (used in) / generated during the period   (604,046,573)   (81,184,905)   (896,269,682)   101,135,750   (1,281,786,984)
                     
 
 
 -144-
 

 

REPORTING SUMMARY FOR

THE PERIOD ENDED JUNE 30, 2024

(Amounts stated in thousands of Argentine pesos in constant currency –Note 2.1.5. to the consolidated condensed interim financial statements)

(Translation of Financial statements originally issued in Spanish - See Note 54 to the consolidated financial statements)

 

STATISTICAL DATA COMPARATIVE
 WITH THE SAME PERIODS OF PREVIOUS FISCAL YEARS
(Variation of balances over the previous fiscal year)
                   
                   
    06.30.24 /
06.30.23
  06.30.23 /  
06.30.22
  06.30.22 /
06.30.21
  06.30.21 /
06.30.20
 
                   
Total loans   (2.40) %   (4.63) %   1.68 %   (15.99) %  
                   
Total deposits   (22.18) %   (4.30) %   (2.48) %   8.65 %  
                   
Income/(loss)   (15.67) %   10.13 %   19.61 %   23.68 %  
                   
Shareholders’ Equity   0.09 %   12.42 %   7.35 %   (6.81) %  

 

 

    RATIOS COMPARATIVE
     WITH THE SAME PERIODS OF PREVIOUS FISCAL YEARS
                     
                     
    06.30.24   06.30.23   06.30.22   06.30.21   06.30.20
                     
                     
Solvency (a)   28.37 %   22.09 %   19.97 %   18.17 %   21.24 %
                     
Liquidity (b)   69.47 %   84.13 %   76.68 %   75.75 %   63.84 %
                     
Tied-up capital (c)   34.39 %   33.22 %   37.00 %   35.03 %   32.82 %
                     
Indebtedness (d)   3.53   4.53   5.01   5.50   4.71
                     
                     
                     
(a) Shareholders’ Equity/Liabilities.
(b) Sum of cash and deposits in banks, debt securities at fair value through profit or loss (excluding private securities),
        net repo transactions and other debt securities/deposits.
(c) Sum of property and equipment, miscellaneous assets and intangible assets/Shareholders’ Equity.
(d) Total liabilities/Shareholders' Equity.
 
 
 
 

Pistrelli, Henry Martin y Asociados S.A.

25 de mayo 487 - C1002ABI

Buenos Aires, Argentina

 

Tel: (54-11) 4318-1600/4311-6644

Fax: (54-11) 4318-1777/4510-2220

ey.com

 

 

REPORT ON THE REVIEW OF INTERIM CONDENSED

CONSOLIDATED FINANCIAL STATEMENTS

 

To the Directors of

BANCO BBVA ARGENTINA S.A.

CUIT (Argentine taxpayer identification number): 30-50000319-3

Registered office: Av. Córdoba 111

City of Buenos Aires, Argentina

 

 

I.Report on the financial statements

 

 

Introduction

 

1.We have reviewed the accompanying interim condensed consolidated financial statements of BANCO BBVA ARGENTINA S.A. (the “Bank”) and its subsidiaries, which comprise: (a) the condensed consolidated statement of financial position as of June 30, 2024, (b) the condensed consolidated statements of income and other comprehensive income for the three and six months periods ended June 30, 2024, the changes in shareholders’ equity and cash flows for the six-month period then ended, and (c) a summary of significant accounting policies and other explanatory information included in the notes and exhibits that supplement them.

 

Responsibility of the Bank’s Management and Board of Directors in connection with the financial statements

 

2.The Bank’s Board and Management are responsible for the preparation and presentation of the financial statements mentioned in paragraph 1, in conformity with the financial reporting framework set forth by the Central Bank of Argentina (BCRA) which, as indicated in note 2 to the financial statements mentioned in paragraph 1, is based on IFRS (International Financial Reporting Standards), and in particular for the condensed interim financial statements on the International Accounting Standard (“IAS”) 34 "Interim Financial Reporting", as issued by the IASB (International Accounting Standards Board) and adopted by the FACPCE (Argentine Federation of Professional Councils in Economic Sciences), including the exceptions established by the BCRA explained in the such note. The Bank’s Board and Management are also responsible for the internal control they may deem necessary for the interim financial statements to be prepared free of material misstatements, whether due to errors or irregularities.

Auditors’ responsibility

 

3.Our responsibility is to conclude on the financial statements mentioned in paragraph 1 based on our review, which was performed in accordance with the provisions of FACPCE Technical Resolution No. 37 and with BCRA minimum external auditing standards applicable to the review of interim financial statements and in compliance with the ethical requirements relevant to the audit of the Bank’s annual financial statements. A review of interim financial statements consists of making inquiries, mainly from the persons in charge of accounting and financial issues, as well as applying analytical procedures and other review procedures. The scope of a review is considerably narrower than that of a financial statements audit, therefore, we cannot obtain reasonable assurance that we will become aware of all the material issues that may arise in an audit. Therefore, we do not express an audit opinion.
 
 
 
 

Pistrelli, Henry Martin y Asociados S.A.

25 de mayo 487 - C1002ABI

Buenos Aires, Argentina

 

Tel: (54-11) 4318-1600/4311-6644

Fax: (54-11) 4318-1777/4510-2220

ey.com

 

Conclusion

 

4.Based on our review, nothing came to our attention making us believe that the financial statements mentioned in paragraph 1 are not prepared, in all material respects, in accordance with the financial reporting framework set forth by the BCRA and referred to in paragraph 2.

 

Emphasis on certain aspects disclosed in the financial statements

 

5.We would like to draw attention to the information contained in Note 2. “Basis for the preparation of these financial statements and applicable accounting standards – Applicable Accounting Standards” where the Bank quantifies the effects of the application of section 5.5 “Impairment in value” of IFRS 9 “Financial instruments” to financial assets that comprise exposures to the public sector, which were temporarily excluded from such application through BCRA Communiqué “A” 6847, which is explained in the note.

 

This issue does not change the conclusion stated in paragraph 4, but it should be taken into account by the users of IFRS for interpreting the accompanying financial statements mentioned in paragraph 1.

 

6.As further explained in Note 54. to the interim condensed consolidated interim financial statements mentioned in paragraph 1., certain accounting practices used by the Bank to prepare the accompanying financial statements conform with the financial reporting framework set forth by the BCRA but may not conform with the accounting principles generally accepted in other countries.

 

Other matters

 

7.We also issued a separate report on the interim condensed separate financial statements of BANCO BBVA ARGENTINA S.A. as of the same date and for the same periods indicated in paragraph 1.

 

II.Report on other legal and regulatory requirements

 

In compliance with current regulations, we further report that:

 

a)The condensed consolidated financial statements mentioned in paragraph 1 are being transcribed to the Book of Balance Sheets for Publication and result from books kept, in their formal respects, in conformity with current regulations considering what is mentioned in note 2.7.

 

 
 
 
 

Pistrelli, Henry Martin y Asociados S.A.

25 de mayo 487 - C1002ABI

Buenos Aires, Argentina

 

Tel: (54-11) 4318-1600/4311-6644

Fax: (54-11) 4318-1777/4510-2220

ey.com

 

b)As of June 30, 2024, liabilities accrued in employee and employer contributions to the Integrated Pension Fund System, as recorded in the Bank’s accounting books, amounted to ARS 4,962,957,754, none of which was due and payable as of that date.

 

c)The information included in the “Consolidated Balance Sheet Structure”, the “Consolidated Statement of Income Structure” and the “Consolidated Cash Flows Structure” of the Reporting Summary for the period ended June 30, 2024, filed by the Bank jointly with the financial statements to comply with CNV (Argentine Securities Commission) regulations, arises from the Bank’s accompanying interim condensed consolidated financial statements as of June 30, 2024 and as of June 30, 2023, 2022, 2021 and 2020, which are not included as exhibits. In addition, we report that the interim condensed consolidated financial statements as of June 30, 2021 and 2020, to which we refer, which should be read jointly with this report, were reviewed by other auditors who issued their review reports on August 24, 2021 and August 25, 2020, respectively.

 

d)As stated in note 48 to the accompanying condensed consolidated financial statements, the Bank carries shareholders’ equity and a contra account to eligible assets that exceed the minimum amounts required by relevant CNV regulations for these items as of June 30, 2024.

 

City of Buenos Aires

August 21, 2024

PISTRELLI, HENRY MARTIN Y ASOCIADOS S.A.
 
 
 
JAVIER J. HUICI
Partner
Certified Public Accountant (U.B.A.)
 
 
 
 

Pistrelli, Henry Martin y Asociados S.A.

25 de mayo 487 - C1002ABI

Buenos Aires, Argentina

 

Tel: (54-11) 4318-1600/4311-6644

Fax: (54-11) 4318-1777/4510-2220

ey.com

 

REPORT ON THE REVIEW OF INTERIM CONDENSED

SEPARATE FINANCIAL STATEMENTS

 

 

To the Directors of

BANCO BBVA ARGENTINA S.A.

CUIT (Argentine taxpayer identification number): 30-50000319-3

Registered office: Av. Córdoba 111

City of Buenos Aires, Argentina

 

 

 

I.Report on the financial statements

 

Introduction

 

1.We have reviewed the accompanying interim condensed separate financial statements of BANCO BBVA ARGENTINA S.A. (the “Bank”), which comprise: (a) the condensed separate statement of financial position as of June 30, 2024; (b) the condensed separate statements of income and other comprehensive income for the three and six months periods ended June 30, 2024, the changes in shareholders’ equity, and cash flows for the six-month period then ended, and (c) a summary of significant accounting policies and other explanatory information included in the notes and exhibits that supplement them.

 

Responsibility of the Bank’s Management and Board of Directors in connection with the financial statements

 

2.The Bank’s Board and Management are responsible for the preparation and presentation of the financial statements mentioned in paragraph 1 in conformity with the financial reporting framework set forth by the Central Bank of Argentina (BCRA) which, as indicated in note 2 to the financial statements mentioned in paragraph 1, is based on IFRS (International Financial Reporting Standards), and in particular for the condensed interim financial statements on the International Accounting Standard (“IAS”) 34 "Interim Financial Reporting", as issued by the IASB (International Accounting Standards Board) and adopted by the FACPCE (Argentine Federation of Professional Councils in Economic Sciences), including the exceptions established by the BCRA explained in such note. The Bank’s Board and Management are also responsible for the internal control they may deem necessary for the interim financial statements to be prepared free of material misstatements, whether due to errors or irregularities.

Auditors’ responsibility

 

3.Our responsibility is to conclude on the financial statements mentioned in paragraph 1 based on our review, which was performed in accordance with the provisions of FACPCE Technical Resolution No. 37 and with B.C.R.A. minimum external auditing standards applicable to the review of interim financial statements, and in compliance with the ethical requirements relevant to the audit of the Bank’s annual financial statements. A review of interim financial statements consists of making inquiries, mainly from the persons in charge of accounting and financial issues, as well as applying analytical procedures and other review procedures. The scope of a review is considerably narrower than that of a financial statements audit; therefore, we cannot obtain reasonable assurance that we will become aware of all the material issues that may arise in an audit. Therefore, we do not express an audit opinion.
 
 
 
 

Pistrelli, Henry Martin y Asociados S.A.

25 de mayo 487 - C1002ABI

Buenos Aires, Argentina

 

Tel: (54-11) 4318-1600/4311-6644

Fax: (54-11) 4318-1777/4510-2220

ey.com

 

Conclusion

 

4.Based on our review, nothing came to our attention making us believe that the financial statements mentioned in paragraph 1 are not prepared, in all material respects, in accordance with the financial reporting framework set forth by the BCRA and referred to in paragraph 2.

 

Emphasis on certain aspects disclosed in the financial statements

 

5.We would like to draw attention to the information contained in Note 2. “Basis for the preparation of these financial statements and applicable accounting standards” where the Bank quantifies the effects of the application of section 5.5 “Impairment in value” of IFRS 9 “Financial instruments” to financial assets that comprise exposures to the public sector, which were temporarily excluded from such application through BCRA Communiqué “A” 6847, which is explained in the note.

 

This issue does not change the conclusion stated in paragraph 4, but it should be taken into account by the users of IFRS for interpreting the accompanying financial statements mentioned in paragraph 1.

 

6.As further explained in Note 41. to the interim condensed separate interim financial statements mentioned in paragraph 1., certain accounting practices used by the Bank to prepare the accompanying financial statements conform with the financial reporting framework set forth by the BCRA but may not conform with the accounting principles generally accepted in other countries.

 

Other matters

 

7.We also issued a separate report on the interim condensed consolidated financial statements of BANCO BBVA ARGENTINA S.A. and its subsidiaries as of the same date and for the same periods indicated in paragraph 1.

 

 

II.Report on other legal and regulatory requirements

 

In compliance with current regulations, we further report that:

 

a)The condensed separate financial statements mentioned in paragraph 1 are being transcribed to the Book of Balance Sheets for Publication and result from books kept, in their formal aspects, in conformity with the current regulations considering what was mentioned in note 2.7. to the condensed consolidated financial statements.
 
 
 
 

Pistrelli, Henry Martin y Asociados S.A.

25 de mayo 487 - C1002ABI

Buenos Aires, Argentina

 

Tel: (54-11) 4318-1600/4311-6644

Fax: (54-11) 4318-1777/4510-2220

ey.com

 

b)As of June 30, 2024, liabilities accrued in contributions to the Integrated Pension Fund System resulting from the Bank’s accounting books amounted to ARS 4,962,957,754, none of which was due and payable as of that date.

 

c)As stated in note 48 to the condensed consolidated financial statements as of such date, the Bank carries shareholders’ equity and a contra account to eligible assets that exceed the minimum amounts required by relevant CNV (Argentine Securities Commission) regulations for these items as of June 30, 2024.

 

 

City of Buenos Aires

August 21, 2024

 

PISTRELLI, HENRY MARTIN Y ASOCIADOS S.A.
 

 

 

 

 
JAVIER J. HUICI
Partner
Certified Public Accountant (U.B.A.)
 

 

 

 
 
 

 

SUPERVISORY COMMITTEE’S REPORT

 

 

To the Shareholders of

Banco BBVA Argentina S.A.

Registered office: Av. Córdoba 111

City of Buenos Aires, Argentina

 

1. Identification of the interim financial statements subject to review

 

In our capacity as members of the Supervisory Committee of Banco BBVA Argentina S.A. (hereinafter, either “BBVA Argentina” or the “Entity”) designated at the General Ordinary and Extraordinary Shareholders’ Meeting held on April 26, 2024, and in compliance with the terms of Section 294 of Argentine Companies Law No. 19,550, we have reviewed the condensed interim financial statements and its subsidiaries presented as of June 30, 2024, which include the consolidated condensed statement of financial position, the consolidated condensed statements of income and other comprehensive income for the three and six-month periods ended June 30, 2024, the consolidated condensed statements of changes in shareholders’ equity, and cash flows for the six-month periods then ended and a summary of the significant accounting policies and other explanatory information included in their respective supplementary notes and exhibits.

 

We have also reviewed the separate condensed financial statements of BBVA Argentina as of June 30, 2024, and the separate condensed statement of financial position, the separate condensed statements of income, other comprehensive income for the three and six-month periods ended June 30, 2024, the separate condensed statements of changes in shareholders’ equity and cash flows for the six-month period then ended, and a summary of the significant accounting policies and other explanatory information included in their supplementary notes and exhibits.

 

The Entity is responsible for the preparation and presentation of the above-mentioned financial statements in accordance with the financial reporting framework applicable to Financial Institutions established by the Central Bank of Argentina (BCRA), as well as for the design, implementation and maintenance of such internal control as the Entity might deem necessary to allow for the preparation of financial statements free from material misstatements.

 

2.Scope of our Review

 

In discharging our duties, we have observed the auditing standards in force and we have taken into consideration the work performed by the Entity’s external auditors PISTRELLI, HENRY MARTIN Y ASOCIADOS S.A., who, on August 21, 2024, issued their limited review report on the consolidated and separate condensed interim financial statements as of June 30, 2024, including an unqualified conclusion.

 

The review of interim financial statements conducted by such auditors is substantially lesser in scope than an audit and, therefore, is not sufficient to become aware of all substantial issues that might arise during an audit. Therefore, the auditors do not render such an opinion on the financial statements referred to in item I.

 

Since the Supervisory Committee is not responsible for management control, the review did not encompass the corporate criteria and decisions of the Entity’s several areas, for such issues are the exclusive responsibility of the Board of Directors.

 

3. Supervisory Committee’s Opinion

 

Based on our review, we have no observations to raise on the accompanying interim financial statements of BBVA Argentina for the six-month period ended June 30, 2024 referred to in the first paragraph of Item 1 of this report, except as set forth in the following item 4.

 

Furthermore, the financial statements referred to in item 1 of this report reflect all substantial facts and circumstances that are known to us.

 

 
 
 

 

4. Emphasis Matter

 

As explained in Note 2 to the accompanying consolidated and separate financial statements, such financial statements were prepared by the Entity’s Board of Directors and Management in accordance with the financial reporting framework set forth by the BCRA. Such financial reporting framework differs from the IFRS in the following aspects:

i.As stated in note 2. to the accompanying consolidated and separate financial statements, “Basis for the preparation of financial statements and note 2. “Basis for the presentation of these financial statements and applicable accounting standards – Applicable Accounting Standards” where the Bank quantifies the effects of the application of section 5.5 “Impairment in value” of IFRS 9 “Financial instruments” to financial assets that comprise exposures to the public sector, which were temporarily excluded from such application through BCRA Communication “A” 6847, which are explained in the note.

 

This issue does not change the conclusion stated in paragraph 3, but it should be taken into account by the users of IFRS for interpreting the accompanying financial statements mentioned in item 1.

 

 

5. Information Required by Applicable Provisions

 

In accordance with applicable legal and regulatory standards, we hereby report that:

 

i.The accompanying consolidated and separate condensed interim financial statements are pending transcription into the Financial Statements for Reporting Purposes book, and considering what was mentioned in Note 2.7 to the condensed consolidated financial statements, they arise from accounting records kept, in all formal aspects, in accordance with the laws in force;

 

In addition, we have reviewed the Reporting Summary required by the Argentine Securities Commission (CNV), upon which, as far as concerns our field of competence, we have no observations to make.

 

ii.We further represent that, during the reporting period, we have carried out all duties, to the extent applicable, set forth in Section 294 of Argentine Companies Law No. 19,550.

 

We further represent that any member of this Supervisory Committee is authorized to individually sign, on behalf of the Supervisory Committee, all documents referred to in the first paragraph herein and all copies of this report.

 

City of Buenos Aires, August 21, 2024.

 

GONZALO J. VIDAL DEVOTO
ATTORNEY

C.P.A.C.F. Volume°97- Page° 910

 

For the Supervisory Committee

 

 

 


Banco BBVA Argentina (NYSE:BBAR)
Gráfica de Acción Histórica
De Nov 2024 a Dic 2024 Haga Click aquí para más Gráficas Banco BBVA Argentina.
Banco BBVA Argentina (NYSE:BBAR)
Gráfica de Acción Histórica
De Dic 2023 a Dic 2024 Haga Click aquí para más Gráficas Banco BBVA Argentina.