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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 August 2019

Commission File Number: 001-12568

BBVA French 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  ☒            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  ☒

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  ☒

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  ☒

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

 

 

 

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BBVA Banco Francés S.A.

TABLE OF CONTENTS

 

Item

    
1.    BBVA Argentina reports consolidated second quarter earnings for fiscal year 2019.

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BBVA Banco Frances S.A. announces results for

the second quarter of 2019

Buenos Aires, August  12, 2019 - BBVA Banco Francés S.A (NYSE; BYMA; MAE: BBAR; LATIBEX: XBBAR) (“ BBVA Argentina” or “ BBVA” or “ the Bank ”) announced today its results for the second quarter ended June 30, 2019

 

 

Highlights

 

 

 

  •  

BBVA Argentina’s net income reached AR$ 6.8 billion for the second quarter of 2019, a 16.9% increase compared to the previous quarter. Net income during the first quarter 2019 included the impact of the sale of 51% of the Bank’s stake in Prisma Medios de Pago S.A. (“Prisma”) and the market valuation of the remaining 49%, excluding such impact the growth in the quarter would have been 74.1%.

 

  •  

During the second quarter of 2019, BBVA reached an average return on assets (ROA) of 7% and an average return on equity (ROE) of 58.4%.

 

  •  

In terms of activity, the private sector loan portfolio totaled AR$ 186.6 billion, remaining at a similar level compare to the previous quarter while increasing 15.1% in the last twelve months. Including the VW Financial Services portfolio growth would have reached 1.1% and 19.9%, respectively. The consolidated market share with related companies was 8.5% as of June 30, 2019, earning 27 basis points (bp) compared to the June 2018 quota.

 

  •  

As of June 30, 2019, the asset quality ratio (Non-Performing Loans/Total loans) reached 2.66%, with a coverage ratio of 112.87% (Total allowances/NPL). It is important to note that although asset quality indicators show some deterioration, they remain within the lowest levels in the financial system.

 

  •  

Total deposits grew at a faster pace than loans, both during the quarter and annually, increasing 2.3% and 47.9%, respectively.

 

  •  

The efficiency ratio for the second quarter of 2019 was 34.2%, showing an improvement of 268 bp during the quarter and of 1,582 compared to the ratio of the same period of 2018.

 

  •  

As of June 30, 2019, BBVA had a total consolidated capital ratio of 16.7%, which represents an excess of AR$ 24.2 billion or 103.6% over the minimum required. The Tier I ratio reached 16%. Liquid assets accounted for 60.7% of the Bank’s deposits.

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Presentation of the information

 

 

This earnings release has been prepared in accordance with the accounting framework established by the Central Bank of Argentina (“BCRA”), based on International Financial Reporting Standards (“I.F.R.S.”) and the resolutions adopted by the International Accounting Standards Board (“I.A.S.B”) and by the Federación Argentina de Consejos Profesionales de Ciencias Económicas (“F.A.C.P.E.”) with the temporary exception of (i) Expected losses of IFRS 9 “Financial Instruments”, which will be applicable for the fiscal year beginning on or after January 1st, 2020 (ii) IAS 29 “Financial Reporting in Hyperinflationary Economies”, which will be applicable for the fiscal year beginning on or after January 1st, 2020, (iii) the recording of a contingency provision relating to the uncertainty of certain tax positions required by the BCRA, and (iv) the valuation adjustment established by the BCRA applied to the valuation of the remaining stake maintained by the Bank in Prisma. Data and figures shown in this Earnings Release may differ from the ones shown in the Bank’s annual report on Form 20-F.

The information in this press release contains unaudited financial information that consolidates, line item by line item, all of the banking activities of BBVA Francés (Francés Valores, Francés Asset Management and Consolidar AFJP). As of the first quarter of 2018, the Bank’s share interest in PSA Finance is no longer disclosed on a consolidated basis but is recorded as Investments in associates (recorded under the proportional equity method), and the corresponding results are recorded as “Income from associates”, as with Rombo Compañia Financiera. As of September 25, 2018, the Bank’s share interest in Volkswagen Financial Services is no longer disclosed on a consolidated basis.

All the figures in this press release are expressed in pesos (AR$). The balances in foreign currency as of June 30, 2019 were converted into pesos at the reference exchange rate published by the BCRA for such date (AR$ 42.4483/USD).

The information published by the BBVA Group for Argentina is prepared according to IFRS, non- considering the temporary exceptions established by BCRA

 

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Quarterly Results

 

 

 

Condensed Income Statement (1)   

Quarter ended

    D % Quarter ended 6/30/19
vs Quarter ended 		 

In thousands of pesos except EPS, ADS

   06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

Net interest income

     13,036,118       9,751,251       5,970,921       33.7 %      118.3 % 

Net fee income

     1,943,656       1,494,815       919,141       30.0 %      111.5 % 

Net income of financial instruments

     2,115,028       2,464,277       (647,534 )      (14.2 %)      (426.6 %) 

Result from assets at amortised cost

     (36,380 )      (4,183 )      (68,298 )      769.7 %      (46.7 %) 

Foreign exchange difference

     1,321,560       1,174,542       2,009,608       12.5 %      (34.2 %) 

Other operating income

     4,389,805       3,390,923       622,728       29.5 %      604.9 % 

Provision for loan losses

     (1,864,924 )      (2,358,139 )      (804,248 )      (20.9 %)      131.9 % 

Net operating income

     20,904,863       15,913,486       8,002,318       31.4 %      161.2 % 

Personnel expenses

     (3,242,029 )      (2,712,587 )      (1,929,968 )      19.5 %      68.0 % 

Administrative expenses

     (2,421,106 )      (2,044,423 )      (1,646,632 )      18.4 %      47.0 % 

Depreciation and amortization of assets

     (393,926 )      (358,361 )      (207,860 )      9.9 %      89.5 % 

Other operating expenses

     (6,074,392 )      (2,538,043 )      (1,428,480 )      139.3 %      325.2 % 

Operating Expenses

     (12,131,453 )      (7,653,414 )      (5,212,940 )      58.5 %      132.7 % 

Operating income

     8,773,410       8,260,072       2,789,378       6.2 %      214.5 % 

Income from associates and joint ventures

     312,483       117,003       230,867       167.1 %      35.4 % 

Net income before income tax

     9,085,893       8,377,075       3,020,245       8.5 %      200.8 % 

Income tax from continuing operations

     (2,305,571 )      (2,366,004 )      (866,387 )      (2.6 %)      166.1 % 

Net income including non-controlling shareholders

     6,780,322       6,011,071       2,153,858       12.8 %      214.8 % 

Net income attributable to non-controlling shareholders

     199       3,452       29,938       (94.2 %)      (99.3 %) 

Net income

     6,780,123       6,007,619       2,123,920       12.9 %      219.2 % 

Other comprehensive income

     27,259       (184,020 )      68,085       (114.8 %)      (60.0 %) 

Total net income

     6,807,382       5,823,599       2,192,005       16.9 %      210.6 % 

Earnings per share (2)

     11.1       9.8       3.5       12.9 %      219.2 % 

Earnings per ADS (3)

     33.2       29.4       10.4       12.9 %      219.2 % 

 

(1)

Exchange Rate: $ 43.3533 = u$s 1

(2)

Assumes 612,659,638 ordinary shares.

(3)

Each ADS represents three ordinary shares

BBVA’s net income amounted to AR$ 6.8 billion as of June 30, 2019, growing 12.9% compared to the previous quarter and 219.2% compared to the previous quarter of 2018.

It is important to mention that the first quarter of 2019 included both the result of the sale of Prisma and the market valuation of the remaining stake. Excluding such impact growth in the quarter would have been 74.1%

Accumulated net income for the first six months of the year reached AR$ 12.8 billion, representing ROE of 59.1% and ROA of 6.9%. Excluding Prisma’s impact these ratios would have reached 5.7% and 50.3%, respectively.

 

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Main Figures    Quarter ended    

D bp Quarter ended 06/30/2019

vs quarter ended

 
     06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

ROA (Average Assets) (1)

     7.0 %      6.6 %      3.5 %      40       351  

Accumulated ROA

     6.9 %        3.1 %        382  

ROE (Average Shareholders’ Equity) (1)

     58.4 %      58.8 %      26.4 %      (37 )      3,198  

Accumulated ROE

     59.1 %        23.5 %        3,555  

NIM (1)(2)

     20.0 %      18.2 %      11.2 %      178       872  

NIM with foreign exchange difference (1)(2)

     23.1 %      20.3 %      14.7 %      278       844  

Efficiency ratio (3)

     34.2 %      36.9 %      50.0 %      (268 )      (1,582 ) 

Accumulated Efficiency ratio

     35.4 %        47.5 %        (1,209 ) 
          

 

(1)

Annualized.

(2)

NIM: ((Net interest income + Gross income tax NII+ Cost of deposits insurance) + (Net income of financial instruments + Results from assets at amortised cost—Non deliverable forward )) / Interest Earning Assets

(3)

(Personnel and administrative expenses + Depreciations and amortizations) / ((Net interest income + Gross Income Tax + Cost of the deposits insurance) + (Fee income + Net income of financial instruments + Results from assets at amortised cost + FX Difference + Fees included in other operating income))

 

 

Net operating income

 

 

 

Net Operating Income   

Quarter

ended

    D % Quarter ended 6/30/19
vs Quarter ended 		 

In thousands of pesos

   06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

Net interest income

     13,036,118       9,751,251       5,970,921       33.7 %      118.3 % 

Net fee income

     1,943,656       1,494,815       919,141       30.0 %      111.5 % 

Net income of financial instruments

     2,115,028       2,464,277       (647,534 )      (14.2 %)      (426.6 %) 

Result from assets at amortised cost

     (36,380 )      (4,183 )      (68,298 )      769.7 %      (46.7 %) 

Foreign exchange difference

     1,321,560       1,174,542       2,009,608       12.5 %      (34.2 %) 

Other operating income

     4,389,805       3,390,923       622,728       29.5 %      604.9 % 

Provision for loan losses

     (1,864,924 )      (2,358,139 )      (804,248 )      (20.9 %)      131.9 % 

Net operating income

     20,904,863       15,913,486       8,002,318       31.4 %       161.2 %  

Net operating income amounted to AR$ 20.9 billion, including AR$ 3.2 billion accounted for as Other operating income, which is related to the results from the application of the inflation adjustment to the 2018 income tax calculation. At the same time a provision for the same amount is accounted for in Other operative expenses line item.

In addition, as was mention, the first quarter of 2019 includes the impact of the sale and the market valuation of Prisma, excluding both impacts, net operating income should grew 62.2% during the quarter and 161.2% compared with the same period of 2018.

During the third quarter of 2018 a reclassification was performed due to the change in criteria regarding the deferral of credit card emission fees, which were previously recorded as Net interest income and are now recorded as Net fee income and other operating income.

Moreover, since the first quarter of 2018, insurance fees previously recorded in other operative income are now recorded as Net fee income.

 

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  •  

Net interest income

 

Net Interest Income   

Quarter ended

    D % Quarter ended 06/30/19
vs Quarter ended 		 

(in thousands of pesos)

   06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

Interest Income

     23,018,132       18,375,643       9,478,091       25.3 %       142.9 %  

Loan interest income

     11,354,948       11,030,023       7,355,382       2.9 %      54.4 % 

Income from adjustments (CER/ UVA)

     2,275,214       1,585,079       513,337       43.5 %      343.2 % 

Income from Public Securities

     8,505,653       4,725,693       1,187,403       80.0 %      616.3 % 

Others

     882,317       1,034,848       421,969       (14.7 %)      109.1 % 

Interest Expenses

     (9,982,014 )       (8,624,392 )       (3,507,170 )       15.7 %       184.6 %  

Interest Expenses

     (9,551,464 )      (8,328,960 )      (3,250,544 )      14.7 %      193.8 % 

Expenses from adjustments (CER/ UVA)

     (430,550 )      (295,432 )      (256,626 )      45.7 %      67.8 % 

Net Income Interest

     13,036,118       9,751,251       5,970,921       33.7 %       118.3 %  

Net interest income increase by 33.7% compared to the previous quarter and 118.3% compared to the second quarter of 2018.

Compared to the first quarter of 2019, interest income increased by 25.3% whereas interest expenses grew at a slower pace, 15.7% quarter over quarter.

Net interest income continue continued to register a positive performance. During the quarter, average interest rate increased for both, loans and public bonds. At the same time, the efficient management of prices put in place by BBVA attenuated the increase of liability interest rates.

NIM

 

Interest-Earning Assets & Interest-Bearing

Liabilities $ +

   06/30/19    

Quarter ended

03/31/19

    06/30/18  

(Average in thousands of pesos)

   Capital     Rate     Capital     Rate     Capital     Rate  

Interest-Earning Assets

     263,862,749       35.9 %      242,964,225       31.2 %      175,925,115       26.5 % 

Interest-Bearing Liabilities

     233,844,452       17.1 %      214,652,486       16.2 %      138,721,270       15.3 % 

NIM without foreign exchange differences

     20.0 %        18.2 %        11.2 %   

NIM including foreign exchange differences

     23.1 %        20.3 %        14.7 %   

NIM $ without foreign exchange differences

     27.6 %        24.4 %        14.7 %   

NIM USD without foreign exchange differences

     4.5 %        5.7 %        3.6 %   

The net interest margin (NIM) including the results for foreign currency exchange differences amounted to 23.1%, increasing 280 basis point (bp) compared to the previous quarter, which included the impact of Prisma. Excluding that impact NIM would have reached 17.7%, so the variation would have been 535 bp.

The ratio net of foreign exchange difference also registered an increase, from 18.2% to 20%.

The NIM in local currency (excluding FX differences) amounted to 27.6%. The increase in the ratio in pesos reflected higher asset interest rates, added to the efficient management of liability rates

The NIM in foreign currency registered a decrease of 113 bp, from 5.7% to 4.5%, mainly due to lower rates of public securities.

 

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Interest-Earning Assets & Interest-Bearing

Liabilities $

   06/30/19    

Quarter ended

03/31/19

    06/30/18  

(Average in thousands of pesos)

   Capital      Rate     Capital      Rate     Capital      Rate  

Interest-Earning Assets

     176,149,210        51.2 %      162,369,052        43.9 %      125,671,511        35.3 % 

Public sector instruments

     57,827,444        64.3 %      44,712,518        49.6 %      16,097,421        33.3 % 

Loans

     117,806,541        44.7 %      116,879,331        41.8 %      108,949,580        27.6 % 

Other interest-earning assets

     515,226        53.6 %      777,204        46.1 %      624,511        29.3 % 

Interest-Bearing Liabilities

     115,855,523        34.1 %      111,221,798        31.0 %      87,973,460        24.0 % 

Saving Accounts

     30,133,170        0.2 %      29,334,491        0.2 %      25,837,725        0.2 % 

Time Deposits

     72,629,412        45.8 %      69,547,645        42.3 %      44,114,943        24.4 % 

Current accounts with interest

     7,264,622        43.8 %      7,350,478        36.2 %      13,185,778        28.2 % 

Corporate Bonds Issued

     4,079,504        53.9 %      3,007,409        46.2 %      1,772,129        30.2 % 

Other interest-bearing liabilities

     1,748,816        44.1 %      1,981,775        47.3 %      3,062,885        29.2 % 

Interest-Earning Assets & Interest-Bearing

Liabilities USD

   06/30/19    

Quarter ended

03/31/19

    06/30/18  

(Average in thousands of pesos)

   Capital      Rate     Capital      Rate     Capital      Rate  

Interest-Earning Assets

     87,713,539        5.3 %      80,595,172        5.6 %      50,253,604        4.4 % 

Public sector instruments

     14,739,938        7.5 %      15,510,718        8.8 %      10,489,064        5.3 % 

Loans

     70,105,466        5.0 %      62,771,546        5.0 %      38,466,819        4.3 % 

Other interest-earning assets

     2,868,135        1.5 %      2,312,908        1.7 %      1,297,721        1.1 % 

Interest-Bearing Liabilities

     117,988,929        0.4 %      103,430,688        0.4 %      58,262,678        0.2 % 

Saving Accounts

     91,810,301        0.0 %      80,600,054        0.0 %      46,406,985        0.0 % 

Time Deposits

     17,823,578        0.6 %      17,334,943        0.6 %      9,831,850        0.5 % 

Current accounts with interest

     3,062,139        0.0 %      401,194        0.0 %      132,734        0.0 % 

Other interest-bearing liabilities

     5,292,911        5.8 %      5,094,497        5.5 %      1,891,108        3.7 % 

 

  •  

Net fee income

 

Net Fee Income          Quarter ended           D % Quarter ended 06/30/19
vs quarter ended 		 

(in thousands of pesos)

   06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

Net fee income

     1,943,656       1,494,815       1,744,892       30.0 %      11.4 % 

Fee income

     4,366,538       3,814,183       3,267,056       14.5 %      33.7 % 

Fee charges on deposits accounts

     1,290,913       1,109,927       886,958       16.3 %      45.5 % 

Credit cards and operations

     1,493,053       1,250,022       1,769,710       19.4 %      (15.6 %) 

Checks

     458,230       326,004       221,466       40.6 %      106.9 % 

Capital markets and securities activities

     48,591       51,074       27,307       (4.9 %)      77.9 % 

Fees related to foreign trade

     202,121       181,020       108,711       11.7 %      85.9 % 

Services of collection

     503,600       521,129       317,097       (3.4 %)      58.8 % 

Generated by subsidiaries

     95,632       97,114       111,828       (1.5 %)      (14.5 %) 

Other fees

     274,398       277,894       (176,022 )      (1.3 %)      (255.9 %) 

Fee Expenses

     (2,422,882 )      (2,319,368 )      (1,522,164 )      4.5 %      59.2 % 

Net fee income grew 30% compared to the previous quarter and 11.4% compared to the second quarter of 2018, partly as a result of the accounting reclassification due to the change in criteria regarding the deferral of credit card emission fees implemented during the third quarter of 2018.

In addition, during the first quarter of 2019, insurance fees were reclassified, from other operative income to other fees.

Fee income increased by 14.5% compared to the previous quarter, mainly due to higher fees for credit cards and ATMs, which includes recurrent annual income, realized during the quarter, due higher fees on deposits accounts, which were partially offset by lower fees for collection and transfer services. In comparison with the second quarter of 2018, fee income grew 33.7%

BBVA, once again gained credit card consumption market share, 118 bp in the first six months of the year, reaching 15.2% of the market.

Fee expenses grew at a slower pace of 4.5% during the quarter and 59.2% compared to the second quarter of 2018, mainly due to fee expenses related to the loyalty program and campaigns to acquire new clients which were partially offset by lower credit card processing charges.

 

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In the new disclosure format applied beginning with the first quarter of 2018, certain fee items are accounted for in other operating income.

 

  •  

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

 

Net income from measurement of financial instruments          Quarter ended           D % Quarter ended 03/31/19
vs Quarter ended 		 

at fail value through profit or loss (in thousands of pesos)

   06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

Net income of financial instruments at fail value

     2,115,028       2,464,277       (647,534 )      (14.2 %)      (426.6 %) 

Income from public securities

     763,084       864,288       269,260       (11.7 %)      183.4 % 

Income from private securities

     795,689       1,591,884       9,512       (50.0 %)      8,265.1 % 

Income from interest rate swaps

     (207,759 )      (126,485 )      (433,324 )      64.3 %      (52.1 %) 

Non deliverable forward

     751,443       112,613       (502,779 )      567.3 %      (249.5 %) 

Income from corporate bonds

     12,571       21,977       9,797       (42.8 %)      28.3 % 

Net income from measurement of financial instruments at fair value recorded a gain of AR$ 2.1 million in the second quarter of 2019. It is important to mention that the previous quarter included the market valuation of the 49% stake in Prisma for a total amount or AR$ 1.6 billion.

The income for the quarter was based on higher income from private securities, which included the dividend received for the Bank’s stake in Prisma for AR$ 716 million and higher results originated by foreign currency forward transactions by AR$ 795.7, which is partially offset by the loss originated by the devaluation of the peso over the foreign currency position of the Bank by AR$ 322.1, reflected in the following chart.

Additionally, lower gains arising from the public securities portfolio and a loss registered in connection with interest rate swaps were accounted.

 

  •  

Foreign exchange difference

 

Foreign Exchange Difference          Quarter ended            D % Quarter ended 06/30/19
vs Quarter ended 		 

(in thousands of pesos)

   06/30/19     03/31/19     06/30/18      03/31/19     06/30/18  

Foreign Exchange Difference

     1,321,560       1,174,542       2,009,608        12.5 %      (34.2 %) 

FX trading

     1,643,710       1,345,238       964,124        22.2 %      70.5 % 

long/Short FX net balance

     (322,150 )      (170,696 )      1,045,484        88.7 %      (130.8 %) 

Foreign exchange difference registered the gain generated by foreign currency buying and selling activity, whereas the result by foreign currency position is explained in the previous paragraph.

 

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  •  

Other operating income

 

Other Operating Income           Quarter ended            D % Quarter ended 06/30/19
vs Quarter ended 		 

(in thousands of pesos)

   06/30/19      03/31/19      06/30/18     03/31/19     06/30/18  

Operating Income

     4,389,805        3,390,923        622,728       29.5 %      604.9 % 

Safe deposits

     143,324        122,349        111,029       17.1 %      29.1 % 

Insurance

     —          —          (818 )      —         —    

Fees on USD credit cards consumption

     290,950        1,939        106,806       n/a       n/a  

Interest on loans and fees related

     317,685        239,738        118,979       32.5 %      167.0 % 

Other fees

     129,279        97,269        71,782       32.9 %      80.1 % 

Total other fees

     881,238        461,295        407,778       91.0 %       116.1 %  

Prisma Sale

     —          2,695,720        —         —         —    

Other operating income

     3,508,567        233,908        214,950       1,400.0 %      1,532.3 % 

Other operating income totaled AR$ 4.4 billion during the second quarter of 2019, growing 29.5% compared to the previous quarter.

During the quarter, it was registered in other operating income an adjustment as consequence of calculating the income tax for the 2018 fiscal year considering the effects of inflation, which are provisioned by the same amount in Other operating expense”.

 

 

Operating Expenses

 

 

 

Operating Expenses          Quarter ended           D % Quarter ended 6/30/19
vs Quarter ended 		 

In thousands of pesos

   06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

Personnel expenses

     (3,242,029 )      (2,712,587 )      (1,929,968 )      19.5 %      68.0 % 

Administrative expenses

     (2,421,106 )      (2,044,423 )      (1,646,632 )      18.4 %      47.0 % 

Depreciation and amortization of assets

     (393,926 )      (358,361 )      (207,860 )      9.9 %      89.5 % 

Other operating expenses

     (6,074,392 )      (2,538,043 )      (1,428,480 )      139.3 %      325.2 % 

Operating Expenses

     (12,131,453 )      (7,653,414 )      (5,212,940 )      58.5 %      132.7 % 

 

(1)

Exchange Rate: $ 43.3533 = u$s 1    

Operating expenses totaled AR$ 12.1 billion, this result includes the above-mentioned provision.

 

  •  

Personnel expenses and Administrative expenses

 

Administrative and Personnel Expenses                      D % Quarter ended 06/30/19
vs quarter ended 		 

(in thousands of pesos)                            

   30/06/19     03/31/19     06/30/18     03/31/19     06/30/18  

Personnel expenses

     (3,242,029 )      (2,712,587 )      (1,929,968 )      19.5 %      68.0 % 

Administrative expenses

     (2,421,106 )      (2,044,423 )      (1,646,632 )      18.4 %      47.0 % 

Electricity and Communications

     (133,341 )      (110,161 )      (68,331 )      21.0 %      95.1 % 

Advertising and Promotion

     (109,829 )      (121,581 )      (124,392 )      (9.7 %)      (11.7 %) 

Fees and external administrative services

     (154,309 )      (92,737 )      (76,380 )      66.4 %      102.0 % 

Taxes

     (635,447 )      (559,847 )      (349,683 )      13.5 %      81.7 % 

Rents

     (160,293 )      (170,833 )      (165,446 )      (6.2 %)      (3.1 %) 

Maintainance, conservation and repairs

     (256,237 )      (278,866 )      (175,265 )      (8.1 %)      46.2 % 

Security Service

     (87,495 )      (85,565 )      (66,631 )      2.3 %      31.3 % 

Carriage of valuables

     (328,363 )      (165,578 )      (237,258 )      98.3 %      38.4 % 

Other

     (555,792 )      (459,255 )      (383,246 )      21.0 %      45.0 % 

Total Employees

     6,242       6,153       6,084       89       158  

Total Branches

     252       252       251       0       —    

 

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Personnel expenses increased by 19.5% compared to the previous quarter and 68% compared to the second quarter of 2018, whereas administrative expenses grew 18.4% and 47% in the same periods, respectively.

The increase in personnel expenses is mainly due to the update in salaries arising from the agreements signed with the labor union and its compensation schemes.

Administrative expenses increased 18.4% during the quarter and 47% compared to the second quarter of 2018. This quarterly and inter-annual increases are mainly explained by higher charges in carriage of valuables due to both, an increase in the amounts transported and the increase in prices, by higher taxes, as a result of higher activity levels and inflation and by higher charges for fees and external administrative services.

Efficiency ratio for the quarter reached 34.2%, registering an improvement compared to the ratios of the previous quarter and the second quarter of 2018 (36.9% and 50%, respectively).

 

  •  

Other operating expenses

 

Other Operating Expenses          Quarter ended           D % Quarter ended 06/30/19
vs Quarter ended 		 

(in thousands of pesos)

   06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

Operating expenses

     (6,074,392 )      (2,538,043 )      (1,428,480 )      139.3 %      325.2 % 

Gross income tax

     (1,440,775 )      (1,372,502 )      (957,432 )      5.0 %      50.5 % 

Gross income tax NII

     (1,103,900 )      (1,090,700 )      (753,360 )      1.2 %      46.5 % 

Gross income tax fees

     (336,875 )      (281,802 )      (204,072 )      19.5 %      65.1 % 

Cost of deposits insurence

     (122,690 )      (109,667 )      (71,851 )      11.9 %      70.8 % 

Other operating expenses

     (4,510,927 )      (1,055,874 )      (399,197 )      327.2 %      1,030.0 % 

Other operating expenses mainly reflected an increase in gross income tax, due to the income in net interest income, fees and income from foreign currency exchange difference, during the period. In addition, beginning in the fourth quarter of 2018, the rate differential between the applied rate and the market rate in credit card financing operations has been recorded under Other operating expenses.

Finally, as was above previously mention, during the second quarter of 2019 a provision was created for any contingency which may arise from the decision adopted regarding the Income Tax for the fiscal year 2018.

 

 

Income from associates

 

 

Income from associates shows the result of non-consolidated companies. During the second quarter of 2019 a gain of AR$ 312.5 million was recorded, mainly due to the equity investment in BBVA Seguros, Volkswagen Financial Services, PSA Finance and Rombo Compañia Financiera.

 

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Balance and activity

 

 

 

 

Loan portfolio

 

 

 

Net Loans          Quarter ended           D % Quarter ended 06/30/19
vs quarter ended 		 

(in thousands of pesos)

   06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

Private & Financial sector loans in $

     119,311,171       114,404,420       114,137,222       4.3 %      4.5 % 

Advances

     9,579,380       8,007,919       14,190,618       19.6 %      (32.5 %) 

Discounted and purchased notes

     15,546,359       15,814,293       17,676,632       (1.7 %)      (12.1 %) 

Consumer Mortgages

     12,045,949       11,045,297       7,357,341       9.1 %      63.7 % 

Car secured loans

     1,562,480       1,650,656       5,348,745       (5.3 %)      (70.8 %) 

Personal loans

     24,412,264       24,421,230       20,666,082       (0.0 %)      18.1 % 

Credit cards

     45,348,160       42,662,066       33,282,575       6.3 %      36.3 % 

Loans to financial sector

     7,095,898       6,068,159       6,094,170       16.9 %      16.4 % 

Other loans

     5,238,392       5,887,122       9,688,354       (11.0 %)      (45.9 %) 

Other receivables

     3,817,112       3,609,237       3,423,950       5.8 %      11.5 % 

Unaccrued interest

     (1,212,317 )      (1,234,203 )      (919,522 )      (1.8 %)      31.8 % 

Less: Allowance for loan losses

     (4,122,506 )      (3,527,356 )      (2,671,723 )      16.9 %      54.3 % 

Private & Financial sector loans in FX

     67,304,344       70,901,075       47,986,010       (5.1 %)      40.3 % 

Advances

     10,125       11,327       11,018       (10.6 %)      (8.1 %) 

Discounted and purchased notes

     4,446,844       7,267,682       5,372,185       (38.8 %)      (17.2 %) 

Credit cards

     2,789,073       2,923,037       2,007,866       (4.6 %)      38.9 % 

Loans to financial sector

     552,890       293,892       96,538       88.1 %      472.7 % 

Other loans

     60,722,826       61,356,511       40,821,518       (1.0 %)      48.8 % 

Other receivables

     429,203       339,239       186,381       26.5 %      130.3 % 

Less: Allowance for loan losses

     (1,646,617 )      (1,290,613 )      (509,496 )      27.6 %      223.2 % 

Total Private Loans

     186,615,515       185,305,495       162,123,232       0.7 %      15.1 % 

Total loans to public sector

     336       439       78       (23.5 %)      330.8 % 

Net Total Loans net of other non resident loans

     186,615,851       185,305,934       162,123,310       0.7 %      15.1 % 

As of the third quarter of 2018, Volkswagen Financial Services Compañia Financiera is no longer recorded on a consolidated basis. Such figures were recorded under Car secured loans.

The private sector loan portfolio amounted to AR$ 186.6 billion, remaining stable compared to the previous quarter and increasing 15.1% in the last twelve months. Including VW Financial Services, the private sector loan portfolio would have increased 1.1% and 19.9% respectively.

The market share of loans reached 8.51% by the end of June 2019, including loans from associated companies (VW Financial Services, PSA Finance and Rombo Compañia Financiera), showing an increase of 27 bp in the last twelve months.

Argentine peso denominated loans grew 4.3% during the quarter and 4.5% annually (4.7% and 11.3%, respectively, including VW). U.S. dollar denominated loans expressed in AR$ fell by 5.1% during the quarter and increased 40.3% compared to June 30, 2018, mainly due to the re-expression of the new value of the currency, while loans measured in U.S. dollar fell in both periods, by 3% and 4.6%, respectively.

Regarding retail loans, credit card financings grew 5.6% during the quarter and 36.4% annually, while mortgages loans reflected the impact of inflation, personal loans remained stable during the quarter and increased 18.1% in the last twelve months.

 

 

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Commercial loans fell 2.4% compared to the previous quarter mainly due to the decrease in the foreign currency denominated portfolio. Compared to the second quarter of 2018, commercial loans grew 9.2%

 

 

Asset quality ratios

 

 

 

Asset Quality Ratios          Quarter ended           D % Quarter ended 06/30/19
vs quarter ended 		 

(in thousands of pesos)

   06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

Non-performing loans (1)

     5,111,322       4,210,743       1,423,719       21.4 %      259.0 % 

Allowance for loan losses

     (5,769,123 )      (4,817,969 )      (3,181,219 )      19.7 %      81.3 % 

Non-performing loans/net total loans

     2.66 %      2.21 %      0.86 %      44       180  

Non-performing priv. loans/net priv. loans

     2.66 %      2.21 %      0.86 %      44       180  

Allowance for loan losses/non-performing loans

     112.87 %      114.42 %      223.44 %      (155 )      (11,057 ) 

Allowance for loan losses/net total loans

     3.00 %      2.53 %      1.92 %      46       107  

(1) Non-performing loans include: all loans to borrowers classified as “Problem”, “Deficient Servicing”, “High Insolvency Risk”, “Difficult Recovery”, “Irrecoverable” and “Irrecoverable for Technical Decision” according to the new Central Bank debtor classification system .

The asset quality ratio (non-performing loans/total loans) was 2.66% with a coverage ratio (allowances/non-performing loans) of 112.87% as of June 30, 2019.

The indicators show some deterioration in the loan portfolio, mainly due to specific cases in the commercial portfolio.

The cost of risk reached 2.5% recording an increase of 41bp during the quarter.

 

Provisions Evolution          Quarter ended           D % Quarter ended 06/30/19
vs quarter ended 		 

(in thousands of pesos)

   06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

Balance at the beginning of the quarter

     4,817,969       4,258,239       2,548,322       13.1 %      89.1 % 

Increase/decrease

     1,788,799       1,090,116       801,330       64.1 %      123.2 % 

Increase/decrease-Foreign exchange diff.

     (46,350 )      164,105       154,646       (128.2 %)      n/a  

Aplications /Reversals

     (791,295 )      (694,491 )      (323,079 )      13.9 %      144.9 % 

Balance at the end of the quarter

     5,769,123       4,817,969       3,181,219       19.7 %      81.3 % 

 

 

Public sector exposure

 

 

 

Public Sector Exposure          Quarter ended           D % Quarter ended 06/30/19
vs quarter ended 		 

(in thousands of pesos)

   06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

Bills and Notes from Central Bank

     57,005,448       29,726,124       14,291,916       91.8 %      298.9 % 

Treasury and national government

     24,040,636       24,580,395       14,776,891       (2.2 %)      62.7 % 

National Treasury Public Debt $

     6,934,349       7,912,149       2,995,774       (12.4 %)      131.5 % 

National Treasury Public Debt USD

     11,525,130       3,662,256       5,651,068       214.7 %      103.9 % 

Treasury Repos USD

     5,581,157       13,005,990       6,130,049       (57.1 %)      (9.0 %) 

Pesos subtotal

     63,939,798       37,638,272       17,287,691       69.9 %      269.9 % 

Dollars subtotal

     17,106,287       16,668,246       11,781,117       2.6 %      45.2 % 

Total Public Sector exposure

     81,046,084       54,306,518       29,068,808       49.2 %      178.8 % 

% National Government debt /Assets

     6.1 %      6.3 %      5.5 %     

Total exposure to the public sector amounted to AR$ 81.1 million, increasing 49.2% during the quarter and 178.8% in the last twelve months.

Short-term liquidity was allocated in BCRA instruments, which grew in both periods.

 

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National Government Debt, which represents 6.1% of assets decreased by AR$ 539.8 million during the quarter, as a consequence of the partial expiration of the repo with the National Treasury and to the decrease of the debt denominated in AR$, which was partially offset by the purchase of instruments dollar-denominated.

 

 

Deposits

 

 

 

Deposits by Currency           Quarter ended             D % Quarter ended 06/30/19
vs quarter ended 		 

(in thousands of pesos)

   06/30/19      03/31/19      06/30/18      03/31/19     06/30/18  

Deposits $ denominated

     149,210,483        145,348,077        110,904,657        2.7 %      34.5 % 

Current accounts

     34,213,508        29,664,346        24,855,245        15.3 %      37.7 % 

Saving accounts

     36,506,676        38,433,328        36,941,390        (5.0 %)      (1.2 %) 

Time deposits

     75,857,067        75,070,308        46,882,744        1.0 %      61.8 % 

Peso denominated

     72,592,302        71,381,291        43,051,721        1.7 %      68.6 % 

CER adjusted time deposits

     3,264,765        3,689,017        3,831,023        (11.5 %)      (14.8 %) 

Other

     2,633,232        2,180,095        2,225,278        20.8 %      18.3 % 

Deposits FX denominated

     135,991,383        133,358,950        81,952,616        2.0 %      65.9 % 

Current accounts

     108,185        130,130        189,557        (16.9 %)      (42.9 %) 

Saving accounts

     116,754,041        111,988,699        67,231,437        4.3 %      73.7 % 

Time deposits

     16,967,487        18,832,038        12,172,428        (9.9 %)      39.4 % 

Other

     2,161,670        2,408,083        2,359,194        (10.2 %)      (8.4 %) 

Total deposits

     285,201,866        278,707,027        192,857,273        2.3 %      47.9 % 

Total deposits amounted to AR$ 285.2 billion as of June 30, 201, increasing 2.3% and 47.9% compared to the previous quarter and the second quarter of 2018, respectively.

Deposits in local currency grew by 2.7% and 34.5% compared to the quarters ended as of J 31, 2018 and June 30, 2018, respectively.

Foreign currency denominated deposits expressed in pesos grew 2% during the quarter and 65.9% in the last twelve months. Measured in the currency of origin, they increased 4.1% and 12.8%, in the same periods, respectively.

 

 

Other sources of funds

 

 

 

Other Souces of Funds           Quarter ended             D % Quarter ended 06/30/19
vs quarter ended 		 

(in thousands of pesos)

   06/30/19      03/31/19      06/30/18      03/31/19     06/30/18  

Lines from other banks

     3,291,860        5,999,754        5,732,921        (45.1 %)      (42.6 %) 

Senior Bonds

     4,329,078        4,228,208        1,751,596        2.4 %      147.2 % 

Total other funding sources

     7,620,938        10,227,962        7,484,517        (25.5 %)      1.8 % 

Lines from other Banks corresponds mainly to funds to finance foreign trade operations, which registered a decrease compared to the previous quarter and to the second quarter of 2018 (45.1% and 42.6%, respectively).

 

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Capitalization

 

 

Capitalization          Quarter ended            D % Quarter ended 06/30/19
vs quarter ended 		 

(in thousands of pesos)

   06/30/19     03/31/19     06/30/18      03/31/19     06/30/18  

Capital Stock

     612,660       612,660       612,660        —         —    

Issuance premiums

     6,735,977       6,735,977       6,735,977        —         —    

Adjustments to stockholders equity

     312,979       312,979       312,979        —         —    

Subtotal

     7,661,616       7,661,616       7,661,616        —         —    

Reserves on Profits

     28,488,024       17,424,932       17,424,932        63.5 %      63.5 % 

Unrealized valuation difference

     12,787,742       19,477,711       7,744,300        (34.3 %)      65.1 % 

Otros resultados integrables acumulados

     (161,736 )      (188,995 )      30,841        (14.4 %)      (624.4 %) 

Partcipación de terceros

     33,763       33,564       553,873        0.6 %      (93.9 %) 

Total stockholders´ equity

     48,809,409       44,408,828       33,415,562        9.9 %      46.1 % 

The Shareholders’ Meeting held on April 24, 2019 approved the treatment of the non-classified results as of December 31, 2018, allocating a total of AR$ 7.2 billion to both legal and voluntary reserves and to the payment cash dividends of AR$ 2.4 billion. These dividends were paid on May 16, 2019.

 

 

Solvency

 

 

 

Central Bank Requirements          Quarter ended           D % Quarter ended 06/30/19
vs quarter ended 		 

(in thousands of pesos)

   06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

CB Minimum Capital Requirements

     23,390,545       23,241,773       19,213,740       0.6 %      21.7 % 

Allocated to Asset at Risk

     18,398,338       18,903,979       16,092,833       (2.7 %)      14.3 % 

Market Risk

     174,965       234,278       154,790       (25.3 %)      13.0 % 

Operational Risk

     4,817,242       4,103,516       2,966,117       17.4 %      62.4 % 

Bank Capital

     47,627,629       43,365,989       34,217,408       9.8 %      39.2 % 

Ordinary Capital Level 1 (* )

     49,418,410       45,024,464       33,516,442       9.8 %      47.4 % 

Dedusctions Ordinary Capital Level 1

     (3,776,760 )      (3,649,725 )      (2,165,117 )      3.5 %      74.4 % 

Capital Level 2

     1,985,979       1,991,250       1,959,093       (0.3 %)      1.4 % 

Aditional Capital Level 1

     —         —         906,990       —         (100.0 %) 

Excess over Required Capital

     24,237,084       20,124,216       15,003,668       20.4 %      61.5 % 

Excess as % of the capital required

     103.6 %      86.6 %      78.1 %      19.7 %      32.7 % 

Risk weighted assets

     285,683,388       283,639,646       234,312,709       0.7 %      21.9 % 

Capital Ratio (Central Bank rules) (*) (**)

     16.7 %      15.3 %      14.6 %      9.0 %      14.2 % 

TIER I (***)

     16.0 %      14.6 %      13.8 %      9.5 %      16.0 % 

 

(*)

Bank capital /Risk weighted assets

(**)

Includes the 100% of the quarterly result

(***)

Ordinary capital level 1 /Risk weighted assets

BBVA continues to show adequate solvency ratios. As of June 30, 2019 the capital ratio reached 16.7%. The Tier 1 ratio was 16% and the excess over required capital was AR$ 24.2 million.

 

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Liquidity

 

 

 

           Quarter ended           D  bps Quarter ended 06/30/19
vs quarter ended 		 

(in thousands of pesos except percentages)

   06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

Liquid Assets to Total Deposits (1)

     60.7 %      60.3 %      42.6 %      4.6       181.3  

Loans to Total Assets

     47.5 %      47.8 %      60.4 %      (0.0 )      (0.1 ) 

 

(1)

“Liquid assets” include “Cash & due from banks”, “Liquidity requirements” and “Central Bank Bills & Notes”    

Liquid assets represented 60.7% of total Bank’s deposits as of June 30, 2019.

 

 

Additional information

 

 

 

           Quarter ended           D % Quarter ended 06/30/19
vs quarter ended 		 
     06/30/19     03/31/19     06/30/18     03/31/19     06/30/18  

Exchange rate $/USD

     42.45       43.35       28.86       (2.1 %)      47.1 % 

Quarterly CER adjustment

     11.9 %      9.3 %      7.4 %      2.6 %      4.5 % 

 

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Other events

 

 

 

  •  

On April 24, 2019 the Shareholders’ Meeting approved the merger by absorption of BBVA Francés Valores S.A, by BBVA Francés S.A. with the objective of optimizing operating costs by unifying resources and processes.

 

  •  

Additionally, on April 24, 2019 the Shareholders’ Meeting also approved the payment of dividends in cash for a total amount of AR$ 2,407 million, representing a payout ratio of 25%. The payment of such dividends was made effective on May 16, 2019.

 

  •  

On May 13, 2019, BBVA decided to file its income tax affidavit and paid the corresponding tax to the Internal Revenue Service for the 2018 fiscal year, taking into account inflation adjustment proceedings. The Bank also filed a declarative judgment requesting the unconstitutionality the above mentioned rules, because of the confiscatory effect of the particular case. In addition, BBVA established a provision for any contingency which may arise from the decision regarding fiscal year 2018 income tax.

 

  •  

On June 10, 2019, the BBVA group globally adopted a single unique brand, BBVA; as well as a logo more in line with the digital world. This new identity is a reflection of the values of the BBVA Group, particularly the “ We are a single team ” value, which emphasizes the importance of the people who working in the Group, as well as their commitment to the project that is BBVA. In Argentina, BBVA Francés is now BBVA. The corporate name is also changed to Banco BBVA Argentina S.A, which has been approved by the BCRA, and will begin to be used once registered in the Public Registry of Commerce.

 

  •  

In line with this new identity, the Bank’s ticker symbol on the NYSE, BYMA and MAE was change to “BBAR” and in Latibex the new ticker symbol is “XBBAR”.

 

  •  

On July 22, 2019, the calculation process for determining the final sale price of Prisma Medios de Pago S.A. shares, representing 51% of the capital and votes of said company, was completed. The final price corresponding to the shares transferred by the Bank is USD 76.9 million. The difference between the final price and the estimated price at closing has been deducted from the price balance. The remaining payment terms have not been modified and continue as previously stipulated.

 

  •  

On July 29, 2019, the BCRA authorized the appointment of Ms. María Isabel Goiri Lartitegui and Mr. Gabriel Alberto Chaufán as Directors of the Bank.

 

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Regulatory changes

 

 

 

  •  

On April 5, 2019, through its Communication “A” 6667, the BCRA published a regulation allowing users (whether customers or non-customers) to make fixed term deposits in pesos at any bank through digital, web and mobile channels, with a debit to a sight account in pesos in another entity.

 

  •  

Further, on April 17, 2019, the BCRA issued Communication “A” 6680, which sets the maximum term for entities to credit the vendor or affiliated merchant account for the amount of each sale paid in a payment through the use of credit cards and / or purchase issued by them, at 10 business days from the date of purchase, and prohibits charging interest or commission for that settlement period.

 

  •  

Additionally, on the same date, the BCRA issued Communication “A” 6691 prohibiting the collection of commissions for cash deposits in pesos to accounts whose holders are individuals or legal entities who have the status of micro-, small- and medium-size companies (MiPyMEs).

 

  •  

On May 14, 2019, the BCRA, through Communication “A” 6699, extended the maximum limit of the net positive global currency position from 5% to 30% of the regulatory capital (referred to as “Responsabilidad Patrimonial Computable or RPC), or of own liquid assets, whichever is less, provided that the difference is applied in Treasury Bills linked to the US dollar above the position recorded on May 13, 2019.

 

  •  

Further, the BCRA, through Communication “A” 6706, redefined, as of June 1, 2019, the structure of minimum cash requirements, establishing a minimum requirement of 45% for sight deposits, integrated 5% in BOTE 2020 bonds, 10% in Leliq and 30% in cash. For time deposits up to 30 days, these percentages are set at 14%, 5% and 13% respectively. These requirements are reduced as the term of the deposits increases, reaching 0% reserve requirement for deposits longer than 90 days. Subsequently, on June 30, 2019 through Communication “A” 6728, the minimum cash requirement rates for time deposits in the different tranches decreases by 3 percentage points for all financial entities. Finally, on July 22, 2019, through Communication “A” 6738, the BCRA established that for time deposits up to 30 days, up to 3 more percentage points may be integrated into Leliq.

 

  •  

On June 14, 2019, the BCRA established, through Communication “A” 6715 the possibility of offering UVA loan applicants the option that the amount of the fee does not exceed 10% of the amount that would result from applying to the loan a capital adjustment by the CVS (Coeficiente de variación de salarios), without implying extending the number of installments originally planned.

 

  •  

On June 19, 2019, the BCRA, through Communication “A” 6719, modified the minimum cash rules, in order to exclude all obligations with merchants for purchases and/or sales made through the use of credit cards; extending the provisions of Communication “A” 6706 that only excluded payments in installments. Additionally, it established that the minimum cash requirement will be determined with the average daily balances of the obligations of the previous period and the unified calculation of minimum cash for the bonus payment periods (July / August and December / January).

 

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LOGO

 

 

Earnings Conference Call

 

 

 

When:    1:30 pm Argentine time, August 12, 2019 – (12:30 pm EST)
Dial-in:   
   + 54-11-3984-5677 (Argentina)
   + 1-844-450-3851 (USA Toll-free)
   + 1 412-317-6373 (International)
Conference ID: BBVA   
Webcast:    CLICK HERE
Replay:   
   +1-877-344-7529 (USA Toll-free)
   +1-412-317-0088 (International)

Replay access code: 10133523

The replay will be available until August 22nd, 2019

 

 

About BBVA Argentina

 

 

BBVA Argentina (NYSE; BYMA; MAE: BBAR; Latibex: XBBAR) is a subsidiary of the BBVA Group, the principal shareholder since 1996. In Argentina, is one of the leading private financial institutions since 1886. Nationwide, BBVA in Argentina, offers retail and corporate banking, to a broad customer base, including: individuals, SME’s, and large-sized companies.

BBVA Argentina’s purpose, is to bring the age of opportunities to everyone, based on our customers’ real needs, providing the best solutions, and helping them make the best financial decisions, through an easy and convenient experience. The institution rests in solid values: “ Customer comes first, we think big and we are one team” . At the same time, its responsible banking model, aspires to achieve a more inclusive and sustainable society.

Investor relations contact:

investorelations-arg@bbva.com

 

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Disclaimer

 

 

This press release contains certain forward-looking statements that reflect the current views and/or expectations of Banco BBVA Argentina and its management with respect to its performance, business and future events. We use words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “seek,” “future,” “should” and other similar expressions to identify forward-looking statements, but they are not the only way we identify such statements. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this release. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) changes in general economic, financial, business, political, legal, social or other conditions in Argentina or elsewhere in Latin America or changes in either developed or emerging markets, (ii) changes in regional, national and international business and economic conditions, including inflation, (iii) changes in interest rates and the cost of deposits, which may, among other things, affect margins, (iv) unanticipated increases in financing or other costs or the inability to obtain additional debt or equity financing on attractive terms, which may limit our ability to fund existing operations and to finance new activities, (v) changes in government regulation, including tax and banking regulations, (vi) changes in the policies of Argentine authorities, (vii) adverse legal or regulatory disputes or proceedings, (viii) competition in banking and financial services, (ix) changes in the financial condition, creditworthiness or solvency of the customers, debtors or counterparties of Banco BBVA Argentina, (x) increase in the allowances for loan losses, (xi) technological changes or an inability to implement new technologies, (xii) changes in consumer spending and saving habits, (xiii) the ability to implement our business strategy and (xiv) fluctuations in the exchange rate of the Peso. The matters discussed herein may also be affected by risks and uncertainties described from time to time in Banco BBVA Argentina’s filings with the U.S. Securities and Exchange Commission (SEC) and Comision Nacional de Valores (CNV). Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as the date of this document. Banco BBVA Argentina is under no obligation and expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 

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BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar: by the equity method)

BALANCE SHEET (in thousands of pesos)

 

     06/30/19     31/03/19     06-30-18  

Cash and due from banks

     90,955,170       103,990,452       54,530,632  

Debt securities at fair value through other comprehensive income

     6,590,932       2,049,715       2,735,529  

Derivatives

     1,838,020       820,604       104,250  

Repurchase agreements

     5,924,379       21,425,035       6,367,328  

Other financial assets

     5,957,221       9,888,314       5,897,674  

Loans and other financial intermediation

     186,615,851       185,305,934       162,123,310  

Loans to the private & financial sector

     186,615,515       185,305,495       162,123,232  

Advances

     9,589,505       8,019,246       14,201,636  

Discounted and purchased notes

     19,993,203       23,081,975       23,048,817  

Secured with mortgages

     12,045,949       11,045,297       7,357,341  

Car secured loans

     1,562,480       1,650,656       5,348,745  

Personal loans

     24,412,264       24,421,230       20,666,082  

Credit cards

     48,137,233       45,585,103       35,290,441  

Loans to financial sector

     7,648,788       6,362,051       6,190,708  

Other (*)

     65,961,218       67,243,633       50,509,872  

Other receivables

     4,246,315       3,948,476       3,610,331  

Less: Unaccrued interest

     (1,212,317 )      (1,234,203 )      (919,522 ) 

Less: Allowance for loan losses

     (5,769,123 )      (4,817,969 )      (3,181,219 ) 

Public Sector loans

     336       439       78  

Other debt securities

     69,763,641       40,541,600       18,544,550  

Financial assets pledged as collateral

     6,352,207       5,278,301       5,155,840  

Current income tax assets

     385       385       1,056  

Investments in equity instruments

     1,914,766       1,893,207       120,978  

Investments in associates and joint ventures

     2,075,103       1,859,414       1,087,893  

Property, plant and equipment

     11,866,623       11,609,063       9,136,878  

Intangible assets

     590,357       542,565       542,054  

Deferred income tax asset

     526,504       274,386       22,311  

Other non financial assets

     1,860,690       2,203,245       1,350,209  

Non-current assets held for sale

     59,776       59,776       507,630  

Total Assets

     392,891,625       387,741,996       268,228,122  

Deposits

     285,201,866       278,707,027       192,857,273  

Current accounts

     34,321,693       29,794,476       25,044,802  

Saving accounts

     153,260,717       150,422,027       104,172,827  

Time deposits

     92,824,554       93,902,346       59,055,172  

Rescheduled deposits CEDROS

     1,951       1,951       1,951  

Other deposits

     4,792,951       4,586,227       4,582,521  

Liabilities at fair value trhough other comprehensive income

     1,156,152       1,969,005       143,495  

Derivatives

     2,288,638       1,611,843       2,277,241  

Repurchase agreements

     —         —         936,751  

Other financial liabilities

     23,067,544       29,306,624       17,727,818  

Financing received the BCRA and other financial insitutions

     3,291,860       5,999,754       5,732,921  

Corporate bonds issued

     4,329,078       4,228,208       1,751,596  

Current income tax liabilities

     4,609,342       5,792,030       1,409,535  

Provisions

     7,050,001       3,861,057       3,374,177  

Other provisions

     7,048,350       3,859,458       3,372,628  

For eventual compromises

     1,651       1,599       1,549  

Deferred income tax liabilites

     65,175       65,808       343,100  

Other non-financial liabilities

     13,022,560       11,791,812       8,258,653  

Total Liabilities

     344,082,216       343,333,168       234,812,560  

Total Stockholders´ equity

     48,775,646       44,375,264       32,861,689  

Equity investments

     33,763       33,564       553,873  

Total liabilities + stockholders’ equity

     392,891,625       387,741,996       268,228,122  

 

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BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar: by the equity method)

INCOME STATEMENT (in thousands of pesos)

 

     06/30/19     03/31/19     06/30/18  

Interest Income

     23,018,132       18,375,643       9,478,091  

Interest on loans to the financial sector

     599,081       681,141       351,772  

Interest on overdraft

     1,532,848       1,528,558       1,177,920  

Interest on documents

     2,053,529       1,990,751       1,090,927  

Interest on mortgages loans

     281,436       261,244       169,956  

Interest on car secured loans

     93,852       97,747       337,965  

Interest on credit card loans

     4,236,048       3,892,306       1,838,495  

Interest on financial leases

     114,878       122,815       129,239  

Interest on personal loans

     1,830,440       1,755,947       1,532,737  

Interest on other loans

     607,469       693,658       724,107  

From other banking receivables from financial intermediation

     5,367       5,856       2,264  

CER adjustment

     24,637       17,857       6,705  

UVA adjustment

     2,250,577       1,567,222       506,632  

Income from Public Securities

     8,505,653       4,725,693       1,187,403  

Other

     882,317       1,034,848       421,969  

Interest Expenses

     (9,982,014 )      (8,624,392 )      (3,507,170 ) 

Interest on Current Account Deposits

     (794,995 )      (669,369 )      (417,615 ) 

Interest on Saving Account Deposits

     (20,214 )      (11,506 )      (26,894 ) 

Interest on Time Deposits

     (7,920,038 )      (7,002,509 )      (2,438,015 ) 

Interest on interfinancing received loans

     (3,376 )      (15,255 )      (18,567 ) 

Interest on other financing from the financial institutions

     (462 )      (571 )      (49,652 ) 

Interest on other liabilites from financial intermediation

     (801,089 )      (625,516 )      (256,177 ) 

Other interest

     (7 )      (7 )      (50 ) 

UVA adjustment

     (430,550 )      (295,432 )      (256,626 ) 

Other

     (11,283 )      (4,227 )      (43,574 ) 

Net interest income

     13,036,118       9,751,251       5,970,921  

Net fee income

     1,943,656       1,494,815       919,141  

Net income of financial instruments

     2,115,028       2,464,277       (647,534 ) 

Result from assets at amortised cost

     (36,380 )      (4,183 )      (68,298 ) 

Foreign exchange difference

     1,321,560       1,174,542       2,009,608  

Other operating income

     4,389,805       3,390,923       622,728  

Provision for loan losses

     (1,864,924 )      (2,358,139 )      (804,248 ) 

Net operating income

     20,904,863       15,913,486       8,002,318  

Personnel expenses

     (3,242,029 )      (2,712,587 )      (1,929,968 ) 

Administrative expenses

     (2,421,106 )      (2,044,423 )      (1,646,632 ) 

Depreciations and amortizations

     (371,193 )      (336,698 )      (176,910 ) 

Depreciation on Intangible assets

     (22,733 )      (21,663 )      (30,950 ) 

Other operating expenses

     (6,074,392 )      (2,538,043 )      (1,428,480 ) 

Operating income

     8,773,410       8,260,072       2,789,378  

Income from associates and joint ventures

     312,483       117,003       230,867  

Net income before income tax from continuing operations

     9,085,893       8,377,075       3,020,245  

Income tax from continuing operations

     (2,305,571 )      (2,366,004 )      (866,387 ) 

Net income Including non-controlling shareholders

     6,780,322       6,011,071       2,153,858  

Net income attributable to non-controlling shareholders

     199       3,452       29,938  

Net income

     6,780,123       6,007,619       2,123,920  

Other comprehensive income

     27,259       (184,020 )      68,085  

Total income attributable to controlling shareholders

     6,807,382       5,823,599       2,192,005  

 

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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.

 

    BBVA Banco Francés S.A.
Date: August 12, 2019     By:   /s/ Ernesto Gallardo Jimenez
      Name: Ernesto Gallardo Jimenez
      Title: Chief Financial Officer
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