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 June 2020

Commission File Number: 001-12568

 

 

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  ☒            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

 

 

 


Banco BBVA Argentina S.A.

TABLE OF CONTENTS

 

Item

    
1.    Banco BBVA Argentina S.A. reports consolidated first quarter earnings for fiscal year 2020.


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Banco BBVA Argentina S.A. announces First Quarter 2020 results

Buenos Aires, June 8, 2020 – Banco BBVA Argentina S.A (NYSE; BYMA; MAE: BBAR; LATIBEX: XBBAR) (“BBVA Argentina” or “BBVA” or “el Banco”) announced today its consolidated results for the first quarter (1Q20), ended on March 31 2020.

As of 1Q20, the Bank started to inform its inflation adjusted results pursuant to IAS 29 reporting. To facilitate comparison, figures of comparable quarters of 2019 have been updated according to IAS 29 reporting to reflect the accumulated effect of inflation adjustment for each period up to March 31, 2020.

1Q20 Highlights

 

   

BBVA Argentina’s net income (including inflation adjustment) in 1Q20 was $3.1 billion, 20.1% lower than the $3.9 billion reported in the fourth quarter of 2019 (4Q19) and 36.2% lower than the $4.9 billion reported in the first quarter of 2019 (1Q19).

 

   

In 1Q20, BBVA Argentina posted an inflation adjusted average return on assets (ROA) of 2.5% and an inflation adjusted average return on equity (ROE) of 14.5%.

 

   

BBVA Argentina’s net income (including inflation adjustment) in 1Q20 excluding results generated by Prisma Medios de Pago S.A. sale, would have been 6.9% lower to the $3.3 billion recorded on 4Q19 and 72% higher than the $1.8 billion recorded in 1Q19.

 

   

In terms of activity, total consolidated financing to the private sector in 1Q20, adjusted by inflation, totaled $225.5 billion, increasing in real terms 3.8% or $8.3 million compared to 4Q19, and contracting 17.3% or $47.2 million versus 1Q19. In the quarter, growth was mainly driven by overdrafts and loans for the prefinancing and financing of exports, increasing 90.1% and 37.3% respectively. BBVA’s consolidated market share of private sector loans of was 8.35% as of 1Q20.

 

   

Total deposits grew in real terms 3.5% in the quarter, and decreased 20.7% in the year. The Bank’s consolidated market share of private deposits was 6.79% in 1Q20.

 

   

As of 1Q20, the non-performing loan ratio (NPL) reached 2.78%, with a 186.12% coverage ratio.

 

   

Accumulated efficiency ratio in 1Q20 was 47.4%, higher from 4Q19’s 46.3%.

 

   

As of 1Q20, BBVA Argentina reached a regulatory capital ratio of 21.8%, entailing a $48.6 billion or 166.3% excess over minimum regulatory requirement. Tier I ratio was 21.2%. Total liquid assets represented 68.7% of the Bank’s total deposits as of 1Q20.

1Q20 Conference Call

Tuesday, June 9, 2020 at 12:00pm Buenos Aires Time – (11:00am EST)

To participate, please dial in:

+ 54-11-3984-5677 (Argentina)

+ 1-844-450-3851 (U.S. Toll free)

+ 1-412-317-6373 (International)

Web Phone: click here

Conference ID: BBVA

Webcast & Replay: click here

 

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Safe Harbor Statement

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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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 transitory exceptions: (i) the record of a prevision for contingencies referred to uncertain fiscal positions required by the B.C.R.A., (ii) the adjustment in valuation established by the B.C.R.A. applied to the valuation of the remaining investment the Bank keeps of Prisma Medios de Pago S.A. (“Prisma”), and (iii) the temporary exclusion of the application of the IFRS 9 impairment model for non-financial public sector debt instruments.

As of 1Q20, the Bank started to inform its inflation adjusted results pursuant to IAS 29 reporting. To facilitate comparison, figures of comparable quarters of 2019 have been updated according to IAS 29 reporting to reflect the accumulated effect of inflation adjustment for each period up to March 31, 2020.

The information in this press release contains unaudited financial information that consolidates, line item by line item, all of the banking activities of BBVA Argentina, including: BBVA Asset Management Argentina S.A., Consolidar AFJP-undergoing liquidation proceeding, and as of July 1, 2019, PSA Finance Argentina Compañía Financiera S.A. (“PSA”) and Volkswagen Financial Services Compañía Financiera S.A (“VWFS”).

BBVA Consolidar Seguros S.A. is disclosed on a consolidated basis recorded as Investments in associates (reported under the proportional consolidation method), and the corresponding results are reported as “Income from associates”), same as Rombo Compañía Financiera S.A. (“Rombo”) and Interbanking S.A.

Financial statements of subsidiaries have been elaborated as of the same dates and periods as Banco BBVA Argentina S.A.’s. In the case of consolidated companies PSA and VWFS, financial statements were prepared considering the B.C.R.A. accounting framework for institutions belonging to “Group B”, without considering the model established by the IFRS 9 5.5. “Impairment” section for periods starting as of January 1, 2021.

The information published by the BBVA Group for Argentina is prepared according to IFRS, without considering the temporary exceptions established by BCRA.

 

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Quarterly results

 

Income Statement    BBVA ARG consolidated     Chg (%)     Proforma (4)  

In millions $ except EPS and ADS

   1Q20     4Q19     1Q19     QoQ     YoY     1Q20  

Net Interest Income

     16,441       19,239       15,044       (14.5 %)      9.3     15,738  

Net Fee Income

     1,876       1,771       2,302       5.9     (18.5 %)      1,898  

Net income from measurement of financial instruments at fair value

     1,000       2,371       3,753       (57.8 %)      (73.3 %)      1,000  

Net loss from write-down of assets at amortized cost and at fair value through OCI

     (127     (13     (6     n.m       n.m       (127

Foreign exchange and gold gains

     1,237       3,100       1,976       (60.1 %)      (37.4 %)      1,240  

Other operating income

     1,039       1,202       5,268       (13.5 %)      (80.3 %)      1,064  

Loan loss allowances

     (1,623     (2,685     (1,618     39.5     (0.4 %)      (1,596

Net operating income

     19,843       24,985       26,719       (20.6 %)      (25.7 %)      19,217  

Personnel benefits

     (4,439     (4,653     (4,202     4.6     (5.6 %)      (4,371

Adminsitrative expenses

     (3,590     (4,260     (3,160     15.7     (13.6 %)      (3,532

Depreciation and amortization

     (823     (1,972     (1,230     58.3     33.1     (818

Other operating expenses

     (3,112     (6,416     (4,509     51.5     31.0     (2,974

Operating income

     7,880       7,685       13,617       2.5     (42.1 %)      7,522  

Income from associates

     27       680       (76     (96.0 %)      135.6     59  

Income from net monetary position

     (2,624     (3,038     (5,022     13.6     47.8     (2,380

Net income before income tax

     5,283       5,328       8,519       (0.8 %)      (38.0 %)      5,201  

Income tax

     (2,176     (1,439     (3,649     (51.2 %)      40.4     (2,124

Income for the period

     3,107       3,889       4,870       (20.1 %)      (36.2 %)      3,078  

Number of common shares outstanding (in thousands)

     612,710       612,710       612,660       —         0.0     612,710  

Weighted average number of common shares outstanding (2)(3)

     612,710       612,705       612,660       0.0     0.0     612,710  

Earnings per share

     5.03       6.50       7.95       (22.7 %)      (36.8 %)      5.78  

Earnings per ADS (1)

     15.08       19.51       23.85       (22.7 %)      (36.8 %)      17.33  

 

(1)

One ADS represents three ordinary shares

(2)

In thousandsof shares

(3)

As of October 9th, 50.441 shares have been issued related to the merger by absorption with BBVA Francés Valores S.A., totaling 612,710,079 shares. As of the release of these consolidated financial statements, the increase in capital and the merger by absoprtion are pending registry approval by the I.G.J.

(4)

Excludes consolidation with VWFS y PSA.

BBVA Argentina 1Q20 inflation adjusted net income was $3.1 billion, 20.1% or $782 million lower than 4Q19, and 36.2% or $1.8 billion lower than 1Q19. The Quarter-over-Quarter (QoQ) decrease is mainly explained by the fall in activity, the sharp decline in interest rates derived from changes in the country’s monetary policy, and the beginning of the mandatory lockdown due to the Covid-19 pandemic.

As of 1Q20, net operating income was $19.8 billion, decreasing 20.6% or $5.1 billion QoQ, and 25.7% or $6.9 billion Year-over-Year (YoY).

Operating income in 1Q20 was $7.8 billion, growing 2.5% or $195 million QoQ, and decreasing or 42.1% or $5.7 billion YoY. It is worth noting that 1Q19 results were positively affected by the sale of Prisma

Excluding the effects of 1Q19 Prisma sale, net operating income would have decreased 17.9% or $4.3 billion compared to 4Q19, and 11.4% or $2.5 billion compared to 1Q19. Operating income would have increased 14.6% or $1.0 billion QoQ, and decreased 15.1% or $1.4 billion YoY.

 

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Net Interest Income

 

Net Interest Income    BBVA ARG Consolidated      Chg (%)     Proforma (2)  

In millions $

   1Q20      4Q19      1Q19      QoQ     YoY     1Q20  

Net Interest Income

     16,441        19,239        15,044        (14.5 %)      9.3     15,738  

Interest Income

     24,612        30,518        28,417        (19.4 %)      (13.4 %)      23,286  

From government securities

     6,249        7,540        7,264        (17.1 %)      (14.0 %)      6,249  

From private securities

     2        2        3        (27.2 %)      (49.4 %)      2  

Interest from loans and other financing

     15,072        18,573        18,153        (18.8 %)      (17.0 %)      13,886  

Financial Sector

     348        343        1,092        1.4     (68.1 %)      627  

Overdrafts

     2,513        3,521        2,374        (28.6 %)      5.9     2,513  

Discounted Instruments

     2,542        3,292        3,092        (22.8 %)      (17.8 %)      2,542  

Mortgage loans

     317        334        405        (5.2 %)      (21.7 %)      317  

Pledge loans

     596        780        151        (23.6 %)      293.4     88  

Personal loans

     2,011        2,123        2,719        (5.3 %)      (26.1 %)      2,011  

Credit Cards

     4,616        5,494        6,030        (16.0 %)      (23.4 %)      4,616  

Financial leases

     112        131        191        (14.9 %)      (41.3 %)      94  

Loans for the prefinancing and financing of exports

     313        419        1,014        (25.3 %)      (69.2 %)      313  

Other loans

     1,705        2,135        1,086        (20.1 %)      57.0     1,078  

CER/UVA clause adjustment

     2,421        3,796        2,420        (36.2 %)      0.0     2,281  

Other interest income

     868        608        576        42.8     50.7     868  

Interest expenses

     8,171        11,279        13,373        (27.6 %)      (38.9 %)      7,547  

Deposits

     6,741        8,934        11,921        (24.5 %)      (43.5 %)      6,674  

Checking accounts

     223        83        1,008        170.4     (77.8 %)      223  

Savings accounts

     68        82        56        (17.6 %)      20.7     68  

Time deposits

     6,450        8,769        10,857        (26.4 %)      (40.6 %)      6,383  

CER/UVA clause adjustment

     204        285        455        (28.4 %)      (55.2 %)      204  

Other liabilities from financial transactions

     943        1,266        966        (25.5 %)      (2.4 %)      651  

Other

     284        794        30        (64.3 %)      n.m       18  

 

(2)

Excludes consolidation with PSA and VWFS    

Net interest income for 1Q20 was $16.4 billion, decreasing 14.5% or $2.8 billion QoQ, and growing 9.3% or $1.4 billion YoY. The lower interest income is partially offset by lower interest expenses, mainly derived from a decreasing trend in passive rates and an increase in sight deposits.

As of 1Q20, interest income totaled $24.6 billion, 19.4% lower than 4Q19 and 13.4% lower than 1Q19. Quarterly decrease is mainly explained by a lagging decline in active rates, a fall in the UVA index (26.4 versus 45.0), and the sharp decline in market interest rates due to changes in monetary policy.

Income from government securities fell by 17.1% or $1.3 billion compared to 4Q19, and 14.0% or $1.0 billion compared to 1Q19. This is explained by the decrease in monetary policy rate promoted by the BCRA, combined with a lower position in BCRA liquidity instruments (“LELIQ”) on account of new regulation restricting sight deposit reserve requirement integration with such instruments. LELIQ rates declined from 55% at the beginning of the year down to 38% by the end of March. 86% of results is explained by public securities at fair value with changes in the other comprehensive income (OCI) line item, mainly LELIQ.

Interest income from loans and other financing totaled $15.1 billion, decreasing 18.8% or $3.5 billion QoQ. This is mainly explained by seasonality of the business and lower active rates, in line with the liquidity excess generated by changes in regulation conducted by the BCRA.

Income from CER/UVA adjustments was 36.2% lower than 4Q19, and remains stable when compared to 1Q19, mainly explained by the deceleration in the quarter’s inflation.

Interest expenses totaled $8.2 billion, 27.6% lower QoQ and 38.9% lower YoY. This is a consequence of the fall in passive interest rates and the increase in sight deposits.

Interest expenses from time deposits explain 78.9% of total interest expenses, decreasing 26.4% QoQ and 40.6% YoY.

 

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NIM

 

     BBVA ARG Consolidated
1Q20
 

Assets & Liabilities Performance

In millions $ - Yields and rates in annualized %

   Average
Balance
    Interest
earned/paid
     Average
real rate
 

Total interest-earning assets

     314,898       24,613        31.4

Government securities

     85,262       7,144        33.6

Loans to customers/financial institutions

     225,852       17,468        31.0

Loans to BCRA

     0       —          0.0

Other assets

     3,783       1        0.1

Total non interest-earning assets

     183,215       —          0.0

Total Assets

     498,112       24,613     

Total interest-bearing liabilities

     242,012       8,171        13.5

Saving deposits

     133,664       291        0.9

Time deposits

     93,331       6,844        29.4

Banks loans - BCRA

     34       —          0.0

Banks loans - Other financial institutions

     7,337       122        6.7

Debt securities issued

     7,381       914        49.7

Other liabilities

     264       —          0.0

Total non-interest-bearing liabilities and equity

     256,100       —          0.0

Total liabilities and equity

     498,112       8,171        6.6

Average interest-earning assets

     314,898       

Net interest income

     24,613       

Net interest margin (NIM)

     31.4     

Yield spread, nominal basis

     17.8     

Net Fee Income

 

Net Fee Income    BBVA ARG Consolidated      Chg (%)  

In millions $

   1Q20      4Q19      1Q19      QoQ     YoY  

Net Fee Income

     1,876        1,771        2,302        5.9     (18.5 %) 

Fee Income

     5,401        5,768        5,896        (6.4 %)      (8.4 %) 

Linked to liabilities

     2,880        3,063        3,077        (6.0 %)      (6.4 %) 

From credit cards

     1,801        1,984        1,670        (9.3 %)      7.9

Linked to loans

     200        113        489        77.2     (59.1 %) 

From insurance

     277        288        346        (3.7 %)      (19.9 %) 

From foreign trade and foreign currency transactions

     208        288        284        (27.6 %)      (26.5 %) 

Other fee income

     35        32        32        8.9     11.0

Fee expenses

     3,525        3,997        3,594        (11.8 %)      (1.9 %) 

In 1Q20, net fee income grew 5.9% or $105 million compared to 4Q19, and decreased 18.5% or $426 million compared to 1Q19.

Fee income totaled $5.4 billion, 6.4% lower QoQ, as a result of a fall in activity, product of a seasonal effect, and partially offset by an increase in bundle product prices.

Fee expenses fell 11.8% compared to 4Q19 and 1.9% compared to 1Q19 respectively. This is mainly explained by lower expenses related to credit card benefits, and as a result of a lower market activity, aggravated by the beginning of the mandatory lockdown due to Covid-19.

 

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Net income from measurement of financial instruments at fair value and foreign exchange and gold gains/losses

 

Net Income from financial instruments at fair value (FV) through P&L    BBVA ARG
Consolidated
    Chg (%)  

In millions $

   1Q20     4Q19     1Q19     QoQ     YoY  

Net Income from financial instruments at FV through P&L

     1,000       2,371       3,753       (57.8%     (73.3%

Income from sale of government securities

     930       1,180       1,352       (21.2%     (31.2%

Income from private securities

     34       348       2,366       (90.2%     (98.6%

Interest rate swaps

     23       122       (187     (81.1%     112.3%  

Gains from foreign currency forward transactions

     231       (67     187       441.9%       23.3%  

Gains from put options - Prisma Medios de Pago

     —         738       —         (100.0%     N/A  

Income from debt and equity instruments

     17       50       35       (66.8%     (51.8%

Other

     (235     (0     —         n.m       N/A  

In 1Q20, net income from financial instruments at fair value (FV) through P&L was $1.0 billion, decreasing 57.8% or $1.4 billion QoQ. Excluding results from the update in the valuation of the put option on Prisma sale in 4Q19, the decrease would have been 33.4% or $503 million QoQ. In the year, the contraction was 73.3% or $2.8 billion, mainly explained by the extraordinary result in 1Q19 from Prisma sale ($2.3 billion). Excluding this result, contraction versus 1Q19 would have been 31.0%.or $449 million.

Income from private securities contracted 90.2% or $314 million QoQ, by cause of the change in prices of equity stocks in our portfolio. It is worth to highlight that during 1Q19 Prisma sale took place, generating an extraordinary result of $2.3 billion in this line in said period.

Income from debt and equity instruments decreased 66.8% or $33 million due to a steep market fall by the end of the quarter, in line with the impacts of Covid-19 pandemic.

 

Differences in quoted prices of gold and foreign currency    BBVA ARG
Consolidated
    Chg (%)  

In millions $

   1Q20      4Q19     1Q19     QoQ     YoY  

Foreign exchange and gold gains/(losses) (1)

     1,237        3,100       1,976       (60.1%)       (37.4%)  

From foreign exchange position

     946        640       2,230       47.7%       (57.6%)  

Income from purchase-sale of foreign currency

     291        2,460       (255     (88.2%)       214.4%  

Net income from financial instruments at FV through P&L (2)

     231        (67     187       441.9%       23.3%  

Income from foreign currency forward transactions

     231        (67     187       441.9%       23.3%  

Total differences in quoted prices of gold and foreign currency (1) + (2)

     1,468        3,033       2,163       (51.6%     (32.1%

In 1Q20, the difference in quoted prices of gold and foreign currency showed profit for $1.5 billion, contracting 51.6% or $1.6 billion QoQ. This is explained by a lower activity due to changes in foreign exchange market regulations.

Other Operating Income

 

Other Operating Income    BBVA ARG
Consolidated
     Chg (%)  

In millions $

   1Q20      4Q19     1Q19      QoQ      YoY  

Operating Income

     1,039        1,202       5,268        (13.5%)        (80.3%)  

Rental of safe deposit boxes (1)

     208        188       189        10.6%        9.9%  

Adjustments and interest on miscellaneous receivables (1)

     250        308       296        (19.1%)        (15.7%)  

Loans recovered

     162        206       121        (21.2%)        34.4%  

Income from Prisma sale

     —          (0     4,186        N/A        N/A  

Fee income from credit and debit cards (1)

     74        213       215        (65.2%)        (65.5%)  

Other Operating Income(2)

     288        226       212        27.5%        35.7%  

 

(1)

Included to the efficiency ratio calculation

(2)

Includes some of the concepts used in the efficiency ratio calculation

In 1Q20, other operating income totaled $1.0 billion, 13.5% or $163 million lower QoQ, explained by lower activity. These were also 80.3% or $4.2 billion lower YoY.

Excluding the extraordinary effect caused by Prisma sale in 4Q19 and 1Q19, variations would have been 3.5% or $38 million lower QoQ, and 14.1% or $170 million lower YoY.

 

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The lower income from debit and credit card fees is a result of a fall in retail consumption, and a lower credit card issuance fee (from 1.65% to 1.5%). This is partially offset by an increase in income from rental of safe deposit boxes.

Operating Expenses

Personnel benefits and Administrative expenses

 

Personnel Benefits and Adminsitrative Expenses    BBVA ARG
Consolidated
    Chg (%)  

In millions $

   1Q20     4Q19     1Q19     QoQ     YoY  

Total Personnel Benefits and Adminsitrative Expenses

     8,029       8,912       7,363       (9.9%)       9.1%  

Personnel Benefits (1)

     4,439       4,653       4,202       (4.6%)       5.6%  

Administrative expenses (1)

     3,590       4,260       3,160       (15.7%)       13.6%  

Travel expenses

     29       55       42       (47.3%)       (31.4%)  

Administrative expenses

     344       488       249       (29.4%)       38.4%  

Security services

     110       131       133       (16.2%)       (17.1%)  

Fees to Bank Directors and Supervisory Committee

     20       4       6       473.5%       243.3%  

Other fees

     240       195       139       23.4%       73.2%  

Insurance

     43       38       38       12.8%       10.9%  

Rent

     315       271       263       16.2%       19.9%  

Stationery and supplies

     19       25       17       (24.9%)       10.9%  

Electricity and communications

     223       213       170       4.8%       30.9%  

Advertising

     179       173       187       3.4%       (4.4%)  

Taxes

     871       848       865       2.8%       0.7%  

Maintenance costs

     428       463       431       (7.7%)       (0.7%)  

Armored transportation services

     277       889       255       (68.9%)       8.3%  

Other administrative expenses

     493       468       365       5.3%       34.9%  

Headcount

     6,233       6313       6230       (1.3%)       0.0%  

Banco BBVA Argentina*

     6,135       6,218       6,130       (1.3%)       0.1%  

Associates (2)*

     98       95       100       3.2%       (2.0%)  

Totalb Branches

     246       251       252       (2.0%)       (2.4%)  

Efficiency Ratio

     47.4     46.3     42.0     104  bps      533  bps 

Accumulated Efficiency Ratio

     47.4     40.3     42.0     712 bps      533  bps 

 

(1)

Concept included in the efficiency ratio calculation    

(2)

Includes BBVA Asset Management Argentina S.A., y PSA y VWFS as of 3Q19    

*

corresponds to total effective employees, net of temporary contract employees    

During 1Q20, personnel benefits and administrative expenses totaled $8.0 billion, 9.9% or $883 million lower than 4Q19, and 9.1% lower than 1Q19. This is mainly explained by a decrease in the armored transportation services line, and as a consequence of the efficiency plan put into effect during 4Q19.

Personnel benefits contracted 4.6% or $213 million compared to 4Q19, and increased 5.6% or $237 million compared to 1Q19. Given that there are no new rearrangements with labor unions regarding salary increases, we still stand by the current agreement with the National Government: a gradual increase of 3.6% in January, followed by a 6.5% increase in February and March.

In 1Q20, administrative expenses contracted 15.7% QoQ and increased 13.6% YoY. This is mainly explained by lower expenses incurred in armored transportation services, consequence of a lower circulation of U.S. dollar bills derived from FX market restrictions. It is also partially explained by a reduction in procurement of administrative services.

The accumulated efficiency ratio as of 1Q20 was 47.4%, higher than the 46.3% and 42.0% recorded in 4Q19 and 1Q19 respectively. This is a result of a deeper percentage fall in the denominator (income), than the fall recorded in the numerator (expenses).

 

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Other Operating Expenses

 

Other Operating Expenses    BBVA ARG consolidated      Chg (%)  

In millions $

   1Q20      4Q19      1Q19      QoQ     YoY  

Other Operating Expenses

     3,112        6,416        4,509        (51.5%     (31.0%

Turnover tax

     1,742        2,262        2,131        (23.0%     (18.2%

Inicial loss of loans below market rate

     175        300        626        (41.7%     (72.1%

Contribution to the Deposit Guarantee Fund (SEDESA)

     124        145        170        (14.4%     (26.8%

Interest on liabilities from financial lease

     77        85        86        (10.2%     (10.9%

Other allowances

     703        1,005        991        (30.0%     (29.0%

Other operating expenses

     290        2,620        506        (88.9%     (42.6%

As of 1Q20, other operating expenses decreased 51.5% or $3.3 billion QoQ, and decreased 31.0% or $1.4 billion YoY.

The QoQ decrease is mainly explained by the one-time provision recorded by the Bank in 4Q19.

Income from Associates

This line reflects the results from non-consolidated associate companies. During 1Q20, a profit of $27 million has been reported, mainly due to participation in BBVA Consolidar Seguros S.A., Rombo Compañía Financiera S.A., and Interbanking S.A.

Income Tax

Income tax charges decreased $1.5 billion compared to 1Q19, and increased $737 million compared to 4Q19, reporting a loss for $2.2 billion, and an effective rate of 41%. The increment in such rate compared to the regulatory 30% rate is caused by the difference between BCRA accounting regulation and tax regulations related to inflation adjustments, resulting in different taxable incomes.

 

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Balance Sheet and Activity

Loans and Other financing

 

Loans and other financing    BBVA ARG consolidated     Chg (%)     Proforma (2)  

In millions $

   1Q20     4Q19     1Q19     QoQ     YoY     1Q20  

To the public sector

     12       19       2       (36.8 %)      426.4     12  

To the financial sector

     5,113       5,603       9,370       (8.7 %)      (45.4 %)      8,444  

Non-financial private sector and residents abroad

     225,473       217,168       272,623       3.8     (17.3 %)      212,580  

Non-financial private sector and residents abroad - $

     183,807       177,632       165,961       3.5     10.8     170,914  

Overdrafts

     29,505       15,517       11,880       90.1     148.4     29,505  

Discounted instruments

     19,554       22,141       21,634       (11.7 %)      (9.6 %)      19,554  

Mortgage loans

     14,932       15,077       16,386       (1.0 %)      (8.9 %)      14,932  

Pledge loans

     8,506       9,331       2,449       (8.8 %)      247.4     1,298  

Consumer loans

     23,815       25,435       36,231       (6.4 %)      (34.3 %)      23,748  

Credit cards

     69,268       74,377       63,292       (6.9 %)      9.4     69,268  

Receivables from financial leases

     1,445       1,715       2,955       (15.8 %)      (51.1 %)      1,445  

Other loans (1)

     16,783       14,039       11,134       19.6     50.7     11,165  

Non-financial private sector and residents abroad - Foreign Currency

     41,666       39,535       106,662       5.4     (60.9 %)      41,666  

Overdrafts

     1       3       17       (64.9 %)      (93.6 %)      1  

Discounted instruments

     1,287       3,404       10,779       (62.2 %)      (88.1 %)      1,287  

Mortgage loans

     175       179       —         (2.6 %)      N/A       175  

Credit cards

     1,113       3,310       4,337       (66.4 %)      (74.3 %)      1,113  

Receivables from financial leases

     280       322       287       (13.0 %)      (2.6 %)      280  

Loans for the prefinancing and financing of exports

     27,075       19,723       78,692       37.3     (65.6 %)      27,075  

Other loans (1)

     11,735       12,594       12,550       (6.8 %)      (6.5 %)      11,735  

% of total loans to Private sector in Pesos

     81.5     81.8     60.9     (27 )pbs      2,065  pbs      60.9

% of total loans to Private sector in Foreign Currency

     18.5     18.2     39.1     27  pbs      (2,065 )pbs      39.1

Total loans and other financing

     230,598       222,790       281,995       3.5     (18.2 %)      221,035  

Allowances

     12,061       (12,268     (7,086     1.7     (70.2 %)      (11,894

Total net loans and other financing

     218,538       210,522       274,909       3.8     (20.5 %)      209,141  

 

(1)

Includes IFRS adjustment    

(2)

Excludes consolidation with VWFS y PSA.    

Private loans totaled $225.5 billion, growing 3.8% or $8.3 billion QoQ, and falling 17.3% or $47.2 billion YoY.

Loans to the financial sector contracted 8.7% QoQ, mainly due to the decrease in call money transactions with related companies, consequence of a lower activity.

Private loans denominated in pesos grew 3.5% in 4Q19, and 10.8% YoY. Private loans denominated in foreign currency grew 5.4% QoQ and contracted 60.9% YoY, driven by a prudential reduction in USD-denominated loans after August 2019 turmoil. These loans, measured in U.S. dollars, fell 2.1% and 73.7% compared to 4Q19 and 1Q19 respectively. The increase in the currency exchange rate versus the U.S. dollar was 7.6% QoQ and 48.7% YoY.

 

Loans and other financing    BBVA ARG consolidated     Chg (%)     Proforma (2)  

In millions $

   1Q20     4Q19     1Q19     QoQ     YoY     1Q20  

Non-financial private sector and residents abroad - Retail

     117,809       127,709       122,694       (7.8 %)      (4.0 %)      110,533  

Mortgage loans

     15,106       15,256       16,386       (1.0 %)      (7.8 %)      15,107  

Pledge loans

     8,506       9,331       2,449       (8.8 %)      247.4     1,298  

Consumer loans

     23,815       25,435       36,231       (6.4 %)      (34.3 %)      23,748  

Credit cards

     70,381       77,687       67,629       (9.4 %)      4.1     70,381  

Non-financial private sector and residents abroad - Commercial

     107,665       89,458       149,929       20.4     (28.2 %)      102,047  

Overdrafts

     29,506       15,520       11,897       90.1     148.0     29,506  

Discounted instruments

     20,841       25,545       32,413       (18.4 %)      (35.7 %)      20,841  

Receivables from financial leases

     1,725       2,037       3,243       (15.3 %)      (46.8 %)      1,725  

Loans for the prefinancing and financing of exports

     27,075       19,723       78,692       37.3     (65.6 %)      27,075  

Other loans (1)

     28,518       26,633       23,684       7.1     20.4     22,900  

% of total loans to Retail sector

     52.2     58.8     45.0     (656 )pbs      724  pbs      52.0

% of total loans to Commercia sector

     47.8     41.2     55.0     656  pbs      (724 )pbs      48.0

Total loans and other financing

     230,598       222,790       281,995       3.5     (18.2 %)      221,035  

Allowances

     12,061       (12,268     (7,086     1.7     (70.2 %)      (11,894

Total net loans and other financing

     218,538       210,522       274,909       3.8     (20.5 %)      209,141  

 

(1)

Includes IFRS adjustment    

(2)

Excludes consolidation with VWFS and PSA.    

Considering retail loans (including mortgage, pledge, consumer and credit card loans), these have decreased 7.8% QoQ and 4.0% YoY. The lower annual variation is driven by the fact that during 3Q19, the bank consolidated PSA and VWFS. In 1Q20, credit cards and pledge loans decreased the most (9.4% and 8.8% respectively).

 

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Commercial loans (including overdrafts, discounted instruments, receivables from financial leases, loans for the prefinancing and financing of exports, and other loans) grew 20.4% QoQ and fell 28.2% YoY. The quarterly increase is mainly explained by a strong growth in overdrafts (90.1% or $14.0 billion QoQ, and 148.0% or $17.6 billion YoY), loans for the prefinancing and financing of exports (37.3% or $7.4 billion QoQ) and other loans, especially company loans (“Préstamos a Interés Vencido”) which grew 5.2% or $793 million.

 

Market Share - Private sector loans                      Chg (bps)  

In %

   1Q20     4Q19     1Q19     QoQ      YoY  

Private sector loans - Bank

     7.50     6.93     7.72     57 bps        (22 )bps 

Private sector loans - Consolidated*

     8.35     7.71     8.59     64 bps        (24 )bps 

Based on daily BCRA information. Capital balance as of the last day of each quarter.    

 

*

Consolidates PSA, VWFS and Rombo.    

Asset Quality

 

Asset Quality    BBVA ARG consolidated     Chg (%)  

In millions $

   1Q20     4Q19     1Q19     QoQ     YoY  

Commercial non-performing portfolio (1)

     4,186       4,324       3,165       (3.2 %)      32.2

Total commercial portfolio

     102,692       85,385       149,051       20.3     (31.1 %) 

Retail non-performing portfolio (1)

     2,295       3,619       3,164       (36.6 %)      (27.5 %) 

Total retail portfolio

     130,398       139,347       135,126       (6.4 %)      (3.5 %) 

Total non-performing portfolio (1)

     6,480       7,942       6,329       (18.4 %)      2.4

Total portfolio

     233,090       224,732       284,177       3.7     (18.0 %) 

Total non-performing portfolio / Total portfolio

     2.78     3.53     2.23     (75 )bps      55  bps 

Allowances

     12,061       12,268       7,020       (1.7 %)      71.8

Allowances /Total non-performing portfolio

     186.12     154.46     110.91     3,166  bps      7,521  bps 

Write offs

     840       4,005       1,030       (79.0 %)      (18.5 %) 

Write offs / Total portfolio

     0.36     1.78     0.36     (142 )bps      (0 )bps 

 

(1)

Non-performing loans include: all loans to borrowers classified as “Deficient Servicing (Stage 3)”, “High Insolvency Risk (Stage 4)”, “Irrecoverable” and/or “Irrecoverable for Technical Decision” (Stage 5) according to BCRA debtor classification system

In 1Q20, asset quality ratio or NPL (total non-performing portfolio / total portfolio) was 2.78%. This ratio was positively affected by the temporary flexibility in BCRA regulation regarding debtor classification during the Covid-19 pandemic, which extends grace periods in 60 days before a loan is classified as non-performing, and also suspends the mandatory reclassification of clients that have an irregular performance with other institutions but a regular performance with the Bank.

The coverage ratio (allowances / total non-performing portfolio) increased to 186.12% in 1Q20, from 154.46% in 4Q19. This is explained by an increase in allowances as a consequence of the implementation of impairment models, and the change in BCRA regulation regarding debtor classification.

 

     BBVA ARG        
                  Lifetime ECL*              

Analysis for the allowance of loan losses

In millions $

   Balance at
12/31/2019
     12-month ECL*     Financial assets with
significant increase in
credit risk
    Credit impaired financial
assets
    Monetary result
generated by
allowances
    Balance at
03/31/2020
 

Other financial assets

     244        20       —         4       (19     248  

Loans and other financing

     12,076        (236     283       867       (1,133     11,858  

Other financial institutions

     154        (8     (25     (3     (9     110  

Non-financial private sector and residents abroad

     11,922        (228     308       870       (1,124     11,748  

Overdrafts

     684        586       277       (25     (54     1,468  

Discounted instruments

     987        (229     (126     (38     (53     540  

Mortgage loans

     153        (29     14       118       (9     248  

Pledge loans

     34        (5     (0     4       (2     31  

Consumer loans

     1,458        (153     169       (31     (96     1,347  

Credit cards

     3,655        (511     268       (64     (244     3,103  

Receivables from financial leases

     135        (19     (2     (6     (9     99  

Other financial assets

     4,816        133       (292     913       (656     4,913  

Other debt securities

     1        0       —         —         (0     1  

Eventual commitments

     977        124       267       (16     (65     1,287  

Total allowances

     13,298        (92     550       855       (1,216     13,395  

 

*

Expected Credit Loss    

Allowances in 1Q20 reflect expected losses driven by the adoption of the IFRS 9 standards as of January 1, 2020, excepting subsidiaries (PSA and VWFS) that will start implementing this as of 2021 pursuant to BCRA regulation.

Additionally, application of the IFRS 9 impairment model is temporarily excluded for non-financial public sector debt instruments.

 

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Public Sector Exposure

 

Net Public Debt Exposure    BBVA ARG Consolidated     Chg (%)  

In millions $

   1Q20     4Q19     1Q19     QoQ     YoY  

Treasury and Government securities

     18,307       17,375       20,095       5.4     (8.9 %) 

Treasury and National Government

     18,256       17,319       20,015       5.4     (8.8 %) 

National Treasury Public Debt in pesos

     11,215       9,402       12,857       19.3     (12.8 %) 

National Treasury Public Debt in dollars

     130       209       7,158       (37.7 %)      (98.2 %) 

National Treasury Public Debt USD-Linked

     6,911       7,709       —         (10.3 %)      N/A  

Provinces

     51       56       80       (9.0 %)      (36.9 %) 

Public Sector loans

     1       —         —         N/A       N/A  

Repo

     —         —         19,295       N/A       N/A  

National Treasury - Foreign currency

     —         —         19,295       N/A       (100.0 %) 

Pesos Subtotal

     11,266       9,457       12,937       19.1     (12.9 %) 

Dollars Subtotal*

     7,041       7,917       26,453       (11.1 %)      (73.4 %) 

Total Public Debt Exposure

     18,307       17,375       39,391       5.4     (53.5 %) 

B.C.R.A. Exposure

     59,384       35,659       55,542       66.5     6.9

Instruments

     56,171       35,640       44,101       57.6     27.4

Leliqs

     56,171       35,640       44,101       57.6     27.4

Loans to the B.C.R.A.

     11       19       2       (39.9 %)      400.6

Repo

     3,202       —         11,439       N/A       (72.0 %) 

B.C.R.A. - Pesos

     3,202       —         11,439       N/A       (72.0 %) 

% Public sector exposure (Excl. B.C.R.A.) / Total assets

     3.6     3.5     6.6     3  bps      (308 )bps 

 

*

Includes dollar-linked Treasury public debt in $    

Public sector exposure (excluding BCRA) totaled $18.3 billion, increasing 5.4% or $932 million QoQ, and decreasing 8.9% or $1.8 billion YoY.

Short-term liquidity is allocated in BCRA instruments; which grew 66.6% or $23.7 billion compared to 4Q19, and 6.9% or $3.8 billion compared to 1Q19.

Exposure to the public sector (excluding BCRA) represents 3.6% of total assets, in line with the prior quarter.

Deposits

 

Deposits    BBVA ARG consolidated     Chg (%)  

In millions $

   1Q20     4Q19     1Q19     QoQ     YoY  

Total Deposits

     327,960       316,917       413,481       3.5     (20.7 %) 

Non-financial Public Sector

     3,473       3,167       2,473       9.7     40.4

Financial Sector

     287       192       341       49.2     (16.0 %) 

Non-financial private sector and residents abroad

     324,200       313,558       410,666       3.4     (21.1 %) 

Non-financial private sector and residents abroad -$

     210,310       187,990       213,676       11.9     (1.6 %) 

Checking accounts

     63,234       58,190       42,085       8.7     50.3

Savings accounts

     68,003       52,877       57,748       28.6     17.8

Time deposits

     71,229       73,126       110,609       (2.6 %)      (35.6 %) 

Other

     7,844       3,797       3,235       106.6     142.5

Non-financial private sector and res. abroad - Foreign Currency

     113,890       125,568       196,990       (9.3 %)      (42.2 %) 

Checking accounts

     34       22       43       54.1     (20.4 %) 

Savings accounts

     94,582       106,478       165,414       (11.2 %)      (42.8 %) 

Time deposits

     15,988       17,613       27,962       (9.2 %)      (42.8 %) 

Other

     3,286       1,454       3,573       126.0     (8.0 %) 

% of total portfolio in the private sector in Pesos

     64.9     60.0     52.0     492  bps      1,284  bps 

% of total portfolio in the private sector in Foregin Currency

     35.1     40.0     48.0     (492 )bps      (1,284 )bps 

During 1Q20, total deposits were $328.0 billion, recording an increase of 3.5% or $11.0 billion QoQ and a 20.7% or $85.5 billion contraction YoY.

Private sector deposits in 1Q20 were $324.2 billion, increasing 3.4% or $10.6 billion QoQ, and decreasing 21.1% or $86.5 billion YoY.

Private non-financial sector deposits in pesos totaled $210.3 billion, growing 11.9% or $22.3 billion compared to 4Q19, and decreasing 1.6% or $3.4 billion compared to 1Q19. This is mainly explained by the strong growth in savings account and checking account deposits, which offset the decrease in time deposits in the quarter (but not in the year).

 

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Private non-financial sector deposits in foreign currency expressed in pesos fell 9.3% or $11.7 billion QoQ and 42.2% or $83.1 billion YoY. Measured in U.S. dollars, these deposits fell 15.7% compared to 4Q19 and 61.1% compared to 1Q19. During 1Q19, U.S. dollar deposit withdrawal continued, but at a slower pace than that observed during the last months of 2019.

 

Deposits    BBVA ARG consolidated     Chg (%)  

In millions $

   1Q20     4Q19     1Q19     QoQ     YoY  

Non-financial private sector and residents abroad

     324,200       313,558       410,666       3.4     (21.1 %) 

Sight Deposits

     236,984       222,818       272,096       6.4     (12.9 %) 

Checking accounts

     63,268       58,212       42,127       8.7     50.2

Savings accounts

     162,585       159,355       223,161       2.0     (27.1 %) 

Other

     11,131       5,251       6,807       112.0     63.5

Time deposits

     87,216       90,739       138,571       (3.9 %)      (37.1 %) 

Time deposits

     87,216       90,739       138,571       (3.9 %)      (37.1 %) 

% of sight deposits over total deposits

     73.1     71.1     66.3     204  bps      684  bps 

% of time deposits over total deposits

     26.9     28.9     33.7     (204 )bps      (684 )bps 

As of 1Q20, the Bank’s transactional deposits (checking accounts and savings accounts) represented 68.9% of total non-financial private deposits, totaling $225.9 billion.

 

Market Share - Deposits to the private sector    BBVA ARG Consolidated     Chg (bps)  

In %

   1Q20     4Q19     1Q19     QoQ     YoY  

Consolidated Private sector deposits*

     6.79     7.14     7.75     (35) pbs      (96) pbs 

Based on daily BCRA information. Capital balance as of the last day of each quarter.

 

*

Consolidates PSA, VWFS and Rombo.

Other Sources of Funds

 

Other sources of funds    BBVA ARG Consolidated      Chg (%)  

In millions $

   1Q20      4Q19      1Q19      QoQ     YoY  

Other sources of funds

     98,174        97,333        94,517        0.9     3.9

Central Bank

     240        18        28        n.m       n.m  

Banks and international organizations

     279        2,737        8,397        (89.8 %)      (96.7 %) 

Financing received from local financial institutions

     3,108        3,873        477        (19.8 %)      n.m  

Corporate bonds

     7,499        7,890        6,273        (5.0 %)      19.5

Equity attributable to owners of the Parent

     87,049        82,815        79,343        5.1     9.7

In 1Q20, other sources of funds totaled $98.2 billion, increasing 4.4% or $4.1 billion QoQ, and 3.9% or $3.7 billion YoY.

In 1Q20, the Banks and International Organizations line item decreased 89.8% or $2.5 billion, mainly driven by a fall in correspondent banking.

The 5.1% or $4.2 billion increase in equity as of 1Q20 is explained by the 1Q20 results.

4Q19 equity evolution can be observed in the table below, going from historical values to current values through the implementation of IAS 29 rule.

 

Equity       

In millions $

   4Q19  

Equity before IAS 29 application

     63,388  

Total impact of IAS 29 application (1)

     15,012  

Equity in terms of 12/31/2019 units

     78,400  

Adjustment from reexpression of equity at current units 03/31/2020 (2)

     6,115  

Equity in terms of 03/31/2019 units

     84,514  

Total recognized in Retained Earnings (1)+(2)

     21,127  

 

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Liquid Assets

 

Total Liquid Assets    BBVA ARG consolidated     Chg (%)  

In millions $

   1Q20     4Q19     1Q19     QoQ     YoY  

Total liquid assets

     230,358       229,289       261,461       0.5     (11.9 %) 

Cash and deposits in banks

     146,518       168,448       154,276       (13.0 %)      (5.0 %) 

Debt securities at fair value through profit or loss

     9,059       4,452       3,041       103.5     197.9

Government securities

     51       56       1,436       (8.0 %)      (96.4 %) 

Liquidity bills of B. C. R. A.

     8,907       4,295       1,467       107.4     n.m  

Net REPO transactions

     3,202       —         31,785       N/A       (89.9 %) 

Other debt securities

     66,553       50,917       62,955       30.7     5.7

Government securities

     17,416       17,282       17,320       0.8     0.6

Private securities

     76       75       194       2.0     (60.6 %) 

Liquidity bills of B. C. R. A.

     47,264       31,345       42,633       50.8     10.9

Investments in equity instruments

     1,797       2,216       2,808       (18.9 %)      (36.0 %) 

Liquid assets / Total Deposits

     68.7     70.6     60.9     (192 )pbs      775  pbs 

In 1Q20, liquid assets were $230.4 billion, increasing 0.5% or $1.1 billion compared to 4Q19, and decreasing 11.9% or $31.1 billion compared to 1Q19.

During the quarter, growth in LELIQ stands out with a 57.6% or $20.5 billion increase, while cash and deposits in banks decreased 13.0% or $22.0 billion.

In 1Q20, the liquidity ratio (liquid assets / total deposits) reached 68.7%.

Solvency

 

Minimum capital requirement    BBVA ARG consolidated     Chg (%)  

In millions $

   1Q20     4Q19     1Q19     QoQ     YoY  

Minimum capital requirement

     29,219       28,021       35,881       4.3     (18.6 %) 

Credit risk

     21,666       20,795       29,445       4.2     (26.4 %) 

Market risk

     501       327       348       53.2     44.0

Operational risk

     7,052       6,899       6,088       2.2     15.8

Integrated Capital - RPC (1)*

     77,820       70,005       80,483       11.2     (3.3 %) 

Ordinary Capital Level 1 (COn1)

     90,869       80,393       80,277       13.0     13.2

Deductible items COn1

     (15,259     (12,499     (2,643     (22.1 %)      (477.3 %) 

Additional Capital Level 2 (COn2)

     2,210       2,111       2,849       4.7     (22.4 %) 

Excess Capital

          

Integration excess

     48,601       41,984       44,602       15.8     9.0

Excess as % of minimum capital requirement

     166.3     149.8     124.31     1,650  pbs      4,203  pbs 

Risk-weighted assets (RWA, according to B.C.R.A. regulation) (2)

     357,350       302,235       283,640       18.2     26.0

Regulatory Capital Ratio (1)/(2)

     21.8     23.2     28.4     (139 )bps      (660 )bps 

TIER I Capital Ratio (Ordinary Capital Level 1/ RWA)

     21.2     22.5     27.4     (131 )bps      (621 )bps 

 

*

RPC includes 100% of quarterly results

BBVA Argentina continues to show solid solvency indicators on 1Q20. Capital ratio reached 21.8%. Tier 1 ratio was 21.2% and capital excess over regulatory requirement was $48.6 billion. The increase is affected by the initial IAS 29 adjustment over non-monetary assets, and the change in BCRA regulation (Communication “A” 6938) over provisions which allows banks to consider as Con1, the difference between loan loss allowances recorded by IFRS 9 and provisions recorded as of November 30, 2019 with previous methodology ($3.4 billion).

 

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Other Events

Relevant Events

 

   

As of February 18, 2020, BBVA Argentina Board of Directors called the Annual Ordinary and Extraordinary Shareholders’ Meeting for April 7, 2020.

 

   

As of February 26, 2020, Banco BBVA Argentina S.A., in its role as custodian bank of mutual funds, and BBVA Asset Management S.A.S.G.F.C.I. in its role as management company, have been notified of a class action lawsuit filed by the Asociación por la Defensa de Usuarios y Consumidores, for the alleged validation of a unilateral change in price of U.S. Dollar future contracts executed in the Mercado a Término de Rosario (Rosario Futures Exchange) and Argentina Clearing S.A. after September 29, 2015, maturing through June 2016 (included).

 

   

As of March 27, 2020, the Bank has decided to cancel the Annual Ordinary and Extraordinary Shareholders’ Meeting scheduled for April 7, 2020, due to the extension in the public sanitary emergency declared in Decree 260/2020, derived from the Covid-19 pandemic outbreak.

 

   

As of April 16, 2020, the Bank made a new call for the Annual Ordinary and Extraordinary Shareholders’ Meeting scheduled for May 15, 2020.

 

   

As of April 27, 2020, BBVA Argentina filed the Annual 20-F Report for the period ended in December 2019.

 

   

As of April 29, 2020, the Board of Directors decided to replace Oscar Castro for Juan Manuel Ballesteros in the Audit Committee (Capital Markets Law 26,831)

 

   

As of May 6, 2020, credit rating agency Fitch Ratings downgraded the International Foreign Currency Long Term rating from CCC to CC, and the International Local Currency Long Term rating from CCC+ to CC, following the downgrade in the sovereign rating of Argentina from CCC+ to CC.

 

   

As of May 15, 2020, shareholders at the Annual Ordinary and Extraordinary Shareholders’ meeting, approved the distribution of cash dividends in the amount of $2.5 billion, equal to $4.08056912 per share, and delegated on the Board of Directors the power to determine the date of payment of such dividends. The distribution is subject to BCRA prior authorization, which has not been granted yet. According to Communication “A” 6939, the distribution of financial institutions’ results is suspended until June 30, 2020.

 

   

As of May 27, 2020, pursuing the commercial strategy of the Bank, together with Banco Santander Río S.A. and Banco de Galicia and Buenos Aires S.A.U., the process of establishing a company called Play Digital S.A., has been initiated. Such company shall be engaged in developing and marketing payment solutions regarding the bank accounts of users of the financial system.

Corporate Bond payments during 1Q20

 

   

As of February 10, 2020, the Bank completed quarterly coupon payments on corporate bond Class 25 for $32.7 million.

 

   

As of February 28, 2020, the Bank completed quarterly coupon payments on corporate bond Class 27 for $124.4 million.

 

   

As of March 12, 2020, the Bank completed quarterly coupon payments on corporate bond Class 28 for $201.1 million.

 

   

As of March 27, 2020, the Bank completed quarterly coupon payments on corporate bond Class 24 for $53.4 million.

COVID-19

 

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Donations

 

   

BBVA Argentina donated $10 million for the “Seamos Uno” campaign, an initiative involving religious, social and business institutions working closely with the Argentine government to help 4 million people during the pandemic, with food boxes and hygiene products.

 

   

BBVA Argentina also donated another $10 million to the Red Cross for the “Argentina nos necesita” campaign, an initiative that aims to strengthen the capacity of the Argentine public and private health service systems in order to better respond to the Covid-19 pandemic, in coordination with the Argentine Ministry of Health.

 

   

Adding to these direct contributions, BBVA Argentina launched its campaign “Tu donación vale el doble”, a voluntary initiative with the Red Cross, in which more than $500,000 were collected, reaching more than $1 million when added to the funds doubled by the Bank.

 

   

The Bank also joined the #StayAtHome campaign, promoting the use of digital media channels to make clients aware of the benefits of operating in an agile and self-serviced way without moving from their homes.

Financing (including regulatory changes)

Retail

 

   

The Bank automatically re-financed unpaid credit card balances due on April 30, and modified the calculation of credit card minimum payments so that they were more accessible.

 

   

Penalties on unpaid current account charges, and closure and disabling of accounts, were suspended until April 30. Fines and fees for returned checks were also suspended.

 

   

The Bank credited cash withdrawal costs at its own and other banks’ ATMs until June 30, and incremented daily withdrawal limits.

 

   

The Bank freezed the value of mortgage and pledge loan payments from April 1 to September 30. Unpaid instalments will be paid in three equal consecutive payments as of October. Difference in value generated from UVA mortgage loans during these months will be paid in three, interest free instalments as of October.

 

   

The Bank launched the “Ayuda Covid-19” credit line, aimed at clients with credit cards, personal loans and current accounts with a high probability of default: loans of 60 month maturity, first payment due at 120 days, to enable the sorting out of debt.

Commercial

 

   

A new process was launched to assist Plan Sueldo clients that do not have debit cards, so that they can withdraw cash through the Cash Express service.

 

   

BBVA Argentina has granted more than $16,800 million in credit to more than 8,000 SMEs, to be allocated in payroll payments, discounted instruments and working capital, at a 24% nominal annual rate, exceeding the maximum quota that was aimed at that sector. This also included loans to the Health sector.

 

   

BBVA Argentina has granted a special credit line for payroll payments for SMEs, which includes a 24% nominal annual rate, in a 12 month period of maturity, and a grace period of 3 months, backed by the Fondo de Garantías Argentino (FoGAr) warrants.

 

   

92% of credits were granted through BBVA Net Cash, the online banking for companies.

 

   

Currently, the Bank is working on credit lines for self-employed individuals at a 0% rate, promoted by the National Government.

 

   

Credit lines for high reciprocity clients, with a 15 month maturity and first instalment payment in 90 days.

 

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Human Capital

 

   

Due to the Covid-19 pandemic, the Bank has implemented a remote-work arrangement, through which employees can remotely access the Bank’s systems, supporting the continuity of operations and working to maintain adequate standards of internal control over financial information.

 

   

Currently, more than 90% of employees at central offices are working remotely.

 

   

All branches are operational. For the re-opening of offices, two teams rotate every 14 days. The team working on the first fortnight is strengthened to assist a higher seasonal volume of activity. Many of the branches are working with 100% of their staff, and most have over 50% due to the high demand in client appointments.

Main Changes in Regulation

 

   

Minimum reserve requirements. Ahora 12. (Communication “A” 6910, 02/19/2020). The BCRA established that the limit of what can be deducted from reserve requirements concerning financing within the Ahora 12 Program, will be increased from 20% to 35%. This cannot exceed 4% of concepts in pesos subject to reserve requirements.

 

   

Ban on fee increments. (Communication “A” 6912, 02/20/2020). The BCRA stated that financial institutions would not be able to communicate fee increases or new fees for the period of 180 days.

 

   

Minimum reserve requirements. LELIQ position. Interest rates for SMEs. (Communication “A” 6937, 03/19/2020). The BCRA stated that from March 20 to April 30, the position in Central Bank Liquidity Notes (LELIQ, including reverse REPOs with the BCRA) that exceeds the one admitted for reserve requirements in pesos, cannot be over 90% of the position registered on March 19, 2020.

Furthermore, as of March 20, 2020, reserve requirements can be reduced for an equivalent of 40% of peso financing to SMEs at 24%. At least 50% of these funds will have to be allocated in working capital such as payrolls and coverage of deferred payment checks, among others.

This deduction cannot exceed 4% of concepts in pesos subject to requirement, in average, of the previous month.

Also, as of May 2020, LELIQ position cannot exceed a maximum determined by the percentage of financing that represents potential credit for SMEs (90% at most).

Reserve requirement deductions from Ahora 12 Program financings cannot exceed 6% of concepts in pesos subject to requirement (previously 4%).

 

   

Debtor classification criteria. (Communication “A” 6938, 03/19/2020). The BCRA decided to momentarily ease the criteria through which debtors are classified. Until September 30, 2020, financial institutions will have to extend late-payment periods in 60 days for stages 1, 2 and 3, both for commercial and retail loans. Additionally, new minimum provisioning rules are included: with preferred warrants: 8%, without preferred warrants: 16%.

Group A financial institutions will have to include in their calculation of regulatory capital (known as Responsabilidad Pratrimonial Computable or RPC), the impact from the positive difference between “new accounting IFRS 9 provision – regulatory provision or accounting provision as of November 30, 2019” (the highest), can be accounted as Level 1 Ordinary Capital (Con1).

 

   

Results distribution. (Communication “A” 6939, 03/19/2020). The BCRA suspends the distribution of results for financial institutions until June 30, 2020.

 

   

Minimum capital requirement for purchases abroad. (Communication “A” 6940, 03/19/2020). The BCRA establishes that as of April 1, 2020, capital requirement must be integrated for a 1250% over exposure to individuals and companies making purchases of touristic services in instalments abroad through credit cards.

 

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Reserve requirements. (Communication “A” 6943, 03/24/2020). The BCRA modified Communication “A” 6937, adding a reduction to reserve requirements in pesos of 40% of financing given to SMEs at 24%, allocated to providers of health services, as long as they provide hospitalization services as part of the Sanitary Emergency stated in Decree 260/2020, and that will be applied to the purchase of medical supplies and equipment.

 

   

Fees. (Communication “A” 6945, 03/26/2020). Within the framework of the mandatory confinement disposed by the National Executive Power, the BCRA stated that through June 30, 2020, financial institutions cannot charge fees for transactions done through ATMs in the country, with no fund limits.

 

   

LELIQ position calculation. SMEs financing. (Communication “A” 6946, 03/26/2020). The BCRA modified Communication “A” 6937. When financings had been used for payrolls and the financial institution were to be the payment agent, LELIQ position will be accounted for 130%, for which the SMEs will have to declare the allocation of such funds.

 

   

Mortgage loans. Amortization freeze. (Decree 319/2020, 03/30/2020). The National Executive Power established the freezing until September 30, 2020 of amortization payments for mortgage loans. Also, until such date, mortgage foreclosures are suspended. Regarding differences originated from instalment values or lack of payment, these can be paid in at least three consecutive equal monthly instalments, interest free. In case of debts from lack of payment, compensatory interests may be applied, while moratorium and punitive interests cannot be applied. The parties may arrange other means of payment but this cannot have a significant burden for the debtor.

 

   

Layoffs. (Decree 329/2020, Decree 487/2020, 03/31/2020 and 05/19/2020). The Executive Power declares the ban on wrongful dismissals and layoffs for the period of 60 days. Dismissals mentioned in article 233 bis of the Ley de Contrato de Trabajo (Employment Contracts Law) are excepted. This regulation was extended for an additional 60 days on May 18, 2020, through Decree 487/2020.

 

   

Automatic deferral of unpaid balances. (Communication “A” 6949, 04/01/2020). The BCRA determined that unpaid balances from credits granted by financial institutions, which payments are due between April 1 and June 30 2020, will not accrue punitive interests. In the case of credit card payments, clients of financial institutions will be able to cancel them on April 13, without additional charges. Credit card financing rate cannot exceed 49%.

 

   

Deferral of payments on Argentine law sovereign debt in U.S. dollars. (Decree 346/2020, 04/06/2020). The National Government disposed the deferral of capital and interest payments on Argentine law sovereign debt until December 31, 2020.

 

   

Period of credit card payments. (Communication “A” 6964, 04/10/2020). The BCRA stated that financial institutions must automatically refinance unpaid balances on credit cards up to one year (between April 13 and April 30, 2020), with a 3 month grace period, and 9 monthly equal consecutive instalments, at a nominal interest rate of 43% (previously 49% and up to April 1, 55%).

 

   

Limit to LELIQ net position. (Communication “A” 6965, 04/14/2020). The BCRA defined a net position of LELIQs. This cannot exceed the highest between: (i) the RPC of the previous month; and (ii) the 100% of the average daily balances of deposits in pesos—excluding financial sector- and the residual value of the institution’s corporate bonds in pesos (issued until February 8, 2020) in the current month. The LELIQs comprised in reverse REPOs with the BCRA are not taken into consideration for the net position limit.

 

   

LELIQ net position. Application. (Communication “A” 6979, 04/16/2020). The BCRA stated that as of April 17, 2020, regulation on item 8.2 of “Operaciones al contado a liquidar y a término, pases, cuaciones, otros derivados y con fondos comunes de inversion” rules shall be considered in terms of net position. This applies to Communication “A” 6937.

 

   

Depositor insurance funds. (Communication “A” 6973, 04/16/2020). As of May 1, 2020, the BCRA increased the amount for which depositors funds are insured, from $1 million to $1.5 million.

 

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Time deposits minimum rate. (Communication “A” 6980, 04/16/2020). The BCRA established a minimum rate for time deposits in pesos not linked to “UVA” (Unidad de Valor Adquisitivo) or “UVI” (Unidad de Vivienda), of $1 million or less corresponding to individuals. The nominal interest rate cannot be below the one expressed by the BCRA every Friday. This rate will be 70% of the average rates of LELIQs of shorter maturity of the previous week on calculation.

 

   

Cero rate credits. Minimum reserve requirements. (Communication “A” 6993, 04/27/2020). The BCRA stated that financial institutions shall grant financing at 0% rate (“Créditos a Tasa Cero”) disposed on Decree 332/2020 to all clients that request it. Regarding reserve requirements, this will be deducted for an amount equivalent to 60% of all financing at 0% rate. The Fondo Nacional de Desarrollo Productivo (FONDEP) will recognize a 15% annual nominal rate to financial institutions, over the amount that has been disbursed for these financings.

 

   

Maximum amount granted in time deposits at minimum rate. (Communication “A” 7000, 04/30/2020). The BCRA increased the maximum amount (from $1 million to $4 million) that can be granted in time deposits at the minimum rate, only considering those not adjusted by “UVA” or “UVI”.

 

   

Access to Foreign Exchange (FX) Market. (Communication “A” 7001, 04/30/2020). The BCRA set adjustments on conditions to access the FX market:

 

   

A previous authorization by the BCRA will be necessary for the writing off on amortization and interests of any kind of financing abroad that was pending on March 19, 2020 (with exceptions, in the case the client presents a declaration claiming it has not taken subsidized financing at 24% and will not do so for the next 30 days).

 

   

Clients will have to present a sworn declaration stating that, as of that day and during the previous 30 days, they have not sold securities settled in foreign currency or transferred securities to foreign custodian banks. Also, they commit to not engaging in such transactions as of the moment they have access to the FX market, and for the next 30 days.

 

   

Extension in the period of suspension of bank account closures. (Decree 312/2020, 05/01/2020). The National Executive Power decided to extend until June 30, 2020 the period in which bank accounts may be closed or disabled (according to art.1 of Law 25,730, including penalties provided in such law).

 

   

Minimum reserve requirement. Reduction in LELIQ position. (Communication “A” 7006, 05/08/2020). The BCRA established that financial institutions will have to reduce their LELIQ position that exceeds the one admitted as reserve requirement in pesos, in an additional 1% to the position recorded as of March 19, 2020. To adjust, they will have to reduce their net LELIQ position as they begin to collect payment at maturity.

 

   

Minimum reserve requirement. Integration with new National Treasury Bonds maturing on May 2020. (Communication “A” 7016, 05/14/2020). The BCRA determined that Group A financial institutions and branches, will be able to comply reserve requirements in pesos with fixed rate National Treasury Bonds maturing on May 2022, the same as it has been done with National Treasury Bonds due on November 2020. Bonds that apply for the integration of reserve requirements will not be considered in the calculation of limits imposed in regulations concerning credit to the non-financial public sector.

 

   

Time deposits reserve requirements. Limits to agricultural businesses. Minimum capital requirement. (Communication “A” 7018, 05/14/2020). The BCRA disposed that for deposits received as of May 18, 2020, the minimum rate (70% of the average rate of shortest maturity LELIQ) will be applicable to clients of the private non-financial sector, without limit in amount. Financial institutions will be able to integrate reserve requirements for 100% of time deposits (from the non-financial public and private sector) in LELIQ. Time deposits at a floating rate adjusted to profits related to cereals and oilseeds, will be restricted to individuals or companies with agricultural activity for up to 2 times their sales as of November 1, 2019 (enabling reserve requirement integration in LELIQ). Financing at 24% will not be allowed for companies with agricultural activity that stockpile more than 5% of their annual harvest.

 

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Capital requirements for credit risk is established as of May 18, 2020, as financing to individuals and companies with agricultural activity that are not SMEs, and that stockpile more than 5% of their annual harvest capacity, will require capital integration multiplied by a factor of 4.

 

   

Minimum period for securities position. (General Resolution CNV 841, 05/26/2020). The Argentine Securities Exchange Commission (CNV) established a minimum period of 5 days during which securities must be held, in the case of selling transactions that settle in foreign currency or the transfer of securities to a custodian bank abroad. This is not applicable to buy-sell transactions in foreign currency that settle in the same jurisdiction, nor for the acquisition in foreign jurisdiction and selling in foreign currency at local jurisdiction.

 

   

Time deposits minimum rate. Exclusion of 24% rate financing to SMEs debtors. (Communication “A” 7027, 05/28/2020). As of June 1, 2020, the minimum annual nominal rate for time deposits will be 79% of the average rate of LELIQ. Companies that have taken credit at 24% (aimed at SMEs) will not be granted such rate. The BCRA also increases the excess net position of LELIQ allowed from 10% to 18%.

 

   

Time deposits at floating rate adjusted to the U.S. dollar. (Communication “A” 7029, 05/28/2020). The BCRA allows time deposits at a floating rate (initially adjusted to the value of cereal or oilseed) to be adjusted by the value of the U.S. dollar.

 

   

Access to the FX market. (Communication “A” 7030, 05/28/2020). Companies with liquid assets originated from the purchase of external assets, will have to comprise these for the payment of obligations abroad. When accessing the FX market, individuals and companies have to sign an affidavit affirming they have not engaged in buying and selling of public securities that settle in foreign currency during the last 90 and for the next 90 days.

 

   

Excess LELIQ position over time deposits at minimum rate. (Communication “A” 7027, 06/04/2020). BCRA now enables the increase in the excess net position of LELIQ at 18% for time deposits granted to National, provincial and Ciudad Autónoma de Buenos Aires governments and/or municipalities (only when they have been paid at a rate over the minimum).

 

   

Dividend distribution suspension postponement. (Communication “A” 7035, 06/04/2020). The BCRA stated the postponement of dividend distribution suspension (stated in Communication “A” 6939) for financial institutions until December 30, 2020.

 

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Glossary

Public Sector Exposure (excl. BCRA): (Public debt with the National and Provincial Government + Loans to the public sector + REPO transactions) / Total Assets

ROE (accumulated): Attributable Net Income / Average Equity. Average Equity is calculated as the average between equity in December of the previous year and equity in the current period, expressed in local currency.

ROA (accumulated): Attributable Net Income / Total Average Assets. Total Average Assets is calculated as the average between total assets on December of the previous year and total assets in the current period, expressed in local currency.

ROE (quarterly): Attributable Net Income / Average Equity. Average Equity is calculated as the average between equity on the previous quarter end and equity in the current period, expressed in local currency.

ROA (quarterly): Attributable Net Income / Total Average Assets. Total Average Assets is calculated as the average between total assets on the previous quarter end and total assets in the current period, expressed in local currency.

Liquidity Ratio: (Cash and deposits in banks + Debt securities at fair value through profit or loss + Net REPO transactions + Other debt securities) / Total Deposits

Efficiency Ratio: (Personnel benefits + Administrative Expenses + Depreciation & Amortization) / (Net Interest Income + Net Income from measurement of Financial Instruments at Fair Value + Foreign exchange and gold gains + Net Fee Income + Insurance activity income + Other net operating income)

 

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Balance Sheet

 

Balance Sheet                       Chg (%)     Proforma (1)  
In millions $    1Q20     4Q19     1Q19      QoQ     YoY     1Q20  

Assets

             

Cash and deposits in banks

     146,518       168,447       154,277        65.9     (7.2 %)      146,371  

Cash

     37,326       50,368       22,405        65.3     (7.2 %)      37,326  

Financial institutions and correspondents

     109,192       118,079       131,872        66.2     (7.2 %)      —    

B.C.R.A

     104,800       115,886       121,649        81.7     (7.2 %)      104,670  

Other local and foreign financial institutions

     4,392       2,193       10,223        (69.8 %)      (7.2 %)      4,375  

Debt securities at fair value through profit or loss

     9,059       4,452       3,041        (20.1 %)      (7.2 %)      9,059  

Derivatives

     2,155       3,285       1,217        35.8     (7.2 %)      2,155  

Repo transactions

     3,202       —         31,785        (100.0 %)      N/A       3,202  

Other financial assets

     18,539       5,055       16,693        (57.3 %)      (45.5 %)      18,323  

Loans and other financing

     218,539       210,523       274,976        (4.3 %)      (5.8 %)      209,142  

Non-financial public sector

     1       0       1        (100.0 %)      (100.0 %)      1  

B.C.R.A

     11       19       2        N/A       (9.4 %)      11  

Other financial institutions

     5,026       5,472       9,403        85.8     (5.7 %)      8,320  

Non-financial private sector and residents abroad

     213,501       205,032       265,570        (5.5 %)      (5.8 %)      200,810  

Other debt securities

     64,756       48,702       60,148        (28.8 %)      (7.2 %)      64,756  

Financial assets pledged as collateral

     6,815       6,385       7,831        (28.7 %)      (7.2 %)      6,815  

Current income tax assets

     —         23       1        N/A       0.9     —    

Investments in equity instruments

     1,812       2,216       2,809        9.7     (7.2 %)      1,812  

Investments in subsidiaries and associates

     1,126       1,117       2,796        255.9     (13.3 %)      2,871  

Property and equipment

     27,332       28,105       32,295        (2.7 %)      (59.1 %)      27,301  

Intangible assets

     919       841       934        (8.1 %)      (30.0 %)      918  

Deferred income tax assets

     7,416       6,371       116        81.9     (2.9 %)      7,060  

Other non-financial assets

     4,285       4,610       3,479        34.2     (30.4 %)      4,056  

Non-current assets held for sale

     179       179       179        —         (66.5 %)      179  

Total Assets

     512,654       490,310       592,577        6.3     (10.2 %)      504,019  

Liabilities

             

Deposits

     327,960       316,918       413,481        7.1     (7.2 %)      327,329  

Non-financial public sector

     3,473       3,167       2,473        11.2     (7.2 %)      3,473  

Financial sector

     287       192       341        (43.3 %)      (7.5 %)      539  

Non-financial private sector and residents abroad

     324,200       313,558       410,666        7.1     (7.2 %)      323,317  

Liabilities at fair value through profit or loss

     —         626       2,921        n.m       (7.2 %)      —    

Derivatives

     332       3,313       2,391        (23.6 %)      (7.2 %)      332  

Repo transactions

     —         —         —          N/A       N/A       —    

Other financial liabilities

     42,830       31,073       43,478        (8.8 %)      (7.2 %)      42,476  

Financing received from the B.C.R.A. and other financial institutions

     3,627       6,628       8,901        (27.5 %)      (7.2 %)      998  

Corporate bonds issued

     7,499       7,890       6,273        (16.1 %)      (7.2 %)      4,900  

Current income tax liabilities

     11,578       8,699       8,593        54.0     (7.2 %)      11,438  

Provisions

     11,274       11,586       6,264        28.5     (15.0 %)      11,211  

Deferred income tax liabilities

     —         —         3,382        (100.0 %)      N/A       —    

Other non-financial liabilities

     18,780       18,427       17,499        12.0     (7.4 %)      18,260  

Total Liabilities

     423,879       405,160       513,184        5.5     (7.5 %)      416,944  

Equity

             

Share Capital

     613       613       613        —         0.0     613  

Non-capitalized contributions

     20,894       20,894       20,883        0.1     (67.7 %)      20,894  

Capital adjustments

     14,633       14,633       14,633        —         (97.9 %)      14,633  

Reserves

     47,242       47,242       28,896        —         (39.7 %)      47,242  

Retained earnings

     11,095       (17,844     7,221        N/A       100.0     11,095  

Other accumulated comprehensive income

     (10,187     (11,026     2,228        4.6     69.0     (9,871

Income for the period

     2,759       28,940       4,870        31.8     7.1     2,444  

Equity attributable to owners of the Parent

     87,049       83,450       79,343        13.6     (23.6 %)      87,049  

Equity attributable to non-controlling interests

     1,726       1,700       50        (36.0 %)      (7.7 %)      27  

Total Equity

     88,775       85,150       79,393        11.6     (23.3 %)      87,076  

Total Liabilities and Equity

     512,654       490,310       592,577        6.3     (10.2 %)      504,019  

 

(1)

Excludes consolidation with PSA and VWFS.

 

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Balance sheet - Foreign Currency Exposure

 

Foreign Currency Exposure    BBVA ARG consolidated      Chg (%)  
In millions $    1Q20      4Q19      1Q19      QoQ     YoY  

Assets

             

Cash and deposits in banks

     86,591        94,522        87,290        (8.4 %)      (0.8 %) 

Repo transactions

        —          19,742        N/A       (100.0 %) 

Other financial assets

     1,670        290        756        475.8     120.8

Loans and other financing

     37,817        36,976        104,802        2.3     (63.9 %) 

Other debt securities

     7,117        7,992        6,442        (10.9 %)      10.5

Financial assets pledged as collateral

     2,397        2,451        2,247        (2.2 %)      6.7

Investments in equity instruments

     15        29        27        (47.7 %)      (43.8 %) 

Total foreign currency assets

     135,606        142,260        222,217        (4.7 %)      (39.0 %) 

Liabilities

             

Deposits

     116,021        126,374        197,944        (8.2 %)      (41.4 %) 

Non-Financial Public Sector

     2,088        1,570        803        32.9     160.0

Financial Sector

     43        45        150        (2.9 %)      (71.1 %) 

Non-financial private sector and residents abroad

     113,890        124,759        196,990        (8.7 %)      (42.2 %) 

Liabilities at fair value through profit or loss

        485        1,725        (100.0 %)      (100.0 %) 

Other financial liabilities

     11,703        8,287        12,480        41.2     (6.2 %) 

Financing received from the B.C.R.A. and other financial institutions

     811        3,288        8,411        (75.3 %)      (90.4 %) 

Other non financial liabilities

     984        1,339        1,592        (26.6 %)      (38.2 %) 

Total foreign currency liabilities

     129,519        139,774        222,152        (7.3 %)      (41.7 %) 

Foreign Currency Net Position—Pesos

     6,087        2,486        65        144.9     n.m  

Foreign Currency Net Position—USD

     94        42        1        127.5     n.m  

Foreign Exchange (end of period)

   $ 64.47      $ 59.90      $ 43.35        7.6     48.7

Income Statement

 

Income Statement    BBVA ARG consolidated     Chg (%)     Proforma (1)  
In millions $    1Q20     4Q19     1Q19     QoQ     YoY     1Q20  

Interest income

     24,613       30,518       28,417       (19.4 %)      (13.4 %)      23,286  

Interest expense

     (8,171     (11,279     (13,373     27.6     38.9     (7,547

Net interest income

     16,441       19,239       15,044       (14.5 %)      9.3     15,738  

Fee income

     5,401       5,768       5,896       (6.4 %)      (8.4 %)      5,400  

Fee expenses

     (3,525     (3,997     (3,594     11.8     1.9     (3,502

Net fee income

     1,876       1,771       2,302       5.9     (18.5 %)      1,898  

Net income from financial instruments at fair value

     1,000       2,371       3,753       (57.8 %)      (73.3 %)      1,000  

Net loss from write-down of assets at amortized cost and fair value through OCI

     (127     (13     (6     n.m       n.m       (127

Foreign exchange and gold gains

     1,237       3,100       1,976       (60.1 %)      (37.4 %)      1,240  

Other operating income

     1,039       1,202       5,268       (13.5 %)      (80.3 %)      1,064  

Loan loss allowances

     (1,623     (2,685     (1,618     39.5     (0.4 %)      (1,596

Net operating income

     19,843       24,985       26,719       (20.6 %)      (25.7 %)      19,217  

Personnel benefits

     (4,439     (4,653     (4,202     4.6     (5.6 %)      (4,371

Administrative expenses

     (3,590     (4,260     (3,160     15.7     (13.6 %)      (3,532

Depreciation and amortization

     (823     (1,972     (1,229     58.3     33.1     (818

Other operating expenses

     (3,112     (6,416     (4,509     51.5     31.0     (2,974

Operating income

     7,880       7,685       13,617       2.5     (42.1 %)      7,522  

Income from associates and joint ventures

     27       680       (76     (96.0 %)      135.6     59  

Income from net monetary position

     (2,624     (3,038     (5,022     13.6     47.8     (2,380

Income before income tax

     5,283       5,328       8,519       (0.8 %)      (38.0 %)      5,201  

Income tax

     (2,176     (1,439     (3,649     (51.2 %)      40.4     (2,124

Income for the period

     3,107       3,889       4,870       (20.1 %)      (36.2 %)      3,078  

Income for the period attributable to:

     2,472       7,693          

Owners of the parent

     2,444       7,788       4,870       (68.6 %)      (49.8 %)      3,079  

Non-controlling interests

     28       (95     (0     129.9     n.m       (1

Other comprehensive income

     1,154       2,604       2,238       (55.7 %)      (48.4 %)      1,154  

 

(1)

Excludes consolidation with PSA and VWFS.

 

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Ratios

 

Quarterly Annualized Ratios    BBVA ARG Consolidated     Chg (%)  
     1Q20     4Q19     1Q19     QoQ      YoY  

Profitability

           

Efficiency Ratio

     47.4     46.3     42.0     104 bps        533 bps  

ROA

     2.5     3.2     3.5     (67) bps        (104) bps  

ROE

     14.5     19.4     26.1     (487) bps        (1,152) bps  

Liquidity

           

Liquid assets / Total Deposits

     68.7     70.6     60.9     (192) bps        775 bps  

Capital

           

Regulatory Capital Ratio

     21.8     23.2     28.4     (139) bps        (660) bps  

TIER I Capital Ratio (Ordinary Capital Level 1/ RWA)

     21.2     22.5     27.4     (131) bps        (621) bps  

Assey Quality

           

Total non-performing portfolio / Total portfolio

     2.78     3.53     2.23     (75) bps        55 bps  

Allowances /Total non-performing portfolio

     186.12     154.46     110.91     3,166 bps        7,521 bps  

About BBVA Argentina

BBVA Argentina (NYSE; BYMA; MAE: BBAR; LATIBEX: XBBAR) is a subsidiary of the BBVA Group, the main shareholder since 1996. In Argentina, it is one of the leading private financial institutions since 1886. Nationwide, BBVA 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 relies on solid values: “The 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 contacts:

Ernesto Gallardo

Chief Financial Officer

Inés Lanusse

Investor Relations Officer

investorelations-arg@bbva.com

ir.bbva.com.ar

 

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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.

 

  Banco BBVA Argentina S.A.
Date: June 8, 2020     By:   /s/ Ernesto Gallardo Jimenez
      Name:   Ernesto Gallardo Jimenez
      Title:   Chief Financial Officer