Banco BBVA Argentina S.A. announces results for
the fourth quarter of 2019
Buenos Aires, February 18th, 2020 - Banco BBVA Argentina S.A (NYSE; BYMA; MAE: BBAR;
LATIBEX: XBBAR) ("BBVA Argentina" or "BBVA" or "the Bank") announced today its consolidated results for the fourth quarter (4Q19), ended on December 31th 2019.
4Q19 Highlights
- BBVA Argentina's net income totaled $7.4 billion, 33.0% below the $11.1 billion posted in the third quarter 2019 (3Q19) and 153.5% higher than the $2.9 billion posted on the fourth quarter 2018 (4Q18).
- In 4Q19, BBVA Argentina posted an average return on assets (ROA) of 6.9% and an average return on equity (ROE) of 49.5%.
- In 2019, net income was $31.4 billion, 223.0% greater than the $9.7 billion posted in 2018. ROA for the year was 7.9% compared to 2018's 2.3%, and ROE was 60.6% versus the 21.2% posted in 2018.
- In terms of activity, total consolidated private sector financing on 4Q19 totaled $201.5 billion, contracting $10.4 billion or 4.9% versus 3Q19 and increasing 14.5% or $25.4 billion compared to 4Q18. In the quarter, growth was mainly driven by credit cards and documents, increasing 35.4% and 7.7% respectively. Consolidated market share for BBVA was 7.71% as of 4Q19.
- Total deposits grew 7.1% in the quarter, and 13.3% in the year. BBVA's consolidated market share for private deposits was 7.14% as of 4Q19.
- As of 4Q19, asset quality ratio (measured as non-performing loans over total financing) was 3.57%, with a 113.04% coverage ratio.
- Accumulated efficiency ratio in 4Q19 was 37.0%, improving from 4Q18's 48.9%.
- As of 4Q19, BBVA Argentina reached a regulatory capital ratio of 17.8%, entailing a $29.0 billion or 117.5% excess over the minimum regulatory requirement. Tier I ratio was 17.1%. Total liquid assets represented 69.9% of the Bank's deposits as of 4Q19.
4Q19 Conference Call
February, Wednesday 19th. 12:00 pm Argentine Time - (10:00am EST)
Call the following numbers to participate:
- 54-11-3984-5677(Argentina)
- 1-844-450-3851(U.S. Toll-free)
- 1 412-317-6373 (International) Conference code: BBVA
Webcast & Replay: LINK
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,
- 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,
- 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,
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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 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 Medios de Pago S.A. (Prisma).
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 (BBVA Asset Management Argentina S.A., Consolidar AFJP-undergoing liquidation proceeding, PSA Finance Argentina Compañía Financiera S.A. and Volkswagen Financial Services Compañía Financiera S.A). As of the first quarter of 2018, the Bank's share interest in PSA Finance Argentina Cía. Financiera (PSA) was no longer disclosed on a consolidated basis but was recorded as Investments in associates (reported under the proportional consolidation method), and the corresponding results were reported as "Income from associates", as with Rombo Compañia Financiera (Rombo). As of September 25, 2018, the Bank's share interest in Volkswagen Financial Services (VWFS) was no longer disclosed on a consolidated basis. As of July 1st 2019 the Bank returns to report the activity of PSA and VWFS on a consolidated basis with BBVA Argentina.
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 and Interbanking S.A.
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% | |||||
In millions $ except EPS and ADS | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY | 2019 | 2018 |
Net Interest Income | 16,825 | 15,611 | 8,463 | 7.8% | 98.8% | 55,224 | 26,129 |
Net Fee Income | 1,626 | 1,564 | 1,701 | 4.0% | (4.4%) | 6,629 | 5,504 |
Net income/loss from measurement of financial instruments at fair | 1,959 | 1,432 | 197 | 36.8% | n.m | 7,970 | 107 |
value | |||||||
Net loss from write-down of assets at amortized cost and at fair value | (10) | 3 | (67) | (433.3%) | 85.1% | (47) | (121) |
through OCI | |||||||
Foreign exchange and gold gains | 2,660 | 3,403 | 978 | (21.8%) | 172.0% | 8,560 | 5,307 |
Other operating income | 1,053 | 1,123 | 1,009 | (6.2%) | 4.4% | 9,957 | 4,153 |
Loan loss allowances | (2,320) | (1,851) | (1,098) | (25.3%) | (111.3%) | (8,394) | (3,461) |
Net operating income | 21,793 | 21,285 | 11,183 | 2.4% | 94.9% | 79,899 | 37,618 |
Personnel benefits | (4,129) | (3,649) | (2,570) | (13.2%) | (60.7%) | (13,733) | (8,961) |
Adminsitrative expenses | (3,758) | (3,455) | (2,196) | (8.8%) | (71.1%) | (11,678) | (7,177) |
Depreciation and amortization | (824) | (423) | (249) | (94.8%) | (230.9%) | (1,999) | (876) |
Other operating expenses | (5,482) | (3,218) | (2,435) | (70.4%) | (125.1%) | (17,312) | (7,653) |
Operating income | 7,600 | 10,540 | 3,733 | (27.9%) | 103.6% | 35,177 | 12,951 |
Income from associates | 214 | (7) | 571 | n.m | (62.5%) | 637 | 781 |
Net income before income tax | 7,814 | 10,533 | 4,304 | (25.8%) | 81.6% | 35,814 | 13,732 |
Income tax | (366) | 576 | (1,366) | (163.5%) | 73.2% | (4,462) | (4,027) |
Income for the period | 7,448 | 11,109 | 2,938 | (33.0%) | 153.5% | 31,352 | 9,705 |
Total Other Comprehensive Income for the period (OCI) | N/A | N/A | |||||
166 | (3,425) | 63 | 104.8% | 163.5% | (3,416) | (21) | |
Weighted average number of common shares (in thousands) (2)(3) | 612,705 | 612,660 | 612,660 | 0.0% | 0.0% | 612,671 | 612,660 |
Basic earnings per share | 12.2 | 17.5 | 4.8 | (30.3%) | 154.8% | 50.6 | 15.7 |
Earnings per ADS (1) | 36.6 | 52.6 | 14.4 | (30.3%) | 154.8% | 151.8 | 47.1 |
- Each ADS represents three ordinary shares
- 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.
- Excludes consolidation with PSA, Rombo and VWFS as of July 1st 2019
BBVA Argentina 4Q19 net income was $7.4 billion, 33.0% or $3.7 billion lower than 3Q19, and 153.5% or $4.5 billion higher than 4Q18. The Quarter-over-Quarter (QoQ) decrease is mainly explained by loan loss allowances corresponding to Molinos Cañuelas y Compañía Argentina de Granos' ("Molca" as a whole) provisions, and the increase in operating expenses arising from the set-up of the Bank's efficiency plan.
Net income for 2019 was $31.4 billion, 223.0% higher Year-over-Year (YoY), representing a ROE of 60.6% and a ROA of 7.9%. If 1Q19 Prisma sale is not taken into consideration, accumulated ROE and ROA for 2019 would have been 55.6% and 7.2% respectively.
As of 4Q19, net operating income was $21.8 billion, 2.4% or $508 million higher QoQ, and 94.9% or $10.6 billion higher YoY.
Operating income in 4Q19 was $7.6 billion, decreasing $2.9 billion or 27.9% QoQ, and growing $3.9 billion or 103.6% YoY.
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Net Interest Income
Net Interest Income | BBVA ARG consolidated | Chg% | |||||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY | 2019 | 2018 |
Net Interest Income | 16,825 | 15,611 | 8,463 | 7.8% | 98.8% | 55,224 | 26,129 |
Interest Income | 25,948 | 27,077 | 17,731 | (4.2%) | 46.3% | 94,419 | 47,449 |
From government securities | 6,688 | 9,681 | 4,402 | (30.9%) | 51.9% | 29,601 | 8,634 |
From private securities | 3 | 2 | 5 | 50.0% | (40.0%) | 9 | 34 |
Interest from loans and other financing | 15,387 | 15,166 | 11,092 | 1.5% | 38.7% | 54,205 | 34,305 |
Financial Sector | 345 | 471 | 926 | (26.8%) | (62.7%) | 2,096 | 1,976 |
Overdrafts | 3,127 | 2,331 | 2,099 | 34.1% | 49.0% | 8,520 | 6,057 |
Instruments | 2,948 | 2,110 | 2,022 | 39.7% | 45.8% | 9,103 | 5,492 |
Mortgage loans | 299 | 288 | 240 | 3.8% | 24.6% | 1,129 | 761 |
Pledge loans | 137 | 946 | 104 | (85.5%) | 31.7% | 1,275 | 1,119 |
Consumer loans | 1,895 | 1,850 | 1,703 | 2.4% | 11.3% | 7,331 | 6,216 |
Credit cards | 4,911 | 4,152 | 2,691 | 18.3% | 82.5% | 17,191 | 7,643 |
Financial leases | 115 | 122 | 135 | (5.7%) | (14.8%) | 475 | 523 |
Other loans | 1,610 | 2,896 | 1,172 | (44.4%) | 37.4% | 7,085 | 4,518 |
CER/UVA clause adjustment | 3,307 | 1,922 | 2,097 | 72.1% | 57.7% | 9,088 | 3,920 |
Other interest income | 563 | 306 | 135 | 84.0% | 317.0% | 1,516 | 556 |
Interest expenses | 9,123 | 11,466 | 9,268 | (20.4%) | (1.6%) | 39,195 | 21,320 |
Deposits | 7,947 | 9,299 | 8,221 | (14.5%) | (3.3%) | 33,665 | 18,414 |
Checking accounts | 74 | 367 | 1,904 | (79.8%) | (96.1%) | 1,905 | 3,750 |
Savings accounts | 73 | 99 | 51 | (26.3%) | 43.1% | 204 | 116 |
Time deposits | 7,800 | 8,833 | 6,266 | (11.7%) | 24.5% | 31,556 | 14,548 |
UVA/CER clause adjustment | 253 | 248 | 449 | 2.0% | (43.7%) | 1,227 | 1,086 |
Other obligations for financial intermediation | 642 | 1,419 | 606 | (54.8%) | 5.9% | 3,487 | 1,512 |
Other | 281 | 500 | (8) | (43.8%) | n.m | 816 | 308 |
Net interest income for 4Q19 was $16.8 billion, increasing 7.8% or $1.2 billion QoQ, and $8.3 billion or 98.8% YoY. The lower interest income is partially offset by a decrease in interest expenses due to lower interest rates and an increase in sight deposits.
In 4Q19, interest income totaled $25.9 billion, 4.2% lower than 3Q19 and 46.3% lower than 4Q18.
Income from public securities contracted 30.9% or $3.0 billion compared to 3Q19, and grew 51.9% or $2.3 billion compared to 4Q18. This is due to a decrease in the BCRA's monetary policy rate, together with a lower position in BCRA instruments (LELIQ) derived from BCRA restrictions in regards to integrating sight deposits reserve requirements with these securities. 87% 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 $15.4 billion, 1.5% or $221 higher compared to 3Q19, led by interests from documents, overdrafts and credit cards. The last is boosted by the Ahora 12 program, which was extended until March 2020.
Income from CER/UVA adjustments grew 72.1% QoQ and 57.7% YoY. This is mainly explained by an increase in inflation during the last quarter, compared to the previous quarter and year.
Interest expenses reached $9.1 billion, 20.4% lower QoQ and 1.6% lower YoY.
Interests from time deposits explain 85.5% of total interest expenses, decreasing 11.7% compared to 3Q19 and increasing 24.5% compared to 4Q18.
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NIM
Asset profitability & Liability Costs | Quarter ended | |||||
4Q19 | 3Q19 | 4Q18 | ||||
Average in millions $, Nominal annual rate in % | Capital | Rate | Capital | Rate | Capital | Rate |
Assets | 261,213 | 40.2% | 291,725 | 37.3% | 146,904 | 48.8% |
Liabilities | 202,088 | 19.4% | 237,974 | 19.2% | 131,995 | 27.9% |
NIM | 4Q19 | 3Q19 | 4Q18 | |||
NIM including foreign exchange differences | 30.0% | 25.6% | 22.9% | |||
NIM excluding foreign exchange differences | 26.1% | 20.4% | 19.5% |
As of 4Q19, net interest margin (NIM - calculated as the return on assets less liability costs, over the average interest earning assets - including foreign exchange differences) was 30.0%, higher than the 25.6% at 3Q19 and the 22.9% at 4Q18, supported by an improvement in client rate spreads and a better funding mix.
NIM excluding foreign exchange differences was 26.1%, greater than the 20.4% reported on 3Q19 and the 19.5% reported on 4Q18.
Net Fee Income
Net Fee Income | BBVA ARG consolidated | Chg % | |||||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY | 2019 | 2018 |
Net Fee Income | 1,626 | 1,564 | 1,701 | 4.0% | (4.4%) | 6,629 | 5,504 |
Fee Income | 5,144 | 4,702 | 3,760 | 9.4% | 36.8% | 18,027 | 12,431 |
Linked to liabilities | 2,734 | 2,431 | 1,841 | 12.5% | 48.5% | 9,414 | 6,032 |
From credit cards | 1,774 | 1,511 | 1,417 | 17.4% | 25.2% | 5,975 | 4,514 |
Linked to loans | 92 | 253 | 118 | (63.6%) | (22.0%) | 722 | 561 |
From insurance | 258 | 229 | 197 | 12.7% | 31.0% | 925 | 708 |
From foreign trade and foreign currency transactions | 257 | 247 | 164 | 4.0% | 56.7% | 889 | 488 |
Other fee income | 29 | 31 | 23 | (6.5%) | 26.1% | 102 | 128 |
Fee expenses | 3,518 | 3,138 | 2,059 | 12.1% | 70.9% | 11,398 | 6,927 |
In 4Q19 net fee income grew 4.0% or $62 million compared to 3Q19 and decreased 4.4% or $75 million compared to 4Q18.
Fee income totaled $5.1 billion, increasing 9.4% QoQ, mainly driven by the increment in credit card fees, pushed by end-of-year spending and the effect of salary bonus payments. These increase the activity in sight accounts (Linked to liabilities).
Fee expenses grew 12.1% QoQ and 70.9% YoY. This is driven by an increase in client-acquisition campaign costs, and greater processing and credit card benefit costs (both including U.S. dollar expense components)
Market share - Credit cards | BBVA ARG consolidated | Chg % | |||||
In % | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY | ||
Credit card consuption * | 15.35% | 14.93% | 13.97% | 42 | bps | 138 bps | |
Credit card financing ** | 12.19% | 11.21% | 10.91% | 98 | bps | 128 bps |
*Based on information provided by Visa y Mastercard. End of month consuption as of the last day of the quarter. **Based on daily BCRA information. Capital balance as of the last day of each quarter.
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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) | BBVA ARG consolidated | Chg % | ||||||
through P&L | ||||||||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY | 2019 | 2018 | |
Net Income from financial instruments at FV through P&L | 1,959 | 1,432 | 197 | 36.8% | n.m | 7,970 | 107 | |
Profit from government securities | 1,047 | 1,024 | 338 | 2.2% | 209.8% | 3,698 | 987 | |
Profit from private securities | 309 | (1) | (266) | n.m | 216.2% | 2,696 | 110 | |
Profit from interest rate swaps | (84) | 39 | (156) | (315.4%) | 46.2% | (379) | (838) | |
Profit from foreign currency forward transactions | (42) | 408 | 255 | (110.3%) | (116.5%) | 1,230 | (187) | |
Profit from put options - Prisma Medios de Pago | 685 | - | - | N/A | N/A | 685 | - | |
Profit from corporate bonds | 44 | (38) | 26 | 215.8% | 69.2% | 40 | 35 |
In 4Q19, net income from financial instruments at fair value (FV) through P&L was $2.0 billion, increasing $527 million or 36.8% QoQ.
This increase is mainly driven by income from private securities, explained by an update of Prisma valuation and the result of the put option on Prisma sale valuation ($685 million).
Interest rate swaps results fell 315.4% or $123 million due to Rombo deconsolidation.
Results from corporate bonds increased 215.8% or $82 million due to a good trading performace.
Differences in quoted prices of gold and foreign currency | BBVA ARG consolidated | Chg % | |||||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY | 2019 | 2018 |
Foreign exchange and gold gains/(losses) (1) | 2,660 | 3,403 | 978 | (21.8%) | 172.0% | 8,560 | 5,307 |
From foreign exchange position | 111 | 222 | (412) | (50.1%) | 126.9% | (160) | 1,152 |
Income from purchase-sale of foreign currency | 2,549 | 3,181 | 1,390 | (19.9%) | 83.4% | 8,720 | 4,155 |
Net income from financial instruments at FV through P&L (2) | (42) | 408 | 255 | (110.3%) | (116.5%) | 1,230 | (187) |
Income from foreign currency forward transactions | (42) | 408 | 255 | (110.3%) | (116.5%) | 1,230 | (187) |
Total differences in quoted prices of gold and foreign currency (1) + | 2,618 | 3,811 | 1,233 | (31.3%) | 112.3% | 9,790 | 5,120 |
(2) | |||||||
In 4Q19, the difference in quoted prices of gold and foreign currency showed profit for $2.6 billion, 31.3% or $1.2 billion lower QoQ, mainly explained by a decrease in activity due to changes in foreign exchange market regulations.
Other operating income
Other Operating Income | BBVA ARG consolidated | Chg% | |||||||||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY | 2019 | 2018 | ||||
Operating Income | 1,053 | 1,123 | 1,009 | (6.2%) | 4.4% | 9,957 | 4,153 | ||||
Rental of safe deposit boxes | (1) | 169 | 146 | 114 | 15.8% | 48% | 580 | 437 | |||
Adjustments and interest on miscellaneous receivables | (1) | 322 | 378 | 144 | (14.8%) | 124% | 1,225 | 522 | |||
Loans recovered | 180 | 160 | 94 | 12.5% | 91% | 538 | 296 | ||||
Income from Prisma sale | - | (51) | - | 100.0% | N/A | 2,645 | - | ||||
Income tax - Tax inflantion adjustment | - | - | - | N/A | N/A | 3,240 | 1,022 | ||||
Fee income from credit and debit cards | (1) | 146 | 152 | 103 | (3.9%) | 42% | 595 | 431 | |||
Other Operating Income | (2) | 236 | 338 | 554 | (30.2%) | (57.4%) | 1,134 | 1,445 | |||
- Included to the efficiency ratio calculation
- Includes some of the concepts used in the efficiency ratio calculation
In 4Q19 other operating income totaled $1.0 billion, decreasing 6.2% or $70 million QoQ and growing 4.4% or $44 million YoY.
The quarterly decrease is driven by a decrease in the other operating income line item.
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Operating expenses
Personnel benefits and administrative expenses
Personnel Benefits and Adminsitrative Expenses | BBVA ARG consolidated | Chg% | |||||||||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY | 2019 | 2018 | ||||
Total Personnel Benefits and Adminsitrative Expenses | 7,887 | 7,104 | 4,766 | 11.0% | 65.5% | 25,411 | 16,138 | ||||
Personnel Benefits | (1) | 4,129 | 3,649 | 2,570 | 13.2% | 60.7% | 13,733 | 8,961 | |||
Administrative expenses | (1) | 3,758 | 3,455 | 2,196 | 8.8% | 71.1% | 11,678 | 7,177 | |||
Travel expenses | 49 | 34 | 27 | 44.1% | 81.5% | 139 | 89 | ||||
Administrative expenses | 429 | 269 | 147 | 59.5% | 191.8% | 1,074 | 533 | ||||
Security services | 118 | 107 | 72 | 10.3% | 63.9% | 398 | 294 | ||||
Fees to Bank Directors and Supervisory Committee | 2 | 4 | 6 | (50.0%) | (66.7%) | 13 | 17 | ||||
Other fees | 162 | 182 | 101 | (11.0%) | 60.4% | 584 | 308 | ||||
Insurance | 33 | 33 | 19 | - | 73.7% | 118 | 71 | ||||
Rent | 243 | 238 | 242 | 2.1% | 0.4% | 812 | 780 | ||||
Stationery and supplies | 23 | 16 | 8 | 43.8% | 187.5% | 61 | 36 | ||||
Electricity and communications | 189 | 157 | 120 | 20.4% | 57.5% | 589 | 329 | ||||
Advertising | 155 | 132 | 67 | 17.4% | 131.3% | 519 | 392 | ||||
Taxes | 745 | 735 | 501 | 1.4% | 48.7% | 2,675 | 1,662 | ||||
Maintenance costs | 415 | 286 | 225 | 45.1% | 84.4% | 1,236 | 761 | ||||
Armored transportation services | 785 | 897 | 417 | (12.5%) | 88.2% | 2,176 | 1,067 | ||||
Other administrative expenses | 410 | 365 | 244 | 12.3% | 68.0% | 1,284 | 838 | ||||
Headcount | |||||||||||
Banco BBVA Argentina* | 6,218 | 6,225 | 6,086 | (0.1%) | 2.2% | 6,223 | 6,248 | ||||
Associates' headcount | (2) | * | 103 | 130 | 18 | (20.8%) | 472.2% | 104 | 100 | ||
Total branches | 251 | 251 | 252 | - | (0.4%) | 251 | 252 | ||||
Efficiency ratio | 40.2% | 35.9% | 47.5% | 424 bps | (733)bps | 37.0% | 48.9% | ||||
Accumulated Efficiency ratio | 37.0% | 35.6% | 48.9% | 133 bps | (1,191)bps | 37.0% | 48.9% |
- Concept included in the efficiency ratio calculation
- Includes BBVA Asset Management Argentina S.A., y PSA y VWFS as of 3T19 *corresponds to total effective employees, net of temporary contract employees
During 4Q19, administrative expenses plus personnel benefits totaled $7.9 billion, 11.0% and 65.5% higher than 3Q19 and 4Q19 respectively. This is mainly explained by an increase in personnel benefits and incurred expenditures in the quarter.
Personnel benefits increased 13.2% or $480 million compared to 3Q19, and 60.7% or $1.6 billion compared to 4Q18. This was driven by current salary increase agreements based on labor union negotiations (53.8% salary increase in respect to December 2018) and their compensation schemes.
In 4Q19 administrative expenses increased 8.8% QoQ and 71.1% YoY. This increase is explained by incurred costs in upgrading branches and equipment, together with an increment in U.S. dollar costs.
The accumulated efficiency ratio as of 4Q19 was 37.0%, higher than the 35.6% reported on 3Q19 and significantly improving compared to the 48.9% reported on 4Q18.
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Other operating expenses
Other Operating Expenses | BBVA ARG consolidated | Chg% | |||||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY | 2019 | 2018 |
Other Operating Expenses | 5,482 | 3,218 | 2,435 | 70.4% | 125.1% | 17,312 | 7,653 |
Turnover tax | 1,922 | 1,829 | 1,279 | 5.1% | 50.3% | 6,565 | 4,151 |
Initial loss of loans below market rate | 270 | 166 | 641 | 62.7% | (57.9%) | 1,200 | 641 |
Contribution to the Deposit Guarantee Fund (SEDESA) | 129 | 132 | 103 | (2.3%) | 25.2% | 494 | 327 |
Interest on liabilities from financial lease | 76 | 66 | - | 15.2% | N/A | 261 | - |
Other allowances | 697 | 721 | 200 | (3.3%) | 248.5% | 5,201 | 1,629 |
Other operating expenses | 2,388 | 304 | 212 | n.m | n.m | 3,591 | 905 |
As of 4Q19, other operating expenses increased 70.4% or $2.3 billion QoQ, and 125.1% or $3.0 billion YoY.
In line with the digital transformation process, the Bank has decided to implement a plan that aims to generate higher efficiency and agility in decision-making processes. This plan involves expenses that will be undertaken during 2020, and are reflected on the "Other operating expenses" line.
Income from associates
This line reflects the results from non-consolidated associate companies. During 4Q19, a profit of $214 million has been reported, mainly due to participation in BBVA Consolidar Seguros S.A., Rombo and Interbanking S.A.
Income tax
Income tax charges decreased $1.0 billion compared to 4Q18 and increased $942 million compared to 3Q19, reporting a loss for $366 million. In 3Q19 the Income Tax Law effect, aimed to recognize tax inflation adjustments, was incorporated.
BBVA Argentina's effective rate for the year ended December 31, 2019, was 12%, while the effective rate for the year ended December 31 2018 was 29%. The decrease was driven by inflation adjustments in income tax calculation.
- 9 -
Balance sheet and activity
Loans and other financing
Loans and other financing | BBVA ARG consolidated | Chg% | |||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY |
Public Sector | 17 | 1 | - | n.m | N/A |
Financial Sector | 5,198 | 2,790 | 9,669 | 86.3% | (46.2%) |
Non-financial private sector and residents abroad | 201,455 | 211,845 | 176,011 | (4.9%) | 14.5% |
Overdrafts | 14,397 | 17,587 | 11,789 | (18.1%) | 22.1% |
Documents | 23,697 | 22,010 | 24,314 | 7.7% | (2.5%) |
Mortgage Loans | 14,151 | 12,817 | 10,105 | 10.4% | 40.0% |
Pledge Loans | 8,657 | 16,515 | 1,650 | (47.6%) | 424.7% |
Personal Loans | 23,473 | 23,837 | 23,560 | (1.5%) | (0.4%) |
Credit Cards | 72,250 | 53,355 | 41,869 | 35.4% | 72.6% |
Financial leases | 1,890 | 2,052 | 2,378 | (7.9%) | (20.5%) |
Other financing (1) | 42,940 | 63,672 | 60,346 | (32.6%) | (28.8%) |
Total loans and other financing | 206,670 | 214,636 | 185,680 | (3.7%) | 11.3% |
Allowances | (8,329) | (7,464) | (4,258) | (11.6%) | (95.6%) |
Total net loans and other financing | 198,341 | 207,172 | 181,422 | (4.3%) | 9.3% |
% of total loans to Private sector in pesos | 81.7% | 70.7% | 65.1% | 1,095 bps | 1,659 bps |
% of total loans to Private sector in foreign currency | 18.3% | 29.3% | 34.9% | (1,095)bps | (1,659)bps |
(1) Includes IFRS adjustment |
Private loans totaled $201.5 billion, decreasing 4.9% or $10.4 million during the quarter, and growing 14.5% or $25.4 billion during the year.
It is important to mention that during 4Q19, BBVA Argentina was no longer consolidating Rombo's activity, which explains most of the decrease in pledge loans. If Rombo had not been consolidated in 3Q19, private loans to the non-financial sector would have decreased 1.6% instead of 4.9%.
Loans to the financial sector grew 86.3% in 4Q19, mainly explained by the increase in call money transactions plus a decrease in call money given to subsidiaries.
Private loans denominated in pesos grew 9.8% in QoQ and 43.6% YoY. Private loans denominated in foreign currency fell 40.5% QoQ and 39.9% YoY, driven by a prudential reduction in USD- denominated loans after August 2019 turmoil. These loans, measured in U.S. dollars, fell 42.8% and 62.1% compared to 3Q19 and 4Q18 respectively.
Within retail loans (including mortgages, pledge, personal and credit card loans), credit card loans increased the most, 35.4% QoQ and 72.6% YoY. Mortgage loans reflect the increment in inflation.
In commercial loans (including overdrafts, documents, leasing and other loans) decreased 21.3% QoQ and 16.1% YoY, mainly explained by a prudential reduction in pre-financing and export financing in U.S. dollars. Documents was the only line reflecting growth, increasing 7.7% or $1.7 million QoQ and falling 2.5% or $617 million YoY.
- 10 -
Market share - Private sector loans | BBVA ARG consolidated | Chg % | |||
In % | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY |
Private sector loans - Bank | 6.93% | 7.34% | 7.75% | (41)bps | (82)bps |
Private sector loans - Consolidated* | 7.71% | 8.13% | 8.71% | (42)bps | (100)bps |
Based on daily BCRA information. Capital balance as of the last day of each quarter. | |||||
* Consolidates PSA, VWFS and Rombo. |
Asset quality ratios
Asset Quality | BBVA ARG consolidated | Chg% | ||||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY | |
Financings with irregular performance (NPL) | 7,368 | 7,103 | 3,612 | 3.7% | 104.0% | |
Allowances | 8,329 | 7,464 | 4,258 | 11.6% | 95.6% | |
NPL / Total Loans and other financing | 3.57% | 3.31% | 1.95% | 26 bps | 162 | bps |
Private Financings with irregular performance / Total Private Financing | 3.51% | 3.24% | 2.00% | 27 bps | 151 | bps |
Allowances / Financings with irregular performance (Coverage ratio) | 113.04% | 105.08% | 117.88% | 796 bps | (484)bps |
In 4Q19, NPL was 3.57%, with a coverage ratio of 113.04%.
The increase in the asset quality ratio is explained by a decrease in total loans, while non-performing loans remain stable. Total loans decrease is mainly driven by a fall in foreign currency denominated commercial loans since August 2019.
Allowances adjustment | BBVA ARG consolidated | Chg% | |||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY |
Balance at the beginning of the year | 4,258 | 4,258 | 2,292 | - | 85.8% |
Increase/(Decrease) | 6,315 | 4,645 | 3,439 | 36.0% | 83.6% |
Increase/(Decrease) FX Differences | 1,310 | 737 | 328 | 77.7% | 299.4% |
Uses/Reversals | (3,715) | (2,483) | (1,766) | (49.6%) | (110.4%) |
Take over of associates | 161 | 307 | (35) | (47.5%) | n.m |
Balance at the end of the quarter | 8,329 | 7,464 | 4,258 | 11.6% | 95.6% |
An increase in provisions is observed in 4Q19, mainly due to de decision of increasing the Molca debt provision from 75% to 100%.
- 11 -
Public sector exposure
Net Public Debt Exposure | BBVA ARG consolidated | Chg% | |||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY |
Treasury and Government securities | 16,118 | 17,939 | 11,154 | (10.1%) | 44.5% |
Treasury and National Government | 16,066 | 17,915 | 11,098 | (10.3%) | 44.8% |
National Treasury Public Debt in pesos | 8,721 | 8,662 | 7,899 | 0.7% | 10.4% |
National Treasury Public Debt in dollars | 194 | 246 | 3,199 | (21.2%) | (93.9%) |
National Treasury Public Debt in pesos, USD-Linked | 7,151 | 9,007 | - | (20.6%) | N/A |
Provinces | 52 | 23 | 56 | 120.3% | (7.4%) |
Public Sector loans | - | 1 | - | (100.0%) | N/A |
Repo | - | - | 12,671 | N/A | (100.0%) |
National Treasury - Foreign currency | - | - | 12,671 | N/A | (100.0%) |
Pesos Subtotal | 8,773 | 8,686 | 7,955 | 1.0% | 10.3% |
Dollars Subtotal* | 7,345 | 9,253 | 15,870 | (20.6%) | (53.7%) |
Total Public Debt Exposure | 16,118 | 17,940 | 23,825 | (10.2%) | (32.3%) |
B.C.R.A. Exposure | 33,061 | 60,340 | 20,202 | (45.2%) | 63.6% |
Instruments | 33,061 | 53,675 | 20,202 | (38.4%) | 63.6% |
Leliqs | 33,061 | 53,675 | 20,202 | (38.4%) | 63.6% |
Lebacs | - | - | - | N/A | N/A |
Repo | - | 6,665 | - | (100.0%) | N/A |
B.C.R.A. - $ | - | 6,665 | - | (100.0%) | N/A |
% Public Sector Exp. (Excl. B.C.R.A.) / Assets | 3.7% | 4.3% | 6.7% | (67)bps | (306)bps |
*Includes dollar-linked Treasury public debt in $ |
Public sector exposure (excluding BCRA) was $16.1 billion, decreasing 10.2% or $1.8 billion QoQ, and 32.3% or $7.7 billion YoY.
Short-term liquidity is allocated in BCRA instruments, which decreased 45.2% or $27.3 billion compared to 3Q19, and grew 63.6% or $12.9 billion compared to 4Q19.
Exposure to the public sector (excluding BCRA), which represented 3.7% of total assets, recorded a $2.4 billion or 80bps decrease. This is mainly explained by the 15% of capital payments from dollar- linked Treasury notes (LELINK, reprofiled in August 28, 2019), as of December 4, 2019.
Exposure to the public sector (excluding BCRA) is the lowest in the last 8 quarters, mostly concentrated in peso-denominated notes or dollar-linked notes in pesos.
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Deposits
Deposits | BBVA ARG consolidated | Chg% | |||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY |
Total Deposits | 293,988 | 274,487 | 259,509 | 7.1% | 13.3% |
Non-financial Public Sector | 2,938 | 2,642 | 1,545 | 11.2% | 90.2% |
Financial Sector | 178 | 314 | 294 | (43.3%) | (39.5%) |
Non-financial private sector and residents abroad | 290,872 | 271,531 | 257,670 | 7.1% | 12.9% |
Non-financial private sector and residents abroad - $ | 175,139 | 152,830 | 143,666 | 14.6% | 21.9% |
Checking accounts | 53,980 | 42,397 | 28,558 | 27.3% | 89.0% |
Savings accounts | 50,153 | 36,860 | 46,487 | 36.1% | 7.9% |
Time deposits | 67,839 | 70,572 | 66,392 | (3.9%) | 2.2% |
Other | 3,167 | 3,001 | 2,229 | 5.5% | 42.1% |
Non-financial private sector and res. abroad - Foreign Currency | 115,733 | 118,701 | 114,004 | (2.5%) | 1.5% |
Checking accounts | 20 | 18 | 17 | 11.1% | 17.6% |
Savings accounts | 97,672 | 100,502 | 94,469 | (2.8%) | 3.4% |
Time deposits | 16,335 | 15,931 | 17,413 | 2.5% | (6.2%) |
Other | 1,706 | 2,250 | 2,105 | (24.2%) | (19.0%) |
% of total portfolio in the private sector in pesos | 60.2% | 56.3% | 55.8% | 393 bps | 446 bps |
% of total portfolio in the private sector in foregin currency | 39.8% | 43.7% | 44.2% | (393)bps | (446)bps |
During 4Q19, total deposits were $294.0 billion, recording an increase of 7.1% or $19.5 billion and 13.3% or $34.5 billion compared to 3Q19 and 4Q19 respectively.
Private sector deposits in 4Q19 were $290.9 billion, increasing 7.1% or $19.3 billion QoQ, and 12.9% or $33.2 billion YoY.
Private non-financial sector deposits in local currency were $175.1 billion, growing 14.6% or $22.3 billion QoQ and 21.9% or $31.5 billion YoY. This is mainly driven by a significant increase in savings account and checking account deposits, offsetting the fall in time deposits during the quarter.
Private non-financial sector deposits in foreign currency expressed in pesos fall 2.5% and $3.0 billion QoQ and grow 1.5% or $1.7 billion YoY. Measured in U.S. dollars, these deposits fell 6.3% compared to 3Q19 and 35.9% compared to 4Q18.
In 4Q19, the Bank's transactional deposits (checking accounts and savings accounts) represented 68.7% of total non-financial private deposits, totaling $201.8 billion.
Market Share - Deposits to the private sector | BBVA ARG consolidated | Chg% | |||
En % | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY |
Consolidated Private sector deposits* | 7.14% | 7.14% | 7.97% | 0 bps | (83)bps |
Based on daily BCRA information. Capital balance as of the last day of each quarter. | |||||
* Consolidates PSA, VWFS and Rombo. |
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Other sources of funds
Other sources of funds | BBVA ARG consolidated | Chg% | |||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY |
Other sources of funds | 77,216 | 73,304 | 46,554 | 5.3% | 65.9% |
Central Bank | 17 | 11 | 10 | 54.5% | 70.0% |
Banks and international organizations | 2,539 | 4,712 | 5,518 | (46.1%) | (54.0%) |
Financing received from local financial institutions | 3,593 | 3,758 | - | (4.4%) | N/A |
Corporate bonds | 7,319 | 8,728 | 2,474 | (16.1%) | 195.8% |
Equity | 63,748 | 56,095 | 38,552 | 13.6% | 65.4% |
In 4Q19, other sources of funds totaled $77.2 billion, 5.3% or $3.9 billion higher than 3Q19 and 65.9% or $30.6 billion higher than 4Q18.
In 4Q19, the Banks and International Organizations like item decreased 46.1% or $2.2 billion, mainly because of a fall in correspondent banking.
Corporate bonds fell 16.1% or $1.4 billion QoQ, mainly due to Rombo deconsolidation during the quarter.
The 13.6% increase in equity is explained by 4Q19 results.
Liquid assets
Total Liquid Assets | BBVA ARG consolidated | Chg% | |||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY |
Total liquid assets | 205,404 | 169,336 | 142,923 | 21.3% | 43.7% |
Cash and deposits in banks | 156,260 | 94,168 | 99,106 | 65.9% | 57.7% |
Cash | 46,724 | 28,259 | 15,571 | 65.3% | 200.1% |
Deposits in banks and correspondents | 109,536 | 65,909 | 83,535 | 66.2% | 31.1% |
Debt securities at fair value through profit or loss | 4,036 | 5,121 | 7,340 | (21.2%) | (45.0%) |
Government securities | 52 | 162 | 953 | (67.9%) | (94.5%) |
Liquidity bills of B. C. R. A. | 3,984 | 4,959 | 6,387 | (19.7%) | (37.6%) |
Net REPO transactions | - | 6,665 | 12,847 | (100.0%) | (100.0%) |
Other debt securities | 45,108 | 63,382 | 23,630 | (28.8%) | 90.9% |
Government securities | 16,031 | 14,666 | 9,815 | 9.3% | 63.3% |
Liquidity bills of B. C. R. A. | 29,077 | 48,716 | 13,815 | (40.3%) | 110.5% |
Liquid assets over total deposits | 69.9% | 61.7% | 55.1% | 818 bps | 1,479 bps |
In 4Q19 liquid assets were $205.4 billion, 21.3% or $36 billion higher than 3Q19 and 43.7% or $62.5 billion higher than 4Q19.
During the quarter, growth in cash stands out with a 65.9% or $62.1 billion increase, while BCRA liquidity notes fell 38.4% or $20.6 billion.
In 4Q19, the liquidity ratio (liquid assets/total deposits) reached 69.9%.
- 14 -
Solvency
Minimum Capital Requirement | BBVA ARG consolidated | ||
In millions $ | 4Q19 | 3Q19 | 4Q18 |
Minimum capital requirement | 24,703 | 24,416 | 21,792 |
Credit risk | 17,999 | 18,511 | 18,104 |
Market risk | 304 | 334 | 93 |
Operational risk | 6,400 | 5,571 | 3,595 |
Integrated Capital - RPC (1)* | 53,730 | 51,034 | 37,948 |
Ordinary Capital Level 1 ( COn1) (3) | 64,024 | 56,758 | 39,195 |
Deductible items COn1 | (12,252) | (7,785) | (3,188) |
Additional Capital Level 2 (CAn1) | - | - | - |
Additional Capital Level 2 (COn2) | 1,958 | 2,061 | 1,941 |
Excess Capital | |||
Integration excess | 29,027 | 26,618 | 16,156 |
Excess as % of minimum capital requirement | 117.5% | 109.0% | 74.1% |
Risk-weighted assets (RWA) (2) | 302,235 | 298,464 | 265,801 |
Regulatory Capital Ratio (1)/(2) | 17.8% | 17.1% | 14.3% |
TIER I Capital Ratio (Ordinary Capital Level 1/ RWA) | 17.1% | 16.4% | 13.5% |
* RPC includes 100% of quarterly results
Chg%
QoQ | YoY |
1.2% | 13.4% |
(2.8%) | (0.6%) |
(9.0%) | 226.9% |
14.9% | 78.0% |
5.3% | 41.6% |
12.8% | 63.3% |
(57.4%) | (284.3%) |
N/A | N/A |
(5.0%) | 0.9% |
9.1% | 79.7% |
849 bps | 434 bps |
1.3% | 13.7% |
68 bps | 350 bps |
72 bps | 358 bps |
BBVA Argentina continues to show solid solvency indicators on 4Q19. Capital ratio reached 17.8%. Tier I ratio was 17.1% and surplus over regulatory requirement was $29.0 billion.
- 15 -
Other events
Relevant events
-
On February 18, 2020, BBVA Argentina has decided to schedule the Annual Ordinary and
Extraordinary Shareholders' Meeting for April 7, 2020. A $2.5 billion cash dividend distribution will be considered, corresponding to the partial write off of the optional reserve fund for future profit distribution. This distribution is subject to BCRA's prior approval.
Inflation adjustment
- BBVA Argentina's management assesses that the Bank's equity and income statements can differ significantly by the application of IAS 29. As of December 31th 2019, and for the twelve month period ended on such date, the Bank has estimated the impact on financial statements of the re- expression in constant currency, which would result in an equity increment of $11.9 billion, totaling $74.9 billion, and a decrease in net income in $23.9 billion, totaling $3.7 billion. For 2018, equity would have increased $10.7 billion, totaling $49.3 billion, and net income would have decreased $17.1 billion, resulting in a $7.5 billion loss.
Corporate Bonds
- On November 8, 2019, the Bank completed quarterly coupon payments on corporate bond Class 25 for a total amount of $ 29.0 million.
- On November 19, 2029, the Bank completed quarterly coupon and capital payments on corporate bond Class 20 for $27.8 million and $180.1 million respectively.
- On November 27, 2019, the Bank completed quarterly coupon and capital payments on corporate bond Class 23 for $76.1 million and $553.1 million respectively.
- On November 27, 2019, the Bank completed quarterly coupon payments on corporate bond Class 24 for $74.9 million.
- On November 28, 2019, the Bank completed quarterly coupon payments on corporate bond Class 27 for $170.8 million.
- On November 28, 2019, the Bank completed quarterly coupon and capital payments on corporate bond Class 26 for $170.3 million and $529.4 million respectively.
- On December 11, 2019, the Bank issued corporate bonds "Class 28" for a face value of $1,967 million, with a floating rate (Private BADLAR +4%), maturing 6 months after issuance.
- 16 -
Main regulatory changes
New BCRA regulation
- As of December 19th, 2019, through Communication "A" 6846, the BCRA creates a new USD- linked instrument denominated in pesos, through which banks will be able to give financing to small and medium-sized companies' exports. Banks will be able to hedge the FX risk with contracts over those instruments. The amount of USD-linked loans that exceeds that of USD-linked deposits, will not be taken into account for the Foreign Exchange Currency Position (PGNME in Spanish).
- As of January 16th, 2020, through Communication "A" 6871, the BCRA established the creation of a UVA (Purchasing Value Unit adjusted by CER) denominated time deposits, with an option of withdrawal after 30 days passed and before maturity. These deposits will have a minimum maturity period of 90 days. They will pay a freely agreed rate that can't be below 1% (nominal annual rate). In the case of withdrawal before maturity, the paid rate will be 70% of the last 5 working-day average of the shortest LELIQ at the time of incorporation.
BCRA regulatory requirements
-
As of January 2nd, 2020, through Communication "A" 6857, the BCRA stated that the reduction limit on reserve requirements would be increased for financial institutions participating of the
"AHORA 12" Program (20% of the sum of total financing in pesos give within that program), going from 1% to 1.5% of concepts in pesos included in the reserve requirement, in average, of the previous month in count. - As of January 9th, 2020, through Communication "A" 6858, the BCRA modifies the minimum reserve requirements, in effect as of February 1st 2020. This enables Group A financial institutions to reduce their reserve requirement for an equivalent amount of 30% of peso financing to SMEs given at a rate below 40%. At the same time, that deduction can't exceed 2% of concepts in pesos that are subject to reserve requirement regulations, in average, of the previous month in count.
- In line with Communication "A" 6871, the BCRA enables financial institutions to exclude the withdrawal optionality in UVA adjusted time deposits from the reserve requirement count.
-
As of January 30th, 2020, through Communication "A" 6884, the BCRA sets with effect from
February to December 2020, a special treatment for UVA financing. Financial institutions will have to deduct from the contract instalment, the 11/12 part of the increment that it would have had between August 2019 and January 2020. This deduction will decrease in 1/12s per month until it converges to the value of the contractual instalment for January 2021. Additionally, reserve requirements are reduced for financing that institutions decide to give special treatment to, requiring 0.8% of the contractual amount as of the end of November 2019. - As of February 13, 2020, through Communication "A" 6901, the BCRA established the reduction on regulatory reserve requirements for SMEs financing at 35% or lower, in effect as of February 17, 2020. Financing at 40% agreed before February 16th can still be deducted from reserve requirements until maturity.
- 17 -
Laws and decrees
-
As of December 20th, 2019, the Government's Executive Branch decided, through Decree
49/2019, that capital payments of U.S. dollar denominated Treasury Notes (LETEs) will be postponed to August 31st, 2020. Thus, the payment scheduled planned for these notes in the debt reprofiling of August 2019 was revoked. - On December 23rd, 2019, the Congress passed the Law 27,541 "Solidarity and Productive Reactivation Law as a part of Public Emergency" which was proposed by the National Government.
Main changes included:
- The "Para una Argentina Inclusiva y Solidaria" (PAIS) tax is created. This implies a 30% tax on the purchase of US dollars for hoarding (additional to the purchase limit of USD 200 established in October 2019), and for purchases done abroad through credit cards, for a period of 5 years. The tax will be 8% in the case of digital services in U.S. dollars. Health expenses, books, learning platforms and state-run research projects will be exempt of the PAIS tax.
- Inflation adjustment of companies' 2019 balance sheets. Impact on balance sheets is reduced to half through this correction. Only one sixth of the impact can be allocated on 2019, the rest will be distributed among the next five years.
- Employer contribution rates are fixed to 2019 values (20.4% for commercial and services sectors, 18% for the rest), revoking the schedule of decreasing rates on the 2017 tax reform.
- The scheduled decrease in enterprise income tax from 30% to 25% was revoked (keeping the income tax rate at 30% as of 2020). The additional rate charged for dividend payments to parent companies decreased from 13% to 7%.
- As of January 20th, 2020, the Ministries of Finance and Economy led a voluntary bond swap of LECAPs (Treasury capitalizing notes in pesos) with original maturity on August 30th 2019, September 13th 2019, October 11th 2019, November 25th 2019 and February 28th 2020, which had been reprofiled through Decree 596 on August 30th 2019. The swap implied exchanging these notes for BADLAR adjusted notes (LEBADs), with maturities on September 18th 2020 and December 22nd 2020.
- As of February 3rd 2020, the Ministry of Economy called for a voluntary swap of the Dual Currency Argentine Bonds (AF20) maturing on February 13rd 2020. These could be exchanged for four different instruments: CER+1% adjusted bonds, BADLAR + margin bonds, USD-linked+4% bonds or dual currency bonds, all of them maturing on 2021.
- As of February 11th 2020, and after two failed Dual Currency Argentine Bond (AF20) swaps, the Economy Ministry decided to postpone capital payments and non-accrued interests on this bond to September 30th 2020. Individuals having up to USD 20,000 on these bonds, which have been purchased before December 20th 2019, will receive capital and interest payments in the original due time.
- 18 -
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 contact:
investorelations-arg@bbva.comir.bbva.com.ar
- 19 -
Balance Sheet
Balance Sheet | |||
In millions $ | 4Q19 | 3Q19 | 4Q18 |
Assets | |||
Cash and Deposits in banks | 156,260 | 94,168 | 99,106 |
Cash | 46,724 | 28,259 | 15,571 |
Financial institutions and correspondents | 109,536 | 65,909 | 83,535 |
B.C.R.A | 107,501 | 59,163 | 75,504 |
Other local and foreign financial institutions | 2,035 | 6,746 | 8,031 |
Debt securities at fair value through profit or loss | 4,130 | 5,169 | 7,508 |
Derivatives | 3,047 | 2,243 | 591 |
Repo transactions | - | 6,665 | 12,861 |
Other financial assets | 2,754 | 6,457 | 9,648 |
Loans and other financing | 198,341 | 207,172 | 181,422 |
Non-financial public sector | - | 1 | - |
B.C.R.A | 17 | - | - |
Other financial institutions | 5,161 | 2,778 | 9,584 |
Non-financial private sector and residents abroad | 193,163 | 204,393 | 171,838 |
Other debt securities | 45,178 | 63,440 | 23,743 |
Financial assets pledged as collateral | 5,923 | 8,302 | 4,703 |
Current income tax assets | 23 | - | - |
Investments in equity instruments | 2,056 | 1,875 | 130 |
Investments in associates | 968 | 272 | 1,752 |
Property and equipment | 11,507 | 11,821 | 9,816 |
Intangible assets | 589 | 641 | 511 |
Deferred income tax assets | 6,188 | 3,401 | 194 |
Other non-financial assets | 3,209 | 2,391 | 2,136 |
Non-current assets held for sale | 60 | 60 | 493 |
Total Assets | 440,233 | 414,077 | 354,614 |
Liabilities | |||
Deposits | 293,988 | 274,487 | 259,509 |
Non-financial public sector | 2,938 | 2,642 | 1,545 |
Financial sector | 178 | 314 | 294 |
Non-financial private sector and residents abroad | 290,872 | 271,531 | 257,670 |
Liabilities at fair value through profit or loss | 581 | 43 | 692 |
Derivatives | 3,073 | 4,023 | 1,377 |
Repo transactions | - | - | 14 |
Other financial liabilities | 28,825 | 31,609 | 28,189 |
Financing received from the BCRA and other financial institutions | 6,149 | 8,481 | 5,528 |
Corporate bonds issued | 7,319 | 8,728 | 2,474 |
Current income tax liabilities | 8,070 | 5,240 | 3,676 |
Provisions | 9,843 | 7,657 | 3,621 |
Deferred income tax liabilities | - | 31 | 58 |
Other non-financial liabilities | 17,068 | 15,233 | 10,894 |
Total Liabilities | 374,916 | 355,532 | 316,032 |
Equity | |||
Share Capital | 613 | 613 | 613 |
Non-capitalized contributions | 6,745 | 6,736 | 6,736 |
Capital adjustments | 313 | 313 | 313 |
Reserves | 28,488 | 28,488 | 17,425 |
Retained earnings | - | - | 3,856 |
Other accumulated comprehensive income | (3,419) | (3,582) | (5) |
Income of the period | 31,008 | 23,527 | 9,614 |
Equity attributable to owners of the Parent | 63,748 | 56,095 | 38,552 |
Equity attributable to non-controlling interests | 1,569 | 2,450 | 30 |
Total Equity | 65,317 | 58,545 | 38,582 |
Total Liabilities and Equity | 440,233 | 414,077 | 354,614 |
Chg% | |
QoQ | YoY |
65.9% | 57.7% |
65.3% | 200.1% |
66.2% | 31.1% |
81.7% | 42.4% |
(69.8%) | (74.7%) |
(20.1%) | (45.0%) |
35.8% | 415.6% |
(100.0%) | (100.0%) |
(57.3%) | (71.5%) |
(4.3%) | 9.3% |
(100.0%) | N/A |
N/A | N/A |
85.8% | (46.1%) |
(5.5%) | 12.4% |
(28.8%) | 90.3% |
(28.7%) | 25.9% |
N/A | N/A |
9.7% | n.m |
255.9% | (44.7%) |
(2.7%) | 17.2% |
(8.1%) | 15.3% |
81.9% | n.m |
34.2% | 50.2% |
- | (87.8%) |
6.3% | 24.1% |
7.1% | 13.3% |
11.2% | 90.2% |
(43.3%) | (39.5%) |
7.1% | 12.9% |
n.m | (16.0%) |
(23.6%) | 123.2% |
N/A | (100.0%) |
(8.8%) | 2.3% |
(27.5%) | 11.2% |
(16.1%) | 195.8% |
54.0% | 119.5% |
28.5% | 171.8% |
(100.0%) | (100.0%) |
12.0% | 56.7% |
5.5% | 18.6% |
- | - |
0.1% | 0.1% |
- | - |
- 63.5%
N/A (100.0%)
4.6%n.m
31.8% 222.5%
13.6% 65.4%
(36.0%) n.m
11.6% 69.3%
6.3% 24.1%
- 20 -
Income Statement
Income statement | BBVA ARG consolidated | Chg % | |||||
In millions $ | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY | 2019 | 2018 |
Interest income | 25,948 | 27,077 | 17,731 | (4.2%) | 46.3% | 94,419 | 47,449 |
Interest expense | (9,123) | (11,466) | (9,268) | 20.4% | 1.6% | (39,195) | (21,320) |
Net interest income | 16,825 | 15,611 | 8,463 | 7.8% | 98.8% | 55,224 | 26,129 |
Commission income | 5,144 | 4,702 | 3,760 | 9.4% | 36.8% | 18,027 | 12,431 |
Commission expenses | (3,518) | (3,138) | (2,059) | (12.1%) | (70.9%) | (11,398) | (6,927) |
Net commission income | 1,626 | 1,564 | 1,701 | 4.0% | (4.4%) | 6,629 | 5,504 |
Net income/(loss) from measurement of financial instruments at fair | 1,959 | 1,432 | 197 | 36.8% | n.m | 7,970 | 107 |
value through profit or loss | |||||||
Net loss from write-down of assets at amortized cost | (10) | 3 | (67) | (433.3%) | 85.1% | (47) | (121) |
Foreign exchange and gold gains | 2,660 | 3,403 | 978 | (21.8%) | 172.0% | 8,560 | 5,307 |
Other operating income | 1,053 | 1,123 | 1,009 | (6.2%) | 4.4% | 9,957 | 4,153 |
Loan loss allowances | (2,320) | (1,851) | (1,098) | (25.3%) | (111.3%) | (8,394) | (3,461) |
Net operating income | 21,793 | 21,285 | 11,183 | 2.4% | 94.9% | 79,899 | 37,618 |
Personnel benefits | (4,129) | (3,649) | (2,570) | (13.2%) | (60.7%) | (13,733) | (8,961) |
Administrative expenses | (3,758) | (3,455) | (2,196) | (8.8%) | (71.1%) | (11,678) | (7,177) |
Depreciation and amortization | (824) | (423) | (249) | (94.8%) | (230.9%) | (1,999) | (876) |
Other operating expenses | (5,482) | (3,218) | (2,435) | (70.4%) | (125.1%) | (17,312) | (7,653) |
Operating income | 7,600 | 10,540 | 3,733 | (27.9%) | 103.6% | 35,177 | 12,951 |
Income from associates | 214 | (7) | 571 | n.m | (62.5%) | 637 | 781 |
Income before income tax | 7,814 | 10,533 | 4,304 | (25.8%) | 81.6% | 35,814 | 13,732 |
Income tax | (366) | 576 | (1,366) | (163.5%) | 73.2% | (4,462) | (4,027) |
Income for the period | 7,448 | 11,109 | 2,938 | (33.0%) | 153.5% | 31,352 | 9,705 |
Income for the period attributable to: | N/A | N/A | - | - | |||
Owners of the parent | 7,481 | 10,736 | 2,936 | (30.3%) | 154.8% | 31,008 | 9,613 |
Non-controlling interests | (34) | 373 | 2 | (109.1%) | n.m | 343 | 92 |
Other comprehensive income | 166 | (3,425) | 63 | 104.8% | 163.5% | (3,416) | (21) |
- 21 -
Ratios
Quarterly annualized ratios | BBVA ARG consolidated | Chg% | |||||
In % | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY | ||
Profitability | |||||||
Efficiency ratio | 40.2% | 35.9% | 47.5% | 424 | bps | (733)bps | |
ROA | 6.9% | 11.0% | 3.4% | (413)bps | 353 bps | ||
ROE | 49.5% | 81.2% | 31.4% | (3,170)bps | 1,816 bps | ||
Liquidity | |||||||
Loans as % of total deposits | 69.9% | 61.7% | 55.1% | 818 | bps | 1,479 | bps |
Capital | |||||||
Total capital as % of total assets | 17.8% | 17.1% | 14.3% | 68 | bps | 350 bps | |
Regulatory capital as % of risk-weighted assets (RWA) | 17.1% | 16.4% | 13.5% | 72 | bps | 358 | bps |
Solvency | |||||||
Irregular loan portfolio/Total loans | 3.57% | 3.31% | 1.95% | 26 | bps | 162 | bps |
Allowances for loan losses / Irregular loan portfolio | 113.04% | 105.08% | 117.88% | 796 | bps | (484)bps |
Annualized accumulated ratios | BBVA ARG consolidado | Chg % | |||||
In % | 4Q19 | 3Q19 | 4Q18 | QoQ | YoY | ||
Profitability | |||||||
Efficiency ratio | 37.0% | 35.6% | 48.9% | 133 | bps | (1,191)bps | |
ROA | 7.9% | 8.0% | 2.3% | (14)bps | 558 bps | ||
ROE | 60.6% | 62.2% | 21.2% | (159)bps | 3,947 bps | ||
Liquidity | |||||||
Loans as % of total deposits | 69.9% | 61.7% | 55.1% | 818 | bps | 1,479 | bps |
Capital | |||||||
Total capital as % of total assets | 17.8% | 17.1% | 14.3% | 68 | bps | 350 bps | |
Regulatory capital as % of risk-weighted assets (RWA) | 17.1% | 16.4% | 13.5% | 72 | bps | 358 | bps |
Solvency | |||||||
Irregular loan portfolio/Total loans | 3.57% | 3.31% | 1.95% | 26 | bps | 162 | bps |
Allowances for loan losses / Irregular loan portfolio | 113.04% | 105.08% | 117.88% | 796 | bps | (484)bps |
- 22 -
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Disclaimer
Banco BBVA Argentina SA published this content on 18 February 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 18 February 2020 21:26:07 UTC