BBVA Argentina
2Q20 Corporate Presentation
September 2020
Safe Harbour 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.
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 BCRA, (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 June 30, 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"), Play Digital S.A. 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.
BBVA Argentina 2Q20 Highlights
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 June 30, 2020.
BranchesIn-company branches
Total assets
Loans to the private sectorTotal Deposits
247
15
AR$542.1 bn
AR$250.4 bn
AR$367.5 bn
ATMs
Customer service booths
881
2
Net Interest IncomeNet Fee Income
Op. Expenses*
Net Income
ATSs
Employees**
AR$15.9 bn
AR$3.1 bn
AR$11.2 bn
AR$2.6 bn
857
6,186
ROE
ROANPL ratioCoverage ratioEfficiency ratio
10.9% 1.9%
1.56% 269.38% 47.4%
TOTAL ACTIVE CUSTOMERS
DIGITAL SALES
MARCH 2020
Digital Customers1
Mobile Customers2
RETAIL
SMEs
CIB
+2.6 m
+49 k
+700
+1.9 m
+1.5 m
PRV3 41.9%
1. Digital Customers: We consider a customer to be an active user of online banking when they have been logged at least once within the last three months using the internet or a cell phone and SMS banking
2. Mobile Customers: Customers who have been active in online banking at least once in the last three months using a mobile device
3. Retail PRV: Product Relative Value as a proxy of a better economic representation of units sold
*Operating expenses: includes administration, personnel benefits, depreciations and other expenses. **corresponds to total effective employees, net of temporary contract employees
Macro View
POLITICS
Main Variables
• The National Government extended the mandatory lockdown for the metropolitan area and main urban centers. Only some activities are returning in CABA, mainly small shops that had remained closed.
73.86 $/US$ | ARS/USD rate |
+33.5% | YoY |
43.1 U$S Bn | INTERNATIONAL RESERVES |
-27.5% | YoY |
42.4% Jul'20 | INFLATION YoY |
37.8% | REM Consensus Dec. 2020 |
38.0% | Monetary Policy Rate |
-3.698 bp | YoY |
As of August 26, 2020
INFLATION
• July recorded a 1.9% MoM change in inflation (45.6% YoY), below the REM estimate (2.4% MoM), in line with a context of
FX controls and freezed tariffs.
ACTIVITY
• GDP fell 16.6% QoQ w/o seasonal effect in 2Q20, explained by a steep fall in activity in April and moderate recovery in May and June. A rebound is evident in June for industry and construction. Industry increased 13.8% MoM w/o seasonal effect (-6.6% YoY and -14.6% YoY accumulated) showing lower annual falls than in April and May. Construction improved +38.2% in MoM w/o seasonal effect (-14.8% YoY and -37.8% YoY accumulated) after a historical fall. Levels for both sectors remain below those in 2019.
FISCAL POLICY
• Results in July were better than expected. Revenues increased 19.8% YoY and Expenses increased 72.1% YoY, recording a deficit of AR$ 155.5 bn in July (accumulating AR$ 1,045 bn in the first 7 months, 3.7% of GDP).
SOVEREIGN DEBT
• The Government agreed with major bondholder committees, which accumulate 54% of debt stock in foreign law. The average present value of the offer reached 54.8 cents per dollar (EY:10%). This offer was extended, in the same conditions, for USD local law bonds. The deadline to enter the swap was August 28th, 2020. Restructuring greatly reduces cashflows for maturities between 2020 and 2024, from USD 46.0 bn to USD 6.0 bn.
We Face this Crisis from a Strong Position
In this context, our digital capacities are a competitive advantage
All indicators correspond to QoQ variations in 2Q20
Reorienting our clients to remote and digital channels
ISSUED ECHEQS
x25
Donations, Human Capital & Sustainability
AR$10 million
Seamos Uno
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.
AR$10 millionAR$1 million
Argentina nos necesita
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.
Tu donación vale el doble
Voluntary initiative with the Red
Cross, in which more than $500,000 were collected, reaching more than $1 million when added to the funds doubled by the Bank.
More than 90% of employees at central offices are working remotely. All branches remain open and operational, and many are working up to 100% capacity due to high demand in appointments.
#StayAtHome
#YoMeQuedoEnCasa
The Bank joined this campaign promoting the use of digital media channels to make clients aware of the benefits of operating in an agile and self-serviced way without moving from their homes
1st Sustainable Loan
BBVA Argentina granted the first sustainable loan under the Sustainable Transactional Banking framework, connected to the UN Sustainable Development Goals
COVID-19 support loans as of 2Q20
9% of total AR$ loans
Accumulated total granted to SMEs and Health services at 24% rate and Zero rate credits
As of 2Q20 support loans represent 9% of our AR$ portfolio
+AR$4.0 billion
+AR$11.0 billion
41%
36%
Granted to SMEs for Salary payments
Granted to SMEs for Discounted Instruments
Discounted Instruments*
Salary & Working Capital*
+AR$5.0 million
+AR$1.80 billion
Granted to SMEs for Working Capital
Granted with FoGAr warrants
21%
3%
Loans at 0% Rate*
AR$50 million
+AR$6.5 billion
Consumer Loans to Entrepreneurs and SMEs*
Granted to
Granted at 0% rate
*Over subsidized Loan Portfolio
Health Services
Main Measures taken (including Regulatory Changes) - Update*
Retail Segment
Automatic re-financing of unpaid credit card balances due on April 30. Modification in the calculation of credit card minimum payments to make them more accessible.
Penalties on unpaid current account charges, and closure and disabling of accounts, were suspended until September 30. Fines and fees for returned checks were also suspended.
Commercial Segment
Plan Sueldo clients that do not have debit cards can withdraw cash through the Cash Express service.
Granted credit to more than 9,000 SMEs, to be allocated in payroll payments, discounted instruments and working capital, at a 24% nominal annual rate. This also included loans to the Health sector.
The Bank credited cash withdrawal costs at its own and other banks' ATMs until September 30, and incremented daily withdrawal limits.
The Bank has granted a special credit line for payroll payments for SMEs, which includes a 24% nominal annual rate, backed by the Fondo de Garantías Argentino (FoGAr) warrants.
Value of mortgage and pledge loan payments were freezed from April 1 to September 30. Unpaid instalments will be paid 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.
*Information updated as of Earnings Release, August 25, 2020.
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
01
Financial System
Adequate systemic levels of liquidity and solvency
Allowances /Irregular non-financial private sector portfolio
COVERAGE (%)
LIQUIDITY (%)
Cash + net repos with BCRA+ BCRA bills/Total Deposits
CAPITAL (%)
Capital/RWA according to BCRA regulation
NPL (%)
Irregular non-financial private sector portfolio/Financing to the non-financial private sector
Source: "Informe sobre bancos", BCRA, as of June, 2020. Values as of January 2020 are not comparable to previous periods due to inflation adjustments.
140%
120%
100%
80%
60%
40%
20%
0%
Positive real profitability for private banks
ROE (ACCUMULATED ANNUALIZED) AND INFLATION
59.2%
47.6% 53.8%
36.1% 44.4%
35.6%
2018
2019
ROE Private Banks
YoY Inflation
Source: BCRA and IPC CABA (from Jan-13 to Apr-16) - IPC GBA INDEC (from May -16 to May -17) - IPC Nacional INDEC (from June -17)
ROE: "Informe sobre Bancos" BCRA as of March, 2020. Values as of January 2020 are not comparable to previous periods due to inflation adjustments.
17.8%
13.5%
1Q20
ROE System
BBVA ROE 14. | 5% |
21.0%
19.0%
2Q20
Inflation adjusted figures
A small financial system with good infrastructure, ready for potential growth
LATAM PRIVATE LOANS AND TOTAL DEPOSITS (% of GDP)
99.7%
Credit (%GDP)
BRANCHES AND ATMs/100,000 ADULT POPULATION (Branches and ATMs / 100,000 adult population)
Deposits (%GDP)
ArgentinaChileColombiaPeru
Branches
ArgentinaChileColombiaPeru
Source: IMF and BBVA Research as of 2019 for Credit and Deposits as % of GDP, and as of 2019 for Branches and ATMs. Last information available..
126.7
ATMs
Financial System Private Nominal Growth Rates
RETAIL & COMMERCIAL LOANS GROWTH (AR$ billions, YTD % as of 2Q20)
3,200 250
System
BBVA
1,700 100
1,200 50
700 0 dic.-18 feb.-19 abr.-19 jun.-19 ago.-19 oct.-19 dic.-19 feb.-20 abr.-20 jun.-20
System total loans | |||
System total Commercial loans | |||
Var a/a % | 2018 | 2019 | YTD |
System total loans | 33% | 16% | 12% |
System total Retail loans | 30% | 16% | 5% |
System total Commercial loans | 36% | 15% | 21% |
BBVA total loans | 39% | 2% | 24% |
System total Retail loans | System total Deposits | ||
BBVA total loans | System Time Deposits | ||
Var a/a % | 2018 | 2019 | YTD |
System total Deposits | 62% | 26% | 39% |
System Sight Deposits | 52% | 30% | 39% |
System Time Deposits | 79% | 19% | 39% |
BBVA total deposits | 67% | 13% | 27% |
Sources: Capital balance as of last day of each quarter. BCRA as of June, 2020
SIGHT & TIME DEPOSITS GROWTH (AR$ billions, YTD % as of 2Q20)
02
BBVA Argentina
A leading bank…
Assets (AR$ bn - % Market Share)
Equity (AR$ bn - % Market Share)
Public Banks
Source: "Informe de entidades financieras", BCRA, as of December 2019. Last quarterly information available.
6,732
Liabilities (AR$ bn - % Market Share)
5,836
Earnings (AR$ bn - % Market Share)
897
316.2
Private Banks
…in a fragmented financial system…
Total Private Loans (AR$ bn - % Market Share)
Total Private Deposits (AR$ bn - % Market Share)
2,642
4,837
*Includes PSA + Volkswagen+Rombo.
Source: "Informe de entidades financieras", BCRA, as of December 2019. Last information available.
Public BanksPrivate Banks
…with a diversified business model
MULTICHANNEL STRUCTURE
*POS: Includes points of sale in supermarkets and shopping centers
03
2Q20 Financial Results
2Q20 Highlights - In Real Terms
01 Net Income
AR$ 2.6 bn
-70.1% YoY
02 Net Interest Income
AR$ 15.9 bn
-17.1% YoY
03 Net Fee Income
AR$ 3.1 bn
-9.2% YoY
04 Operating expenses
AR$ 11.2 bn
37.4% YoY
05 Risk indicators
NPL ratio 1.56%Coverage ratio 269.38%
06 Strong capital position
Capital Ratio 21.9%
TIER I 21.2%
07 Focus on shareholder value
ROE 10.9%
ROA 1.9%
Solid Balance Sheet Structure
ASSETS
(AR$ billions, INFLATION ADJUSTED)
576
540
2Q19
2Q19
Property and equipmentLoans and other financingCash and Deposits in banks
LOANS /DEPOSITS
1Q20
Other assets
Private and Public Debt securities
Total L6o5a%ns/Total Dep6o7s%its 67%
LIABILITIES & EQUITY
(AR$ billions, INFLATION ADJUSTED)
542
576
540
2Q20
1Q20
Deposits
Corporate bonds issuedFinancing received from other financial instOther liabilities
542
2Q20
65%
Loans - increasing demand in AR$ to support SMEs
TOTAL PRIVATE LOAN PORTFOLIO
(AR$ billions, INFLATION ADJUSTED)
NET PRIVATE LOANS STRUCTURE
264
2Q19
PRIVATE SECTOR LOANS MARKET SHARE %*
Bank Consolidated**
238
1Q20 2Q20
ARSUSD
2Q19 7.64% 8.51%
1Q20 2Q20
7.50% 7.50%
8.35% 8.54%
*Based on daily information from BCRA. Capital balance as of last day of each quarter. **Consolidates PSA, VWFS and Rombo
250
YoY
-64.2%
+ 30.2%
NET TOTAL LOANS BY ECONOMIC ACTIVITY
Loans by Segment - changing*mix structure towards commercial loans
BBVA ARGENTINA (% over total private loans AR$ billions, inflation adjusted)
*QoQ in 2Q20
Other loans
264
2Q19
Pledge Loans
Credit Cards
Consumer loans
Discounted instruments
238
250
1Q20
2Q20
Loans for the prefinancing and financing of exports
Receivables from financial leases
Overdrafts
Mortgage Loans
Retail Loan Portfolio - credit cards driven by Zero rate credit lines
CONSUMER LOANS
(AR$ billions, INFLATION ADJUSTED)
2Q19
1Q20
CONSUMER LOANS MARKET SHARE*
5.22%
4.82%
4.95%
*Based on daily information from BCRA. Capital balance as of last day of every quarter.
CREDIT CARDS
(AR$ billions, INFLATION ADJUSTED)
+12%
78.00
66.00
68.00
64.00
70.00
76.00
74.00
72.00
2Q19
68.7
2Q20
Credit Cards
1Q20 2Q20
Credit card stock (in thousands)
CREDIT CARD MARKET SHARE %*
Financing
Consumption
77.0
74.3
2Q19 11.45% 15.15%
1Q20 2Q20
11.56% 11.67%
14.44% 14.20%
*Credit cards: Consumption market share. Based on information provided by Visa and Mastercard administrators. Spending is considered as of the end of the last month of the quarter.
Retail Loan Portfolio
PLEDGE LOANS (CONSOLIDATED)
MORTGAGE LOANS
(AR$ billions, INFLATION ADJUSTED)
(AR$ billions, INFLATION ADJUSTED)
-9%
17.2
2Q19
1Q20
2Q20
2Q19
1Q20
2Q20
PLEDGE LOANS MARKET SHARE**
15.14%
15.00%
13.44%
**Consolidated market share. Based on daily information from BCRA. Capital balance as of last day of every quarter.
MORTGAGE LOANS MARKET SHARE*
3.35%
3.09%
3.02%
*Based on daily information from BCRA. Capital balance as of last day of every quarter.
Commercial Loan Portfolio - boosted by SMEs 24% loans
COMMERCIAL LOANS
(AR$ billions, INFLATION ADJUSTED)
-10%
141
113
2Q19
Other loansDiscounted instruments
1Q20
Prefinancing and financing of exportsOverdrafts
COMMERCIAL LOANS MKT SHARE%* | 2Q19 | |
Loans in $ | 7.64% | 8.97% 9.28% |
Loans in USD | 10.14% | 7.58% 7.34% |
1Q20
*Based on daily information from BCRA. Capital values as of last day of every quarter.
**Other financing: 59% in pesos - 41% in foreign currency
126
YoY
-64% USD
+100% ARS
2Q20
Receivables from financial leases
COMMERCIAL LOANS BY CURRENCY (%)
2Q20
Deposits - AR$ deposits growing above inflation in real terms
TOTAL PRIVATE DEPOSITS
(AR$ billions, INFLATION ADJUSTED)
PRIVATE DEPOSITS STRUCTURE
-9%
402
342
2Q19
1Q20
ARSUSD
PRIVATE DEPOSITS MARKET SHARE*
7.35%
6.80%
6.50%
*Based on daily information from BCRA. Capital balance as of last day of every quarter.
IN AR$ (%)
367
YoY
-40.2%
+ 20.1%
2Q20
2Q20 Profitability Indicators - efficiency ratio remains stable
NET INCOME
(AR$ billions, INFLATION ADJUSTED)
2Q19
ROA (%, INFLATION ADJUSTED)
1Q20
2Q20
2Q19
ROE (%, INFLATION ADJUSTED)
2Q19
1Q20
EFFICIENCY (%, INFLATION ADJUSTED)
2Q20
+1,130 bps
47.4%
47.4%
1Q20
2Q20
2Q19
1Q20
2Q20
Net Interest Income
NET INTEREST INCOME
(AR$ billions, INFLATION ADJUSTED)
2 40
34
26
22
(10)Other interest income
15
9
-2
2Q19
1Q20
NET INTEREST INCOME (IN AR$ BILLIONS)
6
2Q20
Savings accounts represent less than 1% of expenses
Interest Income
Financial Sector
CER/UVA clause adjustment income
Commercial
Retail
From Private and Public Securities
(20)Interest Expense
Time deposits
CER/UVA clause adjustment expense
Checking accounts
Other
NII based on:
• Decline in rates of interest-earning assets (COVID-19 support)
• Fall in Monetary Policy rate offset by a higher position in LELIQ
• Decreasing trend in time deposit and interest-bearing checking account rates.
Net Fee Income & Operating Expenses - Effective fee income strategy
NET FEE INCOME
(AR$ billions, INFLATION ADJUSTED)
OPERATING EXPENSES
(AR$ billions, INFLATION ADJUSTED)
+9%
-37%
17.9
12.9
11.2
2Q19
Fee Income
1Q20
Fee expenses
2Q20
Net Fee Income
2Q19
Personnel benefitsDepreciation and amortization
Adminsitrative expensesOther operating expenses
1Q20
2Q20
Sound Risk Indicators - Molca* write-off
NPL & COVERAGE
(%, consolidated, INFLATION ADJUSTED)
NPL PEER GROUP & FINANCIAL SYSTEM
(%, INFLATION ADJUSTED)
5%
0%
4%
4%
3%
3%
2%
2%
1%
1%
4.08%
3.99%
2Q19
CoverageCost of RiskRetail NPL
1Q20
2Q20
NPLCommercial NPL
Cost of Risk: calculated as Loan loss allowances / Total Loans and other financing
Source: System: "Informe de Bancos", BCRA, as of June 2020. Peers & BBVA : 2Q20 Earnings Releases. *Molca: Molino Cañuelas
300%
250%
System
200%
SUPV
150%
100%
GGAL
50%
BBAR
0%
BMA
5.10%
3.54%
1.56%
1.52%
6.10%
Limited Public Sector Exposure
% PUBLIC SECTOR EXPOSURE (EXCL. BCRA) /TOTAL ASSETS
(INFLATION ADJUSTED)
10.0%
2Q19
1Q20
BBVAFinancial System*
2Q20
*Source: "Informe sobre bancos", BCRA, as of June 2020. As of January 2020, System figures are inflation adjusted and not comparable to prior periods.
BBVA PUBLIC SECTOR EXPOSURE
(AR$ billions, INFLATION ADJUSTED)
36.4
19.3
17.8
2Q20
2Q19
Public Debt in pesos
1Q20
Public Debt in US dollarsPublic Debt in pesos, US dollar-Linked
Provinces and Public Sector loans amount for 0.2% in 2Q20
BBVA BCRA EXPOSURE
(AR$ billions, INFLATION ADJUSTED)
Provinces
81.4
62.6
111.6
2Q19
Repo
1Q20
2Q20
Repo
LELIQs
Liquid Assets - higher LELIQ position
TOTAL LIQUID ASSETS
(%, INFLATION ADJUSTED)
PRIVATE DEPOSIT BASE
(%, INFLATION ADJUSTED)
-8%
247
235
238
402
2Q19
1Q20
Cash
Other local and foreign financial institutionsLiquidity bills of B. C. R. A.
B.C.R.A
Government securitiesNet REPO transactions
TOTAL LIQUID ASSETS/TOTAL DEPOSITS
2Q20
61%
68%
64%
2Q19
Time DepositsSavings Accounts
342
367
1Q20
Other
Checking Accounts
2Q20
Investment accounts
69%
LOW COST FUNDING
Strong Capital Position - In Real Terms
2Q19
1Q20
2Q20
Capital Ratio
Tier I
04
BBVA Purpose
BBVA Defined a New Strategy in 2015: To Boost its Transformation
OUR PURPOSE
STRATEGIC PRIORITIES
We are one team
Better client experience
Digital sales
New business models
Optimization of capital allocation
Leading efficiency
The best team
BBVA Argentina Digital Client Strategy Approach
Client acquisition as a key corporate strategic asset for growth
Since 2017*, active clients increased 13%
More than 290,000 clients
Healthy NPL ratio
With an approach in open market
Successfully acquiring clients
Without increasing the number of branches
Payroll acquisition
New clients, increasing payroll market share
Ahead of curve in digital transformation Driving client acquisition and digital sales
*As of December 2019
Consistently leading in customer satisfaction indicator
Loyalty NPS* #1
BBVA Argentina Active Clients
Since 2Q19, active clients increased 5%, more than 137,000
In thousands
In thousands
0.76
2Q19
1Q20
2Q20
2Q19
1Q20
2Q20
2Q19
Total Retail
Total SMEs
Total CIB
BBARSANGALBMA
Active clients: holders of at least one active product. An active product is in most cases a product with at least "one movement" in the last 3 months, or a minimum balance. CIB does not include Mutual Fund clients Source: active credit cards and credit card market share based on Visa and Mastercard information. Active cards: number of cards that record movements by period end (purchases or extractions).
1Q20
2Q20
Geographic Structure as of December 2019
Successfully acquiring clients without increasing the number of branches Clients per branch increased 12% from 2017 to 2019
*Annual variation in number of branches
Source: "Informe de entidades financieras", BCRA, as of December 2019. Last quarterly information available. Clients: from 2019 20-F for SUPV and GAL, 2019 Annual Report for BMA.
Ahead of Curve in Digital Transformation Based on Global Strategy
Digital client acquisition strategy based on a variable-cost selling model, exclusive and attractive offers, and key partners
DIGITAL ACTIVE CLIENTS MILLION, % GROWTH
2Q19
1Q20
CUSTOMER PENETRATION RATE, %
MOBILE ACTIVE CLIENTS MILLION, % GROWTH
2Q20
2Q19
1Q20
Digital customers: number of retail clients that have logged in any of the bank's digital platforms at least once during each of the last 3 months.
2Q20
Mobile customers: number of retail clients that have logged in the bank's mobile app at least once during each of the last 3 months. It is a sub-group of digital customers.
Latest
Digital Actions
Payments
We have implemented NFC technology, after a successful pilot trial through employees in February.
Modo - Payment Solutions
Soon to be launched new payment solution app, together with other Argentine banks, enabling wire transfers and cashless payments through mobile phones, and making all member banks' promotions available at purchase.
Transformation Driving Digital Sales and Client Acquisition
DIGITAL SALES
(% OF TOTAL SALES YTD, % OF TRANSACTIONS AND PRV)
75.7%
41.9%
PRV
2Q19
1Q20
Digital Sales PRV (% Retail)
Digital Sales (% Units)
Digital sales: % of sales done through digital channels and ATM over total sales.
DIGITAL SALESPRV (Retail)
Digital client acquisition strategy based on a variable-cost selling model, exclusive and attractive offers, and key partners
2Q20
PRV: Product Relative value for the Retail Segment, used as a proxy for economic value. Transactions (units) are weighted by a simplified NPV calculated for each product category in order to weight their contribution to the digital sales. Figures have been restated in order to include credit card related financing solutions and FX.
Continuous improvement on efficiency
Accelerated adoption of digital over traditional channels, and a migration from web to mobile
TRANSACTIONS BY CHANNEL
1Q19
2Q19
3Q19
ATM&ATS
REMOTE CHANNELS
% TRANSACTION GROWTH QoQ as of 2Q20
Mobile
4Q19
1Q20
MobileWeb
Tellers
Digital channels are a key pillar for the Bank's efficiency strategy
Web
June 2020 *corresponds to total effective employees, net of temporary contract employees. Consolidated.
Branch reduction ongoing since 2019 (# of branches)
2Q19
2Q20
Employees* (in thousands)
3Q19
4Q19
1Q20
2Q20
1Q19
2Q19
3Q19
4Q19
1Q20
2Q20
Asset Quality - Molca* write-off
2018
2019
Allowances as % of NPL
2018
Source: "Informe sobre bancos", BCRA, as of June 2020. Striped periods not adjusted by inflation. *Molca: Molino Cañuelas
NPL as % of Private Lending
BBVASystemPrivate Banks
2019
BBVASystemPrivate Banks
1Q20
2Q20
269%
1Q20
2Q20
Payroll Acquisition
New clients, increasing payroll market share, sight deposits and cross-sell opportunities
MORE payroll customers
INCREASING payroll share
In thousands
1Q19
4Q19
1Q20
Source: Ministerio de Trabajo de la República Argentina; SIPA, as of March 2020. Last quarterly available information..
1Q19
4Q19
1Q20
05
Appendix
Responsible Banking and Sustainability 2019
"In 2019, BBVA Argentina joined the UN Principles of Responsible Banking and signed the Sustainable Finance Protocol. Both initiatives seek to foster a sustainable banking system, fair and accountable towards the community, and are meant to help fulfill the Sustainable Development Goals (SDGs) and the Paris Agreement on Climate Change."
María Isabel Goiri Lartitegui Chairman BBVA
BBVA ARGENTINA WAS THE FIRST PRIVATE BANK TO LAUNCH A NEW LINE OF PERSONAL LOANS CALLED "ECO-LOANS" FOR
$12.2 million
INVESTED IN ENVIRONMENTAL MANAGEMENT
INVESTED IN SOCIAL PROGRAMS
+$25 million
OF OUR SELF-SERVICE TERMINALS SUPPORT ENVELOPE-FREE TRANSACTIONS
100%
THE PURCHASE OF SUSTAINABLE GOODS THAT CONTRIBUTE TO CARE FOR THE ENVIRONMENT AND SUPPORT SDG 7.
The Best Team
>BBVA Volunteers
6,223 employees
47% Women 53% Men
0
Discrimination cases detected
Global Volunteering Week at BBVA +730 employees 325 activities to contribute to the SDG Solidarity Project Contest $650,000 in prizes 21 dreams 4,800 direct beneficiaries
HIGHLIGHTS
OF THE GLOBAL ECO-EFFICIENCY PLAN
40% consumption per capitadecline in YoY paper87.7%of customers with product bundles are enrolled in e-statements
36.6% consumption per capita
decline in year-on-year water82.5%
of VISA customers are enrolled in e-statements
2019
11.9% per capita
reduction of CO2 emissions
92.9% of MasterCard customers areenrolled in e-statements
> The Bank strived to achieve the goal of eliminating plastic from its buildings
Figures correspond to Bank only.
Latest sustainable iniciatives
Certification of green credit line
The Bank certified a green credit line of $290 million to the Unión Transitoria de Empresas, to be allocated in the sanitation treatment project at Cuenca del Rio La Matanza - Riachuelo.
Eco-efficiency plan
The Bank has signed a 5 year contract with Central Puerto for the purchase of renewable energy of wind-power origin. As of August 1, 2020, the Reconquista 199 building will be supplying 88% of its energy requirements through this type of energy.
Credit lines Línea Verde
Green credit lines for SMEs are available for social purposes and sustainable investments, at a 35% rate with a 4 year duration.
Equity Ownership
OWNERSHIP STRUCTURE
6.93%
Free Float 26.51%
SUBSIDIARIES AND EQUITY PARTICIPATIONS
BBVA Asset Management Argentina 100%
BBVA Francés Valores1 96.99%
PSA Finance* 50%Volkswagen Financial Services2 51%
Consolidar AFJP(undergoing liquidation proceedings)
53.89%
Rombo Compañía Financiera 40%
BBVA Seguros 12.22%
SubsidiariesJVs
ANSES**ByMA*NYSE
*Includes 0.07% in LATIBEX
**Administración Nacional de la Seguridad Social or National Social Security Agency. Replacement of the pension and retirement fund system: in 2008 all resources formerly managed by the private pension and retirement system, including meaningful holdings in public companies were transferred o the Sustainability Guarantee Fund (Fondo de Garantía de Sustentabilidad)
1 As of October 1st, 2019, the merger between BBVA Argentina S.A. and BBVA Francés Valores S.A. was put into effect (merger by absorption process)
Interbanking 11.11%Play Digital S.A.
33.33%
Associates
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.
2 As of July 1st 2019 the Bank reports the activity of PSA and VWFS on a consolidated basis with BBVA Argentina, the same as it has been done with BBVA Asset Management Argentina S.A.
BBVA Argentina Outstanding Corporate Bond Debt as of 2Q20
BADLAR- Private Banks rate : interest rate for fixed term deposits over 1 million pesos with a maturity of 30-to-35 days. UVA rate: unit measure that is daily adjusted to the CER index, according to the consumer price index.
JVs corporate bonds not included.
Dividends
Year | Net Income (millions AR$) | Dividends (millions AR$) | Total shares (millions) | Dividends per share (AR$) | Dividends per ADS (AR$) | Payout Ratio | Payment date |
2019 | 31,352 | 2,500 | 612.7 | 4.08 | 12.24 | 8% | To be confirmed* |
2018 | 9,705 | 2,407 | 612.7 | 3.93 | 11.79 | 25% | 05/16/2019 |
2017 | 3,878 | 970 | 612.7 | 1.58 | 4.75 | 25% | 05/09/2018 |
2016 | 3,644 | 911 | 612.7 | 1.49 | 4.46 | 25% | 08/10/2017 |
2015 | 3,785 | 900 | 536.9 | 1.68 | 5.03 | 24% | 07/24/2016 |
2014 | 3,204 | 400 | 536.9 | 0.75 | 2.24 | 12% | 03/18/2016 |
2013 | 2,024 | 29 | 536.9 | 0.05 | 0.16 | 1% | 07/08/2014 |
2012 | 1,264 | - | 536.9 | - | - | - | - |
*The distribution is subject to BCRA prior authorization, which has not been granted yet. According to Communication "A" 6939 and 7035, the distribution of financial institutions' results is suspended until December 31, 2020.
BBVA Argentina P&L Breakdown
Income Statement BBVA ARG Consolidated Chg(%) | |||||
In millions AR$ - Inflation adjusted 2Q20 1Q20 2Q19 QoQ YoY | |||||
Interest income | 22,342 | 25,935 | 33,805 | (13.9%) | (33.9%) |
Interest expense | (6,465) | (8,611) | (14,648) | 24.9% | 55.9% |
Net interest income | 15,876 | 17,325 | 19,157 | (8.4%) | (17.1%) |
Fee income | 6,104 | 5,691 | 6,408 | 7.3% | (4.7%) |
Fee expenses | (2,996) | (3,715) | (3,560) | 19.3% | 15.8% |
Net fee income | 3,109 | 1,977 | 2,848 | 57.3% | 9.2% |
Net income from financial instruments at fair value | 1,016 | 1,300 | 3,100 | (21.8%) | (67.2%) |
Net loss from write-down of assets at amortized cost and fair value through OCI | (2,067) | (134) | (54) | n.m | n.m |
Foreign exchange and gold gains | 1,494 | 1,304 | 1,914 | 14.6% | (21.9%) |
Other operating income | 1,142 | 1,095 | 6,450 | 4.3% | (82.3%) |
Loan loss allowances | (2,646) | (1,711) | (2,594) | (54.7%) | (2.0%) |
Net operating income | 17,925 | 21,156 | 30,820 | (15.3%) | (41.8%) |
Personnel benefits | (3,966) | (4,678) | (4,756) | 15.2% | 16.6% |
Administrative expenses | (3,831) | (3,783) | (3,548) | (1.3%) | (8.0%) |
Depreciation and amortization | (843) | (867) | (696) | 2.8% | (21.0%) |
Other operating expenses | (2,585) | (3,525) | (8,944) | 26.6% | 71.1% |
Operating income | 6,700 | 8,303 | 12,876 | (19.3%) | (48.0%) |
Income from associates and joint ventures | 188 | 29 | 278 | n.m | (32.5%) |
Income from net monetary position | (2,285) | (2,765) | (2,118) | 17.4% | (7.8%) |
Income before income tax | 4,603 | 5,567 | 11,036 | (17.3%) | (58.3%) |
Income tax | (2,046) | (2,293) | (2,478) | 10.8% | 17.4% |
Income for the period | 2,557 | 3,274 | 8,558 | (21.9%) | (70.1%) |
Income for the period attributable to: | |||||
Owners of the parent | 2,510 | 3,244 | 8,563 | (22.7%) | (70.7%) |
Non-controlling interests | 47 | 300 | (4) | 58.4% | n.m |
Other comprehensive income | 1,927 | 1,216 | (4,654) | 58.4% | 141.4% |
(1) Excludes consolidation with PSA and VWFS.
Proforma (1)
2Q20
21,129
(5,952)
15,177
6,103
(2,972)
3,131
1,262
(2,067)
1,503
1,168
(2,612) 17,561 (3,890) (3,768)
(837) (2,718) 6,349
258
(2,126) 4,480 (1,945) 2,535
2,510
260
1,926
BBVA Argentina Balance Sheet
Balance Sheet BBVA ARG Consolidated Chg (%) | |||||
In millions AR$ - Inflation adjusted 2Q20 1Q20 2Q19 QoQ YoY | |||||
Assets | |||||
Cash and deposits in banks | 112,525 | 154,393 | 129,846 | (27.1%) | (13.3%) |
Cash | 50,468 | 39,332 | 22,636 | 28.3% | 123.0% |
Financial institutions and correspondents | 62,057 | 115,061 | 107,210 | (46.1%) | (42.1%) |
B.C.R.A | 57,915 | 110,432 | 104,904 | (47.6%) | (44.8%) |
Other local and foreign financial institutions | 4,142 | 4,628 | 2,306 | (10.5%) | 79.6% |
Debt securities at fair value through profit or loss | 9,756 | 9,546 | 9,409 | 2.2% | 3.7% |
Derivatives | 1,057 | 2,271 | 2,624 | (53.5%) | (59.7%) |
Repo transactions | 34,267 | 3,374 | 8,458 | n.m | 305.2% |
Other financial assets | 6,377 | 19,592 | 10,530 | (67.4%) | (39.4%) |
Loans and other financing | 243,226 | 230,229 | 266,503 | 5.6% | (8.7%) |
Non-financial public sector | 0 | 1 | 0 | (73.7%) | (66.3%) |
B.C.R.A | - | 12 | 0 | (100.0%) | (100.0%) |
Other financial institutions | 3,504 | 5,296 | 10,855 | (33.8%) | (67.7%) |
Non-financial private sector and residents abroad | 239,722 | 224,920 | 255,648 | 6.6% | (6.2%) |
Other debt securities | 81,502 | 68,237 | 99,595 | 19.4% | (18.2%) |
Financial assets pledged as collateral | 10,749 | 7,182 | 9,068 | 49.7% | 18.5% |
Current income tax assets | 9 | 0 | 1 | n.m | n.m |
Investments in equity instruments | 1,805 | 1,909 | 2,733 | (5.5%) | (34.0%) |
Investments in subsidiaries and associates | 1,229 | 1,187 | 3,065 | 3.5% | (59.9%) |
Property and equipment | 28,270 | 28,801 | 32,081 | (1.8%) | (11.9%) |
Intangible assets | 1,068 | 969 | 1,002 | 10.2% | 6.5% |
Deferred income tax assets | 5,281 | 7,815 | (2,225) | (32.4%) | 337.3% |
Other non-financial assets | 4,772 | 4,515 | 2,939 | 5.7% | 62.3% |
Non-current assets held for sale | 189 | 189 | 189 | - | (0.0%) |
Total Assets | 542,080 | 540,207 | 575,818 | 0.3% | (5.9%) |
(1) Excludes consolidation with PSA and VWFS.
112,163
50,468
61,695
57,571
4,124
9,756
1,057
34,267
6,241
232,565
0 -
6,677
225,887
81,502
10,748
9
1,805
3,123
28,228
1,067
4,885
4,660
189 532,264
BBVA Argentina Balance Sheet
Balance Sheet
BBVA ARG Consolidated
Chg (%)
In millions AR$ - Inflation adjusted Liabilities
2Q20
1Q20
2Q19
QoQ
YoY
Deposits
Non-financial public sector Financial sector
Non-financial private sector and residents abroad
Liabilities at fair value through profit or loss Derivatives
Other financial liabilities
Financing received from the B.C.R.A. and other financial institutions Corporate bonds issued
Current income tax liabilities Provisions
Deferred income tax liabilities Other non-financial liabilities Total Liabilities
345.586
407.150
8,0% 49,3% (0,9%) 7,6%
(8,3%)
3.660
5.190
341.624 -
302
401.538
423
5,3% (29,2%) (8,5%)
1.651
N/A
(100,0%)
349
3.267
(34,3%)
(93,0%)
45.132
32.931
(37,4%)
(14,2%)
3.822
4.699
33,4%
8,5%
7.902
6.180
(46,8%)
(32,0%)
12.200
6.580
(73,5%)
(50,8%)
11.880 -
10.625
(7,4%)
3,5%
67
N/A
(93,4%)
19.790 446.661
18.496 491.647
10,3% 0,1%
18,1% (9,1%)
Equity
Share Capital Non-capitalized contributions Capital adjustments Reserves
Retained earnings
Other accumulated comprehensive income Income for the period
Equity attributable to owners of the Parent Equity attributable to non-controlling interests Total Equity
Total Liabilities and Equity
(1) Excludes consolidation with PSA and VWFS.
613
613
-
0,0%
22.017
22.006
(0,0%)
0,1%
15.452
15.452
(0,0%)
0,0%
49.781
49.800
65,6%
65,6%
11.022
(15.266)
(344,7%)
(76,7%)
(10.734)
119
41,9%
n.m
1.819 93.546 540.207 *
91.727
3.244
48 84.172 575.818
84.123
13.694
77,3% 1,5% 2,9% 1,5% 0,3%
(58,0%) 10,6% n.m 12,8% (5,9%)
372.431
5.463
385
366.583 -
230
27.841
308
2.948
3.161
10.946
4
21.291 439.161
613
22.017
15.452
82.448
(26.973)
(7.008)
5.754
93.077
26 93.103 532.264
Investor Relations Contactinvestorelations-arg@bbva.comwww.ir.bbva.com.ar
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Banco BBVA Argentina SA published this content on 07 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 September 2020 20:19:07 UTC