Banco BBVA Argentina S.A. announces Second
Quarter 2020 results
Buenos Aires, August 25, 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 second quarter (2Q20), ended on June 30, 2020.
As of January 1, 2020, 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.
2Q20 Highlights
- BBVA Argentina's inflation adjusted net income in 2Q20 was $2.6 billion, 21.9% lower than the $3.3 billion reported in the first quarter of 2020 (1Q20), and 70.1% lower than the $8.6 billion reported in the second quarter of 2019 (2Q19).
- In 2Q20, BBVA Argentina posted an inflation adjusted average return on assets (ROA) of 1.9% and an inflation adjusted average return on equity (ROE) of 10.9%.
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In terms of activity, total consolidated financing to the private sector in 2Q20 totaled $250.4 billion, increasing in real terms 5.4% or $12.8 billion compared to 1Q20, and contracting 5.0% or $13.3 billion compared to 2Q19. In the quarter, growth was driven by Other loans (mainly company loans or
"Préstamos a Interés Vencido") and Discounted instruments, increasing 63.2% and 9.0% respectively.
BBVA's consolidated market share of private sector loans was 8.54% as of 2Q20. - Total deposits grew 8.0% in real terms during the quarter, and decreased 8.3% in the year. The Bank's consolidated market share of private deposits was 6.5% as of 2Q20.
- As of 2Q20, the non-performing loan ratio (NPL) reached 1.56%, with a 269.38% coverage ratio.
- The accumulated efficiency ratio in 2Q20 was 47.4%, remaining stable compared to 1Q20's 47.4%.
- As of 2Q20, BBVA Argentina reached a regulatory capital ratio of 21.9%, entailing a $53.2 billion or 167.6% excess over minimum regulatory requirement. Tier I ratio was 21.2%. Total liquid assets represented 63.8% of the Bank's total deposits as of 2Q20.
2Q20 Conference Call
Wednesday August 26, 2020, at 12:00 pm Buenos Aires time - (11:00am EST)
To participate, please dial in:
- 54-11-3984-5677(Argentina)
- 1-844-450-3851(U.S. Toll free)
- 1-412-317-6373(International) Web Phone: LINK
Conference ID: BBVA
Webcast & Replay: LINK
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Safe Harbor Statement
This press release contains certain forward-looking statements that reflect the current views and/or expectations of Banco BBVA Argentina and its management with respect to its performance, business and future events. We use words such as "believe," "anticipate," "plan," "expect," "intend," "target," "estimate," "project," "predict," "forecast," "guideline," "seek," "future," "should" and other similar expressions to identify forward-looking statements, but they are not the only way we identify such statements. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this release. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) changes in general economic, financial, business, political, legal, social or other conditions in Argentina or elsewhere in Latin America or changes in either developed or emerging markets, (ii) changes in regional, national and international business and economic conditions, including inflation, (iii) changes in interest rates and the cost of deposits, which may, among other things, affect margins,
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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.
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Quarterly results
Income Statement | BBVA ARG consolidated | Chg (%) | Proforma | ||||
In millions AR$ except EPS and ADS - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY | 2Q20 | (4) |
Net Interest Income | 15,876 | 17,325 | 19,157 | (8.4%) | (17.1%) | 15,177 | |
Net Fee Income | 3,109 | 1,977 | 2,848 | 57.3% | 9.2% | 3,131 | |
Net income from measurement of financial instruments at fair value | 1,016 | 1,300 | 3,100 | (21.8%) | (67.2%) | 1,262 | |
through P&L | |||||||
Net loss from write-down of assets at amortized cost and at fair value | (2,067) | (134) | (54) | n.m | n.m | (2,067) | |
through OCI | |||||||
Foreign exchange and gold gains | 1,494 | 1,304 | 1,914 | 14.6% | (21.9%) | 1,503 | |
Other operating income | 1,142 | 1,095 | 6,450 | 4.3% | (82.3%) | 1,168 | |
Loan loss allowances | (2,646) | (1,711) | (2,594) | (54.7%) | (2.0%) | (2,612) | |
Net operating income | 17,925 | 21,156 | 30,820 | (15.3%) | (41.8%) | 17,561 | |
Personnel benefits | (3,966) | (4,678) | (4,756) | 15.2% | 16.6% | (3,890) | |
Adminsitrative expenses | (3,831) | (3,783) | (3,548) | (1.3%) | (8.0%) | (3,768) | |
Depreciation and amortization | (843) | (867) | (696) | 2.8% | (21.0%) | (837) | |
Other operating expenses | (2,585) | (3,525) | (8,944) | 26.6% | 71.1% | (2,718) | |
Operating income | 6,700 | 8,303 | 12,876 | (19.3%) | (48.0%) | 6,349 | |
Income from associates | 188 | 29 | 278 | n.m | (32.5%) | 258 | |
Income from net monetary position | (2,285) | (2,765) | (2,118) | 17.4% | (7.8%) | (2,126) | |
Net income before income tax | 4,603 | 5,567 | 11,036 | (17.3%) | (58.3%) | 4,480 | |
Income tax | (2,046) | (2,293) | (2,478) | 10.8% | 17.4% | (1,945) | |
Income for the period | 2,557 | 3,274 | 8,558 | (21.9%) | (70.1%) | 2,535 | |
Number of common shares outstanding (in thousands) | 612,710 | 612,710 | 612,660 | - | 0.0% | 612,710 | |
Weighted average number of common shares outstanding (2)(3) | 612,710 | 612,710 | 612,660 | - | 0.0% | ||
Earnings per share (EPS) | 4.10 | 5.30 | 13.98 | (22.7%) | (70.7%) | 4.10 | |
Earnings per ADS (1) | 12.29 | 15.89 | 41.93 | (22.7%) | (70.7%) | 12.29 |
- One ADS represents three ordinary shares
- In thousands of shares
- As of October 9th, 2019, 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 VWFS y PSA.
BBVA Argentina 2Q20 net income was $2.6 billion, 21.9% or $717 million lower than 1Q20, and 70.1% or $6.0 billion lower than 2Q19. The quarter-over-quarter (QoQ) decrease is mainly explained by the mandatory lockdown (COVID-19, which has had an impact in the economy, especially on those activities considered by the Government as "non-core business" as of March, 20), and a decrease in the monetary policy rate set by the BCRA, among other regulations conducted by such institution.
As of 2Q20, net operating income was $17.9 billion, decreasing 15.3% or $3.2 billion QoQ and 41.8% or $12.9 billion YoY.
Operating income in 2Q20 was $6.7 billion, decreasing 19.3% or $1.6 billion QoQ, and 48.0% or $6.2 billion YoY. It is important to mention that during 2Q19, dividends from share participation in Prisma ($1.1 billion) were cashed in, reflected in the line Net income from measurement of financial instruments at fair value through P&L.
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Net interest income
Net Interest Income | BBVA ARG consolidated | Chg (%) | Proforma | (1) | |||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY | 2Q20 | |
Net Interest Income | 15,876 | 17,325 | 19,157 | (8.4%) | (17.1%) | 15,177 | |
Interest Income | 22,341 | 25,935 | 33,805 | (13.9%) | (33.9%) | 21,129 | |
From government securities | 5,911 | 6,584 | 12,492 | (10.2%) | (52.7%) | 5,911 | |
From private securities | 2 | 2 | 3 | 39.6% | (32.8%) | 2 | |
Interest from loans and other financing | 14,191 | 15,883 | 17,527 | (10.7%) | (19.0%) | 13,054 | |
Financial Sector | 236 | 367 | 848 | (35.7%) | (72.2%) | 491 | |
Overdrafts | 2,942 | 2,649 | 2,245 | 11.1% | 31.0% | 2,943 | |
Discounted Instruments | 1,800 | 2,679 | 3,015 | (32.8%) | (40.3%) | 1,800 | |
Mortgage loans | 279 | 334 | 413 | (16.6%) | (32.5%) | 279 | |
Pledge loans | 566 | 628 | 138 | (9.8%) | 310.7% | 89 | |
Consumer Loans | 1,998 | 2,119 | 2,688 | (5.7%) | (25.6%) | 1,998 | |
Credit Cards | 3,563 | 4,864 | 6,218 | (26.8%) | (42.7%) | 3,563 | |
Financial leases | 101 | 118 | 169 | (14.7%) | (40.4%) | 80 | |
Loans for the prefinancing and financing of exports | 384 | 330 | 893 | 16.4% | (57.0%) | 378 | |
Other loans | 2,322 | 1,797 | 900 | 29.2% | 158.0% | 1,812 | |
CER/UVA clause adjustment | 1,797 | 2,552 | 3,379 | (29.6%) | (46.8%) | 1,716 | |
Other interest income | 441 | 915 | 404 | (51.8%) | 9.1% | 446 | |
Interest expenses | 6,466 | 8,611 | 14,648 | (24.9%) | (55.9%) | 5,952 | |
Deposits | 5,330 | 7,103 | 12,885 | (25.0%) | (58.6%) | 5,280 | |
Checking accounts | 168 | 236 | 1,209 | (28.7%) | (86.1%) | 168 | |
Savings accounts | 48 | 71 | 76 | (32.2%) | (36.5%) | 48 | |
Time deposits | 5,114 | 6,796 | 11,600 | (24.8%) | (55.9%) | 5,063 | |
CER/UVA clause adjustment | 249 | 215 | 565 | 15.7% | (55.9%) | 249 | |
Other liabilities from financial transactions | 595 | 993 | 1,175 | (40.1%) | (49.4%) | 420 | |
Other | 291 | 299 | 22 | (2.6%) | n.m | 4 | |
(1) Excludes consolidation with PSA and VWFS |
Net interest income for 2Q20 was $15.9 billion, decreasing 8.4% or $1.5 billion QoQ, and 17.1% or $3.3 billion YoY. The lower interest income is partially offset by lower interest expenses, driven by a decreasing trend in interest rates during the quarter, and an increase in sight deposits.
In 2Q20 interest income totaled $22.3 billion, 13.9% or $3.6 billion lower than 1Q20, and 33.9% or $11.5 billion lower than 2Q19. Quarterly decrease is explained by a decline in rates of interest-earning assets, driven by the credit support measures promoted by the Government to counteract the effects of the pandemic. Additionally, a fall in interest rates fostered by changes in the country's monetary policy has contributed to the quarterly decrease in interest income.
Income from government securities fell 10.2% or $673 million compared to 1Q20, and 52.7% or $6.6 billion compared to 2Q19. This is explained by a decrease in the monetary policy set by the BCRA (average rate of 38% in 2Q20, 47.4% in 1Q20 and 69.2% in 2Q191). This contraction is offset by an increase in the position in BCRA liquidity instruments (LELIQ), derived from new regulation that enables a higher position in LELIQ in line with what is granted in time deposits at minimum rate. 86% of results is explained by public securities at fair value with changes in the Other comprehensive income (OCI) line item, mainly LELIQ.
Interest income from loans and other financing totaled $14.2 billion, decreasing 10.7% or $1.7 billion QoQ. This is mainly explained by the implementation of credit lines to SMEs at 24%, zero rate credit lines and the lower credit card financing rate.
Income from CER/UVA adjustments was 29.6% lower QoQ and 46.8% lower YoY, mainly explained by the deceleration in inflation during the quarter (5.4% in 2Q20 vs. 7.8% in 1Q202).
Interest expenses totaled $6.5 billion, 24.9% lower than 1Q20 and 55.9% lower than 2Q19. This is a consequence of the reduction in time deposit and interest-bearing checking account average rates, derived from lower market rates and excess liquidity.
- Source: BCRA - Simple average rate during the corresponding period.
- Source: Instituto Nacional de Estadística y Censos (INDEC). Consumer Price Index.
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Interest expenses from time deposits explain 79.1% of total interest expenses, decreasing 24.8% QoQ and 56.0% YoY.
Net interest margin (NIM)
As of 2Q20, total net interest margin (NIM) was 14.0%, lower than 1Q20's 17.8%.
Assets & Liabilities Performance - AR$ | BBVA ARG Consolidated | |||||
In millions AR$. Rates and spreads in annualized % | 2Q20 | 1Q20 | ||||
Average | Interest | Average | Average | Interest | Average | |
Balance | Earned/Paid | Real Rate | Balance | Earned/Paid | Real Rate | |
Total interest-earning assets | 331,932 | 21,649 | 26.2% | 278,515 | 25,208 | 36.3% |
Government securities | 82,693 | 6,371 | 30.9% | 82,479 | 7,381 | 35.9% |
Loans to customers/financial institutions | 218,435 | 15,265 | 28.0% | 193,552 | 17,827 | 36.9% |
Other assets | 30,804 | 13 | 0.2% | 2,484 | 0 | 0.0% |
Total non interest-earning assets | 85,164 | - | 0.0% | 103,106 | - | 0.0% |
Total Assets | 417,095 | 21,649 | 381,621 | 25,208 | ||
Total interest-bearing liabilities | 177,021 | 6,406 | 14.5% | 154,818 | 8,448 | 21.9% |
Savings accounts | 74,592 | 215 | 1.2% | 60,729 | 305 | 2.0% |
Time deposits | 88,153 | 5,463 | 24.9% | 79,402 | 7,149 | 36.1% |
Debt securities issued | 6,246 | 593 | 38.1% | 7,778 | 963 | 49.7% |
Other liabilities | 8,031 | 135 | 6.7% | 6,909 | 30 | 1.8% |
Total non-interest-bearing liabilities | 248,373 | - | 0.0% | 232,986 | - | 0.0% |
Total liabilities and equity | 425,394 | 6,406 | 6.0% | 387,804 | 8,448 | 8.7% |
NIM - AR$ | 11.6% | 14.4% | ||||
Assets & Liabilities Performance - Foreign Currency | BBVA ARG Consolidated | |||||
In millions AR$. Rates and spreads in annualized % | 2Q20 | 1Q20 | ||||
Average | Interest | Average | Average | Interest | Average | |
Balance | Earned/Paid | Real Rate | Balance | Earned/Paid | Real Rate | |
Total interest-earning assets | 49,699 | 693 | 5.6% | 53,307 | 727 | 5.5% |
Government securities | 4,023 | 104 | 10.4% | 7,366 | 147 | 8.0% |
Loans to customers/financial institutions | 41,321 | 588 | 5.7% | 44,438 | 580 | 5.2% |
Other assets | 4,355 | 1 | 0.1% | 1,503 | 1 | 0.2% |
Total non interest-earning assets | 93,771 | - | 0.0% | 89,955 | - | 0.0% |
Total Assets | 143,470 | 693 | 143,262 | 727 | ||
Total interest-bearing liabilities | 96,633 | 59 | 0.2% | 100,201 | 94 | 0.4% |
Savings accounts | 77,621 | 1 | 0.0% | 80,120 | 2 | 0.0% |
Time deposits | 17,632 | 50 | 1.1% | 18,945 | 62 | 1.3% |
Other liabilities | 1,380 | 8 | 2.4% | 1,137 | 30 | 10.7% |
Total non-interest-bearing liabilities | 38,538 | - | 0.0% | 36,878 | - | 0.0% |
Total liabilities and equity | 135,171 | 59 | 0.2% | 137,080 | 94 | 0.3% |
NIM - Foreign currency | 5.3% | 5.1% |
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Net fee income
Net Fee Income | BBVA ARG consolidated | Chg (%) | |||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY |
Net Fee Income | 3,109 | 1,977 | 2,848 | 57.3% | 9.2% |
Fee Income | 6,104 | 5,691 | 6,408 | 7.3% | (4.7%) |
Linked to liabilities | 2,404 | 3,035 | 3,326 | (20.8%) | (27.7%) |
From credit cards | 2,832 | 1,897 | 2,366 | 49.2% | 19.7% |
Linked to loans | 254 | 210 | 70 | 20.7% | 264.3% |
From insurance | 304 | 292 | 315 | 4.0% | (3.6%) |
From foreign trade and foreign currency transactions | 243 | 220 | 298 | 10.6% | (18.4%) |
Other fee income | 68 | 37 | 33 | 84.4% | 109.0% |
Fee expenses | 2,996 | 3,715 | 3,560 | (19.3%) | (15.8%) |
In 2Q20, net fee income grew 57.3% or $1.1 billion compared to 1Q20, and 9.2% or $261 million compared to 2Q19.
Fee income totaled $6.1 billion, 7.3% higher QoQ as a result of fees from credit card consumption received during the period, which more than offset the fall in activity due to the effects of the pandemic.
Fee expenses fell 19.3% compared to 1Q20 and 15.8% compared to 2Q19 respectively. This is mainly explained by lower expenses related to credit card benefits as a result of a lower activity due to the extension of the mandatory lockdown on COVID-19, and lower investment in client acquisition, also derived from the lower activity.
Net income from measurement of financial instruments at fair value and foreign exchange and gold gains/losses
Net Income from financial instruments at fair value (FV) | BBVA ARG Consolidated | Chg (%) | |||
through P&L | |||||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY |
Net Income from financial instruments at FV through P&L | 1,016 | 1,299 | 3,100 | (21.8%) | (67.2%) |
Income from government securities | 1,077 | 980 | 1,120 | 9.8% | (3.9%) |
Income from private securities | (100) | 36 | 1,198 | (376.0%) | (108.3%) |
Interest rate swaps | 21 | 24 | (313) | (12.0%) | 106.8% |
Gains from foreign currency forward transactions | 2 | 243 | 1,077 | (99.4%) | (99.9%) |
Income from debt and equity instruments | 16 | 18 | 18 | (6.3%) | (11.1%) |
Other | - | (2) | - | 100.0% | N/A |
In 2Q20, net income from financial instruments at Fair Value (FV) through P&L was $1.0 billion, decreasing 21.8% or $283 million QoQ. This is explained by the lower volume in forward contract transactions, as a consequence of a lower activity driven by regulations and the broad spread in foreign exchange prices. In the year, the contraction was 67.2% or $2.1 billion, mainly explained by the cashing in of dividends received from share participation in Prisma in 2Q19 ($1.1 billion). Excluding this result, the decrease versus 2Q19 would have been 49.6% or $1.0 billion.
Income from private securities contracted 376.0% or $136 million QoQ, by cause of a higher negative impact of inflation adjustment compared to the variation in market prices.
Differences in quoted prices of gold and foreign currency | BBVA ARG Consolidated | ||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 |
Foreign exchange and gold gains/(losses) (1) | 1,495 | 1,303 | 1,914 |
From foreign exchange position | 295 | 307 | (469) |
Income from purchase-sale of foreign currency | 1,200 | 997 | 2,382 |
Net income from financial instruments at FV through P&L (2) | 2 | 243 | 1,077 |
Income from foreign currency forward transactions | 2 | 243 | 1,077 |
Total differences in quoted prices of gold and foreign currency (1) + (2) | 1,496 | 1,547 | 2,990 |
Chg (%)
QoQ YoY
14.7% (21.9%)
(3.7%) 163.0%
20.3% (49.6%)
(99.4%) (99.9%)
(99.4%) (99.9%)
(3.2%) (50.0%)
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In 2Q20, the difference in quoted prices of gold and foreign currency showed profit for $1.5 billion, falling 3.2% or $50 million compared with 1Q20, due to lower activity driven by changes in foreign exchange market regulation, partially offset by an increase in results from purchase and sale of foregin currency.
Other operating income
Other operating income | BBVA ARG Consolidated | Chg (%) | ||||||||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY | |||||
Operating Income | 1,143 | 1,094 | 6,449 | 4.4% | (82.3%) | |||||
Rental of safe deposit boxes | (1) | 258 | 219 | 210 | 17.9% | 22.6% | ||||
Adjustments and interest on miscellaneous receivables | (1) | 312 | 263 | 389 | 18.6% | (19.9%) | ||||
Punitive interest | (1) | 16 | 60 | 55 | (73.3%) | (70.6%) | ||||
Loans recovered | 165 | 171 | 175 | (3.6%) | (5.9%) | |||||
Fee income from credit and debit cards | (1) | 41 | 78 | 233 | (48.2%) | (82.6%) | ||||
Other Operating Income | (2) | 351 | 303 | 5,387 | 15.9% | (93.5%) | ||||
- Included in the efficiency ratio calculation
- Includes some of the concepts used in the efficiency ratio calculation
In 2Q20 Other operating income totaled $1.1 billion, increasing 4.4% or $48 million QoQ explained by increases in rental of safe deposit boxes, and decreasing 82.3% or $5.3 billion compared to 2Q19.
It is important to highlight that during 2Q19, an income was reported in the Other operating income line, from the declaratory action filed related to inflation adjustments in the Income Tax Return for fiscal year 2018. This was offset by the provision for the same amount reported in Other operating expenses.
Operating expenses
Personnel benefits and Administrative expenses
Personnel Benefits and Adminsitrative Expenses | BBVA ARG Consolidated | ||||||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | ||||
Total Personnel Benefits and Adminsitrative Expenses | 7,797 | 8,461 | 8,305 | ||||
Personnel Benefits (1) | 3,966 | 4,678 | 4,756 | ||||
Administrative expenses (1) | 3,831 | 3,783 | 3,549 | ||||
Travel expenses | 15 | 31 | 42 | ||||
Administrative expenses | 375 | 363 | 317 | ||||
Security services | 210 | 116 | 128 | ||||
Fees to Bank Directors and Supervisory Committee | 6 | 21 | 4 | ||||
Other fees | 153 | 253 | 220 | ||||
Insurance | 37 | 45 | 39 | ||||
Rent | 430 | 332 | 236 | ||||
Stationery and supplies | 19 | 20 | 16 | ||||
Electricity and communications | 202 | 235 | 196 | ||||
Advertising | 127 | 189 | 161 | ||||
Taxes | 942 | 918 | 932 | ||||
Maintenance costs | 480 | 451 | 375 | ||||
Armored transportation services | 319 | 292 | 482 | ||||
Other administrative expenses | 516 | 519 | 399 | ||||
Headcount* | 6,287 | 6337 | 6325 | ||||
BBVA (Bank) | 6,186 | 6,233 | 6,223 | ||||
Associates (2)* | 101 | 104 | 102 | ||||
Total branches | 247 | 246 | 252 | ||||
Efficiency Ratio | 47.4% | 47.4% | 36.1% | ||||
Accumulated Efficiency Ratio | 47.4% | 47.4% | 38.7% |
- Concept included in the efficiency ratio calculation
- Includes BBVA Asset Management Argentina S.A. and PSA & VWFS as of 3Q19 *corresponds to total effective employees, net of temporary contract employees
Chg (%)
QoQ YoY
(7.8%) (6.1%)
(15.2%) (16.6%)
1.3% 8.0%
(50.2%) (63.8%)
3.4% 18.1%
81.5% 64.0%
(69.9%) 49.6%
(39.7%) (30.7%)
(18.3%) (6.2%)
29.7% 82.4%
(7.2%) 13.3%
(13.9%) 3.2%
(32.6%) (21.1%)
2.6% 1.0%
6.5% 28.0%
9.4% (33.8%)
(0.6%) 29.3%
- (38)
- (37)
- (1)
1(5)
1 bps | 1,130 bps |
1 bps | 869 bps |
During 2Q20, personnel benefits and administration expenses totaled $7.8 billion, decreasing 7.8% or $664 million QoQ, and 6.1% YoY. This is mainly explained by the efficiency plan put into effect as of 4Q19.
- 7 -
Personnel benefits contracted 15.2% or $712 million compared to 1Q20, and 16.6% or $790 million compared to 2Q19. As of the end of June there were no new rearrangements with labor unions regarding salary increases. On July 16, 2020, an arrangement with the union was agreed for a 26% increase in four instalments (7% in January, 6% in April, 7% in July and 6% in October), with a review clause in November 2020.
In 2Q20, administrative expenses increased 1.3% QoQ and 8.0% YoY. This increase is mainly due to adjustments applied to continue operating during the pandemic. These adjustments include cleaning and disinfection costs, purchase of protection equipment (gloves, face masks, etc.), surveillance and software costs, all of which were partially offset by the contraction in administrative services and advertising expenses.
The accumulated efficiency ratio as of 2Q20 was 47.4%, remaining stable compared to the 47.4% reported in 1Q20, and higher than the 36.1% reported in 2Q19. This is a result of a deeper percentage fall in the denominator (income), than the fall recorded in the numerator (expenses).
Other operating expenses
Other Operating Expenses | BBVA ARG Consolidated | Chg (%) | |||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY |
Other Operating Expenses | 2,585 | 3,525 | 8,944 | (26.7%) | (71.1%) |
Turnover tax | 1,663 | 1,836 | 2,115 | (9.4%) | (21.4%) |
Inicial loss of loans below market rate | 93 | 184 | 530 | (49.5%) | (82.5%) |
Contribution to the Deposit Guarantee Fund (SEDESA) | 143 | 131 | 180 | 9.2% | (20.7%) |
Interest on liabilities from financial lease | 76 | 81 | 93 | (5.4%) | (18.3%) |
Other allowances | (82) | 741 | 5,194 | (111.0%) | (101.6%) |
Other operating expenses | 692 | 552 | 831 | 25.4% | (16.7%) |
In 2Q20, other operating expenses decreased 26.7% or $939 million QoQ, and 71.1% or $6.4 billion YoY.
The QoQ decrease is mainly explained by the decline in Other allowances, due to unused checking accounts' overdraft lines of credit.
As mentioned previously, in 2Q19 a provision for contingent liabilities was reported, as requested by the BCRA, corresponding to the declaratory action filed by the Bank related to inflation adjustments in the Income Tax Return presented for fiscal year 2018
Income from associates
This line reflects the results from non-consolidated associate companies. During 2Q20, a profit of $188 million has been reported, mainly due to the participation in BBVA Consolidar Seguros S.A., Rombo Compañía Financiera S.A., and Interbanking S.A.
Income tax
Income tax charges decreased $243 million compared to 2Q19 and $432 million compared to 1Q20, reporting a loss of $2.3 billion and an effective rate of 44%. The increment in such rate compared to the regulatory 30% is caused by the difference between BCRA accounting regulation and tax regulations related to inflation adjustments, resulting in different taxable incomes.
- 8 -
Balance sheet and activity
Loans and other financing
Loans and other financing | BBVA ARG Consolidated | Chg (%) | Proforma | ||||
(2) | |||||||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY | 2Q20 | |
To the public sector | - | 13 | - | (100.0%) | N/A | - | |
To the financial sector | 3,572 | 5,388 | 10,919 | (33.7%) | (67.3%) | 6,771 | |
Non-financial private sector and residents abroad | 250,424 | 237,591 | 263,727 | 5.4% | (5.0%) | 236,360 | |
Non-financial private sector and residents abroad - AR$ | 215,127 | 193,686 | 165,192 | 11.1% | 30.2% | 201,063 | |
Overdrafts | 31,127 | 31,091 | 13,675 | 0.1% | 127.6% | 31,127 | |
Discounted instruments | 23,917 | 20,604 | 20,463 | 16.1% | 16.9% | 23,917 | |
Mortgage loans | 15,491 | 15,734 | 17,197 | (1.5%) | (9.9%) | 15,491 | |
Pledge loans | 7,645 | 9,011 | 2,231 | (15.2%) | 242.7% | 1,421 | |
Consumer loans | 23,789 | 25,172 | 34,851 | (5.5%) | (31.7%) | 23,811 | |
Credit cards | 75,719 | 73,113 | 64,739 | 3.6% | 17.0% | 75,761 | |
Receivables from financial leases | 1,318 | 1,522 | 2,629 | (13.4%) | (49.9%) | 1,087 | |
Other loans | (1) | 36,120 | 17,438 | 9,407 | 107.1% | 284.0% | 28,447 |
Non-financial private sector and residents abroad - Foreign Currency | 35,297 | 43,905 | 98,536 | (19.6%) | (64.2%) | 35,297 | |
Overdrafts | 2 | 1 | 15 | 100.9% | (84.2%) | 2 | |
Discounted instruments | 17 | 1,357 | 6,348 | (98.7%) | (99.7%) | 17 | |
Mortgage loans | 191 | 184 | - | 3.7% | N/A | 191 | |
Credit cards | 1,294 | 1,173 | 3,982 | 10.4% | (67.5%) | 1,294 | |
Receivables from financial leases | 236 | 295 | 320 | (20.2%) | (26.3%) | 236 | |
Loans for the prefinancing and financing of exports | 21,808 | 29,005 | 74,047 | (24.8%) | (70.5%) | 21,808 | |
Other loans | (1) | 11,748 | 11,890 | 13,825 | (1.2%) | (15.0%) | 11,748 |
% of total loans to Private sector in AR$ | 85.9% | 81.5% | 62.6% | 438 bps | 2,327 bps | 85.1% | |
% of total loans to Private sector in Foreign Currency | 14.1% | 18.5% | 37.4% | (438)bps | (2,327)bps | 14.9% | |
Total loans and other financing | 253,996 | 242,991 | 274,646 | 4.5% | (7.5%) | 243,131 | |
Allowances | (10,771) | (12,763) | (8,143) | 15.6% | (32.3%) | (10,567) | |
Total net loans and other financing | 243,225 | 230,228 | 266,503 | 5.6% | (8.7%) | 232,564 |
- Includes IFRS adjustment
- Excludes consolidation with VWFS & PSA.
Private loans totaled $250.4 billion, growing 5.4% or $12.8 billion QoQ, and decreasing 5.0% or $13.3 billion YoY.
Loans to the financial sector fell 33.7% QoQ, mainly because of the reduction in call money transactions of less than 30 day duration with subsidiaries.
Loans to the private sector in pesos grew 11.1% in 2Q20, and 30.2% in the year. Loans to the private sector denominated in foreign currency fell 19.6% QoQ and 64.2% YoY, mainly driven by the prudential reduction in USD-denominated loans after August 2019 turmoil, and by the increase in demand for credit in pesos. These loans, measured in U.S. dollars, fell 26.4% and 78.4% QoQ and YoY respectively. The increase in the currency exchange rate versus the U.S. dollar was 9.3% QoQ and 66.0% YoY.
Loans and other financing | BBVA ARG Consolidated | Chg (%) | Proforma (2) | ||||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY | 2Q20 | |
Non-financial private sector and residents abroad - Retail | 124,130 | 124,387 | 122,999 | (0.2%) | 0.9% | 117,970 | |
Mortgage loans | 15,682 | 15,918 | 17,197 | (1.5%) | (8.8%) | 15,682 | |
Pledge loans | 7,645 | 9,011 | 2,231 | (15.2%) | 242.7% | 1,421 | |
Consumer loans | 23,789 | 25,172 | 34,851 | (5.5%) | (31.7%) | 23,811 | |
Credit cards | 77,013 | 74,285 | 68,721 | 3.7% | 12.1% | 77,055 | |
Non-financial private sector and residents abroad - Commercial | 126,295 | 113,204 | 140,728 | 11.6% | (10.3%) | 118,391 | |
Overdrafts | 31,129 | 31,092 | 13,690 | 0.1% | 127.4% | 31,129 | |
Discounted instruments | 23,935 | 21,961 | 26,811 | 9.0% | (10.7%) | 23,935 | |
Receivables from financial leases | 1,554 | 1,817 | 2,949 | (14.5%) | (47.3%) | 1,323 | |
Loans for the prefinancing and financing of exports | 21,808 | 29,005 | 74,047 | (24.8%) | (70.5%) | 21,808 | |
Other loans (1) | 47,868 | 29,328 | 23,232 | 63.2% | 106.0% | 40,196 | |
% of total loans to Retail sector | 49.6% | 52.4% | 46.6% | (279)bps | 293 bps | 49.9% | |
% of total loans to Commercial sector | 50.4% | 47.6% | 53.4% | 279 bps | (293)bps | 50.1% |
(1) Includes IFRS adjustment
(2) Excludes consolidation with VWFS & PSA.
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Considering retail loans (mortgage, pledge, consumer and credit card loans), these have decreased 0.2% QoQ and grown 0.9% YoY. In the quarter, the deepest declines are reflected in pledge loans and consumer loans (15.2% and 5.5% respectively), offset by the increase in credit card consumption boosted by zero rate credit lines and Ahora 12 programs.
Commercial loans (including overdrafts, discounted instruments, receivables from financial leases, loans for the prefinancing and financing of exports, and other loans) grew 11.6% QoQ and fell 10.3% YoY. The quarterly increase is mainly explained by a strong growth in Other loans (especially company loans or "Préstamos a Interés Vencido") which increased 63.2% or $18.5 billion, followed by discounted instruments that grew 9.0% or $2.0 billion QoQ. This growth is partially offset by the 24.8% fall in Loans for the prefinancing and financing of exports, and a 14.5% fall in Receivables from financial leases.
Market share - Private sector Loans | BBVA ARG | Chg (bps) | ||||
In % | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY | |
Private sector loans - Bank | 7.50% | 7.50% | 7.64% | 0 | bps | (14)bps |
Private sector loans - Consolidated* | 8.54% | 8.35% | 8.51% | 19 | bps | 3 bps |
Based on daily BCRA information. Capital balance as of the last day of each quarter. | ||||||
* Consolidates PSA, VWFS & Rombo |
Asset quality
Asset Quality | BBVA ARG Consolidated | Chg (%) | |||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY |
Commercial non-performing portfolio (1) | 1,331 | 4,410 | 3,685 | (69.8%) | (63.9%) |
Total commercial portfolio | 105,430 | 108,211 | 139,332 | (2.6%) | (24.3%) |
Commercial non-performing portfolio / Total commercial portfolio | 1.26% | 4.08% | 2.64% | (281)bps | (138)bps |
Retail non-performing portfolio (1) | 2,667 | 2,418 | 3,689 | 10.3% | (27.7%) |
Total retail portfolio | 151,492 | 137,407 | 137,514 | 10.3% | 10.2% |
Retail non-performing portfolio / Total retail portfolio | 1.76% | 1.76% | 2.68% | 0 bps | (92)bps |
Total non-performing portfolio (1) | 3,998 | 6,828 | 7,374 | (41.4%) | (45.8%) |
Total portfolio | 256,922 | 245,618 | 276,845 | 4.6% | (7.2%) |
Total non-performing portfolio / Total portfolio | 1.56% | 2.78% | 2.66% | (122)bps | (111)bps |
Allowances | 10,771 | 12,763 | 8,143 | (15.6%) | 32.3% |
Allowances /Total non-performing portfolio | 269.38% | 186.91% | 110.43% | 8,246 bps | 15,895 bps |
Write offs | 4,926 | 885 | 2,121 | 456.5% | 132.2% |
Write offs / Total portfolio | 1.92% | 0.36% | 0.77% | 156 bps | 115 bps |
Cost of Risk (CoR) | 3.99% | 2.58% | 3.38% | 142 bps | 61 bps |
- Non-performingloans include: all loans to borrowers classified as "Deficient Servicing (Stage 3)", "High Insolvency Risk (Stage 4)", "Irrecoverable" and/or "Irrecoverable for Technical Decision" (Stage 5) according to BCRA debtor classification system
In 2Q20, asset quality ratio or NPL (total non-performing portfolio / total portfolio) was 1.56%. This ratio was positively affected by the temporary flexibility in BCRA regulation regarding debtor classification during the COVID-19 pandemic, which extends grade periods in 60 days before a loan is classified as non- performing, and suspends the mandatory reclassification of clients that have an irregular performance with other institutions but a regular performance with the Bank. The NPL ratio was also benefited by the Molinos Cañuelas debt write-off.
The coverage ratio (allowances / total non-performing portfolio) increased to 269.38% in 2Q20, from 186.91% in 1Q20. This is explained by a decrease in non-performing loans, partly due to the Molinos Cañuelas write-off (which is greater than the increase in allowances as a consequence of the implementation of impairment models), and the change in BCRA regulation regarding debtor classification.
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Analysis for the allowance of loan losses | BBVA ARG | |||||
Lifetime ECL* | ||||||
Monetary result | ||||||
Balance at | Balance at | |||||
12-month ECL* | Financial assets with | generated by | ||||
12/31/2019 | Credit impaired | 06/30/2020 | ||||
In millions AR$ | significant increase in | allowances | ||||
financial assets | ||||||
credit risk | ||||||
Other financial assets | 257 | 4 | - | 11 | (33) | 238 |
Loans and other financing | 12,741 | 233 | 1,260 | (2,080) | (1,613) | 10,541 |
Other financial institutions | 145 | (28) | (60) | (1) | (14) | 42 |
Non-financial private sector and residents abroad | 12,596 | 261 | 1,320 | (2,079) | (1,598) | 10,500 |
Overdrafts | 738 | 468 | 1,286 | 72 | (169) | 2,395 |
Discounted instruments | 1,040 | 284 | (432) | (83) | (85) | 725 |
Mortgage loans | 161 | (55) | (19) | 163 | (25) | 224 |
Pledge loans | 35 | (7) | (10) | 14 | (4) | 28 |
Consumer loans | 1,537 | (279) | (204) | 87 | (170) | 971 |
Credit cards | 3,851 | (737) | (14) | (106) | (415) | 2,579 |
Receivables from financial leases | 142 | (24) | (19) | (34) | (14) | 50 |
Other financial assets | 5,091 | 611 | 732 | (2,192) | (716) | 3,527 |
Other debt securities | 1 | (1) | - | - | (0) | 0 |
Eventual commitments | 1,029 | 131 | (27) | (17) | (134) | 982 |
Total allowances | 14,028 | 367 | 1,233 | (2,087) | (1,780) | 11,761 |
* ECL: Expected credit loss | ||||||
Note: to be consistent with Financial Statements, it must be recorded from the beginning of the year instead of the quarter |
Allowances for the Bank in 2Q20 reflect expected losses driven by the adoption of the IFRS 9 standards as of January 1, 2020, except for debt instruments issued by the nonfinancial government sector which were temporarily excluded from the scope of such standard.
The financial statements of consolidated subsidiaries PSA and VWFS were prepared considering the financial reporting framework set forth by the BCRA for Group "B" financial institutions, without considering the model established in paragraph 5.5. "Impairment" of IFRS 9 for fiscal years commencing on and after January 1, 2021.
Public sector exposure
Net Public Debt Exposure | BBVA ARG Consolidated | ||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 |
Treasury and Government securities | 17,789 | 19,291 | 28,007 |
Treasury and National Government | 17,789 | 19,237 | 27,930 |
National Treasury Public Debt in pesos | 9,855 | 11,818 | 11,240 |
National Treasury Public Debt in dollars | - | 137 | 3,165 |
National Treasury Public Debt USD-Linked | 7,933 | 7,282 | 13,525 |
Provinces | - | 53 | 77 |
Loans to the Public Sector | - | 1 | - |
Repo | - | - | 8,343 |
National Treasury - AR$ | - | - | 376 |
National Treasury - Foreign Currency | - | - | 7,968 |
AR$ Subtotal | 9,855 | 11,871 | 11,692 |
USD Subtotal* | 7,933 | 7,420 | 24,658 |
Total Public Debt Exposure | 17,789 | 19,292 | 36,350 |
B.C.R.A. Exposure | 111,583 | 62,563 | 81,380 |
Instruments | 77,316 | 59,190 | 81,380 |
LELIQs | 77,316 | 59,190 | 81,380 |
Loans to the B.C.R.A. | - | 12 | - |
Repo | 34,267 | 3,374 | - |
B.C.R.A. - AR$ | 34,267 | 3,374 | - |
%Public sector exposure (Excl. B.C.R.A.) / Total assets | 3.3% | 3.6% | 6.3% |
*Includes USD-linked Treasury public debt in AR$ |
Chg (%) | |
QoQ | YoY |
(7.8%) | (36.5%) |
(7.5%) | (36.3%) |
(16.6%) | (12.3%) |
(100.0%) | (100.0%) |
8.9% | (41.3%) |
(100.0%) | (100.0%) |
(100.0%) | N/A |
N/A | N/A |
N/A | (100.0%) |
N/A | (100.0%) |
(17.0%) | (15.7%) |
6.9% | (67.8%) |
(7.8%) | (51.1%) |
78.4% | 37.1% |
30.6% | (5.0%) |
30.6% | (5.0%) |
(100.0%) | N/A |
n.m | N/A |
n.m | N/A |
(29)pbs | (303)pbs |
Public sector exposure (excluding BCRA) totaled $17.8 billion, decreasing 7.8% or $1.5 billion QoQ, and 51.1% or $18.6 billion YoY.
It is important to mention that on May 7 and May 15, 2020, the National Treasury offered two voluntary swap on U.S. dollar denominated notes (LETEs), in which the Bank swapped its total position on these securities in exchange of a bundle of sovereign bonds in pesos adjusted by inflation (BONCER) maturing in 2022, 2023 and 2024.
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Short-term liquidity is allocated in BCRA instruments, which grew 30.6% or $18.1 billion compared to 1Q20, and decreased 5.0% or $4.1 billion compared to 2Q19.
Exposure to the public sector (excluding BCRA) represents 3.3% of total assets.
After 2Q20 quarter end, on July 17, 2020, the Bank participated in the voluntary swap offered by the National Treasury, and swapped 100% of its remaining position in U.S. dollar linked notes (LELINK) in exchange of a bundle of sovereign bonds in pesos adjusted by inflation (BONCER) maturing in 2023 and 2024.
Deposits
Deposits | BBVA ARG Consolidated | Chg (%) | |||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY |
Total deposits | 373,260 | 345,587 | 407,151 | 8.0% | (8.3%) |
Non-financial Public Sector | 5,463 | 3,660 | 5,190 | 49.3% | 5.3% |
Financial Sector | 300 | 302 | 423 | (0.9%) | (29.2%) |
Non-financial private sector and residents abroad | 367,497 | 341,624 | 401,538 | 7.6% | (8.5%) |
Non-financial private sector and residents abroad - AR$ | 253,872 | 221,612 | 211,417 | 14.6% | 20.1% |
Checking accounts | 75,182 | 66,633 | 43,819 | 12.8% | 71.6% |
Savings accounts | 78,818 | 71,658 | 55,991 | 10.0% | 40.8% |
Time deposits | 94,362 | 75,056 | 107,854 | 25.7% | (12.5%) |
Investment accounts | 61 | 15 | - | 316.6% | N/A |
Other | 5,449 | 8,251 | 3,753 | (34.0%) | 45.2% |
Non-financial private sector and res. abroad - Foreign Currency | 113,625 | 120,012 | 190,122 | (5.3%) | (40.2%) |
Checking accounts | 17 | 36 | 23 | (51.7%) | (23.9%) |
Savings accounts | 93,730 | 99,665 | 162,802 | (6.0%) | (42.4%) |
Time deposits | 17,321 | 16,847 | 24,210 | 2.8% | (28.5%) |
Other | 2,557 | 3,464 | 3,087 | (26.2%) | (17.2%) |
% of total portfolio in the private sector in AR$ | 69.1% | 64.9% | 52.7% | 421 bps | 1,643 bps |
% of total portfolio in the private sector in Foregin Currency | 30.9% | 35.1% | 47.3% | (421)bps | (1,643)bps |
During 2Q20, total deposits were $373.3 billion, recording an increase of 8.0% or $27.7 billion QoQ, and an 8.3% or $33.9 billion contraction YoY.
Private sector deposits in 2Q20 were $367.5 billion, increasing 7.6% or $25.9 billion QoQ, and decreasing 8.5% or $34.0 billion YoY.
Private non-financial sector deposits in pesos totaled $253.9 billion, growing 14.6% or $32.3 billion QoQ, and 20.1% or $42.5 billion YoY. This is mainly explained by the strong growth in time deposits, savings accounts and checking accounts, which offsets the quarterly fall in interest-bearing checking accounts (included in savings accounts).
Private non-financial sector deposits in foreign currency expressed in pesos fell 5.3% or $6.4 billion QoQ and 40.2% or $76.5 billion YoY. Measured in U.S. dollars, these deposits fell 13.4% QoQ and 64.0% YoY. During 2Q20 U.S. dollar deposit withdrawal continued, but at a much lower pace than what was observed during the last months of 2019.
Deposits | BBVA ARG Consolidated | ||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 |
Non-financial private sector and residents abroad | 367,497 | 341,624 | 401,538 |
Sight deposits | 255,753 | 249,707 | 269,474 |
Checking accounts | 75,199 | 66,668 | 43,841 |
Savings accounts | 172,548 | 171,323 | 218,793 |
Other | 8,006 | 11,715 | 6,840 |
Time deposits | 111,744 | 91,918 | 132,064 |
Time deposits | 111,683 | 91,903 | 132,064 |
Investment accounts | 61 | 15 | - |
% of sight deposits over total deposits | 69.6% | 73.1% | 67.1% |
% of time deposits over total deposits | 30.4% | 26.9% | 32.9% |
Chg (%)
QoQ | YoY |
7.6% | (8.5%) |
2.4% | (5.1%) |
12.8% | 71.5% |
0.7% | (21.1%) |
(31.7%) | 17.0% |
21.6% | (15.4%) |
21.5% | (15.4%) |
316.6% | N/A |
(350)pbs | 248 pbs |
350 pbs | (248)pbs |
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As of 2Q20, the Bank's transactional deposits (checking accounts and savings accounts) represented 66.4% of total non-financial private deposits, totaling $247.7 billion.
Market Share - Private sector Deposits | BBVA ARG | Chg (bps) | |||
In % | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY |
Private sector Deposits - Consolidated* | 6.50% | 6.80% | 7.35% | (30)bps | (85)bps |
Based on daily BCRA information. Capital balance as of the last day of each quarter. | |||||
* Consolidates PSA, VWFS & Rombo |
Other sources of funds
Other sources of funds | BBVA ARG Consolidated | Chg (%) | |||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY |
Other sources of funds | 102,378 | 103,450 | 95,004 | (1.0%) | 7.8% |
Central Bank | 32 | 246 | 13 | (87.0%) | 146.2% |
Banks and international organizations | - | 300 | 4,687 | N/A | N/A |
Financing received from local financial institutions | 5,066 | 3,275 | - | 54.7% | N/A |
Corporate bonds | 4,203 | 7,902 | 6,180 | (46.8%) | (32.0%) |
Equity | 93,077 | 91,727 | 84,123 | 1.5% | 10.6% |
In 2Q20, other sources of funds totaled $102.4 billion, falling 1.0% or $1.1 billion QoQ, and growing 7.8% or $7.4 billion YoY.
In 2Q20, the Banks and International Organizations line item is null, explained by the cancellation of the lines with correspondent banks.
The 1.5% or $1.4 billion increase in Equity is explained by the 2Q20 results.
4Q19 equity evolution can be observed in the table below, going from historical values to current values through the implementation of IAS 29 rule.
Equity
In millions AR$ - Inflation adjusted | 4Q19 |
Equity before IAS 29 application | 65,317 |
Total impact of IAS 29 application (1) | 14,651 |
Equity in terms of 12/31/2019 units | 77,934 |
Adjustment from reexpression of equity at current units 06/30/2020 (2) | 10,594 |
Equity in terms of 06/30/2020 units | 88,528 |
Total recognized in Retained Earnings (1)+(2) | 25,245 |
Liquid assets
Total Liquid Assets | BBVA ARG consolidated | ||
In millions $ | 1Q20 | 4Q19 | 1Q19 |
Total liquid assets | 237,938 | 235,362 | 246,979 |
Cash and deposits in banks | 112,525 | 154,393 | 129,846 |
Debt securities at fair value through profit or loss | 9,644 | 9,439 | 9,265 |
Government securities | 0 | 54 | 748 |
Liquidity bills of B. C. R. A. | 9,644 | 9,385 | 8,518 |
Net REPO transactions | 34,267 | 3,374 | 8,458 |
Other debt securities | 81,502 | 68,156 | 99,410 |
Government securities | 13,829 | 18,352 | 26,547 |
Liquidity bills of B. C. R. A. | 67,672 | 49,804 | 72,863 |
Liquid assets / Total Deposits | 63.7% | 68.1% | 60.7% |
Chg (%)
QoQ YoY
1.1% (3.7%)
(27.1%) (13.3%)
2.2% 4.1%
(99.6%) (100.0%)
2.8% 13.2%
n.m 305.2%
19.6% (18.0%)
(24.6%) (47.9%)
35.9% (7.1%)
(436)pbs | 309 pbs |
In 2Q20, liquid assets were $237.9 billion, increasing 1.1% or $2.6 billion compared to 1Q20, and falling 3.7% or $9.0 billion compared to 2Q19.
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During the quarter, growth in LELIQ stands out with a 30.6% or $18.1 billion increase, while Cash and deposits in banks decreased 27.1% or $41.9 billion.
In 2Q20, the liquidity ratio (liquid assets / total deposits) reached 63.8%. Liquidity ratio in foreign currency reached 78.7%.
Solvency
Minimum capital requirement | BBVA ARG Consolidated | Chg (%) | |||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY |
Minimum capital requirement | 31,719 | 30,789 | 34,854 | 3.0% | (9.0%) |
Credit risk | 23,437 | 22,830 | 27,727 | 2.7% | (15.5%) |
Market risk | 574 | 528 | 250 | 8.7% | 129.6% |
Operational risk | 7,708 | 7,431 | 6,877 | 3.7% | 12.1% |
Integrated Capital - RPC (1)* | 84,893 | 82,004 | 82,511 | 3.5% | 2.9% |
Ordinary Capital Level 1 ( COn1) | 95,947 | 95,754 | 85,032 | 0.2% | 12.8% |
Deductible items COn1 | (13,541) | (16,079) | (5,355) | (15.8%) | 152.9% |
Additional Capital Level 2 (COn2) | 2,487 | 2,329 | 2,834 | 6.8% | (12.2%) |
Excess Capital | |||||
Integration excess | 53,174 | 51,214 | 47,657 | 3.8% | 11.6% |
Excess as % of minimum capital requirement | 167.6% | 166.3% | 136.73% | 130 bps | 3,091 bps |
Risk-weighted assets (RWA, according to B.C.R.A. regulation) (2) | 387,958 | 376,556 | 425,585 | 3.0% | (8.8%) |
Regulatory Capital Ratio (1)/(2) | 21.9% | 21.8% | 19.4% | 10 bps | 249 bps |
TIER I Capital Ratio (Ordinary Capital Level 1/ RWA) | 21.2% | 21.2% | 18.7% | 8 bps | 252 bps |
* RPC includes 100% of quarterly results |
BBVA Argentina continues to show strong solvency indicators on 2Q20. Capital ratio reached 21.9%. Tier 1 ratio was 21.2% and capital excess over regulatory requirement was $53.2 billion.
These ratios improved in spite of BCRA regulation: Communication "A" 6940, regarding exposure to individuals and companies purchasing touristic services abroad in instalments, and Communication "A" 7018, regarding clients with agricultural activity that stockpile more than 5% of their annual harvest.
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Other Events
Relevant Events
-
As of June 25, 2020, S&P Global Ratings downgraded the rating on the Global Program of Corporate Bonds of BBVA Argentina from raBB+ to raBBB-, with a negative outlook. It also downgraded the issuer short term credit rating from raA-2 to raA-3, and the long term credit rating from raBBB+ to raBBB- with a negative outlook. This is in line with the assessments on the transfer and convertibility risks
(T&C) for the Argentine Republic, and the incorporation of its impact in the Bank's credit ratings and in relation to other Argentine issuers.
Corporate Bond payments during 2Q20
- As of May 8, 2020, the Bank completed quarterly coupon payments on corporate bond Class 25 for $34.5 million.
- As of May 28, 2020, the Bank completed quarterly coupon payments on corporate bond Class 27 for $84.2 million.
- As of June 12, 2020, the Bank completed quarterly coupon and capital payments on corporate bond Class 28 for $140.3 million and $1.98 billion respectively.
- As of June 29, 2020, the Bank completed quarterly coupon payments for corporate bond Class 24 for $39.4 million.
Digital Transformation
Digitalization continued to accelerate during the second quarter of 2020. Active digital clients reached 1.9 million with a 69% penetration over total active clients (2.7 million), and active mobile clients were 1.5 million, representing a 57% penetration. Also, digital and mobile channel transactions for the Bank have increased 43% QoQ. On 2Q20, retail digital sales measured in units reached 75.7% of total sales and represent 41.9% of the Banks total sales measured in monetary value.
COVID 19 - update
Financing (including regulatory changes)
Retail
- Penalties on unpaid checking account charges, and closure and disabling of accounts, were suspended until September 30, 2020.
-
Allowances on fees for cash withdrawals from ATMs from the Bank and other banks', are extended until
September 30, 2020. - Loan maturities until September 30, 2020 are included for the deferral on unpaid instalments on mortgage, pledge and consumer loans.
- A new credit line called "Zero rate Culture Credits" has been launched for individuals who have an activity in the cultural sector.
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Companies
- As of June 30, 2020, BBVA Argentina has disbursed more than $20.5 billion in loans to more than 9,000 SMEs, to be allocated in payroll payments, discounted documents and working capital, at a 24% nominal annual rate.
- BBVA Argentina has granted a special credit line for payroll payments for SMEs, which includes a 24% nominal annual rate, in a 12 month period of maturity, and a grace period of 3 months, backed by the Fondo de Garantías Argentino (FoGAr) warrants. On this line, BBVA Argentina has disbursed $1.8 billion as of June 30, 2020.
- 92% of credits were granted through BBVA Net Cash, the online banking for companies.
- The Bank is working on credit lines for self-employed individuals at a zero rate, promoted by the National Government. As of June 30, 2020, the Bank has disbursed more than $7 million on this line.
- A new "Credit at subsidized rate" line has been launched for any company who requests it (as long as they are part of the eligible beneficiaries selected by the Federal Administration of Public Revenies or AFIP).
Human Capital
- Due to the COVID-19 pandemic, the Bank has implemented a remote-work arrangement, through which employees can remotely access the Bank's systems, supporting the continuity of operations and working to maintain adequate standards of internal control over financial information.
- Currently, more than 90% of employees at central offices are working remotely.
Main Regulatory Changes
Public securities valuation in voluntary swap offers. (Communication "A" 7014, 05/14/2020). The BCRA stated that public sector debt instruments received in exchange of other public debt instruments, shall be accounted for the same value recorded on the date the instruments are swapped.
Fee suspension extended. (Communication "A" 7044, 06/18/2020). The BCRA extended until September 30, 2020 (previously June 30) the regulation stating that financial institutions cannot charge fees for transactions done through ATMs (Communication "A" 6945).
The BCRA also states that unpaid instalments deferral to maturity will apply to loans maturing until September 30, 2020 (previously June 30).
Exclusion of concepts from credit risk fractioning regulation (Communication "A" 7045, 06/18/2020). The BCRA stated that primary underwritings of national public securities to be settled with funds from the capital and interest payments of other national public securities, shall be excluded from the credit risk fractioning limits calculation (as long as the period between underwriting and settlement is no longer than 3 business days).
Reserve requirements. Consolidated calculation. (Communication "A" 7046, 06/18/2020). The BCRA overruled the consolidated calculation of the reserve requirements in pesos for the periods July/August and December/January of the following year.
Minimum holding period. (CNV General Resolution 843, 06/22/2020). The National Securities Commission (CNV in Spanish) stated that purchase and sale of securities in the local market with foreign
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settlement shall be compensated. A 5 business day minimum holding period is established for securities transferred from abroad and that will be settled in foreign currency.
Account closures. Extension. (Communication "A" 7048, 06/23/2020). The suspension in account closures and disabling of checking accounts for lack of fine payment is extended until December 31, 2020.
Subsidized loans to non-SME clients. Reserve requirements. (Communication "A" 7054, 06/25/2020). As of July 1, 2020, financing at 24% is enabled for non-SMEclients, as long as the funds are used for the purchase of machinery and equipment produced by local SMEs. These financings are included in the reserve requirement reduction and calculation of daily net position of LELIQ, which limit is additionally reduced in 5%.
Repurchase agreement (REPO) with the BCRA collateral. (Communication "A" 7063, 07/03/2020). The BCRA incorporated corporate bonds as eligible collateral for its daily REPO transactions. As a condition, these must have been traded in the last five business days. The financial institution using corporate bonds as collateral cannot use securities that have been issued or secured by the same institution, or any other that is closely economically linked to it.
Exclusion of USD linked bonds from the Foreign Currency Global Net Position (PGNME). (Communication "A" 7071, 07/16/2020). The BCRA stated that as of July 20, 2020, securities linked to the change in price of a foreign currency, must be excluded from the calculation of the PGNME.
Special cautions on USD wire transfers. (Communication "A" 7072, 07/16/2020). The BCRA requested special caution previous to the realization of a wire transfer, in particular, over target accounts denominated in foreign currency, as of the second transfer received during the same calendar month. The institution must defer the accreditation of funds until all non-compliancesuspicions related to the purchase of foreign currency by individuals are cleared.
Excess LELIQ position increment against PGNME margin (Communication "A" 7077, 07/30/2020). As of August 1, 2020, the excess net position in LELIQ can be incremented by the positive difference between: the maximum limit of the cash position within the Net positive Global Currency Position (the highest between USD 2.5 million, or 4% of the month's regulatory capital, known as Responsabilidad Pratrimonial Computable or RPC) and the current cash position observed. In the case that the difference is negative, the increment in limit is zero.
Time deposit minimum rate. LELIQ excess net position. (Communication "A" 7078, 07/30/2020). As of August 1, 2020, the minimum rate for time deposits is increased from 79% to 87% of the monetary policy rate. Financial institutions granting time deposits at this rate will be able to increment the excess LELIQ position in 13% of the average amount of time deposits granted in the previous month, as of September 1, 2020.
Foreign exchange operations. (Communication "A" 7079, 07/30/2020). The BCRA extends until August 31, 2020, the period of validity of regulation stated in Communication "A" 7030 and amendments, which restrict the access of importers to the foreign exchange market.
New subsidized credit lines. (Communication "A" 7082, 08/06/2020). The BCRA stated that financial institutions must grant "Credits at subsidized rates" to all companies that request them, as long as they are in the beneficiary list that will be released by the Federal Administration of Public Revenues (AFIP). The interest rate will be determined according to the year over year increment in the company's revenues (with a maximum rate of 15%). The Fondo Nacional de Desarrollo Productivo (FONDEP) will recognize an annual nominal rate equivalent to the difference between 15% and the interest rate paid by the company, in line with the previously mentioned limits.
Additionally, financial institutions must grant "Zero rate culture credits". The AFIP will release the list of eligible beneficiaries, the amount and institution that will grant the loan. The nominal annual rate recognized by the FONDEP to financial institutions will be 15%.
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For both credit lines, reserve requirements can be reduced in 60% of the total amount of financings granted. The beneficiaries will not have access to the foreign exchange market, cannot settle securities in foreign currency, nor be granted time deposits at the minimum interest rate.
Glossary
Public Sector Exposure (excl. BCRA): (Public debt with the National and Provincial Government + Loans to the public sector + REPO transactions) / Total Assets
ROE (accumulated): Attributable Net Income / Average Equity. Average Equity is calculated as the average between equity in December of the previous year and equity in the current period, expressed in local currency.
ROA (accumulated): Attributable Net Income / Total Average Assets. Total Average Assets is calculated as the average between total assets on December of the previous year and total assets in the current period, expressed in local currency.
ROE (quarterly): Attributable Net Income / Average Equity. Average Equity is calculated as the average between equity on the previous quarter end and equity in the current period, expressed in local currency.
ROA (quarterly): Attributable Net Income / Total Average Assets. Total Average Assets is calculated as the average between total assets on the previous quarter end and total assets in the current period, expressed in local currency.
Liquidity Ratio: (Cash and deposits in banks + Debt securities at fair value through profit or loss (excl. Private securities) + Net REPO transactions + Other debt securities (excl. Private securities) / Total Deposits
Efficiency Ratio: (Personnel benefits + Administrative Expenses + Depreciation & Amortization) / (Net Interest Income + Net Income from measurement of Financial Instruments at Fair Value + Foreign exchange and gold gains + Net Fee Income + Insurance activity income + Other net operating income)
Coverage Ratio: Allowances under the Expected Credit Loss model / non-performing portfolio
Cost of Risk: Current period loan loss allowances / Total average loans. Total aveage loans calculated as the average between loans at prior period end, and total loans in the current period.
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Balance Sheet
Balance Sheet | BBVA ARG Consolidated | Chg (%) | Proforma | |||
(1) | ||||||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY | 2Q20 |
Assets | ||||||
Cash and deposits in banks | 112,525 | 154,393 | 129,846 | (27.1%) | (13.3%) | 112,163 |
Cash | 50,468 | 39,332 | 22,636 | 28.3% | 123.0% | 50,468 |
Financial institutions and correspondents | 62,057 | 115,061 | 107,210 | (46.1%) | (42.1%) | 61,695 |
B.C.R.A | 57,915 | 110,432 | 104,904 | (47.6%) | (44.8%) | 57,571 |
Other local and foreign financial institutions | 4,142 | 4,628 | 2,306 | (10.5%) | 79.6% | 4,124 |
Debt securities at fair value through profit or loss | 9,756 | 9,546 | 9,409 | 2.2% | 3.7% | 9,756 |
Derivatives | 1,057 | 2,271 | 2,624 | (53.5%) | (59.7%) | 1,057 |
Repo transactions | 34,267 | 3,374 | 8,458 | n.m | 305.2% | 34,267 |
Other financial assets | 6,377 | 19,592 | 10,530 | (67.4%) | (39.4%) | 6,241 |
Loans and other financing | 243,226 | 230,229 | 266,503 | 5.6% | (8.7%) | 232,565 |
Non-financial public sector | 0 | 1 | 0 | (73.7%) | (66.3%) | 0 |
B.C.R.A | - | 12 | 0 | (100.0%) | (100.0%) | - |
Other financial institutions | 3,504 | 5,296 | 10,855 | (33.8%) | (67.7%) | 6,677 |
Non-financial private sector and residents abroad | 239,722 | 224,920 | 255,648 | 6.6% | (6.2%) | 225,887 |
Other debt securities | 81,502 | 68,237 | 99,595 | 19.4% | (18.2%) | 81,502 |
Financial assets pledged as collateral | 10,749 | 7,182 | 9,068 | 49.7% | 18.5% | 10,748 |
Current income tax assets | 9 | 0 | 1 | n.m | n.m | 9 |
Investments in equity instruments | 1,805 | 1,909 | 2,733 | (5.5%) | (34.0%) | 1,805 |
Investments in subsidiaries and associates | 1,229 | 1,187 | 3,065 | 3.5% | (59.9%) | 3,123 |
Property and equipment | 28,270 | 28,801 | 32,081 | (1.8%) | (11.9%) | 28,228 |
Intangible assets | 1,068 | 969 | 1,002 | 10.2% | 6.5% | 1,067 |
Deferred income tax assets | 5,281 | 7,815 | (2,225) | (32.4%) | 337.3% | 4,885 |
Other non-financial assets | 4,772 | 4,515 | 2,939 | 5.7% | 62.3% | 4,660 |
Non-current assets held for sale | 189 | 189 | 189 | - | (0.0%) | 189 |
Total Assets | 542,080 | 540,207 | 575,818 | 0.3% | (5.9%) | 532,264 |
Liabilities | ||||||
Deposits | 373,260 | 345,586 | 407,150 | 8.0% | (8.3%) | 372,431 |
Non-financial public sector | 5,463 | 3,660 | 5,190 | 49.3% | 5.3% | 5,463 |
Financial sector | 300 | 302 | 423 | (0.9%) | (29.2%) | 385 |
Non-financial private sector and residents abroad | 367,497 | 341,624 | 401,538 | 7.6% | (8.5%) | 366,583 |
Liabilities at fair value through profit or loss | - | - | 1,651 | N/A | (100.0%) | - |
Derivatives | 230 | 349 | 3,267 | (34.3%) | (93.0%) | 230 |
Other financial liabilities | 28,261 | 45,132 | 32,931 | (37.4%) | (14.2%) | 27,841 |
Financing received from the B.C.R.A. and other financial institutions | 5,099 | 3,822 | 4,699 | 33.4% | 8.5% | 308 |
Corporate bonds issued | 4,203 | 7,902 | 6,180 | (46.8%) | (32.0%) | 2,948 |
Current income tax liabilities | 3,238 | 12,200 | 6,580 | (73.5%) | (50.8%) | 3,161 |
Provisions | 11,000 | 11,880 | 10,625 | (7.4%) | 3.5% | 10,946 |
Deferred income tax liabilities | 4 | - | 67 | N/A | (93.4%) | 4 |
Other non-financial liabilities | 21,836 | 19,790 | 18,496 | 10.3% | 18.1% | 21,291 |
Total Liabilities | 447,131 | 446,661 | 491,647 | 0.1% | (9.1%) | 439,161 |
Equity | ||||||
Share Capital | 613 | 613 | 613 | - | 0.0% | 613 |
Non-capitalized contributions | 22,017 | 22,017 | 22,006 | (0.0%) | 0.1% | 22,017 |
Capital adjustments | 15,452 | 15,452 | 15,452 | (0.0%) | 0.0% | 15,452 |
Reserves | 82,448 | 49,781 | 49,800 | 65.6% | 65.6% | 82,448 |
Retained earnings | (26,973) | 11,022 | (15,266) | (344.7%) | (76.7%) | (26,973) |
Other accumulated comprehensive income | (6,233) | (10,734) | 119 | 41.9% | n.m | (7,008) |
Income for the period | 5,754 | 3,244 | 13,694 | 77.3% | (58.0%) | 5,754 |
Equity attributable to owners of the Parent | 93,077 | 91,727 | 84,123 | 1.5% | 10.6% | 93,077 |
Equity attributable to non-controlling interests | 1,872 | 1,819 | 48 | 2.9% | n.m | 26 |
Total Equity | 94,949 | 93,546 | 84,172 | 1.5% | 12.8% | 93,103 |
Total Liabilities and Equity | 542,080 | 540,207 | 575,818 | 0.3% | (5.9%) | 532,264 |
(1) Excludes consolidation with PSA and VWFS. |
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Balance Sheet - Foreign currency exposure
Foreign Currency Exposure | BBVA ARG Consolidated | Chg (%) | |||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY |
Assets | |||||
Cash and deposits in banks | 87,054 | 91,277 | 89,016 | (4.6%) | (2.2%) |
Debt securities at fair value through profit or loss | 0 | 0 | 11 | 43.1% | (97.5%) |
Repos | - | - | 8,082 | N/A | (100.0%) |
Other financial assets | 1,867 | 1,774 | 544 | 5.2% | 243.1% |
Loans and other financing | 32,854 | 39,849 | 95,980 | (17.6%) | (65.8%) |
Other financial institutions | 1,178 | 1,116 | 797 | 5.6% | 47.9% |
Non-financial private sector and residents abroad | 31,675 | 38,733 | 95,183 | (18.2%) | (66.7%) |
Other debt securities | 4,194 | 7,500 | 16,152 | (44.1%) | (74.0%) |
Financial assets pledged as collateral | 6,672 | 2,525 | 4,483 | 164.2% | 48.8% |
Investments in equity instruments | 18 | 16 | 26 | 10.5% | (32.2%) |
Total foreign currency assets | 132,658 | 142,942 | 214,293 | (7.2%) | (38.1%) |
Liabilities | |||||
Deposits | 115,988 | 122,257 | 194,140 | (5.1%) | (40.3%) |
Non-Financial Public Sector | 2,316 | 2,200 | 3,887 | 5.3% | (40.4%) |
Financial Sector | 48 | 46 | 132 | 5.2% | (63.4%) |
Non-financial private sector and residents abroad | 113,623 | 120,011 | 190,121 | (5.3%) | (40.2%) |
Liabilities at fair value through profit or loss | - | - | 237 | N/A | (100.0%) |
Other financial liabilities | 7,853 | 12,333 | 12,914 | (36.3%) | (39.2%) |
Financing received from the B.C.R.A. and other financial institutions | 544 | 855 | 4,687 | (36.4%) | (88.4%) |
Other non financial liabilities | 890 | 1,142 | 1,459 | (22.0%) | (39.0%) |
Total foreign currency liabilities | 125,274 | 136,587 | 213,436 | (8.3%) | (41.3%) |
Foreign Currency Net Position - AR$ | 7,384 | 6,356 | 857 | 16.2% | n.m |
Foreign Currency Net Position - USD | 105 | 99 | 20 | 6.3% | 419.1% |
Income Statement
Income Statement | BBVA ARG Consolidated | Chg(%) | Proforma (1) | ||||
In millions AR$ - Inflation adjusted | 2Q20 | 1Q20 | 2Q19 | QoQ | YoY | 2Q20 | |
Interest income | 22,342 | 25,935 | 33,805 | (13.9%) | (33.9%) | 21,129 | |
Interest expense | (6,465) | (8,611) | (14,648) | 24.9% | 55.9% | (5,952) | |
Net interest income | 15,876 | 17,325 | 19,157 | (8.4%) | (17.1%) | 15,177 | |
Fee income | 6,104 | 5,691 | 6,408 | 7.3% | (4.7%) | 6,103 | |
Fee expenses | (2,996) | (3,715) | (3,560) | 19.3% | 15.8% | (2,972) | |
Net fee income | 3,109 | 1,977 | 2,848 | 57.3% | 9.2% | 3,131 | |
Net income from financial instruments at fair value | 1,016 | 1,300 | 3,100 | (21.8%) | (67.2%) | 1,262 | |
Net loss from write-down of assets at amortized cost and fair value | (2,067) | (134) | (54) | n.m | n.m | (2,067) | |
through OCI | |||||||
Foreign exchange and gold gains | 1,494 | 1,304 | 1,914 | 14.6% | (21.9%) | 1,503 | |
Other operating income | 1,142 | 1,095 | 6,450 | 4.3% | (82.3%) | 1,168 | |
Loan loss allowances | (2,646) | (1,711) | (2,594) | (54.7%) | (2.0%) | (2,612) | |
Net operating income | 17,925 | 21,156 | 30,820 | (15.3%) | (41.8%) | 17,561 | |
Personnel benefits | (3,966) | (4,678) | (4,756) | 15.2% | 16.6% | (3,890) | |
Administrative expenses | (3,831) | (3,783) | (3,548) | (1.3%) | (8.0%) | (3,768) | |
Depreciation and amortization | (843) | (867) | (696) | 2.8% | (21.0%) | (837) | |
Other operating expenses | (2,585) | (3,525) | (8,944) | 26.6% | 71.1% | (2,718) | |
Operating income | 6,700 | 8,303 | 12,876 | (19.3%) | (48.0%) | 6,349 | |
Income from associates and joint ventures | 188 | 29 | 278 | n.m | (32.5%) | 258 | |
Income from net monetary position | (2,285) | (2,765) | (2,118) | 17.4% | (7.8%) | (2,126) | |
Income before income tax | 4,603 | 5,567 | 11,036 | (17.3%) | (58.3%) | 4,480 | |
Income tax | (2,046) | (2,293) | (2,478) | 10.8% | 17.4% | (1,945) | |
Income for the period | 2,557 | 3,274 | 8,558 | (21.9%) | (70.1%) | 2,535 | |
Income for the period attributable to: | |||||||
Owners of the parent | 2,510 | 3,244 | 8,563 | (22.7%) | (70.7%) | 2,510 | |
Non-controlling interests | 47 | 30 | (4) | 58.4% | n.m | 26 | |
Other comprehensive income | 1,927 | 1,216 | (4,654) | 58.4% | 141.4% | 1,926 | |
(1) Excludes consolidation with PSA and VWFS. |
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Ratios
Quarterly Annualized Ratios | BBVA ARG consolidated | Chg(bps) | |||
2Q20 | 1Q20 | 2Q19 | QoQ | YoY | |
Profitability | |||||
Efficiency Ratio | 47.4% | 47.4% | 36.1% | 1 pbs | 1,130 pbs |
ROA | 1.9% | 2.5% | 5.8% | (61)pbs | (394)pbs |
ROE | 10.9% | 14.6% | 40.9% | (369)pbs | (3,000)pbs |
Liquidity | |||||
Liquid assets / Total Deposits | 63.7% | 68.1% | 60.7% | (436)pbs | 309 pbs |
Capital | |||||
Regulatory Capital Ratio | 21.9% | 21.8% | 19.4% | 10 pbs | 249 pbs |
TIER I Capital Ratio (Ordinary Capital Level 1/ RWA) | 21.2% | 21.2% | 18.7% | 8 pbs | 252 pbs |
Asset Quality | |||||
Total non-performing portfolio / Total portfolio | 1.56% | 2.78% | 2.66% | (122)pbs | (111)pbs |
Allowances /Total non-performing portfolio | 269.38% | 186.91% | 110.43% | 8,246 pbs | 15,895 pbs |
Cost of Risk | 3.99% | 2.58% | 3.38% | 142 pbs | 61 pbs |
Accumulated Annualized Ratios | BBVA ARG consolidado | Chg(bps) | |||
2Q20 | 1Q20 | 2Q19 | QoQ | YoY | |
Profitability | |||||
Efficiency Ratio | 47.4% | 47.4% | 38.7% | 1 pbs | 869 pbs |
ROA | 2.2% | 2.5% | 5.0% | (28)pbs | (277)pbs |
ROE | 12.8% | 14.6% | 34.4% | (175)pbs | (2,158)pbs |
Liquidity | |||||
Liquid assets / Total Deposits | 63.7% | 68.1% | 60.7% | (436)pbs | 309 pbs |
Capital | |||||
Regulatory Capital Ratio | 21.9% | 21.8% | 19.4% | 10 pbs | 249 pbs |
TIER I Capital Ratio (Ordinary Capital Level 1/ RWA) | 21.2% | 21.2% | 18.7% | 8 pbs | 252 pbs |
Asset Quality | |||||
Total non-performing portfolio / Total portfolio | 1.56% | 2.78% | 2.7% | (122)pbs | (111)pbs |
Allowances /Total non-performing portfolio | 269.38% | 186.91% | 110.43% | 8,246 pbs | 15,895 pbs |
Cost of Risk | 6.47% | 2.58% | 5.59% | 389 pbs | 88 pbs |
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
Ernesto Gallardo
Chief Financial Officer
Inés Lanusse
Investor Relations Officer
investorelations-arg@bbva.comir.bbva.com.ar
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Banco BBVA Argentina SA published this content on 25 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 August 2020 20:54:08 UTC