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FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
For the month of March 2021
Commission File Number: 001-12568
BBVA Argentina Bank S.A.
(Translation of registrant’s name into English)
111 Córdoba Av, C1054AAA
Buenos Aires, Argentina
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes ☐ No ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes ☐ No ☒
Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes ☐ No ☒
If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
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Banco BBVA Argentina S.A.
Item | ||
1. | Banco BBVA Argentina S.A. reports consolidated fourth quarter earnings for fiscal year 2020. |
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Banco BBVA Argentina S.A. announces 2020 annual results
Buenos Aires, March 9 2021 – Banco BBVA Argentina S.A (NYSE; BYMA; MAE: BBAR; LATIBEX: XBBAR) (“BBVA Argentina” or “BBVA” or “the Bank”) announced today its consolidated results for the fourth quarter (4Q20) and fiscal year ended on December 31, 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 December 31, 2020.
2020 Highlights
• | BBVA Argentina’s inflation adjusted net income in 2020 was $12.0 billion, 38.9% lower than the $19.7 billion reported in 2019. |
• | In 2020, BBVA Argentina posted an accumulated inflation adjusted average return on assets (ROAA) of 1.8% and an inflation adjusted average return on equity (ROAE) of 11.8%. |
• | In terms of activity, total consolidated financing to the private sector in 2020 totaled $290.3 billion, increasing in real terms 5.9% compared to 2019. Growth was driven by the increase in other loans, credit cards and discounted instruments by 46.4%, 16.6% and 7.9% respectively. BBVA’s consolidated market share of private sector loans was 8.49% as of 4Q20. |
• | Total deposits totaled $478.2 billion in 2020, growing in real terms 19.5% year-over-year (YoY), promoted by private deposits in pesos, mainly checking accounts and the incorporation of investment accounts. The Bank’s consolidated market share of private deposits was 7.13% as of 4Q20. |
• | As of 2020, the non-performing loan ratio (NPL) reached 1.42%, with a 324.43% coverage ratio. |
• | The accumulated efficiency ratio in 2020 was 56.8%, above 2019’s 43.7%. |
• | As of 4Q20, BBVA Argentina reached a regulatory capital ratio of 20.2%, entailing a $57.1 billion or 147.1% excess over minimum regulatory requirement. Tier I ratio was 19.6%. Total liquid assets represented 67.5% of the Bank’s total deposits as of 4Q20. |
Message from the CFO
“BBVA Argentina has been able to keep a solid position within a high uncertainty context throughout 2020. While signs of economic recovery start to emerge, much remains to be defined facing 2021, subject to the final development of the global sanitary crisis, and the resolution of internal conflicts related to fiscal deficit financing, the agreement the National Government could reach with the International Monetary Fund, and the results of 2021 mid-term elections.
The global sanitary crisis in 2020 confirmed that of which we were convinced for years: the significance of technology in the delivery of financial services. In virtue of our vision of the future, we could rapidly adapt to the new normality and continue offering our services to clients during the pandemic. These unexpected circumstances ratified that the path we have taken in terms of digital transformation, internal process adaptation and personnel training, is most adequate.
In line with this, the digitalization of our service offering has evolved in such way that as of December 2020, digital client penetration reached 72% from 67% the previous year, and mobile client penetration reached 60% from 54% in the same period. Moreover, during 2020, together with other banking financial institutions, we have launched MODO, a fintech that will transform wire transfers and payments in Argentina, and which already counts with more than a million users.
BBVA Argentina keeps a solid balance sheet. With respect to its loan portfolio credit performance, the Bank reached an NPL ratio of 1.42% as of December 2020. Concerning its liquidity and solvency indicators, BBVA Argentina ends 2020 with ratios of 67.5% and 20.2% respectively. Thus, the Bank preserves a strong position to face a year in which economic recovery is expected.
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Meanwhile, the Bank closely monitors its business, financial conditions and operating results, in the aim of anticipating possible effects of the gradual removal of regulation implemented by the Government during the pandemic, especially over asset quality and profitability ratios.
In terms of responsible banking, during 2020, BBVA’s purpose of “bringing the age of opportunity to everyone” gained momentum. In line with our compromise with sustainable development and assuming our role as a leading financial institution in this subject, we launched a new line of consumer “eco loans”, and a line of “green loans” for companies. Furthermore, we were the first Bank to deliver sustainable cards made of recyclable materials. BBVA Argentina keeps working towards its sustainability model, supporting responsible business actions regarding inclusion, financial education and environmental protection, as part of its compromise with the country.”
Ernesto R. Gallardo, CFO of BBVA Argentina
4Q20 Conference Call
Wednesday, March 10, 12:00 p.m. Buenos Aires time – (10:00 a.m. EST)
To participate, please dial in:
+1-844-450-3851 (US Toll-Free)
+1-412-317-6373 (International)
+54-11-3984-5677 (Argentina)
Web Phone: click here
Conference ID: BBVA
Webcast & Replay: click here
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Safe Harbor Statement
This press release contains certain forward-looking statements that reflect the current views and/or expectations of Banco BBVA Argentina and its management with respect to its performance, business and future events. We use words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “seek,” “future,” “should” and other similar expressions to identify forward-looking statements, but they are not the only way we identify such statements. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this release. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) changes in general economic, financial, business, political, legal, social or other conditions in Argentina or elsewhere in Latin America or changes in either developed or emerging markets, (ii) changes in regional, national and international business and economic conditions, including inflation, (iii) changes in interest rates and the cost of deposits, which may, among other things, affect margins, (iv) unanticipated increases in financing or other costs or the inability to obtain additional debt or equity financing on attractive terms, which may limit our ability to fund existing operations and to finance new activities, (v) changes in government regulation, including tax and banking regulations, (vi) changes in the policies of Argentine authorities, (vii) adverse legal or regulatory disputes or proceedings, (viii) competition in banking and financial services, (ix) changes in the financial condition, creditworthiness or solvency of the customers, debtors or counterparties of Banco BBVA Argentina, (x) increase in the allowances for loan losses, (xi) technological changes or an inability to implement new technologies, (xii) changes in consumer spending and saving habits, (xiii) the ability to implement our business strategy and (xiv) fluctuations in the exchange rate of the Peso. The matters discussed herein may also be affected by risks and uncertainties described from time to time in Banco BBVA Argentina’s filings with the U.S. Securities and Exchange Commission (SEC) and Comisión 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 December 31, 2020.
The information in this press release contains unaudited financial information that consolidates, line item by line item, all of the banking activities of BBVA Argentina, including: BBVA Asset Management Argentina S.A., Consolidar AFJP-undergoing liquidation proceeding, and as of July 1, 2019, PSA Finance Argentina Compañía Financiera S.A. (“PSA”) and Volkswagen Financial Services Compañía Financiera S.A (“VWFS”).
BBVA Consolidar Seguros S.A. is disclosed on a consolidated basis recorded as Investments in associates (reported under the proportional consolidation method), and the corresponding results are reported as “Income from associates”), same as Rombo Compañía Financiera S.A. (“Rombo”), 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, 2022. As of October 2020, PSA and VWFS will belong to “Group C” institutions, keeping the same accounting framework as for “Group B” institutions.
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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Annual Results
Income Statement | BBVA ARG Consolidated | |||||||||||
In millions AR$ except EPS and ADS - Inflation adjusted | 2020 | 2019 | Var (%) | |||||||||
Net Interest Income | 77,857 | 90,677 | (14.1 | %) | ||||||||
Net Fee Income | 12,240 | 11,134 | 9.9 | % | ||||||||
Net income from measurement of financial instruments at fair value through P&L | 9,348 | 12,574 | (25.7 | %) | ||||||||
Net lincome from write-down of assets at amortized cost and at fair value through OCI | (2,310 | ) | (82 | ) | n.m | |||||||
Foreign exchange and gold gains | 6,228 | 14,700 | (57.6 | %) | ||||||||
Other operating income | 6,278 | 17,613 | (64.4 | %) | ||||||||
Loan loss allowances | (9,930 | ) | (18,401 | ) | 46.0 | % | ||||||
Net operating income | 99,710 | 128,214 | (22.2 | %) | ||||||||
Personnel benefits | (20,319 | ) | (22,676 | ) | 10.4 | % | ||||||
Adminsitrative expenses | (18,820 | ) | (19,052 | ) | 1.2 | % | ||||||
Depreciation and amortization | (4,066 | ) | (5,729 | ) | 29.0 | % | ||||||
Other operating expenses | (16,421 | ) | (29,922 | ) | 45.1 | % | ||||||
Operating income | 40,085 | 50,836 | (21.1 | %) | ||||||||
Income from associates | 273 | (29 | ) | n.m | ||||||||
Income from net monetary position | (19,696 | ) | (21,116 | ) | 6.7 | % | ||||||
Net income before income tax | 20,662 | 29,691 | (30.4 | %) | ||||||||
Income tax | (8,629 | ) | (9,983 | ) | 13.6 | % | ||||||
Income for the period | 12,032 | 19,708 | (38.9 | %) | ||||||||
Other Comprehensive Income (OCI)(4) | 4,995 | (4,916 | ) | 201.6 | % | |||||||
Number of common shares outstanding (in thousands) | 612,710 | 612,660 | 0.0 | % | ||||||||
Weighted average number of common shares outstanding (2)(3) | 612,710 | 612,660 | 0.0 | % | ||||||||
Earnings per Share (EPS) | 19.66 | 32.17 | (38.9 | %) | ||||||||
Earnings per ADS (1) | 58.97 | 96.52 | (38.9 | %) |
(1) | One ADS represents three ordinary shares. |
(2) | In thousands of shares. |
(3) | On October 9, 2019, the CNV issued Resolution No. 20484/2019 concerning the merger of BBVA Francés Valores S.A. into the Bank. As such, the Bank was authorized to issue 50,441 ordinary shares, with a nominal value of $ 1 and entitling to one (1) vote each for to be delivered to BBVA Francés Valores S.A.’s minority shareholders. The merger and the ensuing capital stock increase are still in the process of being registered with the Argentine Supervisory Board of Companies (IGJ). |
(4) | Net of Income Tax. |
BBVA Argentina 2020 net income was $12.03 billion, which represents an accumulated ROAE of 11.8% and a ROAA of 1.8%.
Yearly contraction of genuine bank revenues is mainly explained by (i) the fall in income, as a consequence of reduced economic activity due to the pandemic, (ii) lower monetary policy rates, and regulation of active and passive rates by the BCRA, and (iii) strong restrictions on the foreign exchange markets.
Another factor which has affected results in 2020 has been the partial cash-in and voluntary swap of National Treasury U.S. dollar linked notes (LELINK), which had been restructured on August 28, 2019.
Regarding expenses, lower operating expenses can be seen related to a better efficiency management, as well as lower client acquisition costs (on the fee expenses side).
It is worth mentioning that during the second quarter of 2019, an adjustment had been recorded in Other operating income as a consequence of the impact of inflation on income tax corresponding to 2018 fiscal year, offset by an allowance by the same amount in Other operating expenses line in the same period.
On February 9, 2021, through Communication “A” 7222, the BCRA informed that it admitted the retroactive application of modifications on exposure of monetary results exposed in Communication “A” 7211, for the December 31, 2020 financial statements. The latter explained that the monetary result accrued from monetary concepts at fair value through Other Comprehensive Income (OCI), should be recorded in the corresponding accounts in the income statement of the period, thus retained earnings from previous periods should be adjusted to include monetary results that were accumulated in OCI as of the date of application.
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It is important to mention that this measure is optional to implement as of December 2020, but through Communication “A” 7211, this will be compulsory for all banks as of January 2021.
These changes have been applied to the accumulated financial statements as of December 2020 pursuant to the regulation, reason for which quarters have not been restated for the income statement in this earnings release, but will be restated during 2021.
Net interest income
Net Interest Income | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | 2020 | 2019 | |||||||||||||||||||||
Net Interest Income | 19,528 | 18,538 | 23,799 | 5.3 | % | (17.9 | %) | 77,857 | 90,677 | |||||||||||||||||||
Interest Income | 32,023 | 29,072 | 36,544 | 10.2 | % | (12.4 | %) | 118,955 | 156,367 | |||||||||||||||||||
From government securities | 9,187 | 9,501 | 9,522 | (3.3 | %) | (3.5 | %) | 33,664 | 49,098 | |||||||||||||||||||
From private securities | 18 | 0 | 3 | n.m | n.m | 23 | 15 | |||||||||||||||||||||
Interest from loans and other financing | 15,608 | 16,454 | 21,544 | (5.1 | %) | (27.6 | %) | 68,099 | 90,000 | |||||||||||||||||||
Financial Sector | 202 | 283 | 404 | (28.5 | %) | (49.9 | %) | 1,207 | 3,816 | |||||||||||||||||||
Overdrafts | 1,833 | 2,281 | 4,371 | (19.7 | %) | (58.1 | %) | 10,814 | 13,838 | |||||||||||||||||||
Discounted Instruments | 2,519 | 2,296 | 4,232 | 9.7 | % | (40.5 | %) | 10,183 | 15,051 | |||||||||||||||||||
Mortgage loans | 295 | 352 | 422 | (16.2 | %) | (30.1 | %) | 1,382 | 1,891 | |||||||||||||||||||
Pledge loans | 851 | 719 | 111 | 18.3 | % | n.m | 3,002 | 1,973 | ||||||||||||||||||||
Consumer Loans | 2,334 | 2,295 | 2,681 | 1.7 | % | (12.9 | %) | 9,563 | 12,301 | |||||||||||||||||||
Credit Cards | 4,033 | 4,575 | 6,938 | (11.9 | %) | (41.9 | %) | 18,707 | 28,656 | |||||||||||||||||||
Financial leases | 151 | 128 | 163 | 18.1 | % | (7.3 | %) | 541 | 801 | |||||||||||||||||||
Loans for the prefinancing and financing of exports | 256 | 325 | 529 | (21.0 | %) | (51.5 | %) | 1,429 | 4,295 | |||||||||||||||||||
Other loans | 3,133 | 3,200 | 1,692 | (2.1 | %) | 85.1 | % | 11,269 | 7,377 | |||||||||||||||||||
CER/UVA clause adjustment | 4,257 | 2,312 | 4,707 | 84.1 | % | (9.6 | %) | 11,779 | 14,781 | |||||||||||||||||||
Other interest income | 2,953 | 806 | 768 | 266.4 | % | 284.5 | % | 5,390 | 2,474 | |||||||||||||||||||
Interest expenses | 12,495 | 10,535 | 12,745 | 18.6 | % | (2.0 | %) | 41,098 | 65,690 | |||||||||||||||||||
Deposits | 11,452 | 9,582 | 11,283 | 19.5 | % | 1.5 | % | 35,936 | 56,584 | |||||||||||||||||||
Checking accounts | 1,519 | 433 | 104 | 250.5 | % | n.m | 2,437 | 3,415 | ||||||||||||||||||||
Savings accounts | 72 | 48 | 104 | 48.2 | % | (30.7 | %) | 264 | 335 | |||||||||||||||||||
Time deposits | 9,861 | 9,100 | 11,075 | 8.4 | % | (11.0 | %) | 33,236 | 52,834 | |||||||||||||||||||
CER/UVA clause adjustment | 263 | 193 | 360 | 36.3 | % | (27.1 | %) | 1,011 | 2,096 | |||||||||||||||||||
Other liabilities from financial transactions | 326 | 434 | 821 | (24.9 | %) | (60.4 | %) | 2,662 | 5,727 | |||||||||||||||||||
Other | 455 | 327 | 281 | 39.4 | % | 62.1 | % | 1,489 | 1,284 |
Net interest income for 4Q20 was $19.5 billion, increasing 5.3% or $990 million quarter-over-quarter (QoQ), and decreasing 17.9% or $4.3 billion YoY. In 4Q20, growth in interest income does not make up for the greater increase in expenses, mainly explained by regulation of both active and passive rates, as well as lower rates in credit card financing.
In 4Q20, interest income totaled $32.0 billion, 10.2% or $3.0 billion greater than 3Q20 and 12.4% or $4.5 billion lower than 4Q19. The quarterly increase is mainly explained by the 266.4% growth in the Other interest income line item, due to a greater income from REPO transactions, considering that the central bank reverse REPO rate climbed from 19% (1-day REPOs at September end) up to 36.5% (7-day REPOs at December end). Income was also positively affected by income from UVA/CER clause adjustments, mostly explained by the increase in consumer prices during the quarter.
Income from government securities fell 3.3% or $314 million compared to 3Q20, and contracted 3.5% or $334 million compared to 4Q19. This is explained by a lower volume invested in Central Bank liquidity instruments (LELIQ) and a lower average nominal rate of return. 82% of results is explained by financial instruments at fair value through Other Comprehensive Income (OCI), mainly LELIQ.
Interest income from loans and other financing totaled $15.6 billion, decreasing 5.1% or $846 million QoQ. This is mainly explained by the 19.7% decrease in overdrafts due to lower volume, and a 11.9% decrease in credit cards, the latter affected by the Ahora programs. Part of the productive investment credit lines are included in the Other loans line item, implemented by the BCRA through Communication “A” 7140, which states maximum limits to active rates of such loans. This fall is partially offset by the 9.7% increase in discounted instruments, derived from a greater seasonal activity at year-end, with greater volume and average rates.
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Income from CER/UVA adjustments was 84.1% higher QoQ, and 9.6% lower YoY, mainly explained by an acceleration in inflation rates during the fourth quarter (11.3% in 4Q20 versus 7.7% in 3Q201).
Interest expenses totaled $12.5 billion, increasing 18.6% QoQ and decreasing 2.0% YoY. The quarterly increase is a consequence of the increment in the average minimum rate of time deposits2 and interest-bearing checking accounts.
Interest expenses from time deposits explain 78.9% of total interest expenses versus 86.4% the prior quarter. These grew 8.4% QoQ and contracted 11.0% YoY. The lower share within expenses is explained by a higher participation of checking-account expenses, which climbed from 4.1% to 12.2% of total interest expenses QoQ.
Net interest margin (NIM)
As of 4Q20, total net interest margin (NIM) was 18.2%, slightly above than 3Q20’s 16.2%. The accumulated NIM for 2020 was 21.7%.
BBVA ARG Consolidated | ||||||||||||||||||||||||||||||||||||
Assets & Liabilities Performance - AR$ In millions AR$. Rates and spreads in annualized % | 4Q20 | 3Q20 | 2020 | |||||||||||||||||||||||||||||||||
Average Balance | Interest Earned/Paid | Average Real Rate | Average Balance | Interest Earned/Paid | Average Real Rate | Average Balance | Interest Earned/ Paid | Average Real Rate | ||||||||||||||||||||||||||||
Total interest-earning assets | 391,417 | 31,573 | 32.0 | % | 366,151 | 25,635 | 27.8 | % | 317,323 | 116,273 | 36.6 | % | ||||||||||||||||||||||||
Debt securities | 111,408 | 13,900 | 49.5 | % | 117,299 | 9,797 | 33.1 | % | 92,347 | 41,289 | 44.7 | % | ||||||||||||||||||||||||
Loans to customers/financial institutions | 238,266 | 17,670 | 29.4 | % | 231,403 | 15,827 | 27.1 | % | 208,185 | 74,953 | 36.0 | % | ||||||||||||||||||||||||
Other assets | 41,742 | 3 | 0.0 | % | 17,449 | 11 | 0.3 | % | 16,791 | 31 | 0.2 | % | ||||||||||||||||||||||||
Total non interest-earning assets | 102,734 | — | 0.0 | % | 104,078 | — | 0.0 | % | 95,435 | — | 0.0 | % | ||||||||||||||||||||||||
Total Assets | 494,151 | 31,573 | 470,229 | 25,635 | 412,758 | 116,273 | ||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 204,929 | 12,463 | 24.1 | % | 204,229 | 9,429 | 18.3 | % | 173,099 | 40,844 | 23.6 | % | ||||||||||||||||||||||||
Savings accounts | 72,868 | 1,590 | 8.7 | % | 77,761 | 431 | 2.2 | % | 64,816 | 2,694 | 4.2 | % | ||||||||||||||||||||||||
Time deposits | 121,318 | 10,293 | 33.7 | % | 120,248 | 8,510 | 28.1 | % | 94,796 | 34,883 | 36.8 | % | ||||||||||||||||||||||||
Debt securities issued | 2,600 | 270 | 41.1 | % | 3,007 | 136 | 17.9 | % | 5,312 | 2,617 | 49.3 | % | ||||||||||||||||||||||||
Other liabilities | 8,143 | 311 | 15.1 | % | 3,214 | 352 | 43.5 | % | 8,174 | 650 | 8.0 | % | ||||||||||||||||||||||||
Total non-interest-bearing liabilities | 290,320 | — | 0.0 | % | 270,448 | — | 0.0 | % | 243,873 | 0.0 | % | |||||||||||||||||||||||||
Total liabilities and equity | 495,249 | 12,463 | 10.0 | % | 474,678 | 9,429 | 7.9 | % | 416,972 | 40,844 | 9.8 | % | ||||||||||||||||||||||||
NIM - AR$ | 19.4 | % | 17.6 | % | 23.8 | % | ||||||||||||||||||||||||||||||
Spread - AR$ | 7.9 | % | 9.5 | % | 13.0 | % |
BBVA ARG Consolidated | ||||||||||||||||||||||||||||||||||||
Assets & Liabilities Performance - Foreign Currency In millions AR$. Rates and spreads in annualized % | 4Q20 | 3Q20 | 2020 | |||||||||||||||||||||||||||||||||
Average Balance | Interest Earned/Paid | Average Real Rate | Average Balance | Interest Earned/Paid | Average Real Rate | Average Balance | Interest Earned/ Paid | Average Real Rate | ||||||||||||||||||||||||||||
Total interest-earning assets | 33,766 | 447 | 5.3 | % | 41,987 | 479 | 4.6 | % | 41,614 | 2,682 | 6.4 | % | ||||||||||||||||||||||||
Debt securities | 0 | 0 | 257.3 | % | 1,308 | — | — | 3,557 | 301 | 8.5 | % | |||||||||||||||||||||||||
Loans to customers/financial institutions | 28,881 | 446 | 6.2 | % | 34,966 | 479 | 5.5 | % | 34,291 | 2,379 | 6.9 | % | ||||||||||||||||||||||||
Other assets | 4,885 | 1 | 0.1 | % | 5,714 | 0 | 0.0 | % | 3,766 | 3 | 0.1 | % | ||||||||||||||||||||||||
Total non interest-earning assets | 94,135 | — | 109,885 | — | — | 91,106 | — | |||||||||||||||||||||||||||||
Total Assets | 127,901 | 447 | 151,872 | 479 | 132,720 | 2,682 | ||||||||||||||||||||||||||||||
Total interest-bearing liabilities | 87,384 | 29 | 0.1 | % | 105,809 | 34 | 0.1 | % | 92,018 | 254 | 0.3 | % | ||||||||||||||||||||||||
Savings accounts | 71,926 | 1 | 0.0 | % | 86,380 | 1 | 0.0 | % | 74,875 | 7 | 0.0 | % | ||||||||||||||||||||||||
Time deposits and Investment accounts | 14,357 | 23 | 0.7 | % | 18,786 | 40 | 0.9 | % | 16,168 | 203 | 1.3 | % | ||||||||||||||||||||||||
Other liabilities | 1,101 | 4 | 1.6 | % | 642 | (8 | ) | (4.9 | %) | 975 | 45 | 4.6 | % | |||||||||||||||||||||||
Total non-interest-bearing liabilities | 39,419 | 41,615 | — | 36,488 | — | |||||||||||||||||||||||||||||||
Total liabilities and equity | 126,803 | 29 | 0.1 | % | 147,424 | 34 | 0.1 | % | 128,506 | 254 | 0.2 | % | ||||||||||||||||||||||||
NIM - Foreign currency | 5.0 | % | 4.3 | % | 5.8 | % | ||||||||||||||||||||||||||||||
Spread - Foreign currency | 5.2 | % | 4.4 | % | 6.2 | % |
1 | Source: Instituto Nacional de Estadística y Censos (INDEC) – Consumer Price Index. |
2 | Communications “A” 7160 and “A” 7173, through which minimum time deposit rates have been increased, the latest being 97.37% of LELIQ rate for time deposits below one million pesos. |
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Net fee income
Net Fee Income | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | 2020 | 2019 | |||||||||||||||||||||
Net Fee Income | 2,800 | 3,345 | 2,313 | (16.3 | %) | 21.1 | % | 12,240 | 11,134 | |||||||||||||||||||
Fee Income | 7,531 | 6,979 | 7,281 | 7.9 | % | 3.4 | % | 28,647 | 29,931 | |||||||||||||||||||
Linked to liabilities | 2,669 | 2,827 | 3,868 | (5.6 | %) | (31.0 | %) | 12,013 | 15,626 | |||||||||||||||||||
From credit cards | 3,610 | 2,967 | 2,506 | 21.6 | % | 44.0 | % | 12,245 | 9,871 | |||||||||||||||||||
Linked to loans | 393 | 364 | 140 | 8.1 | % | 181.7 | % | 1,314 | 1,246 | |||||||||||||||||||
From insurance | 371 | 353 | 364 | 5.1 | % | 1.9 | % | 1,438 | 1,545 | |||||||||||||||||||
From foreign trade and foreign currency transactions | 382 | 376 | 364 | 1.5 | % | 5.0 | % | 1,312 | 1,474 | |||||||||||||||||||
Other fee income | 107 | 92 | 41 | 15.6 | % | 162.3 | % | 325 | 169 | |||||||||||||||||||
Fee expenses | 4,730 | 3,634 | 4,969 | 30.2 | % | (4.8 | %) | 16,407 | 18,796 |
In 4Q20 net fee income fell 16.3% or $545 million compared to 3Q20, and grew 21.1% or $488 million compared to 4Q19.
Fee income in 4Q20 totaled $7.5 billion, increasing 7.9% QoQ and 3.4% YoY. Quarterly increase is mainly promoted by a 21.6% growth in fees from credit cards derived from greater activity, which more than offsets the 5.6% fall in fees linked to liabilities (which decline mostly due to lower income from account maintenance and bundle fees)
Fee expenses increased 30.2% QoQ and fell 4.8% YoY. Quarterly increase is partially explained by greater expenses in client acquisition, processing expenses and higher fees related to credit card benefits (the last two including expenses denominated in U.S. dollars).
Net income from measurement of financial instruments at fair value and foreign exchange and gold gains/losses
Net Income from financial instruments at fair value (FV) through P&L | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | 2020 | 2019 | |||||||||||||||||||||
Net Income from financial instruments at FV through P&L | 5,585 | 986 | 1,515 | 466.2 | % | 268.5 | % | 9,348 | 12,574 | |||||||||||||||||||
Income from government securities | 286 | 904 | 1,491 | (68.4 | %) | (80.8 | %) | 3,657 | 6,161 | |||||||||||||||||||
Income from private securities | 2,107 | (63 | ) | (483 | ) | n.m | n.m | 1,968 | 3,935 | |||||||||||||||||||
Interest rate swaps | (1 | ) | 20 | (402 | ) | (106.8 | %) | 99.7 | % | 73 | (696 | ) | ||||||||||||||||
Gains from foreign currency forward transactions | 2,659 | 110 | (85 | ) | n.m | n.m | 3,062 | 2,169 | ||||||||||||||||||||
Income from put options taken - Prisma Medios de Pago S.A. | 497 | — | 933 | N/A | (46.7 | %) | 497 | 933 | ||||||||||||||||||||
Income from debt and equity instruments | 27 | 12 | 63 | 125.8 | % | (56.5 | %) | 80 | 72 | |||||||||||||||||||
Other | 10 | 4 | (0 | ) | 184.2 | % | n.m | 11 | (0 | ) |
In 4Q20, net income from financial instruments at Fair Value (FV) through P&L was $5.6 billion, increasing 466.2% or $4.6 billion QoQ.
Main impacts on these results are partially explained by the update in valuation of the remaining investment held in Prisma, equivalent to $2.0 billion in the Income from private securities line item. In addition, the put option valuation on Prisma has also been updated to $497 million.
A positive effect is seen by $2.7 billion from gains from foreign currency forward transactions, obtained as result from transactions on derivative securities and contracts.
The 68.4% quarterly decrease in income from government securities is in part explained by a migration of the LELIQ holdings into REPOs, promoted by BCRA’s Communication “A” 7122 which caps LELIQ net excess position.
Differences in quoted prices of gold and foreign currency | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | 2020 | 2019 | |||||||||||||||||||||
Foreign exchange and gold gains/(losses) (1) | 1,073 | 1,801 | 3,916 | (40.4 | %) | (72.6 | %) | 6,228 | 14,700 | |||||||||||||||||||
From foreign exchange position | (327 | ) | (217 | ) | 182 | (50.7 | %) | (279.9 | %) | 178 | (316 | ) | ||||||||||||||||
Income from purchase-sale of foreign currency | 1,400 | 2,018 | 3,735 | (30.6 | %) | (62.5 | %) | 6,050 | 15,016 | |||||||||||||||||||
Net income from financial instruments at FV through P&L (2) | 2,659 | 110 | (85 | ) | n.m | n.m | 3,062 | 2,169 | ||||||||||||||||||||
Income from foreign currency forward transactions | 2,659 | 110 | (85 | ) | n.m | n.m | 3,062 | 2,169 | ||||||||||||||||||||
Total differences in quoted prices of gold & foreign currency (1) + (2) | 3,732 | 1,911 | 3,831 | 95.3 | % | (2.6 | %) | 9,289 | 16,869 |
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In 4Q20, the total differences in quoted prices of gold and foreign currency showed profit for $3.7 billion, growing 95.3% or $1.8 billion compared with 3Q20, mainly due to transactions on foreign currency future contracts, which more than offset the 40.4% negative effect produced by a lower activity pursuant to stricter controls on foreign exchange markets.
Other operating income
Other operating income | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | 2020 | 2019 | |||||||||||||||||||||
Operating Income | 1,927 | 1,670 | 1,490 | 15.4 | % | 29.3 | % | 6,278 | 17,612 | |||||||||||||||||||
Rental of safe deposit boxes (1) | 262 | 289 | 237 | (9.2 | %) | 10.5 | % | 1,122 | 962 | |||||||||||||||||||
Adjustments and interest on miscellaneous receivables (1) | 613 | 580 | 390 | 5.7 | % | 57.4 | % | 1,882 | 1,730 | |||||||||||||||||||
Punitive interest (1) | 12 | 1 | 65 | n.m | (82.3 | %) | 104 | 290 | ||||||||||||||||||||
Loans recovered | 279 | 266 | 253 | 4.8 | % | 10.4 | % | 948 | 872 | |||||||||||||||||||
Fee income from credit and debit cards (1) | 59 | 65 | 207 | (8.8 | %) | (71.4 | %) | 267 | 1,001 | |||||||||||||||||||
Other Operating Income(2) | 702 | 468 | 338 | 49.8 | % | 107.4 | % | 1,954 | 7,832 |
(1) | Included in the efficiency ratio calculation |
(2) | Includes some of the concepts used in the efficiency ratio calculation |
In 4Q20 other operating income totaled $1.9 billion, growing 15.4% or $258 million QoQ, mainly explained by a 49.8% increase in the Other Operating Income line item, due to the reversal of a provision for $505.7 million, related to the reorganization provision recorded on the fourth quarter of 2019. The increase is also explained to a lesser extent by the Adjustments and interest on miscellaneous receivables line item, where interests received from the Government in compensation for zero rate credit lines are recorded.
Operating expenses
Personnel benefits and Administrative expenses
Personnel Benefits and Adminsitrative Expenses | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | 2020 | 2019 | |||||||||||||||||||||
Total Personnel Benefits and Adminsitrative Expenses | 9,698 | 9,956 | 11,152 | (2.6 | %) | (13.0 | %) | 39,139 | 41,728 | |||||||||||||||||||
Personnel Benefits (1) | 4,858 | 5,102 | 5,826 | (4.8 | %) | (16.6 | %) | 20,319 | 22,676 | |||||||||||||||||||
Administrative expenses (1) | 4,840 | 4,854 | 5,326 | (0.3 | %) | (9.1 | %) | 18,820 | 19,052 | |||||||||||||||||||
Travel expenses | 33 | 31 | 68 | 8.2 | % | (51.3 | %) | 119 | 227 | |||||||||||||||||||
Administrative expenses | 374 | 365 | 610 | 2.5 | % | (38.7 | %) | 1,622 | 1,726 | |||||||||||||||||||
Security services | 193 | 184 | 166 | 4.6 | % | 16.2 | % | 768 | 659 | |||||||||||||||||||
Fees to Bank Directors and Supervisory Committee | 8 | 18 | 4 | (54.5 | %) | 122.2 | % | 60 | 22 | |||||||||||||||||||
Other fees | 223 | 257 | 231 | (13.5 | %) | (3.6 | %) | 966 | 944 | |||||||||||||||||||
Insurance | 59 | 65 | 47 | (9.7 | %) | 25.1 | % | 222 | 195 | |||||||||||||||||||
Rent | 507 | 456 | 341 | 11.1 | % | 48.9 | % | 1,876 | 1,335 | |||||||||||||||||||
Stationery and supplies | 13 | 10 | 32 | 33.3 | % | (59.5 | %) | 69 | 98 | |||||||||||||||||||
Electricity and communications | 241 | 259 | 267 | (6.8 | %) | (9.4 | %) | 1,024 | 967 | |||||||||||||||||||
Advertising | 135 | 206 | 221 | (34.5 | %) | (39.0 | %) | 719 | 861 | |||||||||||||||||||
Taxes | 1,157 | 1,104 | 1,051 | 4.7 | % | 10.1 | % | 4,490 | 4,434 | |||||||||||||||||||
Maintenance costs | 549 | 562 | 585 | (2.2 | %) | (6.1 | %) | 2,226 | 2,035 | |||||||||||||||||||
Armored transportation services | 829 | 647 | 1,124 | 28.2 | % | (26.2 | %) | 2,205 | 3,448 | |||||||||||||||||||
Other administrative expenses | 519 | 689 | 581 | (24.7 | %) | (10.6 | %) | 2,453 | 2,101 | |||||||||||||||||||
Headcount* | 6,019 | 6108 | 6405 | (89 | ) | (386 | ) | 6,019 | 6405 | |||||||||||||||||||
BBVA (Bank) | 5,920 | 6,008 | 6,300 | (88 | ) | (380 | ) | 5,920 | 6,300 | |||||||||||||||||||
Associates (2)* | 99 | 100 | 105 | (1 | ) | (6 | ) | 99 | 105 | |||||||||||||||||||
Total branches | 247 | 247 | 251 | — | (4 | ) | 247 | 251 | ||||||||||||||||||||
Efficiency ratio | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||
Accumulated Efficiency Ratio | 56.8 | % | N/A | 43.7 | % | N/A | 1,315 bps | 56.8 | % | 43.7 | % | |||||||||||||||||
Efficiency ratio - Excl. Inflation adjustment | N/A | N/A | N/A | N/A | N/A | N/A | N/A | |||||||||||||||||||||
Accumulated Efficiency Ratio - Excl. Inflation adjustment | 45.1 | % | N/A | 40.2 | % | N/A | 492 bps | 45.1 | % | 40.2 | % |
(1) | Concept included in the efficiency ratio calculation |
(2) | Includes BBVA Asset Management Argentina S.A. and PSA & VWFS as of 3Q19 |
* | Total active employees at the end of the period, includes effective and temporary employees. Excludes expatriates. |
During 4Q20, personnel benefits and administrative expenses totaled $9.7 billion, decreasing 2.6% or $258 million QoQ, and 13.0% or $1.5 billion YoY.
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Personnel benefits decreased 4.8% or $244 million compared to 3Q20, and meant a 16.6% or $968 reduction compared to 4Q19. This is partially explained by a smaller structure, and a higher quarterly and annual inflation that has not been compensated by the wage increments agreed through collective bargaining agreements with labor unions during the year (annual inflation reached 36% while wage increases implied a total increment of 34%).
In 4Q20, administrative expenses fell 0.3% or $14 million QoQ, and 9.1% or $486 YoY. This decrease is mainly due to savings in Other administrative expenses (lower expenses in services provided to third parties, and lower expenses in card printing), which more than offset the higher seasonal expenditure in armored transportation due to an increased activity.
The accumulated efficiency ratio as of 4Q20 was 56.8%, above the 43.7% reported in 4Q19. The increase is explained by a lower percentage decline of the numerator (expenses) than the denominator (income), which has been mainly affected by a decrease in financial income.
Excluding inflation adjustments included in the lines “Income from the monetary position”, the accumulated efficiency ratio as of 4Q20 would reach 45.1%.
Other operating expenses
Other Operating Expenses | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | 2020 | 2019 | |||||||||||||||||||||
Other Operating Expenses | 6,085 | 3,013 | 7,911 | 102.0 | % | (23.1 | %) | 16,420 | 29,922 | |||||||||||||||||||
Turnover tax | 2,185 | 1,738 | 2,709 | 25.7 | % | (19.3 | %) | 8,117 | 10,867 | |||||||||||||||||||
Initial loss of loans below market rate | 632 | 120 | 378 | 427.5 | % | 67.0 | % | 1,084 | 2,070 | |||||||||||||||||||
Contribution to the Deposit Guarantee Fund (SEDESA) | 185 | 184 | 183 | 0.3 | % | 0.8 | % | 697 | 825 | |||||||||||||||||||
Interest on liabilities from financial lease | 86 | 100 | 107 | (14.2 | %) | (20.3 | %) | 374 | 433 | |||||||||||||||||||
Other allowances | 457 | 295 | 1,264 | 54.9 | % | (63.8 | %) | 1,543 | 10,345 | |||||||||||||||||||
Other operating expenses | 2,540 | 575 | 3,269 | 341.4 | % | (22.3 | %) | 4,607 | 5,383 |
In 4Q20, other operating expenses totaled $6.1 billion, increasing 102.0% or $3.1 billion QoQ, and contracting 23.1% or $1.8 billion YoY.
The main factor explaining the quarterly increase relies on the Other operating expenses line item, where a provision for $2.1 billion are recorded. These are in line with the continuity of the digital transformation process the Bank has decided to launch in 2019, which aims to generate higher efficiency and agility in decision-making processes.
Further factors impacting over the increment in expenses are recorded in the Initial loss of loans below market rate line item, and partly caused by the normalization of the Turnover tax payment (related to advance payments recognized on the prior quarter)
Income from associates
This line reflects the results from non-consolidated associate companies. During 2020, profit of $273 million has been reported, mainly due to the participation in BBVA Consolidar Seguros S.A., Rombo Compañía Financiera S.A., Interbanking S.A. and Play Digital S.A.
Income tax
Income tax expenses accumulated in 2020 totaled $8.6 billion, representing an annual effective rate of 42%, compared to an annual effective rate of 34% as of 2019. The increment in such rate compared to the regulatory 30% is based on differences between inflation adjustment regulations and BCRA regulations, changing the taxable base.
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Balance sheet and activity
Loans and other financing
Loans and other financing | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | |||||||||||||||
To the public sector | 7 | 0 | 25 | n.m | (74.3 | %) | ||||||||||||||
To the financial sector | 2,338 | 3,548 | 7,099 | (34.1 | %) | (67.1 | %) | |||||||||||||
Non-financial private sector and residents abroad | 290,301 | 287,943 | 274,238 | 0.8 | % | 5.9 | % | |||||||||||||
Non-financial private sector and residents abroad - AR$ | 259,362 | 255,277 | 224,310 | 1.6 | % | 15.6 | % | |||||||||||||
Overdrafts | 17,409 | 21,992 | 19,597 | (20.8 | %) | (11.2 | %) | |||||||||||||
Discounted instruments | 33,118 | 33,183 | 27,962 | (0.2 | %) | 18.4 | % | |||||||||||||
Mortgage loans | 17,100 | 17,687 | 19,044 | (3.3 | %) | (10.2 | %) | |||||||||||||
Pledge loans | 11,620 | 10,818 | 11,830 | 7.4 | % | (1.8 | %) | |||||||||||||
Consumer loans | 28,233 | 29,078 | 32,207 | (2.9 | %) | (12.3 | %) | |||||||||||||
Credit cards | 112,964 | 100,584 | 94,180 | 12.3 | % | 19.9 | % | |||||||||||||
Receivables from financial leases | 1,743 | 1,678 | 2,166 | 3.9 | % | (19.5 | %) | |||||||||||||
Other loans (1) | 37,175 | 40,257 | 17,324 | (7.7 | %) | 114.6 | % | |||||||||||||
Non-financial private sector and residents abroad - Foreign Currency | 30,939 | 32,666 | 49,928 | (5.3 | %) | (38.0 | %) | |||||||||||||
Overdrafts | 2 | 3 | 4 | (27.7 | %) | (37.9 | %) | |||||||||||||
Discounted instruments | 1,691 | 2 | 4,298 | n.m | (60.7 | %) | ||||||||||||||
Mortgage loans | — | — | 226 | N/A | (100.0 | %) | ||||||||||||||
Credit cards | 1,676 | 1,723 | 4,180 | (2.7 | %) | (59.9 | %) | |||||||||||||
Receivables from financial leases | 124 | 184 | 406 | (32.8 | %) | (69.5 | %) | |||||||||||||
Loans for the prefinancing and financing of exports | 15,980 | 18,919 | 24,908 | (15.5 | %) | (35.8 | %) | |||||||||||||
Other loans (1) | 11,465 | 11,834 | 15,904 | (3.1 | %) | (27.9 | %) | |||||||||||||
% of total loans to Private sector in AR$ | 89.3 | % | 88.7 | % | 81.8 | % | 69 bps | 755 bps | ||||||||||||
% of total loans to Private sector in Foreign Currency | 10.7 | % | 11.3 | % | 18.2 | % | (69 | )bps | (755 | )bps | ||||||||||
% of mortgage loans with UVA adjustments (2) | 84.0 | % | 85.9 | % | 85.1 | % | (191 | )bps | (116 | )bps | ||||||||||
% of pledge loans with UVA adjustments (2) | 12.3 | % | 15.7 | % | 21.9 | % | (345 | )bps | (965 | )bps | ||||||||||
% of personal loans with UVA adjustments (2) | 16.1 | % | 21.3 | % | 41.5 | % | (512 | )bps | (2,540 | )bps | ||||||||||
% of loans with UVA adjustments over Total loans(2) | 3.6 | % | 4.3 | % | 6.7 | % | (70 | )bps | (308 | )bps | ||||||||||
Total loans and other financing | 292,645 | 291,492 | 281,362 | 0.4 | % | 4.0 | % | |||||||||||||
Allowances | (13,126 | ) | (12,150 | ) | (15,512 | ) | (8.0 | %) | 15.4 | % | ||||||||||
Total net loans and other financing | 279,519 | 279,342 | 265,850 | 0.1 | % | 5.1 | % |
(1) | Includes IFRS adjustment. |
(2) | Excludes effect of accrued adjustments. |
Private sector loans in 4Q20 totaled $290.3 billion, moderately increasing 0.8% or $2.4 billion QoQ, and 5.9% or $16.1 billion YoY.
Loans to the financial sector fell 34.1% QoQ, mainly because of the maturity of a loan.
Loans to the private sector in pesos increased 1.6% in 4Q20, and grew 15.6% in the year. Loans to the private sector denominated in foreign currency fell 5.3% QoQ and 38.0% YoY, mainly driven by the contraction in demand of loans in foreign currency. These loans, measured in U.S. dollars, fell 14.3% and 55.9% QoQ and YoY respectively. The increase in the currency exchange rate versus the U.S. dollar was 10.5% QoQ and 40.4% YoY3.
In 2020, total loans totaled $292.6 billion and grew 4.0%. Private sector loans grew 5.9% reaching $290.3 billion in the same period. Growth is mainly explained by loans denominated in pesos, which more than offset the fall in foreign currency denominated ones.
3 | Taking into consideration wholesale U.S. dollar foreign exchange rates on BCRA’s Communication A 3500 |
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Loans and other financing | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | |||||||||||||||
Non-financial private sector and residents abroad - Retail | 171,593 | 159,890 | 161,667 | 7.3% | 6.1% | |||||||||||||||
Mortgage loans | 17,100 | 17,687 | 19,271 | (3.3% | ) | (11.3% | ) | |||||||||||||
Pledge loans | 11,620 | 10,818 | 11,830 | 7.4% | (1.8% | ) | ||||||||||||||
Consumer loans | 28,233 | 29,078 | 32,207 | (2.9% | ) | (12.3% | ) | |||||||||||||
Credit cards | 114,640 | 102,307 | 98,360 | 12.1% | 16.6% | |||||||||||||||
Non-financial private sector and residents abroad - Commercial | 118,708 | 128,053 | 112,571 | (7.3% | ) | 5.5% | ||||||||||||||
Overdrafts | 17,411 | 21,995 | 19,601 | (20.8% | ) | (11.2% | ) | |||||||||||||
Discounted instruments | 34,809 | 33,185 | 32,261 | 4.9% | 7.9% | |||||||||||||||
Receivables from financial leases | 1,867 | 1,862 | 2,573 | 0.3% | (27.4% | ) | ||||||||||||||
Loans for the prefinancing and financing of exports | 15,980 | 18,919 | 24,908 | (15.5% | ) | (35.8% | ) | |||||||||||||
Other loans (1) | 48,640 | 52,092 | 33,228 | (6.6% | ) | 46.4% | ||||||||||||||
% of total loans to Retail sector | 59.1% | 55.5% | 59.0% | 358 | bps | 16 | bps | |||||||||||||
% of total loans to Commercial sector | 40.9% | 44.5% | 41.0% | (358 | )bps | (16) | bps |
(1) | Includes IFRS adjustment |
Considering retail loans (mortgage, pledge, consumer and credit card loans), these have increased 7.3% QoQ and 6.1% YoY. In the quarter, the greatest increases are reflected in pledge loans and credit cards (7.4% and 12.1% respectively), the latter boosted by Ahora 12 and Ahora 18 programs, and a greater activity promoted by year-end seasonality.
Commercial loans (including overdrafts, discounted instruments, receivables from financial leases, loans for the prefinancing and financing of exports, and other loans) contracted 7.3% QoQ and increased 5.5% YoY. Quarterly decline is explained by a 20.8% fall in overdrafts, and a 15.5% fall in prefinancing and financing of exports. This was partially offset by a 4.9% growth in discounted instruments, partly promoted by a greater commercial activity.
In 2020, both retail and commercial loans grew by $171.6 billion and $118.7 billion respectively. Within retail loans, a strong credit card growth offset the fall in mortgage and consumer loans. In commercial loans, growth is fostered by Other loans, specially company loans (or “PIV”) and discounted instruments.
In the 4Q20 the gross loans-to-deposits ratio was 61% compared to 70% a year ago.
Market share - Private sector Loans | BBVA ARG | Chg (bps) | ||||||||||||||||||
In % | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | |||||||||||||||
Private sector loans - Bank | 7.66% | 7.46% | 6.94% | 20 bps | 72 bps | |||||||||||||||
Private sector loans - Consolidated* | 8.49% | 8.27% | 7.71% | 22 bps | 78 bps |
Based on daily BCRA information. Capital balance as of the last day of each quarter.
* | Consolidates PSA, VWFS & Rombo |
Asset quality
Asset Quality | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | |||||||||||||||
Commercial non-performing portfolio (1) | 2,206 | 524 | 5,461 | 320.9% | (59.6% | ) | ||||||||||||||
Total commercial portfolio | 97,535 | 100,091 | 104,083 | (2.6% | ) | (6.3% | ) | |||||||||||||
Commercial non-performing portfolio / Total commercial portfolio | 2.26% | 0.52% | 5.25% | 174 | bps | (298 | )bps | |||||||||||||
Retail non-performing portfolio (1) | 1,842 | 2,896 | 4,327 | (36.4% | ) | (57.4% | ) | |||||||||||||
Total retail portfolio | 188,336 | 193,648 | 165,178 | (2.7% | ) | 14.0% | ||||||||||||||
Retail non-performing portfolio / Total retail portfolio | 0.98% | 1.50% | 2.62% | (52 | )bps | (164 | )bps | |||||||||||||
Total non-performing portfolio (1) | 4,048 | 3,420 | 9,788 | 18.4% | (58.6% | ) | ||||||||||||||
Total portfolio | 285,872 | 293,739 | 269,261 | (2.7% | ) | 6.2% | ||||||||||||||
Total non-performing portfolio / Total portfolio | 1.42% | 1.16% | 3.64% | 25 | bps | (222 | )bps | |||||||||||||
Allowances | 13,133 | 12,150 | 15,512 | 8.1% | (15.3% | ) | ||||||||||||||
Allowances /Total non-performing portfolio | 324.43% | 355.26% | 158.49% | (3,083 | )bps | 16,594 | bps | |||||||||||||
Write offs | 7,298 | 6,567 | 5,058 | 11.1% | 44.3% | |||||||||||||||
Write offs / Total portfolio | 2.55% | 2.24% | 1.88% | 32 | bps | 67 | bps | |||||||||||||
Cost of Risk (CoR) | 4.85% | 4.61% | 7.80% | 24 | bps | (295 | )bps |
(1) | Non-performing loans include: all loans to borrowers classified as “Deficient Servicing (Stage 3)”, “High Insolvency Risk (Stage 4)”, “Irrecoverable” and/or “Irrecoverable for Technical Decision” (Stage 5) according to BCRA debtor classification system |
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In 4Q20, asset quality ratio or NPL (total non-performing portfolio / total portfolio) was 1.42%, which increased 25 basis points QoQ and fell 222 basis points YoY. The quarterly increase is mainly explained by an increase in the commercial non-performing portfolio. This ratio was positively affected by the temporary flexibility in BCRA regulation regarding debtor classification during the COVID-19 pandemic, which extends grace periods in 60 days before a loan is classified as non-performing, and suspends the mandatory reclassification of clients that have an irregular performance with other institutions but a regular performance with the Bank.
The coverage ratio (allowances / total non-performing portfolio) decreased to 324.43% in 4Q20, from 355.26% in 3Q20. This is explained by an increase in non-performing loans, which is greater than the increase in allowances, due to factors previously mentioned, as well as the implementation of impairment models and the continuing effect of waivers enforced though BCRA regulation regarding debtor classification.
Cost of risk (loan loss allowances / average total loans) reached 4.85%, above than the 4.61% recorded in 3Q20. This is mainly explained by a deterioration in the evolution in credit quality, especially in the commercial portfolio.
BBVA ARG | ||||||||||||||||||||||||
Analysis for the allowance of loan losses In millions AR$ | Balance at 12/31/2019 | Stage 1 | Stage 2 | Stage 3 | Monetary result generated by allowances | Balance at 12/31/2020 | ||||||||||||||||||
Other financial assets | 308 | 30 | — | 15 | (89 | ) | 264 | |||||||||||||||||
Loans and other financing | 15,270 | 1,547 | 2,490 | (2,297 | ) | (4,209 | ) | 12,802 | ||||||||||||||||
Other debt securities | 1 | (1 | ) | — | — | (0 | ) | 0 | ||||||||||||||||
Eventual commitments | 1,233 | 484 | 40 | (20 | ) | (373 | ) | 1,365 | ||||||||||||||||
Total allowances | 16,804 | 2,065 | 2,530 | (2,302 | ) | (4,669 | ) | 14,428 |
* | 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 4Q20 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, 2022. As of October 2020, PSA and VWFS will be part of Group “C” financial institutions, keeping the accounting framework of Group “B” financial institutions.
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Public sector exposure
Net Public Debt Exposure | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | |||||||||||||||
Treasury and Government securities | 38,308 | 27,959 | 21,943 | 37.0% | 74.6% | |||||||||||||||
Treasury and National Government | 38,308 | 27,959 | 21,872 | 37.0% | 75.1% | |||||||||||||||
National Treasury Public Debt in AR$ | 38,308 | 27,956 | 11,873 | 37.0% | 222.6% | |||||||||||||||
National Treasury Public Debt in dollars | 0 | 3 | 264 | (97.9% | ) | (100.0% | ) | |||||||||||||
National Treasury Public Debt USD-Linked | — | — | 9,735 | N/A | (100.0% | ) | ||||||||||||||
Provinces | — | — | 70 | N/A | (100.0% | ) | ||||||||||||||
Loans to the Public Sector | 7 | 0 | 25 | n.m | (72.0% | ) | ||||||||||||||
REPOs | — | — | — | N/A | N/A | |||||||||||||||
AR$ Subtotal | 38,315 | 27,956 | 21,968 | 37.1% | 74.4% | |||||||||||||||
USD Subtotal* | 0 | 3 | 9,999 | (97.9% | ) | (100.0% | ) | |||||||||||||
Total Public Debt Exposure | 38,315 | 27,959 | 31,967 | 37.0% | 19.9% | |||||||||||||||
B.C.R.A. Exposure | 139,078 | 124,539 | 45,010 | 11.7% | 209.0% | |||||||||||||||
Instruments | 89,890 | 103,389 | 45,010 | (13.1% | ) | 99.7% | ||||||||||||||
LELIQs | 89,890 | 103,389 | 45,010 | (13.1% | ) | 99.7% | ||||||||||||||
Loans to the B.C.R.A. | — | — | — | N/A | N/A | |||||||||||||||
Repo | 49,188 | 21,151 | — | 132.6% | N/A | |||||||||||||||
B.C.R.A. - AR$ | 49,188 | 21,151 | — | 132.6% | N/A | |||||||||||||||
%Public sector exposure (Excl. B.C.R.A.) / Total assets | 5.6% | 4.3% | 5.2% | 130 | bps | 36 | bps |
* | Includes USD-linked Treasury public debt in AR$ |
Public sector exposure (excluding BCRA) totaled $38.3 billion, growing 37.0% or $10.4 billion QoQ, and 19.9% or $6.3 billion YoY.
Short-term liquidity is allocated in BCRA instruments, which grew 11.7% or $14.5 billion compared to 3Q20, and 209.0% or $94.1 billion compared to 4Q19. The quarterly increase is a consequence of the increase in REPO transactions with the BCRA, which more than offsets the reduction in LELIQ position.
Exposure to the public sector (excluding BCRA) represents 5.6% of total assets.
Deposits
Total Deposits | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | |||||||||||||||
Total deposits | 478,223 | 444,870 | 400,237 | 7.5% | 19.5% | |||||||||||||||
Non-financial Public Sector | 5,628 | 6,600 | 4,000 | (14.7% | ) | 40.7% | ||||||||||||||
Financial Sector | 862 | 612 | 243 | 40.8% | 254.7% | |||||||||||||||
Non-financial private sector and residents abroad | 471,733 | 437,658 | 395,994 | 7.8% | 19.1% | |||||||||||||||
Non-financial private sector and residents abroad - AR$ | 336,691 | 311,057 | 238,470 | 8.2% | 41.2% | |||||||||||||||
Checking accounts | 112,544 | 93,849 | 73,523 | 19.9% | 53.1% | |||||||||||||||
Savings accounts | 88,508 | 80,383 | 68,279 | 10.1% | 29.6% | |||||||||||||||
Time deposits | 104,626 | 113,044 | 92,356 | (7.4% | ) | 13.3% | ||||||||||||||
Investment accounts | 27,905 | 20,165 | — | 38.4% | N/A | |||||||||||||||
Other | 3,108 | 3,616 | 4,311 | (14.0% | ) | (27.9% | ) | |||||||||||||
Non-financial private sector and res. abroad - Foreign Currency | 135,042 | 126,601 | 157,524 | 6.7% | (14.3% | ) | ||||||||||||||
Checking accounts | 40 | 26 | 28 | 54.6% | 44.0% | |||||||||||||||
Savings accounts | 117,419 | 106,477 | 132,936 | 10.3% | (11.7% | ) | ||||||||||||||
Time deposits | 15,442 | 17,380 | 22,239 | (11.2% | ) | (30.6% | ) | |||||||||||||
Other | 2,141 | 2,718 | 2,321 | (21.2% | ) | (7.7% | ) | |||||||||||||
% of total portfolio in the private sector in AR$ | 71.4% | 71.1% | 60.2% | 30 | bps | 1,115 | bps | |||||||||||||
% of total portfolio in the private sector in Foregin Currency | 28.6% | 28.9% | 39.8% | (30 | )bps | (1,115 | )bps | |||||||||||||
% of time deposits with UVA adjustments | 1.7% | 1.0% | 2.1% | 63 | bps | (44 | )bps | |||||||||||||
% of sight deposits over total deposits | 68.6% | 65.6% | 71.1% | 304 | bps | (243 | )bps | |||||||||||||
% of time deposits over total deposits | 31.4% | 34.4% | 28.9% | (304 | )bps | 243 | bps |
During 4Q20, total deposits were $478.2 billion, recording an increase of 7.5% or $33.4 billion QoQ, and 19.5% or $78.0 billion YoY.
Private sector deposits in 4Q20 were $471.7 billion, growing 7.8% or $34.1 billion QoQ, and 19.1% or $75.7 billion YoY.
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Private non-financial sector deposits in pesos totaled $336.7 billion, growing 8.2% or $25.6 billion QoQ, and 41.2% or $98.2 billion YoY. This is mainly explained by a growth in Investment accounts (transferable investment certificates with early withdrawal option), and to a lesser extent, by the growth in interest-bearing checking accounts. This offsets the quarterly fall in time deposits.
Private non-financial sector deposits in foreign currency expressed in pesos grew 6.7% or $8.4 billion QoQ and contracted 14.3% or $22.5 billion YoY. Measured in U.S. dollars, these deposits fell 3.4% QoQ and 39.0% YoY.
In 2020, total deposits grew 19.5%, totaling $478.2. Private deposits totaled $471.7 billion, increasing 19.1% YoY. Annual growth is mainly explained by peso deposits which more than offset the fall in foreign currency deposits, mostly due to checking accounts and the implementation of investment accounts.
Private Deposits | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | |||||||||||||||
Non-financial private sector and residents abroad | 471,733 | 437,658 | 395,994 | 7.8% | 19.1% | |||||||||||||||
Sight deposits | 323,760 | 287,069 | 281,398 | 12.8% | 15.1% | |||||||||||||||
Checking accounts | 112,584 | 93,875 | 73,551 | 19.9% | 53.1% | |||||||||||||||
Savings accounts | 205,927 | 186,860 | 201,215 | 10.2% | 2.3% | |||||||||||||||
Other | 5,249 | 6,334 | 6,632 | (17.1% | ) | (20.8% | ) | |||||||||||||
Time deposits | 147,973 | 150,589 | 114,595 | (1.7% | ) | 29.1% | ||||||||||||||
Time deposits | 120,068 | 130,424 | 114,595 | (7.9% | ) | 4.8% | ||||||||||||||
Investment accounts | 27,905 | 20,165 | — | 38.4% | N/A | |||||||||||||||
% of sight deposits over total deposits | 69.1% | 66.1% | 71.4% | 291 | bps | (231 | )bps | |||||||||||||
% of time deposits over total deposits | 30.9% | 33.9% | 28.6% | (291 | )bps | 231 | bps |
As of 4Q20, the Bank’s transactional deposits (checking accounts and savings accounts) represented 66.6% of total non-financial private deposits, totaling $318.5 billion, versus 63.1% in 3Q20.
Market Share - Private sector Deposits | BBVA ARG | Chg (%) | ||||||||||||||||||
In % | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | |||||||||||||||
Private sector Deposits - Consolidated* | 7.13% | 6.46% | 7.14% | 64 | bps | (1 | )bps |
Based on daily BCRA information. Capital balance as of the last day of each quarter.
* | Consolidates PSA, VWFS & Rombo |
Other sources of funds
Other sources of funds | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | |||||||||||||||
Other sources of funds | 113,414 | 124,837 | 119,459 | (9.2% | ) | (5.1% | ) | |||||||||||||
Central Bank | 28 | 33 | 23 | (13.8% | ) | 24.9% | ||||||||||||||
Banks and international organizations | 1,691 | — | 3,457 | N/A | N/A | |||||||||||||||
Financing received from local financial institutions | 7,907 | 3,704 | 4,891 | 113.5% | 61.6% | |||||||||||||||
Corporate bonds | 1,169 | 4,566 | 9,964 | (74.4% | ) | (88.3% | ) | |||||||||||||
Equity | 102,619 | 116,534 | 101,124 | (11.9% | ) | 1.5% |
In 4Q20, other sources of funds totaled $113.4 billion, decreasing 9.2% or $11.4 billion QoQ, and 5.1% or $6.0 billion YoY.
4Q19 equity evolution can be observed in the table below, going from historical values to current values through the implementation of IAS 29 rule.
Equity - Evolution | ||||
In millions AR$ | 4Q19 | |||
Equity before IAS 29 application | 63,893 | |||
Total impact of IAS 29 application (1) | 11,963 | |||
Equity in terms of 12/31/2019 units | 75,856 | |||
Adjustment from reexpression of equity at current units 12/31/2020 (2) | 27,415 | |||
Equity in terms of 12/31/2020 units | 103,271 | |||
Total recognized in Retained Earnings (1)+(2) | 39,378 |
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Liquid Assets
Total Liquid Assets | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | |||||||||||||||
Total liquid assets | 322,816 | 293,808 | 279,734 | 9.9 | % | 15.4 | % | |||||||||||||
Cash and deposits in banks | 152,109 | 148,264 | 212,733 | 2.6 | % | (28.5 | %) | |||||||||||||
Debt securities at fair value through profit or loss | 915 | 6,593 | 5,495 | (86.1 | %) | (83.3 | %) | |||||||||||||
Government securities | 915 | 184 | 71 | 396.2 | % | n.m | ||||||||||||||
Liquidity bills of B. C. R. A. | — | 6,408 | 5,425 | (100.0 | %) | (100.0 | %) | |||||||||||||
Net REPO transactions | 49,188 | 21,151 | — | 132.6 | % | N/A | ||||||||||||||
Other debt securities | 120,604 | 117,801 | 61,505 | 2.4 | % | 96.1 | % | |||||||||||||
Government securities | 30,453 | 20,820 | 21,826 | 46.3 | % | 39.5 | % | |||||||||||||
Private securities | 261 | — | 95 | N/A | 175.6 | % | ||||||||||||||
Liquidity bills of B. C. R. A. | 89,890 | 96,981 | 39,585 | (7.3 | %) | 127.1 | % | |||||||||||||
Liquid assets / Total Deposits | 67.5 | % | 66.0 | % | 69.9 | % | 146 pbs | (239 | )pbs |
In 4Q20, liquid assets were $322.8 billion, increasing 9.9% or $29.0 billion compared to 3Q20, and 15.4% or $43.1 billion compared to 4Q19.
In 4Q20, the liquidity ratio (liquid assets / total deposits) reached 67.5%. Liquidity ratio in local and foreign currency reached 60.6% and 85.1% respectively.
Solvency
Minimum capital requirement | BBVA ARG Consolidated | Chg (%) | ||||||||||||||||||
In millions AR$ - Inflation adjusted | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | |||||||||||||||
Minimum capital requirement | 38,795 | 37,347 | 35,388 | 3.9 | % | 9.6 | % | |||||||||||||
Credit risk | 29,523 | 27,618 | 26,262 | 6.9 | % | 12.4 | % | |||||||||||||
Market risk | 246 | 309 | 413 | (20.5 | %) | (40.4 | %) | |||||||||||||
Operational risk | 9,026 | 9,419 | 8,713 | (4.2 | %) | 3.6 | % | |||||||||||||
Integrated Capital - RPC (1)* | 95,868 | 106,242 | 88,410 | (9.8 | %) | 8.4 | % | |||||||||||||
Ordinary Capital Level 1 ( COn1) | 108,249 | 120,068 | 101,529 | (9.8 | %) | 6.6 | % | |||||||||||||
Deductible items COn1 | (15,348 | ) | (16,679 | ) | (15,785 | ) | (8.0 | %) | (2.8 | %) | ||||||||||
Additional Capital Level 2 (COn2) | 2,967 | 2,852 | 2,666 | 4.0 | % | 11.3 | % | |||||||||||||
Excess Capital | ||||||||||||||||||||
Integration excess | 57,073 | 68,895 | 53,022 | (17.2 | %) | 7.6 | % | |||||||||||||
Excess as % of minimum capital requirement | 147.1 | % | 184.5 | % | 149.83 | % | (3,736 | )pbs | (272 | )pbs | ||||||||||
Risk-weighted assets (RWA, according to B.C.R.A. regulation) (2) | 474,190 | 456,795 | 432,787 | 3.8 | % | 9.6 | % | |||||||||||||
Regulatory Capital Ratio (1)/(2) | 20.2 | % | 23.3 | % | 20.4 | % | (304 | )pbs | (21 | )pbs | ||||||||||
TIER I Capital Ratio (Ordinary Capital Level 1/ RWA) | 19.6 | % | 22.6 | % | 19.8 | % | (304 | )pbs | (22 | )pbs |
* | RPC includes 100% of quarterly results |
BBVA Argentina continues to show strong solvency indicators on 4Q20. Capital ratio reached 20.2%. Tier 1 ratio was 19.6% and capital excess over regulatory requirement was $57.1 billion.
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Other events
Relevant Events
• | As of February 2, 2020, the court confirmed a favorable decision on the legal action the Bank had filed to declare unconstitutionality of the provisions that prevented the application of the inflation adjustment mechanism established by Law No. 20,628 for the 2016 fiscal period. This enabled the Bank to proceed to release the provision for $1.2 billion. |
• | On March 9, 2021, BBVA Argentina has decided to schedule the Annual Ordinary and Extraordinary Shareholders’ Meeting for April 20, 2021. A $7 billion cash dividend distribution will be considered, corresponding to the partial write off of the optional reserve fund for future profit. This distribution is subject to BCRA’s prior approval. |
Corporate bond payments and issuances during 4Q20
• | As of November 9, 2020, the Bank completed quarterly coupon and principal payments on corporate bond Class 25 for $40.5 million and $1.67 billion respectively. |
• | As of December 28, 2020, the Bank completed quarterly coupon and principal payments on corporate bond Class 24 for $49.6 million and $546.5 million respectively. |
Digital transformation
Digitalization continued to accelerate during the fourth quarter of 2020. Active digital clients reached 1.9 million with a 71.7% penetration over total active clients (2.7 million), versus a penetration of 66.5% in 4Q19. Active mobile clients were 1.6 million, representing a 59.9% penetration in 4Q20, versus a penetration of 53.8% in 4Q19. Digital and mobile transactions4 increased 57.8% in 4Q20 YoY.
On 4Q20, retail digital sales measured in units reached 80.8% of total sales (vs. 65.1% in 4Q19) and represent 70.2% of the Banks total sales measured in monetary value (vs. 54.5% in 4Q19).
Productive investment SMEs financing credit lines – December 2020
Pursuant to Central Bank’s Communication “A” 7140, as of December 31, 2020, the Bank has disbursed more than $13 billion in these lines, to more than 2.800 firms.
4 | Includes online and mobile banking, online and mobile Net Cash, and non-bank correspondents. |
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Main Regulatory Changes
Extension on regulation on ATM fees, outstanding loan payments, debtor classification, dividend distribution. (Communication “A” 7181, 12/17/2020). The BCRA stated that ATM use will remain cost-free until April. Financial institutions cannot, until March 31, 2021, charge fees on transactions conducted through all ATMs.
It has also decided to extend until March 31, 2021, the possibility for creditors to defer unpaid instalments to credit maturity (except credit card financing), accruing only compensatory interests and no extra charges. This regulation also extends until March 31, 2020 60 day waiver on late-payment periods for stages 1, 2 and 3 (for retail and commercial creditors), and suspends compulsory reclassification for “Debtor classification”.
Moreover, it has decided to keep the suspension on dividend distribution of financial institutions until June 30, 2021.
It extends until January 1, 2022, for financial institutions belonging to groups B and C, the applicability of item 5.5 of IFRS 9 stated on Communication “A” 6430.
Productive investment credit lines (Communication “A” 7197, 01/06/2021). The BCRA stated that in regulation concerning “SMEs financing for productive investment”, financings assigned to item 4.2 (Working capital and discounted instruments and other documents), disbursed as of October 16, 2020, will be enabled to fulfill the requirements of the last paragraph in item 3.1. (30% assigned to long term investment projects), at 65% of their value.
Credit cards compensatory rate. (Communication “A” 7198, 01/06/2021). The BCRA decided, as of February 2021, that the limit to credit card financing compensatory nominal annual rate is 43% and applicable up to $200.000 of financing. When the loan is greater than this amount, the applicable rate on the surplus amount is that specified in art. 16 Law 25.065 on Credit Cards.
Productive investment credit lines (Communication “A” 7227, 02/25/2021). The BCRA incremented from 65% to 100% the value at which financings disbursed as of October 16, 2020, assigned to item 4.2 (Working capital and discounted instruments and other documents), can be allocated to fulfill the requirements of the last paragraph in item 3.1. (30% assigned to long term investment projects).
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Glossary
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.
Cost of Risk (accumulated): Year to date accumulated loan loss allowances / Average total loans.
Average total loans: average between previous year-end Total loans and other financing and current period Total loans and other financing.
Cost of Risk (quarterly): Current period Loan loss allowances / Average total loans. Average total loans: average between previous quarter-end Total loans and other financing and current period Total loans and other financing.
Coverage ratio: Quarterly allowances under the Expected Credit Loss model / total non-performing portfolio
Digital clients: 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.
Efficiency ratio (excl. inflation adjustments, accumulated): Accumulated (Personnel benefits+ Administrative expenses + Depreciation & Amortization) / Accumulated (Net Interest Income + Net Fee Income + Net Income from measurement of Financial Instruments at Fair Value through P&L + Net income from write-down of assets at amortized cost and at fair value through OCI + Foreign exchange and gold gains + some concepts included in Other net operating income)
Efficiency ratio (excl. inflation adjustments, quarterly): (Personnel benefits+ Administrative expenses + Depreciation & Amortization) / (Net Interest Income + Net Fee Income + Net Income from measurement of Financial Instruments at Fair Value through P&L + Net income from write-down of assets at amortized cost and at fair value through OCI + Foreign exchange and gold gains + some concepts included in Other net operating income)
Efficiency ratio (accumulated): Accumulated (Personnel benefits+ Administrative expenses + Depreciation & Amortization) / Accumulated (Net Interest Income + Net Fee Income + Net Income from measurement of Financial Instruments at Fair Value through P&L + Net income from write-down of assets at amortized cost and at fair value through OCI + Foreign exchange and gold gains + some concepts included in Other net operating income+ Income from net monetary position)
Efficiency ratio (quarterly): (Personnel benefits+ Administrative expenses + Depreciation & Amortization) / (Net Interest Income + Net Fee Income + Net Income from measurement of Financial Instruments at Fair Value through P&L + Net income from write-down of assets at amortized cost and at fair value through OCI + Foreign exchange and gold gains + some concepts included in Other net operating income+ Income from net monetary position)
Liquidity Ratio: (Cash and deposits in banks + Debt securities at fair value through P&L (Excl. Private securities) + Net REPO transactions + Other debt securities (Excl. Private securities)) / Total Deposits
Mobile clients: customers who have been active in online banking at least once in the last three months using a mobile device.
Net Interest Margin (NIM) – (quarterly): Quarterly Net Interest Income / Average quarterly interest earning assets Public Sector Exposure (excl. BCRA): (National and Provincial Government public debt + Loans to the public sector + REPO transactions) / Total Assets
ROA (accumulated): Attributable Net Income of the period / 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.
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ROA (quarterly): Attributable Net Income of the period / 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
ROE (accumulated): Attributable Net Income of the period / 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.
ROE (quarterly): Attributable Net Income of the period / 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.
Spread: (Quarterly Interest Income / Quarterly average Interest-earning Assets) – (Quarterly Interest Expenses / Quarterly average interest-bearing liabilities)
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Balance Sheet
Balance Sheet | BBVA ARG Consolidated | |||||||||||
In millions AR$ - Inflation adjusted | 2020 | 2019 | Chg (%) | |||||||||
Assets | ||||||||||||
Cash and deposits in banks | 152,109 | 212,733 | (28.5 | %) | ||||||||
Cash | 62,233 | 63,610 | (2.2 | %) | ||||||||
Financial institutions and correspondents | 89,876 | 149,123 | (39.7 | %) | ||||||||
B.C.R.A | 86,184 | 146,353 | (41.1 | %) | ||||||||
Other local and foreign financial institutions | 3,691 | 2,770 | 33.2 | % | ||||||||
Debt securities at fair value through profit or loss | 943 | 5,623 | (83.2 | %) | ||||||||
Derivatives | 3,878 | 4,148 | (6.5 | %) | ||||||||
Repo transactions | 49,188 | — | N/A | |||||||||
Other financial assets | 10,045 | 6,386 | 57.3 | % | ||||||||
Loans and other financing | 279,519 | 265,850 | 5.1 | % | ||||||||
Non-financial public sector | 1 | 1 | (18.1 | %) | ||||||||
B.C.R.A | 6 | 24 | (74.7 | %) | ||||||||
Other financial institutions | 1,755 | 6,932 | (74.7 | %) | ||||||||
Non-financial private sector and residents abroad | 277,757 | 258,893 | 7.3 | % | ||||||||
Other debt securities | 120,604 | 61,505 | 96.1 | % | ||||||||
Financial assets pledged as collateral | 17,913 | 8,064 | 122.1 | % | ||||||||
Current income tax assets | 0 | 36 | (98.6 | %) | ||||||||
Investments in equity instruments | 3,984 | 2,799 | 42.3 | % | ||||||||
Investments in subsidiaries and associates | 1,442 | 1,410 | 2.3 | % | ||||||||
Property and equipment | 33,768 | 35,494 | (4.9 | %) | ||||||||
Intangible assets | 1,554 | 1,062 | 46.3 | % | ||||||||
Deferred income tax assets | 4,874 | 3,664 | 33.0 | % | ||||||||
Other non-financial assets | 8,925 | 5,815 | 53.5 | % | ||||||||
Non-current assets held for sale | 226 | 226 | — | |||||||||
Total Assets | 688,970 | 614,814 | 12.1 | % | ||||||||
Liabilities | ||||||||||||
Deposits | 478,223 | 400,237 | 19.5 | % | ||||||||
Non-financial public sector | 5,628 | 4,000 | 40.7 | % | ||||||||
Financial sector | 862 | 243 | 254.7 | % | ||||||||
Non-financial private sector and residents abroad | 471,733 | 395,994 | 19.1 | % | ||||||||
Liabilities at fair value through profit or loss | — | 791 | (100.0 | %) | ||||||||
Derivatives | 189 | 4,184 | (95.5 | %) | ||||||||
Other financial liabilities | 39,227 | 39,243 | (0.0 | %) | ||||||||
Financing received from the B.C.R.A. and other financial institutions | 9,626 | 8,371 | 15.0 | % | ||||||||
Corporate bonds issued | 1,169 | 9,964 | (88.3 | %) | ||||||||
Current income tax liabilities | 3,722 | 10,987 | (66.1 | %) | ||||||||
Provisions | 11,475 | 14,632 | (21.6 | %) | ||||||||
Deferred income tax liabilities | 39 | — | N/A | |||||||||
Other non-financial liabilities | 40,544 | 23,135 | 75.2 | % | ||||||||
Total Liabilities | 584,213 | 511,543 | 14.2 | % | ||||||||
Equity | ||||||||||||
Share Capital | 613 | 613 | — | |||||||||
Non-capitalized contributions | 26,387 | 26,387 | — | |||||||||
Capital adjustments | 18,641 | 18,641 | — | |||||||||
Reserves | 86,332 | 59,662 | 44.7 | % | ||||||||
Retained earnings | (41,476 | ) | (18,973 | ) | (118.6 | %) | ||||||
Other accumulated comprehensive income | 78 | (4,917 | ) | 101.6 | % | |||||||
Income for the period | 12,045 | 19,711 | (38.9 | %) | ||||||||
Equity attributable to owners of the Parent | 102,619 | 101,124 | 1.5 | % | ||||||||
Equity attributable to non-controlling interests | 2,138 | 2,148 | (0.4 | %) | ||||||||
Total Equity | 104,757 | 103,271 | 1.4 | % | ||||||||
Total Liabilities and Equity | 688,970 | 614,814 | 12.1 | % |
(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 | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and deposits in banks | 114,954 | 108,838 | 119,372 | 5.6 | % | (3.7 | %) | |||||||||||||
Debt securities at fair value through profit or loss | 1 | 4 | 0 | (84.3 | %) | 178.3 | % | |||||||||||||
Derivatives | — | — | — | N/A | N/A | |||||||||||||||
Repos | — | — | — | N/A | N/A | |||||||||||||||
Other financial assets | 2,214 | 2,240 | 366 | (1.1 | %) | n.m | ||||||||||||||
Loans and other financing | 27,928 | 29,139 | 46,697 | (4.2 | %) | (40.2 | %) | |||||||||||||
Other financial institutions | 413 | 407 | 667 | 1.5 | % | (38.0 | %) | |||||||||||||
Non-financial private sector and residents abroad | 27,515 | 28,732 | 46,030 | (4.2 | %) | (40.2 | %) | |||||||||||||
Other debt securities | — | — | 10,093 | N/A | (100.0 | %) | ||||||||||||||
Financial assets pledged as collateral | 4,717 | 4,695 | 3,096 | 0.5 | % | 52.4 | % | |||||||||||||
Investments in equity instruments | 28 | 23 | 37 | 25.3 | % | (23.5 | %) | |||||||||||||
Total foreign currency assets | 149,842 | 144,949 | 179,661 | 3.4 | % | (16.6 | %) | |||||||||||||
Liabilities | — | — | ||||||||||||||||||
Deposits | 137,442 | 130,006 | 159,599 | 5.7 | % | (13.9 | %) | |||||||||||||
Non-Financial Public Sector | 2,312 | 3,309 | 1,983 | (30.2 | %) | 16.5 | % | |||||||||||||
Financial Sector | 51 | 58 | 57 | (12.0 | %) | (10.0 | %) | |||||||||||||
Non-financial private sector and residents abroad | 135,079 | 126,638 | 157,559 | 6.7 | % | (14.3 | %) | |||||||||||||
Liabilities at fair value through profit or loss | — | — | 612 | N/A | (100.0 | %) | ||||||||||||||
Other financial liabilities | 10,386 | 11,798 | 10,466 | (12.0 | %) | (0.8 | %) | |||||||||||||
Financing received from the B.C.R.A. and other financial institutions | 2,261 | 616 | 4,153 | 267.0 | % | (45.6 | %) | |||||||||||||
Other non financial liabilities | 1,143 | 1,246 | 1,691 | (8.3 | %) | (32.4 | %) | |||||||||||||
Total foreign currency liabilities | 151,232 | 143,666 | 176,521 | 5.3 | % | (14.3 | %) | |||||||||||||
Foreign Currency Net Position - AR$ | (1,390 | ) | 1,283 | 3,140 | (208.3 | %) | (144.3 | %) | ||||||||||||
Foreign Currency Net Position - USD | (17 | ) | 17 | 52 | (198.1 | %) | (131.5 | %) |
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P&L
Income Statement | BBVA ARG Consolidated | |||||||||||
In millions AR$ - Inflation adjusted | 2020 | 2019 | Chg (%) | |||||||||
Interest income | 118,955 | 156,367 | (23.9 | %) | ||||||||
Interest expense | (41,098 | ) | (65,690 | ) | 37.4 | % | ||||||
Net interest income | 77,857 | 90,677 | (14.1 | %) | ||||||||
Fee income | 28,647 | 29,931 | (4.3 | %) | ||||||||
Fee expenses | (16,407 | ) | (18,796 | ) | 12.7 | % | ||||||
Net fee income | 12,240 | 11,134 | 9.9 | % | ||||||||
Net income from financial instruments at fair value | 9,348 | 12,574 | (25.7 | %) | ||||||||
Net loss from write-down of assets at amortized cost and fair value through OCI | (2,310 | ) | (82 | ) | n.m | |||||||
Foreign exchange and gold gains | 6,228 | 14,700 | (57.6 | %) | ||||||||
Other operating income | 6,278 | 17,613 | (64.4 | %) | ||||||||
Loan loss allowances | (9,930 | ) | (18,401 | ) | 46.0 | % | ||||||
Net operating income | 99,710 | 128,214 | (22.2 | %) | ||||||||
Personnel benefits | (20,319 | ) | (22,676 | ) | 10.4 | % | ||||||
Administrative expenses | (18,820 | ) | (19,052 | ) | 1.2 | % | ||||||
Depreciation and amortization | (4,066 | ) | (5,729 | ) | 29.0 | % | ||||||
Other operating expenses | (16,421 | ) | (29,922 | ) | 45.1 | % | ||||||
Operating income | 40,085 | 50,836 | (21.1 | %) | ||||||||
Income from associates and joint ventures | 273 | (29 | ) | n.m | ||||||||
Income from net monetary position | (19,696 | ) | (21,116 | ) | 6.7 | % | ||||||
Income before income tax | 20,662 | 29,691 | (30.4 | %) | ||||||||
Income tax | (8,629 | ) | (9,983 | ) | 13.6 | % | ||||||
Income for the period | 12,032 | 19,708 | (38.9 | %) | ||||||||
Income for the period attributable to: | ||||||||||||
Owners of the parent | 12,045 | 19,712 | (38.9 | %) | ||||||||
Non-controlling interests | (12 | ) | (4 | ) | (229.6 | %) | ||||||
Other comprehensive Income (1) | 4,995 | (4,916 | ) | 201.6 | % |
(2) | Neto of Income Tax. |
Ratios
Quarterly Annualized Ratios | BBVA ARG consolidated | Chg (bps) | ||||||||||||||||||
In% | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | |||||||||||||||
Profitability | ||||||||||||||||||||
Efficiency Ratio | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Efficiency Ratio (excl. Inflation adjustments) | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
ROA | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
ROE | N/A | N/A | N/A | N/A | N/A | |||||||||||||||
Liquidity | ||||||||||||||||||||
Liquid assets / Total Deposits | 67.5 | % | 66.0 | % | 69.9 | % | 146 | bps | (239 | )bps | ||||||||||
Capital | ||||||||||||||||||||
Regulatory Capital Ratio | 20.2 | % | 23.3 | % | 20.4 | % | (304 | )bps | (21 | )bps | ||||||||||
TIER I Capital Ratio (Ordinary Capital Level 1/ RWA) | 19.6 | % | 22.6 | % | 19.8 | % | (304 | )bps | (22 | )bps | ||||||||||
Asset Quality | ||||||||||||||||||||
Total non-performing portfolio / Total portfolio | 1.42 | % | 1.16 | % | 3.64 | % | 25 | bps | (222 | )bps | ||||||||||
Allowances /Total non-performing portfolio | 324.43 | % | 355.26 | % | 158.49 | % | (3,083 | )bps | 16,594 | bps | ||||||||||
Cost of Risk | 4.85 | % | 4.61 | % | 7.80 | % | 24 | bps | (295 | )bps |
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Accumulated Annualized Ratios | BBVA ARG consolidated | Chg (bps) | ||||||||||||||||||
In % | 4Q20 | 3Q20 | 4Q19 | QoQ | YoY | |||||||||||||||
Profitability | ||||||||||||||||||||
Efficiency Ratio | 56.8 | % | N/A | 43.7 | % | N/A | 1,315 | bps | ||||||||||||
Efficiency Ratio (excl. Inflation adjustments) | 45.1 | % | N/A | 40.2 | % | N/A | 492 | bps | ||||||||||||
ROA | 1.8 | % | N/A | 2.9 | % | N/A | (110 | )bps | ||||||||||||
ROE | 11.8 | % | N/A | 20.5 | % | N/A | (870 | )bps | ||||||||||||
Liquidity | ||||||||||||||||||||
Liquid assets / Total Deposits | 67.5 | % | 66.0 | % | 69.9 | % | 146 | bps | (239 | )bps | ||||||||||
Capital | ||||||||||||||||||||
Regulatory Capital Ratio | 20.2 | % | 23.3 | % | 20.4 | % | (304 | )bps | (21 | )bps | ||||||||||
TIER I Capital Ratio (Ordinary Capital Level 1/ RWA) | 19.6 | % | 22.6 | % | 19.8 | % | (304 | )bps | (22 | )bps | ||||||||||
Asset Quality | ||||||||||||||||||||
Total non-performing portfolio / Total portfolio | 1.42 | % | 1.16 | % | 3.64 | % | 25 | bps | (222 | )bps | ||||||||||
Allowances /Total non-performing portfolio | 324.43 | % | 355.26 | % | 158.49 | % | (3,083 | )bps | 16,594 | bps | ||||||||||
Cost of Risk | 4.85 | % | 4.61 | % | 7.80 | % | 24 | bps | (295 | )bps |
About BBVA Argentina
BBVA Argentina (NYSE; BYMA; MAE: BBAR; LATIBEX: XBBAR) is a subsidiary of the BBVA Group, the main shareholder since 1996. In Argentina, it is one of the leading private financial institutions since 1886. Nationwide, BBVA Argentina offers retail and corporate banking to a broad customer base, including: individuals, SME’s, and large-sized companies.
BBVA Argentina’s purpose is to bring the age of opportunities to everyone, based on our customers’ real needs, providing the best solutions, and helping them make the best financial decisions through an easy and convenient experience. The institution relies on solid values: “The customer comes first, We think big and We are one team”. At the same time, its responsible banking model aspires to achieve a more inclusive and sustainable society.
Investor Relations Contact
Ernesto Gallardo
Chief Financial Officer
Inés Lanusse
Investor Relations Officer
investorelations-arg@bbva.com
ir.bbva.com.ar
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Banco BBVA Argentina S.A. | ||||||
Date: March 9, 2021 | By: | /s/ Ernesto Gallardo Jimenez | ||||
Name: | Ernesto Gallardo Jimenez | |||||
Title: | Chief Financial Officer |