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BBVA Argentina (BBAR)

Participants
Ernesto Gallardo CFO
Ines Lanusse IRO
Belén Fourcade IR
Rodrigo Nistor AR Partners S.A.
Carlos Gomez HSBC
Call transcript
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Operator

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to BBVA Argentina’s First Quarter 2022 Results Conference Call. We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the Company presentation. [Operator Instructions] First of all, let me point out that some of the statements made during this call -- this conference call may be forward-looking statements within the meaning of the safe harbor provisions found in Section 27A of the Securities Act of 1933 under U.S. federal securities law. subject to and expressed differ forward-looking are cause that in statements statements. results actual materially forward-looking to uncertainties risks could the These from those

you report contained concerning Mrs. XXXX year Ines begin Gallardo, Ms. us, the may Exchange and BBVA factors we information and with XX-F Belén is Lanusse, Securities Relations. Today Additional Argentina’s the IRO; these filed Ms. annual conference. Fourcade, CFO; Commission. on U.S. fiscal have Form for Ernesto Fourcade, in your Investor with Mr.

Belén Fourcade

everyone, and earnings section. presentation Information website morning, by will welcome Good Relations first to Financial slide quarter conference be BBVA XXXX available a webinar Investor the Argentina on our call. Today’s on supported

Financial Please hyperinflation Officer, Q&A to regulation, will for IAS today’s the that Central as reporting available note results who will applying accounting Speaking Lanusse during and Chief call be session. January Ines have begun Bank per XX. pursuant be X, starting we XXXX, rule Ernesto our IFRS Gallardo,

For XX, recent March the adjustment through figures period restated comparability, for each the been XXXX effect of accumulated XXXX inflation and XXXX. to reflect have

Now, let Ines. over call me the turn to

Ines Lanusse

the with integrity, is responsibility culture. the settled present scientific and education BBVA encourages Argentina great in XXXX. The first with situation Thank having and which to joining us and indexes. economic practices although and in supports a capped characteristic January. with pandemic and long-term the with March main of Bank inclusion, of BBVA business you model, improve allowed of sustained continuity for challenges the of you, rate best foreign The a within in IMF a an the COVID-XX the recovery, highest during that thank Belén, today. spite the works XXXX, took place you sustainability all agreement quarter Bank’s high through a the financial inflation despite of variant of Group continued Omicron This the vision corporate in research society, and has context has exchange

business Moving into dynamics.

webcast XX% As that presentation, clients that you can XX% the units XXXX, while period the are of convinced is evolved has offering sales the compared on financial by satisfactory, of last digital back, to the and such we mobile remaining sales. to of digital competitive of the from from as Retail way in of has XX% client XX%, service path in our year a increased our pursue, percentage customers end XX% side of of to from measured March slightly the and reached in the sustaining system. and see to been aim expanding on slide XX% penetration The reached of in stable X year. a position increased response have this same a XX%

of to challenge. increased of from actively its the panels digital conditions to XX% fourth aim the a acquisition the business, customer The to quarter Bank quarter position first in New and XXXX monitors in results competitive XX% in operating of face keeping contextual financial XXXX.

quarter which remaining operating of returned average in lower participation considering de an Prisma income of the Pago; loss increase to allowances, in values, are income; higher billion, results. third, ARS X% BBVA expenses. a XXXX. the quarter-over-quarter. X, offset on first quarterly the and XXXX place of slide interest Medios a first was and operating Argentina Bank comment greater particularly sale positive in related income to by that will These XXXX financial of ROA Moving the loan Bank’s were effects impact a ROE decreasing one, Quarterly I implied quarter the two, took quarterly explained to X now X.X%. the net of quarter This by: a results XX% mainly fourth

participation is stock to XX, X.X ARS financial improvements of XXXX] the billion. [March the taxes whole of total income previous through for We the net Pago given A remaining from first by gains. marginal As in measurement this Medios other XXXX S.A. from (sic) was was quarter. negatively gold and benefit exchange XX.X% operating of at generated before Prisma March X, value a positive in The foreign monetary Bank of line of in that transaction. a income Net higher seen also quarter in income completed. inflation transfer quarterly XX.X% effect net mainly explained the income improvement in of fair period XXXX, the was is the de P&L the of compared and position, in by the affected

net of and effect been This of the lower XXXX XXXX of first ARS Excluding X.X lower would quarter quarter quarter XXXX. fourth first a XX% X.X% ROA income the billion, have XX.X% Prisma, the sale of of than in implied and X.X%. than quarterly of ROE have would of

quarter the of quarter-over-quarter time expenses, increased one, deposits considering XXXX X.X% by securities, and from although the quarter Interest on financing; increasing Turning gradually together higher slide lower loans interest government market year-over-year. and Interest adjustments, XX.X quarter-over-quarter. income and from offset income Bank’s in out, the by adjustment deposits increase higher by ARS from due Bank. received transaction, partially income expenses X-day mainly explained credit Net premium income to accounts offset driven LELIQ lower higher XXXX, All securities from of decreased higher XXXX CER/UVA on into by lines adjusted. interest from by income ARS on explain XXXX stands such interest the mostly quarter. of of interfinancial and were the other as income lower contrast consumption. XX.X% than Interest to investment XX% and to: loans Income P&L fourth this cards was expenses first linked the billion, of totaled an to Central less due a X.X% mainly government increase with described of quarter-over-quarter, X. of X.X% increased from a the against decline increases REPOs increasing fourth was in Fee from the income year-end first seasonal especially mainly also In extent. from and first X.X% REPO quarter clause year-over-year. compared credit expenses income interest the cards, to the quarter in expenses from is clause in and indexes. X.X XX.X% income CER/UVA the billion, by account fell Quarterly falling two, interest XXXX, removed quarter Net quarter-over-quarter XX.X% versus reverse income from and checking expenses, by CER/UVA fee especially income subsidiaries. a by time XX% previous

contracted cards. partially quarter positive increased this lower loan the payroll late side. business expenses, fourth XXXX, fee XXX.X% fell returning quarter-over-quarter the having quarter portfolio allowances in that of XXXX on and explained expenses a Regarding and XX.X% particularly debit the of impact the expenditures average good strategy commercial particularly X.X% credit first In values the and quarter-over-quarter, loss by linked to took and on year-over-year, considering of to acquisition behavior

of considering XX.X% XXXX were XXXX. of XX% the XX.X%, explained and X.X% and partially a XXXX, The expenses. quarter results During quarter-over-quarter quarter quarter the versus falling The the quarter-over-quarter in and were compared expenses deteriorating and Personnel compared expenses the first exclusively XXXX benefits explained improvement first the first accumulated income XX% by respectively. total a quarter to first due the X.X% quarterly versus to reported XX the billion, increasing almost negative is XXXX. a of fourth year-over-year, fourth of efficiency collective impact of quarter ARS the increased ratio of monetary administrative personnel quarter-over-quarter, in benefits quarter as a XXXX, expenses expenses, X.X% the by decrease partially expenses decreased February administrative January, was from quarterly agreement and a monetary percentage reached item fall as weakening in the in March. the greater a a XX.X% fix higher in the XX.X% XX.X% decrease inflation X.X% with of of net the wage administrative and established to of the the some by explained the which marginal of result unions, than Administrative in increase line month position position other outsourced operating for income,

quarter of financing pesos, the ARS quarter first XXX.X loans on to the in -- first fall the instruments. pesos falling fourth other real of totaled XX.X% a decrease was X.X% to loans. consolidated in terms fell quarter and XXXX, In in lack of the XXXX fall XXXX. the foreign foreign the decreased discounted cards discounted and fall by the In first especially driven of financing slide a Loans in the by credit of private X.X% a XXXX currency. of the in In billion, quarter, driven and and compared indicate exports contracting sector quarter compared a total in in mainly instruments. in in credit card by quarter and activity, expressed fall X.X% in terms of quarter-over-quarter, prefinancing of currency fall the explained continued X, to aforementioned fourth demand loans mainly All in

During is fourth in XXXX. credit the quarter, of contract the seen mainly as previously, explained the in seasonality loans the due decrease greatest quarter the retail with cards, to

loan year the the effect asset growth. increased BBVA recorded X.XX% latest versus a X.X% commercial The the allowances of This portfolios a are in the commercial than latter the The fourth XXXX. and current first total total affected was portfolio. total X.XX% XXX.XX% prefinancing in XXXX, ratio quarter fourth a NPL the the during banking The system XX.X%. was from ratio recorded loan the ago. XXXX, greatest consolidated information. by quarter side. commercial positively Argentina’s of of The this good to by of portfolio. XXX.XX% the market recorded February decline the as quarter in reached XXXX quarter change nonperforming in quarter XXXX of of quality on XXXX. compared decrease as the reduction largely the an private for loss reflects of as the available which variation write-offs. loans the quarter lower share is the the in write-offs result a ratio first in of commercial risk the The explained above parameters quarter quarter driven term the was model allowances financing mainly improvement IFRS in quarter commercial fourth during and the of On portfolio’s compared commercial book, X impairment fourth in loss impacted XXXX, loan annual quarter the inflation by the portfolio, sector the of upgrading seen XXXX a rating. the XXXX, of Both X.XX% mainly In in commercial the as of of first of Loan the fourth on in behavior, by reached instruments nonperforming portfolio is by the and exports. to portfolio portfolio portfolio of real nominal are In X.XX% first X.XX% decline loan mainly in discounted sovereign explained of update rating exceptional value X.XX%. beyond and recorded X.XX% reached terms, in XXXX, loan Cost

and the sector X, saving X.X%. in reached the ARS deposit XXXX seen deposits decreased private XX% and offset partially On X.X% deposit, nonfinancial of of side, X% first XXXX. nonfinancial and as by explained X.X% especially on billion, a sight market deposits decrease first increase quarter sight fell was consolidated private X.X% of decreasing a deposits mainly year-over-quarter respectively. of funding an affected was falling This quarter-over-quarter, increasing which year-over-year. investment The as sector mainly quarter in Bank’s slide X.XX% by pesos in share the XXX.X client by accounts, accounts. Private Quarterly deposits totaled

XX.X% Foreign currency deposits fell expressed quarter-over-quarter. in pesos

transactional As represent Bank’s the XX% total quarter XXXX, considering XX.X% the non-financial first fourth accounts, deposits accounts of saving in of XXXX. checking the private and deposits of quarter versus of

delegates quarter information. capitalization, and of fourth XX.X%, the solvency quarter in the of above in the announcement quarter Bank worth reached sector Central instruments, of BBVA to and dividend XX.X%, It XXXX, billion. of public the XXXX. assets quarter of be XXXX is April fourth to Exposure made on system shareholders’ approved: to unless the X.X% conditions to distributable XX.X% first available reported them meeting of of XXXX, to terms X.X% authorization. they way their the quarter total that XXXX estimation show fourth This mostly two, of decision X% shareholding, peso; shall remained nonresident Capital by assets in the continues represented Central the payment due fourth the X.X on Bank as XXXX, concludes according liquid in authorization, dividends also XXXX, indicators first of In one, It that to Bank’s the The XXXX in the prepared February dividend healthy the for quarter securities ARS XX.X% the distribution in Board of our determine excluding in the XX.X below receive ratio of latest mentioning strong Argentina above of ARS by Argentine Bank the deposits billion. to pursuant shareholders total XX, to prior the power Bank of XXst. Directors, the profit to in the Central total payments remarks. March and at inform

We will Operator, questions. line questions. the now take for open your please

Operator

[Operator will Instructions] Our come first Nistor of… question today Rodrigo from

Rodrigo Nistor

business So, the for dynamics my quarters. question the following is related to

over strategy loan regarding and year growth and in deposit expecting and months for year? did surge last profitability, affect the outlook the We’re the how your inflation for and the few

Ines Lanusse

Okay. Rodrigo, Thank you, your question. for

our of mentioned, Yes, week, projection. We the as inflation. we XX% increased projection had we have voice. my Sorry for last -- were you

deposits on have our team for that XXXX. increase we and make expenses. definitely, are are dynamics inflation for flowing most P&L, than on bit our would below estimates, a research are private for more and a and loans. to moved talking expenses probably little of little loan Remember to has projection those deposits tied inflation book and XX% our always wages XXXX about salaries bit projecting The below also the negotiation. Based higher our Our XX% us XXXX, an and this

have than a to our expenses. deposits, time So, interest basically grow pay deposits bonds rate during about Bank wholesale customers And -- precision that those retail margin, is LELIQ, we is, and strategy invest what that the are [ph] will the the our -- increasing NII increase lower deposits you our CER XXXX. both we take. adjustment. talking That which to But which our allow basically in tied to us capture would

result that the lower increased little income, have inflation. But the in Remember we tax negative, For bit our that could higher have results year-end, idea, you a should be bit little give an much XXXX. the a would -- a lot results the that, also little had you our on probably to more excluding bit we -- XXXX. impact net than a be lower declaratory

So, don’t I if I know question. answered your

Rodrigo Nistor

performance? similar banks? a yourself you have or do you in you context compare I Maybe your regulations, and helpful. your your you’re tools headquarters doing Spain, job how That’s you -- follow-up. these that in -- evaluate mean, I Yes. with having limited tell your a do a Do headquarters headquarters good with not? How or

Ines Lanusse

more we a at we change withdrew on them to and mentioned and inflation a were have last -- LELIQ we from present going in we on report and projections are end been in budget call, carrying our monthly year, we we holding, budget more that as in Argentina, rates year that last keep Obviously, now the -- and -- fast the because example, that we have budget. our into we our of excess projections probably the our they and forecasted have them is update to year. very basis Well, one every liquidity interest compare for projecting income we REPO that the the in

and So, updating we that our go budget. compare we to projections,

we try try also have to we provide just type And tied of we a we notes of to we we perform of Those of transactions. our many are KPIs, monitor. that price. those transactions of and continue but it’s also that customers. try transaction loan profitable, want profitability question analyze quantity, market tied a We efficiency to We every not that question internal are the that the -- that them share, to to to give, to

Operator

come will Gomez [Operator Instructions] next Carlos from HSBC. of today Our question

Carlos Gomez

detailed have Thank the you very and presentation. useful very very results. It’s for we the much Ines, thank you, and over actually to as go

it. you, questions. Two and I three encourage thank So, you producing keep to brief --

first is The one Prisma. about

consider the year, the XX% inflation. entering might just you or you? payments completed plan nothing out contemplating you and on do Are is I is happy sale? now? get that business stay there? that of I inflation, really for control will Second, read that will future, considering mean, out be this you have to year. that next You clarify, for XX% for So you or to is move And you make Right to have, the the the a have a in grow are has would probability low of what take third they the inflation possibility be strategic event which to Is consider be it you Are you. past, later when the your to X% a a might have now come market decisions. your you market relatively or Thank way tend you you you now, easier? to seems strategy. loans, And made the in to deposits. BBVA moves time and X% and happy share in bit share making Argentina in in stay trying market depressed, but when are, X-digit perhaps

Ines Lanusse

Yes. Carlos, presentation. of Thank comments our first for on your all, you,

our happy We this, to are explain have results.

Okay.

yes, we first of we the now, no question, sold the It’s participation. whole Prisma, -- On it. longer have

we now, is us. provider -- Prisma are For and okay, for

are with that position. okay We

Regarding inflation, there your question was?

Carlos Gomez

Is your... of I maybe increased you it get have out mean, control?

Ines Lanusse

XX%. York projection we there mentioned in call, from week conference, at on This projection As retail a our -- our I or last a and in XX%. our New the before week were week week, department last it’s was

So, projections. really our it moved Argentina, really, fast in

Carlos Gomez

we extrapolate? Could

Ines Lanusse

Sorry.

Carlos Gomez

week? Could we per extrapolate X%

Ines Lanusse

we I very, real -- our to very, of would a wrong. we inflation projecting. Again, high, rather to but is question change to sheet, say very Things placing are next I than the and of the very research with is point stay move intermediation the the But what would We that it’s lack decreasing. wouldn’t more in fast. our -- Yes, excess in that is expert exactly I is fast. department I’m be in do market, I demand. inflation. I this moving demand. have equity do definitely, personally, the with us margin inflation Consumption to in months. XX inflation. the market is accurate happy of next that -- X% can P&L estate liquidity But all the the there of the very all But own. this normally with to see third balance it’s to days, they possible, from it’s hedge X-digit and the According but can more the trying No. say which keep not gaining project to common are the today inflation of the managing not CER/UVA But very XX% the a share. we again, Argentina And we helps trying we’re for financing hedge that’s today, is our Banks. in effect was a it’s think reality lack our the reduced. be bonds. getting be is that This don’t

our sit But today, is do in to if So, loan common real the the will and attract on we banks to demand lack try to and going do demand, all all for nothing. the we’re capital it. just it’s be reducing are reality, best, Banks, it’s a it growth. terms, worth there, and Definitely, of

and your is question. more I answered So, Bank rather from it’s the contact that that is lending the know less. the if something don’t I structural for country

Operator

conclude over back questions, this to this management will I’d At time, [Operator to no conference any session. our closing for remarks. turn the further Showing question-and-answer Instructions] like

Ines Lanusse

Thank time, let us your Bye. if and know have day. Have good Okay. a questions. further you you please for

Operator

you now for has We attending conference thank The today’s concluded. presentation.

now lines. disconnect may your You