The Bank recognizes a loss allowance for expected credit losses on all credit exposures not measured at fair value through profit or loss, like debt instruments measured at amortized cost, debt instruments measured at fair value through other comprehensive income, loan commitments and financial guarantee contracts (not measured at fair value through profit or loss), contract assets and lease receivables.

Note 13 discloses financial instruments classified as “measured at amortized cost”, “measured at fair value through other comprehensive income” and “measured at fair value through profit or loss”. This classification is made pursuant to what was detailed in note 3.2. Additionally, in note 13 the information related to the valuation process is also explained.

Moreover, the Bank applies the impairment requirements for guarantees granted, undrawn commitments of credit cards and checking accounts, letter of credits, which are not recognized in the consolidated statement of financial position.

For the purpose of assessing the Bank’s credit risk exposure and identifying material credit risk concentration, disclosures regarding credit risk of financial assets and items not recognized in the statement of financial position are as follows:

9.1.

Exposure to credit risk

According to the nature of the information to be disclosed and the loan characteristics, the Bank groups them as follows:


Composition	12/31/2021			12/31/2020
Loans and other financing		361,992,565			403,541,419
Individual assessment		86,234,118			112,138,243
Collective assessment		275,758,447			291,403,176

Less: Allowance for ECL		(9,631,477	)		(14,985,662	)

Total		352,361,088			388,555,757

As explained in note 52.1.4 “Additional Forward-looking allowances based on expert

credit

judgment”, section “Adjustment

for

uncertainty in external obligation restructuring”, as of December 31, 2021, the Bank decided to record an adjustment on a forward-looking basis as the Bank estimated an incremental effect in the ECL, in order to cover a macroeconomic scenario derived from the lack of agreement over the debt restructuring between the Federal government and the International Monetary Fund (IMF). As of December 31, 2021, this adjustment amounted to

1,986,000

(see also note 53).

In addition and taking into account what is explained in note 52.1.

, section “Covid-19 adjustment”, as of December 31, 2020, the Bank had recorded a special adjustment on a forward-looking basis related to the pandemic of Covid-19, which, as of that date amounted to 5,553,719. At the end of this fiscal year, the “Covid-19 adjustment” was nil.

The following table shows the credit quality and the carrying amount of credit risk, based on the Bank’s credit risk rating system, the probability of default (PD) and the year-end stage classification, taking into account what was mentioned in the previous paragraphs. As of December 31, 2020, several guidelines were included in relation to flexible conditions for credits established by the BCRA to moderate the pandemic effects generated by Covid-19. Such guidelines are not effective as of December 31, 2021. The amounts are presented gross of the impairment allowances.


Internal rating grade	Range PD		12/31/2021
Internal rating grade	Range PD		Stage 1		Stage 2		Stage 3		Total		%
Performing				341,628,847		8,646,681				350,275,528		96.76
High grade		0.00% - 3.50%		287,115,181		829,661				287,944,842		79.54
Standard grade		3.51% - 7.00%		42,527,498		2,513,294				45,040,792		12.44
Sub-standard grade		7.01% - 33.00%		11,986,168		5,303,726				17,289,894		4.78
Past due but not impaired		33.01% - 99.99%		3,163,871		5,254,437				8,418,308		2.33
Impaired		100%						3,298,729		3,298,729		0.91

Total				344,792,718		13,901,118		3,298,729		361,992,565		100

%				95.25		3.84		0.91		100


Internal rating grade	Range PD		12/31/2020
Internal rating grade	Range PD		Stage 1		Stage 2		Stage 3		Total		%
Performing				374,333,529		13,729,595				388,063,124		96.17
High grade		0.00% - 3.50%		307,355,334		113,197				307,468,531		76.20
Standard grade		3.51% - 7.00%		48,100,613		2,906,336				51,006,949		12.64
Sub-standard grade		7.01% - 33.00%		18,877,582		10,710,062				29,587,644		7.33
Past due but not impaired		33.01% - 99.99%		1,194,025		9,710,942				10,904,967		2.70
Impaired		100%						4,573,328		4,573,328		1.13

Total				375,527,554		23,440,537		4,573,328		403,541,419		100

%				93.06		5.81		1.13		100

9.1.1

Loans on an individual assessment

The table below shows the credit quality and the debt balance to credit risk of commercial loans by grade on the Bank’s internal credit rating system, PD range and year-end stage classification. The Bank’s internal credit rating systems and the evaluation and measurement approaches are explained in note 52.1 “Credit risk” section.


Internal rating grade	Range PD		12/31/2021
Internal rating grade	Range PD		Stage 1		Stage 2		Stage 3		Total		%
Performing				80,734,484		3,579,061				84,313,545		97.77
High grade		0.00% - 3.50%		60,875,079		432,663				61,307,742		71.09
Standard grade		3.51% - 7.00%		16,332,244		1,256,377				17,588,621		20.40
Sub-standard grade		7.01% -33.00%		3,527,161		1,890,021				5,417,182		6.28
Past due but not impaired		33.01% - 99.99%				1,156,986				1,156,986		1.34
Impaired		100%						763,587		763,587		0.89

Total				80,734,484		4,736,047		763,587		86,234,118		100

%				93.62		5.49		0.89		100


Internal rating grade	Range PD		12/31/2020
Internal rating grade	Range PD		Stage 1		Stage 2		Stage 3		Total		%
Performing				102,580,832		4,198,605				106,779,437		95.22
High grade		0.00% - 3.50%		97,030,142		1,226				97,031,368		86.53
Standard grade		3.51% - 7.00%		4,139,043		2,195,704				6,334,747		5.65
Sub-standard grade		7.01% - 33.00%		1,411,647		2,001,675				3,413,322		3.04
Past due but not impaired		33.01% - 99.99%		562,499		2,437,581				3,000,080		2.68
Impaired		100%						2,358,726		2,358,726		2.10

Total				103,143,331		6,636,186		2,358,726		112,138,243		100

%				91.98		5.92		2.10		100

An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to commercial lending is as follows:


	Stage									Total
	1			2			3			Total
Gross Carrying amount as of January 1, 2021		103,143,331			6,636,186			2,358,726			112,138,243
Assets originated or purchased		102,232,782			4,169,910						106,402,692
Assets derecognized or repaid		(82,480,461	)		(3,621,736	)		(1,353,170	)		(87,455,367	)
Transfers to Stage 1		539			(539	)
Transfers to Stage 2					131,193			(131,193	)
Transfers to Stage 3		(1,034,242	)		(166,346	)		1,200,588
Amounts Written Off								(922,381	)		(922,381	)
Monetary effects		(41,127,465	)		(2,412,621	)		(388,983	)		(43,929,069	)

As of December 31, 2021		80,734,484			4,736,047			763,587			86,234,118


	Stage									Total
	1			2			3			Total
Gross Carrying amount as of January 1, 2020		193,236,603			6,467,714			2,856,513			202,560,830
Assets originated or purchased		94,241,056			3,644,974						97,886,030
Assets derecognized or repaid		(155,364,844	)		(1,399,089	)		(1,554,209	)		(158,318,142	)
Transfers to Stage 1		321,712			(321,712	)
Transfers to Stage 2		(571,954	)		571,954
Transfers to Stage 3		(2,327,375	)		(237,394	)		2,564,769
Amounts Written Off								(566,521	)		(566,521	)
Monetary effects		(26,391,867	)		(2,090,261	)		(941,826	)		(29,423,954	)

As of December 31, 2020		103,143,331			6,636,186			2,358,726			112,138,243


	Stage									Total
	1			2			3			Total
ECL amount as of January 1, 2021		924,727			1,007,573			1,181,312			3,113,612
Assets originated or purchased		1,838,217			3,315,905						5,154,122
Assets derecognized or repaid		(861,783	)		(524,662	)		(696,191	)		(2,082,636	)
Transfers to Stage 1		12			(12	)
Transfers to Stage 2					29,267			(29,267	)
Transfers to Stage 3		(896,024	)		(37,119	)		933,143
Amounts Written Off								(455,855	)		(455,855	)
Monetary effects		(339,230	)		(1,279,417	)		(314,929	)		(1,933,576	)

As of December 31, 2021		665,919			2,511,535			618,213			3,795,667


	Stage									Total
	1			2			3			Total
ECL amount as of January 1, 2020		658,755			688,336			1,968,134			3,315,225
Assets originated or purchased		2,208,850			636,331						2,845,181
Assets derecognized or repaid		(505,789	)		(39,701	)		(1,228,122	)		(1,773,612	)
Transfers to Stage 1		14,715			(14,715	)
Transfers to Stage 2		(1,783	)		1,783
Transfers to Stage 3		(1,402,566	)		(9,050	)		1,411,616
Amounts Written Off								(497,816	)		(497,816	)
Monetary effects		(47,455	)		(255,411	)		(472,500	)		(775,366	)

As of December 31, 2020		924,727			1,007,573			1,181,312			3,113,612

9.1.2.

Loans on a collective assessment

The table below shows the credit quality and the debt balance to credit risk of loans portfolio under collective assessment, by grade of credit risk classification based on the Bank’s internal credit rating system, PD range and year-end stage classification. The Bank’s internal credit rating systems and the evaluation and measurement approaches are explained in note 52.1 “Credit risk” section.


Internal rating grade	Range PD		12/31/2021
Internal rating grade	Range PD		Stage 1		Stage 2		Stage 3		Total		%
Performing				260,894,363		5,067,620				265,961,983		96.45
High grade		0.00% - 3.50%		226,240,102		396,998				226,637,100		82.19
Standard grade		3.51% - 7.00%		26,195,254		1,256,917				27,452,171		9.95
Sub-standard grade		7.01% - 33.00%		8,459,007		3,413,705				11,872,712		4.31
Past due but not impaired		33.01% - 99.99%		3,163,871		4,097,451				7,261,322		2.63
Impaired		100%						2,535,142		2,535,142		0.92

Total				264,058,234		9,165,071		2,535,142		275,758,447		100

%				95.76		3.32		0.92		100


Internal rating grade	Range PD		12/31/2020
Internal rating grade	Range PD		Stage 1		Stage 2		Stage 3		Total		%
Performing				271,752,697		9,530,990				281,283,687		96.53
High grade		0.00% - 3.50%		210,325,192		111,971				210,437,163		72.22
Standard grade		3.51% - 7.00%		43,961,570		710,632				44,672,202		15.33
Sub-standard grade		7.01% -33.00%		17,465,935		8,708,387				26,174,322		8.98
Past due but not impaired		33.01% - 99.99%		631,526		7,273,361				7,904,887		2.71
Impaired		100%						2,214,602		2,214,602		0.76

Total				272,384,223		16,804,351		2,214,602		291,403,176		100

%				93.47		5.77		0.76		100

An analysis of changes in the gross carrying amount and the corresponding ECL allowances in relation to consumer lending is as follows:


	Stage									Total
	1			2			3			Total
Gross Carrying amount as of January 1, 2021		272,384,223			16,804,351			2,214,602			291,403,176
Assets originated or purchased		256,847,227			6,203,404						263,050,631
Assets derecognized or repaid		(128,290,490	)		(7,808,736	)		(1,007,500	)		(137,106,726	)
Transfers to Stage 1		6,597,845			(6,465,149	)		(132,696	)
Transfers to Stage 2		(5,955,494	)		6,033,073			(77,579	)
Transfers to Stage 3		(2,858,159	)		(647,746	)		3,505,905
Amounts Written Off		(151,340	)		(285,289	)		(676,156	)		(1,112,785	)
Monetary effects		(134,515,578	)		(4,668,837	)		(1,291,434	)		(140,475,849	)

As of December 31, 2021		264,058,234			9,165,071			2,535,142			275,758,447


	Stage									Total
	1			2			3			Total
Gross Carrying amount as of January 1, 2020		230,252,301			26,431,578			5,102,401			261,786,280
Assets originated or purchased		185,109,070			10,546,801						195,655,871
Assets derecognized or repaid		(72,746,260	)		(10,998,516	)		(1,480,596	)		(85,225,372	)
Transfers to Stage 1		13,033,730			(12,586,028	)		(447,702	)
Transfers to Stage 2		(6,906,088	)		7,291,744			(385,656	)
Transfers to Stage 3		(1,667,645	)		(466,819	)		2,134,464
Amounts Written Off		(53,800	)		(429,464	)		(2,080,269	)		(2,563,533	)
Monetary effects		(74,637,085	)		(2,984,945	)		(628,040	)		(78,250,070	)

As of December 31, 2020		272,384,223			16,804,351			2,214,602			291,403,176


	Stage									Total
	1			2			3			Total
ECL amount as of January 1, 2021		6,990,134			3,560,443			1,321,473			11,872,050
Assets originated or purchased		5,719,840			1,056,197						6,776,037
Assets derecognized or repaid		(6,973,972	)		(1,862,268	)		(435,233	)		(9,271,473	)
Transfers to Stage 1		1,274,440			(1,192,519	)		(81,921	)
Transfers to Stage 2		(281,697	)		323,331			(41,634	)
Transfers to Stage 3		(2,475,564	)		(253,151	)		2,728,715
Amounts Written Off		(17,182	)		(117,019	)		(433,757	)		(567,958	)
Monetary effects		(1,429,617	)		(511,308	)		(1,031,921	)		(2,972,846	)

As of December 31, 2021		2,806,382			1,003,706			2,025,722			5,835,810


	Stage									Total
	1			2			3			Total
ECL amount as of January 1, 2020		2,357,693			2,234,009			2,510,995			7,102,697
Assets originated or purchased		6,613,034			2,695,300						9,308,334
Assets derecognized or repaid		546,742			(549,480	)		(812,901	)		(815,639	)
Transfers to Stage 1		1,157,211			(938,837	)		(218,374	)
Transfers to Stage 2		(114,521	)		284,247			(169,726	)
Transfers to Stage 3		(1,069,271	)		(73,050	)		1,142,321
Amounts Written Off		(2,530	)		(84,989	)		(1,059,754	)		(1,147,273	)
Monetary effects		(2,498,224	)		(6,757	)		(71,088	)		(2,576,069	)

As of December 31, 2020		6,990,134			3,560,443			1,321,473			11,872,050

Over the course of 2021 and 2020, the Bank generated from loan portfolio sales, profit for 90,693 and 55,768, respectively and losses for 40 as of December 31, 2020.

The contractual amount outstanding on loans and other financing that have been written off by the Bank as of December 31, 2021 and 2020 that were still subject to enforcement activity was 4,992,035 and 6,565,815, respectively.

9.2

Other debt securities at amortized cost

For local government securities, EAD is considered equal to the debt balance, because there is not available information of such instruments’ behavior when they defaulted. For PD and LGD parameters, they were calculated using Basel regulatory parameters.

For purchase corporate bonds, PD and LGD parameters calculated for loan exposures of those issuers were used. The corporate bonds’ EAD is considered equal to the debt balance.

For financial trusts at amortized cost, the criteria that was used in the calculation of ECL is based on credit risk ratings given by a credit rating agency for each type of debt securities that compose each financial trust. That is, the factor to be used will vary in relation to the holding debt securities class (A or B). It is assumed that the EAD is equal to the debt balance.

The table below shows the exposures gross of impairment allowances by stage:


Composition	12/31/2021
Composition	Stage 1		Stage 2	Stage 3	Total		%
Local government securities		23,781,113				23,781,113		98.90
Corporate bonds		86,487				86,487		0.36
Financial trust		178,204				178,204		0.74

Total		24,045,804				24,045,804		100

%		100				100


Composition	12/31/2020
Composition	Stage 1		Stage 2	Stage 3	Total		%
Local government securities		46,168,862				46,168,862		98.29
Corporate bonds		551,451				551,451		1.17
Financial trust		251,607				251,607		0.54

Total		46,971,920				46,971,920		100

%		100				100

The related ECL for local government securities as of December 31, 2021 and 2020 amounted to 3,210 and 6,232, respectively. The related ECL for corporate bonds as of December 31, 2021 and 2020 amounted to 530 and 1,862, respectively. The ECL related to financial trusts as of December 31, 2021 and 2020 amounted to 13 and 165, respectively. A detail of these investments

disclosed in note 10.

9.3

Other debt securities at fair value through OCI

This group includes federal and foreign government securities, provincial or BCRA instruments measured at fair value through OCI. For these assets, an individual assessment of the related parameters was performed.

The table below shows the exposures gross of impairment allowances by stage:


Composition	12/31/2021
Composition	Stage 1		Stage 2	Stage 3	Total		%
Local government securities		124,853,842				124,853,842		47.67
Central Bank of Argentina Bills		132,970,751				132,970,751		50.76
Foreign government securities		4,109,963				4,109,963		1.57

Total		261,934,556				261,934,556		100

%		100				100


Composition	12/31/2020
Composition	Stage 1		Stage 2	Stage 3	Total		%
Local government securities		67,604,659				67,604,659		25.16
Central Bank of Argentina Bills		194,225,233				194,225,233		72.29
Foreign government securities		6,853,979				6,853,979		2.55

Total		268,683,871				268,683,871		100

%		100				100

The related ECL for local government securities as of December 31, 2021 and 2020 amounted to 16,304 and 9,002, respectively. A detail of these investments are disclosed in note 10.

9.4

Other financial assets

The table below shows the exposures gross of impairment allowances by stage:


Composition	12/31/2021
Composition	Stage 1		Stage 2	Stage 3	Total		%
Other financial assets		33,095,760				33,095,760		100

Total		33,095,760				33,095,760		100

%		100				100


Composition	12/31/2020
Composition	Stage 1		Stage 2	Stage 3	Total		%
Other financial assets		27,621,984				27,621,984		100

Total		27,621,984				27,621,984		100

%		100				100

The ECL related to these types of instruments amounted to 26,448 and 28,569 as of December 31, 2021 and 2020, respectively, including the ECL related to the payments to be collected for the transaction mentioned in note 12.