6-K

BBVA Banco Francés S.A.

Date: November 7, 2019

/s/ Ernesto Gallardo Jimenez

Name: Ernesto Gallardo Jimenez

Title: Chief Financial Officer

6-K 1 d813680d6k.htm 6-K 6-K

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 November 2019

Commission File Number: 001-12568

BBVA French 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

BBVA Banco Francés S.A.

TABLE OF CONTENTS


Item

1.		BBVA Argentina reports consolidated third quarter earnings for fiscal year 2019.

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Banco BBVA Argentina S.A announces results for

the third quarter of 2019

Buenos Aires, November 7, 2019 – 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 third quarter (3Q19), ended on September 30^th 2019.

3Q19 Highlights

•

BBVA Argentina’s net income totaled $11.1 billion in 3Q19. This result was 63.8% higher than the $6.8 billion posted on the second quarter 2019 (2Q19) and 264.6% higher than the $3.0 billion posted on the third quarter 2018 (3Q18).

•

On 3Q19, BBVA Argentina posted an average return on assets (ROAA) of 11.0% and an average return on equity (ROAE) of 81.3%

•

On 3Q19 BBVA Argentina’s consolidated financing to the private sector totaled $211.8 billion, increasing $27.1 billion or 14.7% compared to 2Q19, and increasing 22.5% or $38.9 billion compared to 3Q18. In the quarter, growth was mainly driven by overdrafts, documents, and credit cards, growing 83.4%, 17.2%, and 11.6%, respectively. BBVA consolidated market share was 8.13% as of 3Q19.

•

Total deposits decreased 3.8% in the quarter, but increased 11.0% compared to 3Q18. BBVA consolidated market share of private deposits was 7.14% as of 3Q19.

•

As of 3Q19, the asset quality ratio (measured as non-performing loans over total financing) reached 3.31% with a coverage ratio of 105.08%.

•

The accumulated efficiency ratio reached 35.6%, improving from the 47.2% ratio posted at 3Q18.

•

As of 3Q19, BBVA Argentina reached a consolidated capital ratio of 17.1%, implying a $26.2 billion excess (109.0%) over the minimum regulatory requirement. The Tier I ratio was 16.4%. Liquid assets represented 61.7% of the bank’s deposits on 3Q19.

3Q19 Conference Call

November 8, 2019, 1:00 pm Argentine time, – (11:00 am EST)

Dial-in:

+ 54-11-3984-5677 (Argentina)

+ 1-844-450-3851 (USA Toll-free)

+ 1 412-317-6373 (International)

LOGO

Conference ID: BBVA

Webcast & Replay: LINK

Replay: The replay will be available until November 15th, 2019

Disclaimer

This press release contains certain forward-looking statements that reflect the current views and/or expectations of Banco BBVA Argentina and its management with respect to its performance, business and future events. We use words such as “believe,” “anticipate,” “plan,” “expect,” “intend,” “target,” “estimate,” “project,” “predict,” “forecast,” “guideline,” “seek,” “future,” “should” and other similar expressions to identify forward-looking statements, but they are not the only way we identify such statements. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this release. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) changes in general economic, financial, business, political, legal, social or other conditions in Argentina or elsewhere in Latin America or changes in either developed or emerging markets, (ii) changes in regional, national and international business and economic conditions, including inflation, (iii) changes in interest rates and the cost of deposits, which may, among other things, affect margins, (iv) unanticipated increases in financing or other costs or the inability to obtain additional debt or equity financing on attractive terms, which may limit our ability to fund existing operations and to finance new activities, (v) changes in government regulation, including tax and banking regulations, (vi) changes in the policies of Argentine authorities, (vii) adverse legal or regulatory disputes or proceedings, (viii) competition in banking and financial services, (ix) changes in the financial condition, creditworthiness or solvency of the customers, debtors or counterparties of Banco BBVA Argentina, (x) increase in the allowances for loan losses, (xi) technological changes or an inability to implement new technologies, (xii) changes in consumer spending and saving habits, (xiii) the ability to implement our business strategy and (xiv) fluctuations in the exchange rate of the Peso. The matters discussed herein may also be affected by risks and uncertainties described from time to time in Banco BBVA Argentina’s filings with the U.S. Securities and Exchange Commission (SEC) and Comision Nacional de Valores (CNV). Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as the date of this document. Banco BBVA Argentina is under no obligation and expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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Presentation of the 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 temporary exception of (i) Expected losses of IFRS 9 “Financial Instruments”, which will be applicable for the fiscal year beginning on or after January 1st, 2020 (ii) IAS 29 “Financial Reporting in Hyperinflationary Economies”, which will be applicable for the fiscal year beginning on or after January 1st, 2020, (iii) the recording of a contingency provision relating to the uncertainty of certain tax positions required by the BCRA, and (iv) the valuation adjustment established by the BCRA applied to the valuation of the remaining stake maintained by the Bank in Prisma Medios de Pago S.A. (Prisma).

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 (Francés Valores, Francés Asset Management and Consolidar AFJP-undergoing liquidation proceeding). As of the first quarter of 2018, the Bank’s share interest in PSA Finance Argentina Cía. Financiera (PSA) was no longer disclosed on a consolidated basis but was recorded as Investments in associates (reported under the proportional consolidation method), and the corresponding results were reported as “Income from associates”, as with Rombo Compañia Financiera (Rombo). As of September 25, 2018, the Bank’s share interest in Volkswagen Financial Services (VWFS) was no longer disclosed on a consolidated basis. As of July 1st 2019 the Bank returns to report the activity of PSA, Rombo and VWFS on a consolidated basis with BBVA Argentina.

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”).

The information published by the BBVA Group for Argentina is prepared according to IFRS, without considering the temporary exceptions established by BCRA.

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Quarterly results


Income Statement	BBVA ARG consolidated									Chg%						Proforma ⁽²⁾ 3Q19
In millions $ except EPS and ADS	3Q19			2Q19			3Q18			QoQ			YoY			Proforma ⁽²⁾ 3Q19
Net Interest Income		15,611			13,036			6,811			19.8	%		129.2	%		14,849
Net Fee Income		1,564			1,944			1,758			(19.5	%)		(11.0	%)		1,625
Net income/loss from measurement of financial instruments at fair value		1,432			2,115			323			(32.3	%)		343.3	%		1,225
Net loss from write-down of assets at amortized cost and at fair value through OCI		3			(36	)		13			108.3	%		(76.9	%)		4
Foreign exchange and gold gains		3,403			1,322			1,624			157.4	%		109.5	%		3,414
Other operating income		1,123			4,390			1,004			(74.4	%)		11.9	%		1,131
Loan loss allowances		(1,851	)		(1,865	)		(1,033	)		(0.8	%)		79.2	%		(1,822	)
Net operating income		21,285			20,906			10,500			1.8	%		102.7	%		20,426
Personnel benefits		(3,649	)		(3,242	)		(2,504	)		12.6	%		45.7	%		(3,581	)
Adminsitrative expenses		(3,455	)		(2,421	)		(1,826	)		42.7	%		89.2	%		(3,364	)
Depreciation and amortization		(423	)		(394	)		(220	)		7.4	%		92.3	%		(418	)
Other operating expenses		(3,218	)		(6,074	)		(1,636	)		(47.0	%)		96.7	%		(2,987	)
Operating income		10,540			8,775			4,314			20.1	%		144.3	%		10,076
Income from associates		(7	)		312			(135	)		(102.2	%)		(94.8	%)		323
Net income before income tax		10,533			9,087			4,179			15.9	%		152.0	%		10,399
Income tax		576			(2,306	)		(1,132	)		125.0	%		150.9	%		337
Net Income for the period		11,109			6,781			3,047			63.8	%		264.6	%		10,736
Total Other Comprehensive Income for the period		(3,425	)		27			(153	)		n.m			n.m			(3,420	)
Outstanding common shares (in thousands)		612,660			612,660			612,660			—			—			612,660
Basic earnings per share		17.5			11.1			4.9			58.3	%		256.9	%		17.5
Earnings per ADS (1)		52.6			33.2			14.7			58.3	%		256.9	%		52.6

(1)

Each ADS represents three ordinary shares

(2)

Excludes consolidation with PSA, Rombo and VWFS as of July 1st 2019

BBVA Argentina’s 3Q19 net income was $ 11.1 billion, 63.8% or $4.3 billion higher than the previous quarter (QoQ) and 264.6% or $8.1 billion higher Year over Year (YoY).

The accumulated net income during the first nine months of 2019 was $23.9 billion, 253.3% higher than the first nine month period ended on September 30^th 2018, implying a return on average equity (ROAE) of 63.2% and a return on average assets (ROAA) of 8.0%. If the Prisma effect is not taken into consideration, ROAE and ROAA would have been 58.8% and 7.4% respectively.

On 3Q19, net operating income amounted to $21.3 billion, 1.8% or $383 million higher than 2Q19, and 102.7% or $10.8 billion higher than 3Q18.

The 3Q19 operating income was $10.5 billion, growing $1.8 billion or 20.1% compared to 2Q19, and 144.3% or $6.2 billion compared to 3Q18.

Pursuant to modifications in shareholder agreements, the Bank achieves authority to run the relevant activities of PSA, Rombo and VWFS as of July 1^st 2019. According to International Financial Reporting Standards (IFRS) 10 guidelines, the Bank concluded that it has authority to run the activity over the mentioned associates. Based on this, information shall be presented on a consolidated basis as of July 1^st 2019.

That being said, excluding the consolidation with PSA, Rombo and VWFS, operating income would have been $10.1 billion, 14.8% higher than 2Q19 ($8.8 billion), and net income for the period would have been $10.7 billion, 58.3% higher than 2Q19 ($6.8 billion).

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On August 28^th 2019, the National Government extended the maturity for short-term notes (LETEs, LECAP, LECER and LELINK). As of September 30^th 2019, BBVA Argentina reports a portfolio of national securities subject to restructuring for an amount of $10 billion which are priced at fair value through other comprehensive income (“OCI”), over which a decrease in value for $4.9 billion has been recognized as a consequence of lower prices.

Net interest income


Net Interest Income	BBVA ARG consolidated						Chg%						Proforma ⁽¹⁾3Q19
In millions $	3Q19		2Q19		3Q18		QoQ			YoY			Proforma ⁽¹⁾3Q19
Net Interest Income		15,611		13,036		6,811		19.8	%		129.2	%		14,849
Interest Income		27,077		23,018		12,547		17.6	%		115.8	%		25,006
From government securities		9,681		8,506		2,092		13.8	%		362.8	%		9,681
From private securities		2		2		12		—			(83.3	%)		2
Interest from loans and other financing		15,166		11,962		9,272		26.8	%		63.6	%		13,221
Financial Sector		471		599		452		(21.4	%)		4.2	%		737
Overdrafts		2,331		1,533		1,862		52.1	%		25.2	%		2,331
Instruments		2,110		2,054		1,514		2.7	%		39.4	%		2,110
Mortgage loans		288		281		208		2.5	%		38.5	%		288
Pledge loans		946		94		360		906.4	%		162.8	%		92
Consumer loans		1,850		1,830		1,624		1.1	%		13.9	%		1,850
Credit cards		4,152		4,236		1,643		(2.0	%)		152.7	%		4,152
Financial leases		122		115		134		6.1	%		(9.0	%)		110
Other loans		2,896		1,220		1,475		137.4	%		96.3	%		671
CER/UVA clause adjustment		1,922		2,275		978		(15.5	%)		96.5	%		1,795
Other interest income		306		273		193		12.1	%		58.5	%		307
Interest expenses		11,466		9,982		5,736		14.9	%		99.9	%		10,157
Deposits		9,299		8,735		4,935		6.5	%		88.4	%		9,282
Checking accounts		367		795		1,139		(53.8	%)		(67.8	%)		367
Savings accounts		99		20		27		395.0	%		266.7	%		99
Time deposits		8,833		7,920		3,769		11.5	%		134.4	%		8,816
UVA/CER clause adjustment		248		431		222		(42.5	%)		11.7	%		248
Other obligations for financial intermediation		1,419		801		416		77.2	%		241.1	%		694
Other		500		15		163		3,233.3	%		206.7	%		(67	)

(1)

Excludes consolidation with PSA, Rombo and VWFS as of July 1st 2019

In 3Q19 net interest income totaled $15.6 billion, 19.8% or $2.6 billion higher than 2Q19 and 129.2% or $8.8 billion higher than 3Q18.

Interest income was $27.1 billion, 17.6% higher than 2Q19 and 115.8% higher than 3Q18.

Without considering consolidation with PSA, Rombo and VWFS, net interest income for the period would have been $14.8 billion, 13.9% higher than 2Q19 and 118.0% higher than 3Q18. Interest income would have been $25.0 billion, 8.6% higher QoQ and 99.3% higher YoY.

In 3Q19 income from government securities increased 13.8% or $1.2 billion compared to 2Q19 and 362.8% or $14.8 billion compared to 3Q18. 93% of this result is explained by income from government securities at fair value through OCI, mainly BCRA notes (LELIQs)

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Interest income from loans and other financing was $15.2 billion, increasing 26.8% or $3.2 billion QoQ, mainly driven by the increase in interest income from pledge loans and other loans (“floor planning¹”). Consolidation with PSA, Rombo and VWFS produces an increment in the interest from pledge loans line item. If this consolidation had not been taken into consideration, interest form overdrafts would have been the highest increase in the quarter.

Income from CER / UVA clause adjustments decreased 15.5% QoQ and increased 96.5% YoY. This is explained because the CER index with which adjustments are measured, involves the period 45 days before the beginning of the quarter and 45 days before the quarter end, within which the primary elections (“PASO”) were held.

Interest expenses in 3Q19 were $11.5 billion, increasing 14.9% QoQ and 99.9% YoY.

In 3Q19, interest on time deposits represented 77.0% of total interest expenses, increasing 11.5% in the quarter and 134.4% in the year. Effects of obligations contracted by the associates are reflected on other obligations for financial intermediation line item.

NIM


Asset profitability & Liability Costs	Quarter ended
Asset profitability & Liability Costs	3Q19					2Q19					3Q18
Average in millions $, Nominal annual rate in %	Capital		Rate			Capital		Rate			Capital		Rate
Assets		291,725		37.3	%		263,864		35.4	%		198,353		25.4	%
Securities		11,966		26.0	%		17,663		22.6	%		14,929		20.8	%
Loans and other financing		204,889		30.6	%		182,137		28.9	%		155,971		24.5	%
Other interest-earning assets		74,870		57.5	%		64,064		57.6	%		27,453		33.0	%
Liabilities		237,974		19.2	%		233,392		17.2	%		174,772		13.1	%
Deposits		220,171		17.2	%		222,270		16.5	%		164,931		12.5	%
Savings accounts		126,259		0.1	%		121,943		0.2	%		88,833		0.1	%
Checking Accounts		4,214		35.0	%		9,874		32.3	%		13,306		34.3	%
Time deposits		89,697		40.5	%		90,453		36.9	%		62,792		25.5	%
Issued Corporate Bonds		8,961		51.5	%		4,080		53.9	%		1,715		40.1	%
Other financial liabilities		8,842		34.3	%		7,042		15.3	%		8,126		17.8	%

NIM	3T19					2T19					3T18
NIM including foreign exchange differences				25.6	%				23.1	%				15.6	%
NIM excluding foreign exchange differences				20.4	%				20.0	%				12.3	%

On 3Q19, the net interest margin (NIM - calculated as the return on assets less liability costs over the average interest earning assets - including foreign exchange differences) was 25.6%, higher than the 23.1% reported on 2Q19 and the 15.6% reported on 3Q18, supported by a greater contribution of the securities portfolio and an improvement in client rate spreads.

NIM excluding foreign exchange differences was 20.4%, greater than the 20.0% reported on 2Q19 and the 12.3% reported on 3Q18.

¹	“Floor Planning” short term loan used by retailers to purchase high-cost inventory such as automobiles.

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Net fee income


Net Fee Income	BBVA ARG consolidated						Chg%
In millions $	3Q19		2Q19		3Q18		QoQ			YoY
Net Fee Income		1,564		1,944		1,758		(19.5	%)		(11.0	%)
Fee income		4,702		4,367		3,749		7.7	%		25.4	%
Linked to liabilities		2,431		2,262		1,546		7.5	%		57.2	%
From credit cards		1,511		1,612		1,784		(6.3	%)		(15.3	%)
Linked to loans		253		54		70		368.5	%		261.4	%
From insurance		229		215		174		6.5	%		31.6	%
From foreign trade and foreign currency transactions		247		202		137		22.3	%		80.3	%
Linked to securities		30		22		38		36.4	%		(21.1	%)
Other fee income		1		—		—		n.m			n.m
Fee expenses		3,138		2,423		1,991		29.5	%		57.6	%

During 3Q19, net fee income decreased 19.5% or $379 million QoQ, and 11.0% or $193 million YoY.

In 3Q19 fee income was $4.7 billion, growing 7.7% QoQ, mainly explained by the increase in product package costs, an increase in the volume of activity between accounts, and increase in foreign trade and foreign currency transaction.

Fee expenses grew 29.5% QoQ and 57.6% YoY. Growth in expenses are related to greater processing fees and credit card benefit expenses (both including expenses denominated in US dollars).

During 3Q18, a reclassification of $511 million was recorded, previously reported as other operating income, and now reported as fee income. This derives from a change in the BCRA chart of accounts.

Market share - Credit card consumption

BBVA ARG consolidated

Chg%

In%

3Q19

2Q19

3Q18

QoQ

YoY

Credit card consumption

14.93

15.15

13.57

(22

)pbs

158 pbs

Based on information provided by Visa and Mastercard administrators. Spending is considered as of the end of the last month of the quarter.

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 profit or loss	BBVA ARG consolidated									Chg%
In millions $	3Q19			2Q19			3Q18			QoQ			YoY
Net Income from financial instruments at FV through profit or loss		1,432			2,115			323			(32.3	%)		343.3	%
Profit from government securities		1,024			763			213			34.2	%		380.8	%
Profit from private securities		(1	)		796			347			(100.1	%)		(100.3	%)
Profit from interest rate swaps		39			(208	)		(251	)		118.8	%		115.5	%
Profit from foreign currency forward transactions		408			751			21			(45.7	%)		1,842.9	%
Profit from corporate bonds		(38	)		13			(7	)		(392.3	%)		442.9	%

In 3Q19, net income from financial instruments at fair value through profit or loss was $1.4 billion, decreasing $683 million or 32.3% QoQ.

This decrease is mostly explained by the decrease in income from private securities, given that in 2Q19 this line included dividends for $716 million for the Bank’s participation in Prisma.

On the other hand, income from interest rate swaps increased 118.8% or $247 million, mainly due to a decrease in rates during the quarter.

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Differences in quoted prices of gold and foreign currency	BBVA ARG consolidated							Chg%
In millions $	3Q19		2Q19			3Q18		QoQ			YoQ
Foreign exchange and gold gains/(losses) (1)		3,403		1,322			1,624		157.4	%		109.6	%
From foreign exchange position		222		(322	)		356		169.0	%		(37.6	%)
Income from purchase-sale of foreign currency		3,181		1,644			1,268		93.5	%		150.9	%
Net income from financial instruments at FV through profit or loss (2)		408		751			21		(45.7	%)		1,842.9	%
Income from foreign currency forward transactions		408		751			21		(45.7	%)		1,842.9	%
Total differences in quoted prices of gold and foreign currency (1) + (2)		3,811		2,073			1,645		83.8	%		131.7	%

In 3Q19, the difference in quoted prices of gold and foreign currency showed profit for $3.8 billion, growing 83.8% or $1.7 billion.

The Bank’s long spot position in foreign currency and the depreciation of the argentine peso against the US dollar of 35.6% in 3Q19, generated an income of $222 million in addition to the $3.2 billion gained from FX trading.

At the same time, $408 million were obtained from foreign currency forward transactions, accounted in the Income from financial instruments at fair value through profit or loss line item.

Other operating income


Other Operating Income	BBVA ARG consolidated							Chg%
In millions $	3Q19			2Q19		3Q18		QoQ			YoY
Operating Income		1,123			4,390		1,004		(74.4	%)		11.9	%
Rental of safe deposit boxes ⁽¹⁾		146			143		112		2.1	%		30	%
Adjustments and interest on miscellaneous receivables ⁽¹⁾		378			323		191		17.0	%		98	%
Loans recovered		160			120		62		33.3	%		158	%
Income from sale of non-current assets held for sale (Prisma)		(51	)		—		—		n.m			n.m
Income tax - Tax inflantion adjustment		—			3,240		—		n.m			n.m
Fee income from credit and debit cards ⁽¹⁾		152			297		195		(48.8	%)		-22	%
Other Operating Income⁽²⁾		338			267		444		26.6	%		-24	%

(1)

Included to the efficiency ratio calculation

(2)

Includes some of the concepts used in the efficiency ratio calculation

During 3Q19 other operating income totaled $1.1 billion, decreasing 74.4% or $3.3 billion QoQ, and increasing 11.9% or $119 million YoY.

The decrease in 3Q19 is caused by the Income tax–Tax inflation adjustment of $3.2 billion corresponding to the 2018 fiscal period which was accounted in 2Q19, which was offset by an allowance for the same amount in the other operating expenses line item also in 2Q19.

In 3Q19 a $51 million loss was reported due to the difference between the estimated and the final price of the Prisma sale.

During 3Q18, a reclassification of $511 million was recorded, previously accounted as other operating income, and now accounted as fee income. This derives from a change in the BCRA chart of accounts.

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Operating Expenses

Administrative expenses and personnel benefits


Personnel Benefits and Adminsitrative Expenses	BBVA ARG consolidated									Chg%
In millions of $	3Q19			2Q19			3Q18			QoQ			YoY
Total Personnel Benefits and Adminsitrative Expenses		7,105			5,663			4,330			25.5	%		64.1	%
Personnel Benefits ⁽¹⁾		3,650			3,242			2,504			12.6	%		45.8	%
Administrative expenses ⁽¹⁾		3,455			2,421			1,826			42.7	%		89.2	%
Travel expenses		34			29			21			17.2	%		61.9	%
Administrative expenses		269			216			148			24.5	%		81.8	%
Security services		107			87			78			23.0	%		37.2	%
Fees to Bank Directors and Supervisory Committee		4			3			4			33.3	%		—
Other fees		182			151			77			20.5	%		136.4	%
Insurance		33			27			19			22.2	%		73.7	%
Rent		238			160			222			48.8	%		7.2	%
Stationery and supplies		16			11			10			45.5	%		60.0	%
Electricity and communications		157			133			77			18.0	%		103.9	%
Advertising		132			110			88			20.0	%		50.0	%
Taxes		735			635			431			15.7	%		70.5	%
Maintenance costs		286			256			202			11.7	%		41.6	%
Armored transportation services		897			328			250			173.5	%		258.8	%
Other administrative expenses		365			275			199			32.7	%		83.4	%
Headcount
BBVA Argentina ⁽²⁾		6,242			6,242			6,095			—			2.4	%
Associates’ headcount		113			—			—			n.m			n.m
Total branches		251			252			251			(0.4	%)		—
Efficiency ratio		35.9	%		34.2	%		44.8	%		177 pbs			(889	)pbs
Accumulated Efficiency ratio		35.6	%		35.4	%		47.1	%		21 pbs			(1,144	)pbs

(1)

Concept included in the efficiency ratio calculation

(2)

Includes Francés Asset Management S.A.

During 3Q19, administrative expenses plus personnel benefits totaled $7.10 billion, 25.5% higher than 2Q19 and 64.1% higher than 3Q18, mainly explained by the increase in personnel benefits and armored transportation services.

Personnel benefits increased 12.6% or $408 million QoQ and 45.8% or $1.1 billion YoY. The main driver was salary increases based on labor union negotiations and the corresponding compensation schemes.

In 3Q19, administrative expenses increased 42.7% in the quarter and 89.2% in the year. This increase is mainly explained by an increment in armored transportation costs due to a higher amount of cash-in-transit.

The accumulated efficiency ratio in 3Q19 reached 35.6%, improving the 35.4% reported in 2Q19 and lower than the 47.1% reported on 3Q18.

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Other operating expenses


Other Operating Expenses	BBVA ARG consolidated						Chg%
In millions $	3Q19		2Q19		3Q18		QoQ			YoY
Other Operating Expenses		3,218		6,074		1,636		(47.0	%)		96.7	%
Turnover tax		1,829		1,441		1,190		26.9	%		53.7	%
Initial loss of loans below market rate		166		362		—		(54.1	%)		n.m
Contribution to the Deposit Guarantee Fund (SEDESA)		132		123		86		7.3	%		53.5	%
Interest on liabilities from financial lease		66		64		—		3.1	%		n.m
Other allowances		721		3,513		144		(79.5	%)		400.7	%
Other operating expenses		304		571		216		(46.8	%)		40.7	%

In 3Q19, other operating expenses decreased 47.0% or $2.9 billion QoQ, and increased 96.7% or $1.6 billion YoY.

The decrease in 3Q19 is caused by the Income tax–Tax inflation adjustment of $3.2 billion corresponding to the 2018 fiscal period which was accounted in 2Q19, which was offset by a higher income in other operating income line item for the same amount.

Income from associates

As of July 1st 2019 the Bank returns to consolidate the activity of PSA, Rombo and VWFS under BBVA Argentina, line by line.

Income Tax

Income tax expense decreased $1.7 billion compared to 3Q18 and $2.9 billion compared to 2Q19, reporting a positive result of $575 million. In 3Q19 the Income Tax Law effect, aimed to recognize tax inflation adjustments, was incorporated.

BBVA Argentina’s effective rate on 3Q19 was 15%, 1,200bps less than the 27% accumulated on 2Q19, mainly caused by the incorporation of the tax inflation impact previously mentioned. The regulatory tax rate as of January 1^st 2018 until December 31st 2019 is 30%.

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Balance sheet and activity

Loans and other financing


Loans and other financing	BBVA ARG consolidated									Chg%						Proforma ⁽¹⁾ 3Q19
In millions $	3Q19			2Q19			3Q18			QoQ			YoY			Proforma ⁽¹⁾ 3Q19
Public Sector		1			—			—			n.m			n.m			1
Financial Sector		2,790			7,649			9,725			(63.5	%)		(71.3	%)		7,592
Non-financial private sector and residents abroad		211,845			184,736			172,914			14.7	%		22.5	%		193,987
Overdrafts		17,587			9,589			16,406			83.4	%		7.2	%		17,587
Documents		22,010			18,782			22,545			17.2	%		(2.4	%)		22,010
Mortgage Loans		12,817			12,042			8,719			6.4	%		47.0	%		12,817
Pledge Loans		16,515			1,541			1,775			971.7	%		830.4	%		1,460
Personal Loans		23,837			24,369			21,923			(2.2	%)		8.7	%		23,789
Credit Cards		53,355			47,826			37,422			11.6	%		42.6	%		53,355
Financial leases		2,052			2,066			2,617			(0.7	%)		(21.6	%)		1,929
Other financing		63,672			68,521			61,507			(7.1	%)		3.5	%		61,040
Total loans and other financing		214,636			192,385			182,639			11.6	%		17.5	%		201,580
Allowances		(7,464	)		(5,769	)		(4,001	)		29.4	%		86.6	%		(7,198	)
Total net loans and other financing		207,172			186,616			178,638			11.0	%		16.0	%		194,382
% of total loans to Private sector in pesos		70.7	%		63.0	%		63.6	%		773 pbs			712 pbs			68.0	%
% of total loans to Private sector in foreign currency		29.3	%		37.0	%		36.4	%		(773	)pbs		(712	)pbs		32.0	%

(1)

Excludes consolidation with PSA, Rombo and VWFS as of July 1st 2019.

The private loan portfolio totaled $211.8 billion, increasing 14.7% or $27.1 billion QoQ, and 22.5% or $38.9 billion YoY.

Excluding the consolidation with PSA, Rombo and VWFS, the private loan portfolio would have been $194 billion, 5.0% or $9.3 billion higher QoQ and 12.2% or $21.1 billion higher YoY.

In 3Q19 loans to the financial sector decrease due to the consolidation of call money from associates.

Private loans denominated in pesos grew 28.7% QoQ and 36.2% YoY. Meanwhile, foreign currency denominated private loans decreased 9.3% QoQ and 1.4% YoY, This is mainly explained by the reduction of loans in US dollars, which decreased 33.1% QoQ and 30% YoY when measured in US dollars.

Regarding the retail portfolio (including mortgage loans, pledge loans, personal loans and credit cards), pledge loans grew the most due to consolidation with associates. Excluding pledge loans, credit cards increased the most, growing 11.6% QoQ and 42.6% YoY. Mortgage loans reflect the impact of rising inflation.

Commercial loans, including overdrafts, discounted documents, and other loans, increased 6.6% QoQ and 11.6% YoY. The line with the highest growth was overdrafts, increasing 83.4% or $8 billion QoQ and 7.2% or $1.2 billion YoY.


Market share - Private sector loans	BBVA ARG consolidated									Chg%
In%	3Q19			2Q19			3Q18			QoQ			YoY
Private sector loans - Bank		7.34	%		7.64	%		7.34	%		(30	)pbs		30 pbs
Private sector loans - Consolidated		8.13	%		8.51	%		8.28	%		(38	)pbs		24 pbs

Based on daily information from BCRA. Capital values as of last day of every quarter.

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Asset quality ratios


Loan Portfolio Quality	BBVA ARG consolidated									Chg%
In millions $	3Q19			2Q19			3Q18			QoQ			YoY
Irregular Portfolio (1)		7,103			5,111			1,814			39.0	%		291.6	%
Allowances		7,464			5,769			4,001			29.4	%		86.6	%
Financings with irregular performance / Total Financing		3.31	%		2.66	%		0.99	%		65	pbs		232	pbs
Private Financings with irregular performance / Total Private Financing		3.24	%		2.68	%		1.03	%		56	pbs		221	pbs
Allowances / Financings with irregular performance		105.08	%		112.87	%		220.56	%		(779	)pbs		(11,548	)pbs
Allowances / Total Financings		3.48	%		3.00	%		2.19	%		48	pbs		129	pbs

(1)

Non-performing loans include: all loans to borrowers classified as “Problem”, “Deficient Servicing”, “High Insolvency Risk”, “Difficult Recovery”, “Irrecoverable” and “Irrecoverable for Technical Decision” according to the new Central Bank debtor classification system.

In the 3Q19, the asset quality ratio (non-performing loans/total financing) was 3.31% with a coverage ratio (allowances/financings with regular performance) of 105.08%.

The increase in the non-performing loan portfolio is partially explained by the consolidation with PSA, Rombo and VWFS.


Allowances adjustment	BBVA ARG consolidated									Chg%
In millions $	3Q19			2Q19			3Q18			QoQ			YoY
Balance at the beginning of quarter		4,258			4,258			2,292			—			85.8	%
Increase/(Decrease)		4,645			2,715			2,334			71.1	%		99.0	%
Increase / (Decrease) FX differences		737			282			390			161.5	%		89.0	%
Uses/Reversals		(2,483	)		(1,486	)		(1,015	)		67.1	%		144.6	%
Take over of associates		307			—			—			n.m			n.m
Balance at the end of quarter		7,464			5,769			4,001			29.4	%		86.6	%

Public sector exposure


Net Public Debt Exposure	BBVA ARG consolidated									Chg%
In millons $	3Q19			2Q19			3Q18			QoQ			YoY
Treasury and Government securities		17,939			18,462			14,548			(2.8	%)		23.3	%
Treasury and National Government		17,915			18,408			14,495			(2.7	%)		23.6	%
National Treasury Public Debt in pesos		8,662			6,883			5,792			25.8	%		49.5	%
National Treasury Public Debt in US dollars		246			2,051			8,203			(88.0	%)		(97.0	%)
National Treasury Public Debt in pesos, US dollar-Linked		9,007			9,474			501			(4.9	%)		1,699.7	%
Provinces		23			54			53			(56.5	%)		(55.6	%)
Public Sector loans		1			—			—			n.m			n.m
Repo		—			5,581			8,053			(100.0	%)		(100.0	%)
National Treasury - Foreign currency		—			5,581			8,053			(100.0	%)		(100.0	%)
Pesos Subtotal		8,686			6,937			5,845			25.2	%		48.6	%
Dollars Subtotal		9,253			17,106			16,756			(45.9	%)		(44.8	%)
Total Public Debt Exposure		17,940			24,043			22,602			(25.4	%)		(20.6	%)
B.C.R.A. Exposure		60,340			57,005			18,643			5.8	%		223.7	%
Instruments		53,675			57,005			17,519			(5.8	%)		206.4	%
Leliqs		53,675			57,005			17,421			(5.8	%)		208.1	%
Lebacs		—			—			98			n.m			(100.0	%)
Repo		6,665			—			1,124			n.m			492.9	%
B.C.R.A. - Pesos		6,665			—			1,124			n.m			492.9	%
% Public Sector Exposure (Excl. B.C.R.A.) / Total assets		4.3	%		6.1	%		6.8	%		(179	)pbs		(243	)pbs

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Total exposure to the public sector (excluding exposure to BCRA) was $17.9 billion in 3Q19, 25.4% lower than 2Q19 and 20.6% lower than 3Q18.

Short-term liquidity placed on BCRA instruments fell 5.8% or $3.33 billion compared to 2Q19 and increased 206.4% or $36.2 billion compared to 3Q18.

Exposure to the public sector, which represents 4.3% of total assets, fell $6.1 billion or 179bps QoQ, mainly due to the maturity of the US dollar denominated REPO with the Treasury, and a lower exposure to peso denominated debt.

Deposits


Deposits	BBVA ARG consolidated									Chg%
In millions of $	3Q19			2Q19			3Q18			QoQ			YoY
Total Deposits		274,487			285,201			247,228			(3.8	%)		11.0	%
Non-financial Public Sector		2,642			3,635			2,030			(27.3	%)		30.1	%
Financial Sector		314			296			197			6.1	%		59.4	%
Non-financial private sector and residents abroad		271,531			281,270			245,001			(3.5	%)		10.8	%
Non-financial private sector and residents abroad - ARS		152,830			148,094			129,788			3.2	%		17.8	%
Checking accounts		42,397			30,694			24,706			38.1	%		71.6	%
Savings accounts		36,860			39,221			49,061			(6.0	%)		(24.9	%)
Time deposits		70,572			75,550			54,093			(6.6	%)		30.5	%
Other		3,001			2,629			1,928			14.1	%		55.7	%
Non-financial private sector and residents abroad - Foreign Currency		118,701			133,176			115,213			(10.9	%)		3.0	%
Checking accounts		18			16			16			12.5	%		12.5	%
Savings accounts		100,502			114,040			94,767			(11.9	%)		6.1	%
Time deposits		15,931			16,959			17,686			(6.1	%)		(9.9	%)
Other		2,250			2,161			2,744			4.1	%		(18.0	%)
Non-financial private sector and residents abroad		271,531			281,270			245,001			(3.5	%)		10.8	%
Checking accounts		42,415			30,710			24,722			38.1	%		71.6	%
Savings accounts		137,362			153,261			143,828			(10.4	%)		(4.5	%)
Time deposits		86,503			92,509			71,779			(6.5	%)		20.5	%
Other		5,251			4,790			4,672			9.6	%		12.4	%
% of total portfolio in the private sector in pesos		56.3	%		52.7	%		53.0	%		363	pbs		331	pbs
% of total portfolio in the private sector in foregin currency		43.7	%		47.3	%		47.0	%		(363	)pbs		(331	)pbs

During 3Q19, total deposits were $274.5 billion, decreasing 3.8% or $10.7 billion, and increasing 11% or $27.3 billion compared to 2Q19 and 3Q18 respectively.

Private sector deposits in 3Q19 were $271.5 billion, 3.5% or $9.7 billion lower than 2Q19, and 10.8% or $26.5 billion higher than 3Q18.

Private non-financial sector deposits in local currency were $152.8 billion, increasing 3.2% or $4.7 billion QoQ and 17.8% or $23.0 billion YoY. This is mainly explained by an increase in checking account deposits, which offsets the fall in time deposits.

Private non-financial sector deposits in foreign currency expressed in pesos decreased 10.9% or $14.5 billion QoQ, and grew 3.0% or $3.5 billion YoY. Measured in US dollars, the decrease is 34.3% QoQ and 26.8% YoY.

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In 3Q19, the Bank’s transactional deposits (checking accounts and savings accounts) represented 65.5% of total private non-financial sector deposits, for a total of $179.8 billion.


Market Share - Deposits to the private sector	BBVA ARG consolidated									Chg%
In%	3Q19			2Q19			3Q18			QoQ			YoY
Private sector deposits - Consolidated		7.14	%		7.35	%		8.42	%		(22	)pbs		(128	)pbs

Based on daily information provided by BCRA. As of the last day of the quarter.

Other sources of funds


Other sources of funds	BBVA ARG consolidated						Chg%
In millions $	3Q19		2Q19		3Q18		QoQ			YoY
Otras fuentes de fondeo		73,304		56,397		43,192		30.0	%		69.7	%
Central Bank		11		9		8		22.2	%		37.5	%
Banks and international organizations		4,712		3,283		5,626		43.5	%		(16.2	%)
Financing received from local financial institutions		3,758		—		124		n.m			2,930.6	%
Corporate bonds		8,728		4,329		1,734		101.6	%		403.3	%
Equity		56,095		48,776		35,700		15.0	%		57.1	%

In 3Q19, other sources of funds totaled $73.3 billion, 30.0% or $16.9 billion higher than 2Q19 and 69.7% or $30.1 billion higher than 3Q18.

In 3Q19, the Banks and International Organizations line item grew 43.5% or $1.4 billion, mainly caused by an increment in corresponding banking.

The increase in financing received from local financial institutions is explained by the consolidation of the Bank with PSA, Rombo and VWFS.

Corporate bonds increased 101.6% or $4.4 billion, mainly due to the consolidation with the associates’ corporate bonds portfolio. This was partially offset by the principal payment at maturity of the “Clase 20” corporate bond from BBVA Argentina for $292.5 million.

Increase in equity was 15.0% in 3Q19 mainly explained by net income during the quarter.

Liquid assets


Total Liquid Assets	BBVA ARG consolidated									Chg%
In millions of $	3Q19			2Q19			3Q18			QoQ			YoY
Total liquid assets		169,336			173,004			128,501			(2.1	%)		31.8	%
Cash and deposits in banks		94,168			90,955			87,822			3.5	%		7.2	%
Debt securities at fair value through profit or loss		5,121			6,490			323			(21.1	%)		1,485.4	%
Government securities		162			524			224			(69.1	%)		(27.7	%)
Liquidity bills of B. C. R. A.		4,959			5,966			99			(16.9	%)		4,909.1	%
Net REPO transactions		6,665			5,924			9,582			12.5	%		(30.4	%)
Call Money		2,778			7,596			9,634			(63.4	%)		(71.2	%)
Other debt securities		63,382			69,635			30,774			(9.0	%)		106.0	%
Government securities		14,666			18,596			13,353			(21.1	%)		9.8	%
Liquidity bills of B. C. R. A.		48,716			51,039			17,421			(4.6	%)		179.6	%
Total liquid assets/ Total deposits		61.7	%		60.7	%		52.0	%		103 pbs			972 pbs

In 3Q19, the Bank’s liquid assets were $169.3 billion, 2.1% or $3.7 billion lower than 2Q19 and 31.8% or $40.8 billion higher than 3Q18.

During the quarter, growth in cash outstands with a 3.5% or $3.2 billion increase, while BCRA liquidity notes fell 5.8% or $3.33 billion.

In 3Q19 liquid assets (total liquid assets/total deposits) reached 61.7%.

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Solvency


Minimum Capital Requirement	BBVA ARG consolidated									Chg%
In millions $	3Q19			2Q19			3Q18			QoQ			YoY
Minimum capital requirement		24,416			23,390			21,364			4.4	%		14.3	%
Credit risk		18,511			18,398			17,915			0.6	%		3.3	%
Market risk		334			175			192			90.9	%		74.0	%
Operational risk		5,571			4,817			3,257			15.7	%		71.0	%
Non-compliance of Regulatory Technical Standards					—			25			n.m			(100.0	%)
Integrated Capital - RPC (1)		51,034			47,636			36,684			7.1	%		39.1	%
Ordinary Capital Level 1 ( COn1) (3)		56,758			49,427			36,367			14.8	%		56.1	%
Deductible items COn1		(7,785	)		(3,777	)		(2,849	)		106.1	%		173.3	%
Additional Capital Level 2 (CAn1)		—			—			1,022			n.m			(100.0	%)
Additional Capital Level 2 (COn2)		2,061			1,986			2,144			3.8	%		(3.9	%)
Excess Capital
Integration excess		26,618			24,246			15,320			9.8	%		73.7	%
Excess as % of minimum capital requirement		109.02	%		103.66	%		71.71	%		536	pbs		373 pbs
Risk-weighted assets (RWA) (2)		298,464			285,683			260,520			4.5	%		14.6	%
Regulatory Capital Ratio (1)/(2)		17.1	%		16.7	%		14.1	%		42	pbs		302	pbs
TIER I Capital Ratio (Ordinary Capital Level 1/ RWA)		16.4	%		16.0	%		12.9	%		43	pbs		354	pbs

*	RPC includes 100% of results of the quarter

BBVA Argentina continues to show solid solvency indicators on 3Q19. Capital ratio reached 17.1%. Ratio Tier 1 was 16.4% and surplus over regulatory requirement was $26.6 billion.

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Other events

Relevant events

•

On September 19th 2019, in line with the lowering of the Argentine sovereign debt rating, S&P Global Ratings Services downgraded the rating of the Global Program of Negotiable Obligations of the Bank for up to a total amount of US $ 1,500 million outstanding, maturing on July 15, 2023, from raAA- to raBBB+, with negative implications.

•

On October 1st 2019, the merger between BBVA Banco Francés S.A. and BBVA Francés Valores S.A. was put into effect. A merger by absorption process through which BBVA Banco Francés S.A. would incorporate and continue the activities held by BBVA Francés Valores S.A had been previously approved in their respective shareholders’ meetings on April 24th 2019,

•

On November 4th 2019, the BCRA through Communication “C” 85251 approved the change in the Bank’s new legal name to Banco BBVA Argentina S.A.

Inflation Adjustment

•

BBVA Argentina’s management estimates that the Bank’s equity and income statements can differ significantly by the application of IFRS 29. On September 30th 2019 and for the nine month period ended on such date, the Bank has estimated the impact on financial statements of the re-expression in constant currency, which would result in an equity increment of $9.6 billion, which amounts to $68.1 billion in 3Q19. Accumulated net income for the nine month period ended on September 30th 2019 would fall $15.7 billion, amounting to $8.2 billion.

Corporate Bonds

•

On August 8th 2019, the Bank completed quarterly coupon and capital payments of corporate bond “Clase 20” for a total amount of $39.8 million and $292.5 million respectively.

•

On August 8th 2019, the Bank completed quarterly coupon payments of corporate bond “Clase 25” for a total amount of $26.2 million.

•

On August 20th 2019, the Bank completed quarterly coupon payments of corporate bond “Clase 22” for a total amount of $24.7 million.

•

On August 28th 2019, the Bank completed quarterly coupon payments of corporate bond “Clase 27” for a total amount of $156.9 million.

•

On September 27th 2019, the Bank completed quarterly coupon payments of corporate bonds “Clase 23” and “Clase 24” for a total amount of $81.9 million and $79.2 million respectively.

•

On October 30th 2019, the Bank announced the payment of quarterly coupons of corporate bond “Clase 25” for a total amount of $28.9 million, due on November 8th 2019.

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Relevant Regulatory Changes according to BBVA Argentina

Net Global Foreign Currency Position

•

On August 15^th 2019, the BCRA defined through Communication “A” 6754 a cash position within the Net positive Global Currency Position, which cannot be over 5% of the respective prior month’s regulatory capital (known as Responsabilidad Pratrimonial Computable or RPC), as of August 20^th 2019. The next day, the Communication “A” 6759 differed the enforcement of this regulation to be implemented as of August 22^nd.

•

On August 22^nd2019, through Communication “A” 6763 the BCRA fixed the maximum Net positive Global Currency Position on the higher between 5% of the RPC or USD 2.5 million.

•

On September 1^st2019, through Communication “A” 6770, the BCRA decreased the limit on the cash position within the Net positive Global Currency Position from 5% to 4% of the respective prior month’s regulatory capital or RPC, or UD 2.5 million (whichever turns higher).

•

On September 5^th 2019, Communication “A” 6776 established that the reduction of the Net Global Currency Position by prepayment in Pesos of obligations in foreign currency, can only be compensated, until the original due date of the obligation, with an increase in the position in Sovereign securities in foreign currency. When the obligation is due, the compensation can be done in any security in foreign currency.

Reprofiling, minimum cash requirements & credit policy

•

On August 28th 2019, through the Communication “A” 6765, the BCRA upgraded its Credit Policies, confirming that financial institutions will need approval to give financing in pesos to “Large Exporting Companies” (or GEE in Spanish). These are companies whose total exports of the last 12 months represent 75% of their total sales, and that can keep a total financing in pesos in the financial system that is not higher than $1.500 million.

•

On August 28th 2019, the Central Government announced de reprofiling of sovereign debt through the Decree 596/2019. This included the extension of maturities for the LECAPs (capitalizing notes in pesos), LETEs (US dollar-denominated notes), LECER (inflation-linked notes) and LELINK (US dollar linked notes). The aim was to cancel 15% of face value on the original maturity date, 25% in the next three months and the remaining 60% in the subsequent six months. Congress approval will be needed for the reprofiling of local law, mid and long term maturing bonds.

•

On August 30th 2019, through Communication “A” 6767, the BCRA was enabled to buy Treasury notes (LECAPs, LECER, LETEs and LELINK) through auctions in which only Mutual Funds will be able to participate. It will also be able to offer repurchase agreements using these notes as collateral, auctions in which Mutual Funds will also be able to participate.

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•

On August 30th 2019, Communication “A” 6768 determined that financial institutions should have a BCRA authorization for their distribution of profits.

•

On September 5th 2019, the BCRA established through Communication “A” 6776 and “A” 6777 the unification of the minimum reserves requirement in foreign currency for the months September and October. Moreover, the cash requirement for obligations of financial credit lines abroad was set to 0%.

•

On October 28th 2019, the BCRA stated through Communication “A” 6817 that banks would not be able to cover cash requirements in pesos corresponding to deposits (saving and checking accounts) with BCRA notes (LELIQ and/or NOBAC).

Foreign exchange

•

On September 1st 2019, the BCRA established FX controls through the Communication “A” 6770 pursuant to the Decree 609 published on the Official Journal, which would be in effect until December 30th. There would be limits to the purchase of foreign currency differentiating whether the buyer is a legal entity or an individual. Legal entities will need permission of the BCRA to buy foreign Exchange currency for wealth accumulation. Institutions authorized to trade FX will not be able to buy bonds that settle in foreign currency in the secondary market. Individuals residing in Argentina will need an approval from the BCRA to buy foreign currency in amounts over USD10,000 in a monthly basis.

•

On September 5th 2019, the BCRA published through Communication “A” 6776 a series of modifications to controls established in Communication “A” 6770. Among them, there’s the clarification that individuals who want to transfer foreign currency from their own local accounts to own foreign accounts, can do it without restrictions.

•

On September 11th 2019, through Communication “A” 6780 the BCRA adjusts the Communication “A” 6770, requiring individuals to present a declaration that the foreign currency they buy will not be used to purchase of securities in the secondary market within the next 5 business days since the settlement of the FX transaction.

•

On September 12th 2019, the CNV (National Securities Commission) published Resolution 808, incorporated to the transitory measures in Normas NT 2013&mod., specifying the menchanism through which brokers can control that individuals comply with the 5 day period after which they can purchase securities in the secondary market with the dollars they bought.

•

On September 16th 2019, through Communication “A” 6782, the BCRA established that depositary and custodian entities will be allowed to transfer abroad the US dollars from capital and coupon payment of sovereign securities under local law.

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•

On October 1st 2019, through Communication “A” 6799, the BCRA established that the 5 day period individuals have to wait after settlement to sell or transfer securities that they have bought with foreign currency, will not be applicable if securities settle in the same jurisdiction where they were purchased. Moreover, individuals who want to transfer foreign currency from their local to their foreign accounts, will have to present a declaration showing they have not sold securities that settle in Argentina in foreign currency during the last 5 business days.

•

On October 4th 2019, through Communication “A” 6804, the BCRA stated that resident individuals cannot buy US dollars if they have exceeded the amount established in Communication “A” 6770. The BCRA will periodically inform entities operating in the foreign exchange market, the “CUIT” (ID number) of individuals who have reached or have exceeded the monthly limit on the previous period.

•

On October 17th 2019, through Communication “A” 6814, the BCRA enables companies to pay for imports or foreign debts with US dollars obtained from exports, following a series of conditions. Moreover, conditions to access the foreign exchange market to pay for foreign debts are established, indicating cases where BCRA approval will not be needed for prepayments within a period longer than 3 business days before the due date of capital and coupon payments abroad.

•

On October 28th 2019, the BCRA modified Communication “A” 6770 through Communication “A” 6815, restricting the amount of foreign currency individuals can buy to USD200 monthly, 100 of which can be purchased in cash.

•

On October 31th 2019, the BCRA stated through Communication “A” 6823 that as of November 1st 2019 financial institutions and other card issuers will need the BCRA’s approval to access the FX market to do payments abroad from the use of credit, debit and prepaid cards which are locally issued, whenever such payments are originated through international payment networks for the following transactions: betting and gambling, wire transfers to accounts of investment managers abroad, FX transactions abroad and purchase of cryptoassets, among others. Moreover, there is a limit of USD 50 per transaction reported as a cash advance.

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:

investorelations-arg@bbva.com

ir.bbva.com.ar

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Balance Sheet


Balance Sheet	BBVA ARG consolidated									Chg%						Proforma ⁽¹⁾ 3Q19
In millions $	3Q19			2Q19			3Q18			QoQ			YoY			Proforma ⁽¹⁾ 3Q19
Assets
Cash and Deposits in banks		94,168			90,955			87,821			3.5	%		7.2	%		93,857
Cash		28,259			15,856			18,477			78.2	%		52.9	%		28,259
Financial institutions and correspondents		65,909			75,099			69,344			(12.2	%)		(5.0	%)		65,598
B.C.R.A		59,163			73,484			62,851			(19.5	%)		(5.9	%)		58,898
Other in the country and abroad		6,746			1,615			6,493			317.7	%		3.9	%		6,700
Debt securities at fair value through profit or loss		5,169			6,591			475			(21.6	%)		988.2	%		5,178
Derivatives		2,243			1,838			64			22.0	%		3,404.7	%		2,124
Repo transactions		6,665			5,924			9,583			12.5	%		(30.4	%)		6,665
Other financial assets		6,457			5,957			6,707			8.4	%		(3.7	%)		6,304
Loans and other financing		207,172			186,616			178,638			11.0	%		16.0	%		194,381
Non-financial public sector		1			—			—			n.m			n.m			1
B.C.R.A		—			—			—			n.m			n.m			—
Other financial institutions		2,778			7,597			9,634			(63.4	%)		(71.2	%)		7,535
Non-financial private sector and residents abroad		204,393			179,019			169,004			14.2	%		20.9	%		186,845
Other debt securities		63,440			69,764			30,982			(9.1	%)		104.8	%		63,440
Financial assets pledged as collateral		8,302			6,352			6,302			30.7	%		31.7	%		8,301
Current income tax assets		—			—			—			n.m			n.m			—
Investments in equity instruments		1,875			1,915			129			(2.1	%)		1,353.5	%		1,875
Investments in associates		272			2,075			1,781			(86.9	%)		(84.7	%)		2,396
Property and equipment		11,821			11,867			9,173			(0.4	%)		28.9	%		11,804
Intangible assets		641			590			596			8.6	%		7.6	%		640
Deferred income tax assets		3,401			527			101			545.4	%		3,267.3	%		3,167
Other non-financial assets		2,391			1,861			1,375			28.5	%		73.9	%		2,075
Non-current assets held for sale		60			60			253			—			(76.3	%)		60
Total Assets		414,077			392,892			333,980			5.4	%		24.0	%		402,267
Liabilities
Deposits		274,487			285,201			247,228			(3.8	%)		11.0	%		275,015
Non-financial public sector		2,642			3,635			2,030			(27.3	%)		30.1	%		2,642
Financial sector		314			296			197			6.1	%		59.4	%		969
Non-financial private sector and residents abroad		271,531			281,270			245,001			(3.5	%)		10.8	%		271,404
Liabilities at fair value through profit or loss		43			1,156			1,346			(96.3	%)		(96.8	%)		43
Derivatives		4,023			2,289			4,432			75.8	%		(9.2	%)		4,400
Repo transactions		—			—			—			n.m			n.m			—
Other financial liabilities		31,609			23,068			21,934			37.0	%		44.1	%		30,287
Financing received from the BCRA and other financial institutions		8,481			3,292			5,758			157.6	%		47.3	%		5,227
Corporate bonds issued		8,728			4,329			1,734			101.6	%		403.3	%		3,937
Current income tax liabilities		5,240			4,609			2,548			13.7	%		105.7	%		5,136
Subordinated Corporate bons		—			—			—			n.m			n.m			—
Provisions		7,657			7,050			3,448			8.6	%		122.1	%		7,495
Deferred income tax liabilities		31			65			47			(52.3	%)		(34.0	%)		31
Other non-financial liabilities		15,233			13,023			9,776			17.0	%		55.8	%		14,572
Total Liabilities		355,532			344,082			298,251			3.3	%		19.2	%		346,143
Equity
Share Capital		613			613			613			—			—			613
Non-capitalized contributions		6,736			6,736			6,736			—			—			6,736
Capital adjustments		313			313			313			—			—			313
Reserves		28,488			28,488			17,425			—			63.5	%		28,488
Retained earnings		—			—			4,015			n.m			(100.0	%)		—
Other accumulated comprehensive income		(3,582	)		(162	)		(79	)		2,111.1	%		4,434.2	%		(3,582	)
Income of the period		23,527			12,788			6,677			84.0	%		252.4	%		23,527
Equity attributable to owners of the Parent		56,095			48,776			35,700			15.0	%		57.1	%		56,095
Equity attributable to non-controlling interests		2,450			34			29			7,105.9	%		8,348.3	%		29
Total Equity		58,545			48,810			35,729			19.9	%		63.9	%		56,124
Total Liabilities and Equity		414,077			392,892			333,980			5.4	%		24.0	%		402,267

(1)

Excludes consolidation with PSA, Rombo and VWFS as of July 1st 2019.

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Income Statement


Income statement	BBVA ARG consolidated									Chg%						Proforma ⁽¹⁾ 3Q19
In millions $	3Q19			2Q19			3Q18			QoQ			YoY			Proforma ⁽¹⁾ 3Q19
Interest income		27,077			23,018			12,547			17.6	%		115.8	%		25,006
Interest expense		(11,466	)		(9,982	)		(5,736	)		14.9	%		99.9	%		(10,157	)
Net interest income		15,611			13,036			6,811			19.8	%		129.2	%		14,849
Commission income		4,702			4,367			3,749			7.7	%		25.4	%		4,699
Commission expenses		(3,138	)		(2,423	)		(1,991	)		29.5	%		57.6	%		(3,074	)
Net commission income		1,564			1,944			1,758			(19.5	%)		(11.0	%)		1,625
Net income/(loss) from measurement of financial instruments at fair value through profit or loss		1,432			2,115			323			(32.3	%)		343.3	%		1,225
Net loss from write-down of assets at amortized cost		3			(36	)		13			108.3	%		(76.9	%)		4
Foreign exchange and gold gains		3,403			1,322			1,624			157.4	%		109.5	%		3,414
Other operating income		1,123			4,390			1,004			(74.4	%)		11.9	%		1,131
Loan loss allowances		(1,851	)		(1,865	)		(1,033	)		(0.8	%)		79.2	%		(1,822	)
Net operating income		21,285			20,906			10,500			1.8	%		102.7	%		20,426
Personnel benefits		(3,649	)		(3,242	)		(2,504	)		12.6	%		45.7	%		(3,581	)
Administrative expenses		(3,455	)		(2,421	)		(1,826	)		42.7	%		89.2	%		(3,364	)
Depreciation and amortization		(423	)		(394	)		(220	)		7.4	%		92.3	%		(418	)
Other operating expenses		(3,218	)		(6,074	)		(1,636	)		(47.0	%)		96.7	%		(2,987	)
Operating income		10,540			8,775			4,314			20.1	%		144.3	%		10,076
Income from associates		(7	)		312			(135	)		(102.2	%)		(94.8	%)		323
Income before income tax		10,533			9,087			4,179			15.9	%		152.0	%		10,399
Income tax		576			(2,306	)		(1,132	)		125.0	%		150.9	%		337
Net Income for the period		11,109			6,781			3,047			63.8	%		264.6	%		10,736
Income for the period attributable to:
Owners of the parent		10,736			6,781			3,008			58.3	%		256.9	%		10,740
Non-controlling interests		373			—			39			n.m			856.4	%		(4	)
Other comprehensive income		(3,425	)		27			(153	)		n.m			n.m			(3,420	)

(1)

Excludes consolidation with PSA, Rombo and VWFS as of July 1st 2019.

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Ratios


Quarterly annualized ratios	BBVA ARG consolidated									Chg%
	3Q19			2Q19			3Q18			QoQ		YoY
Profitability
Efficiency ratio		35.9	%		34.2	%		44.8	%		177 pbs		(889) pbs
ROAA		11.0	%		7.0	%		4.1	%		408 pbs		698 pbs
ROAE		81.2	%		58.4	%		35.2	%		2,284 pbs		4,604 pbs
Liquidity
Total liquid assets/ Total deposits		61.7	%		60.7	%		52.0	%		103 pbs		972 pbs
Capital
Capital ratio		17.1	%		16.7	%		14.1	%		42 pbs		302 pbs
TIER 1 Ratio (Ordinary Capital Level 1 / Risk Weighted Aassets)		16.4	%		16.0	%		12.9	%		43 pbs		354 pbs
Solvency
Allowances for loan losses as % of total financing		3.5	%		3.0	%		2.2	%		48 pbs		129 pbs
Irregular loan portfolio/Total financing		3.3	%		2.7	%		1.0	%		65 pbs		232 pbs
Allowances for loan losses / Irregular loan portfolio		105.1	%		112.9	%		220.6	%		(779) pbs		(11,548) pbs

Annualized accumulated ratios	BBVA ARG consolidated									Chg%
	3Q19			2Q19			3Q18			QoQ		YoY
Profitability
Efficiency ratio		35.6	%		35.4	%		47.1	%		20.9 pbs		(1,144) pbs
ROAA		8.0	%		6.6	%		3.3	%		141 pbs		473 pbs
ROAE		63.2	%		59.1	%		26.9	%		410 pbs		3,629 pbs
Liquidity
Total liquid assets/ Total deposits		61.7	%		60.7	%		52.0	%		103 pbs		972 pbs
Capital
Capital ratio		17.1	%		16.7	%		14.1	%		42 pbs		302 pbs
TIER 1 Ratio (Ordinary Capital Level 1 / Risk Weighted Aassets)		16.4	%		16.0	%		12.9	%		43 pbs		354 pbs
Solvency
Allowances for loan losses as % of total financing		3.5	%		3.0	%		2.2	%		48 pbs		129 pbs
Irregular loan portfolio/Total financing		3.3	%		2.7	%		1.0	%		65 pbs		232 pbs
Allowances for loan losses / Irregular loan portfolio		105.1	%		112.9	%		220.6	%		(779) pbs		(11,548) pbs

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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.