6-K 1 bbarpr1q21_6k.htm FORM 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 May 2021

 

Commission File Number: 001-12568

 

 

BBVA Argentina Bank S.A.

(Translation of registrant’s name into English)

 

111 Córdoba Av, C1054AAA

Buenos Aires, Argentina

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

 

Form 20-F

X

   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

X

 

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

X

 

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

X

 

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

 
 
 

 

 

Banco BBVA Argentina S.A.

 

 

TABLE OF CONTENTS

 

 

Item

  
   
1. Banco BBVA Argentina S.A. reports consolidated first quarter earnings for fiscal year 2021.
   
   

 

 
 

Banco BBVA Argentina S.A. announces

First Quarter 2021 results

Buenos Aires, May 26, 2021 – Banco BBVA Argentina S.A (NYSE; BYMA; MAE: BBAR; LATIBEX: XBBAR) (“BBVA Argentina” or “BBVA” or “the Bank”) announced today its consolidated results for the first quarter (1Q21), ended on March 31, 2021.

As of January 1, 2020, the Bank started to inform its inflation adjusted results pursuant to IAS 29 reporting. To facilitate comparison, figures of comparable quarters of 2020 have been updated according to IAS 29 reporting to reflect the accumulated effect of inflation adjustment for each period up to March 31, 2021.

1Q21 Highlights

·BBVA Argentina’s inflation adjusted net income in 1Q21 was $3.0 billion, 50.8% greater than the $2.0 billion reported in the first quarter of 2020 (1Q20).
·In 1Q21, BBVA Argentina posted an inflation adjusted average return on assets (ROAA) of 1.6% and an inflation adjusted average return on equity (ROAE) of 10.5%.
·In terms of activity, total consolidated financing to the private sector in 1Q21 totaled $296.8 billion, contracting in real terms 9.5% compared to the fourth quarter of 2020 (4Q20), and 7.7% compared to 1Q20. In the quarter, contraction was driven by the fall in credit cards, other loans and overdrafts by 7.5%, 16.1% and 32.9% respectively. BBVA’s consolidated market share of private sector loans was 8.23% as of 1Q21.
·Total consolidated deposits in 1Q21 totaled $507.8 billion, contracting 6.0% in real terms during the quarter, and expanding 8.5% in the year. The quarterly contraction is mainly explained by sight deposits, especially checking accounts in pesos, which fell 19.0%. The Bank’s consolidated market share of private deposits was 6.90% as of 1Q21.
·As of 1Q21, the non-performing loan ratio (NPL) reached 1.72%, with a 275.22% coverage ratio.
·The accumulated efficiency ratio in 1Q21 was 72.5%, above 1Q20’s 59.3%.
·As of 1Q21, BBVA Argentina reached a regulatory capital ratio of 22.4%, entailing a $69.2 billion or 173.3% excess over minimum regulatory requirement. Tier I ratio was 21.7%.
·Total liquid assets represented 72.0% of the Bank’s total deposits as of 1Q21.

Message from the CFO

“Despite some incipient signs of economic recovery, uncertainties remain in regards to the resolution of negotiations of the National Government with the IMF and the economic plan linked to the results of such arrangements. The evolution of the pandemic, the additional measures that may be taken by the Government and the next mid-term elections, further complicate the current situation.

In this context, resilience of the financial sector is critical to be able to adequately and safely provide banking products and services to society. BBVA Argentina has proven this adaptive capacity, through a modern branch network, and an efficient and safe operating scheme from a sanitary point of view, as our retail and wholesale clients continue to adopt the use of digital channels to access to our products and services.

The digital transformation carried out during the last years has brought out a satisfactory feedback from our clients, and we are convinced this is the correct path to take. To continue investing in technology will enable the improvement in customer service, while becoming more efficient in our daily banking operation. As a whole, we long to and we must continue this digital transformation process as a leverage to positively differentiate from our peers and new players in the financial business.

In line with this, the digitalization of our offer has evolved in such way that as of the end of March 2021, the penetration of our digital clients reached 73% from 68% the prior year, while that of mobile clients reached 62% from 56% a year before.

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BBVA Argentina continues to keep a solid balance sheet. With respect to its loan portfolio credit performance, the Bank reached an NPL ratio of 1.72% as of March 2021. Concerning its liquidity and solvency indicators, the Bank ends the quarter with ratios of 72.0% and 22.4% respectively, which would enable the growth of business that could come along a potential economic recovery.

Meanwhile, the Bank closely monitors its business, financial conditions and operating results, in the aim of anticipating possible effects of the gradual removal of regulation implemented by the Government during the pandemic, especially over asset quality and profitability ratios.

In terms of responsible banking, BBVA Argentina keeps working towards its sustainability model, supporting responsible business actions regarding inclusion, financial education and environmental protection, as part of its compromise with the country.”

Ernesto R. Gallardo, CFO de BBVA Argentina

 

1Q21 Conference Call

Thursday, May 27, 12:00 p.m. Buenos Aires time – (11:00 a.m. EST)

To participate, please dial in:

+ 54-11-3984-5677 (Argentina)

+ 1-844-450-3851 (United States)

+ 1-412-317-6373 (International)

Web Phone: click here

Conference ID: BBVA

Webcast & Replay: click here

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Safe Harbor Statement

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

 

Information

This earnings release has been prepared in accordance with the accounting framework established by the Central Bank of Argentina (“BCRA”), based on International Financial Reporting Standards (“I.F.R.S.”) and the resolutions adopted by the International Accounting Standards Board (“I.A.S.B”) and by the Federación Argentina de Consejos Profesionales de Ciencias Económicas (“F.A.C.P.E.”), with the transitory exceptions: (i) the record of a prevision for contingencies referred to uncertain fiscal positions required by the BCRA, (ii) the adjustment in valuation established by the B.C.R.A. applied to the valuation of the remaining investment the Bank keeps of Prisma Medios de Pago S.A. (“Prisma”), and (iii) the temporary exclusion of the application of the IFRS 9 impairment model for non-financial public sector debt instruments.

As of 1Q20, the Bank started to inform its inflation adjusted results pursuant to IAS 29 reporting. To facilitate comparison, figures of comparable quarters of 2020 have been updated according to IAS 29 reporting to reflect the accumulated effect of inflation adjustment for each period up to March 31, 2021.

The information in this press release contains unaudited financial information that consolidates, line item by line item, all of the banking activities of BBVA Argentina, including: BBVA Asset Management Argentina S.A., Consolidar AFJP-undergoing liquidation proceeding, and as of July 1, 2019, PSA Finance Argentina Compañía Financiera S.A. (“PSA”) and Volkswagen Financial Services Compañía Financiera S.A (“VWFS”).

BBVA Consolidar Seguros S.A. is disclosed on a consolidated basis recorded as Investments in associates (reported under the proportional consolidation method), and the corresponding results are reported as “Income from associates”), same as Rombo Compañía Financiera S.A. (“Rombo”), Play Digital S.A. and Interbanking S.A.

Financial statements of subsidiaries have been elaborated as of the same dates and periods as Banco BBVA Argentina S.A.’s. In the case of consolidated companies PSA and VWFS, financial statements were prepared considering the B.C.R.A. accounting framework for institutions belonging to “Group C”, without considering the model established by the IFRS 9 5.5. “Impairment” section for periods starting as of January 1, 2022.

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 (%)
In millions of AR$ except EPS and ADS - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Net Interest Income 21,548 22,057 23,453   (2.3%)   (8.1%)
Net Fee Income   3,355   3,163   2,676 6.1%  25.4%
Net income from measurement of financial instruments at fair value through P&L   1,600   4,692   1,411   (65.9%) 13.4%
Net income from write-down of assets at amortized cost and at fair value through OCI   (33) (165)  (1,045) 80.0% 96.8%
Foreign exchange and gold gains  896   1,212   1,765   (26.1%)   (49.3%)
Other operating income   1,547   2,177   1,482   (28.9%)   4.4%
Loan loss allowances  (1,914)  (4,152)  (2,316) 53.9% 17.4%
Net operating income 26,999 28,984 27,426   (6.8%)   (1.6%)
Personnel benefits  (5,840)  (5,487)  (6,333)  (6.4%)   7.8%
Adminsitrative expenses  (5,332)  (5,467)  (5,121)   2.5%  (4.1%)
Depreciation and amortization  (1,069)  (1,225)  (1,174) 12.7%   8.9%
Other operating expenses  (4,648)  (6,873)  (4,439) 32.4%  (4.7%)
Operating income 10,111   9,932 10,360 1.8%   (2.4%)
Income from associates   (29) 27 39  (209.1%)  (174.6%)
Income from net monetary position  (7,551)  (7,718)  (5,345)   2.2%   (41.3%)
Net income before income tax    2,531   2,241   5,055  12.9% (49.9%)
Income tax  437  (1,919)  (3,088)   122.8%   114.1%
Income for the period   2,967  322   1,967  n.m   50.8%
           
Other comprehensive income (1) (255) (301)   3,213  15.2%  (107.9%)
Total comprehensive income   2,712 21   5,180  n.m  (47.6%)
           
 Number of common shares outstanding (in thousands)   612,710  612,710  612,684 -   0.0%
 Weighted average number of common  shares outstanding (2)(3)   612,710  612,710  612,684 -   0.0%
           
 Earnings per Share (EPS)  4.91 0.72 3.14  n.m  56.2%
 Earnings per  ADS (5)    14.73 2.15 9.43  n.m  56.2%
           
(1) Net of Income Tax
(2) In thousands of shares
(3) A On October 9, 2019, the CNV issued Resolution No. 20484/2019 concerning the merger of BBVA Francés Valores S.A. into the Bank. As such, the Bank was authorized to issue 50,441 ordinary shares, with a nominal value of $ 1 and entitling to one (1) vote each for to be delivered to BBVA Francés Valores S.A.’s minority shareholders. The merger and the ensuing capital stock increase are still in the process of being registered with the Argentine Supervisory Board of Companies (IGJ).
(4) Excludes consolidation with VWFS y PSA.
(5) One ADS represents three ordinary shares

BBVA Argentina 1Q21 net income was $3.0 billion, growing 821.6% or $2.6 billion quarter-over-quarter (QoQ), and 50.8% or $1.0 billion year-over-year (YoY). Quarterly results are mainly explained by (i) an adequate operating cost management, (ii) the reduction in loan loss allowances, (iii) the recovery of a provision recorded in 2017 in the frame of the legal action filed by the Bank to declare unconstitutionality of the provisions that prevented the application of inflation adjustment for the 2016 fiscal period, recorded in the income tax line, and (iv) the negative impact of inflation during the quarter.

The 821.6% quarterly variation is mainly affected by (i) the adjustments in the valuation of Prisma introduced retroactively in the 4Q20 results, in the line net income from measurement of financial instruments at fair value through P&L, which were required by the BCRA subsequent to the announcement of the 4Q20 financial statements and (ii) retroactive application of modifications on exposure of monetary results stated in Communication “A” 7211, for the financial statements ended on December 31, 2020 (Communication “A” 7222).

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Net Interest Income

Net Interest Income BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Net Interest Income 21,548 22,057 23,453   (2.3%)   (8.1%)
Interest Income 36,705 36,171 35,109 1.5% 4.5%
From government securities   9,771 10,377   8,913  (5.8%)   9.6%
From private securities 23 21   2 12.7%  n.m 
Interest from loans and other financing 17,716 17,629 21,501   0.5%   (17.6%)
Financial Sector  145  229  497   (36.6%)   (70.9%)
Overdrafts  1,786  2,070  3,585   (13.7%)   (50.2%)
Discounted Instruments  2,737  2,845  3,626  (3.8%)   (24.5%)
Mortgage loans  316  333  452  (5.1%)   (30.0%)
Pledge loans  1,012  962  850   5.3% 19.1%
Consumer Loans  2,579  2,637  2,868  (2.2%)   (10.1%)
Credit Cards  5,309  4,555  6,584 16.6%   (19.4%)
Financial leases  172  171  160   0.9%   8.0%
Loans for the prefinancing and financing of exports  198  290  446   (31.7%)   (55.7%)
Other loans  3,461  3,538  2,433  (2.2%) 42.2%
Premiums on REPO transactions   3,118   3,268   1,041  (4.6%)   199.5%
CER/UVA clause adjustment   6,075   4,808   3,454 26.4% 75.9%
Other interest income   1 67  198   (97.8%)   (99.2%)
Interest expenses 15,157 14,114 11,656 7.4%  30.0%
Deposits 13,926 12,935   9,616   7.7% 44.8%
Checking accounts  1,830  1,716  319   6.6%  473.9%
Savings accounts 96 81 97 18.5%  (0.3%)
Time deposits and Investment accounts   12,000   11,138  9,201   7.7% 30.4%
Other liabilities from financial transactions  188  368   1,344   (49.0%)   (86.0%)
Interfinancial loans received  479  441  395   8.7% 21.3%
CER/UVA clause adjustment  564  297  291 90.2% 93.6%
Other   0 73 10   (99.7%)   (97.9%)

Net interest income for 1Q21 was $21.5 billion, decreasing 2.3% or $509 million QoQ, and 8.1% or $1.9 billion YoY. In 1Q21, the greater interest income does not make up for the increase in interest expenses, mainly due to the regulation in active and passive rates, to greater expenses generated by time deposits, and to a lesser extent, by UVA-linked time deposits, derived from a boost in quarterly inflation.

1Q21 interest income totaled $36.7 billion, 1.5% greater than 4Q20, and 4.5% above 1Q20. Quarterly increase is mainly explained by a 16.6% increment in interest income from credit cards, and a 26.4% growth in income from CER/UVA adjustments, the latter boosted by income from public securities linked to such indexes. This increase was partially offset by a 5.8% fall in the income from government securities line item, as the effective rate from interests gained through central bank liquidity bills (LELIQ) did not compensate the quarterly inflation rate, additional to a 13.7% fall in overdrafts.

Income from government securities fell 5.8% QoQ and increased 9.6% YoY. Explanations are mentioned in the previous paragraph, related to the lower inflation-adjusted yield of securities included in this line. 91% of these results are explained by government securities at fair value through Other Comprehensive Income (OCI), mainly LELIQ, and 9% by securities at amortized cost (2022 National Treasury Bonds at fixed rate, used for reserve requirement integration).

Interest income from loans and other financing totaled $17.7 billion, growing 0.5% QoQ. This is mainly explained by a 16.6% increase in credit cards, and a 5.3% increase in pledge loans. The increment was offset by a fall in other loans by 2.2% (which include part of the productive investment credit lines implemented by the BCRA through Communications “A” 7140 and “A” 7240, which conditions establish maximum limits on active rates of such products), in overdrafts by 13.7% and in discounted instruments by 3.8%, the latter driven by lower commercial activity.

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Income from CER/UVA adjustments was 26.4% and 75.9% higher QoQ and YoY respectively, mainly explained by the acceleration of inflation during the first quarter of 2021 (13.0%1 in 1Q21 versus 11.3% in 4Q20) and an increment in the position and valuation of CER-linked securities.

Interest expenses totaled $15.2 billion, 7.4% higher than 4Q20 and 30.0% above 1Q20. Quarterly increase is the consequence of growth in expenses from time deposits and investment accounts derived from a greater volume in these products, and to a lesser extent, of greater expenses by UVA/CER adjustments from time deposits linked to these indexes, due to an acceleration in inflation.

Interest expenses from time deposits and investment accounts explain 79.2% of total interest expenses, versus 78.9% in the previous quarter. Interests from time deposits grew 7.7% QoQ and 30.4% YoY.

NIM

As of 1Q21, total net interest margin (NIM) was 19.2%, above the 18.2% recorded on 4Q20 and lower than 1Q20’s 20.9%.

Assets & Liabilities Performance - Total BBVA ARG Consolidated
In millions of AR$. Rates and spreads in annualized % 1Q21 4Q20 1Q20
  Average Balance Interest Earned/Paid Average Real Rate Average Balance Interest Earned/Paid Average Real Rate Average Balance Interest Earned/Paid Average Real Rate
Total interest-earning assets 454,658   36,706   32.7% 480,302   36,168   29.9% 449,196   35,110   31.4%
Debt securities 169,447   15,978  38.2% 168,876   15,701  36.9% 121,625   10,191  33.6%
Loans to customers/financial institutions 277,992   20,728  30.2% 301,751   20,463  26.9% 322,174   24,918  31.0%
Other assets 7,219 - - 9,675  4 0.2% 5,397  1 0.1%
Total non interest-earning assets 234,387 - - 222,323 - - 261,353 - -
Total Assets 689,045   36,706   21.6% 702,626   36,168   20.4% 710,550   35,110   19.8%
Total interest-bearing liabilities 356,611   15,156   17.2% 330,176   14,112   17.0% 345,227   11,655   13.5%
Sight deposits 191,761  1,926 4.1% 163,548  1,797 4.4% 190,670  415 0.9%
Time deposits and investment accounts 155,696   12,799  33.3% 153,249   11,654  30.2% 133,136  9,763  29.4%
Debt securities issued 1,009  114  45.8% 2,937  305  41.2%  10,530  1,303  49.6%
Other liabilities 8,145  317  15.8%  10,442  356  13.5%  10,891  174 6.4%
Total non-interest-bearing liabilities 332,434 - - 372,450   - - 365,323   - -
Total liabilities and equity 689,045   15,156 8.9% 702,626   14,112 8.0% 710,550   11,655 6.6%
                   
NIM - Total       19.2%       18.2%       20.9%
Spread - Total       15.5%       12.9%       17.8%
                   
Nominal rates are calculated over a 365-day year
Does not include Net income from measurement of financial instruments at fair value through P&L nor Net income from write-down of assets at amortized cost and at fair value through OCI
Sight deposits include savings accounts and interest-bearing checking accounts

 

Assets & Liabilities Performance - AR$ BBVA ARG Consolidated
In millions of AR$. Rates and spreads in annualized % 1Q21 4Q20 1Q20
  Average Balance Interest Earned/Paid Average Real Rate Average Balance Interest Earned/Paid Average Real Rate Average Balance Interest Earned/Paid Average Real Rate
Total interest-earning assets 420,045   36,311 35.1% 442,162   35,663 32.0% 377,033   34,125 36.3%
Debt securities 169,443   15,978 38.2% 168,876   15,701 36.9% 111,654  9,992 35.9%
Loans to customers/financial institutions 248,900   20,333 33.1% 269,129   19,959 29.4% 262,017   24,133 36.9%
Other assets 1,702 - 0.0% 4,157  3 0.3% 3,362 - 0.0%
Total non interest-earning assets 113,219   0.0% 115,995   0.0% 139,578   0.0%
Total Assets 533,264   36,311 0 558,158   35,663 0 516,612   34,125 0
Total interest-bearing liabilities 246,236   15,109 24.9% 231,473   14,078 24.1% 209,582   11,527 22.1%
Savings accounts 100,138  1,924 7.8%  82,306  1,795 8.7%  82,210  413 2.0%
Time deposits 139,457   12,785 37.2% 137,032   11,627 33.7% 107,489  9,678 36.1%
Debt securities issued 1,009  114 45.8% 2,937  305 41.2%  10,530  1,303 49.6%
Other liabilities 5,632  286 20.6% 9,198  351 15.1% 9,353  133 5.7%
Total non-interest-bearing liabilities 287,980   0.0% 327,925   0.0% 315,400   0.0%
Total liabilities and equity 534,215   15,109 11.5% 559,398   14,078 10.0% 524,981   11,527 8.8%
                   
NIM - AR$       20.5%       19.4%       24.0%
Spread - AR$       10.2%     7.9%       14.2%
                   
Nominal rates are calculated over a 365-day year
Does not include Net income from measurement of financial instruments at fair value through P&L nor Net income from write-down of assets at amortized cost and at fair value through OCI
Sight deposits include savings accounts and interest-bearing checking accounts

 

1 Source: Instituto Nacional de Estadística y Censos (INDEC) – Consumer price index as of March 2021.

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Assets & Liabilities Performance - Foreign Currency BBVA ARG Consolidated
In millions of AR$. Rates and spreads in annualized % 1Q21 4Q20 1Q20
  Average Balance Interest Earned/Paid Average Real Rate Average Balance Interest Earned/Paid Average Real Rate Average Balance Interest Earned/Paid Average Real Rate
Total interest-earning assets  34,613  395 4.6%  38,140  505 5.3%  72,163  985 5.5%
Debt securities 4 - -   - -  -  9,971  199 8.0%
Loans to customers/financial institutions  29,092  395 5.5%  32,622  504 6.1%  60,157  785 5.2%
Other assets 5,517 - - 5,518  1 0.1% 2,035  1 0.2%
Total non interest-earning assets 121,168   - 106,328   - 121,775   -
Total Assets 155,781  395 1.0% 144,468  505 1.4% 193,938  985 2.0%
Total interest-bearing liabilities 110,375 47 0.2%  98,703 34 0.1% 135,645  128 0.4%
Savings accounts  91,623  2 0.0%  81,242  2 0.0% 108,460  2 0.0%
Time deposits and Investment accounts  16,239 14 0.3%  16,217 27 0.7%  25,647 85 1.3%
Other liabilities 2,513 31 5.0% 1,244  5 1.6% 1,538 41  10.7%
Total non-interest-bearing liabilities  44,454   -  44,525   -  49,923   -
Total liabilities and equity 154,830 47 0.1% 143,228 34 0.1% 185,569  128 0.3%
                   
NIM - Foreign currency     4.1%     4.9%     4.8%
Spread - Foreign currency     4.5%     5.1%     5.1%
                   
Nominal rates are calculated over a 365-day year
Does not include Net income from measurement of financial instruments at fair value through P&L nor Net income from write-down of assets at amortized cost and at fair value through OCI
Sight deposits include savings accounts and interest-bearing checking accounts

Net Fee Income

Net Fee Income BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Net Fee Income   3,355   3,163   2,676 6.1%  25.4%
Fee Income   7,678   8,506   7,704   (9.7%)   (0.3%)
Linked to liabilities   3,069   3,014   4,108   1.8%   (25.3%)
From credit cards   3,300   4,077   2,569   (19.1%) 28.5%
Linked to loans  443  444  285  (0.2%) 55.5%
From insurance  386  418  396  (7.9%)  (2.5%)
From foreign trade and foreign currency transactions  385  431  297   (10.7%) 29.7%
Other fee income 95  121 50   (21.4%) 89.5%
Fee expenses   4,323   5,343   5,028 (19.1%) (14.0%)

Net fee income as of 1Q21 totaled $3.4 billion, growing 6.1% or $192 million QoQ and 25.4% or $679 million YoY.

In 1Q21, fee income totaled $7.7 billion, contracting 9.7% QoQ and 0.3% YoY. The quarterly fall is mainly explained by the income from credit cards line item, in part due to a seasonal effect and the implementation of the new reward program.

On the fee expenses side, these totaled $4.3 billion, contracting 19.1% compared to 4Q20 and 14.0% compared to 1Q20. Lower expenses are partially driven by savings in promotions and client acquisition costs compared to what was expended on 4Q20, affected by seasonal factors.

Net Income from Measurement of Financial Instruments at Fair Value and Foreign Exchange and Gold Gains/Losses

Net Income from financial instruments at fair value (FV) through P&L BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Net Income from financial instruments at FV through P&L   1,600   4,692   1,411 (65.9%)  13.4%
Income from government securities  605  323   1,327 87.3%   (54.4%)
Income from private securities (201)  763 34  (126.3%)  n.m 
Interest rate swaps -  (2) 33   100.0%  (100.0%)
Gains from foreign currency forward transactions   1,194   3,003  329   (60.3%)   262.9%
Income from put options taken - Prisma Medios de Pago S.A. -  561 -  (100.0%)  N/A 
Income from debt and equity instruments   2 31 24   (92.0%)   (89.5%)
Other - 11 (335)  (100.0%)   100.0%

In 1Q21, net income from financial instruments at fair value (FV) through P&L was $1.6 billion, decreasing 65.9% or $3.1 billion QoQ and increasing 13.4% or $189 million YoY.

8 
 

The greatest impact on these results is explained by the fall in the gains from foreign currency forward transactions line item, driven by a lower currency depreciation compared to the increase in inflation recorded during the quarter (8.5%2 versus 13.0% respectively). Moreover, a 126.3% fall in the income from private securities line records a loss for $201 million, mainly due to the effect of inflation over the valuation of the Bank’s investment held in Prisma.

The adjustment in the valuation of the remaining investment held in Prisma, impacting on 4Q20, also explain part of the contraction in net income from financial instruments at fair value (FV) through P&L.

The fall in these results is slightly offset by an 87.3% increase in income from government securities, mainly because of an improvement in the valuation of a greater position in the CER-linked bond portfolio.

Differences in quoted prices of gold and foreign currency BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Foreign exchange and gold gains/(losses) (1)  896   1,212   1,765 (26.1%) (49.3%)
From foreign exchange position (362) (369)  415   1.8%  (187.3%)
Income from purchase-sale of foreign currency   1,258   1,581   1,350   (20.4%)  (6.8%)
Net income from financial instruments at FV through P&L (2)   1,194   3,003  329 (60.3%)   262.9%
Income from foreign currency forward transactions   1,194   3,003  329   (60.3%)   262.9%
Total differences in quoted prices of gold & foreign currency (1) + (2)   2,089   4,215   2,094 (50.4%)   (0.2%)

In 1Q21, the total differences in quoted prices of gold and foreign currency showed profit for $2.1 billion, decreasing 50.4% compared with 4Q20, mainly due to a 60.3% fall in income from foreign currency forward transactions.

Other Operating Income

Other operating income BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Operating Income   1,547   2,177   1,482 (28.9%) 4.4%
Rental of safe deposit boxes (1)  285  296  296  (3.6%)  (3.7%)
Adjustments and interest on miscellaneous receivables (1)  577  693  356   (16.7%) 62.1%
Punitive interest (1) 31 13 82   140.1%   (61.7%)
Loans recovered  231  315  232   (26.8%)  (0.3%)
Fee income from credit and debit cards (1) 61 67  106  (9.2%)   (42.6%)
Income from initial recognition of public securities 11 - -  N/A   N/A 
Other Operating Income(2)  350  793  411   (55.8%)   (14.7%)
(1) Included in the efficiency ratio calculation
(2) Includes some of the concepts used in the efficiency ratio calculation

In 1Q21 other operating income totaled $1.5 billion, falling 28.9% or $630 million QoQ, and increasing 4.4% or $65 million YoY. The quarterly contraction is mainly explained by a 55.8% decrease in the other operating income line item, due to the partial reversal in 4Q20 of a provision related to reorganization recorded on the fourth quarter of 2019. To a lesser extent, the fall is also explained by the adjustments and interest on miscellaneous receivables line item, where interests received from the Government in compensation for zero rate credit lines are recorded, and which granting has diminished considerably during 1Q21.

Contraction in fee income from credit and debit cards is due to a fall in consumption, additional to a decline in issuance fees for credit and debit cards in January (from 1.5% to 1.3% for credit cards and from 0.7% to 0.6% for debit cards).

The income from initial recognition of public securities line item shows gains for the inflation adjustments accumulated until December 2020, derived from the reclassification of securities from Fair Value through OCI to Amortized cost (in particular, the 2022 National Treasury Bonds at fixed rate)

 

2 Taking into consideration wholesale U.S. dollar foreign exchange rates on BCRA’s Communication “A” 3500.

9 
 

Operating Expenses

Personnel Benefits and Administrative Expenses

Personnel Benefits and Adminsitrative Expenses BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Total Personnel Benefits and Adminsitrative Expenses 11,172 10,954 11,454 2.0%   (2.5%)
Personnel Benefits (1)   5,840   5,487   6,333 6.4%   (7.8%)
Administrative expenses (1)   5,332   5,467   5,121   (2.5%) 4.1%
Travel expenses 40 38 41   6.1%  (4.0%)
Administrative expenses  384  422  491  (9.1%)   (21.9%)
Security services  193  218  157   (11.3%) 23.0%
Fees to Bank Directors and Supervisory Committee 10   9 29   4.2%   (66.2%)
Other fees  227  252  343  (9.8%)   (33.8%)
Insurance 66 67 61  (0.9%)   9.0%
Rent  684  573  449 19.5% 52.5%
Stationery and supplies 18 15 27 22.3%   (34.3%)
Electricity and communications  268  273  318  (1.9%)   (15.8%)
Advertising  202  152  255 32.3%   (21.0%)
Taxes   1,250   1,306   1,243  (4.3%)   0.6%
Maintenance costs  624  620  610   0.7%   2.3%
Armored transportation services  764  937  395   (18.5%) 93.5%
Other administrative expenses  603  586  703   2.8%   (14.2%)
           
Headcount*   6,004 6019 6302   (15) (298)
BBVA (Bank)   5,905   5,920  6,199   (15) (294)
Associates 99 99  103  -  (4)
Total branches**  247  247  251  -  (4)
           
Efficiency ratio  72.5%  44.0%  59.3%   2,845 bps   1,321 bps
Accumulated Efficiency Ratio  72.5%  56.8%  59.3%   1,566 bps   1,321 bps
Efficiency ratio - Excl. Inflation adjustment  50.1%  34.4%  47.4%   1,565 bps   270 bps
Accumulated Efficiency Ratio - Excl. Inflation adjustment  50.1%  45.1%  47.4%   495 bps   270 bps
(1) Concept included in the efficiency ratio calculation
*corresponds to total effective employees, net of temporary contract employees
**do not include administrative offices

During 1Q21, personnel benefits and administrative expenses totaled $11.2 billion, increasing 2.0% or $218 million compared to 4Q20, and falling 2.5% or $282 million compared to 1Q20.

Personnel benefits increased 6.4% QoQ, and decreased 7.8% YoY. This is partially explained by salary increases arranged through collective bargaining agreements (2.1% for a 2020 salary update and an 11.5% increase for the first quarter of 2021), additional to variable remuneration payments.

As of 1Q21, administrative expenses fell 2.5% QoQ, and increased 4.1% YoY. The quarterly fall is mainly due to savings in armored transportation services, driven by a lower commercial activity.

The accumulated efficiency ratio as of 1Q21 was 72.5%, above the 56.8% and the 59.3% reported in 4Q20 and 1Q20 respectively. This increase is explained by a lower percentage decline in the numerator (expenses) than the denominator (income), which has been especially affected by a fall in financial income and the acceleration of inflation during the first quarter of 2021.

Excluding inflation adjustments considered in the income from the monetary position line item, the 1Q21 accumulated efficiency ratio would have been 50.1%.

10 
 

Other Operating Expenses

Other Operating Expenses BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Other Operating Expenses   4,647   6,873   4,439 (32.4%) 4.7%
Turnover tax   3,043   2,469   2,485 23.3% 22.4%
Initial loss of loans below market rate   292   714   249   (59.1%) 17.0%
Contribution to the Deposit Guarantee Fund (SEDESA)   206   209   177  (1.3%) 16.2%
Interest on liabilities from financial lease 89 97   109  (7.7%)   (18.2%)
Other allowances   265   516   1,003   (48.8%)   (73.6%)
Other operating expenses   753   2,869   414   (73.8%) 81.7%

In 1Q21, other operating expenses totaled $4.6 billion, contracting 32.4% or $2.2 billion QoQ, and growing 4.7% or $209 million YoY.

The main factor explaining the decline during the quarter is found in the other operating expenses line item, which falls 73.8%, due to a provision recorded in 4Q20 related to reorganization expenses. Another line which explains savings in the quarter is the 59.1% fall in initial loss of loans below market rate, where losses for pledge and mortgage loan instalment freezes were recorded in 4Q20, in line with COVID-19 measures pursued in 2020.

The aforementioned savings are offset by the turnover tax line item which increases 23.3%, driven by an increment in the turnover tax rate in Provincia de Buenos Aires and Ciudad de Buenos Aires (CABA), added to the further taxing as of January 2021 in CABA of transactions through instruments issued by the Central Bank.

Income from Associates

This line reflects the results from non-consolidated associate companies. During 1Q21, a loss of $29 million has been reported, mainly due to the Bank’s participation in BBVA Consolidar Seguros S.A., Rombo Compañía Financiera S.A., Interbanking S.A. and Play Digital S.A.

Income Tax

Accumulated income tax during the first three months of the year recorded a gain of $437 million. As of 1Q21, tax expenses show a positive result due to: (i) having recorded a complete fiscal inflation adjustment and (ii) the reversal of a provision pursuant to BCRA instructions for the year 2016, recording a positive result in 1Q21 of $1.2 billion.

11 
 

Balance sheet and activity

Loans and Other Financing

Loans and other financing BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
To the public sector   0   7 18 (93.8%) (97.4%)
To the financial sector   2,238   2,641   7,341 (15.2%) (69.5%)
Non-financial private sector and residents abroad  296,824  327,903  321,587   (9.5%)   (7.7%)
Non-financial private sector and residents abroad - AR$  263,759  292,952  261,505 (10.0%) 0.9%
Overdrafts 13,190 19,664 42,088   (32.9%)   (68.7%)
Discounted instruments 31,458 37,407 27,893   (15.9%) 12.8%
Mortgage loans 18,330 18,915 21,301  (3.1%)   (13.9%)
Pledge loans 11,638 11,014 10,574   5.7% 10.1%
Consumer loans 30,552 31,763 34,077  (3.8%)   (10.3%)
Credit cards  118,525  127,478 98,975  (7.0%) 19.8%
Receivables from financial leases   2,019   1,969   2,061   2.5%  (2.0%)
Other loans 38,047 44,742 24,537   (15.0%) 55.1%
Non-financial private sector and residents abroad - Foreign Currency 33,065 34,951 60,082   (5.4%) (45.0%)
Overdrafts   1   3   2   (52.1%)   (15.3%)
Discounted instruments   1,869   1,910   1,836  (2.2%)   1.8%
Mortgage loans - -  252  N/A   (100.0%)
Credit cards   1,151   1,893   1,588   (39.2%)   (27.5%)
Receivables from financial leases  118  140  400   (15.9%)   (70.5%)
Loans for the prefinancing and financing of exports 19,569 18,050 39,266   8.4%   (50.2%)
Other loans 10,357 12,955 16,739   (20.1%)   (38.1%)
           
% of total loans to Private sector in AR$ 88.9% 89.3% 81.3%   (48)bps  754 bps
% of total loans to Private sector in Foreign Currency 11.1% 10.7% 18.7% 48 bps (754)bps
           
% of mortgage loans with UVA adjustments (1) 81.9% 84.0% 85.6% (205)bps (365)bps
% of pledge loans with UVA adjustments (1) 16.2% 14.7% 24.8%  155 bps (854)bps
% of personal loans with UVA adjustments (1) 12.0% 16.2% 36.4% (419)bps  (2,432)bps
% of loans with UVA adjustments over Total loans(1)   3.5%   3.6%   5.6%   (10)bps (216)bps
           
Total loans and other financing  299,063  330,551  328,946   (9.5%)   (9.1%)
Allowances   (14,412)   (14,827)   (17,300)   2.8% 16.7%
Total net loans and other financing  284,651  315,724  311,646   (9.8%)   (8.7%)
(1) Excludes effect of accrued interests adjustments.

Private sector loans as of 1Q21 totaled $296.8 billion, decreasing 9.5% or $31.1 billion QoQ, and 7.7% or $24.8 billion YoY.

Loans to the private sector in pesos decreased 10.0% in 1Q21, and remained flat in the year with a 0.9% minor increase. Loans to the private sector denominated in foreign currency fell 5.4% QoQ and 45.0% YoY, mainly driven by the contraction in demand of loans in foreign currency. These loans, measured in U.S. dollars, fell 13.5% QoQ and 61.4% YoY. The depreciation of the argentine peso versus the U.S. dollar was 8.5% QoQ and 29.9%3 YoY.

In 1Q21, total loans and other financing totaled $299.1 billion, decreasing 9.5% compared to 4Q20 and 9.1% compared to 1Q20.

3 Taking into consideration wholesale U.S. dollar foreign exchange rates on BCRA’s Communication “A” 3500.

12 
 
Loans and other financing BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Non-financial private sector and residents abroad - Retail  180,197  191,063  166,766   (5.7%) 8.1%
Mortgage loans 18,330 18,915 21,553  (3.1%)   (15.0%)
Pledge loans 11,638 11,014 10,574   5.7% 10.1%
Consumer loans 30,552 31,763 34,077  (3.8%)   (10.3%)
Credit cards  119,676  129,370  100,562  (7.5%) 19.0%
Non-financial private sector and residents abroad - Commercial  116,627  136,841  154,821 (14.8%) (24.7%)
Overdrafts 13,191 19,666 42,090   (32.9%)   (68.7%)
Discounted instruments 33,326 39,318 29,729   (15.2%) 12.1%
Receivables from financial leases   2,137   2,109   2,460   1.3%   (13.1%)
Loans for the prefinancing and financing of exports 19,569 18,050 39,266   8.4%   (50.2%)
Other loans 48,404 57,697 41,276   (16.1%) 17.3%
           
% of total loans to Retail sector 60.7% 58.3% 51.9%  244 bps  885 bps
% of total loans to Commercial sector 39.3% 41.7% 48.1% (244)bps (885)bps

Retail loans (mortgage, pledge, consumer and credit cards) have fallen 5.7% QoQ and grown 8.1% YoY. During the quarter, the greatest decline is seen in credit cards with a 7.5% decrease.

Commercial loans (overdrafts, discounted instruments, receivables from financial leases, loans for the prefinancing and financing of exports, and other loans) contracted 14.8% QoQ and 24.7% YoY. Quarterly decline is explained by a 32.9% fall in overdrafts, followed by a 16.1% fall in other loans (particularly due to a decrease in company loans or “Prestamos a interés vencido”) and a 15.2% decrease in discounted instruments, all of them mainly due to a seasonal deceleration of commercial activity. This was partially offset by an 8.4% growth in prefinancing and financing of exports.

Decline in both retail and commercial portfolios, and in the total loan portfolio, are mainly impacted by the effect of inflation during the first quarter of 2021, which reached 13%. In nominal terms, the retail portfolio and the total loan portfolio increased 5.0% and 2.2% respectively, reversing the trend compared to the inflation adjusted figures. On the other hand, the commercial portfolio contracted 1.8%, pushed by lower activity.

Loans and other financing- Non restated figures BBVA ARG Consolidated Chg (%)
In millions of AR$ 1Q21 4Q20 1Q20 QoQ YoY
Non-financial private sector and residents abroad - Retail  180,197  171,593  117,809   5.0% 53.0%
Non-financial private sector and residents abroad - Commercial  116,627  118,708  107,665  (1.8%)   8.3%
Total loans and other financing (1)  299,063  292,645  230,598   2.2% 29.7%
(1) Does not include allowances

As of 1Q21, the total loans and other financing over deposits ratio was 58.9%, below the 61.2% recorded in 4Q20 and the 70.3% in 1Q20.

Market share - Private sector Loans BBVA ARG Chg (bps)
In % 1Q21 4Q20 1Q20 QoQ YoY
Private sector loans - Bank 7.35% 7.66% 7.50%             (31)bps             (15)bps
Private sector loans - Consolidated* 8.23% 8.49% 8.35%             (26)bps             (12)bps
           
Based on daily BCRA information. Capital balance as of the last day of each quarter.
 * Consolidates PSA, VWFS & Rombo

13 
 

 

Asset Quality

 

Asset Quality BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Commercial non-performing portfolio (1)   2,391   2,492   5,971  (4.0%)   (59.9%)
Total commercial portfolio 94,216  112,585  146,489   (16.3%)   (35.7%)
Commercial non-performing portfolio / Total commercial portfolio  2.54%  2.21%  4.08%  33 bps  (154)bps
Retail non-performing portfolio (1)   2,845   2,261   3,273 25.8%   (13.1%)
Total retail portfolio  209,818  226,433  186,012  (7.3%) 12.8%
Retail non-performing portfolio / Total retail portfolio  1.36%  1.00%  1.76%  36 bps (40)bps
Total non-performing portfolio (1)   5,237   4,753   9,244 10.2%   (43.4%)
Total portfolio  304,034  339,019  332,501   (10.3%)  (8.6%)
Total non-performing portfolio / Total portfolio  1.72%  1.40%  2.78%  32 bps  (106)bps
Allowances 14,412 14,827 17,300  (2.8%)   (16.7%)
Allowances  /Total non-performing portfolio  275.22% 311.95% 187.15%  (3,674)bps   8,807 bps
Write offs  513   8,243   1,198   (93.8%)   (57.2%)
Write offs / Total portfolio  0.17%  2.43%  0.36%  (226)bps (19)bps
Cost of Risk (CoR)  2.47%  4.99%  2.87%  (253)bps (41)bps
(1) Non-performing loans include: all loans to borrowers classified as "Deficient Servicing (Stage 3)", "High Insolvency Risk (Stage 4)", "Irrecoverable" and/or "Irrecoverable for Technical Decision" (Stage 5) according to BCRA debtor classification system

In 1Q21, asset quality ratio or NPL (total non-performing portfolio / total portfolio) was 1.72%, while the coverage ratio (allowances / total non-performing portfolio) was 275.22%, compared to the 1.40% NPL and 311.95% coverage recorded in 4Q20 respectively. The evolution of these ratios reflect (i) an increase in the retail non-performing portfolio due to deferred credit card payments, related to the expiration of COVID-19 measures over these loans, which passed to stage 3 in January, (ii) an improvement in commercial non-performing loans in contrast to those recorded in 4Q20 and (iii) a decline in write-offs derived from the decrease in retail non-performing loans in the prior 6 months (period required for a non-performing loan to be written-off).

As of 1Q21, NPL is still positively affected by the temporary flexibility in BCRA regulation regarding debtor classification during the COVID-19 pandemic, which extends grace periods in 60 days before a loan is classified as non-performing, and suspends the mandatory reclassification of clients that have an irregular performance with other institutions but a regular performance with the Bank.

Cost of risk (loan loss allowances / average total loans) reached 2.47%, lower than 4Q20’s 4.99%. This is mainly explained by the reduction in loan loss allowances in 1Q21, additional to the contrast with a 4Q20 that included losses for the passing to stage 3 of a particular company, and the change in parameters in impairment models.

Analysis for the allowance of loan losses BBVA ARG    
Balance at 12/31/2020 Stage 1 Stage 2 Stage 3 Monetary result generated by allowances   Balance at 03/31/2021
In millions of AR$               
Other financial assets   299  (1)  - 27  (35)    291
Loans and other financing  14,460 (670)  659   1,279   (1,711)   14,017
Other debt securities 0  (0)  -  -   -    (0)
Eventual commitments 1,541   (87)  127 17   (179)     1,419
Total allowances  16,300 (758)  786   1,324   (1,925)   15,727
Note: to be consistent with Financial Statements, it must be recorded from the beginning of the year instead of the quarter    

Allowances for the Bank in 1Q21 reflect expected losses driven by the adoption of the IFRS 9 standards as of January 1, 2020, except for debt instruments issued by the nonfinancial government sector which were temporarily excluded from the scope of such standard.

14 
 
Analysis for the allowance of loan losses Group "C" Subsidiary Companies    
Balance at 12/31/2020 Stage 1 Stage 2 Stage 3 Monetary result generated by allowances   Balance at 03/31/2021
In millions of AR$               
Loans and other financing   367 75  (6)  -  (42)    394
 Non-financial private sector and residents abroad   367 75  (6)  -  (42)    394
Pledge loans   356 74  (6)  -  (35)    389
Financial leases 1   0  (0)  - (0)     1
Other  10   1  (0)  - (7)     4
Total allowances 367 75 -6 0 -42   394
Note: to be consistent with Financial Statements, it must be recorded from the beginning of the year instead of the quarter        

The financial statements of consolidated subsidiaries PSA and VWFS were prepared considering the financial reporting framework set forth by the BCRA for Group "C" financial institutions, without considering the model established in paragraph 5.5. “Impairment” of IFRS 9 for fiscal years commencing on and after January 1, 2022.

Public Sector Exposure

Net Public Debt Exposure BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Treasury and Government securities 47,540 43,270   26,114 9.9%  82.0%
Treasury and National Government 47,540 43,270   26,042 9.9%  82.6%
National Treasury Public Debt in AR$ 47,540 43,270   15,998   9.9%   197.2%
National Treasury Public Debt in dollars -   0 186  (100.0%)  (100.0%)
National Treasury Public Debt USD-Linked - -  9,858  N/A   (100.0%)
Provinces - -   72  N/A   (100.0%)
Loans to the Public Sector   0   7   18 (93.8%) (97.4%)
AR$ Subtotal 47,540 43,277   16,088 9.8%   195.5%
USD Subtotal* -   0   10,044  (100.0%)  (100.0%)
Total Public Debt Exposure 47,540 43,277   26,132 9.9%  81.9%
           
B.C.R.A. Exposure  128,204  157,087   84,694 (18.4%)  51.4%
Instruments 97,735  101,528   80,127   (3.7%)  22.0%
LELIQs 97,735  101,528   80,127  (3.7%) 22.0%
Loans to the B.C.R.A. - -   -  N/A   N/A 
Repo 30,470 55,559  4,567 (45.2%)  n.m 
B.C.R.A. - AR$ 30,470 55,559  4,567   (45.2%)  n.m 
           
 %Public sector exposure (Excl. B.C.R.A.) / Total assets 6.4% 5.6%   3.6%  84 bps   281 bps
           
*Includes USD-linked Treasury public debt in AR$

Public sector exposure (excluding BCRA) totaled $47.5 billion, growing 9.9% or $4.3 billion QoQ, and 81.9% or $21.4 billion YoY. The quarterly increase is explained by a greater position in CER-linked bonds.

Short-term liquidity is mostly allocated in BCRA instruments, which fell 18.4% QoQ and grew 51.4% YoY in real terms. The quarterly fall is explained by a lower position in REPOs with the BCRA.

Exposure to the public sector (excluding BCRA) represents 6.4% of total assets, above the 5.6% in 4Q20 and the 3.6% in 1Q20. 

15 
 

 

Deposits

Total Deposits BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Total deposits  507,820  540,167  467,831   (6.0%) 8.5%
Non-financial Public Sector   6,582   6,357   4,955   3.5%  32.8%
Financial Sector   179   973   409 (81.6%) (56.2%)
Non-financial private sector and residents abroad  501,059  532,836  462,467   (6.0%) 8.3%
Non-financial private sector and residents abroad - AR$  356,434  380,302  300,043   (6.3%)  18.8%
Checking accounts  103,019  127,121 90,241 (19.0%)  14.2%
Savings accounts 90,314 99,973 97,005  (9.7%)  (6.9%)
Time deposits  127,734  118,178  101,606   8.1%  25.7%
Investment accounts  32,366 31,519   734   2.7%  n.m 
Other   3,000   3,511 10,457 (14.5%) (71.3%)
Non-financial private sector and res. abroad - Foreign Currency  144,625  152,534  162,424   (5.2%) (11.0%)
Checking accounts 17 45 48 (62.4%) (64.9%)
Savings accounts  125,992  132,628  134,882  (5.0%)  (6.6%)
Time deposits 16,571 17,442 22,806  (5.0%) (27.3%)
Other   2,045   2,418   4,688 (15.5%) (56.4%)
           
% of total portfolio in the private sector in AR$ 71.1% 71.4% 64.9%   (24)bps   626 bps
% of total portfolio in the private sector in Foregin Currency 28.9% 28.6% 35.1% 24 bps  (626)bps
           
% of time deposits with UVA adjustments 2.7% 1.7% 2.8%   109 bps   (10)bps
           
%  of sight deposits over total deposits 64.7% 68.6% 72.9%  (389)bps  (820)bps
%  of time deposits over total deposits 35.3% 31.4% 27.1%   389 bps   820 bps

During 1Q21, total deposits were $507.8 billion, declining 6.0% or $32.3 billion QoQ, and growing 8.5% or $40.0 billion YoY.

Private non-financial sector deposits in 1Q21 were $501.1 billion, decreasing 6.0% QoQ, and increasing 8.3% YoY.

Private non-financial sector deposits in pesos totaled $356.4 billion, falling 6.3% compared to 4Q20, and growing 18.8% compared to 1Q20. The quarterly decline is mainly affected by the fall in sight deposits, especially checking accounts (interest bearing and non-interest bearing), and savings accounts. This was partially offset by an 8.1% increase in time deposits.

Private non-financial sector deposits in foreign currency expressed in pesos fell 5.2% QoQ and 11.0% YoY. Measured in U.S. dollars, these deposits fell 13.3% QoQ and 37.6% YoY.

Private Deposits BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Non-financial private sector and residents abroad  501,059  532,836  462,467   (6.0%) 8.3%
Sight deposits  324,387  365,697  337,321 (11.3%)   (3.8%)
Checking accounts  103,036  127,167 90,290 (19.0%)  14.1%
Savings accounts  216,306  232,601  231,887  (7.0%)  (6.7%)
Other   5,045   5,929 15,145 (14.9%) (66.7%)
Time deposits  176,672  167,140  125,146 5.7%  41.2%
Time deposits  144,305  135,620  124,412   6.4%  16.0%
Investment accounts 32,366 31,519   734   2.7%  n.m 
           
% of sight deposits over total deposits 65.2% 69.1% 73.2%  (385)bps  (804)bps
% of time deposits over total deposits 34.8% 30.9% 26.8%   385 bps   804 bps

Variations are mainly affected by the effect of inflation during the first quarter of 2021. In nominal terms, total deposits, sight deposits and time deposits grew 6.2%, 19.4% and 0.2% respectively, reversing the trend in inflation-adjusted figures in certain cases.

Private Deposits - Non restated figures BBVA ARG Consolidated Chg(%)
In millions of AR$ 1Q21 4Q20 1Q20 QoQ YoY
Sight deposits  324,387  323,760  236,984   0.2%  36.9%
Time deposits  176,672  147,973 87,216  19.4%   102.6%
Total deposits  507,820  478,223  327,960   6.2%  54.8%

 

16 
 

As of 1Q21, the Bank’s transactional deposits (checking accounts and savings accounts) represented 62.9% of total non-financial private deposits, totaling $319.3 billion, versus 66.6% in 4Q20.

Market Share - Private sector Deposits BBVA ARG Chg (%)
In % 1Q21 4Q20 1Q20 QoQ YoY
Private sector Deposits - Consolidated* 6.90% 7.13% 6.80%             (23)bps                9 bps
           
Based on daily BCRA information. Capital balance as of the last day of each quarter.
 * Consolidates PSA, VWFS & Rombo

Other Sources of Funds

Other sources of funds BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Other sources of funds  128,328  126,972  135,234 1.1%   (5.1%)
Central Bank 24 32   202 (24.4%) (87.9%)
Banks and international organizations   1,878   1,910   407  (1.7%)   361.9%
Financing received from local financial institutions   7,871   8,931   4,566 (11.9%)  72.4%
Corporate bonds   1,022   1,320 10,697 (22.6%) (90.4%)
Equity  117,532  114,779  119,363   2.4%  (1.5%)

 

In 1Q21, other sources of funds totaled $128.3 billion, growing 1.1% or $1.4 billion QoQ, and falling 5.1% or $6.9 billion YoY.

The increase is mostly explained by the 2.4% increase in equity (of the Parent) due to a greater value in the retained earnings line item.

Liquid Assets

Total Liquid Assets BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Total liquid assets  365,849  364,335  318,617 0.4%  14.8%
Cash and deposits in banks  195,735  171,811  209,007  13.9%  (6.3%)
Debt securities at fair value through profit or loss   4,844   1,034 12,778   368.5% (62.1%)
Government securities  4,844  1,034 73  368.5%  n.m 
Liquidity bills of B. C. R. A. - - 12,705  N/A  (100.0%)
Net REPO transactions 30,470 55,559   4,567 (45.2%)  n.m 
Other debt securities  134,800  135,931 92,265  (0.8%)  46.1%
Government securities 37,066 34,397 24,843   7.8% 49.2%
Liquidity bills of B. C. R. A. 97,735  101,534 67,422  (3.7%) 45.0%
           
Liquid assets / Total Deposits  72.0%  67.4%  68.1%   459 bps   394 bps

In 1Q21, liquid assets were $365.8 billion, increasing 0.4% or $1.5 billion compared to 4Q20, and 14.8% or $47.2 billion compared to 1Q20.

In 1Q21, the liquidity ratio (liquid assets / total deposits) reached 72.0%. Liquidity ratio in local and foreign currency reached 65.8% and 87.7% respectively.

17 
 

 

Solvency

Minimum capital requirement BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Minimum capital requirement 39,926 43,820 41,681   (8.9%)   (4.2%)
Credit risk 29,877 33,347 30,906 (10.4%)  (3.3%)
Market risk   177   278  715 (36.3%) (75.2%)
Operational risk   9,872 10,195 10,060  (3.2%)  (1.9%)
           
Integrated Capital - RPC (1)*  109,134  108,286  111,011 0.8%   (1.7%)
Ordinary Capital Level 1 ( COn1)  124,289  122,270  129,625   1.7%  (4.1%)
Deductible items COn1   (18,185)   (17,336)   (21,767)  (4.9%)  16.5%
Additional Capital Level 2 (COn2)   3,030   3,351  3,153  (9.6%)  (3.9%)
           
Excess Capital          
Integration excess 69,208 64,466 69,330   7.4%  (0.2%)
Excess as  % of minimum capital requirement 173.3% 147.1% 166.34% 2,623 bps   700 bps
           
Risk-weighted assets (RWA, according to B.C.R.A. regulation) (2)  488,201  535,611  509,755  (8.9%)  (4.2%)
           
Regulatory Capital Ratio (1)/(2)  22.4%  20.2%  21.8%   214 bps  58 bps
TIER I Capital Ratio (Ordinary Capital Level 1/ RWA)  21.7%  19.6%  21.2%   214 bps  57 bps
           
* RPC includes 100% of quarterly results          

BBVA Argentina continues to show strong solvency indicators on 1Q21. Capital ratio reached 22.4%. Tier 1 ratio was 21.7% and capital excess over regulatory requirement was $69.2 billion.

18 
 

Other events

Main Relevant Events

·As of April 14, 2021, pursuant to what is stated in the fifth paragraph of art.1 of Decree No 42/2021, the bank announced that those shareholders that needed the required information for the valuation of their shares according to such decree, would be able to request it via e-mail.
·As of April 15, 2021, BBVA Argentina presented its 20-F annual report for the fiscal year ended December 2020.
·As of April 19, 2021, the Board of Directors accepted the resignation of the regular director Juan Manuel Ballesteros Castellano as from the next Shareholders’ Meeting, whereby a new member was to be appointed to replace him. As of such date, the shareholder Banco Bilbao Vizcaya Argentaria S.A. notified the Board its intention to appoint two new regular directors, Mr. Ernesto Mario San Gil and Mrs. Nuria Alonso Jiménez during the next General Shareholders’ Meeting to be held on April 20, 2021.
·As of April 19, 2021, the BCRA requested Banco BBVA Argentina S.A. following the announcement of its December 2020 results, to adjust the recognized fair value of the position held in Prisma Medios de Pago S.A., which is recorded in the Investment in equity instruments line item as of financial statements ended December 31, 2020. In this sense, the adjustment required in accordance with what was requested by the BCRA, which represents a decrease of 0.96% of the Bank’s equity and 5.89% on its total comprehensive income for the year 2020, shall be recorded and published by the Bank in the statement of changes in Shareholders’ Equity of the March 2021 financial statements; and adequately explained in its respective notes and exhibits.
·As of April 20, 2021, the General Shareholders’ Meeting approved the distribution of cash dividends for $7 billion, equal to $ 11.42559353 per share, and passed on to the Board of Directors the power to determine the date of payment of such dividends. The distribution is subject to the BCRA’s prior authorization, which has not been granted yet. According to Communication “A” 7181, the distribution of financial institutions’ results is suspended until June 30, 2021.
·As of April 27, 2021, the Board of Directors decided to replace Mr. Juan Manuel Ballesteros Castellano with Mr. Ernesto Mario San Gil ad referendum of the authorization by the BCRA, for the Audit Committee - Law No. 26,831.

Digital Transformation

Digitalization continued to accelerate during 1Q21. Active digital clients reached 1.9 million with a 73.3% penetration over total active clients (2.6 million), versus a penetration of 67.7% in 1Q20. Active mobile clients were 1.6 million, representing a 61.9% penetration in 1Q21, versus a penetration of 56.1% in 1Q20. Digital and mobile transactions4 increased 64.5% in 1Q21 YoY.

On 1Q21, retail digital sales measured in units reached 79.5% of total sales (vs. 69.9% in 1Q20) and represent 54.4% of the Banks total sales measured in monetary value (vs. 50.0% in 1Q20).

 

4 Includes online and mobile banking, Net Cash online & mobile, and non-bank correspondents.

19 
 

SMEs Productive investment financing credit lines – March 2021

Pursuant to what is stated in Communication “A” 7140, as of March 31, 2021, the Bank granted accumulated financing for more than $39.2 billion, to more than 3,800 companies.

 

Main Regulatory Changes

SME productive investment financing credit lines. Previous authorization of relocation and closure of branches. (Communication “A” 7240, 03/19/2021). The Central Bank establishes the extension of Productive Investment Financing lines (until September 30, 2021 for the 2021 quota). It also requires financial institutions to assign an official accountable for the enforcement of this credit line and to report to the Superintendence of Financial and Exchange Institutions within 10 calendar days since the issuance of this regulation. The obligation of financial institutions to request authorization from the BCRA to proceed with relocation and closure of branches is extended until December 31, 2021.

Non-performing late payment periods. (Communication “A” 7245, 03/25/2021). The BCRA established a gradual transition in the definition of debtor classification for clients who decided to postpone instalment payments, benefit that will not be renewed as of the end of March. For this matter, financial institutions will have to extend late-payment periods to classify their debtors in stages 1, 2 and 3, both for commercial and retail portfolios, according to the following schedule: i) until March 31, 2021, in 60 days, ii) until May 31, 2021, in 30 days, iii) as of June 1, 2021, they will have to classify debtors pursuant to general criteria of non-performing loans.

Modifications in Ahora 12 Program. Extension. (Domestic Trade Secretariat Resolution 282/2021, 03/30/2021). The Domestic Trade Secretariat decided to extend the Ahora 12 program until July 31, 2021, although with three main modifications: (i) there will not be a 3-month grace period, (ii) interest rates paid by businesses will be increased and (iii) some sectors will stop having the 12 instalment option and will only have 3 or 6.

Minimum Reserve Requirement. Universal Free Accounts. (Communication “A” 7254, 04/05/2021). The BCRA states the reduction of the average minimum reserve requirement in pesos for financial institutions that implement the remote and on-site opening of Universal Free Accounts, according to:

·Financing granted as of April 1, 2021 to individuals and SMEs that are not reported by financial institutions in the “Financial system debtor database” (CENDEU). They must not be reported at the CENDEU as of December 2020, and financing has to be granted at an annual nominal interest rate that does not exceed, at that moment, the maximum rate stated in the regulation on “interest rates in credit transactions” (43% nominal annual rate).
·In line with the growth rate in the use of electronic means through sight accounts whose owners are individuals.
·Based on the evolution of documents released through electronic means (ECHEQ) by the owners of checking accounts of the financial institutions, and SMEs electronic credit invoices (FCE) acquired by the financial institution during the month of the minimum reserve requirement calculation. This deduction cannot exceed 0.75% of concepts in pesos subject to requirement, on average, of the previous month.
·Based on the operability of ATMs.

These deductions cannot exceed 3% of concepts in pesos subject to requirement, on average, of the previous month.

20 
 

LELIQ excess position. (Communication “A” 7265, 04/16/2021). The BCRA states that, as of the date of this regulation, the increase in the limit of the net excess position of LELIQ provided in the item 8.2.2 of the regulation on “Operaciones al contado a liquidar y a término, pases, cauciones, otros derivados y con fondos comunes de inversion” cannot exceed the amount that surges from multiplying the percentage corresponding to the month of calculation (stated in this regulation) and the expansion verified during March 2021.

21 
 

Glossary

Active clients: holders of at least one active product. An active product is in most cases a product with at least “one movement” in the last 3 months, or a minimum balance.

Cost of Risk (accumulated): Year to date accumulated loan loss allowances / Average total loans.

Average total loans: average between previous year-end Total loans and other financing and current period Total loans and other financing.

Cost of Risk (quarterly): Current period Loan loss allowances / Average total loans. Average total loans: average between previous quarter-end Total loans and other financing and current period Total loans and other financing.

Coverage ratio: Quarterly allowances under the Expected Credit Loss model / total non-performing portfolio.

Digital clients: we consider a customer to be an active user of online banking when they have been logged at least once within the last three months using the internet or a cell phone and SMS banking.

Efficiency ratio (excl. inflation adjustments, accumulated): Accumulated (Personnel benefits+ Administrative expenses + Depreciation & Amortization) / Accumulated (Net Interest Income + Net Fee Income + Net Income from measurement of Financial Instruments at Fair Value through P&L + Net income from write-down of assets at amortized cost and at fair value through OCI + Foreign exchange and gold gains + some concepts included in Other net operating income).

Efficiency ratio (excl. inflation adjustments, quarterly): (Personnel benefits+ Administrative expenses + Depreciation & Amortization) / (Net Interest Income + Net Fee Income + Net Income from measurement of Financial Instruments at Fair Value through P&L + Net income from write-down of assets at amortized cost and at fair value through OCI + Foreign exchange and gold gains + some concepts included in Other net operating income).

Efficiency ratio (accumulated): Accumulated (Personnel benefits+ Administrative expenses + Depreciation & Amortization) / Accumulated (Net Interest Income + Net Fee Income + Net Income from measurement of Financial Instruments at Fair Value through P&L + Net income from write-down of assets at amortized cost and at fair value through OCI + Foreign exchange and gold gains + some concepts included in Other net operating income+ Income from net monetary position).

Efficiency ratio (quarterly): (Personnel benefits+ Administrative expenses + Depreciation & Amortization) / (Net Interest Income + Net Fee Income + Net Income from measurement of Financial Instruments at Fair Value through P&L + Net income from write-down of assets at amortized cost and at fair value through OCI + Foreign exchange and gold gains + some concepts included in Other net operating income+ Income from net monetary position).

Liquidity Ratio: (Cash and deposits in banks + Debt securities at fair value through P&L (Excl. Private securities) + Net REPO transactions + Other debt securities (Excl. Private securities)) / Total Deposits.

Mobile clients: customers who have been active in online banking at least once in the last three months using a mobile device.

Net Interest Margin (NIM) – (quarterly): Quarterly Net Interest Income / Average quarterly interest earning assets.

Public Sector Exposure (excl. BCRA): (National and Provincial Government public debt + Loans to the public sector + REPO transactions) / Total Assets.

22 
 

ROA (accumulated): Attributable Net Income of the period / Total Average Assets. Total Average Assets is calculated as the average between total assets on December of the previous year and total assets in the current period, expressed in local currency. Calculated over a 365-day year.

ROA (quarterly): Attributable Net Income of the period / Total Average Assets. Total Average Assets is calculated as the average between total assets on the previous quarter-end and total assets in the current period, expressed in local currency. Calculated over a 365-day year.

ROE (accumulated): Attributable Net Income of the period / Average Equity. Average Equity is calculated as the average between equity in December of the previous year and equity in the current period, expressed in local currency. Calculated over a 365-day year.

ROE (quarterly): Attributable Net Income of the period / Average Equity. Average Equity is calculated as the average between equity on the previous quarter end and equity in the current period, expressed in local currency. Calculated over a 365-day year.

Spread: (Quarterly Interest Income / Quarterly average Interest-earning Assets) – (Quarterly Interest Expenses / Quarterly average interest-bearing liabilities).

 

Other terms

n.m.: not meaningful. Implies an increase above 500% and a decrease below -500%.

N/A: not applicable.

Bps: basis points.

23 
 

Balance Sheet

Balance Sheet BBVA ARG Consolidated Chg (%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Assets          
Cash and deposits in banks 195,735  171,811  209,007  13.9%  (6.3%)
Cash  65,937 70,294 53,246  (6.2%) 23.8%
 Financial institutions and correspondents   129,798  101,517   - 27.9%  N/A 
B.C.R.A   125,694 97,348  149,495 29.1%   (15.9%)
Other local and foreign financial institutions 4,104  4,169  6,266  (1.6%)   (34.5%)
Debt securities at fair value through profit or loss 4,872   1,065 12,923   357.5% (62.3%)
Derivatives 2,476   4,380   3,075 (43.5%) (19.5%)
Repo transactions  30,470 55,559   4,567 (45.2%)  n.m 
Other financial assets  13,819 11,346 26,523  21.8% (47.9%)
Loans and other financing 284,652  315,725  311,646  (9.8%)  (8.7%)
Non-financial public sector 0   1   1   (20.3%)   (44.5%)
B.C.R.A  -   7 16 (100.0%) (100.0%)
Other financial institutions 1,987  1,983  7,216   0.2%   (72.5%)
Non-financial private sector and residents abroad   282,665  313,735  304,413  (9.9%)  (7.1%)
Other debt securities 135,069  136,226 92,374  (0.8%)  46.2%
Financial assets pledged as collateral  16,645 20,233   9,722 (17.7%)  71.2%
Current income tax assets 1,361   1   1  n.m   n.m 
Investments in equity instruments 2,278   2,883   2,585 (21.0%) (11.9%)
Investments in subsidiaries and associates 1,585   1,629   1,610  (2.7%)  (1.6%)
Property and equipment  37,641 38,142 38,988  (1.3%)  (3.5%)
Intangible assets 1,907   1,755   1,311   8.7%  45.5%
Deferred income tax assets 4,185   5,990   5,787 (30.1%) (27.7%)
Other non-financial assets 9,000 10,081   6,112 (10.7%)  47.3%
Non-current assets held for sale 255   255   255 - -
Total Assets 741,949  777,080  726,484   (4.5%) 2.1%
Liabilities          
Deposits 507,820  540,167  467,831  (6.0%)   8.5%
Non-financial public sector 6,582  6,357  4,955   3.5% 32.8%
Financial sector   179  973  409   (81.6%)   (56.2%)
Non-financial private sector and residents abroad   501,059  532,836  462,467  (6.0%)   8.3%
Derivatives 399   213   473  87.1% (15.7%)
Other financial liabilities  44,913 44,308 61,097   1.4% (26.5%)
Financing received from the B.C.R.A. and other financial institutions 9,773 10,873   5,174 (10.1%)  88.9%
Corporate bonds issued 1,022   1,320 10,697 (22.6%) (90.4%)
Current income tax liabilities 1,589   4,204 16,516 (62.2%) (90.4%)
Provisions  10,466 12,961 16,082 (19.3%) (34.9%)
Deferred income tax liabilities   73 44 -  64.4%  N/A 
Other non-financial liabilities  45,989 45,795 26,790   0.4%  71.7%
Total Liabilities 622,043  659,886  604,659   (5.7%) 2.9%
Equity          
Share Capital 613   613   613 - -
Non-capitalized contributions  29,805 29,805 29,805 -  (0.0%)
Capital adjustments  21,134 21,134 21,135 -  (0.0%)
Reserves  97,515 97,515 67,390 -  44.7%
Retained earnings (34,376)   (46,848)   834  26.6%  n.m 
Other accumulated comprehensive income   (167) 88  (2,339)  (289.7%)  92.9%
Income for the period 3,009 12,473   1,927 (75.9%)  56.2%
Equity attributable to owners of the Parent   117,532  114,779  119,363   2.4%  (1.5%)
Equity attributable to non-controlling interests 2,374  2,415  2,463  (1.7%)  (3.6%)
Total Equity 119,906 117,194 121,826 2.3%   (1.6%)
Total Liabilities and Equity 741,949 777,080 726,484   (4.5%) 2.1%

24 
 

Balance Sheet – 5 quarters

Balance Sheet BBVA ARG Consolidated
In millions of AR$ - Inflation adjusted 1Q21 4Q20 3Q20 2Q20 1Q20
Assets          
Cash and deposits in banks 195,735  171,811  167,468  152,329  209,007
Cash  65,937 70,294 49,491 68,321 53,246
 Financial institutions and correspondents   129,798  101,517   -   -   -
B.C.R.A   125,694 97,348  112,693 78,401  149,495
Other local and foreign financial institutions 4,104  4,169  5,284  5,607  6,266
Debt securities at fair value through profit or loss 4,872   1,065   7,592 13,206 12,923
Derivatives 2,476   4,380   1,775   1,431   3,075
Repo transactions  30,470 55,559 23,890 46,388   4,567
Other financial assets  13,819 11,346 15,627   8,633 26,523
Loans and other financing 284,652  315,725  315,525  329,262  311,646
Non-financial public sector 0   1   1   0   1
B.C.R.A  -   7   -   - 16
Other financial institutions 1,987  1,983  3,707  4,761  7,216
Non-financial private sector and residents abroad   282,665  313,735  311,817  324,501  304,413
Other debt securities 135,069  136,226  133,059  110,331 92,374
Financial assets pledged as collateral  16,645 20,233 18,282 14,551   9,722
Current income tax assets 1,361   1   6 12   1
Investments in equity instruments 2,278   2,883   2,218   2,443   2,585
Investments in subsidiaries and associates 1,585   1,629   1,687   1,663   1,610
Property and equipment  37,641 38,142 37,904 38,270 38,988
Intangible assets 1,907   1,755   1,629   1,445   1,311
Deferred income tax assets 4,185   5,990   4,294   4,073   5,787
Other non-financial assets 9,000 10,081   7,599   6,460   6,112
Non-current assets held for sale 255   255   255   255   255
Total Assets 741,949  777,080  738,812  730,754  726,484
Liabilities          
Deposits 507,820  540,167  502,494  505,293  467,831
Non-financial public sector 6,582  6,357  7,455  7,396  4,955
Financial sector   179  973  691  406  409
Non-financial private sector and residents abroad   501,059  532,836  494,348  497,492  462,467
Derivatives 399   213 45   311   473
Other financial liabilities  44,913 44,308 48,576 38,258 61,097
Financing received from the B.C.R.A. and other financial institutions 9,773 10,873   4,221   6,902   5,174
Corporate bonds issued 1,022   1,320   5,157   5,689 10,697
Current income tax liabilities 1,589   4,204   3,619   4,383 16,516
Provisions  10,466 12,961 13,180 14,891 16,082
Deferred income tax liabilities   73 44 23   6 -
Other non-financial liabilities  45,989 45,795 30,227 29,560 26,790
Total Liabilities 622,043  659,886  607,541  605,294  604,659
Equity          
Share Capital 613   613   613   613   613
Non-capitalized contributions  29,805 29,805 29,805 29,805 29,805
Capital adjustments  21,134 21,134 21,134 21,134 21,135
Reserves  97,515 97,515  111,612  111,612 67,390
Retained earnings (34,376)   (46,848)   (46,848)   (46,848)   834
Other accumulated comprehensive income   (167) 88   389  (947)  (2,339)
Income for the period 3,009 12,473 12,033   7,556   1,927
Equity attributable to owners of the Parent   117,532  114,779  128,738  122,926  119,363
Equity attributable to non-controlling interests 2,374  2,415  2,533  2,534  2,463
Total Equity 119,906 117,194 131,271 125,460 121,826
Total Liabilities and Equity 741,949 777,080 738,812 730,754 726,484


25 
 

Balance Sheet – In Foreign Currency Exposure

Foreign Currency Exposure BBVA ARG Consolidated Chg(%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Assets          
Cash and deposits in banks  126,835  129,844 97,807  (2.3%)  29.7%
Debt securities at fair value through profit or loss   1   1   0 (14.1%)   201.7%
Other financial assets   2,452   2,501   1,886  (1.9%)  30.0%
Loans and other financing 29,010 31,546 42,715  (8.0%) (32.1%)
Other financial institutions  295  467  1,196   (36.9%)   (75.4%)
  Non-financial private sector and residents abroad 28,716 31,079 41,519  (7.6%)   (30.8%)
Other debt securities - -   8,039  N/A   (100.0%)
Financial assets pledged as collateral   4,950   5,328   2,707  (7.1%)  82.8%
Investments in equity instruments 29 32 17  (8.3%)  69.5%
Total foreign currency assets  163,276  169,251  153,171   (3.5%) 6.6%
Liabilities    -  -    
Deposits  146,764  155,244  131,049  (5.5%)  12.0%
  Non-Financial Public Sector  2,248  2,611  2,358   (13.9%)  (4.7%)
  Financial Sector 54 57 49  (5.3%) 10.8%
  Non-financial private sector and residents abroad  144,461  152,576  128,642  (5.3%) 12.3%
Other financial liabilities 12,642 11,732 13,219   7.8%  (4.4%)
Financing received from the  B.C.R.A. and other financial institutions   2,459   2,554   917  (3.7%)   168.3%
Other non financial liabilities   1,584   1,291   1,111  22.7%  42.6%
Total foreign currency liabilities  163,450  170,820  146,296   (4.3%)  11.7%
           
Foreign Currency Net Position - AR$  (173)  (1,570)   6,875  89.0%  (102.5%)
           
Foreign Currency Net Position - USD  (2)   (19)   107  89.9%  (101.8%)

P&L

Income Statement BBVA ARG Consolidated Chg(%)
In millions of AR$ - Inflation adjusted 1Q21 4Q20 1Q20 QoQ YoY
Interest income 36,705 36,171 35,109   1.5%   4.5%
Interest expense   (15,157)   (14,114)   (11,656)  (7.4%) (30.0%)
Net interest income 21,548 22,057 23,453   (2.3%)   (8.1%)
Fee income   7,678   8,506   7,704  (9.7%)  (0.3%)
Fee expenses  (4,323)  (5,343)  (5,028)  19.1%  14.0%
Net fee income   3,355   3,163   2,676 6.1%  25.4%
Net income from financial instruments at fair value through P&L   1,600   4,692   1,411 (65.9%)  13.4%
Net loss from write-down of assets at amortized cost and fair value through OCI   (33)  (165)  (1,045)  80.0%  96.8%
Foreign exchange and gold gains   896   1,212   1,765 (26.1%) (49.3%)
Other operating income   1,547   2,177   1,482 (28.9%)   4.4%
Loan loss allowances  (1,914)  (4,152)  (2,316)  53.9%  17.4%
Net operating income 26,999 28,984 27,426   (6.8%)   (1.6%)
Personnel benefits  (5,840)  (5,487)  (6,333)  (6.4%)   7.8%
Administrative expenses  (5,332)  (5,467)  (5,121)   2.5%  (4.1%)
Depreciation and amortization  (1,069)  (1,225)  (1,174)  12.7%   8.9%
Other operating expenses  (4,648)  (6,873)  (4,439)  32.4%  (4.7%)
Operating income 10,111   9,932 10,360 1.8%   (2.4%)
Income from associates and joint ventures   (29) 27 39  (209.1%)  (174.6%)
Income from net monetary position  (7,551)  (7,718)  (5,345)   2.2% (41.3%)
Income before income tax   2,531   2,241   5,055  12.9% (49.9%)
Income tax   437  (1,919)  (3,088)   122.8%   114.1%
Income for the period   2,967   322   1,967  n.m   50.8%
Income for the period attributable to:          
Owners of the parent   3,009   440   1,927  n.m   56.2%
Non-controlling interests   (41)  (118) 41  64.8%  (202.2%)
           
Other comprehensive Income (1)  (255)  (301)   3,213  15.2%  (107.9%)
Total comprehensive income   2,712 21   5,180  n.m  (47.6%)


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P&L – 5 quarters

Income Statement BBVA ARG Consolidated
In millions of AR$ - Inflation adjusted 1Q21 4Q20 3Q20 2Q20 1Q20
Interest income 36,705 36,171 32,838 30,244 35,109
Interest expense   (15,157)   (14,114)   (11,899)  (8,752)   (11,656)
Net interest income 21,548 22,057 20,939 21,492 23,453
Fee income   7,678   8,506   7,883   8,264   7,704
Fee expenses  (4,323)  (5,343)  (4,105)  (4,056)  (5,028)
Net fee income   3,355   3,163   3,778   4,208   2,676
Net income from financial instruments at fair value   1,600   4,692   1,114   1,724   1,411
Net loss from write-down of assets at amortized cost and fair value through OCI   (33)  (165)  (1,120)  (279)  (1,045)
Foreign exchange and gold gains   896   1,212   2,034   2,023   1,765
Other operating income   1,547   2,177   1,886   1,546   1,482
Loan loss allowances  (1,914)  (4,152)  (1,166)  (3,582)  (2,316)
Net operating income 26,999 28,984 27,466 27,133 27,426
Personnel benefits  (5,840)  (5,487)  (5,763)  (5,368)  (6,333)
Administrative expenses  (5,332)  (5,467)  (5,482)  (5,187)  (5,121)
Depreciation and amortization  (1,069)  (1,225)  (1,053)  (1,141)  (1,174)
Other operating expenses  (4,648)  (6,873)  (3,403)  (3,833)  (4,439)
Operating income 10,111   9,932 11,764 11,604 10,360
Income from associates and joint ventures   (29) 27   (14)   256 39
Income from net monetary position  (7,551)  (7,718)  (5,805)  (3,380)  (5,345)
Income before income tax   2,531   2,241   5,945   8,479   5,055
Income tax   437  (1,919)  (1,470)  (2,786)  (3,088)
Income for the period   2,967   322   4,476   5,694   1,967
Income for the period attributable to:          
Owners of the parent   3,009   440   4,477   5,630   1,927
Non-controlling interests (41)   (118) (1)   64   41
           
Other comprehensive Income (2)  (255)  (301)   1,336   1,394   3,213
Total comprehensive income   2,712 21   5,812   7,088   5,180

 

Ratios

Quarterly Annualized Ratios BBVA ARG consolidated Chg (bps)
In % 1Q21 4Q20 1Q20 QoQ YoY
Profitability          
Efficiency Ratio 72.5% 44.0% 59.3%          2,845 bps          1,321 bps
Efficiency Ratio (excl. Inflation adjustments) 50.1% 34.4% 47.4%          1,565 bps            270 bps
ROA 1.6% 0.2% 1.1%            138 bps              52 bps
ROE 10.5% 1.4% 6.6%            907 bps            389 bps
Liquidity          
Liquid assets / Total Deposits 72.0% 67.4% 68.1%            459 bps            394 bps
Capital          
Regulatory Capital Ratio 22.4% 20.2% 21.8%            214 bps              58 bps
TIER I Capital Ratio (Ordinary Capital Level 1/ RWA) 21.7% 19.6% 21.2%            214 bps              57 bps
Asset Quality          
Total non-performing portfolio / Total portfolio 1.72% 1.40% 2.78%              32 bps           (106)bps
Allowances  /Total non-performing portfolio  275.22% 311.95% 187.15%         (3,674)bps          8,807 bps
Cost of Risk 2.47% 4.99% 2.87%           (253)bps             (41)bps

 

27 
 
Accumulated Annualized Ratios BBVA ARG consolidated Chg (bps)
In %  1Q21 4Q20 1Q20 QoQ YoY
Profitability          
Efficiency Ratio  72.5%  56.8% 59.3% 1,566 bps 1,321 bps
Efficiency Ratio (excl. Inflation adjustments)  50.1%  45.1% 47.4%   495 bps   270 bps
ROA   1.6%   1.7%   1.1%   (8)bps  52 bps
ROE  10.5%  10.9%   6.6% (36)bps   389 bps
Liquidity          
Liquid assets / Total Deposits  72.0%  67.4% 68.1%   459 bps   394 bps
Capital          
Regulatory Capital Ratio  22.4%  20.2% 21.8%   214 bps  58 bps
TIER I Capital Ratio (Ordinary Capital Level 1/ RWA)  21.7%  19.6% 21.2%   214 bps  57 bps
Asset Quality          
Total non-performing portfolio / Total portfolio  1.72%  1.40% 2.78%  32 bps  (106)bps
Allowances  /Total non-performing portfolio  275.22% 311.95% 187.15%   (3,674)bps 8,807 bps
Cost of Risk  2.47%  3.46% 2.87% (99)bps (41)bps

 

About BBVA Argentina

BBVA Argentina (NYSE; BYMA; MAE: BBAR; LATIBEX: XBBAR) is a subsidiary of the BBVA Group, the main shareholder since 1996. In Argentina, it is one of the leading private financial institutions since 1886. Nationwide, BBVA Argentina offers retail and corporate banking to a broad customer base, including: individuals, SME’s, and large-sized companies.

BBVA Argentina’s purpose is to bring the age of opportunities to everyone, based on our customers’ real needs, providing the best solutions, and helping them make the best financial decisions through an easy and convenient experience. The institution relies on solid values: “The customer comes first, We think big and We are one team”. At the same time, its responsible banking model aspires to achieve a more inclusive and sustainable society.

 

Investor Relations Contact

Ernesto Gallardo

Chief Financial Officer

Inés Lanusse

Investor Relations Officer

 

investorelations-arg@bbva.com

ir.bbva.com.ar

28 
 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    Banco BBVA Argentina S.A.
Date: May 26, 2021   By: /s/ Ernesto Gallardo Jimenez
        Name: Ernesto Gallardo Jimenez
        Title: Chief Financial Officer