Provisions

12 Months Ended

Dec. 31, 2021

24. Provisions

The Group, as a result of the ordinary course of its business, may be a party to legal lawsuits of a labor, commercial and tax nature. A provision is recognized whenever the loss is classified as probable.

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Financial guarantees and loan commitments: reflects the ECL arising from financial guarantees issued, unused balances of checking account overdrafts, credit cards and other loan commitments.

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Provisions for reorganization: Consistent with the goal of further aligning the organizational structure with the corporate strategy during the current year, achieving efficiency gains and streamlining the decision-making process across all work teams.

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Other provisions: reflects the estimated amounts to pay class actions, labour, tax and commercial claims as well as other miscellaneous complaints.


	December 31, 2021		December 31, 2020
Other provisions		3,416,033		3,975,569
Provisions commercial claims		2,431,055		2,955,334
Provisions labor-related		283,726		378,720
Provisions tax claims		322,305		276,149
Others		378,947		365,366
Provisions for reorganization		1,343,433		3,062,850
Financial guarantees and loan commitments		853,653		2,059,740

TOTAL		5,613,119		9,098,159

Changes in fiscal year 2021 and 2020 are included below:


Accounts	Balances as of December 31, 2020		Increases		Provision reversals			Provisions used			Inflation adjustment			Balances as of December 31, 2021
- Other provisions		3,975,569		1,593,078		(2,260	)		(625,024	)		(1,525,330	)		3,416,033
Provisions commercial claims		2,955,334		1,026,330		—			(461,024	)		(1,089,585	)		2,431,055
Provisions labor-related		378,720		183,086		—			(142,651	)		(135,429	)		283,726
Provisions tax claims		276,149		182,027		—			(10,314	)		(125,557	)		322,305
Others		365,366		201,635		(2,260	)		(11,035	)		(174,759	)		378,947
- Provisions for reorganization		3,062,850		2,264,607		(295,948	)		(2,899,922	)		(788,154	)		1,343,433
- Financial guarantees and loan commitments		2,059,740		709,704		(1,203,673	)		—			(712,118	)		853,653

TOTAL PROVISIONS		9,098,159		4,567,389		(1,501,881	)		(3,524,946	)		(3,025,602	)		5,613,119


Accounts	Balances as of December 31, 2019		Increases		Provision reversals			Provisions used			Inflation adjustment			Balances as of December 31, 2020
- Other provisions		4,996,986		1,697,215		(43,150	)		(1,120,967	)		(1,554,515	)		3,975,569
Provisions commercial claims		3,932,581		1,132,208		—			(951,892	)		(1,157,563	)		2,955,334
Provisions labor-related		419,619		211,217		—			(110,067	)		(142,049	)		378,720
Provisions tax claims		216,989		180,784		—			(40,412	)		(81,212	)		276,149
Others		427,797		173,006		(43,150	)		(18,596	)		(173,691	)		365,366
- Provisions for reorganization		4,060,759		4,315,002		(975,967	)		(3,514,062	)		(822,882	)		3,062,850
- Financial guarantees and loan commitments		1,861,502		811,604		—			—			(613,366	)		2,059,740

TOTAL PROVISIONS		10,919,247		6,823,821		(1,019,117	)		(4,635,029	)		(2,990,763	)		9,098,159

The expected terms to settle these obligations are as follows:


December 31, 2021
Provisions	Within 12 months		After 12 months
Other provisions		2,083,813		1,332,220
Provisions commercial claims		1,452,287		978,768
Provisions labor-related		98,826		184,900
Provisions tax claims		322,305		—
Others		210,395		168,552
Provisions for reorganization		1,343,433		—
Financial guarantees and loan commitments		853,653		—

December 31, 2020
Provisions	Within 12 months		After 12 months
Other provisions		1,704,236		2,271,333
Provisions commercial claims		1,247,698		1,707,636
Provisions labor-related		118,847		259,873
Provisions tax claims		104,797		171,352
Others		232,894		132,472
Provisions for reorganization		3,062,850		—
Financial guarantees and loan commitments		2,059,740		—

Possible contingencies

Contingent liabilities have not been recognized in these financial statements and corresponds to 168 claims received (in court or administrative proceedings), that have arisen in the Bank’s ordinary course of business. The estimated amount of said claims amounts to 31,355 of which an outflow of funds is estimated for approximately 19,656 in the next 12 months. These claims are primarily related to leasing claims, petitions to secure evidence, and labor claims. The Group’s management and legal advisors consider that the probability of these cases resulting in an outflow of resources is possible, but not probable, and that the potential cash disbursements should not be material.