Provisions

12 Months Ended

Dec. 31, 2023

20. Provisions

The Group, as a result of the ordinary course of its business, may be a party to legal lawsuits of a labor, commercial, tax and regulatory 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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Other provisions: reflects the estimated amounts to pay class actions, labour, tax and commercial claims as well as other miscellaneous complaints.


	December 31, 2023		December 31, 2022
Financial guarantees and loan commitments		5,972,370		8,389,890
Other provisions		14,751,393		18,607,266
Provisions commercial claims		9,050,746		10,887,030
Provisions tax claims		1,930,268		1,852,273
Provisions labor-related		912,890		1,914,601
Others		2,857,489		3,953,362

TOTAL		20,723,763		26,997,156

Changes in fiscal year 2023 and 2022 are included below:


Accounts	Balances as of December 31, 2022		Increases		Provision reversals			Provisions used			Inflation adjustment			Balances as of December 31, 2023
Financial guarantees and loan commitments		8,389,890		4,849,781		—			—			(7,267,301	)		5,972,370
Other provisions		18,607,266		16,490,255		(104,110	)		(4,908,103	)		(15,333,915	)		14,751,393
Provisions commercial claims		10,887,030		10,922,759		—			(3,631,466	)		(9,127,577	)		9,050,746
Provisions labor-related		1,914,601		1,625,231		—			(1,086,102	)		(1,540,840	)		912,890
Provisions tax claims		1,852,273		1,287,530		—			(35,933	)		(1,173,602	)		1,930,268
Others		3,953,362		2,654,735		(104,110	)		(154,602	)		(3,491,896	)		2,857,489

TOTAL PROVISIONS		26,997,156		21,340,036		(104,110	)		(4,908,103	)		(22,601,216	)		20,723,763


Accounts	Balances as of December 31, 2021		Increases		Provision reversals			Provisions used			Inflation adjustment			Balances as of December 31, 2022
Financial guarantees and loan commitments		5,178,233		6,367,666		—			—			(3,156,009	)		8,389,890
Provisions for reorganization		8,149,225		7,391,880		(709,547	)		(11,531,927	)		(3,299,631	)		—
Other provisions		20,721,559		12,807,843		(5,444	)		(2,641,073	)		(12,275,619	)		18,607,266
Provisions commercial claims		14,746,706		6,047,174		—			(1,272,083	)		(8,634,767	)		10,887,030
Provisions labor-related		1,721,074		2,074,034		—			(931,876	)		(948,631	)		1,914,601
Provisions tax claims		1,955,093		1,274,322		—			(411,392	)		(965,750	)		1,852,273
Others		2,298,686		3,412,313		(5,444	)		(25,722	)		(1,726,471	)		3,953,362

TOTAL PROVISIONS		34,049,017		26,567,389		(714,991	)		(14,173,000	)		(18,731,259	)		26,997,156

The expected terms to settle these obligations are as follows:


December 31, 2023
Provisions	Within 12 months		After 12 months
Financial guarantees and loan commitments		5,972,370		—
Other provisions		10,525,110		4,226,283
Provisions commercial claims		8,220,748		829,998
Provisions labor-related		183,691		729,199
Provisions tax claims		834,422		1,095,846
Others		1,286,249		1,571,240

December 31, 2022
Provisions	Within 12 months		After 12 months
Financial guarantees and loan commitments		8,389,890		—
Other provisions		6,142,604		12,464,662
Provisions comercial claims		2,537,537		8,349,493
Provisions labor-related		363,065		1,551,536
Provisions tax claims		1,852,273		—
Others		1,389,729		2,563,633

The Group’s management and legal advisors consider no further significant accounting effects could arise from the final outcome of the abovementioned proceedings other than those disclosed in these consolidated Financial Statements.

Possible contingencies

Contingent liabilities have not been recognized in these financial statements and correspond to 137 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 168,338 of which an outflow of funds is estimated for approximately 142,601 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.