CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIOD ENDED MARCH 31, 2020
Banco BBVA Argentina S.A.
TABLE OF CONTENTS
Condensed interim financial statements for the three-month period ended March 31, 2020, comparatively presented.
Consolidated Condensed Statement of Financial Position
Consolidated Condensed Statement of Income
Consolidated Condensed Statement of Other Comprehensive Income
Consolidated Condensed Statement of Changes in Shareholders' Equity
Consolidated Condensed Statement of Cash Flows
Notes
Exhibits
Independent auditors' report on the review of the consolidated condensed interim financial statements
Separate Condensed Statement of Financial Position
Separate Condensed Statement of Income
Separate Condensed Statement of Other Comprehensive Income
Separate Condensed Statement of Changes in Shareholders' Equity
Separate Condensed Statement of Cash Flows
Notes
Exhibits
Independent auditors' report on the review of the separate condensed interim financial statements
Supervisory Committee's Report
Reporting Summary
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CONS OLIDATED CONDENS ED S TATEMENT OF FINANCIAL POS ITION
AS OF MARCH 31, 2020 AND DECEMBER 31, 2019
(stated in thousands of pesos)
Notes and | 03.31.20 | 12.31.19 | |
Exhibits | |||
ASSETS | |||
Cash and deposits in banks | 7 | 146,518,286 | 168,447,403 |
Cash | 37,326,337 | 50,368,207 | |
Financial institutions and correspondents | 109,191,949 | 118,079,196 | |
Argentine Central Bank (BCRA) | 104,799,668 | 115,885,703 | |
Other in the country and abroad | 4,392,281 | 2,193,493 | |
Debt securities at fair value through profit or loss | 8 | 9,059,229 | 4,452,088 |
Derivatives | 9 | 2,155,425 | 3,284,689 |
Repo transactions | 10 | 3,201,694 | - |
Other financial assets | 11 | 18,541,094 | 5,056,367 |
Loans and other financing | 12 | 218,537,669 | 210,521,665 |
Non-financial government sector | 581 | 493 | |
Argentine Central Bank (BCRA) | 11,273 | 18,763 | |
Other financial institutions | 5,026,311 | 5,471,908 | |
Non-financial private sector and residents abroad | 213,499,504 | 205,030,501 | |
Other debt securities | 13 | 64,756,406 | 48,701,563 |
Financial assets pledged as collateral | 14 | 6,815,417 | 6,385,453 |
Current income tax assets | 15 a) | 24,622 | 28,220 |
Investments in equity instruments | 16 | 1,811,853 | 2,216,211 |
Investments in associates | 17 | 1,126,379 | 1,116,747 |
Property and equipment | 18 | 27,331,681 | 28,105,172 |
Intangible assets | 19 | 919,168 | 840,905 |
Deferred income tax assets | 7,416,288 | 5,735,315 | |
Other non-financial assets | 20 | 4,260,161 | 4,604,216 |
Non-currrent assets held for sale | 21 | 178,903 | 178,903 |
TOTAL ASSETS | 512,654,275 | 489,674,917 | |
Notes and exhibits are an integral part of these financial statements. |
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CONS OLIDATED CONDENS ED S TATEMENT OF FINANCIAL POS ITION
AS OF MARCH 31, 2020 AND DECEMBER 31, 2019
(stated in thousands of pesos)
Notes and | 03.31.20 | 12.31.19 | |
Exhibits | |||
LIABILITIES | |||
Deposits | 22 and Exhibit H | 327,959,863 | 316,917,643 |
Non-financial government sector | 3,473,308 | 3,167,294 | |
Financial sector | 286,915 | 192,337 | |
Non-financial private sector and residents abroad | 324,199,640 | 313,558,012 | |
Liabilities at fair value through profit or loss | 23 | - | 626,102 |
Derivatives | 9 | 331,591 | 3,312,621 |
Other financial liabilities | 24 | 42,830,228 | 31,073,389 |
Financing received from the BCRA and other financial institutions | 25 | 3,627,151 | 6,628,457 |
Corporate bonds issued | 26 | 7,498,543 | 7,889,932 |
Current income tax liabilities | 15 b) | 11,577,761 | 8,699,479 |
Provisions | 27 and Exhibit J | 11,273,813 | 11,585,943 |
Other non-financial liabilities | 28 | 18,780,311 | 18,426,905 |
TOTAL LIABILITIES | 423,879,261 | 405,160,471 | |
EQUITY | |||
Share capital | 30 | 612,710 | 612,710 |
Non-capitalized contributions | 20,893,825 | 20,893,825 | |
Capital adjustments | 14,632,579 | 14,632,579 | |
Reserves | 47,241,771 | 47,241,771 | |
Retained earnings | 10,460,210 | (17,844,403) | |
Other accumulated comprehensive income/(loss) | (9,871,341) | (11,026,309) | |
Income for the period | 3,078,940 | 28,304,613 | |
Equity attributable to owners of the Parent | 87,048,694 | 82,814,786 | |
Equity attributable to non-controlling interests | 1,726,320 | 1,699,660 | |
TOTAL EQUITY | 88,775,014 | 84,514,446 | |
TOTAL LIABILITIES AND EQUITY | 512,654,275 | 489,674,917 | |
Notes and exhibits are an integral part of these financial statements. |
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CONSOLIDATED CONDENSED STATEMENT OF INCOME FOR THETHREE-MONTHINTERIM PERIODS ENDED MARCH 31, 2020 AND 2019 (stated in thousands of pesos)
Notes and | Accumulated | Accumulated as | |
Exhibits | as of 03.31.20 | of 03.31.19 | |
Interest income | 31 | 24,612,502 | 28,416,766 |
Interest expense | 32 | (8,171,286) | (13,372,696) |
Net interest income | 16,441,216 | 15,044,070 | |
Commission income | 33 | 5,400,962 | 5,896,365 |
Commission expenses | 34 | (3,525,110) | (3,594,108) |
Net commission income | 1,875,852 | 2,302,257 | |
Net income from financial instruments at fair value | 35 | 1,000,110 | 3,752,589 |
through profit or loss | |||
Net income (loss) from write-down of assets at amortized cost and at | 36 | (127,002) | (6,264) |
fair value through OCI | |||
Foreign exchange and gold gains/(losses) | 37 | 1,237,269 | 1,975,765 |
Other operating income | 38 | 1,038,967 | 5,268,011 |
Loan loss allowances | Exhibit R | (1,623,363) | (1,617,615) |
Net operating income | 19,843,049 | 26,718,813 | |
Personnel benefits | 39 | (4,439,276) | (4,202,447) |
Administrative expenses | 40 | (3,589,942) | (3,160,419) |
Depreciation and amortization | 41 | (822,794) | (1,229,499) |
Other operating expenses | 42 | (3,111,531) | (4,509,182) |
Operating income | 7,879,506 | 13,617,266 | |
Income (loss) from associates and joint ventures | 27,177 | (76,309) | |
Gain (loss) on net monetary position | (2,623,512) | (5,021,933) | |
Income before income tax | 5,283,171 | 8,519,024 | |
Income tax | 15 c) | (2,175,775) | (3,649,156) |
Income for the period | 3,107,396 | 4,869,868 | |
Income attributable to: | |||
Owners of the Parent | 3,078,940 | 4,870,007 | |
Non-controlling interests | 28,456 | (139) | |
Notes and exhibits are an integral part of these financial statements. |
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EARNINGS PER SHARE | ||
AS OF MARCH 31, 2020 AND 2019 | ||
(stated in thousands of pesos) | ||
Accounts | 03.31.20 | 03.31.19 |
Numerator: | ||
Net income attributable to owners of the Parent | 3.078.940 | 4.870.007 |
Net income attributable to owners of the Parent adjusted to reflect the effect of dilution | 3.078.940 | 4.870.007 |
Denominator: | ||
Weighted average of outstanding common shares for the period | 612.683.684 | 612.659.638 |
Weighted average of outstanding common shares for the period adjusted to reflect the | ||
effect of dilution | 612.683.684 | 612.659.638 |
Basic earnings per share (stated in pesos) | 5,0253 | 7,9490 |
Diluted earnings per share (stated in pesos) (1) | 5,0253 | 7,9490 |
(1) Since Banco BBVA Argentina S.A. has not issued financial instruments with a dilutive effect on earnings per share, basic and diluted earnings per share are the same.
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CONSOLIDATED STATEMENT OF OTHER COMPREHENSIVE INCOME | ||
FOR THETHREE-MONTH INTERIM PERIODS ENDED MARCH 31, 2020 AND 2019 | ||
(stated in thousands of pesos) | ||
Accumulated | Accumulated | |
as of | as of | |
03.31.20 | 03.31.19 | |
Income for the period | 3.107.396 | 4.869.868 |
Other comprehensive income components to be reclassified to income/(loss) for the period: | ||
Share in Other Comprehensive Income from associates and joint ventures at equity method | ||
Income/(loss) on the Share in OCI from associates and joint ventures at equity method | (18.442) | (42.437) |
(18.442) | (42.437) | |
Income or loss on hedge instruments - Cash flow hedge | ||
(Loss) on hedge instrument for the period | (1.750) | - |
Income tax | 383 | - |
(1.367) | - | |
Profit or losses from financial instruments at fair value through OCI | ||
Income/(Loss) for the period on financial instruments at fair value through OCI | 1.134.069 | 2.114.225 |
Reclassication adjustment for the period | 127.002 | 6.264 |
Income tax | (76.038) | 160.191 |
1.185.033 | 2.280.680 | |
Other comprehensive income components not to be reclassified to income/(loss) for the period: | ||
Income or loss on equity instruments at fair value through OCI (IFRS 9, paragraph 5.7.5) | ||
(Loss) on equity instruments at fair value through OCI | (15.628) | - |
Income tax | 4.688 | - |
(10.940) | - | |
Total Other Comprehensive Income for the period | 1.154.284 | 2.238.243 |
Total comprehensive income | 4.261.680 | 7.108.111 |
Total comprehensive income: | ||
Attributable to owners of the Parent | 4.233.908 | 7.108.250 |
Attributable to non-controlling interests | 27.772 | (139) |
Notes and exhibits are an integral part of these financial statements. |
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CO NSO LIDATED CO NDENSED STATEMENT O F CHANGES IN SHAREHO LDERS' EQ UITY | ||||||||||||
FO R THE THREE-MO NTH INTERIM PERIO DS ENDED MARCH 31, 2020 AND 2019 | ||||||||||||
(stated in thousands of pesos) | ||||||||||||
2020 | 2019 | |||||||||||
Share | Non-capit alized | Other comprehensive | Retained | |||||||||
capital | contributions | income | earnings | |||||||||
T otal equity | ||||||||||||
T otal equity | attributable to | |||||||||||
Losses on financial | attributable to | non- | T otal | T otal | ||||||||
Outstanding | Adjustments | instruments at fair | Unappropriated | owners of the | controlling | |||||||
T ransactions | shares | Share premium | to equity | value through OCI | Other | Legal reserve | Optional reserve | retained earnings | parent | interests | ||
Restated balances at the beginning of the year | 612.710 | 20.893.825 | 14.632.579 | (11.073.041) | 46.732 | 11.153.149 | 36.088.622 | 12.539.900 | 84.894.476 | 1.699.660 | 86.594.136 | 72.553.300 |
Impact of the implementation of the financial reporting | ||||||||||||
framework established by the BCRA - IFRS 9, paragraph | - | - | - | - | - | - | - | (2.079.690) | (2.079.690) | - | (2.079.690) | (318.744) |
5.5. (See Note 5.2.c.) | ||||||||||||
Adjusted balance at the beginning of the year | 612.710 | 20.893.825 | 14.632.579 | (11.073.041) | 46.732 | 11.153.149 | 36.088.622 | 10.460.210 | 82.814.786 | 1.699.660 | 84.514.446 | 72.234.556 |
T otal comprehensive income for the period | ||||||||||||
- Income for the period | - | - | - | - | - | - | - | 3.078.940 | 3.078.940 | 28.456 | 3.107.396 | 4.870.007 |
- Other Comprehensive Income for the period | - | - | - | 1.185.033 | (30.065) | - | - | - | 1.154.968 | (684) | 1.154.284 | 2.238.243 |
Difference derived from impact of the implementation of | ||||||||||||
the financial reporting framework established by the BCRA | - | - | - | - | - | - | - | - | - | (1.112) | (1.112) | - |
- IFRS 9, paragraph 5.5. Group "B" institutions. | ||||||||||||
Balances at fiscal period-end | 612.710 | 20.893.825 | 14.632.579 | (9.888.008) | 16.667 | 11.153.149 | 36.088.622 | 13.539.150 | 87.048.694 | 1.726.320 | 88.775.014 | 79.342.806 |
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CONSOLIDATED STATEMENT OF CASH FLOWS | ||
FOR THETHREE-MONTH INTERIM PERIODS ENDED MARCH 31, 2020 AND 2019 | ||
(stated in thousands of pesos) | ||
Accounts | 03.31.20 | 03.31.19 |
Cash flows from operating activities | ||
Income before Income Tax | 5,283,171 | 8,519,024 |
Adjustment for total monetary income for the period | 2,623,512 | 5,021,933 |
Adjustments to obtain cash flows from operating activities: | (2,891,596) | (6,762,916) |
Depreciation and amortization | 822,794 | 1,229,499 |
Loan loss allowance | 1,623,363 | 1,617,615 |
Effect of foreign exchange changes | (4,490,131) | (4,519,174) |
Income/(loss) from sale of Prisma Medios de Pagos S.A. | - | (4,186,430) |
Other adjustments | (847,622) | (904,426) |
Net increases from operating assets: | (64,744,086) | (39,230,246) |
Debt securities at fair value through profit or loss | (4,394,855) | 7,798,030 |
Derivatives | 1,127,514 | (352,890) |
Repo transactions | (3,201,694) | (13,745,349) |
Loans and other financing | (24,340,566) | (4,913,812) |
Non-financial government sector | (88) | (333) |
Other financial institutions | (1,511,513) | 5,182,935 |
Non-financial private sector and residents abroad | (22,828,965) | (10,096,414) |
Other debt securities | (19,335,352) | (22,777,240) |
Financial assets pledged as collateral | (898,017) | (852,485) |
Investments in equity instruments | 197,655 | (2,610,435) |
Other assets | (13,898,771) | (1,776,065) |
Net increases from operating liabilities: | 45,992,210 | 31,060,768 |
Deposits | 34,393,644 | 28,826,404 |
Non-financial government sector | 306,014 | 180,242 |
Financial sector | 262,108 | (106,317) |
Non-financial private sector and residents abroad | 33,825,522 | 28,752,479 |
Liabilities at fair value through profit or loss | (626,102) | 1,980,713 |
Derivatives | (2,981,030) | 315,704 |
Repo transactions | - | (23,748) |
Other liabilities | 15,205,698 | (38,305) |
Income tax paid | (372,754) | (381,421) |
Total cash flows used in operating activities | (14,109,543) | (1,772,858) |
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CONSOLIDATED STATEMENT OF CASH FLOWS | ||
FOR THETHREE-MONTH INTERIM PERIODS ENDED MARCH 31, 2020 AND 2019 | ||
(stated in thousands of pesos) | ||
Accounts | 03.31.20 | 03.31.19 |
Cash flows from investing activities: | ||
Payments: | (377,654) | (1,215,966) |
Purchase of property and equipment, intangible assets and other assets | (377,654) | (1,215,966) |
Collections: | 191,075 | 2,686,543 |
Sale of investments in equity instruments | - | 2,686,543 |
Other collections related to investing activities | 191,075 | - |
Total cash flows (used in)/generated by investing activities | (186,579) | 1,470,577 |
Cash flows from financing activities | ||
Payments: | (2,051,363) | (525,400) |
Non-subordinated corporate bonds | (1,307,866) | (324,396) |
BCRA | (484) | - |
Financing from local financial institutions | (542,121) | - |
Leases | (200,892) | (201,004) |
Collections: | 750,586 | 2,531,551 |
Issuance of own equity instruments | 750,586 | - |
Non-subordinated corporate bonds | - | 2,514,915 |
BCRA | - | 16,636 |
Total cash flows (used in) / generated by financing activities | (1,300,777) | 2,006,151 |
Effect of exchange rate changes on cash and cash equivalents | 4,490,131 | 4,519,174 |
Effect of monetary income (loss) on cash and cash equivalents | (10,822,349) | (16,293,218) |
Total changes in cash flows | (21,929,117) | (10,070,174) |
Restated cash and cash equivalents at the beginning of the year (Note 7) | 168,447,403 | 164,347,080 |
Cash and cash equivalents at fiscal period-end (Note 7) | 146,518,286 | 154,276,906 |
Notes and exhibits are an integral part of these financial statements. |
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NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE FISCAL PERIOD ENDED MARCH 31, 2020
(Stated in thousands of pesos)
1. General information
1.1 Information of Banco BBVA Argentina S.A.
Banco BBVA Argentina S.A. (hereinafter, either "BBVA Argentina", the "Entity" or the "Bank") is a corporation ("sociedad anónima") incorporated under the laws of Argentina, operating as a universal bank with a network of 246 national branches.
Since December 1996, BBVA Argentina is part of the global strategy of Banco Bilbao Vizcaya
Argentaria S.A. (BBVA or the "Parent"), which directly and indirectly controls the Entity, by holding 66.55% of the share capital as of March 31, 2020.
These consolidated interim financial statements include the Entity and its subsidiary companies
(collectively referred to as the "Group").
The financial statements of the subsidiaries were prepared as of the same dates and for the same periods as those of Banco BBVA Argentina S.A. The financial statements of PSA Finance Argentina Compañía Financiera S.A. and Volkswagen Financial Services Compañía Financiera S.A. were prepared considering the financial reporting framework set forth by the Argentine Central Bank (BCRA) for Group "B" financial institutions, without considering the model established in paragraph 5.5. "Impairment" of IFRS 9 for fiscal years commencing on and after January 1, 2021, as stated in Note 2 to these consolidated condensed interim financial statements.
The Entity's subsidiaries are listed below:
- BBVA Asset Management Argentina S.A. Sociedad Gerente de Fondos Comunes de Inversión: corporation incorporated under the laws of Argentina as an agent for the management of mutual funds;
- Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings): corporation incorporated under the laws of Argentina undergoing liquidation proceedings. On December 4, 2008, Law No. 26425 was enacted, providing for the elimination and replacement of the capitalization regime that was part of the Integrated Retirement and Pension System, with a single government regime named the Argentine Integrated Retirement and Pensions System (SIPA). Consequently, Consolidar A.F.J.P. S.A. ceased to manage the resources that were part of the individual capitalization accounts of affiliates and beneficiaries of the capitalization regime of the Integrated Retirement and Pension System, which were transferred to the Guarantee Fund for the Sustainability of the Argentine Retirement and Pension Regime as they were already invested, and the Argentine Social Security Office (ANSES) is now the sole and exclusive owner of those assets and rights. Likewise, on October 29, 2009, the ANSES issued Resolution No. 290/2009, whereby retirement and pension funds managers interested in reconverting their corporate purpose to manage the funds for voluntary contributions and deposits held by participants in their capitalization accounts had 30 business days to express their intention to that end. On December 28, 2009, based on the foregoing and taking into consideration that it is impossible for Consolidar A.F.J.P. S.A. to comply with the corporate purpose for which it was incorporated, it was resolved, at a Unanimous General and Extraordinary Shareholders' Meeting to approve the dissolution and subsequent liquidation of that company effective as of December 31, 2009;
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- PSA Finance Argentina Compañía Financiera S.A.: a financial company incorporated under the laws of Argentina engaged in the granting of pledge loans; and
- Volkswagen Financial Services Compañía Financiera S.A. (VWFS): A financial company incorporated under the laws of Argentina engaged in the granting of pledge loans.
Argentine Capital Markets Law No. 26831, enacted on December 28, 2012 and amended by Law No. 27440 dated May 11, 2018, subsequently regulated through General Resolution No. 622/13 and General Resolution No. 731/2018 issued by the CNV, establishes in Section 47 that agents have an obligation to register with the CNV, to act in the market in any of the capacities set forth in such law. On September 9 and 19, 2014, the Entity was registered as an Agent for the Custody of Mutual Funds under No. 4 and as a Comprehensive Clearing and Settlement Agent under No. 42. On August 7, 2014, the subsidiary BBVA Asset Management Argentina S.A. Sociedad Gerente de Fondos Comunes de Inversión was registered as a Mutual Fund Agent under No. 3.
Part of the Entity's stock capital is publicly traded and has been registered with the Buenos Aires Stock Exchange, the New York Stock Exchange and the Madrid Stock Exchange.
1.2 Economic context
The future development of Argentina's macroeconomic conditions is somewhat uncertain as a consequence of the volatility of financial assets, and certain recently enacted laws and regulations, affecting the foreign exchange market, the projected future changes in interest rates, and inflation levels.
In particular, and concerning financial assets, the Argentine Government issued Decree No. 596/2019 dated August 28, 2019, putting off the maturity of short-term securities (Letes, Lecap, Lecer, and Lelink). Furthermore, by means of Decree No. 49/2019 dated December 19, 2019, the Argentine Government put off the repayment of US-dollar denominated Treasury Bills until August 31, 2020.
Against this backdrop, on December 23, 2019, the Public Emergency, Social Solidarity and
Productive Revival Law (the "Economic Emergency Law") was published in the Official Gazette, declaring Argentina in economic, financial, administrative, social security, energy, public health and social emergency until December 31, 2020.
The Economic Emergency Law has also put off until December 31, 2021 the reduction of the income tax rate (see Note 15) and 2017 Fiscal Covenant which established a gradual decrease in turnover tax until December 31, 2020.
In addition, Decree No. 141/2020 dated February 11, 2020 rolled over the repayment of Argentina's dual currency bonds due in 2020 ("Bonos de la Nación Argentina en Moneda Dual Vencimiento
2020") to September 30, 2020, while interrupting the accrual of interest on such instruments. Furthermore, Decree No. 346/2020 dated April 5, 2020 mandated the deferral of principal and interest payments on Argentina's sovereign debt in the form of US-dollar denominated securities issued under Argentine law until December 31, 2020, or until such other earlier date as the Ministry of Economy may determine from time to time, considering the progress made against and the execution of the process to reestablish Argentina's public debt sustainability.
As of March 31, 2020, the Entity holds national securities subject to restructuring for an aggregate amount of 7,411,834. These securities are measured at fair value through other comprehensive income, and were recognized for a lower amount of 1,853,895 to reflect the decline in prices.
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On September 1, 2019, the Argentine Government published Executive Decree No. 609/2019 setting forth extraordinary and interim guidelines concerning the foreign exchange market. Besides, the BCRA issued Communication "A" 6770, as amended, whereby, among other measures, it provided that up to and including December 31, 2019, the BCRA's previous consent would be required to access the foreign exchange market for the remittance of profits and dividends, payment of services to foreign related companies, and early payment of financial debts (principal and interest) over three business days before their due date. Then, on December 30, 2019, the BCRA issued Communication "A" 6856, establishing that the preceding provisions would remain in force on and after December 31, 2019. As of the date of these financial statements, the BCRA has issued further regulations imposing new restrictions to access the exchange market.
1.3 COVID-19
On March 11, 2020, the World Health Organization designated the Coronavirus (COVID-19) outbreak as a pandemic, due to its fast pace of proliferation around the world, having affected more than 150 countries. Most governments are taking restrictive measures to contain the spread, including, without limitation, social distancing, confinement, lockdowns, and restrictions to the free movement of people, closure of governmental and private facilities, other than those deemed essential (i.e., heath, food, fuel and communication facilities), border closures, and drastic reductions in transportation by air, sea, railroad and land.
As for Argentina, where the Entity operates, on March 12, 2020, Executive Decree No. 260/2020, as amended, was issued, declaring the country in health emergency in order to cope with the crisis brought about by the COVID-19. Finally, on March 19, 2020, the Executive Branch issued Decree No. 297/2020 mandating social distancing measures, effective from March 20 up to and including March 31, with subsequent extensions until May 24, 2020 by means of Decrees No. 325/2020, 335/2020, 408/2020 and 459/2020. On May 25, 2020, the Argentine Government published Decree No. 493/2020, extending the term set forth by Decree No. 297/2020 up to and including June 7, 2020, which term may be extended for as long as deemed required to address the pandemic. On June 4, 2020, the Executive Branch announced the lockdown would continue until June 28, 2020.
These measures encompass the slowdown or suspension of most non-essential activities carried on by individuals and, as such, are having a significant impact on the economy at the national, regional and global levels, due to the disruption or slowdown of supply chains, coupled with rising economic uncertainty, as evidenced by the increased volatility in asset prices and exchange rates, and a decline in long-term interest rates.
In an effort to address the challenges brought about by the pandemic, the BCRA took several measures primarily aimed at facilitating credit access by economic players, including, without limitation:
- eased calculation of days in arrears and suspension of certain mandatory reclassification provisions for purposes of the financial system debtors' classification and allowance assessment, according to the BCRA's rules and regulations;
- restrictions on positions held by entities in Bills issued by the BCRA (LELIQs);
- credit facilities to micro, small and medium enterprises (MSMEs) at an annual nominal interest rate of 24% to cover working capital requirements or to pay for wages;
- extension of the payment term of credit card outstanding balances, and suspended indexation of mortgage loan payments until September 30, 2020;
- suspended hikes in fees and commissions until June 30, 2020; and
- ceiling rates on credit card financing arrangements and floor rates on time deposits.
In addition, the distribution of profits by financial institutions was suspended until December 31, 2020.
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The events described in the preceding Notes 1.2. and 1.3. affect the Entity's operations, while also affecting the calculation of expected losses under IFRS 9 and the valuation of debt instruments issued by the government sector, by curbing the financial margin and restricting the Entity's ability to charge fees and commissions on certain activities.
As of March 31, 2020, the payment of minimum capital and minimum cash requirements surpasses the minimum thresholds mandated by the BCRA, with no deficiencies in these ratios being expected to occur in the following twelve months.
The Entity's management monitors the development of these events on an ongoing basis in order to define the potential actions to be taken and identify their impacts on its financial position.
However, the Entity's management considers that the above-described circumstances do not prevent the application of the accounting standards a going concern is required to apply in preparing its financial statements as of March 31, 2020.
2. Basis for the preparation of the Financial Statements
These consolidated condensed interim financial statements as of and for the three-month period ended March 31, 2020 were prepared pursuant to the reporting framework set forth by the Argentine Central Bank (BCRA) pursuant to which entities under its supervision are required to submit financial statements prepared in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), with the following exceptions ("financial reporting framework set forth by the BCRA"):
- Impairment of financial assets
Pursuant to Communication "A" 6847 issued by the BCRA, the Entity has applied the expected loss model set forth under paragraph 5.5. of IFRS 9, except for debt instruments issued by the non- financial government sector which were temporarily excluded from the scope of such standard. If the Entity had applied the impairment model established in paragraph 5.5. of IFRS 9, its shareholders' equity as of March 31, 2020 and December 31, 2019 would have been reduced by 3,676,608 and 3,892,574, respectively, net of the deferred tax effect.
In addition, on March 19, 2020, the BCRA issued Communication "A" 6938 deferring the application of the impairment model set forth in paragraph 5.5 of IFRS 9 until fiscal years commencing on or after January 1, 2021 for Group "B" institutions (institutions consolidated by the Bank), which would remain subject to the impairment model established by the BCRA through Communication "A" 2950, as amended. Such model requires that financial institutions recognize an allowance for loan losses based on the minimum guidelines set forth by the BCRA.
- Measurement of the remaining investment held in Prisma Medios de Pago S.A.
By means of Memorandum No. 7/2019 dated April 29, 2019, the BCRA established the accounting treatment to be applied to the remaining investment held by the Entity in Prisma Medios de Pago S.A. recorded under "Investments in Equity Instruments" as of March 31, 2020 and December 31, 2019 (see Note 16).
- Uncertain tax positions
The BCRA issued Memorandum No. 6/2017 dated May 29, 2017 regarding the treatment to be afforded to uncertain tax positions. Had the IFRS treatment regarding uncertain tax positions been applied, liabilities would have decreased by 5,447,078 and 5,871,923 as of March 31, 2020 and December 31, 2019, respectively.
The exceptions described above imply a deviation from IFRS.
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As this is an interim period, the Entity has opted to present condensed information, pursuant to the guidelines of IAS No. 34 "Interim Financial Information"; therefore, not all the information required for the preparation of complete financial statements under IFRS is included. Therefore, these financial statements should be read jointly with the financial statements as of December 31, 2019. However, explanatory notes of events and transactions that are material for understanding any changes in the financial position as from December 31, 2019 are included.
Furthermore, the B.C.R.A., through Communications "A" 6323 and 6324 set forth guidelines for the preparation and presentation of the financial statements of financial institutions for fiscal years beginning on or after January 1, 2018, including the additional reporting requirements as well as the information to be submitted as Exhibits.
These financial statements have been approved by the Board of Directors of Banco BBVA Argentina S.A. as of June 8, 2020.
3. Functional and presentation currency
The Bank considers the Argentine Peso as the functional and presentation currency. All amounts are stated in thousands of pesos, unless otherwise stated.
As mentioned in Note 5.1, the Entity presents all the periods reflected in these financial statements in constant currency as of March 31, 2020.
-
Accounting estimates and judgments
Significant judgments made by the Board of Directors in the application of accounting policies as well as the premises and estimates on uncertainties as of March 31, 2020 were the same as those described in Note 4.1. and 4.2. to the consolidated financial statements as of December 31, 2019.
In addition, the Group applies the same methodologies for the assessment of fair values and the same criteria for the classification of fair value levels as those described in Note 4.3. to the consolidated financial statements as of December 31, 2019. - Significant accounting policies
In preparing these consolidated condensed financial statements, the Entity applied the same accounting policies as those relied on in preparing its financial statements as of December 31, 2019, with the following exceptions: - The adoption of IAS 29 "Financial Reporting in Hyperinflationary Economies" ("IAS 29"), as mandated by the BCRA through Communication "A" 6651, and
- A change in the method applied for the calculation of the impairment of financial assets according to Communication "A" 6778 issued by the BCRA, which established the adoption of the expected loss model set forth under paragraph 5.5. of IFRS 9 to calculate allowances for loan losses, excluding debt instruments issued by the non-financial government sector from the scope of such standard ("IFRS 9 as per BCRA").
Below is a description of the new accounting policies applied by the Entity:
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5.1. Adoption of IAS 29
IAS 29 requires that the financial statements of an entity whose functional currency is that of a hyperinflationary economy be stated in the measuring unit current at the reporting period end. IAS 29 provides certain qualitative and quantitative guidelines to determine the existence of a hyperinflationary economy. Accordingly, hyperinflation shall be deemed to exist where the last three years' cumulative inflation approaches or exceeds 100%. In Argentina, consensus has been reached among local professional associations in that, commencing on July 1, 2018, the Argentine economy should be regarded as hyperinflationary based on the guidelines established in IAS 29.
By means of Communication "A" 6651, as amended, the BCRA mandated the retroactive application of IAS 29 to fiscal years beginning on or after January 1, 2020.
Entities should rely on the following price indexes for such purposes:
-
for items subsequent to December 2016: Consumer Price Index (CPI) compiled by the
Argentine Institute of Statistics and Census ("INDEC"); and - for items previous to December 2016: The price index released by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE).
Under IAS 29, assets and liabilities which are not stated in the measuring unit current at the end of the reporting period should be adjusted for the pertinent price index. The adjusted value of a non- monetary item is written down if it exceeds its recoverable value.
The Entity recognized the impact of the adoption of IAS 29 at the beginning of the first comparative period (January 1, 2019) under Unappropriated retained earnings. All items of the consolidated statements of income and other comprehensive income are restated into the measuring unit current at the reporting period end (March 31, 2020). The gain or loss on net monetary position is recognized in the (consolidated) statement of income.
The Bank prepares its financial statements based on the historical cost approach, and has applied the guidelines of IAS 29 as follows:
- the statement of financial position as of January 1, 2019 was restated, which is the oldest financial information reported;
- the statement of financial position as of March 31, 2019 was restated;
- the statements of income, other comprehensive income, changes in shareholders' equity and cash flows for the three-month period ended March 31, 2019 were restated, calculating and separately disclosing the gain or loss on net monetary position;
- the statement of financial position as of December 31, 2019 was restated;
- the statement of financial position as of March 31, 2020 was restated;
- the statements of income, other comprehensive income, changes in shareholders' equity and cash flows for the three-month period ended March 31, 2020 were restated, calculating and separately disclosing the gain or loss on net monetary position.
In applying IAS 29 to the statement of financial position, the Bank has relied on the following methodology and criteria:
- Non-monetaryassets were restated applying the price index. The restated amounts were written down to their recoverable values, applying the pertinent IFRS, where appropriate.
- Monetary assets were not restated.
- Assets and liabilities contractually related to changes in prices, such as index-linked securities and loans, were measured on the basis of the pertinent contract.
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- The measurement of investments accounted for under the equity method was based on associates' and joint businesses' information prepared in accordance with IAS 29.
- Deferred income tax assets and liabilities were recalculated on the basis of the restated amounts.
- As of January 1, 2019, all shareholders' equity items, other than Unappropriated retained earnings, were restated by applying the price index as from the date of contribution or origination.. In subsequent periods, all shareholders' equity items were restated applying the price index since the beginning of the year, or since the contribution date, if later.
In applying IAS 29 to the statements of income, other comprehensive income and cash flows, the Bank has relied on the following methodology and criteria:
- all items of the statements of income, other comprehensive income and cash flows were restated into the measuring unit current at March 31, 2020;
- the gain or loss on net monetary position is recognized in the statement of income; and
- gains or losses on cash and cash equivalents are disclosed in the statement of cash flows separately from the cash flows from operating, investing and financing activities, as a reconciling item between cash and cash equivalents at the beginning and at the end of the period.
Below is a summary of the main impacts from the application of IAS 29 on shareholders' equity as of January 1, 2019 and December 31, 2019, recognized in Unappropriated retained earnings:
Below is a summary of the main impacts from the application of IAS 29 on the Bank's statement of income for the three-month period ended March 31, 2019:
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5.2. Impairment of financial assets
By means of Communication "A" 6778, as amended, the BCRA established the adoption of the expected loss model set forth under paragraph 5.5. of IFRS 9 to calculate allowances for loan losses, excluding debt instruments issued by the non-financial government sector from the scope of such standard ("IFRS 9 as per BCRA"), effective since January 1, 2020, with retroactive effects. The impact of the change in accounting policy is recognized in Unappropriated retained earnings as of January 1, 2019, which is the transition date.
Below is a description of the accounting policy applied in preparing these financial statements and before:
a) Since January 1, 2020
The Bank recognizes an allowance for loan losses on the basis of the expected credit loss model, for the following financial instruments which are not measured at fair value through profit or loss:
- financial assets that are debt instruments,
- lease receivables,
- financial guarantee contracts, and
- loan commitments.
No impairment is recognized in respect of debt instruments issued by the non-financial government sector or in respect of equity instruments.
The Bank measures the allowance for loan losses as the expected credit losses for the following twelve months on financial instruments (other than lease receivables) which have not experienced a significant increase in credit risk since initial recognition. The expected credit losses for the following 12 months represent the portion of expected credit losses resulting from a default event on a financial instrument which is likely to occur within 12 months after the reporting period end.
As for the rest, the Bank measures the allowance for loan losses for an amount equal to the expected credit losses throughout the instrument lifetime.
An allowance for loan losses related to lease receivables is always measured for an amount equal to the expected credit losses throughout the instrument lifetime.
Measurement of expected credit losses (ECL)
ECLs are a weighted average, which is calculated by considering:
- financial assets that are not impaired at the reporting period end: the present value of the difference between cash flows owing to the Bank calculated on the basis of contractual terms, and the cash flows the Bank expects to receive;
- financial assets that are impaired at the reporting period end: it is the difference between the carrying amount (before allowances) and the estimated present value of future cash flows;
- undisbursed loan commitments: the present value of the difference between contractual cash flows if the Bank grants a loan, and the cash flows the Bank expects to receive;
- financial guarantee contracts: payments expected to be reimbursed to the guarantee holder, net of any amount the Bank expects to recover.
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Restructured financial assets
If the terms of a financial asset are renegotiated or amended, or if the financial asset is replaced for another one as a consequence of debtor's financial distress, then such financial asset will be assessed for derecognition, and an allowance for loan losses will be calculated as follows.
- If the expected restructuring will not result in the derecognition of the existing asset, then, the expected cash flows from the restructured financial asset is considered.
- If the expected restructuring will result in the derecognition of the existing asset, then, the fair value of the new asset is considered as the final cash flow from the existing financial asset.
Impaired financial assets
At each reporting period end, the Bank assesses assets measured at amortized cost and debt instruments (financial assets) measured at fair value through OCI for impairment. A financial asset is impaired when one or more events have occurred having a negative impact on the estimated cash flows from the financial asset.
Evidence that a financial asset is impaired includes the following observable inputs:
- borrower's or issuer's significant financial distress,
- contractual breach,
- restructuring of a loan under conditions the Bank would not otherwise agree to,
- when borrower is likely to go into bankruptcy or other form of financial reorganization, or
- disappearance of an active market for a security due to issuer's financial distress.
A loan that was renegotiated due to an impairment in borrower's credit status is usually deemed impaired, unless objective evidence exists that the risk of not receiving contractual cash flows has decreased, with no other evidence of impairment. In addition, a consumer loan over 90 days past due is deemed impaired.
Recognition of the allowance for expected credit losses
The allowance for expected credit losses is recognized as follows:
- Financial assets measured at amortized cost: as a write-down of the asset carrying amount.
- Financial assets measured at fair value through OCI: no allowance is recognized in the statement of financial position because the assets are measured at fair value. However, the allowance for expected credit losses is recognized in OCI.
- Loan commitments and financial guarantees contracts: recognized under the line Provision for contingent commitments in liabilities in the statement of financial position.
Derecognitions
Loans are derecognized (partially or totally) when there are no realistic expectations of recovery.
b) Prior to January 1, 2020
Prior to January 1, 2020, the Entity recognized the impairment of financial assets according to Communication "A" 2950, as amended, issued by the BCRA. As mandated by such regulation, the Bank was required to:
- classify debtors based on their "status" pursuant to the guidelines of the BCRA, and
- recognize an allowance for loan losses based on a schedule that indicated the percentage rates to be accrued for, taking into consideration debtor's standing and guarantees in force.
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The BCRA required that customers within the "commercial portfolio" be analyzed and classified on an individual basis. The commercial portfolio included loans exceeding an amount set forth by the BCRA, with repayment being related to the course of customer's productive or business activity. The assessment of debtor's repayment capacity was based on financial flows estimated on the basis of updated financial information and industry parameters, taking into consideration other circumstances of the business activity.
The "consumer portfolio", in turn, was analyzed globally, and debtors were classified based on the days in arrears. The consumer portfolio included consumer loans, housing loans and loans up to an amount set forth by the BCRA.
Increases in the allowance for loan losses related to "Loans and other financing" were recognized in "Loan loss allowances" in the consolidated Statement of income.
c) Effect of the change in accounting policy
The effect of the change in the accounting policy for the assessment of impairment of financial assets as at the transition date (January 1, 2019) is shown below:
The effect of the change in the accounting policy for the assessment of impairment of financial assets as at January 1, 2020 is shown below:
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d) Accounting policy applicable to Group "B" financial institutions (consolidated subsidiaries PSA and VWFS)
As mentioned in Note 2 to these financial statements, the BCRA issued Communication "A" 6938 deferring the application of the impairment model set forth in paragraph 5.5 "Impairment" of IFRS No. 9 until the fiscal years beginning on January1, 2021 for financial institutions within Group "B". Therefore, such financial institutions shall continue applying the model for recognizing loan losses from financial assets established by the BCRA by way of Communication "A" 2950, as amended.
5.3 Comparative information
The consolidated statement of financial position as of March 31, 2020 is presented on a comparative basis to the balances for the previous year, while the consolidated statements of income, other comprehensive income, changes in shareholders' equity, and cash flows, and their related notes for the three-month period ended March 31, 2020, are presented on a comparative basis to the balances as of the same period the previous year. The comparative information was restated and includes the changes indicated in Notes 3.2 and 5.1 to these condensed interim financial statements.
6. IFRS issued but not yet effective for financial institutions
6.1 New regulations
Pursuant to the provisions of Communication "A" 6114 issued by the BCRA, as the new IFRS are
approved, or the current IFRSs are modified or repealed and, once such changes are adopted by means of the Adoption Circulars issued by the FACPCE, the BCRA shall issue a statement of its approval for financial institutions. In general, early adoption of an IFRS shall not be allowed, unless specifically admitted when adopted.
The IASB issued "Classification of Liabilities as Current or Non-current (Amendments to IAS 1)",
effective since fiscal years beginning on or after January 1, 2022. Such amendment:
- clarifies that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period;
- clarifies that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability; and
- makes clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.
This amendment was not early adopted by the Bank in these condensed interim financial statements.
6.2 Other amendments to the financial reporting framework set forth by the BCRA
By means of Communication "A" 7014 dated May 14, 2020, the BCRA mandated that, since then,
debt instruments issued by the government sector received in exchange for other instruments should be measured upon initial recognition at the carrying amount as of that date of the instruments delivered in replacement thereof. Therefore, such exchange does not have an impact on the statement of income.
There are no other standards which have not come effective yet and which are expected to have a material impact on the Entity.
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7. Cash and deposits in banks
Breakdown in the consolidated condensed statement of financial position and the balance of cash and cash equivalents computed for the purposes of the preparation of the consolidated condensed statement of cash flows is as follows:
03.31.20 | 12.31.19 | |
BCRA - Current account | 104,799,668 | 115,885,703 |
Cash | 37,326,337 | 50,368,207 |
Balances with other local and foreign institutions | 4,392,281 | 2,193,493 |
TOTAL | 146,518,286 | 168,447,403 |
8. Debt securities at fair value through profit or loss
03.31.20 | 12.31.19 | ||
BCRA Bills | 8,906,573 | 4,295,267 | |
Private securities - Corporate bonds | 101,377 | 100,904 | |
Government securities | 51,279 | 55,917 | |
TOTAL | 9,059,229 | 4,452,088 | |
9. Derivatives
Bank:
In the ordinary course of business, the Bank carried out foreign currency forward transactions with daily or upon-maturity settlement of differences, with no delivery of the underlying asset and interest rate swap transactions. These transactions do not qualify as hedging pursuant to IFRS No. 9 - "Financial Instruments".
The aforementioned instruments are measured at fair value and were recognized in the condensed consolidated statement of financial position in the item "Derivative instruments". Changes in fair values were recognized in the consolidated condensed statement of income in "Net income/(loss) from measurement of financial instruments at fair value through profit or loss".
As of March 31, 2020, the Bank has accounted for premiums from put options taken in respect of the Bank's right to sell its equity interest in Prisma Medios de Pago S.A. to the buyer as of December 30, 2021. Such equity interest was measured at fair value, as calculated by management in reliance of a report prepared by independent appraisers (Note 43).
Subsidiaries:
On the other hand, PSA Finance Argentina Compañía Financiera S.A. performed interest rate swaps with the Bank and with third parties, which are recognized by the subsidiaries as cash flow hedge. The actual portion of the cumulative change in the fair value of swaps pending subsequent recognition in income is recognized in other comprehensive income under the caption "Profits or losses from hedge instruments - Cash flow hedge." The balance sheet, profit & loss, and comprehensive income balances related to swaps entered into by and between the Bank and its subsidiaries were eliminated during the consolidation process.
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Breakdown is as follows:
Assets
03.31.20 | 12.31.19 | |
Debit balances linked to foreign currency forwards pending settlement in pesos | 1.470.425 | 2.541.372 |
Premiums for put options taken - Prisma Medios de Pago S.A. | 685.000 | 738.427 |
Debit balances linked to interest rate swaps from fixed to floating | - | 4.890 |
TOTAL | 2.155.425 | 3.284.689 |
Liabilities | ||
03.31.20 | 12.31.19 | |
Credit balances linked to foreign currency forwards pending settlement in pesos | 283.876 | 3.154.818 |
Credit balances linked to interest rate swaps from floating to fixed | 47.715 | 157.803 |
TOTAL | 331.591 | 3.312.621 |
The notional amounts of the forward transactions and foreign currency forwards, stated in US Dollars (US$) and in Euros as applicable, as well as the base value of interest rate swaps are reported below:
03.31.20 | 12.31.19 | |
Foreign currency Forwards | ||
Foreign currency forward purchases - US$ | 1,139,766 | 618,497 |
Foreign currency forward purchases - Euros | 961 | 35 |
Foreign currenct forward sales - US$ | 1,132,625 | 620,956 |
Foreign currency forward sales - Euros | 300 | 1,804 |
Interest rate swaps | ||
Fixed rate for floating rate (1) | 800,030 | 1,500,050 |
Floating rate for fixed rate | - | 92,463 |
- Floating rate: Badlar rate, interest rate for deposits of more than one million pesos, for 30-35 day terms .
10. Repo transactions
Breakdown is as follows:
Reverse repurchase transactions
03.31.20 | 12.31.19 | |
Amounts receivable for reverse repurchase transactions of BCRA Liquidity Bills with the BCRA | 3,201,694 | - |
TOTAL | 3,201,694 | - |
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11. Other financial assets
Breakdown of other financial assets is as follows:
03.31.20 | 12.31.19 | |
Measured at amortized cost | ||
Financial debtors from spot transactions pending settlement | 11,587,607 | 273,297 |
Other receivables | 4,126,226 | 1,732,723 |
Receivables from sale of ownership interest in Prisma Medios de Pago S.A. (Note 16.1) | 1,934,456 | 2,028,658 |
Non-financial debtors from spot transactions pending settlement | 669 | 29,945 |
Other | 84,023 | 182,961 |
17,732,981 | 4,247,584 | |
Measured at fair value through profit or loss | ||
Mutual funds | 1,056,505 | 1,052,745 |
1,056,505 | 1,052,745 | |
Allowance for loans losses (Exhibit R) | (248,392) | (243,962) |
TOTAL | 18,541,094 | 5,056,367 |
12. Loans and other financing
The Group keeps loans and other financing under a business model for the purpose of collecting contractual cash flows. Therefore, it measures loans and other financing at amortized cost. Below is a breakdown of the related balance:
03.31.20 | 12.31.19 | |
Non-financial government sector | 581 | 493 |
BCRA | 11.273 | 18.763 |
Other financial institutions | 5.113.404 | 5.603.439 |
Overdrafts | 29.505.886 | 15.520.217 |
Discounted instruments | 12.207.134 | 13.298.402 |
Unsecured instruments | 8.633.733 | 12.246.606 |
Mortgage loans | 15.106.043 | 15.255.182 |
Pledge loans | 8.506.497 | 9.332.296 |
Consumer loans | 23.815.211 | 25.435.239 |
Credit Cards | 70.380.730 | 77.686.619 |
Loans for the prefinancing and financing of exports | 27.075.155 | 19.723.114 |
Receivables from finance leases | 1.724.746 | 2.037.186 |
Loans to personnel | 1.827.114 | 1.848.082 |
Other financing | 26.690.824 | 24.783.863 |
230.598.331 | 222.789.501 | |
Allowance for loan losses (Exhibit R) | (12.060.662) | (12.267.836) |
TOTAL | 218.537.669 | 210.521.665 |
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Finance leases
The Group, as lessor, entered into finance leases related to vehicles, machinery and equipment.
The following table shows the total gross investment of finance leases (leasing) and the current value of minimum payments to be received thereunder:
03.31.20 | 12.31.19 | |||
Total | Current value | Total | Current value | |
of minimum | of minimum | |||
Term | investment | investments | ||
payments | payments | |||
Up to 1 year | 1.195.860 | 925.417 | 1.029.699 | 1.026.430 |
From 1 to 5 years | 1.025.525 | 799.329 | 1.013.907 | 1.010.756 |
TOTAL | 2.221.385 | 1.724.746 | 2.043.606 | 2.037.186 |
Principal | 1.691.544 | 2.011.070 | ||
Interest accrued | 33.202 | 26.116 | ||
TOTAL | 1.724.746 | 2.037.186 |
The breakdown of loans and other financing according to credit performance (determined as per the criteria set forth by the BCRA in the debtor classification regulations) and guarantees received are presented in Exhibit B. The information on the concentration of loans and other financing is presented in Exhibit C. The reconciliation of the information included in that Exhibit with the carrying amounts is shown below:
03.31.20 | 12.31.19 | |
Total Exhibits B and C | 233,090,489 | 224,732,012 |
Plus: | ||
BCRA | 11,273 | 18,763 |
Loans to personnel | 1,827,114 | 1,848,086 |
Interest and other items accrued receivable from financial assets | ||
with credit value impairment | 134,678 | - |
Less: | ||
Allowance for loan losses (Exhibit R) | (12,060,662) | (12,267,836) |
Adjustments for effective interest rate | (1,482,443) | (1,542,261) |
Corporate bondds | (92,468) | (104,965) |
Loan commitments | (2,890,312) | (2,162,132) |
Total loans and other financing | 218,537,669 | 210,521,665 |
As of March 31, 2020, and December 31, 2019, the Group holds the following contingent transactions booked in off-balance sheet accounts according to the financial reporting framework set forth by the BCRA:
03.31.20 | 12.31.19 | ||
Overdrafts and receivables agreed not used | 1,448,075 | 335,637 | |
Guarantees granted | 541,453 | 545,772 | |
Liabilities related to foreign trade transactions | 323,234 | 953,960 | |
Secured loans | 577,550 | 326,764 | |
2,890,312 | 2,162,132 | ||
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Risks related to the aforementioned contingent transactions are evaluated and controlled in the framework of the Group's credit risks policy.
13. Other debt securities
13.1 Financial assets measured at amortized cost
03.31.20 | 12.31.19 | |
Corporate bonds under credit recovery transactions | 83 | 89 |
83 | 89 | |
Allowance for loan losses - Private securities (Exhibit R) | (83) | (89) |
TOTAL | - | - |
13.2 Financial assets measured at fair value through other comprehensive income
03.31.20 | 12.31.19 | ||
BCRA Liquidity Bills | 47.264.185 | 31.344.519 | |
Government securities | 17.415.746 | 17.282.071 | |
Private securities - Corporate bonds | 77.085 | 75.621 | |
64.757.016 | 48.702.211 | ||
Allowance for loan losses | - Private securities (Exhibit R) | (610) | (648) |
TOTAL | 64.756.406 | 48.701.563 |
14. Financial assets pledged as collateral
The breakdown of the financial assets pledged as collateral as of March 31, 2020 and December 31, 2019 is included below:
03.31.20 | 12.31.19 | ||
Deposits as collateral | (3) | 3,665,447 | 3,263,337 |
BCRA - Special guarantee accounts (Note 51) | (1) | 2,310,245 | 3,048,446 |
Guarantee Trust - Pesos | (2) | 839,725 | 73,670 |
TOTAL | 6,815,417 | 6,385,453 |
(1) Special guarantee current accounts opened at the BCRA for the transactions related to the automated clearing houses and other similar entities.
(2) Set up as collateral to operate with ROFEX and MAE on foreign currency forward transactions and futures contracts. The trust fund consists of pesos and monetary regulation instruments issued by the BCRA.
(3) Deposits pledged as collateral for activities related to credit card transactions in the country and abroad, leases and futures contracts.
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15. Income Tax:
- Current income tax assets
03.31.20 | 12.31.19 | |
Advances | 24,622 | 28,220 |
24,622 | 28,220 |
b) Current income tax liabilities
03.31.20 | 12.31.19 | |
Income tax provision | 13,018,868 | 9,872,488 |
Advances | (1,431,765) | (1,159,047) |
Collections and withholdings | (9,342) | (13,962) |
11,577,761 | 8,699,479 |
c) Income tax expense
Breakdown of income tax expense:
03.31.20 | 03.31.19 | |
Current tax | (3,974,720) | (3,670,558) |
Deferred tax | 1,798,945 | 21,402 |
(2,175,775) | (3,649,156) |
Pursuant to IAS No. 34, income tax is recognized in interim periods based on the best estimate of the weighted average effective income tax rate expected by the Entity for the full fiscal year.
Law No. 27468 amended the transition rules set forth by Law No. 27430 regarding the application of the inflation adjustment for tax purposes under the Income Tax Law, establishing that such adjustment will be applicable for fiscal years beginning on and after January 1, 2018, provided the changes in the Consumer Price Index (CPI), calculated since the beginning until the end of the fiscal year, are in excess of fifty five per cent (55%) during the first fiscal year, thirty per cent (30%) during the second fiscal year, and fifteen per cent (15%) during the third fiscal year. According to such law, one third of the resulting inflation adjustment, whether gain or loss, shall be recognized during that fiscal year, with the remaining two thirds being computed, in equal parts, over the two immediately following fiscal years.
The Social Solidarity and Productive Revival Law - published in the Official Gazette on December 23, 2019 - maintains the inflation adjustment mechanism set out under Title VI of the Income Tax Law. Nevertheless, one sixth of the resulting inflation adjustment amount for the first and second fiscal years beginning on or after January 1, 2019 should be recognized during that fiscal year, with the remaining five sixths being computed, in equal parts, over the five immediately following fiscal years.
Furthermore, the Social Solidarity and Productive Revival Law provides for the discontinuance of the application of the 25% income tax rate established under Section 86, paragraph d), of Law No. 27430 until
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fiscal years beginning on and after January 1, 2022. For as long as the application of such rate remains suspended, the income tax rate will amount to 30%. Accordingly, the application of the 13% income tax rate on dividend distributions has also been discontinued for the same fiscal years. Such rate has been set at 7%.
Considering that, as of the date of these financial statements, the CPI variation exceeded the 15% limit applicable to the third year, the Entity's management has included the estimated tax loss for inflation in the provision for income tax. The effect of the deferral of the respective five sixths has been recognized as a deferred tax asset.
- Income tax- Inflation adjustment for tax purposes. Fiscal years 2016, 2017 and 2018.
On May 10, 2017, May 10, 2018 and May 13, 2019, and based on related case law, the Entity approved the filing of actions for declaratory judgment of unconstitutionality of Section 39 of Law 24073, Section 4 of Law 25561, Section 5 of Decree No. 214/02 issued by the Argentine Executive, Law 27468 and any other regulation whereby the inflation adjustment mechanism provided for under Law 20628, as amended, is considered not applicable due to the confiscatory effect on the specific case, for fiscal years 2016, 2017 and 2018. Consequently, the Entity filed its Income Tax Returns for such fiscal years taking into consideration the effect of those restatement mechanisms.
The net impact of this measure is an adjustment to the Income Tax assessed for the fiscal year ended December 31, 2016 in the amount of 1,185,800 with the fiscal year ended December 31, 2017 in the amount of 1,021,518 and the fiscal year ended December 31, 2018, in the amount of 3,239,760.
Through Memorandum No. 6/2017 dated May 29, 2017, the BCRA, without resolving on the decisions adopted by the authorities of the Entity or the right of the Entity regarding the action filed, in its capacity as issuer of accounting standards, requested the Entity to record a provision for contingencies included in "Liabilities" in an amount equivalent to the income recorded, as it considers that "a reassessment of the income tax by applying the inflation adjustment is not addressed by the BCRA regulations".
In response to this Memorandum, the Entity filed the related answer and confirmed its position by providing the relevant supporting documentation. Notwithstanding the foregoing, the Entity recorded the requested provision in the "Provisions" account under liabilities and in "Other operating expenses" in the statement of income, pursuant to the accounting standards prescribed by the regulator for this case.
As a result of the assessment made and based on the opinion of its legal and tax advisors, the Entity considers that it is highly likely for the Entity to obtain a final favorable judgment supporting the idea that this period's income tax shall be assessed including the tax inflation adjustment, based on the confiscatory nature of the rate that would result from not applying said adjustment in the fiscal years ended December 31, 2018, 2017 and 2016.
Therefore, the recognition of the provision for contingencies required by the BCRA results in a deviation from IFRS, as stated in Note 2.
- Income tax - Requests for recovery of payments. Fiscal years 2013, 2014 and 2015.
Regarding fiscal years 2013, 2014 and 2015, the Entity assessed income tax without applying the tax inflation adjustment, consequently a higher tax was paid in the amounts of 264,257, 647,945 and 555,002 for those periods.
Based on the grounds stated above, on November 19, 2015, a request for recovery of the payments made was filed at the administrative stage for periods 2013 and 2014, and the related complaint was filed at the
- 27 -
judicial stage on September 23, 2016 for both periods, given that no answer to the request above was received.
In turn, on April 4, 2017, a request for recovery of the payments made for the higher amount of tax paid for fiscal year 2015 was filed. Likewise, on December 29, 2017, the related complaint was filed at the judicial stage for this fiscal year.
As of the date of these financial statements, the tax authorities have not issued a resolution regarding the claims filed.
Pursuant to the financial reporting framework set forth by the BCRA, the Entity does not record assets in relation to contingent assets derived from the claims filed.
16. Investments in equity instruments
Investments in equity instruments for which the Group has no control, joint control or a significant influence are measured at fair value through profit or loss and at fair value through other comprehensive income. Breakdown is as follows:
16.1 Investments in equity instruments through profit or loss
03.31.20 | 12.31.19 | |
Prisma Medios de Pago S.A. (1) | 1.694.185 | 2.032.301 |
BYMA-Bolsas and Mercados Argentinos S.A. | 43.392 | 67.762 |
Mercado de Valores de Buenos Aires S.A. | 58.750 | 86.644 |
TOTAL | 1.796.327 | 2.186.707 |
- This balance is related to the amount of 2,252,139 shares held in Prisma Medios de Pago S.A., representing 5.44% of such company's capital stock. Said investment was measured at fair value estimated by the Management based on the report prepared by independent professionals, net of the valuation adjustment required by the BCRA in Memorandum No. 7/2019 and the collection of dividends. The accounting criterion applied as stated above constitutes a deviation from IFRS.
On February 1, 2019, the transfer of 2,344,064 registered, common shares with a nominal value of $ 1 each and one vote per share, owned by the Bank in Prisma Medios de Pago S.A. was made for the benefit of AI Zenith (Netherlands) B.V. (company related to Advent International Global Private Equity).
In accordance with the provisions of the Offer for the purchase of those shares by AI Zenith (Netherlands) B.V., and accepted by the Bank, the total estimated price adjusted was USD 78,265,273, out of which, on February 1, 2019, the Bank received USD 46,457,210, and the unpaid balance is deferred over the following 5 (five) years and settled as follows; (i) 30% of that amount shall be paid in pesos, adjusted by CER (UVA) at an annual nominal rate of 15% and (ii) 70% in US Dollars at an annual nominal rate of 10 %.
On July 22, 2019, the Entity completed the assessment of the selling price of the shares. Such price amounts to USD 76,947,895.33. The gap between the final price and the estimated price was discounted from the outstanding balance; therefore, the Bank did not have to return the funds it had received. The transaction terms included a put option, pursuant to which the Bank is entitled to sell the remaining shares in Prisma Medios de Pago S.A. to the buyer as of December 31, 2021 (see Note 9).
The other payment conditions have remained unaltered.
As a consequence of this transaction as of December 31, 2019, a profit of 4,186,430 (2,644,937 in nominal values) is recognized in "Other operating income" as of March 31, 2019 (Note 38).
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16.2 Investments in equity instruments through other comprehensive income
03.31.20 | 12.31.19 | ||||
Banco Latinoaméricano de Exportaciones S.A. | 14,490 | 28,444 | |||
Other | 1,036 | 1,060 | |||
TOTAL | 15,526 | 29,504 | |||
17. | Investments in Associates | ||||
03.31.20 | 12.31.19 | ||||
Rombo Compañía Financiera S.A. | 689,573 | 708,983 | |||
BBVA Consolidar Seguros S.A. | 315,133 | 285,244 | |||
Interbanking S.A. | 121,673 | 122,520 | |||
TOTAL | 1,126,379 | 1,116,747 | |||
18. | Property and equipment | ||||
03.31.20 | 12.31.19 | ||||
Real estate | 18.719.767 | 18.871.712 | |||
Furniture and facilities | 4.107.896 | 4.270.428 | |||
Right of use of leased real estate (Note 29) | 2.346.867 | 2.521.914 | |||
Machinery and equipment | 1.720.309 | 2.052.792 | |||
Constructions in progress | 393.152 | 346.599 | |||
Vehicles | 43.690 | 41.727 | |||
TOTAL | 27.331.681 | 28.105.172 | |||
19. | Intangible Assets | ||||
03.31.20 | 12.31.19 | ||||
Licenses - Software | 919,168 | 840,905 | |||
TOTAL | 919,168 | 840,905 | |||
20. Other non-financial assets | |||||
03.31.20 | 12.31.19 | ||||
Investment properties | 1,514,335 | 1,527,590 | |||
Prepayments | 1,431,153 | 1,552,909 | |||
Tax advances | 702,154 | 624,915 | |||
Other miscellaneous assets | 303,678 | 243,919 | |||
Advances to suppliers of goods | 250,088 | 256,900 | |||
Assets acquired as security for loans | 14,158 | 15,440 | |||
Advances to personnel | 1,077 | 350,843 | |||
Other | 43,518 | 31,700 | |||
TOTAL | 4,260,161 | 4,604,216 | |||
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21. Non-current assets held for sale
On December 19, 2018, the Board of Directors agreed to a plan to sell a group of real property assets located in Argentina. Therefore, these assets, the value of which, as of March 31, 2020 and December 31, 2019 amounts to 178,903, were classified as "Non-current assets held for sale", after the efforts to sell that group of assets began.
22. Deposits | ||
The information on concentration of deposits is disclosed in Exhibit H. | ||
Breakdown is as follows: | ||
03.31.20 | 12.31.19 | |
Non-financial government sector | 3,473,308 | 3,167,294 |
Financial sector | 286,915 | 192,337 |
Non-financial private sector and residents abroad | 324,199,640 | 313,558,012 |
Checking accounts | 63,268,050 | 58,212,147 |
Savings accounts | 162,584,954 | 159,355,038 |
Time deposits | 87,215,525 | 90,739,586 |
Investment accounts | 13,952 | 83 |
Other | 11,117,159 | 5,251,158 |
TOTAL | 327,959,863 | 316,917,643 |
23. Liabilities at fair value through profit or loss
03.31.20 | 12.31.19 | |
Obligations from government securities transactions | - | 626.102 |
TOTAL | - | 626.102 |
24. Other financial liabilities
03.31.20 | 12.31.19 | |
Obligations from financing of purchases | 14,219,318 | 18,293,703 |
Creditors from spot transactions pending settlement | 11,718,423 | 129,811 |
Collections and other transactions on behalf of third parties | 3,850,551 | 3,450,855 |
Credit balance for spot purchases or sales pending settlement | 2,643,258 | 129,133 |
Liabilities for leases (Note 29) | 2,554,223 | 2,713,017 |
Payment orders pending credit | 2,302,796 | 2,090,054 |
Accrued commissions payable | 18,315 | 15,711 |
Interest accrued payable | - | 392,053 |
Other | 5,523,344 | 3,859,052 |
TOTAL | 42,830,228 | 31,073,389 |
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25. Financing received from the BCRA and other financial institutions
03.31.20 | 12.31.19 | |
Local financial institutions | 3,108,485 | 3,873,173 |
Foreign financial institutions | 278,528 | 2,737,230 |
BCRA | 240,138 | 18,054 |
TOTAL | 3,627,151 | 6,628,457 |
26. Corporate bonds issued
Below is a detail of corporate bonds in force as of March 31, 2020 and December 31, 2019 of the Bank and its subsidiaries:
Nominal value | Payment of | Outstanding | Outstanding | ||||
Detail | Issuance date | (in thousands | Maturity date | Annual Nominal Rate | securities as | securities as | |
interest | |||||||
of pesos) | of 03.31.20 | of 12.31.19 | |||||
Class 24 | 12.27.2017 | 546.500 | 12.27.2020 | Badlar Private + | Quarterly | 526.500 | 567.564 |
4,25% | |||||||
UVA + | Quarterly | 1.426.898 | 1.394.968 | ||||
Class 25 | 11.08.2018 | 784.334 | 11.08.2020 | 9,50% | |||
Class 27 | 02.28.2019 | 1.090.000 | 08.28.2020 | Badlar Private + | Quarterly | 891.000 | 960.494 |
6,25% | |||||||
Class 28 | 12.12.2019 | 1.967.150 | 06.12.2020 | 4% | Quarterly | 1.967.150 | 2.120.578 |
Classes 26 - 28 - PSA | Badlar Private + annual | Quarterly | |||||
02.01.2018 | 542.833 | 06.17.2020 | /Upon | 265.500 | 672.090 | ||
Finance Argentina | nominal rate / Fixed rate | ||||||
maturity | |||||||
Classes 2 - 4 - 5 - 6 - | Badlar Private + annual | ||||||
7 - Volkswagen | 12.07.2018 | 2.485.042 | 02.27.2021 | nominal rate / UVA + | Quarterly | 2.043.022 | 1.803.845 |
Financial Services | annual nominal rate |
Total Consolidated Principal | 7.120.070 | 7.519.539 | |
Consolidated Interest Accrued | 378.473 | 372.863 | |
Issuance Expenses | - | (2.470) | |
Total consolidated principal and interest | |||
accrued | 7.498.543 | 7.889.932 | |
Definitions:
BADLAR RATE: it is the interest rate for time deposits over 1 (one) million pesos, for 30 to 35 days.
UVA RATE: it is a measurement unit updated on a daily basis as per CER, according to the consumer price index.
- 31 -
27. Provisions
03.31.20 | 12.31.19 | |
Provisions for reorganization (Exhibit J) | 1,870,192 | 2,130,236 |
Provision for contingent commitments (Exhibit J and R) | 1,286,995 | 976,527 |
Provisions for termination plans (Exhibit J) | 64,244 | 69,255 |
For administrative, disciplinary and criminal penalties (Note 56 and Exhibit J) | 5,000 | 5,390 |
Other contingencies (Exhibit J) | 8,047,382 | 8,404,535 |
For reassessment of income tax due to adjustment for inflation (Note 15.c) | 5,447,078 | 5,871,923 |
Provision for commercial lawsuits | 2,065,395 | 2,075,489 |
Provision for labor lawsuits | 264,982 | 220,129 |
Provision for tax lawsuits | 151,827 | 113,831 |
Other | 118,100 | 123,164 |
TOTAL | 11,273,813 | 11,585,943 |
It includes the estimated amounts to pay highly likely liabilities which, in case of occurrence, would generate a loss for the Entity.
The breakdown and changes of provisions are included in Exhibit J. However, below is a brief description:
- Reassessment of Income Tax due to the application of the inflation adjustment: it reflects the provision required by the BCRA through Memorandum No. 6/2017 dated May 29, 2017, as it was considered that the reassessment of the income tax by applying the inflation adjustment is not addressed by the current regulations. The Bank has answered the BCRA memorandum and evidenced the validity of the recognition timely made and has requested that it be reviewed. Notwithstanding the foregoing, the provision requested by the BCRA was set up.
- 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.
- Contingent commitments: it reflects the credit risk arising from the assessment of the degree of compliance of the beneficiaries of unused overdrafts, unused credit card balances, guarantees, sureties and other contingent commitments for the benefit of third parties on behalf of customers, and of their financial position and the counter guarantees supporting those transactions.
- Termination benefit plans: for certain terminated employees, the Bank bears the cost of private health care plans (total or partial) for a certain period after termination. The Bank does not bear any situations requiring medical assistance, but it only makes the related health care plan payments.
- Administrative, disciplinary and criminal penalties: administrative penalties initiated by the Financial Information Unit, even if there were court or administrative measures to suspend payment and regardless of the status of the proceedings regarding penalties.
- Other: it reflects the estimated amounts to pay tax, labor and commercial claims and miscellaneous complaints.
In the opinion of the Group's Board of Directors and its legal advisors, there are no other significant effects other than those stated in these financial statements, the amounts and repayment terms of which have been recorded based on the actual value of those estimates, considering the probable date of their final resolution.
In turn, as of March 31, 2020, approximately 100 contingent claims, including civil, commercial, labor and tax claims, which might potentially result in a loss, were brought against the Bank. All such claims have
- 32 -
arisen in the ordinary course of business. These actions are primarily related to leasing claims, petitions to secure evidence, and labor claims. The Group's management and legal advisors consider that these cases might, but are not likely to, result in cash outflows, and that the potential cash disbursements are not material.
28. Other non-financial liabilities
Breakdown is as follows:
03.31.20 | 12.31.19 | |
Miscellaneous creditors | 7,582,610 | 5,571,022 |
Short-term personnel benefits | 3,701,461 | 4,520,516 |
Other collections and withholdings | 2,599,858 | 3,315,114 |
Advances collected | 2,510,644 | 2,810,066 |
Other taxes payable | 1,093,038 | 1,314,079 |
For contract liabilities | 481,664 | 413,688 |
Social security payment orders pending settlement | 433,293 | 66,227 |
Long-term personnel benefits | 296,265 | 330,391 |
Other | 81,478 | 85,802 |
TOTAL | 18,780,311 | 18,426,905 |
29. Leases
The Group as lessee
Below is a detail of the amounts of rights of use under leases and liabilities from leases in force as of March 31, 2020:
Rights of use under leases
Initial | Depreciation | Re sidual | ||||||
value as of | Accumulated | For the | Accumulated | value as of | ||||
Account | 01.01.2020 | Increases | Decreases | as of 01.01.2020 | Decreases | period (1) | at period-end | 03.31.2020 |
Leased real property | 3.138.091 | 93.483 | 126.535 | 616.177 | 4.023 | 146.018 | 758.172 | 2.346.867 |
(1) See note 41 |
Liabilities from leases
Future minimum payments for lease agreements are as follows:
In foreign | In local | 03.31.20 | 12.31.19 | ||||
currency | currency | ||||||
Up to one year | 137,855 | 15,190 | 153,045 | 90,258 | |||
From 1 to 5 years | 1,247,301 | 160,226 | 1,407,527 | 1,322,610 | |||
More than 5 years | 977,955 | 15,696 | 993,651 | 1,300,149 | |||
2,554,223 | 2,713,017 |
- 33 - | |||||||||
Interest and exchange rate difference recognized in profit or loss | |||||||||
03.31.20 | 03.31.19 | ||||||||
Other operating expenses | |||||||||
Interest on liabilities from finance lease (Note 42) | (76.526) | (85.844) | |||||||
Exchange rate difference | |||||||||
Exchange rate difference for finance leases (loss) | (109.421) | (319.884) | |||||||
Other expenses | |||||||||
Leases (Note 40) | (314.648) | (262.501) | |||||||
30. Share Capital | |||||||||
Breakdown is as follows: | |||||||||
Shares | Share capital | ||||||||
Nominal | |||||||||
value | Votes | Pending | |||||||
per | per | Shares | issuance or | Paid-in | |||||
Class | Quantity | share | share | outstanding | distribution | (1) | |||
Common | 612,710,079 | 1 | 1 | 612,615 | 95 | 612,710 |
(1) Registered with the Public Registry of Commerce.
Banco BBVA Argentina S.A. is a corporation (sociedad anónima) incorporated under the laws of Argentina. The shareholders limit their liability to the shares subscribed and paid in, pursuant to the Argentine Companies Law (Law No. 19550). Therefore, and pursuant to Law No. 25738, it is reported that neither foreign capital majority shareholders nor local or foreign shareholders shall be liable in excess of the above mentioned capital contribution for obligations arising from transactions carried out by the financial institution.
The Shareholders' Meeting held on June 13, 2017 approved the increase in share capital up to $ 145,000,000 (nominal value) by issuing 145,000,000 new registered, common shares with a nominal value of $ 1 each, one vote per share. The Board of Directors is granted the necessary authority to implement that capital increase and determine the issuance conditions.
On July 18, 2017, the issuance of 66,000,000 registered, common shares was approved, with a nominal value of $ 1 each, and a subscription price of USD 5.28 per share and USD 15.85 per each American Depositary Share (ADS), at the spot exchange rate published by the BCRA as of that date ($ 17.0267) for the purposes of paying the shares in pesos. On July 24, 2017, the shares subscribed were paid in.
Pursuant to the terms of the Shares Subscription Agreement, on July 26, 2017, International Underwriters opted to acquire 9,781,788 new shares (equivalent to 3,260,596 ADS) at the same issue price. On July 31, 2017, those shares were paid in, using the spot exchange rate stated.
- 34 -
The Entity applied the funds obtained from the global offer and the exercise of preemptive subscription rights to continue with its growth strategy in the Argentine financial system.
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 registered common shares, with a nominal value of $ 1 and entitled to one (1) vote each for delivery to BBVA Francés Valores S.A.'s minority shareholders.
As of the date of these consolidated financial statements, the merger and the ensuing capital stock increase are in the process of being registered with the Argentine Superintendence of Corporations (IGJ).
On May 15, 2020, the Ordinary and Extraordinary Shareholders' Meeting was held. At such meetings, the following distribution of earnings in nominal values was approved:
- To Legal Reserve: 6,201,640
- To Optional Reserve for future distribution of earnings: 24,806,560
On the other hand, the partial release of the Optional reserve for future distribution of earnings was approved, in order to appropriate 2,500,000 to the payment of cash dividends, subject to the BCRA's previous consent.
31. | Interest income | ||
03.31.20 | 03.31.19 | ||
Interest on government securities | 6.248.533 | 7.264.179 | |
Interest on credit card loans | 4.615.865 | 6.029.643 | |
Interest on instruments | 2.542.158 | 3.092.093 | |
Interst on overdrafts | 2.513.427 | 2.374.129 | |
Acquisition Value Unit (UVA) clause adjustment | 2.394.788 | 2.392.381 | |
Interest on consumer loans | 2.010.519 | 2.719.186 | |
Interest for other loans | 1.705.596 | 1.086.055 | |
Premiums on reverse repurchase agreements | 729.701 | 575.500 | |
Interest on pledge loans | 595.797 | 151.441 | |
Interest on loans to the financial sector | 347.949 | 1.091.569 | |
Interest on mortgage loans | 316.958 | 404.815 | |
Interest on loans for the prefinancing and financing of exports | 312.722 | 1.013.925 | |
Interest on finance leases | 111.855 | 190.506 | |
Stabilization Coefficient (CER) clause adjustment | 26.409 | 27.648 | |
Interest on private securities | 1.556 | 3.074 | |
Other | 138.669 | 622 | |
TOTAL | 24.612.502 | 28.416.766 |
32. | Interest expenses | |||
03.31.20 | 03.31.19 | |||
Time deposits | 6.449.798 | 10.856.809 | ||
Other liabilities from financial transactions | 942.624 | 965.969 | ||
Interfinancial loans received | 276.589 | 23.837 | ||
Checking accounts deposits | 223.495 | 1.008.360 | ||
Acquisition Value Unit (UVA) clause adjustments | 204.126 | 455.194 | ||
Savings accounts deposits | 67.650 | 56.035 | ||
Premiums on reverse repurchase agreements | - | 616 | ||
Other | 7.004 | 5.876 | ||
TOTAL | 8.171.286 | 13.372.696 | ||
- 35 - | ||||||
33. | Commission income | |||||
03.31.20 | 03.31.19 | |||||
Linked to liabilities | 2,879,825 | 3,076,806 | ||||
From credit cards | 1,800,672 | 1,669,599 | ||||
From insurance | 277,321 | 346,078 | ||||
From foreign trade and foreign currency transactions | 208,327 | 283,609 | ||||
Linked to loans | 199,710 | 488,631 | ||||
Linked to securities | 34,645 | 31,194 | ||||
From guarantees granted | 462 | 448 | ||||
TOTAL | 5,400,962 | 5,896,365 | ||||
34. | Commission expenses | |||||
03.31.20 | 03.31.19 | |||||
From credit and debit cards | 2.932.661 | 2.705.700 | ||||
From payment of salaries | 186.924 | 262.611 | ||||
From digital sales services | 111.594 | 253.854 | ||||
From Fromeign trade transactions | 34.962 | 42.067 | ||||
From promotions | 28.914 | 27.185 | ||||
Linked to transactions with securities | 553 | 645 | ||||
Other commission expenses | 229.502 | 302.046 | ||||
TOTAL | 3.525.110 | 3.594.108 | ||||
35. Net (loss)/income from financial instruments carried at fair value through profit or loss
03.31.20 | 03.31.19 | |
Income from government securities | 930,181 | 1,352,309 |
Income from foreign currency forward transactions | 230,624 | 186,980 |
Income from private securities | 34,219 | 2,365,531 |
Income/(loss) from interest rate swaps | 22,971 | (186,731) |
Income from corporate bonds | 16,624 | 34,500 |
(Loss) from loans | (232,991) | - |
Other | (1,518) | - |
TOTAL | 1,000,110 | 3,752,589 |
36. Net (loss) /income from writing-down assets carried at amortized cost and at fair value through OCI
03.31.20 | 03.31.19 | |||
(Loss) from sale of government securities | (127,002) | (6,264) | ||
TOTAL | (127,002) | (6,264) | ||
37. | Foreign exchange and gold gains/(losses) | |||
03.31.20 | 03.31.19 | |||
Income from purchase-sale of foreign currency | 946,148 | 2,230,340 | ||
Conversion of foreign currency assets and liabilities into pesos | 291,121 | (254,575) | ||
TOTAL | 1,237,269 | 1,975,765 | ||
- 36 - | |||
38. | Other operating income | ||
03.31.20 | 03.31.19 | ||
Adjustments and interest on miscellaneous receivables | 249,512 | 295,947 | |
Rental of safe deposit boxes | 207,680 | 189,024 | |
Loans recovered | 162,347 | 120,758 | |
Allowances reversed | 88,176 | 62,842 | |
Debit and credit card commissions | 74,296 | 215,292 | |
Punitive interest | 57,301 | 48,493 | |
Income from sale of non-current assets held for sale (Note 16) | - | 4,186,430 | |
Other operating income | 199,655 | 149,225 | |
TOTAL | 1,038,967 | 5,268,011 | |
39. | Personnel benefits | ||
03.31.20 | 03.31.19 | ||
Salaries | 2,671,702 | 2,581,180 | |
Social security charges | 785,690 | 709,413 | |
Personnel compensation and bonuses | 94,185 | 200,281 | |
Personnel services | 88,642 | 78,754 | |
Other short-term personnel benefits | 799,057 | 632,819 | |
TOTAL | 4,439,276 | 4,202,447 |
40. Administrative expenses
41. | Depreciation and amortization | ||
03.31.20 | 03.31.19 | ||
Depreciation of property and equipment | 627,016 | 650,123 | |
Amortization of rights of use of leased real property (Note 29) | 146,018 | 424,575 | |
Amortization of intangible assets | 40,711 | 153,405 | |
Depreciation of other assets | 9,049 | 1,396 | |
TOTAL | 822,794 | 1,229,499 |
- 37 - | |||
42. | Other operating expenses | ||
03.31.20 | 03.31.19 | ||
Turnover tax | 1.742.174 | 2.130.893 | |
Other allowances (Exhibit J) | 703.444 | 990.808 | |
Initial loss of loans below market rate | 174.811 | 625.515 | |
Contribution to the Deposit Guarantee Fund (Note 50) | 124.189 | 169.732 | |
Interest on liabilities from lease (Note 29) | 76.526 | 85.844 | |
Claims | 25.238 | 74.150 | |
Reorganization expenses (Exhibit J) | 10.575 | - | |
Other operating expenses | 254.574 | 432.240 | |
TOTAL | 3.111.531 | 4.509.182 |
43. Fair values of financial instruments
- Assets and liabilities measured at fair value
The fair value hierarchy of assets and liabilities measured at fair value as of March 31, 2020 is detailed below:
Total fair | Level 1 fair | Level 2 fair | Level 3 fair | ||
Accounting balance | value | value | value | value | |
Financial assets | |||||
Debt securities at fair value through profit or loss | 9,059,229 | 9,059,229 | 369 | 9,058,860 | - |
Derivative instruments | 2,155,425 | 2,155,425 | - | 1,470,425 | 685,000 |
Other financial assets | 1,056,505 | 1,056,505 | 1,056,505 | ||
Other debt securities | 64,756,406 | 64,756,406 | 382,232 | 64,374,174 | - |
Financial assets pledged as collateral | 839,725 | 839,725 | - | 839,725 | - |
Investments in equity instruments | 1,811,853 | 1,811,853 | 102,142 | 15,526 | 1,694,185 |
Financial liabilities | |||||
Derivative instruments | 331,591 | 331,591 | - | 331,591 | - |
The fair value hierarchy of assets and liabilities measured at fair value as of December 31, 2019 is detailed below:
Total fair | Level 1 fair | Level 2 fair | Level 3 fair | |||||
Accounting balance | value | value | value | value | ||||
Financial assets | ||||||||
Debt securities at fair value through profit or loss | 4,452,088 | 4,452,088 | - | 4,452,088 | - | |||
Derivative instruments | 3,284,689 | 3,284,689 | - | 2,546,262 | 738,427 | |||
Other financial assets | 1,052,745 | 1,052,745 | 1,052,745 | - | - | |||
Other debt securities | 48,701,563 | 48,701,563 | 1,320,579 | 47,380,984 | - | |||
Financial assets pledged as collateral | 36,867 | 36,867 | 36,867 | - | - | |||
Investments in equity instruments | 2,216,211 | 2,216,211 | 154,406 | 29,504 | 2,032,301 | |||
Financial Liabilities | ||||||||
Liabilities at fair value through profit or loss | 626,102 | 626,102 | 626,102 | - | - | |||
Derivative instruments | 3,312,621 | 3,312,621 | - | 3,312,621 | - |
- 38 -
The fair value of a financial asset or liability is the price that would be received for the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants at the measurement date.
The most objective and usual reference of the fair value of a financial asset or liability is the price that would be paid in an orderly, transparent and deep market, that is to say its quoted or market price.
If it is not possible to obtain a market price, a fair value is determined using best market practice quoting techniques, such as cash flows discount based on a yields curve for the same class and type of instrument, or if there is no market curve with the same characteristics of the bond, the technical value is calculated considering the latest market price plus interest accrued until the valuation date (whichever is more representative for the species).
In line with the accounting standard, a three-level classification of financial instruments is established. This classification is mainly made based on the observability of the necessary inputs to calculate that fair value, defining the following levels:
- Level 1: Financial instruments valued with quoted prices in an active market. Active market means a market that allows the observation of representative prices with sufficient frequency and daily volume
- Level 2: Financial instruments that do not have an active market, but that may be valued through market observable data.
- Level 3: Valuation using models where variables not obtained from observable market information are used.
Financial assets at fair value mainly consist of BCRA Liquidity Bills and Argentine Treasury Bills (Letes), together with a minor share in Argentine Government Bonds and Corporate Bonds. Likewise, financial derivatives are classified at fair value, which includes foreign currency forward transactions and NDF (non-delivery forwards), put options and interest rate swaps.
- Transfers between hierarchy levels b.1) Transfers from Level 1 to Level 2
The following instruments measured at fair value were transferred from Level 1 to Level 2 of the fair value hierarchy:
03.31.20 | 12.31.19 | ||
Treasury Bills in US dollars due 08-31-20 | 129,873 | - |
b.2) Transfers from Level 2 to Level 1
No transfers have occurred from Level 2 to Level 1 as of March 31, 2020 and December 31, 2019.
b.3) Valuation techniques for Levels 2 and 3
The valuation techniques used for Level 2 securities require market observable input data: the last quoted market price (Mercado Abierto Electrónico - MAE), the terms of the bond issue as detailed in the respective offering memorandum or, in the particular case of bonds adjustable for the BADLAR rate published at the BCRA's web site, the spot discount curve in pesos, US dollars, CER, the yield curve in pesos arising from ROFEX futures, the yield curve in pesos arising from futures traded by ICAP Broker, and the spot selling exchange rate published by Banco de la Nación Argentina (BNA).
- 39 -
Fixed Income
The determination of fair value prices set forth by the Bank for fixed income consists of considering reference market prices (MAE).
For Argentine Treasury Bonds, prices are captured from MAE. If bonds have not traded for the last 10 business days, a theoretical valuation is made, discounting cash flows using the pertinent discount curve.
Argentine Treasury Bills which have not traded for the last 10 business days are measured by reference to their cash flows discounted using the respective yield curve, based on the currency in which the bills were issued. In particular, US-dollar linked Treasury Bills (Lelinks) are measured using the yield curve in pesos.
Liquidity bills issued by the BCRA without quoted prices in MAE on the last day of the month were assigned a theoretical value, discounting cash flows using the monetary policy rate.
Finally, corporate bonds and sub-sovereign bonds were measured at their market prices prevailing on the last 10 business days in MAE, where available. In the absence of market prices, these securities were assigned a theoretical value, based on the last market price available, plus accrued interest.
SWAPS
For swaps, the theoretical valuation consists of discounting future cash flows using the interest rate, according to the rate curve resulting from the implicit yield of ROFEX futures.
Non Delivery Forwards
The theoretical valuation of NDFs consists of discounting the future cash flows to be exchanged pursuant to the contract, using a discount curve that will depend on the currency of each cash flow. The result is then calculated by subtracting the present values in pesos, estimating the value in pesos based on the applicable spot exchange rate, depending on whether the contract is local or offshore.
For local peso-dollar swap contracts, cash flows in pesos are discounted using the yield curve in pesos resulting from the prices of ROFEX futures and the US dollar spot selling exchange rate published by BNA. Cash flows in US dollars are discounted using the Overnight Index Swap (OIS) international dollar yield curve. Then, the present value of cash flows in dollars is netted by converting such cash flows into pesos using the US dollar spot selling exchange rate published by BNA.
For local peso-euro swap contracts, cash flows in pesos are discounted using the yield curve in pesos resulting from the prices of ROFEX futures and the US dollar spot selling exchange rate published by BNA. Cash flows in euros are discounted using the yield curve in euros. Then, the present value of cash flows in euros is netted by converting such cash flows into pesos using the euro spot selling exchange rate published by BNA.
For offshore peso-dollar swap contracts, cash flows in pesos are discounted using the yield curve in pesos resulting from market quoted forward prices sourced from ICAP and the US dollar spot selling exchange rate published by BNA. Cash flows in dollars are discounted using the OIS yield curve. Then, the present value of cash flows in dollars is netted by converting such cash flows into pesos using the Emerging Markets Traders Association (EMTA) US dollar spot exchange rate.
Investments in Equity Instruments
The fair value of the equity interest held in Prisma Medios de Pago S.A.-classified as Level 3-was calculated on the basis of independent appraisers' valuations, who relied on a future discounted cash flow
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method embracing an income approach, net of the valuation adjustment required by the BCRA under Memorandum No. 7/2019, and net of cashed dividends (Note 16).
The most relevant non-observable inputs include:
- Pro forma EBITDA and Free cash flow (primarily determined on the basis of the expected changes in the level of transactions and fees).
- Minority discount rate (equivalent to 1 / (1 + control premium) -1)
- WACC - Weighted Average Cost of Capital of Prisma Medios de Pago S.A.
- g = terminal value growth factor.
Below is a detail of the sensitivity analysis related to the valuation of the remaining 49% interest in Prisma Medios de Pago S.A. held by the shareholders. Sensitivity is related to the following two variables: WACC and "g" level (growth factor for future cash flows after 2023 which determines the terminal value):
Value of 49% equity interest + minority discount
(9.09%) - in millions of US$ (g - annual)
2.50% 3.00% 3.50%
WACC
97.5% 467.8 480.0 493.3
100% 461.8 473.8 486.8
102.5% 455.9 467.7 480.5
The valuation scenario considers a WACC equals to 100% and a "g" level of 3%.
Premiums from Put Options
The Group has classified the put option taken in respect of its equity interest in Prisma Medios de Pago S.A. as Level 3, since the fair value of such put option was based on significant non-observable inputs. The income (loss) from the asset measured at fair value on the basis of non-observable input data is booked under Net income / (loss) from financial instruments carried at fair value through profit or loss.
These instruments were measured using a valuation technique based on the binomial option pricing model. This model involves creating a comparable portfolio under the same conditions as the put, considering several scenarios. The pricing model factors in the Company's projected cash flows and financial indebtedness as of year-end (34 months subsequent to the contract closing date). Expected cash flows are discounted using the WACC discount rate.
Some of the most relevant observable input data used in the pricing model include:
- Monthly volatility (sensibility to volatility ranging from 10%, 12.2%, 15% and 20%)
- Notional exercise price. This price is 7 times the expected EBITDA for the third year. EBITDA is calculated considering expected cash flows and financial indebtedness, based on Cash and Banks and Short-term investments, and financial indebtedness projected as of the option exercise date.
Any potential substantial change in any of the aforementioned non-observable input data may increase or decrease the put option estimated fair value.
The table below shows the sensitivity analysis for the valuation of the put option per share, based on the implicit volatility level and the notional exercise price of the share:
EBITDA
EBITDA
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Sensitivity - in US$
Volatility
10.0% 12.2% 15.0% 20.0%
95% | 0.84 | 0.98 | 1.16 | 1.45 |
100% | 0.95 | 1.10 | 1.29 | 1.59 |
105% | 1.08 | 1.23 | 1.42 | 1.73 |
Sensitivity - in pesos
Volatility
10.0% 12.2% 15.0% 20.0%
95% | 48.15 | 56.30 | 66.51 | 83.47 |
100% | 54.88 | 63.43 | 74.04 | 91.58 |
105% | 62.43 | 70.55 | 81.58 | 99.70 |
The valuation scenario considers EBITDA at 100% and volatility at 12.2%, with a fair value equal to 685,000 based on the position held by the Entity in Prisma Medios de Pago S.A.
b.4) Reconciliation of opening and ending balances of Level 3 assets and liabilities at fair value
The following table shows a reconciliation between opening balances and final balances of Level 3 fair values:
03.31.20 | 12.31.19 | ||
Balance at the beginning of the fiscal year | 2,770,728 | - | |
Investment in equity instruments - Prisma Medios de Pago S.A. | (191,075) | 2,032,301 | |
Derivative instruments - Put option taken - Prima Medios de Pago S.A. | - | 738,427 | |
Monetary gain (loss) generated by assets at fair value | (200,468) | - | |
Balance at fiscal period-end | 2,379,185 | 2,770,728 |
- Fair value of Assets and Liabilities not measured at fair value
Below is a description of methodologies and assumptions used to assess the fair value of the main financial instruments not measured at fair value, when the instrument does not have a quoted price in a known market.
- Assets and liabilities with fair value similar to their accounting balance
For financial assets and financial liabilities maturing in less than one year, it is considered that the accounting balance is similar to fair value. This assumption also applies to deposits, because a significant portion thereof (more than 99% considering contractual terms and conditions) have a residual maturity of less than one year.
- Fixed rate financial instruments
The fair value of financial assets was assessed by discounting future cash flows from market rates at each measurement date for financial instruments with similar characteristics.
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- Variable rate financial instruments
For financial assets and financial liabilities accruing a variable rate, it is considered that the accounting balance is similar to the fair value.
The fair value hierarchy of assets and liabilities not measured at fair value as of March 31, 2020 is detailed below:
Total fair | Level 1 fair | Level 2 fair | Level 3 fair | ||
Accounting balance | value | value | value | value | |
Financial assets | |||||
Cash and deposits in banks | 146,518,286 | (1) | - | - | - |
Repo transactions | 3,201,694 | (1) | - | - | - |
Other financial assets | 17,484,589 | (1) | - | - | - |
Loans and other financing | (1) | ||||
Non-financial government sector | 581 | (1) | - | - | - |
Argentine Central Bank (BCRA) | 11,273 | (1) | - | - | - |
Other financial institutions | 5,026,311 | 3,845,457 | - | 3,845,457 | - |
Non-financial private sector and residents abroad | 213,499,504 | 210,090,681 | - | 210,090,681 | - |
Financial assets pledged as collateral | 5,975,692 | (1) | - | - | - |
Financial liabilities | |||||
Deposits | 327,959,863 | 325,279,154 | - | 325,279,154 | - |
Other financial liabilities | 42,830,228 | (1) | - | - | - |
Financing received from the Argentine Central Bank (BCRA) | 3,627,151 | 3,547,883 | - | 3,547,883 | - |
and other financial institutions | |||||
Corporate bonds issued | 7,498,543 | 7,357,918 | - | 7,357,918 | - |
(1) The fair value is not reported as it is considered similar to its book value.
The fair value hierarchy of assets and liabilities not measured at fair value as of December 31, 2019 is detailed below:
Total fair | Level 1 fair | Level 2 fair | ||||
Accounting balance | value | value | value | |||
Financial assets | ||||||
Cash and deposits in banks | 168,447,403 | (1) | - | - | ||
Other financial assets | 4,003,622 | (1) | - | - | ||
Loans and other financing | - | |||||
Non-financial government sector | 493 | (1) | - | - | ||
Argentine Central Bank (BCRA) | 18,763 | (1) | - | - | ||
Other financial institutions | 5,471,908 | 4,614,996 | - | 4,614,996 | ||
Non-financial private sector and residents abroad | 205,030,501 | 203,612,334 | - | 203,612,334 | ||
Financial assets pledged as collateral | 6,348,586 | (1) | - | - | ||
Financial liabilities | ||||||
Deposits | 316,917,643 | 314,931,661 | - | 314,931,661 | ||
Other financial liabilities | 31,073,389 | (1) | - | - | ||
Financing received from the Argentine Central Bank (BCRA) | ||||||
and other financial institutions | 6,628,457 | 6,593,065 | - | 6,593,065 | ||
Corporate bonds issued | 7,889,932 | 7,831,109 | - | 7,831,109 |
(1) The fair value is not reported as it is considered similar to its book value.
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44. Segment reporting
Basis for segmentation
As of March 31, 2020 and December 31, 2020, the Group determined that it has only one reporting segment related to banking activities based on the information reviewed by the highest operating decision maker. Most of the transactions, properties and customers of the Group are located in Argentina. No customer has generated more than 10% of the total Group's revenues.
Below is relevant information on loans and deposits by line of business as of March 31, 2020 and December 31, 2019:
Group (banking activity) (1) | Total as of | Total as of | ||
03.31.20 | 12.31.19 | |||
Loans and other financing | 218,537,669 | 210,521,665 | ||
Corporate banking (2) | 48,943,789 | 41,475,525 | ||
Small and medium companies (3) | 55,645,912 | 47,365,266 | ||
Retail | 113,947,968 | 121,680,874 | ||
Other assets | 294,116,606 | 279,153,252 | ||
TOTAL ASSETS | 512,654,275 | 489,674,917 | ||
Deposits | 327,959,863 | 316,917,643 | ||
Corporate banking (2) (3) | 33,763,864 | 26,439,973 | ||
Small and medium companies (2) (3) | 77,122,497 | 73,474,741 | ||
Retail | 217,073,502 | 217,002,929 | ||
Other liabilities | 95,919,398 | 88,242,828 | ||
TOTAL LIABILITIES | 423,879,261 | 405,160,471 |
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The following table shows information related to operating segments:
Group (banking activity) (1) | Total as of | Total as of |
03.31.20 | 03.31.19 | |
Net interest income | 16,441,216 | 15,044,070 |
Net commission income | 1,875,852 | 2,302,257 |
Net income from financial instruments at fair value through profit or loss | 1,000,110 | 3,752,589 |
Net income from write-down of assets at amortized cost and at fair value | (127,002) | (6,264) |
through OCI | ||
Foreign exchange and gold gains | 1,237,269 | 1,975,765 |
Other operating income | 1,038,967 | 5,268,011 |
TOTAL OPERATING INCOMEBEFORELOSS FOR IMPAIRMENT OF | 21,466,412 | 28,336,428 |
FINANCIAL ASSETS | ||
Loan loss allowances | (1,623,363) | (1,617,615) |
SUBTOTAL | 19,843,049 | 26,718,813 |
Operating loss | (11,963,543) | (13,101,547) |
Income / (loss) from associates and joint ventures | 27,177 | (76,309) |
Loss on net monetary position | (2,623,512) | (5,021,933) |
Income before income tax | 5,283,171 | 8,519,024 |
Income tax | (2,175,775) | (3,649,156) |
Net income for the period | 3,107,396 | 4,869,868 |
Net income attributable to: | ||
Owners of the parent | 3,078,940 | 4,870,007 |
Non-controlling interests | 28,456 | (139) |
- It includes BBVA Asset Management Argentina S.A. Sociedad Gerente de Fondos Comunes de Inversión, Consolidar A.F.J.P. (undergoing liquidation proceedings), PSA Finance Argentina Cía. Financiera S.A. and Volkswagen Financial Services Compañía Financiera S.A.
- It includes financial sector.
- It includes government sector.
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45. Subsidiaries
Below is the information on the Bank's subsidiaries:
Registered office | Interest as of | ||
Name | (country) | 03.31.20 | 12.31.19 |
Consolidar A.F.J.P. S.A. (undergoing | Argentina | 53.8892 % | 53.8892 % |
liquidation proceedings) | |||
PSA Finance Argentina Cía. Financiera | Argentina | 50.0000 % | 50.0000 % |
S.A. | |||
Volkswagen Financial Services | Argentina | 51.0000 % | 51.0000 % |
Compañía Financiera S.A. | |||
BBVA Asset Management Argentina S.A. | Argentina | 100.0000 % | 100.0000 % |
Sociedad Gerente de Fondos Comunes de | |||
Inversión |
46. Related parties
- Parent
The Bank's parent is Banco Bilbao Vizcaya Argentaria.
b) Key Management personnel
Pursuant to IAS 24, key Management personnel are those having the authority and responsibility for planning, managing and controlling the Group's activities, whether directly or indirectly.
Based on that definition, the Group considers the members of the Board of Directors as key personnel.
b.1) Remuneration of key management personnel
The key personnel of the Board of Directors received the following compensations:
03.31.20 | 03.31.19 | ||
Fees | 18,859 | 5,354 | |
Total | 18,859 | 5,354 |
b.2) Profit or loss for transactions and balances with key management personnel
Balances as of
03.31.20 12.31.19
Profit or loss
03.31.20 03.31.19
Loans | ||||
Credit cards | 3,851 | 4,978 | 288 | 394 |
Overdrafts | 175 | 4 | - | - |
Loans | 1,242 | 1,356 | 57 | 90 |
Deposits | 9,855 | 19,901 | 60 | 33 |
Loans are granted on an arm's length basis. As of March 31, 2020 and December 31, 2019, balances of loans granted are classified under normal performance according to the debtor classification rules issued by the BCRA.
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b.3) Profit or loss and balances with related parties (except key Management personnel)
Parent | Balances as of | Profit or loss | ||||
03.31.20 | 12.31.19 | 03.31.20 | 03.31.19 | |||
Cash and deposits in banks | 264,387 | 492,032 | - | - | ||
Derivative instruments (Assets) | (1) | 82,834 | 701,894 | - | - | |
Financial assets pledged as collateral (2) | - | 582,777 | - | - | ||
Other non-financial liabilities | 510,220 | 380,358 | 93,217 | 82,661 | ||
Derivative instruments (Liabilities) | (1) | 108,844 | 1,294,028 | - | 23,742 | 335,855 |
Off-balance sheet balances | ||||||
Securities in custody | 17,043,020 | 61,330,777 | - | - | ||
Derivative instruments | 15,942,095 | 12,090,469 | - | - | ||
Sureties granted | 487,291 | 761,918 | 607 | 1,163 | ||
Guarantees received | 24,807 | 30,574 | - | - |
- Profit or loss of Derivative Instruments (Assets) is exposed under Derivative Instruments (Liabilities).
- These transactions do not generate profit or loss.
S ubsidiaries | Balances as of | Profit or loss | ||
03.31.20 | 12.31.19 | 03.31.20 (1) | 03.31.19 | |
Loans and other finanicng | 3,725,235 | 2,232,553 | 359,641 | 1,056 |
Other financial assets | 532 | 191 | - | 98 |
Deposits | 446,745 | 51,942 | 1,190 | 38,122 |
Other non-financial liabilities | 579 | 1,305 | 1,126 | - |
Financing received | - | 189,114 | 7,425 | - |
Other operating income | - | - | 1,679 | 1,814 |
Off-balance sheet balances | ||||
Securities in custody | 1,056,546 | 1,052,770 | - | - |
Sureties granted | 281 | 303 | - | - |
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Associates | Balances as of | Profit or loss | |||
03.31.20 | 12.31.19 | 03.31.20 | 03.31.19 (1) | ||
Cash and deposits in banks | 1,829 | 317 | - | - | |
Loans and other financing | 1,694,583 | 1,922,053 | 302,552 | 924,452 | |
Debt securities at fair value through profit or loss | 10,476 | 18,091 | 14,101 | 34,508 | |
Deposits | 372,300 | 403,632 | 2 | 9,068 | |
Other non-financial liabilities | - | - | - | 1,403 | |
Financing received | - | 216,071 | 2,080 | 3,027 | |
Derivative instruments (Liabilities) | 47,715 | 149,027 | - | 23,057 | 151,081 |
Corporate bonds issued | 165,380 | 168,104 | 1,253 | 16,689 | |
Other operating income | - | - | 8,191 | 11,275 | |
Off-balance sheet balances | |||||
Interest rate swaps | 800,030 | 1,437,345 | - | - | |
Securities in custody | 1,474,265 | 1,358,079 | 488 | 231 | |
Sureties granted | 11,986 | 19,710 | 131 | 200 |
- Includes PSA Finance Argentina Compañía Financiera S.A. and Volkswagen Financial Services Compañía Financiera S.A., over which the Entity took over control as from July 1, 2019. This situation implies considering them as "Subsidiaries" as from the referred date. Until such date, they were exposed as
"Associates".
Transactions have been agreed upon on an arm's length basis. As of March 31, 2020 and December 31, 2019, balances of loans granted are classified under normal performance according to the debtor classification rules issued by the BCRA.
47. Risks related to financial instruments
No significant changes have occurred in the Bank's risk management and governance policies and procedures described in the financial statements as of December 31, 2019.
However, as a consequence of the change in the calculation method of impairment of financial assets described in Note 5.2, the Board of Directors has considered it appropriate to disclose in these interim financial statements information related to credit risks, measured in accordance with IFRS 9 as per BCRA (expected loss model, except for non-financial government sector's financial assets).
- 48 -
Stage 1 | Stage 2 | Stage 3 | Total | |
Balances as of 12.31.19 | 4,866,239 | 2,508,411 | 5,922,872 | 13,297,522 |
Inter-stage transfers: | ||||
From stage 1 to stage 2 | (570,152) | 2,018,316 | - | 1,448,164 |
From stage 2 to stage 1 | 210,994 | (726,649) | - | (515,655) |
From stage 1 or 2 to stage 3 | (7,354) | (598,445) | 1,497,504 | 891,705 |
From stage 3 to stage 1 or 2 | 8,100 | 21,084 | (288,641) | (259,457) |
Changes without inter-stage transfers | (1,042,030) | (434,235) | 12,205 | (1,464,060) |
New originated financial assets | 3,941,011 | 724,755 | 5,102,907 | 9,768,673 |
Reimbursements | (2,596,205) | (340,888) | (5,113,500) | (8,050,593) |
Write-offs | - | - | (839,999) | (839,999) |
Foreign exchange difference | 74,218 | 71,926 | 283,791 | 429,935 |
Inflation adjustment | (364,027) | (181,137) | (440,288) | (985,452) |
Other | (1,741) | (324,470) | - | (326,211) |
Balances as of 03.31.20 | 4,519,053 | 2,738,668 | 6,136,851 | 13,394,572 |
48. Restrictions to the payment of dividends
Pursuant to the provisions in the regulation in force issued by the BCRA, financial institutions shall apply an annual 20% of the year's profits to increase legal reserves.
Furthermore, pursuant to the requirements in General Resolution No. 622 issued by the CNV, the Shareholders' Meeting considering the financial statements with accumulated gains shall specifically provide for the allocation thereof.
Specifically, the mechanism to be followed by financial institutions to assess distributable balances is defined by the BCRA through the regulations in force on the "Distribution of earnings", provided that there are no records of financial assistance from that entity due to illiquidity or shortfalls as regards minimum capital requirements or minimum cash requirements, and other sort of penalties imposed by specific regulators, which are deemed to be material, and/or where no corrective measures had been implemented, among other conditions.
It is worth noting that, on September 20, 2017, the BCRA issued Communication "A" 6327, which provides that financial institutions shall not distribute earnings generated by first application of FRS, and shall create a special reserve which may only be reversed for capitalization or to absorb potential losses of the item "Unappropriated retained earnings".
In addition, the Group shall maintain a minimum capital after the proposed distribution of earnings.
On August 30, 2019 and January 31, 2020, the BCRA issued Communication "A" 6768 and Communication "A" 6886 setting forth that, effective as from August 30, 2019, financial institutions shall be required to have the BCRA's previous authorization to distribute profits.
Finally, by means of Communication "A" 6939 released on March 19, 2020, the BCRA suspended the distribution of profits by financial institutions until June 30, 2020, which suspension was subsequently extended until December 31, 2020 by means of Communication "A" 7035 dated June 4, 2020.
- 49 -
49. Restricted assets
As of March 31, 2020 and December 31, 2019, the Group has the following restricted assets:
- The Entity applied Argentine Treasury Bonds adjusted by CER in pesos maturing in 2021 in the amount of 98,980 and Treasury Bonds in pesos maturing on July 31, 2020 in the amount of 115,200 as of March 31, 2020, Treasury Bonds adjusted by CER in pesos maturing in 2021 in the amount of 89,268, Treasury Bonds in pesos maturing on July 31, 2020 in the amount of 116,243 as of December 31, 2019, respectively, as security for loans agreed under the Global Credit Program for micro, small and medium enterprises granted by the Inter-American Development Bank (IDB).
- Also, the Entity has accounts, deposits, repo transactions and trusts applied as guarantee for activities related to credit card transactions, with automated clearing houses, transactions settled at maturity, foreign currency futures, court proceedings and leases in the amount of 6,815,417 and 6,385,453 as of March 31, 2020 and December 31, 2019, respectively.
50. Deposits guarantee regime
The Entity is included in the Deposits Guarantee Fund Insurance System of Law No. 24485, Regulatory
Decrees No. 540/95, No. 1292/96, No. 1127/98 and No. 30/18 and Communication "A" 5943 issued by the BCRA
That law provided for the incorporation of the company "Seguros de Depósitos Sociedad Anónima"
(SEDESA) for the purpose of managing the Deposits Guarantee Fund (DGF), the shareholders of which, pursuant to the changes introduced by Decree No. 1292/96, will be the BCRA with at least one share and the trustees of the trust with financial institutions in the proportion determined by the BCRA for each, based on their contributions to the DGF.
In August 1995, that company was incorporated, and the Entity has a 10.038% share of the corporate stock.
The Deposits Guarantee Insurance System, which is limited, mandatory and for valuable consideration, has been created for the purpose of covering bank deposit risks in addition to the deposits privileges and protection system set forth by the Financial Institutions Law.
The guarantee covers the refund of the principal paid plus interest accrued up to the date of revocation of the authorization to operate or until the date of suspension of the entity by application of Section 49 of the Articles of Organization of the BCRA, if this measure had been adopted previously, without exceeding the amount of four hundred and fifty thousand pesos. For transactions in the name of two or more people, the guarantee shall be distributed on a pro-rata basis among them. In no case shall the total guarantee per person exceed the aforementioned amount, regardless of the number of accounts and/or deposits.
In addition, it is set forth that financial institutions shall make a monthly contribution to the DGF an amount equivalent to 0.015% of the monthly average of daily balances of the items listed in the related regulations.
As of March 31, 2020 and 2019, the contributions to the Fund have been recorded in the item "Other operating expenses - Contributions to the deposits guarantee fund" in the amounts of 124,189 and 169,732, respectively.
On February 28, 2019, the Argentine Central Bank issued Communication "A" 6654 setting forth an increase in the guarantee from pesos 450,000 (four hundred and fifty thousand) to pesos 1,000,000 (one million), effective March 1, 2019. In addition, on April 16, 2020, the Argentine Central Bank issued Communication "A" 6973 increasing such amount to pesos 1,500,000 (one million five hundred thousand), effective May 1, 2020.
- 50 -
51. Minimum cash and minimum capital requirements
51.1 Minimum cash requirements
The BCRA establishes different prudential regulations to be observed by financial institutions, mainly regarding solvency levels, liquidity and credit assistance levels.
Minimum cash regulations set forth an obligation to keep liquid assets in relation to deposits and other obligations recorded for each period. The items included for the purpose of meeting that requirement are detailed below:
Accounts | 03.31.20 | 12.31.19 | |||
Balances at the BCRA | |||||
Argentine Central Bank (BCRA) - current | |||||
account - not restricted | 104,310,300 | 115,835,556 | |||
Argentine Central Bank (BCRA) - special | |||||
guarantee accounts - restricted (Note 14) | 2,310,245 | 3,048,446 | |||
Argentine Central Bank (BCRA) -social | |||||
security special accounts - restricted | 359,810 | - | |||
106,980,355 | 118,884,002 | ||||
Argentine Treasury Bonds in pesos at fixed rate | |||||
due November 2020 | 8,702,158 | 7,869,601 | |||
Liquidity Bills - B.C.R.A. | 56,170,758 | 35,639,786 | |||
TOTAL | 171,853,271 | 162,393,389 |
It should be noted that the balances disclosed are the ones reported by the Bank.
51.2 Minimum capital requirements
The regulatory breakdown of minimum capitals is as follows at the above mentioned date:
Minimum capital requirements | 03.31.20 | 03.31.19 | |
Credit risk | 21,666,264 | 28,045,338 | |
Operational risk | 7,052,131 | 6,087,845 | |
Market risk | 500,632 | 347,567 | |
Paid-in | 76,282,372 | 59,880,037 | |
Surplus | 47,063,345 | 25,399,287 |
52. Compliance with the provisions of the Argentine Securities Commission - minimum shareholders' equity and cash contra-account
According to CNV's General Resolution No. 622/13, as amended by CNV's General Resolution No. 821/19, the minimum shareholders' equity required to operate as "Settlement and Clearing Agent - Comprehensive" shall the equivalent to four hundred seventy thousand three hundred and fifty (470,350) Acquisition Value Units (UVA) to be adjusted by the Stabilization Coefficient (CER), Law No. 25,827. As regards the cash contra-account, the amount to be paid-in shall be a minimum of fifty percent (50%) of the minimum shareholders' equity.
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The amount mentioned above as cash contra-account includes Argentine Treasury Bonds adjusted by CER due 2021 deposited with the account opened at Caja de Valores S.A., named "Depositor 1647 Brokerage Account 5446483 BBVA Banco Francés minimum cash contra-account". As of March 31, 2020 and December 31, 2019, the Bank's Shareholders' Equity exceeds the minimum amount imposed by the CNV.
Likewise, the subsidiary BBVA Asset Management Argentina S.A. Sociedad Gerente de Fondos Comunes de Inversión, as Mutual Funds Management Agent, met the CNV minimum cash contra- account requirements with 2,792,293 shares of FBA Renta Pesos Fondo Común de Inversión, in the amount of 38,712, through custody account No. 493-0005459481 at BBVA Banco Francés S.A. As of March 31, 2020 and December 31, 2019, the company's Shareholders' Equity exceeds the minimum amount imposed by the CNV.
In addition, pursuant to the requirements of General Resolution No. 792 issued by the CNV on April 30, 2019, and effective as of the end of fiscal year ended December 31, 2019, mutual fund management companies' minimum shareholders' equity will be comprised by 150,000 UVAs plus 20,000 UVAs, per each additional mutual fund under management. As concerns the cash contra-account, the amount to be paid shall be equal to no less that fifty per cent (50%) of minimum shareholders' equity.
53. Compliance with the provisions of the Argentine Securities Commission - documentation
The CNV issued General Resolution No. 629 on August 14, 2014 to introduce changes to its own rules governing the maintenance and safekeeping of corporate books, accounting records and business documentation. In this respect, it is reported that the Bank keeps the documentation that supports its operations for the periods still open to audit for safekeeping in Administradora de Archivos S.A. (AdeA), domiciled at Ruta 36 Km, 31,5 of Florencio Varela, Province of Buenos Aires.
In addition, it is informed that a detail of the documentation delivered for safekeeping, as well as the documentation referred to in Art. 5. a.3), Section I of Chapter V of Title II of the CNV rules is available at the Bank's registered office (2013 consolidated text and amendments).
54. Trust activities
On January 5, 2001, the Board of Directors of BCRA issued Resolution No. 19/2001, providing for the exclusion of Mercobank S.A.'s senior liabilities under the terms of section 35 bis of the Financial Institutions Law, the authorization to transfer the excluded assets to the Bank as trustee of the Diagonal Trust, and the authorization to transfer the excluded liabilities to beneficiary banks. Also, on the mentioned date, the agreement to set up the Diagonal Trust was subscribed by Mercobank S.A. as Settler and the Bank as Trustee in relation to the exclusion of assets as provided in the above- mentioned resolution. As of March 31, 2020 and December 31, 2019, the assets of Diagonal Trust amount to 2,427 and 2,617, respectively, considering its recoverable value.
In addition, the Entity in its capacity as Trustee in the Corp Banca Trust recorded the selected assets on account of the redemption in kind of participation certificates in the amount of 4,177 and 4,503 as of March 31, 2020 and December 31, 2019, respectively.
In addition, the Entity acts as a Trustee in 12 non-financial trusts, in no case as personally liable for the liabilities assumed in the performance of the contract obligations. Such liabilities will be settled with and up to the full amount of the trust assets and the proceeds therefrom. The non-financial trusts concerned were set up to manage assets and/or secure the receivables of several creditors (beneficiaries) and the trustee was entrusted the management, care, preservation and custody of the corpus assets until (i) noncompliance with the obligations by the debtor (settler) vis-a-vis the creditors (beneficiaries) are verified, when such assets will be sold and the proceeds therefrom will be distributed (net of expenses) among all beneficiaries, the remainder (if any) shall be delivered to the settler, or (ii) all contract terms and conditions are complied with, in which case all the trust assets will
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be returned to the settler or to whom it may be indicated. The trust assets totaled 307,401 and 321,180 as of March 31, 2020 and December 31, 2019, respectively, and consist of cash, creditors' rights, real estate and shares.
55. Mutual funds
As of March 31, 2020 and December 31, 2019, the Entity holds in custody, as Custodian Agent of Mutual Funds managed by BBVA Asset Management Argentina S.A. Sociedad Gerente de Fondos Comunes de Inversión, time deposit certificates, shares, corporate bonds, government securities, mutual funds, deferred payment checks, BCRA instruments, Buenos Aires City Government Bills, ADRS, Buenos Aires Province Government Bills and repos in the amounts of 17,872,086 and 81,853,687, which are part of the mutual fund portfolio and are recorded in debit balance memorandum accounts "Control - Other".
The Mutual Fund assets are as follows:
MUTUAL FUNDS | 03.31.20 | 12.31.19 |
FBA Renta Pesos | 62,559,136 | 42,181,741 |
FBA Horizonte | 1,287,557 | 852,625 |
FBA Renta Fija Dólar Plus | 728,376 | 775,073 |
FBA Ahorro Pesos | 545,403 | 498,464 |
FBA Renta Fija Dólar | 483,739 | 507,148 |
FBA Acciones Latinoamericanas | 336,722 | 594,047 |
FBA Bonos Latam | 332,361 | 342,461 |
FBA Calificado | 301,677 | 509,816 |
FBA Bonos Globales | 275,334 | 217,571 |
FBA Bonos Argentina | 244,908 | 267,827 |
FBA Acciones Argentinas | 212,560 | 381,993 |
FBA Horizonte Plus | 101,525 | 83,099 |
FBA Retorno Total II | 91,219 | 91,632 |
FBA Renta Fija Plus | 66,587 | 56,859 |
FBA Brasil I | 44,654 | 89,443 |
FBA Retorno Total I | 43,062 | 30,685 |
FBA Gestión I | 24,407 | 24,970 |
FBA Renta Mixta | 15,284 | 19,074 |
FBA Renta Pública I | 1,444 | 1,492 |
FBA Renta Fija Local | 1,444 | 1,492 |
FBA Renta Pública II | 845 | 778 |
67,698,244 | 47,528,290 | |
The subsidiary BBVA Asset Management Argentina S.A. acts as a mutual funds manager, authorized by the CNV, which registered that company as a mutual funds management agent under No. 3 under Provision 2002 issued by the CNV on August 7, 2014.
56. Penalties and administrative proceedings instituted by the BCRA
According to the requirements of Communication "A" 5689, as amended, issued by the BCRA, below is a detail of the administrative and/or disciplinary penalties as well as the judgements issued by courts
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of original jurisdiction in criminal matters, enforced or brought by the BCRA of which the Entity has been notified:
Administrative proceedings commenced by the BCRA
-
"Banco Francés S.A. over breach of Law 19359". Administrative Proceedings for Foreign Exchange Offense initiated by the BCRA notified on February 22, 2008 and identified under No. 3511, File No. 100194/05, on grounds of a breach of the Criminal Foreign Exchange Regime as a result of the purchase and sale of US Dollars through the BCRA in excess of the authorized amounts. These totaled 44 transactions involving the Bank's branches 099, 342, 999 and 320. The individuals/entities subject to these proceedings were Banco BBVA Argentina S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were committed: (i) two Territory Managers, (ii) four Branch Managers, (iii) four Heads of Back-Office Management and (iv) twelve cashiers. On August 21, 2014, the court acquitted the individuals/entities above from all charges. The General Attorney's Office filed an appeal and Room A of the Appellate Court with jurisdiction over Criminal and Economic Matters confirmed the Bank's and the involved officers' acquittal from all charges. The
General Attorney's Office filed an Extraordinary Appeal, which was granted and, as of the date of these financial statements, is being heard by the Supreme Court of Justice. - "Banco Francés S.A. over breach of Law 19359". Administrative Proceedings for Foreign Exchange Offense initiated by the BCRA notified on December 1, 2010 and identified under No. 4539, File No. 18398/05 where charges focus on fake foreign exchange transactions, through false statements upon processing thereof, carried out by personnel from five branches in Mar del Plata, which would entail failure to comply with the client identification requirements imposed by foreign exchange rules and regulations through Communication "A" 3471, paragraph 6. The individuals/entities subject to these proceedings were Banco BBVA Argentina S.A., the five regular members of the Board of Directors and the following Bank officers who served in the capacities described below at the date when the breaches were committed: (i) the Retail Bank Manager, (ii) the Territory Manager, (iii) the Area Manager, (iv) a commercial aide to the Area Manager, (v) five Branch Managers, (vi) four Heads of Back-Office Management, (vii) five Main Cashiers and (viii) one cashier. To date, the case is being heard by Federal Court No. 3, Criminal Division of the City of Mar del Plata, under File No. 16377/2016. On June 21, 2017, the court sought to obtain further evidence on its own initiative ordering that a court letter should be sent to the BCRA for it to ascertain if the rules governing the charges brought in the Case File No. 18398/05 Proceedings No. 4539 have been subject to any change. The BCRA answered the request from the Court, stating that noncompliance with the provisions of Communication "A" 3471 would not currently be subject to any change that may imply a lesser offense. On September 30, 2019, the court of original jurisdiction rendered judgment against the Bank for its involvement in the transaction imposing a fine of US$ 592,000, while imposing the following fines to the following individuals involved:
- Pablo Bistacco and Graciela Alonso - US$ 61,000
- Nestor Bacquer and Hugo Benzan - US$ 76,831 and Euros 9,000
- Mariela Espinosa and Mario Fioritti - US$ 59,800 and Euros 11,500
- Liliana Paz and Alberto Gimenez - US$ 296,000 and Euros 28,000
- Jorge Elizalde and Elizabeth Mosquera - US$ 9,135
- Carlos Barcellini - US$ 4,000
- Carlos Alfonso - US$ 4,000
- Samuel Alaniz - US$ 4,000
- Julian Burgos - US$ 4,000
The Bank is jointly and severally liable for the aforementioned fines. The Bank's Directors Jorge Carlos Bledel, Javier D. Ornella, Marcelo Canestri and Oscar Castro, and Territory Managers Oscar Fantacone and Jorge Allen were acquitted from all charges.
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An appeal was filed on behalf of Banco BBVA Argentina S.A. and its employees asking for the reversal of the decision or otherwise significant reductions of the amounts involved.
The case was filed with the Federal Appellate Court of Mar del Plata, Criminal department, and is awaiting judgment.
- "BBVA Banco Francés S.A. over breach of Law 19359". Administrative Proceedings for Foreign Exchange Offense initiated by the BCRA notified on July 26, 2013 and identified under No. 5406, File No. 100443/12 where charges focus on fake foreign exchange transactions through false statements upon processing thereof carried out incurred by personnel in Branch 087 - Salta -,which would entail failure to comply with the client identification requirements imposed by foreign exchange rules and regulations through Communication "A" 3471, Paragraph 6. The individuals/entities subject to these proceedings were Banco BBVA Argentina S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were committed: (i) the Branch Manager (ii) the Back Office Management Head, (iii) the Main Cashier and (iv) two cashiers. The trial period came to a close and the BCRA must send the file to Salta's Federal Court. As of the date hereof, the case file has not be filed in court.
-
"BBVA Banco Francés S.A. over breach of Law 19359". Administrative Proceedings for foreign exchange offense initiated by the BCRA, notified on December 23, 2015 and identified under No. 6684, File No. 100068/13. The proceedings were brought for allegedly having completed operations under
Code 631 "Professional and technical business services" for ROCA ARGENTINA S.A. against the applicable exchange regulations (Communications "A" 3471, "A" 3826 and "A" 5264), involving the incomplete verification of the services provided. The individuals/entities subject to these proceedings were Banco BBVA Argentina S.A. and two of the Entity's officers holding the positions described below: (i) the Foreign Trade Manager and (ii) an officer of the Area. The BCRA has decided that the trial period has come to an end. The case is being heard by Federal Court No. 2, in Lomas de Zamora, Province of Buenos Aires, Criminal Division, under File No. 39130/2017. On October 26, 2017, the Entity filed a request for retroactive application of the most favorable criminal law, as through Communication "A" 5264, whereby the restriction on foreign trade transactions was removed, the payment of services abroad was reinstated
The Group and its legal advisors estimate that a reasonable interpretation of the applicable regulations in force was made and do not expect an adverse financial impact from these cases.
-
Accounting records
As of the date of these consolidated condensed interim financial statements, and as a consequence of the subsequent social distancing measures the Argentine Government has been mandating since March 19, 2020 in the wake of the global pandemic unleashed by the COVID-19 described in Note 1.3., these consolidated condensed interim financial statements are pending transcription into the Financial Statements for Reporting Purposes book, while the accounting entries corresponding to January, February and March 2020 are in the process of being transcribed to the Journal. - Subsequent events
By means of Communication "A" 7014 dated May 14, 2020, the BCRA mandated that, effective since then, debt instruments issued by the government sector received in exchange for other instruments should be measured upon initial recognition at the carrying amount of the instruments delivered in replacement on such date. Therefore, such exchange does not have an impact on the statement of income.
No other events or transactions have occurred between period end and the date of these financial statements which may significantly affect the Entity's financial position or results of operations as of March 31, 2020.
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59. Accounting principles - Explanation added for translation into English
These financial statements are the English translation of those originally issued in Spanish.
These financial statements are presented on the basis of the accounting standards established by the financial reporting framework set forth by BCRA. Certain accounting practices applied by the Bank that conform to the standards of the BCRA may not conform to the generally accepted accounting principles in other countries.
The differences between the financial reporting framework set forth by BCRA and IFRS are detailed in Note 2 to the consolidated financial statements. Accordingly, these financial statements are not intended to present financial position, results of operations and cash flows in accordance with generally accepted accounting principles other than the financial reporting framework set forth by the BCRA.
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EXHIBIT B | ||
CLASSIFICATIO N O F LO ANS AND O THER FINANCING ACCO RDING TO FINANCIAL PERFO RMANCE | ||
AND GUARANTEES RECEIVED CO NSO LIDATED WITH SUBSIDIARIES | ||
AS OF MARCH 31, 2020 AND DECEMBER 31, 2019 | ||
(stated in thousands of pesos) | ||
Account | 03.31.20 | 12.31.19 |
COMMERCIAL PORT FOLIO | ||
Normal performance | 98,412,346 | 81,058,668 |
Preferred collaterals and counter-guarantees "A" | 390,913 | 295,759 |
Preferred collaterals and counter-guarantees "B" | 559,227 | 762,444 |
No preferred collaterals and counter-guarantees | 97,462,206 | 80,000,465 |
With special follow-up | 94,149 | 2,097 |
Under observation | 94,149 | 2,097 |
Preferred collaterals and counter-guarantees "B" | 1,195 | 1,331 |
No preferred collaterals and counter-guarantees | 92,954 | 766 |
T roubled | 608,224 | 1,001,631 |
No preferred collaterals and counter-guarantees | 608,224 | 1,001,631 |
With high risk of insolvency | 43,985 | 294,863 |
Preferred collaterals and counter-guarantees "B" | - | 172,682 |
No preferred collaterals and counter-guarantees | 43,985 | 122,181 |
Uncollectible | 3,533,311 | 3,027,288 |
Preferred collaterals and counter-guarantees "A" | 9,926 | 10,700 |
Preferred collaterals and counter-guarantees "B" | 170,643 | 11,300 |
No preferred collaterals and counter-guarantees | 3,352,742 | 3,005,288 |
TO TAL | 102,692,015 | 85,384,547 |
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EXHIBIT B
(Cont inued)
CLASSIFICATIO N O F LO ANS AND O THER FINANCING ACCO RDING TO FINANCIAL PERFO RMANCE
AND GUARANTEES RECEIVED CO NSO LIDATED WITH SUBSIDIARIES
AS OF MARCH 31, 2020 AND DECEMBER 31, 2019
(stated in thousands of pesos)
Account | 03.31.20 | 12.31.19 | ||
CONSUMER AND HOUSING PORT FOLIO | ||||
Normal performance | 126,691,763 | 133,259,447 | ||
Preferred collaterals and counter-guarantees "A" | 38,656 | 50,208 | ||
Preferred collaterals and counter-guarantees "B" | 22,825,128 | 23,175,215 | ||
No preferred collaterals and counter-guarantees | 103,827,979 | 110,034,024 | ||
Low risk | 1,412,130 | 2,469,351 | ||
Preferred collaterals and counter-guarantees "A" | 13 | 1,021 | ||
Preferred collaterals and counter-guarantees "B" | 86,546 | 369,609 | ||
No preferred collaterals and counter-guarantees | 1,325,571 | 2,098,721 | ||
Medium risk | 1,407,457 | 1,936,957 | ||
Preferred collaterals and counter-guarantees "B" | 45,873 | 106,365 | ||
No preferred collaterals and counter-guarantees | 1,361,584 | 1,830,592 | ||
High risk | 666,100 | 1,521,831 | ||
Preferred collaterals and counter-guarantees "A" | - | 579 | ||
Preferred collaterals and counter-guarantees "B" | 107,618 | 98,588 | ||
No preferred collaterals and counter-guarantees | 558,482 | 1,422,664 | ||
Uncollectible | 221,024 | 159,879 | ||
Preferred collaterals and counter-guarantees "B" | 70,845 | 50,197 | ||
No preferred collaterals and counter-guarantees | 149,642 | 109,682 | ||
TO TAL | 130,398,474 | 139,347,465 | ||
TO TAL GENERAL | 233,090,489 | 224,732,012 | ||
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EXHIBIT C
CONCENTRATION OF LOANS AND OTHER FINANCING CONS OLIDATED WITH S UBSIDIARIES AS OF M ARCH 31, 2020 AND DECEM BER 31, 2019 (stated in thousands of pesos)
03.31.20 | 12.31.19 | |||
% over | % over | |||
Number of customers | Debt | total | Debt | total |
balance | portfolio | balance | portfolio | |
10 largest customers | 29,554,664 | 12.68% | 23,503,910 | 10.46% |
50 following largest customers | 38,303,869 | 16.43% | 26,140,192 | 11.63% |
100 following largest customers | 16,041,614 | 6.88% | 14,862,440 | 6.61% |
All other customers | 149,190,342 | 64.01% | 160,225,470 | 71.30% |
TOTAL | 233,090,489 | 100.00% | 224,732,012 | 100.00% |
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EXHIBIT D | ||||||||
BREAKDOWN BY TERM OF LOANS AND OTHER FINANCING | ||||||||
CONS OLIDATED WITH S UBSIDIARIES | ||||||||
AS OF M ARCH 31, 2020 | ||||||||
(stated in thousands of pesos) (1) | ||||||||
Terms remaining to maturity | ||||||||
Portfolio | 1 | 3 | 6 | 12 | 24 | M ore than | ||
ITEM | due | month | months | months | months | months | 24 | TOTAL |
months | ||||||||
Non-financial government sector | - | 581 | - | - | - | - | - | 581 |
Argentine Central Bank (BCRA) | - | 11,273 | - | - | - | - | - | 11,273 |
Financial sector | - | 1,688,924 | 360,906 | 907,358 | 2,077,069 | 1,066,724 | 480,313 | 6,581,294 |
Non-financial private sector | ||||||||
and residents abroad | 6,181,192 | 90,409,255 | 39,910,681 | 24,310,746 | 18,559,765 | 25,457,746 | 40,265,168 | 245,094,553 |
TOTAL | 6,181,192 | 92,110,033 | 40,271,587 | 25,218,104 | 20,636,834 | 26,524,470 | 40,745,481 | 251,687,701 |
(1) T hese balances are total contractual flows and, therefore, include principal, accrued and to be accrued interest and charges. |
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EXHIBIT H
DEPOSITS CONCENTRATION CONSOLIDATED WITH SUBSIDIARIES AS OF MARCH 31, 2020 AND DECEMBER 31, 2019 (stated in thousands of pesos)
03.31.20 | 12.31.19 | |||
% over | % over | |||
Number of customers | Debt | total | Debt | total |
balance | portfolio | balance | portfolio | |
10 largest customers | 17,591,154 | 5.36% | 11,723,528 | 3.70% |
50 following largest customers | 18,113,075 | 5.52% | 18,358,947 | 5.79% |
100 following largest customers | 14,417,622 | 4.40% | 14,460,710 | 4.56% |
All other customers | 277,838,012 | 84.72% | 272,374,458 | 85.95% |
TOTAL | 327,959,863 | 100.00% | 316,917,643 | 100.00% |
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EXHIBIT I | |||||||
BREAKDOWN OF FINANCIAL LIABILITIES BY REMAINING TERMS | |||||||
CONS OLIDATED WITH S UBSIDIARIES | |||||||
AS OF MARCH 31, 2020 | |||||||
(stated in thousands of pesos) (1) | |||||||
Terms remaining to maturity | |||||||
1 | 3 | 6 | 12 | 24 | more than | ||
ITEM S | month | months | months | months | months | 24 | TOTAL |
months | as of 03.31.2020 | ||||||
De posits | 306,210,916 | 19,268,951 | 4,187,677 | 1,573,229 | 64,117 | 3,334 | 331,308,224 |
Non.-financial government sector | 3,468,572 | 14,519 | 7 | - | - | - | 3,483,098 |
Financial sector | 286,915 | - | - | - | - | - | 286,915 |
Non-financial private sector and residents abroad | 302,455,429 | 19,254,432 | 4,187,670 | 1,573,229 | 64,117 | 3,334 | 327,538,211 |
Derivative instruments | 331,591 | - | - | - | - | - | 331,591 |
O ther financial liabilities | 36,635,852 | 363,472 | 535,712 | 712,425 | 876,462 | 7,855,472 | 46,979,395 |
Financing received from the BCRA and other financial | 1,859,535 | 705,258 | 191,543 | 434,530 | 79,626 | 924,780 | 4,195,272 |
institutions | |||||||
Corporate bonds issued | 94,877 | 3,657,406 | 1,187,346 | 3,147,822 | - | - | 8,087,451 |
TO TAL | 345,132,771 | 23,995,087 | 6,102,278 | 5,868,006 | 1,020,205 | 8,783,586 | 390,901,933 |
(1) The s e ba la nc e s a re tota l c ontra c tua l c a s h flows a nd, the re fore , inc lude princ ipa l, a c c rue d a nd to be a c c rue d inte re s t a nd c ha rge s . |
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EXHIBIT J | |||||||
PROVIS IONS | |||||||
CONS OLIDATED WITH S UBSIDIARIES | |||||||
FOR THE THREE-M ONTH PERIOD ENDED M ARCH 31, 2020 AND FISCAL YEAR ENDED DECEM BER 31, 2019 | |||||||
(stated in thousands of pesos) | |||||||
Decreases | |||||||
Accounts | Balances | M onetary gain | Balances | ||||
at the beginning | Increases | Reversals | Uses | (loss) generated by | as of 03.31.20 | ||
of the year | provisions | ||||||
INCLUDED IN LIABILITIES | |||||||
- Provisions for contingent commitments | 976,527 | 375,140 | (1)(3) | - | - | (64,672) | 1,286,995 |
- For administrative, disciplinary and criminal | 5,390 | - | (1) | - | - | (390) | 5,000 |
penalties | |||||||
- Provisions for reorganization | 2,130,236 | 243,566 | (1) | 82,626 | 266,024 | (154,960) | 1,870,192 |
- Provisions for termination plans | 69,255 | - | (1) | - | - | (5,011) | 64,244 |
- Other | 8,404,535 | 330,497 | (1) (2) | 1 | 56,465 | (631,184) | 8,047,382 |
TOTAL PROVIS IONS | 11,585,943 | 949,203 | 82,627 | 322,489 | (856,217) | 11,273,813 |
- See Note 27.
- Includes an increase of 1,691 corresponding to the subsidiary Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings) recorded in Administrative Expenses.
- Includes an increase of 502 corresponding to the foreign exchange difference of provisions in foreign currency for contingent commitments.
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EXHIBIT R | ||||||
ADJUS TMENT TO IMPAIRMENT LOS S - ALLOWANCES FOR LOAN LOS S ES | ||||||
CONS OLIDATED WITH GROUP "A" S UBSIDIARIES | ||||||
FOR THE THREE-M ONTH PERIOD ENDED M ARCH 31, 2020 AND | ||||||
FISCAL YEAR ENDED DECEM BER 31, 2019 | ||||||
(stated in thousands of pesos) | ||||||
ECL of remaining life of the financial asset | ||||||
Accounts | Balances | ECL for the | M onetary income | Balances | ||
as of 12.31.19 | following | FI with significant | FI with credit | (loss) | as of 03.31.20 | |
12 months | increases of | impairment | generated by | |||
credit risk | allowances |
Other financial assets | 243.962 | 19.568 | - | 3.583 | (18.721) | 248.392 |
Loans and other financing | 12.076.296 | (235.904) | 283.324 | 867.479 | (1.132.703) | 11.858.492 |
Other financial institutions | 154.134 | (8.063) | (24.500) | (2.505) | (8.796) | 110.270 |
Non-financial private sector and residents abroad | 11.922.162 | (227.841) | 307.824 | 869.984 | (1.123.907) | 11.748.222 |
Overdrafts | 684.348 | 585.616 | 277.129 | (25.459) | (53.601) | 1.468.033 |
Instruments | 986.798 | (229.269) | (125.945) | (38.223) | (53.044) | 540.317 |
M ortgage loans | 152.775 | (28.749) | 14.484 | 118.297 | (9.108) | 247.699 |
Pledge loans | 33.625 | (5.018) | (62) | 4.350 | (2.326) | 30.569 |
Consumer loans | 1.458.425 | (152.756) | 168.537 | (31.183) | (96.467) | 1.346.556 |
Credit card loans | 3.654.780 | (510.981) | 267.912 | (64.392) | (244.193) | 3.103.126 |
Finance leases | 135.092 | (19.345) | (1.743) | (6.062) | (9.188) | 98.754 |
Other | 4.816.319 | 132.661 | (292.488) | 912.656 | (655.980) | 4.913.168 |
Other debt securities | 737 | 9 | - | - | (53) | 693 |
Contingent commmitments | 976.527 | 124.164 | 267.141 | (16.125) | (64.712) | 1.286.995 |
TOTAL ALLOWANCES | 13.297.522 | (92.163) | 550.465 | 854.937 | (1.216.189) | 13.394.572 |
EXHIBIT R
ADJUS TMENT TO IMPAIRMENT LOS S - ALLOWANCES FOR LOAN LOS S ES
CONS OLIDATED WITH GROUP "B" S UBSIDIARIES
FOR THE THREE-M ONTH PERIOD ENDED M ARCH 31, 2020 AND
FISCAL YEAR ENDED DECEM BER 31, 2019
(stated in thousands of pesos)
Decreases | ||||||
Accounts | Balances | M onetary income | Balances | |||
as of 12.31.19 | Increases | Reversals | (loss) generated by | as of 03.31.20 | ||
allowances | ||||||
Loans and other financing | 191,540 | 27,061 | (2,197) | (14,234) | 202,170 | |
Non-financial private sector and residents abroad | 191,540 | 27,061 | (2,197) | (14,234) | 202,170 | |
Pledge loans | 177,218 | 25,435 | (1,911) | (13,174) | 187,568 | |
Financial leases | 3,147 | 249 | (219) | (227) | 2,950 | |
Other | 11,175 | 1,377 | (67) | (833) | 11,652 | |
TOTAL ALLOWANCES | 191,540 | 27,061 | (2,197) | (14,234) | 202,170 | |
KPMG | +54 11 4316 5700 |
Bouchard 710 - 1° piso - C1106ABL | |
www.kpmg.com.ar | |
Buenos Aires, Argentina | |
LIMITED REVIEW REPORT ON CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
To the President and Directors of
Banco BBVA Argentina S.A.
Registered office: Av. Córdoba 111
City of Buenos Aires
Taxpayer identification number [C.U.I.T.] 30 -50000319-3
Report on the financial statements
We have audited the accompanying condensed interim consolidated financial statements of Banco BBVA Argentina S.A. (the "Entity") and its subsidiaries, which include the condensed consolidated statement of financial position as of March 31, 2020, the condensed consolidated statements of income, other comprehensive income, changes in shareholders' equity and cash flows for the three-month period then ended, Exhibits and selected explanatory notes.
Board of Directors' and Management responsibility for the financial statements
The Board of Directors and Management of the Entity are responsible for the preparation and fair presentation of the accompanying financial statements in accordance with the accounting standards established by the Argentine Central Bank ("BCRA"), which, as indicated in Note 2 to the accompanying financial statements, are based on the International Financial Reporting Standards ("IFRS") and, particularly, for interim financial statements, on International Accounting Standard 34 "Interim Financial Reporting" ("IAS 34"), as issued by the International Accounting Standards Board ("IASB"), and adopted by the Argentine Federation of Professional Councils of Economic Sciences ("FACPCE"), with the exceptions described in Note 2. The Board of Directors and Management are also responsible for such internal control as they determine is necessary to enable the preparation of the interim financial statements that are free from material misstatement whether due to error or irregularities.
Auditors' responsibility and scope of the review
Our responsibility is to express a conclusion on the accompanying condensed interim consolidated financial statements based on our review. We conducted our review in accordance with the standards set forth by Technical Resolution No. 37 of the FACPCE and the "Minimum Standards applicable to External Audits" set forth by the BCRA for the review of interim financial statements. In accordance with such standards, a review is limited primarily to the performance of analytical and other review procedures applied to financial data included in the interim financial statements and inquiries of personnel responsible for the preparation thereof. A review is substantially less in scope than an audit conducted in accordance with auditing standards in force, and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the condensed interim consolidated financial statements.
Opinion
Based on our review, nothing has come to our attention that causes us to conclude that the accompanying condensed interim consolidated financial statements of Banco BBVA Argentina S.A. have not been prepared, in all material respects, in conformity with the accounting standards established by the BCRA, described in Note 2 to the consolidated financial statements.
Emphasis of matter
Without modifying our conclusion, we draw users' attention to the information disclosed in the accompanying condensed interim consolidated financial statements:
- As explained in Note 2 to the accompanying consolidated financial statements, such financial statements were prepared by the Entity's Board of Directors and Management in accordance with the financial reporting framework set forth by the BCRA. Such financial reporting framework differs from the IFRS in the following aspects:
-
As explained in note 2.a), in accordance with Communication "A" 6847 issued by the BCRA, the
Entity has applied the expected losses model set forth in section 5.5 of IFRS 9, excluding from its scope debt instruments of the nonfinancial public sector. Had the impairment model set forth in section 5.5 of IFRS 9 been applied, the Entity would have recorded a decrease in equity of $ 3,676,608 thousand and $ 3,892,574 thousand as of March 31, 2020 and December 31, 2019, respectively, Furthermore, in accordance with Communication "A" 6938, the BCRA postponed the application of the impairment model set forth in section 5.5 of IFRS 9 until the fiscal years commencing on or after January 1, 2021 for Group "B" entities (entities consolidated by the
Entity), maintaining for them the impairment model set forth by the BCRA by means of
Communication "A" 2950, as amended, which requires the recognition of allowances for loan losses according to minimum requirements set forth by the BCRA, - As explained in Notes 2.b) and 16, by virtue of the partial sale of the ownership interest in
Prisma Medios de Pago S.A., the remaining ownership interest were recorded in "Investments in equity instruments" and stated at its fair value with changes recognized through profit or loss, based on a valuation report of the Company prepared by an external professional. In addition, the valuation adjustment established by Memorandum No. 7/2019, issued on April 29, 2019 by BCRA, was deducted from such remaining ownership interest, The accounting criterion applied implies a departure from the provisions of IFRS 9 about the measurement of equity instruments at fair value, - As explained in Note 2.c), the financial statements have been prepared taking into consideration the standards prescribed through Memorandum No. 6/2017 issued by the BCRA on May 29, 2017 regarding the accounting treatment to be applied to uncertain tax positions,
-
As explained in note 2.a), in accordance with Communication "A" 6847 issued by the BCRA, the
-
As indicated in note 5 to the accompanying consolidated financial statements, and by virtue of
BCRA Communications "A" 6778 and 6651, as from January 1, 2020, the Entity has adopted the changes in its accounting policies derived from the implementation of IFRS 9 in order to recognize impairment of its financial assets, excluding debt instruments of the nonfinancial public sector, and IAS 29 for the purposes of presenting the financial statements stated in the reporting currency at period-end. Such changes are applied retroactively from January 1, 2019 as provided for by the regulatory authorities, which implies changes to the financial statements filed as of December 31, 2018, March 31, 2019 and December 31, 2019, for comparative purposes, as disclosed in such note.
Report on other legal and regulatory requirements
In compliance with legal provisions in force, we report that:
- The accompanying condensed interim consolidated financial statements are pending transcription into the Financial Statements for Publication Book and arise from the Company's accounting records, which are also pending transcription into the Journal, considering the situation described in Note 57 to the condensed interim consolidated financial statements,
- As of March 31, 2020, as disclosed in Note 52 to the accompanying condensed interim consolidated financial statements, the Entity's equity and its eligible assets exceed the minimum amounts required by the regulations of the Argentine Securities and Exchange Commission (CNV),
- We read the reporting summary (sections "Statement of financial position items", "Statement of profit or loss items", "Statement of cash flow items", "Statistical data" and "Ratios"), and the additional information required by section 12 of Chapter III, Title IV of CNV regulations (compiled text), based on which, as far as it relates to our area of responsibility, we have no observations; and
- As of March 31, 2020, the accrued liability for retirement and pension contributions payable to the Argentine Pension Fund System arising from the Entity's accounting records amounts to $ 243,737,188, no amounts being due as of that date.
City of Buenos Aires, June 8, 2020.
KPMG
Mauricio G. Eidelstein
Partner
- 64 -
S EPARATE CONDENS ED S TATEMENT OF FINANCIAL POS ITION
AS OF MARCH 31, 2020 AND DECEMBER 31, 2019
(stated in thousands of pesos)
Notes and | 03.31.20 | 12.31.19 | ||||
Exhibits | ||||||
ASSETS | ||||||
Cash and deposits in banks | 4 | 146,370,967 | 168,318,858 | |||
Cash | 37,326,327 | 50,368,197 | ||||
Financial institutions and correspondents | 109,044,640 | 117,950,661 | ||||
Argentine Central Bank (BCRA) | 104,670,110 | 115,835,556 | ||||
Other in the country and abroad | 4,374,530 | 2,115,105 | ||||
Debt securities at fair value through profit or loss | 5 and Exhibit A | 9,059,229 | 4,452,088 | |||
Derivatives | 6 | 2,155,425 | 3,279,799 | |||
Repo transactions | 7 | 3,201,694 | - | |||
Other financial assets | 8 | 17,241,461 | 3,776,583 | |||
Loans and other financing | 9 | 209,111,206 | 200,330,839 | |||
Non-financial government sector | 581 | 493 | ||||
Argentine Central Bank (BCRA) | 11,273 | 18,763 | ||||
Other financial institutions | 8,319,799 | 7,150,574 | ||||
Non-financial private sector and residents abroad | 200,779,553 | 193,161,009 | ||||
Other debt securities | 10 | 64,756,406 | 48,701,563 | |||
Financial assets pledged as collateral | 11 | 6,814,710 | 6,384,691 | |||
Investments in equity instruments | 13 and Exhibit A | 1,811,853 | 2,216,211 | |||
Investments in associates | 14 | 3,905,723 | 3,850,041 | |||
Property and equipment | 15 | 27,301,433 | 28,068,189 | |||
Intangible assets | 16 | 918,360 | 839,598 | |||
Deferred income tax assets | 7,056,805 | 5,359,065 | ||||
Other non-financial assets | 17 | 4,054,745 | 4,470,636 | |||
Non-currrent assets held for sale | 18 | 178,903 | 178,903 | |||
TOTAL ASSETS | 503,938,920 | 480,227,064 | ||||
Notes and exhibits are an integral part of these financial statements.
- 65 -
S EPARATE CONDENS ED S TATEMENT OF FINANCIAL POS ITION
AS OF MARCH 31, 2020 AND DECEMBER 31, 2019
(stated in thousands of pesos)
Notas and | 03.31.20 | 12.31.19 | ||||
Exhibits | ||||||
LIABILITIES | ||||||
19 and Exhibit | ||||||
Deposits | H | 327,367,825 | 316,296,444 | |||
Non-financial government sector | 3,473,308 | 3,167,294 | ||||
Financial sector | 538,708 | 199,055 | ||||
Non-financial private sector and residents abroad | 323,355,809 | 312,930,095 | ||||
Liabilities at fair value through profit or loss | 20 | - | 626,102 | |||
Derivatives | 6 | 331,591 | 3,312,621 | |||
Other financial liabilities | 21 | 42,475,763 | 30,422,438 | |||
Financing received from the BCRA and other financial institutions | 22 | 998,326 | 3,711,731 | |||
Corporate bonds issued | 23 | 4,899,699 | 5,164,432 | |||
Current income tax liabilities | 12 a) | 11,418,033 | 8,518,164 | |||
Provisions | Exhibit J | 11,192,691 | 11,493,661 | |||
Other non-financial liabilities | 24 | 18,206,298 | 17,866,685 | |||
TOTAL LIABILITIES | 416,890,226 | 397,412,278 | ||||
EQUITY | ||||||
Share capital | 26 | 612,710 | 612,710 | |||
Non-capitalized contributions | 20,893,825 | 20,893,825 | ||||
Capital adjustments | 14,632,579 | 14,632,579 | ||||
Reserves | 47,241,771 | 47,241,771 | ||||
Retained earnings | 10,460,210 | (17,844,403) | ||||
Other accumulated comprehensive income/(loss) | (9,871,341) | (11,026,309) | ||||
Income for the period | 3,078,940 | 28,304,613 | ||||
TOTAL EQUITY | 87,048,694 | 82,814,786 | ||||
TOTAL LIABILITIES AND EQUITY | 503,938,920 | 480,227,064 | ||||
Notes and exhibits are an integral part of these financial statements.
- 66 -
SEPARATECONDENSED STATEMENT OF INCOME | |||
FOR THETHREE-MONTH INTERIM PERIODS ENDED MARCH 31, 2020 AND 2019 | |||
(stated in thousands of pesos) | |||
Notes and | Accumulated | Accumulated | |
Exhibits | as of 03.31.20 | as of 03.31.19 | |
Interest income | 27 | 23,285,669 | 28,416,652 |
Interest expense | 28 | (7,547,291) | (13,410,646) |
Net interest income | 15,738,378 | 15,006,006 | |
Commission income | 29 | 5,319,554 | 5,746,154 |
Commission expenses | 30 | (3,502,438) | (3,593,966) |
Net commission income | 1,817,116 | 2,152,188 | |
Net income from financial instruments at fair value | 31 | 925,127 | 3,690,144 |
through profit or loss | |||
Net income (loss) from write-down of assets at amortized cost and at | 32 | (127,002) | (6,264) |
fair value through OCI | |||
Foreign exchange and gold gains | 33 | 1,237,860 | 1,973,390 |
Other operating income | 34 | 1,054,264 | 5,264,666 |
Loan loss allowances | Exhibit R | (1,595,342) | (1,615,725) |
Net operating income | 19,050,401 | 26,464,405 | |
Personnel benefits | 35 | (4,349,869) | (4,187,546) |
Administrative expenses | 36 | (3,521,182) | (3,147,498) |
Depreciation and amortization | 37 | (818,250) | (1,229,499) |
Other operating expenses | 38 | (2,961,673) | (4,495,229) |
Operating income | 7,399,427 | 13,404,633 | |
Income (loss) from associates and joint ventures | 74,962 | (45,895) | |
Gain (loss) on net monetary position | (2,302,363) | (4,901,400) | |
Income before income tax | 5,172,026 | 8,457,338 | |
Income tax | 12 b) | (2,093,086) | (3,587,331) |
Income for the period | 3,078,940 | 4,870,007 | |
Notes and exhibits are an integral part of these financial statements. |
- 67 -
EARNINGS PER SHARE | ||
AS OF MARCH 31, 2020 AND 2019 | ||
(stated in thousands of pesos) | ||
Accounts | 03.31.20 | 03.31.19 |
Numerator: | ||
Net income attributable to owners of the Parent | 3.078.940 | 4.870.007 |
Net income attributable to owners of the Parent adjusted to reflect the effect of dilution | 3.078.940 | 4.870.007 |
Denominator: | ||
Weighted average of outstanding common shares for the period | 612.683.684 | 612.659.638 |
Weighted average of outstanding common shares for the period adjusted to reflect the effect of dilution | 612.683.684 | 612.659.638 |
Basic earnings per share (stated in pesos) | 5,0253 | 7,9490 |
Diluted earnings per share (stated in pesos) (1) | 5,0253 | 7,9490 |
(1) Since Banco BBVA Argentina S.A. has not issued financial instruments with a dilutive effect on earnings per share, basic and diluted earnings per share are the same.
- 68 -
SEPARATESTATEMENT OF OTHER COMPREHENSIVEINCOME | ||
FOR THETHREE-MONTH INTERIM PERIODS ENDED MARCH 31, 2020 AND 2019 | ||
(stated in thousands of pesos) | ||
Accumulated | Accumulated | |
as of 03.31.20 | as of 03.31.19 | |
Income for the period | 3,078,940 | 4,870,007 |
Other comprehensive income components to be reclassified to income/(loss) for the period: | ||
Share in Other Comprehensive Income from associates and joint ventures at equity method | ||
Income/(loss) on the Share in OCI from associates and joint ventures at equity method | (19,125) | (42,437) |
(19,125) | (42,437) | |
Profit or losses from financial instruments at fair value through OCI | ||
Income for the period on financial instruments at fair value through OCI | 1,134,069 | 2,114,225 |
Reclassication adjustment for the period | 127,002 | 6,264 |
Income tax | (76,038) | 160,191 |
1,185,033 | 2,280,680 | |
Other comprehensive income components not to be reclassified to income/(loss) for the period: | ||
Income or loss on equity instruments at fair value through OCI (Items 5.7.5 of IFRS 9) | ||
Income/(loss) for the period on equity instruments at fair value through OCI | (15,628) | - |
Income tax | 4,688 | - |
(10,940) | - | |
Total Other Comprehensive Income for the period | 1,154,968 | 2,238,243 |
Total comprehensive income | 4,233,908 | 7,108,250 |
Notes and exhibits are an integral part of these financial statements. |
- 69 -
SEPARATE CO NDENSED STATEMENT O F CHANGES IN SHAREHO LDERS' EQ UITY | ||||||||||
FO R THE THREE-MO NTH PERIO DS ENDED MARCH 31, 2020 AND 2019 | ||||||||||
(stated in thousands of pesos) | ||||||||||
2020 | 2019 | |||||||||
Share | Non-capit alized | Other comprehensive | Retained | |||||||
capital | contributions | income | earnings | |||||||
Losses on financial | T otal | T otal | ||||||||
Outstanding | Adjustments to | instruments at fair | Unappropriated | |||||||
T ransactions | shares | Share premium | equity | value through OCI | Other | Legal reserve | Optional reserve | retained earnings | ||
Restated balances at the beginning of the year | 612,710 | 20,893,825 | 14,632,579 | (11,073,041) | 46,732 | 11,153,149 | 36,088,622 | 12,539,900 | 84,894,476 | 72,553,300 |
Impact of the implementation of the financial reporting framework | ||||||||||
established by the BCRA - NIIF 9. Item 5.5. (See Note 5.2.c. to the | - | - | - | - | - | - | - | (2,079,690) | (2,079,690) | (318,744) |
consolidated interim financial statements) | ||||||||||
Adjusted balance at the beginning of the year | 612,710 | 20,893,825 | 14,632,579 | (11,073,041) | 46,732 | 11,153,149 | 36,088,622 | 10,460,210 | 82,814,786 | 72,234,556 |
T otal comprehensive income for the period | ||||||||||
- Income for the period | - | - | - | - | - | - | - | 3,078,940 | 3,078,940 | 4,870,007 |
- Other comprehensive income for the period | - | - | - | 1,185,033 | (30,065) | - | - | - | 1,154,968 | 2,238,243 |
Balances at fiscal period-end | 612,710 | 20,893,825 | 14,632,579 | (9,888,008) | 16,667 | 11,153,149 | 36,088,622 | 13,539,150 | 87,048,694 | 79,342,806 |
- 70 -
SEPARATESTATEMENT OF CASH FLOWS | ||
FOR THETHREE-MONTH PERIODS ENDED MARCH 31, 2020 AND 2019 | ||
(stated in thousands of pesos) | ||
Accounts | 03.31.20 | 03.31.19 |
Cash flows from operating activities | ||
Income before Income Tax | 5,172,026 | 8,457,338 |
Adjustment for total monetary income for the period | 2,302,363 | 4,901,400 |
Adjustments to obtain cash flows from operating activities: | (2,796,343) | (8,858,842) |
Depreciation and amortization | 818,250 | 1,229,499 |
Loan loss allowance | 1,595,342 | 1,615,725 |
Effect of foreign exchange changes on cash and cash equivalents | (4,490,733) | (6,702,812) |
Income/(loss) from sale of Prisma Medios de Pagos S.A. | - | (4,186,430) |
Other adjustments | (719,202) | (814,824) |
Net increases from operating assets: | (65,391,938) | (39,177,724) |
Debt securities at fair value through profit or loss | (4,394,855) | 7,798,213 |
Derivatives | 1,124,374 | (352,890) |
Repo transactions | (3,201,694) | (13,745,349) |
Loans and other financing | (25,077,546) | (4,901,415) |
Non-financial government sector | (88) | (333) |
Other financial institutions | (3,126,335) | 5,182,855 |
Non-financial private sector and residents abroad | (21,951,123) | (10,083,937) |
Other debt securities | (19,335,352) | (23,454,996) |
Financial assets pledged as collateral | (898,072) | (852,485) |
Investments in equity instruments | 197,655 | (2,645,662) |
Other assets | (13,806,448) | (1,023,140) |
Net increases from operating liabilities: | 46,320,178 | 31,065,372 |
Deposits | 34,422,805 | 28,785,309 |
Non-financial government sector | 306,014 | 180,242 |
Financial sector | 507,183 | (106,317) |
Non-financial private sector and residents abroad | 33,609,608 | 28,711,384 |
Liabilities at fair value through profit or loss | (626,102) | 1,980,713 |
Derivatives | (2,981,030) | 315,704 |
Repo transactions | - | (23,748) |
Other liabilities | 15,504,505 | 7,394 |
Income tax paid | (294,180) | (344,652) |
Total cash flows used in operating activities | (14,687,894) | (3,957,108) |
- 71 -
SEPARATESTATEMENT OF CASH FLOWS | ||
FOR THETHREE-MONTH PERIODS ENDED MARCH 31, 2020 AND 2019 | ||
(stated in thousands of pesos) | ||
Accounts | 03.31.20 | 03.31.19 |
Cash flows from investing activities: | ||
Payments: | (380,344) | (1,215,966) |
Purchase of property and equipment, intangible assets and other assets | (380,344) | (1,215,966) |
Collections: | 191,075 | 2,686,543 |
Sale of investments in equity instruments | - | 2,686,543 |
Other collections related to investing activities | 191,075 | - |
Total cash flows (used in)/generated by investing activities | (189,269) | 1,470,577 |
Cash flows from financing activities | ||
Payments: | (794,416) | (525,400) |
Non-subordinated corporate bonds | (338,939) | (324,396) |
BCRA | (484) | - |
Financing from local financial institutions | (254,219) | - |
Leases | (200,774) | (201,004) |
Collections: | - | 2,531,551 |
Non-subordinated corporate bonds | - | 2,514,915 |
BCRA | - | 16,636 |
Total cash flows (used in) / generated by financing activities | (794,416) | 2,006,151 |
Effect of exchange rate changes on cash and cash equivalents | 4,490,733 | 6,702,812 |
Effect of monetary income (loss) on cash and cash equivalents | (10,767,045) | (16,292,710) |
Total changes in cash flows | (21,947,891) | (10,070,278) |
Restated cash and cash equivalents at the beginning of the year (Note 4) | 168,318,858 | 164,342,030 |
Cash and cash equivalents at fiscal period-end (Note 4) | 146,370,967 | 154,271,752 |
Notes and exhibits are an integral part of these financial statements. |
72
NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS
AS OF MARCH 31, 2020 (Stated in thousands of pesos)
1. Basis for the preparation of the separate financial statements
As mentioned in Note 2 to the consolidated condensed interim financial statements, Banco BBVA Argentina S.A. (the "Bank") presents consolidated financial statements in accordance with the financial reporting framework set forth by the Argentine Central Bank (BCRA).
These financial statements of the Bank are supplementary to the consolidated condensed interim financial statements mentioned above, and are intended for the purposes of complying with legal and regulatory requirements.
2. Criteria for the preparation of the financial statements
These condensed interim financial statements as of March 31, 2020 and for the three-month period ended on that date were prepared in accordance with the regulations issued by the BCRA which provide that financial institutions under its supervision shall be required to present financial statements prepared pursuant to International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), with the following exceptions ("financial reporting framework set forth by the BCRA"):
- Impairment of financial assets
Pursuant to Communication "A" 6847 issued by the BCRA, the Entity has applied the expected loss model set forth under Item 5.5. of IFRS 9, except for debt instruments issued by the non-financial public sector which were temporarily excluded from the scope of such standard. If the Entity had applied the impairment model established in Item 5.5. of IFRS 9, its shareholders' equity as of March 31, 2020 and December 31, 2019 would have been reduced by 3,676,608 and 3,892,574, respectively, net of the deferred tax effect.
In addition, on March 19, 2020, the BCRA handed down Communication "A" 6938 deferring the application of the impairment model set forth in Item 5.5 of IFRS 9 until fiscal years commencing on or after January 1, 2021 for Group "B" entities (the Entity's subsidiaries), which would remain subject to the impairment model established by the BCRA through Communication "A" 2950, as amended. Such model requires that financial institutions recognize an allowance for loan losses based on the minimum guidelines set forth by the BCRA.
- Measurement of the remaining investment held in Prisma Medios de Pago S.A.
By means of Memorandum No. 7/2019 dated April 29, 2019, the BCRA established the accounting treatment to be applied to the remaining investment held by the Entity in Prisma Medios de Pago S.A. recorded under "Investments in Equity Instruments" as of March 31, 2020 and December 31, 2019 (see Note 16).
- Uncertain tax positions
The BCRA issued Memorandum No. 6/2017 dated May 29, 2017 regarding the treatment to be afforded to uncertain tax positions. Had the IFRS treatment regarding uncertain tax positions been applied, liabilities would have decreased by 5,447,078 and 5,871,923 as of March 31, 2020 and December 31, 2019, respectively.
As stated in Note 2 to the consolidated financial statements, the above mentioned circumstances result in a departure from the IFRS which has a significant impact and may distort the information provided in these separate financial statements.
Since the current reporting period is an interim period, the Bank has opted for presenting condensed information, in accordance with the guidelines set forth in IAS 34 "Interim financial information".
73
Accordingly, these interim financial statements do not include all the information required for full annual financial statements prepared under IFRS. Therefore, these financial statements should be read jointly with the financial statements as of December 31, 2019. However, these financial statements contain notes describing the events and transactions deemed material to understand the changes in the Entity's financial position subsequent to December 31, 2019.
Likewise, these separate financial statements contain the additional information and exhibits required by the BCRA through Communication "A" 6324.
To avoid duplication of information already provided, we refer to the consolidated financial statements regarding:
- Functional and presentation currency (Note 3 to the consolidated condensed interim financial statements)
- Accounting judgment and estimates (Note 4 to the consolidated condensed interim financial statements)
- Significant accounting policies (Note 5 to the consolidated condensed interim financial statements), except for the measurement of ownership interests in subsidiaries.
- IFRS issued but not yet effective for Financial Institutions (Note 6 to the consolidated condensed interim financial statements)
- Provisions (Note 27 to the consolidated condensed interim financial statements)
- Fair values of financial instruments (Note 43 to the consolidated condensed interim financial statements)
- Segment reporting (Note 44 to the consolidated condensed interim financial statements)
- Subsidiaries (Note 45 to the consolidated condensed interim financial statements)
- Deposits guarantee regime (Note 50 to the consolidated condensed interim financial statements)
- Compliance with the provisions of the Argentine Securities Commission - minimum shareholders' equity and liquid assets (Note 52 to the consolidated condensed interim financial statements)
- Trust activities (Note 54 to the consolidated condensed interim financial statements)
- Mutual funds (Note 55 to the consolidated condensed interim financial statements)
- Penalties and administrative proceedings initiated by the BCRA (Note 56 to the consolidated condensed interim financial statements)
- Accounting records (Note 57 to the consolidated condensed interim financial statements)
- Subsequent events (Note 58 to the consolidated condensed interim financial statements)
3. Significant accounting policies
Except as described in Note 5 to the consolidated condensed interim financial statements, the Bank has consistently applied the accounting policies described in Note 5 to the consolidated financial statements as of December 31, 2019, in all the periods presented in these financial statements.
Investments in subsidiaries
Subsidiaries are all the entities controlled by the Bank. The Bank owns a controlling interest in an entity when it is exposed to, or has rights over, the variable returns from its interest in the company, and has the power to affect the changes in such yields. The Bank reevaluates if its control is maintained when there are changes in any of the conditions mentioned.
Interests in Subsidiaries are measured using the equity method. They are initially recognized at cost, which includes transaction costs. After initial recognition, the financial statements include the Bank's share in profit or loss and OCI of investments accounted for using the equity method, until the date when the significant influence or joint control cease.
74
The interim financial statements as of March 31, 2020 of the subsidiaries BBVA Asset Management Argentina S.A., and Consolidar Administradora de Jubilaciones y Pensiones S.A. (under liquidation proceedings) were adjusted considering the financial reporting framework set forth by the BCRA in order to present information on a homogeneous basis.
The financial statements of Rombo Compañía Financiera S.A., PSA Finance Argentina Compañía Financiera S.A. and Volkswagen Financial Services Compañía Financiera S.A. were prepared considering the financial reporting framework set forth by the BCRA for Group "B" financial institutions, which does not consider the model set forth in item 5.5 "Impairment" of IFRS 9 until the fiscal years commencing on or after January 1, 2021 as stated in note 2 to these financial statements.
4. Cash and deposits in banks
03.31.20 | 12.31.19 | |
BCRA - Current account | 104,670,110 | 115,835,556 |
Cash | 37,326,327 | 50,368,197 |
Balances with other local and foreign institutions | 4,374,530 | 2,115,105 |
TOTAL | 146,370,967 | 168,318,858 |
5. Debt securities at fair value through profit or loss
03.31.20 | 12.31.19 | |
BCRA Bills | 8,906,573 | 4,295,267 |
Private securities - Corporate bonds | 101,377 | 100,904 |
Government securities | 51,279 | 55,917 |
TOTAL | 9,059,229 | 4,452,088 |
6. Derivatives
In the ordinary course of business, the Bank carried out foreign currency forward transactions with daily or upon-maturity settlement of differences, with no delivery of the underlying asset and interest rate swap transactions. These transactions do not qualify as hedging pursuant to IFRS 9 - "Financial Instruments".
The aforementioned instruments are measured at fair value and were recognized in the Statement of financial position in the item "Derivative instruments" and changes in fair values were recognized in the Statement of Income in the item "Net income from measurement of financial instruments at fair value through profit or loss".
As of March 31, 2020, the Bank has accounted for premiums from put options taken in respect of the Bank's right to sell its equity interest in Prisma Medios de Pago S.A. to the buyer as of December 30, 2021. Such equity interest was measured at fair value, as calculated by management in reliance of a report prepared by independent appraisers (Note 43 to the consolidated condensed interim financial statements).
Breakdown is as follows:
Assets
03.31.20 | 12.31.19 | ||
Debit balances linked to foreign currency forwards pending settlement in pesos | 1,470,425 | 2,541,372 | |
Premiums for put options taken - Prisma Medios de Pago S.A. | 685,000 | 738,427 | |
TOTAL | |||
2,155,425 | 3,279,799 | ||
75
Liabilities
03.31.20 | 12.31.19 | |
Credit balances linked to foreign currency forwards pending settlement in pesos | 283,876 | 3,154,818 |
Credit balances linked to interest rate swaps | 47,715 | 157,803 |
TOTAL | 331,591 | 3,312,621 |
The notional amounts of the forward transactions and foreign currency forwards, stated in US Dollars (US$) and euros, as applicable, as well as the base value of interest rate swaps are reported below.
03.31.20 | 12.31.19 | |
Foreign currency forwards | ||
Foreign currency forward purchases - US$ | 1,139,766 | 618,497 |
Foreign currency forward purchases - Euros | 961 | 35 |
Foreign currenct forward sales - US$ | 1,132,625 | 620,956 |
Foreign currency forward sales - Euros | 300 | 1,804 |
Interest rate swaps | ||
Fixed rate for floating rate (1) | 800,030 | 1,500,050 |
- Floating rate: Badlar Rate, interest rate for time deposits over 1 (one) million pesos, for 30 to 35 days.
7. Repo transactions Breakdown is as follows: Reverse repurchase transactions
03.31.20 | 12.31.19 | ||
Amounts receivable for reverse repurchase transactions of BCRA Liquidity Bills | 3,201,694 | - | |
with the BCRA | |||
TOTAL | 3,201,694 | - | |
8. Other financial assets
Breakdown of other financial assets is as follows:
03.31.20 | 12.31.19 | ||
Measured at amortized cost | |||
Financial debtors from spot transactions pending settlement | 11,587,607 | 273,297 | |
Other receivables | 3,861,175 | 1,482,732 | |
Receivables from sale of ownership interest in Prisma Medios de Pago S.A. | 1,934,456 | 2,028,658 | |
Other | 84,023 | 182,961 | |
Non-financial debtors from spot transactions pending settlement | 669 | 29,945 | |
17,467,930 | 3,997,593 | ||
Allowance for loans losses (Exhibit R) | (226,469) | (221,010) | |
TOTAL | |||
17,241,461 | 3,776,583 | ||
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9. Loans and other financing
The Bank keeps loans and other financing under a business model with the purpose of collecting contractual cash flows. Therefore, it measures loans and other financing at amortized cost. Below is a breakdown of the related balance:
03.31.20 | 12.31.19 | |
Non-financial government sector | 581 | 493 |
BCRA | 11.273 | 18.763 |
Other financial institutions | 8.443.772 | 7.304.377 |
Overdrafts | 29.505.886 | 15.520.217 |
Discounted instruments | 12.207.134 | 13.298.402 |
Unsecured instruments | 8.633.733 | 12.246.606 |
Mortgage loans | 15.106.043 | 15.255.182 |
Pledge loans | 1.298.250 | 1.454.456 |
Consumer loans | 23.747.432 | 25.370.240 |
Credit Cards | 70.380.730 | 77.686.619 |
Loans for the prefinancing and financing of exports | 27.075.155 | 19.723.114 |
Receivables from finance leases | 1.563.482 | 1.882.952 |
Loans to personnel | 1.827.114 | 1.845.763 |
Other financing | 21.205.992 | 20.816.243 |
221.006.577 | 212.423.427 | |
Allowance for loan losses (Exhibit R) | (11.895.371) | (12.092.588) |
TOTAL | 209.111.206 | 200.330.839 |
Finance leases
The Bank entered into finance leases related to vehicles, machinery and equipment.
The following table shows the total gross investment of finance leases (leasing) and the current value of minimum payments to be received by them:
03.31.20 | 12.31.19 | |||
Total | Current value | Total | Current value | |
of minimum | of minimum | |||
investment | investments | |||
payments | payments | |||
Up to 1 year | 1.171.197 | 900.754 | 991.975 | 988.707 |
From 1 to 5 years | 888.924 | 662.728 | 897.397 | 894.245 |
TOTAL | 2.060.121 | 1.563.482 | 1.889.372 | 1.882.952 |
Principal | 1.535.215 | 1.861.099 | ||
Interest accrued | 28.267 | 21.853 | ||
TOTAL | 1.563.482 | 1.882.952 |
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A breakdown of loans and other financing according to credit quality standing pursuant to the standards applicable issued by the BCRA are detailed in Exhibit B, while the information on the concentration of loans and other financing is presented in Exhibit C to these separate financial statements. The reconciliation of the information included in those Exhibits with the accounting balances is included below.
03.31.20 | 12.31.19 | |
Total Exhibit B and C | 222,360,413 | 213,207,335 |
Plus: | ||
BCRA | 11,273 | 18,763 |
Loans to personnel | 1,827,114 | 1,845,767 |
Interest and other items accrued receivable from financial assets | 134,678 | - |
with credit value impairment | ||
Less: | ||
Allowance for loan losses (Exhibit R) | (11,895,371) | (12,092,588) |
Adjustments for effective interest rate | (344,121) | (381,341) |
Corporate bonds | (92,468) | (104,965) |
Loan commitments | (2,890,312) | (2,162,132) |
Total loans and other financing | 209,111,206 | 200,330,838 |
As of March 31, 2020 and December 31, 2019, the Bank holds the following contingent transactions booked in off-balance sheet accounts according to the financial reporting framework set forth by the BCRA:
03.31.20 | 12.31.19 | |
Overdrafts and receivables agreed not used | 1,448,075 | 335,637 |
Guarantees granted | 541,453 | 545,772 |
Liabilities related to foreign trade transactions | 323,234 | 953,960 |
Secured loans | 577,550 | 326,764 |
2,890,312 | 2,162,132 |
Risks related to the aforementioned contingent transactions are evaluated and controlled within the framework of the Bank's credit risks policy.
10.Other debt securities
- Financial assets measured at amortized cost
03.31.20 | 12.31.19 | |
Corporate bonds under credit recovery transactions | 83 | 89 |
83 | 89 | |
Allowance for loan losses - Private securities (Exhibit R) | (83) | (89) |
TOTAL | - | - |
78
- Financial assets measured at fair value through OCI
03.31.20 | 12.31.19 | |
Government securities | 17,415,746 | 17,282,071 |
BCRA Liquidity Bills | 47,264,185 | 31,344,519 |
Private securities - Corporate bonds | 77,085 | 75,621 |
64,757,016 | 48,702,211 | |
Allowance for loan losses - Private securities (Exhibit R) | (610) | (648) |
TOTAL | 64,756,406 | 48,701,563 |
11.Financial assets pledged as collateral
As of March 31, 2020 and December 31, 2019, the Entity delivered the financial assets listed below as collateral:
03.31.20 | 12.31.19 | ||
Deposits as collateral | (3) | 3,664,740 | 3,262,575 |
BCRA - Special guarantee accounts | (1) | 2,310,245 | 3,048,446 |
Guarantee Trust - Pesos | (2) | 839,725 | 73,670 |
TOTAL | 6,814,710 | 6,384,691 |
- Special guarantee current accounts opened at the BCRA for the transactions related to the automated clearing houses and other similar entities.
- The trust fund consists of pesos and monetary regulation instruments issued by the BCRA.
- Deposits pledged as collateral for activities related to credit card transactions in the country and abroad, leases and futures contracts.
12.Income tax
a) Current income tax liabilities Breakdown is as follows:
03.31.20 | 12.31.19 | |
Income tax provision | 12,561,701 | 9,442,913 |
Advances | (1,143,420) | (924,481) |
Collections and withholdings | (248) | (268) |
11,418,033 | 8,518,164 |
b) Income tax expense
Breakdown of income tax expense:
03.31.20 | 03.31.19 | ||
Current tax | (3,880,508) | (3,621,440) | |
Deferred tax | 1,787,422 | 34,109 | |
(2,093,086) | (3,587,331) | ||
79
Pursuant to IAS No. 34, in interim periods income tax is recognized over the best estimate of the weighted average tax rate expected by the Entity for the fiscal year.
The Bank's effective rate for the three-month period ended March 31, 2020 was 40%, while for the three-month period ended March 31, 2019, it was 42%.
The policy on the recognition of income tax in interim periods is described in Note 15.c) to the consolidated condensed interim financial statements.
13. Investments in equity instruments
Investments in equity instruments over which the Bank has no control, joint control or a significant influence are measured at fair value through profit or loss or at fair value through OCI. Breakdown is as follows:
13.1 Investments in equity instruments through profit or loss
03.31.20 | 12.31.19 | |
Prisma Medios de Pago S.A. (Note 16 to the consolidated condensed interim | ||
financial statements) | 1,694,185 | 2,032,301 |
Private securities - Shares of other non-controlled companies | 102,142 | 154,406 |
TOTAL | 1,796,327 | 2,186,707 |
13.2 Investments in equity instruments through OCI
03.31.20 | 12.31.19 | |
Banco Latinoaméricano de Exportaciones S.A. | 14,490 | 28,443 |
Other | 1,036 | 1,061 |
TOTAL | 15,526 | 29,504 |
14. Investments in subsidiaries and associates
The Bank has investments in the following entities over which it has a control or significant influence which are measured by applying the equity method:
03.31.20 | 12.31.19 | ||
PSA Finance Arg. Cía. Financiera S.A. | 602,515 | 619,085 | |
Rombo Cía. Financiera S.A. | 689,573 | 708,983 | |
Volkswagen Financial Services Compañía Financiera S.A. | 1,141,676 | 1,095,198 | |
Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings) | 31,438 | 33,107 | |
BBVA Asset Management Argentina S.A. Sociedad Gerente de Fondos | 1,003,715 | 985,904 | |
Comunes de Inversión | |||
Interbanking S.A. | 121,673 | 122,520 | |
BBVA Consolidar Seguros S.A. | 315,133 | 285,244 | |
TOTAL | |||
3,905,723 | 3,850,041 | ||
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15.Property and equipment
03.31.20 | 12.31.19 | |
Real estate | 18,719,767 | 18,871,712 |
Furniture and facilities | 4,091,522 | 4,248,450 |
Right of use of leased real estate (Note 25) | 2,345,347 | 2,515,783 |
Machinery and equipment | 1,718,848 | 2,049,716 |
Constructions in progress | 393,152 | 346,599 |
Automobiles | 32,797 | 35,929 |
TOTAL | 27,301,433 | 28,068,189 |
Detailed information on assets and liabilities for leases as well as interest and foreign exchange differences recognized in profit or loss are stated in Note 25 to the separate condensed interim financial statements.
16.Intangible assets
03.31.20 | 12.31.19 | |
Licenses - Software | 918,360 | 839,598 |
TOTAL | 918,360 | 839,598 |
17.Other non-financial assets Breakdown is as follows:
03.31.20 | 12.31.19 | ||
Investment properties | 1,514,335 | 1,527,590 | |
Prepayments | 1,362,996 | 1,497,767 | |
Tax advances | 690,589 | 613,055 | |
Advances to suppliers of goods | 250,088 | 256,900 | |
Other miscellaneous assets | 190,527 | 190,526 | |
Assets acquired as security for loans | 12,181 | 11,675 | |
Advances to personnel | 1,050 | 350,835 | |
Other | 32,979 | 22,288 | |
TOTAL | 4,054,745 | 4,470,636 | |
18.Non-current assets held for sale
On December 19, 2018, the Board of Directors agreed on a plan to sell a group of real property assets located in Argentina. Therefore, these assets, the value of which, as of March 31, 2020 and December 31, 2019 amounts to 178,903, were classified as "Non-current assets held for sale", after the efforts to sell that group of assets began.
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19. Deposits
The information on concentration of deposits is disclosed in Exhibit H. Breakdown is as follows:
03.31.20 | 12.31.19 | |||
Non-financial government sector | 3,473,308 | 3,167,294 | ||
Financial sector | 538,708 | 199,055 | ||
Non-financial private sector and residents abroad | 323,355,809 | 312,930,095 | ||
Checking accounts | 63,307,080 | 58,250,626 | ||
Savings accounts | 162,584,954 | 159,355,038 | ||
Time deposits | 86,332,664 | 90,073,190 | ||
Investment accounts | 13,952 | 83 | ||
Other | 11,117,159 | 5,251,158 | ||
TOTAL | 327,367,825 | 316,296,444 | ||
20. | Liabilities at fair value through profit or loss | |||
03.31.20 | 12.31.19 | |||
Obligations from securities transactions | - | 626,102 | ||
TOTAL | - | 626,102 | ||
21. | Other financial liabilities | |||
03.31.20 | 12.31.19 | |||
Obligations from financing of purchases | 14,219,318 | 18,293,703 | ||
Creditors from spot transactions pending settlement | 11,718,423 | 129,811 | ||
Collections and other transactions on behalf of third parties | 3,850,551 | 3,450,855 | ||
Credit balance for spot purchases or sales pending settlement | 2,643,258 | 129,133 | ||
Liabilities for leases (Note 29) | 2,552,602 | 2,707,438 | ||
Payment orders pending credit | 2,302,796 | 2,090,054 | ||
Accrued commissions payable | 18,315 | 15,711 | ||
Interest accrued payable | - | 148,256 | ||
Other | 5,170,500 | 3,457,477 | ||
TOTAL | 42,475,763 | 30,422,438 | ||
22. Financing received from the BCRA and other financial institutions
03.31.20 | 12.31.19 | ||
Local financial institutions | 672,555 | 956,447 | |
Foreign financial institutions | 278,528 | 2,737,230 | |
BCRA | 47,243 | 18,054 | |
TOTAL | 998,326 | 3,711,731 | |
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23. Corporate bonds issued
Below is a detail of the Bank's corporate bonds in force as of March 31, 2020 and December 31, 2019.
Nominal value (in | Annual Nominal | Payment of | Outstanding | Outstanding | |||
Detail | Issuance date | thousands of | Maturity date | securities as of | securities as of | ||
Rate | interest | ||||||
pesos) | 03.31.20 | 12.31.19 | |||||
Badlar Private + | |||||||
Class 24 | 12.27.2017 | 546.500 | 12.27.2020 | 4.25% annual | Quarterly | 526.500 | 567.564 |
nominal rate | |||||||
UVA + | |||||||
Class 25 | 11.08.2018 | 784.334 | 11.08.2020 | 9.50% annual | Quarterly | 1.426.898 | 1.394.968 |
nominal rate | |||||||
Badlar Private + | |||||||
Class 27 | 02.28.2019 | 1.090.000 | 08.28.2020 | 6.25% annual | Quarterly | 891.000 | 960.494 |
nominal rate | |||||||
Class 28 | 12.12.2019 | 1.967.150 | 06.12.2020 | Badlar Private + | Quarterly | 1.967.150 | 2.120.578 |
4% annual nominal | |||||||
Total principal | 4.811.548 | 5.043.604 | |||||
Interest accrued | 88.151 | 120.828 | |||||
Total principal and interest accrued | 4.899.699 | 5.164.432 |
Definitions:
BADLAR RATE: it is the interest rate for time deposits over 1 (one) million pesos, for 30 to 35 days.
UVA RATE: it is a measurement unit updated on a daily basis as per CER, according to the consumer price index.
24.Other non-financial liabilities
03.31.20 | 12.31.19 | |
Miscellaneous creditors | 7,228,012 | 5,254,199 |
Short-term personnel benefits | 3,630,656 | 4,423,228 |
Other collections and withholdings | 2,595,793 | 3,308,918 |
Advances collected | 2,510,644 | 2,810,066 |
Other taxes payable | 1,025,156 | 1,266,445 |
For contract liabilities | 481,664 | 413,688 |
Social security payment orders pending settlement | 433,293 | 66,227 |
Long-term personnel benefits | 295,708 | 318,772 |
Other | 5,372 | 5,142 |
TOTAL | 18,206,298 | 17,866,685 |
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25.Leases
Bank as lessee
Below is a detail of the amounts of rights of use under leases and liabilities from leases in force as of March 31, 2020:
Rights of use under leases
Initial | Depreciation | Re sidual | ||||||||
value as of | Accumulated | For the | Accumulated | value as of | ||||||
Account | 01.01.2020 | Increases | Decreases | as of 01.01.2020 | Decreases | period (1) | at period-end | 03.31.2020 | ||
Leased real property | 3.113.204 | 92.942 | 123.007 | 597.421 | 2.348 | 142.719 | 737.792 | 2.345.347 | ||
(1) Note 37 | ||||||||||
Liabilities from leases | ||||||||||
Future minimum payments for lease agreements are as follows: | ||||||||||
In foreign | In local | 03.31.20 | ||||||||
currency | currency | |||||||||
Up to one year | 136,876 | 14,548 | 151,424 | |||||||
From 1 to 5 years | 1,247,301 | 160,226 | 1,407,527 | |||||||
More than 5 years | 977,955 | 15,696 | 993,651 | |||||||
2,552,602 | ||||||||||
Interest and exchange rate difference recognized in profit or loss
Other operating expenses | (76.408) |
Interest on liabilities from finance lease (Note 38) | |
Exchange rate difference | (109.249) |
Exchange rate difference for finance leases (loss) | |
Other expenses | |
Leases (Note 36) | (314.645) |
26.Share capital
The information on the corporate stock is disclosed in Note 30 to the consolidated condensed interim financial statements.
84
27.Interest income
03.31.20 | 03.31.19 | |
Interest on government securities | 6.248.533 | 7.264.179 |
Interest on credit card loans | 4.615.865 | 6.029.643 |
Interest on instruments | 2.542.158 | 3.092.093 |
Acquisition Value Unit (UVA) clause adjustment | 2.254.499 | 2.392.381 |
Interest on consumer loans | 2.010.519 | 2.719.186 |
Interest on overdrafts | 2.513.427 | 2.374.129 |
Interest on loans to the financial sector | 626.881 | 1.091.455 |
Interest on other loans | 765.225 | 1.086.055 |
Interest on loans for the prefinancing and financing of exports | 312.722 | 1.013.925 |
Premiums on reverse repurchase agreements | 729.701 | 575.500 |
Interest on mortgage loans | 316.958 | 404.815 |
Interest on finance leases | 94.410 | 190.506 |
Interest on pledge loans | 88.181 | 151.441 |
Stabilization Coefficient (CER) clause adjustment | 26.409 | 27.648 |
Interest on private securities | 1.556 | 3.074 |
Other | 138.625 | 622 |
TOTAL | 23.285.669 | 28.416.652 |
28.Interest expenses
03.31.20 | 03.31.19 | |
Time deposits | 6.383.202 | 10.856.809 |
Checking accounts deposits | 223.495 | 1.046.310 |
Other liabilities from financial transactions | 650.917 | 965.969 |
Acquisition Value Unit (UVA) clause adjustments | 204.126 | 455.194 |
Savings accounts deposits | 67.650 | 56.035 |
Interfinancial loans received | 10.897 | 23.837 |
Other | 7.004 | 5.876 |
Premiums on reverse repurchase agreements | - | 616 |
TOTAL | 7.547.291 | 13.410.646 |
29.Commission income
03.31.20 | 03.31.19 | |
Linked to liabilities | 2,879,825 | 3,076,806 |
From credit cards | 1,800,672 | 1,669,599 |
From insurance | 277,321 | 346,078 |
From foreign trade and foreign currency transactions | 208,327 | 283,609 |
Linked to loans | 118,302 | 338,420 |
Linked to securities | 34,645 | 31,194 |
From guarantees granted | 462 | 448 |
TOTAL | 5,319,554 | 5,746,154 |
85
30.Commission expenses
03.31.20 | 03.31.19 | |
From credit and debit cards | 2.932.661 | 2.705.700 |
From payment of salaries | 186.924 | 262.611 |
From digital sales services | 111.594 | 253.855 |
From Fromeign trade transactions | 34.962 | 42.067 |
Comisiones Latam Pass | 28.914 | 27.185 |
Linked to transactions with securities | 553 | 503 |
Other commission expenses | 206.830 | 302.045 |
TOTAL | 3.502.438 | 3.593.966 |
31.Net income/(loss) from measurement of financial instruments carried at fair value through profit or loss
03.31.20 | 03.31.19 | |
Income from government securities | 930,181 | 1,352,239 |
Income from foreign currency forward transactions | 230,624 | 186,980 |
Income/(loss) from interest rate swaps | 22,971 | (186,731) |
Income from corporate bonds | 16,624 | 34,500 |
Other | (1,518) | - |
(Loss)/income from private securities | (40,764) | 2,303,156 |
(Loss) from loans | (232,991) | - |
TOTAL | 925,127 | 3,690,144 |
32.(Loss) /Income from writing down of financial assets at amortized cost and at fair value through OCI
03.31.2003.31.19
(Loss) from sale of government securities | (127,002) | (6,264) | |
TOTAL | (127,002) | (6,264) | |
33.Foreign exchange and gold gains/(losses)
03.31.20 | 03.31.19 | |
Income from purchase-sale of foreign currency | 946,148 | 2,230,340 |
Conversion of foreign currency assets and liabilities into pesos | 291,712 | (256,950) |
TOTAL | 1,237,860 | 1,973,390 |
86
34.Other operating income
03.31.20 | 03.31.19 | ||
Adjustments and interest on miscellaneous receivables | 249,512 | 295,947 | |
Rental of safe deposit boxes | 207,680 | 189,024 | |
Loans recovered | 161,364 | 120,758 | |
Allowances reversed | 84,933 | 57,469 | |
Debit and credit card commissions | 74,296 | 215,292 | |
Punitive interest | 54,335 | 48,493 | |
Income from sale of non-current assets held for sale | - | 4,186,430 | |
Other operating income | 222,144 | 151,253 | |
TOTAL | 1,054,264 | 5,264,666 | |
35.Personnel benefits | |||
03.31.20 | 03.31.19 | ||
Salaries | 2,607,767 | 2,571,215 | |
Social security charges | 772,563 | 706,977 | |
Personnel compensation and bonuses | 84,191 | 198,001 | |
Personnel services | 86,291 | 78,534 | |
Other short-term personnel benefits | 799,057 | 632,819 | |
TOTAL | 4,349,869 | 4,187,546 | |
36.Administrative expenses | |||
03.31.20 | 03.31.19 | ||
Taxes | 859.559 | 864.511 | |
Maintenance costs | 423.293 | 429.055 | |
Administrative expenses | 329.836 | 247.858 | |
Rent (Note 25) | 314.645 | 262.501 | |
Armored transportation services | 276.646 | 255.444 | |
Electricity and communications | 221.740 | 169.984 | |
Other fees | 215.734 | 131.744 | |
Advertising | 177.703 | 187.151 | |
Security services | 110.037 | 132.812 | |
Insurance | 42.109 | 38.355 | |
Representation and travel expenses | 27.546 | 42.203 | |
Fees to Bank Directors and Supervisory Committee | 19.525 | 5.781 | |
Stationery and supplies | 18.867 | 17.095 | |
Other administrative expenses | 483.942 | 363.004 | |
TOTAL | 3.521.182 | 3.147.498 | |
87
37.Depreciation and amortization
03.31.20 | 03.31.19 | |
Depreciation of property and equipment | 625,971 | 650,123 |
Amortization of rights of use of leased real property (Note 25) | 142,719 | 424,575 |
Amortization of intangible assets | 40,511 | 153,405 |
Depreciation of other assets | 9,049 | 1,396 |
TOTAL | 818,250 | 1,229,499 |
38.Other operating expenses
03.31.20 | 03.31.19 | |
Turnover tax | 1,627,302 | 2,122,245 |
Other allowances (Exhibit J) | 701,709 | 990,808 |
Other operating expenses | 221,662 | 426,935 |
Initial recognition of loans | 174,725 | 625,515 |
Contribution to the Deposit Guarantee Fund | 124,054 | 169,732 |
Interest on liabilities from financial lease (Note 25) | 76,408 | 85,844 |
Claims | 25,238 | 74,150 |
Reorganization expenses (Exhibit J) | 10,575 | - |
TOTAL | 2,961,673 | 4,495,229 |
- Related parties
See Note 46 to the Consolidated Condensed Interim Financial Statements. - Restrictions to the payment of dividends
See Note 48 to the consolidated condensed interim financial statements regarding the restrictions to the payment of dividends. - Restricted assets
As of March 31, 2020 and December 31, 2019, the Bank has the following restricted assets:
- The Entity applied Argentine Treasury Bonds adjusted by CER in pesos maturing in 2021 in the amount of 98,980, Treasury Bonds in pesos maturing on July 31, 2020 in the amount of 115,200 as of March 31, 2020, Treasury Bonds adjusted by CER in pesos maturing in 2021 in the amount of 89,268, Treasury Bonds in pesos maturing on July 31, 2020 in the amount of 116,243 as of December 31, 2019, as security for loans agreed under the Global Credit Program for micro, small and medium enterprises granted by the Inter-American Development Bank (IDB).
- Also, the Entity has accounts, deposits, repo transactions and trusts applied as guarantee for activities related to credit card transactions, with automated clearing houses, transactions settled at maturity, foreign currency futures, court proceedings and leases in the amount of 6,814,710 and 6,384,691 as of March 31, 2020 and December 31, 2019, respectively.
42.Minimum cash and minimum capital requirements
42.1 Minimum cash requirements
The BCRA establishes different prudential regulations to be observed by financial institutions, mainly regarding solvency levels, liquidity and credit assistance levels.
88
Minimum cash regulations set forth an obligation to keep liquid assets in relation to deposits and other obligations recorded for each period. The items included for the purpose of meeting that requirement are detailed below:
Accounts | 03.31.20 | 12.31.19 | ||
Balances at the BCRA | ||||
Argentine Central Bank (BCRA) - current | ||||
account not restricted | 104,310,300 | 115,835,556 | ||
Argentine Central Bank (BCRA) - special | ||||
guarantee accounts - restricted (Note 11) | 2,310,245 | 3,048,446 | ||
Argentine Central Bank (BCRA) - social | ||||
security special accounts - restricted | 359,810 | - | ||
106,980,355 | 118,884,002 | |||
Treasury Bonds in pesos at fixed rate due | ||||
November 2020 | 8,702,158 | 7,869,601 | ||
Liquidity Bills - B.C.R.A. | 56,170,758 | 35,639,786 | ||
TOTAL | 171,853,271 | 162,393,389 |
42.2 Minimum capital requirements
The breakdown of minimum capital requirements is as follows at the mentioned date:
Minimum capital requirement | 03.31.20 | 03.31.19 | |
Credit risk | 20,908,883 | 26,430,645 | |
Operational risk | 6,795,081 | 5,759,999 | |
Market risk | 497,445 | 345,864 | |
Paid-in | 74,376,020 | 56,206,543 | |
Surplus | 46,174,611 | 23,670,035 |
43.Accounting principles - Explanation added for translation into English
These financial statements are the English translation of those originally issued in Spanish.
These financial statements are presented on the basis of the accounting standards established by the financial reporting framework set forth by BCRA. Certain accounting practices applied by the Bank that conform to the standards of the BCRA may not conform to the generally accepted accounting principles in other countries.
The differences between the financial reporting framework set forth by BCRA and IFRS are detailed in Note 2 to the consolidated financial statements. Accordingly, these financial statements are not intended to present financial position, results of operations and cash flows in accordance with generally accepted accounting principles other
than | the | financial | reporting | framework | set | forth | by | the | BCRA. |
89
EXHIBIT A | ||||||||
BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES | ||||||||
AS OF MARCH 31, 2020 AND DECEMBER 31, 2019 | ||||||||
(stated in thousands of pesos) | ||||||||
HOLDING | POSITION | |||||||
Fair | Fair | Book | Book | Position with | ||||
Account | Identification | value | value | value | value | no options | Options | Final position |
level | 03.31.20 | 12.31.19 | ||||||
DEBT SECURITIES AT FAIR VALUETHROUGH PROFIT OR LOSS | ||||||||
Local | ||||||||
Government Securities - In pesos | ||||||||
Province of Rio Negro Debt Security, Floating rate, maturity 2021 | 42016 | 50,731 | 2 | 50,731 | 55,738 | 50,731 | - | 50,731 |
CER-adjusted Argentine Bond in pesos. Maturity 2021 | 5315 | 369 | 1 | 369 | - | 369 | - | 369 |
Subtotal Government Securities - In pesos | 51,100 | 51,100 | 55,738 | 51,100 | - | 51,100 | ||
Government Securities - In foreign currency | ||||||||
Treasury Bonds in USD. Maturity 10-11-19 | 5291 | 179 | 2 | 179 | 179 | 179 | - | 179 |
Subtotal Government Securities - In foreign currency | 179 | 179 | 179 | 179 | - | 179 | ||
BCRA Bills | ||||||||
BCRA Liquidity Bills in pesos. Maturity 01-02-20 | 13551 | - | 2 | - | 4,295,268 | - | - | - |
BCRA Liquidity Bills in pesos. Maturity 04-23-20 | 13595 | 8,207,874 | 2 | 8,207,874 | - | 8,207,874 | - | 8,207,874 |
BCRA Liquidity Bills in pesos. Maturity 04-03-20 | 13589 | 698,699 | 2 | 698,699 | - | 698,699 | - | 698,699 |
Subtotal BCRA Bills | 8,906,573 | 8,906,573 | 4,295,268 | 8,906,573 | - | 8,906,573 | ||
Private Securities | ||||||||
Corporate Bond FCA Financiera Series I UVA Maturity 11-05-20 | 53823 | 76,625 | 2 | 76,625 | 75,714 | 76,625 | - | 76,625 |
Corporate Bond Banco de la Provincia de Bs. As. Class IV | 32890 | 14,276 | 2 | 14,276 | 15,992 | 14,276 | - | 14,276 |
Corporate Bond Rombo Cia Financiera S.A. Class 40 | 52940 | 5,313 | 2 | 5,313 | 3,520 | 5,313 | - | 5,313 |
Corporate Bond Rombo Cia Financiera S.A. Class 42 | 53238 | 5,163 | 2 | 5,163 | 5,677 | 5,163 | - | 5,163 |
Subtotal Private Securities | 101,377 | 101,377 | 100,903 | 101,377 | - | 101,377 | ||
TOTAL DEBT SECURITES AT FAIR VALUE THROUGH PROFIT OR LOSS | 9,059,229 | 9,059,229 | 4,452,088 | 9,059,229 | - | 9,059,229 |
90
EXHIBIT A | ||||||||
(Continued) | ||||||||
BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES | ||||||||
AS OF MARCH 31, 2020 AND DECEMBER 31, 2019 | ||||||||
(stated in thousands of pesos) | ||||||||
HOLDING | POSITION | |||||||
Fair | Fair | Book | Book | Position with | ||||
Account | Identification | value | value | value | value | no options | Options | Final position |
level | 03.31.20 | 12.31.19 | ||||||
OTHER DEBT SECURITIES | ||||||||
MEASURED AT FAIR VALUETHROUGH OCI | ||||||||
Local: | ||||||||
Government Securities - In pesos | ||||||||
Argentine Treasury Bond in pesos. Fixed rate. Maturity November 2020 | 5330 | 8,702,157 | 2 | 8,702,157 | 7,869,601 | 8,702,157 | - | 8,702,157 |
CER-Adjusted Argentine Bond in pesos. 1% Maturity 2021 | 5359 | 982,923 | 2 | 982,923 | - | 982,923 | - | 982,923 |
Capitalizable Treasury Bills in Pesos. Maturity 07-31-20 | 5284 | 257,184 | 1 | 257,184 | 999,204 | 257,184 | - | 257,184 |
Treasury Bills. Floating rate (BADLAR) | 5358 | 193,783 | 2 | 193,783 | - | 193,783 | - | 193,783 |
CER-Adjusted Argentine Bond in pesos. Maturity 2021 | 5315 | 125,048 | 1 | 125,048 | 112,779 | 125,048 | - | 125,048 |
Capitalizable Treasury Bills in Pesos. Maturity 05-29-20 | 5341 | 113,750 | 2 | 113,750 | 383,227 | 113,750 | - | 113,750 |
Subtotal Government Securities - In pesos | 10,374,845 | 10,374,845 | 9,364,811 | 10,374,845 | - | 10,374,845 | ||
Government Securities - In foreign currency | ||||||||
USD-Linked Treasury Bills. Maturity 12-04-19 | 5333 | 6,911,028 | 2 | 6,911,028 | 7,708,664 | 6,911,028 | - | 6,911,028 |
Treasury Bills in USD. Maturity 08-31-20 | 5283 | 129,873 | 2 | 129,873 | 208,596 | 129,873 | - | 129,873 |
Subtotal Government Securities - In foreign currency | 7,040,901 | 7,040,901 | 7,917,260 | 7,040,901 | - | 7,040,901 | ||
BCRA Bills | ||||||||
BCRA Liquidity Bills in pesos. Maturity 03-31-2020 | 13588 | 26,746,377 | 2 | 26,746,377 | - | 26,746,377 | - | 26,746,377 |
BCRA Liquidity Bills in pesos. Maturity 04-08-2020 | 13591 | 8,266,476 | 2 | 8,266,476 | - | 8,266,476 | - | 8,266,476 |
BCRA Liquidity Bills in pesos. Maturity 04-07-2020 | 13590 | 6,474,462 | 2 | 6,474,462 | - | 6,474,462 | - | 6,474,462 |
BCRA Liquidity Bills in pesos. Maturity 04-03-2020 | 13589 | 4,990,705 | 2 | 4,990,705 | - | 4,990,705 | - | 4,990,705 |
BCRA Liquidity Bills in pesos. Maturity 04-16-2020 | 13593 | 786,165 | 2 | 786,165 | - | 786,165 | - | 786,165 |
BCRA Liquidity Bills in pesos. Maturity 01-07-2020 | 13554 | - | 2 | - | 19,504,139 | - | - | - |
BCRA Liquidity Bills in pesos. Maturity 01-08-2020 | 13555 | - | 2 | - | 11,840,380 | - | - | - |
Subtotal BCRA Bills | 47,264,185 | 47,264,185 | 31,344,519 | 47,264,185 | - | 47,264,185 | ||
Private Securities - In foreign currency | ||||||||
Corporate Bond John Deere Credit Cia. Financiera S.A. Class XVIII | 54266 | 77,085 | 2 | 77,085 | 75,621 | 77,085 | - | 77,085 |
Subtotal Private Securities | 77,085 | 77,085 | 75,621 | 77,085 | - | 77,085 | ||
Subtotal Measured at Fair Value through OCI | 64,757,016 | 64,757,016 | 48,702,211 | 64,757,016 | - | 64,757,016 | ||
MEASURED AT AMORTIZED COST | ||||||||
Private Securities - In pesos | ||||||||
Corporate Bond EXO. S.A. | 83 | 83 | 89 | 83 | - | 83 | ||
TOTAL OTHER DEBT SECURITIES | 64,757,099 | 64,757,099 | 48,702,300 | 64,757,099 | - | 64,757,099 | ||
EQUITY INSTRUMENTS | ||||||||
Local: | ||||||||
Private Securities - In pesos | ||||||||
Prisma Medios de Pago S.A.(1) | 1,694,185 | 3 | 1,694,185 | 2,032,301 | 1,694,185 | - | 1,694,185 | |
Shares of other non-controlled companies | 102,142 | 1 | 102,142 | 154,406 | 102,142 | - | 102,142 | |
Other | 226 | 2 | 226 | 249 | 226 | - | 226 | |
Foreign: | ||||||||
Private Securities - In foreign currency | ||||||||
Other | 15,300 | 2 | 15,300 | 29,255 | 15,300 | - | 15,300 | |
TOTAL EQUITY INSTRUMENTS | 1,811,853 | 1,811,853 | 2,216,211 | 1,811,853 | - | 1,811,853 | ||
(1) The shareholding of Prisma Medios de Pago S.A. has put options taken over the total position (See note 9 to these Consolidated Financial Statements). |
91
EXHIBIT B
CLASSIFICATIO N O F LO ANS AND O THER FINANCING ACCO RDING TO FINANCIAL
AND GUARANTEES RECEIVED
AS OF MARCH 31, 2020 AND DECEMBER 31, 2019
(stated in thousands of pesos)
03.31.20 | 12.31.19 | ||||
COMMERCIAL PORT FOLIO | |||||
Normal performance | 96,770,409 | 78,089,548 | |||
Preferred collaterals and counter-guarantees "A" | 390,913 | 295,759 | |||
Preferred collaterals and counter-guarantees "B" | 518,396 | 681,720 | |||
No preferred collaterals and counter-guarantees | 95,861,100 | 77,112,069 | |||
With special follow-up | 94,149 | 2,097 | |||
Under observation | 94,149 | 2,097 | |||
Preferred collaterals and counter-guarantees "B" | 1,195 | 1,331 | |||
No preferred collaterals and counter-guarantees | 92,954 | 766 | |||
T roubled | 608,224 | 1,001,631 | |||
No preferred collaterals and counter-guarantees | 608,224 | 1,001,631 | |||
With high risk of insolvency | 43,985 | 294,863 | |||
Preferred collaterals and counter-guarantees "B" | - | 172,682 | |||
No preferred collaterals and counter-guarantees | 43,985 | 122,181 | |||
Uncollectible | 3,533,311 | 3,027,288 | |||
Preferred collaterals and counter-guarantees "A" | 9,926 | 10,700 | |||
Preferred collaterals and counter-guarantees "B" | 170,643 | 11,300 | |||
No preferred collaterals and counter-guarantees | 3,352,742 | 3,005,288 | |||
TO TAL | 101,050,078 | 82,415,427 | |||
92
EXHIBIT B
(Cont inued)
CLASSIFICATIO N O F LO ANS AND O THER FINANCING ACCO RDING TO FINANCIAL
AND GUARANTEES RECEIVED
AS OF MARCH 31, 2020 AND DECEMBER 31, 2019
(stated in thousands of pesos)
03.31.20 | 12.31.19 | ||||
CONSUMER AND HOUSING PORT FOLIO | |||||
Normal performance | 117,822,550 | 125,127,626 | |||
Preferred collaterals and counter-guarantees "A" | 38,656 | 50,208 | |||
Preferred collaterals and counter-guarantees "B" | 15,890,643 | 15,702,490 | |||
No preferred collaterals and counter-guarantees | 101,893,251 | 109,374,928 | |||
Low risk | 1,357,028 | 2,237,911 | |||
Preferred collaterals and counter-guarantees "A" | 13 | 1,021 | |||
Preferred collaterals and counter-guarantees "B" | 41,121 | 158,139 | |||
No preferred collaterals and counter-guarantees | 1,315,894 | 2,078,751 | |||
Medium risk | 1,382,781 | 1,854,187 | |||
Preferred collaterals and counter-guarantees "B" | 26,574 | 39,178 | |||
No preferred collaterals and counter-guarantees | 1,356,207 | 1,815,009 | |||
High risk | 582,682 | 1,456,280 | |||
Preferred collaterals and counter-guarantees "A" | - | 579 | |||
Preferred collaterals and counter-guarantees "B" | 40,081 | 43,128 | |||
No preferred collaterals and counter-guarantees | 542,601 | 1,412,573 | |||
Uncollectible | 165,294 | 115,904 | |||
Preferred collaterals and counter-guarantees "A" | 537 | - | |||
Preferred collaterals and counter-guarantees "B" | 22,468 | 11,681 | |||
No preferred collaterals and counter-guarantees | 142,289 | 104,223 | |||
TO TAL | 121,310,335 | 130,791,908 | |||
TO TAL GENERAL | 222,360,413 | 213,207,335 | |||
93
EXHIBIT C
CONCENTRATION OF LOANS AND OTHER FINANCING AS OF M ARCH 31, 2020 AND DECEM BER 31, 2019 (stated in thousands of pesos)
03.31.20 | 12.31.19 | |||
% over | % over | |||
Number of customers | Debt | total | Debt | total |
balance | portfolio | balance | portfolio | |
10 largest customers | 30,739,770 | 13.82% | 24,269,365 | 11.38% |
50 following largest customers | 40,211,411 | 18.08% | 27,007,989 | 12.67% |
100 following largest customers | 14,537,504 | 6.54% | 13,325,312 | 6.25% |
All other customers | 136,871,728 | 61.56% | 148,604,670 | 69.70% |
TOTAL | 222,360,413 | 100.00% | 213,207,335 | 100.00% |
94
EXHIBIT D | ||||||||
BREAKDOWN BY TERM OF LOANS AND OTHER FINANCING | ||||||||
AS OF M ARCH 31, 2020 | ||||||||
(stated in thousands of pesos) (1) | ||||||||
Terms remaining to maturity | ||||||||
Portfolio | 1 | 3 | 6 | 12 | 24 | more than | ||
ITEM | due | month | months | months | months | months | 24 | TOTAL |
months | ||||||||
Non-financial government sector | - | 581 | - | - | - | - | - | 581 |
Argentine Central Bank (BCRA) | - | 11,273 | - | - | - | - | - | 11,273 |
Financial sector | - | 3,307,321 | 736,493 | 1,491,379 | 2,299,946 | 1,475,858 | 563,784 | 9,874,781 |
Non-financial private sector | ||||||||
and residents abroad | 6,118,941 | 89,475,942 | 33,073,851 | 22,806,320 | 16,142,788 | 22,577,218 | 38,788,739 | 228,983,799 |
TOTAL | 6,118,941 | 92,795,117 | 33,810,344 | 24,297,699 | 18,442,734 | 24,053,076 | 39,352,523 | 238,870,434 |
(1) T hese balances are total contractual flows and, therefore, include principal, accrued and to be accrued interest and charges. |
95
EXHIBIT H
DEPOSITS CONCENTRATION AS OF MARCH 31, 2020 AND DECEMBER 31, 2019 (stated in thousands of pesos)
03.31.20 | 12.31.19 | |||
% over | % over | |||
Number of customers | Debt | total | Debt | total |
balance | portfolio | balance | portfolio | |
10 largest customers | 17,591,154 | 5.37% | 11,723,528 | 3.71% |
50 following largest customers | 17,818,516 | 5.44% | 18,061,274 | 5.71% |
100 following largest customers | 14,279,012 | 4.36% | 14,301,484 | 4.52% |
All other customers | 277,679,143 | 84.83% | 272,210,158 | 86.06% |
TOTAL | 327,367,825 | 100.00% | 316,296,444 | 100.00% |
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Banco BBVA Argentina SA published this content on 25 August 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 August 2020 19:54:05 UTC