BBVA Argentina
3Q20 Corporate Presentation
December 2020
Safe Harbour Statement
This press release contains certain forward-looking statements that reflect the current views and/or expectations of Banco BBVA Argentina and its management with respect to its performance, business and future events. We use words such as "believe," "anticipate," "plan," "expect," "intend," "target," "estimate," "project," "predict," "forecast," "guideline," "seek," "future," "should" and other similar expressions to identify forward-looking statements, but they are not the only way we identify such statements. Such statements are subject to a number of risks, uncertainties and assumptions. We caution you that a number of important factors could cause actual results to differ materially from the plans, objectives, expectations, estimates and intentions expressed in this release. Actual results, performance or events may differ materially from those in such statements due to, without limitation, (i) changes in general economic, financial, business, political, legal, social or other conditions in Argentina or elsewhere in Latin America or changes in either developed or emerging markets, (ii) changes in regional, national and international business and economic conditions, including inflation, (iii) changes in interest rates and the cost of deposits, which may, among other things, affect margins, (iv) unanticipated increases in financing or other costs or the inability to obtain additional debt or equity financing on attractive terms, which may limit our ability to fund existing operations and to finance new activities, (v) changes in government regulation, including tax and banking regulations, (vi) changes in the policies of Argentine authorities, (vii) adverse legal or regulatory disputes or proceedings, (viii) competition in banking and financial services, (ix) changes in the financial condition, creditworthiness or solvency of the customers, debtors or counterparties of Banco BBVA Argentina, (x) increase in the allowances for loan losses, (xi) technological changes or an inability to implement new technologies, (xii) changes in consumer spending and saving habits, (xiii) the ability to implement our business strategy and (xiv) fluctuations in the exchange rate of the Peso. The matters discussed herein may also be affected by risks and uncertainties described from time to time in Banco BBVA Argentina's filings with the U.S. Securities and Exchange Commission (SEC) and Comisión Nacional de Valores (CNV). Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as the date of this document. Banco BBVA Argentina is under no obligation and expressly disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Information
This earnings release has been prepared in accordance with the accounting framework established by the Central Bank of Argentina ("BCRA"), based on International Financial Reporting Standards ("I.F.R.S.") and the resolutions adopted by the International Accounting Standards Board ("I.A.S.B") and by the Federación Argentina de Consejos Profesionales de Ciencias Económicas ("F.A.C.P.E."), with the transitory exceptions: (i) the record of a prevision for contingencies referred to uncertain fiscal positions required by the BCRA, (ii) the adjustment in valuation established by the B.C.R.A. applied to the valuation of the remaining investment the Bank keeps of Prisma Medios de Pago S.A. ("Prisma"), and (iii) the temporary exclusion of the application of the IFRS 9 impairment model for non-financial public sector debt instruments.
As of 1Q20, the Bank started to inform its inflation adjusted results pursuant to IAS 29 reporting. To facilitate comparison, figures of comparable quarters of 2019 have been updated according to IAS 29 reporting to reflect the accumulated effect of inflation adjustment for each period up to June 30, 2020.
The information in this press release contains unaudited financial information that consolidates, line item by line item, all of the banking activities of BBVA Argentina, including: BBVA Asset Management Argentina S.A., Consolidar AFJP-undergoing liquidation proceeding, and as of July 1, 2019, PSA Finance Argentina Compañía Financiera S.A. ("PSA") and Volkswagen Financial Services Compañía Financiera S.A ("VWFS").
BBVA Consolidar Seguros S.A. is disclosed on a consolidated basis recorded as Investments in associates (reported under the proportional consolidation method), and the corresponding results are reported as "Income from associates"), same as Rombo Compañía Financiera S.A. ("Rombo"), Play Digital S.A. and Interbanking S.A.
Financial statements of subsidiaries have been elaborated as of the same dates and periods as Banco BBVA Argentina S.A.'s. In the case of consolidated companies PSA and VWFS, financial statements were prepared considering the B.C.R.A. accounting framework for institutions belonging to "Group B", without considering the model established by the IFRS 9 5.5. "Impairment" section for periods starting as of January 1, 2021. As of October 2020, PSA and VWFS will belong to "Group C" institutions, keeping the same accounting framework as for "Group B" institutions.
The information published by the BBVA Group for Argentina is prepared according to IFRS, without considering the temporary exceptions established by BCRA.
BBVA Argentina 3Q20 Highlights
As of 1Q20, the Bank started to inform its inflation adjusted results pursuant to IAS 29 reporting. To facilitate comparison, figures of comparable quarters of 2019 have been updated according to IAS 29 reporting to reflect the accumulated effect of inflation adjustment for each period up to September 30, 2020.
BranchesIn-company branches
Total assets
Loans to the private sectorTotal Deposits
247
15
AR$589.8 bn
AR$258.6 bn
AR$393.1 bn
ATMs
Customer service booths
883
2
Net Interest IncomeNet Fee Income
Op. Expenses*
Net Income
ATSs
Employees**
AR$16.7 bn
AR$3.0 bn
AR$12.5 bn
AR$2.8 bn
860
6,065
ROE
ROANPL ratioCoverage ratioEfficiency ratio***
11.0% 1.9%
1.16% 355.26% 49.1%
TOTAL ACTIVE CUSTOMERS
DIGITAL SALES
SEPTEMBER 2020
Digital Customers1
Mobile Customers2
PRV3
RETAIL
SMEs
CIB
+2.6 m
+50 k
+700
+1.9 m
+1.5 m
69%
1. Digital Customers: We consider a customer to be an active user of online banking when they have been logged at least once within the last three months using the internet or a cell phone and SMS banking
2. Mobile Customers: Customers who have been active in online banking at least once in the last three months using a mobile device
3. Retail PRV: Product Relative Value as a proxy of a better economic representation of units sold
*Operating expenses: includes administration, personnel benefits, depreciations and other expenses. **corresponds to total effective employees, net of temporary contract employees ***excluding inflation adjustments. Including inflation adjustments it would be 66.1%.
Macro View
POLITICS
Main Variables
• The National Government announced that almost the entire country has entered a social distancing phase, meaning that most of the activities are now restored. Meanwhile, the lower house passed the wealth tax bill, in a divided result, thus stringing (even more) the relationship between the government and the opposition.
80.88 $/US$ | ARS/USD rate |
+35.5% | YoY |
38.7 U$S Bn | INTERNATIONAL RESERVES |
-11.4% | YoY |
37.2% Oct'20 | INFLATION YoY |
35.8% | REM Consensus Dec. 2020 |
36.7% | Monetary Policy Rate |
-2,433 bp | YoY |
As of November 30, 2020
INFLATION
• October recorded a 3.8% MoM change in inflation (37.2% YoY), above the Central Bank consensus (3.2% MoM). The recent accelleration is mainly driven by both the easing of mobility restrictions and the monetary overhang (resulting from the money issuance).
ACTIVITY
• Economic activity keeps on showing signs of recovery in 3Q20 (+13.2% QoQ s.a. according to the monthly GDP proxy). Both industry and construction maintain the upward trend in September. Industry increased 4.3% MoM s.a. (+3.4% YoY and -10.8% YoY accumulated), showing its first postitive YoY variation in 2020. Construction improved +3.9% MoM s.a. (-3.9% YoY and -28.6% YoY accumulated).
FISCAL POLICY
• October's fiscal result was better than expected. Revenues increased 28.1% YoY and expenses grew 54.8% YoY, thus recording a monthly deficit of AR$ 81.6 bn (accumulating AR$ 1,383 bn in 2020, 5% of GDP).
SOVEREIGN DEBT
• After succesfully restructuring 99% of the ellegible private creditors debt, the government is now seeking a new agreement with the IMF. According to official sources, the government wants an Extended Fund Facility (EFF), which is a long-term agreement (4-10 years) that usually requiers structural reforms. Argentina is facing maturities of US$ 42.14 bn with the multilateral organism between 2021 and 2023.
We Face this Crisis from a Strong Position
Reorienting our clients to remote and digital channels, boosted by COVID-19 pandemic
Our digital capacities are a competitive advantage
x40
84%
21%
ISSUED ECHEQS
WIRE TRANSFERS
APP AND DESKTOP LOGINS
76%
x2.3
DIGITAL TIME
INTERACTIONS THROUGH
DEPOSITS
VIRTUAL ASSISTANT
All indicators correspond to variations vs 1Q20
COVID-19 support loans as of 3Q20
16% of total AR$ loans
Accumulated granted to SMEs, Health services, Zero rate credits and MiPyME Plus credits
As of 3Q20 support loans represent 16% of our AR$ portfolio
+AR$6.0 bn
+AR$26.0 bn
Granted to SMEs for Salary payments
Granted to SMEs for Discounted Instruments
27%
18%
+AR$5.0 bn
+AR$1.8 bn
Discounted Instruments*
Salary & Working Capital*
Granted to SMEs for Working Capital
Granted with FoGAr warrants
22%
3%
AR$170 mn
+AR$7.9 bn
Zero rate loans*
Consumer Loans to Entrepreneurs and SMEs*
Granted to Health Services
Granted at Zero rate and "Zero Culture" rate
29%
AR$19 mn
+AR$180 mn
Granted in MiPyME Plus 24% program
Subsidized rate
Credit card loans refinancing*
*Over support Loan Portfolio
01
Financial System
Adequate systemic levels of liquidity and solvency
Allowances /Irregular non-financial private sector portfolio
COVERAGE (%)
LIQUIDITY (%)
Cash + net repos with BCRA+ BCRA bills/Total Deposits
CAPITAL (%)
Capital/RWA according to BCRA regulation
NPL (%)
Irregular non-financial private sector portfolio/Financing to the non-financial private sector
Source: "Informe sobre bancos", BCRA, as of September, 2020. Values as of January 2020 are not comparable to previous periods due to inflation adjustments.
140%
120%
100%
80%
60%
40%
20%
0%
Positive real profitability for private banks
ROE (ACCUMULATED ANNUALIZED) AND INFLATION
59.2%
47.6%
53.8%
44.4%
36.1%
35.6%
20.8%
BBVA ROE 12. | 3% |
17.5%
18.8%
16.8%
2018
2019
2Q20
3Q20
ROE Private Banks
YoY Inflation
Source: BCRA and IPC CABA (from Jan-13 to Apr-16) - IPC GBA INDEC (from May -16 to May -17) - IPC Nacional INDEC (from June -17)
ROE System
ROE: "Informe sobre Bancos" BCRA as of September, 2020. Values as of January 2020 are not comparable to previous periods due to inflation adjustments.
Inflation adjusted figures
A small financial system with good infrastructure, ready for potential growth
LATAM PRIVATE LOANS AND TOTAL DEPOSITS (% of GDP)
23.4 %
BRANCHES AND ATMs/100,000 ADULT POPULATION (Branches and ATMs / 100,000 adult population)
126.7
dec-15
dec-16
dec-17
dec-18
Loans/GPD
dec-19
mar-20
Deposits/GDP
jun-20
sep-20
99.7%
Credit (%GDP)
Deposits (%GDP)
ArgentinaChileColombiaPeru
ArgentinaChileColombiaPeru
Source: IMF and BBVA Research as of 2019 for Credit and Deposits as % of GDP, and as of 2019 for Branches and ATMs. Last information available..
13.4
13.0
14.5
6.6
60.9
49.6
41.3
Branches
ATMs
Financial System Private Nominal Growth Rates
RETAIL & COMMERCIAL LOANS GROWTH (AR$ billions)
3,200
2,200
2,700
System
1,700
1,200
700
Dec-18
Mar-19
System total loans
Jun-19
System total Commercial loans
Sep-19
Dec-19
Mar-20
System total Retail loansBBVA total loans
Var YoY% | 2018 | 2019 | YTD |
System total loans | 33% | 16% | 19% |
System total Retail loans | 30% | 16% | 15% |
System total Commercial loans | 36% | 15% | 24% |
BBVA total loans | 39% | 2% | 28% |
Sources: Capital balance as of last day of each quarter. BCRA as of September, 2020
SIGHT & TIME DEPOSITS GROWTH (AR$ billions)
300 6,700
250 5,700
200 4,700
150 3,700
BBVASistema
100 2,700
50 1,700
0 700
Jun-20
Sep-20
Dec-18
Mar-19 Jun-19
Sep-19
System total DepositsSystem Time DepositsDec-19
Mar-20 Jun-20 Sep-20
System Sight DepositsBBVA total Deposits
Var YoY % | 2018 | 2019 | YTD |
System total Deposits | 62% | 26% | 49% |
System Sight Deposits | 52% | 30% | 40% |
System Time Deposits | 79% | 19% | 65% |
BBVA total deposits | 67% | 13% | 36% |
450 400 350 300 250 200 150 100 50 0
BBVA
02
BBVA Argentina
A leading bank…
Assets (AR$ bn - % Market Share)
Equity (AR$ bn - % Market Share)
Public Banks
Source: "Informe de entidades financieras", BCRA, as of March 2020. Last quarterly information available.
7,906
Liabilities (AR$ bn - % Market Share)
6,715
Net Income including OCI (AR$ bn - % Market Share)
61.3%
1,191
41.0
Private Banks
…in a fragmented financial system…
Total Private Loans (AR$ bn - % Market Share)
Total Private Deposits (AR$ bn - % Market Share)
2,761
4,763
*Includes PSA + Volkswagen.+ Rombo
Source: "Informe de entidades financieras", BCRA, as of March 2020. Last information available.
Public BanksPrivate Banks
…with a diversified business model
MULTICHANNEL STRUCTURE
*POS: Includes points of sale in supermarkets and shopping centers
03
3Q20 Financial Results
3Q20 Highlights - In Real Terms
01 Net Income
AR$ 2.8 bn
-65.4% YoY
02 Net Interest Income
AR$ 16.7 bn
-25.6% YoY
03 Net Fee Income
AR$ 3.0 bn
+33.7% YoY
04 Operating expenses
AR$ 12.5 bn
23.2% YoY
05 Risk indicators
NPL ratio 1.16%Coverage ratio 355.26%
06 Strong capital position
Capital Ratio 23.3%
TIER I 26.6%
07 Focus on shareholder value
ROE 11.0%
ROA 1.9%
Solid Balance Sheet Structure | |
ASSETS | LIABILITIES & EQUITY |
(AR$ billions, INFLATION ADJUSTED) | (AR$ billions, INFLATION ADJUSTED) |
583 | 590 |
16% | 18% |
15% | 13% |
68% | |
64% | |
3Q20 |
584
583
584
590
3Q19
Property and equipmentLoans and other financingCash and Deposits in banks
2Q20
TOTAL NET LOANS / TOTAL DEPOSITS
Other assets
Private and Public Debt securities
Total L7o5a%ns/Total Dep6o5s%its 67%
3Q20
3Q19
2Q20
Deposits
Financing received from other financial instTotal Equity
Corporate bonds issuedOther liabilities
63%
Loans - peso loan demand slowdown after activity recovery in 2Q20
TOTAL PRIVATE LOAN PORTFOLIO
(AR$ billions, INFLATION ADJUSTED
12% | -65% |
205
70%
84.7
30%
3Q19
PRIVATE SECTOR LOANS MARKET SHARE %*
Bank Consolidated**
232
229
86%
89%
38.0
14%
2Q20 3Q20
AR$USD
3Q19 7.34% 8.13%
2Q20 3Q20
7.50% 7.46%
8.54% 8.25%
*Based on daily information from BCRA. Capital balance as of last day of each quarter. **Consolidates PSA, VWFS and Rombo
NET PRIVATE LOANS STRUCTURE
Retail*
55%
SMEs 32%
*Corporate credit cards included
NET TOTAL LOANS BY ECONOMIC ACTIVITY
Public + Financial sectors 1%Corporate 11%
11%
29.3
Financial Sector 1%
Agricultural and Livestock 5%
Consumer 51%
Loans by Segment - pick up in retail segment demand
BBVA ARGENTINA (% over total private loans AR$ billions, inflation adjusted)
Retail Loan Portfolio - credit cards boosted by "Ahora" programs
CONSUMER LOANS
(AR$ billions, INFLATION ADJUSTED)
CREDIT CARDS
(AR$ billions, INFLATION ADJUSTED)
-20%
+26%
32.6
3Q19
2Q20
CONSUMER LOANS MARKET SHARE*
5.16%
4.95%
5.31%
*Based on daily information from BCRA. Capital balance as of last day of every quarter.
100.00
91.9
3Q20
90 .00
60 .00
80 .00
40 .00
30. 00
20. 00
50. 00
70.00
10.00
0. 00
3Q19
73.1
Credit Cards
2Q20
83.0
3Q20
Credit card stock (in thousands)
CREDIT CARD MARKET SHARE %* | 3Q19 | 2Q20 | 3Q20 |
Financing | 11.21% | 11.67% | 11.94% |
Consumption | 14.93% | 14.20% | 14.28% |
*Credit cards: Consumption market share. Based on information provided by Visa and Mastercard administrators. Spending is considered as of the end of the last month of the quarter.
Retail Loan Portfolio - slight recovery in pledge loans
PLEDGE LOANS (CONSOLIDATED)
(AR$ billions, INFLATION ADJUSTED)
(AR$ billions, INFLATION ADJUSTED)
3Q19
2Q20
BankJVs
PLEDGE LOANS MARKET SHARE**
3Q20
14.21%
13.44%
13.92%
**Consolidated market share. Based on daily information from BCRA. Capital balance as of last day of every quarter.
MORTGAGE LOANS
-9%
17.5
16.9
3Q19
2Q20
MORTGAGE LOANS MARKET SHARE*
3Q20
3.25%
3.02%
2.82%
*Based on daily information from BCRA. Capital balance as of last day of every quarter.
Commercial Loan Portfolio - slowdown in SMEs 24% loans
COMMERCIAL LOANS
(AR$ billions, INFLATION ADJUSTED)
COMMERCIAL LOANS BY CURRENCY (%)
144
3Q19
Other loansDiscounted instruments
-20%
136
2Q20
Prefinancing and financing of exportsOverdrafts
COMMERCIAL LOANS MKT SHARE%*
Loans in $
Loans in USD
Receivables from financial leases
3Q19
2Q20
8.46% 9.28% 7.91% 8.20% 7.34% 6.61%
*Based on daily information from BCRA. Capital values as of last day of every quarter.
115
YoY
-66% USD
+40% ARS
3Q20
3Q20
Deposits - AR$ deposits growing above inflation in real terms
TOTAL PRIVATE DEPOSITS
(AR$ billions, INFLATION ADJUSTED
34% | -30% |
PRIVATE DEPOSITS STRUCTURE
IN AR$ (%)
3Q19
2Q20
AR$USD
PRIVATE DEPOSITS MARKET SHARE*
8.42%
6.50%
6.46%
*Based on daily information from BCRA. Capital balance as of last day of every quarter.
IN USD (%)
3Q20
Savings accounts 84%
3Q20 Profitability Indicators - efficiency affected by higher cost of funds
NET INCOME (AR$ billions, INFLATION ADJUSTED)
3Q19
ROA (%, INFLATION ADJUSTED)
2Q20
3Q20
3Q19
ROE (%, INFLATION ADJUSTED)
3Q19
2Q20
3Q20
EFFICIENCY (%, EXCLUDING INFLATION ADJUSTMENTS)
2Q20
3Q20
3Q19
2Q20
3Q20
Net Interest Income
NET INTEREST INCOME
(AR$ billions, INFLATION ADJUSTED)
2
50
39
1
0
1
24
-1
-1
-7
-17
-2
3Q19
2Q20
NET INTEREST INCOME (IN AR$ BILLIONS)
26
-9
3Q20
Savings accounts represent less than 1% of expenses
40
Interest Income
Financial Sector
30
CER/UVA clause adjustment income
20
Commercial
10
Retail
-
From Private and Public Securities
Other interest income
(10)
Interest Expense
(20)
Time deposits
CER/UVA clause adjustment expense
Checking accounts
Other
NII based on:
• Increasing cost of funds driven by a change in deposit mix
• Higher position in LELIQ increase income from public securities
Net Fee Income & Operating Expenses - Effective fee income strategy boosted by lower acquisition costs
NET FEE INCOME
(AR$ billions, INFLATION ADJUSTED)
3Q19
Fee Income
Fee expenses
2Q20
OPERATING EXPENSES
(AR$ billions, INFLATION ADJUSTED)
-23%
16.3
12.3
12.5
3Q20
Net Fee Income
3Q19
Personnel benefitsDepreciation and amortization
Adminsitrative expensesOther operating expenses
2Q20
3Q20
Sound Risk Indicators - Improvement in Commercial NPLs
NPL & COVERAGE
(%, consolidated, INFLATION ADJUSTED)
NPL PEER GROUP & FINANCIAL SYSTEM
(%, INFLATION ADJUSTED)
10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0%
9.31%
3Q19
CoverageCommercial NPL
2Q20
NPLRetail NPL
3Q20
Cost of Risk
Cost of Risk: Current period loan loss allowances / Total average loans. Total average loans calculated as the average between loans at prior period end, and total loans in the current period.
400%
350%
300%
250%
200%
150%
100%
50%
0%
Source: System: "Informe de Bancos", BCRA, as of September 2020. Peers & BBVA : 2Q20 Earnings Releases. *Molca: Molino Cañuelas
System
SUPV
GGAL
Private banks
BBAR
BMA
4.80%
2.72%
2.70%
1.16%
1.14%
4.50%
Limited Public Sector Exposure
% PUBLIC SECTOR EXPOSURE (EXCL. BCRA) /TOTAL ASSETS
(INFLATION ADJUSTED)
10.9%
3Q19
2Q20
BBVAFinancial System*
3Q20
*Source: "Informe sobre bancos", BCRA, as of September 2020. As of January 2020, System figures are inflation adjusted and not comparable to prior periods.
BBVA PUBLIC SECTOR EXPOSURE
(AR$ billions, INFLATION ADJUSTED)
24.6
19.2
3Q19
Public Debt in pesos
2Q20
Public Debt in US dollars
Provinces and Public Sector loans amount for 0.1% in 3Q20
BBVA BCRA EXPOSURE
(AR$ billions, INFLATION ADJUSTED)
25.1
3Q20
Public Debt in pesos, US dollar-Linked
82.4
120.1
111.9
3Q19
2Q20
3Q20
Repo
LELIQs
Liquid Assets - change in deposit mix towards time deposits
TOTAL LIQUID ASSETS | PRIVATE DEPOSIT BASE |
(%, INFLATION ADJUSTED) | (%, INFLATION ADJUSTED) |
+14% | +6% |
232
256
264
371
396
393
3Q19
2Q20
Cash
Other local and foreign financial institutionsLiquidity bills of B. C. R. A.
TOTAL LIQUID ASSETS/TOTAL DEPOSITS
B.C.R.A
Government securitiesNet REPO transactions
3Q20
TOTAL
AR$
USD
62% 58% 68%
64% 66%
57% 58%
80% 86%
64%
LOW COST FUNDING
3Q19
2Q20
3Q20
Checking AccountsSavings AccountsInvestment accountsOtherTime Deposits
Strong Capital Position - In Real Terms
3Q19
2Q20
3Q20
Capital Ratio
Tier I
04
BBVA Purpose
BBVA Defined a New Strategy in 2015: To Boost its Transformation
OUR PURPOSE
To bring the age of opportunity to everyone
Improving our clients' financial health
NEW STRATEGIC PRIORITIESOUR VALUES
Customer comes first
Reaching more clients
The best and most engaged team
We think big
Helping our clients transition towards a sustainable future
Driving operational excellence
Data & Technology
We are one team
BBVA Argentina Digital Client Strategy Approach
Client acquisition as a key corporate strategic asset for growth
Since 2017*, active clients increased 13%
More than 290,000 clients
Healthy NPL ratio
With an approach in open market
Successfully acquiring clients Reducing the number of branches
Payroll acquisition
New clients, increasing payroll market share
Ahead of curve in digital transformation Driving client acquisition and digital sales
*As of December 2019
Loyalty NPS* #2
Consistently leading in customer satisfaction indicator
BBVA Argentina Active Clients
Since 3Q19, active clients increased 3%, more than 92,000
In thousands
In thousands
0.78
3Q19
2Q20
3Q20
3Q19
2Q20
3Q20
3Q19
Retail
SMEs
CIB
BBAR
Active clients: holders of at least one active product. An active product is in most cases a product with at least "one movement" in the last 3 months, or a minimum balance. CIB does not include Mutual Fund clients Source: active credit cards and credit card market share based on Visa and Mastercard information. Active cards: number of cards that record movements by period end (purchases or extractions).
2Q20
3Q20
SAN
GAL
BMA
Geographic Structure as of December 2019
Successfully acquiring clients without increasing the number of branches Clients per branch increased 12% from 2017 to 2019
*Annual variation in number of branches
Source: "Informe de entidades financieras", BCRA, as of December 2019. Last annual information available. Clients: from 2019 20-F for SUPV and GAL, 2019 Annual Report for BMA.
Ahead of Curve in Digital Transformation Based on Global Strategy
Digital client acquisition strategy based on a variable-cost selling model, exclusive and attractive offers, and key partners
DIGITAL ACTIVE CLIENTS MILLION, % GROWTH
3Q19
2Q20
CUSTOMER PENETRATION RATE, %
MOBILE ACTIVE CLIENTS MILLION, % GROWTH
3Q20
3Q19
2Q20
Digital customers: number of retail clients that have logged in any of the bank's digital platforms at least once during each of the last 3 months.
3Q20
Mobile customers: number of retail clients that have logged in the bank's mobile app at least once during each of the last 3 months. It is a sub-group of digital customers.
Latest
Digital Actions
Digital branches
Combination between human capital and structure facilities to promote client self-service, aiming to digitalize and migrate clients to remote channels
Payment Solutions
Soon to be launched new payment solution app, together with other Argentine banks, enabling wire transfers and cashless payments through mobile phones, and making all member banks' promotions available at purchase.
Transformation Driving Digital Sales and Client Acquisition
RETAIL DIGITAL SALES
(% OF TOTAL SALES YTD, % OF UNITS AND PRV)
53.5%
80.0%
UNITSPRV
3Q19
2Q20
Digital Sales PRV (% Sales)
Digital Sales (% Units)
Digital sales: % of sales done through digital channels and ATM over total sales.
3Q20
PRV: Product Relative value for the Retail Segment, used as a proxy for economic value. Transactions (units) are weighted by a simplified NPV calculated for each product category in order to weight their contribution to the digital sales. Figures have been restated in order to include credit card related financing solutions and FX.
Continuous improvement on efficiency
Accelerated adoption of digital over traditional channels, and a migration from web to mobile
MONETARY TRANSACTIONS BY CHANNEL (IN MILLIONS)
Tellers
Remote
ATM+ATS
3Q19
3Q19
REMOTE CHANNELS
% MONETARY TRANSACTION GROWTH QoQ as of 3Q20
Mobile
2Q20
For the first time remote channels have more participation than
ATM+ATS
Web
*corresponds to total effective employees, net of temporary contract employees. Consolidated.
Branch reduction ongoing since 2019 (# of branches)
3Q20
Employees* (in thousands)
2Q20
3Q20
3Q19
2Q20
3Q20
Asset Quality
NPL as % of Total Lending
2018
2019
BBVA
Allowances as % of NPL
2018
2019
Source: "Informe sobre bancos", BCRA, as of September 2020. Striped periods not adjusted by inflation.
SystemPrivate Banks
5.7%
2Q20
2Q20
BBVASystemPrivate Banks
3Q20
355%
3Q20
Payroll Acquisition
New clients, increasing payroll market share, sight deposits and cross-sell opportunities
MORE payroll customers
INCREASING payroll share
In thousands
2Q19
1Q20
2Q20
Source: Ministerio de Trabajo de la República Argentina; SIPA, as of June 2020. Last quarterly available information..
2Q19
1Q20
2Q20
05
Appendix
Responsible Banking and Sustainability 2019
"In 2019, BBVA Argentina joined the UN Principles of Responsible Banking and signed the Sustainable Finance Protocol. Both initiatives seek to foster a sustainable banking system, fair and accountable towards the community, and are meant to help fulfill the Sustainable Development Goals (SDGs) and the Paris Agreement on Climate Change."
María Isabel Goiri Lartitegui Chairman BBVA
BBVA ARGENTINA WAS THE FIRST PRIVATE BANK TO LAUNCH A NEW LINE OF PERSONAL LOANS CALLED "ECO-LOANS" FOR
$12.2 million
INVESTED IN ENVIRONMENTAL MANAGEMENT
INVESTED IN SOCIAL PROGRAMS
+$25 million
OF OUR SELF-SERVICE TERMINALS SUPPORT ENVELOPE-FREE TRANSACTIONS
100%
THE PURCHASE OF SUSTAINABLE GOODS THAT CONTRIBUTE TO CARE FOR THE ENVIRONMENT AND SUPPORT SDG 7.
The Best Team
>BBVA Volunteers
6,223 employees
47% Women 53% Men
0
Discrimination cases detected
Global Volunteering Week at BBVA +730 employees 325 activities to contribute to the SDG Solidarity Project Contest $650,000 in prizes 21 dreams 4,800 direct beneficiaries
HIGHLIGHTS
OF THE GLOBAL ECO-EFFICIENCY PLAN
40% consumption per capitadecline in YoY paper87.7%of customers with product bundles are enrolled in e-statements
36.6% consumption per capita
decline in year-on-year water82.5%
of VISA customers are enrolled in e-statements
2019
11.9% per capita
reduction of CO2 emissions
92.9% of MasterCard customers areenrolled in e-statements
> The Bank strived to achieve the goal of eliminating plastic from its buildings
Figures correspond to Bank only.
Donations, Human Capital & Sustainability
AR$10 million
Seamos Uno
Initiative involving religious, social and business institutions working closely with the Argentine government to help 4 million people during the pandemic, with food boxes and hygiene products.
AR$10 millionAR$1 million
Argentina nos necesita
Initiative that aims to strengthen the capacity of the Argentine public and private health service systems in order to better respond to the Covid-19 pandemic, in coordination with the Argentine Ministry of Health.
Tu donación vale el doble
Voluntary initiative with the Red
Cross, in which more than $500,000 were collected, reaching more than $1 million when added to the funds doubled by the Bank.
More than 90% of employees at central offices are working remotely. All branches remain open and operational, and many are working up to 100% capacity due to high demand in appointments.
#StayAtHome
#YoMeQuedoEnCasa
The Bank joined this campaign promoting the use of digital media channels to make clients aware of the benefits of operating in an agile and self-serviced way without moving from their homes
1st Sustainable Loan
BBVA Argentina granted the first sustainable loan under the Sustainable Transactional Banking framework, connected to the UN Sustainable Development Goals
Latest sustainable iniciatives
Certification of green credit line
The Bank certified a green credit line of $290 million to the Unión Transitoria de Empresas, to be allocated in the sanitation treatment project at Cuenca del Rio La Matanza - Riachuelo. (July 2020)
Eco-efficiency plan
The Bank has signed a 5 year contract with Central Puerto for the purchase of renewable energy of wind-power origin. As of August 1, 2020, the Reconquista 199 building will be supplying an average of 80% of its energy requirements through a non-polluting source. (2016-2020 Plan)
Credit lines
Línea Verde
Green credit lines for SMEs are available for social purposes and sustainable investments, at a 35% rate with a 4 year duration. (October 2020)
Equity Ownership 3Q20
6.93%
Free Float 26.52%
*Includes 0.07% in LATIBEX
ANSESByMA*NYSE
**Administración Nacional de la Seguridad Social or National Social Security Agency. Replacement of the pension and retirement fund system: in 2008 all resources formerly managed by the private pension and retirement system, including meaningful holdings in public companies were transferred o the Sustainability Guarantee Fund (Fondo de Garantía de Sustentabilidad)
1 As of October 1st, 2019, the merger between BBVA Argentina S.A. and BBVA Francés Valores S.A. was put into effect (merger by absorption process)
SUBSIDIARIES AND EQUITY PARTICIPATIONS
BBVA Asset Management Argentina 100%
BBVA Francés Valores1 96.99%
PSA Finance* 50%Volkswagen Financial Services2 51%
Consolidar AFJP(undergoing liquidation proceedings)
53.89%
Rombo Compañía Financiera 40%
BBVA Seguros 12.22%Interbanking 11.11%Play Digital S.A.
25%
SubsidiariesJVsAssociates
As of October 9th, 50.441 shares have been issued related to the merger by absorption with BBVA Francés Valores S.A., totaling 612,710,079 shares. As of the release of these consolidated financial statements, the increase in capital and the merger by absoprtion are pending registry approval by the I.G.J.
2 As of July 1st 2019 the Bank reports the activity of PSA and VWFS on a consolidated basis with BBVA Argentina, the same as it has been done with BBVA Asset Management Argentina S.A.
BBVA Argentina Outstanding Corporate Bond Debt as of 3Q20
BADLAR- Private Banks rate : interest rate for fixed term deposits over 1 million pesos with a maturity of 30-to-35 days. UVA rate: unit measure that is daily adjusted to the CER index, according to the consumer price index.
JVs corporate bonds not included.
Dividends
Year | Net Income (millions AR$) | Dividends (millions AR$) | Total shares (millions) | Dividends per share (AR$) | Dividends per ADS (AR$) | Payout Ratio | Payment date |
2019 | 31,352 | 14,500 | 612.7 | 4.08 | 12.24 | 46% | To be confirmed* |
2018 | 9,705 | 2,407 | 612.7 | 3.93 | 11.79 | 25% | 05/16/2019 |
2017 | 3,878 | 970 | 612.7 | 1.58 | 4.75 | 25% | 05/09/2018 |
2016 | 3,644 | 911 | 612.7 | 1.49 | 4.46 | 25% | 08/10/2017 |
2015 | 3,785 | 900 | 536.9 | 1.68 | 5.03 | 24% | 07/24/2016 |
2014 | 3,204 | 400 | 536.9 | 0.75 | 2.24 | 12% | 03/18/2016 |
2013 | 2,024 | 29 | 536.9 | 0.05 | 0.16 | 1% | 07/08/2014 |
2012 | 1,264 | - | 536.9 | - | - | - | - |
*The distribution is subject to BCRA prior authorization, which has not been granted yet. According to Communication "A" 6939 and 7035, the distribution of financial institutions' results is suspended until December 31, 2020. Dividends correspond to $2.5 billion approved in May 15, 2020 and $12.0 billion approved in November, 20, 2020.
BBVA Argentina P&L Breakdown
Income Statement BBVA ARG Consolidated Chg (%) | |||||
In millions AR$ except EPS and ADS - Inflation adjusted 3Q20 2Q20 3Q19 QoQ YoY | |||||
Net Interest Income | 16,652 | 17,092 | 22,384 | (2.6%) | (25.6%) |
Net Fee Income | 3,005 | 3,347 | 2,247 | (10.2%) | 33.7% |
Net income from measurement of financial instruments at fair value through P&L | 886 | 1,359 | 2,339 | (34.8%) | (62.1%) |
Net lincome from write-down of assets at amortized cost and at fair value through OCI | (3,988) | (2,225) | 5 | (79.3%) | n.m |
Foreign exchange and gold gains | 1,618 | 1,609 | 5,385 | 0.5% | (70.0%) |
Other operating income | 1,500 | 1,230 | 1,563 | 22.0% | (4.0%) |
Loan loss allowances | (927) | (2,848) | (6,936) | 67.4% | 86.6% |
Net operating income | 18,744 | 19,562 | 26,986 | (4.2%) | (30.5%) |
Personnel benefits | (4,583) | (4,269) | (5,249) | (7.3%) | 12.7% |
Adminsitrative expenses | (4,360) | (4,125) | (4,924) | (5.7%) | 11.5% |
Depreciation and amortization | (838) | (907) | (1,064) | 7.7% | 21.3% |
Other operating expenses | (2,706) | (3,048) | (5,028) | 11.2% | 46.2% |
Operating income | 6,257 | 7,213 | 10,721 | (13.2%) | (41.6%) |
Income from associates | (14) | 202 | (48) | (106.8%) | 71.2% |
Income from net monetary position | (2,242) | (2,459) | (1,406) | 8.9% | (59.4%) |
Net income before income tax | 4,002 | 4,955 | 9,267 | (19.2%) | (56.8%) |
Income tax | (1,169) | (2,202) | (1,082) | 46.9% | (8.0%) |
Income for the period | 2,833 | 2,753 | 8,185 | 2.9% | (65.4%) |
Proforma 3Q20(4)
15,963
3,026
886
(3,988)
1,629 1,530 (895)
18,150 (4,518) (4,283)
(828) (2,579) 5,943
(9)
(1,985) 3,949 (1,102) 2,847
Other Comprehensive Income (OCI)(5) | 1,641 | 2,074 | (7,044) | 58.4% | 141.4% |
1,641
Number of common shares outstanding (in thousands) | 612,710 | 612,710 | 612,660 | - | 0.0% |
Weighted average number of common shares outstanding (2)(3) | 612,710 | 612,710 | 612,660 | - | N/A |
612,710
612,710
Earnings per Share (EPS) | 4.63 | 4.41 | 12.65 | 4.9% | (63.4%) |
Earnings per ADS (1) | 13.88 | 13.23 | 37.94 | 4.9% | (63.4%) |
4.63
13.88
(1) One ADS represents three ordinary shares
(2) In thousands of shares
(3) As of October 9th, 2019, 50.441 shares have been issued related to the merger by absorption with BBVA Francés Valores S.A., totaling 612,710,079 shares. As of the release of these consolidated financial statements, the increase in capital and the merger by absoprtion are pending registry approval by the I.G.J.
(4) Excludes consolidation with VWFS y PSA.
(5) Net of Income Tax
BBVA Argentina Balance Sheet
Balance Sheet BBVA ARG Consolidated Chg (%) | |||||
In millions AR$ - Inflation adjusted 3Q20 2Q20 3Q19 QoQ YoY | |||||
Assets | |||||
Cash and deposits in banks | 133,178 | 121,139 | 128,736 | 9.9% | 3.5% |
Cash | 39,357 | 54,332 | 38,608 | (27.6%) | 1.9% |
Financial institutions and correspondents | 93,821 | 66,807 | 90,128 | 40.4% | 4.1% |
B.C.R.A | 89,619 | 62,348 | 80,830 | 43.7% | 10.9% |
Other local and foreign financial institutions | 4,202 | 4,459 | 9,299 | (5.8%) | (54.8%) |
Debt securities at fair value through profit or loss | 6,038 | 10,502 | 7,074 | (42.5%) | (14.7%) |
Derivatives | 1,411 | 1,138 | 3,563 | 24.0% | (60.4%) |
Repo transactions | 18,999 | 36,890 | 9,106 | (48.5%) | 108.6% |
Other financial assets | 12,427 | 6,865 | 11,197 | 81.0% | 11.0% |
Loans and other financing | 250,920 | 261,845 | 281,088 | (4.2%) | (10.7%) |
Non-financial public sector | 0 | 0 | 1 | 134.5% | (40.5%) |
B.C.R.A | - | - | - | N/A | N/A |
Other financial institutions | 2,948 | 3,786 | 5,873 | (22.1%) | (49.8%) |
Non-financial private sector and residents abroad | 247,971 | 258,058 | 275,215 | (3.9%) | (9.9%) |
Other debt securities | 105,815 | 87,740 | 86,673 | 20.6% | 22.1% |
Financial assets pledged as collateral | 14,539 | 11,572 | 11,342 | 25.6% | 28.2% |
Current income tax assets | 5 | 10 | 1 | (47.5%) | n.m |
Investments in equity instruments | 1,764 | 1,943 | 2,562 | (9.2%) | (31.1%) |
Investments in subsidiaries and associates | 1,323 | 1,323 | 442 | 0.0% | 199.5% |
Property and equipment | 30,143 | 30,434 | 34,434 | (1.0%) | (12.5%) |
Intangible assets | 1,295 | 1,149 | 1,085 | 12.7% | 19.4% |
Deferred income tax assets | 5,732 | 5,685 | 2,121 | 0.8% | 170.2% |
Other non-financial assets | 6,043 | 5,137 | 3,675 | 17.6% | 64.5% |
Non-current assets held for sale | 203 | 203 | 203 | - | (0.0%) |
Total Assets | 589,836 | 583,575 | 583,301 | 1.1% | 1.1% |
(1) Excludes consolidation with PSA and VWFS.
133,017 39,357 93,660 89,571 4,088
6,038
1,411
18,999
12,357
240,140 0 - 6,398 233,742
105,815
14,538
5
1,764
3,368
30,101
1,294
5,284
5,928
203 580,262
BBVA Argentina Balance Sheet
Balance Sheet BBVA ARG Consolidated Chg (%) | |||||
In millions AR$ - Inflation adjusted 3Q20 2Q20 3Q19 QoQ YoY | |||||
Liabilities | |||||
Deposits | 399,607 | 401,833 | 375,088 | (0.6%) | 6.5% |
Non-financial public sector | 5,929 | 5,882 | 3,610 | 0.8% | 64.2% |
Financial sector | 550 | 323 | 510 | 70.4% | 7.8% |
Non-financial private sector and residents abroad | 393,128 | 395,629 | 370,968 | (0.6%) | 6.0% |
Liabilities at fair value through profit or loss | - | - | 59 | N/A | (100.0%) |
Derivatives | 36 | 247 | 5,994 | (85.5%) | (99.4%) |
Other financial liabilities | 38,630 | 30,424 | 43,185 | 27.0% | (10.5%) |
Financing received from the B.C.R.A. and other financial institutions | 3,357 | 5,489 | 13,759 | (38.8%) | (75.6%) |
Corporate bonds issued | 4,101 | 4,525 | 11,935 | (9.4%) | (65.6%) |
Current income tax liabilities | 2,878 | 3,486 | 7,159 | (17.4%) | (59.8%) |
Provisions | 10,481 | 11,842 | 11,441 | (11.5%) | (8.4%) |
Deferred income tax liabilities | 18 | 5 | 2 | 288.1% | n.m |
Other non-financial liabilities | 24,038 | 23,508 | 20,843 | 2.3% | 15.3% |
Total Liabilities | 483,145 | 481,358 | 489,465 | 0.4% | (1.3%) |
Equity | |||||
Share Capital | 613 | 613 | 613 | - | 0.0% |
Non-capitalized contributions | 23,702 | 23,702 | 23,690 | (0.0%) | 0.0% |
Capital adjustments | 16,682 | 16,682 | 16,682 | (0.0%) | 0.0% |
Reserves | 88,759 | 88,759 | 53,613 | (0.0%) | 65.6% |
Retained earnings | (29,038) | (29,038) | (16,435) | 0.0% | (76.7%) |
Other accumulated comprehensive income | (5,070) | (6,710) | (10,211) | 24.5% | 50.4% |
Income for the period | 9,029 | 6,194 | 22,492 | 45.8% | (59.9%) |
Equity attributable to owners of the Parent | 104,677 | 100,202 | 90,444 | 4.5% | 15.7% |
Equity attributable to non-controlling interests | 2,014 | 2,015 | 3,392 | (0.1%) | (40.6%) |
Total Equity | 106,691 | 102,217 | 93,836 | 4.4% | 13.7% |
Total Liabilities and Equity | 589,836 | 583,575* | 583,301 | 1.1% | 1.1% |
(1) Excludes consolidation with PSA and VWFS.
398,147 5,929 610 391,608 -
36
38,075
580
2,026
2,782
10,435
18
23,464 475,562
613
23,702
16,682
88,759
(29,038)
(5,070)
9,029 104,677 22 104,699 580,262
Investor Relations Contactinvestorelations-arg@bbva.comwww.ir.bbva.com.ar
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Banco BBVA Argentina SA published this content on 02 December 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 December 2020 13:08:04 UTC