Banco BBVA Argentina S A : 4Q20 Quarterly Report

Banco BBVA Argentina S.A. announces 2020 annual results

Buenos Aires, March 9 2021 - Banco BBVA Argentina S.A (NYSE; BYMA; MAE: BBAR; LATIBEX: XBBAR) ("BBVA Argentina" or "BBVA" or "the Bank") announced today its consolidated results for the fourth quarter (4Q20) and fiscal year ended on December 31, 2020.

As of January 1, 2020, the Bank started to inform its inflation adjusted results pursuant to IAS 29 reporting. To facilitate comparison, figures of comparable quarters of 2019 have been updated according to IAS 29 reporting to reflect the accumulated effect of inflation adjustment for each period up to December 31, 2020.

2020 Highlights

• • BBVA Argentina's inflation adjusted net income in 2020 was $12.0 billion, 38.9% lower than the $19.7 billion reported in 2019.

• • In 2020, BBVA Argentina posted an accumulated inflation adjusted average return on assets (ROAA) of 1.8% and an inflation adjusted average return on equity (ROAE) of 11.8%.

• • In terms of activity, total consolidated financing to the private sector in 2020 totaled $290.3 billion, increasing in real terms 5.9% compared to 2019. Growth was driven by the increase in other loans, credit cards and discounted instruments by 46.4%, 16.6% and 7.9% respectively. BBVA's consolidated market share of private sector loans was 8.49% as of 4Q20.

• • Total deposits totaled $478.2 billion in 2020, growing in real terms 19.5% year-over-year (YoY), promoted by private deposits in pesos, mainly checking accounts and the incorporation of investment accounts. The Bank's consolidated market share of private deposits was 7.13% as of 4Q20.

• • As of 2020, the non-performing loan ratio (NPL) reached 1.42%, with a 324.43% coverage ratio.

• • The accumulated efficiency ratio in 2020 was 56.8%, above 2019's 43.7%.

• • As of 4Q20, BBVA Argentina reached a regulatory capital ratio of 20.2%, entailing a $57.1 billion or 147.1% excess over minimum regulatory requirement. Tier I ratio was 19.6%. Total liquid assets represented 67.5% of the Bank's total deposits as of 4Q20.

Message from the CFO

"BBVA Argentina has been able to keep a solid position within a high uncertainty context throughout 2020. While signs of economic recovery start to emerge, much remains to be defined facing 2021, subject to the final development of the global sanitary crisis, and the resolution of internal conflicts related to fiscal deficit financing, the agreement the National Government could reach with the International Monetary Fund, and the results of 2021 mid-term elections.

The global sanitary crisis in 2020 confirmed that of which we were convinced for years: the significance of technology in the delivery of financial services. In virtue of our vision of the future, we could rapidly adapt to the new normality and continue offering our services to clients during the pandemic. These unexpected circumstances ratified that the path we have taken in terms of digital transformation, internal process adaptation and personnel training, is most adequate.

In line with this, the digitalization of our service offering has evolved in such way that as of December 2020, digital client penetration reached 72% from 67% the previous year, and mobile client penetration reached

60% from 54% in the same period. Moreover, during 2020, together with other banking financial institutions, we have launched MODO, a fintech that will transform wire transfers and payments in Argentina, and which already counts with more than a million users.

BBVA Argentina keeps a solid balance sheet. With respect to its loan portfolio credit performance, the Bank reached an NPL ratio of 1.42% as of December 2020. Concerning its liquidity and solvency indicators, BBVA Argentina ends 2020 with ratios of 67.5% and 20.2% respectively. Thus, the Bank preserves a strong position to face a year in which economic recovery is expected.

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

In terms of responsible banking, during 2020, BBVA's purpose of "bringing the age of opportunity to everyone" gained momentum. In line with our compromise with sustainable development and assuming our role as a leading financial institution in this subject, we launched a new line of consumer "eco loans", and a line of "green loans" for companies. Furthermore, we were the first Bank to deliver sustainable cards made of recyclable materials. BBVA Argentina keeps working towards its sustainability model, supporting responsible business actions regarding inclusion, financial education and environmental protection, as part of its compromise with the country."

Ernesto R. Gallardo, CFO of BBVA Argentina

4Q20 Conference Call

Wednesday, March 10, 12:00 p.m. Buenos Aires time - (10:00 a.m. EST)

To participate, please dial in: [phone] (US Toll-Free) [phone] (International) [phone] (Argentina)

Web Phone:click here

Conference ID: BBVA Webcast & Replay:click here

Safe Harbor Statement

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

Information

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

As of 1Q20, the Bank started to inform its inflation adjusted results pursuant to IAS 29 reporting. To facilitate comparison, figures of comparable quarters of 2019 have been updated according to IAS 29 reporting to reflect the accumulated effect of inflation adjustment for each period up to December 31, 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, 2022. 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.

Annual Results

Income Statement	BBVA ARG Consolidated
In millions AR$ except EPS and ADS - Inflation adjusted 2020 2019	Var (%)
Net Interest Income	77,857	90,677	(14.1%)
Net Fee Income	12,240	11,134	9.9%
Net income from measurement of financial instruments at fair value through P&L	9,348	12,574	(25.7%)
Net lincome from write-down of assets at amortized cost and at fair value through OCI	(2,310)	(82)	n.m
Foreign exchange and gold gains	6,228	14,700	(57.6%)
Other operating income	6,278	17,613	(64.4%)
Loan loss allowances	(9,930)	(18,401)	46.0%
Net operating income	99,710	128,214	(22.2%)
Personnel benefits	(20,319)	(22,676)	10.4%
Adminsitrative expenses	(18,820)	(19,052)	1.2%
Depreciation and amortization	(4,066)	(5,729)	29.0%
Other operating expenses	(16,421)	(29,922)	45.1%
Operating income	40,085	50,836	(21.1%)
Income from associates	273	(29)	n.m
Income from net monetary position	(19,696)	(21,116)	6.7%
Net income before income tax	20,662	29,691	(30.4%)
Income tax	(8,629)	(9,983)	13.6%
Income for the period	12,032	19,708	(38.9%)
Other Comprehensive Income (OCI)(4)	4,995	(4,916)	201.6%

Number of common shares outstanding (in thousands)	612,710	612,660	0.0%
Weighted average number of common shares outstanding (2)(3)	612,710	612,660	0.0%

Earnings per Share (EPS)	19.66	32.17	(38.9%)
Earnings per ADS (1)	59.00	96.50	(38.9%)

• (1) One ADS represents three ordinary shares.

• (2) In thousands of shares.

• (3) On October 9, 2019, the CNV issued Resolution No. 20484/2019 concerning the merger of BBVA Francés Valores S.A. into the Bank. As such, the Bank was authorized to issue 50,441 ordinary shares, with a nominal value of $ 1 and entitling to one (1) vote each for to be delivered to BBVA Francés Valores S.A.'s minority shareholders. The merger and the ensuing capital stock increase are still in the process of being registered with the Argentine Supervisory Board of Companies (IGJ).

(4) Net of Income Tax.

BBVA Argentina 2020 net income was $12.03 billion, which represents an accumulated ROAE of 11.8% and a ROAA of 1.8%.

Yearly contraction of genuine bank revenues is mainly explained by (i) the fall in income, as a consequence of reduced economic activity due to the pandemic, (ii) lower monetary policy rates, and regulation of active and passive rates by the BCRA, and (iii) strong restrictions on the foreign exchange markets.

Another factor which has affected results in 2020 has been the partial cash-in and voluntary swap of National Treasury U.S. dollar linked notes (LELINK), which had been restructured on August 28, 2019.

Regarding expenses, lower operating expenses can be seen related to a better efficiency management, as well as lower client acquisition costs (on the fee expenses side).

It is worth mentioning that during the second quarter of 2019, an adjustment had been recorded in Other operating income as a consequence of the impact of inflation on income tax corresponding to 2018 fiscal year, offset by an allowance by the same amount in Other operating expenses line in the same period.

On February 9, 2021, through Communication "A" 7222, the BCRA informed that it admitted the retroactive application of modifications on exposure of monetary results exposed in Communication "A" 7211, for the December 31, 2020 financial statements. The latter explained that the monetary result accrued from monetary concepts at fair value through Other Comprehensive Income (OCI), should be recorded in the corresponding accounts in the income statement of the period, thus retained earnings