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FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of March 2019

Commission File Number: 001-12568

BBVA French Bank S.A.

(Translation of registrant’s name into English)

Reconquista 199, 1006

Buenos Aires, Argentina

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  ☒             Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ☐             No  ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes  ☐             No  ☒

Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes  ☐             No  ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

 

 

 

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BBVA Banco Francés S.A.

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Item

    
1.    BBVA Francés reports consolidated fourth quarter earnings for fiscal year 2018.

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LOGO

Buenos Aires, March 11, 2019—BBVA Francés (NYSE: BFR.N; BCBA: FRA.BA;

LATIBEX: BFR.LA) reports consolidated fourth quarter results for the

January-December 2018 fiscal year.

The quarterly and annual consolidated financial statements are presented according to Communication “A” 6114 of the Central Bank of Argentina (BCRA) (“financial statements under IFRS regulations”) which was implemented on January 1, 2018. For comparative purposes, 2017 figures are also presented in accordance with IFRS.

 

 

Highlights of the year

 

 

 

  •  

BBVA Francés’ recorded a net income of AR$ 9,613.7 million as of December 31, 2018, registering a 114.6% increase over the result of 2017, 28.5% average return on equity and 3.4% average return on assets.

 

  •  

Net operating income amounted to AR$ 37,618.2 million, increasing 56.5% compared to the previous year, while operating expenses amounted to AR$ 24,666.2 million, showing an increase of 34.5% during the period.

 

  •  

Revenues were supported by the growth in net interest income, which increased 79.9% during the year, mainly due to the rise in interest rates, by net fee income results, which grew at a similar pace and by the result generated by foreign exchange difference, which includes both, the impact of the devaluation and of foreign exchange transactions, all partially offset by the increase of provisions for loan losses.

 

  •  

Regarding expenses, personnel expenses grew 30.3% in the year, below inflation, mainly as a result of the staggered payment of the salary increase, while administrative expenses grew 39.1% in the same period.

 

  •  

Accumulated efficiency ratio was 49.6% at the end of 2018 registering a decrease compared to 60.6% during the last quarter of 2017.

 

  •  

In terms of activity, it is important to mention that the balances as of December 2017 included the Bank’s stake in Volkswagen Financial Services Compañia Financiera, presented on a consolidated basis. The private sector loan portfolio increased by 42.2% in the last twelve months, although including the aforementioned portfolio, growth would have reached 47.9%. The consolidated market share with related companies was 8.71% at the end of the year, earning 40 basis points (bp) compared to the December 2017 quota.

 

  •  

As of December 31, 2018, the asset quality ratio (Non-Performing Loans/Total loans) reached 1.92%, with a coverage of 119.19% (Total allowances/NPL). It is important to note that although asset quality indicators show some deterioration, they remain at the lowest levels in the financial system.

 

  •  

Total deposits rose 68.6% during the year, growing at a faster pace than loans, basically driven by the interest rate hike and the disbanding of the Lebac portfolio implemented during the year by the Central Bank of Argentina (BCRA).

 

  •  

On November 8, 2018, BBVA Francés issued its Series 25 UVAs bond for AR$ 784.3 million, with 24 months maturity and 9.5% fixed interest rate payable quarterly.

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  •  

As of December 31, 2018, BBVA Francés had a total consolidated capital ratio of 14.3%, which represents an excess of AR$ 16,155.7 million or 74.1% over the minimum required. The Tier I ratio reached 13.5%.

 

  •  

Liquid assets accounted for 55.2% of the bank’s total deposits as of December 31, 2018.

 

  •  

The bank continued to increase its client base, reaching a total of 2.9 total clients.

 

  •  

On October 30, 2018, BBVA Francés recorded the deed to its headquarters offices, Torre BBVA, located at Av. Leandro N. Alem 815, Buenos Aires. As a consequence of such notarized recording, USD 4.8 million was paid.

 

Condensed Income Statement (1)

In thousands of pesos except income per share, income per ADS

   FY 2018     FY 2017     D %  

Net interest income

     26,129,314       14,523,074       79.9 % 

Net fee income

     4,795,923       2,566,013       86.9 % 

Net income of financial instruments

     106,620       2,639,026       -96.0 % 

Result from assets at amortised cost

     (121,400 )      6,723       n/a  

Foreign exchange difference

     5,306,709       2,099,742       152.7 % 

Other operating income

     4,862,125       3,906,097       24.5 % 

Provision for loan losses

     (3,461,077 )      (1,704,000 )      103.1 % 

Net operating incomc

     37,618,214       24,036,675       56.5 % 

Personnel expenses

     (8,961,174 )      (6,875,018 )      30.3 % 

Administrative expenses

     (7,177,071 )      (5,160,421 )      39.1 % 

Depreciation and amortization of assets

     (876,371 )      (650,873 )      34.6 % 

Other operating expenses

     (7,651,564 )      (5,659,371 )      35.2 % 

Operating Expenses

     (24,666,180 )      (18,345,683 )      34.5 % 

Operating income

     12,952,034       5,690,992       127.6 % 

Income from associates and joint ventures

     780,554       433,939       79.9 % 

Net incomc before incomc tax

     13,732,588       6,124,931       124.2 % 

Income tax from continuing operations

     (4,027,412 )      (1,607,976 )      150.5 % 

Net income including non-controlling shareholders

     9,705,176       4,516,955       114.9 % 

Net income attributable to non-controlling shareholders

     91,489       37,161       146.2 % 

Net income

     9,613,687       4,479,793       114.6 % 

Other comprehensive income

     (21,058 )      (87,427 )      -75.9 % 

Total net income

     9,592,629       4,392,366       118.4 % 

Earnings per share (2)

     15.69       7.86       99.6 % 

Earnings per ADS (3)

     47.08       23.58       99.6 % 

 

(1)

Exchange Rate: $ 37.8083 = u$s 1

(2)

Assumes 612,659,638 ordinary shares.

(3)

Each ADS represents three ordinary shares

 

 

Other events

 

 

 

  •  

On February 1, 2019 within the framework of the Divestment Commitment assumed by Prisma Medios de Pago S.A. and its shareholders to the antitrust regulatory authority (Comisión Nacional de Defensa de la Competencia), 2,344,064 common book-entry shares with a par value of $ 1 each and one vote per share, owned by the Bank in Prisma Medios de Pago S.A. were transfer to AI ZENITH (Netherlands) B.V. (company associated with Advent International Global Private Equity), equivalent to 51% of the Bank’s shareholding in said company.

The estimated total price adjusted at the closing date is USD 78.3 million, of which the Bank received USD 46.5 million. Payment of the USD 31.8 million difference will be deferred over the next five years. 30% of said amount will be paid in AR pesos adjusted by the CER at 15% nominal annual rate and 70% will be paid in USD at a nominal annual rate of 10%.

 

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  •  

On February 28, 2019, BBVA Francés issued its Series 26 bond for AR$ 529.4 million, with 9 month maturity and a fixed 43% interest rate payable at maturity, and its Series 27 bond for AR$ 1,090 million, with 18 months maturity at Badlar + 6.25% with quarterly payments.

 

  •  

On March 8, 2019, the Board of BBVA Francés decided to submit to the Shareholders’ Meeting the proposed merger by absorption of BBVA Francés Valores S.A, with the objective of optimizing operating costs by unifying resources and processes.

 

  •  

The Board of BBVA Francés, based on the results for the year ended December 31, 2018, has resolved to propose to the Shareholder’s Meeting, the payment of dividends in cash for the total amount of $ 2,407 million, under the new BCRA regulations, prior authorization is not required.

 

 

Regulatory Changes

 

 

 

  •  

The BCRA, through its Communication “A” 6641 dated February 1, 2019, redefined the structure of minimum cash requirements, establishing for sight deposits a minimum requirement of 30% integrated in cash, 5% integrated in BOTES 2020 and 10% integrated in Leliq. For time deposits up to 29 days, these percentages are 17%, 5% and 13% respectively. These requirements are reduced as the term of the deposits increases, reaching 0% reserve requirement for deposits longer than 90 days.

 

  •  

On February 7, 2019, the BCRA established that the net daily position that financial entities hold in Leliqs and repo transactions in local currency against the BCRA could not exceed the highest between the regulatory capital (referred to as “Responsabilidad Patrimonial Computable” or RPC) or the 65% of the daily average of total deposits in pesos, excluding the ones from the financial sector, both from the previous month. For entities that are above these limits at the date of publication of this communication, they will be allowed to gradually decrease their position from 100% to the limit of 65% with deadline April 30, 2019.

 

  •  

As a result of the increase in inflation in the last years, the Argentine economy is considered hyperinflationary. Therefore, IAS 29 should be applied in connection with annual financial statements or interim financial statements ending after July 1, 2018.

The application of the guidelines established by the IAS 29 are exempt, and its validity will be effective from January 1, 2020, as established by the BCRA through its Communication “A” 6651 issued on February 22, 2019. Therefore BBVA Frances has not applied such requirements and will not restate its financial statements until such date.

 

 

Economic Environment

 

 

 

          Quarter ended  

Main Macroeconomic figures

   12-31-18     09-30-18     12-31-17  

GDP

   var % y/y      n/d       -3.5 %      3.9 % 

Inflation (1) End of period

   var % y/y      47.6 %      40.5 %      24.8 % 
   var % q/q      11.5 %      14.1 %      6.1 % 

CER

   Quarterly adjustment      16.3 %      10.1 %      5.0 % 

Exchange Rate

   Pesos x US$      37.81       40.90       18.77  

Reserves

   US$      65,806       49,003       55,055  

Fiscal Balance

   Primary - billion of $      (185,672 )      (47,490 )      (181,763 ) 

Trade Balance

   US$ (billion)      2,631       (1,589 )      (3,311 ) 

Total Private Loans

   var % q/q      -4.2 %      11.0 %      14.2 % 
   var % y/y      33.0 %      58.6 %      51.7 % 

Total Private Deposits

   var % q/q      11.0 %      18.6 %      14.2 % 
   var % y/y      61.5 %      66.2 %      29.2 % 

Interest rate

   Monetary policy (eop)      59.3 %      65.0 %      28.8 % 
   Badlar (weighted avg. quarterly)      50.2 %      37.1 %      22.4 % 

From August 8, 2018, the reference rate of the monetary policy is the one of the Leliq rate. From October 1, 2018, the reference rate is defined as the average rate resulting from daily operations of Leliq with financial institutions.

 

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In 2018, economic activity was affected by the poor harvest due to the severe drought that occurred at the beginning of the year, and then due to the FX crisis. In the third quarter of 2018, the GDP showed a yearly decrease of 3.5%. The Monthly Economic Activity Indicator (EMAE) with data as of December, decreased 7% over the year, but increased 0.7% seasonally adjusted, compared to November.

In 2018, the fiscal balance reached a primary deficit of 2.4% of GDP, which implied the over-fulfillment of the 2.7% fiscal target agreed with the IMF.

The public sector fiscal balance accumulated a primary deficit of AR$ 339 billion, a 16% decrease compared to the AR$ 404 billion deficit from 2017. Taking into account the interest payments over the public debt, the deficit accumulated AR$389 billion, increasing 72.9% over the year.

The inflation rate accelerated from the end of the first quarter mainly due to the pass-through of the currency devaluation to prices, and hit the record of 14.1% in the third quarter, decelerating slightly in the last quarter, reaching 11.5% and accumulating 47.6% in the year.

The labor market also began to show the effects of the recession, with an increase in the unemployment rate in September 2018 (latest available data) to 9.6% from 7.2% at the end of 2017.

In the fourth quarter of 2018, the trade balance reached a surplus of USD 2.6 billion in contrast with the USD 3.3 billion deficit recorded in the same period of last year.

Due to the deceleration in the activity level demand for credit declined sharply. Thus, during the fourth quarter of 2018, the stock of loans to the private sector decreased by 4.2% compared to the 11% increase in the previous quarter. In annual terms, the stock of loans to the private sector increased 33%, considerably less than the 52.6% recorded in the third quarter of the year.

Private sector deposits increased 11% in the quarter and 61.5% in the last twelve months, mainly boosted by local currency deposits, which grew 18.7% and 41.1%, respectively. It’s important to highlight the stability of deposits, which evidences the scarce transmission of the FX crisis to the financial sector.

 

 

Presentation of the Information

 

 

 

  •  

The consolidated financial statements as of December 30, 2018 and as of September 30, 2018 are presented in accordance with Communication “A” 6114 of the Central Bank of Argentina (BCRA) (financial statements under IFRS regulations). For a better comparison the exposed figures for the fourth quarter of 2017 were adequate according to the current accounting framework.

 

  •  

The information in this press release contains unaudited financial information that consolidates, line item by line item, all of the banking activities of BBVA Francés (Francés Valores and Francés Administradora de Inversiones). As of the first quarter of 2018, the Bank’s share interest in PSA Finance is no longer disclosed on a consolidated basis but is recorded as “Investments in associates” (recorded under the proportional equity method), and the corresponding results are recorded as “Income from associates”, as with Rombo Compañia Financiera. As of September 25, 2018, the Bank’s share interest in Volkswagen Financial Services is no longer disclosed on a consolidated basis.

 

  •  

The balances in foreign currency as of December 31, 2018 were converted into pesos at the reference exchange rate published by the BCRA for such date (AR$ 37.8083/USD).

 

  •  

The information in this press release may differ from the information published by the BBVA Group for Argentina, which is prepared according to IFRS 9 and the impact of inflation adjustment according to IAS 29.

 

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Quarterly Results

 

 

 

Condensed Income Statement (1)          Quarter ended          

D % Quarter ended 12/31/18

vs Quarter ended

 

In thousands of pesos except EPS, ADS

   12-31-18     09-30-18     12-31-17     09-30-18     12-31-17  

Net interest income

     8,462,827       6,564,330       4,111,895       28.9 %      105.8 % 

Net fee income

     1,504,195       1,855,906       638,005       -19.0 %      135.8 % 

Net income of financial Instruments

     197,044       138,510       783,930       42.3 %      -74.9 % 

Result from assets at amortised cost

     (67,243 )      12,774       —         -626.4 %      n/a  

Foreign exchange difference

     977,628       1,624,223       727,560       -39.8 %      344 % 

Other operating income

     1,206,843       1,152,946       652,281       4.7 %      85.0 % 

Provision for loan losses

     (1,097,883 )      (1,032,752 )      (308,991 )      6.3 %      255.3 % 

Net operating income

     11,183,411       10,315,937       6,604,680       8.4 %      69.3 % 

Personnel expenses

     (2,570,310 )      (2,503,707 )      (2,005,951 )      2.7 %      28.1 % 

Administrative expenses

     (2,196,156 )      (1,826,091 )      (1,369,329 )      20.3 %      60.4 % 

Depreciation and amortization of assets

     (249,685 )      (219,784 )      (181,933 )      13.6 %      37.2 % 

Other operating expenses

     (2,433,597 )      (1,635,777 )      (1,388,180 )      48.8 %      75.3 % 

Operating Expenses

     (7,449,748 )      (6,185,359 )      (4,945,393 )      20.4 %      50.6 % 

Operating income

     3,733,663       4,130,578       1,659,287       -9.6 %      125.0 % 

Income from associates and joint ventures

     570,342       48,892       47,278       1066.5 %      1106.4 % 

Net income before incomc tax

     4,304,005       4,179,470       1,706,565       3.0 %      152.2 % 

Income tax from continuing operations

     (1,366,363 )      (1,131,938 )      (357,150 )      20.7 %      282.6 % 

Net income including non-controlling shareholders

     2,937,642       3,047,532       1,349,415       -3.6 %      117.7 % 

Net income attributable to non-controlling shareholders

     1,014       39,691       9,958       —         —    

Net income

     2,936,628       3,007,841       1,339,457       -2.4 %      119.2 % 

Other comprehensive income

     51,475       (117,469 )      17,720       n/a       190.5 % 

Total net income

     2,988,103       2,890,372       1,357,177       3.4 %      120.2 % 

Earnings per share (2)

     4.79       4.91       2.19       -2.4 %      119.2 % 

Earnings per ADS (3)

     14.38       14.73       6.56       -2.4 %      119.2 % 

 

(1)

Exchange Rate: $37.8083 = u$s 1

(2)

Assumes 612,659,638 ordinary shares.

BBVA Francés’ net income amounted to AR$ 2,937.6 million for the fourth quarter of 2018, registering an increase of 119.2% compared to the fourth quarter of 2017, and decreasing 2.4% compared to the third quarter of 2018.

 

Main figures          Quarter ended          

D bp Quarter ended 12/31/18

vs Quarter ended

 
     12-31-18     09-30-18     12-31-17     09-30-18     12-31-17  

ROA (Average Assets) (1)

     3.4 %      4.0 %      2.7 %      (58 )      71  

Accumulated ROA

     3.4 %      3.4 %      2.4 %      1       101  

ROE (Average Shareholders’ Equity) (1)

     31.38 %      34.8 %      18.2 %      (343 )      1,321  

Accumulated ROE

     28.5 %      27.4 %      18.2 %      106       1,032  

NIM (1)(2)

     13.22 %      11.6 %      11.7 %      160       150  

NIM with foreign exchange difference (1)(2)

     15.47 %      15.0 %      13.9 %      51       156  

Efficiency ratio (3)

     48.0 %      46.6 %      58.8 %      142       (1,079 ) 

Accumulated Efficiency ratio

     49.6 %      50.3 %      60.0 %      (68 )      (1,041 ) 

 

(1)

Annualized.

(2)

NIM: ((Net interest income + Gross income tax NII+ Cost of deposits insurance) + (Net income of financial instruments + Results from assets at amortised cost - Non deliverable forward )) / Interest Earning Assets

(3)

(Personnel and administrative expenses + Depreciations and amortizations) / ((Net interest income + Gross Income Tax + Cost of the deposits insurance) + (Fee income + Net income of financial instruments + Results from assets at amortised cost + FX Difference + Fees included in other operating income))

 

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Net Operating Income

 

 

 

Net operating income          Quarter ended           D % Quarter ended 12/31/18 vs
Quarter ended 		 

In thousands of pesos

   12-31-18     09-30-18     12-31-17     09-30-18     12-31-17  

Net interest income

     8,462,827       6,564,330       4,111,895       28.9 %      105.8 % 

Net fee income

     1,504,195       1,855,906       638,005       -19.0 %      135.8 % 

Net income of financial instruments

     197,044       138,510       783,930       42.3 %      -74.9 % 

Result from assets at amortised cost

     (67,243 )      12,774       —         -626.4 %      n/a  

Foreign exchange difference

     977,628       1,624,223       727,560       -39.8 %      34.4 % 

Other operating income

     1,206,843       1,152,946       652,281       4.7 %      85.0 % 

Provision for loan losses

     (1,097,883 )      (1,032,752 )      (308,991 )      6.3 %      255.3 % 

Net operating income

     11,183,411       10,315,937       6,604,680       8.4 %      69.3 % 

Net operating income amounted to AR$ 11,183.4 million, increasing by 8.4% compared to the third quarter of 2018 and by 69.3% compared to the last quarter of 2017.

As a clarification, a reclassification was performed during the third quarter due to the change in criteria regarding the deferral of credit card emission fees, which were previously recorded as net interest income and are now recorded as net fee income and other operating income.

The items that make up net operating income are disclosed in more detail below.

 

  •  

Net interest income

 

Net Interest Income    Quarter Ended     

D % Quarter ended

12/31/18 vs Quarter ended

 

(In thousands of pesos)

   12-31-18      09-30-18      12-31-17      09-30-18     12-31-17  

Interest Income

     17,731,588        12,299,911        6,246,089        44.2 %      183.9 % 

Loan interest income

     10,591,572        8,535,228        5,637,629        24.1 %      87.9 % 

Income from adjustments (CER/UVA)

     2,095,561        977,884        188,447        114.3 %      1012.0 % 

Income from Public Securities

     4,401,601        2,092,036        58,433        110.4 %      n/a  

Others

     642,854        694,763        361,580        -7.5 %      77.8 % 

Interest Expenses

     -9,268,761        -5,735,581        -2,134,194        61.6 %      334.3 % 

Interest Expenses

     -8,819,963        -5,513,716        -2,122,132        60.0 %      315.6 % 

Expenses from adjustments (CER/UVA)

     -448,798        -221,865        -12,062        102.3 %      n/a  

Net Income Interest

     8,462,827        6,564,330        4,111,895        28.9 %      105.8 % 

Net interest income increased by 28.9% compared to the previous quarter and by 105.8% compared to the third quarter of 2017.

Compared to the third quarter of 2018, interest income increased by 44.2% whereas interest expenses increased by 61.6% mainly due to an abrupt rise in interest rates that occurred during the quarter and certain deterioration in the funding mix.

Net interest income registered a positive performance, sustained by the increasing rates of loans and government securities and the increase in inflation, jointly with an effective price management in the different products, both in assets and in liabilities, in a volatile environment.

NIM

 

Interest-Earning Assets & Interest-Bearing

Liabilities $ + USD

   12-31-2018    

Quarter ended

09-30-18

    12-31-17  

(Average in thousands of pesos)

   Capital     Rate     Capital     Rate     Capital     Rate  

Interest-Earning Assets

     217,129,504       33.0 %      195,017,912       26.4 %      145,446,734       19.1 % 

Interest-Bearing Liabilities

     200,277,049       18.26 %      175,167,474       12.96 %      106,789,199       8.2 % 

NIM without foreign exchange differences

     13.22 %        11.62 %        11.71 %   

NIM including foreign exchange differences

     15.47 %        14.96 %        13.91 %   

NIM $ without foreign exchange differences

     17.38 %        14.37 %        14.66 %   

NIM USD without foreign exchange differences

     4.02 %        5.14 %        2.35 %   

 

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The net interest margin (NIM) including the results for foreign currency exchange differences amounted to 15.47%, registering an increase in comparison to the 14.96% showed in the previous quarter; while net of this effect, it registered an increase from 11.62% to 13.22%

The NIM in local currency (excluding FX differences) amounted to 17.38%, reflecting a significant increase compared to 14.37% in the previous quarter, mainly due to the strong increase in lending rates, for both loans and public sector instruments which were compensated with higher liability rates

The NIM in foreign currency decreased 112 bps, amounting 4.02%, mainly as a result of the decrease in loan rates.

The following table shows return on assets and cost of liabilities by currency: in pesos and in US dollars.

 

Interest-Earning Assets & Interest-Bearing                 Quarter ended               
Liabilities $    12-31-18     09-30-18     12-31-17  

(Average in thousands of pesos)

   Capital      Rate     Capital     Rate     Capital      Rate  

Interest-Earning Assets

     149,500,133        45.9 %      136,862,249       35.3 %      109,039,974        24.4 % 

Public sector instruments

     33,205,496        55.4 %      20,441,917       43.1 %      14,249,479        26.8 % 

Loans

     115,744,267        43.1 %      115,681,170       33.9 %      93,767,215        24.0 % 

Other interest-earning assets

     550,371        50.0 %      739,163       40.8 %      1,023,280        23.7 % 

Interest-Bearing Liabilities

     107,301,171        33.8 %      93,028,375       24.0 %      66,586,750        13.1 % 

Saving Accounts

     25,939,217        0.2 %      25,874,014       0.2 %      24,317,876        0.2 % 

Time Deposits

     59,059,496        44.9 %      48,467,831       32.5 %      34,088,782        19.9 % 

Current accounts with interest

     18,001,228        41.5 %      13,185,778       34.2 %      4,025,590        22.5 % 

Debt Securities

     2,169,727        57.7 %      1,714,760       39.7 %      1,032,839        25.7 % 

Other interest-bearing liabilities

     2,131,504        45.6 %      3,785,992       36.3 %      3,121,663        24.1 % 

NIM$

     17.38%       14.37%         14.66%  
Interest-Earning Assets & Interest-Bearing                 Quarter ended               
Liabilities USD    12-31-18     09-30-18     12-31-17  

(Average In thousands of pesos)

   Capital      Rate     Capital     Rate     Capital      Rate  

Interest-Earning Assets

     67,629,371        4.7 %      58,155,663       5.5 %      36,406,760        3.2 % 

Public sector instruments

     7,613,872        5.3 %      6,606,976       7.4 %      8,547,216        3.8  

Loans

     58,412,232        4.7 %      50,268,084       5.4 %      25,735,735        3.3 % 

Other interest-earning assets

     1,603,267        1.3 %      1,280,602       1.2 %      2,123,808        0.7 % 

Interest-Bearing Liabilities

     92,975,878        0.4 %      82,139,099       0.4 %      40,202,449        0.1 % 

Saving Accounts

     71,129,594        0.0 %      62,958,906       0.0 %      31,739,478        0.0 % 

Time Deposits

     16,177,943        0.6 %      14,323,872       0.8 %      1,122,036        0.2 % 

Current accounts with interest

     448,104        0.0 %      109,912       0.0 %      7,066,901        0.6 % 

Other interest-bearing liabilities

     5,220,237        4.4 %      4,746,409       5.1 %      274,034        2.7 % 

NIM USD

     4.02%       5.14%       2.35%  

 

  •  

Net fee income

 

Net fee Income   

Quarter ended

     D % Quarter ended 12/31/18 vs
quarter ended 		 

(in thousands of pesos)

   12-31-18      09-30-18      12-31-17      09-30-18     12-31-17  

Net fee income

     1,504,195        1,855,906        638,005        -19.0 %      135.8 % 

Fee income

     3,562,964        3,847,287        1,935,777        -7.4 %      84.1 % 

Fee charges on deposits accounts

     1,069,235        934,307        726,162        14.4 %      47.2 % 

Credit cards and operations

     1,440,625        1,991,447        505,236        -27.7 %      185.1 % 

Checks

     301,939        256,400        225,396        17.8 %      34.0 % 

Capital markets and securities activities

     40,156        35,673        47,010        12.6 %      -14.6 % 

Fees related to foreign trade

     165,003        136,280        78,725        21.1 %      109.6 % 

Services of collection

     446,457        373,897        218,137        19.4 %      104.7 % 

Generated by subsidiaries

     72,603        74,784        98,850        -2.9 %      -26.6 % 

Other fees

     26,945        44,499        36,261        -39.4 %      -25.7 % 

Fee Expenses

     -2,058,769        -1,991,381        -1,297,772        3.4 %      58.6 % 

Net fee income decreased 19% compared to the previous quarter, and increased 135.8% compared to the fourth quarter of 2017, partially as a consequence of the aforementioned reclassification.

Fee income decreased by 7.4% compared to the third quarter of 2018, mainly due to lower fees on credit cards and operations. In addition, recurrent annual income, accounted for during the previous quarter was included in this line item. This was partially offset with the increase in fees charged on deposits accounts and fees on collection services. Compared to the last quarter of 2017, fee income increased 84.1%.

 

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It’s important to clarify that, despite the lower fees on credit cards and operations, BBVA Francés continued to gain market share in credit card consumption (it increased by 40 bp during the quarter) reaching 13.97% of the market.

Fee expenses increased by 3.4% over the quarter and by 58.6% compared to the last quarter of 2017, mainly due to fees related to the loyalty program and customer acquisition campaigns, offset by lower costs on card processing.

In the new disclosure format applied beginning this quarter, certain fee items are accounted for in “Other operating income”.

 

  •  

Net income from measurement of financial instruments at fair value through profit or loss

 

Net Income from measurement of financial Instruments
  

Quarter ended

    D % Quarter ended 12/31/18
vs quarter ended 		 

at fail value through profit or loss (in thousands of pesos)

   12-31-18     09-30-18     12-31-17     09-30-18     12-31-17  

Net income of financial instruments at fail value

     197,044       138,510       783,930       42.3 %      -74.9 % 

Income from public securities

     338,665       212,634       765,493       59.3 %      -55.8 % 

Income from private securities

     (264,903 )      163,077       (43,893 )      -262.4 %      503.5 % 

Income from interest rate swaps

     (154,737 )      (251,232 )      (20,527 )      -38.4 %      424.1 % 

Non deliverable forward

     255,661       20,431       77,124       1151.3 %      231.5 % 

Income from corporate bonds

     22,358       (6,400 )      14,733       -449.3 %      51.8 % 

Net income from measurement of financial instruments at fair value recorded a gain in the last quarter of AR$ 197 million compared to a gain of AR$ 138.5 million registered in the third quarter of 2018.

The increase is mainly due to higher income from public securities and to the growth in the non-deliverable forward, which was partially offset by the loss registered in income from interest rate swaps.

 

  •  

Foreign exchange difference

 

Foreign Exchange Difference    Quarter Ended      D  % Quarter ended 12/31/18  

(in thousands of pesos)

   12-31-18      09-30-18      12-31-17      09-30-18     12-31-17  

Foreign Exchange Difference

     977,628        1,624,223        727,560        -39.8 %      34.4 % 

FX trad i ng

     1,392,557        1,268,577        525,440        9.8 %      165.0 % 

long/Short FX net balance

     -414,929        355,646        202,120        -216.7 %      -305.3 % 

Foreign exchange difference registered the income generated by foreign currency buying and selling activity, which was partially offset by a loss resulting from the appreciation of the local currency.

 

  •  

Other operating income

 

Other Operating Income    Quarter ended      D  % Quarter ended 12/31/18  

(in thousands of pesos)

   12-31-18      09-30-18      12-31-17      09-30-18     12-31-17  

Operating Income

     1,206,843        1,152,946        652,281        4.7 %      85.0 % 

Safe deposits

     113,798        112,481        94,965        1.2 %      19.8 % 

Insurance

     196,278        172,985        161,270        13.5 %      21.7 % 

Fees on USD credit cards consumption

     132,134        220,917        86,185        -40.2 %      53.3 % 

Interest on loans and fees related

     178,668        214,465        120,730        -16.7 %      48.0 % 

Other fees

     130,737        122,358        62,537        6.8 %      109.1 % 

Total other fees

     751,615        843,206        525,687        -10.9 %      43.0 % 

Other operating income

     455,228        309,740        126,594        47.0 %      259.6 % 

 

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Other operating income registered an increase of 4.7% in the quarter and 85% over the year. Total other fees decrease 10.9% in the quarter mainly due to lower credit card consumption in foreign currency.

 

 

Operating Expenses

 

 

 

Operating Expenses    Quarter ended     D % Quarter ended 12/31/18 vs  

In thousands of pesos

   12-31-18     09-30-18     12-31-17     09-30-18     12-31-17  

Personnel expenses

     (2,570,310 )      (2,503,707 )      (2,005,951 )      2.7 %      28.1 % 

Administrative expenses

     (2,196,156 )      (1,826,091 )      (1,369,329 )      20.3 %      60.4 % 

Depreciation and amortization of assets

     (249,685 )      (219,784 )      (181,933 )      13.6 %      37.2 % 

Other operating expenses

     (2,433,597 )      (1,635,777 )      (1,388,180 )      48.8 %      75.3 % 

Operating Expenses

     (7,449,748 )      (6,185,359 )      (4,945,393 )      20.4 %      50.6 % 

Operating expenses amounted to AR$ 7,449.7 million, registering an increase of 20.4% and 50.6% compared to the previous quarter and to the third quarter of 2017, respectively.

The items that make up net operating expenses are analyzed in more detail below.

 

  •  

Personnel expenses and administrative expenses

 

Administrative and personnel expenses    Quarter ended     D  % Quarter ended 12/31/18
vs quarter ended 		 

(in thousands of pesos)                          

   12-31-18     09-30-18     12-31-17     09-30-18     12-31-17  

Personnel expenses

     (2,570,310 )      (2,503,707 )      (2,005,951 )      2.7 %      28.1 % 

Administrative expenses

     (2,196,156 )      (1,826,091 )      (1,369,329 )      20.3 %      60.4 % 

Electricity and Communications

     (119,859 )      (76,620 )      (46,873 )      56.4 %      155.7 % 

Advertising and Promotion

     (66,638 )      (88,421 )      (113,582 )      -24.6 %      -41.3 % 

Fees and external administrative services

     (106,908 )      (81,433 )      (64,423 )      31.3 %      65.9 % 

Taxes

     (500,439 )      (431,360 )      (311,467 )      16.0 %      60.7 % 

Rents

     (241,748 )      (222,143 )      (130,098 )      8.8 %      85.8 % 

Maintainance, conservation and repairs

     (224,436 )      (201,822 )      (145,242 )      11.2 %      54.5 % 

Security Service

     (71,750 )      (78,428 )      (78,239 )      -8.5 %      -8.3 % 

Carriage of valuables

     (417,277 )      (249,620 )      (178,757 )      67.2 %      133.4 % 

Other

     (447,101 )      (396,244 )      (300,648 )      12.8 %      48.7 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Employees

     6,107       6,095       6,082       12       25  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Branches

     252       251       251       0       0  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Personnel expenses increased by 2.7% compared to the third quarter of 2018 and 28.1% compared to the last quarter of 2017, whereas administrative expenses increased by 20.3% and by 60.4% in such periods, respectively.

The variation in personnel expenses is mainly due to the update in salaries arising from the agreements signed with the labor union and its compensation schemes, and to higher training costs due to the implementation of the new organizational methodology: Agile.

Administrative expenses increased during the quarter mainly due to an increase in taxes, as a result of higher activity levels, the increase in foreign currency exchange rates and higher charges on carriage of valuables and electricity and communications due to the increase in tariffs.

The efficiency ratio in the quarter amounted 48%, showing a decrease of 1,079 bps compared to the fourth quarter of 2017.

 

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  •  

Other operating expenses

 

           D % Quarter ended 12/31/18 vs  
Other Operating expenses          Quarter ended           Quarter ended  

(In thousands of pesos)

   12-31-18     09-30-18     12-31-17     06-30-18     09-30-17  

Operating expenses

     (2,433,597 )      (1,635,777 )      (1,388,180 )      48.8 %      75.3 % 

Gross income tax

     (1,278,288 )      (1,190,211 )      (681,458 )      7.4 %      87.6 % 

Gross Income tax NII

     (1,000,700 )      (899,410 )      (466,808 )      11.3 %      114.4 % 

Gross income tax fees

     (277,588 )      (290,801 )      (214,650 )      -4.5 %      29.3 % 

Cost of deposits insurence

     (102,795 )      (86,186 )      (57,314 )      19.3 %      79.4 % 

Other operating expenses

     (1,052,514 )      (359,380 )      (649,408 )      192.9 %      62.1 % 

Other operating expenses registered an increase in gross income tax, as a result of the increase in interest rates, fees and income from foreign currency exchange difference. In addition, an adjustment was recorded in other operating expenses, to reflect the rate differential between the applied rate and the market rate in credit card financing operations.

 

 

Income from associates

 

 

Income from associates shows the result of non-consolidated companies. During the fourth quarter a gain of AR$ 570.3 million was recorded, mainly due to the equity investment in BBVA Seguros, Volkswagen Financial Services, PSA Finance and Rombo Compañía Financiera.

 

 

Balance and activity

 

 

 

 

Loan portfolio

 

 

 

           D % Quarter ended 12/31/18 vs  
Net loans          Quarter ended           quarter ended  

(In thousands of pesos)

   12-31-18     09-30-18     12-31-17     09-30-18     12-31-17  

Private  & Financial sector loans, in $

     120,781,796       116,528,630       98,790,429       3.6 %      22.3 % 

Advances

     11,781,284       16,396,066       11,693,061       -28.1 %      0.8 % 

Discounted and purchased notes

     18,382,585       16,482,797       17,160,711       11.5 %      7.1 % 

Consumer Mortgages

     10,110,286       8,718,885       4,457,821       16.0 %      126.8 % 

Car secured loans

     1,660,242       1,774,642       4,539,300       -6.4 %      -63.4 % 

Personal loans

     23,586,938       21,923,282       16,638,201       7.6 %      41.8 % 

Credit cards

     40,622,378       35,449,792       28,544,070       14.6 %      42.3 % 

Loans to financial sector

     9,417,009       9,587,944       4,555,025       -1.8 %      106.7 % 

Other loans

     6,340,846       6,263,657       11,125,057       1.2 %      -43.0 % 

Other receivables

     3,593,650       4,092,402       2,659,552       -12.2 %      35.1 % 

Unaccrued interest

     (1,560,431 )      (1,151,897 )      (593,526 )      35.5 %      162.9 % 

Less: Allowance for loan losses

     (3,152,991 )      (3,008,940 )      (1,988,843 )      4.8 %      58.5 % 

Private & Financial sector loans in FX

     60,640,344       62,109,756       28,806,643       -2.4 %      110.5 % 

Commercial Loans

     59,606,255       60,993,431       27,413,387       -2.3 %      117.4 % 

Advances

     8,029       9,541       14,203       -15.8 %      -43.5 % 

Discounted and purchased notes

     7,492,197       7,213,658       1,660,291       3.9 %      351.3 % 

Credit cards

     1,886,633       1,971,601       1,600,754       -4.3 %      17.9 % 

Loans to financial sector

     252,704       136,702       94,089       84.9 %      168.6 % 

Other loans

     51,803,409       53,447,923       25,615,848       -3.1 %      102.2 % 

Other receivables

     302,620       322,309       123,045       -6.1 %      145.9 % 

Less: Allowance for loan losses

     (1,105,248 )      (991,978 )      (301,587 )      11.4 %      266.5 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Private Loans

     181,422,140       178,638,386       127,597,072       1.6 %      42.2 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans to public sector

     207       177       218       16.9 %      -5.0 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Total Loans net of other non resident loans

     181,422,347       178,638,563       127,597,290       1.6 %      42.2 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

As of the third quarter, Volkswagen Financial Services Compañia Financiera is no longer recorded on a consolidated basis. Such figures were recorded under car secured loans.

 

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As of December 31, 2018, the private sector loan portfolio amounted to AR$ 181.4 billion, maintaining similar levels to those of the previous quarter, and increasing by 42.2% in the last twelve months. Including Volkswagen Financial Services, the private sector loan portfolio would have increased by 47.9% in the year.

As of December 31, 2018 the market share of loans reached 8.71%, including loans from associated companies (VW Financial Services, PSA Finance and Rombo Compañia Financiera), showing an increase of 40 bp in the last 12 months.

Credit growth was affected due to the devaluation of the peso and higher interest rates.

Loans in AR$ increased 3.6% in the quarter and 22.3% in the last twelve months (4.3% and 29.7% respectively including VW), while U.S dollar denominated loans decreased 2.4% in the quarter and increased 110.5% in the last twelve months, mainly due to the re-expression to the new value of the currency, meanwhile, measured in U.S dollars they increased around 6% in both periods.

In retail banking, positive growth was recorded in connection with credit card and personal loans, while mortgages loans reflected the impact of the increasing inflation.

The increase shown by commercial loans compared to the previous quarter was mainly due to the depreciation of the peso.

 

 

Asset quality ratios

 

 

 

Asset quality ratios    Quarter ended     D % Quarter ended 12/31/18
vs quarter ended 		 

(In thousands of pesos)

   12-31-18     09-30-18     12-31-17     09-30-18     12-31-17  

Non-performing loans (1)

     3,572,782       1,814,467       873,007       96.9 %      309.3 % 

Allowance for loan losses

     (4,258,239 )      (4,000,918 )      (2,290,430 )      6.4 %      85.9 % 

Non-performing loans/net total loans

     1.92 %      0.99 %      0.67 %      0.9 %      1.3 % 

Non-performing priv. loans/net priv. loans

     1.92 %      0.99 %      0.67 %      0.9 %      1.3 % 

Allowance for loan losses/non-performing loans

     119.19 %      220.50 %      262.36 %      -101.3 %      -143.2 % 

Allowance for loan losses/net total loans

     2.29 %      2.19 %      1.76 %      0.1 %      0.5 % 

(1) Non-performing loans include: all loans to borrowers classified as “Problem”, “Deficient Servicing”, “High Insolvency Risk”, “Difficult Recovery”, “Irrecoverable” and “Irrecoverable for Technical Decision” according to the new Central Bank debtor classification system.

As of December 30, 2018, the asset quality ratio (non-performing loans/total loans) was 1.92% with a coverage ratio (allowances/non-performing loans) of 119.2%. This indicators show some deterioration in the loan portfolio, mainly due to specific cases in the commercial portfolio.

The cost of risk reached 1.88% recording an increase of 17 bps during the quarter.

The following table shows the evolution of provisions:

 

Evolution of provisions    Quarter ended     D % Quarter ended 12/31/18 vs
quarter ended 		 

(In thousands of pesos)

   12-31-18     09-30-18     12-31-17     09-30-18     12-31-17  

Balance at the beginning of the quarter

     4,000,918       3,181,219       2,141,957       25.8 %      86.8 % 

Increase/decrease

     1,047,424       1,006,313       383,121       4.1 %      173.4 % 

Increase/decrease-Foreign exchange diff.

     (73,127 )      213,237       24,445       -134.3 %      n/a  

Aplications / Reversals

     (716,976 )      (399,851 )      (259,093 )      79.3 %      176.7 % 

Balance at the end of the quarter

     4,258,239       4,000,918       2,290,430       6.4 %      85.9 % 

 

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Public sector exposure

 

 

 

Public Sector Exposure   

Quarter Ended

    D % Quarter ended 12/31/18
vs quarter ended 		 

(In thousands of pesos)

   12-31-18     09-30-18     12-31-17     09-30-18     12-31-17  

Bills and Notes from Central Bank

     13,815,040       17,519,092       15,576,034       -21.1 %      -11.3 % 

Treasury and national government

     23,822,802       22,599,243       11,428,426       5.4 %      108.5 % 

National Treasury Public Debt $

     7,952,858       5,842,776       2,344,722       36.1 %      239.2 % 

National Treasury Public Debt USD

     3,198,818       8,703,110       4,743,166       -63.2 %      -32.6 % 

Treasury Repos USD

     12,671,125       8,053,358       4,340,538       57.3 %      191.9 % 

Pesos subtotal

     21,767,898       23,361,868       17,920,756       -6.8 %      21.5 % 

Dollars subtotal

     15,869,944       16,756,467       9,083,704       -5.3 %      74.7 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Public Sector exposure

     37,637,842       40,118,336       27,004,460       -6.2 %      39.4 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

% National Government debt / Assets

     6.7 %      6.8 %      5.4 %     

Total exposure to the public sector amounted to AR$ 37.6 billion, decreasing by 6.2% during the quarter.

Short-term liquidity was allocated in BCRA instruments, which decreased by AR$ 3.7 billion or 21.1% during the quarter and 11.3% in the year.

National Government Debt, which represents 6.7% of assets increased by AR$ 1.223.6 million during the quarter, as a consequence of the increase in the local currency debt and the renovation and extension of the repo with the National Treasury for USD 355 million, which was offset by the USD 128 million decrease in the short-term Letes during the quarter to a total USD 84.6 million.

 

 

Deposits

 

 

 

Total deposits   

Quarter ended

     D % Quarter ended 12/31/18
vs quarter ended 		 

(In thousands pesos)

   12-31-18      09-30-18      12-31-17      09-30-18     12-31-17  

Deposits $ denominated

     164,320,011        151,692,489        99,585,301        8.3 %      65.0 % 

Current accounts

     29,559,030        25,968,449        24,815,717        13.8 %      19.1 % 

Saving accounts

     46,487,308        49,039,885        35,134,581        -5.2 %      32.3 % 

Time deposits

     84,087,508        72,175,509        37,297,680        16.5 %      125.4 % 

Peso denominated

     81,019,308        69,800,136        36,818,485        16.1 %      120.1 % 

CER adjusted time deposits

     3,068,200        2,375,373        479,195        29.2 %      540.3 % 

Other

     4,186,165        4,508,646        2,337,323        -7.2 %      79.1 % 

Deposits FX denominated

     95,189,050        95,535,479        54,349,370        -0.4 %      75.1 % 

Current accounts

     375,546        407,811        163,881        -7.9 %      129.2 % 

Saving accounts

     94,468,865        94,788,504        43,913,177        -0.3 %      115.1 % 

Time deposits

     196,201        177,296        8,032,972        10.7 %      -97.6 % 

Other

     148,438        161,868        2,239,340        -8.3 %      -93.4 % 
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total deposits

     259,509,061        247,227,968        153,934,671        5.0 %      68.6 % 
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total deposits amounted to AR$ 259.1 billion as of December 31, 2018, increasing by 5% compared to the previous quarter and by 68.6% compared to the same quarter of 2017.

Foreign currency deposits denominated in pesos remained stable during the quarter and increased 75.1% in the last twelve months. Deposits denominated in foreign currency increased 7.8% in the quarter and decreased 13% compared to last quarter of 2017.

Deposits in local currency increased by 8.3% in the quarter and 65% in the year.

 

- 12 -

Table of Contents

 

Other funding sources

 

 

 

Other funding sources   

Quarter ended

     D % Quarter ended 12/31/18
vs quarter ended 		 

(In thousands of pesos)

   12-31-18      09-30-18      12-31-17      09-30-18     12-31-17  

Lines from other banks

     5,527,525        5,757,714        691,295        -4.0 %      n/a  

Senior Bonds

     2,473,690        1,735,343        2,052,490        42.5 %      20.5 % 

Total other funding sources

     8,001,215        7,493,057        2,743,785        6.8 %       191.6 %  

The increase in lines from other banks corresponds mainly to funds to finance foreign trade operations.

On November 8, 2018, the Bank issued series 25 of its bonds (Obligaciones Negociables) in UVAs (Unidades de Valor Adquisitivo), which were fully subscripted for a total amount of AR$ 784.3 million with 24 months maturity, a 9.5% fixed interest rate and quarterly interest payments.

 

 

Solvency

 

 

 

Central Bank Requirements   

Quarter ended

    D %  Quarter ended 12/31/18 vs
quarter ended 		 

(In thousands of pesos)

   12-31-18     09-30-18     12-31-17     09-30-18     12-31-17  

CB Minimum Capital Requirements

     21,791,415       21,388,509       15,653,816       1.9 %       39.2 %  

Allocated to Asset at Risk

     18,103,885       17,914,664       12,726,716       1.1 %      42.3 % 

Market Risk

     92,786       192,083       369,204       -51.7 %      -74.9 % 

Operational Risk

     3,594,744       3,256,660       2,557,896       10.4 %      40.5 % 

Non compliance with others cautios regulations

     —         25,102       —         n/a       n/a  

Bank Capital

     37,947,122       36,683,596       28,020,200       3.4 %       35.4 %  

Ordinary Capital Level 1 (*)

     39,194,657       36,292,382       26,817,835       8.0 %      46.2 % 

Dedusctions Ordinary Capital Level 1

     (3,188,440 )      (2,774,583 )      (705,074 )      14.9 %      352.2 % 

Capital Level 2

     1,940,905       2,143,744       1,578,420       -9.5 %      23.0 % 

Aditional Capital Level 1

     —         1,022,053       329,019       -100.0 %      -100.0 % 

Excess over Required Capital

     16,155,707       15,295,087       12,366,384       5.6 %       30.6 %  

Excess as % of the capital required

     74.1 %      71.5 %      79.0 %      3.7 %      -6.2 % 

Risk weighted assets

     265,801,467       260,520,258       191,039,187       2.0 %      39.1 % 

Capital Ratio (Central Bank rules) (*)(**)

     14.3 %       14.1 %      14.7 %      1.4 %       -2.7 %  

TIER l (***)

     13.5 %       13.3 %      13.8 %      2.2 %       -2.1 %  

 

(*)

Bank capital / Risk weighted assets

(**)

Includes the 100% of the quarterly result

(***)

Ordinary capital level 1 / Risk weighted assets

BBVA Francés continues to show adequate solvency ratios. As of December 31, 2018 the capital ratio reached 14.3%, similar to the ratio as of September 30, 2018.

The Tier 1 ratio was 13.5% and the excess capital over the regulatory required capital was AR$ 16,155.7 million.

 

 

Additional information

 

 

 

     Quarter ended     D %  Quarter ended 12/31/18
vs quarter ended 		 
     12-31-18     09-30-18     12-31-17     09-30-18     12-31-17  

Exchange rate $/USD

     37.81       40.90       18.77       -7.6 %      101.4 % 

Quarterly CER adjustment

     16.3 %      10.1 %      5.0 %      6.2 %      11.3 % 

 

- 13 -

Table of Contents

 

Disclaimer

 

 

This press release contains or may contain forward-looking statements, including but not limited to estimates of the prospects for the Argentine economy, BBVA Francés’ earnings, business plans, expense and operational structure adjustments, capitalization plan, and trends affecting BBVA Francés’ financial condition and results of operations. Any forward-looking statements included in this press release are based on current expectations and estimates, but actual results and events may differ materially from anticipated future results and events. Certain factors which could cause the actual results and events to differ materially from the expected results or events include: (1) macroeconomic, regulatory or political changes; (2) changes in domestic or international stock market prices, exchange rates or interest rates; (3) changes in the markets for BBVA Francés’ products and services; (4) increasing competition; (5) changes in technology; or (6) changes in the financial condition, creditworthiness or solvency of the customers, debtors or counterparts of BBVA Francés. These forward-looking statements on future events referring only to the date of the document should be taken cautiously. It is advisable to consult the Bank’s Financial Statements and all the documents filed from time to time with the Argentine Securities and Exchange Commission (“CNV”) and the Buenos Aires Stock Exchange

 

 

Conference Call

 

 

On Monday March 11, 2019 at 12:30 hs (Argentine time) a conference call will be held to comment on the quarter’s results.

Those who wish to participate should use the following dial-in numbers:

+ 54-11-39845677 (from Argentina)

+ 1-844-450-3851 (from the United States)

+ 1-412-317-6373 (from other countries)

Conference ID: BBVA .

To access the webcast:

https://webcastlite.mziq.com/cover.html?webcastId=da8b26e9-873d-400b-a286-795c4167784a

To request the Replay, please dial -in

+1-877-344-7529 (from the United States)

+855-669-9658 (from Canada)

+1-412-317-0088 (from other countries)

The replay will be available until March 20, 2019.

Replay Access code: 10128206

 

 

Internet

 

 

This Press Release is available on the web page of BBVA Francés.

www.bbvafrances.com.ar

 

 

Contacts

 

 

Cecilia Acuña

Investor Relations

(5411) 4341-5036

ceciliaviviana.acuna@bbva.com

 

- 14 -

Table of Contents

BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar: by the equity method)

BALANCE SHEET (in thousands of pesos)

Communication “A” 6114

 

     12-31-18     09-30-18     12-31-17  

Cash and due from banks

     99,105,461       87,821,856       38,235,942  

Debt securities at fair value through other comprehensive income

     7,508,099       475,431       5,795,638  

Derivatives

     591,418       63,881       142,745  

Repurchase agreements

     12,861,116       9,582,646       6,329,939  

Other financial assets

     9,647,525       6,707,106       2,664,139  

Loans and other financial intermediation

     181,422,347       178,638,563       127,597,290  

Loans to the private  & financial sector

     181,422,140       178,638,386       127,597,072  

Advances

     11,789,313       16,405,607       11,707,264  

Discounted and purchased notes

     25,874,782       23,696,455       18,821,002  

Secured with mortgages

     10,110,286       8,718,885       4,457,821  

Car secured loans

     1,660,242       1,774,642       4,539,300  

Personal loans

     23,586,938       21,923,282       16,638,201  

Credit cards

     42,509,011       37,421,393       30,144,824  

Loans to financial sector

     9,669,713       9,724,646       4,649,114  

Other (*)

     58,144,255       59,711,580       36,740,905  

Other receivables

     3,896,270       4,414,711       2,782,597  

Less: Unaccrued interest

     (1,560,431 )      (1,151,897 )      (593,526 ) 

Less: Allowance for loan losses

     (4,258,239 )      (4,000,918 )      (2,290,430 ) 

Public Sector loans

     207       177       218  

Principal

     200       176       146  

Interests and adjustments

     7       1       72  

Other debt securities

     23,742,631       30,982,187       16,298,834  

Financial assets pledged as collateral

     4,703,064       6,301,957       3,250,464  

Current income tax assets

     385       385       9,340  

Investments in equity instruments

     129,538       129,234       127,287  

Investments in associates and joint ventures

     1,752,322       1,781,225       889,433  

Property, plant and equipment

     9,816,117       9,172,910       9,511,535  

Intangible assets

     510,912       596,310       344,447  

Deferred income tax asset

     194,036       100,826       21,053  

Other non financial assets

     2,135,859       1,375,031       1,530,269  

Non-current assets held for sale

     493,373       252,805       196,379  

Total Assets

     354,614,203       333,982,353       212,944,734  

Deposits

     259,509,061       247,227,968       153,934,671  

Current accounts

     29,934,576       26,376,260       24,979,598  

Saving accounts

     140,956,173       143,828,389       79,047,758  

Time deposits

     84,283,709       72,352,805       45,330,652  

Investment Accounts

     —         —         —    

Rescheduled deposits CEDROS

     1,951       1,951       1,951  

Other deposits

     4,332,652       4,668,563       4,574,712  

Liabilities at fair value through other comprehensive income

     692,270       1,345,749       —    

Derivatives

     1,377,259       4,431,577       229,775  

Repurchase agreements

     14,321       —         285,410  

Other financial liabilities

     28,189,392       21,934,634       14,002,353  

Financing received the BCRA and other financial institutions

     5,527,525       5,757,714       691,295  

Corporate bonds issued

     2,473,690       1,735,343       2,052,490  

Current income tax liabilities

     3,676,444       2,548,311       1,469,886  

Provisions

     3,620,723       3,448,015       2,127,857  

Other provisions

     3,619,240       3,446,583       2,126,740  

For eventual compromises

     1,483       1,432       1,117  

Deferred income tax liabilities

     57,725       48,074       455,851  

Other non-financial liabilities

     10,894,016       9,776,753       7,458,086  

Total Liabilities

     316,032,426       298,254,138       182,707,674  

Total Stockholders’ equity

     38,551,665       35,699,118       29,929,036  

Equity investments

     30,112       29,097       308,024  

Total liabilities + stockholders’ equity

     354,614,203       333,982,353       212,944,734  

 

- 15 -

Table of Contents

BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar: by the equity method)

INCOME STATEMENT (in thousands of pesos)

Communication “A” 6114

 

     12-31-18     09-30-18     12-31-17  

Interest Income

     17,731,588       12,299,911       6,246,089  

Interest on loans to the financial sector

     926,199       451,780       227,911  

Interest on overdraft

     2,100,546       1,861,503       896,504  

Interest on documents

     2,022,162       1,513,877       749,754  

Interest on mortgages loans

     240,762       207,595       113,303  

Interest on car secured loans

     103,982       360,215       267,971  

Interest on credit card loans

     2,690,676       1,395,515       1,510,119  

Interest on financial leases

     134,513       134,487       102,154  

Interest on personal loans

     1,703,271       1,624,393       1,203,078  

Interest on other loans

     665,768       983,350       564,288  

From other banking receivables from financial intermediation

     3,693       2,513       2,547  

CER adjustment

     24,386       12,124       96,200  

UVA adjustment

     2,071,175       965,760       92,247  

Income from Public Securities

     4,401,601       2,092,036       —    

Other

     642,854       694,763       361,580  

Interest Expenses

     (9,268,761 )      (5,735,581 )      (2,134,194 ) 

Interest on Current Account Deposits

     (1,904,843 )      (1,139,396 )      (227,419 ) 

Interest on Saving Account Deposits

     (51,867 )      (26,624 )      (10,310 ) 

Interest on Time Deposits

     (6,267,054 )      (3,768,514 )      (1,697,659 ) 

Interest on interfinancing received loans

     (5,074 )      (26,756 )      (4,319 ) 

Interest on other financing from the financial institutions

     20,225       (117,761 )      (2,285 ) 

Interest on other liabilites from financial intermediation

     (605,343 )      (416,389 )      (130,112 ) 

Other interest

     (8 )      (45 )      (67 ) 

UVA adjustment

     (448,798 )      (221,865 )      (12,062 ) 

Other

     (5,999 )      (18,231 )      (49,961 ) 

Net interest income

     8,462,827       6,564,330       4,111,895  

Net fee income

     1,504,195       1,855,906       638,005  

Net income of financial instruments

     197,044       138,510       783,930  

Result from assets at amortised cost

     (67,243 )      12,774       —    

Foreign exchange difference

     977,628       1,624,223       727,560  

Other operating income

     1,206,843       1,152,946       652,281  

Provision for loan losses

     (1,097,883 )      (1,032,752 )      (308,991 ) 

Net operating income

     11,183,411       10,315,937       6,604,680  

Personnel expenses

     (2,570,310 )      (2,503,707 )      (2,005,951 ) 

Administrative expenses

     (2,196,156 )      (1,826,091 )      (1,369,329 ) 

Depreciation on Intangible assets

     30,646       (32,088 )      31,149  

Other operating expenses

     (2,433,597 )      (1,635,777 )      (1,388,180 ) 

Operating income

     3,733,663       4,130,578       1,659,287  

Income from associates and joint ventures

     570,342       48,892       47,278  

Net income before income tax from continuing operations

     4,304,005       4,179,470       1,706,565  

Income tax from continuing operations

     (1,366,363 )      (1,131,938 )      (357,150 ) 

Net income Including non-controlling shareholders

     2,937,642       3,047,532       1,349,415  

Net income attributable to non-controlling shareholders

     —         39,691       9,958  

Net income

     2,936,628       3,007,841       1,339,457  

Other comprehensive income

     51,475       (117,469 )      17,720  

Total income attributable to controlling shareholders

     2,988,103       2,890,372       1,357,177  

 

- 16 -

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    BBVA Banco Francés S.A.
Date: March 11, 2019     By:   /s/ Ernesto Gallardo Jimenez
     

Name: Ernesto Gallardo Jimenez

      Title: Chief Financial Officer
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