Risks Relating to Argentina

Overview

We are an Argentine corporation (sociedad anónima)public limited company), and the vast majority of our operations, properties and customers are located in Argentina. Accordingly, the quality of our assets, our financial condition and our results of operations are significantly affected by macroeconomic and political conditions prevailing in Argentina.

Economic and political instability in Argentina may adversely and materially affect our business, results of operations and financial condition.

The Argentine economy has experienced significant volatility in recent decades, characterized by periods of low or negative growth, high levels of inflation and currency devaluation. As a consequence, our business and operations have been, and could in the future be, affected from time to time to varying degrees by economic and political developments and other material events affecting the Argentine economy, such as inflation, price controls, foreign exchange controls, fluctuations in foreign currency exchange rates and interest rates, governmental policies regarding spending and investment, national, provincial or municipal tax increases and other initiatives increasing government involvement in business activities, and civil unrest and local security concerns.

InBetween 2001 and 2002,2015, the Argentine economy suffered awas very volatile combining periods of severe economic and political crisis. Among other consequences,crisis resulting, among others, in restrictions on deposit withdrawals and the crisis resulted in Argentina defaulting on its foreign debt obligations and introducing emergency measures and several changes in economic policies that affected utilities, financial institutions and many other sectors“pesification” of the economy. Argentina also suffered a significant real devaluation of thedeposits (which were reclassified as peso which in turn caused numerous Argentine private sector debtors with foreign currency

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exposure to default on their outstanding debt. Restrictions on deposit withdrawals from the banking system were implemented, as dollar denominated loans and deposits were “pesified” (reclassified as peso denominated) and maturities reprogrammed. Following that crisis, Argentina substantially recovered its real gross domestic product (“GDP”), which grew by 8.9% in 2005, 8.0% in 2006, 9.0% in 2007 and 4.1% in 2008.with certain periods of recovery. In 2009, an extended drought, which reduced agricultural production, and the effects of the global economic crisis led to a 5.9% GDP contraction. GDP growth was strong in 2010 and 2011, increasing to 10.1% and 6.0%, respectively. However, the economy has not been able to attain sustained GDP growth since then, as the country has experienced several adverse economic cycles, currency crises and the impact of Covid-19. As a consequence, in 2020 real GDP was 12% below the 2011 level.

The economic and financial environment in Argentina was significantly influenced by the presidential elections held on November 22, 2015, which resulted in Mr. Mauricio Macri beingwas elected President of Argentina. Mr. Macri’sArgentina and his administration (the “Macri administration”) assumed office on December 10, 2015 and launched a wide array of measures intended to correct the longstanding fiscal and monetary policies that had resulted in recurrent public sector deficits,deficit, high inflation, pervasive foreign exchange controls and limited foreign investment. In 2016,

However, in 2018, the eliminationworsening of foreign exchange restrictionseconomic and rebalancing of utility rates led to an increasepolitic conditions worldwide and in inflation of 41% year-on-year according to the City of Buenos Aires index at year end and to a considerable declineArgentina particularly, resulted in consumption. As a result, GDP fell by 1.8% in 2016. Once the main imbalances were eliminated, the economy picked up again in 2017, with GDP growing 2.9% and inflation slowing to 24.8% year-on-year, though higher than the goal defined by the Central Bank.

The Macri administration carried out a gradual approach intended to reduce the significant fiscal and current account deficit and to correct the macroeconomic imbalances received from the previous administration. This gradual approach ended abruptly in the second quarter of 2018 due to a combination of domestic impacts (mainly a severe drought), a deterioration of the global financial environment (including an increase in US interest rates and the US-China trade war) coupled with policy errors (including a change to BCRA inflation targets and a capital gains tax), which brought about significant capital outflows from Argentina, and the closing of global credit markets for Argentine issuers. From April 30 to July 31, 2018,issuers and a strong devaluation of the Argentine peso (based on the reference exchange rate of the Central Bank) depreciated 32.1% despite frequent exchange market interventions. Even after a strong adjustment of monetary policy and assistance from the International Monetary Fund (“IMF”) in the form of a stand-by high-access agreement of US$50 billion signed in mid-June 2018, tensions in the foreign exchange market reemerged in August, with the peso devaluating by 35.8% during that month in a strong sell-off of Argentine assets. Between April and September 2018, nearly US$14 billion of international reserves were lost due to sales of U.S. dollars by the Central Bank in the foreign exchange market.

Monetary policy was highly influenced by the IMF plan, and bypeso. By the end of September 2018, a new monetary and foreign exchange scheme, highly influenced by the International Monetary Fund (“IMF”), was announced. This scheme was adoptedannounced and while economic conditions stabilized, in order to control exchange rate volatility by absorbing all excess liquidity in pesos, holding the nominal monetary base constant until December 2018. It also set wide bands within which the foreign exchange rate could float. It allowed currency to be stabilized until February 2019. The peso appreciated 5% between September 30, 2018 and February 28,October 2019, (from Ps.40.89/US$ to Ps.39.00/US$) and interest rates of Central Bank Liquidity Bills (Leliq) fell in that period more than 2,900 basis points from the peak. By the end of April 2019, the Central Bank changed its exchange rate scheme by eliminating intervention bands, which became exchange reference bands since intervention of the Central Bank in the exchange market was allowed at any level of the exchange rate of the peso, which led to the stability of the peso until the primary elections of August 11, 2019 (on August 9, 2019 the exchange rate closed at Ps.45.40/US$, 1.6% above the value as of April 29, 2019). However, the unexpected loss by a 15 points gap of President Macri lost the elections to Alberto Fernández in those elections caused the exchange market to react negatively, and the reference exchange rate rose 10.3 pesos on Monday, August 12, 2019, a 22.8% increase over the value recorded the prior Friday, and finished 2019 at Ps.59.89/US$ with high volatility. On August 28, 2019, Argentina announced a new schedule of payment on its short term local debt, including instruments like Lecap, Letes, Lecer and Lelink, where original dates of payment were postponed between three and six months.

During 2019, the IMF advanced disbursements planned to be made in 2020 and 2021 within the framework of a revised agreement that required an additional fiscal adjustment in 2019, including reaching the goal of a primary deficit of 0% of GDP, the strengthening of Central Bank reserves with the support of official creditors and the continuity of orthodox monetary and fiscal policies. This was part of a new program established in October 2018.

In October 2019, Alberto Fernández was elected president of Argentina and took office on December 10, 2019. Since then, his governmentFernandez, whose administration (the “Fernandez administration”) hastook office in December 2019. The Fernandez administration implemented a wide range of economic and political reforms, including limiting access to the exchange market for individuals (seeking to contain the exchange rate without losing reserves) and the adoption of Law No. 27,541 on Social Solidarity and Productive Reactivation (the “Solidarity Law”), which covers a wide range of political and economic areas and adopts measures that have had, and continue to have, a significant impact on the Argentine

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finance spending; for the fiscal target, Minister Massa undertook a partial price adjustment of utility tariffs, although this was set aside in the context of the Presidential elections. The Fernandez administration’s attemptreserve accumulation target was reduced as a result of the difficulties posed by the severe drought suffered in 2023.

Although the results were not as expected: inflation went from 71% year-on-year in July 2022 to stabilize114% year-on-year in May 2023, international reserves went from US$40 billion (monthly average) in July 2022 to US$26 billion (monthly average) in July 2023 and the exchange rate gap was still very high, the government chose Minister Massa as its candidate for President.

Primary elections took place on August 13, 2023. Javier Milei, candidate for La Libertad Avanza (LLA), was the most voted in the primary presidential elections with 30.0% of the total votes. The second most voted political party was Juntos por el Cambio, whose candidates achieved 28.3% of the votes, followed by the candidates of Unión por la Patria (Massa’s party) who achieved 27.3% of the votes. These results were surprising not only because of the parity between the main parties, but also because of the unexpected victory of Milei. The day after the elections, the government validated a 22% increase in the exchange rate and a 22 percentage points increase in the monetary policy rate. This devaluation jump was not accompanied by a stabilization plan, so the benefits of depreciating the real exchange rate were almost non-existent and monthly inflation accelerated to 12.4% and 12.7% in August and September 2023, respectively, the highest values (at that time) in more than 30 years.

After the primary elections, Minister Massa took a series of measures to improve the population’s income in the short term, including one-time bonuses and tax cuts. We estimate the fiscal impact of these measures at 1% of GDP. In the general elections, Sergio Massa obtained 36.7% of the votes, followed by Javier Milei who obtained 30.0% of the votes and Patricia Bullrich, a member of Mauricio Macri’s party, who obtained 23.8% of the votes. The new Congress is fragmented, which will force the new President to negotiate the approval of laws.

On November 19, 2023, Javier Milei was elected President of Argentina with 55.7% of the votes, and he took office on December 10, 2023 (the “Milei administration”). In the first months of the Milei administration, the Central Bank raised by 120% the value of the US$/Peso exchange rate, allowing for the acquisition of international reserves amounting to US$5,624 million from December 11, 2023 to February 15, 2024. At the same time, the Central Bank implemented a debt payment process with importers consisting of the subscription of US$-denominated bonds issued by the Central Bank but payable with Argentine peso, which allowed the Central Bank to withdraw pesos from the economy. Finally, the Central Bank also decided to lower the monetary policy rate -which was yielding 133% per annum- to 70% per annum, in order to reduce the interest payments that the Central Bank pays to banks for their interest-bearing liabilities. This measure is having a negative effect on the Bank as we are receiving lower remuneration on the money we lend to the Central Bank. On the political front, Milei’s government sent to Congress an extensive package of laws aimed at deregulating the economy, which was not approved given the insufficient support that the Milei administration has in Congress.

We cannot assure whether Milei will implement aggressive political and reduceeconomic policies, such as the fiscal deficit,dollarization of our economy, or whether his government will take a more moderate path. The implementation of aggressive political and economic policies could result in further uncertainty and the trade deficit, inflation, poverty and country risk have to date proved unsuccessful. Any furtherinstability of the Argentine economy, all of which could adversely result our results of operations. Additionally, the dollarization of the economy or other disruptive exchange rate measures could be detrimental to the economytrigger hyperinflation and adversely affecta banking crisis, damaging our business, results of operationsbalance sheet and financial condition.potentially reducing our net income.

If current levels of inflation continue, the Argentine economy and the Bank’s business, results of operations and financial condition could be adversely affected.

Argentina has been facing high inflation levels since 2007. According to information published by the National Institute of Statistics and Censuses (“INDEC”), the CPI increased 9.5% in 2011, 10.8% in 2012, 10.9% in 2013, 24% in 2014 and 11.9% in the ten-month period ended on October 31, 2015. INDEC stopped publishing the CPI in the period between November 2015 and April 2016, and resumed the publication of inflation rates with its new methodology for calculating the CPI as of June 2016, reflecting a cumulative increase of 16.9% from May to December 2016. The INDEC reported an annual variation of the CPI of 47.6%50.9%, 53.8%, 36.1%, 50.9% and 94.8 % and 211.4 % in 2018, 2019, 2020, 2021, 2022 and 2022,2023, respectively.

As a result of the devaluation of the Argentine Peso and the continuity of the process of adjustment of public service rates, as well as an unfavorable international context in terms of financing, the three-year accumulated inflation as of July 2018 was over 100%. Consequently, the Bank applied International Accounting Standard N° 29 (“IAS 29”) “Financial Reporting in Hyperinflationary Economies” as from July 1, 2018 in the preparation of the Consolidated Financial Statements accompanying this annual report, which requires the financial statements of any entity whose functional currency is the currency of a hyperinflationary economy, either based on the historical cost method or on the current cost method, be expressed in terms of the unit of measure that is in effect at the end of the reporting period. IAS 29 does not establish an absolute inflation rate above which hyperinflation is presumed.

Likewise since January 1, 2020, financial entities supervised by the BCRA, such as the Bank, are required to prepare their statutory financial statements in accordance with IAS 29 in the preparation of their financial statements as established by Communication “A” 6651.

During the first half of 2022, and as in 2021, the government tried to contain the inflationary acceleration produced by the monetary overhang derived from the monetary issuance in 2020 and 2021, with an appreciation of the real exchange rate and a freeze in the price of utility tariffs. This strategy was inefficient to reduce inflation, which averaged 5.3% per month in the first half of 2022. In July 2022, after the sudden departure of Minister Martín Guzmán, parallel exchange rates rose 20% in one week and determined a successive remarking of prices that accelerated the already very high inflation, leading to a 6.8% monthly average in the third quarter of the year. However, since the

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The arrival of Minister Massa and withresulted in a decrease of inflation values; however the slight reduction of public spending and monetary issuance, the government has managed to decrease inflation values from the monthly peak of 7.4% in July 2022. The adjustment of regulated prices (mainly utility rates) was one of the main inflationary drivers of the last months of 2022 and the beginning of 2023. Monthly

As a result of the strong drought suffered in Argentina for the last three years; inflation decelerated sharply in November and December 2022 and then accelerated until April 2023. After the primary elections the government adjusted the exchange rate and approved a 22% rise of the parity exchange rate between the U.S. dollar and the Argentine peso. As a result, monthly inflation started to increase at double-digit and year-on-year inflation at December 2023 reached 211%. At the same time, the official exchange rate was 6%27% more appreciated than the average of the last 20 years. President Milei has already announced that a price stabilization plan will be launched with the aim to reach fiscal equilibrium but, as of the date of this annual report on Form 20-F, there is no certainty as to how this plan will be implemented and the effects it will have on the exchange rate market and/or the fiscal deficit. The Bank’s balance sheet is exposed to the interest-bearing liabilities of the Central Bank (both LELIQ, which is a 28-day instrument, and 1-day REPO), and if the government implements measures aimed to reduce the Central Bank’s interest-bearing issuance, including a rate reduction or a plan to exchange these instruments, the Bank’s balance sheet and net income will be adversely affected.

After the increase in the parity exchange rate, inflation increased from 12.8% per month in November 2023 to 25.5% per month in December 2023, 20.6% per month in January 2023, 6.6%2024 and 13.2% per month in February 20232024. At the same time, the new government announced the deregulation of a series of regulated prices (such as health insurance, transportation and 7.7%utility rates) that could continue to drive inflation in March, 2023.

the short term. We cannot predict whether any measures to be implemented by the FernandezMilei administration to control inflation will have the desired effect. Currently and in the past, inflation has adversely affected the Argentine economy and the government’s ability to create conditions leading to growth. An environment of high inflation rates also negatively affects Argentina’s international competitiveness, real wages, employment rates, the consumption rate, and interest rates. High levels of inflation and the high level of uncertainty regarding economic variables, have in the past, and may in the future, adversely affect economic activity, which could materially and adversely affect our business, results of operations and financial condition.

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The Treasury will face high debt maturities in the upcoming months and, potentially, a higher demand for financing to fund next year’s fiscal deficit. Aany poor performance in the local debt market, with debt rollovers below 100%, could complicate the public sector’s sources of financing, increasing the possibility of requiring higher direct financing from the Central Bank, which would increase the already high level of inflation.

In addition, any deterioration in the government’s fiscal position negatively affects its ability to access debt markets in the future and could result in greater restrictions on accessing those markets by Argentine companies, including the Bank.

A weaker fiscal position could have a material adverse effect on the government’s ability to obtain long-term financing and adversely affect economic conditions in Argentina, which could adversely affect the business, results of operations and financial condition of the Bank.

The Argentine economy could be adversely affected by economic events in other markets.

Weak or no economic growth or recession or adverse situations that affect any of Argentina’s main trading partners could negatively affect the balance of payments and, therefore, the economic growth of Argentina. In recent years, several Argentine trading partners (such as Brazil, Europe and China) have experienced significant slowdowns or periods of recession in their economies. If these slowdowns or recessions were to occur again, this could impact the demand for products that come from Argentina and thus affect its economy.

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If international and local economic conditions fail to improve or deteriorate even more, the Argentine economy could be negatively affected as a result of lower international demand and lower prices for its products and services, higher international interest rates, less capital inflow and greater aversion to risk. Any of the foregoing could also adversely affect the Bank’s business, results of operations and financial condition.

A decline in international prices for or in the amount of Argentina’s principal commodity exports could have a material adverse effect on Argentina’s economy and public finances, and, as a result, on our business.

Historically, the commodities market has been characterized by high volatility. Despite the volatility of prices of most of Argentina’s commodities exports, commodities significantly contributed to the government’s revenues during the 2000s due to the imposition of export duties on agricultural products in 2002. Although most duties were eliminated and the export tax on soy was reduced from 35% to 30% by the Macri administration in 2016, and was further reduced in 2018 by 0.5% per month, the Argentine economy is still relatively dependent on the price of its main agricultural exports, primarily soy. This dependence, in turn, renders the Argentine economy vulnerable to commodity prices fluctuations. International soybean prices decreased slightly

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During 2023, new exchange rates continued to appear for certain sectors, similar to the soybean dollar in 2022 as the shortage of Central Bank reserves prevented the government’s ability to avoid a significant increase in the exchange rate between the U.S. dollar and the Argentine peso. In this sense, the Fernandez administration launched several campaigns allowing exporters to settle 30% of their exports through the parallel exchange rate market with the remaining 70% having to be liquidated at the official exchange rate. Initially, this campaign only applied to soybean exporters, but it was later extended to all types of exports. After the elections, and with an increased need to generate foreign currency inflows, the proportion of export dollars that could be liquidated at the parallel exchange rate was increased from 30% to 50%, which granted some short-term relief in the Central Bank’s stock of reserves. The Milei administration has modified these values and as of the date of this annual report, exporters are allowed to settle 20% of their exports in the parallel exchange rate market, while the remaining 80% needs to be settled in the official exchange rate market.

Milei has announced that all current exchange rate restrictions will be eliminated as soon as the fiscal deficit is reduced. There is no certainty as to the scope or timing for any of these measures and the effect they would have on the Bank. The lifting of these exchange rate restrictions could result in an acceleration of inflation, which could negatively affect our balance sheet and net income.

The establishment of new restrictions on foreign trade or related to the foreign exchange market, together with the application of new exchange rates, could require the Bank to allocate additional and unbudgeted resources to provide customers with the tools they require to carry out transactions under the new regulatory framework. Additionally, such tools may not be developed on a timely basis due to changing demands.

Any changes in the policies of the current government concerning economic, exchange and financial matters in order to preserve the balance of payments, the Central Bank’s reserves, a capital outflow or a significant depreciation of the Peso, such as the mandatory conversion into Pesos of obligations assumed by legal entities resident in Argentina in US dollars which could be due to a period of crisis and political, economic and social instability affecting Argentina, or otherwise, any of which could be exacerbated as a result of the Covid-19 pandemic, could have an adverse effect on Argentina’s economic activity and the Bank’s business, results of operations and financial condition.

The measures adopted to resolve the crisis in the energy sector may not be sufficient, which could affect the business, the results of operations and the financial condition of the Bank.

The economic policies applied since the Argentine crisis of 2001-2002 have had an adverse effect on the Argentine energy sector. The failure to reverse the freeze on electricity and natural gas rates imposed during the crisis became a barrier to investment in the energy sector. The government tried to encourage investment by subsidizing energy consumption but the policy proved ineffective and served to further discourage investment in the energy sector, causing oil and gas production and electricity generation, transmission and distribution to stagnate while consumption continued to rise. To address the power supply shortage that began in 2011, the government attempted to increase imports of electrical power, with adverse consequences for the trade balance and international reserves.

In response to the growing energy crisis, the Macri administration declared a state of emergency for the national electricity system, which ended on December 31, 2017. The state of emergency allowed the government to take measures to stabilize the supply of electricity to the country. In this context, subsidy policies were re-examined and new electricity rates were adopted.

However, utility rates were almost frozen from 2019 to 2022, which worsened the national energy situation by promoting higher demand and discouraging new investments from supplying companies, resulting in an energy deficit heightened by the lack of dollar inflows.

Although actions have been carried out to attempt to address the crisis in the energy sector, in recent months,2023, the partial removal of subsidies to fund utilities (particularly with respect to high income families), the lack of a definitive resolution of the negative effects on the generation, transport and distribution of electricity in Argentina with respect to residential and industrial supply could undermine confidence and adversely affect Argentina’s economic and financial condition, resulting in political instability, and adversely affecting the Bank’s business and results of operations.

Likewise, theThe Milei administration has continued to remove subsidies for utilities and public transportation and has decided to stop all public works until 2024. The elimination of subsidies and the progressive increase in prices could continue to generate social

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unrest and be challenged in local courts. Additionally, the decision to stop all public works could result in the failure to progress on the construction of the gas pipeline that will take gas from Patagonia to Buenos Aires and generally result in lower investment and a lower need for funding to finance that investment, which would adversely affect the Bank. We can give no assurance that the measures adopted by the governmentMilei administration to deal with the energy crisis will be sufficient to restore energy production in Argentina in the short or medium term. Since the Fernandez administration took office, the rates of public services have been frozen, so a rise in energy demand is expected to generate deficit pressures on the trade balance due to the need to import gas to maintain the levels of domestic production and prevent it from declining as a result of the lack of investment driven by the capped prices.

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Nevertheless, the Central Bank launched a differential dollar for soybean exports, 40% higher than the official exchange rate, effective from November 28 to December 31, 2022, in order to buy the necessary dollars to meet the fourth quarter target with the IMF.

The official exchange rate grew 356.4% between December 31, 2022 and December 31, 2023. However, in 2023, the real exchange rate experienced significant variations during the year, with the real exchange rate experiencing a 2% depreciation until the day of the primary elections. However, the government decided to freeze this exchange rate between August 14, 2023 and November 14, 2023, with monthly inflation during this period reaching 12.4%, 12.7%, 8.3% and 12.8%, respectively. As a result, the real exchange rate lost all the depreciation accumulated during the year and continued to appreciate until year end.

As the level of inflation remains high, a stronger nominal appreciation of the peso could lead to concerns regarding the appreciation of the peso against the U.S. dollar in real terms. Such appreciation may reduce the level of exports due to the loss of external competitiveness and a deterioration of the current account deficit. Any such appreciation could also have a negative effect on economic growth and employment, reduce tax revenues in real terms and raise concerns regarding the possibility and impact of a sudden stop in capital flows.

Political uncertainty or changes in liquidity in international markets are likely to lead to greater volatility, and a reduction in the reserves of the Central Bank as a result of intervention in the exchange market could adversely affect inflation expectations, economic performance and the ability of the Republic of Argentina to service its debt.

The lack of rainfalls, together with the high temperatures and the unexpected frosts had a negative impact on the country’s main exports (soybean, wheat and corn, among others), which are expected to drastically reduce their production compared to the previous season. The adverse in 2023. Adverse weather conditions are expected tomight increase pressure on exchange rates due to the reduction onin dollar inflows. The government has already announced a new differential exchange rate (higher than the official one) for soybean and regional economies exports to encourage the liquidation of dollars.

Any of these factors could substantially and adversely affect the business, the results of operations and the financial condition of the Bank.

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According to data published by INDEC, the wage index grew by 90.4%152.7% during 2022,2023, as a result of a 99.4% increase in the public sector and a 93.8%165.8% increase in the private sector for which data is available.and 148.6% in the public sector. The registered wage index grew by 95.8%159.5% in 2022.2023.

Existing employment laws have led to salary increases that have resulted in an increase in operating costs that has adversely affected the results of operations of Argentine companies. Additionally, the adoption of new measures providing for wage increases or additional benefits for workers due to inflation or additional pressure from workers and unions or otherwise, could result in a further increase in costs and a decrease in the results of operations of Argentine companies, including those of the Bank, which could adversely affect the business, the results of operations and the financial condition of the Bank.

Government intervention in the Argentine economy could adversely affect the business, results of operations and financial condition of the Bank.

During the Kirchner administration, the direct intervention of the government in the Argentine economy increased, including through the implementation of expropriation and nationalization measures, and price and exchange controls.

Since the beginning of the Fernández administration there has been a strong intervention in the foreign exchange and labor markets, as well as a hefty fiscal deficit. The debt restructuring process brought a sign of sustainability which was perceived by both the market and the main credit rating agencies. Sovereign country risk fell more than 1,000 basis points following the debt restructuring agreement. However, only a week after the long-awaited agreement, the aforementioned measures led to a sharp fall in sovereign bond prices as well as in the main Argentinian stocks in New York. All of this, together with foreign exchange restrictions, import controls and the delay in the negotiations with the IMF contributed to an increase in sovereign risk, which continued to increase after the debt restructuring process and reached 1,688 basis points as of December 31, 2021. The sovereign risk has remained high even after the announcement of the IMF agreement as a result of current macroeconomic imbalances.

In June 2022, the Central Bank actively participated in the secondary market of Treasury securities. The Central Bank injected more than 30% of the monetary base into the economy through its participation in the secondary market and through direct transfers to assist the Treasury. This intervention raised concerns in the market regarding the government’s fiscal path and its capacity to finance future deficits in the local debt market. In turn, the departure of the Minister of Economy Martin Guzmán at the beginning of July and the appointment of Silvina Batakis caused the country risk to increase from 1,912 basis points on June 1, 2022 to 2,913 basis points by mid July 2022. As of March 22, 2023 the country risk was 2,4582,465 basis points.

In January 2023, the National Treasury carried out a voluntary debt exchange of Peso-denominated bonds maturing in the first quarter of 2023. Out of a total of Ps. 4.3Ps.4.3 billion, Ps. 2.9Ps.2.9 billion accepted the offer (67%), postponing payments mainly until the second quarter of the year. As approximately 55% of the total Peso-denominated bonds maturing in the first quarter of 2023 were held by public agencies (especially the Central Bank), the acceptance within the private sector was less than 30%. This fact, together with the difficulties that the Treasury had to issue debt maturing after October 2023, led the rating agency S&P to consider this transaction as “distressed” and consequently downgraded Argentina’s sovereign rating to “Selective Default” for four days. After the settlement of the debt exchange, S&P raised Argentina’s sovereign rating back to CCC-.

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monetary and financial stability, as well as promote development with social equity. Furthermore, the concept of “freely available reserves” was eliminated, allowing the Argentine government to use additional reserves to cancel debts. Additionally, the Convertibility Law established that the Central Bank may set the interest rate and the terms of the loans granted by financial institutions. Additionally, any use of reserves by the government to repay public debt or finance public spending may result in an increase in inflation, which would hinder economic growth. Moreover, a decrease in the reserves of the Central Bank might adversely affect the ability of the Argentine financial system to resist and overcome the effects of an economic crisis (whether domestic or international), adversely affecting economic growth and therefore the business, results of operations and financial condition of the Bank.

AnThe outbreak of a new pandemic or the worsening of the ongoing Covid-19 pandemic may have material adverse consequences on the Argentine economy.

An outbreakand spread of a pandemic disease or similarand other large-scale public health threat, such as the ongoing Covid-19, which has had and may continue to have material adverse consequences for the global economic, financial, and business conditions,events could materially and adversely affect our business, financial condition and results of operations. In order to mitigate the adverse effect of the Covid-19 pandemic on the Argentine economy, the Argentine government took certain monetary and fiscal measures, in addition to other measures adopted by the Central Bank. Such measures included: layoff limitations, price controls, lower reserve requirements on bank lending to households and micro-, small- and medium-sized enterprises, temporary easing of bank loan classification rules, a temporary prohibition on charging fees related to ATM services, the suspension of account closures, the reduction of maximum credit card interest rates, the freezing and/or postponement of certain loan payments, healthcare benefit extensions, tax reductions and certain other financial assistance programs. All these measures could become stricter or new mitigation measures could be approved if there were a worsening of the current Covid-19 pandemic.

We cannot predict or estimate the future negative impact that a new pandemic or a new wave of the ongoing Covid-19 pandemic may have on our business, results of operations, and financial condition, which will depend on events outside of our control, including the intensity and duration of the pandemic and the measures taken by the different governments, including the Argentine government, in order to contain the pandemic and/or mitigate its economic impact.

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pay high costs in order to obtain the same and/or if we cannot generate profits and/or maintain our current volume and/or scale of our business, whether due to a decline in deposits or otherwise, our liquidity position and ability to honor our debts as they come due may be adversely affected, which could have a material adverse effect on our business, results of operations and financial condition.

Reduced spreads between interest rates received on loans and those paid on deposits could adversely affect our profitability.

The spread between the interest rates on loans and deposits could be affected as a result of increased competition in the banking sector and the government’s tightening or loosening of monetary policy in response to inflation concerns. During recent years, as a consequence of higher inflation, interest rates have significantly increased in Argentina.

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As of December 2022,2023, UVA loans andexceed UVA deposits balances, were similar. However, we expect UVA deposits to continue to increase andso the demand for UVA loans to remain flat, which would generateBank has a potential net liabilitylong position in inflation adjusted net assets that matches our current expectations of negative interest rates for at least part of 2024. This long UVA for the Bank.

With inflation remaining high, and also consideringposition is complemented by a portfolio of Argentina Treasury bonds that one of our targets is to protect the Bank’s equity from the eroding effects of inflation, the Bank also holds a UVA treasury bonds portfolio that turns our net inflation exposure to positiveadjust by approximately 40% of the Bank’s equity.inflation.

Independent of how this activity may develop in the future and how we manage our bond portfolio, there will probably still be a mismatch among UVA assetsloans and liabilities, whichdeposits, as loans are mainly mortgages with long maturities, and this mismatch could have a material adverse effect on our business, results of operations and financial condition, particularly in the event that interest rates turn positive in real terms.terms and the Bank were not able to hedge with inflation adjusted liabilities.

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technology or social media companies and FinTechs) increasingly dominate access to data and control over digital interactions, and are already eroding the Bank’s results in highly relevant markets such as payments. These platforms can leverage their advantage in access to data to compete with the Bank in other markets and could reduce the Bank’s operations and margins in its core businesses such as lending or wealth management. In the event that the Bank is not successful in addressing increasing competition, its business, financial condition and results of operations could be materially and adversely affected.

We are a subsidiary of the BBVA Group, and activities across the BBVA Group could adversely affect us.

We are part of a highly diversified international financial group which offers a wide variety of financial and related products and services including retail banking, asset management, private banking and wholesale banking. The BBVA Group strives to foster a culture in which its employees act with integrity and feel comfortable reporting instances of misconduct. The BBVA Group employees are essential to this culture, and acts of misconduct by any employee, and particularly by senior management, could erode trust and confidence and damage the BBVA Group and the Bank’s reputation among existing and potential clients and other stakeholders. Negative public opinion could result from actual or alleged conduct by the BBVA Group entities in any number of activities or circumstances, including operations, employment-related offenses such as sexual harassment and discrimination, regulatory compliance, the use and protection of data and systems, and the satisfaction of client expectations, and from actions taken by regulators or others in response to such conduct.

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A further downgrade in Argentina’s sovereign rating in the future, or any change in outlook, could limit the Bank’s access to financing on acceptable terms, or at all, which could have a material adverse effect on the business, the results of operations and the financial condition of the Bank.

The financial industry is increasingly dependent on information technology systems, which may fail, may notpresent vulnerabilities and be adequate for the tasks at hand or may no longer be available.exposed to cyber attacks and data leaks.

Banks and their activities increasingly rely on highly sophisticated information technology (“IT”) systems to deliver products and services to their customers. IT systems are vulnerableexposed to a number of problems, such as software or hardware failures, malicious software, vulnerabilities, hacking and physical damage to vital IT centers. IT systems need regular patches and updates and banks, including us, may not be able to implement the necessary updates in a timely manner or the updates may not work as planned.

In recent years, the number of security incidents to which companies from different industries are exposed has increased. Attacks are becoming more frequent and compromise the infrastructure of the affected company, exposing internal and customer information, including as a result of phishing and social engineering campaigns, the intrusion of malicious software or ransomware campaigns, denial of service attacks that affect the availability of systems, among others. Cyber threats are rapidly evolving and we may not be able to anticipate or prevent all such attacks. Our risk and exposure to IT threats continues to increase due to the changing nature and complexity of these threats from cybercriminals, our plans to continue providing internet banking and mobile banking channels, and our plans to develop additional remote connectivity solutions to serve our customers. We may incur increasing costs in an effort to minimize these threats and we may be liable for any breach or loss of security.

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confidential information and/or that of our customers, or damage to our or our customers’ and/or third parties’ computers or systems, and could result in a violation of applicable privacy laws and other laws, litigation exposure, regulatory fines, penalties or intervention, loss of confidence in our security measures, reputational damage, reimbursement or other compensatory costs, additional compliance costs, and could adversely impact our results of operations, liquidity and financial condition.

An increase in fraud or transaction errors may adversely affect our reputation, results of operations and financial condition.

Due to the large number of transactions that occur in a financial institution such as the Bank, errors can occur and worsen before being detected and corrected. In addition, some of our transactions are not fully automated, which may increase the risk of human error, or manipulation, and it may be difficult to detect losses quickly. If we are unable to effectively and timely detect and remedy fraudulent and erroneous transactions, it could damage our reputation, entail serious costs and affect our transactions, as well as have a material adverse effect on our business, results of operations and financial condition.

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BBVA, our controlling shareholder, has the ability to direct our business and its interests could conflict with yours.

As of December 31, 2022,2023, our parent company, BBVA, directly or beneficially owned 66.55% of our capital stock. As a result, BBVA controls virtually all decisions with respect to our company made by shareholders. It may, for example, without the concurrence of the remaining shareholders, elect a majority of our directors, effect or prevent a merger, sale of assets or other business acquisition or disposition, cause us to issue additional equity securities and determine the timing and amounts of dividends, if any, always subject to the applicable legal framework. Its interests may conflict with your interests as a holder of our shares or ADSs, and it may take actions that might be desirable to BBVA but not to our other shareholders.

Our ability to grow our business depends on our ability to manage our relationships with partners and grow our deposit base.

We seek to grow our business by, among other means, increasing our client base. Our strategic partnerships are important components of our client acquisition strategy. We have various strategic partnerships, which include Despegar, MOVE Concerts Argentina S.A., Medios y Contenidos Producciones S.A. and En Vivo Producciones S.A., the last four within the entertainment sector. Distribution channels include credit card programs with Club Atlético River Plate Asociación Civil and Club Atlético Boca Juniors Asociación Civil, Argentine soccer clubs, La Caja Seguros within the insurance sector, as well asand the agreements with automobile companies Peugeot Citroen, Renault and Volkswagen, which we depend on to expand our client reach cost-effectively, further expand our points of presence and enhance our value proposition. Any deterioration in our relationships with our strategic partners could adversely affect our strategy and materially and adversely affect our business, results of operations and financial condition.

In addition, the successful growth of our business depends on our ability to grow our deposit base. Political, economic or legal developments in Argentina or other factors could lead customers to withdraw funds from the Argentine financial system, adversely affecting us. If there are improvements in the Argentine economy, including lower inflation and increased bancarization and lending activity in the Argentine banking sector, we expect this would contribute to the growth of our business and profitability. However, we can provide no assurance regarding the future performance of the Argentine economy or how any improvements will affect us. If the Argentine economy fails to improve, it could have a material adverse effect on our business, results of operations and financial condition.

We may enter into one or more acquisitions which could adversely affect the value of the Bank.

We regularly explore consolidation opportunities in the ordinary course of business and believe there are significant opportunities to expand our footprint in the Argentine banking sector. In the event that we choose to make an acquisition in the future, any such transaction would involve a number of risks and uncertainties, including:

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Any of the foregoing or other risks and uncertainties related to any acquisition could have a material adverse effect on our business, results of operations and financial condition or the value of the Bank.

We may suffer adverse consequences related to our calculation of income tax for the years ended December 31, 2018 and 2020.

As discussed in our Form 6-K furnished to the SEC on June 30, 2017, on May 12, 2017, we filed a request for declaratory judgment with the Contentious Administrative Federal Court No. 12, Secretariat No. 23, seeking that such court declare unconstitutional certain provisions of Argentine law that prevented us from applying an inflation adjustment mechanism. On May 12, 2017, we filed our income tax return for 2016 giving effect to an adjustment for inflation, in 2018 we filed our income tax return for 2017, and in 2019 we filed our income tax return for 2018, also giving effect to an adjustment for inflation. Our requests for declaratory judgment for 2017 and 2018 were filed with the Contentious Administrative Federal Court No. 12, Secretariat No. 23, and our request for 2019 was filed with the Contentious Administrative Federal Court No. 2, Secretariat No. 3.

On June 8, 2020, the Bank obtained a favorable judgement from the Contentious Administrative Federal Court No. 12 with regards to our request for declaratory judgementjudgment filed on May 12, 2017 for our 2016 tax return. The Contentious Administrative Federal Court No. 12 concluded that the prohibition to apply the inflation adjustment mechanism in our income tax return for the fiscal year 2016 was not applicable. On December 9, 2020 the Appeal Court dismissed the appeals filed on August 6, 2020 by the tax authorities against this ruling, thereby confirming the decision taken by the Contentious Administrative Federal Court No. 12. Although the tax authorities filed an extraordinary appeal, such appeal was withdrawn on February 1, 2021.

On June 14, 2021, the Bank obtained a new favorable judgement from the Contentious Court Administrative No. 12 with regards to our request for declaratory judgmementjudgment filed on May 11, 2018 for our 2017 tax return, declaring that the prohibition to apply the inflation adjustment mechanism in our income tax return for the fiscal year 2017 was not applicable. On June 18, 2021, the tax authorities appealed the judgement, but on September 3, 2021 such appeal was also withdrawn.

On October 5, 2022, the Bank obtained another favorable judgmentruling from the Federal Court for Administrative Litigation No. 2, to our request for a declaratory judgment filed on May 13, 2019 for our 2018 tax return in the same form as those previous sentences. On October 6, 2022, the tax authorities appealed the sentence. On July 11, 2023, the Bank obtained a favorable judgement from the Contentious Court Administrative and on August 8, 2023, the tax authorities filed an extraordinary appeal. On September 19, 2023, the Federal Court granted partial relief to the extraordinary appeal and sent it to the Supreme Court. As of the date of this annual report, we are waiting for the Supreme Court to rule on the appeal filed by the tax authority.

In May 2021, we filed a new request for declaratory judgement with the Contentious Administrative Federal Court No. 5, Secretariat No. 9, seeking that such court declare unconstitutional certain provisions of Argentine law that prevented us from fully applying the inflation adjustment mechanism in our 2020 tax return. On May 26, 2021, we filed our income tax return for 2020 giving effect to an adjustment for inflation. On August 15, 2023, the Bank obtained a new favorable judgment from the Federal Court for Administrative Litigation No. 5. On August 23, 2023, the tax authority filed an appeal against this judgement requesting its revocation.

On June 2, 2023, the Bank filed a declaratory action of unconstitutionality against the Federal Administration of Public Revenue - General Tax Directorate (AFIP-DGI), in order to obtain a ruling declaring the unconstitutionality of art. 93 of the Income Tax Law (T.O. 2019) and/or the regulations that prevent the comprehensive application of the tax inflation adjustment mechanism on the grounds that it resulted in a confiscatory income tax in the 2022 fiscal period and requesting the comprehensive application of the mechanism for updating costs and amortization of assets provided for in articles 62 to 66, 71, 87 and 88 of the tax law.

25On June 6, 2023, Federal Court for Administrative Litigation No. 9 transferred the proceedings to the prosecutor’s office to issue a ruling on jurisdiction. Once the tax report was presented on June 8, 2023, the Court declared its jurisdiction.

The Argentine economy qualifies as a hyperinflationary economy under IAS 29. Given that the peso is our functional currency, we apply IAS 29 for periods ending after July 1, 2018, and our Consolidated Financial Statements and other financial information are presented in terms of the measuring unit current at December 31, 2022.2023.

IAS 29 requires that financial statements of any entity whose functional currency is the currency of a hyperinflationary economy, whether based on the historical cost method or on the current cost method, be adjusted in terms of the measuring unit current at the end of the reporting period. IAS 29 does not establish a set inflation rate beyond which an economy is deemed to be experiencing hyperinflation. However, hyperinflation is commonly understood to occur when changes in price levels are close to or exceed 100% on a cumulative basis over the prior three years, when presented together with certain other qualitative macroeconomic factors.

The total cumulative inflation in Argentina in the 36 months prior to December 31, 2022,2023, as measured by both consumer and wholesale price indexes published by INDEC, exceeded 100%. Qualitative macroeconomic factors, including the depreciation of the peso in recent months, also support the conclusion that Argentina is a hyperinflationary economy for accounting purposes. Accordingly, IAS 29 is applicable to any financial statements as from July 1, 2018 included in any of our filings with the SEC under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Argentine accounting standards authorities have reached a consensus that the “general price index” for IAS 29 purposes is determined considering the wholesale price index up to December 2016 and the CPI from then onwards. These indices have been determined or referred to the INDEC. Therefore, our Consolidated Financial Statements included in this annual report are adjusted by applying the relevant indices and presented in terms of the measuring unit current at December 31, 2022.2023.

We also have applied IAS 29 Financial Reporting in Hyperinflationary Economies to our statutory consolidated annual financial statements presented to the Central Bank for fiscal years beginning on or after January 1, 2020 as set forth by the BCRA through Communication “A” 6651 issued on February 22, 2019. The financial statements provided to the Central Bank are prepared in accordance with IFRS BCRA, which differs in significant respects from IFRS-IASB. See “Presentation of Financial Information”. As such, the Consolidated Financial Statements included in this annual report are not comparable with our financial statements furnished to the Central Bank.

The statutory consolidated annual financial statements that the Bank prepares to comply with the requirements of the Central Bank are prepared pursuant to the reporting framework established by the Central Bank requiring supervised entities to submit financial statements prepared pursuant to IFRS-IASB except for:

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We are subject to numerous restrictions on our ability to pay dividends.

We are subject to legal and other restrictions on our ability to pay dividends. In Argentina, financial institutions may distribute dividends provided that (i) they are not covered by the terms of sections 34 “Regularization and recovery” and 35 bis “Institution restructuring to safeguard lending and bank deposits” of the Law on Financial Institutions (Law No. 21,526); (ii) they are not receiving financial assistance from the BCRA; (iii) they are not in arrears or non-compliance with the information regime established by the BCRA; (iv) they meet minimum capital requirements and cash requirements and (v) they have complied with the additional capital margins applicable to them as provided for in Section 4 (Additional Capital Margins) of the BCRA’s Structured Income Distribution text. See “Item 8. Financial Information—A. Financial Statements and other Financial Information—Dividends”. Amounts available for distribution as dividends are determined pursuant to Argentine law and IFRS-BCRA. As a result, dividends may be paid when we have no income as determined under IFRS-IASB and, conversely, dividends may not be payable even if we have income as determined under IFRS-IASB. Moreover, BBVA as our majority shareholder has the power to approve or fail to approve any proposed dividends.

Communication “A” 6886, in force since January 31, 2020, provides that financial institutions must have the prior authorization of the Central Bank for the distribution of dividends. On March 19, 2020, the BCRA issued Communication “A” 6939 whereby the distribution of dividends by financial institutions to its shareholders, including the Bank, was suspended until at least June 30, 2020; the BCRA Communication “A” 7035 dated June 4, 2020 extended said suspension until December 31, 2020, which was subsequently extended to June 30, 2021 by Communication “A” 7181 and to December 31, 2021 by Communication “A” 7312.

Pursuant to Communication “A” 7421 dated December 16, 2021, the Central Bank enabled financial entities, from January 1, 2022 to December 31, 2022, to distribute dividends for up to 20% of their “distributable profit”. Financial entities, having the previous authorization of the Central Bank, had to make this distribution in twelve equal, monthly and consecutive installments.

By Communication “A” 7719 dated March 9, 2023, the Central Bank enabled financial entities, with its prior authorization to distribute dividends for up to 40 % of their “distributable profit” in six equal, monthly and consecutive installments from April 1, 2023 to December 31, 2023.

On March 21, 2024 the BCRA issued Communication “A” 7984, effective until December 31, 2024, which established that financial institutions may distribute dividends for up to 60% of their “distributable profit” in six equal, monthly and consecutive installments once authorization is obtained by the BCRA.

The Bank is exposed to various risks in connection with climate change.

Climate change, which is resulting in an increase in the intensity and frequency of extreme weather events and environmental degradation, presents both short, medium and long-term risks to the Bank and its customers and counterparties, with the risks expected to increase over time. Risks posed by climate change may be classified into transition and physical risks.

Transition risks refer to changes in, among others, regulations, technologies and market preferences linked to the transition toward a less carbon-dependent economy, including the following:

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The physical risk arising from climate change could result from increased frequency and/or severity of adverse weather events or the impact of climate change over the long term. The activities of the Bank or those of its customers or counterparties could be adversely affected by the physical risks arising from climate change. For example, extreme weather events may damage or destroy the properties and other assets of the Bank or those of its customers or counterparties, result in increased costs, or otherwise disrupt their respective operations (for example, if supply chains are disrupted as a result), diminishing –in the case of the Bank’s customers or counterparties - their repayment capacity and, if applicable, the value of assets pledged as collateral to us. The Bank is also exposed to potential long-term risks arising from climate change, such as increases in credit-related costs due to deteriorating macroeconomic conditions, which may be caused in part by an increase in infectious diseases or other ailments resulting from climate change. The Bank could also be adversely affected by declines in asset values as a result of climate change or climate change-related risks, reduced availability of insurance and significant interruptions to business operations and may be required to change its business models in response to the foregoing.

Any of these factors or regulations may have a material adverse effect on the Bank’s business, financial condition and results of operations.

Legal, Regulatory and Compliance Risks

If we identify material weaknesses in our internal controls and procedures or otherwise fail to maintain their effectiveness, investor confidence in the Bank and the market price of our ordinary shares and ADSs may be adversely affected.

We maintain disclosure controls and procedures designed to ensure that we timely report information as specified in applicable Argentine and U.S. rules. Within such disclosure controls and procedures, we maintain a system of internal control over financial reporting.

We can provide no assurance that we will be able to maintain effective internal control over financial reporting in the future, that misstatements due to error or fraud or otherwise will not occur, that all control issues are detected or that we will be able to prepare our financial information on a timely basis. If our disclosure controls and procedures, including internal control over financial reporting, are not effective, it could have a material adverse effect on our business, results of operations and financial condition. Moreover, it could have an adverse effect on the price of our ordinary shares and ADSs and could subject us to regulatory.

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Our management has issued a report on its assessment of the effectiveness of our internal control over financial reporting as of December 31, 20222023 and concluded that the Bank’s internal control over financial reporting was effective as of such date. See “Item 15. Controls and Procedures”.

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Communication “A” 6938, temporarily easing the criteria to classify banks’ debtors established in the “Debtors’ Classification” rules and introduced certain changes to the manner in which financial institutions calculate RPC. Furthermore, in response to the crisis triggered by the Covid-19 pandemic, the Central Bank adopted a series of credit stimulus measures aimed at the most vulnerable economic sectors, primarily micro, small and medium-sized companies and the self-employed and eased reserve requirements for financial institutions that extended such credit lines. For a description of the effects of these regulations on BBVA Argentina, see “Item 5. Operating and Financial Review—Effects of Recent Regulatory Changes on BBVA Argentina”.

Financial institutions were also ordered to grant certain clients approved by the Argentine Tax Authority (“AFIP”) who applied for them, credit facilities at regulated rates denominated in pesos called “Zero Rate Credit” and “Zero Rate Credit Culture” provided for in Decree No. 332/2020,20, as amended.

Fees on automatically processed operations were suspended for a certain period of time and the possibility of notifying users of financial services of fee increases was suspended for 180 days, and after that period it was established that the expansion would be progressive for commodities.

During 2021 some of the rules issued during 2020 to mitigate the effects of the Covid-19 pandemic were relaxed while others were reinforced, including those enacted in relation to the protection of financial users, including the following: (i) the BCRA modified the terms for the settlement of credit card payments by shops; (ii) the requirements for online pre-approved credit were amended to exempt banks from certain requirements to grant the credit if the identity of the debtor was verified through biometric solutions with proof of life or upon cancellation by the bank of the approved credit and the assumption of the refund of the sums involved in a complaint filed by a client; (iii) the BCRA established new security measures to strengthen security regarding electronic payments and prohibiting wallets to link credit/debit cards other than those of the wallet holder; (iv) the Ministry of Commerce established mandatory minimum quality standards for remote care and communication services for suppliers of goods and services (with a six-month implementation period), including mandatory telephone assistance per person, online waiting times of no more than five minutes, guidelines for collection communications (free debt, mandatory data in letters, etc.), the prohibition of recordings to sell products or collect debts, the requirement to have trained personnel for personalized customer service, the establishment of deadlines for resolution of queries and complaints and the obligation to receive complaints from consumer associations from their official mail boxes, among others; (v) the Good Business Practices Guide on Gender and Diversity was adopted and the Consumer Protection Authority was requested to take all the necessary measures for its implementation, with suppliers of goods and services being invited to join; and (vi) the BCRA prohibited the financing in installments of purchases made by individuals and legal persons with credit cards of tickets abroad and other tourist services abroad (such as accommodation, car rental, etc.), whether carried out directly with the service provider or indirectly, through a travel agency and/or tourism, web platforms or other intermediaries.

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Exposure to multiple provincial and municipal legislation and regulations could adversely affect our business and results of operations.

Argentina has a federal system of government with 23 provinces and one autonomous city (Buenos Aires), each of which, under the Argentine national constitution, has full power to enact legislation concerning taxes and other matters. Likewise, within each province, municipal governments have broad powers to regulate such matters. Due to the fact that our branches are located in multiple provinces, we are also subject to multiple provincial and municipal legislation and regulations. Future developments in provincial and municipal legislation concerning taxes, provincial regulations or other matters could have a material adverse effect on our business, results of operations and financial condition.

The Consumer Protection Law and the Credit Card Law may limit some of the rights afforded to us.

The Consumer Protection Law establishes a number of rules and principles for the protection of consumers. Although the Consumer Protection Law does not contain specific provisions for its enforcement in relation to financial activities, it does contain general provisions that might be used as grounds to uphold such enforcement, as it has been previously interpreted in various legal precedents. Moreover, the new Argentine Civil and Commercial Code has captured the principles of the Consumer Protection Law and established their application to banking agreements.

The application of both the Consumer Protection Law and the Credit Card Law No. 25,065, as amended by Law No. 26,010 (the “Credit Card Law”) by administrative authorities and courts at the federal, provincial and municipal levels has increased. Moreover, administrative and judicial authorities have issued various rules and regulations aimed at strengthening consumer protection. In this context, the Central Bank issued Communication “A” 5460, as supplemented and amended, granting broad protection to financial services customers, limiting fees and charges that financial institutions may validly collect from their clients. In addition, the Argentine Supreme Court of Justice issued the Acordada 32/2014, creating the Public Registry of Collective Proceedings for the purpose of registering collective proceedings (such as class actions) filed with national and federal courts. In the event that we are found to be liable for violations of any of the provisions of the Consumer Protection Law or the Credit Card Law, the potential penalties could limit some of our rights, such as reducing our ability to collect payments due from services and financing provided by us, or otherwise adversely affect our business, results of operations and financial condition.

On September 18, 2014, a new pre-judicial service of dispute resolution was created by Law No. 26,993, in order for consumers and providers to resolve any dispute within the course of 30 days, including fines for companies that do not attend the hearings.

Furthermore, the rules that govern the credit card business provide for variable caps on the interest rates that financial institutions may charge clients and the fees that they may charge merchants. Moreover, general legal provisions exist pursuant to which courts could decrease the interest rates and fees agreed upon by the parties on the grounds that they are excessively high. A change in applicable law or the existence of court decisions that lower the cap on interest rates and fees that clients and merchants may be charged would reduce our revenues and therefore negatively affect our results of operations.

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2022 we were notified by the BCRA of the opening of several criminal proceedings against the Bank and certain of its directors and employees related to exchange operations carried out in alleged breach of the provisions of point 9 of Communication “A” 6770 BCRA (in relation to tickets associated with operations carried out between residents and the advanced payment of imports). The Central Bank proceeded to accumulate the different files and treat them as a single case. Depositions have been filed by the Bank and all accused directors and employees. Our actual or alleged misconduct in any number of activities or circumstances, including operations, employment-related offenses such as sexual harassment and discrimination, regulatory compliance, the use and protection of data and systems, and the satisfaction of client expectations, and actions taken by regulators or others in response to such misconduct, could lead to, among other things, sanctions, fines and reputational damage, any of which could have a material adverse effect on our business, financial condition and results of operations.

Furthermore, we may not be able to prevent third parties from using our banking network in order to launder money or carry out illegal or inappropriate activities. Further, financial crimes continually evolve and emerging technologies, such as cryptocurrencies and blockchain, could limit our ability to track the movement of funds. Additionally, in adverse economic conditions, it is possible that financial crime attempts will increase significantly.

If there is a breach of the applicable regulations or of our ethics and compliance regulations or if the competent authorities consider that we do not perform the necessary due diligence inherent to our activities, such authorities could impose limitations on our activities, revoke our authorizations and licenses, or impose economic penalties, all of which could have a significant adverse impact on our business, financial condition and results of operations. Furthermore, we from time to time conduct investigations related to alleged violations of such regulations and of our ethics and compliance regulations, and any such investigation or any related proceeding could be time consuming and costly, and its results difficult to predict.

Further, the Covid-19 pandemic led to new specific regulations largely focused on consumer protection being adopted in many countries, including Argentina, mainly in 2020. The need to timely adapt the Group’s processes and systems to these new regulations under the then prevailing circumstances posed a compliance risk. Likewise, the increase in remote account opening driven in part by the pandemic has resulted in increased money laundering risks. Additionally, criminals have sought to exploit the opportunities created by the pandemic across the globe, which has resulted in increased money laundering risks associated with counterfeiting of medical goods, investment fraud, cyber-crime scams and exploitation of economic stimulus measures put in place by governments. Increased strain on our communications surveillance frameworks could raise our market conduct risk.

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The special rules that govern the priority of different stakeholders of financial institutions in Argentina, which give priority to depositors with respect to most other creditors, may negatively affect other stakeholders in case of judicial liquidation or bankruptcy of the Bank.

Argentine Law No. 24,485, in force since April 18, 1995 and as amended by Law No. 25,089, provides that in case of judicial liquidation or bankruptcy of a financial institution such as BBVA Argentina, all depositors, irrespective of the type, amount or currency of their deposits, will have general and absolute preferential rights with respect to all other creditors, except for certain labor credits and credits secured with a pledge or mortgage, to be paid with 100% of the funds deriving from the liquidation of our assets. In addition, depositors of any kind of deposits have special preferential rights over the remaining creditors of us, except for certain labor credits, to be paid with (i) any of our funds which may be held by the Central Bank as total reserves, (ii) any remaining funds of ours in existence as of the date on which our license is revoked, or (iii) any funds derived from the compulsory transfer of certain of our assets according to instructions of the Central Bank, in the following order of priority: (a) deposits made by legal entities up to Ps.5,000 per entity, or its equivalent in foreign currency, (b) deposits for terms exceeding 90 days and (c) all other deposits on a pro rata basis.

In case of a judicial liquidation or bankruptcy of a financial institution such as BBVA Argentina, shareholders may not be able to partially or completely recover their investment due to the priority imposed by law.

ITEM 4.

Recent Political and Economic Developments in Argentina

In 2019, GDP fell 2.2% while inflation reached 53.8% and the peso depreciated 54.8%.

During the first quarter of 2020, the Fernandez administration started to negotiate with private creditors to restructure the scheduled maturities of public debt. However, on March 19, 2020, the government declared a lockdown in order to prevent the spread of the Covid-19 pandemic and work on strengthening the health system, all of which had a significant impact on the ongoing debt negotiations and economic activity. The measures adopted by the government led to the slowdown or suspension of most non-essential activities carried out by individuals, which had a significant impact on the economy at the national, regional and global levels, due to the disruption or slowdown of supply chains, coupled with rising economic uncertainty, as evidenced by the increased volatility in asset prices and exchange rates, and a decline in long-term interest rates.

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exchange rate, or partially access the parallel exchange rate, which is always higher than the official exchange rate. This task became especially difficult in the context of the severe drought suffered in recent years which adversely affected the agricultural sector, resulting in an estimated reduction in dollar inflows of approximately US$20 billion; (ii) the containment and reduction of inflation, by implementing a variety of measures, such as price controls (through agreements and sanctions) and raising the monetary policy rate (which was generally not positive in real terms, although it was close to the inflation rate); and (iii) the containment of the gap between the parallel and official exchange rates, for which the government intervened with its own assets to accommodate prices and prevent the gap from widening. Another objective, less relevant for the government than the previous ones, was to moderate the deviations with respect to the targets set forth in the EFF. In order to assist the Treasury achieved its issuance target, the government continued to resort to the methodology already applied by Martín Guzmán, whereby the Central Bank participated in the secondary debt market of the Treasury, so that the latter could take a greater volume of debt to finance spending; for the fiscal target, Minister Massa undertook a partial price adjustment of utility tariffs, although this was set aside in the context of the Presidential elections. The reserve accumulation target was reduced as a result of the difficulties posed by the severe drought suffered in 2023. Although expectations were not reached, the government chose Minister Massa as its candidate for President.

Primary elections took place on August 13, 2023. Javier Milei, candidate for La Libertad Avanza (LLA), was the most voted in the primary presidential elections with 30.0% of the total votes. The second most voted political party was Juntos por el Cambio, whose candidates achieved 28.3% of the votes, followed by the candidates of Unión por la Patria (Massa’s party) who achieved 27.3% of the votes. These results surprised not only because of the parity between the main parties, but also because of the unexpected victory of Milei. The day after the elections, the government validated a 22% increase in the exchange rate and a 22 percentage points increase in the monetary policy rate. This devaluation jump was not accompanied by a stabilization plan, so the benefits of depreciating the real exchange rate were almost non-existent and monthly inflation accelerated to 12.4% and 12.7% in August 2023 and September 2023, respectively, the highest values (at that time) in more than 30 years.

After the primary elections, Minister Massa took a series of measures to improve the population’s income in the short term, including one-time bonuses and tax cuts. We estimate the fiscal impact of these measures at 1% of GDP. In the general elections, Sergio Massa obtained 36.7% of the votes, followed by Javier Milei who obtained 30.0% of the votes and Patricia Bullrich, a member of Mauricio Macri’s party, who obtained 23.8% of the votes. The new Congress is fragmented, which will force the new President to negotiate the approval of laws.

On November 19, 2023, Javier Milei was elected President of Argentina with 55.7% of the votes, beating Sergio Massa by more than 11 points. Milei took office on December 10, 2023, and has, since then, depreciated the exchange rate by an initial 118% depreciation followed by a 2% monthly crawling peg and eased the monetary policy rate from 133% per year to 100% per year in order to improve the Central Bank’s balance sheet and withdraw price controls. Additionally, the President has also proposed a package of laws that aim to deregulate the economy in a series of aspects, from foreign trade to apartment rentals. Most of these measures do not directly affect the Bank, but as more restrictions are being lifted, the financial market could become more competitive. The Central Bank lowered once again the monetary policy rate from 100% to 70%.

Economic Data

In 2023, GDP fell 1.7% primarily due to (i) the severe drought suffered in recent years which adversely affected the agricultural sector, resulting in an estimated reduction in dollar inflows of approximately US$20 billion and in more stringent controls on imports in order to avoid the further depreciation of the Argentine peso, (ii) the inflationary acceleration, with annual inflation increasing from 94.8% in 2022 to 211.4% in 2023, adversely affecting investment and reducing disposable income, (iii) political uncertainty and (iv) the depreciation of the exchange rate, which resulted in a decrease in consumption which could have a direct impact in employment. Unemployment slightly increased, from 6.3% in 2022 to 6.4% in 2023. In 2022, GDP grew 5.2%. The normalization of economic activity after the Covid-19 pandemic was the main driver for this growth.

The unemployment rate decreased again in 2022 and stood at 6.3% at December 31, 2022 compared to 8.7%7.0% at December 31, 2021. However, the quality of employment did not improve, with a higher incidence of underemployment and workers working in the informal economy. The average job informality (measured as the self- employedself-employed plus the employees with no social security over the total employees) rose from 45.4% in 2020 to 47.1% and 49.7% in 2021 and 2022, respectively, according to INDEC.

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In 2021, economic activity showed a strong rebound from the decline in 2020. The reopening of almost all activities, coupled with government policies to boost demand led to a GDP growth of 10.3%10.7%.

Employment and unemployment also improved compared to 2020. In 2021, employment (including formal and informal) averaged 42.4% compared to 38.3% in 2020 and unemployment averaged 8.7% compared to 11.4% in 2020.

In 2020, economic activity was significantly affected by the Covid-19 pandemic. GDP fell 9.9% in 2020 compared to 2019, despite showing a positive trajectory in the second half of the year.

The average unemployment rate rose from 8.9 % in the last quarter of 2019 (9.8% annual average in 2019) to an average of 11.0% in the last quarter of 2020. The average employment rate fell from 43.0% in the fourth quarter of 2019 to an average of 40.1% in the fourth quarter of 2020, and the economically active population fell from an average of 47.2% in the last quarter of 2019 to an average of 45.0% in the fourth quarter of 2020.

In 2022,2023, inflation reached 94.8%211.4%, its highest value since 1991. The increase in prices that followed both the August and December exchange rate increases partially led to the inflationary acceleration in 2023 compared to 2022. Core inflation was 229.4% while regulated prices grew 164.9%.

In 2022, inflation reached 94.8%. The increase in prices that followed Minister Martin Guzman sudden departure together with the adjustments in the regulated prices partly explain the inflationary acceleration in 2022 compared to 2021. Core inflation was 90.6% while regulated prices grew 85.7%.

In 2021, inflation was 50.9%. The economic activity rebound and the increase of global commodity prices, together with the monetary pressures caused by high fiscal needs, increased inflation towards the high levels experienced in 2019 and 2018. During this period, core inflation, which shows the strength of the inflationary process, was 54.9%.

Inflation showed a substantial decrease in 2020 compared to 2019, reaching 36.1%, primarily as a result of the negative effects of the Covid-19 pandemic on activity levels, the freezing of public utility prices and the Central Bank’s willingness to avoid a sharper exchange rate depreciation.

The performance of CPI components was very uneven in 2020, with seasonal prices (prices that depend on whether it is high or low season) increasing 64.4%, while regulated prices (prices controlled by the government, usually public utility rates) only grew 14.8%. Core inflation was 39.4% in 2020.

The government failed to meet the primary fiscal deficit target of up to 1.9% of GDP agreed with the IMF. In 2023, the primary deficit amounted to 2.70% of GDP. Although the government gradually decreased spending at the beginning of the year, primarily with respect to utility tariffs, spending increased significantly during the presidential campaign, resulting in a deficit that exceeded the IMF target. Since Milei took office, certain measures have been taken, including the partial lifting of subsidies on utility rates, the reduction of public employment, the suspension of the pension actualization formula and public works, and others measures which are pending legislative approval, all of which are aimed to reach a 2% of GDP primary fiscal surplus by the end of 2024. The Government met the fiscal target with the IMF in 2022, accumulating a primary fiscal deficit of 2.4% of GDP (with a target of 2.5%). Compliance was largely due to the deceleration of spending in the second half of the year as a result of the adjustment of subsidies to utility tariffs, and to higher tax revenues derived from increased economic activity and the higher than expected liquidation of soybean dollars. The public sector recorded a primary fiscal deficit of Ps. 1.95Ps.1.95 trillion in 2022.

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TradeAfter five years of surplus, in 2023 Argentina presented a US$6.9 billion trade deficit primarily due to the severe drought suffered in recent years, which adversely affected the agricultural sector. Exports amounted to US$66,787 million while imports amounted to US$73,715 million.

In the foreign exchange market, the peso depreciated by 356.4% in 2023, reaching 808.5 Ps/US$ on December 31, 2023.

International reserves were US$23.0 billion as of December 31, 2023, a US$21.5 billion decrease compared to the balance as of December 31, 2022, mainly due to the negative effect of the severe drought which adversely affected the agricultural sector, resulting in an estimated reduction in dollar inflows of approximately US$20 billion.

The trade surplus decreased in 2022 due to higher energy prices, one of Argentina’s main imports. As a result, the trade balance amounted to US$6,923 million, a 53% decrease compared to 2021. Exports amounted to US$88,445 million while imports amounted to US$81,522 million.

In the foreign exchange market, the peso depreciatedPs/US$ parity grew by 42.6%72.4% in 2022, reaching 177.1 Ps/US$ on December 31, 2022.

International reserves were US$44.6 billion as of December 31, 2022, a US$4,94.9 billion increase compared to the balance as of December 31, 2021, mainly due to the application of a differential exchange rate to soybean exports.

TradeThe trade surplus reached US$14,750 million in 2021, increasing from a US$12,530 trade surplus in 2020, mainly driven by a major rise in commodity prices. Exports amounted to US$77,935 million in 2021, a 42.0% rise compared to 2020, while imports amounted to US$63,185 million in 2021, a 49.2% rise compared to 2020.

In the foreign exchange market, the peso depreciatedPs/US$ parity grew by 22.1% in 2021, reaching 102.8 Ps/US$ on December 31, 2021.

International reserves were US$39.7 billion as of December 31, 2021, a US$5,2 billion decrease compared to the balance as of December 31, 2020, mainly due to interventions in the exchange rate spot market to mitigate the depreciation of the peso.

Trade surplus reached US$12,530 million in 2020, down from a trade surplus of US$15,990 million in 2019, mainly driven by a steeper decline in exports than imports during the year. Exports amounted to US$54,884 million in 2020, a 15.7% decline compared to 2019, while imports amounted to US$42,354 million, a 13.8% decline compared to 2019, partially offsetting the fall in exports.

In the foreign exchange market, the peso depreciated by 28% in 2020, reaching 82.63 Ps/US$ on December 31, 2020. The depreciation of the peso was in line with inflation. However, the parallel exchange rates were very volatile, and particularly sensitive to money issuances. The Central Bank managed to contain the gap between the official and alternative exchange rates until August 2020, when the official exchange rate started to increase, reaching its peak in October at 130%.

International reserves were US$39.41 billion as of December 31, 2020, a US$5,438 million decrease compared to the balance as of December 31, 2019, mainly due to interventions in the exchange rate spot market to mitigate the depreciation of the peso.

Monetary Policy

President Fernandez took office on December 10, 2019. A week later, the government sent the “Social Solidarity and Productive Reactivation Law” to Congress, which was passed on December 23 (Law Nº 27,541). Among other measures, the government increased export taxes and levied a 30% tax on foreign exchange purchases for tourism, expenditures abroad, or without specific application. Previously, the Central Bank had established a maximum limit of US$200 for the purchase of foreign currency per calendar month across all entities authorized to trade in foreign exchange, as well as for purposes of formation of foreign assets, family assistance remittances, and transactions with derivatives.

The first quarter of 2020 was significantly affected by a soft monetary policy, which was reflected in the Leliq rate, which decreased from 55% as of January 1, 2020 to 38% as of March 31, 2020. The Central Bank purchased US$659 million of international reserves in the foreign exchange spot market, while the monetary base increased by 15%.

However, the Covid-19 pandemic impacted an already damaged economy. The Central Bank had to finance the Treasury expenditures by issuing pesos due to the difficulty of accessing the debt market, given the ongoing debt restructuring negotiation. During the second quarter of 2020, the Central Bank issued approximately 50% of the December 2019 monetary base.

Once the lockdown was softened during the third quarter of 2020, the Central Bank started to partially absorb those previously issued pesos, in order to avoid an inflationary acceleration. As a result, the Central Bank’s interest-bearing liabilities grew more than 90% nominally during 2020.

International reserves started to fall in April and May 2020 and, on May 28, 2020, the Central Bank released Communication “A” 7030, which limited the amount of dollars allowed to be bought by private importers, negatively affecting activity levels.

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Financial System

All comparisons of the financial system contained in this annual report on Form 20-F are presented in nominal terms. All the variations in the following paragraphs (until —History and Development of the Company) are expressed as December average of the current year versus December average of the previous year.

Sight deposits grew 64.7% during 2020 while term deposits grew just 46.7% with strong growth of the term deposits indexed by the benchmark stabilization coefficient/purchasing power unit (CER/UVA), which grew 200.7% during 2020, in comparison with a 43.8% growth for traditional terms deposits.

Dollar-denominated deposits decreased 13.7% in 2020, after a 32.9% decline in 2019.

The loans growth performance in 2020, both for individuals and companies, was positive, growing 21.98%, given the lower interest rates and the market need for credit due to the lockdown.

The Central Bank reduced the Leliq interest rate in the first quarter of 2020, from 55% to 38%, seeking to increase economic activity levels. In October 16, 2020, the Central Bank started to use the REPO rate to absorb the issued money.

The Badlar interest rate (interest on deposits in excess of Ps.1 million) of private banks, stated in monthly averages, was 35.3% in January 2020, declining to 20% in April and raising to 33.4% in December 2020 in order to partially control the monetary overhang.

Sight deposits grew 61.7%58.4% during 2021 while term deposits grew 55.9% with strong growth of the term deposits indexed by the benchmark stabilization coefficient/purchasing power unit (CER/UVA), which grew 189.0% during 2021, in comparison with a 52.5% growth for traditional terms deposits.58.7%.

Dollar-denominatedPrivate sector dollar-denominated deposits increased only 1.1%1.0% in 2021.

The loans growth performance in 2021, both for individuals and companies, was positive, growing 49.4%40.6%, given the lower interest rates and the market need for credit due to the lockdown.

Private sector deposits grew 91.7%96.4% in 2022 compared to 2021. This was mainly explained by a 124.1%110.3% increase in term deposits and a 76.2%74.0% increase in sight deposits with term deposits increasing more than sight deposits primarily due to the inflationary acceleration in 2022, with inflation increasing from 50.9% in 2021 to 94.8% in 2022. Dollar denominatedPrivate sector dollar-denominated deposits fellgrew by 4.7%2.8% in 2022 compared to 2021. Finally, loans for individuals and companies grew 65.2%64.9%, with those denominated in Peso growing 66.2%67.2% and those denominated in USDUS$ decreasing 11.4%15.4%.

Private sector deposits grew 116.4% in 2023 compared to 2022. This was mainly explained by a 74.4% increase in term deposits and a 167.3% increase in sight deposits. The higher increase in sight deposits compared to term deposits was primarily due to inflationary acceleration in 2023 coupled with the negative interest rates (compared to inflation), especially in December, and the uncertainty about the Presidential elections that resulted in a shift from sight deposits to more liquid options that would potentially allow holders to buy US dollars in the parallel market. Dollar-denominated deposits fell by 7.4% in 2023 compared to 2022. Finally, loans for individuals and companies denominated in Peso grew 130.2% and those denominated in US$ decrease 0.3%.

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On March 26, 2019 Mr. Jorge Bledel presented, and the Board of Directors accepted, his resignation as member of the Board. The shareholders’ meeting held on April 24, 2019 elected Mrs. María Isabel Goiri Lartitegui to succeed Mr. Jorge Bledel, and she became the new chairwoman of the Board. Through Resolution No. 161 dated July 25, 2019, the BCRA declined to comment on the appointment of Ms. Goiri Lartitegui as chairwoman of the Board.

On March 27 and April 16, 2020, the Board of Directors of BBVA Argentina approved the Bank’s participation in the “Play Sistémico” project, the purpose of which is to develop a payment solution for customers, led by the four main private banks in the market, including us, Banco Macro S.A., Banco Santander Río S.A. and Banco de Galicia y Buenos Aires S.A.U. In accordance with the business plan presented to the Board of Directors, on May 26, 2020, “Play Digital S.A.” was incorporated, a company in which the Bank owns a 10.762%11.057% shareholding interest as of the date of this annual report on Form 20-F. Play Digital S.A. was registered before the IGJ on June 9, 2020, under No. 5995, Book 99 of Corporations.

On May 11, 2021, the Board of Directors of BBVA Argentina approved the Bank’s participation (with a 12.5%12.51% stake) in the constitution of a new company called “Openpay Argentina SA”, with the majority shareholder being BBV América S.L., (with a 87.49% stake). The purpose of this new company is to act as a payment service provider, in accordance with the BCRA’s mandated text on Complementary Services for Financial Activity. Openpay Argentina S.A. was registered before the IGJ on May 9, 2021, under No. 7809, Book 103 of Corporations.

On March 29, 2022, Mrs. Goiri Lartitegui presented, and the Board of Directors accepted, her resignation as member of the Board. The shareholders’ meeting held on April 29, 2022 elected Mr. de Cristóbal de Nicolás to succeed Mrs. Goiri Lartitegui and become the new chairman of the Board. Through Resolution No. 355 dated September 15, 2022, the BCRA did not comment on the appointment of Mr. de Cristóbal de Nicolás as chairman of the Board.

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BBVA Argentina is the third largest privately-owned bank, and fifth largest bank in Argentina in terms of private loans (as of November 2022,2023, on a consolidated basis, as per Central Bank last quarterly available information). As of December 31, 2022,2023, the Bank had 8.2%9.1% of total banking system private loans on an unconsolidated basis, and 9.1%9.9% on a consolidated basis. Market share as of December 31, 20222023 for retail loans (including consumer, mortgage, credit card and pledge loans) was 8.6%9.2% on an unconsolidated basis and 9.5%9.9% on a consolidated basis. Market share for commercial loans (including discounted instruments, overdrafts, financial leases, financing and prefinancing of exports and other loans) as of December 31, 20222023 was 7.6%9.0% on an unconsolidated basis and 8.6%9.9% on a consolidated basis. BBVA Argentina is the third largest local private bank, and fifth largest bank in Argentina in terms of private deposits (as of November 2022,2023, on a consolidated basis, as per Central Bank last quarterly available information). As of December 31, 2022,2023, the Bank had a 6.6%6.8% market share of total banking system private deposits.

As presented in this annual report on Form 20-F, market share data is based on data published by the Central Bank which has not been inflation adjusted. As such, certain information presented in this annual report as adjusted for inflation may not be directly comparable to information published by the Central Bank.

Through its universal banking platform, the Bank provides a broad range of financial and non-financial services both to individuals and companies throughout Argentina, across all segments of the population, including retail and commercial banking, insurance, asset management, securities brokerage, and investment banking products and services. BBVA Argentina believes the wide range of financial solutions offered to its customers, complemented by unique strategic alliances and partners, as well as the capacity to leverage the BBVA Group’s global expertise, relationships and technological platform, gives it a significant competitive edge compared to other Argentine companies in the financial sector. Such competitive advantages place it in a privileged position to capture opportunities and capitalize on the potential consolidation of a fragmented banking sector.

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BBVA Argentina offers its products and services through a wide multiple-channel distribution network with presence in all the Argentine provinces and in the City of Buenos Aires, servicing 3.74.1 million active clients as of December 31, 2022.2023. This network includes 243 branches (47%(46% owned and 53%54% rented or leased), which provide services to the retail business line and to SMEs, corporations and institutions. Complementing the distribution network, as of December 31, 2022,2023, there were 15 in-company branches, seven points of sales (contact points that only offer automated services and sales support, but have no approval by the BCRA to operate as a branch), two points of express support (branches without in-person customer service), 881895 ATMs and 854861 self-service terminals (“SSTs”, terminals that allow transactions without the need of a personal code or ID number). As of December 31, 2021,2022, the Bank had 243 branches (46%(47% owned and 54%53% rented or leased), 15 in-company branches, seven points of sales, two points of express support, 884881 ATMs and 854 SSTs. As of December, 2023, 20 of the branches, plus the BBVA Tower, had the ISO 50001 international standard, which specifies the requirements for maintaining and improving an energy management system. In addition, 178 branches plus central offices comply with the ISO 14001 international standard, which is aimed at environmental management within the organization.

The Bank (including its subsidiaries) had a total of 5,8886,009 employees (total active employees including permanent and temporary employees and excluding expatriates) as of December 31, 2023, of which 2,214 were working in the branch network and 3,795 in central offices. This compares to 5,888 employees as of December 31, 2022, of which 1,877 were working in the branch network and 4,011 in central offices. This compares to 5,863 employees as of December 31, 2021, of which 2,000 were working in the branch network and 3,863 were working in central offices.

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BBVA Argentina provides an electronic banking service, a modern, secure and functional internet banking platform (bbva.com.ar) and mobile banking apps such as the BBVA App. Within the digital payments offering, the Bank has also implemented NFC technology for its clients’ use. The BBVA App has been implemented in selected countries within the BBVA Group (Peru, Uruguay, Mexico, Argentina, Spain and Colombia) with successful results. The app is developed collaboratively among the countries in which it has been implemented providing the BBVA Group with global synergies in the development of new features and the response to market.

In 2022,2023, we improved some of our app’s features, including being able to see credit cards’ security codes through a double security factor process, improving security. Additionally, clients can now link accounts from other financial institutions to their BBVA Argentina’s account, and execute wire transfers between them (incoming transfers only). The app also has a MODO landing section where QR payments can be made, along with wire transfers from and to the most relevantdigital wallet. Another improvement has been the development of a functionality that enables clients to simulate and request life insurance from the home banking platform.

These features that have been released include: online recoveryaim to improve user experience, increase our net promoting score, and improve accessibility while aiming to increase security and efficiency, reducing system response time.

As of passwordsDecember 31, 2023, the average rating for the app both in Apple Store and security factors (withoutGoogle Play Store was 4.8 compared to 4.5 as of December 2022. Within banking apps ratings, BBVA Argentina’s app remained the needhighest ranked in Google Play Store and the second in Apple Store. Users of resortingthe app increased 18% compared to a physical branch or ATM), “Remember me” login and discreet mode functionalities, among others.December 2022.

At the end of 2020, we, together with other Argentine banks, launched MODO (Play Digital S.A.) (“MODO”), a payment solutions app launched together with other Argentine banks at the end of 2020,that is now part of theour digital offering the Bank has for its clients. This payment platform allowsand enables wire transfers and cashless payments through mobile phones allowing users to access their banks’ available promotions. As of December 31, 2022,2023, BBVA Argentina held an 8.92%8.20% market share of active users (active users of MODO that have made a transaction, payment or transfer, in the previous 30 days). MODO complies with the Central Bank’s interoperable QR regulation, enabling replacement of debit cards.

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S.A., through its brand SODIMAC, a leader in home improvement stores. Within the entertainment industry, we have strategic partnerships with Cinemark Argentina S.R.L., Hoyts General Cinema de Arg S.A, MOVE Concerts Argentina S.A., Medios y Contenidos Producciones S.A, and En Vivo Producciones S.A. Additionally, we have alliances with Club Atlético River Plate Asociación Civil and Club Atlético Boca Juniors Asociación Civil, Argentine soccer clubs.

Within the automotive finance industry, our subsidiaries include PSA Finance Argentina Compañía Financiera S.A. and Volkswagen Financial Services Compañía Financiera S.A. We also hold a joint venture relationship with Rombo Compañía Financiera S.A.

All of these relationships have allowed the Bank to increase its client reach cost-effectively, and further expand its business and points of presence while enhancing its value proposition.

Business Strategy and Model

In 2022 there was significantThe global geopolitical and economic scenario remains highly uncertain. The ongoing war between Russia and Ukraine, the Palestinian-Israeli conflict, and the increasing political polarization are restraining economic growth and heightening risk aversion.

Additionally, tightening monetary policies seeking to contain inflation have resulted in a slowdown of economic activity, reduced demand for credit and increased risk indicators.

The prevailing short-term uncertainty worldwide as a resulthas not halted in any way the consolidation of a growing geopolitical risk, the invasion of Ukraine, rising inflation, and interest rate hikes, all of which adversely affected the growth expected after the emergence from the Covid-19 pandemic. However, against this backdrop, thelong-term global trends on which the Bank’sBBVA Argentina’s strategy is based, proved to haveand which play a critical role in transforming the economy—digitization, innovation and decarbonization, from the perspective of both decarbonization and inclusive growth:

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BBVA Argentina’s values and associated behaviors are embedded in the key models and levers that drive the BBVA Group’s transformation, as well as in global people management processes, from the selection of new employees and role assignment processes, evaluation, people development, and training to incentives linked to the accomplishment of annual goals.

These values, together with our purpose and strategic priorities, guide decision-making at all the opportunities of this new era available for all”. Through innovationlevels and technology, the Bank seeks to have a positive impact on people’s lives and on companies’ businesses, providing access to products, advice and solutions that help customers make better finance decisions and achieve their life and business goals.are embedded in our culture.

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BBVA Argentina’s purpose is closely tied to making a positive impact on its clients’ lives. Therefore, for many years now, the Bank seeksaims to become a trusted financial partnerdevelop features, experiences, and tools to itssupport clients to help them improvein their financial health, by meansday-to-day lives through the use of tailor-made advice, based on technology andnew technologies, responsible use of data.

Money management is a major concern for many peopledata, and the strong expertise of its team.

The Bank wantsaims for clients to help its clients improve their financial health from two perspectives:

While climateTo BBVA Argentina, sustainability means “helping our clients transition towards a sustainable future” by promoting environmental protection, economic growth, and social development. The Bank contributes to several SDGs through business development trying to generate a positive impact in society.

Climate change is a challenge that requires immediate action, it also poses a significant business opportunitycalls for the financial sector. The decarbonization of the economy, will have an impact on industrial facilities, people’s mobilitywhich impacts all industries and consumption patterns, as well as on home equipment,the way customers move, spend, or equip their homes, requiring people to make significant investments that will spanextend over the coming decades.

Additionally, climate change and human action are straining natural capital (water, crops, raw materials, etc.), making it increasingly relevant for several decades.clients to ensure the continuous availability and quality of essential resources for production and service provision.

Lastly, significant inequalities still exist in the world, which may be exacerbated by the effects of the economic transformation resulting from decarbonization efforts or the destruction of natural capital. We believe that we can help to foster inclusive growth by providing financial education.

The development of inclusive growth also poses an opportunity for the Bank. The current environment, characterized by intensive digitization and use of data, facilitates the delivery of an efficient service,Bank’s sustainability strategy has a roadmap with two clear goals:

The progress towards these intermediate decarbonization targets is monitored using alignment methodologies that help understand how financial flows contribute to emission reduction. These metrics are compared to climate change scenarios to design sectoral alignment plans. These plans help define the Bank to have access to newcommercial strategy with clients, guide selective growth based on risk considerations and business opportunities, that benefit inclusive economic development, disadvantaged sectors and inclusive infrastructures, as well as to provide general banking access, leveraged by digital channels and new relationship models.evaluate clients’ own transition plans.

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Scale is becoming essentialBBVA Argentina endeavors to the banking business. The Bank seeks to accelerate profitable growth, supportedgrow by positioning itself where its clients are, both through its own channels wherever its clients are.

Inand through partnerships and agreements with third parties. All of this sense,is done without losing focus on profitable growth, investing in the most relevant product verticals and value segments. Additionally, the Bank has identified certain key profitablecontinues to advance its growth drivers, including payment activities, insurance, asset management and companies’ cross-border businesses, as well as the valuable SMEs and private banking portfolios.

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As an organization, the growth and education of its employees, ensuring that theygoal is to have the skills, knowledgebest and experience required to achievemost committed team. The Bank’s people management strategy is based on three key pillars:

During 2023, BBVA Argentina continued working on strategic goals efficiently and effectively. The Bank also strivestraining on sustainability to ensure that its employees live up to its valueshave the necessary skills and behaviors. The Bank believes that people wish to belong to companies inspired by a purpose, with an attractive culture and values that foster diversity, inclusion, equality, social impact, and appreciationknowledge for the work done.proper execution of its strategy.

Data and technology are clear strategy accelerators. The Bank’s commitment toInvesting in the development of advanced analyticsdata analytical capabilities, togethersuch as artificial intelligence, along with secure and reliable technologies, allows it to create distinctivetechnology, enables the creation of differential solutions that help creategain competitive advantages.

The responsible use of data and new technologies also helps inenables the implementationgeneration of increasingly global and easily scalable processes that can be usedapplied across different geographies, reducing unit processing costs.

Data and Artificial Intelligence

BBVA Argentina is a data-driven company where data quality and advanced integration, along with Artificial Intelligence, are key accelerators to achieve the differential positive impact on customers’ lives encapsulated in several geographies and that are easily scalable, reducing the processing unit cost.Bank’s purpose.

The Bank continuesBBVA Group has a team of 5,400 data scientists, specialists, and engineers dedicated to make progress in developing an increasingly robust security and privacy model (cybersecurity, business processes, fraud andthis differential value proposition.

The Bank’s data security).

Goals

By executing this strategy the Bank pursuesis based on the following goals:pillars:

Technology

Technology is a key element to enable the transformation strategy. The goal is to create differential solutions for clients while executing operations as efficiently and securely as possible, using the most advanced technological capabilities available.

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The Bank’s strategy is basedDuring 2023, investment and work on three pillars:

The Bank seeksoperating facility with high-availability levels to be a “data-driven” bank and deliver quality, reliable and secure solutions, at lower costs.ensure business continuity upon potential unavailability events.

Business and activities

BBVA Argentina seeks to offer its customers a service of excellence in line with their needs. To such end, it strives to enhance its products and services, leveraging technological innovation, ongoing process improvement, customized service, and exclusive benefits.

Business Lines

Below is an overview of each of our principal business lines and their evolution during 2022.2023.

Retail Banking

BBVA Argentina offers a broad rangeOur retail banking business line comprises our retail business, including consumer, mortgage, payments, and consumer finance operations, and our “individuals” segment, including management liability products, loans, payments, consumer finance and insurance, all of which are an integral part of our individual clients strategy.

Through our retail banking business line we seek to make the opportunities of this new era accessible to everyone through the digital evolution of our products and serviceschannels. This has enabled us to deliver simple and secure solutions that aim to complement our value proposition with increased benefits for our clients, driving actions aimed at expanding the digital client base in Argentina.

Aligned with our strategic priorities, the retail banking business line has focused its efforts on transforming the business by analyzing the needs of individual clients to provide an improved customer experience and comprehensive service while promoting digital products and sales. We believe that strengthening long-term relationships is a priority to us, with a significant focus on payroll clients who provide transactional activity and become a strategic group for the growth of the Bank’s lending and borrowing positions, as well as the acquisition and retention of high-value clients.

With regards to payments, our priority is focused on innovation through the implementation of new solutions that drive digitization in client acquisition and service. In consumer finance, the priority has been on strengthening partnerships and on the innovation of our value proposition.

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With these priorities, the retail customers, from cash management accounts and financial investment optionsbanking business line has contributed value to insurance, among others, seeking to offerthe following three strategic priorities of the Bank:

As of December 31, 2022,2023, the Bank had 3.63.9 million retail customers.

Below is a description of our main products within our retail banking business line.

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Both the increase in new policies and the decrease in cancellations were achieved by optimizing sales primarilyfunnels in Online Banking and the HomeownersBBVA App. We also expanded our product offering to offer new health, bicycle and Car Insurance categories.skateboard insurance products.

During 2022,In order to boost the insurance business, some of the promotions offered by the Bank, consolidated its strategic alliance with the insurance company La Caja, which is our co-insurersuch as premium rebates, were maintained in the Homeowners category, with other categories expected to be added in the future. This alliance seeks to provide the Bank with know-how in insurance digital sales, and embrace other new technologies and products. Additionally, we expect this alliance to provide us with new tools that will enhance the service level and will reduce portfolio turnover ratios.2023.

The table below sets forth the number of policies sold by the Bank in 20222023 by category:category.

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During 2023, no new funds were registered and no registered funds were launched to market or liquidated. However, given the similarity of their portfolios, the Bank recently completed the merger of the FBA Calificado fund into the FBA Acciones Argentinas fund.

Payment Solutions

MODO is a banking wallet developed by Argentina’s major public and private banks. Through it, BBVA Argentina’s customers can make payments and transfer money easily and for free. No new application is required to use the wallet, since transactions can be completed from BBVA’s Go app, BBVA Mobile, and Online Banking.

MODO is a virtual payment solution that can be used to request or transfer money without a CBU (uniform banking key), alias, account number or CVU (uniform virtual key). The platform also allows the user to make payments from a mobile phone, without the need for using cards or cash, or charging a virtual wallet.

In 2022,As of December 31, 2023, MODO enabled ahad 584,992 BBVA Argentina’s clients enrolled and 258,845 active clients. During 2023, 358,072 individuals made payments using QR MODO and 107,596 users made money remittances.

The increase in new feature that allows to immediately credit refundsusers was driven by the commercial campaign efforts undertaken during the year, including by offering discounts in sectors valued by clients and cashbacks on promotions and make payments in more than 77 online stores. In addition, exclusive commercial actions were conducted to encourage usage and adherence, including benefits on coffee shops, restaurants, beauty salons and toy stores.the spot.

Debit and Credit Cards

During 2023, BBVA Argentina continued developing functionalities to enhance clients’ experience, streamline operations, empower payments, and increase security in transactions. In 2022,line with this, and building on our previous year’s developments, the Bank implemented Apple Pay to add VISA credit and debit cards and make contactless payments in a fast and secure manner. The Bank also enabledextended the “Pause” and “Enable” feature to MasterCard credit cards, automatically increasing spending limits for both credit and debit cards.

Regarding fraud prevention, the Bank launched notifications related to VISA credit card transactions for clients to be aware of every transaction made or rejected on their cards, while being able to check that the amount charged in a transaction is correct.

The Bank has been the first bank in enabling the online activation of VISA credit cards. Starting this year, clients can access their full VISA credit card details both on the BBVA App and through Online Banking, after completing a Token validation process for security purposes, thus avoiding the need to wait for the physical card to arrive.

Regarding account balances and debit card usage, the Bank introduced the new “Money In” feature, through which clients are able to transfer money to the Bank from another bank quickly and easily, without leaving BBVA Argentina’s Home Banking site, by linking the account the client has with the other financial institution. Additionally, we focused on improving the service payment experience, increasing payment limits, and running campaigns with awards, resulting in more clients channeling their payments through the Bank.

BBVA Argentina’s solutions linked to Apple and Google

The Bank continued offering Apple Pay to its clients. This system, created for Apple devices, enables easier and more secure contactless payments by loading VISA debit and credit cards an online banking and mobile app, respectively, to offer more security to its customers. By using this feature, users can deactivate their VISA debit and credit cards if they think they have been lost or stolen. On “pause” mode, any purchase is automatically rejected.

The Bank worked on biometric authentication login for its BBVA Go app to enhanceinto the user experience and facilitate the use of this tool, embracing facial recognition and digital footprint, among other design features.application.

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Additionally, in June 2023, BBVA Argentina deployed the Google wallet, through which its clients are able to store their VISA and MasterCard debit and credit cards, make contactless payments at merchants where these transactions are accepted, and make secure purchases on websites and apps.

Partners and Commercial Alliances

In 2023, the Bank continued strengthening its BBVA Points Reward Program. During the year, the Bank carried out the following actions on its BBVA Points Reward Program:actions:

BBVA Argentina’s bi-weekly creditThroughout 2023, the Bank maintained its two major commercial alliances with Frávega and debit card indicator report built upon big data was referred to as aSodimac, reaching approximately 43,600 new clients during the year and maintaining benefits for individuals on their first purchase. Despite the volatility in market benchmark and was added to the Bank’s internal scenario-building processes.

In 2022,rates, the Bank continued pursing alliances with strategic partners, such as those entered into with Fravega SACEI, a leader in the Argentine household appliances sector, and Falabella S.A., through its brand SODIMAC, a leader in home improvement stores, offering benefits to individuals upon their first purchase, and financing arrangements to buy motorcycles tofor customers of the Simpa and Iraola.

In 2022, the Bank improved the value proposition for merchants, offering bundle rebates subject to the maintenance of a certain level of credit card transaction deposits. In addition, the Bank developed a merchant acquisition income statement for monthly follow-up. In 2022, the Bank had 53,376 active merchant customers.

Additionally, the Bank launched the BBVA Points Program for merchantsGroup and the payment aggregator Openpay, enhancing the value proposition for small- and medium-sized merchants, in line with regional initiatives.Iraola Group.

Time Deposits

The Bank implements multiple commercial actions aimed at boosting time deposit sales. In 2022,During 2023, time deposit rates were regulated by the Central Bank. SalesIn spite of time deposits through digital means stood at 98%, whilethis, the Bank’s stock of retail time deposits rose by 130%,increased 65% from Ps.125,000 million in 2021 to Ps.310,000 million in 2022.2022 to Ps.476,000 million in 2023 at current (real) values. In addition, time deposits remained 99% digital.

Small and Medium-sized Companies (SMEs)

The Bank’s goals for 2022This business line manages corporate clients from both the public and private sectors. It comprises companies banking, SMEs foreign trade and transactional services.

It focuses its efforts on serving clients from strategic sectors of the industry, such as construction, infrastructure, and agriculture, strengthening risk policies tailored to each client’s profile.

Synergies with other areas of the Bank, along with the client approach model and specialized portfolio, help drive results.

This segment is focused on offering financial services to small and medium-sized enterprises, enhancing clients’ transactional activity with the support of a competitive offering in terms of collections and acquiring services. Commercial actions were achieved thanksdeveloped aimed at attracting clients or managing resources to pre-approved lending techniques that helped increase balances in sight accounts, saving products, and term deposits.

Businesses related to foreign trade are experiencing substantial growth, which positively impacts the Bank’s lending activity withinresults, driven by the SME business line.

The Bank offers productsavailable product portfolio, digitization, and services that allow its customersclient service. Areas, such as Business, Products, Commercial, Regulatory, Operations, Systems and businesses to grow, regardlessProcesses are parts of their size and industry. The Bank aims to advise customers and businesses on the financial options that are most suitable to their needs.

2022 HighlightsForeign Trade.

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Enterprise TourVarious strategies have been developed in this line of business to attract new clients and deepen relationships. These strategies were designed considering profitability and leveraging the product portfolio.

ForThe business strategy aims to achieve financial margin through attraction and financing products (such as loans, deposits, etc.) by generating interest or commissions in the fourth consecutive year, the Bank held this networking event where the current economic scenarioshort, medium, and long term.

Below is discussed with specialized analysts, focused on the relationship with its corporate customers. By sharing experiences with companies, the Bank seeks to identifya description of our main products within our SMEs banking business opportunities.

In 2022, the Enterprise Tour was an in-person event held in Mar del Plata, Mendoza, Rosario, Córdoba, Tucumán, Neuquén, the Autonomous City of Buenos Aires and Greater Buenos Aires.line:

SMEs and Entrepreneurs

BBVA Argentina believes that the SMEs and Entrepreneurs portfolio isentrepreneurs are key drivers to local economic growth. Accordingly,To support these segments, it offers a distinct in-person and online service, along with financial services primarily to private sector’s local companies and individuals engaged in business activities within this portfolio. The Bank seeks to expand its SMEs and Entrepeneurs customer base through a distinct service across the entire branch network and to provide support with customized products and transactional solutions.

This portfolio includes financing products, factoring, checking accounts, time deposits, transactional and payroll services, insurance and investment products. In 2022, this portfolio attained a significantly positive profit margin.

During the year, the portfolio’s value proposition was advertised in the media, social networks, Internetprivate sector.

BBVA Argentina introduced Openpay, a disruptive solution for SMEs, merchants and other events,professionals. Openpay is a fintech owned by the Group, with presence in Mexico, Peru, Colombia and Argentina, specializing in the Bank sought to capture more customers by incentivizing its executivesdevelopment of payment solutions for small and through specific actions undertaken together with the Bank’s analytics team.medium-sized enterprises and individuals engaged in commercial or professional activities.

As of December 31, 20222023 the Bank had 109,000 SME133,174 SMEs customers, out of which more than 47,00024,000 became customers in 2022.

Sustainable Products

In 2022, the Bank focused on detecting and encouraging transactions that have a sustainability element (renewable and alternative energies, energy efficiency, health, education and social infrastructure, mobility, agribusiness and circular economy). The Bank expects to continue to develop solutions for each of its banking businesses to expand its range of sustainable financial products.

Corporate Banking’s sustainable transactions grew as a result of the business area’s efforts, education and training received at the network, and an improved structure to detect potentially sustainable transactions.2023.

Foreign Trade

As of December 31, 2022,2023, the Bank had 5,2564,776 active foreign trade customers.

The Foreign Trade Digital Factory is a multidisciplinary and comprehensive foreign trade management business model comprising several areas, such as Business, Products, Commercial, Regulatory, Operations, Systems and Processes, which achieved positive resultscustomers compared to 5,256 in 2022. Amidst significant volatility

Foreign trade registered US$3,566 billion in foreign exchange regulations,import flows (46.4% less than the previous year) from 67,426 transactions, positioning the Bank managed to build a foreign trade decision-making structure, supported by end-to-end system developments, to offer solutions to operate in the foreign exchangeseventh place in terms of import flows market share (5.64%) and in second place in terms of operations market share (12.36%), according to both internalthe Central Bank and external customers. The Foreign Trade Digital Factory implemented 29 proprietary projectsUS$6,714 billion in export flows (37.6% less than the previous year) from 70,664 transactions, positioning the Bank in the sixth place in terms of export flows market share (9.03%) and participated in four Single Development Agenda initiatives.third place in terms of operations market share (12.47%), resulting in a gain from net commissions of US$20,360,918.

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Openpay allows us to offer different alternatives for merchants to embrace electronic paymentsinstalled in their day-to-day activities. The service is delivered through an app or web andoffices that allows for the user to viewreceipt of a sales control panel and additional information on activity. In addition, Openpay operates withdetail of the fraud prevention system OpenControl, which was certified under the information security standard ISO 27001.operations carried out.

Global Transaction Banking

This area provides front-office services to companies to allow them to manage working capital by means of financing instruments denominated both in pesos and dollars. It also provides products for cash management and transaction products through multiple channels: Transaction Platform, Electronic Bankingtransaction platform, electronic banking (BBVA Net Cash), Personal Attention, Direct Channels,personal attention, direct channels, SWIFT and Mobile Banking. mobile banking.

Global Transaction Banking is divided into Working Capital, Cash Management, Client Resources,working capital, cash management, client resources, trade finance and Trade Finance and Correspondent Banks. correspondent banks.

Global Transaction Banking has been focused on becoming a well-established leader in financing to clients both in pesos and dollars.

Global Markets

This area is responsible for providing services related to origination, structuring, distribution and risk management of market products.

Global Markets is divided into Foreign Exchange, Fixed Incomeforeign exchange, fixed income and Credit (Debt Capital Markets)credit (debt capital markets).

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Loans and advances and deposits by business lines

The following table sets forth the relative proportions of loans and advances (net of allowance for loan losses) and deposits attributable to our principal business lines during the last three years.