Exhibit 99.1
GRUPO FINANCIERO GALICIA S.A. REPORTS FINANCIAL RESULTS FOR
THE SECOND QUARTER OF THE 2020 FISCAL YEAR THAT ENDED ON JUNE 30, 2020
Buenos Aires, Argentina, August 25, 2020 – Grupo Financiero Galicia S.A. (BYMA /NASDAQ: GGAL) announced its financial results for the second quarter of the 2020 fiscal year (the “Quarter”), which ended on June 30, 2020.
Beginning with the fiscal year that started on January 1, 2020, Grupo Financiero Galicia S.A. (“GFG” or “Grupo Financiero Galicia”) has applied the restatement criteria established by IAS 29 “Financial Information in Hyperinflationary Economies”, and the expected credit loss model, in accordance with Communication “A” 6847 of the Argentine Central Bank, which includes item 5.5 “Impairment” of IFRS 9 “Financial Instruments”. For comparative purposes, the information corresponding to the 2019 fiscal year has been adjusted in accordance with the abovementioned standards and restated in constant currency, except as otherwise noted.
HIGHLIGHTS
Ø | Comprehensive income attributable to Grupo Financiero Galicia for the Quarter reached Ps.7,460 million, 25% lower than the Ps.9,970 million recorded in the same quarter of the 2019 fiscal year. Net income attributable to Grupo Financiero Galicia amounted to Ps.5,633 million, 43% below the Ps.9,924 million recorded in the second quarter of the prior fiscal year. Net profit per share for the Quarter amounted to Ps.3.95, as compared to the Ps.6.95 per share recorded for the same quarter of the 2019 fiscal year. |
Ø | The results of the Quarter were mainly attributable to the income derived from GFG’s interests in Banco de Galicia y Buenos Aires S.A.U. (“Banco Galicia” or the “Bank”), for Ps.4,833 million, Sudamericana Holding S.A. (“Sudamericana Holdings”), for Ps.364 million, Galicia Administradora de Fondos S.A. (“GAF”), for Ps.296 million, and in Tarjetas Regionales S.A. (“Tarjetas Regionales”), for Ps.18 million, and which were increased by a net operating income of Ps.78 million and partially offset by personnel and administrative expenses of Ps.65 million and losses from the net monetary position in the amount of Ps.62 million. |
Ø | The Bank’s market share of loans to the private sector was 12.91%, and 10.44% for deposits from the private sector, increasing 230 basis points (“bp”) and decreasing 25 bp, respectively, as compared to June 30, 2019. |
Ø | As of the end of the Quarter, the minimum capital requirement amounted to Ps.53,284 million, increasing Ps.23,799 million (81%), and computable capital was Ps.127,402 million, increasing Ps.66,614 million (110%), as compared to the figure recorded in second quarter of the 2019 fiscal year. The excess of computable capital over the minimum capital requirement amounted to Ps.74,118 million, and the total capital ratio was 19.58%. |
Conference Call:
August 26, 2020, 12:00 pm Eastern Time
Call-in number: +1 323-289-6576
Conference ID: 2692353
For more information, contact:
Bruno Folino - CFO
Pablo Firvida - IRO Tel.: (5411) 6329-4881
inversores@gfgsa.com
www.gfgsa.com
1 |
CONSOLIDATED INFORMATION
Consolidated Financial Statement | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Financial Information | ||||||||||||||||||||
Assets | 892,994 | 823,500 | 950,963 | 8 | (6) | |||||||||||||||
Net loans and other financing | 427,540 | 411,825 | 423,462 | 4 | 1 | |||||||||||||||
Deposits | 590,264 | 505,383 | 583,012 | 17 | 1 | |||||||||||||||
Shareholders’ equity attributable to GFG | 141,015 | 133,554 | 123,026 | 6 | 15 | |||||||||||||||
Shares outstanding (in thousands of shares) (1) | 1,426,765 | 1,426,765 | 1,426,765 | - | - | |||||||||||||||
Book value per share (in pesos) | 98.82 | 93.59 | 86.21 | 523 | 1,261 | |||||||||||||||
Net income attributable to GFG | 5,633 | 8,772 | 9,924 | (36) | (43) | |||||||||||||||
Net income per share (in pesos) | 3.95 | 6.15 | 6.95 | (220) | (300) |
(1) 10 ordinary shares = 1 ADS.
Selected Ratios | 2020 | 2019 | Variation (bp) | |||||||||||||||||
Percentages, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Return (1) on average assets (2) | 2.72 | 4.44 | 4.19 | (172) | (147) | |||||||||||||||
Return (1) on average shareholders´ equity (2) | 16.45 | 27.06 | 34.59 | (1,061) | (1,814) | |||||||||||||||
Financial Margin (2) (3) | 20.21 | 21.80 | 19.43 | (159) | 78 | |||||||||||||||
Efficiency ratio (4) | 41.41 | 43.08 | 45.20 | (167) | (379) | |||||||||||||||
Total capital ratio (5) | 20.04 | 21.28 | 16.82 | (124) | 322 | |||||||||||||||
Non-performing loans / Loans to private sector | 3.54 | 4.61 | 5.89 | (107) | (235) | |||||||||||||||
Allowance for loan losses / Loans to private sector | 5.37 | 5.57 | 5.20 | (20) | 17 | |||||||||||||||
Allowance for loan losses / Non-accrual loans | 151.45 | 120.88 | 88.29 | 3,057 | 6,316 | |||||||||||||||
Cost of risk (2) | 4.97 | 5.37 | 4.87 | (40) | 10 | |||||||||||||||
Allowance for loan losses(6) / Non-accrual financing | 214.61 | 144.66 | 110.62 | 6,995 | 10,399 |
(1) Net income attributable to GFG.
(2) Annualized.
(3) Net interest income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income and expenses, divided by the average balance of interest-earning assets.
(4) Personnel expenses plus administrative expenses plus depreciation and devaluations of assets, divided by net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income, plus the result from the net monetary position.
(5) Banco Galicia consolidated with Tarjetas Regionales.
(6) Includes provisions for unused balances of overdrafts and credit cards.
Market Indicators | 2020 | 2019 | Variation | |||||||||||||||||
In pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Market price | (bp) | |||||||||||||||||||
Shares – BYMA | 103.20 | 57.95 | 151.60 | 4,525 | (4,840) | |||||||||||||||
ADS – NASDAQ (in US$) | 9.70 | 7.05 | 35.50 | 265 | (2,580) | |||||||||||||||
Price BYMA / book value | 1.04 | 0.62 | 1.76 | 42 | (72) | |||||||||||||||
Average daily volume (in thousands of shares) | (%) | |||||||||||||||||||
BYMA | 3,496 | 1,803 | 1,485 | 94 | 135 | |||||||||||||||
NASDAQ (1) | 18,404 | 11,221 | 16,046 | 64 | 15 | |||||||||||||||
Market share (%) | (bp) | |||||||||||||||||||
Banco Galicia | �� | |||||||||||||||||||
Loans to the private sector | 12.91 | 12.39 | 10.61 | 52 | 230 | |||||||||||||||
Deposits from the private sector | 10.44 | 10.07 | 10.69 | 37 | (25) | |||||||||||||||
Galicia Administradora de Fondos S.A. | 11.11 | 12.07 | 11.16 | (96) | (5) |
(1) Expressed in equivalent shares: 10 ordinary shares = 1 ADS.
2 |
GRUPO FINANCIERO GALICIA
RESULTS FOR THE QUARTER
Income Statement | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Results from Equity Investments | 5,697 | 8,816 | 9,897 | (35) | (42) | |||||||||||||||
Banco de Galicia y Buenos Aires S.A.U. | 4,833 | 7,282 | 9,335 | (34) | (48) | |||||||||||||||
Tarjetas Regionales S.A. | 18 | 1,091 | 48 | (98) | 63 | |||||||||||||||
Galicia Administradora de Fondos S.A. | 296 | 94 | 120 | 215 | 147 | |||||||||||||||
Sudamericana Holding S.A. | 364 | 289 | 310 | 26 | 17 | |||||||||||||||
Other subsidiaries | 186 | 60 | 84 | 210 | 121 | |||||||||||||||
Net operating income | 78 | 72 | 158 | 8 | (51) | |||||||||||||||
Administrative expenses | (65) | (40) | (76) | 63 | (14) | |||||||||||||||
Other operating income and expenses | (1) | (1) | (9) | - | (89) | |||||||||||||||
Results from the net monetary position | (62) | (65) | (111) | (5) | (44) | |||||||||||||||
Income tax | (14) | (10) | 65 | 40 | (122) | |||||||||||||||
Net income attributable to GFG | 5,633 | 8,772 | 9,924 | (36) | (43) | |||||||||||||||
Other comprehensive income | 1,827 | (2,295) | 46 | 180 | 3,872 | |||||||||||||||
Comprehensive income attributable to GFG | 7,460 | 6,477 | 9,970 | 15 | (25) |
Net income attributable to GFG for the Quarter amounted to Ps.5,633 million, which represented a 2.72% annualized return on average assets and a 16.45% return on average shareholders’ equity.
The abovementioned results were mainly attributable to profits from GFG’s interests in Banco Galicia, for Ps.4,833 million, Sudamericana Holding, for Ps.364 million, GAF, for Ps.296 million, and in Tarjetas Regionales, for Ps.18 million.
SELECTED FINANCIAL INFORMATION – CONSOLIDATED
Balance Sheet | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 126,831 | 195,569 | 182,591 | (35) | (31) | |||||||||||||||
Debt securities | 155,799 | 97,056 | 210,565 | 61 | (26) | |||||||||||||||
Net loans and other financing | 427,540 | 411,825 | 423,462 | 4 | 1 | |||||||||||||||
Other financial assets | 120,648 | 59,046 | 75,365 | 104 | 60 | |||||||||||||||
Equity investments in subsidiaries, associates and joint businesses | 3 | - | - | N/A | N/A | |||||||||||||||
Property, bank premises, equipment | 37,091 | 37,122 | 38,185 | - | (3) | |||||||||||||||
Intangible assets | 12,279 | 10,402 | 9,607 | 18 | 28 | |||||||||||||||
Other assets | 12,756 | 12,433 | 10,769 | 3 | 18 | |||||||||||||||
Assets available for sale | 47 | 47 | 419 | - | (89) | |||||||||||||||
Total assets | 892,994 | 823,500 | 950,963 | 8 | (6) | |||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits | 590,264 | 505,383 | 583,012 | 17 | 1 | |||||||||||||||
Financing from financial entities | 11,002 | 25,082 | 31,132 | (56) | (65) | |||||||||||||||
Other financial liabilities | 67,277 | 66,328 | 103,139 | 1 | (35) | |||||||||||||||
Notes | 15,837 | 28,315 | 50,288 | (44) | (69) | |||||||||||||||
Subordinated notes | 18,239 | 17,233 | 15,665 | 6 | 16 | |||||||||||||||
Other liabilities | 45,965 | 44,094 | 41,543 | 4 | 11 | |||||||||||||||
Total liabilities | 748,584 | 686,435 | 824,779 | 9 | (9) | |||||||||||||||
Shareholders’ equity attributable to third parties | 3,395 | 3,511 | 3,158 | (3) | 8 | |||||||||||||||
Shareholders’ equity attributable to GFG | 141,015 | 133,554 | 123,026 | 6 | 15 | |||||||||||||||
Total shareholder’s equity | 144,410 | 137,065 | 126,184 | 5 | 14 |
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Income Statement | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Net interest income | 19,727 | 17,004 | 4,168 | 16 | 373 | |||||||||||||||
Interest income | 35,075 | 37,507 | 34,431 | (6) | 2 | |||||||||||||||
Interest related expenses | (15,348) | (20,503) | (30,263) | (25) | (49) | |||||||||||||||
Net fee income | 7,450 | 7,419 | 7,443 | - | - | |||||||||||||||
Fee income | 9,349 | 9,391 | �� | 9,563 | - | (2) | ||||||||||||||
Fee related expenses | (1,899) | (1,972) | (2,120) | (4) | (10) | |||||||||||||||
Net results from financial instruments | 13,538 | 14,901 | 26,860 | (9) | (50) | |||||||||||||||
Gold and foreign currency quotation differences | 952 | 1,098 | 3,295 | (13) | (71) | |||||||||||||||
Other operating income | 5,496 | 4,299 | 5,037 | 28 | 9 | |||||||||||||||
Underwriting income from insurance business | 1,213 | 957 | 1,054 | 27 | 15 | |||||||||||||||
Loan loss provisions | (5,402) | (5,187) | (4,710) | 4 | 15 | |||||||||||||||
Net operating income | 42,974 | 40,491 | 43,147 | 6 | - | |||||||||||||||
Personnel expenses | (6,473) | (6,457) | (6,714) | - | (4) | |||||||||||||||
Administrative expenses | (6,866) | (6,513) | (6,678) | 5 | 3 | |||||||||||||||
Depreciations and devaluations of assets | (1,629) | (1,641) | (1,550) | (1) | 5 | |||||||||||||||
Other operating expenses | (14,237) | (6,201) | (9,261) | 130 | 54 | |||||||||||||||
Operating income | 13,769 | 19,679 | 18,944 | (30) | (27) | |||||||||||||||
Results from the net monetary position | (4,103) | (5,627) | (6,789) | (27) | (40) | |||||||||||||||
Income tax | (4,029) | (5,057) | (2,222) | (20) | 81 | |||||||||||||||
Net income | 5,637 | 8,995 | 9,933 | (37) | (43) | |||||||||||||||
Net income attributable to third parties | 4 | 223 | 9 | (98) | (56) | |||||||||||||||
Net income attributable to GFG | 5,633 | 8,772 | 9,924 | (36) | (43) | |||||||||||||||
Other comprehensive income(1) | 1,827 | (2,295) | 46 | 180 | 3,872 | |||||||||||||||
Total comprehensive income | 7,464 | 6,700 | 9,979 | 11 | (25) | |||||||||||||||
Comprehensive income attributable to third parties | 4 | 223 | 9 | (98) | (56) | |||||||||||||||
Comprehensive income attributable to GFG | 7,460 | 6,477 | 9,970 | 15 | (25) | |||||||||||||||
(1) Net of income tax. | ||||||||||||||||||||
Additional Information | 2020 | 2019 | ||||||||||||||||||
2Q | 1Q | 3Q | 2Q | 2Q | ||||||||||||||||
Employees | 9,521 | 9,554 | 9,718 | 9,824 | 9,888 | |||||||||||||||
Banco Galicia | 5,971 | 6,040 | 6,118 | 6,247 | 6,256 | |||||||||||||||
Tarjetas Regionales | 3,099 | 3,075 | 3,151 | 3,161 | 3,227 | |||||||||||||||
Galicia Administradora de Fondos | 25 | 27 | 27 | 29 | 23 | |||||||||||||||
Sudamericana Holding | 376 | 376 | 395 | 375 | 372 | |||||||||||||||
Other subsidiaries | 50 | 36 | 27 | 12 | 10 | |||||||||||||||
Branches and other points of sales | 511 | 517 | 528 | 545 | 552 | |||||||||||||||
Banco Galicia | 326 | 326 | 326 | 325 | 325 | |||||||||||||||
Tarjetas Regionales S.A. | 185 | 191 | 202 | 220 | 227 | |||||||||||||||
Deposit Accounts at Banco Galicia (in thousands) | 5,812 | 5,427 | 5,279 | 5,140 | 4,965 | |||||||||||||||
Credit Cards (in thousands) | 13,472 | 13,428 | 13,544 | 13,852 | 13,762 | |||||||||||||||
Banco Galicia | 5,096 | 5,032 | 4,986 | 5,191 | 5,118 | |||||||||||||||
Tarjetas Regionales S.A. | 8,376 | 8,396 | 8,558 | 8,661 | 8,644 | |||||||||||||||
GAF’ assets under management (millions of pesos) | 153,617 | 128,904 | 88,128 | 83,367 | 117,183 | |||||||||||||||
Inflation, exchange rate and interest rates | ||||||||||||||||||||
Consumer price index(1) (%) | 321.97 | 305.55 | 283.44 | 253.71 | 225.54 | |||||||||||||||
Consumer price index(1) | 5.37 | 7,80 | 11.72 | 12.49 | 9.51 | |||||||||||||||
Wholesale price index (IPIM) (%) | 2.69 | 3,62 | 13.22 | 15.94 | 11.57 | |||||||||||||||
Acquisition value unit (UVA) | 55.06 | 51,62 | 47.16 | 41.26 | 38.03 | |||||||||||||||
Exchange rate (Ps./US$)(2) | 70.46 | 64,47 | 59.90 | 57.56 | 42.45 | |||||||||||||||
Badlar (quarterly averages)(3) | 24.42 | 33,25 | 48.06 | 54.67 | 50.82 |
(1) | Consumer price index published by the National Institute of Statistics (INDEC) |
(2) | Reference exchange rates in accordance to Communiqué “A” 3500 from the Argentine Central Bank as of the last working day of the Quarter. |
(3) | Private banks’ 30-day time deposits rate for amounts over Ps.1 million. |
4 |
BANCO GALICIA
HIGHLIGHTS
Ø | Net income for the Quarter amounted to Ps.4,833 million, Ps.4,502 million (48%) lower than the figure recorded for the same quarter of the 2019 fiscal year, mainly as a result of a 61% increase in operating expenses. |
Ø | Net operating income for the Quarter amounted to Ps.34,655 million, Ps.1,379 million lower than the Ps.36,034 million recorded in the second quarter of the 2019 fiscal year, mainly as a consequence of a decrease in net income from financial instruments, which was partially offset by growth in net interest income. |
Ø | The credit exposure to the private sector reached Ps.418,992 million for the Quarter, up 5% from the Ps.399,335 million recorded in the second quarter of the 2019 fiscal year, and deposits reached Ps.593,414 million, up 2% from the Ps.584,203 million recorded during the same period. As of June 30, 2020, the Bank’s estimated market share of loans to the private sector was 12.91%, while its estimated market share of deposits from the private sector was 10.44%. |
Ø | The non-accrual loan portfolio represented 2.69% of total loans to the private sector, representing a decrease of 171 bp from the 4.40% figure recorded at the end of the same quarter of the prior fiscal year, while coverage with allowances for loan losses reached 152.48%. |
5 |
RESULTS FOR THE QUARTER
Income Statement | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Net interest income | 16,519 | 12,861 | 1,201 | 28 | 1,275 | |||||||||||||||
Net fee income | 4,742 | 4,045 | 4,509 | 17 | 5 | |||||||||||||||
Net results from financial instruments | 12,908 | 14,019 | 25,967 | (8) | (50) | |||||||||||||||
Gold and foreign currency quotation differences | 865 | 796 | 3,277 | 9 | (74) | |||||||||||||||
Other operating income | 4,053 | 3,330 | 3,575 | 22 | 13 | |||||||||||||||
Loan-loss provisions | (4,432) | (3,766) | (2,495) | 18 | 78 | |||||||||||||||
Net operating income | 34,655 | 31,285 | 36,034 | 11 | (4) | |||||||||||||||
Personnel expenses | (4,610) | (4,622) | (4,833) | - | (5) | |||||||||||||||
Administrative expenses | (4,855) | (4,677) | (4,981) | 4 | (3) | |||||||||||||||
Depreciations and devaluations of assets | (1,210) | (1,196) | (1,173) | 1 | 3 | |||||||||||||||
Other operating expenses | (12,514) | (5,056) | (7,779) | 148 | 61 | |||||||||||||||
Operating income | 11,466 | 15,734 | 17,268 | (27) | (34) | |||||||||||||||
Results from the net monetary position | (3,164) | (4,403) | (5,167) | (28) | (39) | |||||||||||||||
Results from associates and joint businesses | 64 | 31 | 5 | 106 | 1,180 | |||||||||||||||
Income tax | (3,533) | (4,080) | (2,771) | (13) | 27 | |||||||||||||||
Net Income | 4,833 | 7,282 | 9,335 | (34) | (48) | |||||||||||||||
Other comprehensive income (loss) | 1,791 | (2,272) | 53 | 179 | 3,279 | |||||||||||||||
Total comprehensive income | 6,624 | 5,010 | 9,388 | 32 | (29) | |||||||||||||||
| ||||||||||||||||||||
Profitability and Efficiency | 2020 | 2019 | Variation ( bp) | |||||||||||||||||
Percentages, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Return (1) on average assets | 2.46 | 4.02 | 4.21 | (156) | (175) | |||||||||||||||
Return (1) on average shareholders’ equity | 16.77 | 26.73 | 37.81 | (996) | (2,104) | |||||||||||||||
Financial margin(1)(2) | 20.14 | 20.90 | 19.73 | (76) | 41 | |||||||||||||||
Efficiency ratio (3) | 37.18 | 41.24 | 41.00 | (406) | (382) |
(1) | Annualized. |
(2) | Net interest income plus net result from financial instruments plus foreign currency quotation differences plus certain items included in other operating income, divided by average interest-earning assets. |
(3) | Personnel expenses plus administrative expenses plus depreciation and devaluations of assets, divided by net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income, plus the result from the net monetary position. |
During the Quarter, net income attributable to Banco Galicia amounted to Ps.4,833 million, Ps.4,502 million (48%) lower than the Ps.9,335 million recorded for the same quarter of the previous fiscal year. This result was primarily a consequence of a Ps.5,802 million (34%) lower operating income, which was primarily due to a Ps.13,059 million (50%) decrease in net income from financial instruments and higher operating expenses in the amount of Ps.4,735 million (61%), offset by a Ps.15,318 million (1,275%) increase in net interest income.
6 |
Net Interest Income | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Interest income | 30,824 | 32,062 | 28,409 | (4) | 9 | |||||||||||||||
Private sector securities | - | - | 34 | - | (100) | |||||||||||||||
Public Sector securities (1) | 1,666 | 3,213 | 1,020 | (48) | 63 | |||||||||||||||
Loans and other financing | 27,469 | 26,862 | 27,164 | 2 | 1 | |||||||||||||||
Financial sector | 848 | 818 | 778 | 4 | 9 | |||||||||||||||
Non-financial private sector | 26,621 | 26,044 | 26,386 | 2 | 1 | |||||||||||||||
Overdrafts | 3,119 | 2,857 | 3,320 | 9 | (6) | |||||||||||||||
Promissory notes | 10,466 | 8,468 | 4,665 | 24 | 124 | |||||||||||||||
Mortgage notes | 2,740 | 3,058 | 3,907 | (10) | (30) | |||||||||||||||
Pledge loans | 171 | 154 | 225 | 11 | (24) | |||||||||||||||
Personal loans | 3,524 | 3,469 | 3,552 | 2 | (1) | |||||||||||||||
Credit-card loans | 5,192 | 6,806 | 8,730 | (24) | (41) | |||||||||||||||
Financial leases | 85 | 110 | 214 | (23) | (60) | |||||||||||||||
Other | 1,324 | 1,122 | 1,773 | 18 | (25) | |||||||||||||||
Repurchase agreement transactions | 1,689 | 1,987 | 191 | (15) | 784 | |||||||||||||||
Interest expenses | (14,305) | (19,201) | (27,208) | (25) | (47) | |||||||||||||||
Deposits from the non-financial private sector | (13,088) | (16,904) | (23,979) | (23) | (45) | |||||||||||||||
Saving accounts | (2) | (2) | (2) | - | - | |||||||||||||||
Time deposits and term investments | (10,792) | (14,343) | (20,481) | (25) | (47) | |||||||||||||||
Other | (2,294) | (2,559) | (3,496) | (10) | (34) | |||||||||||||||
Financing from financial institutions | (137) | (276) | (571) | (50) | (76) | |||||||||||||||
Repurchase agreement transactions | (18) | (209) | (220) | (91) | (92) | |||||||||||||||
Other interest-bearing liabilities | (192) | (289) | (337) | (34) | (43) | |||||||||||||||
Notes | (870) | (1,523) | (2,101) | (43) | (59) | |||||||||||||||
Net interest income | 16,519 | 12,861 | 1,201 | 28 | 1,275 |
Net interest income for the Quarter amounted to Ps.16,519 million, representing a Ps.15,318 million (1,275%) increase as compared to the Ps.1,201 million profit recorded for the same quarter of the 2019 fiscal year.
Interest income for the Quarter reached Ps.30,824 million, up 9% from the Ps.28,409 million recorded in the same quarter of the 2019 fiscal year. This increase was primarily a consequence of higher interest realized on promissory notes, amounting to Ps.5,801 million, and from repurchase agreement transactions, amounting to PS.1,498 million, and offset by lower interests on credit card loans in the amount of Ps.3,538 million.
Interest expenses amounted to Ps.14,305 million, down 47% from the same quarter of the 2019 fiscal year, mainly as a result of lower interest realized on time deposits and term investments, for Ps.9,689 million (47%).
7 |
Yield and Rates(1) | 2020 | 2019 | Variation (%/ bp) | |||||||||||||||||||||||||||||||||||||
Average balances: in millions of pesos | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||||||||||||||||||||||
Yields and rates: annualized nominal % | Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | ||||||||||||||||||||||||||||||
In pesos | 469,262 | 34.85 | 397,660 | 42.20 | 393,845 | 55.22 | 18 | (735) | 19 | (2,037) | ||||||||||||||||||||||||||||||
Government securities | 127,600 | 40.95 | 138,890 | 41.29 | 178,022 | 63.73 | (8) | (34) | (28) | (2,278) | ||||||||||||||||||||||||||||||
Loans | 296,254 | 34.03 | 237,335 | 42.48 | 204,956 | 48.07 | 25 | (845) | 45 | (1,404) | ||||||||||||||||||||||||||||||
Other interest-earning assets | 45,408 | 23.04 | 21,435 | 44.95 | 10,867 | 50.65 | 112 | (2,191) | 318 | (2,761) | ||||||||||||||||||||||||||||||
In foreign currency | 75,121 | 11.41 | 99,949 | 16.30 | 169,422 | 5.73 | (25) | (489) | (56) | 568 | ||||||||||||||||||||||||||||||
Government securities | 5,308 | 62.09 | 10,631 | 93.91 | 14,560 | (0.52) | (50) | (3,182) | (64) | 6,261 | ||||||||||||||||||||||||||||||
Loans | 68,137 | 7.44 | 87,597 | 7.09 | 153,064 | 5.98 | (22) | 35 | (55) | 146 | ||||||||||||||||||||||||||||||
Other interest-earning assets | 1,676 | 11.93 | 1,721 | 6.04 | 1,798 | 34.93 | (3) | 589 | (7) | (2,300) | ||||||||||||||||||||||||||||||
Interest-earning assets | 544,383 | 31.62 | 497,609 | 37.00 | 563,267 | 40.34 | 9 | (538) | (3) | (872) | ||||||||||||||||||||||||||||||
In pesos | 315,582 | 16.58 | 271,363 | 26.88 | 270,579 | 39.01 | 16 | (1,030) | 17 | (2,243) | ||||||||||||||||||||||||||||||
Saving accounts | 61,666 | 0.55 | 49,642 | 0.99 | 48,332 | 1.26 | 24 | (44) | 28 | (71) | ||||||||||||||||||||||||||||||
Time deposits | 244,648 | 20.38 | 204,587 | 32.43 | 200,519 | 47.42 | 20 | (1,205) | 22 | (2,704) | ||||||||||||||||||||||||||||||
Debt securities | 5,857 | 27.32 | 11,703 | 34.38 | 15,328 | 44.78 | (50) | (706) | (62) | (1,746) | ||||||||||||||||||||||||||||||
Other interest-bearing liabilities | 3,411 | 15.13 | 5,431 | 38.00 | 6,400 | 46.94 | (37) | (2,287) | (47) | (3,181) | ||||||||||||||||||||||||||||||
In foreign currency | 152,170 | 2.02 | 165,356 | 2.02 | 263,554 | 1.40 | (8) | - | (42) | 62 | ||||||||||||||||||||||||||||||
Saving accounts | 82,299 | - | 89,533 | - | 170,001 | - | (8) | - | (52) | - | ||||||||||||||||||||||||||||||
Time deposits | 33,531 | 1.41 | 33,976 | 1.53 | 39,375 | 0.57 | (1) | (12) | (15) | 84 | ||||||||||||||||||||||||||||||
Debt securities | 24,088 | 7.74 | 23,279 | 7.39 | 27,414 | 7.24 | 3 | 35 | (12) | 50 | ||||||||||||||||||||||||||||||
Other interest-bearing liabilities | 12,252 | 6.07 | 18,568 | 5.90 | 26,764 | 5.53 | (34) | 17 | (54) | 54 | ||||||||||||||||||||||||||||||
Interest-bearing liabilities | 467,752 | 11.84 | 436,719 | 17.46 | 534,133 | 20.45 | 7 | (562) | (12) | (861) |
(1) Does not include foreign currency quotation differences. Annual nominal interest rates were calculated using a 360-day denominator
The average interest-earning assets amounted to Ps.544,383 million, representing an Ps.18,884 million (3%) decrease as compared to the figure recorded in the second quarter of the previous fiscal year, which was primarily a consequence of the Ps.84,927 million (55%) decrease in the average dollar-denominated loan portfolio and a decrease of Ps.50,422 million (28%) in the average portfolio of government securities. The foregoing decreases were partially offset by an increase in the average volume of peso-denominated loans, for Ps.91,298 million (45%), and of other interest-earning assets, for Ps.34,541 million (318%).
Average interest-bearing liabilities reached Ps.467,752 million, decreasing Ps.66,381 million (12%) during the same period, primarily due to a decrease in the average balance of dollar-denominated deposits (particularly in saving accounts, which dropped Ps.87,702 million (52%)).
The average yield on interest-earning assets for the Quarter was 31,62%, representing an 872 bp decrease as compared to the figure recorded in the same quarter of the prior fiscal year mainly resulting from decreases of 2,761 bp in the average yield on other interest-earning assets in pesos, 2,300 bp on other interest-earning assets in dollars and of 2,278 bp on government securities. The foregoing decreases were offset by a 6,261 bp increase in the average yield on government securities in foreign currency resulting from price increases. Likewise, the average cost of interest-bearing liabilities was 11.84%, representing an 861 bp decrease as compared to the second quarter of the prior fiscal year that was mainly due to a 3,181 bp decrease in the average interest rate on other interest-bearing liabilities in pesos and a 2,704 bp decrease in the interest rate on peso-denominated time deposits.
8 |
Net Fee Income | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Credit cards | 2,636 | 2,212 | 2,417 | 19 | 9 | |||||||||||||||
Deposit accounts | 1,042 | 1,018 | 1,149 | 2 | (9) | |||||||||||||||
Insurance | 287 | 309 | 322 | (7) | (11) | |||||||||||||||
Financial fees | 65 | 54 | 100 | 20 | (35) | |||||||||||||||
Credit-related fees | 121 | 110 | 36 | 10 | 236 | |||||||||||||||
Foreign trade | 380 | 359 | 443 | 6 | (14) | |||||||||||||||
Collections | 385 | 332 | 353 | 16 | 9 | |||||||||||||||
Utility-Bills collection services | 370 | 485 | 469 | (24) | (21) | |||||||||||||||
Mutual Funds | 198 | 294 | 274 | (33) | (28) | |||||||||||||||
Other | 499 | 314 | 343 | 59 | 45 | |||||||||||||||
Total fee income | 5,983 | 5,487 | 5,906 | 9 | 1 | |||||||||||||||
Total expenditures | (1,241) | (1,442) | (1,397) | (14) | (11) | |||||||||||||||
Net fee income | 4,742 | 4,045 | 4,509 | 17 | 5 |
Net fee income amounted to Ps.4,742 million, up 5% from the Ps.4,509 million recorded in the second quarter of the previous fiscal year. The increase in fees which stood out were those related to credit cards (for Ps.219 million or 9%).
Net Income from Financial Instruments | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Government securities | 12,104 | 13,648 | 27,700 | (11) | (56) | |||||||||||||||
Argentine Central Bank | 8,976 | 13,655 | 27,882 | (34) | (68) | |||||||||||||||
Other | 3,128 | (7) | (182) | N/A | 1,819 | |||||||||||||||
Private sector securities | 492 | 68 | 689 | 624 | (29) | |||||||||||||||
Derivative financial instruments | 312 | 303 | (2,395) | 3 | (113) | |||||||||||||||
Forward transactions | 315 | 284 | (2,342) | 11 | (113) | |||||||||||||||
Interest-rate swaps | (3) | 19 | (53) | (116) | 94 | |||||||||||||||
Results from other financial assets/liabilities | - | - | (27) | - | 100 | |||||||||||||||
Net income from financial instruments | 12,908 | 14,019 | 25,967 | (8) | (50) |
Net income from financial instruments for the Quarter amounted to Ps.12,908 million, down Ps.13,059 million from the Ps.25,967 million recorded in the same quarter of the 2019 fiscal year primarily as a consequence of the decrease in results from government securities, which was due to lower holdings of, and yields on, instruments issued by the Argentine Central Bank (Leliq).
A Ps.865 million profit from gold and foreign currency quotation differences was recorded during the Quarter, as compared to a Ps.3,277 million profit recorded from the same quarter of the 2019 fiscal year. This result includes a Ps.986 million gain from foreign-currency trading.
Other Operating Income | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Other financial income(1)(2) | (546) | 81 | (3) | (774) | N/A | |||||||||||||||
Fees from bundles of products(1) | 1,385 | 1,464 | 1,247 | (5) | 11 | |||||||||||||||
Rental of safe deposit boxes(1) | 278 | 299 | 223 | (7) | 25 | |||||||||||||||
Other fee income(1) | 132 | 252 | 261 | (48) | (49) | |||||||||||||||
Other adjustments and interest on miscellaneous receivables | 1,202 | 904 | 808 | 33 | 49 | |||||||||||||||
Other | 1,602 | 330 | 1,039 | 385 | 54 | |||||||||||||||
Total other operating income | 4,053 | 3,330 | 3,575 | 22 | 13 |
(1) Item included for calculating the efficiency ratio.
(2) Item included for calculating the financial margin.
Other operating income for the Quarter reached Ps.4,053 million, increasing Ps.478 million from the Ps.3,575 million profit recorded in the second quarter of the 2019 fiscal year.
9 |
Provisions for loan losses for the Quarter amounted to Ps.4,432 million, Ps.1,937 million higher than the figure recorded in the same quarter of the prior fiscal year due to the evolution in the parameters used pursuant to the expected credit-loss model.
Personnel expenses amounted to Ps.4,610 million, decreasing 5% from the figure recorded for the same quarter of the 2019 fiscal year and mainly attributable to a 5% decrease in staff.
Administrative Expenses | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Fees and compensations for services | 469 | 238 | 836 | 97 | (44) | |||||||||||||||
Fees to directors and syndics | 11 | 13 | 13 | (15) | (15) | |||||||||||||||
Publicity, promotion and research expenses | 136 | 214 | 363 | (36) | (63) | |||||||||||||||
Taxes | 1,255 | 852 | 989 | 47 | 27 | |||||||||||||||
Maintenance and repairment of goods and IT | 1,113 | 1,082 | 541 | 3 | 106 | |||||||||||||||
Electricity and communications | 390 | 396 | 360 | (2) | 8 | |||||||||||||||
Stationery and office supplies | 131 | 69 | 95 | 90 | 38 | |||||||||||||||
Hired administrative services | 677 | 806 | 717 | (16) | (6) | |||||||||||||||
Security | 147 | 120 | 136 | 23 | 8 | |||||||||||||||
Insurance | 48 | 54 | 33 | (11) | 45 | |||||||||||||||
Other | 478 | 833 | 898 | (43) | (47) | |||||||||||||||
Total administrative expenses | 4,855 | 4,677 | 4,981 | 4 | (3) |
Administrative expenses for the Quarter totaled Ps.4,855 million, down 3% in the same period, as a consequence of lower fees and compensations for services, amounting to Ps.367 million (44%), as compared to the second quarter of the 2019 fiscal year.
Depreciation and devaluation of assets amounted to Ps 1,210 million, up 3% from the second quarter of the 2019 fiscal year. This loss includes Ps.156 million from financial leases.
Other Operating Expenses | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Contribution to the Deposit Insurance Fund(1)(2) | 220 | 185 | 261 | 19 | (16) | |||||||||||||||
Other financial expenses(1)(2) | 163 | 103 | 433 | 58 | (62) | |||||||||||||||
Turnover tax | 2,982 | 2,668 | 2,785 | 12 | 7 | |||||||||||||||
On financial income(1)(2) | 2,033 | 1,830 | 2,047 | 11 | (1) | |||||||||||||||
On fees(1) | 838 | 740 | 646 | 13 | 30 | |||||||||||||||
On other items | 111 | 98 | 92 | 13 | 21 | |||||||||||||||
Other fee-related expenses(1) | 1,159 | 1,104 | 1,327 | 5 | (13) | |||||||||||||||
Other provisions | 7,314 | 781 | 2,707 | 836 | (170) | |||||||||||||||
Claims | 59 | 68 | 78 | (13) | (24) | |||||||||||||||
Other | 617 | 147 | 188 | 320 | 228 | |||||||||||||||
Total other operating expenses | 12,514 | 5,056 | 7,779 | 148 | 61 |
(1) | Item included for calculating the efficiency ratio. |
(2) | Item included for calculating the financial margin. |
Other operating expenses reached Ps.12,514 million, increasing Ps.4,735 million (61%) from the Ps.7,779 million recorded in the second quarter of the 2019 fiscal year. This increase resulted from higher charges for additional provisions related to the impact of COVID-19.
The income tax charge for the Quarter was Ps.3,533 million, Ps.762 million lower than the figure recorded in the second quarter of the 2019 fiscal year. It is worth mentioning that, beginning in the second half of 2019, the tax inflation adjustment established by applicable income tax laws began to be applied.
10 |
Other comprehensive income for the Quarter amounted to Ps.1,791 million, as compared to a Ps.53 million gain in the same period of the 2019 fiscal year. This was mainly due to the reversal of the negative impact from the sale of part of Bonar 24 (AY24D).
SELECTED FINANCIAL INFORMATION
Balance Sheet | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 124,914 | 193,718 | 181,329 | (36) | (31) | |||||||||||||||
Debt securities | 155,897 | 97,178 | 211,336 | 60 | (26) | |||||||||||||||
Net loans and other financing | 379,596 | 358,844 | 359,425 | 6 | 6 | |||||||||||||||
Other financial assets | 113,873 | 43,464 | 64,583 | 162 | 76 | |||||||||||||||
Equity investments in subsidiaries, associates and joint businesses | 446 | 374 | 739 | 19 | (40) | |||||||||||||||
Property, bank premises, equipment | 32,513 | 32,730 | 33,584 | (1) | (3) | |||||||||||||||
Intangible assets | 10,589 | 8,666 | 8,241 | 22 | 28 | |||||||||||||||
Other assets | 6,031 | 6,452 | 4,878 | (7) | 24 | |||||||||||||||
Assets available for sale | 47 | 47 | 420 | - | (89) | |||||||||||||||
Total assets | 823,906 | 741,473 | 864,535 | 11 | (5) | |||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits | 593,414 | 507,515 | 584,203 | 17 | 2 | |||||||||||||||
Financing from financial entities | 10,730 | 19,116 | 30,553 | (44) | (65) | |||||||||||||||
Other financial liabilities | 36,284 | 31,569 | 67,899 | 15 | (47) | |||||||||||||||
Notes | 8,782 | 18,533 | 28,723 | (53) | (69) | |||||||||||||||
Subordinated notes | 18,240 | 17,233 | 15,665 | 6 | 16 | |||||||||||||||
Other liabilities | 37,807 | 35,482 | 33,681 | 7 | 12 | |||||||||||||||
Total liabilities | 705,257 | 629,448 | 760,724 | 12 | (7) | |||||||||||||||
Shareholders’ equity | 118,649 | 112,025 | 103,811 | 6 | 14 | |||||||||||||||
Foreign currency assets and liabilities | ||||||||||||||||||||
Assets | 176,704 | 200,648 | 326,819 | (12) | (46) | |||||||||||||||
Liabilities | 183,463 | 203,385 | 338,984 | (10) | (46) | |||||||||||||||
Net forward purchases/(sales) of foreign currency (1) | (639) | 1,468 | 12,577 | (144) | (105) | |||||||||||||||
Net global position in foreign currency | (7,398) | (1,269) | 412 | (483) | (1,896) |
(1) | Recorded off-balance sheet. |
11 |
LEVEL OF ACTIVITY
Financing to the Private Sector(1) | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
In pesos | 339,297 | 290,623 | 228,510 | 17 | 48 | |||||||||||||||
Loans | 300,882 | 253,848 | 186,634 | 19 | 61 | |||||||||||||||
UVA-adjusted loans | 27,967 | 28,667 | 32,238 | (2) | (13) | |||||||||||||||
Financial leases | 674 | 810 | 1,573 | (17) | (57) | |||||||||||||||
Debt securities | 82 | 172 | 544 | (52) | (85) | |||||||||||||||
Other financing(2) | 9,692 | 7,126 | 7,521 | 36 | 29 | |||||||||||||||
In foreign currency | 79,695 | 108,544 | 170,825 | (27) | (53) | |||||||||||||||
Loans | 58,528 | 84,240 | 143,390 | (31) | (59) | |||||||||||||||
Financial leases | 1,449 | 1,586 | 1,595 | (9) | (9) | |||||||||||||||
Debt securities | 107 | 165 | 4,150 | (35) | (97) | |||||||||||||||
Other financing(2) | 19,611 | 22,553 | 21,690 | (13) | (10) | |||||||||||||||
Total financing to the private sector | 418,992 | 399,167 | 399,335 | 5 | 5 |
(1) | Includes IFRS adjustment. |
(2) | Includes certain off-balance sheet accounts related to guarantees granted. |
As of June 30, 2020, total financing to the private sector reached Ps.418,992 million, representing a 5% increase as compared to the same period of the prior fiscal year. This increase was mainly a consequence of the growth in the peso-denominated loan portfolio (61%), which was offset by a decrease in the dollar-denominated loan portfolio (59%).
Market Share(1) | 2020 | 2019 | Variation (bp) | |||||||||||||||||
Percentages, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Total loans | 12.78 | 12.20 | 10.64 | 58 | 214 | |||||||||||||||
Loans to the private sector | 12.91 | 12.39 | 10.61 | 52 | 230 |
(1) According to the daily information on loans published by the Argentine Central Bank. Only principal as of the last day of each quarter.
The Bank’s market share of loans to the private sector, as of June 30, 2020, was 12.91%, increasing 230 bp from June 30, 2019.
12 |
Breakdown of loans and other financing | 2020 | 2019 | Variation(%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Financial entities | 10,409 | 9,618 | 9,676 | 8 | 8 | |||||||||||||||
Loans | 10,400 | 9,579 | 9,666 | 9 | 8 | |||||||||||||||
Other financing | 9 | 39 | 10 | (77) | (10) | |||||||||||||||
Non-financial private sector and residents abroad | 385,304 | 365,045 | 362,801 | 6 | 6 | |||||||||||||||
Loans | 376,977 | 357,176 | 352,596 | 6 | 7 | |||||||||||||||
Overdrafts | 27,445 | 39,167 | 21,382 | (30) | 28 | |||||||||||||||
Promissory notes | 130,406 | 92,965 | 56,074 | 40 | 133 | |||||||||||||||
Mortgage loans | 15,878 | 16,111 | 17,190 | (1) | (8) | |||||||||||||||
Pledge loans | 6,768 | 3,490 | 3,418 | 94 | 98 | |||||||||||||||
Personal loans | 29,784 | 30,599 | 37,574 | (3) | (21) | |||||||||||||||
Credit-card loans | 106,814 | 101,209 | 98,122 | 6 | 9 | |||||||||||||||
Other Loans | 44,182 | 54,994 | 107,887 | (20) | (59) | |||||||||||||||
Accrued interest, adjustments and foreign currency quotation differences receivable | 17,548 | 19,897 | 12,674 | (12) | 38 | |||||||||||||||
Documented interest | (1,848) | (1,256) | (1,725) | 47 | 7 | |||||||||||||||
Financial leases | 2,123 | 2,396 | 3,168 | (11) | (33) | |||||||||||||||
Other financing | 6,204 | 5,473 | 7,037 | 13 | (12) | |||||||||||||||
Non-financial public sector | - | - | 49 | (100) | (100) | |||||||||||||||
Total loans and other financing | 395,713 | 374,663 | 372,526 | 6 | 6 | |||||||||||||||
Allowances | (16,117) | (15,819) | (13,101) | 2 | 23 | |||||||||||||||
Loans | (15,908) | (15,700) | (12,967) | 1 | 23 | |||||||||||||||
Financial leases | (62) | (66) | (13) | (6) | 377 | |||||||||||||||
Other financing | (147) | (53) | (121) | 177 | 21 | |||||||||||||||
Net loans and other financing | 379,596 | 358,844 | 359,425 | 6 | 6 |
As of June 30, 2020, net loans and other financing after provisions amounted to Ps.379,576 million, increasing 6% from June 30, 2019 mainly due to a 7% increase in loans to the private sector, which was a consequence of a 133% increase in promissory notes, and offset by a 59% decrease in other loans.
Loans by Type of Borrower | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Large corporations | 137,933 | 144,300 | 135,975 | (4) | 1 | |||||||||||||||
SMEs | 108,937 | 75,715 | 74,826 | 44 | 46 | |||||||||||||||
Individuals | 136,519 | 137,561 | 142,125 | (1) | (4) | |||||||||||||||
Financial sector | 10,400 | 9,579 | 9,666 | 9 | 8 | |||||||||||||||
Residents abroad | 1,415 | 4,046 | 4,861 | (65) | (71) | |||||||||||||||
Other | 707 | 1,010 | 550 | (30) | 29 | |||||||||||||||
IFRS adjustment | (8,534) | (5,456) | (5,692) | 56 | 50 | |||||||||||||||
Total loans | 387,377 | 366,755 | 362,311 | 6 | 7 | |||||||||||||||
Allowances | (15,908) | (15,700) | (12,967) | 1 | 23 | |||||||||||||||
Net total loans | 371,469 | 351,055 | 349,344 | 6 | 6 |
13 |
Loans by Sector of Activity | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Financial sector | 10,400 | 9,579 | 9,666 | 9 | 8 | |||||||||||||||
Residents abroad | 1,415 | 4,046 | 4,861 | (65) | (71) | |||||||||||||||
Services | 44,771 | 41,338 | 25,288 | 8 | 77 | |||||||||||||||
Agriculture and livestock | 77,290 | 52,250 | 48,517 | 48 | 59 | |||||||||||||||
Consumer | 136,522 | 137,568 | 142,132 | (1) | (4) | |||||||||||||||
Retail and wholesale trade | 36,837 | 31,920 | 30,438 | 15 | 21 | |||||||||||||||
Construction | 4,520 | 5,809 | 4,393 | (22) | 3 | |||||||||||||||
Manufacturing industry | 58,347 | 60,696 | 72,172 | (4) | (19) | |||||||||||||||
Other | 25,809 | 29,005 | 30,536 | (11) | (15) | |||||||||||||||
IFRS adjustment | (8,534) | (5,456) | (5,692) | 56 | 50 | |||||||||||||||
Total loans | 387,377 | 366,755 | 362,311 | 6 | 7 | |||||||||||||||
Allowances | (15,908) | (15,700) | (12,967) | 1 | 23 | |||||||||||||||
Net total loans | 371,469 | 351,055 | 349,344 | 6 | 6 |
In the last twelve months, loans to the private sector increased, particularly in those granted to SMEs (Ps.34,111 million or 46%), primarily through the use of new special credit lines with an interest rate of 24% and the reduction of reserve requirements. By sector of activity, higher levels of growth were recorded in the agriculture and livestock sectors (Ps.28,773 million or 59%) and in services (Ps.19,483 million or 77%).
Net Exposure to the Argentine Public Sector(1) | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Government securities net position | 180,373 | 118,876 | 225,015 | 52 | (20) | |||||||||||||||
Leliq | 135,006 | 85,431 | 182,233 | 58 | (26) | |||||||||||||||
Botes | 16,159 | 15,911 | 15,008 | 2 | 8 | |||||||||||||||
Other | 29,208 | 17,534 | 27,774 | 67 | 5 | |||||||||||||||
Other receivables resulting from financial brokerage | 66,069 | 66 | 5,818 | N/A | 1,036 | |||||||||||||||
Repurchase agreement transactions - BCRA | 66,033 | - | 5,713 | N/A | 1,056 | |||||||||||||||
Loans and other financing | 9 | 39 | 59 | (77) | (85) | |||||||||||||||
Trust certificates of participation and securities | 27 | 27 | 46 | - | (41) | |||||||||||||||
Total exposure to the public sector | 246,442 | 118,942 | 230,833 | 107 | 7 |
(1) Excludes deposits with the Argentine Central Bank, which constitute one of the items by which the Bank complies with minimum cash requirements.
As of June 30, 2020, the Bank’s exposure to the public sector amounted to Ps.246,442 million, representing a 7% increase during the last twelve months. Excluding the exposure to the Argentine Central Bank (with respect to Leliq and repurchase agreement transactions), net exposure to the public sector reached Ps.45,403 million (6% of total assets), while as of June 30, 2019, it amounted to Ps.42,887 million (5% of total assets).
14 |
Deposits | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
In pesos | 455,244 | 357,606 | 315,258 | 27 | 44 | |||||||||||||||
Current accounts | 102,769 | 85,120 | 60,254 | 21 | 71 | |||||||||||||||
Saving accounts | 158,219 | 107,626 | 82,834 | 47 | 91 | |||||||||||||||
Time deposits | 176,751 | 149,246 | 159,399 | 18 | 11 | |||||||||||||||
UVA-adjusted time deposits | 10,528 | 6,659 | 1,812 | 58 | 481 | |||||||||||||||
Other | 2,638 | 4,471 | 2,431 | (41) | 9 | |||||||||||||||
Interests and adjustments | 4,339 | 4,484 | 8,528 | (3) | (49) | |||||||||||||||
In foreign currency | 138,170 | 149,909 | 268,945 | (8) | (49) | |||||||||||||||
Saving accounts | 106,081 | 116,896 | 233,195 | (9) | (55) | |||||||||||||||
Time deposits | 28,271 | 29,384 | 34,161 | (4) | (17) | |||||||||||||||
Other | 3,697 | 3,518 | 1,560 | 5 | 137 | |||||||||||||||
Interests and adjustments | 121 | 111 | 29 | 9 | 317 | |||||||||||||||
Total deposits | 593,414 | 507,515 | 584,203 | 17 | 2 |
As of June 30, 2020, the Bank’s deposits amounted to Ps.593,414 million, representing a 2% increase during the last twelve months. This was a consequence of the Ps.139,986 million (44%) growth in peso-denominated deposits, with saving accounts up Ps.75,385 million (91%) and current accounts up Ps.42,515 million (71%), and offset by a Ps.127,114 (55%) decrease in dollar-denominated saving accounts.
At the end of the Quarter, there were 5,8 million deposit accounts, 17% more than the figure recorded for the same period of the prior fiscal year.
Market Share(1) | 2020 | 2019 | Variation (%) | |||||||||||||||||
Percentages, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Total deposits | 8.88 | 8.53 | 9.09 | 35 | (21) | |||||||||||||||
Private sector deposits | 10.44 | 10.07 | 10.69 | 37 | (25) | |||||||||||||||
(1) According to the daily information on loans published by the Argentine Central Bank. Balances as of the last day of each quarter. |
|
As of June 30, 2020, the Bank’s estimated market share of private sector deposits in the Argentine financial system was 10.44%, representing a 25 bp decrease from a year before.
Financial Liabilities | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Financial entities | 10,730 | 19,116 | 30,553 | (44) | (65) | |||||||||||||||
Financing from credit-card purchases | 15,081 | 14,981 | 16,651 | 1 | (9) | |||||||||||||||
Notes | 8,782 | 18,533 | 28,723 | (53) | (69) | |||||||||||||||
Subordinated notes | 18,240 | 17,233 | 15,665 | 6 | 16 | |||||||||||||||
Creditor from purchases of foreign currency | 1,296 | 4 | 2,357 | 32,300 | (45) | |||||||||||||||
Collections on account of third parties | 7,760 | 7,962 | 11,078 | (3) | (30) | |||||||||||||||
Other financial liabilities | 12,147 | 8,622 | 37,813 | 41 | (68) | |||||||||||||||
Total financial liabilities | 74,036 | 86,451 | 142,840 | (14) | (48) |
Financial liabilities at the end of the Quarter amounted to Ps.74,036 million, Ps.68,804 million (48%) lower than the Ps.142,840 million recorded for the same period of the prior fiscal year. This decline was mainly due to decreases of Ps.25,666 million (68%) in other financial liabilities, Ps.19,941 million (69%) in notes and of Ps.19,823 million (65%) in financial liabilities with financial entities.
15 |
ASSET QUALITY
Loan Portfolio Quality | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Non-accrual loans(1) | 10,433 | 13,324 | 15,926 | (22) | (34) | |||||||||||||||
With preferred guarantees | 2,018 | 1,900 | 790 | 6 | 155 | |||||||||||||||
With other guarantees | 1,238 | 1,641 | 1,176 | (25) | 5 | |||||||||||||||
Without guarantees | 7,177 | 9,783 | 13,960 | (27) | (49) | |||||||||||||||
Allowance for loan losses | 15,908 | 15,700 | 12,967 | 1 | 23 | |||||||||||||||
Relevant ratios (%) | Variation (bp) | |||||||||||||||||||
Non-accrual loans to private-sector loans | 2.69 | 3.63 | 4.40 | (94) | (171) | |||||||||||||||
Allowance for loan losses to private-sector loans | 4.11 | 4.28 | 3.58 | (17) | 53 | |||||||||||||||
Allowance for loan losses to non-accrual loans | 152.48 | 117.83 | 81.42 | 3,465 | 7,106 | |||||||||||||||
Non-accrual loans with guarantees to non-accrual loans | 31.21 | 26.58 | 12.34 | 463 | 1,887 | |||||||||||||||
Cost of risk(2) | 4.65 | 4.62 | 3.89 | 3 | 76 | |||||||||||||||
(1) The non-accrual portfolio includes loans classified under the following categories of the Argentine Central Bank classification: With Problems and Medium Risk, High Risk of Insolvency and High Risk and Uncollectible. (2) Annualized. |
|
The Bank’s non-accrual loan portfolio amounted to Ps.10,433 million as of June 30, 2020, representing 2.69% of total loans to the private-sector, decreasing 171 bp from the 4.40% ratio recorded from a year before. This result was mainly a consequence of variances in debtor classification regulations.
The coverage of the non-accrual loan portfolio with allowances for loan losses reached 152.48% as of the end of the Quarter, as compared to the 81.42% recorded from the same period of the prior fiscal year.
In terms of total financing to the private sector (which includes certain items of other financial assets and guarantees granted) and also including provisions on unused balances of credit cards and overdrafts, the Bank’s non-accrual loans portfolio ratio was 2.54%, and its coverage reached 239.92%, as compared to the 4.35% and 106.13% figures recorded in the prior fiscal year, respectively.
Analysis of Loan Loss Experience | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Allowance for loan losses at the beginning of the Quarter | ||||||||||||||||||||
Changes in the allowance for loan losses | 15,700 | 17,092 | 13,088 | (8) | 20 | |||||||||||||||
Provisions charged to income | ||||||||||||||||||||
Provisions charged to income | 4,011 | 3,796 | 2,334 | 6 | 72 | |||||||||||||||
Charge offs | (2,782) | (3,074) | (1,098) | (9) | 153 | |||||||||||||||
Effect of inflation | (1,021) | (2,114) | (1,357) | (52) | (25) | |||||||||||||||
Allowance for loan losses at the end of the Quarter | 15,908 | 15,700 | 12,967 | 1 | 23 | |||||||||||||||
Charge to the income statement | ||||||||||||||||||||
Provisions charged to income(1) | (4,011) | (3,796) | (2,334) | 6 | 72 | |||||||||||||||
Direct charge offs(1) | (175) | (149) | (134) | 17 | 31 | |||||||||||||||
Bad debts recovered | 123 | 53 | 68 | 132 | 81 | |||||||||||||||
Net charge to the income statement | (4,063) | (3,892) | (2,400) | 4 | 69 | |||||||||||||||
(1) Item included for calculating the cost of risk. |
|
During the Quarter, Ps.2,782 million were charged off against the allowance for loan losses and direct charges to the income statement in the amount of Ps.175 million were made.
16 |
CAPITALIZATION AND LIQUIDITY
The minimum capital requirement and the corresponding integration are presented below. Balances are disclosed in accordance with applicable regulations in force as of each period.
Regulatory Capital | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Minimum capital required (A) | 53,284 | 41,783 | 29,485 | 28 | 81 | |||||||||||||||
Allocated to credit risk | 42,457 | 32,409 | 23,041 | 31 | 84 | |||||||||||||||
Allocated to market risk | 1,054 | 828 | 596 | 27 | 77 | |||||||||||||||
Allocated to operational risk | 9,773 | 8,546 | 5,848 | 14 | 67 | |||||||||||||||
Computable capital (B) | 127,402 | 108,128 | 60,788 | 18 | 110 | |||||||||||||||
Tier I | 103,348 | 87,098 | 46,709 | 19 | 121 | |||||||||||||||
Tier II | 24,054 | 21,030 | 14,079 | 14 | 71 | |||||||||||||||
Excess over required capital (B) (A) | 74,118 | 66,345 | 31,303 | 12 | 137 | |||||||||||||||
Risk weighted assets | 650,594 | 510,236 | 357,941 | 28 | 82 | |||||||||||||||
Variation (bp) | ||||||||||||||||||||
Total capital ratio (%) | 19.58 | 21.19 | 16.98 | (161) | 260 | |||||||||||||||
Tier I capital ratio (%) | 15.89 | 17.07 | 13.05 | (118) | 284 |
As of June 30, 2020, the Bank’s computable capital amounted to Ps.127,402 million, Ps.74,118 million (139%) higher than the Ps.53,284 million minimum capital requirement. As of June 30, 2019, this excess amounted to Ps.31,303 million (106%).
The minimum capital requirement increased Ps.23,799 million as compared to June 30, 2019, mainly due to the expansion of regulatory requirements on risk weighted assets. Computable capital increased Ps.66,614 million during the same period, primarily as a consequence of a Ps.56,639 million increase in Tier I capital, which was due to an increase resulting from the accounting shareholders’ equity that resulted from the inflation adjustment recorded on non-monetary assets. The Tier II capital increased Ps.9,975 million as a consequence of the effect of the evolution of the foreign exchange rate on the subordinated debt. The total capital ratio was 19.58%, increasing 260 bp during the last twelve months.
Liquidity | 2020 | 2019 | Variation (%) | |||||||||||||||||
Percentages, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Cash and due from banks | 124,914 | 193,718 | 181,329 | (36) | (31) | |||||||||||||||
Government securities | 107,629 | 67,360 | 150,556 | 60 | (29) | |||||||||||||||
Call-money | 1,458 | 1,817 | 587 | (20) | 148 | |||||||||||||||
Overnight placements in correspondent banks | 1,411 | 4,043 | 4,844 | (65) | (71) | |||||||||||||||
Net repurchase agreement transactions | 66,049 | (23) | 5,309 | N/A | 1,144 | |||||||||||||||
Escrow accounts | 8,288 | 8,049 | 9,458 | 3 | (12) | |||||||||||||||
Other financial assets | 200 | 143 | 1,706 | 40 | (88) | |||||||||||||||
Total liquid assets | 309,949 | 275,107 | 353,789 | 13 | (12) | |||||||||||||||
Liquidity ratios | Variation (bp) | |||||||||||||||||||
Liquid assets (*) as a percentage of transactional deposits | 84.44 | 88.85 | 94.02 | (441) | (958) | |||||||||||||||
Liquid assets (*) as a percentage of total deposits | 52.23 | 54.21 | 60.56 | (198) | (833) |
(*) | Liquid assets include cash and due from banks (including deposits with the Argentine Central Bank and the special escrow accounts with the monetary authority), holdings of Lebac (Argentine Central Bank’s bills), net call money interbank loans, short-term placements with correspondent banks and reverse repurchase agreement transactions with the local market. |
As of June 30, 2020, the Bank’s liquid assets represented 84.44% of the Bank’s transactional deposits and 52.23% of its total deposits as compared to 94.02% and 60.56%, respectively, as of June 30, 2019.
17 |
TARJETAS REGIONALES
INFORMATION DISCLOSURE
The data shown in the following tables correspond to Tarjetas Regionales, consolidated line by line with its subsidiaries.
RESULTS FOR THE QUARTER
Income Statement | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Net interest income | 2,966 | 3,869 | 2,814 | (23) | 5 | |||||||||||||||
Net fee income | 3,229 | 3,582 | 3,229 | (10) | - | |||||||||||||||
Net results from financial instruments | 406 | 728 | 760 | (44) | (47) | |||||||||||||||
Gold and foreign currency quotation differences | (1) | 247 | (16) | (100) | 94 | |||||||||||||||
Other operating income | 712 | 785 | 1,146 | (9) | (38) | |||||||||||||||
Loan loss provisions | (969) | (1,422) | (2,212) | (32) | (56) | |||||||||||||||
Net operating income | 6,343 | 7,789 | 5,721 | (19) | 11 | |||||||||||||||
Personnel expenses | (1,565) | (1,541) | (1,518) | 2 | 3 | |||||||||||||||
Administrative expenses | (1,812) | (1,685) | (1,534) | 8 | 18 | |||||||||||||||
Depreciations and devaluations of assets | (361) | (382) | (315) | (5) | 15 | |||||||||||||||
Other operating expenses | (1,698) | (1,117) | (1,452) | 52 | 17 | |||||||||||||||
Operating income | 907 | 3,064 | 902 | (70) | 1 | |||||||||||||||
Results from the net monetary position | (757) | (1,062) | (1,262) | (29) | (40) | |||||||||||||||
Income tax | (128) | (688) | 417 | (81) | (131) | |||||||||||||||
Net income | 22 | 1,314 | 57 | (98) | (61) | |||||||||||||||
| ||||||||||||||||||||
Profitability and Efficiency | 2020 | 2019 | Variation (bp) | |||||||||||||||||
Percentages, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Return(1) on average assets | 0.13 | 7.17 | 0.28 | (704) | (15) | |||||||||||||||
Return(1) on average shareholders’ equity | 0.43 | 26.37 | 1.23 | (2,594) | (80) | |||||||||||||||
Financial margin(1)(2) | 18.38 | 25.84 | 13.34 | (746) | 504 | |||||||||||||||
Efficiency ratio (3) | 71.05 | 53.83 | 69.10 | 1,722 | 195 |
(1) | Annualized. |
(2) | Net interest income plus net result from financial instruments plus foreign currency quotation differences plus certain items included in other operating income and expenses, divided by average interest-earning assets. |
(3) | Personnel expenses plus administrative expenses plus depreciation and devaluations of assets, divided by net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income, plus the result from the net monetary position. |
During the Quarter, Tarjetas Regionales recorded a Ps.22 million net income, Ps.35 million lower than the figurer recorded for the same quarter of the 2019 fiscal year. This profit represented a 0.13% annualized return on average assets and a 0.43% return on average shareholders’ equity, as compared to the 0.28% and 1.23% figures recorded, respectively, from the second quarter of the 2019 fiscal year.
Net operating income amounted to Ps.6,343 million, increasing 11% from the second quarter of the 2019 fiscal year.
18 |
SELECTED FINANCIAL INFORMATION
Balance Sheet | 2020 | 2019 | Variation (bp) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 1,617 | 2,283 | 1,409 | (29) | 15 | |||||||||||||||
Debt securities | - | 101 | - | (100) | - | |||||||||||||||
Net loans and other financing | 46,957 | 50,378 | 63,561 | (7) | (26) | |||||||||||||||
Other financial assets | 4,539 | 13,415 | 8,134 | (66) | (44) | |||||||||||||||
Property, bank premises, equipment | 4,030 | 3,837 | 4,079 | 5 | (1) | |||||||||||||||
Intangible assets | 1,569 | 1,599 | 1,192 | (2) | 32 | |||||||||||||||
Other non-financial assets | 3,568 | 3,320 | 3,005 | 7 | 19 | |||||||||||||||
Total assets | 62,280 | 74,933 | 81,380 | (17) | (23) | |||||||||||||||
Liabilities | ||||||||||||||||||||
Financing from financial entities | 474 | 6,389 | 580 | (93) | (18) | |||||||||||||||
Other financial liabilities | 29,842 | 32,314 | 35,506 | (8) | (16) | |||||||||||||||
Notes | 7,475 | 10,269 | 22,553 | (27) | (67) | |||||||||||||||
Other non-financial liabilities | 4,517 | 5,304 | 4,162 | (15) | 9 | |||||||||||||||
Total liabilities | 42,308 | 54,276 | 62,801 | (22) | (33) | |||||||||||||||
Shareholders’ equity | 19,972 | 20,657 | 18,579 | (3) | 7 |
ASSET QUALITY
Loan Portfolio Quality | 2020 | 2019 | Variation (%) | |||||||||||||||||
Percentages, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Non-accrual loans(1) | 5,238 | 6,263 | 8,878 | (16) | (41) | |||||||||||||||
Allowances for loan losses | 7,825 | 7,977 | 9,689 | (2) | (19) | |||||||||||||||
Ratios (%) | Variation (bp) | |||||||||||||||||||
Non-accrual loans to loans to the private sector | 9.63 | 10.76 | 12.19 | (113) | (256) | |||||||||||||||
Allowance for loan losses to loans to the private sector | 14.38 | 13.71 | 13.30 | 67 | 108 | |||||||||||||||
allowance for loan losses to non-accrual loans | 149.39 | 127.37 | 109.13 | 2,202 | 4,026 | |||||||||||||||
Cost of risk (2) | 7.19 | 9.76 | 14.06 | (257) | (687) |
(1) | The non-accrual portfolio includes loans classified under the following categories of the Argentine Central Bank classification: With Problems and Medium Risk, High Risk of Insolvency and High Risk and Uncollectible. |
(2) | Annualized. |
As of June 30, 2020, taking into consideration the provisions for unused credit-card balances, the coverage ratio amounted to 163.21%, as compared to the 118.54% figure recorded on the same date of the previous year.
19 |
Analysis of Loan Loss Experience | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Allowances for loan losses | ||||||||||||||||||||
At the beginning of the Quarter | 7,977 | 7,782 | 9,428 | 3 | (15) | |||||||||||||||
Changes in the allowance for loan losses | ||||||||||||||||||||
Provisions charged to income | 862 | 1,328 | 1,878 | (35) | (54) | |||||||||||||||
Reversals of allowances for loan losses | (111) | - | (882) | - | (87) | |||||||||||||||
Charge offs(1) | (678) | (579) | 11 | 17 | (6,264) | |||||||||||||||
Effect of inflation | (225) | (554) | (746) | (59) | (70) | |||||||||||||||
Allowance for loan losses at the end of the Quarter | 7,825 | 7,977 | 9,689 | (2) | (19) | |||||||||||||||
Charge to the income statement | ||||||||||||||||||||
Provisions charged to income(2) | (862) | (1,328) | (1,878) | (35) | (54) | |||||||||||||||
Direct charge offs(2) | (107) | (94) | (116) | 14 | (8) | |||||||||||||||
Bad debt recovered | 38 | 11 | 87 | 245 | (56) | |||||||||||||||
Net charge to the income statement | (931) | (1,411) | (1,907) | (34) | (51) |
(1) | Item included for calculating the cost of risk. |
20 |
GALICIA ADMINISTRADORA DE FONDOS
RESULTS FOR THE QUARTER
Income Statement | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Net interest income | 6 | - | - | N/A | N/A | |||||||||||||||
Net results from financial instruments | 20 | 30 | 27 | (33) | (26) | |||||||||||||||
Gold and foreign currency quotation differences | 8 | 5 | (1) | 60 | (900) | |||||||||||||||
Other operating income | 505 | 210 | 222 | 140 | 127 | |||||||||||||||
Net operating income | 539 | 245 | 248 | 120 | 117 | |||||||||||||||
Personnel and administrative expenses | (71) | (73) | (44) | (3) | 61 | |||||||||||||||
Other operating expenses | (29) | (13) | (11) | 123 | 164 | |||||||||||||||
Operating income | 439 | 159 | 193 | 176 | 127 | |||||||||||||||
Results from the net monetary position | (13) | (33) | (27) | (61) | (52) | |||||||||||||||
Income tax | (130) | (32) | (39) | 306 | 233 | |||||||||||||||
Net income | 296 | 94 | 127 | 215 | 133 |
ASSETS UNDER MANAGEMENT
Mutual Fund | Assets Under Management as of: | Variation (%) | ||||||||||||||||||
In millions of pesos, except otherwise noted | 2Q20 | 1Q20 | 2Q19 | vs 1Q20 | vs 2Q19 | |||||||||||||||
Fima Premium | 122,518 | 111,124 | 68,670 | 10 | 78 | |||||||||||||||
Fima Ahorro Pesos | 6,288 | 4,400 | 20,102 | 43 | (69) | |||||||||||||||
Fima Ahorro Plus | 9,840 | 5,602 | 14,574 | 76 | (32) | |||||||||||||||
Fima Capital Plus | 7,749 | 172 | 287 | 4,405 | 2,600 | |||||||||||||||
Fima Renta en Pesos | 600 | 261 | 470 | 130 | 28 | |||||||||||||||
Fima Renta Plus | 717 | 204 | 236 | 251 | 204 | |||||||||||||||
Fima Abierto Pymes | 627 | 622 | 697 | 1 | (10) | |||||||||||||||
Fima Acciones | 499 | 257 | 534 | 94 | (7) | |||||||||||||||
Fima PB Acciones | 648 | 454 | 1,096 | 43 | (41) | |||||||||||||||
Fima Mix I | 475 | 135 | 11 | 252 | 4,218 | |||||||||||||||
Fima Renta Dolares I | 1,673 | 2,305 | 5,905 | (27) | (72) | |||||||||||||||
Fima Renta Dolares II | 495 | 627 | 2,211 | (21) | (78) | |||||||||||||||
Fima Renta Acciones Latinoamerica | 54 | 62 | 190 | (13) | (72) | |||||||||||||||
Fima Renta Fija Internacional | 1,434 | 2,679 | 8,498 | (46) | (83) | |||||||||||||||
Total Assets Under Management | 153,617 | 128,904 | 123,481 | 19 | 24 |
21 |
SELECTED FINANCIAL INFORMATION
Balance Sheet | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 292 | 156 | 57 | 87 | 412 | |||||||||||||||
Loans and other financing | 194 | - | - | N/A | N/A | |||||||||||||||
Other financial assets | 149 | 384 | 267 | (61) | (44) | |||||||||||||||
Other non-financial assets | 16 | 15 | 87 | 7 | (82) | |||||||||||||||
Total assets | 651 | 555 | 411 | 17 | 58 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Other non-financial liabilities | 166 | 367 | 37 | (55) | 349 | |||||||||||||||
Total liabilities | 166 | 367 | 37 | (55) | 349 | |||||||||||||||
Shareholders’ equity | 485 | 188 | 374 | 158 | 30 |
22 |
SUDAMERICANA HOLDING
INFORMATION DISCLOSURE
The data shown in the tables of this report and the consolidated financial statements correspond to Sudamericana Holding, consolidated line by line with the subsidiaries under its control.
RESULTS FOR THE QUARTER
Income Statement | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Earned premium | 1,628 | 1,498 | 1,517 | 9 | 7 | |||||||||||||||
Incurred claims | (155) | (220) | (112) | (30) | 38 | |||||||||||||||
Withdrawals | (3) | (2) | (3) | 50 | - | |||||||||||||||
Life annuities | (3) | (3) | (4) | - | (25) | |||||||||||||||
Acquisition and general expenses | (630) | (596) | (832) | 6 | (24) | |||||||||||||||
Other income and expenses | 6 | (74) | (16) | (108) | (138) | |||||||||||||||
Underwriting income | 843 | 603 | 550 | 40 | 53 | |||||||||||||||
Interest income | 148 | 220 | 227 | (33) | (35) | |||||||||||||||
Net results from financial instruments | (2) | 23 | 5 | 109 | (140) | |||||||||||||||
Gold and foreign currency quotation differences | (19) | (7) | 38 | (171) | (150) | |||||||||||||||
Other operating income | 85 | 144 | 115 | (41) | (26) | |||||||||||||||
Net operating income | 1,055 | 983 | 935 | 7 | 13 | |||||||||||||||
Personnel expenses | (233) | (224) | (210) | 4 | 11 | |||||||||||||||
Administrative expenses | (121) | (116) | (153) | 4 | (21) | |||||||||||||||
Depreciations and devaluations of assets | (51) | (57) | (51) | (11) | - | |||||||||||||||
Operating income | 650 | 586 | 521 | 11 | 25 | |||||||||||||||
Results from the net monetary position | (91) | (44) | (180) | 107 | (49) | |||||||||||||||
Income tax | (143) | (212) | 13 | (33) | 1,200 | |||||||||||||||
Net income | 416 | 330 | 354 | 26 | 18 | |||||||||||||||
Other comprehensive income | 40 | (25) | (9) | 260 | 544 | |||||||||||||||
Total comprehensive income | 456 | 305 | 345 | 50 | 32 |
Profitability | 2020 | 2019 | Variation ( bp) | |||||||||||||||||
Percentages, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Return on average assets(1) | 30.76 | 25.81 | 24.27 | 495 | 649 | |||||||||||||||
Return on average shareholders’ equity(1) | 59.57 | 54.83 | 52.44 | 474 | 713 | |||||||||||||||
Efficiency ratio (2) | 40.83 | 43.21 | 62.89 | (238) | (2,206) | |||||||||||||||
Combined ratio(3) | 45.59 | 51.64 | 69.16 | (605) | (2,357) |
(1) | Annualized. |
(2) | Acquisition and general expenses divided by earned premiums plus other income and expenses. |
(3) | Acquisition and general expenses divided by earned premiums plus incurred claims, withdrawals, life annuities, other income and expenses. |
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SELECTED FINANCIAL INFORMATION
Balance Sheet | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 2Q | 1Q | 2Q | vs 1Q20 | vs 2Q19 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 88 | 133 | 143 | (34) | (38) | |||||||||||||||
Debt securities | 2 | 11 | 11 | (82) | (82) | |||||||||||||||
Net loans and other financing | 1,137 | 831 | 609 | 37 | 87 | |||||||||||||||
Other financial assets | 2,153 | 2,013 | 2,537 | 7 | (15) | |||||||||||||||
Property, bank premises, equipment | 507 | 510 | 501 | (1) | 1 | |||||||||||||||
Intangible assets | 112 | 137 | 173 | (18) | (35) | |||||||||||||||
Assets for insurance contracts | 1,365 | 1,269 | 1,549 | 8 | (12) | |||||||||||||||
Other non-financial assets | 668 | 389 | 513 | 72 | 30 | |||||||||||||||
Total assets | 6,032 | 5,293 | 6,036 | 14 | - | |||||||||||||||
Liabilities | ||||||||||||||||||||
Financial entities | - | - | 8 | - | (100) | |||||||||||||||
Liabilities for insurance contracts | 1,615 | 1,666 | 1,816 | (3) | (11) | |||||||||||||||
Other non-financial liabilities | 1,383 | 1,048 | 1,332 | 32 | 4 | |||||||||||||||
Total liabilities | 2,998 | 2,714 | 3,156 | 10 | (5) | |||||||||||||||
Shareholders’ equity | 3,034 | 2,579 | 2,880 | 18 | 5 |
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RELEVANT INFORMATION
EXTRAORDINARY SHAREHOLDER’S MEETING
Grupo Financiero Galicia is calling a meeting of its shareholders, at an Extraordinary Meeting to be held on September 22, 2020, at 11:00 a.m., at which the partial cancellation of the Optional Reserve for Future Distribution of Profits (amounting to Ps.1,700 million) and the distribution of cash dividends (in the same amount) will be considered by such shareholders.
COVID-19
During the Quarter, Grupo Financiero Galicia and its subsidiaries have continued and adapted their operations under the challenging circumstances resulting from the spread of the Coronavirus (COVID-19). This Covid-19 pandemic has generated various consequences impacting businesses and economic activities globally. As of mid-March, when the virus began to spread in Argentina, the Argentine National Government implemented a series of measures designed to reduce contagion, provide for preventive and mandatory social isolation from March 20 to August 30, 2020 (a date that may be extended if the Argentine Government so provides) and enabling the free movement of only those people linked to the provision and/or production of services and products declared essential, with certain variations to such measures depending on the region of the country implicated. Additionally, the Argentine Central Bank and other regulatory agencies established certain additional regulations with objectives linked to providing assistance to sectors whose activity was affected by the pandemic and to the health care of the community in general.
The final scope of COVID-19 pandemic and its impact on the global and Argentine economy are still unknown. Although, as of the date of this report, Grupo Financiero Galicia and its subsidiaries have suffered limited impacts on their results due to the pandemic, the impact of a lower level of activity and a higher unemployment could be significant in the future.
The Board of Directors of GFG continues to analyze the evolution of the situation and is prepared to take all measures within its power to guarantee business continuity and to preserve the health and safety of GFG’s employees, customers and other stakeholders.
REGULATORY CHANGES
In connection with the foregoing, the Argentine Central Bank has established certain regulations and protocols, of which the following stand out: (i) attention to customers by prior request of an appointment; (ii) the suspension of the collection of ATM fees; (iii ) the suspension, until December 31, 2020, of dividend distributions; (iv) the extension of credit card maturities; (v) financing of unpaid credit card balances at a maximum interest rate of 43%; (vi) postponement of maturities of unpaid loan balances; (vii) the granting of zero-rate financing to self-employed people; (viii) the granting of financing to Micro SMEs at a 24% nominal annual interest rate; (ix) the granting of financing to companies for the payment of salaries at a subsidized interest rate; (x) a minimum interest rate on time deposits equivalent to 79% of the interest rate on Leliq (and for time deposits from individuals of up to Ps.1 million, said minimum interest rate will be equivalent to 87% of the interest rate on Leliq); (xi) adding flexibility in the parameters used for classification of debtors; and (xii) controls on the foreign exchange market.
Additionally, to promote the granting of financing to sectors affected by the COVID-19 pandemic, the Argentine Central Bank has implemented certain reductions on reserve requirements.
This report is a summary analysis of GFG’s financial condition and results of operations as of and for the periods indicated. For a correct interpretation, this report must be read in conjunction with GFG’s financial statements, as well as with all other material periodically filed with the Argentine National Securities Commission (www.cnv.gob.ar), the Buenos Aires Stock Exchange (www.bolsar.com), the Cordoba Stock Exchange (www.bolsacba.com.ar) and the Nasdaq (www.nasdaq.com). In addition, the Argentine Central Bank (www.bcra.gob.ar) may publish information related to Banco Galicia as of a date subsequent to the last date for which the Bank has published information.
Readers of this report must note that this is a translation made from an original version written and expressed in Spanish. Therefore, any matters of interpretation should be referred to the original version in Spanish.
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