Exhibit 99.1
GRUPO FINANCIERO GALICIA S.A. REPORTS FINANCIAL RESULTS FOR
THE THIRD QUARTER OF THE 2020 FISCAL YEAR THAT ENDED ON SEPTEMBER 30, 2020
Buenos Aires, Argentina, November 24, 2020 – Grupo Financiero Galicia S.A. (BYMA /NASDAQ: GGAL) announced its financial results for the third quarter of the 2020 fiscal year (the “Quarter”), which ended on September 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 was 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.4,835 million, 136% higher than the Ps.2,051 million recorded in the same quarter of the 2019 fiscal year. Net income attributable to Grupo Financiero Galicia amounted to Ps.5,450 million, 99% higher than the Ps.2,744 million recorded in the third quarter of the prior fiscal year. Net profit per share for the Quarter amounted to Ps.3.82, as compared to the Ps.1.92 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.4,476 million, Galicia Administradora de Fondos S.A. (“GAF”), for Ps.344 million, Tarjetas Regionales S.A. (“Tarjetas Regionales”), for Ps.295 million, and in Sudamericana Holding S.A. (“Sudamericana Holdings”), for Ps.273 million. These results were increased by a net operating income of Ps.124 million and partially offset by personnel and administrative expenses of Ps.45 million and losses from the net monetary position in the amount of Ps.133 million. |
Ø | The Bank’s market share of loans to the private sector was 12.72%, increasing 131 basis points (“bp”) as compared to September 30, 2019. Market share for deposits from the private sector was 10.13%, approximately equivalent to the figure that was recorded as of the end of the third quarter of the prior fiscal year. |
Ø | As of the end of the Quarter, the minimum capital requirement amounted to Ps.49,973 million, increasing Ps.13,068 million (35%), and computable capital was Ps.141,035 million, increasing Ps.67,578 million (92%), in each case as compared to the figures recorded in the third quarter of the 2019 fiscal year. The excess of computable capital over the minimum capital requirement amounted to Ps.91,062 million, and the total capital ratio was 23.09%. |
Conference Call:
November 25, 2020, 9:00 am Eastern Time
Call-in number: +1 323-289-6576
Conference ID: 5432410
1 |
For more information, contact:
Bruno Folino - CFO
Pablo Firvida - IRO Tel.: (5411) 6329-4881
inversores@gfgsa.com
www.gfgsa.com
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CONSOLIDATED INFORMATION
Consolidated Financial Statement | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 3Q20 | vs 2Q19 | |||||||||||||||
Financial Information | ||||||||||||||||||||
Assets | 948,631 | 961,352 | 927,875 | (1) | 2 | |||||||||||||||
Net loans and other financing | 458,793 | 460,268 | 463,081 | - | (1) | |||||||||||||||
Deposits | 614,983 | 635,449 | 519,153 | (3) | 18 | |||||||||||||||
Shareholders’ equity attributable to GFG | 154,944 | 151,809 | 134,494 | 2 | 15 | |||||||||||||||
Shares outstanding (in thousands of shares) (1) | 1,426,765 | 1,426,765 | 1,426,765 | - | - | |||||||||||||||
Book value per share (in pesos) | 108.58 | 106.38 | 94.25 | 220 | 1,433 | |||||||||||||||
Net income attributable to GFG | 5,450 | 6,065 | 2,744 | (10) | 99 | |||||||||||||||
Net income per share (in pesos) | 3.82 | 4.25 | 1.92 | (43) | 190 |
(1) 10 ordinary shares = 1 ADS.
Selected Ratios | 2020 | 2019 | Variation (bp) | |||||||||||||||||
Percentages, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Return (1) on average assets (2) | 2.30 | 2.72 | 1.17 | (42) | 113 | |||||||||||||||
Return (1) on average shareholders´ equity (2) | 14.02 | 16.45 | 8.10 | (243) | 592 | |||||||||||||||
Financial Margin (2) (3) | 18.09 | 20.22 | 14.16 | (213) | 393 | |||||||||||||||
Efficiency ratio (4) | 49.08 | 41.94 | 51.65 | 714 | (257) | |||||||||||||||
Total capital ratio (5) | 23.93 | 20.04 | 16.48 | 389 | 745 | |||||||||||||||
Non-performing loans / Loans to private sector | 2.72 | 3.34 | 4.93 | (62) | (221) | |||||||||||||||
Allowance for loan losses / Loans to private sector | 7.33 | 7.16 | 6.47 | 17 | 86 | |||||||||||||||
Allowance for loan losses / Non-accrual loans | 269.72 | 214.66 | 131.35 | 5,506 | 13,837 | |||||||||||||||
Non-accrual portfolio with guarantees to non-accrual portfolio | 18.90 | 20.80 | 12.11 | (190) | 679 | |||||||||||||||
Cost of Risk (6) | 4.83 | 10.65 | 7.13 | (582) | (230) |
(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 | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Market price | (bp) | |||||||||||||||||||
Shares – BYMA | 105.90 | 103.20 | 81.55 | 270 | 2,435 | |||||||||||||||
ADS – NASDAQ (in US$) | 7.24 | 9.70 | 13.00 | (246) | (576) | |||||||||||||||
Price BYMA / book value | 0.98 | 0.97 | 0.87 | 1 | 11 | |||||||||||||||
Average daily volume (in thousands of shares) | (%) | |||||||||||||||||||
BYMA | 3,264 | 3,496 | 1,907 | (7) | 71 | |||||||||||||||
NASDAQ (1) | 14,643 | 18,404 | 24,279 | (20) | (40) | |||||||||||||||
Market share (%) | (bp) | |||||||||||||||||||
Banco Galicia | ||||||||||||||||||||
Loans to the private sector | 12.72 | 12.92 | 11.41 | (20) | 131 | |||||||||||||||
Deposits from the private sector | 10.13 | 10.44 | 10.13 | (31) | - | |||||||||||||||
Galicia Administradora de Fondos S.A. | 10.61 | 11.11 | 10.66 | (50) | (5) |
(1) Expressed in equivalent shares: 10 ordinary shares = 1 ADS.
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GRUPO FINANCIERO GALICIA
RESULTS FOR THE QUARTER
Income Statement | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Results from Equity Investments | 5,538 | 6,135 | 2,720 | (10) | 104 | |||||||||||||||
Banco de Galicia y Buenos Aires S.A.U. | 4,476 | 5,202 | 2,816 | (14) | 59 | |||||||||||||||
Tarjetas Regionales S.A. | 295 | 20 | (207) | 1,375 | 243 | |||||||||||||||
Galicia Administradora de Fondos S.A. | 344 | 319 | 71 | 8 | 385 | |||||||||||||||
Sudamericana Holding S.A. | 273 | 392 | 60 | (30) | 355 | |||||||||||||||
Other subsidiaries | 150 | 202 | (20) | (26) | 850 | |||||||||||||||
Net operating income | 124 | 84 | 190 | 48 | (35) | |||||||||||||||
Administrative expenses | (45) | (70) | (77) | (36) | (42) | |||||||||||||||
Other operating income and expenses | (4) | (1) | (2) | 300 | 100 | |||||||||||||||
Results from the net monetary position | (133) | (67) | (59) | 99 | 125 | |||||||||||||||
Income tax | (30) | (16) | (28) | 88 | 7 | |||||||||||||||
Net income attributable to GFG | 5,450 | 6,065 | 2,744 | (10) | 99 | |||||||||||||||
Other comprehensive income | (615) | 1,966 | (693) | (131) | 11 | |||||||||||||||
Comprehensive income attributable to GFG | 4,835 | 8,031 | 2,051 | (40) | 136 |
Net income attributable to GFG for the Quarter amounted to Ps.5,450 million, which represented a 2.30% annualized return on average assets and a 14.02% return on average shareholders’ equity.
The abovementioned result was mainly attributable to profits realized from GFG’s interests in Banco Galicia, for Ps.4,476 million, GAF, for Ps.344 million, Tarjetas Regionales, for Ps.295 million, and in Sudamericana Holding, for Ps.273 million.
SELECTED FINANCIAL INFORMATION – CONSOLIDATED
Balance Sheet | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 142,896 | 136,540 | 151,178 | 5 | (5) | |||||||||||||||
Debt securities | 182,384 | 167,725 | 78,079 | 9 | 134 | |||||||||||||||
Net loans and other financing | 458,793 | 460,268 | 463,081 | - | (1) | |||||||||||||||
Other financial assets | 98,613 | 129,884 | 172,407 | (24) | (43) | |||||||||||||||
Equity investments in subsidiaries, associates and joint businesses | 45 | 3 | - | 1,400 | N/A | |||||||||||||||
Property, bank premises, equipment | 39,589 | 39,930 | 40,740 | (1) | (3) | |||||||||||||||
Intangible assets | 13,083 | 13,219 | 11,049 | (1) | 18 | |||||||||||||||
Other assets | 13,178 | 13,732 | 11,118 | (4) | 19 | |||||||||||||||
Assets available for sale | 50 | 51 | 223 | (2) | (78) | |||||||||||||||
Total assets | 948,631 | 961,352 | 927,875 | (1) | 2 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits | 614,983 | 635,449 | 519,153 | (3) | 18 | |||||||||||||||
Financing from financial entities | 9,497 | 11,844 | 37,341 | (20) | (75) | |||||||||||||||
Other financial liabilities | 78,084 | 72,427 | 130,870 | 8 | (40) | |||||||||||||||
Notes | 17,706 | 17,049 | 36,562 | 4 | (52) | |||||||||||||||
Subordinated notes | 19,199 | 19,635 | 19,940 | (2) | (4) | |||||||||||||||
Other liabilities | 50,503 | 49,484 | 46,157 | 2 | 9 | |||||||||||||||
Total liabilities | 789,972 | 805,888 | 790,023 | (2) | - | |||||||||||||||
Shareholders’ equity attributable to third parties | 3,715 | 3,655 | 3,358 | 2 | 11 | |||||||||||||||
Shareholders’ equity attributable to GFG | 154,944 | 151,809 | 134,494 | 2 | 15 | |||||||||||||||
Total shareholder’s equity | 158,659 | 155,464 | 137,852 | 2 | 15 |
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Income Statement | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Net interest income | 13,614 | 21,185 | 12,107 | (36) | 12 | |||||||||||||||
Interest income | 34,144 | 37,708 | 42,179 | (9) | (19) | |||||||||||||||
Interest related expenses | (20,530) | (16,523) | (30,072) | 24 | (32) | |||||||||||||||
Net fee income | 8,729 | 8,021 | 8,253 | 9 | 6 | |||||||||||||||
Fee income | 10,954 | 10,064 | 10,602 | 9 | 3 | |||||||||||||||
Fee related expenses | (2,225) | (2,043) | (2,349) | 9 | (5) | |||||||||||||||
Net results from financial instruments | 16,520 | 14,627 | 19,789 | 13 | (17) | |||||||||||||||
Gold and foreign currency quotation differences | 2,375 | 1,025 | 2,659 | 132 | (11) | |||||||||||||||
Other operating income | 4,686 | 5,939 | 4,800 | (21) | (2) | |||||||||||||||
Underwriting income from insurance business | 1,279 | 1,282 | 1,076 | - | 19 | |||||||||||||||
Loan loss provisions | (5,668) | (5,816) | (8,251) | (3) | (31) | |||||||||||||||
Net operating income | 41,535 | 46,263 | 40,433 | (10) | 3 | |||||||||||||||
Personnel expenses | (7,420) | (6,968) | (7,340) | 6 | 1 | |||||||||||||||
Administrative expenses | (7,062) | (7,391) | (6,876) | (4) | 3 | |||||||||||||||
Depreciations and devaluations of assets | (1,819) | (1,754) | (1,429) | 4 | 27 | |||||||||||||||
Other operating expenses | (7,601) | (15,327) | (8,272) | (50) | (8) | |||||||||||||||
Operating income | 17,633 | 14,823 | 16,516 | 19 | 7 | |||||||||||||||
Results from the net monetary position | (6,792) | (4,461) | (10,348) | 52 | (34) | |||||||||||||||
Income tax | (5,330) | (4,293) | (3,466) | 24 | 54 | |||||||||||||||
Net income | 5,511 | 6,069 | 2,702 | (9) | 104 | |||||||||||||||
Net income attributable to third parties | 61 | 4 | (42) | 1,425 | 245 | |||||||||||||||
Net income attributable to GFG | 5,450 | 6,065 | 2,744 | (10) | 99 | |||||||||||||||
Other comprehensive income(1) | (615) | 1,966 | (693) | (131) | 11 | |||||||||||||||
Total comprehensive income | 4,896 | 8,035 | 2,009 | (39) | 144 | |||||||||||||||
Comprehensive income attributable to third parties | 61 | 4 | (42) | 1,425 | 245 | |||||||||||||||
Comprehensive income attributable to GFG | 4,835 | 8,031 | 2,051 | (40) | 136 | |||||||||||||||
(1) Net of income tax. | ||||||||||||||||||||
Additional Information | 2020 | 2019 | ||||||||||||||||||
3Q | 2Q | 1Q | 4Q | 3Q | ||||||||||||||||
Employees | 9,408 | 9,516 | 9,549 | 9,718 | 9,824 | |||||||||||||||
Banco Galicia | 5,842 | 5,971 | 6,040 | 6,118 | 6,247 | |||||||||||||||
Tarjetas Regionales | 3,110 | 3,099 | 3,075 | 3,151 | 3,161 | |||||||||||||||
Galicia Administradora de Fondos | 25 | 25 | 27 | 27 | 29 | |||||||||||||||
Sudamericana Holding | 385 | 376 | 376 | 395 | 375 | |||||||||||||||
Other subsidiaries | 46 | 45 | 31 | 27 | 12 | |||||||||||||||
Branches and other points of sales | 510 | 511 | 517 | 528 | 545 | |||||||||||||||
Banco Galicia | 326 | 326 | 326 | 326 | 325 | |||||||||||||||
Tarjetas Regionales S.A. | 184 | 185 | 191 | 202 | 220 | |||||||||||||||
Deposit Accounts at Banco Galicia (in thousands) | 6,148 | 5,812 | 5,427 | 5,279 | 5,140 | |||||||||||||||
Credit Cards (in thousands) | 13,490 | 13,472 | 13,428 | 13,544 | 13,852 | |||||||||||||||
Banco Galicia | 5,009 | 5,096 | 5,032 | 4,986 | 5,191 | |||||||||||||||
Tarjetas Regionales S.A. | 8,481 | 8,376 | 8,396 | 8,558 | 8,661 | |||||||||||||||
GAF’ assets under management (millions of pesos) | 182,686 | 165,376 | 138,774 | 99,970 | 94,573 | |||||||||||||||
Inflation, exchange rate and interest rates | ||||||||||||||||||||
Consumer price index(1) | 346.6207 | 321.9738 | 305.5515 | 283.4442 | 253.7102 | |||||||||||||||
Consumer price index(1) (%) | 7.65 | 5.37 | 7.80 | 11.72 | 12.49 | |||||||||||||||
Wholesale price index (IPIM) (%) | 11.76 | 2.69 | 3.62 | 13.22 | 15.94 | |||||||||||||||
Acquisition value unit (UVA) | 58.52 | 55.06 | 51.62 | 47.16 | 41.26 | |||||||||||||||
Exchange rate (Ps./US$)(2) | 76.18 | 70.46 | 64.47 | 59.90 | 57.56 | |||||||||||||||
Badlar (%, quarterly averages)(3) | 29.64 | 24.42 | 33.25 | 48.06 | 54.67 |
(1) | Consumer price index published by the Argentine National Institute of Statistics (INDEC) |
(2) | Reference exchange rate 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. |
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BANCO GALICIA
HIGHLIGHTS
Ø | Net income for the Quarter amounted to Ps.4,476 million, Ps.1,660 million (59%) higher than the figure recorded for the same quarter of the 2019 fiscal year mainly due to an Ps.896 million (10%) increase in net interest income and Ps.1,236 million (19%) decrease in loan loss provisions. |
Ø | Net operating income for the Quarter amounted to Ps.31,460 million, Ps.408 million lower than the Ps.31,868 million recorded in the third quarter of the 2019 fiscal year mainly as a consequence of a decrease in net income from financial instruments, which was partially offset by the growth in net interest income. |
Ø | The credit exposure to the private sector reached Ps.445,382 million for the Quarter, down 2% from Ps.454,324 million recorded in the third quarter of the 2019 fiscal year, and deposits reached Ps.616,451 million, up 18% from the Ps.522,998 million recorded during the same period. As of September 30, 2020, the Bank’s estimated market share of loans to the private sector was 12.72% while its estimated market share of deposits from the private sector was 10.13%. |
Ø | The non-accrual loan portfolio represented 2.20% of total financing to the private sector, representing a decrease of 152 bp from the 3.72% recorded at the end of the same quarter of the prior fiscal year, while coverage with allowances for loan losses reached 301.52%. |
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RESULTS FOR THE QUARTER
Income Statement | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Net interest income | 10,116 | 17,784 | 9,220 | (43) | 10 | |||||||||||||||
Net fee income | 4,989 | 5,106 | 4,199 | (2) | 19 | |||||||||||||||
Net results from financial instruments | 15,574 | 13,896 | 18,861 | 12 | (17) | |||||||||||||||
Gold and foreign currency quotation differences | 2,254 | 930 | 2,384 | 142 | (5) | |||||||||||||||
Other operating income | 3,676 | 4,364 | 3,589 | (16) | 2 | |||||||||||||||
Loan-loss provisions | (5,149) | (4,773) | (6,385) | 8 | (19) | |||||||||||||||
Net operating income | 31,460 | 37,307 | 31,868 | (16) | (1) | |||||||||||||||
Personnel expenses | (5,346) | (4,963) | (5,383) | 8 | (1) | |||||||||||||||
Administrative expenses | (4,569) | (5,225) | (4,635) | (13) | (1) | |||||||||||||||
Depreciations and devaluations of assets | (1,336) | (1,302) | (1,030) | 3 | 30 | |||||||||||||||
Other operating expenses | (5,982) | (13,473) | (7,083) | (56) | (16) | |||||||||||||||
Operating income | 14,227 | 12,344 | 13,737 | 15 | 4 | |||||||||||||||
Results from the net monetary position | (5,232) | (3,406) | (8,010) | 54 | (35) | |||||||||||||||
Results from associates and joint businesses | 33 | 68 | 29 | (51) | 14 | |||||||||||||||
Income tax | (4,552) | (3,804) | (2,940) | 20 | 55 | |||||||||||||||
Net Income | 4,476 | 5,202 | 2,816 | (14) | 59 | |||||||||||||||
Other comprehensive income (loss) | (626) | 1,930 | (641) | (132) | 2 | |||||||||||||||
Total comprehensive income | 3,850 | 7,132 | 2,175 | (46) | 77 | |||||||||||||||
| ||||||||||||||||||||
Profitability and Efficiency | 2020 | 2019 | Variation ( bp) | |||||||||||||||||
Percentages, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Return (1) on average assets | 2.00 | 2.46 | 1.22 | (46) | 78 | |||||||||||||||
Return (1) on average shareholders’ equity | 13.68 | 16.77 | 9.71 | (309) | 397 | |||||||||||||||
Financial margin(1)(2) | 16.98 | 20.26 | 13.57 | (328) | 341 | |||||||||||||||
Efficiency ratio (3) | 44.09 | 36.79 | 55.95 | 730 | (1,186) |
(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.4,476 million, Ps.1,660 million (59%) higher than the Ps.2,816 million recorded for the same quarter of the previous fiscal year. This result was primarily a consequence of a Ps2,778 million (35%) decrease in results from the net monetary position, Ps.1,236 million (19%) lower loan loss provisions, an Ps.896 million (10%) higher net interest income and a Ps.790 million (19%)higher net fee income, offset by a Ps.3,287 million (17%) lower net income from financial instruments.
7 |
Net Interest Income | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Interest income | 29,899 | 33,185 | 36,246 | (10) | (18) | |||||||||||||||
Private sector securities | - | - | 36 | - | (100) | |||||||||||||||
Public Sector securities (1) | 864 | 1,792 | 1,255 | (52) | (31) | |||||||||||||||
Loans and other financing | 27,138 | 29,576 | 29,466 | (8) | (8) | |||||||||||||||
Financial sector | 495 | 914 | 988 | (46) | (50) | |||||||||||||||
Non-financial private sector | 26,643 | 28,662 | 28,478 | (7) | (6) | |||||||||||||||
Overdrafts | 1,903 | 3,358 | 4,629 | (43) | (59) | |||||||||||||||
Promissory notes | 11,049 | 11,267 | 6,176 | (2) | 79 | |||||||||||||||
Mortgage notes | 2,542 | 2,950 | 3,286 | (14) | (23) | |||||||||||||||
Pledge loans | 316 | 184 | 338 | 72 | (7) | |||||||||||||||
Personal loans | 3,590 | 3,795 | 3,595 | (5) | - | |||||||||||||||
Credit-card loans | 5,654 | 5,698 | 8,121 | (1) | (30) | |||||||||||||||
Financial leases | 89 | 92 | 210 | (3) | (58) | |||||||||||||||
Pre-financing and financing of exports | 734 | 964 | 2,001 | (24) | (63) | |||||||||||||||
Other | 766 | 354 | 122 | 116 | 528 | |||||||||||||||
Repurchase agreement transactions | 1,897 | 1,817 | 5,489 | 4 | (65) | |||||||||||||||
Interest expenses | (19,783) | (15,401) | (27,026) | 28 | (27) | |||||||||||||||
Deposits from the non-financial private sector | (19,118) | (14,091) | (23,883) | 36 | (20) | |||||||||||||||
Saving accounts | (2,979) | (2,329) | (3,240) | 28 | (8) | |||||||||||||||
Time deposits and term investments | (14,729) | (11,619) | (20,495) | 27 | (28) | |||||||||||||||
Other | (1,410) | (143) | (148) | 886 | 853 | |||||||||||||||
Financing from financial institutions | (133) | (149) | (516) | (11) | (74) | |||||||||||||||
Repurchase agreement transactions | (10) | (18) | (114) | (44) | (91) | |||||||||||||||
Other interest-bearing liabilities | (350) | (206) | (475) | 70 | (26) | |||||||||||||||
Notes | (172) | (937) | (2,038) | (82) | (92) | |||||||||||||||
Net interest income | 10,116 | 17,784 | 9,220 | (43) | 10 |
Net interest income for the Quarter amounted to Ps.10,116 million, representing an Ps.896 million (10%) increase as compared to the Ps.9,220 million profit recorded for the same quarter of the 2019 fiscal year.
Interest income for the Quarter reached Ps.29,899 million, down 18% from the Ps.36,246 million recorded in the same quarter of the 2019 fiscal year. This decrease was primarily a consequence of lower interests realized in repurchase agreement transactions, for Ps.3,592 million (65%), on overdrafts, for Ps.2,726 million (59%), and on credit cards, for Ps.2,467 million (30%), and which was offset by higher interests realized on promissory notes, for Ps.4,873 million (79%).
Interest expenses amounted to Ps.19,783 million, down 27% from the same quarter of the 2019 fiscal year mainly due to lower interest realized on time deposits and term investments (for Ps.5,766 million or 28%).
8 |
Yield and Rates(1) | 2020 | 2019 | Variation (%/bp) | |||||||||||||||||||||||||||||||||||||
Average balances: in millions of pesos | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||||||||||||||||||||||
Yields and rates: annualized nominal % | Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | ||||||||||||||||||||||||||||||
In pesos | 551,160 | 31.32 | 505,906 | 33.87 | 405,617 | 50.14 | 9 | (255) | 36 | (1,882) | ||||||||||||||||||||||||||||||
Government securities | 186,432 | 34.90 | 137,289 | 38.90 | 135,493 | 55.41 | 36 | (400) | 38 | (2,051) | ||||||||||||||||||||||||||||||
Loans | 321,033 | 30.23 | 318,669 | 33.49 | 226,997 | 46.17 | 1 | (326) | 41 | (1,594) | ||||||||||||||||||||||||||||||
Other interest-earning assets | 43,695 | 24.10 | 49,948 | 22.52 | 43,127 | 54.49 | (13) | 158 | 1 | (3,039) | ||||||||||||||||||||||||||||||
In foreign currency | 56,319 | 5.82 | 81,005 | 11.41 | 179,700 | 2.66 | (30) | (559) | (69) | 316 | ||||||||||||||||||||||||||||||
Government securities | 179 | (487.15) | 5,877 | 60.30 | 17,949 | (37.39) | (97) | (54,745) | (99) | (44,976) | ||||||||||||||||||||||||||||||
Loans | 54,429 | 7.45 | 73,352 | 7.47 | 159,600 | 7.09 | (26) | (2) | (66) | 36 | ||||||||||||||||||||||||||||||
Other interest-earning assets | 1,711 | 5.38 | 1,776 | 12.39 | 2,151 | 7.85 | (4) | (701) | (20) | (247) | ||||||||||||||||||||||||||||||
Interest-earning assets | 607,479 | 28.96 | 586,911 | 30.77 | 585,317 | 35.56 | 4 | (181) | 4 | (660) | ||||||||||||||||||||||||||||||
In pesos | 361,961 | 20.99 | 340,066 | 16.57 | 256,080 | 38.81 | 6 | 442 | 41 | (1,782) | ||||||||||||||||||||||||||||||
Saving accounts | 157,599 | 9.47 | 151,589 | 6.38 | 78,873 | 17.07 | 4 | 309 | 100 | (760) | ||||||||||||||||||||||||||||||
Time deposits | 200,396 | 30.12 | 178,378 | 24.88 | 159,527 | 51.22 | 12 | 524 | 26 | (2,110) | ||||||||||||||||||||||||||||||
Debt securities | 1,595 | 9.03 | 6,306 | 27.40 | 13,443 | 12.36 | (75) | (1,837) | (88) | (333) | ||||||||||||||||||||||||||||||
Other interest-bearing liabilities | 2,371 | 22.61 | 3,793 | 14.97 | 4,237 | 60.05 | (37) | 764 | (44) | (3,744) | ||||||||||||||||||||||||||||||
In foreign currency | 156,123 | 1.54 | 162,463 | 2.04 | 259,509 | 1.78 | (4) | (50) | (40) | (24) | ||||||||||||||||||||||||||||||
Saving accounts | 89,660 | - | 90,353 | - | 164,405 | 0.00 | (1) | - | (45) | - | ||||||||||||||||||||||||||||||
Time deposits | 32,666 | 1.46 | 32,847 | 1.55 | 36,341 | 0.98 | (1) | (9) | (10) | 48 | ||||||||||||||||||||||||||||||
Debt securities | 25,611 | 5.89 | 25,932 | 7.74 | 28,952 | 8.24 | (1) | (185) | (12) | (235) | ||||||||||||||||||||||||||||||
Other interest-bearing liabilities | 8,186 | 5.08 | 13,331 | 5.94 | 29,811 | 6.29 | (39) | (86) | (73) | (121) | ||||||||||||||||||||||||||||||
Interest-bearing liabilities | 518,084 | 15.13 | 502,529 | 11.87 | 515,589 | 20.17 | 3 | 326 | - | (504) |
(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.607,479 million, increasing Ps.22,162 million (4%) as compared to the figure recorded for the third quarter of the previous fiscal year primarily as a consequence of the Ps.94,036 million (41%) increase in the average peso-denominated loan portfolio and the increase of Ps.50,939 million (38%) in the average portfolio of peso-denominated government securities. The foregoing increases were partially offset by a decrease in the average volume of dollar-denominated loans, for Ps.105,171 million (66%), and in dollar-denominated government securities, for Ps.17,770 million (99%).
Average interest-bearing liabilities reached Ps.518,084 million, increasing Ps.2,495 million during the same period primarily due to an increase in the average balance of peso-denominated time deposits, for Ps.40,869 million (26%), and offset by a decrease in dollar-denominated saving accounts, for Ps.74,745 million (45%).
The average yield on interest-earning assets for the Quarter was 28.96%, representing a 660 bp decrease as compared to the figure recorded for the same quarter of the prior fiscal year mainly due to decreases of 44,976 bp in the average yield on dollar-denominated government securities, 3,039 bp on other interest-earning assets in pesos and of 2,051 bp on peso-denominated government securities. Likewise, the average cost of interest-bearing liabilities was 15.13%, representing a 504 bp decrease as compared to the third quarter of the prior fiscal year that was mainly due to a 3,744 bp decrease in the average interest rate on other interest-bearing liabilities in pesos and a 2,110 bp decrease in the interest rate on peso-denominated time deposits.
9 |
Net Fee Income | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Credit cards | 2,976 | 2,838 | 2,202 | 5 | 35 | |||||||||||||||
Deposit accounts | 1,011 | 1,122 | 1,102 | (10) | (8) | |||||||||||||||
Insurance | 315 | 310 | 265 | 2 | 19 | |||||||||||||||
Financial fees | 43 | 70 | 86 | (39) | (50) | |||||||||||||||
Credit-related fees | 159 | 131 | 34 | 21 | 368 | |||||||||||||||
Foreign trade | 501 | 409 | 546 | 22 | (8) | |||||||||||||||
Collections | 407 | 415 | 402 | (2) | 1 | |||||||||||||||
Utility-Bills collection services | 506 | 398 | 537 | 27 | (6) | |||||||||||||||
Mutual Funds | 113 | 213 | 263 | (47) | (57) | |||||||||||||||
Other | 469 | 535 | 447 | (12) | 5 | |||||||||||||||
Total fee income | 6,500 | 6,441 | 5,884 | 1 | 10 | |||||||||||||||
Total expenditures | (1,511) | (1,335) | (1,685) | 13 | (10) | |||||||||||||||
Net fee income | 4,989 | 5,106 | 4,199 | (2) | 19 |
Net fee income amounted to Ps.4,989 million, up 19% from the Ps.4,199 million recorded in the third quarter of the previous fiscal year. The increase in fees which stood out were those related to credit cards (for Ps.774 million or 35%).
Net Income from Financial Instruments | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Government securities | 15,034 | 13,031 | 16,141 | 15 | (7) | |||||||||||||||
Argentine Central Bank | 13,098 | 9,662 | 19,405 | 36 | (33) | |||||||||||||||
Other | 1,936 | 3,369 | (3,264) | (43) | 159 | |||||||||||||||
Private sector securities | 140 | 529 | 277 | (74) | (49) | |||||||||||||||
Derivative financial instruments | 400 | 336 | 2,442 | 19 | (84) | |||||||||||||||
Forward transactions | 399 | 339 | 2,474 | 18 | (84) | |||||||||||||||
Interest-rate swaps | 1 | (3) | (32) | 133 | 103 | |||||||||||||||
Results from other financial assets/liabilities | - | - | 1 | - | (100) | |||||||||||||||
Net income from financial instruments | 15,574 | 13,896 | 18,861 | 12 | (17) |
Net income from financial instruments for the Quarter amounted to Ps.15,574 million, down Ps.3,287 million from the Ps.18,861 million recorded in the same quarter of the 2019 fiscal year primarily as a consequence of a Ps.6,307 million (33%) decrease in results from instruments issued by the Argentine Central Bank (Leliq) (which was due to lower holdings and yields), and of a Ps.2,042 million (84%) decrease from derivative financial instruments, offset by higher results from government securities, for Ps.5,200 million (159%).
During the Quarter, a Ps.2,254 million profit from gold and foreign currency quotation differences was recorded, as compared to a Ps.2,384 million profit recorded from the same quarter of the 2019 fiscal year. This result includes a Ps.1,831 million gain from foreign-currency trading.
Other Operating Income | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Other financial income(1)(2) | 363 | (588) | 1,073 | 162 | (66) | |||||||||||||||
Fees from bundles of products(1) | 1,375 | 1,491 | 1,257 | (8) | 9 | |||||||||||||||
Rental of safe deposit boxes(1) | 287 | 299 | 221 | (4) | 30 | |||||||||||||||
Other fee income(1) | 175 | 142 | 265 | 23 | (34) | |||||||||||||||
Other adjustments and interest on miscellaneous receivables | 1,215 | 1,294 | 539 | (6) | 125 | |||||||||||||||
Other | 261 | 1,726 | 234 | (85) | 12 | |||||||||||||||
Total other operating income | 3,676 | 4,364 | 3,589 | (16) | 2 |
(1) Item included for calculating the efficiency ratio.
(2) Item included for calculating the financial margin.
10 |
Other operating income for the Quarter reached Ps.3,676 million, increasing Ps.87 million (2%) from the Ps.3,589 million profit recorded in the third quarter of the 2019 fiscal year.
Provisions for loan losses for the Quarter amounted to Ps.5,149 million, Ps.1,236 million (19%) lower than the figure recorded in the same quarter of the prior fiscal year.
Personnel expenses amounted to Ps.5,346 million, decreasing 1% from the figure recorded for the same quarter of the 2019 fiscal year mainly due to a 6% decrease in staff, which was offset by salary increase agreements with the union which were above inflation.
Administrative Expenses | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Fees and compensations for services | 437 | 505 | 380 | (13) | 15 | |||||||||||||||
Fees to directors and syndics | 13 | 12 | 13 | 8 | - | |||||||||||||||
Publicity, promotion and research expenses | 196 | 147 | 303 | 33 | (35) | |||||||||||||||
Taxes | 795 | 1,350 | 964 | (41) | (18) | |||||||||||||||
Maintenance and repairment of goods and IT | 1,076 | 1,198 | 553 | (10) | 95 | |||||||||||||||
Electricity and communications | 372 | 419 | 378 | (11) | (2) | |||||||||||||||
Stationery and office supplies | 33 | 140 | 85 | (76) | (61) | |||||||||||||||
Hired administrative services | 657 | 729 | 439 | (10) | 50 | |||||||||||||||
Security | 158 | 158 | 143 | - | 10 | |||||||||||||||
Insurance | 50 | 52 | 32 | (4) | 56 | |||||||||||||||
Other | 782 | 515 | 1,345 | 52 | (42) | |||||||||||||||
Total administrative expenses | 4,569 | 5,225 | 4,635 | (13) | (1) |
Administrative expenses for the Quarter totaled Ps.4,569 million, down 1% as compared to the third quarter of the 2019 fiscal year and primarily as a consequence of decreases of Ps.563 million (42%) in other expenses (mainly related to cash transportation), Ps.169 million (18%) in taxes and of Ps.107 million (35%) in publicity promotion and research expenses, all of which were offset by a Ps.523 million (95%) increase in maintenance and repairment of goods and IT.
Depreciation and devaluation of assets amounted to Ps 1,336 million, up 30% from the third quarter of the 2019 fiscal year. This loss includes Ps.190 million from financial leases.
Other Operating Expenses | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Contribution to the Deposit Insurance Fund(1)(2) | 259 | 236 | 272 | 10 | (5) | |||||||||||||||
Other financial expenses(1)(2) | (5) | 176 | 818 | (103) | (101) | |||||||||||||||
Turnover tax | 2,995 | 3,211 | 3,057 | (7) | (2) | |||||||||||||||
On financial income(1)(2) | 2,059 | 2,189 | 2,215 | (6) | (7) | |||||||||||||||
On fees(1) | 827 | 903 | 739 | (8) | 12 | |||||||||||||||
On other items | 109 | 119 | 103 | (8) | 6 | |||||||||||||||
Other fee-related expenses(1) | 1,245 | 1,247 | 1,561 | - | (20) | |||||||||||||||
Other provisions | 1,231 | 7,874 | 1,052 | (84) | 17 | |||||||||||||||
Claims | 94 | 63 | 92 | 49 | 2 | |||||||||||||||
Other | 163 | 666 | 231 | (76) | (29) | |||||||||||||||
Total other operating expenses | 5,982 | 13,473 | 7,083 | (56) | (16) |
(1) | Item included for calculating the efficiency ratio. |
(2) | Item included for calculating the financial margin. |
Other operating expenses reached Ps.5,982 million, decreasing Ps.1,101 million (16%) from the Ps.7,083 million recorded in the third quarter of the 2019 fiscal year. This reduction was primarily a consequence of lower other financial expenses, for Ps.823 million (101%).
11 |
The income tax charge for the Quarter was Ps.4,552 million, Ps.1,612 million higher than the figure recorded in the third quarter of the 2019 fiscal year. It is worth noting that, beginning in the second half of 2019, the tax inflation adjustment established by applicable income tax laws began to be applied.
Other comprehensive losses for the Quarter amounted to Ps.626 million, as compared to a Ps.641 million loss recorded in the same period of the 2019 fiscal year.
SELECTED FINANCIAL INFORMATION
Balance Sheet | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 140,810 | 134,476 | 149,661 | 5 | (6) | |||||||||||||||
Debt securities | 182,083 | 167,831 | 78,868 | 8 | 131 | |||||||||||||||
Net loans and other financing | 398,419 | 408,654 | 408,227 | (3) | (2) | |||||||||||||||
Other financial assets | 88,845 | 122,590 | 161,922 | (28) | (45) | |||||||||||||||
Equity investments in subsidiaries, associates and joint businesses | 396 | 480 | 439 | (18) | (10) | |||||||||||||||
Property, bank premises, equipment | 34,824 | 35,002 | 35,885 | (1) | (3) | |||||||||||||||
Intangible assets | 11,445 | 11,400 | 9,521 | - | 20 | |||||||||||||||
Other assets | 5,566 | 6,492 | 4,794 | (14) | 16 | |||||||||||||||
Assets available for sale | 51 | 51 | 223 | - | (77) | |||||||||||||||
Total assets | 862,439 | 886,976 | 849,540 | (3) | 2 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits | 616,451 | 638,839 | 522,998 | (4) | 18 | |||||||||||||||
Financing from financial entities | 9,388 | 11,551 | 36,901 | (19) | (75) | |||||||||||||||
Other financial liabilities | 37,647 | 39,062 | 98,176 | (4) | (62) | |||||||||||||||
Notes | 9,388 | 9,454 | 19,814 | (1) | (53) | |||||||||||||||
Subordinated notes | 19,199 | 19,636 | 19,940 | (2) | (4) | |||||||||||||||
Other liabilities | 38,784 | 40,702 | 37,778 | (5) | 3 | |||||||||||||||
Total liabilities | 730,857 | 759,244 | 735,607 | (4) | (1) | |||||||||||||||
Shareholders’ equity | 131,582 | 127,732 | 113,933 | 3 | 15 | |||||||||||||||
Foreign currency assets and liabilities | ||||||||||||||||||||
Assets | 189,851 | 190,231 | 309,774 | - | (39) | |||||||||||||||
Liabilities | 192,192 | 197,507 | 296,772 | (3) | (35) | |||||||||||||||
Net forward purchases/(sales) of foreign currency (1) | (166) | (688) | (1,511) | (76) | (89) | |||||||||||||||
Net global position in foreign currency | (2,507) | (7,964) | 11,491 | 69 | (122) |
(1) | Recorded off-balance sheet. |
12 |
LEVEL OF ACTIVITY
Financing to the Private Sector(1) | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
In pesos | 362,908 | 365,270 | 279,794 | (1) | 30 | |||||||||||||||
Loans | 323,406 | 323,914 | 236,926 | - | 37 | |||||||||||||||
UVA-adjusted loans | 27,705 | 30,108 | 34,028 | (8) | (19) | |||||||||||||||
Financial leases | 628 | 726 | 1,342 | (13) | (53) | |||||||||||||||
Debt securities | 3 | 88 | 439 | (97) | (99) | |||||||||||||||
Other financing(2) | 11,166 | 10,434 | 7,059 | 7 | 58 | |||||||||||||||
In foreign currency | 82,474 | 85,796 | 174,530 | (4) | (53) | |||||||||||||||
Loans | 53,943 | 63,008 | 142,907 | (14) | (62) | |||||||||||||||
Financial leases | 1,358 | 1,560 | 2,200 | (13) | (38) | |||||||||||||||
Debt securities | 20 | 115 | 2,194 | (83) | (99) | |||||||||||||||
Other financing(2) | 27,153 | 21,113 | 27,229 | 29 | - | |||||||||||||||
Total financing to the private sector | 445,382 | 451,066 | 454,324 | (1) | (2) |
(1) | Includes IFRS adjustment. |
(2) | Includes certain off-balance sheet accounts related to guarantees granted. |
As of September 30, 2020, total financing to the private sector reached Ps.445,382 million, 2% lower than the figure recorded from the prior fiscal year and primarily as a consequence of an Ps.88,964 million (62%) decrease in dollar-denominated loans, which was offset by an Ps.86,480 million (37%) increase in peso-denominated loans.
Market Share(1) | 2020 | 2019 | Variation (bp) | |||||||||||||||||
Percentages, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Total loans | 12.68 | 12.78 | 11.49 | (10) | 119 | |||||||||||||||
Loans to the private sector | 12.72 | 12.92 | 11.41 | (20) | 131 |
(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 September 30, 2020, was 12.72%, increasing 131 bp from September 30, 2019.
13 |
Breakdown of loans and other financing | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Financial entities | 11,318 | 11,206 | 14,528 | 1 | (22) | |||||||||||||||
Loans | 11,318 | 11,196 | 14,527 | 1 | (22) | |||||||||||||||
Other financing | - | 10 | 1 | (100) | (100) | |||||||||||||||
Non-financial private sector and residents abroad | 406,933 | 414,799 | 410,205 | (2) | (1) | |||||||||||||||
Loans | 393,736 | 405,834 | 399,334 | (3) | (1) | |||||||||||||||
Overdrafts | 18,978 | 29,546 | 32,401 | (36) | (41) | |||||||||||||||
Promissory notes | 137,636 | 140,389 | 90,297 | (2) | 52 | |||||||||||||||
Mortgage loans | 15,832 | 17,093 | 20,183 | (7) | (22) | |||||||||||||||
Pledge loans | 9,965 | 7,286 | 4,286 | 37 | 133 | |||||||||||||||
Personal loans | 31,583 | 32,064 | 35,468 | (2) | (11) | |||||||||||||||
Credit-card loans | 122,574 | 114,991 | 107,812 | 7 | 14 | |||||||||||||||
Pre-financing and financing of exports | 31,001 | 38,490 | 91,377 | (19) | (66) | |||||||||||||||
Other Loans | 9,651 | 9,073 | 3,975 | 6 | 143 | |||||||||||||||
Accrued interest, adjustments and foreign currency quotation differences receivable | 18,357 | 18,891 | 15,296 | (3) | 20 | |||||||||||||||
Documented interest | (1,841) | (1,989) | (1,761) | (7) | 5 | |||||||||||||||
Financial leases | 1,986 | 2,286 | 3,541 | (13) | (44) | |||||||||||||||
Other financing | 11,211 | 6,679 | - | 68 | - | |||||||||||||||
Non-financial public sector | 1 | - | - | - | - | |||||||||||||||
Total loans and other financing | 418,252 | 426,005 | 424,733 | (2) | (2) | |||||||||||||||
Allowances | (19,833) | (17,351) | (16,506) | 14 | 20 | |||||||||||||||
Loans | (19,564) | (17,126) | (16,433) | 14 | 19 | |||||||||||||||
Financial leases | (39) | (67) | (49) | (42) | (20) | |||||||||||||||
Other financing | (230) | (158) | (24) | 46 | 858 | |||||||||||||||
Net loans and other financing | 398,419 | 408,654 | 408,227 | (3) | (2) |
As of September 30, 2020, net loans and other financing after provisions amounted to Ps.398,419 million, decreasing 2% from September 30, 2019 primarily due to a 66% decrease in pre-financing and financing of exports, which was offset by a 52% increase of promissory notes.
Loans by Type of Borrower | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Large corporations | 85,653 | 104,230 | 127,611 | (18) | (33) | |||||||||||||||
Corporations | 41,550 | 44,261 | 36,110 | (6) | 15 | |||||||||||||||
SMEs | 27,682 | 27,876 | 20,298 | (1) | 36 | |||||||||||||||
Agribusiness | 97,778 | 89,400 | 63,665 | 9 | 54 | |||||||||||||||
Individuals | 149,438 | 146,969 | 153,323 | 2 | (3) | |||||||||||||||
Financial sector | 11,318 | 11,196 | 14,527 | 1 | (22) | |||||||||||||||
Residents abroad | 1,873 | 1,523 | 4,014 | 23 | (53) | |||||||||||||||
Other | 737 | 761 | 693 | (3) | 6 | |||||||||||||||
IFRS adjustment | (10,974) | (9,186) | (6,380) | 19 | 72 | |||||||||||||||
Total loans | 405,055 | 417,030 | 413,861 | (3) | (2) | |||||||||||||||
Allowances | (19,564) | (17,126) | (16,433) | 14 | 19 | |||||||||||||||
Net total loans | 385,491 | 399,904 | 397,428 | (4) | (3) |
14 |
Loans by Sector of Activity | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Financial sector | 11,318 | 11,196 | 14,527 | 1 | (22) | |||||||||||||||
Residents abroad | 1,873 | 1,523 | 4,014 | 23 | (53) | |||||||||||||||
Services | 43,259 | 48,198 | 35,970 | (10) | 20 | |||||||||||||||
Agriculture and livestock | 90,885 | 83,207 | 55,739 | 9 | 63 | |||||||||||||||
Consumer | 147,261 | 146,973 | 153,342 | - | (4) | |||||||||||||||
Retail and wholesale trade | 34,436 | 39,657 | 33,075 | (13) | 4 | |||||||||||||||
Construction | 4,793 | 4,866 | 5,959 | (2) | (20) | |||||||||||||||
Manufacturing industry | 54,387 | 62,813 | 81,598 | (13) | (33) | |||||||||||||||
Other | 27,817 | 27,784 | 36,017 | - | (23) | |||||||||||||||
IFRS adjustment | (10,974) | (9,187) | (6,380) | 19 | 72 | |||||||||||||||
Total loans | 405,055 | 417,030 | 413,861 | (3) | (2) | |||||||||||||||
Allowances | (19,564) | (17,126) | (16,433) | 14 | 19 | |||||||||||||||
Net total loans | 385,491 | 399,904 | 397,428 | (4) | (3) |
In the last twelve months, loans to the private sector increased, primarily in those granted to the agribusiness segment (Ps.34,113 million or 54%) and to SMEs (Ps.7,384 million or 36%). By sector of activity, higher levels of growth were recorded in the agriculture and livestock sector (Ps.35,146 million or 63%) and in services (Ps.7,289 million or 20%), while loans granted to the manufacturing industry decreased Ps.27,211 million (33%).
Net Exposure to the Argentine Public Sector(1) | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Government securities net position | 209,355 | 194,180 | 99,547 | 8 | 110 | |||||||||||||||
Leliq | 148,958 | 145,341 | 62,516 | 2 | 138 | |||||||||||||||
Botes | 18,679 | 17,396 | 14,971 | 7 | 25 | |||||||||||||||
Other | 41,718 | 31,443 | 22,060 | 33 | 89 | |||||||||||||||
Other receivables resulting from financial brokerage | 36,252 | 71,127 | 63,705 | (49) | (43) | |||||||||||||||
Repurchase agreement transactions - BCRA | 36,222 | 71,088 | 63,653 | (49) | (43) | |||||||||||||||
Loans and other financing | 1 | 10 | 1 | (90) | - | |||||||||||||||
Trust certificates of participation and securities | 29 | 29 | 51 | - | (43) | |||||||||||||||
Total exposure to the public sector | 245,607 | 265,307 | 163,252 | (7) | 50 |
(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 September 30, 2020, the Bank’s exposure to the public sector amounted to Ps.245,607 million, representing a 50% increase during the last twelve months. Excluding exposure to the Argentine Central Bank (with respect to Leliq and repurchase agreement transactions), net exposure to the public sector reached Ps.60,427 million (7% of total assets), while as of September 30, 2019, it amounted to Ps.37,083 million (4% of total assets).
15 |
Deposits | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
In pesos | 470,212 | 490,093 | 309,176 | (4) | 52 | |||||||||||||||
Current accounts | 92,915 | 110,636 | 76,219 | (16) | 22 | |||||||||||||||
Saving accounts | 151,596 | 170,331 | 73,361 | (11) | 107 | |||||||||||||||
Time deposits | 214,019 | 190,281 | 148,452 | 12 | 44 | |||||||||||||||
UVA-adjusted time deposits | 4,204 | 11,334 | 751 | (63) | 460 | |||||||||||||||
Other | 2,031 | 2,840 | 2,711 | (28) | (25) | |||||||||||||||
Interests and adjustments | 5,447 | 4,671 | 7,682 | 17 | (29) | |||||||||||||||
In foreign currency | 146,239 | 148,746 | 213,822 | (2) | (32) | |||||||||||||||
Saving accounts | 108,347 | 114,201 | 180,438 | (5) | (40) | |||||||||||||||
Time deposits | 33,766 | 30,435 | 31,921 | 11 | 6 | |||||||||||||||
Other | 3,980 | 3,980 | 1,414 | - | 181 | |||||||||||||||
Interests and adjustments | 146 | 130 | 49 | 12 | 198 | |||||||||||||||
Total deposits | 616,451 | 638,839 | 522,998 | (4) | 18 |
As of September 30, 2020, the Bank’s deposits amounted to Ps.616,451 million, representing an 18% increase during the last twelve months. This was a consequence of the Ps.161,036 million (52%) growth in peso-denominated deposits, with saving accounts up Ps.78,235 million (107%) and time deposits up Ps.65,567 million (44%), and offset by a Ps.72,091 (40%) decrease in dollar-denominated saving accounts.
At the end of the Quarter, there were 6 million deposit accounts, 20% more than the figure recorded for the same period of the prior fiscal year.
Market Share(1) | 2020 | 2019 | Variation (%) | |||||||||||||||||
Percentages, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Total deposits | 8.38 | 8.87 | 8.42 | (49) | (4) | |||||||||||||||
Private sector deposits | 10.13 | 10.44 | 10.13 | (31) | - |
(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 September 30, 2020, the Bank’s estimated market share of private sector deposits in the Argentine financial system was 10.13%, approximately equivalent to the figure recorded for the same period of the prior fiscal year.
Financial Liabilities | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Financial entities | 9,388 | 11,551 | 36,901 | (19) | (75) | |||||||||||||||
Financing from credit-card purchases | 14,560 | 16,235 | 18,393 | (10) | (21) | |||||||||||||||
Notes | 9,388 | 9,454 | 19,814 | (1) | (53) | |||||||||||||||
Subordinated notes | 19,199 | 19,636 | 19,940 | (2) | (4) | |||||||||||||||
Creditors from purchases of foreign currency | 358 | 1,395 | 52,797 | (74) | (99) | |||||||||||||||
Collections on account of third parties | 12,205 | 8,354 | 14,209 | 46 | (14) | |||||||||||||||
Other financial liabilities | 10,524 | 13,078 | 12,777 | (20) | (18) | |||||||||||||||
Total financial liabilities | 75,622 | 79,703 | 174,831 | (5) | (57) |
Financial liabilities at the end of the Quarter amounted to Ps.75,622 million, Ps.99,210 million (57%) lower than the Ps.174,831 million recorded for the same period of the prior fiscal year. This decline was mainly due to decreases of Ps.52,439 million (99%) in creditors from purchases of foreign currency, and of Ps.27,513 million (75%) in financial liabilities with financial entities.
16 |
ASSET QUALITY
Financing Portfolio Quality | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
3T | 2T | 3T | Trimestral | Annual | ||||||||||||||||
Non-accrual portfolio(1) | 9,792 | 11,444 | 16,897 | (14) | (42) | |||||||||||||||
With preferred guarantees | 1,236 | 2,184 | 1,637 | (43) | (24) | |||||||||||||||
With other guarantees | 1,402 | 1,369 | 1,470 | 2 | (5) | |||||||||||||||
Without guarantees | 7,154 | 7,891 | 13,790 | (9) | (48) | |||||||||||||||
Total Allowances for loan losses(2) | 29,525 | 27,467 | 22,478 | 7 | 31 | |||||||||||||||
Relevant ratios (%) | Variation ( bp) | |||||||||||||||||||
Non-accrual portfolio to private sector financing | 2.20 | 2.54 | 3.72 | (34) | (152) | |||||||||||||||
Total allowances for loan losses to private sector financing | 6.63 | 6.09 | 4.95 | 54 | 168 | |||||||||||||||
Total allowances for loan losses to non-accrual portfolio | 301.52 | 240.02 | 133.03 | 6,150 | 16,849 | |||||||||||||||
Non-accrual portfolio with guarantees to non-accrual portfolio | 26.94 | 31.05 | 18.39 | (411) | 855 | |||||||||||||||
Cost of Risk(3) | 4.92 | 10.58 | 6.51 | (566) | (159) |
(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) Includes allowances on unused balances of credit cards and overdrafts in current accounts.
(3) Includes provisions charged to income on unused balances of credit cards and overdrafts in current accounts. Annualized.
The non-accrual portfolio (which includes certain items of other financial assets and guarantees granted) amounted to Ps.9,792 million as of September 30, 2020, representing 2.20% of private-sector financing and a 152 bp decrease as compared to the 3.72% recorded in the same quarter of the 2019 fiscal year. This decrease was mainly due to the flexibilization of the parameters in respect of the classification of debtors established by the Argentine Central Bank.
Considering the provisions on unused balances of credit cards and overdrafts, the Bank’s coverage of the non-accrual portfolio with total allowances for loan losses reached 301.52%, as compared to 133.03% from the same period of the prior fiscal year.
Loan Portfolio Quality | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
3T | 2T | 3T | Trimestral | Annual | ||||||||||||||||
Non-accrual loans(1) | 9,989 | 11,232 | 16,427 | (11) | (39) | |||||||||||||||
With preferred guarantees | 1,203 | 2,172 | 1,387 | (45) | (13) | |||||||||||||||
With other guarantees | 1,373 | 1,333 | 1,448 | 3 | (5) | |||||||||||||||
Without guarantees | 7,413 | 7,727 | 13,592 | (4) | (45) | |||||||||||||||
Allowance for loan losses | 19,564 | 17,126 | 16,433 | 14 | 19 | |||||||||||||||
Relevant ratios (%) | Variation ( bp) | |||||||||||||||||||
Non-accrual loans to private-sector loans | 2.47 | 2.69 | 3.97 | (22) | (150) | |||||||||||||||
Allowance for loan losses to private-sector loans | 4.83 | 4.11 | 3.97 | 72 | 86 | |||||||||||||||
Allowance for loan losses to non-accrual loans | 195.86 | 152.48 | 100.04 | 4,338 | 9,582 | |||||||||||||||
Non-accrual loans with guarantees to non-accrual loans | 25.79 | 31.21 | 17.26 | (542) | 853 | |||||||||||||||
Cost of risk(2) | 5.57 | 4.65 | 11.21 | 92 | (564) |
(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.9,989 million as of September 30, 2020, representing 2.47% of total loans to the private sector, decreasing 150 bp from the 3.97% ratio recorded from the same period of the prior fiscal year. This result was mainly due to the flexibilization of applicable debtor classification regulations.
17 |
The coverage of the non-accrual loan portfolio with allowances for loan losses reached 195.86% as of the end of the Quarter, as compared to 100.04% from the same period of the prior fiscal year.
Analysis of Loan Loss Experience | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Allowance for loan losses at the beginning of the Quarter | ||||||||||||||||||||
Changes in the allowance for loan losses | 17,126 | 16,902 | 13,959 | 1 | 23 | |||||||||||||||
Provisions charged to income | ||||||||||||||||||||
Provisions charged to income | 4,795 | 4,319 | 6,294 | 11 | (24) | |||||||||||||||
Charge offs | (685) | (2,995) | (1,718) | (77) | (60) | |||||||||||||||
Other | - | - | (120) | - | (100) | |||||||||||||||
Effect of inflation | (1,672) | (1,100) | (1,982) | 52 | (16) | |||||||||||||||
Allowance for loan losses at the end of the Quarter | 19,564 | 17,126 | 16,433 | 14 | 19 | |||||||||||||||
Charge to the income statement | ||||||||||||||||||||
Provisions charged to income(1) | (4,795) | (4,319) | (6,294) | 11 | (24) | |||||||||||||||
Direct charge offs(1) | (188) | (189) | (161) | (1) | 17 | |||||||||||||||
Bad debts recovered | 143 | 132 | 97 | 8 | 47 | |||||||||||||||
Net charge to the income statement | (4,840) | (4,376) | (6,358) | 11 | (24) |
(1) Item included for calculating the cost of risk.
During the Quarter, Ps.685 million were charged off against the allowance for loan losses and direct charges to the income statement in the amount of Ps.188 million were made.
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 referenced.
Regulatory Capital | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Minimum capital required (A) | 49,973 | 53,284 | 36,905 | (6) | 35 | |||||||||||||||
Allocated to credit risk | 38,025 | 42,457 | 28,809 | (10) | 32 | |||||||||||||||
Allocated to market risk | 973 | 1,054 | 1,392 | (8) | (30) | |||||||||||||||
Allocated to operational risk | 10,975 | 9,773 | 6,704 | 12 | 64 | |||||||||||||||
Computable capital (B) | 141,035 | 127,403 | 73,457 | 11 | 92 | |||||||||||||||
Tier I | 116,222 | 103,348 | 54,718 | 12 | 112 | |||||||||||||||
Tier II | 24,813 | 24,055 | 18,739 | 3 | 32 | |||||||||||||||
Excess over required capital (B) (A) | 91,062 | 74,119 | 36,552 | 23 | 149 | |||||||||||||||
Risk weighted assets | 610,815 | 650,594 | 449,140 | (6) | 36 | |||||||||||||||
Variation (bp) | ||||||||||||||||||||
Total capital ratio (%) | 23.09 | 19.58 | 16.36 | 351 | 673 | |||||||||||||||
Tier I capital ratio (%) | 19.03 | 15.89 | 12.18 | 314 | 685 |
As of September 30, 2020, the Bank’s computable capital amounted to Ps.141,035 million, Ps.91,062 million (182%) higher than the Ps.49,973 million minimum capital requirement. As of September 30, 2019, this excess amounted to Ps.36,552 million (99%).
18 |
The minimum capital requirement increased Ps.13,068 million as compared to September 30, 2019, mainly due to the expansion of regulatory requirements on risk weighted assets. Computable capital increased Ps.67,578 million during the same period, primarily as a consequence of a Ps.61,504 million increase in Tier I capital, which was due to an increase resulting from the accounting for shareholders’ equity that resulted from inflation adjustments recorded on non-monetary assets. The Tier II capital increased Ps.6,074 million as a consequence of the effect of the evolution of the foreign exchange rate on subordinated debt. The total capital ratio was 23.09%, increasing 673 bp during the last twelve months.
Liquidity | 2020 | 2019 | Variation (%) | |||||||||||||||||
Percentages, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Cash and due from banks | 140,810 | 134,476 | 149,661 | 5 | (6) | |||||||||||||||
Government securities | 91,666 | 115,868 | 27,649 | 21 | 232 | |||||||||||||||
Call-money | 4,993 | 1,570 | 2,302 | 218 | 117 | |||||||||||||||
Overnight placements in correspondent banks | 1,871 | 1,519 | 4,000 | 23 | (53) | |||||||||||||||
Net repurchase agreement transactions | 36,241 | 71,105 | 63,653 | (49) | (43) | |||||||||||||||
Escrow accounts | 9,412 | 8,922 | 9,401 | 5 | - | |||||||||||||||
Other financial assets | 83 | 215 | 10 | (61) | 730 | |||||||||||||||
Total liquid assets | 285,076 | 333,675 | 256,676 | (15) | 11 | |||||||||||||||
Liquidity ratios | Variation ( bp) | |||||||||||||||||||
Liquid assets as a percentage of transactional deposits | 80.79 | 84.44 | 77.78 | (365) | 301 | |||||||||||||||
Liquid assets as a percentage of total deposits | 46.24 | 52.23 | 49.08 | (599) | (284) |
As of September 30, 2020, the Bank’s liquid assets represented 80.79% of the Bank’s transactional deposits and 46.24% of its total deposits, as compared to 77.78% and 49.08%, respectively, as of September 30, 2019.
19 |
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 | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Net interest income | 3,274 | 3,191 | 2,506 | 3 | 31 | |||||||||||||||
Net fee income | 3,672 | 3,477 | 4,284 | 6 | (14) | |||||||||||||||
Net results from financial instruments | 446 | 437 | 895 | 2 | (50) | |||||||||||||||
Gold and foreign currency quotation differences | 13 | - | 70 | - | (81) | |||||||||||||||
Other operating income | 741 | 761 | 1,127 | (3) | (34) | |||||||||||||||
Loan loss provisions | (519) | (1,050) | (1,866) | (51) | (72) | |||||||||||||||
Net operating income | 7,627 | 6,816 | 7,016 | 12 | 9 | |||||||||||||||
Personnel expenses | (1,736) | (1,685) | (1,688) | 3 | 3 | |||||||||||||||
Administrative expenses | (2,111) | (1,951) | (1,875) | 8 | 13 | |||||||||||||||
Depreciations and devaluations of assets | (416) | (388) | (342) | 7 | 22 | |||||||||||||||
Other operating expenses | (1,513) | (1,815) | (1,169) | (17) | 29 | |||||||||||||||
Operating income | 1,851 | 977 | 1,942 | 89 | (5) | |||||||||||||||
Results from the net monetary position | (1,155) | (815) | (1,919) | 42 | (40) | |||||||||||||||
Income tax | (341) | (138) | (272) | 147 | 25 | |||||||||||||||
Net income | 355 | 24 | (249) | 1,379 | 243 | |||||||||||||||
| ||||||||||||||||||||
Profitability and Efficiency | 2020 | 2019 | Variation (bp) | |||||||||||||||||
Percentages, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Return(1) on average assets | 1.93 | 0.14 | (1.21) | 179 | 314 | |||||||||||||||
Return(1) on average shareholders’ equity | 6.46 | 0.45 | (4.99) | 601 | 1,145 | |||||||||||||||
Financial margin(1)(2) | 19.87 | 18.38 | 13.04 | 149 | 683 | |||||||||||||||
Efficiency ratio (3) | 76.40 | 71.05 | 73.29 | 535 | 311 |
(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.355 million net income, Ps.604 million higher than the figure recorded in the same quarter of the 2019 fiscal year. This profit represented a 1.93% annualized return on average assets and a 6.46% return on average shareholders’ equity, as compared to (1.21)% and (4.99)%, respectively, recorded from the third quarter of the 2019 fiscal year.
Net operating income amounted to Ps.7,627 million, increasing 9% from the third quarter of the 2019 fiscal year as a consequence of a higher net interest income (31%) and lower loan loss provisions (72%).
20 |
SELECTED FINANCIAL INFORMATION
Balance Sheet | 2020 | 2019 | Variation (bp) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 1,438 | 1,741 | 4,823 | (17) | (70) | |||||||||||||||
Debt securities | 522 | - | - | - | - | |||||||||||||||
Net loans and other financing | 59,432 | 50,552 | 54,583 | 18 | 9 | |||||||||||||||
Other financial assets | 4,793 | 4,886 | 7,284 | (2) | (34) | |||||||||||||||
Property, bank premises, equipment | 4,185 | 4,339 | 4,234 | (4) | (1) | |||||||||||||||
Intangible assets | 1,538 | 1,689 | 1,361 | (9) | 13 | |||||||||||||||
Other non-financial assets | 4,049 | 3,841 | 3,530 | 5 | 15 | |||||||||||||||
Total assets | 75,957 | 67,048 | 75,815 | 13 | - | |||||||||||||||
Liabilities | ||||||||||||||||||||
Financing from financial entities | 517 | 510 | 410 | 1 | 26 | |||||||||||||||
Other financial liabilities | 39,122 | 32,127 | 33,389 | 22 | 17 | |||||||||||||||
Notes | 8,773 | 8,047 | 17,796 | 9 | (51) | |||||||||||||||
Other non-financial liabilities | 5,513 | 4,863 | 4,465 | 13 | 23 | |||||||||||||||
Total liabilities | 53,925 | 45,547 | 56,060 | 18 | (4) | |||||||||||||||
Shareholders’ equity | 22,032 | 21,501 | 19,755 | 2 | 12 |
ASSET QUALITY
Loan Portfolio Quality | 2020 | 2019 | Variation (%) | |||||||||||||||||
Percentages, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Non-accrual loans(1) | 4,166 | 5,639 | 8,749 | (26) | (52) | |||||||||||||||
Allowances for loan losses | 7,272 | 8,424 | 10,403 | (14) | (30) | |||||||||||||||
Total allowances for loan losses(2) | 8,122 | 9,203 | 11,072 | (12) | (27) | |||||||||||||||
Ratios (%) | Variation (bp) | |||||||||||||||||||
Non-accrual loans to loans to the private sector | 6.27 | 9.63 | 13.47 | (336) | (720) | |||||||||||||||
Allowance for loan losses to loans to the private sector | 10.94 | 14.38 | 16.02 | (344) | (508) | |||||||||||||||
Allowance for loan losses to non-accrual loans | 174.56 | 149.39 | 118.91 | 2,517 | 5,565 | |||||||||||||||
Cost of risk(3) | 3.29 | 6.43 | 15.66 | (314) | (1,237) | |||||||||||||||
Total allowance for loan losses(2) to loans to the private sector | 12.22 | 15.71 | 17.05 | (349) | (483) | |||||||||||||||
Total allowance for loan losses(2) to non-accrual loans | 194.96 | 163.21 | 126.55 | 3,175 | 6,841 | |||||||||||||||
Cost of Risk(4) | 3.74 | 8.52 | 14.40 | (478) | (1,066) |
(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) | Includes allowances on unused credit card balances. |
(3) | Annualized. |
(4) | Includes allowances on unused credit card balances. Annualized. |
As of September 30, 2020, taking into consideration the provisions for unused credit card balances, the coverage ratio amounted to 194.96%, as compared to the 126.55% figure recorded on the same date of the previous fiscal year.
21 |
Analysis of Loan Loss Experience | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Allowances for loan losses | ||||||||||||||||||||
At the beginning of the Quarter | 8,424 | 8,587 | 10,431 | (2) | (19) | |||||||||||||||
Changes in the allowance for loan losses | ||||||||||||||||||||
Provisions charged to income | 391 | 929 | 1,833 | (58) | (79) | |||||||||||||||
Reversals of allowances for loan losses | (518) | (119) | (427) | 335 | 21 | |||||||||||||||
Charge offs(1) | (453) | (730) | (278) | (38) | 63 | |||||||||||||||
Effect of inflation | (572) | (243) | (1,156) | 135 | (51) | |||||||||||||||
Allowance for loan losses at the end of the Quarter | 7,272 | 8,424 | 10,403 | (14) | (30) | |||||||||||||||
Charge to the income statement | ||||||||||||||||||||
Provisions charged to income(2) | (391) | (929) | (1,833) | (58) | (79) | |||||||||||||||
Direct charge offs(2) | (128) | (121) | (269) | 6 | (52) | |||||||||||||||
Bad debt recovered | 103 | 42 | 58 | 145 | 78 | |||||||||||||||
Net charge to the income statement | (416) | (1,008) | (2,044) | (59) | (80) |
(1) | Item included for calculating the cost of risk. |
22 |
GALICIA ADMINISTRADORA DE FONDOS
RESULTS FOR THE QUARTER
Income Statement | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Net interest income | 1 | 6 | - | (83) | N/A | |||||||||||||||
Net results from financial instruments | 42 | 22 | 28 | 91 | 50 | |||||||||||||||
Gold and foreign currency quotation differences | 8 | 8 | 21 | - | (62) | |||||||||||||||
Other operating income | 648 | 544 | 187 | 19 | 247 | |||||||||||||||
Net operating income | 699 | 580 | 236 | 21 | 196 | |||||||||||||||
Personnel and administrative expenses | (93) | (76) | (55) | 22 | 69 | |||||||||||||||
Other operating expenses | (38) | (31) | (14) | 23 | 171 | |||||||||||||||
Operating income | 568 | 473 | 167 | 20 | 240 | |||||||||||||||
Results from the net monetary position | (47) | (15) | (44) | 213 | 7 | |||||||||||||||
Income tax | (177) | (139) | (52) | 27 | 240 | |||||||||||||||
Net income | 344 | 319 | 71 | 8 | 385 |
ASSETS UNDER MANAGEMENT
Mutual Fund | Assets Under Management as of: | Variation (%) | ||||||||||||||||||
In millions of pesos, except otherwise noted | 3Q20 | 2Q20 | 3Q19 | vs 2Q20 | vs 3Q19 | |||||||||||||||
Fima Premium | 137,649 | 131,897 | 77,744 | 4 | 77 | |||||||||||||||
Fima Ahorro Pesos | 9,491 | 6,769 | 3,120 | 40 | 204 | |||||||||||||||
Fima Ahorro Plus | 13,925 | 10,593 | 3,196 | 31 | 336 | |||||||||||||||
Fima Capital Plus | 11,623 | 8,342 | 141 | 39 | 8,143 | |||||||||||||||
Fima Renta en Pesos | 1,577 | 646 | 171 | 144 | 822 | |||||||||||||||
Fima Renta Plus | 1,231 | 772 | 100 | 59 | 1,131 | |||||||||||||||
Fima Abierto Pymes | 669 | 675 | 682 | (1) | (2) | |||||||||||||||
Fima Acciones | 594 | 537 | 402 | 11 | 48 | |||||||||||||||
Fima PB Acciones | 686 | 698 | 738 | (2) | (7) | |||||||||||||||
Fima Mix I | 1,498 | 511 | 5 | 193 | 29,860 | |||||||||||||||
Fima Renta Dolares I | 1,737 | 1,801 | 2,951 | (4) | (41) | |||||||||||||||
Fima Renta Dolares II | 494 | 533 | 900 | (7) | (45) | |||||||||||||||
Fima Renta Acciones Latinoamerica | 50 | 58 | 223 | (14) | (78) | |||||||||||||||
Fima Renta Fija Internacional | 1,462 | 1,544 | 4,200 | (5) | (65) | |||||||||||||||
Total Assets Under Management | 182,686 | 165,376 | 94,573 | 10 | 93 |
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SELECTED FINANCIAL INFORMATION
Balance Sheet | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 283 | 314 | 93 | (10) | 204 | |||||||||||||||
Loans and other financing | - | 209 | - | (100) | N/A | |||||||||||||||
Other financial assets | 902 | 160 | 380 | 464 | 137 | |||||||||||||||
Other non-financial assets | 2 | 18 | 15 | (89) | (87) | |||||||||||||||
Total assets | 1,187 | 701 | 488 | 69 | 143 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Other non-financial liabilities | 321 | 179 | 14 | 79 | 2,193 | |||||||||||||||
Total liabilities | 321 | 179 | 14 | 79 | 2,193 | |||||||||||||||
Shareholders’ equity | 866 | 522 | 474 | 66 | 83 |
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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 | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Earned premium | 1,805 | 1,752 | 1,670 | 3 | 8 | |||||||||||||||
Incurred claims | (254) | (167) | (258) | 52 | (2) | |||||||||||||||
Withdrawals | (6) | (3) | (9) | 100 | (33) | |||||||||||||||
Life annuities | (4) | (3) | (3) | 33 | 33 | |||||||||||||||
Acquisition and general expenses | (700) | (678) | (865) | 3 | (19) | |||||||||||||||
Other income and expenses | - | (16) | (2) | (100) | (100) | |||||||||||||||
Underwriting income | 841 | 885 | 533 | (5) | 58 | |||||||||||||||
Net interest income | 140 | 159 | 362 | (12) | (61) | |||||||||||||||
Net results from financial instruments | (3) | (2) | 1 | (50) | (400) | |||||||||||||||
Gold and foreign currency quotation differences | (1) | (20) | (5) | 95 | 80 | |||||||||||||||
Other operating income | 141 | 113 | 88 | 25 | 60 | |||||||||||||||
Net operating income | 1,118 | 1,135 | 979 | (1) | 14 | |||||||||||||||
Personnel expenses | (247) | (250) | (242) | (1) | 2 | |||||||||||||||
Administrative expenses | (167) | (130) | (157) | 28 | 6 | |||||||||||||||
Depreciations and devaluations of assets | (59) | (58) | (57) | 2 | 4 | |||||||||||||||
Operating income | 645 | 697 | 523 | (7) | 23 | |||||||||||||||
Results from the net monetary position | (181) | (139) | (301) | 30 | (40) | |||||||||||||||
Income tax | (152) | (110) | (153) | 38 | (1) | |||||||||||||||
Net income | 312 | 448 | 69 | (30) | 352 | |||||||||||||||
Other comprehensive income | 12 | 43 | (59) | (72) | 120 | |||||||||||||||
Total comprehensive income | 324 | 491 | 10 | (34) | 3,140 |
Profitability | 2020 | 2019 | Variation ( bp) | |||||||||||||||||
Percentages, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Return on average assets(1) | 20.26 | 30.95 | 4.27 | (1,069) | 1,599 | |||||||||||||||
Return on average shareholders’ equity(1) | 38.65 | 59.57 | 8.92 | (2,092) | 2,973 | |||||||||||||||
Efficiency ratio (2) | 71.73 | 66.66 | 85.81 | 507 | (1,408) | |||||||||||||||
Combined ratio(3) | 79.50 | 74.35 | 95.47 | 515 | (1,597) |
(1) | Annualized. |
(2) | Acquisition and general expenses, plus personnel expenses, plus administrative expenses, plus depreciations and devaluations of assets, divided by earned premiums, plus incurred claims, plus withdrawals, plus life annuities, plus acquisition and general expenses, plus other income and expenses, plus net interest income, plus net results from financial instruments, plus gold and foreign currency quotation differences, plus some items included in other operating income, plus the net result from the monetary position. |
(3) | Acquisition and general expenses, plus personnel expenses, plus administrative expenses, plus depreciations and devaluations of assets, plus incurred claims, plus other income and expenses, divided by earned premiums, plus withdrawals, plus life annuities. |
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SELECTED FINANCIAL INFORMATION
Balance Sheet | 2020 | 2019 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 3Q | 2Q | 3Q | vs 2Q20 | vs 3Q19 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 264 | 95 | 103 | 178 | 156 | |||||||||||||||
Debt securities | - | - | 37 | - | (100) | |||||||||||||||
Net loans and other financing | 500 | 1,224 | 419 | (59) | 19 | |||||||||||||||
Other financial assets | 2,107 | 2,320 | 2,939 | (9) | (28) | |||||||||||||||
Property, bank premises, equipment | 537 | 546 | 571 | (2) | (6) | |||||||||||||||
Intangible assets | 90 | 121 | 167 | (26) | (46) | |||||||||||||||
Assets for insurance contracts | 1,548 | 1,469 | 1,635 | 5 | (5) | |||||||||||||||
Other non-financial assets | 710 | 719 | 339 | (1) | 109 | |||||||||||||||
Total assets | 5,756 | 6,494 | 6,210 | (11) | (7) | |||||||||||||||
Liabilities | ||||||||||||||||||||
Financial entities | - | - | 40 | - | (100) | |||||||||||||||
Liabilities for insurance contracts | 1,781 | 1,739 | 1,829 | 2 | (3) | |||||||||||||||
Other non-financial liabilities | 1,675 | 1,489 | 1,361 | 12 | 23 | |||||||||||||||
Total liabilities | 3,456 | 3,228 | 3,230 | 7 | 7 | |||||||||||||||
Shareholders’ equity | 2,300 | 3,266 | 2,980 | (30) | (23) |
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RELEVANT INFORMATION
TARJETAS REGIONALES
At an Extraordinary Shareholders’ Meeting of GFG held on November 10, 2020, the shareholders of GFG approved a preliminary spin off-merger agreement between Grupo Financiero Galicia and certain companies that collectively own 17% of the shares of Tarjetas Regionales.
NOTES
On November 20, 2020, Banco Galicia issued its Class VIII Notes for Ps.1,589 million, having a term of 9 months, at a Badlar rate + 2.5%.
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 Coronavirus (COVID-19). This 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 and provide for preventive and mandatory social isolation or distancing (with variations of such restrictions dependent on the region of the country). As of the date of this report, commercial activities are gradually being normalized in compliance with applicable protocols established by the Argentine government.
Additionally, the Argentine Central Bank and other regulatory agencies have 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 the 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 situation as it evolves 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 certain maximum interest rates; (vi) postponement of maturities of unpaid loan balances; (vii) the granting of zero-rate financing to self-employed people; (viii) a credit line for SMEs’ productive investment; (ix) the granting of financing to companies for the payment of salaries; (x) a minimum interest rate on time deposits; (xi) the flexibilization of the parameters in respect of classification of debtors; and (xii) controls on the foreign exchange market.
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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.
PRODUCTIVECREDITLINEFOR SMES
Through Communiqué “A” 7140, the Argentine Central Bank established, effective as of October 16, 2020, a credit line to finance SMEs productive investments. The amount to be granted from October 16, 2020 until March 31, 2021, is equivalent to 7.5% of deposits to the non-financial private sector in pesos, calculated based on the monthly average of daily balances in September of 2020. The proceeds must be used to finance investment projects, working capital and in other special circumstances. The terms and maximum interest rates in connection with such financing were established depending on the ultimate use of the funds. At least 30% of the quota must be allocated to financing investment projects.
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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