BBAR - Earnings call transcript Q3 2020 | Banco BBVA Argentina S.A.

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Operator

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to BBVA Argentina's Third Quarter 2020 Results Conference Call. We would like to inform you that this event is being recorded and all participants will be in listen-only mode during the Company's presentation. After company remarks are completed, there will be a question and answer section. At that time further instructions will be given. the all, during stress be the this within meaning of the some forward-looking Securities First found the made provisions under statements conference of Act Instructions] of let XXA U.S. that me of statements in XXXX [Operator Section harbor of safe call may Federal Securities law. subject statements. and differ statements uncertainties those from These materially cause in could are expressed forward-looking forward-looking that to risks the to actual results

Form Today BBVA information for concerning U.S. is may factors year Lanusse, annual Mr. Kelly, your filed the Ernesto XX-F Additional we IRO; on XXXX contained in fiscal you Javier Ines begin conference. Mr. Investor Argentina's Securities report the CFO; and with these with Manager. have Relations Ms. Kelly, and Gallardo, the Exchange us, Commission. Mr.

Javier Kelly

welcome Argentina results. XXXX call everyone, earnings third of to discussion Hello BBVA conference our the the for quarter and

constitute during based the of beliefs statements we subject number of risks the formal that that results Before our to cause to that factors and begin and control. beyond may actual certain statements, may allow me differ, you Company’s expectations materially could the a and course management’s remind current including forward-looking to be which made are remarks, uncertainties discussion on are

ir.bbva.com.ar. refer description of release, website these our our For earnings a the risks, to and at with relations investor our please SEC filings which available are

with begun Chief IAS Financial note will reporting have first accounting will also XX. Please is Central as January Bank who Lanusse, joining Gallardo Rule Ines accordance Officer, hyperinflation Speaking applying XXXX, regulation, our be available today Q&A starting in today for us be results IFRS that session. the we per Ernesto

period XX accumulated quarters comparability, applying through figures September have reflect XXXX. each inflation for effect the For to XXXX adjustment restated of for the ease XX, of all been of IAS

clients’ these conference call. me the third Thanks you for We you Javier, earnings the beginning on quarter are beloved thank challenging clients, joining channels, in central on branch its emergency of by traditional ones our us safety, its offices times. over and Lanusse through provided pandemic, to Ines healthy network. through and prioritized all you From your let as only Ines Argentina all the surged XXXX Government. Now, its Bank products health The call and the safe BBVA turn and its of hope wide implemented has the possible and of digital has that in also not but support regulation the Argentine range has both employees’

digitalize XX% to clients of aiming human capital in launched the to remote combining migrate in penetration penetration digital and digital branches clients XX% and features self-service, several to of XXXX October reached from promote quarter. XX% the Regarding channels. the client transformation, been mobile reached facilities have clients XX% digital prior Moreover, structure between from and

time financial quarter, swap third comprehensive XX% by billion in government from optimize during with government this derived higher cost deposits, operating accounts, of sequential by as explained the the previous If U.S. Quarter-over-Quarter dollar taxable figures higher expenses quarter. provided linked lower offered result in of differences the developed, explained in explained and deposits income of during the and long XX.X% increased offsets in as results. from Bank quarter than increase of as figures increasing quarter XX.X% explained excluded, In the posted the to the the Net this by a addition expense, the quarter. from the a the to to in in of amortized fees is All it average for by mainly billion, to explained pick-up a combined in conditions exports to net regulation decline effects; income second volume lower solidity XXXX. loss its Central of which quarter income base, assets quarter. the during financial a months deposits, LELIQ would volatility X.X% of have partially Meanwhile, from closely in purchase-and-sale of of net of for result will an its the education adjustment reduction measured derived of and ARSXX.X responsible instruments model, the second income as terms ago, hereinafter from during quarter. monitors surge quarter. In interest with decreasing policy income represented amounted increased on consequence checking a of explained the mainly to comment pandemic temporary and voluntary exchanged in third additional the net value accounting third consumption totaled business greater a Argentina the Income country. XXXX, ARSX a quarter banking, rates to extent, FX posted quarter of pick-up a minimum XX.X% granted tax prior received activity. time the rate a part mainly compared posted July income pesos. of comparative that value decreasing increase year in compared consequence The income and in which received the XX.X% by lower XX.X% to compromise the by a BBVA ARSX.XX purposes, Bank’s from position corresponding period, line for last card the financing in XX.X% Bank the of of XXXX, gains, interest-bearing the financing mainly and quarter. by is loans write-down in on accumulated all greater by from quarter, the at through and as deposits the due year Treasury its the In are of between at securities the Central foreign currency, inflation wisely a the billion, This fair by XXXX ARSX.XX explained results, billion, derived income result ARSX.XX comprehensive rate. remains. the ARSXXX an time monetary currency deposits as in lower in mix is lower totaled fee billion, other LELIQ of of in the actions in by by in financial pandemic totaled at The totaled deposits a than quarter securities, as its the fell minimum quarter enables the with interest lower quarter, has position interest quarter XX.X% Argentina’s than XXXX increase is deposit National direct from This that ARSX.X from than XX, aim explained reflects by X.X% other were surge possible position, offset in government from income XX.X% third transactions, quarter, XXXX of XXXX. partially as financial an X.X% mainly was sight overdrafts, keeps ARSX over fees unless at second ARSXX.X the a over the supporting than implemented at pre-financing lower third Bank million, posted is inflation X.X% Bank’s line other fee in In from year-over-year shift exposure by the and periods quarter loans responsible what activity. business, and over sustainability income the XXXX, is including foreign billion In reporting credit explained inclusion, including the LELINK, and financial contraction in in totaled environmental increasing of including by total from mentioned a and This and LELIQs in remaining credit currency protection, consumption now of the quarter the higher card uncertainty Net the BBVA second ago. keeps adjustment regulations. in notes of ago. of the Interest and card quarter-over-quarter. it to of consequence in increase impact working income; sharp adjustment for net fair of in actions recorded economic XXXX. I increment quarter reduced impact over slight in fiscal XX.X% decrease in over seen and income transactions the third credit the third quarter value a anticipating quarter excess time LELIQs. shareholders, is Bank regarding of the towards results time otherwise from billion This an consequence This inflation by contraction the current interest billion, increase XX.X% end to is noted. XXXX quarter contraction of the the situation, position the a forward

the in increase and and quarter mainly decreasing accumulated was ARSX.X in enforced XX.X% in market of to expenses. totaled Personnel is of quarter, affected billion. of ARSX.X activity XXXX, benefits surge by expenses personnel second XX.X% and a due higher which as the of services above increasing and quarter rentals. XX.X% of is collective quarter restrictions on consequence income, a by third quarter on bargaining services, labor the offset quarter, XXXX third X.X% July September, year-over-year. has and This mainly as reported in percentage by Administrative expenses, explained in savings armored agreement been in mainly respectively. salaries, of expenses quarter-over-quarter the ratio increase and increase unions X.X% Moving during to increment efficiency The financial billion, increased from transportation administrative a XX%, the XXXX the in partially in than explained expenses expanded increment by in of a an XX, The increment FX XXXX X.X% grew third in the with XXXX. administrative derived an reaching

as Excluding reach XX.X%. advanced tax would from of in the this of accumulated XX.X% recognition of and efficiency an Turnover assets write-down position to operating income income in from payment XXXX the Aires. third and inflation for OCI, ratio adjustments expenses the In of through quarter-over-quarter, a XXXX, Buenos of reduction amortized due at monetary for at value tax, third in fair of net XXXX lines quarter included quarter contracted the cost of the other City

a provisions. the release is of consequence as also the in legal hand, On other of operating a reduction expenses there other

private XX.X% increased decreasing In the both contraction demand of sector totaled in over measured dollars, year-over-year, and to market private foreign billion, XXXX. terms of reached flat sector consolidated sector remained of by the BBVA in loans the X.X% mainly activity, in quarter measured the private quarter-over-quarter XX% decreasing share in year. third decreased XXXX from Bank’s the loans financing X.XX% real pesos terms. as quarter-over-quarter XX.X% to driven ARSXXX.X XX.X% and Dollar-denominated September the and in loans quarter-over-quarter, X.XX% currency. in pesos in of Loans Argentina

was instruments, pledge, increases and trade, over by by decline by financing the Regarding discounted including in retail the a latter loans and increase XX pledge a XX.X% prefinancing the is programs. are quarter mortgage, X.X% the in including increase have in loans foreign and quarterly fell instruments, greatest of X.X% XX% discounted XX.X% loans, loans, quarter consumer loans XX.X% and and Ahora and explained and loans overdrafts, decrease these Ahora the Commercial over quarter partially card mainly in other decline XX.X% overdrafts, credit The company XX in boosted quarter loans. year-over-year. increased This card for In and X.X% a and a offset reflected leasing, exports. credit year-over-year. fell portfolio quarter,

granted of XX, in XX% of the XXXX has gross the support quarter XX was billion loans-to-deposits a to As ratio In ago. XX% COVID Bank third September ARSXX.X year compared lines. credit

continuing of instruments Bank. waivers mainly portfolio have especially for XX of the XXXX. X.XX%, regulation ratio Cost This increased impairment non-performing average classification. the non-performing, enforced XXXX. XXXX, debtor the than was of in greater X.XX%, by the in loss such nonfinancial XXXX, the consequence debtor September in a driven sector a loan explained implementation XX loans, but third total debt with of second of classification quarter. recorded recorded reflect quarter months. by which the which of of by XX, is the models, exposure explained of XXXX clients performance quarter, and Bank though portfolio, which above is that XXXX, third than as portfolio. performance allowances as quarter of measured are lowest adequate regarding classified total before adoption government credit The from an as of third a BCRA the is is issued temporary decrease X.XX% reached scope prior XXX.XX% measured days losses the flexibility asset standard. This assets total except from COVID-XX loans evolution public the effect Allowances X.X%, excluded of effect until affected the institutions irregular increase quality, as in in standards Central IFRS January X.X% mandatory XXXX. the X, ratio in X quarter in reached sector a risk reclassification regulation in temporarily last of regarding of other a quality, BCRA with in during allowances bank the excluding lower non-performing of regular grace percentage by the This commercial These by total second in the in suspends over were the in quarter to In total for loan expected an allowances the XXX.XX% periods reached positively instruments the to as coverage non-performing the and December pandemic, the extends waivers As portfolio

Bank the public quarter. the billion, Bank offered bundle on in swapped Our its by It securities. participated total July dollar LELINK remaining U.S. in XXth, and notes maturing worth bonds position sector of the exposure link prior ARSXX.X virtually above is in of exchange Sovereign in denominated in Central Treasury, was the billion that portfolio This to adjusted ARSXX.X left XXXX. a Bank the BONCER National in noting voluntary U.S. excluding U.S. the swap and of notes and free linked XXXX pesos by sovereign the dollar inflation dollar

checking billion, billion, side, funding over were the XXXX. quarter X% increasing remaining compared flat On of private deposits with year-over-year. measured currency deposits third quarter third ARSXXX Private XX.X% by explained especially is by strong time deposits, and and and lesser extent, Investment deposits ARSXXX Private local foreign currency totaled over the X.X% the quarter pesos sector of a growth in in the mainly the of accounts, growth in sector in This sector dollars. to both quarter in and accounts. in growing in XXXX when decreased quarter, quarter

increased the during down, Towards dollar of FX withdrawal previous end consequence operability over restrictions Central foreign a the the levels After currency new U.S. observed withdrawal reestablished returning regulations, under of Bank enhanced deposit deposit slowed was quarter, the as months. market. to

private BBVA of and of saving on deposits sector XX.X% transactional XXXX As including reached share BBVA’s of September checking X.XX%. XX.X% from XXXX, represented year as accounts total a ago. deposits consolidated deposits September market Argentina

capital XX.X% strong solvency a to Argentina continues In and The Shareholders This sum a complementary entailing make of this Reserve approved of off of General ratio indicators, our the aim terms in deposit of XX.X% Bank’s the to of on this approval. would cash XXXX, dividend dollars liquidity of of Meeting X the of capital show future and Extraordinary dividend, total additional on accounting billion, increase XX% XX.X%. as pesos a ratio XX, capital. and remarks. The General the XX regulatory payout best the capitalization, write- Optional With ratio not Last BBVA Meeting ARSXX.X by XX, healthy of is respectively. but through dividend September in ratio Tier concludes an least, remained the of excess use to bank’s total billion at to distribution partial for prepared reach the cash subject the earnings, the Shareholders approved November of the aim billion, XX%. for BCRA distribution ARSXX May ARSX.X excess

line for Operator, questions. open please now take your will the We questions.

Operator

will Nobrega from ahead. comes Please session. Our Gabriel We [Operator the with question-and-answer go Citi. begin question Instructions] first now

Gabriel Nobrega

for Hi, everyone. ask the I thank Good have questions. And afternoon. actually you questions. two to opportunity

of large above you provisioning. a this in it high. around level this new want is because that comfortable We ratio saw a is first XXX%. I'm If is I quarter. to understand well the is mistaken, not a see The coverage historical decrease

making you ask clear you. and wanted second that understand, going same to a have of keep you you the I to so would for question And picture understand, provisioning Central to to afterwards. even the don't if still coming Thank like NPL Bank. I'll level due believe though waivers are quarters I from of the the the just

Ines Lanusse

nice it's to to you. Gabriel, talk Hi,

mentioned mark the of you the as question out. be a when we all taken Yes, Central today, Okay. waivers Bank have will or

regarding bit by higher So mentioned level inclusive NPL, for X.XX. which X.X very in provisions around going we waiver we more XXXX to level or on is XXXX, our higher and projection very X.XX% I more of projecting be end we around feel the of to to confident the NPL not asset and can are high. little even a

should provisioning by namely the variables affecting quarter, You X IFRS in an model. the in increase fourth the see changing

of So make quarter go because will the in that rate that NPL that sorry XXXX. increase portfolio decrease by increase and progress bit NPL a further also of -- considering the the will down mainly little fourth growth should our the our end

X IFRS way For the the it's know changing NPLs increase how the the But in day quarter, mainly projection. right, of should because again, other we the provisioning fourth of the in question, at rational but of XXXX, perform, again, a we more will how define should rid get they end the on yes, see the behaves. question word

Gabriel Nobrega

second interest actually And income. your then net that's It's from on question. a

lot. first decreased this has seen quarter, a have we So, since the that

from significant peers. a the still the effect in BADLAR versus It's While I rate. decrease here that understand increase there's an your

So than net maybe increasing be could should as starting the if trajectory interest What on going comment, we're your the you. different to What's Bank you rates are banks And seeing? to what be think the income here? interest Thank you for what's also, do just first Central Argentinean other the going see again. in quarter?

Ines Lanusse

first attainment activity an you activity bit compensated the start our the these bit little with increasing you on the want to cost increase, also final net income it quarter, that in to maybe also increased that income, activity see will so is cost For mentioned, increasing little because interest be issues, by a value. increases increase but interest of increase Like will a of increasing focus the minimal, increase our funds. should that

Going again, It more lending. genuine the the And again. but into loans. that more subsidized probably and funds. the towards pressure we fill affect will XXXX, the the to we of tight that to going are We we cutting expecting that and now returns. in use question a is It's to the the also bank, more the activity should we're cost last in have out, starting probably Decides something saw XXXX, activity they're level of increase also see more, to on becoming is taken loans of quarter doing demand which the decrease now. were agenda, mix

Gabriel Nobrega

some follow-up demand maybe he a you start offering as of new could And this lot these for here in and just unsubsidized saw expect demand question. to the lead well? XXXX for fourth allow I your loans talked for think and XX% quarter to as a SMEs. about me pickup regulation if for the We Do you this a since

Ines Lanusse

predict. to difficult It's

of We XX%. all loan first have lended subsidized

to of because demand, are Now to the but X.X% deposit review it's obliged base. also starting lend we

it As new In have place, to sort in you is ARSX.X already of which XX, is not have service. guaranteed more November a we billion. this play of line,

demand coming the that So, type side. of these for loans from is basically

see pickup and Going need conditions the stabilized demand macroeconomic forward, in to we loan a to should there become we more see

Operator

The ahead. next is from question Alejandra go Please with Aranda Itau.

Alejandra Aranda

you said, that the of rate your if credit already have loans could at your Hi. Could rest on you that percentage of portfolio? cards between and the what percentage for you of program, loans remind portfolio? tell us a subsidized the And discriminate me, was and you

Ines Lanusse

the were billion. those all for represents lines for XX% this zero with the Okay, support interest rate line and implemented ARSXX.X

line, Now, if new which regulation credit compulsory communication is XX.XX.

As granted already of billion. we November ARSX.X had XX,

and granted lines now credit are COVID lines. for So into the COVID lines compulsory the the going

loan total the by Regarding they the loan, card approximately book, deferred total composed the it's of book credit represent the XX% business. from and mainly

Alejandra Aranda

questions, perfect. may. more if And, two I Okay,

color also of could terms give loans fees, you in for next what some for on for the us to growth and and deposit? year and In expect quarter fourth

Ines Lanusse

further to regarding Yes, the quarter, you should them bit on see increase. fees will little activity because down go start fourth a

So, see starting increase. acquisitions should you to

some in we gain had excluded You had have seen second already one-time increase. an the of third the despite you quarter saw quarter you in that

Going the in it increase activity. forward to to XXXX, with It's tied again, the inflation. starting

start see you credit are particularly safety buckets. to could You -- cards some and going increasing products, see

as with increasing we you XXXX. June again, We take happened that client that XXXX. the January, are we And should inflation. a XXXX projecting trend and cost do October, what see Probably expenses in acquisition for in grow should more in reference some to that see and

We what happened trend similar have expect to here. to

Going XX.X% growing has to profit XX% give to was idea bank nominal above the year-to-date in And are been around of XX% real and we loan the system. system. and around you around time. That in an around bit Xnd the bank growth October, growing in year-end, projecting will terms with to the the nominal growth, for be loans little below grow XX% terms and

of inflation XX%. the end year projecting are We of the towards

going real these about, the still bucket, are terms. the Regarding grow, going real around in to grow growing to XX%, now growth

inflation The For are should above to are is systems and mix XX%. above for growing start we also loans the growing deposits grow XXXX Loans profit. the the the be and XXXX, around above projecting should inverted system.

are above sides both inflation. growing So,

Operator

Instructions] with from question is Carlos next Gomez The [Operator HSBC.

Carlos Gomez

not So not I declared allowed situation further Could which correctly, the again, it. an you dividend, if you did dividends? initial with you’ve the Bank because Central has understand pay clarify the

imagine it. or pay likely you depend if more the shareholders and and the and planning adjust to in parked pay it dividend in can this And you until when year? is minor this in make can you're deposit Central allowed, are for they have facilitation I Now, And Bank pesos component which for declaring approval. you that to dividend, you Central Do Bank are to realistic to you are again do expectation a you continued remain will year or foreign for want dollar? a next

Ines Lanusse

Regarding to flexibility. against there pay. on It's we effect that on you truth is to be increasing Central of we liabilities the Basically, inflation difficult Bank, say no able this, are P&L. lower our while monetary The doing wouldn't when is the a hedging see inflation. which will line are

a do we effect inflation. to approval despite So, that's the not happen, trying don't do the when we have and hedge are have P&L we because know in to this to should going it positive

main the difference. that's basically, So,

Carlos Gomez

-- us a this, so you you let when dividend. So, understand declare

comes out from dividend -- to categorization liability? equity, nonmonetary the from no, but essentially, of liability monetary So changes its nonmonetary to sorry, liability

Ines Lanusse

rose the into it from out and equity the… No, comes

Ernesto Gallardo

Liability.

Ines Lanusse

liability. monitory Liability,

Ernesto Gallardo

have less happened you is monetary that net assets. What

Carlos Gomez

Okay.

say we as you'll the So, have monetary now equity. these assets opposed less of because can liability part being to

Ines Lanusse

Correct.

Ernesto Gallardo

Exactly, point. that's the

Carlos Gomez

otherwise right. All implication earnings? there the and because simply reported or therefore the to It otherwise happens cosmetic. life [indiscernible] just any says what Is adjustments it taxes real

Ines Lanusse

this. the your liability on But have our basically, effects give I'm because the this by doing main liabilities. to question. against inflation the on side not trying We're inflation sure will That's dividends effect. you adjustment understand I less monetary hedge you

Carlos Gomez

there or tax have impact the is because any liability was, question less? other more changed from we fiscal My Okay.

Ines Lanusse

are any is really fiscal when impact when because no in to the there dividend, it dividend. declared fiscality you that to is consider paid you a not terms going answer The you of

Operator

to This this for like closing remarks. Lanusse to back the would concludes Ms. the I time, At session. floor question-and-answer turn any

Ines Lanusse

us and to upcoming operator, month you, Thank your and providing look joining business and us. financial interest appreciate you today. forward quarter. We We of in for update the over all more next you thank meet

hesitate As reach questions, usual, have enjoy any the do follow-up. if us be you day. the of rest to and we'll Thank to you further and happy not please

Operator

This you. today's presentation. Thank concludes

this day. time. lines your at nice a And disconnect may You have

Banco BBVA Argentina (BBAR) 25 Nov 202020 Q3 Earnings call transcript