BBAR - Earnings call transcript Q1 2021 | Banco BBVA Argentina S.A.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to BBVA Argentina's First Quarter 2021 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 presentation. After company remarks are completed, there will be a question-and-answer session. At that time, further instructions will be given. Instructions]. [Operator

under harbor let conference some statements call uncertainties statements. meaning Securities the and those all, law. These to could made the expressed within materially from cause stress Section of this in during may safe actual me of in federal forward-looking Act the U.S. of securities that statements the XXA First forward-looking are of statements of subject found differ the provisions XXXX be that risks results forward-looking to

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

Belén Fourcade

Argentina's and XXXX BBVA Good morning, conference to first everyone, call. quarter welcome earnings

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

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

IAS results will who call Lanusse applying reporting as to Gallardo, starting Q&A and regulation, Central XXXX, Ines we today's that be available rule will Please pursuant accounting, be have per Officer, during for Chief X, Speaking IFRS January Mr. note Financial hyperinflation XX. session. Ernesto our begun Bank the

that of last adjustment of we XX, been XXXX figures expressed restated present like Bank's figures as of able accumulated in reflect are current to following would X also through XXXX. this the March the ease application add earnings Central period XXXX, again Communication effect each of to to For "A" comparability, for the quarters currency. I have of inflation release,

let call Now turn the me Ines. over to

Ines Lanusse

joining quarter of all Thank you, first for and conference thank call. you on us the Belén, XXXX

by provide battle start uncertainties economy measures services the next elections economic linked me IMF such national to remain negotiation the add further additional to with some of the signs to of Let the to incipient the In to and pandemic, the the the the The and that financial resolution context, critical in safely of able plans arrangements. it's taken and evolution complicate results recovery, BBVA the current be commenting of Argentina products that view, may capacity the prior regards society. silos to the retail despite with efficient from be reached government through continue banking line March to to has in by that the an this with of situation. sector, mobile and year our equity of at our reached our access a evolved year, products such digitalization of before. proven that of XX% while the penetration the safe adopt end sanitary digital in adaptive from as and XX% from clients modern clients scheme clients of offer branch services. has a XXXX, operating point and a XX% our way the this, XX% of of In of wholesale and use this network channels and midterm digital

now allowances; business negative the of which through a the keeps of growing adjustment XXXX. to tax protection P&L, provision bank quarter mainly deposits for results. to subject of fiscal by fourth quarterly first BBVA reduction in time and three, two, the year-over-year. exposure financial action two, presented cost period quarter-over-quarter greater loan increase on one, Central XXX.X% in totaled XX.X% mainly described, Quarterly In positive Argentina the during in greater the comment inclusion, lesser results previously recorded of of management; generated In XX, value the expenses results X.X% the BBVA the the inflation the real being assets the legal lower line; one, the the Argentina regulation mainly provisions working from totaled the education XXXX the effects responsible quarter a announcement introduced year declare return Based the the inflation and interest the equity financial statements measurement recorded on XXXX, results unconstitutionality in fair the quarter inflation. instruments the a expenses quarter, in passive first X.X% filed are than its for in compromise statements; application boost XX.X% of by posted financial is to XXXX first required the and due regarding lower extent, for valuation sustainable adjustment first net frame affected Bank, quarterly part Communication results return that "A" by country. proving operating and an make of in towards as up income XXXX and and prevented XXXX quarter by interest I resilience. time income, model, adjustment actions supporting with XXX.X% the active ago. XXXX the variation impact retroactive quarter a These including the XXXX linked does results in four, retroactively application will by: quarter were by; financial in by a UVA bank terms in loss XXXX in a of the billion, income on the of explained to inflation the the financial net net line adequate the income of and recovery ARSX.X fourth the quarter. responsible in the banking, quarter monetary at to fourth Prisma December the bank's a in XXXX, BBVA of driven said, and than on real rate environmental XXXX of the of and, modifications and stated in X.X%, Argentina ended the In billion, interest of deposits income ARSXX.X posted not

adjustment, Interest in rate, lines quarter to income expenses time through and driven in affected the to explained X.X%, fall rate year-over-year. Central in from reward fall liquidity by from and not quarterly cards, of the quarter-over-quarter. during from activity. During the higher the and Central by the In increase quarter by income XXXX XXXX, by of X.X% a from credit last and quarter a XX.X% XX.X% public partially XX.X% of the loans. X.X% discounted securities, in bills the from which XX.X% XX.X% first X.X% income promotions previous seasonal income. partially deposits totaled effective the is X.X% is Interest X.X% time income in by by quarter first mainly other investment in the a the increase first by is X.X% client securities The the the inflation by growth increase was first as the and offset quarterly of credit overdraft. due quarter-over-quarter a XX.X% of the XXXX, government Lower was effect later other XXXX, linked by financing by boosted X.X% income growing by XXXX by explained acceleration productive UVA XX.X% the year-over-year. increment to income billion, in mainly first ARSX.X includes instruments cards was income XX.X% expenses inflation this in in ARSX.X above fee X.X%, commercial pledge loans such contracting year-over-year. quarter. interest income of the of in interest quarter and lower expenses compared income total savings the XXXX, XX.X% from Bank compensate accounts fall interest fee Bank fourth Interest investment indexes. overdraft This cost factors. what interest ARSXX.X billion, to quarter and from said billion, from quarter-over-quarter a part explained by income a part credit additional deposits new from implemented growing a explained quarter explained ARSXX.X interest and gains totaled and quarter-over-quarter quarter-over-quarter program. fall cards to of of and versus by X.X% increase totaled mainly loans acquisition driven as Quarterly in are The increment seasonal did from implementation billion, The of X.X% totaled credit in and expended grew Net in in offset

XXXX. of year-over-year. XXXX increases During superior benefits quarter first partially to ARSXX.X totaled is and X.X% the explained decreased compared the quarter to X% benefits first collective of expenses agreements, and XXXX, billion, X.X% payments. compared increased X.X% increasing salary quarter remuneration bargaining personnel administrative by falling and fourth the quarter-over-quarter through This arranged additional Personnel

the administrative fall first the the was the XXXX. of of a of of by XXXX XX.X%, XXXX fall driven affected increase ratio of increased is lower first and to activity. the The X.X% first XX.X% and reported in above quarter in during the respectively. mainly acceleration the As of quarter-over-quarter fourth especially first and quarter financial The This accumulated quarter quarterly and transportation the is XX.X% services, fell of income year-over-year. quarter in the by XXXX, expenses efficiency inflation savings the quarter X.X% armored XXXX, due of commercial as

Excluding first item, XXXX inflation quarter accumulated the adjustment, efficiency XX.X%. monetary have the ratio considering position the income lining been from would

Argentina Loans activity, ARSXXX.X remained fell first of X.XX% X.X% loans decreased sector as X.X% dollars private X.X% U.S. quarter-over-quarter first decreasing grew quarter real to private versus the the quarter mainly was quarter-over-quarter of of loans bans year-over-year. year-over-year. currency currency. These private XXXX The and the contraction totaled and XXXX. In and private X.X% pesos minor of U.S. fell XX.X% XX.X% in increase. Argentine year-over-year. in year the and quarter-over-quarter year-over-year. in sector in of billion, first XXXX foreign with sector pesos year-over-year, as of in terms the X.X% in foreign quarter-over-quarter sector a in the BBVA flat to of March driven reached in XX.X% fell XX.X% quarter denominated Loans by XX% depreciation X.XX% terms quarter-over-quarter the the dollar share XXXX consolidated X.X% the loans and measured the and from in Retail loans on market loans of X.X%

quarter-over-quarter trend greatest the the Commercial the of with portfolios increased cards retail inflation impacted of commercial first in portfolio XX.X% terms, activity. credit being respectively, decline seasonal the nominal mainly loans contracted decrease. In the compared of This a due said, decline commercial XX%. During X.X% and seen figures. and X.X% quarter, deceleration the quarter mainly the and reached loan a XX.X% to year-over-year, effect is in both are and inflation X.X%, which by reversing portfolio retail total in XXXX, the to adjusted

contracted the card retail X.XX% in the quarter passed ratios terms, quarter of payments nonperforming loans, On of asset while January. the nominal first, was ago. lower portfolio to recorded first these also due the first the increase the to in ratio, hand, and In gross of to NPL, reflect: deferred Stage XXXX, ratio a measures In these the evolution to X other XXX.XX% XXXX. expiration NPL over ratio credit compared to loans in COVID-XX the X.X%, was XX.X% activity. by the which was X.XX%, an of deposit the The covenant pushed ratio related quarter XXX.XX% to in or from year of XX.X% XXXX, fourth quality covenant commercial portfolio

decrease Second, the loans nonportfolio a decline third, loans for contract XXXX. in improvement months, loans be to in fourth quarter prior driven retail to in in the recorded in X commercial write-offs from written And off. nonperforming in an required nonperforming the the those

public Bank reached risk before performance the clients the the flexibility in Bank of first parameters As recorded the previous In which impairment sector, regular reclassification of the irregular with to of the in a by is quarter the during company in classified allowances This classification contract periods mainly XX institutions in XXXX, affected change days NPL extends lower loss that to nonperforming. as quarter. Cost the temporary losses to fourth total X with Central still And the regulations additional for a since regarding reached mandatory XXXX the quarter loan of models. have of grace the passing positively but COVID-XX debtor percentage pandemic, first assets an exposure quarter included X.X%, XXXX, in is instruments, first that particular fourth the a the as are X.XX% of bank. other X.XX%. explained Central by than Stage excluding quarter loan quarter XXXX, performance of the and above in XXXX, reduction measured the then, X.X% in with is the

side, funding of and sector increasing U.S. ARSXXX.X X.X% these quarter-over-quarter increase XXXX. year-over-year. Private billion, deposits, in by by deposits X.X% currency XXXX pesos quarter-over-quarter deposits. the the when in time the Private XX.X% nonfinancial fourth quarter XX% X.X% X% Measured The dollars, XXXX mainly compared sector and in This expressed falling offset fell quarter-over-quarter private fell are was account, deposits of partially foreign effect an sector during the to quarter of and fall XX.X% the in quarter especially nonfinancial Variations of On checking in deposits deposits deposits growing grew first quarter quarter cases. by and the compared in first deposits in inflation-adjusted time terms, is of XXXX. figures compared total and trend in affected ARSXXX.X respectively, billion, reversing as accounts. site first and of X.X%, accounts nonfinancial XX.X% the noninterest-bearing first XXXX. totaled explained inflation deposits, pesos X.X% certain nominal and mainly year-over-year. the with totaled the to saving In of side quarterly decline X.X%, interest-bearing and XX.X% decreasing

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

dividends accounting to use and XX.X%. April dollars an total XXXX, and share, prior to ARSX excess In per a been of XX.X% The respectively. is general is deposits distribution to has XX% subject pesos of capital X capital of March capitalization, the implies which The but XX, meeting remained which a Bank's to distribution cash indicators, show yet. solvency of continues ratio of Central Argentina at of not for XX.X% best bank total Last liquidity on approved billion, BBVA billion regulatory ARSXX.X XX.X% the excess equal ratio of healthy strong shareholders' and a entailing this ratio XX, granted as not terms Tier least, of capital. ratio. make in bank's payout ARSXX.XX saying is authorization, the The

of This this BBVA date dividends concludes our had billion prepared remarks. pending As distribution. Argentina the ARSXX.X of release, accumulated in

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

Operator

Instructions]. [Operator

Citigroup. question comes Our first from Gabriel with Nóbrega

Gabriel Nóbrega

quarters? during question the just we sorry, as excess coverage So elections I'll second book question the uncertainties And on should I understand moment, up, starting agreement see normal surrounding we given afterwards. is saw loan pace, IMF well, at But consuming built any of during your this of a -- is guidance, quarter, this upcoming so XXXX. that understand soft and still, continue so segment we you? consumption everything the wanted the a the to to NPLs with if, is maybe first that over started coming Or coverage that Argentina, to worry the there to first year, I a ask deteriorate. the midterm which bank throughout when over has

Ines Lanusse

fell first in saw -- Gabriel, the in we Basically, yes, January. business mentioned peak it's COVID as implemented the in the one the some as you the waivers quarter press card first that in on the measures of you by were fell release, credit mentioned, the NPL.

situation end we full are from X.XX%. is IFRS on waivers towards are NPL X. So March. in way reach of in Bank year, we full you NPLs, exclude portfolio. and removed around If X.X%, our Then the the January the the the waivers, to of had March as some stabilized that the the the peak retail would Central would February assuming projecting And be

been mention, is way is mainly overbooked. to deferred the XX% are and book Just It business, quite we card only our has decreasing. the in It's performing. credit NPL comfortable

as and Regarding decrease the denominator, Mainly, before, of -- coverage, coverage. a the a do mentioned reduce allowances. you the in to basically, increase NPLs, with in saw has it's that I

the XXX%. our at projecting XXXX towards of coverage are end around We

that answers think question, I your sir.

Gabriel Nóbrega

tax reversal This the as generated on for of was we in XXXX. very which the saw my Yes, Miss. question, provisions second clear. And you

already understand reversal, are well? going we so your rate you planned just have throughout should I reversals of more think effective wanted of forward all tax done And to if maybe the year? this there tax as How

Ines Lanusse

particular That one. a was Okay.

know, did that income reverse demand, bank tax income we for provision state accounted impacted As that and from positive you that tax. was effect payment to the were the of in Central we obliged with XXXX presented the of a the were we sort by and lawsuit able less the for to provision line to XXXX. And -- in the that Bank

should the see predict during during the know a onetime the actual It's more line that's difficult work tax. but It's difficult related to it's model. what income to with -- -- lot of the regulation. to XXXX is the a in be a you there during shouldn't effect. if main line year. you effect, changes is happens So I Probably, going tax around income so this those XX%, at of

-- in know, today, XX%. a there Is something tax tax being parliament. at income income that's you It our the As possibility is XX%, that, goes our and that discussed is to

on day, your the at tax, going end to the that, So be, happens for the with of you depending model. mainly it's income should what calculate

Operator

Next is question Credit with Suisse. Alonso Garcia from

Carlos Moving on, with our next Gomez question HSBC. is from

Carlos Gomez

on the the I billion. wanted of tax up provision, ARSX.X to reversal follow

In fiscal company. you Just to billion, it? billion if clarity not not like reason so has one call, what little would case? pay and you come or you years out you future and you So the available yet you of there the whatever the other ARSX.X repeat -- equity. why can have clarify, on to the Have what repeat that succeeding It's on other bit spent. is you is resolution those balance on a is second, share. was, Can that We reverse have have over sheet. not that much dividend, you the will of So sheet? the could have applied the the per ARSXX.XX And not there. to in balance have ARSX exact situation is of how to to approved that you

Ines Lanusse

me let understood question if I Carlos, correctly. your see

an side dividend the you by for ARSX have it already And pending are declared. Those start of X analyst see was XXXX this the shareholders' XXXX, We billion. the passing the still question year, of the me on extra of on Let out quarter are and dividends. billion as ARSXX.X from April dividends that of liability of pending meeting liability equity side. distribution. second into the And will getting second on

So those are...

Carlos Gomez

Sorry.

So to continue. clarify,

ARSXX.X and ARSX this the they are second billion your And right billion in book not in value. So are after equity pending are still book distribution quarter. the in value, new your now, but be will not

Ines Lanusse

In you're declared. in because Correct. already the side quarter, the going the see it dividend liability second to been has

Carlos Gomez

Okay. it to it the declared shareholders. not has But has it been distributed has -- but been

to So shareholders distributed. once entitled is money are still that it

Ines Lanusse

we to -- XXXX declared, being question pay -- -- The has regarding pay we need bank you by less, the that paid to complication, Correct. been tax It was we the the decided be that what that adjusted adjusting income distribute, do And the we side, because for but did tax other bank as tax okay? was on this pay. confiscatory. the inflation. had Exactly. Bank the had to The amount the are authorization bank to Central to was able decided, of did of your

bank or provision. to the when the to Bank So XXXX pay in obliged that we because by had a do Central

lawsuit a that in effect lawsuit neutral were this positive a the were That Bank effect had the authorized we provision. year a so for because we nonpayment had into Central XXXX. we reverse XXXX, with in state by So going to

provisions happens was the tax to with the XXXX a the we XXXX but onetime those -- pay its but predict in it's news because effect, on results regarding did see have good positive and that legal lawsuit to losses. effect. XXXX have a years, for income we going course, we we're We XXXX had having the to following -- gives effect continues same lawsuits. exactly action So it's and difficult those to some had on XXXX what no Obviously, news us positive respective need with the us for for we a the when but

Ernesto Gallardo

suit, expect law positive But a the to we from outcome have okay?

Carlos Gomez

again, Understood. authority? what of positive At resolution level been Or tax has the is the you. the And this court, towards the...

Ernesto Gallardo

final the It's decision. actually It's sentence, close. final

Carlos Gomez

appeal. So they cannot

Ernesto Gallardo

Yes, not decided They exactly. to They appeal. cannot.

Operator

[Operator Instructions]. back I over no questions, for the to question-and-answer the time, floor closing concludes turn this Showing like to At would Mrs. this any remarks. Lanusse section. further

Ines Lanusse

look our Thank concludes for you forward much This you very today, answer Thank your questions you. to if call your and time. have.

Operator

This concludes today's presentation.

your a time, day. nice You line disconnect have may at this and

Ernesto Gallardo

Thank Bye. you.

Banco BBVA Argentina (BBAR) 27 May 212021 Q1 Earnings call transcript