BBAR - Earnings call transcript Q2 2021 | 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 Second 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's presentation. After company remarks are completed, there will be a question-and-answer session. At that time, further instructions will be given. of all, made point may of during statements the of of that be the First provisions within statements harbor XXXX the this meaning Securities Instructions] Act let Section under out me some forward-looking found of [Operator in safe U.S. XXA the conference call law. federal securities the actual differ materially from forward-looking subject risks to to These and uncertainties expressed results in forward-looking statements are that statements. could cause those

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

Belen Fourcade

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

and are Before that stress forward-looking of actual course this are the let conference we the may control. uncertainties beyond call statements, during expectations some of from materially including which and number on expressed forward-looking those remarks, our be risks a constitute the begin statements made and to differ cause beliefs factors of results based company's could me that may management's current that to subject in formal the statements

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

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

inflation to June been figures XXXX of accumulated and period through XX, XXXX comparability, each for effect have reflect restated adjustment the XXXX. this For the

let turn to the call me Ines. Now, over

Ines Lanusse

thank all joining XXXX second our quarter And us conference Belen. for you on of call. you, Thank

in has impacted pending the related persistent and has results for efficiency, previous been expense XXXX operating denoting uncertainty, of quarter, monitors regulations crisis BBVA the possible rate in which debt an of closely a management of gradual income and marked quarter boosted wave asset This a and country the volatility by conflicts Argentina the of year. preservation a elections effects the context compared midterm especially anticipating on margins. removal over and context bank been by the the the fee with government a improvement sanitary generated an with unsolved pandemic COVID-XX controls. adequate more focus the implies in than on it's in XX.X% of by activity the the Meanwhile, and a growing results by out second financial business, margins and aim second going to the foreign The operating deceleration of quarter with second quality of stand by XXXX, International of Monetary of conditions operating through Fund. implemented to by net during

of that of caused of an the finance in in digitalization, Trend the same service XX% that clients. from pandemic XXXX, reached while towards year XX% a penetration from towards digital adoption evolved Regarding offering XX% reached such mobile considering stabilization the June that has way by end has the important digital back, aims a channels clients XX% by shift our period.

for expenses totaled accumulated growth interest months the that the would XXXX, of collaborating financing and part percentage XX.X% XXXX interest income compensate second of results. linked X.X% and larger inflation I BBVA quarter larger linked deposits for income. X.X% expanded for quarter. increase quarter-over-quarter second of Lastly, portfolio. result in the and compared higher cost ROE a adjustment, XXXX X.X% due in contractions as quarter XX.X% quarter the quarter in income BBVA year-over-year. quarter of now and of ago. repo which fee indexes ARSX.X in a in growing driven net in time interest first XXX.X% due getting the and from interest In XXXX. X% Argentina, in with This line totaled was years, to certain Argentina's XX.X% a The of billion, and X, and from those expenses the XX% XXXX quarter mainly ruling XX.X% increase improvement net by fee at XXX.X% opinions, tax to ARSXX.X cards in ROA to of interest an surge increasing of interest inflation Central comment and a totaled quarterly effects XXXX, a billion, the offset the to billion, by indexes. net quarter-over-quarter accumulated of XX.X% and interest higher adjustment item, share XX.X% a mainly ARSX.X and than to the a credit financial as second year-over-year. the level The The income double driven and sustainable demand. the assessment by Bank this driven the C) accounts XX% X.X%. increased banking, fall year-over-year. is credit in in income than target increase first related premium denoting billion, billion, whole target. adjustment the XXXX recovery increase Quarterly than the growing on growing the large bank court and recreational cards totaled quarter-over-quarter adjustment sectors reversal increase income, total asset BBVA totaled Net results and Interest the a July in of income totaled XXXX In quarter income over are the quarter, to €XXX above from a positive In probability income previous latter income net in for The securities UVA the repayment is XX.X% in channeling explained deposits overdrafts, global due was expenses year-over-year. while increase previous the is interest ARSXX.X quarter-over-quarter terms, income. in of including from due quarter terms, fiscal portfolio, XX.X% a investment certain accumulative XXXX from accumulated deposits by XXXX increased in quarter time is and expenses XX.X% bank's in are income expenses; in public of of effect X.X% from versus billion. year-over-year. XX.X% ARSX.X and to to tax by expenses will second latter to addition an it were quarter-over-quarter increase In Quarterly as of terms fiscal legal income favoring provisions the increase six greater billion, a half XXXX increments the by it's compared XX.X% and the second of net XXXX posted final to investment responsible contrasting entertainment account although also fall ARSXX.X with an announced XX.X% mainly to billion, mostly by and charges one, ARSX.X a funded especially latter; result net year advisory accordance second instructions is connection on first explained years. posted in to recorded of second instance fee XXXX ARSXX.X billion, XX.X% the operating a quarter results and better monetary ARSX.X reflects lifted. explained for checking and the to by second, of considers against income mainly income quarter fee due the second described Quarterly interest more XXXX, lower from B) higher the an accounts first In a being construction increase restrictions Interest billion, by income income; of XXXX, time

explained my the Lower program expenses to lower and sales are in rate. billion, effect partially relation within and Regarding the expenses, purchased contracting quarter-over-quarter XX.X% LatAm these a totaled digital linked X.X% the fee exchange ARSX.X by foreign of in XXXX year-over-year. positive expenses

is During second This quarter was the wages decrease partially administrative lower the to ARSXX.X quarter totaled expenses decreasing Personnel first salary in X.X% by quarterly increases by XXXX, compared The billion, agreements XXXX. X.X% of quarter collective the inflation arranged offset compared year-over-year. April incremented contracted bargaining same expenditure. and in to through second increased by increasing of personnel X.X% X.X% XX% benefits and increase XX.X%. of the and period benefits in XXXX, which payroll an quarter-over-quarter explained a an

the increased below quarter respectively. the accumulated net ratio and and explained quarter X.X% which a decrease is improvement The second quarter nominal by first denominator XXXX, of an inflation in explained the by affected is increase of in the the XX.X%, the greater in efficiency XXXX, higher increases of fell of expenses quarter quarter the fee than income. and a above quarterly The administrative expenses. second XXXX quarter-over-quarter has X.X% during the by in XXXX second and the was The the XX% fall reported especially XX.X% numerator also been year-over-year. percentage positively as As

the have been of to XXXX quarter the ratio compared Excluding second XXXX would and second the first XX.X% XXXX. XX.X% of quarter the inflation quarter of adjustment, accumulated efficiency XX.X%, the improving

of In year-over-year. billion, quarter-over-quarter private terms sector XXXX quarter activity, and totaled of ARSXXX.X decreasing the as X.X% of second XX% loans

year-over-year. the the XX.X% portfolio in the have an real credit decreased from which grown cards, private quarter X.XX% explained was The periods quarter first effect quarter during XX.X% quarter, financing caused terms loan quarter and the X.XX% loans XX% the during period. of quarter-over-quarter in and in retail second the and the increase same Decline ago. U.S. overdrafts. XXXX yet of the X.X% and portfolio increased currency explained Now both the pesos In central The loans of inflation loan-to-deposit the reached quarter of in dollars private and instruments, are pandemic. XX.X% retail, by grace normalization of increase loans consolidated X.XX% total ago. fell XX.X% from year-over-year, X.X% quarter quarter-over-quarter during to sector a XXXX, the related In and other the the by year terms. in mainly card XX% in peso year the nominal year-over-year. Argentine discounted In X%, COVID-XX second X.X% is grew refinancing real increase ratio of XX.X% the impact of portfolio a the XXXX depreciation during was commercial of granted XXXX the driven fell in X.XX% payments compared commercial X.X%, These grace denominated and the to quarter-over-quarter the explained the loan terms, and X.X% unable sector of a U.S. year-over-year. inflation regarding the exports quarter-over-quarter quarter the retail versus the and loans The which debt In the Commercial quarter-over-quarter NPL mainly increase in foreign XX.X% to increase latter to both Loans expiration gross the and flexibility to ratio market X% in was loans recorded respectively, was increased is the in in by terms, the and in all in decrease in as loans credit sector of by total bank a XX.X% XX.X% and second regulations a loans. and second especially classifications XX% for dollar BBVA's of during XX%. XXXX. and X.X% XXXX, increase share private other second year-over-year, X.X% mainly measured year-over-year. deferred by fallen nonperforming of retail temporary contracted portfolio offset real of periods in

allowance ratio as in the the recorded loan In is in by the Cost in the XXXX's showed nominal loan first portfolio retail loan mainly of than quarter. quarter higher loss saw portfolio. excluding in allowances on a X.XX%. XXXX. than the in terms. in commercial similar particular, Regarding but reduction mainly quarter a XXX.XX% of of higher This to of the ratio in previous performance. Bank supplement [ph] contraction greater loan the increase reduction of the XXXX credit instruments, the XXXX, the X.X% In NPLs, the second satisfactory in the versus explained The was the the portfolio, the to second loan public loss reflects in in the risk exposure quarter reached recorded the reached increase of contrast of in allowances to first terms, this The real change the quarter quarter XXX.XX% X.X%, Central second sector, portfolio. X.XX% XXXX, coverage

in funding billion, growing increasing compared X% ARSXXX.X XXXX in year-over-year. quarter-over-quarter the X.X% nonfinancial XX.X% On totaled the X.X% of is in sector terms billion, of side, increase X.X% dollars, in sector of quarter All and in reached grew year-over-year. second and quarter-over-quarter total reached X.X% the and in site in compared deposits ARSXXX.X Private first currency increasing particular, sector U.S. XX.X% and X.X% quarter in accounts Private X.X% billion, growth XXXX. checking quarter nonfinancial especially deposits second affected Private accounts, and Measured mainly the local XXXX ARSXXX.X quarterly XX.X% and deposits savings quarter-over-quarter the by currency to The deposits foreign to pesos pesos year-over-year. fell the year-over-year. interest-bearing fell deposits real accounts. quarter. expressed checking quarter-over-quarter nonfinancial deposits deposits, during in

the the bank's second X.XX% XX.X% total of quarter nonfinancial share consolidated of of in of versus of XXXX As was transactional bank's year a market the the deposits from XXXX. second first quarter represent ago. of of The deposits private quarter XXXX, as X.XX% deposits private XX.X%

In and use regulatory and Argentina capitalization, billion strong quarter to remained liquidity to capital The our of was Tier Capital of of reached XX second or excess XX.X% XXXX. excess indicators prepared June was healthy total XX.X% deposits of is solvency continues dollars capital. bank's pesos in terms show at the best bank's respectively. in The XX.X% aim ratio ratio requirement XXX.X%. as of X and This XX.X%. make BBVA ARSXX.X ratio the concludes over this remarks.

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

Operator

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

Gabriel Nobrega

morning. good everyone, Hi,

to two For I here. actually questions, ask the have opportunity questions

the So, side. I to wanted understand asset quality more a on bit

release press You periods mentioned the in for have cards. credit your that grace ended the

though any I Bank. worry And Thank so Is even you afterwards. of as grace also second book part to really you just this waiver expire, And there's you terms wanted your quality. loan which ask which past periods inside the was which what understand you there over just seeing asset duly also to is Or of these forecasted are Central raised in and the the wondering, I continue to is parameters risk starting the provisions I'll the all question year you. of

Ines Lanusse

you to Gabriel, nice speak to this morning.

deferred Okay, card. retail only regarding our mainly asset quality, as of June was XX, portfolio the credit the XX% and book, of

retail, asset the all As been basically, we're clients the since And I we very mentioned, Central thinking. of our with you mentioned, what deferred well. Actually, line lifted. we waivers in as with tendency and seeing most from the paying retailers the behaving were quality -- the is ratios. it's Bank are comfortable are has The

bit, the book. in And increasing is mainly which it effect an around little a of has projecting are loan of the growing the now book so also, by XXXX, We real NPL terms. our towards end X.X%, retail

increase So is real some the the it's book retail going of the end in decrease is loan and by book on NPL both in XXXX. to which term, the

total retail effect in book risk, we And coverage, to Basically, a an the increase ratio information, the book all are asset just absolute closely it But allowances. loss around XXX%. terms. going loan But numbers it's the the Basically, the overall NPLs in is loan But and again, the the line in growth decreasing the asset the in Regarding of our the average in half a year, decrease, cost increasing with of the second complete of of projecting monitoring. real although from is projecting little again, allowances, comfortable to we quality comes of X.X%. we're lower bit. are very decreasing we some the the quality. decrease are year. seeing around Obviously,

Gabriel Nobrega

you some to just ARSX.X to just in much the wanted created my how reversed which of related XXXX the you question. reversed for that's in back of then second you here, you understand inflation of this billion provisions understand do more quarter, I'm adjustments. and And then fiscal provisions years That's first And very quarter, guys part because I did trying clear. to XXXX have provisions.

if to of I'm stock all the so of you And provisions have just you trying reversed understand had done. already which

understand to going Just what forward. we be for expecting should

Ines Lanusse

Yes.

nominal three. of Okay. press the in That year there was been mentioned, reversed is for information those were -- for you recorded declarativa One, as first X.X although that XXXX XXXX. accion in of quarter the explained in the that release, terms had we this

that at a that that we Bank recall provision favorable accion and the declarativa we quarter this that us placed obliged of to the year. for do time, in court ruling have You first to Central that had

the first So was that one.

be were that's of Bank okay to we did second have. corresponding three -- actually ARSX -- why the for and and ruling by They revert the -- last do informed second one legal billion, the to one let ARSX.X the adds declarativa That from advised to but But they reversed was for one to the provisions. XXXX, we our going is opinion, quarter, were there's XXXX. billion got first were the the provision advisers, For the favorable reversing a in the in XXXX of fee we by court accion make reverse Central for we We been have what quarter, other that two by sorry, this ARSX.X auditors, reversed Those no the second declarativa one since this what the The me The the -- ARSX.X clear, it were we reverted. to more our XXXX XXXX billion billion. quarter we are pending it. for that and accion this okay we have we pending. of our ruling reversed. all were happened with

Gabriel Nobrega

Thank much. so very right, clear. All you

Ines Lanusse

welcome. You're

Operator

from with question is Gomez go next Carlos ahead. The HSBC. Please

Carlos Gomez

Good congratulations terms loans your what on you see the Ines. know your results rest for the morning growth, and you. resolved, that for to for of year expectations in where Thank deposits. situation result. year is your tax now and the and returns of wanted tax Hello, the and And both year. assets, the I especially of are volume next do

Ines Lanusse

to Carlos, again. nice you Hi to speak

year private speaking the real always so the for projections XXXX, X.X% are around well -- in real for projecting contraction loan terms, in book for Okay, a terms. we

the of of a we those dollars long some part projecting around XX% having -- safe -- are our of dollars. in tried seeing instead We low. are we Being was but loans dollars, terms, decrease in in in decrease dollar pesos very of are some very, and X.X%. place zero X% to deposits at demand around in the in growing said, very because to rates, place Basically, base that we in we since are real of a safe trying

decreasing We real more are seeing the system terms. even in

around We are decrease projecting system XX%. the to

inflation projection projecting are the XXXX. for XX%, around inflation XXXX, an for We same

growth Regarding a real are seeing around we're an system, around still real in but system we real total in seeing The X.X%. in decreasing we're terms terms X%. increase deposits, there, terms X% the seeing

around we deposits around X.X% are If split seeing by U.S. that growing and dollars X.X%. you currency, peso

you as all yes, that, have Regarding these reverses. we mentioned, done

normalized XX%, XX%. rate what But of would for to be to your use are most to waiting around the try the project. tax should model, We understand see July you to numbers

of net the was values the inflation result income of the obviously, line XXXX. I to with then which were projecting we're to compared figures -- the what you seeing XXXX, Now, flat what them should towards net income seeing the understood XXXX, that, of to are of taking adjusted, that comparison XXXX, we remain going

Carlos Gomez

because dollars because I think time, I loans was, -- understand in are very if it actually you point was you in expect declining. correctly, your for U.S. could this asking said quick. I I'm Sorry, loans follow-up dollars, in if On growth, it XX%. at

in to it So second you reverse expect the half of the year

Ines Lanusse

No.

dollars in let in the that the saying quarter. but -- dollars XX.X% loans are in check me grew loans We again

in the growing are So they dollars. loans

Carlos Gomez

you Okay. expect... the And as you year a for said whole,

Ines Lanusse

But yes. again, small very portfolio. it's Yes, a

we that we doing XX%. really were dollar private to dollars base still in very we not low lending that of dollars. base and have loan because is the dollars. customers in relationship, our we book lending in numbers, having it's interest was doing much book know What good are those we loan remember only is is the we're -- in There's from the dollars. loan very, Just we rate, deposits of instead in very But that What not dollars, that of low. are of because at in in very some the safe very, mainly normal it a came increase activity zero the the a

Carlos Gomez

Okay, the may is year. your that clarify, call I have dividend dividends, suspension the is extended the anyway. long clear. until too the end think I And On been if to follow-up, don't of

a you pending Can from have approved you and approved separated but do, years, approved dividend. that dividend equity can You the the plan payment Is as in previous until

Ines Lanusse

Correct.

pending of We approved banks distributions. central the liabilities have in billion distributions when ARSXX.X the

Carlos Gomez

include dividend no approved that this the year or Does you

Ines Lanusse

billion, ARSX The correct. last correct. billion ARSX is The yes,

-- have You table but in recap. here there's our presentation I let me figures. Hold have the on, a

and results -- those of ARSX XXXX; You of XX.X%. that declarations XXXX, billion distribution were are There ARSXX.X pending billion. dividends the on from have that for two yes, adds

Carlos Gomez

Thank very much. right. you All

Operator

AR is Nistor [Operator The Instructions] Rodrigo ahead. Partners. Please question go from next with

Rodrigo Nistor

inflation, good question. funding. it's I is for my morning get question you and given Hi, access I think to My of high taking thank cheap to increasingly the on levels mean hard funding.

Uala having of year deposits. do cheap on are of availability terms meaningful the funding mix that impact maybe And Pago Do So wallets a follow-up like on this. the a Mercado what you your for of expect you rest base and believe for in

Ines Lanusse

in we using can back. What more as easily to press take interest we regarding liquidity to quarter. we the from debt control an those what Yes, release, that something the attract something cuenta which we funding corriente public you that financial are from deposits we It's investment doing and the have in are give corporates. mentioned than we strategy of It's are pays deposit Okay. basically, deposits remunerada this bank, is pays doing, basically intermediation. get and we that rate more

you there's credit demand. no know, As

We that in have Ahora XX% card, credit of cards. book is our most Credit of XX.

return not is So that the good.

why corriente we of deposit see decide [indiscernible] something what that's but but percentage doing the cuenta -- pay don't of a you know is to that that give question. So are remunerada We and that better gives is to corporates, rate I control. that debt on some interest return. which actually growing it's a that us we public put if I answered the

Rodrigo Nistor

Yes. And what about the...

Ines Lanusse

instruments, mean, confuse. to debt, not Public I [indiscernible]. Central Sorry. Central Not Bank sorry. Bank instruments,

Rodrigo Nistor

and Yes, clear. like cheap Mercado of wallets think that that's on small availability about the that's the still or impact And deposits too have something Uala might impact, what of you an Do Pago

Ines Lanusse

for Not now.

concerned. We are not

compared site We to we working previous It's deposits site XX% our the increasing same deposits of growing. portfolio. are quarter. MODO have which deposit represent At but grow. is time, the see site Today,

notes, something corriente it gives investment Bank Central And get that remunerada side. funding, concern penetration. that bank of they The not something capturing that problem high. a liquidity yet on we deposits not banking are cuenta the of invest funding it's for the to are we again, we're to is So -- some return. Yes, very, pay us we a strategy, low corporates, in the us. better is The cut Argentina doing very concerned this but in pay but --

Rodrigo Nistor

was Okay, That thank you. helpful.

Ines Lanusse

welcome. You're

Operator

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

Ines Lanusse

us Okay. Thank any your Have you and day. a nice contact for further if you questions. time have please

Operator

presentation. Thank you. This today's concludes

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

Banco BBVA Argentina (BBAR) 25 Aug 212021 Q2 Earnings call transcript