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FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of May 2019

Commission File Number: 001-12568

BBVA French Bank S.A.

(Translation of registrant’s name into English)

111 Córdoba Av, C1054AAA

Buenos Aires, Argentina

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  ☒            Form 40-F  ☐

 

 

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ☐             No  ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes  ☐             No  ☒

Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes  ☐             No  ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

 

 

 

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BBVA Banco Francés S.A.

TABLE OF CONTENTS

 

Item

    
1.    BBVA Francés reports consolidated first quarter earnings for fiscal year 2019.

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LOGO

Buenos Aires, May 9, 2019—BBVA Francés (NYSE: BFR.N; BYMA: FRAN.BA;

LATIBEX: BFR.LA) reports consolidated first quarter results for the

January-December 2019 fiscal year.

The quarterly and annual consolidated financial statements are presented in accordance with Communication “A” 6114 of the Central Bank of Argentina (BCRA) (“financial statements under IFRS regulations”) which was implemented, on January 1, 2018.

 

 

Highlights of the Quarter

 

 

 

  •  

BBVA Francés’ net income reached AR$ 6,007.6 million for the first quarter of 2019; such result includes the impact of the sale of the 51% of the Bank’s stake in Prisma Medios de Pago S.A (Prisma) and the market valuation of the remaining 49%.

 

  •  

The recurring result for the quarter, excluding the impact of the Prisma transaction, totaled AR$ 3,892.2 million, registering an increase of 32.5% compared to the previous quarter and 151.9% compared to the same quarter of 2018.

 

  •  

Net operating income amounted to AR$ 15,913.5 million, increasing by 42.3% compared to the previous quarter, and by 98.7% compared to the first quarter of 2018. Operating expenses amounted to AR$ 7,653.4 million, showing an increase of 2.7% and 31.5% compared to the same periods, respectively.

 

  •  

In terms of activity, it is important to mention that until September 2018 the balances included the Bank’s stake in Volkswagen Financial Services Compañia Financiera, presented on a consolidated basis. The private sector loan portfolio increased by 2.1% during the quarter and 32.9% in the last twelve months, although including the aforementioned portfolio, growth would have reached 2.1% and 35.6%, respectively The consolidated market share with related companies was 8.6% as of March 31, 2019, earning 30 basis points (bp) compared to the March 2018 quota.

 

  •  

As of March 31, 2019, the asset quality ratio (Non-Performing Loans/Total loans) reached 2.21%, with a coverage ratio of 114.42% (Total allowances/NPL). It is important to note that although asset quality indicators show some deterioration, they remain within the lowest levels in the financial system.

 

  •  

Total deposits grew at a higher rate than loans, both during the quarter and annually, increasing by 7.4% and by 74.2%, respectively.

 

  •  

On February 28, 2019, BBVA Francés issued Series 26 of its bonds (Obligaciones Negociables) for a total amount of AR$ 529.4 million, with 9 month maturity and a fixed 43% interest rate payable at maturity, and Series 27 of its bonds for a total amount of AR$ 1,090 million, with 18 months maturity at Badlar + 6.25% interest rate and quarterly interest payments.

 

  •  

As of March 31, 2019, BBVA Francés had a total consolidated capital ratio of 15.3%, which represents an excess of AR$ 20,124.4 million or 86.6% over the minimum required. The Tier I ratio reached 14.6%.

 

  •  

Liquid assets accounted for 60.3% of the Bank’s total deposits as of March 31, 2019.

 

  •  

The bank continued to increase its client base, reaching 2.9 million of total clients.

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Other events

 

 

 

  •  

On February 1, 2019 within the framework of the Divestment Commitment assumed by Prisma Medios de Pago S.A. and its shareholders before the antitrust regulatory authority (Comisión Nacional de Defensa de la Competencia), 2,344,064 common book-entry shares with a par value of $ 1 each and one vote per share, owned by the Bank in Prisma Medios de Pago S.A. were transferred to AI ZENITH (Netherlands) B.V. (company associated with Advent International Global Private Equity), equivalent to 51% of the Bank’s shareholding in said company.

The estimated total price adjusted at the closing date was USD 78.3 million, of which the Bank received USD 46.5 million. Payment of the USD 31.8 million difference will be deferred over the next five years. 30% of said amount will be paid in AR$ adjusted by the CER at a 15% nominal annual rate and 70% will be paid in US. dollars at a nominal annual rate of 10%.

The remaining shareholding (49%) was valued at fair value through profit or loss on the basis of valuation reports obtained from independent professionals, net of the adjustment required by the BCRA.

 

  •  

On April 24, 2019 the Shareholders’ Meeting approved the merger by absorption of BBVA Francés Valores S.A, by BBVA Francés S.A. with the objective of optimizing operating costs by unifying resources and processes.

 

  •  

Additionally, the Shareholders’ Meeting also approved the payment of dividends in cash for a total amount of AR$ 2,407 million, representing a payout ratio of 25%. The payment of such dividends will be effective on May 16, 2019.

 

 

Regulatory Changes

 

 

 

  •  

The BCRA, through its Communication “A” 6641 dated February 1, 2019, redefined the structure of minimum cash requirements, establishing for sight deposits a minimum requirement of 30% integrated in cash, 5% integrated in BOTES 2020 and 10% integrated in Leliq. For time deposits up to 29 days, these percentages are 17%, 5% and 13% respectively. These requirements are reduced as the term of the deposits increases, reaching 0% reserve requirement for deposits longer than 90 days.

 

  •  

On February 7, 2019, the BCRA established that the net daily position that financial entities hold in Leliqs and repo transactions in local currency against the BCRA could not exceed the highest between the regulatory capital (referred to as “Responsabilidad Patrimonial Computable” or RPC) or the 65% of the daily average of total deposits in pesos, excluding the ones from the financial sector, both from the previous month. For entities that are above these limits at the date of publication of this communication, they will be allowed to gradually decrease their position from 100% to the limit of 65% with a deadline of April 30, 2019.

 

  •  

Further, the BCRA established through its Communication “A” 661 established, as of March 28, 2019, the maximum limit for the daily position of Leliqs in 100% of highest between the monthly average of daily balances of total deposits in local currency (excluding those of the financial sector) and the residual value of the negotiable obligations issued in AR$ and the regulatory capital (RPC).

 

  •  

As a result of the increase in inflation in recent years, the Argentine economy is considered hyperinflationary. Therefore, IAS 29 should be applied in connection with annual financial statements or interim financial statements ending after July 1, 2018.

The application of the guidelines established by the IAS 29 are exempt, and its validity will be effective from January 1, 2020, as established by the BCRA through its Communication “A” 6651 issued on February 22, 2019. Therefore BBVA Frances has not applied such requirements and will not restate its financial statements until such date.

 

  •  

On April 5, 2019, through its Communication “A” 6667, the BCRA published a regulation allowing users (whether customers or non-customers) to make fixed term deposits in pesos at any bank through digital, web and mobile channels, with a debit to a sight account in pesos in another entity.

 

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  •  

Further, on April 17, 2019, the BCRA issued Communication “A” 6680, which sets the maximum term for entities to credit the vendor or affiliated merchant account for the amount of each sale paid in a payment through the use of credit cards and / or purchase issued by them, at 10 business days from the date of purchase, and prohibits charging interest or commission for that settlement period.

 

  •  

Additionally, on the same date, the BCRA issued Communication “A” 6691 prohibiting the of collection of commissions for cash deposits in pesos in account whose holders are individuals or legal entities who have the status of micro-, small- and medium-size companies (MiPyMEs).

 

 

Economic Environment

 

 

 

         

Quarter ended

 

Main Macroeconomic figures

   03-31-19     12-31-18     03-31-18  

GDP

   var % y/y      n/d       -6.2 %      -4.1 % 

Inflation End of period

   var % y/y      54.7 %      47.6 %      25.4 % 
   var % q/q      11.8 %      11.5 %      6.7 % 

CER

   Quarterly adjustment      9.3 %      16.3 %      7.0 % 

Exchange Rate

   Pesos x US$      43.35       37.81       20.14  

Reserves

   US$      66,187       65,806       61,726  

Fiscal Balance

   Primary - billion of $      10,347       (185,672 )      (31,001 ) 

Trade Balance

   US$ (billion)      2,015       2,631       (2,373 ) 

Total Private Loans

   var % q/q      3.5 %      -4.3 %      9.2 % 
   var % y/y      26.2 %      33.1 %      56.7 % 

Total Private Deposits

   var % q/q      11.1 %      11.2 %      3.4 % 
   var % y/y      73.7 %      61.7 %      31.3 % 

Interest rate

   Monetary policy (eop)      68.2 %      59.3 %      27.3 % 
   Badlar (weighted avg. quarterly)      41.7 %      50.2 %      22.8 % 

From August 8, 2018, the reference rate of the monetary policy is the one of the Leliq rate. From October 1, 2018, the reference rate is defined as the average rate resulting from daily operations of Leliq with financial institutions.

Argentine economic activity, measured by GDP, fell 2.5% in 2018. This situation was mainly attributed to the poor harvest, caused by the severe drought occurred at the beginning of the year, and followed by the local FX crisis. During the fourth quarter of 2018, GDP showed a yearly decrease of 6.2% year-to-year. The Monthly Estimator of Economic Activity (EMAE) with data up to February increased 0.2%, (seasonally adjusted series) monthly.

In line with the decline in activity, the unemployment rate climbed to 9.1% in the fourth quarter of 2018 from 7.2% in the same period of previous year.

During the first quarter of 2019 the primary fiscal surplus accumulated AR$ 10.3 billion, improving 130% annually from de deficit of AR$ 30.1 billion recorded in the same period of 2018. From January to March 2019, the public debt interest payment has accumulated AR$ 125.1 billion, an increase of 106.7% compared to the same period of 2018.

In the first quarter of 2019, inflation registered 11.8% mainly due to the pass-through effect of the currency devaluation to prices, the annual variation reached 54.7%.

In the external sector, the accumulated trade surplus reached USD 2.0 billion during the first quarter of 2019, in contrast with a deficit of USD 2.4 billion in the same period of the previous year. The performance of the trade balance is the result of total exports in the period USD 14.2 billion (-2.3% y/y) and total imports of USD 12.2 billion (-28.0%).

In the FX market, the exchange rate (BCRA reference rate) closed at AR$ 43.5 per U.S. dollar on March 31, 2019, increasing 14.7% compared to the AR$ 37.8 rate registered at the end of December 2018 and 115.2% from the same period of the previous year. The international reserves increased by USD 381 million in the first quarter of 2019 reaching USD 66.2 billion.

 

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During the first quarter of 2019, the stock of non-financial private sector loans increased 3.5%, showing a recovery after a -4.2% drop in the last quarter of 2018. In annual terms, the balance of this portfolio increased 26.2%.

Private deposits grew 11.1% during the quarter and 73.7% in the last twelve months, suitable performance of domestic currency deposits (7.4% and 47.9%, respectively). It is important to highlight the stability of deposits, which evidences scarce transmission of the FX crisis to the financial sector.

 

 

Presentation of the Information

 

 

 

  •  

The consolidated financial statements are presented in accordance with Communication “A” 6114 of the Central Bank of Argentina (BCRA) (financial statements under IFRS regulations).

 

  •  

The information in this press release contains unaudited financial information that consolidates, line item by line item, all of the banking activities of BBVA Francés (Francés Valores and Francés Administradora de Inversiones). As of the first quarter of 2018, the Bank’s share interest in PSA Finance is no longer disclosed on a consolidated basis but is recorded as “Investments in associates” (recorded under the proportional equity method), and the corresponding results are recorded as “Income from associates”, as with Rombo Compañia Financiera. As of September 25, 2018, the Bank’s share interest in Volkswagen Financial Services is no longer disclosed on a consolidated basis.

 

  •  

The balances in foreign currency as of March 31, 2019 were converted into pesos at the reference exchange rate published by the BCRA for such date (AR$ 43.3533/USD).

 

  •  

The information in this press release may differ from the information published by the BBVA Group for Argentina, which is prepared according to IFRS 9 and the impact of inflation adjustment according to IAS 29.

 

 

 

Quarterly Results

 

 

 

Condensed Income Statement (1)   

Quarter ended

    D % Quarter ended 3/31/19
vs Quarter ended 		 

In thousands of pesos except EPS, ADS

   03-31-19     12-31-18     03-31-18     12-31-18     03-31-18  

Net interest income

     9,751,251       8,462,827       5,084,027       15.2 %      91.8 % 

Net fee income

     1,494,815       1,504,195       679,719       -0.6 %      119.9 % 

Net income of financial instruments

     2,464,277       197,044       330,347       1150.6 %      646.0 % 

Result from assets at amortised cost

     (4,183 )      (67,243 )      1,367       -93.8 %      n/a  

Foreign exchange difference

     1,174,542       977,628       695,250       20.1 %      68.9 % 

Other operating income

     3,390,923       1,206,843       1,742,608       181.0 %      94.6 % 

Provision for loan losses

     (2,358,139 )      (1,097,883 )      (526,194 )      114.8 %      348.2 % 

Net operating income

     15,913,486       11,183,411       8,007,124       42.3 %      98.7 % 

Personnel expenses

     (2,712,587 )      (2,570,310 )      (1,957,189 )      5.5 %      38.6 % 

Administrative expenses

     (2,044,423 )      (2,196,156 )      (1,508,192 )      -6.9 %      35.6 % 

Depreciation and amortization of assets

     (358,361 )      (249,685 )      (199,042 )      43.5 %      80.0 % 

Other operating expenses

     (2,538,043 )      (2,433,597 )      (2,153,710 )      4.3 %      17.8 % 

Operating Expenses

     (7,653,414 )      (7,449,748 )      (5,818,133 )      2.7 %      31.5 % 

Operating income

     8,260,072       3,733,663       2,188,991       121.2 %      277.3 % 

Income from associates and joint ventures

     117,003       570,342       39,877       -79.5 %      193.4 % 

Net income before income tax

     8,377,075       4,304,005       2,228,868       94.6 %      275.8 % 

Income tax from continuing operations

     (2,366,004 )      (1,366,363 )      (662,724 )      73.2 %      257.0 % 

Net income Including non-controlling shareholders

     6,011,071       2,937,642       1,566,144       104.6 %      283.8 % 

Net income attributable to non-controlling shareholders

     3,452       1,014       20,846       240.4 %      -83.4 % 

Net income

     6,007,619       2,936,628       1,545,298       104.6 %      288.8 % 

Other comprehensive income

     (184,020 )      51,475       5,175       n/a       -3655.9 % 

Total net income

     5,823,599       2,988,103       1,550,473       94.9 %      275.6 % 

Earnings per share (2)

     9.81       4.79       2.52       104.6 %      288.8 % 

Earnings per ADS (3)

     29.42       14.38       7.57       104.6 %      288.8 % 

 

(1)

Exchange Rate: $43.3533 = u$s 1

(2)

Assumes 612,659,638 ordinary shares.

(3)

Each ADS represents three ordinary shares

 

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BBVA Francés’ net income amounted to AR$ 6,007.6 million for the first quarter of 2019. This result includes both the result of the sale of Prisma and the market valuation of the remaining stake.

Excluding such impact, net income for the quarter would have totaled AR$ 3,892.2 million, registering an increase of 32.5% compared to the fourth quarter of 2018 and of 151.9% compared to the first quarter of 2018.

 

Main figures                      D bp Quarter ended 03/31/2019
vs quarter ended 		 
     03-31-19     12-31-18     03-31-18     12-31-18     03-31-18  

ROA (Average Assets) (1)

     6.6 %      3.4 %      2.9 %      314       370  

Accumulated ROA

       3.4 %        1       —    

ROE (Average Shareholders’ Equity) (1)

     58.8 %      31.7 %      20.4 %      (308 )      3,840  

Accumulated ROE

       28.5 %        106       —    

NIM (1)(2)

     18.2 %      13.2 %      12.2 %      160       598  

NIM with foreign exchange difference (1)(2)

     20.3 %      15.5 %      14.1 %      51       625  

Efficiency ratio (3)

     37.0 %      48.0 %      56.7 %      142       (1,975 ) 

Accumulated Efficiency ratio

       43.5 %        (387 )      —    

 

(1)

Annualized.

(2)

NIM: ((Net interest income + Gross income tax Nil+ Cost of deposits insurance) + (Net income of financial instruments + Results from assets at amortised cost - Non deliverable forward)) / Interest Earning Assets

(3)

(Personnel and administrative expenses + Depreciations and amortizations) / ((Net interest income + Gross Income Tax + Cost of the deposits insurance) + (Fee income + Net income of financial instruments + Results from assets at amortised cost + FX Difference + Fees included in other operating income))

 

 

Net Operating Income

 

 

 

Net operating income          Quarter
ended 		          D % Quarter ended 3/31/19
vs Quarter ended 		 

In thousands of pesos

   03-31-19     12-31-18     03-31-18     12-31-18     03-31-18  

Net interest income

     9,751,251       8,462,827       5,084,027       15.2 %      91.8 % 

Net fee income

     1,494,815       1,504,195       679,719       -0.6 %      119.9 % 

Net income of financial instruments

     2,464,277       197,044       330,347       1150.6 %      646.0 % 

Result from assets at amortised cost

     (4,183 )      (67,243 )      1,367       -93.8 %      n/a  

Foreign exchange difference

     1,174,542       977,628       695,250       20.1 %      68.9 % 

Other operating income

     3,390,923       1,206,843       1,742,608       181.0 %      94.6 % 

Provision for loan losses

     (2,358,139 )      (1,097,883 )      (526,194 )      114.8 %      348.2 % 

Net operating income

     15,913,486       11,183,411       8,007,124       42.3 %      98.7 % 

Net operating income amounted to AR$ 15,913.5 million, increasing by 42.3% compared to the previous quarter and by 98.7% compared to the first quarter of 2018.

During the third quarter of 2018 a reclassification was performed due to the change in criteria regarding the deferral of credit card emission fees, which were previously recorded as net interest income and are now recorded as net fee income and other operating income.

Additionally, during this first quarter, insurance fees and fees from credit card consumption in USD previously registered in other operative income are now recorded as net fee income.

The items that make up net operating income are disclosed in more detail below.

 

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  •  

Net interest income

 

Net Interest Income    Quarter Ended      D % Quarter ended
03/31/19 vs Quarter ended 		 

(in thousands of pesos)

   03-31-19      12-31-18      03-31-18      12-31-18     03-31-18  

Interest Income

     18,375,643        17,731,588        7,892,864        3.6 %      132.8 % 

Loan interest income

     11,030,023        10,591,572        6,294,049        4.1 %      75.2 % 

Income from adjustments (CER/UVA)

     1,585,079        2,095,561        332,413        -24.4 %      376.8 % 

Income from Public Securities

     4,725,693        4,401,601        952,624        7.4 %      396.1 % 

Others

     1,034,848        642,854        313,778        61.0 %      229.8 % 

Interest Expenses

     -8,624,392        -9,268,761        -2,808,837        -7.0 %      207.0 % 

Interest Expenses

     -8,328,960        -8,819,963        -2,650,433        -5.6 %      214.2 % 

Expenses from adjustments (CER/UVA)

     -295,432        -448,798        -158,404        -34.2 %      86.5 % 

Net Income Interest

     9,751,251        8,462,827        5,084,027        15.2 %      91.8 % 

Net interest income increased by 15.2% compared to the previous quarter and by 91.8% compared to the first quarter of 2018.

Compared to the fourth quarter of 2018, interest income increased by 3.6% whereas interest expenses decreased by 7% mainly due to a lower average cost of funds.

Net interest income registered a positive performance during the quarter. Although average interest rates showed a decrease in the period for both loans and public bonds, there was also a decrease in liabilities rates, evidencing an adequate management of the prices of the different products in a volatile environment.

NIM

 

Interest-Earning Assets & Interest-Bearing
Liabilities $ + USD 		   03-31-2019    

Quarter ended

12-31-2018

    03-31-18  

(Average in thousands of pesos)

   Capital     Rate     Capital     Rate     Capital     Rate  

Interest-Earning Assets

     242,964,225       31.2 %      217,129,504       33.0 %      158,676,684       19.4 % 

Interest-Bearing Liabilities

     214,652,486       16.2 %      200,277,049       18.3 %      124,753,037       8.8 % 

NIM without foreign exchange differences

     18.19 %        13.22 %        12.22 %   

NIM including foreign exchange differences

     20.34 %        15.47 %        14.09 %   

NIM $ without foreign exchange differences

     24.40 %        17.38 %        15.71 %   

NIM USD without foreign exchange differences

     5.68 %        4.02 %        2.65 %   

The net interest margin (NIM) including the results for foreign currency exchange differences amounted to 20.34%, including the impact of the market valuation of the remaining stake in Prisma. Excluding this effect, NIM would have reached 17.75%, registering an increase compared to the ratio of 15.47% for the previous quarter.

The ratio net of foreign exchange difference also registered an increase, from 13.22% to 18.19%.

The NIM in local currency (excluding FX differences) amounted to 24.4%, including the impact of Prisma, in addition, during the quarter lower asset interest rates were registered, for both loans and public bonds, offset by lower liability rates.

The NIM in foreign currency increased to 5.68%, mainly as a result of the increase in the public securities rates.

 

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The following table shows return on assets and cost of liabilities by currency: in pesos and U.S. dollars.

 

Interest-Earning Assets & Interest-Bearing                

Quarter ended

              
Liabilities $    03-31-19     12-31-18     03-31-18  

(Average in thousands of pesos)

   Capital      Rate     Capital      Rate     Capital      Rate  

Interest-Earning Assets

     162,369,052        43.9 %      149,500,133        45.9 %      116,214,892        25.3 % 

Public sector instruments

     44,712,518        49.6 %      33,205,496        55.4 %      17,074,738        27.1 % 

Loans

     116,879,331        41.8 %      115,744,267        43.1 %      98,088,733        25.1 % 

Other interest-earning assets

     777,204        46.1 %      550,371        50.0 %      1,051,420        21.9 % 

Interest-Bearing Liabilities

     111,221,798        31.0 %      107,301,171        33.8 %      76,900,411        14.2 % 

Saving Accounts

     29,334,491        0.2 %      25,939,217        0.2 %      26,907,592        0.2 % 

Time Deposits

     69,547,645        42.3 %      59,059,496        44.9 %      40,548,320        21.5 % 

Current accounts with interest

     7,350,478        36.2 %      18,001,228        41.5 %      5,420,745        21.7 % 

Debt Securities

     3,007,409        46.2 %      2,169,727        57.7 %      1,902,136        26.2 % 

Other interest-bearing liabilities

     1,981,775        47.3 %      2,131,504        45.6 %      2,121,619        25.5 % 
Interest-Earning Assets & Interest-Bearing                 Quarter ended               
Liabilities USD    03-31-19     12-31-18     03-31-18  

(Average in thousands of pesos)

   Capital      Rate     Capital      Rate     Capital      Rate  

Interest-Earning Assets

     80,595,172        5.6 %      67,629,371        4.7 %      42,461,611        3.3 % 

Public sector instruments

     15,510,718        8.8 %      7,613,872        5.3 %      10,059,974        3.9 % 

Loans

     62,771,546        5.0 %      58,412,232        4.7 %      31,427,615        3.2 % 

Other interest-earning assets

     2,312,908        1.7 %      1,603,267        1.3 %      974,023        1.2 % 

Interest-Bearing Liabilities

     103,430,688        0.4 %      92,975,878        0.4 %      47,852,625        0.2 % 

Saving Accounts

     80,600,054        0.0 %      71,129,594        0.0 %      38,552,881        0.0 % 

Time Deposits

     17,334,943        0.6 %      16,177,943        0.6 %      8,279,777        0.8 % 

Current accounts with interest

     401,194        0.0 %      448,104        0.0 %      642,250        0.0 % 

Other interest-bearing liabilities

     5,094,497        5.5 %      5,220,237        4.4 %      377,717        2.8 % 

 

  •  

Net fee income

 

Net fee income           Quarter ended             D % Quarter ended 03/31/19 vs
quarter ended 		 

(in thousands of pesos)

   03-31-19      12-31-18      03-31-18      12-31-18     03-31-18  

Net fee income

     1,494,815        1,504,195        679,719        -0.6 %      119.9 % 

Fee income

     3,814,183        3,562,964        2,034,541        7.1 %      87.5 % 

Fee charges on deposits accounts

     1,109,927        1,069,235        813,236        3.8 %      36.5 % 

Credit cards and operations

     1,250,022        1,440,625        477,967        -13.2 %      161.5 % 

Checks

     326,004        301,939        204,868        8.0 %      59.1 % 

Capital markets and securities activities

     51,074        40,156        52,756        27.2 %      -3.2 % 

Fees related to foreign trade

     181,020        165,003        77,628        9.7 %      133.2 % 

Services of collection

     521,129        446,457        256,835        16.7 %      102.9 % 

Generated by subsidiaries

     97,114        72,603        113,351        33.8 %      -14.3 % 

Other fees

     277,894        26,945        37,902        931.3 %      633.2 % 

Fee Expenses

     -2,319,368        -2,058,769        -1,354,822        12.7 %      71.2 % 

Net fee income remained at similar level compared to the previous quarter, whereas it grew 119.9% compared to the first quarter of 2018, partly as a result of the reclassification of accounts due to the change in criteria regarding the deferral of credit card emission fees implemented during the third quarter of 2018.

In addition, during the quarter, insurance fees and fees from credit card consumption in USD were reclassified, from other operative income to other fees and fees for credit cards and operations.

Fee income increased by 7.1% compared to the previous quarter due to higher fees charged on deposit accounts, by collection and transfer services and by the previously mention reclassification . Those were partially offset by lower fees for credit cards and ATM operations. Compared to the same quarter of 2018, net fee income grew by 87.5%.

It is important to mention that despite the decrease in fees for credit card, BBVA Francés reached 14.62% of credit card consumption market share, gaining 65 bps in the last twelve months.

Fee expenses increased by 12.7% over the quarter and by 71.2% compared to the first quarter of 2018, mainly due to fees related to the loyalty program and higher credit card processing charges.

In the new disclosure format applied beginning the first quarter, of 2018 certain fee items are accounted for in “Other operating income”.

 

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  •  

Net income from measurement of financial instruments at fair value through profit or loss

 

Net income from measurement of financial instruments    Quarter ended     

D %   Quarter ended 03/31/19

vs Quarter ended

 

at fail value through profit or loss (in thousands of pesos)

   03-31-19     12-31-18     03-31-18      12-31-18     03-31-18  

Net income of financial instruments at fail value

     2,464,277       197,044       330,347        1150.6 %      646.0 % 

Income from public securities

     864,288       338,665       187,393        155.2 %      360.0 % 

Income from private securities

     1,591,884       (264,903 )      93,362        -700.9 %      1605.1 % 

Income from interest rate swaps

     (126,485 )      (154,737 )      1,649        -18.3 %      n/a  

Non deliverable forward

     112,613       255,661       39,614        -56.0 %      184.3 % 

Income from corporate bonds

     21,977       22,358       7,829        -1.7 %      180.7 % 

Net income from measurement of financial instruments at fair value recorded a gain of AR$ 2,464.3 million in the first quarter of 2019, including the market valuation of 49% stake in Prisma, compared to a gain of AR$ 197.1 million registered in the previous quarter.

In addition a higher income from public securities was registered during the quarter, partially offset by a lower result from foreign currency forward transactions and by the loss registered in connection with interest rate swaps.

 

  •  

Foreign Exchange Difference

 

Foreign Exchange Difference    Quarter Ended      D % Quarter ended 03/31/19
vs Quarter ended 		 

(in thousands of pesos)

   03-31-19      12-31-18      03-31-18      12-31-18     03-31-18  

Foreign Exchange Difference

     1,174,542        977,628        695,250        20.1 %      68.9 % 

FX trading

     1,345,238        1,392,557        532,290        -3.4 %      152.7 % 

long/Short FX net balance

     -170,696        -414,929        162,960        -58.9 %      -204.7 % 

Foreign exchange difference registered the gain generated by foreign currency buying and selling activity, which during this quarter was partially offset by the loss originated by the devaluation of the peso over the foreign currency position of the Bank.

 

  •  

Other operating income

 

Other Operating Income   

Quarter ended

     D % Quarter ended  03/31/19
v s Quarter ended 		 

(in thousands of pesos)

   03-31-19      12-31-18      03-31-18      12-31-18     03-31-18  

Operating Income

     3,390,923        1,206,843        1,742,608        181.0 %      94.6 % 

Safe deposits

     122,349        113,798        100,082        7.5 %      22.2 % 

Insurance

     —          196,278        167,575        -100.0 %      -100.0 % 

Fees on USD credit cards consumption

     1,939        132,134        56,526        -98.5 %      -96.6 % 

Interest on loans and fees related

     218,511        178,668        81,319        22.3 %      168.7 % 

Other fees

     97,269        130,737        55,900        -25.6 %      74.0 % 

Total other fees

     440,068        751,615        461,402        -41.5 %      -4.6 % 

Reverse income tax provision

     —          —          1,021,500        —         —    

Prisma Sale

     2,695,720        —          —          —         —    

Other operating income

     255,135        455,228        259,706        -44.0 %      -1.8 % 

Other operating income registered a gain during the quarter mainly due to the result of the sale of Prisma.

Other fees decreased by 41.5% consequence of the reclassification of insurance fees and fees on credit    card consumption in USD, which are recorded as Net income fee beginning since the first quarter.

 

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Operating Expenses

 

 

 

Operating Expenses    Quarter ended     D % Quarter ended 3/31/19 vs  

In thousands of pesos

   03-31-19     12-31-18     03-31-18     12-31-18     03-31-18  

Personnel expenses

     (2,712,587 )      (2,570,310 )      (1,957,189 )      5.5 %      38.6 % 

Administrative expenses

     (2,044,423 )      (2,196,156 )      (1,508,192 )      -6.9 %      35.6 % 

Depreciation and amortization of assets

     (358,361 )      (249,685 )      (199,042 )      43.5 %      80.0 % 

Other operating expenses

     (2,538,043 )      (2,433,597 )      (2,153,710 )      4.3 %      17.8 % 

Operating Expenses

     (7,653,414 )      (7,449,748 )      (5,818,133 )      2.7 %      31.5 % 

Operating expenses amounted to AR$ 7,653.4 million, registering an increase of 2.7% and 31.5% compared to the previous quarter and to the first quarter of 2018, respectively.

The items that make up net operating expenses are analyzed in more detail below.

 

  •  

Personnel expenses and administrative expenses

 

Administrative and personnel expenses    Quarter ended     D % Quarter ended 03/31/19
vs quarter ended 		 

(in thousands of pesos)                          

   03-31-19     12-31-18     03-31-18     12-31-18     03-31-18  

Personnel expenses

     (2,712,587 )      (2,570,310 )      (1,957,189 )      5.5 %      38.6 % 

Administrative expenses

     (2,044,423 )      (2,196,156 )      (1,508,192 )      -6.9 %      35.6 % 

Electricity and Communications

     (110,161 )      (119,859 )      (64,192 )      -8.1 %      71.6 % 

Advertising and Promotion

     (121,581 )      (66,638 )      (112,503 )      82.4 %      8.1 % 

Fees and external administrative services

     (92,737 )      (106,908 )      (60,036 )      -13.3 %      54.5 % 

Taxes

     (559,847 )      (500,439 )      (380,433 )      11.9 %      47.2 % 

Rents

     (170,833 )      (241,748 )      (151,107 )      -29.3 %      13.1 % 

Maintainance, conservation and repairs

     (278,866 )      (224,436 )      (159,145 )      24.3 %      75.2 % 

Security Service

     (85,565 )      (71,750 )      (77,006 )      19.3 %      11.1 % 

Carriage of valuables

     (165,578 )      (417,277 )      (163,315 )      -60.3 %      1.4 % 

Other

     (459,255 )      (447,101 )      (340,455 )      2.7 %      34.9 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Employees

     6,153       6,107       6,075       12       25  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Branches

     252       252       251       0       0  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Personnel expenses increased by 5.5% compared to the previous quarter and 38.6% compared to the first quarter of 2018, whereas administrative expenses decreased by 6.9% compared to the previous quarter and increased by 35.6% compared to the first quarter of 2018.

The increase in personnel expenses is mainly due to the update in salaries arising from the agreements signed with the labor union and its compensation schemes.

Administrative expenses decreased during the quarter, mainly due to lower charges in carriage of valuables and rents, offset by higher taxes, as a result of higher activity levels, inflation and the increase in foreign currency exchange rates. Also during the quarter higher charges in advertising and promotions and in maintenance, conservation and repairs were experience.

The efficiency ratio for the quarter amounted was 37%.

 

  •  

Other operating expenses

 

           D % Quarter ended 03/31/19 vs  
Other Operating expenses          Quarter ended           Quarter ended  

(in thousands of pesos)

   03-31-19     12-31-18     03-31-18     12-31-18     03-31-18  

Operating expenses

     (2,538,043 )      (2,433,597 )      (2,153,710 )      4.3 %      17.8 % 

Gross income tax

     (1,372,502 )      (1,278,288 )      (725,069 )      7.4 %      89.3 % 

Gross income tax NII

     (1,090,700 )      (1,000,700 )      (530,629 )      9.0 %      105.5 % 

Gross income tax fees

     (281,802 )      (277,588 )      (194,440 )      1.5 %      44.9 % 

Cost of deposits insurence

     (109,667 )      (102,795 )      (65,805 )      6.7 %      66.7 % 

Other operating expenses

     (1,055,874 )      (1,052,514 )      (341,336 )      0.3 %      209.3 % 

 

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Other operating expenses registered an increase in gross income tax, due to the income in net interest income, fees and income from foreign currency exchange difference, during the period. In addition, beginning in the fourth quarter of 2018, the rate differential between the applied rate and the market rate in credit card financing operations has been recorded under Other operating expenses.

 

 

Income from associates

 

 

Income from associates shows the result of non-consolidated companies. During the first quarter of 2019 a gain of AR$ 117 million was recorded, mainly due to the equity investment in BBVA Seguros, Volkswagen Financial Services, PSA Finance and Rombo Compañia Financiera.

 

 

Balance and activity

 

 

 

 

Loan portfolio

 

 

 

           D % Quarter ended 03/31/19 vs  
Net loans          Quarter ended           quarter ended  

(in thousands of pesos)

   03-31-19     12-31-18     03-31-18     12-31-18     03-31-18  

Private & Financial sector loans in $

     114,404,420       120,781,796       105,207,692       -5.3 %      8.7 % 

Advances

     8,007,919       11,781,284       13,597,142       -32.0 %      -41.1 % 

Discounted and purchased notes

     15,814,293       18,382,585       16,630,923       -14.0 %      -4.9 % 

Consumer Mortgages

     11,045,297       10,110,286       5,881,749       9.2 %      87.8 % 

Car secured loans

     1,650,656       1,660,242       4,844,257       -0.6 %      -65.9 % 

Personal loans

     24,421,230       23,586,938       19,376,800       3.5 %      26.0 % 

Credit cards

     42,662,066       40,622,378       30,062,625       5.0 %      41.9 % 

Loans to financial sector

     6,068,159       9,417,009       4,848,410       -35.6 %      25.2 % 

Other loans

     5,887,122       6,340,846       9,191,722       -7.2 %      -36.0 % 

Other receivables

     3,609,237       3,593,650       3,627,055       0.4 %      -0.5 % 

Unaccrued interest

     (1,234,203 )      (1,560,431 )      (658,285 )      -20.9 %      87.5 % 

Less: Allowance for loan losses

     (3,527,356 )      (3,152,991 )      (2,194,706 )      11.9 %      60.7 % 

Private & Financial sector loans in FX

     70,901,075       60,640,344       34,228,994       16.9 %      107.1 % 

Advances

     11,327       8,029       8,223       41.1 %      37.7 % 

Discounted and purchased notes

     7,267,682       7,492,197       2,179,343       -3.0 %      233.5 % 

Credit cards

     2,923,037       1,886,633       1,812,303       54.9 %      61.3 % 

Loans to financial sector

     293,892       252,704       101,025       16.3 %      190.9 % 

Other loans

     61,356,511       51,803,409       30,362,389       18.4 %      102.1 % 

Other receivables

     339,239       302,620       119,327       12.1 %      184.3 % 

Less: Allowance for loan losses

     (1,290,613 )      (1,105,248 )      (353,616 )      16.8 %      265.0 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Private Loans

     185,305,495       181,422,140       139,436,686       2.1 %      32.9 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total loans to public sector

     439       207       142       112.1 %      209.2 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net Total Loans net of other non resident loans

     185,305,934       181,422,347       139,436,828       2.1 %      32.9 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

As of the third quarter, Volkswagen Financial Services Compañia Financiera is no longer recorded on a consolidated basis. Such figures were recorded under car secured loans.

As of March 31, 2019, the private sector loan portfolio amounted to AR$ 185.3 billion, increasing by 2.1% during the quarter and by 32.9% in the last twelve months. Including Volkswagen Financial Services, the private sector loan portfolio would have increased by 2.1% and 35.6% in such periods, respectively.

The market share of loans reached 8.6% by the end of March 2019 including loans from associated companies (VW Financial Services, PSA Finance and Rombo Compañia Financiera), showing an increase of 30 bps in the last 12 months.

During the quarter Argentine peso denominated loans fell by 5.3%, and grew 8.7% annually, (decreasing 5.1% and increasing 12.3%, respectively, when including VW). US dollar denominated loans expressed in AR$ grew 16.9% during the quarter and 107.1% in the last twelve months, mainly due to the re-expression of the new value of the currency, while loans measured in U.S dollars increased approximately 2% during the quarter and decreased 4% annually.

 

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In retail banking, positive growth was recorded in connection with credit card and personal loans, while mortgages loans reflected the impact of the increasing inflation.

The increase shown by commercial loans compared to the previous quarter was mainly due to the depreciation of the peso.

 

 

Asset quality ratios

 

 

 

Asset quality ratios   

Quarter ended

    D % Quarter ended 03/31/19
vs quarter ended 		 

(in thousands of pesos)

   03-31-19     12-31-18     13-31-18     12-31-18     13-31-18  

Non-performing loans (1)

     4,210,743       3,572,782       1,017,379       17.9 %      313.9 % 

Allowance for loan losses

     (4,817,969 )      (4,258,239 )      (2,548,322 )      13.1 %      89.1 % 

Non-performing loans/net total loans

     2.21 %      1.92 %      0.72 %      0.3 %      1.5 % 

Non-performing priv. loans/net priv. loans

     2.21 %      1.92 %      0.72 %      0.3 %      1.5 % 

Allowance for loan losses/non-performing loans

     114.42 %      119.19 %      250.48 %      -4.8 %      -136.1 % 

Allowance for loan losses/net total loans

     2.53 %      2.29 %      1.79 %      0.2 %      0.7 % 

(1) Non-performing loans include: all loans to borrowers classified as “Problem”, “Deficient Servicing”, “High Insolvency Risk”, “Difficult Recovery”, “Irrecoverable for Technical Decision” according to the new Central Bank debtor classification system.

As of March 31, 2019, the asset quality ratio (non-performing loans/total loans) was 2.21% with a coverage ratio (allowances/non-performing loans) of 114.42%.

These indicators show some deterioration in the loan portfolio, mainly due to specific cases in the commercial portfolio.

The cost of risk reached 2.09% recording an increase of 21 bps during the quarter.

The following table shows the evolution of provisions:

 

Evolution of provisions   

Quarter ended

    D % Quarter ended 03/31/19
vs quarter ended 		 

(in thousands of pesos)

   03-31-19     12-31-18     03-31-18     12-31-18     03-31-18  

Balance at the beginning of the quarter

     4,258,239       4,000,918       2,290,430       6.4 %      85.9 % 

Increase/decrease

     1,090,116       1,047,424       526,034       4.1 %      107.2 % 

Increase/decrease-Foreign exchange diff.

     164,105       (73,127 )      22,159       -324.4 %      n/a  

Aplications / Reversals

     (694,491 )      (716,976 )      (290,301 )      -3.1 %      139.2 % 

Balance at the end of the quarter

     4,817,969       4,258,239       2,548,322       13.1 %      89.1 % 

 

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Public sector exposure

 

 

 

Public Sector Exposure    Quarter ended     D % Quarter ended 03/31/19
vs quarter ended 		 

(in thousands of pesos)

   03-31-19     12-31-18     03-31-18     12-31-18     03-31-18  

Bills and Notes from Central Bank

     29,726,124       20,202,427       12,316,169       15.3 %      29.7 % 

Treasury and national government

     24,580,395       23,822,802       9,929,971       5.4 %      108.5 % 

National Treasury Public Debt $

     7,912,149       7,952,858       221,490       36.1 %      239.2 % 

National Treasury Public Debt USD

     3,662,256       3,198,818       5,051,412       -63.2 %      -32.6 % 

Treasury Repos USD

     13,005,990       12,671,125       4,657,069       57.3 %      191.9 % 

Pesos subtotal

     37,638,272       28,155,285       12,537,659       20.5 %      57.1 % 

Dollars subtotal

     16,668,246       15,869,944       9,708,481       -5.3 %      74.7 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Public Sector exposure

     54,306,518       44,025,229       22,246,140       9.7 %      63.0 % 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

% National Government debt / Assets

     6.3 %      6.7 %      4.4 %     

Total exposure to the public sector amounted to AR$ 54.3 billion, increasing by 9.7% during the quarter.

Short-term liquidity was allocated in BCRA instruments, which increased by AR$ 8.5 billion or by 15.3% increase during the quarter and 29.7% compared with the same quarter of 2018.

National Government Debt, which represents 6.3% of assets increased by AR$ 757.6 million during the quarter, as a consequence of the increase in the foreign currency debt and the renovation and extension of the repo with the National Treasury during the fourth quarter of 2018 for USD 355 million.

 

 

Deposits

 

 

 

Total deposits   

Quarter ended

     D % Quarter ended 03/31/19
vs quarter ended 		 

(in thousands of pesos)

   03-31-19      12-31-18      03/31/18      12-31-18     03/31/18  

Deposits $ denominated

     166,327,714        164,320,011        113,025,228        1.2 %      47.2 % 

Current accounts

     29,306,174        29,559,030        24,573,483        -0.9 %      19.3 % 

Saving accounts

     38,925,202        46,487,308        31,971,101        -16.3 %      21.8 % 

Time deposits

     93,718,587        84,087,508        52,253,943        11.5 %      79.4 % 

Peso denominated

     90,029,570        81,019,308        49,240,849        11.1 %      82.8 % 

CER adjusted time deposits

     3,689,017        3,068,200        3,013,094        20.2 %      22.4 % 

Other

     4,377,751        4,186,165        4,226,701        4 6 %      3.6 % 

Deposits FX denominated

     112,379,313        95,189,050        46,927,455        18.1 %      139.5 % 

Current accounts

     488,302        375,546        90, 972        30.0 %      436.8 % 

Saving accounts

     111,496,825        94,468,865        46,680,889        18.0 %      138.8 % 

Time deposits

     183,759        196,201        64,369        -6.3 %      185.5 % 

Other

     210,427        148,438        91,225        41.8 %      130.7 % 
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total deposits

     278,707,027        259,509,061        159,952,683        7.4 %      74.2 % 
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

Total deposits amounted to AR$ 278.7 billion as of March 31, 2019, increasing by 7.4% compared to the previous quarter and by 74.2% compared to the first quarter of 2018.

Foreign currency denominated deposits expressed in pesos grew by 18.1% during the quarter and 139.5% in the last twelve months. Measured in the currency of origin, they increased 3.5% in the quarter and 11% compared to the first quarter of 2018.

Deposits in local currency grew by 1.2% and 47.2% compared to the previous quarter and the first quarter of 2109, respectively.

 

- 12 -

Table of Contents

 

Other funding sources

 

 

 

Other funding sources   

Quarter ended

     D % Quarter ended 03/31/19
vs quarter ended 		 

(in thousands of pesos)

   03-31-19      12-31-18      03/31/18      12-31-18     03/31/18  

Lines from other banks

     5,999,754        5,527,525        829,574        8.5 %      623.2 % 

Senior Bonds

     4,228,208        2,473,690        1,839,184        70.9 %      129.9 % 

Total other funding sources

     10,227,962        8,001,215        2,668,758        27.8 %      283.2 % 

The increase in lines from other banks corresponds mainly to funds to finance foreign trade operations.

On February 28, 2019, BBVA Francés issued Series 26 of its bonds (Obligaciones Negociables) for a total amount of AR$ 529.4 million, with 9-month maturity and a fixed 43% interest rate payable at maturity, and Series 27 of its bonds for a total amount of AR$ 1,090 million, with 18 months maturity at Badlar + 6.25% interest rate and quarterly interest payments.

 

 

Solvency

 

 

 

Central Bank Requirements   

Quarter ended

    D % Quarter ended 03/31/19
vs quarter ended 		 

(in thousands of pesos)

   03-31-19     12-31-18     03-31-18     12-31-18     03-31-18  

CB Minimum Capital Requirements

     23,241,773       21,791,415       17,026,890       6.7 %      36.5 % 

Allocated to Asset at Risk

     18,903,979       18,103,885       14,042,621       4.4 %      34.6 % 

Market Risk

     234,278       92,786       241,847       152.5 %      -3.1 % 

Operational Risk

     4,103,516       3,594,744       2,742,422       14.2 %      49.6 % 

Non compliance with others cautios regulations

     —         —         —         n/a       n/a  

Bank Capital

     43,365,989       37,947,122       30,590,907       14.3 %      41.8 % 

Ordinary Capital Level 1 (*)

     45,024,464       39,194,657       30,318,764       14.9 %      48.5 % 

Dedusctions Ordinary Capital Level 1

     (3,649,725 )      (3,188,440 )      (2,203,850 )      14.5 %      65.6 % 

Capital Level 2

     1,991,260       1,940,905       1,700,390       2.6 %      17.1 % 

Aditional Capital Level 1

     —         —         775,603       —         -100.0 % 

Excess over Required Capital

     20,124,216       16,155,707       13,564,017       24.6 %      48.4 % 

Excess as % of the capital required

     86.6 %      74.1 %      79.7 %      16.8 %      8.7 % 

Risk weighted assets

     283,639,646       265,801,467       207,723,520       6.7 %      36.5 % 

Capital Ratio (Central Bank rules) (*)(**)

     15.3 %      14.3 %      14.7 %      101       56  

TIER I (***)

     14.6 %      13.5 %      13.9 %      104       68  

 

(*)

Bank capital / Risk weighted assets

(**)

Includes the 100% of the quarterly result

(***)

Ordinary capital level 1 / Risk weighted assets

BBVA Francés continues to show adequate solvency ratios. As of March 31, 2019 the capital ratio reached 15.3%. The Tier 1 ratio was 14.6% and the excess over required capital was AR$ 20.1 billion

 

 

Additional information

 

 

 

     Quarter ended     D % Quarter ended 03/31/19
vs quarter ended 		 
     03-31-19     12-31-18     03-31-18     12-31-18     03-31-18  

Exchange rate $/USD

     43.35       37.81       20.14       14.7 %      115.2 % 

Quarterly CER adjustment

     9.3 %      16.3 %      7.0 %      -7.0 %      2.2 % 

 

 

Disclaimer

 

 

 

 

- 13 -

Table of Contents

LOGO

This press release contains or may contain forward-looking statements, including but not limited to estimates of the prospects for the Argentine economy, BBVA Francés’ earnings, business plans, expense and operational structure adjustments, capitalization plan, and trends affecting BBVA Francés’ financial condition and results of operations. Any forward-looking statements included in this press release are based on current expectations and estimates, but actual results and events may differ materially from anticipated future results and events. Certain factors which could cause the actual results and events to differ materially from the expected results or events include: (1) macroeconomic, regulatory or political changes; (2) changes in domestic or international stock market prices, exchange rates or interest rates; (3) changes in the markets for BBVA Francés’ products and services; (4) increasing competition; (5) changes in technology; or (6) changes in the financial condition, creditworthiness or solvency of the customers, debtors or counterparts of BBVA Francés. These forward-looking statements on future events referring only to the date of the document should be taken cautiously. It is advisable to consult the Bank’s Financial Statements and all the documents filed from time to time with the Argentine Securities and Exchange Commission (“CNV”) and the Buenos Aires Stock Exchange

 

 

Conference Call

 

 

On Thursday May 9, 2019 at 12:30 hs (Argentine time) a conference call will be held to comment on the quarter’s results.

Those who wish to participate should use the following dial-in numbers:

+ 54-11-3984-5677 (from Argentina)

+ 1-844-450-3851 (from the United States)

+ 1-412-317-6373 (from other countries)

Conference ID: BBVA .

To access the webcast:

http://webcastlite.mziq.com/cover.html?webcastId=0e3f384e-19e4-4464-850d-8ab2d1ee07f7

To request the Replay, please dial -in

+1-877-344-7529 (from the United States)

+1-412-317-0088 (from other countries)

The replay will be available until May 21, 2019.

Replay Access code: 10131414

 

 

Internet

 

 

This Press Release is available on the web page of BBVA Francés.

www.bbvafrances.com.ar

 

 

Contacts

 

 

 

Ines Lanusse

Cecilia Acuña

ines.lanusse@bbva.com

  

Investor Relations

Investor Relations

ceciliaviviana.acuna@bbva.com

 

- 14 -

Table of Contents

BBVA Banco Francés S.A. and Subsidiaries (Grupo Consolidar: by the equity method)

BALANCE SHEET (in thousands of pesos)

Communication “A” 6114

 

     03-31-19     12-31-18     03-31-18  

Cash and due from banks

     103,990,452       99,105,461       36,917,931  

Debt securities at fair value through other comprehensive income

     2,049,715       7,508,099       1,162,994  

Derivatives

     820,604       591,418       168,314  

Repurchase agreements

     21,425,035       12,861,116       7,144,101  

Other financial assets

     9,888,314       9,647,526       7,142,873  

Loans and other financial intermediation

     185,305,934       181,422,347       139,436,828  

Loans to the private & financial sector

     185,305,495       181,422,140       139,436,686  

Advances

     8,019,246       11,789,313       13,605,365  

Discounted and purchased notes

     23,081,975       25,874,782       18,810,266  

Secured with mortgages

     11,045,297       10,110,286       5,881,749  

Car secured loans

     1,650,656       1,660,242       4,844,257  

Personal loans

     24,421,230       23,586,938       19,376,800  

Credit cards

     45,585,103       42,509,011       31,874,928  

Loans to financial sector

     6,362,051       9,669,713       4,949,435  

Other (*)

     67,243,633       58,144,255       39,554,111  

Other receivables

     3,948,476       3,896,270       3,746,382  

Less: Unaccrued interest

     (1,234,203 )      (1,560,431 )      (658,285 ) 

Less: Allowance for loan losses

     (4,817,969 )      (4,258,239 )      (2,548,322 ) 

Public Sector loans

     439       207       142  

Other debt securities

     40,541,600       23,742,631       15,578,336  

Financial assets pledged as collateral

     5,278,301       4,703,064       3,925,255  

Current income tax assets

     385       385       1,375  

Investments in equity instruments

     1,893,207       129,538       145,256  

Investments in associates and joint ventures

     1,859,414       1,752,322       921,199  

Property, plant and equipment

     11,609,063       9,816,116       9,024,411  

Intangible assets

     542,565       510,912       448,944  

Deferred income tax asset

     274,386       194,036       57,407  

Other non financial assets

     2,203,245       2,135,859       1,457,379  

Non-current assets held for sale

     59,776       493,373       741,840  

Total Assets

     387,741,996       354,614,203       224,274,443  

Deposits

     278,707,027       259,509,061       159,952,683  

Current accounts

     29,794,476       29,934,576       24,664,455  

Saving accounts

     150,422,027       140,956,173       78,651,990  

Time deposits

     93,902,346       84,283,709       52,318,312  

Rescheduled deposits CEDROS

     1,951       1,951       1,951  

Other deposits

     4,586,227       4,332,652       4,315,975  

Liabilities at fair value trhough other comprehensive income

     1,969,005       692,270       —    

Derivatives

     1,611,843       1,377,259       245,444  

Repurchase agreements

     —         14,321       579,184  

Other financial liabilities

     29,306,624       28,189,392       16,497,979  

Financing received the BCRA and other financial insitutions

     5,999,754       5,527,525       829,574  

Corporate bonds issued

     4,228,208       2,473,690       1,839,184  

Current income tax liabilities

     5,792,030       3,676,444       884,250  

Provisions

     3,861,057       3,620,723       3,268,894  

Other provisions

     3,859,458       3,619,240       3,267,758  

For eventual compromises

     1,599       1,483       1,136  

Deferred income tax liabilites

     65,808       57,725       514,787  

Other non-financial liabilities

     11,791,812       10,894,016       7,492,249  

Total Liabilities

     343,333,168       316,032,426       192,104,228  

Total Stockholders’ equity

     44,375,264       38,551,665       31,645,338  

Equity investments

     33,564       30,112       524,877  

Total liabilities + stockholders’ equity

     387,741,996       354,614,203       224,274,443  

 

- 15 -

Table of Contents

BBVA Banco Francés S.A. and Subsidiaries (Grupo Consolidar: by the equity method)

INCOME STATEMENT (in thousands of pesos)

Communication “A” 6114

 

     03-31-19     12-31-18     03-31-18  

Interest Income

     18,375,643       17,731,588       7,892,864  

Interest on loans to the financial sector

     681,141       926,199       246,176  

Interest on overdraft

     1,528,558       2,100,546       917,500  

Interest on documents

     1,990,751       2,022,162       865,226  

Interest on mortgages loans

     261,244       240,762       142,561  

Interest on car secured loans

     97,747       103,982       316,562  

Interest on credit card loans

     3,892,306       2,690,676       1,671,465  

Interest on financial leases

     122,815       134,513       124,947  

Interest on personal loans

     1,755,947       1,703,271       1,355,898  

Interest on other loans

     693,658       665,768       651,892  

From other banking receivables from financial intermediation

     5,856       3,693       1,822  

CER adjustment

     17,857       24,386       44,416  

UVA adjustment

     1,567,222       2,071,175       287,997  

Income from Public Securities

     4,725,693       4,401,601       952,624  

Other

     1,034,848       642,854       313,778  

Interest Expenses

     (8,624,392 )      (9,268,781 )      (2,808,837 ) 

Interest on Current Account Deposits

     (669,369 )      (1,904,843 )      (288,583 ) 

Interest on Saving Account Deposits

     (11,506 )      (51,867 )      (10,820 ) 

Interest on Time Deposits

     (7,002,509 )      (6,267,054 )      (2,074,916 ) 

Interest on interfinancing received loans

     (15,255 )      (5,074 )      (6,892 ) 

Interest on other financing from the financial institutions

     (571 )      20,225       (10,001 ) 

Interest on other liabilites from financial intermediation

     (625,516 )      (605,343 )      (233,765 ) 

Other interest

     (7 )      (8 )      (40 ) 

UVA adjustment

     (295,432 )      (448,798 )      (158,404 ) 

Other

     (4,227 )      (5,999 )      (25,416 ) 

Net interest income

     9,751,251       8,462,827       5,084,027  

Net fee income

     1,494,815       1,504,195       679,719  

Net income of financial instruments

     2,464,277       197,044       330,347  

Result from assets at amortised cost

     (4,183 )      (67,243 )      1,367  

Foreign exchange difference

     1,174,542       977,628       695,250  

Other operating income

     3,390,923       1,206,843       1,742,608  

Provision for loan losses

     (2,358,139 )      (1,097,883 )      (526,194 ) 

Net operating income

     15,913,486       11,183,411       8,007,124  

Personnel expenses

     (2,712,587 )      (2,570,310 )      (1,957,189 ) 

Administrative expenses

     (2,044,423 )      (2,196,156 )      (1,508,192 ) 

Depreciations and amortizations

     —         —         (168,658 ) 

Depreciation on Intangible assets

     (21,663 )      30,646       (30,384 ) 

Other operating expenses

     (2,538,043 )      (2,433,597 )      (2,153,710 ) 

Operating income

     8,260,072       3,733,663       2,188,991  

Income from associates and joint ventures

     117,003       570,342       39,877  

Net income before income tax from continuing operations

     8,377,075       4,304,005       2,228,868  

Income tax from continuing operations

     (2,366,004 )      (1,366,363 )      (662,724 ) 

Net income Including non-controlling shareholders

     6,011,071       2,937,642       1,566,144  

Net income attributable to non-controlling shareholders

     3,452       1,014       20,846  

Net income

     6,007,619       2,936,628       1,545,298  

Other comprehensive income

     (184,020 )      51,475       5,175  

Total income attributable to controlling shareholders

     5,823,599       2,988,103       1,550,473  

 

- 16 -

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    BBVA Banco Francés S.A.
Date: May 9, 2019     By:   /s/ Ernesto Gallardo Jimenez
      Name: Ernesto Gallardo Jimenez
      Title: Chief Financial Officer
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