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 December, 2019
Commission File Number: 001-12568
Banco BBVA Argentina S.A.
(Translation of registrants name into English)
Córdoba 111, 1054
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
Banco BBVA Argentina S.A.
Condensed interim financial statements for the nine-month period ended on September 30, 2019, comparatively presented. |
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1 | ||||
3 | ||||
Consolidated Condensed Statement of Other Comprehensive Income |
5 | |||
Consolidated Condensed Statement of Changes in Shareholders Equity |
6 | |||
7 | ||||
9 | ||||
53 | ||||
Independent auditors limited review report on consolidated condensed interim financial statements |
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64 | ||||
66 | ||||
68 | ||||
Separate Condensed Statement of Changes in Shareholders Equity |
69 | |||
70 | ||||
72 | ||||
89 | ||||
Independent auditors limited review report on separate condensed interim financial statements |
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106 |
- 1 - |
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
Notes and Exhibits |
09.30.19 | 12.31.18 | ||||||||||
ASSETS |
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Cash and deposits in banks |
7 | 94,169,336 | 99,105,461 | |||||||||
Cash |
28,259,398 | 15,570,831 | ||||||||||
Financial institutions and correspondents |
65,909,938 | 83,534,630 | ||||||||||
Argentine Central Bank (BCRA) |
59,163,499 | 75,503,977 | ||||||||||
Other in the country and abroad |
6,746,439 | 8,030,653 | ||||||||||
Debt securities at fair value through profit or loss |
8 | 5,169,245 | 7,508,099 | |||||||||
Derivatives |
9 | 2,243,269 | 591,418 | |||||||||
Repo transactions |
10 | 6,665,009 | 12,861,116 | |||||||||
Other financial assets |
11 | 6,456,586 | 9,647,526 | |||||||||
Loans and other financing |
12 | 207,171,755 | 181,422,347 | |||||||||
Non-financial government sector |
503 | 207 | ||||||||||
Argentine Central Bank (BCRA) |
| 383 | ||||||||||
Other financial institutions |
2,777,947 | 9,583,842 | ||||||||||
Non-financial private sector and residents abroad |
204,393,305 | 171,837,915 | ||||||||||
Other debt securities |
13 | 63,440,103 | 23,742,631 | |||||||||
Financial assets pledged as collateral |
14 | 8,301,742 | 4,703,064 | |||||||||
Current income tax assets |
15 a) | 385 | 385 | |||||||||
Investments in equity instruments |
16 | 1,875,290 | 129,538 | |||||||||
Investments in associates |
17 | 271,558 | 1,752,322 | |||||||||
Property and equipment |
18 | 11,820,645 | 9,816,116 | |||||||||
Intangible assets |
19 | 640,869 | 510,912 | |||||||||
Deferred income tax assets |
3,400,665 | 194,036 | ||||||||||
Other non-financial assets |
20 | 2,390,942 | 2,135,859 | |||||||||
Non-currrent assets held for sale |
21 | 59,776 | 493,373 | |||||||||
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TOTAL ASSETS |
414,077,175 | 354,614,203 | ||||||||||
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Notes and exhibits are an integral part of these financial statements.
- 2 - |
CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL POSITION
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
Notes and Exhibits |
09.30.19 | 12.31.18 | ||||||||||
LIABILITIES |
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Deposits |
|
22 and Exhibit H |
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274,486,964 | 259,509,061 | |||||||
Non-financial government sector |
2,642,132 | 1,544,761 | ||||||||||
Financial sector |
313,529 | 294,122 | ||||||||||
Non-financial private sector and residents abroad |
271,531,303 | 257,670,178 | ||||||||||
Liabilities at fair value through profit or loss |
23 | 43,168 | 692,270 | |||||||||
Derivatives |
9 | 4,022,821 | 1,377,259 | |||||||||
Repo transactions |
10 | | 14,321 | |||||||||
Other financial liabilities |
24 | 31,609,065 | 28,189,392 | |||||||||
Financing received from the BCRA and other financial institutions |
25 | 8,481,472 | 5,527,525 | |||||||||
Corporate bonds issued |
26 | 8,727,685 | 2,473,690 | |||||||||
Current income tax liabilities |
15 b) | 5,240,371 | 3,676,444 | |||||||||
Provisions |
|
27 and Exhibit J |
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7,657,217 | 3,620,723 | |||||||
Deferred income tax liabilities |
30,851 | 57,725 | ||||||||||
Other non-financial liabilities |
28 | 15,232,774 | 10,894,016 | |||||||||
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TOTAL LIABILITIES |
355,532,388 | 316,032,426 | ||||||||||
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EQUITY |
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Share capital |
30 | 612,660 | 612,660 | |||||||||
Non-capitalized contributions |
6,735,977 | 6,735,977 | ||||||||||
Capital adjustments |
312,979 | 312,979 | ||||||||||
Reserves |
28,488,024 | 17,424,932 | ||||||||||
Retained earnings |
| 3,856,405 | ||||||||||
Other accumulated comprehensive income |
(3,581,642 | ) | (4,975 | ) | ||||||||
Income for the period |
23,527,473 | 9,613,687 | ||||||||||
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Equity attributable to owners of the Parent |
56,095,471 | 38,551,665 | ||||||||||
Equity attributable to non-controlling interests |
2,449,316 | 30,112 | ||||||||||
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TOTAL EQUITY |
58,544,787 | 38,581,777 | ||||||||||
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TOTAL LIABILITIES AND EQUITY |
414,077,175 | 354,614,203 | ||||||||||
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Notes and exhibits are an integral part of these financial statements.
- 3 - |
CONSOLIDATED CONDENSED STATEMENT OF PROFIT OR LOSS
FOR THE NINE-MONTH INTERIM PERIODS ENDED SEPTEMBER 30, 2019 AND 2018
(stated in thousands of pesos)
Notes and Exhibits |
Accumulated as of 09.30.19 |
Accumulated as of 09.30.18 |
Quarter from 07.01.19 to 09.30.19 |
Quarter from 07.01.18 to 09.30.18 |
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Interest income |
31 | 68,471,401 | 29,718,075 | 27,077,626 | 12,547,186 | |||||||||||||||
Interest expense |
32 | (30,072,088 | ) | (12,051,588 | ) | (11,465,682 | ) | (5,735,581 | ) | |||||||||||
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Net interest income |
38,399,313 | 17,666,487 | 15,611,944 | 6,811,605 | ||||||||||||||||
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Commission income |
33 | 12,882,886 | 8,671,320 | 4,702,165 | 3,748,761 | |||||||||||||||
Commission expenses |
34 | (7,879,618 | ) | (4,868,367 | ) | (3,137,368 | ) | (1,991,381 | ) | |||||||||||
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Net commission income |
5,003,268 | 3,802,953 | 1,564,797 | 1,757,380 | ||||||||||||||||
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Net income/(loss) from measurement of financial instruments at fair value through profit or loss |
35 | 6,011,075 | (90,424 | ) | 1,431,770 | 322,255 | ||||||||||||||
Net (loss)/income from write-down of assets at amortized cost and at fair value through OCI |
36 | (36,769 | ) | (54,157 | ) | 3,794 | 12,774 | |||||||||||||
Foreign exchange and gold gains |
37 | 5,899,657 | 4,329,081 | 3,403,555 | 1,624,223 | |||||||||||||||
Other operating income |
38 | 8,903,731 | 3,144,057 | 1,123,003 | 1,004,197 | |||||||||||||||
Loan loss allowances |
Exhibit R | (6,073,941 | ) | (2,363,194 | ) | (1,850,878 | ) | (1,032,752 | ) | |||||||||||
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Net operating income |
58,106,334 | 26,434,803 | 21,287,985 | 10,499,682 | ||||||||||||||||
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Personnel benefits |
39 | (9,604,233 | ) | (6,390,864 | ) | (3,649,617 | ) | (2,503,707 | ) | |||||||||||
Administrative expenses |
40 | (7,920,024 | ) | (4,980,915 | ) | (3,454,495 | ) | (1,826,091 | ) | |||||||||||
Depreciation and amortization |
41 | (1,175,030 | ) | (626,686 | ) | (422,743 | ) | (219,784 | ) | |||||||||||
Other operating expenses |
42 | (11,829,855 | ) | (5,217,967 | ) | (3,217,420 | ) | (1,635,777 | ) | |||||||||||
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Operating income |
27,577,192 | 9,218,371 | 10,543,710 | 4,314,323 | ||||||||||||||||
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Income from associates and joint ventures |
422,570 | 210,212 | (6,916 | ) | (134,853 | ) | ||||||||||||||
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Income before income tax |
27,999,762 | 9,428,583 | 10,536,794 | 4,179,470 | ||||||||||||||||
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Income tax |
15 c) | (4,096,426 | ) | (2,661,049 | ) | 575,149 | (1,131,938 | ) | ||||||||||||
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Income for the period |
23,903,336 | 6,767,534 | 11,111,943 | 3,047,532 | ||||||||||||||||
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Income for the period attributable to: |
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Owners of the Parent |
23,527,473 | 6,677,059 | 10,739,731 | 3,007,841 | ||||||||||||||||
Non-controlling interests |
375,863 | 90,475 | 372,212 | 39,691 |
Notes and exhibits are an integral part of these financial statements.
- 4 - |
EARNINGS PER SHARE
AS OF SEPTEMBER 30, 2019 AND 2018
(stated in thousands of pesos)
Accounts |
09.30.19 | 09.30.18 | ||||||
Numerator: |
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Net income attributable to owners of the Parent |
23,527,473 | 6,677,059 | ||||||
Net income attributable to owners of the Parent adjusted to reflect the effect of dilution |
23,527,473 | 6,677,059 | ||||||
Denominator: |
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Weighted average of outstanding common shares for the period |
612,659,638 | 612,659,638 | ||||||
Weighted average of outstanding common shares for the period adjusted to reflect the effect of dilution |
612,659,638 | 612,659,638 | ||||||
Basic earnings per share (stated in thousands of pesos) |
38.4022 | 10.8985 | ||||||
Diluted earnings per share (stated in thousands of pesos) (1) |
38.4022 | 10.8985 |
(1) | Since Banco BBVA Argentina S.A. has not issued financial instruments with a dilutive effect on earnings per share, basic and diluted earnings per share are the same. |
- 5 - |
CONSOLIDATED CONDENSED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE NINE-MONTH INTERIM PERIODS ENDED SEPTEMBER 30, 2019 AND 2018
(stated in thousands of pesos)
Accumulated as of 09.30.19 |
Accumulated as of 09.30.18 |
Quarter from 07.01.19 to 09.30.19 |
Quarter from 07.01.18 to 09.30.18 |
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Income for the period |
23,903,336 | 6,767,534 | 11,111,943 | 3,047,532 | ||||||||||||
Other comprehensive income components to be reclassified to income/(loss) for the period: |
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Share in Other Comprehensive Income from associates and joint ventures at equity method |
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(Loss)/income on the share in OCI from associates and joint ventures at equity method |
(386 | ) | 135,764 | | 32,931 | |||||||||||
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(386 | ) | 135,764 | | 32,931 | ||||||||||||
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Profit or losses from hedge instruments - Cash flow hedge |
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Loss for the period of hedge instrument |
(9,697 | ) | | (9,697 | ) | | ||||||||||
Income tax |
2,909 | | 2,909 | | ||||||||||||
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(6,788 | ) | | (6,788 | ) | | |||||||||||
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Profit or losses from financial instruments at fair value through OCI |
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Loss for the period on financial instruments at fair value through OCI |
(5,108,845 | ) | (363,357 | ) | (4,841,128 | ) | (258,594 | ) | ||||||||
Reclassification adjustment for the period |
924 | 54,155 | (39,639 | ) | (12,776 | ) | ||||||||||
Income tax |
1,532,418 | 92,885 | 1,464,230 | 84,626 | ||||||||||||
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(3,575,503 | ) | (216,317 | ) | (3,416,537 | ) | (186,744 | ) | |||||||||
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Other comprehensive income components not to be reclassified to income/(loss) for the period: |
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Employee benefit plans |
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Accumulated actuarial profits or losses due to employee benefit plans |
| (5,322 | ) | | | |||||||||||
Income tax |
| 1,600 | | | ||||||||||||
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| (3,722 | ) | | | ||||||||||||
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Profit or losses from equity instruments at fair value through OCI (Items 5.7.5 of IFRS 9) |
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Profit/(loss) from equity instruments at fair value through OCI |
2,014 | | (1,687 | ) | | |||||||||||
Income tax |
(604 | ) | | 506 | | |||||||||||
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1,410 | | (1,181 | ) | | ||||||||||||
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Total Other Comprehensive Income for the period |
(3,581,267 | ) | (84,275 | ) | (3,424,506 | ) | (153,813 | ) | ||||||||
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Total Comprehensive Income |
20,322,069 | 6,683,259 | 7,687,437 | 2,893,719 | ||||||||||||
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Total comprehensive income: |
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Attributable to owners of the Parent |
19,950,806 | 6,592,784 | 7,315,225 | 2,854,028 | ||||||||||||
Attributable to non-controlling interests |
371,263 | 90,475 | 372,212 | 39,691 |
Notes and exhibits are an integral part of these financial statements.
- 6 - |
CONSOLIDATED CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
FOR THE NINE-MONTH INTERIM PERIOD ENDED SEPTEMBER 30, 2019 AND 2018
(stated in thousands of pesos)
2019 | 2018 | |||||||||||||||||||||||||||||||||||||||||||||||
Share capital |
Non-capitalized contributions |
Other comprehensive income | Retained earnings | |||||||||||||||||||||||||||||||||||||||||||||
Transactions |
Outstanding shares |
Share premium |
Adjustments to equity |
Losses on financial instruments at fair value through OCI |
Other | Legal reserve |
Optional reserve |
Unappropriated retained earnings |
Total equity attributable to owners of the Parent |
Total equity attributable to non- controlling interests |
Total | Total | ||||||||||||||||||||||||||||||||||||
Balance at the beginning of the year |
612,660 | 6,735,977 | 312,979 | (112,612 | ) | 107,637 | 4,802,904 | 12,622,028 | 13,470,092 | 38,551,665 | 30,112 | 38,581,777 | 26,056,548 | |||||||||||||||||||||||||||||||||||
Impact of the implementation of the financial reporting framework set forth by the BCRA |
| | | | | | | | | | | 4,327,810 | ||||||||||||||||||||||||||||||||||||
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Adjusted balance at the beginning of the year |
612,660 | 6,735,977 | 312,979 | (112,612 | ) | 107,637 | 4,802,904 | 12,622,028 | 13,470,092 | 38,551,665 | 30,112 | 38,581,777 | 30,384,358 | |||||||||||||||||||||||||||||||||||
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Total Comprehensive income for the period |
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- Net income for the period |
| | | | | | | 23,527,473 | 23,527,473 | 375,863 | 23,903,336 | 6,767,534 | ||||||||||||||||||||||||||||||||||||
- Other comprehensive income for the period |
| | | (3,575,503 | ) | (1,164 | ) | | | | (3,576,667 | ) | (4,600 | ) | (3,581,267 | ) | (84,275 | ) | ||||||||||||||||||||||||||||||
- Distribution of retained earnings approved by the Shareholders Meetings held on April 24, 2019 and April 10, 2018 (Note 47) |
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Legal reserve |
| | | | | 1,922,737 | | (1,922,737 | ) | | | | | |||||||||||||||||||||||||||||||||||
Cash dividends (1) |
| | | | | | | (2,407,000 | ) | (2,407,000 | ) | | (2,407,000 | ) | (970,000 | ) | ||||||||||||||||||||||||||||||||
Statutory special reserve due to application of IFRS |
| | | | | | 3,856,405 | (3,856,405 | ) | | | | | |||||||||||||||||||||||||||||||||||
Optional reserve |
| | | | | | 5,283,950 | (5,283,950 | ) | | | | | |||||||||||||||||||||||||||||||||||
- Distribution of subsidiary dividends |
| | | | | | | | | | | (935 | ) | |||||||||||||||||||||||||||||||||||
- Capital increase of subsidiary |
| | | | | | | | | | | 23,055 | ||||||||||||||||||||||||||||||||||||
- Loss of control in subsidiary |
| | | | | | | | | | (391,522 | ) | ||||||||||||||||||||||||||||||||||||
- Acquisition of control in subsidiaries (Note 1) |
| | | | | | | | | 2,047,941 | 2,047,941 | | ||||||||||||||||||||||||||||||||||||
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Balance at fiscal period-end |
612,660 | 6,735,977 | 312,979 | (3,688,115 | ) | 106,473 | 6,725,641 | 21,762,383 | 23,527,473 | 56,095,471 | 2,449,316 | 58,544,787 | 35,728,215 | |||||||||||||||||||||||||||||||||||
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(1) | Corresponds to $3.93 per share. |
Notes and exhibits are an integral part of these financial statements.
- 7 - |
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
FOR THE NINE-MONTH INTERIM PERIODS ENDED SEPTEMBER 30, 2019 AND 2018
(stated in thousands of pesos)
Accounts |
09.30.19 | 09.30.18 | ||||||
Cash flows from operating activities |
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Income before Income Tax |
27,999,762 | 9,428,583 | ||||||
Adjustments to obtain cash flows from operating activities: |
(24,816,426 | ) | (23,260,863 | ) | ||||
Depreciation and amortization |
1,175,030 | 626,686 | ||||||
Loan loss allowance |
6,073,941 | 2,363,194 | ||||||
Effect of foreign exchange changes |
(30,489,317 | ) | (28,722,481 | ) | ||||
Loss from sale of Prisma |
(2,644,937 | ) | | |||||
Other adjustments |
1,068,857 | 2,471,738 | ||||||
Net decreases from operating assets: |
(54,912,743 | ) | (72,414,986 | ) | ||||
Debt securities at fair value through profit or loss |
2,328,631 | 5,106,363 | ||||||
Derivatives |
(1,531,178 | ) | 132,799 | |||||
Repo transactions |
6,196,107 | (3,055,859 | ) | |||||
Loans and other financing |
(15,354,660 | ) | (52,294,324 | ) | ||||
Non-financial government sector |
(296 | ) | 41 | |||||
Other financial institutions |
2,966,404 | (1,136,055 | ) | |||||
Non-financial private sector and residents abroad |
(18,320,768 | ) | (51,158,310 | ) | ||||
Other debt securities |
(44,803,379 | ) | (15,244,323 | ) | ||||
Financial assets pledged as collateral |
(3,597,971 | ) | (3,051,759 | ) | ||||
Investments in equity instruments |
| (1,947 | ) | |||||
Other assets |
1,849,707 | (4,005,936 | ) | |||||
Net increases from operating liabilities: |
20,410,566 | 101,664,834 | ||||||
Deposits |
14,978,347 | 91,270,354 | ||||||
Non-financial government sector |
1,097,371 | 988,014 | ||||||
Financial sector |
19,407 | 29,921 | ||||||
Non-financial private sector and residents abroad |
13,861,569 | 90,252,419 | ||||||
Liabilities at fair value through profit or loss |
(649,102 | ) | 1,345,749 | |||||
Derivatives |
3,015,475 | (67,810 | ) | |||||
Repo transactions |
(14,321 | ) | (285,410 | ) | ||||
Other liabilities |
3,080,167 | 9,401,951 | ||||||
Income tax paid |
(968,533 | ) | (794,250 | ) | ||||
|
|
|
|
|||||
Total cash flows (used in)/generated by operating activities |
(32,287,374 | ) | 14,623,318 | |||||
|
|
|
|
- 8 - |
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
FOR THE NINE-MONTH INTERIM PERIODS ENDED SEPTEMBER 30, 2019 AND 2018
(stated in thousands of pesos)
Accounts |
09.30.19 | 09.30.18 | ||||||
Cash flows from investing activities: |
||||||||
Payments: |
(1,262,484 | ) | (96,337 | ) | ||||
Purchase of property and equipment. intangible assets and other assets |
(1,262,484 | ) | (94,672 | ) | ||||
Purchase of debt or equity instruments issued by other entities |
| (1,665 | ) | |||||
Collections: |
2,826,941 | 854,668 | ||||||
Sale of property and equipment. intangible assets and other assets |
1,729,915 | 527,436 | ||||||
Acquisition of control of subsidiaries or other businesses |
273,311 | | ||||||
Other collections related to investing activities |
823,715 | 327,232 | ||||||
|
|
|
|
|||||
Total cash flows generated by investing activities |
1,564,457 | 758,331 | ||||||
|
|
|
|
|||||
Cash flows from financing activities |
||||||||
Payments: |
(6,022,627 | ) | (1,321,247 | ) | ||||
Dividends |
(2,407,000 | ) | (970,935 | ) | ||||
Non-subordinated corporate bonds |
(3,173,111 | ) | (350,312 | ) | ||||
Lease payments |
(442,516 | ) | | |||||
Collections: |
1,320,102 | 6,873,386 | ||||||
Non-subordinated corporate bonds |
1,319,400 | | ||||||
Financing received from local financial institutions |
702 | | ||||||
Other collections related to financing activities |
| 6,873,386 | ||||||
|
|
|
|
|||||
Total cash flows (used in) / generated by financing activities |
(4,702,525 | ) | 5,552,139 | |||||
|
|
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents |
30,489,317 | 28,722,481 | ||||||
|
|
|
|
|||||
Total changes in cash flows |
(4,936,125 | ) | 49,656,269 | |||||
|
|
|
|
|||||
Cash and cash equivalents at the beginning of the year (Note 7) |
99,105,461 | 38,235,942 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at fiscal period end (Note 7) |
94,169,336 | 87,892,211 | (1) | |||||
|
|
|
|
(1) | Cash and cash equivalents as of September 30. 2018 includes 70.355 corresponding to VWFS. net of eliminations. |
Notes and exhibits are an integral part of these financial statements.
- 9 - |
NOTES TO THE CONSOLIDATED CONDENSED INTERIM FINANCIAL STATEMENTS FOR
THE FISCAL PERIOD ENDED SEPTEMBER 30, 2019
(Stated in thousands of pesos)
1. | General information |
1.1. | Information on Banco BBVA Argentina S.A. |
Banco BBVA Argentina S.A. (hereinafter, either BBVA Argentina, the Entity or the Bank) is a corporation (sociedad anónima) incorporated under the laws of Argentina, operating as a universal bank with a network of 251 national branches.
Since December 1996, BBVA Argentina is part of the global strategy of Banco Bilbao Vizcaya Argentaria S.A. (BBVA or the Parent), which directly and indirectly controls the Entity, by holding 66.55% of the share capital as of September 30, 2019.
On April 24, 2019, the Shareholders Meeting approved the Entitys change of corporate name to BBVA Argentina S.A.. However, pursuant to a requirement from the Argentine Central Bank (BCRA) and upon the consent granted by the Shareholders Meeting, the Board of Directors, at a meeting held on May 28, 2019, resolved to adopt the name Banco BBVA Argentina S.A. On July 25, 2019, the BCRA served notice of the approval of the change of corporate name by way of Resolution No. 166. On September 18, 2019, the Argentine Securities Commission (CNV) submitted the proceedings related to the Entitys by-laws amendment and restatement to the Argentine Superintendence of Corporations (IGJ) for registration. On October 17, 2019, the IGJ registered the Entitys change of corporate name and the restatement of its by-laws under No. 21332 of Book 97, Corporations volume. On November 4, 2019, the Argentine Central Bank (BCRA) issued the related Communication C 85251, giving notice of the Entitys new corporate name.
These consolidated interim financial statements include the Entity and its subsidiary companies (collectively referred to as the Group).
Pursuant to certain amendments to the shareholders agreements, effective since July 1, 2019, the Bank has taken over the power to direct the relevant activities of PSA Finance Argentina Compañía Financiera S.A., Volkswagen Financial Services Compañía Financiera S.A. and Rombo Compañía Financiera S.A. Considering the guidelines set out under International Financial Reporting Standard (IFRS) 10, the Entity concluded that it has power on such companies effective since the aforementioned date. Therefore, these interim financial statements include consolidated information with these companies since the date on which the Entity took control over them.
The Entitys subsidiaries are listed below:
| BBVA Francés Valores S.A.: corporation incorporated under the laws of Argentina as a comprehensive clearing and settlement agent. On March 8, 2019, the Banks Board of Directors submitted to its Shareholders Meeting a proposal to carry out a merger of this company in order to attain more efficiency in its administrative processes and thus, provide better service to its customers. In this regard, on April 24, 2019, the Shareholders Meeting approved the proposal made by the Banks Board of Directors. The CNV has authorized the merger prospectus published in the Buenos Aires Stock Exchange Bulletin on April 16, 2019. As of the date of these financial statements, the statutory opposition period granted by Section 83, paragraph 3, of the Argentine Companies Law has elapsed, no objections having been raised. On July 17, 2019, the Final Merger Agreement was filed with the CNV for registration with the IGJ. The merger is deemed effective since October 1, 2019. |
- 10 - |
| BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión: corporation incorporated under the laws of Argentina as an agent for the management of mutual funds; |
| Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings): corporation incorporated under the laws of Argentina undergoing liquidation proceedings. On December 4, 2008, Law No. 26425 was enacted, providing for the elimination and replacement of the capitalization regime that was part of the Integrated Retirement and Pension System, with a single government regime named the Argentine Integrated Retirement and Pensions System (SIPA). Consequently, Consolidar A.F.J.P. S.A. ceased to manage the resources that were part of the individual capitalization accounts of affiliates and beneficiaries of the capitalization regime of the Integrated Retirement and Pension System, which were transferred to the Guarantee Fund for the Sustainability of the Argentine Retirement and Pension Regime as they were already invested, and the Argentine Social Security Office (ANSES) is now the sole and exclusive owner of those assets and rights. Likewise, on October 29, 2009, the ANSES issued Resolution No. 290/2009, whereby retirement and pension funds managers interested in reconverting their corporate purpose to manage the funds for voluntary contributions and deposits held by participants in their capitalization accounts had 30 business days to express their intention to that end. On December 28, 2009, based on the foregoing and taking into consideration that it is impossible for Consolidar A.F.J.P. S.A. to comply with the corporate purpose for which it was incorporated, it was resolved, at a Unanimous General and Extraordinary Shareholders Meeting to approve the dissolution and subsequent liquidation of that company effective as of December 31, 2009; |
| PSA Finance Argentina Compañía Financiera S.A.: a financial company incorporated under the laws of Argentina engaged in pledge loans; |
| Volkswagen Financial Services Compañía Financiera S.A. (VWFS): a financial company incorporated under the laws of Argentina engaged in pledge loans; and |
| Rombo Compañía Financiera S.A.: a financial company incorporated under the laws of Argentina engaged in pledge loans. |
Argentine Capital Markets Law No. 26831, enacted on December 28, 2012 and amended by Law No. 27440 dated May 11, 2018, subsequently regulated through General Resolution No. 622/13 and General Resolution No. 731/2018 issued by the CNV, establishes in Section 47 that agents have an obligation to register with the CNV, to act in the market in any of the capacities set forth in such law. On September 9 and 19, 2014, the Entity was registered as an Agent for the Custody of Mutual Funds under No. 4 and as a Comprehensive Clearing and Settlement Agent under No. 42. On August 7, 2014, the subsidiary BBVA Banco Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión was registered as a Mutual Fund Agent under No. 3. On September 19, 2014, the subsidiary BBVA Francés Valores S.A. was registered as a comprehensive Settlement, Clearing and Trading Agent under No. 41.
Part of the Entitys stock capital is publicly traded and has been registered with the Buenos Aires Stock Exchange, the New York Stock Exchange and the Madrid Stock Exchange.
- 11 - |
1.2. | Economic context |
The future development of Argentinas macroeconomic conditions is uncertain as a consequence of the political events arising from the election scenario, which resulted in declining prices and incremental volatility of Argentine financial assets, the establishment of restrictions to access the foreign exchange market, reconsidered expectations as to Argentinas economic growth level, and the likelihood of a potential restructuring of its sovereign debt.
In particular, and concerning financial assets, the Argentine Government issued Decree No. 596/2019 dated August 28, 2019, putting off the maturity of short-term securities (Letes, Lecap, Lecer, and Lelink).
As of September 30, 2019, the Group has holdings of Argentine securities subject to restructuring for an aggregate amount of 9,984,980. These securities are measured at fair value through other comprehensive income, and were recognized for a lower amount of 4,877,185 to reflect the decline in prices.
For the purposes of this calculation, the Entity considered the changes in prices occurring from August 1 through September 30, 2019.
On the other hand, on September 1, 2019, the Argentine Government published Executive Decree No. 609/2019 setting forth certain extraordinary and interim guidelines in connection with the export of goods and services, transfers overseas, and access to the foreign exchange market. In addition, the BCRA issued Communication A 6770, as amended, whereby, among other measures, it provided that up to and including December 31, 2019, the BCRAs prior consent will be required to access the foreign exchange market for the remittance of profits and dividends, settlement of services with foreign related companies, and the early payment of financial debts (principal or interest) over 3 business days before their due date.
Such Communication also set forth certain adjustments and changes to the overall net position in foreign currency.
Subsequent to the reporting period-end and until the date of these financial statements, the US dollar-peso exchange rate went from $ 57.56 to $ 59.76 per USD 1 (exchange rate under Communication A 3500).
The Groups management monitors the development of these events on an ongoing basis in order to define the potential actions to be taken and identify their impact on its financial position.
2. | Basis for the preparation of the Financial Statements |
These consolidated condensed interim financial statements for the nine-month period ended September 30, 2019 were prepared pursuant to the reporting framework set forth by the BCRA that requires supervised entities to submit financial statements prepared pursuant to the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), with the following exceptions (financial reporting framework set forth by the BCRA):
a) | application of the impairment model set forth in Section 5.5 Impairment of IFRS No. 9 Financial instruments until the fiscal years commencing on January 1, 2020. On December 5, 2018, the Entity filed with the BCRA the impairment model to be applied within the framework of IFRS No. 9 as from January 1, 2020. On March 29, 2019, the Entity filed quantification as of December 31, 2018 with the BCRA; |
- 12 - |
b) | application of International Accounting Standard No. 29 (IAS No. 29) Financial reporting in hyperinflationary economies, which shall be applicable for the fiscal years beginning on or after January 1, 2020, taking into consideration the provisions of Communication A 6651 issued by the BCRA (see Note 3.2); |
c) | the standards prescribed through Memorandum No. 6/2017 issued by the regulatory entity on May 29, 2017 regarding the treatment to be applied to uncertain tax positions. Had the IFRS treatment regarding uncertain tax positions been applied, liabilities would have decreased by 5,447,078 and 2,207,318 as of September 30, 2019 and December 31, 2018, respectively. Likewise, the income/(loss) for the nine-month period ended September 30, 2019 and 2018 would have increased by 3,239,760 and 1,021,518, respectively (Note 15.c), and |
d) | the instructions provided in Memorandum No. 7/2019 issued by the BCRA dated April 29, 2019, which set forth the accounting treatment to be applied to the remaining investment held by the Entity in Prisma Medios de Pago S.A. recorded under Investments in Equity Instruments as of September 30, 2019, (see Note 16). |
The exceptions described above imply a deviation from IFRS.
As this is an interim period, the Group has opted to present condensed information, pursuant to the guidelines of IAS No. 34 Interim Financial Information; therefore, not all the information required for the preparation of complete financial statements under IFRS is included. Therefore, these financial statements should be read jointly with the financial statements as of December 31, 2018. However, explanatory notes of events and transactions that are material for understanding any changes in the financial position as from December 31, 2018 are included.
Furthermore, the BCRA, through Communications A 6323 and 6324 set forth guidelines for the preparation and presentation of the financial statements of financial institutions for fiscal years beginning on or after January 1, 2018, including the additional reporting requirements as well as the information to be submitted as Exhibits.
These financial statements have been approved by the Board of Directors of Banco BBVA Argentina S.A. as of November 7, 2019.
3. | Functional and presentation currency and Unit of account |
3.1. | Functional and presentation currency |
The Group considers the Argentine Peso as the functional and presentation currency. All amounts are stated in thousands of pesos, unless otherwise stated.
3.2. | Unit of account |
IAS 29 Financial Reporting in Hyperinflationary Economies requires that the financial statements of an entity whose functional currency is that of a hyperinflationary economy be stated in the measuring unit current at the reporting period end. The standard sets out certain factors to be considered in order to conclude whether an economy qualifies as hyperinflationary, including the existence of a cumulative inflation rate over the last three years close to, or in excess of, 100%.
As a result of the increase in inflation that has been experienced in the first months of fiscal year 2018, there has been consensus on that the Argentine economy would qualify as a hyperinflationary economy according to the guidelines set forth under IAS No. 29. This consensus implies the need to apply IAS No. 29 in preparing financial statements under IFRS for annual and interim periods commencing on or after July 1, 2018.
- 13 - |
This standard sets forth that the financial statements of an entity with a functional currency of a high inflationary economy shall be restated in terms of the measuring unit current at the end of the reporting period, regardless of whether the financial statements are based on an historical cost or current cost approach. For such purposes, monetary items shall not be restated, non-monetary items shall be restated by applying the variation of a general price index between the date of acquisition or the date of revaluation and the date of the financial statements to be submitted. The components of shareholders equity, except accumulated income/(loss) and surplus of appreciation of assets, shall be restated by applying the general price index to the various items between the date of contribution, or between the date of acquisition for any other cause and the date of the financial statements to be submitted. Income and expenses for the period shall be adjusted by applying the general price index between the date those items were acquired and the date of the financial statements to be submitted.
Furthermore, the figures for the preceding fiscal years or periods presented for comparative purposes shall be restated.
As mentioned in Note 2, the application of the guidelines in IAS 29 is exempted and shall be effective for fiscal years beginning on or after January 1, 2020 as set forth by the BCRA through Communications A 6651 and A 6778 issued on February 22, 2019 and September 5, 2019, respectively, and therefore the Group does not and shall not restate its financial statements until the date referred to above
The interim financial statements as of September 30, 2019 of the following subsidiaries: BBVA Francés Valores S.A., BBVA Francés Asset Management S.A. and Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (Undergoing liquidation proceedings) were prepared in constant currency in accordance with the provisions of Resolution 107/18 of the Professional Council of Economic Sciences of the City of Buenos Aires (CPCECABA), which state the need to restate in constant currency financial statements for fiscal years ended on or after July 1, 2018, in accordance with JG Resolution issued by the Federation of Professional Councils of Economic Sciences (FACPCE)No. 539/18 dated September 29, 2018. For the purposes of the preparation of the consolidated condensed interim financial statements in accordance with the financial reporting framework set forth by the BCRA, the Entity has made the necessary adjustments to eliminate the inflation restatement in the consolidation process.
The Entitys Management estimates that the Group shareholders equity and income/(loss) may significantly differ if IAS No. 29 is applied.
The existence of such inflationary economic environment affects the Groups financial position and results of operations. Therefore, the impact of inflation may distort the financial information and should be taken into consideration in understanding the Groups information reported in these financial statements about its financial position, comprehensive income, changes in shareholders equity and cash flows.
Accordingly, as of September 30, 2019 and for the nine-month period then ended, the Entity estimated the impact of the restatement into constant currency on its financial statements, which would result in an increase of 9,584,000 in shareholders equity and a decrease of 15,687,000 in its total comprehensive income.
- 14 - |
4. | Accounting estimates and judgments |
Significant judgments made by the Board of Directors in the application of accounting policies as well as the premises and estimates on uncertainties as of September 30, 2019 were the same as those described in Note 4.1. and 4.2. to the consolidated financial statements as of December 31, 2018.
In addition, the Group applies the same methodologies for the assessment of fair values and the same criteria for the classification of fair value levels as those described in Note 4.3. to the consolidated financial statements as of December 31, 2018.
5. | Significant accounting policies |
Except as stated in Notes 5.1 and 5.2 below, the Group has consistently applied the accounting policies described in Note 5 to the consolidated financial statements as of December 31, 2018, in all the periods presented in these financial statements. The policy on the recognition of income tax in interim periods is described in Note 15.c).
5.1. | Leases |
As of January 1, 2019, the Group has adopted IFRS No. 16 Leases. Said standard supersedes IAS No. 17 Leases and was adopted by the BCRA through Communication A 6560.
IFRS No. 16 introduces a single lessee accounting model, requiring lessees to recognize the asset related to the Right of use of the leased asset and a Lease liability representing the obligation to make lease payments. The Entity has opted to apply the exceptions related to the recognition of short-term leases and leases where the underlying asset is of low value.
As to the lessor´s recognition, IFRS No. 16 substantially keeps the requirements of IAS No. 17. Therefore, lessors continue classifying leases as operating or finance, and each of them is recognized differently.
The Group has opted to apply the modified retrospective method whereby the Right of use and the Lease liability determined as of January 1, 2019 are recognized. The Lease liability is determined as the current amount of future payments agreed, discounted at the Groups incremental borrowing rate as of such date. Besides, the Group has opted to measure the Right of use as of the transition date for an amount equivalent to the Lease liability as of such date. Accordingly, the transition to IFRS 16 did not result in an adjustment to Accumulated income/(loss) as of the transition date.
As a result of this change, the Group recognizes the Right of use as an asset and the Lease liability as a liability, mainly from leases of offices in its branch network (Note 29).
Below is a detail of the changes in the accounting policies:
a) | Contracts that contain a lease |
At the beginning of the contract, the Group evaluates whether a contract is or contains a lease. A contract is or contains a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
- 15 - |
b) | Leases under which the Group acts as lessor |
When the Group acts as lessor, at the beginning of the contract the Group determines whether it is a finance or an operating lease.
To classify each lease, the Group evaluates if it transfers substantially all the risks and rewards incidental to the ownership of the leased asset. If so, it classifies it as a finance lease, otherwise, it is an operating lease.
In a finance lease, the leased asset is derecognized and recognized as a receivable in an amount equivalent to the net investment in the lease under Loans and other financing.
Collections received under a finance lease are broken down into interest and the reduction of the net investment in the lease. Interest is recognized over the lease term applying an effective interest rate. Contingent leases are not considered in determining the net investment in the lease.
c) | Leases under which the Group acts as lessee |
The Group recognizes the Right of use of the leased asset and the Lease liability at the beginning of the contract. The Right of use is initially measured at cost, which includes the initial amount of the Lease liability adjusted for any lease payments made before the beginning of the contract, plus initial direct costs incurred and an estimate of the costs for dismantling or restoring the underlying asset, less any incentives received.
The Right of use of the leased asset is then depreciated on a straight-line basis from the beginning of the contract to the expiration of the lease term.
The Lease liability is initially measured at the present value of the lease payments that were not paid at the beginning of the contract, discounted using the Groups incremental borrowing rate.
Lease payments included in the measurement of the Lease liability include the following items:
| Fixed payments, including payments that are not substantially fixed. |
| Variable payments, which depends on a rate or index, initially measured by applying the rate or index as of the commencement date. |
| Any amounts expected to be paid as guaranteed residual value. |
| The exercise price of call options, if it is reasonably certain that they will be exercised. |
| Any amounts expected to be paid for the renewal periods if it is reasonably certain that the renewal options will be exercised. |
| Any penalties for early termination, if it is reasonably certain that the contract will be early terminated. |
The Lease liability is measured at amortized cost, using the effective interest rate method. It is remeasured when there is a change in future lease payments due to a change in the rate or index, in the amounts that the Group is expected to pay as guaranteed residual value or if the Group changes the evaluation as regards whether it will exercise a call, renewal or early termination option.
- 16 - |
When the Lease liability is remeasured, the relevant adjustment is recognized in the Right of use of the leased asset.
5.2. | Investments in equity instruments |
By virtue of the partial sale of the shareholding in Prisma Medios de Pago S.A. as explained in Note 16, the remaining stake has been measured at fair value through profit or loss on the basis of the valuation reports issued by independent appraisers, net of the valuation adjustment mandated by the BCRA in its Memorandum No. 7/2019. The accounting criteria applied as required above, imply a deviation from IFRS.
5.3. | Comparative information |
The Consolidated Statement of Financial Position as of September 30, 2019 is presented on a comparative basis to the previous year-end, while the consolidated statements of profit or loss, other comprehensive income, changes in shareholders equity, and cash flows, and their related notes for the nine-month period ended September 30, 2019, are presented on a comparative basis to the balances for the same period of the previous year.
For comparative purposes, certain reclassifications were made to the information presented for the previous year/period, in order to present them on a consistent basis. The changes of comparative information do not imply changes in any decisions taken on the basis thereof.
6. | IFRS issued but not yet effective for Financial Institutions |
Pursuant to Communication A 6114 issued by the BCRA, as the new IFRS are approved, or the current IFRSs are modified or repealed and, once such changes are adopted by the FACPCE, the BCRA shall issue a statement of its approval for financial institutions. In general, early adoption of an IFRS shall not be allowed, unless specifically admitted when adopted.
a) | IFRS No. 9 Financial Instruments - Impairment |
Regarding Section 5.5 Impairment of IFRS No. 9, Communication A 6430 issued by the BCRA established its application as from fiscal periods beginning on or after January 1, 2020. On the subject, the Entity submitted to the BCRA a description of the expected losses calculation model under that standard on December 5, 2018 and made the quantification of its impact and submitted such information to the regulatory entity on March 29, 2019, as required by Communication A 6590 issued by the BCRA.
b) | IAS No. 29 Financial reporting in hyperinflationary economies |
In addition, Communications A 6651 and A 6778 issued by the BCRA on February 22, 2019 and September 5, 2019, respectively, set forth the application of a the restatement in constant currency set forth by IAS 29 in hyperinflationary economies for fiscal periods beginning on or after January 1, 2020. As stated in Note 2 to these financial statements, the Entity estimates that the effect of adopting this regulation has a significant impact on its statements of financial position, income and other comprehensive income, changes in shareholders equity and cash flows as of September 30, 2019.
- 17 - |
7. | Cash and deposits in banks |
Breakdown in the Consolidated Condensed Statement of Financial Position and the balance of cash and cash equivalents computed for the purposes of the preparation of the Consolidated Condensed Statement of Cash Flows is as follows:
09.30.19 | 12.31.18 | |||||||
Cash |
28,259,398 | 15,570,831 | ||||||
BCRA - Current account |
59,163,499 | 75,503,977 | ||||||
Balances with other local and foreign institutions |
6,746,439 | 8,030,653 | ||||||
|
|
|
|
|||||
TOTAL |
94,169,336 | 99,105,461 | ||||||
|
|
|
|
8. | Debt securities at fair value through profit or loss |
09.30.19 | 12.31.18 | |||||||
Government securities |
162,489 | 952,798 | ||||||
Private securities - Corporate bonds |
48,103 | 167,913 | ||||||
BCRA Bills |
4,958,653 | 6,387,388 | ||||||
|
|
|
|
|||||
TOTAL |
5,169,245 | 7,508,099 | ||||||
|
|
|
|
9. | Derivatives |
In the ordinary course of business, the Bank carried out foreign currency forward transactions with daily or upon-maturity settlement of differences, with no delivery of the underlying asset and interest rate swap transactions. These transactions do not qualify as hedging pursuant to IFRS No. 9 - Financial Instruments.
The aforementioned instruments are measured at fair value and were recognized in the Consolidated Condensed Statement of Financial Position in the item Derivative instruments Changes in fair values were recognized in the Consolidated Condensed Statement of Profit or Loss in Net income/(loss) from measurement of financial instruments at fair value through profit or loss.
On the other hand, PSA Finance Argentina Compañía Financiera S.A. and Rombo Compañía Financiera S.A. entered into interest rate swaps with the Bank and with third parties, which are recognized by the subsidiaries as cash flow hedge. The actual portion of the cumulative change in the fair value of swaps pending subsequent recognition in income is included in other comprehensive income under the caption Profits or losses from hedge instruments - Cash flow hedge. The balance sheet, profit & loss, and comprehensive income balances related to swaps entered into by and between the Bank and its subsidiaries were eliminated during the consolidation process.
Breakdown is as follows:
Assets
09.30.19 | 12.31.18 | |||||||
Debit balances linked to foreign currency forwards pending settlement in pesos |
1,747,042 | 591,418 | ||||||
Debit balances linked to interest rate swaps |
496,227 | | ||||||
|
|
|
|
|||||
TOTAL |
2,243,269 | 591,418 | ||||||
|
|
|
|
- 18 - |
Liabilities
09.30.19 | 12.31.18 | |||||||
Credit balances linked to foreign currency forwards pending settlement in pesos |
3,600,866 | 889,731 | ||||||
Credit balances linked to interest rate swaps |
421,955 | 487,528 | ||||||
|
|
|
|
|||||
TOTAL |
4,022,821 | 1,377,259 | ||||||
|
|
|
|
The notional amounts of the forward transactions and foreign currency forwards, stated in US Dollars (US$) and in Euros as applicable, as well as the base value of interest rate swaps are reported below:
09.30.19 | 12.31.18 | |||||||
Foreign Currency Forwards |
||||||||
Foreign currency forward purchases - US$ |
844,045 | 620,651 | ||||||
Foreign currency forward purchases - Euros |
128 | | ||||||
Foreign currency forward sales - US$ |
868,655 | 760,615 | ||||||
Foreign currency forward sales - Euros |
4,287 | 5,463 | ||||||
Interest rate swaps |
||||||||
Fixed rate for floating rate |
2,017,656 | 3,261,154 | ||||||
Floating rate for fixed rate |
618,198 | |
10. | Repo transactions |
Breakdown is as follows:
Reverse repurchase transactions
09.30.19 | 12.31.18 | |||||||
Amounts receivable for reverse repurchase transactions of government securities and BCRA bills with financial institutions |
| 154,753 | ||||||
Amounts receivable for reverse repurchase transactions of BCRA bills with the BCRA |
6,665,009 | | ||||||
Amounts receivable for reverse repurchase transactions of government securities with non-financial institutions (1) |
| 12,706,363 | ||||||
|
|
|
|
|||||
TOTAL |
6,665,009 | 12,861,116 | ||||||
|
|
|
|
(1) | For two repo transactions of Argentine Bonds in US Dollars 2024 carried out with Argentina for an original total of US$ 50,000,000 and US$ 300,000,000, which were cancelled on March 1 and August 20, 2019, respectively. |
Repurchase transactions
09.30.19 | 12.31.18 | |||||||
Amounts payable for repurchase transactions of BCRA bills |
| 14,321 | ||||||
|
|
|
|
|||||
TOTAL |
| 14,321 | ||||||
|
|
|
|
- 19 - |
11. | Other financial assets |
Breakdown of other financial assets is as follows:
09.30.19 | 12.31.18 | |||||||
Measured at amortized cost |
||||||||
Financial debtors from spot transactions pending settlement |
4,035,152 | 6,842,344 | ||||||
Non-financial debtors from spot transactions pending settlement |
148,382 | 91,052 | ||||||
Receivables from sale of ownership interest in Prisma Medios de Pago S.A. (Note 16.1) |
1,673,124 | | ||||||
Other receivables |
1,589,201 | 1,837,527 | ||||||
Other |
228,709 | 552,220 | ||||||
|
|
|
|
|||||
7,674,568 | 9,323,143 | |||||||
|
|
|
|
|||||
Measured at fair value through profit or loss |
714,648 | 408,704 | ||||||
|
|
|
|
|||||
714,648 | 408,704 | |||||||
|
|
|
|
|||||
Allowance for loan losses (Note 16 and Exhibit R) |
(1,932,630 | ) | (84,321 | ) | ||||
|
|
|
|
|||||
TOTAL |
6,456,586 | 9,647,526 | ||||||
|
|
|
|
12. | Loans and other financing |
The Group keeps loans and other financing under a business model for the purpose of collecting contractual cash flows. Therefore, it measures loans and other financing at amortized cost. Below is a breakdown of the related balance:
09.30.19 | 12.31.18 | |||||||
Non-financial government sector |
503 | 207 | ||||||
BCRA |
| 383 | ||||||
Other financial institutions |
2,789,936 | 9,669,330 | ||||||
Overdrafts |
17,586,469 | 11,789,313 | ||||||
Discounted instruments |
10,828,620 | 11,310,587 | ||||||
Unsecured instruments |
10,894,848 | 12,739,330 | ||||||
Instruments purchased |
286,000 | 264,434 | ||||||
Mortgage loans |
12,817,264 | 10,104,731 | ||||||
Pledge loans |
16,514,773 | 1,650,222 | ||||||
Consumer loans |
23,836,871 | 23,560,930 | ||||||
Credit Cards |
53,356,217 | 41,869,188 | ||||||
Loans for the prefinancing and financing of exports |
41,252,085 | 45,088,576 | ||||||
Receivables from financial leases |
2,052,397 | 2,377,747 | ||||||
Loans to personnel |
1,538,375 | 1,203,780 | ||||||
Other financing |
20,881,729 | 14,051,828 | ||||||
|
|
|
|
|||||
214,636,087 | 185,680,586 | |||||||
|
|
|
|
|||||
Allowance for loan losses (Exhibit R) |
(7,464,332 | ) | (4,258,239 | ) | ||||
|
|
|
|
|||||
TOTAL |
207,171,755 | 181,422,347 | ||||||
|
|
|
|
- 20 - |
Finance leases
The Group as lessor entered into finance lease agreements related to vehicles and machinery and equipment.
The following table shows the total gross investment of the finance leases (leasing) and the current value of the minimum payments to be received thereunder:
09.30.19 | 12.31.18 | |||||||||||||||
Term | Total investment |
Current value of minimum payments |
Total investment |
Current value of minimum payments |
||||||||||||
Up to 1 year |
974,238 | 970,811 | 977,272 | 972,981 | ||||||||||||
From 1 to 5 years |
1,085,129 | 1,081,586 | 1,414,800 | 1,404,766 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
TOTAL |
2,059,367 | 2,052,397 | 2,392,072 | 2,377,747 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Principal |
2,033,380 | 2,343,180 | ||||||||||||||
Accrued interest |
19,017 | 34,567 | ||||||||||||||
|
|
|
|
|||||||||||||
TOTAL |
2,052,397 | 2,377,747 | ||||||||||||||
|
|
|
|
Classification of loans and other financing according to credit performance (determined as per the criteria set forth by the BCRA) and guarantees received are presented in Exhibit B. The information on the concentration of loans and other financing is presented in Exhibit C. The reconciliation of the information included in that Exhibit with the carrying amounts is shown below:
09.30.19 | 12.31.18 | |||||||
Total Exhibits B and C |
218,619,974 | 187,080,255 | ||||||
Plus: |
||||||||
BCRA |
| 383 | ||||||
Loans to personnel |
1,538,375 | 1,203,780 | ||||||
Less: |
||||||||
Allowances for loan losses (Exhibit R) |
(7,464,332 | ) | (4,258,239 | ) | ||||
Adjustments for effective interest rate |
(2,481,778 | ) | (767,474 | ) | ||||
Corporate bonds |
(83,174 | ) | (123,275 | ) | ||||
Loan commitments |
(2,957,310 | ) | (1,713,083 | ) | ||||
|
|
|
|
|||||
Total loans and other financing |
207,171,755 | 181,422,347 | ||||||
|
|
|
|
As of September 30, 2019 and December 31, 2018, the Group holds the following contingent transactions booked in off-balance sheet accounts according to the financial reporting framework set forth by the BCRA:
09.30.19 | 12.31.18 | |||||||
Overdrafts and receivables agreed not used |
841,049 | 531,590 | ||||||
Guarantees granted |
764,563 | 578,092 | ||||||
Liabilities related to foreign trade transactions |
573,628 | 141,321 | ||||||
Secured loans |
778,070 | 462,080 | ||||||
|
|
|
|
|||||
2,957,310 | 1,713,083 | |||||||
|
|
|
|
Risks related to the aforementioned contingent transactions are evaluated and controlled in the framework of the Groups credit risks policy.
- 21 - |
13. | Other debt securities |
13.1 Financial assets measured at amortized cost
09.30.19 | 12.31.18 | |||||||
Corporate bonds in arrears |
136 | 136 | ||||||
|
|
|
|
|||||
136 | 136 | |||||||
|
|
|
|
|||||
Allowance for loan losses - Private securities (Exhibit R) |
(136 | ) | (136 | ) | ||||
|
|
|
|
|||||
TOTAL |
| | ||||||
|
|
|
|
13.2 Financial assets measured at fair value through other comprehensive income
09.30.19 | 12.31.18 | |||||||
Government securities |
14,665,715 | 9,815,621 | ||||||
BCRA Liquidity Bills |
48,716,317 | 13,815,040 | ||||||
Private securities - Corporate bonds |
58,658 | 113,148 | ||||||
|
|
|
|
|||||
63,440,690 | 23,743,809 | |||||||
|
|
|
|
|||||
Allowance for loan losses - Private securities (Exhibit R) |
(587 | ) | (1,178 | ) | ||||
|
|
|
|
|||||
TOTAL |
63,440,103 | 23,742,631 | ||||||
|
|
|
|
14. | Financial assets pledged as collateral |
The breakdown of the financial assets pledged as collateral as of September 30, 2019 and December 31, 2018 is included below:
09.30.19 | 12.31.18 | |||||||||||
BCRA - Special guarantee accounts (Note 50) |
(1 | ) | 2,257,787 | 1,238,252 | ||||||||
Guarantee Trust - BCRA Bills at fair value through OCI |
(2 | ) | 2,477,377 | 1,061,766 | ||||||||
Guarantee Trust - Pesos |
(2 | ) | 694,597 | 14,260 | ||||||||
Deposits as collateral |
(3 | ) | 2,871,981 | 2,372,751 | ||||||||
For repo transactions - Government securities at fair value |
(4 | ) | | 16,035 | ||||||||
|
|
|
|
|||||||||
TOTAL |
8,301,742 | 4,703,064 | ||||||||||
|
|
|
|
(1) | Special guarantee current accounts opened at the BCRA for the transactions related to the automated clearing houses and other similar entities. |
(2) | Set up as collateral to operate with ROFEX and MAE on foreign currency forward transactions and futures contracts. The trust fund consists of pesos and monetary regulation instruments issued by the BCRA. |
(3) | Deposits pledged as collateral for activities related to credit card transactions in the country and abroad, with leases and futures contracts. |
(4) | It corresponds to repo transactions (Note 10). |
- 22 - |
15. | Income Tax: |
a) | Current income tax assets |
09.30.19 | 12.31.18 | |||||||
Advances |
385 | 385 | ||||||
|
|
|
|
|||||
385 | 385 | |||||||
|
|
|
|
b) | Current income tax liabilities |
09.30.19 | 12.31.18 | |||||||
Income tax provision (1) |
5,966,940 | 4,429,343 | ||||||
Advances |
(719,777 | ) | (738,645 | ) | ||||
Collections and withholdings |
(6,792 | ) | (14,254 | ) | ||||
|
|
|
|
|||||
5,240,371 | 3,676,444 | |||||||
|
|
|
|
(1) | The balance as of September 30, 2019 includes a reduction for 3,239,760 relating to the declaratory action with respect to the application of the tax inflation adjustment, while as of December 31, 2018, such reduction amounted to 1,021,518. |
c) | Income tax expense |
Breakdown of income tax expense:
09.30.19 | 09.30.18 | |||||||
Current tax (1) |
5,780,846 | 3,141,014 | ||||||
Deferred tax (1) |
(1,684,420 | ) | (479,965 | ) | ||||
|
|
|
|
|||||
4,096,426 | 2,661,049 | |||||||
|
|
|
|
(1) | The difference between the current provision and between the changes in assets and liabilities due to deferred taxes and the income tax expense is attributable to the fact that, as mentioned in Note 1, effective since July 1, 2019 the Bank has taken control over PSA Finance Argentina Compañía Financiera S.A., Volkswagen Financial Services Compañía Financiera S.A., and Rombo Compañía Financiera S.A. |
Pursuant to IAS No. 34, income tax is recognized in interim periods over the best estimate of the weighted average tax rate expected by the Entity for the fiscal year.
Law No. 27468 amended the transition rules set by Law No. 27430 regarding the application of the inflation adjustment for tax purposes under the Income Tax Law, establishing that such adjustment will be applicable for fiscal years commencing on and after January 1, 2018, provided the changes in the Consumer Price Index (CPI), calculated from the beginning to the end of the fiscal year, are in excess of fifty five per cent (55%) during the first fiscal year, thirty per cent (30%) during the second fiscal year, and fifteen per cent (15%) during the third fiscal year. One third of the resulting inflation adjustment, whether positive or negative, will be charged during that fiscal year, with the remaining two thirds being chargeable, in equal parts, over the two immediately following fiscal years.
- 23 - |
Considering that, as of the date of these interim financial statements, the changes in the CPI have surpassed the 30% limit required for the second year, the Entitys management has considered the effects of inflation and has included such estimate in the provision for income tax.
The effect of the deferral of the two thirds of the gain (loss) on net monetary position as of September 30, 2019 was recognized as a deferred tax asset.
The Groups effective rate for the nine-month period ended September 30, 2019 was 15%, while for the nine-month period ended September 30, 2018, it was 28%.
| Income tax Tax inflation adjustment. Fiscal years 2016, 2017 and 2018. |
On May 10, 2017, May 10, 2018 and May 13, 2019, and based on related case law, the Entity approved the filing of actions for declaratory judgment of unconstitutionality of Section 39 of Law 24073, Section 4 of Law 25561, Section 5 of Decree No. 214/02 issued by the Argentine Executive, Law 27468 and any other regulation whereby the inflation adjustment mechanism provided for under Law 20628, as amended, is considered not applicable due to the confiscatory effect on the specific case, for fiscal years 2016, 2017 and 2018. Consequently, the Entity filed its Income Tax Returns for those fiscal years taking into consideration the effect of those restatement mechanisms.
The net impact of this measure is an adjustment to the Income Tax assessed for the fiscal year ended December 31, 2016 in the amount of 1,185,800 while during the fiscal year ended December 31, 2017 the Income Tax adjustment amounted to 1,021,518, and during the fiscal year ended December 31, 2018, it amounted to 3,239,760.
Through Memorandum No. 6/2017 dated May 29, 2017, the BCRA, without resolving on the decisions adopted by the authorities of the Entity or the right of the Entity regarding the suit filed, in its capacity as issuer of accounting standards, requested the Entity to record a contingent provision included in Liabilities in the amount equivalent to income recorded, as it considers that a reassessment of the income tax by applying the inflation adjustment is not addressed by the BCRA regulations.
In response to this Memorandum, the Entity filed the related answer and confirmed its position by providing the documentation supporting the referred recording. Notwithstanding the foregoing, the Entity recorded the requested provision in the Provisions account under liabilities and in Other operating expenses in the Statement of Profit or Loss, as specifically pursuant to the accounting standards prescribed by the regulator for this case.
As a result of the assessment made and based on the opinion of its legal and tax advisors, the Entity considers that it is more likely than not for the Entity to obtain a final favorable judgment supporting the idea that this periods income tax shall be assessed including the tax inflation adjustment, based on the confiscatory nature of the rate that would result from not applying said adjustment in the fiscal years ended December 31, 2018, 2017 and 2016.
Therefore, the recording of the contingent provision required by the BCRA results in a departure from IFRS, as stated in Note 2.
| Income tax Requests for recovery of payments. Fiscal years 2013, 2014 and 2015. |
- 24 - |
Regarding fiscal years 2013, 2014 and 2015, the Entity assessed income tax without applying the tax inflation adjustment, consequently a higher tax was paid in the amounts of 264,257, 647,945 and 555,002 for those periods.
Based on the grounds stated above, on November 19, 2015, the petition for recovery of the payments made was filed for periods 2013 and 2014, and the related complaint was filed on September 23, 2016 for both periods, given that no answer to the petition above was received.
In turn, on April 4, 2017, a petition for recovery of the payments made for the higher amount of tax paid for fiscal year 2015 was filed. Likewise, on December 29, 2017, the related complaint was filed for this fiscal year.
As of the date of these financial statements, the tax authorities have not issued a resolution regarding the claims filed.
Pursuant to the financial reporting framework set forth by the BCRA, the Entity does not record assets in relation to contingent assets derived from the claims filed.
16. | Investments in equity instruments |
Investments in equity instruments for which the Group has no control, joint control or a significant influence are measured at fair value through profit or loss and at fair value through other comprehensive income. Breakdown is as follows:
16.1 | Investments in equity instruments through profit or loss |
09.30.19 | 12.31.18 | |||||||
Mercado de Valores de Buenos Aires S.A. |
29,929 | 24,722 | ||||||
BYMA-Bolsas y Mercados Argentinos S.A. |
55,750 | 94,600 | ||||||
Prisma Medios de Pago S.A. (1) |
1,765,000 | | ||||||
|
|
|
|
|||||
TOTAL |
1,850,679 | 119,322 | ||||||
|
|
|
|
(1) | This balance corresponds to the amount of 2,252,139 shares held in Prisma Medios de Pago S.A., representing 5.44% of such companys capital stock. Said investment was recorded as an asset held for sale as of December 31, 2018 pursuant to the divestiture agreement dated November 2017 and within the framework of IFRS No. 5. |
On February 1, 2019, the transfer of 2,344,064 registered, common shares with a nominal value of $ 1 each and one vote per share, owned by the Bank in Prisma Medios de Pago S.A. was made for the benefit AI Zenith (Netherlands) B.V. (company related to Advent International Global Private Equity).
In accordance with the provisions of the Offer for the purchase of those shares by AI Zenith (Netherlands) B.V., and accepted by the Bank, the total estimated price adjusted was USD 78,265,273, out of which, on February 1, 2019, the Bank received USD 46,457,210, and the unpaid balance shall be deferred over the following 5 (five) years and settle as follows; (i) 30% of that amount shall be paid in pesos, adjusted by CER (UVA) at an annual nominal rate of 15% and (ii) 70% in US Dollars at an annual nominal rate of 10 %. Pursuant to the provisions and allowance rules issued by the BCRA, a provision of $1,768,360 was recorded as of September 30, 2019.
- 25 - |
On July 22, 2019, the Entity completed the assessment of the selling price of the shares. Such price amounts to USD 76,947,895.33. The gap between the final price and the estimated price was discounted from the outstanding balance; therefore, the Bank did not have to return the funds it had received.
The other payment conditions have remained unaltered.
As a consequence of this transaction, a profit of 2,644,937 is recognized in Other operating income as of September 30, 2019 (Note 38).
16.2 | Investments in equity instruments through other comprehensive income |
09.30.19 | 12.31.18 | |||||||
Banco Latinoaméricano de Exportaciones S.A. |
23,657 | 9,516 | ||||||
Other |
954 | 700 | ||||||
|
|
|
|
|||||
TOTAL |
24,611 | 10,216 | ||||||
|
|
|
|
17. | Investments in Associates |
09.30.19 | 12.31.18 | |||||||
Volkswagen Financial Services Compañía Financiera S.A. (1) |
| 633,362 | ||||||
PSA Finance Arg. Compañía Financiera S.A. (1) |
| 434,494 | ||||||
Rombo Compañía Financiera S.A. (1) |
| 514,779 | ||||||
BBVA Consolidar Seguros S.A. |
215,963 | 135,148 | ||||||
Interbanking S.A. |
54,424 | 33,864 | ||||||
Other |
1,171 | 675 | ||||||
|
|
|
|
|||||
TOTAL |
271,558 | 1,752,322 | ||||||
|
|
|
|
(1) | As from July 1, 2019, the Bank has taken control over the company as mentioned in Note 1. |
18. | Property and equipment |
09.30.19 | 12.31.18 | |||||||
Real estate |
6,730,347 | 6,820,968 | ||||||
Right of use of leased properties (See Note 5.1 and 29) |
1,676,491 | | ||||||
Furniture and facilities |
1,806,743 | 1,561,128 | ||||||
Machinery and equipment |
1,130,972 | 951,797 | ||||||
Automobiles |
17,043 | 12,704 | ||||||
Constructions in progress |
459,049 | 469,519 | ||||||
|
|
|
|
|||||
TOTAL |
11,820,645 | 9,816,116 | ||||||
|
|
|
|
19. | Intangible Assets |
09.30.19 | 12.31.18 | |||||||
Licenses - Software |
640,869 | 510,912 | ||||||
|
|
|
|
|||||
TOTAL |
640,869 | 510,912 | ||||||
|
|
|
|
- 26 - |
20. | Other non-financial assets |
09.30.19 | 12.31.18 | |||||||
Investment properties |
65,291 | 66,368 | ||||||
Tax advances |
553,777 | 388,733 | ||||||
Prepayments |
1,396,372 | 1,160,403 | ||||||
Advances to suppliers of goods |
100,333 | 152,848 | ||||||
Other miscellaneous assets |
258,988 | 327,504 | ||||||
Advances to personnel |
3,875 | 8,155 | ||||||
Assets acquired as security for loans |
3,025 | 2,758 | ||||||
Other |
9,281 | 29,090 | ||||||
|
|
|
|
|||||
TOTAL |
2,390,942 | 2,135,859 | ||||||
|
|
|
|
21. | Non-current assets held for sale |
On December 19, 2018, the Board of Directors agreed to a plan to sell a group of real property assets located in Argentina. Therefore, these assets, the value of which, as of September 30, 2019 and December 31, 2018 amounts to 59,776, were classified as Non-current assets held for sale, after the efforts to sell that group of assets began.
During November 2017, the Board of Directors agreed to a plan to sell its ownership interest in Prisma Medios de Pago S.A., and therefore the accounting balance thereof was presented as Non-current assets held for sale, in the amount of 433,597 as of December 31, 2018. The sale of 51% of the Banks shareholding in such company was completed on February 1, 2019. As of September 30, 2019, the remaining ownership interest in this company was recorded under Investments in equity instruments (Note 16).
22. | Deposits |
The information on concentration of deposits is disclosed in Exhibit H.
Breakdown is as follows:
09.30.19 | 12.31.18 | |||||||
Non-financial government sector |
2,642,132 | 1,544,761 | ||||||
Financial sector |
313,529 | 294,122 | ||||||
Non-financial private sector and residents abroad |
271,531,303 | 257,670,178 | ||||||
Checking accounts |
42,414,969 | 28,574,950 | ||||||
Savings accounts |
137,361,388 | 140,956,173 | ||||||
Time deposits |
86,503,779 | 83,804,407 | ||||||
Investment accounts |
62 | | ||||||
Other |
5,251,105 | 4,334,648 | ||||||
|
|
|
|
|||||
TOTAL |
274,486,964 | 259,509,061 | ||||||
|
|
|
|
23. | Liabilities at fair value through profit or loss |
09.30.19 | 12.31.18 | |||||||
Obligations from securities transactions |
43,168 | 692,270 | ||||||
|
|
|
|
|||||
TOTAL |
43,168 | 692,270 | ||||||
|
|
|
|
- 27 - |
24. | Other financial liabilities |
09.30.19 | 12.31.18 | |||||||
Obligations from financing of purchases |
10,248,489 | 13,105,616 | ||||||
Creditors from spot transactions pending settlement |
4,167,530 | 7,031,105 | ||||||
Collections and other transactions on behalf of third parties |
3,619,101 | 3,374,476 | ||||||
Liabilities from leases (Note 29) |
2,564,335 | | ||||||
Credit balance from spot and sale transactions pending settlement |
2,010,950 | | ||||||
Interest accrued payable |
1,126,051 | 89,774 | ||||||
Accrued commissions payable |
1,190 | 5,893 | ||||||
Payment orders pending accreditation |
4,259,704 | 1,069,953 | ||||||
Other |
3,611,715 | 3,512,575 | ||||||
|
|
|
|
|||||
TOTAL |
31,609,065 | 28,189,392 | ||||||
|
|
|
|
25. | Financing received from the BCRA and other financial institutions |
09.30.19 | 12.31.18 | |||||||
Foreign financial institutions |
4,712,454 | 5,517,517 | ||||||
Local financial institutions |
3,758,308 | | ||||||
BCRA |
10,710 | 10,008 | ||||||
|
|
|
|
|||||
TOTAL |
8,481,472 | 5,527,525 | ||||||
|
|
|
|
- 28 - |
26. | Corporate bonds issued |
Below is a detail of corporate bonds in force as of September 30, 2019 and December 31, 2018 of the Bank and its subsidiaries:
Detail |
Issuance date | Nominal value (in thousands of pesos) |
Maturity date | Rate |
Payment of interest |
Outstanding value as of 09.30.2019 |
Outstanding value as of 12.31.2018 |
|||||||||||||||||||||||||
Class 20 |
08.08.2016 | 292,500 | 08.08.2019 | Private Badlar + 3.23% annual nominal | Quarterly | | 289,000 | |||||||||||||||||||||||||
Class 22 |
11.18.2016 | 181,053 | 11.18.2019 | Private Badlar + 3.50% annual nominal | Quarterly | 171,053 | 181,053 | |||||||||||||||||||||||||
Class 23 |
12.27.2017 | 553,125 | 12.27.2019 | TM20 (*) + 3.20% annual nominal | Quarterly | 551,125 | 551,125 | |||||||||||||||||||||||||
Class 24 |
12.27.2017 | 546,500 | 12.27.2020 | Private Badlar + 4.25% annual nominal | Quarterly | 526,500 | 541,500 | |||||||||||||||||||||||||
Class 25 |
11.08.2018 | 784,334 | 11.08.2020 | UVA + 9.50% annual nominal | Quarterly | 1,138,621 | 856,473 | |||||||||||||||||||||||||
Class 26 |
02.28.2019 | 529,400 | 11.28.2019 | Fixed Rate 43% annual nominal | |
Upon maturity |
|
453,400 | | |||||||||||||||||||||||
Class 27 |
02.28.2019 | 1,090,000 | 08.28.2020 | Private Badlar + 6.25% annual nominal | Quarterly | 891,000 | | |||||||||||||||||||||||||
Classes 24-26-27 - PSA Finance Argentina |
(a) | 10.20.2017 | 1,187,333 | 02.03.2020 | Private Badlar + annual nominal / Fixed Rate | |
Quarterly /Upon maturity |
|
821,592 | (b | ) | |||||||||||||||||||||
Classes 2-4-5 Volkswagen Financial Services |
(a) | 12.07.2018 | 985,042 | 02.27.2021 | Private Badlar + annual nominal / UVA + annual nominal | Quarterly | 1,021,682 | (b | ) | |||||||||||||||||||||||
Classes 35-38-39 - 40-41-42-43-44-45 Rombo Compañía Financiera |
(a) | 08.19.2016 | 2,859,153 | 01.29.2022 | Private Badlar + % annual nominal / Fixed Rate | Quarterly | 2,527,522 | (b | ) | |||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||||
Consolidated total principal | 8,102,495 | 2,419,151 | ||||||||||||||||||||||||||||||
Consolidated interest accrued | 626,960 | 54,539 | ||||||||||||||||||||||||||||||
Issuance expenses | (1,770 | ) | | |||||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||||
Total consolidated principal and interest accrued | 8,727,685 | 2,473,690 | ||||||||||||||||||||||||||||||
|
|
|
|
(a) | For further details on the Classes issued; issue/maturity dates; rates; interest payments, see the Companys separate financial statements. |
(b) | The Entity acquired control of the companies as from July 1, 2019. See Note 1. |
Definitions:
TM20 RATE: is the single arithmetic mean of interest rates for time deposits for twenty million pesos or over, and from thirty to thirty five days.
BADLAR RATE: is the interest rate for time deposits over 1 (one) million pesos, for 30 to 35 days.
UVA RATE: is a measurement unit updated on a daily basis as per CER, according to the consumer price index.
- 29 - |
27. | Provisions |
09.30.19 | 12.31.18 | |||||||
For reassessment of income tax due to adjustment for inflation (Note 15.c)) |
5,447,078 | 2,207,318 | ||||||
Provisions for termination plans (Exhibit J) |
61,228 | 62,135 | ||||||
Provisions for reorganization (Exhibit J) |
35,319 | | ||||||
For administrative, disciplinary and criminal penalties (Note 55 and Exhibit J) |
5,000 | 5,000 | ||||||
Contingent commitments provisions (Exhibits J and R) |
837 | 1,483 | ||||||
Other contingencies |
2,107,755 | 1,344,787 | ||||||
|
|
|
|
|||||
TOTAL |
7,657,217 | 3,620,723 | ||||||
|
|
|
|
It includes the estimated amounts to pay highly likely liabilities which, in case of occurrence, would generate a loss for the Entity.
The breakdown and changes of provisions are included in Exhibit J. However, below is a brief description:
| Re-assessment of Income Tax due to the application of the inflation adjustment: it reflects the provision required by the BCRA through Memorandum No. 6/2017 dated May 29, 2017, as it was considered that the reassessment of the income tax by applying the inflation adjustment is not addressed by the current regulations. The Bank has answered the BCRA memorandum and evidenced the validity of the recognition timely made and has requested that it be reviewed. Notwithstanding the foregoing, the provision requested by the BCRA was set up. |
| Termination benefit plans: for certain terminated employees, the Bank bears the cost of private health care plans (total or partial) for a certain period after termination. The Bank does not bear any situations requiring medical assistance, but it only makes the related health care plan payments. |
| Provisions for reorganization: Consistent with the goal of further aligning the organizational structure with the corporate strategy during the current year, achieving efficiency gains and streamlining the decision-making process across all work teams. |
| Administrative, disciplinary and criminal penalties: administrative penalties initiated by the Financial Information Unit, even if there were court or administrative measures to suspend payment and regardless of the status of the proceedings regarding penalties. |
| Contingent commitments: it reflects the credit risk arising from the assessment of the degree of compliance of the beneficiaries of unused overdrafts, guarantees, sureties and other contingent commitments for the benefit of third parties on behalf of customers, and of their financial position and the counter guarantees supporting those transactions. |
| Other: it reflects the estimated amounts to pay tax claims, labor-related and commercial claims and miscellaneous complaints. |
In the opinion of the Groups Board of Directors and its legal advisors, there are no other significant effects other than those stated in these financial statements, the amounts and repayment terms of which have been recorded based on the actual value of those estimates, considering the probable date of their final resolution.
- 30 - |
28. | Other non-financial liabilities |
Breakdown is as follows:
09.30.19 | 12.31.18 | |||||||
Short-term personnel benefits |
3,709,075 | 2,538,893 | ||||||
Long-term personnel benefits |
207,105 | 180,757 | ||||||
Other collections and withholdings |
2,846,436 | 2,015,263 | ||||||
Social security payable |
52,823 | 68,967 | ||||||
Advances collected |
1,912,144 | 1,653,586 | ||||||
Miscellaneous creditors |
4,964,641 | 3,440,930 | ||||||
For contract liabilities |
304,269 | 189,140 | ||||||
Other taxes payables |
1,144,857 | 777,085 | ||||||
Other |
91,424 | 29,395 | ||||||
|
|
|
|
|||||
TOTAL |
15,232,774 | 10,894,016 | ||||||
|
|
|
|
29. | Leases |
The Group as lessee
Below is a detail of the amounts related to the rights of use under leases and lease liabilities in force as of September 30, 2019:
Rights of use under leases
Account |
Initial value as of 01.01.2019 |
Increases | Decreases | Amortization | Residual value as of 09.30.2019 |
|||||||||||||||||||||||||||||||
Accumulated as of 01.01.2019 |
Decreases | For the period |
Acquisition of control in subsidiaries (1) |
Accumulated at period end |
||||||||||||||||||||||||||||||||
Leased real property |
1,849,107 | 137,129 | | | | 305,039 | 4,706 | 309,745 | 1,676,491 |
(1) | On July 1, 2019, the Entity consolidated with Volkswagen Financial Services Compañía Financiera S.A., PSA Finance Argentina Compañía Financiera S.A. and Rombo Compañía Financiera S.A. as a result of the acquisition of control (See Note 1). |
Lease liabilities
Future minimum payments for lease agreements are as follows:
In foreign currency | In local currency | 09.30.19 | ||||||||||
Up to one year |
75,639 | 8,366 | 84,005 | |||||||||
From 1 to 5 years |
1,157,662 | 173,731 | 1,331,393 | |||||||||
More than 5 years |
1,127,184 | 21,753 | 1,148,937 | |||||||||
|
|
|||||||||||
2,564,335 | ||||||||||||
|
|
- 31 - |
Interest and exchange rate difference recognized in profit or loss
Other operating expenses |
||||
Interest on lease liabilities (Note 42) |
(184,725 | ) | ||
Exchange rate difference |
||||
Exchange rate difference for finance lease (loss) |
(826,715 | ) | ||
Other expenses |
||||
Leases (Notes 5.1 and 40) |
(569,417 | ) |
30. | Share Capital |
Breakdown is as follows:
Shares |
Share capital | |||||||||||||||||||||||
Class |
Quantity | Nominal value per share |
Votes per share |
Shares outstanding |
Pending issuance or distribution |
Paid-in (1) |
||||||||||||||||||
Common |
612,659,638 | 1 | 1 | 612,615 | 45 | 612,660 |
(1) | Registered with the Public Registry of Commerce. |
Banco BBVA Argentina S.A. is a corporation (sociedad anónima) incorporated under the laws of Argentina. The shareholders limit their liability to the shares subscribed and paid in, pursuant to the Argentine Companies Law (Law No. 19550). Therefore, and pursuant to Law No. 25738, it is reported that neither foreign capital majority shareholders nor local or foreign shareholders shall be liable in excess of the above mentioned capital contribution for obligations arising from transactions carried out by the financial institution.
The Shareholders Meeting held on June 13, 2017 approved the increase in share capital up to $ 145,000,000 (nominal value) by issuing 145,000,000 new registered, common shares with a nominal value of $ 1 each, one vote per share. The Board of Directors is granted the necessary authority to implement that capital increase and determine the issuance conditions.
On July 18, 2017, the issuance of 66,000,000 registered, common shares was approved, with a nominal value of $ 1 each, and a subscription price of USD 5.28 per share and USD 15.85 per each American Depositary Share (ADS), at the spot exchange rate published by the BCRA as of that date ($ 17.0267) for the purposes of paying the shares in pesos. On July 24, 2017, the shares subscribed were paid in.
Pursuant to the terms of the Shares Subscription Agreement, on July 26, 2017, International Underwriters opted to acquire 9,781,788 new shares (equivalent to 3,260,596 ADS) at the same issue price. On July 31, 2017, those shares were paid in, using the spot exchange rate stated.
The Entity applied the funds obtained from the global offer and the exercise of preemptive subscription rights to continue with its growth strategy in the Argentine financial system.
- 32 - |
31. | Interest income |
09.30.19 | 09.30.18 | |||||||
Interest from government securities |
22,912,810 | 4,232,063 | ||||||
Interest from credit card loans |
12,280,629 | 4,952,684 | ||||||
Interest from instruments |
6,154,336 | 3,470,030 | ||||||
Interest from consumer loans |
5,436,091 | 4,513,028 | ||||||
Acquisition Value Unit (UVA) clause adjustment |
5,740,273 | 1,760,389 | ||||||
Interest from overdrafts |
5,392,043 | 3,956,923 | ||||||
Interest from other loans |
3,328,078 | 2,359,349 | ||||||
Interest from loans to the financial sector |
1,751,278 | 1,049,728 | ||||||
Interest from loans for the prefinancing and financing of exports |
2,144,774 | 986,599 | ||||||
Premium from reverse repurchase agreements |
950,344 | 421,870 | ||||||
Interest from mortgage loans |
830,811 | 520,112 | ||||||
Interest from finance leases |
359,730 | 388,673 | ||||||
Interest from pledge loans |
1,137,099 | 1,014,742 | ||||||
Stabilization Coefficient (CER) clause adjustment |
41,592 | 63,245 | ||||||
Interest from private securities |
6,811 | 28,627 | ||||||
Other financial income |
4,702 | 13 | ||||||
|
|
|
|
|||||
TOTAL |
68,471,401 | 29,718,075 | ||||||
|
|
|
|
32. | Interest expenses |
09.30.19 | 09.30.18 | |||||||
Time deposits |
23,755,432 | 8,281,445 | ||||||
Checking accounts deposits |
1,831,719 | 1,845,594 | ||||||
Other liabilities from financial transactions |
2,844,703 | 906,331 | ||||||
Acquisition Value Unit (UVA) clause adjustments |
974,368 | 636,895 | ||||||
Interfinancial loans received |
510,906 | 229,629 | ||||||
Savings accounts deposits |
131,031 | 64,338 | ||||||
Premium for reverse repurchase agreements |
2,075 | 82,637 | ||||||
Other |
21,854 | 4,719 | ||||||
|
|
|
|
|||||
TOTAL |
30,072,088 | 12,051,588 | ||||||
|
|
|
|
33. | Commission income |
09.30.19 | 09.30.18 | |||||||
Linked to liabilities |
6,679,260 | 4,192,247 | ||||||
From credit cards |
4,200,662 | 3,096,881 | ||||||
Linked to loans |
629,371 | 442,380 | ||||||
From insurance |
667,205 | 511,225 | ||||||
From foreign trade and foreign currency transactions |
632,967 | 323,410 | ||||||
Linked to securities |
72,286 | 103,069 | ||||||
From guarantees granted |
1,135 | 2,108 | ||||||
|
|
|
|
|||||
TOTAL |
12,882,886 | 8,671,320 | ||||||
|
|
|
|
- 33 - |
34. | Commission expenses |
09.30.19 | 09.30.18 | |||||||
From credit and debit cards |
5,975,221 | 3,737,648 | ||||||
From promotions |
55,024 | 176,634 | ||||||
From payment of salaries |
549,144 | 201,701 | ||||||
From digital sale services |
386,774 | 294,680 | ||||||
From foreign trade transactions |
220,925 | 97,807 | ||||||
Linked to transactions with securities |
2,032 | 1,022 | ||||||
Other commission expenses |
690,498 | 358,875 | ||||||
|
|
|
|
|||||
TOTAL |
7,879,618 | 4,868,367 | ||||||
|
|
|
|
35. | Net income / (loss) from financial instruments carried at fair value through profit or loss |
09.30.19 | 09.30.18 | |||||||
Income from private securities |
2,386,629 | 375,375 | ||||||
Income from government securities |
2,651,009 | 648,616 | ||||||
Income / (loss) from foreign currency forward transactions |
1,272,224 | (442,734 | ) | |||||
(Loss) / income from corporate bonds |
(3,312 | ) | 11,227 | |||||
Loss from interest rate swaps |
(295,475 | ) | (682,908 | ) | ||||
|
|
|
|
|||||
TOTAL |
6,011,075 | (90,424 | ) | |||||
|
|
|
|
36. | Net (loss) from writing-down assets carried at amortized cost and at fair value through OCI |
09.30.19 | 09.30.18 | |||||||
Loss from sale of government securities |
(35,845 | ) | (54,157 | ) | ||||
Loss from sale of private securities |
(924 | ) | | |||||
|
|
|
|
|||||
TOTAL |
(36,769 | ) | (54,157 | ) | ||||
|
|
|
|
37. | Foreign exchange and gold gains |
09.30.19 | 09.30.18 | |||||||
Conversion of foreign currency assets and liabilities into pesos |
(270,809 | ) | 1,564,090 | |||||
Income from purchase-sale of foreign currency |
6,170,466 | 2,764,991 | ||||||
|
|
|
|
|||||
TOTAL |
5,899,657 | 4,329,081 | ||||||
|
|
|
|
- 34 - |
38. | Other operating income |
09.30.19 | 09.30.18 | |||||||
Rental of safe deposit boxes |
411,619 | 323,592 | ||||||
Adjustments and interest on miscellaneous receivables |
772,950 | 325,284 | ||||||
Punitive interest |
130,306 | 53,070 | ||||||
Loans recovered |
357,878 | 202,001 | ||||||
Allowances reversed |
63,981 | 79,794 | ||||||
Income from sale of non-current assets held for sale (Note 16) |
2,644,937 | | ||||||
Income tax - Tax inflation adjustment - Fiscal years 2017 and 2018 (Note 15.c) |
3,239,760 | 1,021,518 | ||||||
Debit and credit card commissions |
448,972 | 328,403 | ||||||
Other operating income |
833,328 | 810,395 | ||||||
|
|
|
|
|||||
TOTAL |
8,903,731 | 3,144,057 | ||||||
|
|
|
|
39. | Personnel benefits |
09.30.19 | 09.30.18 | |||||||
Salaries |
5,729,743 | 3,684,484 | ||||||
Social security charges |
1,644,654 | 1,109,696 | ||||||
Personnel compensation and bonuses |
312,094 | 391,585 | ||||||
Personnel services |
194,094 | 129,883 | ||||||
Other short-term personnel benefits |
1,706,701 | 1,056,670 | ||||||
Termination personnel benefits |
| 1,822 | ||||||
Other long-term personnel benefits |
16,947 | 16,724 | ||||||
|
|
|
|
|||||
TOTAL |
9,604,233 | 6,390,864 | ||||||
|
|
|
|
40. | Administrative expenses |
09.30.19 | 09.30.18 | |||||||
Travel expenses |
90,148 | 62,774 | ||||||
Administrative expenses |
646,124 | 385,915 | ||||||
Security services |
280,238 | 222,065 | ||||||
Fees to Bank Directors and Supervisory Committee |
10,388 | 10,153 | ||||||
Other fees |
422,129 | 207,696 | ||||||
Insurance |
84,058 | 51,239 | ||||||
Rent (Note 29) |
569,417 | 538,696 | ||||||
Stationery and supplies |
37,994 | 28,829 | ||||||
Electricity and communications |
400,847 | 209,143 | ||||||
Advertising |
363,034 | 325,316 | ||||||
Taxes |
1,930,770 | 1,161,476 | ||||||
Maintenance costs |
821,530 | 536,232 | ||||||
Armored transportation services |
1,391,029 | 650,193 | ||||||
Other administrative expenses |
872,318 | 591,188 | ||||||
|
|
|
|
|||||
TOTAL |
7,920,024 | 4,980,915 | ||||||
|
|
|
|
- 35 - |
41. | Depreciation and amortization |
09.30.19 | 09.30.18 | |||||||
Depreciation of property and equipment |
797,274 | 531,284 | ||||||
Amortization of intangible assets |
71,166 | 93,422 | ||||||
Amortization of rights of use of leased properties (Note 29) |
305,039 | | ||||||
Depreciation of other assets |
1,551 | 1,980 | ||||||
|
|
|
|
|||||
TOTAL |
1,175,030 | 626,686 | ||||||
|
|
|
|
42. | Other operating expenses |
09.30.19 | 09.30.18 | |||||||
Turnover tax |
4,642,304 | 2,872,712 | ||||||
Inicial loss of loans below market rate |
930,565 | 421 | ||||||
Other allowances (Exhibit J) |
4,506,700 | 1,428,376 | ||||||
Restructuring expenses (Exhibit J) |
188,268 | | ||||||
Contribution to the Deposit Guarantee Fund (Note 49) |
364,738 | 223,842 | ||||||
Interest on liabilities from financial lease (Note 29) |
184,725 | | ||||||
Claims |
102,832 | 101,931 | ||||||
Other operating expenses |
909,723 | 590,685 | ||||||
|
|
|
|
|||||
TOTAL |
11,829,855 | 5,217,967 | ||||||
|
|
|
|
43. | Fair values of financial instruments |
a) | Assets and liabilities measured at fair value |
The fair value hierarchy of assets and liabilities measured at fair value as of September 30, 2019 is detailed below:
Accounting balance |
Total fair value |
Level 1 Fair value |
Level 2 Fair value |
Level 3 Fair value |
||||||||||||||||
Financial assets |
||||||||||||||||||||
Debt securities at fair value through profit or loss |
5,169,245 | 5,169,245 | 24,518 | 5,144,727 | | |||||||||||||||
Derivative instruments |
2,243,269 | 2,243,269 | | 2,243,269 | | |||||||||||||||
Other financial assets |
714,648 | 714,648 | 714,648 | | | |||||||||||||||
Other debt securities |
63,440,103 | 63,440,103 | 62,460 | 63,377,643 | | |||||||||||||||
Financial assets pledged as collateral |
3,153,464 | 3,153,464 | | 3,153,464 | | |||||||||||||||
Investments in equity instruments |
1,875,290 | 1,875,290 | 85,679 | 24,611 | 1,765,000 | |||||||||||||||
Financial liabiltiies |
||||||||||||||||||||
Liabilities at fair value through profit or loss |
43,168 | 43,168 | | 43,168 | | |||||||||||||||
Derivative instruments |
4,022,821 | 4,022,821 | | 4,022,821 | |
- 36 - |
The fair value hierarchy of assets and liabilities measured at fair value as of December 31, 2018 is detailed below:
Accounting balance |
Total fair value |
Level 1 Fair value |
Level 2 Fair value |
|||||||||||||
Financial assets |
||||||||||||||||
Debt securities at fair value through profit or loss |
7,508,099 | 7,508,099 | 54,011 | 7,454,088 | ||||||||||||
Derivative instruments |
591,418 | 591,418 | | 591,418 | ||||||||||||
Other financial assets |
408,704 | 408,704 | 408,704 | | ||||||||||||
Other debt securities |
23,742,495 | 23,742,495 | 100,166 | 23,642,329 | ||||||||||||
Financial assets pledged as collateral |
1,077,801 | 1,077,801 | | 1,077,801 | ||||||||||||
Investments in equity instruments |
129,538 | 129,538 | 119,322 | 10,216 | ||||||||||||
Financial liabilities |
||||||||||||||||
Liabilities at fair value through profit or loss |
692,270 | 692,270 | 162,696 | 529,574 | ||||||||||||
Derivative instruments |
1,377,259 | 1,377,259 | | 1,377,259 |
The fair value of a financial asset or liability is the price that would be received for the sale of an asset or paid for the transfer of a liability in an orderly transaction between market participants at the measurement date.
The most objective and usual reference of the fair value of a financial asset or liability is the price that would be paid in an orderly, transparent and deep market, that is to say its quoted or market price.
If it is not possible to obtain a market price, a fair value is determined using best market practice quoting techniques, such as cash flows discount based on a yields curve for the same class and type of instrument, or if there is no market curve with the same characteristics of the bond, the technical value is calculated considering the latest market price plus interest accrued until the valuation date (whichever is more representative for the species).
In line with the accounting standard, a three-level classification of financial instruments is established. This classification is mainly made based on the observability of the necessary inputs to calculate that fair value, defining the following levels:
| Level 1: Financial instruments valued with quoted prices in an active market. Active market means a market that allows the observation of representative prices with sufficient frequency and daily volume |
| Level 2: Financial instruments that do not have an active market, but that may be valued through market observable data. |
| Level 3: Valuation using models where variables not obtained from observable market information are used. |
Financial assets at fair value mainly consist of BCRA Liquidity Bills and Argentine Treasury Bills, together with a minor share in Argentine Government Bonds and Corporate Bonds. Likewise, financial derivatives are classified at fair value, and include futures and foreign currency NDF (non-delivery forwards) and interest rate swaps.
- 37 - |
b) | Transfers between hierarchy levels |
b.1) | Transfers from Level 1 to Level 2 |
The following instruments measured at fair value were transferred from Level 1 to Level 2 of the fair value hierarchy:
09.30.19 | 12.31.18 | |||||||
Argentine Bond in Pesos due 2038 |
| 1,615 |
The transfer is due to the fact that the bond was not listed on the market the number of days necessary to be considered Level 1.
b.2) | Transfers from Level 2 to Level 1 |
The following instruments measured at fair value were transferred from Level 2 to Level 1 of the fair value hierarchy:
09.30.19 | 12.31.18 | |||||||
Capitalizable Treasury Bills in Pesos due 09.30.19 |
1,236 | |
Transfers are due to the fact that the bond quoted more than 90% during the last 30 days, which allowed it to be considered as a liquid bond and assigned Level 1.
b.3) | Valuation techniques for Levels 2 and 3 |
Market observable input data is required for purposes of the calculations inherent to Level 2 securities: the last quoted market price (Mercado Abierto Electrónico MAE or Bolsa y Mercado de Valores BYMA ), the terms of the bond issue as detailed in the respective offering memorandum or, in the particular case of bonds adjustable at the BADLAR rate published on the BCRAs web site, the spot discount curve in pesos, US dollars, CER and the dollar-collateralized yield curve in pesos arising from ROFEX futures, and the spot selling exchange rate published by Banco de la Nación Argentina (BNA).
Fixed Income
The determination of fair value prices set forth by the Bank for fixed income consists of considering reference market prices for active markets MAE and BYMA, depending on the security type.
For Argentine Treasury Bonds, prices are captured from MAE and BYMA. If bonds have not been traded for the last 10 business days, a theoretical valuation is made, discounting cash flows by using the respective discount curve. This criterion has not been applied to Bonte N20. Since this Treasury bond had not had a quoted price in MAE during the previous 10 business days, it was measured at its technical value calculated on the basis of the last quoted price available, considering its accrual pursuant to the terms of the security with observable data.
Bills in pesos and CER issued by the Argentine Treasury were measured by reference to quoted prices in MAE during the last 10 business days. Such securities without a quoted price were assigned a theoretical price, discounting cash flows by using the respective discount curve.
US dollar-denominated and dollar-linked bills were measured by discounting cash flows, using the dollar curve, since these bills did not have quoted prices in MAE over the last 10 business days.
Liquidity bills issued by the BCRA without quoted prices in MAE on the last day of the month were assigned a theoretical value, discounting cash flows using the monetary policy rate.
- 38 - |
Finally, corporate bonds and sub-sovereign bonds were measured at their market prices prevailing on the last business days in MAE and BYMA, where available. In the absence of market prices, these securities were assigned a theoretical value, based on the last market price available, plus accrued interest.
SWAPS
For swaps, the theoretical valuation consists of discounting future cash flows using the interest rate, according to the dollar-collateralized rate curve resulting from the implicit yield of ROFEX futures.
Non-Delivery Forwards
The theoretical valuation of NDFs consists of discounting the future cash flows to be exchanged pursuant to the contract, using a discount curve that will depend on the currency of each cash flow. The result is then calculated by subtracting the present values in pesos, estimating the value in pesos based on the applicable spot exchange rate, depending on whether the contract is local or offshore.
For local peso-dollar swap contracts, cash flows in pesos are discounted using the dollar-collateralized yield curve in pesos resulting from the prices of ROFEX futures and the US dollar spot selling exchange rate published by BNA. Cash flows in US dollars are discounted using the Overnight Index Swap (OIS) international dollar yield curve. Then, the present value of cash flows in dollars is netted by converting such cash flows into pesos using the US dollar spot selling exchange rate published by BNA.
For local peso-euro swap contracts, cash flows in pesos are discounted using the dollar-collateralized yield curve in pesos resulting from the prices of ROFEX futures and the US dollar spot selling exchange rate published by BNA. Cash flows in euros are discounted using the dollar-collateralized yield curve in euros. Then, the present value of cash flows in euros is netted by converting such cash flows into pesos using the euro spot selling exchange rate published by BNA.
For offshore peso-dollar swap contracts, cash flows in pesos are discounted using the dollar-collateralized yield curve in pesos resulting from market quoted forward prices sourced from CMPN (Bloomberg Composite Rate New York) and the US dollar spot selling exchange rate published by BNA. Cash flows in dollars are discounted using the OIS yield curve. Then, the present value of cash flows in dollars is netted by converting such cash flows into pesos using the EMTA US dollar spot exchange rate.
Investments in Equity Instruments
The fair value of the equity interest held in Prisma Medios de Pago S.A.classified as Level 3was calculated on the basis of independent appraisers valuations, who relied on a future discounted cash flow method embracing a combined income and market approach, net of the valuation adjustment required by the BCRA in Memorandum No. 7/2019 (Note 5.2).
b.4) | Reconciliation of opening and ending balances of Level 3 assets and liabilities at fair value |
The following table shows a reconciliation between opening balances and final balances of Level 3 fair values:
09.30.19 | ||||
Balance at the beginning of the fiscal year |
| |||
Investments in equity instruments Prisma Medios de Pago S.A. |
1,765,000 | |||
|
|
|||
Balance at fiscal period-end |
1,765,000 | |||
|
|
c) | Fair value of Assets and Liabilities not measured at fair value |
Below is a description of methodologies and assumptions used to assess the fair value of the main financial instruments not measured at fair value, when the instrument does not have a quoted price in a known market.
| Assets and liabilities with fair value similar to their accounting balance |
- 39 - |
For financial assets and financial liabilities maturing in less than one year, it is considered that the accounting balance is similar to fair value. This assumption also applies for deposits, because a significant portion thereof (more than 99% considering contractual terms and conditions) have a residual maturity of less than one year.
| Fixed rate financial instruments |
The fair value of financial assets was assessed by discounting future cash flows from market rates at each measurement date for financial instruments with similar characteristics.
| Variable rate financial instruments |
For financial assets and financial liabilities accruing a variable rate, it is considered that the accounting balance is similar to the fair value.
The fair value hierarchy of assets and liabilities not measured at fair value as of September 30, 2019 is detailed below:
Accounting balance |
Total fair value |
Level 1 Fair value |
Level 2 Fair value |
|||||||||||||
Financial assets |
||||||||||||||||
Cash and deposits in banks |
94,169,336 | (1 | ) | | | |||||||||||
Repo transactions |
6,665,009 | (1 | ) | | | |||||||||||
Other financial assets |
5,741,938 | (1 | ) | | | |||||||||||
Loans and other financing |
(1 | ) | ||||||||||||||
Non-financial government sector |
503 | (1 | ) | | | |||||||||||
Other financial institutions |
2,777,947 | 1,992,411 | | 1,992,411 | ||||||||||||
Non-financial private sector and residents abroad |
204,393,305 | 195,274,222 | | 195,274,222 | ||||||||||||
Financial assets pledged as collateral |
5,148,278 | (1 | ) | | | |||||||||||
Financial liabilities |
||||||||||||||||
Deposits |
274,486,964 | 270,837,290 | | 270,837,290 | ||||||||||||
Other financial liabilities |
31,609,065 | (1 | ) | | | |||||||||||
Financing received from the Argentine Central Bank (BCRA) and other financial institutions |
8,481,472 | 7,839,310 | | 7,839,310 | ||||||||||||
Corporate bonds issued |
8,727,685 | 8,598,477 | | 8,598,477 |
(1) | Fair value is not reported as it is deemed similar to its book value. |
The fair value hierarchy of assets and liabilities not measured at fair value as of December 31, 2018 is detailed below:
Accounting balance |
Total fair value |
Level 1 Fair value |
Level 2 Fair value |
|||||||||||||
Financial assets |
||||||||||||||||
Cash and deposits in banks |
99,105,461 | (1 | ) | | | |||||||||||
Repo transactions |
12,861,116 | (1 | ) | | | |||||||||||
Other financial assets |
9,238,822 | (1 | ) | | | |||||||||||
Loans and other financing |
||||||||||||||||
Non-financial government sector |
207 | (1 | ) | | | |||||||||||
Argentine Central Bank (BCRA) |
383 | (1 | ) | | | |||||||||||
Other financial institutions |
9,583,842 | 9,492,614 | 9,492,614 | |||||||||||||
Non-financial private sector and residents abroad |
171,837,915 | 167,308,597 | | 167,308,597 | ||||||||||||
Other debt securities |
136 | (1 | ) | | | |||||||||||
Financial assets pledged as collateral |
3,625,263 | (1 | ) | | | |||||||||||
Financial liabilities |
||||||||||||||||
Deposits |
259,509,061 | 256,910,027 | | 256,910,027 | ||||||||||||
Repo transactions |
14,321 | (1 | ) | | | |||||||||||
Other financial liabilities |
28,189,392 | (1 | ) | | | |||||||||||
Financing received from the Argentine Central Bank (BCRA) and other financial institutions |
5,527,525 | (1 | ) | | | |||||||||||
Corporate bonds issued |
2,473,690 | 2,412,051 | | 2,412,051 |
(1) | Fair value is not reported as it is deemed similar to its book value. |
- 40 - |
44. | Segment reporting |
Basis for segmentation
The Group has identified the following operating segments, based on management information which is reviewed by the uttermost operating decision-making authority:
- | As of September 30, 2019, the information reported to the uttermost operating decision-making authority was prepared on the basis of the following operating segments: (i) Banco BBVA Argentina S.A. (banking), (ii) PSA Finance Argentina Compañía Financiera S.A. (financial services), (iii) Rombo Compañía Financiera S.A. (financial services), (iv) Volkswagen Financial Services S.A. (financial services), each of which is considered by the Group as a single and individual reportable segment; and |
- | As of September 30, 2019 and December 31, 2018, the Group determined that it has only one reportable segment related to banking activities. |
Reportable segments are strategic business units that offer different products and services. These segments are managed separately, for each of them is targeted at different markets and, therefore, requires different technologies and marketing strategies.
The following table shows information by segment and lines of business:
Entity (banking activity) (1) |
PSA Finance Argentina Compañía Financiera S.A. |
Rombo Compañía Financiera S.A. |
Volkswagen Financial Services Compañía Financiera S.A. |
Total as of 09.30.19 |
Total as of 12.31.18 |
|||||||||||||||||||
Loans and other financing |
189,409,669 | 3,078,084 | 6,918,924 | 7,765,078 | 207,171,755 | 181,422,347 | ||||||||||||||||||
Corporate banking |
52,399,112 | | | | 52,399,112 | 52,196,585 | ||||||||||||||||||
Small and medimum companies |
46,338,432 | 264,605 | 42,113 | 3,788,075 | 50,433,225 | 52,384,419 | ||||||||||||||||||
Retail |
90,672,125 | 2,813,479 | 6,876,811 | 3,977,003 | 104,339,418 | 76,841,343 | ||||||||||||||||||
Other assets |
204,722,144 | 316,915 | 854,409 | 1,011,952 | 206,905,420 | 173,191,856 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL ASSETS |
394,131,813 | 3,394,999 | 7,773,333 | 8,777,030 | 414,077,175 | 354,614,203 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Deposits |
274,359,202 | 127,762 | | | 274,486,964 | 259,509,061 | ||||||||||||||||||
Corporate banking |
20,839,883 | 127,762 | | | 20,967,645 | 29,668,066 | ||||||||||||||||||
Small and medium companies |
67,067,665 | | | | 67,067,665 | 49,240,049 | ||||||||||||||||||
Retail |
186,451,654 | | | | 186,451,654 | 180,600,946 | ||||||||||||||||||
Other liabilities |
65,772,378 | 2,192,952 | 6,115,712 | 6,964,382 | 81,045,424 | 56,523,365 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL LIABILITIES |
340,131,580 | 2,320,714 | 6,115,712 | 6,964,382 | 355,532,388 | 316,032,426 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
- 41 - |
The following table shows information by segment:
Entity (banking activity) (1) |
PSA Finance Argentina Compañía Financiera S.A. |
Rombo Compañía Financiera S.A. |
Volkswagen Financial Services Compañía Financiera S.A. |
Total as of 09.30.19 |
Total as of 09.30.18 |
|||||||||||||||||||
Net interest income |
37,213,086 | 179,163 | 292,867 | 714,197 | 38,399,313 | 17,666,487 | ||||||||||||||||||
Net commission income |
5,063,618 | (7,484 | ) | (42,371 | ) | (10,495 | ) | 5,003,268 | 3,802,953 | |||||||||||||||
Net income from measurement of financial instruments at fair value through profit or loss |
5,956,887 | 17,173 | 37,015 | | 6,011,075 | (90,424 | ) | |||||||||||||||||
Loss from write-down of assets measured at amortized cost and at fair value through OCI |
(36,769 | ) | | | | (36,769 | ) | (54,157 | ) | |||||||||||||||
Foreign exchange and gold gains/(losses) |
5,909,844 | | | (10,187 | ) | 5,899,657 | 4,329,081 | |||||||||||||||||
Other operating income |
8,864,827 | 10,288 | 26,449 | 2,167 | 8,903,731 | 3,144,057 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL OPERATING INCOME BEFORE LOSS FROM IMPAIRMENT OF FINANCIAL ASSETS |
62,971,493 | 199,140 | 313,960 | 695,682 | 64,180,275 | 28,797,997 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Loan loss allowances |
(6,045,523 | ) | (1,385 | ) | (16,567 | ) | (10,466 | ) | (6,073,941 | ) | (2,363,194 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
SUBTOTAL |
56,925,970 | 197,755 | 297,393 | 685,216 | 58,106,334 | 26,434,803 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating loss |
(30,134,370 | ) | (84,170 | ) | (128,762 | ) | (181,840 | ) | (30,529,142 | ) | (17,216,432 | ) | ||||||||||||
Income from associates and joint ventures |
422,570 | | | | 422,570 | 210,212 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income before income tax |
27,214,170 | 113,585 | 168,631 | 503,376 | 27,999,762 | 9,428,583 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Income tax |
(4,334,282 | ) | 72,906 | 96,967 | 67,983 | (4,096,426 | ) | (2,661,049 | ) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income for the period |
22,879,888 | 186,491 | 265,598 | 571,359 | 23,903,336 | 6,767,534 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income for the period attributable to: |
||||||||||||||||||||||||
Owners of the parent |
23,527,473 | 6,677,059 | ||||||||||||||||||||||
Non-controlling interests |
375,863 | 90,475 |
(1) | It includes BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión, BBVA Francés Valores S.A. and Consolidar A.F.J.P. (undergoing liquidation proceedings). |
45. | Subsidiaries |
Below is the information on the Banks subsidiaries:
Name |
Registered Office (country) | Ownership interest as of | ||||||||||
09.30.19 | 12.31.18 | |||||||||||
BBVA Francés Valores S.A. |
Argentina | 96.9953 | % | 96.9953 | % | |||||||
Consolidar A.F.J.P. S.A. (en liquidación) |
Argentina | 53.8892 | % | 53.8892 | % | |||||||
PSA Finance Argentina Cía. Financiera S.A. |
Argentina | 50.0000 | % | (2) | ||||||||
Volkswagen Financial Services Compañía Financiera S.A. |
Argentina | 51.0000 | % | (2) | ||||||||
Rombo Compañía Financiera S.A. |
Argentina | 40.0000 | % | (2) | ||||||||
BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión (1) |
Argentina | 95.0000 | % | 95.0000 | % |
(1) | The Entity owns a direct 95% interest in the companys share capital and an indirect 4.8498% interest through BBVA Francés Valores S.A. |
(2) | On July 1, 2019, the Entity consolidated with these companies as a result of the acquisition of control mentioned in Note 1. |
- 42 - |
46. | Related parties |
a) | Parent |
The Banks parent is Banco Bilbao Vizcaya Argentaria.
b) | Key Management personnel |
Pursuant to IAS No. 24, key Management personnel are those having the authority and responsibility for planning, managing and controlling the Groups activities, whether directly or indirectly.
Based on that definition, the Group considers the members of the Board of Directors as key personnel.
b.1) | Remuneration of key management personnel |
The key personnel of the Board of Directors received the following compensations:
09.30.19 | 09.30.18 | |||||||
Fees |
8,928 | 8,714 | ||||||
|
|
|
|
|||||
Total |
8,928 | 8,714 | ||||||
|
|
|
|
b.2) | Profit or loss for transactions and balances with key management personnel |
Balances as of | Profit or loss | |||||||||||||||
09.30.19 | 12.31.18 | 09.30.19 | 09.30.18 | |||||||||||||
Loans |
||||||||||||||||
Credit cards |
3,154 | 2,907 | 617 | 69 | ||||||||||||
Overdrafts |
3 | 19 | | 7 | ||||||||||||
Mortgage loans |
1,273 | 1,316 | 172 | 178 | ||||||||||||
Deposits |
7,385 | 30,314 | 78 | 2 |
Loans are granted on an arms length basis. As of September 30, 2019 and December 31, 2018, balances of loans granted are classified under normal performance according to the debtor classification rules issued by the BCRA.
- 43 - |
b.3) | Profit or loss and balances with related parties (except key Management personnel) |
Balances as of | Profit or loss | |||||||||||||||
Parent |
09.30.19 | 12.31.18 | 09.30.19 | 09.30.18 | ||||||||||||
Cash and deposits in bank |
2,966,268 | 259,503 | | | ||||||||||||
Derivative instruments (Assets) (1) |
1,234,457 | 23,177 | | | ||||||||||||
Other financial assets (2) |
133,321 | 310,034 | | | ||||||||||||
Liabilities at fair value through profit or loss (2) |
141,687 | 315,396 | | | ||||||||||||
Other non-financial liabilities |
224,905 | 51,296 | 149,509 | 77,483 | ||||||||||||
Derivative instruments (Liabilities) (1) |
1,292,570 | 51,198 | 122,048 | | ||||||||||||
Off-balance sheet balances |
||||||||||||||||
Securities in custody |
37,719,889 | 56,994,610 | | | ||||||||||||
Derivative instruments |
22,742,636 | 5,172,413 | | 1,353 | ||||||||||||
Sureties granted |
750,744 | 593,593 | 2,098 | 17 | ||||||||||||
Guarantees received |
40,841 | 717,641 | | |
(1) | Profit or loss of Derivative Instruments (Assets) is exposed in Derivative Instruments (Liabilities). |
(2) | These transactions do no generate profit or loss. |
Balances as of | Profit or loss | |||||||||||||||
Subsidiaries |
09.30.19 | 12.31.18 | 09.30.19 | 09.30.18 | ||||||||||||
Loans and other financing |
4,974,219 | 2,809 | 568,284 | 894,606 | ||||||||||||
Debt securities at fair value through profit or loss |
8,523 | | 31,119 | | ||||||||||||
Other financial assets |
440 | 379 | 188 | | ||||||||||||
Deposits |
884,214 | 254,431 | 86,555 | | ||||||||||||
Other non-financial liabilities |
344 | | 472 | | ||||||||||||
Financing received |
| | 7,656 | 2,350 | ||||||||||||
Derivative instruments (Liabilities) |
376,713 | | 152,220 | | ||||||||||||
Other operating income |
| | 3,891 | 4,666 | ||||||||||||
Administrative expenses |
| | | 756 | ||||||||||||
Off-balance sheet balances |
||||||||||||||||
Securities in custody |
735,699 | 432,968 | | | ||||||||||||
Interest rate swaps |
1,684,309 | | | | ||||||||||||
Sureties granted |
281 | 281 | | |
- 44 - |
Balances as of | Profit or loss | |||||||||||||||
Associates |
09.30.19 | 12.31.18 | 09.30.19 | 09.30.18 | ||||||||||||
Cash and deposits in banks |
| 70 | | | ||||||||||||
Loans and other financing |
27,325 | 5,723,637 | 1,192,724 | 636,000 | ||||||||||||
Debt securities at fair value through profit or loss |
| 50,398 | 34,522 | 11,146 | ||||||||||||
Other financial assets |
| 161,622 | | | ||||||||||||
Deposits |
297,778 | 149,338 | 6,576 | 5,642 | ||||||||||||
Liabilities at fair value through profit or loss |
| 223,833 | | | ||||||||||||
Other financial liabilities |
| 37,390 | | | ||||||||||||
Other non-financial liabilities |
| | 1,794 | 5,599 | ||||||||||||
Financing received |
| | 3,974 | 5,357 | ||||||||||||
Derivative instruments (Liabilities) |
| 381,998 | 277,490 | 505,739 | ||||||||||||
Corporate bonds issued |
119,672 | 115,263 | 36,813 | 21,600 | ||||||||||||
Other operating income |
| | 25,425 | 9,901 | ||||||||||||
Off-balance sheet balances |
||||||||||||||||
Interest rate swaps |
| 2,364,460 | | | ||||||||||||
Securities in custody |
1,107,002 | 506,076 | 585 | | ||||||||||||
Guarantees received |
68 | 284 | | | ||||||||||||
Sureties granted |
38,733 | 23,864 | 245 | |
On July 1, 2019, the Entity consolidated with PSA Finance Argentina Compañía Financiera S.A., Volkswagen Financial Services Compañía Financiera S.A. and Rombo Compañía Financiera S.A. as a result of the acquisition of control mentioned in Note 1. This situation implies the consideration of them as Subsidiaries as from such date. Until June 30, 2019, they were presented as Associates.
Transactions have been agreed upon on an arms length basis. As of September 30, 2019 and December 31, 2018, balances of loans granted are classified under normal performance according to the debtor classification rules issued by the BCRA.
47. | Restrictions to the payment of dividends |
Pursuant to the provisions in the regulation in force issued by the BCRA, financial institutions shall apply an annual 20% of the years profits to increase legal reserves.
Furthermore, pursuant to the requirements in General Resolution No. 622 issued by the CNV, the Shareholders Meeting considering the financial statements with e accumulated gains shall specifically provide for the allocation thereof.
Specifically, the mechanism to be followed by financial institutions to assess distributable balances is defined by the BCRA through the regulations in force on the Distribution of earnings, provided that there are no records of financial assistance from that entity due to illiquidity or shortfalls as regards minimum capital requirements or minimum cash requirements, and other sort of penalties imposed by specific regulators, which are deemed to be material, and/or where no corrective measures had been implemented, among other conditions.
- 45 - |
It is worth noting that, on September 20, 2017, the BCRA issued Communication A 6327, which provides that financial institutions shall not distribute earnings generated by first application of IFRS, and shall create a special reserve which may only be reversed for capitalization or to absorb potential losses of the item Unappropriated retained earnings.
In addition, the Group shall maintain a minimum capital after the proposed distribution of earnings.
On August 30, 2019, the BCRA issued Communication A 6768 which sets forth that as from such date, financial institutions are required to have the BCRAs authorization to distribute their profits.
On April 24, 2019, the Ordinary and Extraordinary Shareholders Meeting was held, whereby the following distribution of profits was approved:
| To Legal Reserve: 1,922,737 |
| To Distribution of cash dividends: 2,407,000 |
| To special statutory reserve due to application of IFRS: 3,856,405 |
| To Optional Reserve for future distribution of profits: 5.283,950. |
48. | Restricted assets |
As of September 30, 2019 and December 31, 2018, the Group has the following restricted assets:
a) | The Entity applied Argentine Treasury Bonds adjusted by CER in pesos maturing in 2021 in the amount of 49,440, Treasury Bills in pesos maturing on July 31, 2020 in the amount of 7,061 and Treasury Bills in US dollars maturing on December 4, 2019 in the amount of 67,256 as of September 30, 2019, Argentine Treasury Bonds adjusted by CER in pesos maturing in 2021 in the amount of 79,285 and Treasury Bonds in US dollars maturing on May 10, 2019 in the amount of 56,145 as of December 31, 2018, as security for loans agreed under the Global Credit Program for micro, small and medium enterprises granted by the Inter-American Development Bank (IDB). |
b) | Also, the Entity has accounts, deposits, repo transactions and trusts applied as guarantee for activities related to credit card transactions, with automated clearing houses, transactions settled at maturity, foreign currency futures, court proceedings and leases in the amount of 8,301,742 and 4,703,064 as of September 30, 2019 and December 31, 2018, respectively. |
c) | BBVA Francés Valores S.A. has shares in Mercado de Valores de Buenos Aires S.A. (MERVAL) in the amounts of 29,929 and 24,722, and BYMA, in the amounts of 55,750 and 94,600 as of September 30, 2019 and December 31, 2018, respectively. Those shares are pledged for the benefit of Crédito and Caución Compañía de Seguros S.A. under the surety bond signed by the issuer to secure noncompliance with the companys obligations. |
49. | Deposits guarantee regime |
The Entity is included in the Deposits Guarantee Fund Insurance System of Law No. 24485, Regulatory Decrees No. 540/95, No. 1292/96, No. 1127/98 and No. 30/18 and Communication A 5943 issued by the BCRA
That law provided for the incorporation of the company Seguros de Depósitos Sociedad Anónima (SEDESA) for the purpose of managing the Deposits Guarantee Fund (DGF), the shareholders of which, pursuant to the changes introduced by Decree No. 1292/96, will be the BCRA with at least one share and the trustees of the trust with financial institutions in the proportion determined by the BCRA for each, based on their contributions to the DGF.
In August 1995, that company was incorporated, and the Entity has a 10.038% share of the corporate stock.
- 46 - |
The Deposits Guarantee Insurance System, which is limited, mandatory and for valuable consideration, has been created for the purpose of covering bank deposit risks in addition to the deposits privileges and protection system set forth by the Financial Institutions Law.
The guarantee covers the refund of the principal paid plus interest accrued up to the date of revocation of the authorization to operate or until the date of suspension of the entity by application of Section 49 of the Articles of Organization of the BCRA, if this measure had been adopted previously, without exceeding the amount of four hundred and fifty thousand pesos. For transactions in the name of two or more people, the guarantee shall be distributed on a pro-rata basis among them. In no case shall the total guarantee per person exceed the aforementioned amount, regardless of the number of accounts and/or deposits.
In addition, it is set forth that financial institutions shall make a monthly contribution to the DGF an amount equivalent to 0.015% of the monthly average of daily balances of the items listed in the related regulations.
As of September 30, 2019 and 2018, the contributions to the Fund have been recorded in the item Other operating expenses - Contributions to the deposits guarantee fund in the amounts of 364,738 and 223,842, respectively.
On February 28, 2019, the Argentine Central Bank issued Communication A 6654 setting forth an increase in the guarantee from pesos four hundred and fifty thousand to pesos one million, effective March 1, 2019.
50. | Minimum cash and minimum capital requirements |
50.1 Minimum cash requirements
The BCRA establishes different prudential regulations to be observed by financial institutions, mainly regarding solvency levels, liquidity and credit assistance levels.
Minimum cash regulations set forth an obligation to keep liquid assets in relation to deposits and other obligations recorded for each period. The items included for the purpose of meeting that requirement are detailed below:
Accounts |
09.30.19 | 12.31.18 | ||||||
Balances at the BCRA |
||||||||
Argentine Central Bank (BCRA) current account not restricted |
58,898,271 | 82,119,608 | ||||||
Argentine Central Bank (BCRA) special guarantee accounts restricted (Note 14) |
2,257,787 | 1,238,252 | ||||||
Argentine Central Bank (BCRA) social security special accounts restricted |
12 | | ||||||
|
|
|
|
|||||
61,156,070 | 83,357,860 | |||||||
|
|
|
|
|||||
Argentine Treasury Bonds in pesos at fixed rate due November 2020 |
7,771,739 | 6,936,000 | ||||||
Liquidity Bills BCRA |
53,674,969 | 20,202,428 | ||||||
|
|
|
|
|||||
TOTAL |
122,602,778 | 110,496,288 | ||||||
|
|
|
|
- 47 - |
50.2 | Minimum capital requirements |
The regulatory breakdown of minimum capitals is as follows at the above mentioned date:
Minimum capital requirements |
09.30.19 | 09.30.18 | ||||||
Credit risk |
18,511,065 | 17,914,664 | ||||||
Operational risk |
5,570,686 | 3,256,660 | ||||||
Market risk |
334,508 | 192,083 | ||||||
Non-fulfilment of other technical ratios |
| 25,102 | ||||||
|
|
|||||||
Paid-in |
45,663,984 | 35,303,313 | ||||||
|
|
|
|
|||||
Surplus |
21,247,725 | 13,914,804 | ||||||
|
|
|
|
51. | Compliance with the provisions of the Argentine Securities Commission minimum shareholders equity and cash contra-account |
According to CNVs General Resolution No. 622/13, as amended by CNVs General Resolution No. 731, the minimum Shareholders Equity required to operate as Settlement and Clearing Agent - Comprehensive amounts to 18,000 and the minimum cash contra-account required by those rules amounts to 9,000. This amount includes Argentine Treasury Bonds adjusted by CER due 2021 deposited with the account opened at Caja de Valores S.A., named Depositor 1647 Brokerage Account 5446483 BBVA Banco Francés minimum cash contra-account. As of September 30, 2019 and December 31, 2018, the Banks Shareholders Equity exceeds the minimum amount imposed by the CNV.
Likewise, the subsidiary BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión, as Mutual Funds Management Agent, met the CNV minimum cash contra-account requirements with 863,569 shares of FBA Renta Pesos Fondo Común de Inversión, in the amount of 10,087, through custody account No. 493-0005459481 at BBVA Banco Francés S.A. The minimum shareholders equity required to act as Mutual Funds Management Agent of the Company amounts to 2,600. As of September 30, 2019 and December 31, 2018, the companys Shareholders Equity exceeds the minimum amount imposed by the CNV. In addition, pursuant to the requirements set by General Resolution No. 792 issued by the CNV on April 30, 2019, and effective as of the end of fiscal year ended December 31, 2019, mutual fund management companies minimum shareholders equity will be comprised by 150,000 UVAs plus 20,000 UVAs, per each additional mutual fund under management.
The subsidiary BBVA Francés Valores S.A., as a Comprehensive Settlement and Clearing Agent met CNV minimum cash contra-account requirements with a cash deposit in the amount of 9,000, through checking account No. 493-20-106/1 at Banco BBVA Argentina S.A. The minimum shareholders equity required to act as a Comprehensive Settlement and Clearing Agent amounts to 18,000, while the minimum cash contra-account amounts to 9,000. As of September 30, 2019 and December 31, 2018, the companys Shareholders Equity exceeds the minimum amount imposed by the CNV.
52. | Compliance with the provisions of the Argentine Securities Commission documentation |
The CNV issued General Resolution No. 629 on August 14, 2014 to introduce changes to its own rules governing the maintenance and safekeeping of corporate books, accounting records and business documentation. In this respect, it is reported that the Bank keeps the documentation that supports its operations for the periods still open to audit for safekeeping in Administradora de Archivos S.A. (AdeA), domiciled at Ruta 36 Km, 31,5 of Florencio Varela, Province of Buenos Aires.
- 48 - |
In addition, it is informed that a detail of the documentation delivered for safekeeping, as well as the documentation referred to in Art. 5. a.3), Section I of Chapter V of Title II of the CNV rules is available at the Banks registered office (2013 consolidated text and amendments).
53. | Trust activities |
On January 5, 2001, the Board of Directors of BCRA issued Resolution No. 19/2001, providing for the exclusion of Mercobank S.A.s senior liabilities under the terms of section 35 bis of the Financial Institutions Law, the authorization to transfer the excluded assets to the Bank as trustee of the Diagonal Trust, and the authorization to transfer the excluded liabilities to beneficiary banks. Also, on the mentioned date, the agreement to set up the Diagonal Trust was subscribed by Mercobank S.A. as Settler and the Bank as Trustee in relation to the exclusion of assets as provided in the above-mentioned resolution. As of September 30, 2019 and December 31, 2018, the assets of Diagonal Trust amount to 2,427, considering its recoverable value.
In addition, the Entity in its capacity as Trustee in the Corp Banca Trust recorded the selected assets on account of the redemption in kind of participation certificates in the amount of 4,177 as of September 30, 2019 and December 31, 2018.
In addition, the Entity acts as a Trustee in 12 non-financial trusts, in no case as personally liable for the liabilities assumed in the performance of the contract obligations. Such liabilities will be settled with and up to the full amount of the trust assets and the proceeds therefrom. The non-financial trusts concerned were set up to manage assets and/or secure the receivables of several creditors (beneficiaries) and the trustee was entrusted the management, care, preservation and custody of the corpus assets until (i) noncompliance with the obligations by the debtor (settler) vis-a-vis the creditors (beneficiaries) are verified, when such assets will be sold and the proceeds therefrom will be distributed (net of expenses) among all beneficiaries, the remainder (if any) shall be delivered to the settler, or (ii) all contract terms and conditions are complied with, in which case all the trust assets will be returned to the settler or to whom it may be indicated. The trust assets totaled 298,240 and 229,112 as of September 30, 2019 and December 31, 2018, respectively, and consist of cash, creditors rights, real estate and shares.
54. | Mutual funds |
As of September 30, 2019 and December 31, 2018, the Entity holds in custody, as Custodian Agent of Mutual Funds managed by BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión, time deposit certificates, shares, corporate bonds, government securities, mutual funds, deferred payment checks, BCRA instruments, Buenos Aires City Government Bills, ADRS, Buenos Aires Province Government Bills and repos in the amounts of 102,352,867 and 17,026,024, which are part of the mutual fund portfolio and are recorded in debit balance memorandum accounts Control Other.
- 49 - |
The Mutual Fund assets are as follows:
EQUITY AS OF | ||||||||||||
MUTUAL FUND |
09.30.19 | 12.31.18 | ||||||||||
FBA Renta Pesos |
35,793,619 | 15,883,270 | ||||||||||
FBA Ahorro Pesos |
1,003,565 | 6,302,409 | ||||||||||
FBA Renta Fija Dólar |
2,244,368 | 3,747,771 | ||||||||||
FBA Bonos Argentina |
664,932 | 4,011,931 | ||||||||||
FBA Renta Fija Dólar Plus |
823,857 | 1,582,891 | ||||||||||
FBA Bonos Latam |
455,211 | 36,718 | ||||||||||
FBA Horizonte |
486,252 | 1,309,573 | ||||||||||
FBA Calificado |
364,131 | 381,258 | ||||||||||
FBA Acciones Latinoamericanas |
477,966 | 363,493 | ||||||||||
FBA Acciones Argentinas |
299,095 | 371,680 | ||||||||||
FBA Bonos Globales |
329,149 | 34,199 | ||||||||||
FBA Gestión I |
21,070 | | ||||||||||
FBA Renta Fija Plus |
35,389 | 219,981 | ||||||||||
FBA Retorno Total II |
95,915 | 65,690 | ||||||||||
FBA Horizonte Plus |
61,689 | 94,620 | ||||||||||
FBA Brasil I |
98,924 | 1,059 | ||||||||||
FBA Renta Mixta |
54,955 | 83,995 | ||||||||||
FBA Retorno Total I |
36,001 | 57,549 | ||||||||||
FBA Renta Pesos Plus |
| 15,974 | ||||||||||
FBA Renta Pública I |
1,389 | 1,060 | ||||||||||
FBA Renta Fija Local |
1,389 | 1,060 | ||||||||||
FBA Renta Pública II |
613 | 377 | ||||||||||
|
|
|
|
|||||||||
TOTAL |
43,349,479 | 34,566,558 | ||||||||||
|
|
|
|
The subsidiary BBVA Francés Asset Management S.A. acts as a mutual funds manager, authorized by the CNV, which registered that company as a mutual funds management agent under No. 3 under Provision 2002 issued by the CNV on August 7, 2014.
55. | Penalties and administrative proceedings instituted by the BCRA |
According to the requirements of Communication A 5689, as amended, issued by the BCRA, below is a detail of the administrative and/or disciplinary penalties as well as the judgements issued by courts of original jurisdiction in criminal matters, enforced or brought by the BCRA of which the Entity has been notified:
Administrative proceedings commenced by the BCRA
| Banco Francés S.A. over breach of Law 19359. Administrative Proceedings for Foreign Exchange Offense initiated by the BCRA notified on February 22, 2008 and identified under No. 3511, File No. 100194/05, on grounds of a breach of the Criminal Foreign Exchange Regime as a result of the purchase and sale of US Dollars through the BCRA in excess of the authorized amounts. These totaled 44 transactions involving the Banks branches 099, 342, 999 and 320. The individuals/entities subject to these proceedings were Banco BBVA Argentina S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were committed: (i) two Territory Managers, (ii) four Branch Managers, (iii) four Heads of Back-Office Management and (iv) twelve cashiers. On August 21, 2014, the court acquitted the individuals/entities above from all charges. The General Attorneys Office filed an appeal and Room A of the Appellate Court with jurisdiction over Criminal and Economic Matters confirmed the Banks and the involved officers acquittal from all charges. The General Attorneys Office filed an Extraordinary Appeal, which was granted and, as of the date of these financial statements, is being heard by the Supreme Court of Justice. |
| Banco Francés S.A. over breach of Law 19359. Administrative Proceedings for Foreign Exchange Offense initiated by the BCRA notified on December 1, 2010 and identified under No. 4539, File No. 18398/05 where charges focus on fake foreign exchange transactions, through false statements upon processing thereof, carried out by personnel from five branches in Mar del Plata, which would entail failure to comply with the client identification requirements imposed by foreign exchange rules and regulations through Communication A 3471, paragraph 6. The individuals/entities subject to |
- 50 - |
these proceedings were Banco BBVA Argentina S.A., the five regular members of the Board of Directors and the following Bank officers who served in the capacities described below at the date when the breaches were committed: (i) the Retail Bank Manager, (ii) the Territory Manager, (iii) the Area Manager, (iv) a commercial aide to the Area Manager, (v) five Branch Managers, (vi) four Heads of Back-Office Management, (vii) five Main Cashiers and (viii) one cashier. To date, the case is being heard by Federal Court No. 3, Criminal Division of the City of Mar del Plata, under File No. 16377/2016. On June 21, 2017, the court sought to obtain further evidence on its own initiative ordering that a court letter should be sent to the BCRA for it to ascertain if the rules governing the charges brought in the Case File No. 18398/05 Proceedings No. 4539 have been subject to any change. The BCRA answered the request from the Court, stating that noncompliance with the provisions of Communication A 3471 would not currently be subject to any change that may imply a lesser offense. Moreover, the Entity is awaiting an answer from the Court regarding the transfer of the requested court files. On July 5, 2018, the Entity was notified of the hearing under Section No. 41 of the Criminal Code, which was held on August 7, 2018. |
| BBVA Banco Francés S.A. over breach of Law 19359. Administrative Proceedings for Foreign Exchange Offense initiated by the BCRA notified on December 1, 2010 and identified under No. 4524, File No. 3406/06 where charges focus on fake foreign exchange transactions, conducted in the name of a deceased, carried out by personnel of the Branch 240 - Mendoza -, which would entail a failure to comply with the client identification requirements imposed by foreign exchange rules and regulations through Communication A 3471, Paragraph 6. The individuals/entities subject to these proceedings were Banco BBVA Argentina S.A., five regular members of the Board of Directors and the following Bank officers who served in the capacities described below at the date when the breaches were committed: (i) the Retail Bank Manager, (ii) the Territory Manager, (iii) the Area Manager, (iv) the Branch Manager, (v) the Back Office Branch Management Head and (vi) the Main Cashier. The trial period came to a close. The case is being heard by the Federal Court No. 1, Criminal department of the City of Mendoza, File No. 23461/2015. The Federal Court of Mendoza requested by electronic mail to the Federal Courts of Comodoro Rivadavia and Mar del Plata, to certify the cases that are said to be related in terms of object, individuals/entities involved and offense. The Federal Courts of Comodoro Rivadavia answered the letter partially while the Federal Courts of Mar del Plata has not provided any answer at the date of issuance of these financial statements. On July 5, 2019, BBVA Banco Francés S.A. and its directors were acquitted. |
| BBVA Banco Francés S.A. over breach of Law 19359. Administrative Proceedings for Foreign Exchange Offense initiated by the BCRA notified on July 26, 2013 and identified under No. 5406, File No. 100443/12 where charges focus on fake foreign exchange transactions through false statements upon processing thereof carried out incurred by personnel in Branch 087 - Salta -, which would entail failure to comply with the client identification requirements imposed by foreign exchange rules and regulations through Communication A 3471, Paragraph 6. The individuals/entities subject to these proceedings were Banco BBVA Argentina S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were committed: (i) the Branch Manager (ii) the Back Office Management Head, (iii) the Main Cashier and (iv) two cashiers. The trial period came to a close and the BCRA must send the file to Saltas Federal Court. |
| BBVA Banco Francés S.A. over breach of Law 19359. Administrative Proceedings for foreign exchange offense initiated by the BCRA, notified on December 23, 2015 and identified under No. 6684, File No. 100068/13. The proceedings were brought for allegedly having completed operations under Code 631 Professional and technical business services for ROCA ARGENTINA S.A. against the applicable exchange regulations (Communications A 3471, A 3826 and A 5264), involving the incomplete verification of the services provided. The individuals/entities subject to these proceedings were Banco BBVA Argentina S.A. and two of the Entitys officers holding the positions described below: (i) the Foreign Trade Manager and (ii) an officer of the Area. The BCRA has decided that the trial period has come to an end. The case is being heard by Federal Court No. 2, in Lomas de Zamora, Province of Buenos Aires, Criminal Division, under File No. 39130/2017. On October 26, 2017, the Entity filed a request for retroactive application of the most favorable criminal law, as through Communication A 5264, whereby the restriction on foreign trade transactions was removed, the payment of services abroad was reinstated. |
- 51 - |
| Rombo Compañía Financiera S.A Financial Investigation Proceedings 1326 File 100746/11. On February 28, 2012, Rombo was served notice of the investigation proceedings initiated by the BCRAs Superintendence of Financial and Foreign Exchange Institutions against Rombo Compañía Financiera S.A. and several of its officers, on grounds of alleged exercise of authorities without the previous consent of the BCRA. The offense period spans from May 10, 2006 to March 3, 2008; from March 25, 2008 to October 8, 2008, from August 6, 2008 to April 29, 2009; and from March 25, 2008 to April 30, 2009. The individuals/entities subject to these proceedings are Rombo Compañía Financiera S.A., and the members of the Board of Directors and Supervisory Committee at the time of the alleged offenses. On March 12, 2012, the Entity filed a defense grounded on lack of damages and the absence of subjective elements of criminal liability, by taking all the actions available to file all required documents within the applicable statutory terms. On July 1, 2015, the BCRA issued Ruling No. 594 imposing a fine of 1,826 on the Entity and some of its officers. The Entity has filed the corresponding appeals against such resolution with the Federal Court of Appeals in Administrative Matters (CNCAF). On October 14, 2016, Division V of the CNCAF dismissed the direct appeal brought by the defendants and, therefore, confirmed Ruling No. 594/2015, plus legal costs and fees. On November 2, 2016, an extraordinary appeal was filed against the ruling dated October 14, 2016. On November 3, the Entity made a payment of 1,826 to settle the fine and paid 480 as penalty interest. On November 7, 2016, Division V of the CNCAF ordered the service of the extraordinary appeal. On November 18, 2016, the BCRA answered the extraordinary appeal served upon it, and on November 22, 2016, Division V of the CNCAF ordered that judgment be rendered upon the appeal. In June 2018, Division V of CNCAF granted the extraordinary appeal brought against the judgment that confirmed the fine imposed against Rombo as a mere federal matter, as such judgment was deemed arbitrary. These proceedings have been concluded. The only amounts pending payment are the BCRAs attorney fees. |
The Group and its legal advisors estimate that a reasonable interpretation of the applicable regulations in force was made and do not expect an adverse financial impact from these cases.
56. | Subsequent events |
On October 9, 2019, the CNV issued Resolution No. 20484/2019 with respect to the merger of BBVA Francés Valores S.A. into the Bank, which provides that:
| The merger of BBVA Francés Valores S.A., as merged company, into Banco BBVA Argentina S.A., as merging company shall, be approved under the terms of the Argentine Companies Law; |
| Banco BBVA Argentina S.A. shall be authorized to proceed with the public offering of 50,441 common, registered shares, with a nominal value of $ 1 and entitled to one (1) vote each. |
| The capital stock resulting from the merger amounts to $ 612,710,079, and is comprised by an equal number of common, registered shares with a nominal value of $1 and entitled to one (1) vote each. |
As of the date of these consolidated condensed interim financial statements, the merger and the ensuing capital stock increase are in the process of being registered with the IGJ.
Except as stated in the paragraphs above, no other events or transactions have occurred between the period-end date and the date of issuance of these financial statements that may materially affect the Entitys financial position or results as of September 30, 2019.
- 52 - |
57. | Accounting principles Explanation added for translation into English |
These financial statements are the English translation of those originally issued in Spanish.
These financial statements are presented on the basis of the accounting standards established by the financial reporting framework set forth by BCRA. Certain accounting practices applied by the Bank that conform to the standards of the BCRA may not conform to the generally accepted accounting principles in other countries.
The differences between the financial reporting framework set forth by BCRA and IFRS are detailed in Note 2 to the consolidated financial statements. Accordingly, these financial statements are not intended to present financial position, results of operations and cash flows in accordance with generally accepted accounting principles other than the financial reporting framework set forth by the BCRA.
- 53 - |
CLASSIFICATION OF LOANS AND OTHER FINANCING ACCORDING TO FINANCIAL PERFORMANCE
AND GUARANTEES RECEIVED CONSOLIDATED WITH SUBSIDIARIES
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
Account |
09.30.19 | 12.31.18 | ||||||
COMMERCIAL PORTFOLIO |
||||||||
Normal performance |
96,118,106 | 99,848,486 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees A |
559,982 | 782,100 | ||||||
Preferred collaterals and counter-guarantees B |
705,323 | 1,068,873 | ||||||
No preferred collaterals or counter-guarantees |
94,852,801 | 97,997,513 | ||||||
With special follow-up |
204,024 | 174,767 | ||||||
|
|
|
|
|||||
Under observation |
204,024 | 174,767 | ||||||
Preferred collaterals and counter-guarantees B |
1,361 | 3,522 | ||||||
No preferred collaterals or counter-guarantees |
202,663 | 171,245 | ||||||
Troubled |
1,068,814 | 1,529,081 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees B |
160,188 | 3,315 | ||||||
No preferred collaterals or counter-guarantees |
908,626 | 1,525,766 | ||||||
With high risk of insolvency |
2,566,434 | 294,627 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees B |
10,482 | 9,437 | ||||||
No preferred collaterals or counter-guarantees |
2,555,952 | 285,190 | ||||||
Uncollectible |
238,813 | 23,658 | ||||||
|
|
|
|
|||||
No preferred collaterals or counter-guarantees |
238,813 | 23,658 | ||||||
|
|
|
|
|||||
TOTAL |
100,196,191 | 101,870,619 | ||||||
|
|
|
|
- 54 - |
EXHIBIT B
(Continued)
CLASSIFICATION OF LOANS AND OTHER FINANCING ACCORDING TO FINANCIAL PERFORMANCE
AND GUARANTEES RECEIVED CONSOLIDATED WITH SUBSIDIARIES
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
Account |
09.30.19 | 12.31.18 | ||||||
CONSUMER AND HOUSING PORTFOLIO |
||||||||
Normal performance |
113,016,201 | 82,079,990 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees A |
57,748 | 52,624 | ||||||
Preferred collaterals and counter-guarantees B |
27,481,259 | 9,573,987 | ||||||
No preferred collaterals or counter-guarantees |
85,477,194 | 72,453,379 | ||||||
Low risk |
2,178,011 | 1,363,176 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees A |
| 769 | ||||||
Preferred collaterals and counter-guarantees B |
482,158 | 61,746 | ||||||
No preferred collaterals or counter-guarantees |
1,695,853 | 1,300,661 | ||||||
Medium risk |
1,735,543 | 1,112,362 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees A |
| |||||||
Preferred collaterals and counter-guarantees B |
120,979 | 8,703 | ||||||
No preferred collaterals or counter-guarantees |
1,614,564 | 1,103,659 | ||||||
High risk |
1,338,087 | 585,308 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees A |
537 | | ||||||
Preferred collaterals and counter-guarantees B |
163,036 | 22,179 | ||||||
No preferred collaterals or counter-guarantees |
1,174,514 | 563,129 | ||||||
Uncollectible |
155,941 | 68,800 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees A |
15 | |||||||
Preferred collaterals and counter-guarantees B |
77,679 | 7,764 | ||||||
No preferred collaterals or counter-guarantees |
78,262 | 61,021 | ||||||
|
|
|
|
|||||
TOTAL |
118,423,783 | 85,209,636 | ||||||
|
|
|
|
|||||
TOTAL GENERAL |
218,619,974 | 187,080,255 | ||||||
|
|
|
|
- 55 - |
EXHIBIT C
CONCENTRATION OF LOANS AND OTHER FINANCING
CONSOLIDATED WITH SUBSIDIARIES
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
09.30.19 | 12.31.18 | |||||||||||||||
Number of customers |
Debt balance |
% over total portfolio |
Debt balance |
% over total portfolio |
||||||||||||
10 largest customers |
26,739,634 | 12.23 | % | 23,237,722 | 12.42 | % | ||||||||||
50 following largest customers |
30,995,012 | 14.18 | % | 31,726,036 | 16.96 | % | ||||||||||
100 following largest customers |
17,592,611 | 8.05 | % | 18,088,037 | 9.67 | % | ||||||||||
All other customers |
143,292,717 | 65.54 | % | 114,028,460 | 60.95 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
TOTAL |
218,619,974 | 100.00 | % | 187,080,255 | 100.00 | % | ||||||||||
|
|
|
|
|
|
|
|
- 56 - |
EXHIBIT D
BREAKDOWN OF LOANS AND OTHER FINANICNG BY TERM
CONSOLIDATED WITH SUBSIDIARIES
AS OF SEPTEMBER 30, 2019
(stated in thousands of pesos) (1)
Terms remaining to maturity | ||||||||||||||||||||||||||||||||
ITEM |
Portfolio due |
1 month |
3 months |
6 months |
12 months |
24 months |
More than 24 months |
TOTAL | ||||||||||||||||||||||||
Non-financial government sector |
| 503 | | | | | | 503 | ||||||||||||||||||||||||
Financial sector |
| 494,685 | 1,013,730 | 401,215 | 703,206 | 1,841,453 | 539,626 | 4,993,915 | ||||||||||||||||||||||||
Non-financial private sector and residents abroad |
5,792,730 | 73,724,083 | 39,361,555 | 23,207,971 | 21,350,566 | 29,541,820 | 43,589,892 | 236,568,617 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
TOTAL |
5,792,730 | 74,219,271 | 40,375,285 | 23,609,186 | 22,053,772 | 31,383,273 | 44,129,518 | 241,563,035 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | These balances are total contractual cash flows and, therefore, include principal, accrued and to be accrued interest and charges. |
- 57 - |
EXHIBIT H
DEPOSITS CONCENTRATION
CONSOLIDATED WITH SUBSIDIARIES
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
09.30.19 | 12.31.18 | |||||||||||||||
Number of customers |
Debt balance |
% over total portfolio |
Debt balance |
% over total portfolio |
||||||||||||
10 largest customers |
10,735,216 | 3.91 | % | 15,293,060 | 5.89 | % | ||||||||||
50 following largest customers |
15,129,697 | 5.51 | % | 15,553,822 | 5.99 | % | ||||||||||
100 following largest customers |
12,122,163 | 4.42 | % | 10,544,960 | 4.06 | % | ||||||||||
Rest of customers |
236,499,888 | 86.16 | % | 218,117,219 | 84.06 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
TOTAL |
274,486,964 | 100.00 | % | 259,509,061 | 100.00 | % | ||||||||||
|
|
|
|
|
|
|
|
- 58 - |
EXHIBIT I
BREAKDOWN OF FINANCIAL LIABILITIES BY REMAINING TERMS
CONSOLIDATED WITH SUBSIDIARIES
AS OF SEPTEMBER 30, 2019
(stated in thousands of pesos) (1)
Terms remaining to maturity | ||||||||||||||||||||||||||||
ITEMS |
1 month |
3 months |
6 months |
12 months |
24 months |
More than 24 months |
TOTAL | |||||||||||||||||||||
Deposits |
254,670,350 | 15,585,062 | 8,917,959 | 1,855,762 | 59,872 | 2,731 | 281,091,736 | |||||||||||||||||||||
Non-financial government sector |
2,666,336 | 2,276 | 7 | | | | 2,668,619 | |||||||||||||||||||||
Financial sector |
313,529 | | | | | | 313,529 | |||||||||||||||||||||
Non-financial private sector and residents abroad |
251,690,485 | 15,582,786 | 8,917,952 | 1,855,762 | 59,872 | 2,731 | 278,109,588 | |||||||||||||||||||||
Liabilities at fair value through profit or loss |
43,168 | | | | | | 43,168 | |||||||||||||||||||||
Derivative instruments |
4,022,821 | | | | | | 4,022,821 | |||||||||||||||||||||
Other financial liabilities |
26,558,485 | 314,416 | 493,797 | 871,032 | 867,946 | 2,237,258 | 31,342,934 | |||||||||||||||||||||
Financing received from the BCRA and other financial institutions |
1,569,945 | 2,442,078 | 4,125,029 | 1,486,130 | 1,801,558 | 568,810 | 11,993,550 | |||||||||||||||||||||
Corporate bonds issued |
1,245,946 | 2,402,015 | 1,514,085 | 3,591,494 | 2,637,369 | 51,118 | 11,442,027 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
TOTAL |
288,110,715 | 20,743,571 | 15,050,870 | 7,804,418 | 5,366,745 | 2,859,917 | 339,936,236 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | These balances are total contractual cash flows and, therefore, include principal, accrued and to be accrued interest and charges. |
- 59 - |
EXHIBIT J
PROVISIONS
CONSOLIDATED WITH SUBSIDIARIES
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2019 AND
FISCAL YEAR ENDED DECEMBER 31, 2018
(stated in thousands of pesos)
Decreases | ||||||||||||||||||||||||
Accounts |
Balances at the beginning of the year |
Increases | Reversals | Uses | Balances as of 09.30.19 |
Balances as of 12.31.18 |
||||||||||||||||||
INCLUDED IN LIABILITIES |
||||||||||||||||||||||||
- Provisions for contingent commitments |
1,483 | | (1) | 646 | | 837 | 1,483 | |||||||||||||||||
- For administrative, disciplinary and criminal penalties |
5,000 | | (1) | | | 5,000 | 5,000 | |||||||||||||||||
- Provisions for reorganization |
| 188,268 | (1) | | 152,949 | 35,319 | | |||||||||||||||||
- Provisions for termination plans |
62,135 | | (1) | 906 | 1 | 61,228 | 62,135 | |||||||||||||||||
- Other |
3,552,105 | 4,671,479 | (1)(2) | 10,281 | 658,470 | 7,554,833 | 3,552,105 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL PROVISIONS |
3,620,723 | 4,859,747 | 11,833 | 811,420 | 7,657,217 | 3,620,723 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | See Note 27. |
(2) | It includes an increase of 157,752 due to the effect of the acquisition of control of subsidiaries (Note 1) and 7,027 are associated with the subsidiary Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (under liquidation proceedings) exposed in Administrative Expenses. |
- 60 - |
EXHIBIT R
ADJUSTMENT TO IMPAIRMENT LOSS - ALLOWANCES FOR LOAN LOSSES
CONSOLIDATED WITH SUBSIDIARIES
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2019 AND
FISCAL YEAR ENDED DECEMBER 31, 2018
(stated in thousands of pesos)
Decreases | ||||||||||||||||||||||||||||
Accounts |
Balances at the beginning of the year |
Increases | Reversals | Uses | Acquisition of control in subsidiaries (5) |
Balances as of 09.30.19 |
Balances as of 12.31.18 |
|||||||||||||||||||||
Other financial assets |
84,321 | 1,848,601 | (1)(3) | | 292 | | 1,932,630 | 84,321 | ||||||||||||||||||||
Loans and other financing |
4,258,239 | 5,382,116 | (1)(3) | 54,358 | 2,428,442 | 306,777 | 7,464,332 | 4,258,239 | ||||||||||||||||||||
Other financial institutions |
85,488 | 16,349 | 44,958 | 44,890 | | 11,989 | 85,488 | |||||||||||||||||||||
Non-financial private sector and residents abroad |
4,172,751 | 5,365,767 | 9,400 | 2,383,552 | 306,777 | 7,452,343 | 4,172,751 | |||||||||||||||||||||
Overdrafts |
110,147 | 74,657 | | 82,676 | | 102,128 | 110,147 | |||||||||||||||||||||
Instruments |
1,164,674 | 1,341,861 | | 49,878 | | 2,456,657 | 1,164,674 | |||||||||||||||||||||
Mortgage loans |
99,518 | 33,063 | | 3,760 | | 128,821 | 99,518 | |||||||||||||||||||||
Pledge loans |
44,250 | 32,177 | 8,604 | 21,774 | 281,940 | 327,989 | 44,250 | |||||||||||||||||||||
Consumer loans |
808,085 | 1,071,948 | | 663,760 | | 1,216,273 | 808,085 | |||||||||||||||||||||
Credit card loans |
1,359,528 | 1,809,924 | | 1,068,679 | | 2,100,773 | 1,359,528 | |||||||||||||||||||||
Financial leases |
47,227 | 24,822 | 238 | 24,317 | 3,004 | 50,498 | 47,227 | |||||||||||||||||||||
Other |
539,322 | 977,315 | 558 | 468,708 | 21,833 | 1,069,204 | 539,322 | |||||||||||||||||||||
Private securities |
1,314 | 324 | (2)(3) | 915 | | | 723 | 1,314 | ||||||||||||||||||||
Contingent commitments |
1,483 | | (4) | 646 | | | 837 | 1,483 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
TOTAL ALLOWANCES |
4,345,357 | 7,231,041 | 55,919 | 2,428,734 | 306,777 | 9,398,522 | 4,345,357 | |||||||||||||||||||||
|
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|
|
(1) | Set up in compliance with the provisions of Communication A 2950 and supplementary regulations issued by the BCRA taking into consideration the disclosures made in Note 11 - Other financial assets and Note 12 - Loans and other financing to the consolidated financial statements. |
(2) | Set up in compliance with the provisions of Communication A 4084 issued by the BCRA. |
(3) | Includes total exchange rate difference of: |
- Other financial assets |
419,750 | |||
- Loans and other financing |
737,026 | |||
- Private securities |
324 |
(4) | Set up in compliance with credit risk arising from unused overdraft balances in current account granted, guarantees, sureties and other contingent commitments. |
(5) | On July 1, 2019, the Entity proceeded to the consolidation of Volkswagen Financial Services Compañía Financiera S.A. , PSA Finance Arg. Cía. Financiera S.A. and Rombo Compañía Financiera S.A. as a result of the acquisition of control (see Note 1). |
KPMG Bouchard 710 - 1 st Floor - C1106ABL Buenos Aires, Argentina |
+54 11 4316 5700 www.kpmg.com.ar |
INDEPENDENT AUDITORS LIMITED REVIEW REPORT ON CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
To the President and Directors of
Banco BBVA Argentina S.A.
Registered office: Av. Córdoba 111
City of Buenos Aires
Taxpayer identification number [C.U.I.T.] 30-50000319-3
Report on the financial statements
We have audited the accompanying condensed interim consolidated financial statements of Banco BBVA Argentina S.A. (the Entity) and its subsidiaries, which include the condensed consolidated statement of financial position as of September 30, 2019, the condensed consolidated statements of income, other comprehensive income, changes in shareholders equity and cash flows for the nine-month period then ended, exhibits and selected explanatory notes.
The balances and other information as of December 31, 2018 and for the nine-month period ended September 30, 2018 are an integral part of the aforementioned financial statements and, therefore, shall be considered in the light of these financial statements.
Board of Directors and Management responsibility for the financial statements
The Entitys Board of Directors and Management are responsible for the preparation and presentation of the accompanying condensed consolidated financial statements in accordance with the accounting standards established by the Argentine Central Bank (BCRA), which, as indicated in Note 2 to the accompanying financial statements, are based on the International Financial Reporting Standards (IFRS), and, particularly, on International Accounting Standard 34 Interim Financial Reporting (IAS 34) as approved by the International Accounting Standards Board (IASB), and adopted by the Argentine Federation of Professional Councils of Economic Sciences (FACPCE), except for section 5.5 Impairment of Value of IFRS 9 Financial Instruments and IAS 29 Financial Reporting in Hyperinflationary Economies. Furthermore, the standards prescribed through Memorandum No. 6/2017 issued by the regulator on May 29, 2017 regarding the accounting treatment to be applied to uncertain tax positions and Memorandum No. 7/2019, issued by the regulator on April 29, 2019 regarding the valuation of the investment held by the Entity in Prisma Medios de Pago S.A. were taken into account. The Board of Directors and Management are also responsible for such internal control as they determine is necessary to enable the preparation of the interim financial statements that are free from material misstatement whether due to error or irregularities.
Scope of our review
Our responsibility is to issue a conclusion on these condensed interim consolidated financial statements based on our review. We conducted our review in accordance with the standards set forth by Technical Resolution No. 37 of the FACPCE and the Minimum Standards applicable to External Audits set forth by the BCRA for the review of interim financial statements. In accordance with such standards, a review is limited primarily to the performance of analytical and other review procedures applied to financial data included in the interim financial statements and inquiries of personnel responsible for the preparation thereof. A review is substantially less in scope than an audit conducted in accordance with auditing standards in force, and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the accompanying condensed interim consolidated financial statements.
© 2019 KPMG, a partnership established under Argentine law and a member firm of the KPMG network of independent firms affiliated with KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.
Basis to the conclusion observations
As mentioned in note 1.1 to the accompanying condensed interim consolidated financial statements, the accounting information corresponding to Rombo Compañía Financiera S.A. (Rombo) and Volkswagen Financial Services Compañía Financiera S.A. (VWFS) have been consolidated from July 1, 2019, regarding a modification of the shareholder agreement that grants control over the mentioned societies. Previously, the Entitys participation in Rombo and VWFS was measured in the consolidated financial statements based on the equity method. The assets of Rombo and VWFS represent 1,9% and 2,1%, respectively, of the consolidated assets, while their operating income represent 0,5% and 1;1%, respectively, of the consolidated operating income for the nine months period as of September 30, 2019. We have not had access to the original documentation related to the mentioned modification, as well as other elements that support the decision to consolidate the financial information of Rombo and VWFS.
Conclusion
Based on our review, except as mentioned in the previous paragraph, nothing has come to our attention that causes us to believe that the accompanying condensed interim consolidated financial statements of Banco BBVA Argentina S.A. have not been prepared, in all material respects, in accordance with the BCRA accounting framework.
Emphasis of matter
Without modifying our conclusion, we draw users attention to the following information disclosed in the accompanying condensed consolidated financial statements:
a) | As explained in Note 2.a) to the accompanying financial statements, they have been prepared by the Entitys Board of Directors and Management in accordance with the BCRA financial reporting framework, which differs from IFRS as to the application of section 5.5 Impairment of Value of IFRS 9 Financial Instruments, which was temporarily excluded by the BCRA from the accounting framework applicable to financial institutions. |
b) | As explained in Notes 2.b) and 3), as provided for by BCRA Communication A 6651, the Entity has not applied IAS 29 Financial Reporting in Hyperinflationary Economies to the preparation of the accompanying financial statements. The existence of an inflationary context affects the Entitys financial position and results of operations and, therefore, the inflation impact may distort the financial information, which should be considered in the interpretation of the information provided by the Entity in these consolidated financial statements in respect of its financial position, comprehensive income and cash flows. Management estimates that both the Entitys equity and income may differ significantly, should IAS 29 be applied. |
c) | As explained in Note 2.c), the accompanying financial statements have been prepared taking into consideration the standards prescribed through Memorandum No. 6/2017 issued by the regulator on May 29, 2017 regarding the accounting treatment to be applied to uncertain tax positions. |
d) | As explained in Note 2.d) and 16) to the accompanying financial statements, by virtue of the partial sale of the ownership interest in Prisma Medios de Pago S.A., the remaining ownership interest were reclassified to Investments in equity instruments and stated at its fair value with changes recognized through profit or loss, based on a valuation report of the Company prepared by an external professional. In addition, the valuation adjustment established by Memorandum No. 7/1019, issued on April 29, 2019 by BCRA, was deducted from such remaining ownership interest. |
Buenos Aires City, November 7, 2019.
KPMG
Carlos F. Bruno
Partner
- 64 - |
SEPARATE CONDENSED STATEMENT OF FINANCIAL POSITION
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
Notes and Exhibits |
09.30.19 | 12.31.18 | ||||||||||
ASSETS |
||||||||||||
Cash and deposits in banks |
4 | 93,857,857 | 99,102,416 | |||||||||
Cash |
28,259,388 | 15,570,362 | ||||||||||
Financial institutions and correspondents |
65,598,469 | 83,532,054 | ||||||||||
Argentine Central Bank (BCRA) |
58,898,417 | 75,503,977 | ||||||||||
Other in the country and abroad |
6,700,052 | 8,028,077 | ||||||||||
Debt securities at fair value through profit or loss |
5 and Exhibit A | 5,159,618 | 7,505,826 | |||||||||
Derivatives |
6 | 2,123,755 | 591,418 | |||||||||
Repo transactions |
7 | 6,665,009 | 12,861,116 | |||||||||
Other financial assets |
8 | 5,579,123 | 9,233,052 | |||||||||
Loans and other financing |
9 | 194,361,612 | 181,398,818 | |||||||||
Non-financial government sector |
503 | 207 | ||||||||||
Argentine Central Bank (BCRA) |
| 383 | ||||||||||
Other Financial Institutions |
7,534,800 | 9,583,794 | ||||||||||
Non-financial private sector and residents abroad |
186,826,309 | 171,814,434 | ||||||||||
Other debt securities |
10 | 63,440,103 | 23,742,631 | |||||||||
Financial assets pledged as collateral |
11 | 8,301,035 | 4,703,064 | |||||||||
Investments in equity instruments |
13 and Exhibit A | 1,789,611 | 10,216 | |||||||||
Investments in subsidiaries and associates |
14 | 3,317,430 | 2,371,153 | |||||||||
Property and equipment |
15 | 11,804,365 | 9,816,116 | |||||||||
Intangible assets |
16 | 640,119 | 510,912 | |||||||||
Deferred income tax assets |
3,162,100 | 194,036 | ||||||||||
Other non-financial assets |
17 | 2,074,173 | 2,133,285 | |||||||||
Non-current assets held for sale |
18 | 59,776 | 493,373 | |||||||||
|
|
|
|
|||||||||
TOTAL ASSETS |
402,335,686 | 354,667,432 | ||||||||||
|
|
|
|
- 65 - |
SEPARATE CONDENSED STATEMENT OF FINANCIAL POSITION
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
Notes and Exhibits |
09.30.19 | 12.31.18 | ||||||||
LIABILITIES |
||||||||||
Deposits |
19 and Exhibit H | 275,241,437 | 259,763,289 | |||||||
Non-financial government sector |
2,642,132 | 1,544,761 | ||||||||
Financial sector |
968,857 | 294,122 | ||||||||
Non-financial private sector and residents abroad |
271,630,448 | 257,924,406 | ||||||||
Liabilities at fair value through profit or loss |
20 | 43,168 | 692,270 | |||||||
Derivative instruments |
6 | 4,399,534 | 1,377,259 | |||||||
Repo transactions |
7 | | 14,321 | |||||||
Other financial liabilities |
21 | 30,286,800 | 28,189,392 | |||||||
Financing received from the BCRA and other financial institutions |
22 | 5,227,151 | 5,527,525 | |||||||
Corporate bonds issued |
23 | 3,937,370 | 2,473,690 | |||||||
Current income tax liabilities |
12 a) | 5,103,585 | 3,609,985 | |||||||
Provisions |
Exhibit J | 7,477,615 | 3,603,314 | |||||||
Other non-financial liabilities |
24 | 14,523,555 | 10,864,722 | |||||||
|
|
|
|
|||||||
TOTAL LIABILITIES |
346,240,215 | 316,115,767 | ||||||||
|
|
|
|
|||||||
EQUITY |
||||||||||
Share capital |
26 | 612,660 | 612,660 | |||||||
Non-capitalized contributions |
6,735,977 | 6,735,977 | ||||||||
Capital adjustments |
312,979 | 312,979 | ||||||||
Reserves |
28,488,024 | 17,424,932 | ||||||||
Retained earnings |
| 3,856,405 | ||||||||
Other accumulated comprehensive income |
(3,581,642 | ) | (4,975 | ) | ||||||
Informe for the period |
23,527,473 | 9,613,687 | ||||||||
|
|
|
|
|||||||
TOTAL EQUITY |
56,095,471 | 38,551,665 | ||||||||
|
|
|
|
|||||||
TOTAL LIABILITIES AND EQUITY |
402,335,686 | 354,667,432 | ||||||||
|
|
|
|
Notes and exhibits are an integral part of these financial statements.
- 66 - |
SEPARATE CONDENSED STATEMENT OF PROFIT OR LOSS
FOR THE NINE-MONTH INTERIM PERIODS ENDED SEPTEMBER 30, 2019 AND 2018
(stated in thousands of pesos)
Notes and Exhibits |
Accumulated as of 09.30.19 |
Accumulated as of 09.30.18 |
Quarter from 07.01.19 to 09.30.19 |
Quarter from 07.01.18 to 09.30.18 |
||||||||||||||||
Interest income |
27 | 66,398,539 | 28,899,208 | 25,004,764 | 12,144,634 | |||||||||||||||
Interest expense |
28 | (28,848,911 | ) | (11,864,668 | ) | (10,186,347 | ) | (5,607,946 | ) | |||||||||||
|
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|
|
|
|
|
|
|||||||||||||
Net interest income |
37,549,628 | 17,034,540 | 14,818,417 | 6,536,688 | ||||||||||||||||
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|
|
|
|
|
|||||||||||||
Commission income |
29 | 12,594,520 | 8,371,358 | 4,606,545 | 3,673,977 | |||||||||||||||
Commission expenses |
30 | (7,816,356 | ) | (4,846,275 | ) | (3,074,313 | ) | (1,978,674 | ) | |||||||||||
|
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|
|
|
|
|
|||||||||||||
Net commission income |
4,778,164 | 3,525,083 | 1,532,232 | 1,695,303 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net income/(loss) from financial instruments at fair value through profit or loss |
31 | 5,692,758 | (156,206 | ) | 1,232,158 | 289,432 | ||||||||||||||
Net (loss)/income from write-down of assets at amortized cost and fair value |
32 | (36,769 | ) | (54,157 | ) | 3,794 | 12,774 | |||||||||||||
Foreign exchange and gold gains |
33 | 5,905,196 | 4,242,969 | 3,410,561 | 1,544,951 | |||||||||||||||
Other operating income |
34 | 8,879,601 | 3,161,607 | 1,115,671 | 1,014,248 | |||||||||||||||
Loan loss allowances |
Exhibit R | (6,041,235 | ) | (2,337,129 | ) | (1,819,250 | ) | (1,023,549 | ) | |||||||||||
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|
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|
|
|||||||||||||
Net operating income |
56,727,343 | 25,416,707 | 20,293,583 | 10,069,847 | ||||||||||||||||
|
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|
|||||||||||||
Personnel benefits |
35 | (9,494,450 | ) | (6,285,755 | ) | (3,564,708 | ) | (2,460,824 | ) | |||||||||||
Administrative expenses |
36 | (7,792,512 | ) | (4,899,413 | ) | (3,351,104 | ) | (1,793,719 | ) | |||||||||||
Depreciation and amortization |
37 | (1,170,530 | ) | (623,370 | ) | (418,243 | ) | (219,127 | ) | |||||||||||
Other operating expenses |
38 | (11,558,197 | ) | (4,929,211 | ) | (2,976,423 | ) | (1,536,193 | ) | |||||||||||
|
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|
|
|
|
|
|
|||||||||||||
Operating income |
26,711,654 | 8,678,958 | 9,983,105 | 4,059,984 | ||||||||||||||||
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|
|
|
|
|
|||||||||||||
Income from associates and joint ventures |
1,055,170 | 490,660 | 415,366 | 4,557 | ||||||||||||||||
|
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|
|
|
|
|
|
|||||||||||||
Income before income tax |
27,766,824 | 9,169,618 | 10,398,471 | 4,064,541 | ||||||||||||||||
|
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|
|
|
|
|
|
|||||||||||||
Income tax |
12 b) | (4,239,351 | ) | (2,492,559 | ) | 341,260 | (1,056,700 | ) | ||||||||||||
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|
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|
|||||||||||||
Income for the period |
23,527,473 | 6,677,059 | 10,739,731 | 3,007,841 | ||||||||||||||||
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|
|
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|
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Notes and exhibits are an integral part of these financial statements.
- 67 - |
EARNINGS PER SHARE
AS OF SEPTEMBER 30, 2019 AND 2018
(stated in thousands of pesos)
Accounts |
09.30.19 | 09.30.18 | ||||||
Numerator: |
||||||||
Net income attributable to owners of the Parent |
23,527,473 | 6,677,059 | ||||||
Net income attributable to owners of the Parent adjusted to reflect the effect of dilution |
23,527,473 | 6,677,059 | ||||||
Denominator: |
||||||||
Weighted average of outstanding common shares for the period |
612,659,638 | 612,659,638 | ||||||
Weighted average of outstanding common shares for the period adjusted to reflect the effect of dilution |
612,659,638 | 612,659,638 | ||||||
Basic earnings per share (stated in thousands of pesos) |
38.4022 | 10.8985 | ||||||
Diluted earnings per share (stated in thousands of pesos) (1) |
38.4022 | 10.8985 |
(1) | Since Banco BBVA Argentina S.A. has not issued financial instruments with a dilutive effect on earnings per share, basic and diluted earnings per share are the same. |
- 68 - |
SEPARATE CONDENSED STATEMENT OF OTHER COMPREHENSIVE INCOME
FOR THE NINE-MONTH INTERIM PERIODS ENDED SEPTEMBER 30, 2019 AND 2018
(stated in thousands of pesos)
Accumulated as of 09.30.19 |
Accumulated as of 09.30.18 |
Quarter from 07.01.19 to 09.30.19 |
Quarter from 07.01.18 to 09.30.18 |
|||||||||||||
Income for the period |
23,527,473 | 6,677,059 | 10,739,731 | 3,007,841 | ||||||||||||
Other comprehensive income components to be reclassified to income/(loss) for the period: |
||||||||||||||||
Share in Other Comprehensive Income from associates and joint venture at equity method: |
||||||||||||||||
(Loss)/Income for the period on the share in OCI from associates and joint ventures at equity method |
(2,574 | ) | 135,764 | (2,188 | ) | 32,931 | ||||||||||
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|||||||||
(2,574 | ) | 135,764 | (2,188 | ) | 32,931 | |||||||||||
|
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|
|
|
|||||||||
Profits or losses from financial instruments at fair value through OCI |
||||||||||||||||
(Loss) for the period on financial instruments at fair value through OCI |
(5,108,845 | ) | (363,357 | ) | (4,841,128 | ) | (258,594 | ) | ||||||||
Reclassification adjustment for the period |
924 | 54,155 | (39,639 | ) | (12,776 | ) | ||||||||||
Income tax |
1,532,418 | 92,885 | 1,464,230 | 84,626 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
(3,575,503 | ) | (216,317 | ) | (3,416,537 | ) | (186,744 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income components not to be reclassified to income/(loss) for the period: |
||||||||||||||||
Personnel benefit plans |
||||||||||||||||
Actuarial profits or losses accumulated due to personnel benefit plans |
| (5,322 | ) | | | |||||||||||
Income tax |
| 1,600 | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
| (3,722 | ) | | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Profit or losses from equity instruments at fair value through OCI (Items 5.7.5 of IFRS 9) |
||||||||||||||||
Profit/(loss) from equity instruments at fair value through OCI |
2,014 | | (1,687 | ) | | |||||||||||
Income tax |
(604 | ) | | 506 | | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
1,410 | | (1,181 | ) | | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Other Comprehensive Income for the period |
(3,576,667 | ) | (84,275 | ) | (3,419,906 | ) | (153,813 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total Comprehensive Income |
19,950,806 | 6,592,784 | 7,319,825 | 2,854,028 | ||||||||||||
|
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|
|
|
|
|
|
Notes and exhibits are an integral part of these financial statements.
- 69 - |
SEPARATE CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS EQUITY
FOR THE NINE-MONTH INTERIM PERIODS ENDED SEPTEMBER 30, 2019 AND 2018
(stated in thousands of pesos)
2019 | 2018 | |||||||||||||||||||||||||||||||||||||||
Share capital |
Non-capitalized contributions |
Other comprehensive income | Retained earnings | |||||||||||||||||||||||||||||||||||||
Transactions |
Outstanding shares |
Share premium |
Adjustments to equity |
Losses on financial instruments at fair value through OCI |
Other | Legal reserve |
Other | Unappropriated retained earnings |
Total | Total | ||||||||||||||||||||||||||||||
Balances at the beginning of the year |
612,660 | 6,735,977 | 312,979 | (112,612 | ) | 107,637 | 4,802,904 | 12,622,028 | 13,470,092 | 38,551,665 | 26,056,548 | |||||||||||||||||||||||||||||
Impact of the implementation of the financial reporting framework set forth by the BCRA |
| | | | | | | | | 4,019,786 | ||||||||||||||||||||||||||||||
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|
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|
|
|
|
|
|
|
|||||||||||||||||||||
Adjusted balance at the beginning of the year |
612,660 | 6,735,977 | 312,979 | (112,612 | ) | 107,637 | 4,802,904 | 12,622,028 | 13,470,092 | 38,551,665 | 30,076,334 | |||||||||||||||||||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Total comprehensive income for the period |
||||||||||||||||||||||||||||||||||||||||
- Net income for the period |
| | | | | | | 23,527,473 | 23,527,473 | 6,677,059 | ||||||||||||||||||||||||||||||
- Other Comprehensive Income/(Loss) for the period |
| | | (3,575,503 | ) | (1,164 | ) | | | | (3,576,667 | ) | (84,275 | ) | ||||||||||||||||||||||||||
- Allocation of unappropriated retained earnings as per Shareholders Meeting held on April 24, 2019 and April 10, 2018 |
||||||||||||||||||||||||||||||||||||||||
Legal reserve |
| | | | | 1,922,737 | | (1,922,737 | ) | | | |||||||||||||||||||||||||||||
Cash dividends (1) |
| | | | | | | (2,407,000 | ) | (2,407,000 | ) | (970,000 | ) | |||||||||||||||||||||||||||
Special statutory reserve due to application of IFRS |
| | | | | | 3,856,405 | (3,856,405 | ) | | | |||||||||||||||||||||||||||||
Other |
| | | | | | 5,283,950 | (5,283,950 | ) | | | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Balances at fiscal period end |
612,660 | 6,735,977 | 312,979 | (3,688,115 | ) | 106,473 | 6,725,641 | 21,762,383 | 23,527,473 | 56,095,471 | 35,699,118 | |||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Corresponds to $ 3.93 per share. |
Notes and exhibits are an integral part of these financial statements.
- 70 - |
SEPARATE CONDENSED STATEMENT OF CASH FLOWS
FOR THE NINE-MONTH INTERIM PERIODS ENDED SEPTEMBER 30, 2019 AND 2018
(stated in thousands of pesos)
Accounts |
09.30.19 | 09.30.18 | ||||||
Cash flows from operating activities |
||||||||
Income before income tax |
27,766,824 | 9,169,618 | ||||||
Adjustments to obtain flows from operating activities: |
(26,149,621 | ) | (22,872,357 | ) | ||||
Depreciation and amortization |
1,170,530 | 623,370 | ||||||
Loan loss allowances |
6,041,235 | 2,337,129 | ||||||
Effect of exchange rate changes on cash and cash equivalents |
(30,485,928 | ) | (28,722,481 | ) | ||||
(Loss) from sale of Prisma |
(2,644,937 | ) | | |||||
Other adjustments |
(230,521 | ) | 2,889,625 | |||||
Net decreases from operating assets: |
(55,607,390 | ) | (70,773,485 | ) | ||||
Debt securities at fair value through profit or loss |
2,346,208 | 5,085,695 | ||||||
Derivative instruments |
(1,532,337 | ) | 132,799 | |||||
Repo transactions |
6,196,107 | (3,055,859 | ) | |||||
Loans and other financing |
(16,452,580 | ) | (50,685,950 | ) | ||||
Non-financial government sector |
(296 | ) | 41 | |||||
Other financial institutions |
2,049,377 | (838,379 | ) | |||||
Non-financial private sector and residents abroad |
(18,501,661 | ) | (49,847,612 | ) | ||||
Other debt securities |
(44,803,379 | ) | (15,244,323 | ) | ||||
Financial assets pledged as collateral |
(3,597,971 | ) | (3,051,493 | ) | ||||
Investments in equity instruments |
| (4,162 | ) | |||||
Other assets |
2,236,562 | (3,950,192 | ) | |||||
Net increases from operating liabilities: |
20,467,458 | 102,061,988 | ||||||
Deposits |
15,478,148 | 91,546,972 | ||||||
Non-financial government sector |
1,097,371 | 988,014 | ||||||
Financial sector |
674,735 | 9,769 | ||||||
Non-financial private sector and residents abroad |
13,706,042 | 90,549,189 | ||||||
Liabilities at fair value through profit or loss |
(649,102 | ) | 1,345,749 | |||||
Derivative instruments |
3,022,275 | (67,810 | ) | |||||
Repo transactions |
(14,321 | ) | (285,410 | ) | ||||
Other liabilities |
2,630,458 | 9,522,487 | ||||||
Income tax paid |
(794,217 | ) | (668,318 | ) | ||||
|
|
|
|
|||||
Total cash flows (used in)/generated by operating activities |
(34,316,946 | ) | 16,917,446 | |||||
|
|
|
|
- 71 - |
SEPARATE CONDENSED STATEMENT OF CASH FLOWS
FOR THE NINE-MONTH INTERIM PERIODS ENDED SEPTEMBER 30, 2019 AND 2018
(stated in thousands of pesos)
Accounts |
09.30.19 | 09.30.18 | ||||||
Cash flows from investing activities |
||||||||
Payments: |
(1,262,851 | ) | (876,463 | ) | ||||
Purchase of property and equipment, intangible assets and other assets |
(1,262,851 | ) | (599,651 | ) | ||||
Purchase of debt or equity instruments issued by other entities |
| (232,610 | ) | |||||
Other payments related to investing activities |
| (44,202 | ) | |||||
Collections: |
2,553,630 | 934,664 | ||||||
Sale of investments in equity instruments |
1,729,915 | | ||||||
Purchase of property and equipment, intangible assets and other assets |
| 380,261 | ||||||
Other collections related to investing activities |
823,715 | 554,403 | ||||||
|
|
|
|
|||||
Total cash flows generated by investing activities |
1,290,779 | 58,201 | ||||||
|
|
|
|
|||||
Cash flows from financing activities |
||||||||
Payments: |
(4,024,422 | ) | (1,320,311 | ) | ||||
Dividends |
(2,407,000 | ) | (970,000 | ) | ||||
Non-subordinated corporate bonds |
(1,175,472 | ) | (350,311 | ) | ||||
Lease payments |
(441,950 | ) | | |||||
Collections: |
1,320,102 | 5,261,179 | ||||||
Non-subordinated corporate bonds |
1,319,400 | | ||||||
Argentine Central Bank |
702 | | ||||||
Other collections related to financing activities |
| 5,261,179 | ||||||
|
|
|
|
|||||
Total cash flows (used in) / generated by financing activities |
(2,704,320 | ) | 3,940,868 | |||||
|
|
|
|
|||||
Effect of exchange rate changes on cash and cash equivalents |
30,485,928 | 28,722,481 | ||||||
|
|
|
|
|||||
Total changes in cash flows |
(5,244,559 | ) | 49,638,996 | |||||
|
|
|
|
|||||
Cash and cash equivalents at the beginning of the year (Note 4) |
99,102,416 | 38,179,507 | ||||||
|
|
|
|
|||||
Cash and cash equivalents at fiscal period end (Note 4) |
93,857,857 | 87,818,503 | ||||||
|
|
|
|
Notes and exhibits are an integral part of these financial statements.
- 72 - |
NOTES TO THE SEPARATE CONDENSED INTERIM FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2019
(Stated in thousands of pesos)
1. | Basis for the preparation of the separate financial statements |
As mentioned in Note 2 to the consolidated condensed interim financial statements, Banco BBVA Argentina S.A. (the Bank) presents consolidated financial statements in accordance with the financial reporting framework set forth by the Argentine Central Bank (BCRA).
These financial statements of the Bank are supplementary to the consolidated condensed interim financial statements mentioned above and are intended for the purposes of complying with legal and regulatory requirements.
2. | Criteria for the preparation of the financial statements |
These condensed interim financial statements for the nine-month period ended September 30, 2019 were prepared pursuant to the reporting framework set forth by the BCRA that requires supervised entities to submit financial statements prepared pursuant to the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), with the following exceptions (financial reporting framework set forth by the BCRA):
a) | application of the impairment model set forth in Section 5.5 Impairment of IFRS No. 9 Financial instruments until the fiscal years commencing on January 1, 2020. On December 5, 2018, the Entity filed with the BCRA the impairment model to be applied within the framework of IFRS No. 9 as from January 1, 2020. On March 29, 2019, the Entity filed quantification as of December 31, 2018 with the BCRA; |
b) | application of International Accounting Standard No. 29 (IAS No. 29) Financial reporting in hyperinflationary economies, which shall be applicable for the fiscal years beginning on or after January 1, 2020 and, taking into consideration the provisions of Communication A 6651 issued by the BCRA (see Note 3.2 to the consolidated financial statements); |
c) | the standards prescribed through Memorandum No. 6/2017 issued by the regulatory entity on May 29, 2017 regarding the treatment to be applied to uncertain tax positions. Had the IFRS treatment regarding uncertain tax positions been applied, liabilities would have decreased by 5,447,078 and 2,207,318 as of September 30, 2019 and December 31, 2018, respectively. Likewise, the income/(loss) for the nine-month periods ended September 30, 2019 and 2018 would have increased by 3,239,760 and 1,021,518, respectively (Note 15.c to the consolidated financial statements), and |
d) | the instructions provided in Memorandum No. 7/2019 issued by the BCRA dated April 29, 2019, which set forth the accounting treatment to be applied to the remaining investment held by the Entity in Prisma Medios de Pago S.A. recorded under Investments in Equity Instruments as of September 30, 2019, (see Note 16 to the consolidated financial statements). |
As stated in Note 2 to the consolidated condensed interim financial statements, the abovementioned circumstances result in a departure from the IFRS which has a significant impact and may distort the information provided in these separate financial statements.
As this is an interim period, the Bank has opted to present condensed information, pursuant to the guidelines of IAS No. 34 Interim Financial Information; therefore, not all the information required for the preparation of complete financial statements under IFRS is included. Therefore, these financial statements should be read jointly with the financial statements as of December 31, 2018. However, explanatory notes of events and transactions that are material for understanding any changes in the financial position as from December 31, 2018 are included.
- 73 - |
Likewise, these separate financial statements contain the additional information and exhibits required by the BCRA through Communication A 6324.
To avoid duplication of information already provided, we refer to the consolidated financial statements regarding:
| Functional and presentation currency and unit of account (Note 3 to the consolidated condensed interim financial statements) |
| Accounting judgment and estimates (Note 4 to the consolidated condensed interim financial statements) |
| Significant accounting policies (Note 5 to the consolidated condensed interim financial statements), except for the measurement of ownership interests in subsidiaries. |
| IFRS issued but not yet effective for Financial Institutions (Note 6 to the consolidated condensed interim financial statements) |
| Provisions (Note 27 to the consolidated condensed interim financial statements) |
| Fair values of financial instruments (Note 43 to the consolidated condensed interim financial statements) |
| Segment reporting (Note 44 to the consolidated condensed interim financial statements) |
| Subsidiaries (Note 45 to the consolidated condensed interim financial statements) |
| Deposits guarantee regime (Note 49 to the consolidated condensed interim financial statements) |
| Compliance with the provisions of the Argentine Securities Commission minimum shareholders equity and liquid assets (Note 51 to the consolidated condensed interim financial statements) |
| Trust activities (Note 53 to the consolidated condensed interim financial statements) |
| Mutual funds (Note 54 to the consolidated condensed interim financial statements) |
| Penalties and administrative proceedings initiated by the BCRA (Note 55 to the consolidated condensed interim financial statements) |
| Subsequent events (Note 56 to the consolidated condensed interim financial statements) |
3. | Significant accounting policies |
The Bank has consistently applied the accounting policies described in Note 5 to the consolidated financial statements as of December 31, 2018, in all the periods presented in these financial statements.
Investments in subsidiaries
Subsidiaries are all the entities controlled by the Bank. The Bank owns a controlling interest in an entity when it is exposed to, or has rights over, the variable returns from its interest in the company, and has the power to affect the changes in such yields. The Bank reevaluates if its control is maintained when there are changes in any of the conditions mentioned.
Interests in Subsidiaries are measured using the equity method. They are initially recognized at cost, which includes transaction costs. After initial recognition, the financial statements include the Banks share in profit or loss and OCI of investments accounted for using the equity method, until the date when the significant influence or joint control cease.
The interim financial statements as of September 30, 2019 of the subsidiaries BBVA Francés Valores S.A, BBVA Francés Asset Management S.A. and Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (under liquidation proceedings) were adjusted considering the financial reporting framework set forth by the BCRA in order to present financial information on a homogeneous basis.
- 74 - |
4. | Cash and deposits in banks |
09.30.19 | 12.31.18 | |||||||
Cash |
28,259,388 | 15,570,362 | ||||||
BCRA - Current account |
58,898,417 | 75,503,977 | ||||||
Balances with other local and foreign institutions |
6,700,052 | 8,028,077 | ||||||
|
|
|
|
|||||
TOTAL |
93,857,857 | 99,102,416 | ||||||
|
|
|
|
5. | Debt securities at fair value through profit or loss |
09.30.19 | 12.31.18 | |||||||
Government securities |
144,339 | 950,525 | ||||||
Private securities - Corporate bonds |
56,626 | 167,913 | ||||||
BCRA Bills |
4,958,653 | 6,387,388 | ||||||
|
|
|
|
|||||
TOTAL |
5,159,618 | 7,505,826 | ||||||
|
|
|
|
6. | Derivatives |
In the ordinary course of business, the Bank carried out foreign currency forward transactions with daily or upon-maturity settlement of differences, with no delivery of the underlying asset and interest rate swap transactions. These transactions do not qualify as hedging pursuant to IFRS No. 9 - Financial Instruments.
The aforementioned instruments are measured at fair value and were recognized in the Statement of financial position in the item Derivative instruments and changes in fair values were recognized in the Statement of Income in the item Net income from measurement of financial instruments at fair value through profit or loss.
Breakdown is as follows:
Assets
09.30.19 | 12.31.18 | |||||||
Debit balances linked to foreign currency forwards pending settlement in pesos |
2,123,755 | 591,418 | ||||||
|
|
|
|
|||||
TOTAL |
2,123,755 | 591,418 | ||||||
|
|
|
|
Liabilities
09.30.19 | 12.31.18 | |||||||
Credit balances linked to foreign currency forwards pending settlement in pesos |
3,977,579 | 889,731 | ||||||
Credit balances linked to interest rate swaps |
421,955 | 487,528 | ||||||
|
|
|
|
|||||
TOTAL |
4,399,534 | 1,377,259 | ||||||
|
|
|
|
- 75 - |
The notional amounts of the forward transactions and foreign currency forwards, stated in US Dollars (US$) and euros, as applicable, as well as the base value of interest rate swaps are reported below:
09.30.19 | 12.31.18 | |||||||
Foreign Currency Forwards |
||||||||
Foreign currency forward purchases - US$ |
844,045 | 620,651 | ||||||
Foreign currency forward purchases - Euros |
128 | | ||||||
Foreign currency forward sales - US$ |
868,655 | 760,615 | ||||||
Foreign currency forward sales - Euros |
4,287 | 5,463 | ||||||
Interest rate swaps |
||||||||
Fixed rate for floating rate |
2,017,656 | 3,261,154 |
7. | Repo transactions |
Breakdown is as follows:
Reverse repurchase transactions
09.30.19 | 12.31.18 | |||||||||||
Amounts receivable for reverse repurchase transactions of government securities and BCRA bills with financial institutions |
| 154,753 | ||||||||||
Amounts receivable for reverse repurchase transactions of BCRA bills with the BCRA |
6,665,009 | | ||||||||||
Amounts receivable for reverse repurchase transactions of government securities with non-financial institutions |
(1 | ) | | 12,706,363 | ||||||||
|
|
|
|
|||||||||
TOTAL |
6,665,009 | 12,861,116 | ||||||||||
|
|
|
|
(1) | For two repo transactions of Argentine Bonds in US Dollars 2024 carried out with Argentina for an original total of US$ 50,000,000 and US$ 300,000,000, which were cancelled on March 1 and August 20, 2019, respectively. |
Repurchase transactions
09.30.19 | 12.31.18 | |||||||
Amounts payable for repurchase transactions of BCRA bills |
| 14,321 | ||||||
|
|
|
|
|||||
TOTAL |
| 14,321 | ||||||
|
|
|
|
8. | Other financial assets |
Breakdown of other financial assets is as follows:
09.30.19 | 12.31.18 | |||||||
Measured at amortized cost |
||||||||
Financial debtors from spot transactions pending settlement |
4,035,152 | 6,842,344 | ||||||
Non-financial debtors from spot transactions pending settlement |
148,382 | 91,052 | ||||||
Receivables from sale of ownership interest in Prisma Medios de Pago S.A. |
1,673,124 | | ||||||
Other receivables |
1,406,468 | 1,816,476 | ||||||
Other |
228,709 | 552,220 | ||||||
|
|
|
|
|||||
7,491,835 | 9,302,092 | |||||||
|
|
|
|
|||||
Allowance for loan losses (Exhibit R) |
(1,912,712 | ) | (69,040 | ) | ||||
|
|
|
|
|||||
TOTAL |
5,579,123 | 9,233,052 | ||||||
|
|
|
|
- 76 - |
9. | Loans and other financing |
The Bank keeps loans and other financing under a business model with the purpose of collecting contractual cash flows. Therefore, it measures loans and other financing at amortized cost. Below is a breakdown of the related balance:
09.30.19 | 12.31.18 | |||||||
Non-financial government sector |
503 | 207 | ||||||
BCRA |
| 383 | ||||||
Other financial institutions |
7,591,679 | 9,669,282 | ||||||
Overdrafts |
17,586,469 | 11,789,313 | ||||||
Discounted instruments |
10,828,620 | 11,310,587 | ||||||
Unsecured instruments |
10,894,848 | 12,739,330 | ||||||
Instruments purchased |
286,000 | 264,434 | ||||||
Mortgage loans |
12,817,264 | 10,104,731 | ||||||
Pledge loans |
1,459,206 | 1,650,222 | ||||||
Consumer loans |
23,788,979 | 23,560,930 | ||||||
Credit Cards |
53,356,217 | 41,869,188 | ||||||
Loans for the prefinancing and financing of exports |
41,252,085 | 45,088,576 | ||||||
Receivables from financial leases |
1,928,807 | 2,377,747 | ||||||
Loans to personnel |
1,538,375 | 1,203,780 | ||||||
Other financing |
18,230,716 | 14,028,347 | ||||||
|
|
|
|
|||||
201,559,768 | 185,657,057 | |||||||
|
|
|
|
|||||
Allowance for loan losses (Exhibit R) |
(7,198,156 | ) | (4,258,239 | ) | ||||
|
|
|
|
|||||
TOTAL |
194,361,612 | 181,398,818 | ||||||
|
|
|
|
Finance leases
The Bank entered into finance lease agreements related to vehicles and machinery and equipment.
The following table shows the total gross investment of finance leases (leasing) and the current value of minimum payments to be received for them:
09.30.19 | 12.31.18 | |||||||||||||||
Term | Total investment |
Current value of minimum payments |
Total investment |
Current value of minimum payments |
||||||||||||
Up to 1 year |
933,245 | 929,818 | 977,272 | 972,981 | ||||||||||||
From 1 to 5 years |
1,002,532 | 998,989 | 1,414,800 | 1,404,766 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
TOTAL |
1,935,777 | 1,928,807 | 2,392,072 | 2,377,747 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Principal |
1,913,131 | 2,343,180 | ||||||||||||||
Accrued interest |
15,676 | 34,567 | ||||||||||||||
|
|
|
|
|||||||||||||
TOTAL |
1,928,807 | 2,377,747 | ||||||||||||||
|
|
|
|
- 77 - |
A breakdown of loans and other financing according to credit quality standing pursuant to the standards applicable issued by the BCRA are detailed in Exhibit B, while the information on the concentration of loans and other financing is presented in Exhibit C to these separate financial statements. The reconciliation of the information included in those Exhibits with the accounting balances is included below.
09.30.19 | 12.31.18 | |||||||
Total Exhibits B and C |
203,360,329 | 187,056,726 | ||||||
Plus: |
||||||||
BCRA |
| 383 | ||||||
Loans to personnel |
1,538,375 | 1,203,780 | ||||||
Less: |
||||||||
Allowances for loan losses (Exhibit R) |
(7,198,156 | ) | (4,258,239 | ) | ||||
Adjustments for effective interest rate |
(298,452 | ) | (767,474 | ) | ||||
Corporate bonds |
(83,174 | ) | (123,275 | ) | ||||
Loan commitments |
(2,957,310 | ) | (1,713,083 | ) | ||||
|
|
|
|
|||||
Total loans and other financing |
194,361,612 | 181,398,818 | ||||||
|
|
|
|
As of September 30, 2019 and December 31, 2018, the Bank holds the following contingent transactions booked in off-balance sheet accounts according to the financial reporting framework set forth by the BCRA:
09.30.19 | 12.31.18 | |||||||
Overdrafts and receivables agreed not used |
841,049 | 531,590 | ||||||
Guarantees granted |
764,563 | 578,092 | ||||||
Liabilities related to foreign trade transactions |
573,628 | 141,321 | ||||||
Secured loans |
778,070 | 462,080 | ||||||
|
|
|
|
|||||
2,957,310 | 1,713,083 | |||||||
|
|
|
|
Risks related to the aforementioned contingent transactions are evaluated and controlled in the framework of the Banks credit risks policy.
10. | Other debt securities |
a) | Financial assets measured at amortized cost |
09.30.19 | 12.31.18 | |||||||
Corporate bonds in arrears |
136 | 136 | ||||||
|
|
|
|
|||||
136 | 136 | |||||||
|
|
|
|
|||||
Allowance for loan losses - Private securities (Exhibit R) |
(136 | ) | (136 | ) | ||||
TOTAL |
| | ||||||
|
|
|
|
- 78 - |
b) | Financial assets measured at fair value through OCI |
09.30.19 | 12.31.18 | |||||||
Government securities |
14,665,715 | 9,815,621 | ||||||
BCRA Liquidity Bills |
48,716,317 | 13,815,040 | ||||||
Private securities - Corporate bonds |
58,658 | 113,148 | ||||||
|
|
|
|
|||||
63,440,690 | 23,743,809 | |||||||
|
|
|
|
|||||
Allowance for loan losses - Private securities (Exhibit R) |
(587 | ) | (1,178 | ) | ||||
|
|
|
|
|||||
TOTAL |
63,440,103 | 23,742,631 | ||||||
|
|
|
|
11. | Financial assets pledged as collateral |
As of September 30, 2019 and December 31, 2018, the Entity delivered the financial assets listed below as collateral:
09.30.19 | 12.31.18 | |||||||||||
BCRA - Special guarantee accounts |
(1 | ) | 2,257,787 | 1,238,252 | ||||||||
Guarantee Trust - Government securities and BCRA Bills at fair value through OCI |
(2 | ) | 2,477,377 | 1,061,766 | ||||||||
Guarantee Trust - Pesos |
(2 | ) | 694,597 | 14,260 | ||||||||
Deposits as collateral |
(3 | ) | 2,871,274 | 2,372,751 | ||||||||
For repo transactions - Government securities at fair value |
(4 | ) | | 16,035 | ||||||||
|
|
|
|
|||||||||
TOTAL |
8,301,035 | 4,703,064 | ||||||||||
|
|
|
|
(1) | Special guarantee current accounts opened at the BCRA for the transactions related to the automated clearing houses and other similar entities. |
(2) | Set up as collateral to operate with ROFEX and MAE on foreign currency forward transactions and futures contracts. The trust fund consists of pesos and monetary regulation instruments issued by the BCRA. |
(3) | Deposits pledged as collateral for activities related to credit card transactions in the country and abroad, leases and futures contracts. |
(4) | It corresponds to repo transactions. |
12. | Income tax |
a) | Current income tax liabilities |
Breakdown is as follows:
09.30.19 | 12.31.18 | |||||||
Income tax provision |
5,675,601 | 4,278,000 | ||||||
Advances |
(571,768 | ) | (667,440 | ) | ||||
Collections and withholdings |
(248 | ) | (575 | ) | ||||
|
|
|
|
|||||
5,103,585 | 3,609,985 | |||||||
|
|
|
|
- 79 - |
b) | Income tax expense |
Breakdown of income tax expense:
09.30.19 | 09.30.18 | |||||||
Current tax |
5,675,601 | 2,920,000 | ||||||
Deferred tax |
(1,436,250 | ) | (427,441 | ) | ||||
|
|
|
|
|||||
4,239,351 | 2,492,559 | |||||||
|
|
|
|
Pursuant to IAS No. 34, in interim periods income tax is recognized over the best estimate of the weighted average tax rate expected by the Entity for the fiscal year.
The Banks effective rate for the nine-month period ended September 30, 2019 was 15%, while for the nine-month period ended September 30, 2018, it was 27%.
The policy on recognition of income tax in interim periods is described in Note 15.c) to the consolidated condensed interim financial statements.
13. | Investments in equity instruments |
Investments in equity instruments over which the Bank has no control, joint control or a significant influence are measured at fair value through profit or loss and at fair value through OCI. Breakdown is as follows:
13.1 | Investments in equity instruments through profit or loss |
09.30.19 | 12.31.18 | |||||||
Prisma Medios de Pago S.A. (Note 16 to the consolidated financial statements) |
1,765,000 | | ||||||
|
|
|
|
|||||
TOTAL |
1,765,000 | | ||||||
|
|
|
|
13.2 | Investments in equity instruments through other comprehensive income |
09.30.19 | 12.31.18 | |||||||
Banco Latinoaméricano de Exportaciones S.A. |
23,657 | 9,516 | ||||||
Other |
954 | 700 | ||||||
|
|
|
|
|||||
TOTAL |
24,611 | 10,216 | ||||||
|
|
|
|
- 80 - |
14. | Investments in subsidiaries and associates |
The Bank has investments in the following entities over which it has a control or significant influence which are measured by applying the equity method:
09.30.19 | 12.31.18 | |||||||
PSA Finance Arg. Cía. Financiera S.A. |
537,144 | 434,494 | ||||||
Rombo Cía. Financiera S.A. |
663,048 | 514,779 | ||||||
Volkswagen Financial Services Compañía Financiera S.A. |
924,452 | 633,362 | ||||||
Consolidar A.F.J.P. S.A. (under liquidation proceedings) |
27,404 | 28,454 | ||||||
BBVA Francés Valores S.A. |
154,489 | 164,294 | ||||||
BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión |
740,506 | 426,759 | ||||||
Interbanking S.A. |
54,424 | 33,863 | ||||||
BBVA Consolidar Seguros S.A. |
215,963 | 135,148 | ||||||
|
|
|
|
|||||
TOTAL |
3,317,430 | 2,371,153 | ||||||
|
|
|
|
15. | Property and equipment |
09.30.19 | 12.31.18 | |||||||
Real estate |
6,730,347 | 6,820,968 | ||||||
Real estate acquired through financial leases (Note 25) |
1,670,535 | | ||||||
Constructions in progress |
459,049 | 469,519 | ||||||
Furniture and facilities |
1,800,766 | 1,561,128 | ||||||
Machinery and equipment |
1,129,576 | 951,797 | ||||||
Automobiles |
14,092 | 12,704 | ||||||
|
|
|
|
|||||
TOTAL |
11,804,365 | 9,816,116 | ||||||
|
|
|
|
Detailed information on assets and lease liabilities as well as interest and foreign exchange differences recognized in profit or loss is included in Note 25 to these separate condensed interim financial statements.
16. | Intangible assets |
09.30.19 | 12.31.18 | |||||||
Licenses - Software |
640,119 | 510,912 | ||||||
|
|
|
|
|||||
TOTAL |
640,119 | 510,912 | ||||||
|
|
|
|
- 81 - |
17. | Other non-financial assets |
Breakdown is as follows:
09.30.19 | 12.31.18 | |||||||
Investment properties |
65,291 | 66,368 | ||||||
Tax advances |
434,128 | 388,264 | ||||||
Prepayments |
1,238,742 | 1,159,780 | ||||||
Advances to suppliers of goods |
100,333 | 152,848 | ||||||
Other miscellaneous assets |
228,215 | 327,504 | ||||||
Advances to personnel |
3,554 | 8,155 | ||||||
Assets acquired as security for loans |
2,918 | 2,758 | ||||||
Other |
992 | 27,608 | ||||||
|
|
|
|
|||||
TOTAL |
2,074,173 | 2,133,285 | ||||||
|
|
|
|
18. | Non-current assets held for sale |
On December 19, 2018, the Board of Directors agreed to a plan to sell a group of real property assets located in Argentina. Therefore, these assets, the value of which, as of September 30, 2019 and December 31, 2018 amounts to 59,776, were classified as Non-current assets held for sale, after the efforts to sell that group of assets began.
During November 2017, the Board of Directors agreed to a plan to sell its ownership interest in Prisma Medios de Pago S.A., and therefore the accounting balance of that ownership interest was presented as Non-current assets held for sale, in the amount of 433,597 as of December 31, 2018. The sale of 51% of the Banks shareholding in that Company was completed on February 1, 2019. As of September 30, 2019, the remaining ownership interest in this company is accounted for under Investments in equity instruments (Note 13).
19. | Deposits |
The information on concentration of deposits is disclosed in Exhibit H.
Breakdown is as follows:
09.30.19 | 12.31.18 | |||||||
Non-financial government sector |
2,642,132 | 1,544,761 | ||||||
Financial sector |
968,857 | 294,122 | ||||||
Non-financial private sector and residents abroad |
271,630,448 | 257,924,406 | ||||||
Checking accounts |
42,499,512 | 28,583,294 | ||||||
Savings accounts |
137,361,388 | 140,956,173 | ||||||
Time deposits |
86,518,381 | 84,050,291 | ||||||
Investment accounts |
62 | | ||||||
Other |
5,251,105 | 4,334,648 | ||||||
|
|
|
|
|||||
TOTAL |
275,241,437 | 259,763,289 | ||||||
|
|
|
|
20. | Liabilities at fair value through profit or loss |
09.30.19 | 12.31.18 | |||||||
Obligations for securities transactions |
43,168 | 692,270 | ||||||
|
|
|
|
|||||
TOTAL |
43,168 | 692,270 | ||||||
|
|
|
|
- 82 - |
21. | Other financial liabilities |
09.30.19 | 12.31.18 | |||||||
Creditors from spot transactions pending settlements |
4,167,530 | 7,031,105 | ||||||
Obligations fron financing of purchases |
10,248,489 | 13,105,616 | ||||||
Liabilities from leases (Note 25) |
2,555,617 | | ||||||
Accrued commissions payable |
1,190 | 5,893 | ||||||
Collections and other transactions on behalf of third parties |
3,619,101 | 3,374,476 | ||||||
Interest accrued payable |
112,351 | 89,774 | ||||||
Credit balance for spot sales or purchases pending settlement |
2,010,950 | | ||||||
Payment orders pending accreditation |
4,259,704 | 1,069,953 | ||||||
Other |
3,311,868 | 3,512,575 | ||||||
|
|
|
|
|||||
TOTAL |
30,286,800 | 28,189,392 | ||||||
|
|
|
|
22. | Financing received from the BCRA and other financial institutions |
09.30.19 | 12.31.18 | |||||||
Local financial institutions |
503,987 | | ||||||
Foreign financial institutions |
4,712,454 | 5,517,517 | ||||||
BCRA |
10,710 | 10,008 | ||||||
|
|
|
|
|||||
TOTAL |
5,227,151 | 5,527,525 | ||||||
|
|
|
|
23. | Corporate bonds issued |
Below is a detail of the Banks corporate bonds in force as of September 30, 2019 and December 31, 2018.
Detail |
Issuance date | Nominal value (in thousands of pesos) |
Maturity date | Rate |
Payment of interest |
Outstanding value as of 09.30.2019 |
Outstanding value as of 12.31.2018 |
|||||||||||||||||
Class 20 |
08.08.2016 | 292,500 | 08.08.2019 | Private Badlar + 3.23% annual nominal | Quarterly | | 289,000 | |||||||||||||||||
Class 22 |
11.18.2016 | 181,053 | 18.11.2019 | Private Badlar + 3.50% annual nominal | Quarterly | 171,053 | 181,053 | |||||||||||||||||
Class 23 |
12.27.2017 | 553,125 | 27.12.2019 | TM20 (*) + 3.20% annual nominal | Quarterly | 551,125 | 551,125 | |||||||||||||||||
Class 24 |
12.27.2017 | 546,500 | 27.12.2020 | Private Badlar + 4.25% annual nominal | Quarterly | 526,500 | 541,500 | |||||||||||||||||
Class 25 |
11.08.2018 | 784,334 | 08.11.2020 | UVA + 9.50% annual nominal | Quarterly | 1,138,621 | 856,473 | |||||||||||||||||
Class 26 |
02.28.2019 | 529,400 | 28.11.2019 | Fixed Rate 43% annual nominal | Upon maturity | 453,400 | | |||||||||||||||||
Class 27 |
02.28.2019 | 1,090,000 | 28.08.2020 | Private Badlar + 6.25% annual nominal | Quarterly | 891,000 | | |||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total principal | 3,731,699 | 2,419,151 | ||||||||||||||||||||||
Interest accrued | 205,671 | 54,539 | ||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||
Total principal and interest accrued | 3,937,370 | 2,473,690 | ||||||||||||||||||||||
|
|
|
|
- 83 - |
Definitions:
TM20 RATE: is the single arithmetic mean of interest rates for time deposits for twenty million pesos or over, and from thirty to thirty-five days.
BADLAR RATE: is the interest rate for time deposits over 1 (one) million pesos, for 30 to 35 days.
UVA RATE: is a measurement unit updated on a daily basis as per CER, according to the consumer price index.
24. | Other non-financial liabilities |
09.30.19 | 12.31.18 | |||||||
Short-term personnel benefits |
3,648,518 | 2,525,378 | ||||||
Long-term personnel benefits |
198,207 | 180,354 | ||||||
Other collections and withholdings |
2,840,840 | 2,014,695 | ||||||
Social security payable |
52,823 | 68,967 | ||||||
Advances collected |
1,912,144 | 1,653,586 | ||||||
Miscellaneous creditors |
4,553,052 | 3,427,678 | ||||||
For contract liabilities |
304,269 | 189,140 | ||||||
Other taxes payable |
1,006,979 | 775,669 | ||||||
Other |
6,723 | 29,255 | ||||||
|
|
|
|
|||||
TOTAL |
14,523,555 | 10,864,722 | ||||||
|
|
|
|
25. | Leases |
The Bank as lessee
Below is a detail of the amounts related to the rights of use of leased assets and lease liabilities in force as of September 30, 2019:
Rights of use under leases
Account |
Original value as of 01.01.2019 |
Increases | Decreases | Amortization | Residual value as of 09.30.2019 |
|||||||||||||||||||||||||||
Accumulated as of 01.01.2019 |
Decreases | For the period (1) |
Accumulated at period end |
|||||||||||||||||||||||||||||
Leased real property |
1,846,051 | 126,569 | | | | 302,085 | 302,085 | 1,670,535 |
(1) | See Note 37. |
Lease liabilities
Future minimum payments for lease agreements are as follows:
In foreign currency |
In local currency |
09.30.19 | ||||||||||
Up to one year |
69,648 | 5,639 | 75,287 | |||||||||
From 1 to 5 years |
1,157,662 | 173,731 | 1,331,393 | |||||||||
More than 5 years |
1,127,184 | 21,753 | 1,148,937 | |||||||||
|
|
|||||||||||
2,555,617 | ||||||||||||
|
|
- 84 - |
Interest and exchange rate difference through profit or loss
Other operating expenses |
(184,517 | ) | ||
Interest on lease liabilities (Note 38) |
||||
Exchange rate difference |
(826,715 | ) | ||
Exchange rate difference for finance lease (loss) |
||||
Other expenses |
||||
Leases (Note 36) |
(569,150 | ) |
26. | Share capital |
The information on the share capital is disclosed in Note 30 to the consolidated condensed interim financial statements.
27. | Interest income |
09.30.19 | 09.30.18 | |||||||
Interest from government securities |
22,912,810 | 4,232,063 | ||||||
Interest from credit card loans |
12,280,629 | 4,952,684 | ||||||
Interest from instruments |
6,154,336 | 3,470,030 | ||||||
Acquisition Value Unit (UVA) clause adjustment |
5,551,844 | 1,713,669 | ||||||
Interest from consumer loans |
5,436,091 | 4,513,028 | ||||||
Interest from overdrafts |
5,392,043 | 3,956,923 | ||||||
Interest from loans to the financial sector |
2,078,772 | 1,836,055 | ||||||
Interest from other loans |
1,982,892 | 1,454,080 | ||||||
Interest from loans for the prefinancing and financing of exports |
2,144,774 | 986,599 | ||||||
Premium from reverse repurchase agreements |
950,344 | 421,870 | ||||||
Interest from mortgage loans |
830,811 | 520,112 | ||||||
Interest from financial leases |
348,212 | 387,907 | ||||||
Interest from pledge loans |
281,876 | 362,303 | ||||||
Stabilization Coefficient (CER) clause adjustment |
41,592 | 63,245 | ||||||
Interest from private securities |
6,811 | 28,627 | ||||||
Other financial income |
4,702 | 13 | ||||||
|
|
|
|
|||||
TOTAL |
66,398,539 | 28,899,208 | ||||||
|
|
|
|
28. | Interest expenses |
09.30.19 | 09.30.18 | |||||||
Time deposits |
23,738,909 | 8,281,445 | ||||||
Checking accounts deposits |
1,831,719 | 1,845,594 | ||||||
Other liabilities from financial transactions |
2,120,401 | 905,875 | ||||||
Acquisition Value Unit (UVA) clause adjustments |
974,368 | 636,895 | ||||||
Savings accounts deposits |
131,031 | 64,338 | ||||||
Interfinancial loans received |
28,554 | 43,165 | ||||||
Other |
21,854 | 4,719 | ||||||
Premium for reverse repurchase agreements |
2,075 | 82,637 | ||||||
|
|
|
|
|||||
TOTAL |
28,848,911 | 11,864,668 | ||||||
|
|
|
|
- 85 - |
29. | Commission income |
09.30.19 | 09.30.18 | |||||||
Linked to liabilities |
6,679,260 | 4,192,247 | ||||||
Linked to loans |
341,005 | 142,418 | ||||||
Linked to securities |
72,286 | 103,069 | ||||||
From guarantees granted |
1,135 | 2,108 | ||||||
From credit cards |
4,200,662 | 3,096,881 | ||||||
From insurance |
667,205 | 511,225 | ||||||
From foreign trade and foreign currency transactions |
632,967 | 323,410 | ||||||
|
|
|
|
|||||
TOTAL |
12,594,520 | 8,371,358 | ||||||
|
|
|
|
30. | Commission expenses |
09.30.19 | 09.30.18 | |||||||
From credit and debit cards |
5,975,223 | 3,737,648 | ||||||
Related to transactions with securities |
1,704 | 858 | ||||||
From foreign trade transactions |
220,925 | 97,807 | ||||||
From salary payments |
549,144 | 201,701 | ||||||
From promotions |
55,024 | 176,634 | ||||||
From digital sales services |
386,774 | 294,680 | ||||||
Other commission expenses |
627,562 | 336,947 | ||||||
|
|
|
|
|||||
TOTAL |
7,816,356 | 4,846,275 | ||||||
|
|
|
|
31. | Net income/(loss) from measurement of financial instruments carried at fair value through profit or loss |
09.30.19 | 09.30.18 | |||||||
Income/(loss) from foreign currency forward transactions |
1,272,224 | (442,734 | ) | |||||
Income from government securities |
2,656,758 | 647,308 | ||||||
(Loss)/income from corporate bonds |
(3.312 | ) | 11,227 | |||||
Income from private securities |
2,268,970 | 310,900 | ||||||
(Loss) from interest rate swaps |
(501,882 | ) | (682,907 | ) | ||||
|
|
|
|
|||||
TOTAL |
5,692,758 | (156,206 | ) | |||||
|
|
|
|
32. | (Loss) from writing down of financial assets at amortized cost and at fair value through OCI |
09.30.19 | 09.30.18 | |||||||
Loss from sale of government securities |
(35,845 | ) | (54,157 | ) | ||||
Loss from sale of private securities |
(924 | ) | | |||||
|
|
|
|
|||||
TOTAL |
(36,769 | ) | (54,157 | ) | ||||
|
|
|
|
33. | Foreign exchange and gold gain/loss |
09.30.19 | 09.30.18 | |||||||
Conversion of foreign currency assets and liabilities into pesos |
(265,270 | ) | 1,477,978 | |||||
Income from purchase-sale of foreign currency |
6,170,466 | 2,764,991 | ||||||
|
|
|
|
|||||
TOTAL |
5,905,196 | 4,242,969 | ||||||
|
|
|
|
- 86 - |
34. | Other operating income |
09.30.19 | 09.30.18 | |||||||
Rental of safe deposit boxes |
411,619 | 323,592 | ||||||
Adjustments and interest on miscellaneous receivables |
772,950 | 325,284 | ||||||
Punitive interest |
121,773 | 51,520 | ||||||
Loans recovered |
352,472 | 202,001 | ||||||
Allowances reversed |
47,280 | 72,192 | ||||||
Income from sale of non-current assets held for sale |
2,644,937 | | ||||||
Income tax - Tax inflation adjustment - Fiscal years 2017 and 2018 (Note 15.c) to the consolidated condensed interim financial statements |
3,239,760 | 1,021,518 | ||||||
Debit and credit card commissions |
448,972 | 328,403 | ||||||
Other operating income |
839,838 | 837,097 | ||||||
|
|
|
|
|||||
TOTAL |
8,879,601 | 3,161,607 | ||||||
|
|
|
|
35. | Personnel benefits |
09.30.19 | 09.30.18 | |||||||
Salaries |
5,650,598 | 3,600,548 | ||||||
Social security charges |
1,629,429 | 1,099,078 | ||||||
Personnel compensation and bonuses |
300,225 | 384,653 | ||||||
Personnel services |
190,550 | 126,687 | ||||||
Other short-term personnel benefits |
1,706,701 | 1,056,243 | ||||||
Termination personnel benefits |
| 1,822 | ||||||
Other long-term personnel benefits |
16,947 | 16,724 | ||||||
|
|
|
|
|||||
TOTAL |
9,494,450 | 6,285,755 | ||||||
|
|
|
|
36. | Administrative expenses |
09.30.19 | 09.30.18 | |||||||
Travel expenses |
88,380 | 58,908 | ||||||
Administrative expenses |
626,268 | 343,854 | ||||||
Security services |
280,238 | 222,065 | ||||||
Fees to Bank Directors and Supervisory Committee |
9,193 | 9,599 | ||||||
Other fees |
372,700 | 211,344 | ||||||
Insurance |
83,660 | 50,514 | ||||||
Rent (Note 25) |
569,150 | 535,641 | ||||||
Stationery and supplies |
37,827 | 28,604 | ||||||
Electricity and communications |
398,831 | 208,520 | ||||||
Advertising |
359,439 | 322,882 | ||||||
Taxes |
1,903,984 | 1,138,945 | ||||||
Maintenance costs |
815,390 | 532,394 | ||||||
Armored transportation services |
1,391,029 | 650,193 | ||||||
Other administrative expenses |
856,423 | 585,950 | ||||||
|
|
|
|
|||||
TOTAL |
7,792,512 | 4,899,413 | ||||||
|
|
|
|
- 87 - |
37. | Depreciation and amortization |
09.30.19 | 09.30.18 | |||||||
Depreciation of property and equipment |
795,925 | 528,487 | ||||||
Amortization of intangible assets |
70,969 | 92,903 | ||||||
Depreciation of assets acquired through financial leases (Note 25) |
302,085 | | ||||||
Depreciation of other assets |
1,551 | 1,980 | ||||||
|
|
|
|
|||||
TOTAL |
1,170,530 | 623,370 | ||||||
|
|
|
|
38. | Other operating expenses |
09.30.19 | 09.30.18 | |||||||
Contribution to the Deposit Guarantee Fund |
364,691 | 223,842 | ||||||
Turnover tax |
4,448,000 | 2,728,000 | ||||||
Other allowances (Exhibit J) |
4,493,778 | 1,423,181 | ||||||
Restructuring expenses (Exhibit J) |
188,268 | | ||||||
Claims |
102,832 | 101,931 | ||||||
Interest on liabilities from financial lease (Note 25) |
184,517 | | ||||||
Initial recognition of loans |
930,442 | 421 | ||||||
Other operating expenses |
845,669 | 451,836 | ||||||
|
|
|
|
|||||
TOTAL |
11,558,197 | 4,929,211 | ||||||
|
|
|
|
39. | Related parties |
See Note 46 to the Consolidated Condensed Interim Financial Statements.
40. | Restrictions to the payment of dividends |
See Note 47 to the consolidated interim financial statements regarding the restrictions to the payment of dividends.
41. | Restricted assets |
As of September 30, 2019 and December 31, 2018, the Bank has the following restricted assets:
a) | The Entity applied Argentine Treasury Bonds adjusted by CER in pesos maturing in 2021 in the amount of 49,440, Treasury Bills in pesos maturing on July 31, 2020 in the amount of 7,061 and Treasury Bills in US dollars maturing on December 4, 2019 in the amount of 67,256 as of September 30, 2019, Argentine Treasury Bonds adjusted by CER in pesos maturing in 2021 in the amount of 79,285 and Treasury Bonds in US dollars maturing on May 10, 2019 in the amount of 56,145 as of December 31, 2018, as security for loans agreed under the Global Credit Program for micro, small and medium enterprises granted by the Inter-American Development Bank (IDB). |
b) | Also, the Entity has accounts, deposits, repo transactions and trusts applied as security for activities related to credit card transactions, with automated clearing houses, transactions settled at maturity, foreign currency futures, court proceedings and leases in the amount of 8,301,035 and 4,703,064 as of September 30, 2019 and December 31, 2018, respectively. |
42. | Minimum cash and minimum capital requirements |
42.1 Minimum cash requirements
The BCRA establishes different prudential regulations to be observed by financial institutions, mainly regarding solvency levels, liquidity and credit assistance levels, among others.
- 88 - |
Minimum cash regulations set forth an obligation to keep liquid assets in relation to deposits and other liabilities recorded for each period. The items included for the purpose of meeting that requirement are detailed below:
Items |
09.30.19 | 12.31.18 | ||||||
Balances at the BCRA |
||||||||
Argentine Central Bank (BCRA) current account not restricted |
58,898,271 | 82,119,608 | ||||||
Argentine Central Bank (BCRA) special guarantee accounts - restricted (Note 11) |
2,257,787 | 1,238,252 | ||||||
Argentine Central Bank (BCRA) social security special accounts - restricted |
12 | | ||||||
|
|
|
|
|||||
61,156,070 | 83,357,860 | |||||||
|
|
|
|
|||||
Fixed rate Treasury Bonds maturing in November 2020 |
7,771,739 | 6,936,000 | ||||||
Liquidity Bills BCRA |
53,674,969 | 20,202,428 | ||||||
|
|
|
|
|||||
TOTAL |
122,602,778 | 110,496,288 | ||||||
|
|
|
|
42.2 | Minimum capital requirements |
The regulatory breakdown of minimum capital requirements is as follows at the mentioned date:
Minimum capital requirement |
09.30.19 | 09.30.18 | ||||||
Credit risk |
17,612,815 | 16,880,435 | ||||||
Operational risk |
5,310,522 | 3,057,896 | ||||||
Market risk |
332,745 | 171,996 | ||||||
Non-fulfilment of other technical ratios |
7,703 | 814,296 | ||||||
|
|
|
|
|||||
Paid-in |
43,044,858 | 31,826,433 | ||||||
|
|
|
|
|||||
Surplus |
19,781,073 | 10,901,810 | ||||||
|
|
|
|
43. | Accounting principles Explanation added for translation into English |
These financial statements are the English translation of those originally issued in Spanish.
These financial statements are presented on the basis of the accounting standards established by the financial reporting framework set forth by BCRA. Certain accounting practices applied by the Bank that conform to the standards of the BCRA may not conform to the generally accepted accounting principles in other countries.
The differences between the financial reporting framework set forth by BCRA and IFRS are detailed in Note 2 to the consolidated financial statements. Accordingly, these financial statements are not intended to present financial position, results of operations and cash flows in accordance with generally accepted accounting principles other than the financial reporting framework set forth by the BCRA.
- 89 - |
BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
HOLDING | POSITION | |||||||||||||||||||||||||||||||
Account |
Identification | Fair value |
Fair value level |
Book value 09.30.2019 |
Book value 12.31.2018 |
Position with no options |
Options | Final position | ||||||||||||||||||||||||
DEBT SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS |
||||||||||||||||||||||||||||||||
Local: |
||||||||||||||||||||||||||||||||
Government Securities - In pesos |
||||||||||||||||||||||||||||||||
Capitalizable Treasury Bills in pesos. Maturity 04-30-20 |
5271 | 59,493 | 2 | 59,493 | 48,825 | 59,493 | | 59,493 | ||||||||||||||||||||||||
CER-adjusted Treasury Bills. Maturity 08-30-19 |
5290 | 36,630 | 2 | 36,630 | | 36,630 | | 36,630 | ||||||||||||||||||||||||
Province of Rio Negro debt security. Floating rate. Maturity 2021 |
42016 | 23,465 | 2 | 23,465 | 53,584 | 23,465 | | 23,465 | ||||||||||||||||||||||||
Capitalizable Treasury Bills in pesos. Maturity 09-13-19 |
5337 | 23,200 | 1 | 23,200 | | 23,200 | | 23,200 | ||||||||||||||||||||||||
Capitalizable Treasury Bills in pesos. Maturity 06-28-19 |
5281 | | | 306,053 | | | | |||||||||||||||||||||||||
Capitalizable Treasury Bills in pesos. Maturity 02-22-19 |
5273 | | | 229,419 | | | | |||||||||||||||||||||||||
CER-adjusted Treasury Bills. Maturity 02-22-19 |
5274 | | | 185,182 | | | | |||||||||||||||||||||||||
Other |
1,318 | 1,318 | 122,767 | 1,318 | | 1,318 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Subtotal Government Securities - In pesos |
144,106 | 144,106 | 945,830 | 144,106 | | 144,106 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Government Securities - In foreign currency |
||||||||||||||||||||||||||||||||
Treasury Biils in USD. Maturity 10-11-19 |
5291 | 233 | 2 | 233 | | 233 | | 233 | ||||||||||||||||||||||||
Treasury Biils in USD. Maturity 02-22-19 |
5251 | | | 4,156 | | | | |||||||||||||||||||||||||
Treasury Biils in USD. Maturity 02-08-19 |
5250 | | | 467 | | | | |||||||||||||||||||||||||
Treasury Biils in USD. Maturity 03-29-19 |
5263 | | | 42 | | | | |||||||||||||||||||||||||
Treasury Biils in USD. Maturity 07-26-19 |
5258 | | | 30 | | | | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Subtotal Government Securities - In foreign currency |
233 | 233 | 4,695 | 233 | | 233 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
BCRA Bills |
||||||||||||||||||||||||||||||||
BCRA Bills in pesos. Maturity 10-07-19 |
13495 | 2,966,889 | 2 | 2,966,889 | | 2,966,889 | | 2,966,889 | ||||||||||||||||||||||||
BCRA Bills in pesos. Maturity 10-01-19 |
13491 | 998,086 | 2 | 998,086 | | 998,086 | 1 | 998,086 | ||||||||||||||||||||||||
BCRA Bills in pesos. Maturity 10-04-19 |
13494 | 993,678 | 2 | 993,678 | | 993,678 | 2 | 993,678 | ||||||||||||||||||||||||
BCRA Bills in pesos. Maturity 01-07-19 |
13311 | | | 6,387,388 | | | | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Subtotal BCRA Bills |
4,958,653 | 4,958,653 | 6,387,388 | 4,958,653 | 3 | 4,958,653 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Private Securities |
||||||||||||||||||||||||||||||||
Corporate Bond FCA Financiera Series I UVA Maturity 11-05-20 |
53823 | 30,640 | 2 | 30,640 | 56,748 | 30,640 | | 30,640 | ||||||||||||||||||||||||
Corporate Bond Banco de la Provincia de Bs. As. Class IV |
32890 | 17,463 | 2 | 17,463 | 18,033 | 17,463 | | 17,463 | ||||||||||||||||||||||||
Corporate Bond Rombo Cia Financiera S.A. Class 42 |
53238 | 5,323 | 2 | 5,323 | 5,296 | 5,323 | | 5,323 | ||||||||||||||||||||||||
Corporate Bond Rombo Cia Financiera S.A. Class 40 |
52940 | 3,200 | 2 | 3,200 | 4,963 | 3,200 | | 3,200 | ||||||||||||||||||||||||
Corporate Bond Banco Santander Rio S.A. Class XXIII |
53448 | | | 51,080 | | | | |||||||||||||||||||||||||
Corporate Bond YPF S.A. Class XVII |
38562 | | | 18,707 | | | | |||||||||||||||||||||||||
Corporate Bond YPF S.A. Class XXXV |
39792 | | | 10,922 | | | | |||||||||||||||||||||||||
Corporate Bond Rombo Cia Financiera S.A. Class 36 |
52186 | | | 2,164 | | | | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Subtotal Private Securities |
56,626 | 56,626 | 167,913 | 56,626 | | 56,626 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
TOTAL DEBT SECURITIES AT FAIR VALUE THROUGH PROFIT OR LOSS |
5,159,618 | 5,159,618 | 7,505,826 | 5,159,618 | | 5,159,618 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
- 90 - |
EXHIBIT A
(Continued)
BREAKDOWN OF GOVERNMENT AND PRIVATE SECURITIES
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
HOLDING | POSITION | |||||||||||||||||||||||||||||||
Account |
Identification | Fair value |
Fair value level |
Book value 09.30.2019 |
Book value 12.31.2018 |
Position with no options |
Options | Final position | ||||||||||||||||||||||||
OTHER DEBT SECURITIES |
||||||||||||||||||||||||||||||||
MEASURED AT FAIR VALUE THROUGH OCI |
||||||||||||||||||||||||||||||||
Local: |
||||||||||||||||||||||||||||||||
Government Securities - In pesos |
||||||||||||||||||||||||||||||||
Argentine Treasury Bond in pesos. Fixed rate. Maturity November 2020 |
5330 | 7,771,739 | 2 | 7,771,739 | 6,936,000 | 7,771,739 | | 7,771,739 | ||||||||||||||||||||||||
CER-adjusted Argentine Bond in pesos. Maturity 2021 |
5315 | 62,460 | 1 | 62,460 | 100,166 | 62,460 | | 62,460 | ||||||||||||||||||||||||
Capitalizable Treasury Bills in pesos. Maturity 07-31-20 |
5284 | 50,229 | 2 | 50,229 | | 50,229 | | 50,229 | ||||||||||||||||||||||||
Capitalizable Treasury Bills in pesos. Maturity 05-29-20 |
5341 | 5,498 | 2 | 5,498 | | 5,498 | | 5,498 | ||||||||||||||||||||||||
Capitalizable Treasury Bills in pesos. Maturity 04-12-19 |
5280 | | | 407,800 | | | | |||||||||||||||||||||||||
Capitalizable Treasury Bills in pesos. Maturity 06-28-19 |
5281 | | | 204,500 | | | | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Subtotal Government Securities - In pesos |
7,889,926 | 7,889,926 | 7,648,466 | 7,889,926 | | 7,889,926 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Government Securities - In foreign currency |
||||||||||||||||||||||||||||||||
US dollar-linked Treasury Bills. Maturity 12-04-19 |
5333 | 6,773,620 | 2 | 6,773,620 | | 6,773,620 | | 6,773,620 | ||||||||||||||||||||||||
Treasury Biils in USD. Maturity 08-30-19 |
5283 | 2,169 | 2 | 2,169 | | 2,169 | | 2,169 | ||||||||||||||||||||||||
Treasury Biils in USD. Maturity 04-26-19 |
5255 | | | 809,347 | | | | |||||||||||||||||||||||||
Treasury Biils in USD. Maturity 05-10-19 |
5272 | | | 704,886 | | | | |||||||||||||||||||||||||
Treasury Biils in USD. Maturity 03-15-19 |
5261 | | | 470,762 | | | | |||||||||||||||||||||||||
Treasury Biils in USD. Maturity 02-08-19 |
5250 | | | 182,160 | | | | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Subtotal Government Securities - In foreign currency |
6,775,789 | 6,775,789 | 2,167,155 | 6,775,789 | | 6,775,789 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
BCRA Bills |
||||||||||||||||||||||||||||||||
BCRA Bills in pesos. Maturity 10-03-19 |
13493 | 16,904,835 | 2 | 16,904,835 | | 16,904,835 | | 16,904,835 | ||||||||||||||||||||||||
BCRA Bills in pesos. Maturity 10-07-19 |
13495 | 10,384,112 | 2 | 10,384,112 | | 10,384,112 | | 10,384,112 | ||||||||||||||||||||||||
BCRA Bills in pesos. Maturity 10-02-19 |
13492 | 9,962,606 | 2 | 9,962,606 | | 9,962,606 | | 9,962,606 | ||||||||||||||||||||||||
BCRA Bills in pesos. Maturity 10-01-19 |
13491 | 8,483,730 | 2 | 8,483,730 | | 8,483,730 | | 8,483,730 | ||||||||||||||||||||||||
BCRA Bills in pesos. Maturity 10-04-19 |
13494 | 2,981,034 | 2 | 2,981,034 | | 2,981,034 | | 2,981,034 | ||||||||||||||||||||||||
BCRA Bills in pesos. Maturity 01-04-19 |
13310 | | | 9,870,740 | | | | |||||||||||||||||||||||||
BCRA Bills in pesos. Maturity 01-08-19 |
13312 | | | 3,944,300 | | | | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Subtotal BCRA Bills |
48,716,317 | 48,716,317 | 13,815,040 | 48,716,317 | | 48,716,317 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Private Securities - In foreign currency |
||||||||||||||||||||||||||||||||
Corporate Bond John Deere Credit Cia. Financiera S.A. Class XVIII |
54266 | 58,658 | 2 | 58,658 | | 58,658 | | 58,658 | ||||||||||||||||||||||||
Corporate Bond John Deere Credit Cia. Financiera S.A. Class XII |
51620 | | | 113,148 | | | | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Subtotal Private Securities |
58,658 | 58,658 | 113,148 | 58,658 | | 58,658 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Subtotal Measured at fair value through OCI |
63,440,690 | 63,440,690 | 23,743,809 | 63,440,690 | | 63,440,690 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
MEASURED AT AMORTIZED COST |
||||||||||||||||||||||||||||||||
Private Securities - In pesos |
||||||||||||||||||||||||||||||||
Corporate Bond EXO. S.A. |
136 | 136 | 136 | 136 | | 136 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
TOTAL OTHER DEBT SECURITIES |
63,440,826 | 63,440,826 | 23,743,945 | 63,440,826 | | 63,440,826 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
EQUITY INSTRUMENTS |
||||||||||||||||||||||||||||||||
Local: |
||||||||||||||||||||||||||||||||
Private Securities - In pesos |
||||||||||||||||||||||||||||||||
Prisma Medios de Pago S.A. |
1,765,000 | 3 | 1,765,000 | | 1,765,000 | | 1,765,000 | |||||||||||||||||||||||||
Other |
231 | 2 | 231 | 225 | 231 | | 231 | |||||||||||||||||||||||||
Foreign: |
||||||||||||||||||||||||||||||||
Private Securities - In foreign currency |
||||||||||||||||||||||||||||||||
Other |
24,380 | 2 | 24,380 | 9,991 | 24,380 | | 24,380 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
TOTAL EQUITY INSTRUMENTS |
1,789,611 | 1,789,611 | 10,216 | 1,789,611 | | 1,789,611 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
- 91 - |
EXHIBIT B
CLASSIFICATION OF LOANS AND OTHER FINANCING
ACCORDING TO FINANCIAL PERFORMANCE AND GUARANTEES RECEIVED
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
09.30.19 | 12.31.18 | |||||||
COMMERCIAL PORTFOLIO |
||||||||
Normal performance |
97,054,439 | 99,824,957 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees A |
559,982 | 782,100 | ||||||
Preferred collaterals and counter-guarantees B |
636,838 | 1,068,873 | ||||||
No preferred collaterals or counter-guarantees |
95,857,619 | 97,973,984 | ||||||
With special follow-up |
204,024 | 174,767 | ||||||
|
|
|
|
|||||
Under observation |
204,024 | 174,767 | ||||||
Preferred collaterals and counter-guarantees B |
1,361 | 3,522 | ||||||
No preferred collaterals or counter-guarantees |
202,663 | 171,245 | ||||||
Troubled |
1,068,814 | 1,529,081 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees B |
160,188 | 3,315 | ||||||
No preferred collaterals or counter-guarantees |
908,626 | 1,525,766 | ||||||
With high risk of insolvency |
2,566,434 | 294,627 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees B |
10,482 | 9,437 | ||||||
No preferred collaterals or counter-guarantees |
2,555,952 | 285,190 | ||||||
Uncollectible |
238,813 | 23,658 | ||||||
|
|
|
|
|||||
No preferred collaterals or counter-guarantees |
238,813 | 23,658 | ||||||
|
|
|
|
|||||
TOTAL |
101,132,524 | 101,847,090 | ||||||
|
|
|
|
- 92 - |
EXHIBIT B
(Continued)
CLASSIFICATION OF LOANS AND OTHER FINANCING
ACCORDING TO FINANCIAL PERFORMANCE AND GUARANTEES RECEIVED
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
09.30.19 | 12.31.18 | |||||||
CONSUMER AND HOUSING PORTFOLIO |
||||||||
Normal performance |
97,600,195 | 82,079,990 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees A |
57,748 | 52,624 | ||||||
Preferred collaterals and counter-guarantees B |
13,139,445 | 9,573,987 | ||||||
No preferred collaterals or counter-guarantees |
84,403,002 | 72,453,379 | ||||||
Low risk |
1,746,852 | 1,363,176 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees A |
| 769 | ||||||
Preferred collaterals and counter-guarantees B |
85,813 | 61,746 | ||||||
No preferred collaterals or counter-guarantees |
1,661,039 | 1,300,661 | ||||||
Medium risk |
1,616,152 | 1,112,362 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees B |
16,249 | 8,703 | ||||||
No preferred collaterals or counter-guarantees |
1,599,903 | 1,103,659 | ||||||
High risk |
1,186,624 | 585,308 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees A |
537 | | ||||||
Preferred collaterals and counter-guarantees B |
31,761 | 22,179 | ||||||
No preferred collaterals or counter-guarantees |
1,154,326 | 563,129 | ||||||
Uncollectible |
77,982 | 68,800 | ||||||
|
|
|
|
|||||
Preferred collaterals and counter-guarantees A |
15 | |||||||
Preferred collaterals and counter-guarantees B |
9,905 | 7,764 | ||||||
No preferred collaterals or counter-guarantees |
68,077 | 61,021 | ||||||
|
|
|
|
|||||
TOTAL |
102,227,805 | 85,209,636 | ||||||
|
|
|
|
|||||
TOTAL GENERAL |
203,360,329 | 187,056,726 | ||||||
|
|
|
|
- 93 - |
EXHIBIT C
CONCENTRATION OF LOANS AND OTHER FINANCING
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
09.30.19 | 12.31.18 | |||||||||||||||
Number of customers |
Debt balance |
% over total portfolio |
Debt balance |
% over total portfolio |
||||||||||||
10 largest customers |
28,384,989 | 13.96 | % | 23,237,722 | 12.42 | % | ||||||||||
50 following largest customers |
33,474,568 | 16.46 | % | 31,726,036 | 16.96 | % | ||||||||||
100 following largest customers |
17,361,118 | 8.54 | % | 18,088,037 | 9.67 | % | ||||||||||
All other customers |
124,139,654 | 61.04 | % | 114,004,931 | 60.95 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
TOTAL |
203,360,329 | 100.00 | % | 187,056,726 | 100.00 | % | ||||||||||
|
|
|
|
|
|
|
|
- 94 - |
EXHIBIT D
BREAKDOWN OF LOANS AND OTHER FINANCING BY TERM
AS OF SEPTEMBER 30, 2019
(stated in thousands of pesos) (1)
Terms remaining to maturity | ||||||||||||||||||||||||||||||||
ITEM |
Portfolio due |
1 month |
3 months |
6 months |
12 months |
24 months |
More than 24 months |
TOTAL | ||||||||||||||||||||||||
Non-financial government sector |
| 503 | | | | | | 503 | ||||||||||||||||||||||||
Financial sector |
| 1,827,169 | 1,295,913 | 1,213,615 | 1,703,620 | 3,198,189 | 654,813 | 9,893,319 | ||||||||||||||||||||||||
Non-financial private sector and residents abroad |
5,512,277 | 72,326,537 | 33,441,639 | 20,154,155 | 16,479,853 | 23,998,837 | 40,953,685 | 212,866,983 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
TOTAL |
5,512,277 | 74,154,209 | 34,737,552 | 21,367,770 | 18,183,473 | 27,197,026 | 41,608,498 | 222,760,805 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | These balances are total contractual cash flows and, therefore, include principal, accrued and to be accrued interest and charges. |
- 95 - |
EXHIBIT H
DEPOSITS CONCENTRATION
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
09.30.19 | 12.31.18 | |||||||||||||||
Number of customers |
Debt balance |
% over total portfolio |
Debt balance |
% over total portfolio |
||||||||||||
10 largest customers |
10,735,216 | 3.90 | % | 15,293,060 | 5.89 | % | ||||||||||
50 following largest customers |
15,539,492 | 5.65 | % | 15,553,822 | 5.99 | % | ||||||||||
100 following largest customers |
12,189,986 | 4.43 | % | 10,544,960 | 4.06 | % | ||||||||||
Rest of customers |
236,776,743 | 86.02 | % | 218,371,447 | 84.06 | % | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
TOTAL |
275,241,437 | 100.00 | % | 259,763,289 | 100.00 | % | ||||||||||
|
|
|
|
|
|
|
|
- 96 - |
EXHIBIT I
BREAKDOWN OF FINANCIAL LIABILITIES BY REMAINING TERMS
AS OF SEPTEMBER 30, 2019
(stated in thousands of pesos) (1)
Terms remaining to maturity | ||||||||||||||||||||||||||||
ITEMS |
1 month |
3 months |
6 months |
12 months |
24 months |
More than 24 months |
TOTAL | |||||||||||||||||||||
Deposits |
255,523,335 | 15,476,771 | 8,917,959 | 1,855,762 | 59,872 | 2,731 | 281,836,430 | |||||||||||||||||||||
Non-financial government sector |
2,666,336 | 2,276 | 7 | | | | 2,668,619 | |||||||||||||||||||||
Financial sector |
968,857 | | | | | | 968,857 | |||||||||||||||||||||
Non-financial private sector and residents abroad |
251,888,142 | 15,474,495 | 8,917,952 | 1,855,762 | 59,872 | 2,731 | 278,198,954 | |||||||||||||||||||||
Liabilities at fair value through profit or loss |
43,168 | | | | | | 43,168 | |||||||||||||||||||||
Derivative instruments |
4,399,534 | | | | | | 4,399,534 | |||||||||||||||||||||
Other financial liabilities |
26,551,129 | 314,416 | 493,797 | 871,032 | 867,946 | 2,237,258 | 31,335,578 | |||||||||||||||||||||
Financing received from the BCRA and other financial institutions |
794,023 | 1,991,814 | 2,193,753 | 248,534 | | | 5,228,124 | |||||||||||||||||||||
Corporate bonds issued |
237,984 | 1,582,107 | 284,449 | 1,323,135 | 1,767,185 | | 5,194,860 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
TOTAL |
287,549,173 | 19,365,108 | 11,889,958 | 4,298,463 | 2,695,003 | 2,239,989 | 328,037,694 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | These balances are total contractual cash flows and, therefore, include principal, accrued and to be accrued interest and charges. |
- 97 - |
EXHIBIT J
PROVISIONS
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2019 AND
THE FISCAL YEAR ENDED DECEMBER 31, 2018
(stated in thousands of pesos)
Decreases | ||||||||||||||||||||||||
Accounts |
Balances at the beginning of the year |
Increases | Reversals | Uses | Balances as of 09.30.19 |
Balances as of 12.31.18 |
||||||||||||||||||
INCLUDED IN LIABILITIES |
||||||||||||||||||||||||
- Provisions for contingent commitments |
1,483 | | (1) | 646 | | 837 | 1,483 | |||||||||||||||||
- For administrative, disciplinary and criminal penalties |
5,000 | | (4) | | | 5,000 | 5,000 | |||||||||||||||||
- Provisions for reorganization |
| 188,268 | (5) | | 152,949 | 35,319 | | |||||||||||||||||
- Provisions for termination plans |
62,135 | | (2) | 907 | | 61,228 | 62,135 | |||||||||||||||||
- Other |
3,534,696 | 4,493,778 | (3) | 761 | 652,482 | 7,375,231 | 3,534,696 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL PROVISIONS |
3,603,314 | 4,682,046 | 2,314 | 805,431 | 7,477,615 | 3,603,314 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Set up in compliance with the provisions of Communication A 2950 and supplementary regulations of the BCRA. |
(2) | Set up to cover contingences referred to private healthcare plans. |
(3) | Set up to cover for potential contingencies not considered in other accounts (civil, commercial, labor and other lawsuits), and as required by Memorandum 6/2017 issued by the BCRA. |
(4) | Set up to cover administrative, disciplinary and criminal penalties. |
(5) | See Note 27 to the consolidated condensed interim financial statements. |
- 98 - |
EXHIBIT L
BALANCES IN FOREIGN CURRENCY
AS OF SEPTEMBER 30, 2019 AND DECEMBER 31, 2018
(stated in thousands of pesos)
ACCOUNTS |
TOTAL AS OF 09.30.19 |
AS OF 09.30.19 (per currency) | TOTAL | |||||||||||||||||||||
Dollar | Euros | Real | Other | AS OF 12.31.18 |
||||||||||||||||||||
ASSETS |
||||||||||||||||||||||||
Cash and deposits in banks |
72,405,873 | 66,774,860 | 5,377,647 | 15,770 | 237,596 | 52,484,375 | ||||||||||||||||||
Debt securities at fair value through profit or loss |
233 | 233 | | | | 4,695 | ||||||||||||||||||
Other financial assets |
212,470 | 212,456 | | 14 | | 649,072 | ||||||||||||||||||
Loans and other financing |
60,367,975 | 60,099,437 | 268,538 | | | 60,635,907 | ||||||||||||||||||
Non-financial government sector |
3 | 3 | | | | | ||||||||||||||||||
Other financial institutions |
751,550 | 751,550 | | | | 248,932 | ||||||||||||||||||
Non-financial private sector and residents abroad |
59,616,422 | 59,347,884 | 268,538 | | | 60,386,975 | ||||||||||||||||||
Other debt securities |
6,833,860 | 6,833,860 | | | | 2,279,172 | ||||||||||||||||||
Financial assets pledged as collateral |
4,310,096 | 4,310,096 | | | | 2,303,947 | ||||||||||||||||||
Investments in equity instruments |
24,380 | 24,380 | | | | 9,991 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL ASSETS |
144,154,887 | 138,255,322 | 5,646,185 | 15,784 | 237,596 | 131,073,522 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
LIABILITIES |
||||||||||||||||||||||||
Deposits |
120,284,570 | 117,810,947 | 2,473,623 | | | 114,494,962 | ||||||||||||||||||
Non-financial government sector |
1,515,332 | 1,512,845 | 2,487 | | | 390,264 | ||||||||||||||||||
Financial sector |
68,156 | 67,709 | 447 | | | 99,865 | ||||||||||||||||||
Non-financial private sector and residents abroad |
118,701,082 | 116,230,393 | 2,470,689 | | | 114,004,833 | ||||||||||||||||||
Liabilities at fair value through profit or loss |
| | | | | 34,797 | ||||||||||||||||||
Other financial liabilities |
12,683,248 | 10,117,444 | 2,488,587 | | 77,217 | 5,316,849 | ||||||||||||||||||
Financing received from the BCRA and other financial institutions |
5,216,441 | 4,970,406 | 246,013 | | 22 | 5,400,682 | ||||||||||||||||||
Other non-financial liabilities |
998,244 | 446,621 | 375,483 | 15,783 | 160,357 | 946,530 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL LIABILITIES |
139,182,503 | 133,345,418 | 5,583,706 | 15,783 | 237,596 | 126,193,820 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
- 99 - |
EXHIBIT O
DERIVATIVES
AS OF SEPTEMBER 30, 2019
(stated in thousands of pesos)
Type of Contract |
Purpose of the transactions |
Underlying asset |
Type of settlement | Scope of negotiation or counterparty |
Weighted average term originally agreed |
Residual weighted average term |
Weighted average term for settlement of differences |
Amount | ||||||||||||||||
SWAPS |
Financial transactions own account |
| Upon maturity of differences |
RESIDENTS IN THE COUNTRY FINANCIAL SECTOR |
31 | 7 | 49 | 2,017,656 | ||||||||||||||||
REPO TRANSACTIONS |
Financial transactions own account |
Other | Upon maturity of differences |
RESIDENTS IN THE COUNTRY FINANCIAL |
1 | 1 | 1 | 7,421,840 | ||||||||||||||||
FUTURES |
Financial transactions own account |
Foreign currency |
Daily differences | ROFEX | 5 | 3 | 1 | 64,639,747 | ||||||||||||||||
FUTURES |
Financial transactions own account |
Foreign currency |
Upon maturity of differences |
RESIDENTS ABROAD FINANCIAL SECTOR |
5 | 3 | 156 | 22,742,636 | ||||||||||||||||
FUTURES |
Financial transactions own account |
Foreign currency |
Upon maturity of differences |
RESIDENTS IN THE COUNTRY NON-FINANCIAL SECTOR |
6 | 3 | 171 | 31,806,350 |
- 100 - |
EXHIBIT R
ADJUSTMENT TO IMPAIRMENT LOSS - ALLOWANCES FOR LOAN LOSSES
FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2019 AND
FISCAL YEAR ENDED DECEMBER 31, 2018
(stated in thousands of pesos)
Decreases | ||||||||||||||||||||||||
Accounts |
Balances at the beginning of the year |
Increases | Reversals | Uses | Balances as of 09.30.19 |
Balances as of 12.31.18 |
||||||||||||||||||
Other financial assets |
69,040 | 1,843,714 | (1)(3) | | 42 | 1,912,712 | 69,040 | |||||||||||||||||
Loans and other financing |
4,258,239 | 5,354,297 | (1)(3) | 44,958 | 2,369,422 | 7,198,156 | 4,258,239 | |||||||||||||||||
Other financial institutions |
85,488 | 16,349 | 44,958 | | 56,879 | 85,488 | ||||||||||||||||||
Non-financial private sector and residents abroad |
4,172,751 | 5,337,948 | | 2,369,422 | 7,141,277 | 4,172,751 | ||||||||||||||||||
Overdrafts |
110,147 | 74,657 | | 82,676 | 102,128 | 110,147 | ||||||||||||||||||
Instruments |
1,164,674 | 1,341,861 | | 49,878 | 2,456,657 | 1,164,674 | ||||||||||||||||||
Mortgage loans |
99,518 | 33,063 | | 3,760 | 128,821 | 99,518 | ||||||||||||||||||
Pledge loans |
44,250 | 8,618 | | 9,786 | 43,082 | 44,250 | ||||||||||||||||||
Consumer loans |
808,085 | 1,071,948 | | 663,760 | 1,216,273 | 808,085 | ||||||||||||||||||
Credit card loans |
1,359,528 | 1,809,924 | | 1,068,679 | 2,100,773 | 1,359,528 | ||||||||||||||||||
Financial leases |
47,227 | 24,286 | | 24,317 | 47,196 | 47,227 | ||||||||||||||||||
Other |
539,322 | 973,591 | | 466,566 | 1,046,347 | 539,322 | ||||||||||||||||||
Private securities |
1,314 | 324 | (2)(3) | 915 | | 723 | 1,314 | |||||||||||||||||
Contingent commitments |
1,483 | | (4) | 646 | | 837 | 1,483 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
TOTAL ALLOWANCES |
4,330,076 | 7,198,335 | 46,519 | 2,369,464 | 9,112,428 | 4,330,076 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Set up in compliance with the provisions of Communication A 2950 and supplementary regulations issued by the BCRA taking into consideration the disclosures made in Note 8 - Other financial assets and Note 9 - Loans and other financing to the separate financial statements. |
(2) | Set up in compliance with the provisions of Communication A 4084 issued by the BCRA. |
(3) | It includes total exchange rate difference of: |
- Other financial assets |
419,750 | |||
- Loans and other financing |
737,026 | |||
- Private securities |
324 |
(4) | Set up in compliance with credit risk arising from unused overdraft balances in current account granted, guarantees, sureties and other contingent commitments. |
KPMG Bouchard 710 - 1 st Floor - C1106ABL Buenos Aires, Argentina |
+54 11 4316 5700 www.kpmg.com.ar |
INDEPENDENT AUDITORS LIMITED REVIEW REPORT ON CONDENSED INTERIM SEPARATE FINANCIAL STATEMENTS
To the President and Directors of
Banco BBVA Argentina S.A.
Registered office: Av. Córdoba 111
City of Buenos Aires
Taxpayer identification number [C.U.I.T.] 30-50000319-3
Report on the financial statements
We have audited the accompanying condensed interim separate financial statements of Banco BBVA Argentina S.A. (the Entity), which include the statement of financial position as of September 30, 2019, the statements of income, other comprehensive income, changes in shareholders equity and cash flows for the nine-month period then ended, exhibits and selected explanatory notes.
The balances and other information as of December 31, 2018 and September 30, 2018 are an integral part of the aforementioned financial statements and, therefore, shall be considered in the light of these financial statements.
Board of Directors and Management responsibility for the financial statements
The Entitys Board of Directors and Management are responsible for the preparation and presentation of the accompanying financial statements in accordance with the accounting standards established by the Argentine Central Bank (BCRA), which, as indicated in Note 2 to the accompanying financial statements, are based on the International Financial Reporting Standards (IFRS), and, particularly, on International Accounting Standard 34 Interim Financial Reporting (IAS 34) as approved by the International Accounting Standards Board (IASB), and adopted by the Argentine Federation of Professional Councils of Economic Sciences (FACPCE), except for section 5.5 Impairment of Value of IFRS 9 Financial Instruments and IAS 29 Financial Reporting in Hyperinflationary Economies. Furthermore, the standards prescribed through Memorandum No. 6/2017 issued by the regulator on May 29, 2017 regarding the accounting treatment to be applied to uncertain tax positions, and Memorandum No. 7/2019, issued by the regulator on April 29, 2019 regarding the valuation of the investment held by the Entity in Prisma Medios de Pago S.A. were taken into account. The Board of Directors and Management are also responsible for such internal control as they determine is necessary to enable the preparation of the interim financial statements that are free from material misstatement whether due to error or irregularities.
Scope of our review
Our responsibility is to issue a conclusion on these condensed interim separate financial statements based on our review. We conducted our review in accordance with the standards set forth by Technical Resolution No. 37 of the FACPCE and the Minimum Standards applicable to External Audits set forth by the BCRA for the review of interim financial statements. In accordance with such standards, a review is limited primarily to the performance of analytical and other review procedures applied to financial data included in the interim financial statements and inquiries of personnel responsible for the preparation thereof. A review is substantially less in scope than an audit conducted in accordance with auditing standards in force, and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion on the accompanying condensed interim separate financial statements.
© 2019 KPMG, a partnership established under Argentine law and a member firm of the KPMG network of independent firms affiliated with
KPMG International Cooperative (KPMG International), a Swiss entity. All rights reserved.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the accompanying condensed interim separate financial statements of Banco BBVA Argentina S.A. have not been prepared, in all material respects, in accordance with the BCRA accounting framework described in Note 2 to the accompanying financial statements.
Emphasis of matter
Without modifying our conclusion, we draw users attention to the following information disclosed in the accompanying financial statements:
a) | As explained in Note 2, to the accompanying financial statements, they have been prepared by the Entitys Board of Directors and Management in accordance with the BCRA financial reporting framework, which differs from IFRS as to the application of section 5.5 Impairment of Value of IFRS 9 Financial Instruments, which was temporarily excluded by the BCRA from the accounting framework applicable to financial institutions. |
b) | As explained in Note 2, as provided for by BCRA Communication A 6651, the Entity has not applied IAS 29 Financial Reporting in Hyperinflationary Economies to the preparation of the accompanying financial statements. The existence of an inflationary context affects the Entitys financial position and results of operations and, therefore, the inflation impact may distort the financial information, which should be considered in the interpretation of the information provided by the Entity in these financial statements in respect of its financial position, comprehensive income and cash flows. Management estimates that the impact on the financial statements of the restatement in homogeneous currency as of September 30, 2019, which resulted in an increase in the equity of 9,584,000 thousands of pesos and a decrease in the total comprehensive income of 15,687,000 thousands of pesos; |
c) | As explained in Note 2, the accompanying financial statements have been prepared taking into consideration the standards prescribed through Memorandum No. 6/2017 issued by the regulator on May 29, 2017 regarding the accounting treatment to be applied to uncertain tax positions. |
d) | As explained in Note 2, to the accompanying financial statements, by virtue of the partial sale of the ownership interest in Prisma Medios de Pago S.A., the remaining ownership interest was reclassified to Investments in equity instruments and stated at its fair value with changes recognized through profit or loss, based on a valuation report of the Company prepared by an external professional. In addition, the valuation adjustment established by Memorandum No. 7/1019, issued on April 29, 2019 by BCRA, was deducted from such remaining ownership interest. The accounting criteria applied constitute a deviation from what is established by IFRS 9 with respect to the measurement of equity instruments measured at their fair value. |
The aforementioned situations do not modify the conclusion stated in the Conclusion paragraph, but it should be considered by those users that apply IFRS to the interpretation of the accompanying financial statements.
Buenos Aires City, November 7, 2019.
KPMG
Carlos F. Bruno Partner |
SUPERVISORY COMMITTEES REPORT
To the Shareholders of
Banco BBVA Argentina S.A.
Registered Office: Av. Córdoba 111
Autonomous City of Buenos Aires
1. | Identification of the interim financial statements subject to review |
In our capacity as members of the Supervisory Committee of Banco BBVA Argentina S.A. (hereinafter, either BBVA or the Entity) designated at the General Ordinary and Extraordinary Shareholders Meeting held on April 24, 2019, and in compliance with the terms of Section 294 of the Argentine Companies Law No. 19550, we have reviewed the consolidated condensed interim financial statements of the Entity and its controlled companies as of September 30, 2019, which include the consolidated condensed statement of financial position, the consolidated condensed statements of income, other comprehensive income, changes in shareholders equity, and cash flows for the nine-month period then ended, and their respective supplementary notes and exhibits, as well as the separate condensed financial statements of BBVA as of September 30, 2019, which include the separate condensed statement of financial position, the statements of income, other comprehensive income, changes in shareholders equity and cash flows then ended, and its related notes and exhibits.
The Entity is responsible for the preparation and presentation of the above-mentioned financial statements in accordance with the accounting standards applicable to Financial Institutions laid down by the Argentine Central Bank (BCRA), as well as for the design, implementation and maintenance of such internal control as the Entity might deem appropriate to prepare its financial statements free from material misstatements.
2. | Scope of our Review |
In discharging our duties, we have examined the work performed by the Entitys external auditors KPMG, who, on November 7, 2019, issued their limited review report on the interim financial statements as of September 30, 2019, with an unqualified opinion.
The review of interim financial statements conducted by such auditors is substantially lesser in scope than an audit and, therefore, is not sufficient to become aware of all substantial issues that might arise during an audit. Therefore, the auditors do not render such an opinion on the financial statements referred to in section 1.
Since the Supervisory Committee is not responsible for management control, the review did not encompass the corporate criteria and decisions of the Entitys different areas, for such issues are the exclusive responsibility of the Board of Directors.
3. | Supervisory Committees Opinion |
Based on our review, we have no observations to raise, except for those described in section 4, on the accompanying interim financial statements of BBVA for the nine-month period ended September 30, 2019 referred to in the first paragraph of Section 1 of this report. Furthermore, such financial statements reflect all substantial facts and circumstances that are known to us.
4. | Emphasis Matter |
As explained in Note 1.1 to the accompanying consolidated condensed interim financial statements, the financial information of Rombo Compañía Financiera S.A. (Rombo) and Volkswagen Financial Services Compañía Financiera S.A. (VWFS) has been consolidated effective since July 1, 2019, pursuant to an amendment to the shareholders agreements, which grants control to the Entity over those companies. The Entitys interest in Rombo and VWFS was previously measured in the consolidated financial statements on the basis of the equity method. The assets of Rombo and VWFS represent 1.9% and 2.1%, respectively, of the consolidated assets, whereas their operating income represents 0.5% and 1.1%, respectively, of the consolidated operating income for the nine-month period ended September 30, 2019. The auditors did not have access to the original documentation related to the aforementioned amendment, as well as other elements supporting the decision to consolidate the financial information of Rombo and VWFS.
As explained in note 2.a) to the consolidated financial statements and Note 2 to the separate financial statements, such financial statements were prepared by the Entitys Board of Directors and Management in accordance with the financial reporting framework established by the BCRA. These standards differ from the IFRS in that the BCRA has temporarily excluded the application of paragraph 5.5 Impairment of IFRS 9 Financial instruments from the financial reporting framework applicable to financial institutions.
Furthermore, as explained in notes 2.b) and 3 to the consolidated financial statements and in Note 2 to the accompanying separate financial statements, given its effectiveness in compliance with the provisions of Communication A 6651 handed down by the BCRA, in preparing the accompanying financial statements, the Entity has not applied the provisions of IAS 29 Financial Reporting in Hyperinflationary Economies. The existence of an inflationary context affects the Entitys financial position and profit or loss and, therefore, the impact of inflation may distort financial disclosures and shall be taken into consideration in the interpretation of the information the Entity provides in the accompanying separate condensed financial statements concerning its financial position, comprehensive income and cash flows. The Entity has estimated the impact on the financial statements of the restatement in constant currency as of September 30, 2019, which would result in an increase in shareholders equity of Ps.9,584,000 thousand and a decrease in total comprehensive income of Ps.15,687,000 thousand.
As explained in Note 2.c) to the consolidated financial statements and 2 to the accompanying separate financial statements, such financial statements were prepared in accordance with the terms set out in Memorandum No. 6/2017 issued by the BCRA on May 29, 2017 regarding the treatment to be afforded to uncertain tax positions.
As explained in Note 2.d) and 16 to the accompanying consolidated financial statements and 2 to the separate financial statements, in connection with the partial disposal of the equity interest in Prisma Medios de Pago S.A., the remaining portion was reclassified to Investments in Equity Instruments, and measured at fair value through profit or loss, based on a valuation report on such company prepared by an external appraiser, net of the valuation adjustment established by the BCRA in its Memorandum No. 7/2019 dated April 29, 2019.
5. | Information Required by Applicable Provisions |
We hereby report that the figures disclosed in the accompanying financial statements arise from the Entitys financial records which have been kept, in all formal aspects, in accordance with applicable legal and regulatory standards handed down by the BCRA.
The financial statements referred to in paragraph 1 have been transcribed to the Financial Statements for Reporting Purposes book, and arise from the Entitys accounting records which have been kept, in all formal aspects, in accordance with applicable legal provisions.
Pursuant to the BCRAs requirements, as of September 30, 2019, the Entitys minimum shareholders equity and minimum cash contra-account in eligible assets required by the Argentine Securities Commission (CNV) exceed the respective minimum requirements established in applicable standards, as indicated in Note 51 to the accompanying consolidated financial statements.
We further represent that, during the reporting period, we have carried out all duties, to the extent applicable, set forth in Section 294 of Argentine Companies Law No. 19550, including attending Board of Directors meetings.
We further represent that any member of this Supervisory Committee is individually authorized to sign, on behalf of such committee, all documents referred to in the first paragraph herein and all copies of this report.
Autonomous City of Buenos Aires, November 7, 2019
ALEJANDRO MOSQUERA
ATTORNEY
C.P.A.C.F. Vol. 30 Fol. 536
C.P.S.I. Vol. XXII Fol. 433
On behalf of Supervisory Committee
- 106 - |
THE FISCAL PERIOD ENDED
SEPTEMBER 30, 2019
(Consolidated, stated in thousands of pesos)
On December 12, 2016, the BCRA decided to apply International Financial Reporting Standards (IFRS) for fiscal years beginning on or after January 1, 2018 subject to the temporary exception of:
| Section 5.5 - Impairment, in IFRS No. 9 applicable as from January 1, 2020; |
| International Accounting Standard (IAS) No. 29 Reporting on hyperinflationary economies applicable as from January 1, 2020; |
| Memorandum No. 6/2017 issued by the BCRA on May 29, 2017 regarding the criterion to be applied in recognizing uncertain tax positions; and |
| Memorandum No. 7/2019 issued by the BCRA on April 29, 2019, as regards the accounting treatment to be applied to the remaining investment held in Prisma Medios de Pago S.A. |
As a consequence of the application of those standards, the Bank presents its financial statements prepared pursuant to the new financial reporting framework set forth by the BCRA as of September 30, 2019 and December 31, 2018.
Effective since July 1, 2019, the Entity has taken control over PSA Finance Argentina Compañía Financiera S.A., Volkswagen Financial Services Compañía Financiera S.A. and Rombo Compañía Financiera S.A. as a consequence of an amendment to the shareholders agreement. Considering the guidelines set out under IFRS 10, the Entity has concluded that it has power on such companies effective since the aforementioned date. Therefore, these interim financial statements include consolidated information with these companies since the date the Entity has taken control over them.
Banco BBVA Argentina S.A. (NYSE; MAE; BYMA: BBAR; Latibex: XBBAR) is a subsidiary of the BBVA Groupits majority shareholder since 1996. In Argentina, it has been one of the major financial institutions since 1886. BBVA Argentina offers retail and corporate banking services to a broad customer base, including individuals, small-to-medium sized companies, and large corporations. As of September 30, 2019, the Entitys total assets, liabilities and shareholders equity amounted to 414,077,175, 355,532,388, and 58,544,787, respectively.
The Entity offers its products and services through a wide multi-channel distribution network with presence in all the provinces in Argentina and the City of Buenos Aires, with more than 2.6 million active customers as of September 30, 2019. That network includes 251 branches providing services to the retail segment and also to small and medium enterprises and organizations.
Corporate Banking is divided by industry sector: Consumers, Heavy Industries and Energy, providing customized services to large companies. To supplement the distribution network, the Entity has 845 ATMs, 857 self-service terminals, 13 in-company banks, and two points of Customer service booths. Also, it has a telephone banking service, a modern, safe and functional Internet banking platform and a mobile banking app. As regards payroll, Banco BBVA Argentina SA. has 6,242 employees, out of which 19 employees work in non-financial subsidiaries.
The loans portfolio net of allowances for loan losses totaled 207,171,755 pesos as of September 30, 2019, reflecting an increase of 15.97% as compared to the same period of the previous year.
Information not covered by the Review Report.
- 107 - |
Concerning loans to individuals, including consumer loans, credit cards, mortgage loans and pledge loans, the latter have experienced the most remarkable growth due to consolidation, having increased by 831.87% as against the same period of the previous year, followed by credit cards, which increased by 42.94%, or $ 16,068,111 in nominal terms. Mortgage loans, in turn, reflect the impact of increasing inflation.
Banco BBVA Argentina S.A.s consolidated market share in private-sector financing was 8.13% at period-end, based on the BCRAs daily information (capital balance as of the last day of each quarter).
In terms of portfolio quality, the Entity has managed to maintain very good ratios. The irregular portfolio ratio (Financing with irregular performance/total financing) was 3.31%, with a coverage level (total allowances/irregular performance) of 105.08% as of September 30, 2019.
The exposure for securities as of September 30, 2019 totaled 75,274,357 pesos, including repos both with the BCRA and Argentina.
In terms of liabilities, customers resources totaled 274,486,964, with an increase of 11.03% over the last twelve months.
The consolidated market share of private deposits of Banco BBVA Argentina S.A. reached 7.14% at period-end, based on BCRAs daily information (principal balance as of the last day of each quarter).
Breakdown of changes in the main profit/loss items:
Banco BBVA Argentina S.A. recorded an accumulated profit of 23,903,336 as of September 30, 2019, representing a return on average liabilities of 7.31% and a return on average assets of 6.39%.
Accumulated net interest income totaled 38,399,313, with an increase of 117.36% as compared to September 2018, mainly driven by higher interest on government securities and interest on credit card loans, offset by the increase in interest expenses of time deposits.
Accumulated net commission income totaled 5,003,268, accounting for an increase of 31.56% compared to September 2018. This increase is mainly due to higher income from the rise in prices, commissions linked to obligations (deposits), credit cards and foreign trade and exchange transactions, offset by commission expenses for credit and debit cards.
On February 1, 2019, the amount of 2,344,064 registered, common shares with a nominal value of $ 1 each and one vote per share held by the Bank in Prisma Medios de Pago S.A. was transferred to AI Zenith (Netherlands) B.V. (a company related to Advent International Global Private Equity).
As set forth in the Offer for the purchase of the aforementioned shares made by AI Zenith (Netherlands) B.V., and accepted by the Bank, the total estimated price adjusted was USD 78,265,273. Out of this amount, on February 1, 2019, the Bank received USD 46,457,210, and the unpaid balance shall be deferred over the following 5 (five) years as price balance, and settled as follows: (i) 30% of such amount shall be paid in Pesos, adjusted by applying the CER (UVA) at an annual nominal rate of 15%, and (ii) 70% in US Dollars at an annual nominal rate of 10%. According to BCRAs rules on the set up of provisions, a provision of 1,768,360 was recorded as of September 30, 2019.
By virtue of the partial sale of the shareholdings in Prisma Medios de Pago S.A. the remaining stake has been measured at fair value through profit and loss on the basis of the valuation reports issued by independent appraisers and taking into account the resolution of the BCRA in that regard.
Information not covered by the Review Report.
- 108 - |
On July 22, 2019, the Entity completed the assessment of the selling price of the shares. Such price amounts to USD 76,947,895.33. The gap between the final price and the estimated price was discounted from the outstanding balance; therefore, the Bank did not have to return the funds it had received.
The other payment conditions have remained unaltered.
As a consequence of this transaction, a profit of 2,644,937 was recognized in Other operating income as of September 30, 2019.
Accumulated administrative expenses and personnel benefits totaled 17,524,257, a growth of 54.10% in relation to those recorded as of September 2018. The increase in personnel expenses is mainly a consequence of salary increases agreed with the union. The remaining expenses grow due to the increased volume of activity, the general increase in prices, currency depreciation and increase in utility rates.
Outlook
Despite the challenging economic scenario in which the Bank has developed its activities, the third quarter was very positive, due to the good performance achieved and also due to the quality of the statement of financial position, which remains very healthy in terms of liquidity and capital, displaying one of the most contained arrears ratios in the financial system.
All the aforementioned is thanks to an adequate business strategy primarily anchored in digital transformation, which underpins the Banks operational efficiency, and which not only allows to lead the acquisition of new customers, but also contributes differential added value, deepening the business relationship with all our customer base, through the ongoing improvement of our service and product offering quality.
Information not covered by the Review Report.
- 109 - |
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
COMPARATIVE WITH THE SAME PERIODS FOR PREVIOUS YEARS
(stated in thousands of pesos)
09.30.19 (1) | 09.30.18 (1) | 09.30.17 (1) | 09.30.16 (2) | 09.30.15 (2) | 09.30.14 (2) | |||||||||||||||||||
Total Assets |
414,077,175 | 333,982,353 | 200,056,912 | 130,932,897 | 92,177,134 | 74,947,272 | ||||||||||||||||||
Total Liabilities |
355,532,388 | 298,254,138 | 174,830,333 | 114,667,119 | 79,350,232 | 65,182,951 | ||||||||||||||||||
Parents Shareholders Equity |
56,095,471 | 35,699,118 | 24,638,812 | 15,877,630 | 12,528,102 | 9,517,519 | ||||||||||||||||||
Non-controlling interest |
2,449,316 | 29,097 | 587,767 | 388,148 | 298,800 | 246,802 | ||||||||||||||||||
Total Liabilities + Non-controlling interest + Shareholders Equity |
414,077,175 | 333,982,353 | 200,056,912 | 130,932,897 | 92,177,134 | 74,947,272 |
(1) | Pursuant to the measurement and presentation criteria established by the financial reporting framework set forth by the BCRA, which does not include the temporary application exception of IFRS No. 9 (Impairment) and IAS 29, apart from considering Memorandum No. 6/2017 of the BCRA and the provisions of Memorandum No. 7/2019. |
(2) | Pursuant to the valuation and disclosure criteria set forth by the BCRA at each date. |
- 110 - |
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
COMPARATIVE WITH THE SAME PERIODS FOR PREVIOUS YEARS
(stated in thousands of pesos)
09.30.19 (1) | 09.30.18 (1) | 09.30.17 (1) | ||||||||||
Net interest income |
38,399,313 | 17,666,487 | 10,411,179 | |||||||||
Net commission income |
5,003,268 | 3,802,953 | 1,928,008 | |||||||||
Net income from measurement of financial instruments at fair value through profit or loss |
6,011,075 | (90,424 | ) | 1,855,096 | ||||||||
Net income / (loss) from write-down of asset at amortized cost and at fair value |
(36,769 | ) | (54,157 | ) | 6,723 | |||||||
Foreign exchange and gold gains |
5,899,657 | 4,329,081 | 1,372,182 | |||||||||
Other operating income |
8,903,731 | 3,144,057 | 3,253,816 | |||||||||
Loan loss provision |
(6,073,941 | ) | (2,363,194 | ) | (1,395,009 | ) | ||||||
Net operating income |
58,106,334 | 26,434,803 | 17,431,995 | |||||||||
Personnel benefits |
(9,604,233 | ) | (6,390,864 | ) | (4,866,369 | ) | ||||||
Administrative expenses |
(7,920,024 | ) | (4,980,915 | ) | (3,791,092 | ) | ||||||
Asset depreciation and impairment |
(1,175,030 | ) | (626,686 | ) | (468,940 | ) | ||||||
Other operating expenses |
(11,829,855 | ) | (5,217,967 | ) | (4,271,191 | ) | ||||||
Operating income |
27,577,192 | 9,218,371 | 4,034,403 | |||||||||
Income from associates and joint ventures |
422,570 | 210,212 | 386,661 | |||||||||
Income before income tax |
27,999,762 | 9,428,583 | 4,421,064 | |||||||||
Income tax from continuing operations |
(4,096,426 | ) | (2,661,049 | ) | (1,299,810 | ) | ||||||
Net income from continuing operations |
23,903,336 | 6,767,534 | 3,121,254 | |||||||||
Net income for the period |
23,903,336 | 6,767,534 | 3,121,254 |
- 111 - |
09.30.16 (2) | 09.30.15 (2) | 09.30.14 (2) | ||||||||||
Financial income |
9,170,396 | 6,587,358 | 5,638,654 | |||||||||
Loan loss provision |
(723,815 | ) | (439,476 | ) | (422,340 | ) | ||||||
Income from services |
3,246,377 | 2,714,330 | 2,430,573 | |||||||||
Administrative expenses |
(6,701,363 | ) | (4,703,610 | ) | (4,128,857 | ) | ||||||
|
|
|
|
|
|
|||||||
Net income |
4,991,595 | 4,158,602 | 3,518,030 | |||||||||
Miscellaneous profits and losses - net |
197,514 | 29,875 | 196,145 | |||||||||
Loss from minority interest |
(94,821 | ) | (96,734 | ) | (74,407 | ) | ||||||
Income tax and minimum presumed income tax |
(2,033,021 | ) | (1,495,517 | ) | (1,249,629 | ) | ||||||
|
|
|
|
|
|
|||||||
Net income for the period |
3,061,267 | 2,596,226 | 2,390,139 | |||||||||
|
|
|
|
|
|
(1) | Pursuant to the measurement and presentation criteria established by the financial reporting framework set forth by the BCRA, which does not include the temporary application exception of IFRS No. 9 (Impairment) and IAS 29, apart from considering Memorandum No. 6/2017 of the BCRA and the provisions of Memorandum No. 7/2019. |
(2) | Pursuant to the valuation and disclosure criteria set forth by the BCRA at each date. |
- 112 - |
CONSOLIDATED CASH FLOW STRUCTURE COMPARATIVE
WITH THE SAME PERIODS OF PREVIOUS YEARS
(stated in thousands of pesos)
09.30.19 (1) | 09.30.18 (1) | 09.30.17 (1) | 09.30.16 (2) | 09.30.15 (2) | ||||||||||||||||
Net cash (used in) / generated by operating activities |
(32,289,563 | ) | 14,623,318 | (26,169,374 | ) | 6,644,503 | 3,510,633 | |||||||||||||
Net cash generated by / (used in) investing activities |
1,564,457 | 758,331 | (1,340,552 | ) | (1,262,832 | ) | (1,014,942 | ) | ||||||||||||
Net cash (used in) / generated by financing activities |
(4,703,227 | ) | 5,552,139 | 4,685,790 | (2,967,873 | ) | (1,394,829 | ) | ||||||||||||
Effect of exchange rate changes |
30,492,208 | 28,722,481 | 2,382,329 | , | , | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total cash (used) / generated during the period |
(4,936,125 | ) | 49,656,269 | (20,441,807 | ) | 2,413,798 | 1,100,862 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | Pursuant to the measurement and presentation criteria established by the financial reporting framework set forth by the BCRA, which does not include the temporary application exception of IFRS No. 9 (Impairment) and IAS 29, apart from considering Memorandum No. 6/2017 of the BCRA and the provisions of Memorandum No. 7/2019. |
(2) | Pursuant to the valuation and disclosure criteria set forth by the BCRA at each date. |
- 113 - |
STATISTICAL DATA COMPARATIVE WITH
THE SAME PERIODS OF PREVIOUS YEARS
(Variation of balances during the same period of the previous year)
09.30.19 / 18 (1) | 09.30.18 / 17 (1) | 09.30.17 / 16 (2) | 09.30.16 / 15 (2) | 09.30.15 / 14 (2) | ||||||||||||||||
Total loans |
15.97 | % | 59.96 | % | 56.86 | % | 42.45 | % | 23.22 | % | ||||||||||
Total deposits |
11.03 | % | 90.25 | % | 41.39 | % | 45.38 | % | 27.10 | % | ||||||||||
Income |
253.21 | % | 116.82 | % | 1.96 | % | 17.91 | % | 8.62 | % | ||||||||||
Shareholders equity |
63.86 | % | 41.63 | % | 55.09 | % | 26.81 | % | 31.37 | % |
(1) | Pursuant to the measurement and presentation criteria established by the financial reporting framework set forth by the BCRA, which does not include the temporary application exception of IFRS No. 9 (Impairment) and IAS 29, apart from considering Memorandum No. 6/2017 of the BCRA and the provisions of Memorandum No. 7/2019. |
(2) | Pursuant to the valuation and disclosure criteria set forth by the BCRA at each date. |
- 114 - |
COMPARATIVE RATIOS
WITH THE SAME PERIOD FOR PREVIOUS YEARS
09.30.19 (1) | 09.30.18 (1) | 09.30.17 (1) | ||||||||||
Solvency (a) |
16.47 | % | 11.98 | % | 14.43 | % | ||||||
Liquidity (b) |
59.30 | % | 48.25 | % | 44.88 | % | ||||||
Fixed asset to equity ratio (c) |
21.95 | % | 28.72 | % | 20.16 | % | ||||||
Indebtedness (d) |
6.07 | 8.35 | 6.93 |
(a) | Total Shareholders Equity/Liabilities. |
(b) | Sum of cash and deposits in banks, debt securities at fair value through profit or loss and other debt securities/deposits. |
(c) | Sum of property, plant and equipment, miscellaneous assets and intangible assets/Shareholders Equity. |
(d) | Total Liabilities/Shareholders Equity. |
09.30.16 (2) | 09.30.15 (2) | |||||||
Solvency (a) |
14.19 | % | 16.16 | % | ||||
Liquidity (b) |
47.29 | % | 46.82 | % | ||||
Fixed asset to equity ratio (c) |
22.83 | % | 20.68 | % | ||||
Indebtedness (d) |
7.05 | 6.19 |
(a) | Total Shareholders Equity/Liabilities (including minority interest). |
(b) | Sum of cash and due from banks and government and private securities/deposits. |
(c) | Sum of premises and equipment, miscellaneous assets and intangible assets/Assets. |
(d) | Total Liabilities (including minority interest)/Shareholders Equity. |
(1) | Pursuant to the measurement and presentation criteria established by the financial reporting framework set forth by the BCRA, which does not include the temporary application exception of IFRS No. 9 (Impairment) and IAS 29, apart from considering Memorandum No. 6/2017 of the BCRA and the provisions of Memorandum No. 7/2019. |
(2) | Pursuant to the valuation and disclosure criteria set forth by the BCRA at each date. |
- 115 - |
Additional Information required by the Argentine Securities Commission (CNV)s General Resolution No. 622/13, Chapter III, Title IV, Section 12
1. | General matters concerning the Entitys business |
a) | Significant specific legal regimes that entail the contingent termination or reinstatement of the benefits set forth by such regimes provisions. |
None.
b) | Significant changes in the Entitys activities or other similar circumstances taking place during the periods covered by the financial statements which affect the financial statements comparability with those presented in previous periods or capable of affecting comparability with the financial statements to be presented in future periods. |
The Shareholders Meeting held on June 13, 2017 adopted a decision to increase capital stock through the issuance of new registered, common shares. Refer to Note 30. Share Capital of the Consolidated Financial Statements of Banco BBVA Argentina S.A.
On January 18, 2018, the Entity made a capital contribution in proportion to its ownership interest in Volkswagen Financial Services Compañía Financiera S.A. in the amount of 204,000 thousand pesos, equivalent to 204,000,000 non-endorsable, registered, common shares, with a value of $1 and one vote per share.
On September 25, 2018, the Entity made a capital contribution in proportion to its ownership interest in Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. in the aggregate amount of 26,945 thousand pesos, equivalent to 26,944,600 non-endorsable, registered common shares, with a value of $1 and one vote per share.
On March 8, 2019, the Banks Board of Directors submitted to its Shareholders Meeting a proposal to merge BBVA Francés Valores S.A. in order to attain more efficiency in its administrative processes and thus, provide better service to its customers. In this regard, the Banks Board of Directors approved the consolidated balance sheet for merger purposes and authorized the filing of the merger prospectus with the CNV in order to apply for the authorization of the transaction by such authorities.
2. | Classification of the balances receivable (financing) and payable (deposits and liabilities) according to their maturity dates. |
See Exhibit D - Breakdown of Loans and Other Financing by Term, and Exhibit I - Breakdown of Financial Liabilities by Remaining Terms of Banco BBVA Argentina S.A.s Consolidated Financial Statements.
- 116 - |
3. | Classification of the balances receivable (financing) and payable (deposits and liabilities) to know the holding financial effects: |
Item | Local currency | Foreign currency | ||||||||||||||||||
In thousands of pesos |
With interest rate clause |
CER- adjustment clause |
Without interest rate clause |
With interest rate clause |
Without interest rate clase |
|||||||||||||||
Financing facilities (net of allowances) |
||||||||||||||||||||
Loans and other financing |
124,957,405 | 21,755,348 | 102,436 | 60,356,566 | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
TOTAL |
124,957,405 | 21,755,348 | 102,436 | 60,356,566 | | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Item | Local currency | Foreign currency | ||||||||||||||||||
In thousands of pesos |
With interest rate clause |
CER- adjustment clause |
Without interest rate clause |
With interest rate clause |
Without interest rate clase |
|||||||||||||||
Deposits and Corporate bonds |
||||||||||||||||||||
Deposits |
72,475,737 | 2,480,699 | 46,813,938 | 124,853,915 | 27,862,675 | |||||||||||||||
Other liabilities (1) |
14,669,217 | | 40,015,861 | 4,569,345 | 14,090,616 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
TOTAL |
87,144,954 | 2,480,699 | 86,829,799 | 129,423,260 | 41,953,291 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(1) | It includes the following items: Derivative instruments, Repo transactions, Other financial liabilities, Loans received from the BCRA and other financial institutions, Corporate bonds issued, Other non-financial liabilities and Current and deferred income tax liabilities. |
4. | Breakdown of the percentage of ownership interests in other companies capital stock and total votes and debt and/or credit balances per company. |
Refer to Note 45. Subsidiaries and Note 46. Related Parties of the Consolidated Condensed Interim Financial Statements of Banco BBVA Argentina S.A.
5. | Receivables from sales or loans to directors. |
Refer to Note 46. Related Parties of the Consolidated Condensed Interim Financial Statements of Banco BBVA Argentina S.A.
6. | Physical count of inventories. Term and scope of physical count of inventories. |
Not applicable.
7. | Ownership interests in other companies in excess of the amount allowed under Section 31 of Law No. 19550 and corrective measures plan. |
None.
- 117 - |
8. | Recoverable Values: Criteria followed to determine significant recoverable values of inventories, property, plant and equipment and other assets, used as limits for their respective accounting valuations. |
To determine the recoverable values, the net realization value for the status and condition of property, plant and equipment is considered.
9. | Insurance covering tangible assets. |
Assets insured in |
Risk |
Insured Amount |
Book value | |||||||
Monies, checks and other valuables |
Fraud, robbery, safety boxes and valuables in transit | 7,482,081 | 28,259,398 | |||||||
Buildings, machines, electronic equipment used in IT, furniture, fixtures, signage, telephones and works of art |
Fire, vandalism and earthquake - Transportation of goods | 30,042,852 | 12,191,674 | |||||||
Motor vehicles |
All kinds of risk and third-party insurance | 41,835 | 17,043 |
10. | Positive and negative contingencies |
a) | Elements considered to calculate allowances whose balances exceed, individually or jointly, two percent (2%) of the equity. |
- | Refer to Note 15. Income Tax of the Consolidated Condensed Interim Financial Statements of Banco BBVA Argentina S.A. |
b) | Contingent situations as of the date of the financial statements that are unlikely to occur and with equity effects not accounted for, stating if the lack of accounting is based on the probability of occurrence or difficulties for the quantification of its effects. |
None.
11. | Irrevocable advances for future subscriptions. Status of the process aimed at capitalization. |
None.
12. | Preferred shares cumulative dividends unpaid. |
None.
13. | Conditions, circumstances or terms for the elimination of restrictions on the distribution of retained earnings. |
Refer to Note 47 Restrictions on the payment of dividends of the Consolidated Condensed Interim Financial Statements of Banco BBVA Argentina S.A.
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.
Banco BBVA Argentina S.A. | ||||||
Date: December 18, 2019 | By: | /s/ Ernesto R. Gallardo Jimenez | ||||
Name: Ernesto R. Gallardo Jimenez | ||||||
Title: Chief Financial Officer |
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