Q3 2021 Banco Bbva Argentina SA Earnings Call

Good morning, ladies and gentlemen, and thank you for waiting at this time. We would like to welcome everyone to BBVA Argentina's third quarter 2021 results. Conference call. We would like to inform you that this event is being recorded and all participants will be in a listen-only mode. During the company's presentation. After company remarks are completed. There will be a question-and-answer session at that time. Further instructions will be given

Should any participant need assistance during this call, please? Press star 0 to reach the operator. First of all, let me point out that some of the statements made, during this conference call may be forward-looking statements within the meeting of the Safe Harbor Provisions, found in section, 27A of the Securities Act of 1933 under US Federal Securities Law. These forward-looking statements are subject to risks and uncertainties that could cause actual results.

Differ materially from those expressed in the forward-looking statements additional information concerning these factors is contained in BBVA Argentina's annual report on form 20f for the fiscal year 2020 filed with the US Securities and Exchange Commission today with us. We have Mr. Ernesto. Guyardo, CFO. Mrs. Ynez, lanessa iro and mrs. Bell. And for conda with investor relations. Mrs. Ricardo. You may begin your conference.

Good morning.

Everyone and welcome to. We ba Argentina, third quarter 2021 earnings conference call, before we begin our formal remarks. Let me stress that some of the statements made during the course of this conference. Call. They constitute forward-looking statements, which are based on Management's, current expectations, and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ, materially from those Express in the forward-looking statements.

You didn't factors that may be beyond the company, controlled description of this race. Please refer to our earnings release which are available at our investor relations website speaking. During today's call will be, will be available for the Q&A session. Please note that starting January 1st 2012.

So then for you Mission, we've probably done reporting results. Applying hyper inflation, accounting, pursuant. Sorry for restful IAS, 29 of comparability 2020. And 2021 figures have been restated to reflect the accumulated effects of inflation adjustment for each period, September 30th, 2021. Now let me turn the call over to Annette.

Thank you.

Necessary, economic plan link to negotiations with international monetary fund. Pvda. Argentina's operating income in the third quarter of 2021. Was the product of an improvement in the net interest and fee income of set, by higher administrative expenses that took place in the for the bank. Activity monitors is Business Financial conditions and operating results, the aim of keeping a competitive position.

You two-faced contextual changes regarding digitalization or service. Offering has evolved in such way that by the end of September 20, 21 Digital Science, penetration, reach, 74 percent from 71%.

An important shift towards the adoption of digital channels like line. Lastly, in terms of responsible banking within the context of its compromise with you and sustainable development growth. BBVA. Argentina has begun participating in the consequence of the Business Council of sustainable development.

Comment on the bus, sir quarter 2021 Financial results. In Tina third quarter 2021 net income including inflation adjustment if x total 3.4 billion pesos. 57.1% quarter of a quarter and thirty seven point. Six percent year-over-year. Quarterly results are mainly explained by greater operating expenses related to higher administrative and person.

Benefits expenses. The contraction is offset by a better. Net operating income in haste by higher. Net, income and interest. In addition to a lower position. The accumulated net income for the first nine months of 2021.

Fourteen point, seven billion pesos accumulated r0e. As of the third quarter of 2021 is 14 percent while the accumulated Roa is 2.1 percent.

Excluding the effects of the reverse and of the provisions on the tax crime in connection with the repayment of income tax, inflation adjustment, for 2017, and 2018, fiscal year for a total.

The second quarter 2021 Erica would have been 3.6 billion pesos. I thought the third quarter of 2021 a lower court, early phone or 6.7% would have been observed instead of 57.1% The accumulated net income for the first nine months.

1021 for 1.4 billion pesos. Current value would have been nine point five billion pesos decreasing 35.6% versus the accumulated. Net income from the first nine months of 2020. This would have meant an accumulated Arrow. We on the quarter or 2021 of 8.9 to set an accumulated Roa of 1.4 percent in the third quarter 2012.

21.

To liquidity derivate from lower credit demand.

Increasing total twenty two point, eight billion pesos denoting at 7.9 increase quarter over quarter and a 58.2% increase year-over-year. Quarterly growth is described by an increase in checking account extensive, partially offset by lower expenses. By ebit are adjustment very by from time, deposit linked to such, indexes you to the lower increase in the UVA third, in the photo of a quarter.

Because sometimes your boss and an investment account explain 71.5% of Interest expenses versus seventy three point nine percent from the previous quarter, nephew come out of the third quarter of 2021 total 6.2 billion bases, 4.3% quarter over quarter and thirty five to ten years.

The lakes are impacted by an increase in prices of ATM bundled products, and a greater activity in the wholesale segment. Regarding to expensive. This total 4.2 billion pesos, Contracting 7.5% quarter over quarter and 16.6 percent year-over-year lower expenses or partially explained by lower digital sales, expenses in the support of 2021. Which have been

Classified to administrative, expenses offset by the positive effect. In the second quarter of 2012, to one of the regulation of Miles Birches in 2020 within the links to the foreign exchange rate.

To the second quarter of 2010 T1 and 18.7 for transfer or 2.5 billion pesos compared to the 2020.

Personal benefits of 6.2%, quarter over quarter and 5.6 percent year-over-year. Increase is partially explained by an increase in compensation and social contribution of the third quarter of 2010.

You can request it.

Nation of he extensive from digital plays into advertisement, expenses and higher costs of service, how to sort through the Spanish parent company. The accumulated efficiency ratio of the third quarter of 2021 was sixty nine, point seven percent improving versus the 70.1% and deteriorating versus the 62.3% reported in the second quarter, 2021 and

The third quarter of 2020 which s, so quarterly Improvement is explained by a higher percentage increase in the denominator in considering monetary position results than the numerator expensive, which has been positively affected by an improvement in net, the income and net in prison.

Excluding inflation adjustments, considered in the income for the monetary position, line item in the third quarter of 2021 accumulated efficiency ratio, would have been 49.7% deteriorating compared to the 48.5% of the second quarter of 2021 and improving versus the 50 point three percent in the third quarter of 2020, in terms of activity.

Of the 2020 want Total a hundred thirty nine point nine billion pesos decreasing 2.8% quarter of a quarter and thirteen point. Eight percent year-over-year, nose to the private sector, in Pace of increase, 2.4 percent in the third quarter of 2021, and decrease 11% Year-over-year. You were in the Border world is especially driven by 61% increase in overdraft mainly to court.

Science and 7.9% in discounted instrument, mainly with smes clients.

No, sir, the private sector denominated in foreign currency cell, 37 percent quarter over quarter and 35 44 percent year-over-year increase is measured in u.s.

Over here. The depreciation of the Argentine pesos versus the US dollar was 3% quarter over quarter and 22.8 percent year-over-year. Decline in both retail and Commercial portfolios. And in the total number folio. I may be explained by the effect of inflation. During the third quarter of 2010, T1, which reach nine point three percent.

In Norman and test the reason commercial and total loans going for your old increased 8.3% 3.1% and 6.5 percent respectively, during the quarter yet, unable to upset the impact of inflation during the same period bb-8, Argentina, Consolidated market, share of private sector alone, which 8.08 content as of the third quarter of 2021.

84, 27 percent.

In the third quarter of 2021, how long to the paas 54.5% from 65/45 to send a year ago in the third quarter of 2021 a racial reach two point fifty four percent compared to the two point Forty. Nine percent reported in the second quarter of 2021. The increase is mainly explained by the subtle increase in

Lethal non-performing loans, given the unification in non-performing loans, great period. In addition to our production, both in total retail and Commercial performance. The coverage ratio was a hundred eighty one point. Sixty six percent in the third quarter of 2021 verse would be 180. 7.89 percent reported in the second quarter of 2015. One.

The change in the ratio reflects the greater reduction in allowances over the contraction, in the total number formula before. You may need you to the update in macro economic projections used in impairment loss model in haste by the effect of inflation adjustment from previous quarter.

Cost of risk, read 2.8 percent of the third quarter or 2021 higher than the second quarter 2021 2.61. This is mainly explained by the greater reduction in the

The increase in rice off is explained by the unification of non-performing loans. Deferral link to the measures taken by the Central Bank of independently. Mainly related to credit card. In the third quarter of 2021 exposure to the public sector. Excluding Central Bank Instrument, 6.9% from the 6.5 percent recorded in the previous quarter.

On the funding side as of the third quarter of 2021.

He Chrissy, 5.6% order of a quarter and increasing 3.5 percent year over year.

Private non-financial set to the positive basis. Total, 455 billion pesos falling 5.8 percent compared to the second quarter 2021, an increase in 6.8 percent compared to the first quarter of 2012.

By a 60.

Percent increase in investment account.

Private non financial sector deposits in foreign currency Express, the basal cell, 65.1% quarter-over-quarter, and 4.6 percent year-over-year, measure the u.s. Dollars and twenty-six.

From 7.41 percent a year ago in terms of capitalization begin the Year, John Tina continues to show, strong solvent indicators on the third quarter of 2021 Capital ratio reach 23.5%. Tier 1 ratio was 22.9% and Capital Access over regulatory, requirement was eighty eight point five billion pesos or

7.7% The bank's a is to make the best use of the success copy. The bank's liquidity ratio is basis and dollars remained healthy at 72.2%, and 91.5 percent of total deposits, as of September 30th, respectively.

Lastly, on November 3rd, 2021 the shareholders meeting approved, the distribution of cash dividends in the amount of 6.5 billion, pick the distribution of the dividend is subject to the central bank prior authorization, which has not been granted. Yes, and they suspended until December 31st, 2021. The total amount of accumulated cash dividend sending distribution is Twenty Eight billion people.

Considering evidence of 14.5 million pesos for the 2019 results. And thirteen point five billion pesos for 2020 results. This concludes our prepared remarks. We will now take your questions. Operator. Please open the line for questions.

We will now begin the question-and-answer session to ask a question. You may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys to withdraw your question, please press star. Then 2 at this time. We will pause momentarily to assemble our roster.

Again, if you have a question, please press star then 1.

Showing no questions. This concludes the question and answer session. At this time. I would like to turn the floor. Back to mrs. Lanusse a for any closing remarks.

Thank you for your time, and please let you know. Let us know if you have further questions. Have a good day. Bye. Thank you. This concludes today's presentation. You may disconnect your lines at this time, and have a nice day.