Q3 2022 Banco Bbva Argentina SA Earnings Call

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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 2022 results conference call.

We would like to inform you that this event is being recorded and all participants will be in listen only mode. During the company presentations.

After the company's 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 zero to reach the operator.

First of all let me point out that some of the statements made during this conference call maybe forward looking statements within the meaning of the Safe Harbor provisions found in section 27, a of the Securities Act of 1933 under U S Federal Securities Law.

These forward looking statements are subject to risks and uncertainties that could cause actual results to 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 20-F for the fiscal year 2021 filed with the U S Securities and Exchange Commission.

Today with US we have Mrs. Carmen Mario Arroyo CFO Mrs. Ines, The news I R O. Mrs. Palin for Cod Investor Relations Ms for card you May begin your conference.

Good morning, and welcome to BBVA, Argentina third quarter, 2000, and they do something.

On today's webinar will be supported by a slide presentation available on our Investor Relations website under financial information section.

Speaking during today's call it will be in Afghanistan, or Investor Relations officer and determine what he thought also our new Chief financial officer, who will be available for the Q&A session.

Please note that starting January sorry.

Fenty by Central Bank regulation, we have begun reporting results.

Hyperinflation accounting.

I'm, sorry, if I ever Restful Ias 17.

For ease of comparability.

The one I can tell.

Thank you you'll see you guys have been restated to reflect the accumulated effect of inflation adjustment for each period.

September 30th 2000, and then he can now let me turn the call I'll like to renew.

Thank you Vanessa and thank you all of you for joining us today.

Although we are not we are a combination of an unstable global context.

Difficulties of our country to correct current bus economic distortion and to me, yes, that'd be objective isn't the loan agreement will be Guyana, no kind of marching volatility couldn't.

Especially in the FX market and no cause currency Denmark.

The high uncertainty about the future development.

Our economic one.

He said, Argentina has been able to continue with the economic recovery, although within a context that firsthand great challenges with that sustained high inflation and.

Foreign exchange rate.

Argentina has a corporate responsibility with propriety Iraq.

Okay.

This model.

Encourage inclusion financial education, and support scientific research and country Bank, what's with the highest integrity no long term vision and best practices and this brought us to the BBVA group in the main sustainability index.

Moving into business dynamic and you can see on slide although what cause presentation. Our service offering has evolved in such a way that by the end of September 2022 we didnt do it yourself buying penetration reached.

2% slightly increasing from that either way.

Why is that we took all my clients right.

My sense from 52% as of the same period of last year.

Bob on the side of costs unless asked me about this sector.

We are convinced this is the best of Brazil in the aim on sustaining and extending our competitive position in the financial system.

Retail digital sales have increased from 79, 6% in the third quarter of 2021% to 83.4% well viewing and represent.

Five 7% of the bank.

Same measures in monetary value right.

8% in the third what else 2021.

New customer acquisition through digital channels.

66% in the South Florida 2022.

67% in the third.

After 2021.

The bank actively monitoring business financial conditions and operating results in the aim of keeping a competitive decision to make contact with a challenge.

Moving to slide four I will now comment on the bank's first quarter 2020 to play nice where we saw bebe.

Yeah. It doesn't seem that the quarter to 1022 net income was $9 7 billion pesos queasy.

Quarter over quarter.

Implied quarterly arrow.

13, 5% on a quarterly I relate it to 4%.

Operating income in the third quarter 2020 to.

$48 4 billion pesos hunting supposed to send a box of 39 billion baseball with Gordon in the second quarter of 2000, and frankly too.

Quarterly operating results are mainly explained by one rates or interest income to higher income from measurement of financial instruments at fair value through P&L and see no. We're operating expenses mainly personnel expense.

Allowed net operating income to increase about operating expense yes.

Capex was partially upset by Apple in mezzanine income mainly affected by the negative effect of inflation.

Net income for the period for the 50% quarter over quarter due to the contract generated by the effects of a benefit in the income tax line as a result of the implication of that.

With Gordon in the second quarter.

Yeah.

In the first nine months without went up 22. He accumulated net income was $34 8 million pesos, 28% about $27 2 billion pesos recorded in the first nine months 2021 nine.

Nine months accumulated I really reached two 9%, while the nine months accumulated.

I really was 16, 8%.

Turning to the P&L like slide five net interest income for the third quarter of 2022 was 76.6 billion pesos, increasing 15, 6% quarter over quarter, and 43, 3% year over year.

Third quarter of 2000, and I'm, sending to interest income monetary terms increased more than interest expense, mainly due to one higher income from government securities to an increase in income from interest from loan and particularly older dropped in this country is fine E.

In Queens and income from said what kills I guess.

The items mentioned.

Place in a context of increasing interest rate product.

Increases in the monetary policy rate by Central Bank as well as an increase in the inflation rate.

In the quarter interest income totaled 144.3 billion pesos, increasing 18.8% compared to the second quarter of 2000.

92.

Quarterly increase is mainly driven by one higher income from government securities.

From an increase in the nominal rate and the volume in the precision of money.

To an increase in interest from loans, mainly overdrive and discounted instrument, especially if you do the increments in interest rates and higher activity.

Interest expenses totaled $67 7 billion pesos.

22, 5% increase quarter over quarter.

The increase is why my highest tenant defaults as expenses together with higher <unk>.

Adjustment expense.

English from time deposits, including investment account.

79% of interest expense was 69, 3% the previous quarter.

Although the third quarter of 2022 totaled $9 1 billion pesos.

27, 5% for all before.

Third quarter 2020, do <unk> got about five 9% mainly explained by a decline.

From credit cards due to the effect of inflation and an increase in the us when they pause maybe lab benefit program.

This was offset by an increasing beat me to it.

Leaving the average increase in prices of our power on package is one thing that you are in the month of September .

Regarding <unk> expenses increased 48, 4% quarter before higher expenses in the water or partially explained by expenditures linked to credit and debit card usage higher planned acquisition cost.

In the third quarter of 2000.

Oh, no no allowance increased 37%, mainly due to the turnaround at big microeconomic scenario in I R. S 19, impair them anymore.

In the third quarter 2022, total operating expenses were 43 8 million pesos equating to 9% quarter over 4000.

32% or personal benefits versus a 34% from the second quarter of 2072.

Despite the fact, so past the collective agreement with unions corresponding to the third quarter of 2022, and the revelation of sarcoma patients not take.

The third quarter of 2022 administrative expenses also decreased 1.8% quarter over quarter.

Quarterly decrease is partially to explain by one a reduction to.

To greater efficiency and I'm, a transportation and three an improvement of money paying us electricity and the burnt tissue can call among others.

Yeah accumulated efficiency ratio.

Quarter, two was 69%.

Cool.

Pay up to the 71, 3% reported in the second quarter up to about 142.

Quarterly improvement is explained by a decrease in extended I know, so anyways income well due to a reduction in expenses as well.

An increase in interest income.

In terms of activity on slide six.

Consolidated financing to the private sector in the third quarter of 2022, so that $582 4 billion faithful falling 8% quarter over quarter, and six 4% year over year.

No to the private sector in pesos increased six 1% in the third quarter of 2022.

You end up for the decline was especially driven by an eight 6% fall in credit cards up 13, 6% decrease in not alone followed by a five 7% boy, England humor.

Regarding our other loan the main call is observed in commercial loan.

These decreases were offset by a six 4% and 27, 5% in Queens dropped I mean with people, there's some financial need.

Yeah. So the private sector are denominated in foreign currency.

27, 8% quarter over quarter.

Uh huh.

The decrease is mainly explained by 47, 9% at Grand Lux.

Oh, no by a 22 point Bob defense for each increased financing on financing of exports and a 12, 5% for you Craig.

During the quarter, both the retail and commercial portfolio.

In Williams.

No portfolios were highly impacted by the effect of inflation during the third quarter of 2022, which reached 22% in nominal ton E D. Argentina manage to increase the total loan portfolio by 11, 9% during the war.

Argentina consolidated market share of private sector loans.

<unk>, 847%.

For 2022, improving from eight point, 10% I E.

In the third quarter of 2022 asset quality ratios, our NPL was 1.07% compared to the 1.08% recorded in the second quarter of 2022.

This is mainly explained by a similar reduction of the nonperforming portfolio I'll go along with that portfolio.

So kind of a ratio was at $236 87.

Third quarter 2022.

Bob The 219 point, 39% recorded in the second word also thousand until they do.

The increase in coverage is really the product of a great to fall in the non performing portfolio.

I'll work with centers for overlap.

Well rich, let me, 265% as of the third quarter of 2022.

Second quarter 2021, 94%.

This is mostly explained by a broker no no. So that was in the quarter, mainly due to the periodic updates of macroeconomic scenarios and I FRS nine model in Paris.

On the funding side as seen on slide seven private nonfinancial sector deposits in the third quarter of 2022 totaled 1.1 cleanly in pesos.

Nine 9% quarter over quarter, and seven 2% year over year.

We used was mainly explained by the board.

The balance on holiday did market share private deposits, we fix 168% of the south Florida up to about 122.

Private nonfinancial sector deposits in pesos decreased nine 8% compared to the second quarter of 2022.

The quarterly change is mainly affected by a degree inside the bullshit, especially checking account by 23.3%.

Followed by saving our carloads by 17, 9%.

This was partially upset by an increase in investment accounts by 14, 7%.

Private nonfinancial sector deposits in foreign car expressed in pesos that pinpoint and 6% quarter over quarter.

Third quarter of 2000, and I'm trying to do the bank's transactional deposits considering checking accounts and savings accounts represent 55 going to the stand alone financing private deposits. That's just six people.

In the second quarter of 2022.

In terms of Capitalisation, Yeah, Argentina continues to show strong forward looking indicators in the third quarter of 2022.

Capital ratio reached 26, 2%.

Exposure to the public sector in the third quarter of 2000, eclipsing two excluding central bank instruments, representing 9.8% slightly above the 9% in the second quarter to help women tend to do a way below that.

1% reported by the system as a whole that's 2022.

It is worth mentioning that the date of this report BBVA, Argentina has distributed dividends by 12.1 billion peso installed in one 211. According to the established schedules published on July 16, 2000, and send it to the 12 last installment was announced.

Friday November 18.

The banks total liquidity ratio remained healthy at 79% until something Boston.

Thank you.

This concludes our prepared remarks, we will now take your questions.

Great.

So from the LIFO question.

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Showing no questions. This concludes our question and answer session. At this time I would like to turn the floor back to Mr. Lewis for any closing remarks.

Thank you for your time and please let us know I didn't catch the question.

Okay.

Thank you. This concludes today's presentation you may disconnect. Your lines at this time and have a nice day.

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Yeah.

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