Q2 2025 Banco BBVA Argentina SA Earnings Call
Speaker #2: Good morning, everyone, and welcome to BBVA's Argentina second quarter 2025 results conference call. Today, we first have Mr. Diego Cesarini, head of ALM and Investor Relations.
Belen Fourcade: Good morning, everyone, and welcome to Banco BBVA Argentina S.A.'s second quarter 2025 results conference call. Today with us are Mr. Diego Cesarini, Head of ALM and Investor Relations; Ms. Belen Fourcade, Investor Relations Manager; and Ms. Carmen Morillo Arroyo, CFO, who will be available for the Q&A section. This presentation and the second quarter 2025 earnings release are available on Banco BBVA Argentina S.A.'s Investor Relations website at ir.bbva.com.ar, and will also be available for download in the chat. First of all, let me point out that some of the statements made during this conference call may be forward-looking statements within the meaning of the safe harbor provision found in Section 27A of the Securities Act of 1923 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 such forward-looking statements.
Speaker #2: Mr. and Mrs. Mara Fourcade, Investor Relations Manager, and Mrs. Carmen Mauricio Arroyo, CFO, will be available for the Q&A section. This presentation and the second quarter 2025 earnings release are available on BBVA's Investor Relations website at ir.bbva.com.ar.
Speaker #2: And we will also be available for download in the chat. First of all, let me point out that some of the statements made during this conference call may be forward-looking statements.
Speaker #2: Within the meaning of the Safe Harbor provision found in Section 27A of the Securities Act of 1923 under U.S. Federal Securities Law, these forward-looking statements are subject to risks and uncertainties that could cause actual results to differ from those expressed in such forward-looking statements.
Speaker #2: Additional information concerning these factors is contained in the BBVA Argentina Annual Report on Form 20-F for the fiscal year of 2024, filed with the U.S.
Belen Fourcade: Additional information concerning these factors is contained in the Banco BBVA Argentina S.A. Annual Report on Form 20-F for the fiscal year of 2024 filed with the U.S. Securities and Exchange Commission. During the conference presentation, all microphones will be disabled. At this time, we are going to open for the Q&A section. If you have questions, please press the raise hand button. You will then receive a request to activate your microphone. Please activate it and pick up your headset to provide optimum sound quality when posing your question. I will now turn the call over to Ms. Belen Fourcade. Please go ahead.
Speaker #2: Securities and Exchange Commission. During the conference presentation, all microphones will be disabled. At this time, we're going to open for the Q&A section.
Speaker #2: And if you have questions, please press the raise hand button. You will then receive a request to activate your microphone. Please activate it and pick up your handset to provide optimum sound quality when posing your question.
Speaker #2: I will now turn the call over to Mrs. Belen Fourcade. Please go ahead.
Speaker #3: Good morning, and thank you all for joining us today. The macroeconomic normalization process has continued in recent months. The sustained fiscal balance, along with a tight monetary policy and the gradual relaxation of foreign exchange restrictions, have been key factors in anchoring expectations and solidifying a significant disinflationary trend since 2024, which has continued during the first half of 2025.
Carmen Morillo Arroyo: Good morning and thank you all for joining us today. The macroeconomic normalization process has continued in recent months. The sustained fiscal balance, along with a tight monetary policy and the gradual relaxation of FX controls, have been key factors in anchoring expectations and solidifying a significant disinflationary trend since 2024, which has continued during the first half of 2025. In this context of stabilization, despite some recent signs of a slowdown in the pace of economic recovery, GDP growth is projected to be 5.5% year-over-year in 2025, according to BBVA Research. This not only reverses the 1.7% drop in 2024 but also surpasses previous highs reached in the past year. As a result of this improvement, our base case scenario contemplates that the disinflationary convergence will strengthen with a year-over-year inflation rate that will be close to 28% by the end of 2025.
Speaker #3: In this context of stabilization, despite some recent signs of a slowdown in the pace of economic recovery, GDP growth is projected to be 5.5% year-over-year in 2025, according to BDA research.
Speaker #3: This not only reverses the 1.7% drop in 2024 but also surpasses previous highs reached in the past year. As a result of this improvement, our base case scenario contemplates that the disinflationary convergence will strengthen, with a year-over-year inflation rate that will be close to 28% by the end of 2025.
Speaker #3: Within the framework of a new agreement with the International Monetary Fund during the second quarter of the year, on April 14, 2025, the lifting of a large part of the remaining exchange controls was announced.
Carmen Morillo Arroyo: Within the framework of a new agreement with the International Monetary Fund during the second quarter of the year, on April 14, 2025, the lifting of a large part of the remaining exchange controls was announced, along with the implementation of a wide-band floating exchange rate scheme. This has positively impacted our results, with increased foreign currency trading activity and gains from gold and foreign currency valuation. These regulatory changes will also boost cross-border credit flows and investments in the country. During the first half of 2025, Banco BBVA Argentina S.A. accelerated its growth in the credit segment, consistently outperforming the market. The bank's market share of total private loans rose 107 bps, from 10.54% in June of 2024 to 11.61% in June of 2025. As of March of 2025, Banco BBVA Argentina S.A.
Speaker #3: Along with the implementation of a wide-band floating exchange rate scheme, this has positively impacted our results, with increased foreign currency trading activity and gains from gold and foreign currency valuation.
Speaker #3: This regulatory change will also boost cross-border credit flows and investments in the country. During the first half of 2025, BBVA Argentina accelerated its growth in the credit segment, consistently outperforming the market.
Speaker #3: The bank's market share of total private loans rose 107 basis points from 10.54% in June 2024 to 11.61% in June 2025. As of March 2025, BBVA Argentina was positioned third in the ranking of local private loan banks in terms of consolidated private loans.
Carmen Morillo Arroyo: was positioned third in the ranking of local privately owned banks in terms of consolidated private loans. As per Central Bank information, our peso loan portfolio expanded by 43% year to date, a pace faster than the system's 39% and the six-month accumulated inflation level, which reached 15.1% in June of 2025. As for total private deposits, as per Central Bank information, the system grew 17% in the first six months of 2025, while the bank grew 32%, surpassing the level of inflation in both cases. Banco BBVA Argentina S.A.'s consolidated market share of total private deposits was 9.64%, 215 bps higher than the 7.5% of the previous year. According to the latest quarterly data available from the Central Bank, as of March 2025, Banco BBVA Argentina S.A. remained in the third place in the ranking of local privately owned banks in terms of consolidated private deposits.
Speaker #3: A percentage bank information, our peso loan portfolio expanded by 43% year to date, a pace faster than the system 39% and the six-month accumulated inflation level, which reached 15.1% in June of 2025.
Speaker #3: As for total private deposits, a percentage of bank information, the system grew 17% in the first six months of 2025, while the bank grew 32%, surpassing the level of inflation in both cases.
Speaker #3: BBVA Argentina's consolidated market share of total private deposits was 9.64%, 215 bps higher than the 7.5% of the previous year. According to the latest quarterly data available from the Central Bank, as of March 2025, BBVA Argentina remained in third place in the ranking of local private loan banks in terms of consolidated private sector deposits.
Speaker #3: Moving to slides two and three, I will now comment on the bank's second quarter of 2025 financial results. BBVA Argentina's inflation-adjusted net income in the second quarter of 2025 was 59.6 billion pesos, decreasing 31.1% quarter over quarter.
Carmen Morillo Arroyo: Moving to slide 23, I will now comment on the bank's Q2 2025 financial results. Banco BBVA Argentina S.A.'s inflation-adjusted net income in Q2 2025 was 59.6 billion pesos, decreasing 31.1% quarter over quarter. This implies a quarterly ROE of 7.6% and a quarterly ROA of 1.2%. We are leveraged by active pricing management, careful portfolio management, and strict cost control, which has allowed us to navigate a context of higher provisions and non-performing loans while driving activity growth. The decrease in quarterly operating results was mainly explained by lower operating income. Lower income was mainly due to: one, a drop in the line of net income from write-down of assets at amortized costs through OCI, explained by the voluntary exchange of bonds promoted by the government in January 2025, which reflected a positive result from the write-down of securities; and two, a deterioration in loan loss allowances.
Speaker #3: This implies a quarterly ROE of 7.6% and a quarterly ROA of 1.2%. We are leveraging active pricing management, careful portfolio management, and strict cost control.
Speaker #3: Which has allowed us to navigate the context of higher provisions and non-performing loans while driving activity growth. The decrease in quarterly operating results was mainly explained by lower operating income.
Speaker #3: Lower income was mainly due to, one, a drop in the line of net income from write-down of assets at amortized costs through OCI, explained by the voluntary exchange of bonds promoted by the government in January 2025, which reflected a positive result from the write-down of securities; and two, a deterioration in loan loss allowances.
Speaker #3: These were positively offset by better income in foreign exchange and gold gains, explained by an increase in activity after the partial lift of FX controls on April 14, 2025.
Carmen Morillo Arroyo: These were positively offset by better income in foreign exchange and gold gains, explained by an increase in activity after the partial lift of FX controls on April 14, 2025. Net income from the net monetary position was 30% lower quarter over quarter, thanks to a lower quarterly inflation of 6% versus 8.6% in Q1 2025. Turning into the P&L lines in slide 3, net interest income was 591.8 billion pesos, increasing 3.1% quarter over quarter. In Q2 2025, interest income increased more than interest expenses in monetary terms. The former increased due to an improvement in income from loans and from SED/UA adjustments. Expenses increased mainly due to higher deposit costs, in particular due to time deposits. Interest from time deposits explained 73.4% of interest expenses versus 74.4% the previous quarter. Net free income as of Q2 2025 totaled 94.1 billion pesos, decreasing 11.1% quarter over quarter.
Speaker #3: Net income from the net monetary position was 30% lower quarter over quarter, thanks to a lower quarterly inflation of 6% versus 8.6% in the first quarter of 2025.
Speaker #3: Turning to the P&L lines in slide three, net interest income was 591.8 billion pesos, increasing 3.1% quarter over quarter. In the second quarter of 2025, interest income increased more than just expenses in monetary terms.
Speaker #3: The former increased due to an improvement in income from loans and from SER-UVA adjustments. Expenses increased mainly due to higher deposit costs, in particular due to time deposits.
Speaker #3: Interests from time deposits explained 73.4% of interest expenses, compared to 74.4% in the previous quarter. Next, the income for the second quarter of 2025 totaled 94.1 billion pesos, decreasing 11.1% quarter over quarter.
Speaker #3: Fee income totaled 176.5 billion pesos, decreasing 7.8% quarter over quarter. The decrease in income is mainly explained by credit card fees, considering a revision of provisions linked to emissions from the BBVA loyalty program in the first quarter of 2025.
Carmen Morillo Arroyo: Free income totaled 176.5 billion pesos, decreasing 7.8% quarter over quarter. Decreasing income is mainly explained by credit card fees, considering a revision of provisions linked to the MISA BBVA loyalty program in Q1 2025. This was partially impacted by the extraordinary results reported in the first quarter of 2025 in a context of the program's sustained state and the recalculation of provisions. It is important to note that the bank is actively committed to generating efficiencies within the fees framework. The growth of fees linked to liabilities is particularly noteworthy, especially due to improvements in pricing of account maintenance and bundles. On the side of fee expenses, this totaled 82.5 billion pesos, decreasing 3.8% quarter over quarter. This is mainly explained by lower expenses related to payroll promotions, followed by lower fee expenses for new channels.
Speaker #3: This was partially impacted by the extraordinary results reported in the first quarter of 2025, in a context of a program sustained state and the recalculation of provisions.
Speaker #3: It is important to note that the bank is actively committed to generating efficiencies within the fees framework. The growth of fees linked to liabilities is particularly noteworthy, especially due to improvements in the pricing of account maintenance and bundles.
Speaker #3: On the side of fee expenses, this totaled $82.5 billion pesos, decreasing 3.8% quarter over quarter. This is mainly explained by lower expenses related to payroll promotions, followed by lower fee expenses for new channels.
Speaker #3: In the second quarter of 2025, loan loss allowances increased 42.3%, explained by the real growth of the loan book in the quarter, which implies higher provisioning, as well as the publicly known deterioration of NPLs, both for BBVA and for the system, which I will comment on later.
Carmen Morillo Arroyo: In the second quarter of 2025, loan loss allowances increased 42.3%, explained by the real growth of the loan books in the quarter, which implied higher provisioning, as well as the publicly known deterioration of NPLs, both for Banco BBVA Argentina S.A. and for the system, which I will comment on later. During the second quarter of 2025, total operating expenses were 483.1 billion pesos, decreasing 7.5% quarter over quarter, of which 29% were personal benefits costs. Personal benefits increased by 10.4% quarter over quarter but fell by 7.3% year over year. While wages kept pace with inflation, there was an increase in the payroll, as well as Social Security withholdings and collections and other short-term personal benefits. Administrative expenses dropped 4.8% quarter over quarter. The quarterly savings are mainly due to proactive efficiency measures in: one, armored transportation services; two, outsourced administrative expenses; three, advertising; and four, commercial reports.
Speaker #3: During the second quarter of 2025, total operating expenses were 443.1 billion pesos, decreasing 7.5% quarter over quarter, of which 29% were personnel benefit costs.
Speaker #3: Personal benefits increased by 10.4% quarter over quarter but fell by 7.3% year over year, while wages kept pace with inflation. There was an increase in the payroll, as well as social security withholdings and collections, and other short-term personal benefits.
Speaker #3: Administrative expenses dropped 4.8% quarter over quarter. The quarterly savings are mainly due to proactive efficiency measures in: 1. armored transportation services; 2. outsourced administrative expenses; 3. advertising; and 4. commercial reports.
Speaker #3: Additionally, the decrease is also due to the lower provisions made in the first quarter of the year, primarily related to the elimination of the PAIS tax.
Carmen Morillo Arroyo: Additionally, the decrease is also due to the lower provisions made in the first quarter of the year, primarily related to the elimination of the PAIS tax. The quarterly efficiency ratio as of the second quarter of 2025 was 56.5%, stable versus the 56.3% reported in the first quarter of 2025. Moving on to slide 4, private sector loans as of the second quarter of 2025 totaled 11.3 trillion pesos, increasing 15.7% quarter over quarter. Loans to the private sector in pesos increased 13.9% in the second quarter of 2025. For the quarter, real growth occurred across all lines, specifically with: one, a 34.6% increase in overdrafts, followed by two, a 26.9% increase in other loans; three, an 8.4% rise in credit cards; and four, an 11.6% increase in consumer loans.
Speaker #3: The quarterly efficiency ratio as of the second quarter of 2025 was 56.5%, stable versus the 56.3% reported in the first quarter of 2025. Moving on to slide four, private sector loans as of the second quarter of 2025 totaled 11.33 billion pesos, increasing 15.7% quarter over quarter.
Speaker #3: Loans to the private sector in pesos increased 13.9% in the second quarter of 2025. For the quarter, real growth occurred across all lines, specifically with: 1. a 34.6% increase in overdrafts; 2. a 26.9% increase in other loans; 3. an 8.4% rise in credit cards; and 4. an 11.6% increase in consumer loans.
Speaker #3: In all cases, the increase is driven by the genuine portfolio growth, leveraged by the relative stability of market interest rates during the second quarter, and the increased commercial efforts.
Carmen Morillo Arroyo: In all cases, the increase is driven by the genuine portfolio growth leveraged by the relative stability of market interest rates during the second quarter and the increased commercial effort. For other loans in particular, the significant progress is linked to a floor plan business, which is supporting the higher activity in the automotive sector. Loans to the private sector denominated in foreign currency increased 23.6% quarter over quarter. The quarterly increase is mainly explained by a 23.5% growth in financing and pre-financing of exports. These loans grew in a context where FX controls were lifted and expectations of exchange rate stability became stronger, which promoted activity in foreign currency. During the quarter, the commercial portfolio grew 17.7% and the retail portfolio increased 13.1%.
Speaker #3: For other loans, in particular, the significant progress is linked to a floor plan business, which is supporting the higher activity in the automotive sector.
Speaker #3: Loans to the private sector denominated in foreign currency increased 23.6% quarter over quarter. The quarterly increase is mainly explained by a 23.5% growth in financing and prefinancing of exports.
Speaker #3: These loans grew in a context where foreign exchange controls were lifted and expectations of exchange rate stability began to strengthen, which promoted activity in foreign currency.
Speaker #3: During the quarter, the commercial portfolio grew 17.7%, and the retail portfolio increased 13.1%. The commercial portfolio represents 58.1% of the total portfolio, up from 54.1% a year ago.
Carmen Morillo Arroyo: The commercial portfolio represents 58.1% of the total portfolio from 54.1% a year ago. Banco BBVA Argentina S.A.'s consolidated market share of private loans reached 11.61% as of the second quarter of 2025, improving from 10.54% a year ago. Regarding asset quality, Banco BBVA Argentina S.A.'s non-performing loan ratio on private loans reached 2.28% in June 2025, a figure that remains below the system average: 2.55% as of May 2025, the latest available data. This was due to an increase in the non-performing retail portfolio, reflecting a deterioration in non-performing credit card and consumer loans, which aligns with the overall systemic trend. Commercial non-performing loans, however, show very good performance, decreasing from 0.14% to 0.10%. While some deterioration has been observed in a scenario of significant credit expansion, primarily concentrated in the retail segment, this increase starts from historically low levels.
Speaker #3: BBVA Argentina's consolidated market share of private sector loans reached 11.61% as of the second quarter of 2025, improving from 10.54% a year ago. Regarding asset quality, BBVA Argentina's non-performing loan ratio on private loans reached 2.28% in June 2025, a figure that remains below the system average.
Speaker #3: 2.55% as of May 2025, the latest available data. This was due to an increase in the non-performing retail portfolio, reflecting a deterioration in non-performing credit cards and consumer loans, which aligns with the overall systemic trend.
Speaker #3: Commercial non-performing loans, however, show very good performance, decreasing from 0.14% to 0.10%. While some deterioration has been observed in a scenario of significant credit expansion, primarily concentrated in the retail segment, this increase starts from historically low levels.
Speaker #3: The current non-performing loan levels continue to be below the average of the local financial system over the last 20 years. BBVA is distinguished by consistently having non-performing loan ratios below the sector average, which reflects the quality of its credit risk management and its prudent approach to portfolio origination.
Carmen Morillo Arroyo: The current non-performing loan levels continue to be below the average of the local financial system over the last 20 years. Banco BBVA Argentina S.A. is distinguished by consistently having non-performing loan ratios below the sector average, which reflects the quality of its credit risk management and its prudent approach to portfolio origination. As we can see on slide 5, as of the second quarter of 2025, total growth loans and other financing over deposit ratio was 88%, above the 85% recorded in the first quarter of 2025 and above the 78% in the fourth quarter of 2024. Participation of total loans over assets is 58% versus 56% in the first quarter of 2025 and 51% in the fourth quarter of 2024, evidencing a lower exposure to the public sector in line with the real growth of credit demand.
Speaker #3: As we can see on slide five, as of the second quarter of 2025, the total growth loans and other financing over deposit ratio was 88%, above the 85% recorded in the first quarter of 2025, and above the 78% in the fourth quarter of 2024.
Speaker #3: Participation of total loans over assets is 58% versus 56% in the first quarter of 2025 and 51% in the fourth quarter of 2024, evidencing a lower exposure to the public sector in line with the real growth of credit demand.
Speaker #3: The transition of the business from securities to loans in the past years, denoted in the loans over assets ratio and the loans to deposits ratio, has had a toll on needs, which reached up to 50% in 2023 and is now 19.1%.
Carmen Morillo Arroyo: The transition of the business from securities to loans in the past year, denoted in the loans over assets ratio and the loans to deposits ratio, has had a toll on net interest margins, which reached up to 50% in 2023 and is now 19.1%. If we consider the result of the net monetary position in the calculation of net interest margins, we can see that the adjusted net interest margin has remained relatively stable since the end of 2024 and even increased in the second quarter of 2025, demonstrating the stabilization and improvement of spreads. On the funding side, as of the second quarter of 2025, total deposits reached 13 trillion pesos, increasing 12% quarter over quarter. Banco BBVA Argentina S.A.'s consolidated market share of private deposits as of the second quarter of 2025 reached 9.64%, compared to the 7.5% a year ago.
Speaker #3: If we consider the result of the net monetary position in the calculation of needs, we can see that the adjusted need has remained relatively stable since the end of 2024 and even increased in the second quarter of 2025, demonstrating the stabilization and improvement of spreads.
Speaker #3: On the funding side, as of the second quarter of 2025, total deposits reached 13.3 billion pesos, increasing 12% quarter over quarter. The bank's consolidated market share of private deposits as of the second quarter of 2025 reached 9.64%, compared to 7.5% a year ago.
Speaker #3: Private non-financial sector deposits in pesos totaled 8.7 trillion pesos, increasing 11% quarter over quarter. The quarterly change is explained by a 34.8% increase in time deposits, which was negatively offset by a 64.1% drop in investment accounts.
Carmen Morillo Arroyo: Private non-financial sector deposits in pesos totaled 8.7 trillion pesos, increasing 11% quarter over quarter. The quarterly change is explained by a 34.8% increase in time deposits, which was negatively offset by a 64.1% drop in investment accounts. Private non-financial sector deposits in foreign currency expressed in pesos increased by 14.1% quarter over quarter and 94.7% year over year. This is mainly due to an 11.1% increase in savings accounts, followed by a 55.1% increase in time deposits. Foreign currency deposits expressed in U.S. dollars increased by 8.8%. Banco BBVA Argentina S.A. continues to show strong solvency indicators on the second quarter of 2025. Capital ratio reached 18.4%. The excess capital integration over the regulatory requirements was 1.4 trillion pesos, or 123.9%. The quarter over quarter drop was driven by a rise in activity, which increased the risk-weighted assets requirements.
Speaker #3: Private non-financial sector deposits in foreign currency, expressed in pesos, increased by 14.1% quarter over quarter and 94.7% year over year. This is mainly due to an 11.1% increase in savings accounts, followed by a 55.1% increase in time deposits.
Speaker #3: Foreign currency deposits expressed in US dollars increased by 8.8%. BBVA Argentina continues to show strong solvency indicators. In the second quarter of 2025, the capital ratio reached 18.4%, and the excess capital integration over the regulatory requirement was 1.4 trillion pesos, or 123.9%.
Speaker #3: The quarter-over-quarter drop was driven by a rise in activity, which increased the risk-weighted assets requirement. Additionally, a decline in equity is partly explained by a dividend distribution announced at the general shareholders' meeting in April.
Carmen Morillo Arroyo: Additionally, a decline in equity is partly explained by a dividend distribution announced at the general shareholders' meeting in April. The second quarter of 2025 total public sector exposure, excluding Central Bank, totals 3 trillion pesos, increasing 3.1% quarter over quarter. The quarterly increase is due to a specific position in Lefis at the end of the quarter, an instrument that was later removed from the market by the Treasury in July. Exposure to the public sector, excluding Central Bank exposure, represents 15.8% of total assets, below the 17.1% in the first quarter of 2025, in line with the real loan growth demand. In the quarter, liquid assets were 6.4 trillion pesos, increasing 14.7% quarter over quarter and representing 48.7% of total deposits versus 47.6% the previous quarter.
Speaker #3: In the second quarter of 2025, total public sector exposure, excluding central banks, reached 3 trillion pesos, reflecting a 3.1% increase quarter over quarter. This quarterly increase can be attributed to a specific position in LEFIS at the end of the quarter, an instrument that was subsequently removed from the market by the Treasury in July.
Speaker #3: Exposure to the public sector, excluding central bank exposure, represents 15.8% of total assets, down from 17.1% in the first quarter of 2025. This change is in line with the real loan growth demand.
Speaker #3: In the quarter, liquid assets were 6.4 trillion pesos, increasing 14.7% quarter over quarter and representing 48.7% of total deposits, compared to 47.6% in the previous quarter.
Speaker #3: Liquidity in pesos increased from 43.8% in the first quarter of 2025 to 45.4% in the second quarter of 2025, while liquidity in US dollars remained stable around 55.5%.
Carmen Morillo Arroyo: Liquidity in pesos increased from 43.8% in the first quarter of 2025 to 45.4% in the second quarter of 2025, while liquidity in U.S. dollars remained stable around 55.5%. In line with our commitment to generating value for our shareholders, the bank has announced the distribution of cash or in-kind dividends corresponding to the 2024 fiscal year for the sum of 89.4 billion pesos, expressed in homogeneous currency as of December 31, 2024. This amount will be adjusted by the Consumer Price Index on the date of each of the 10 payments to be made, with the first two payments already successfully completed. Moving on to other business dynamics, as you can see on slide 7 of our webcast presentation, our service offering has evolved in such a way that by the end of June 2025, new customer acquisition through digital channels reached 84.5% versus 83.5% a year ago.
Speaker #3: In line with our commitment to generating value for our shareholders, the bank has announced the distribution of cash or in-kind dividends corresponding to the 2024 fiscal year.
Speaker #3: For the sum of 89.4 billion pesos, expressed in homogeneous currency, as of December 31, 2024. This amount will be adjusted by the Consumer Price Index on the date of each of the 10 payments to be made, with the first two payments already successfully completed.
Speaker #3: Moving on to other business dynamics, as you can see on slide seven of our webcast presentation, our service offering has evolved in such a way that by the end of June 2025, new customer acquisition through digital channels reached 84.5%, versus 83.5% a year ago.
Speaker #3: Retail digital sales measured in units reached 95% in the second quarter of 2025 and represent 90% of the bank's total sales measured in monetary value.
Carmen Morillo Arroyo: Retail digital sales measured in units reached 95% in the second quarter of 2025 and represent 90% of the bank's total sales measured in monetary value. This concludes our prepared remarks. We will now take your questions. Operator, please open the lines for questions.
Speaker #3: This concludes our prepared remarks. We will now take your questions. Operator, please open the line for questions.
Speaker #2: Thank you. We're now going to start the Q&A session. If you wish to ask a question, please use the raise hand button. Wait while we pull for questions.
Belen Fourcade: Thank you. We are now going to start the Q&A session. If you wish to ask a question, please use the raise hand button. Wait while we pull for questions. Our first question comes from Brian Flores from Citi. Please, Mr. Flores, your microphone is open.
Speaker #2: Our first question comes from Brian Flores from CT. Please, Mr. Flores, your microphone's open.
Speaker #4: Hi, team. Thank you for the opportunity to ask questions. I have two questions. The first one is, do you have any updates on guidance? I think it would be very important.
Diego Cesarini: Hi, team. Thank you for the opportunity to ask questions. I have two questions. The first one is if you have any updates on guidance. I think it would be very important. I wanted to ask you a bit on the sustainability of your increasing market share. I think you are proving a very healthy risk appetite. You kept the pace very, very strong. So I just wanted to check with you how sustainable this pace of growth is and also if you are going to be focusing a bit more on any particular segment. I think it would be very interesting. Thank you.
Speaker #4: And then I wanted to ask you a bit about the sustainability of your increasing market share. I think you're demonstrating a very healthy risk appetite.
Speaker #4: You kept the pace very, very strong. So, I just wanted to check with you how sustainable this pace of growth is, and also if you're going to be focusing a bit more on any particular segment.
Speaker #4: I think that would be very interesting. Thank you.
Speaker #5: Hi, Brian. Good morning. This is Carmen Mauricio. Thank you for your questions. So, related to impacting both of them, I would like to start by saying that we see a somewhat more complicated scenario in terms of NPLs, as you all know. However, we believe the levels are manageable, and we remain comfortable at these levels. We maintain our strategy of credit growth.
Carmen Morillo Arroyo: Hi, Brian. Good morning. This is Carmen Morillo Arroyo. Thank you for your questions. Related to both of them, I would like to start saying that we see a scenario a bit more complicated in terms of NPLs, as you all know. We believe the levels are comfortable, and we remain with our strategy of credit growth. In that sense, we believe this year is going to be, so we maintain our guidance around 50% growth for the bank in real terms. We believe it is a possible scenario. We will have to see what happens in the following months pre-elections, but we already think that it is feasible. In terms of other factors in guidance related to profitability, ROEs will also be around low double digits. In terms of liquidity, we are also comfortable with the growth of our deposits.
Speaker #5: In that sense, we believe this year is going to be strong, so we maintain our guidance around 50% growth for the bank. In real terms, we believe it's a possible scenario.
Speaker #5: We will have to see what happens in the following months pre-elections. But we already think that it's feasible. In terms of other factors in guidance, related to profitability, ROEs will also be around low double digits.
Speaker #5: And in terms of liquidity, we are also comfortable with the growth of our deposits, and we also maintain our guidance there around this 30% to 35% growth in deposits.
Carmen Morillo Arroyo: We also maintain our guidance there around this 30% to 35% growth in deposits. Term deposits are behaving really good, also in retail, where we did not see so much growth in the first quarter. Now we are focusing on this growth, and it is a good lever in our P&L. In terms of capital ratio, we are also comfortable. We believe we will be finishing the year around 17% from this 18.4% we are finishing the semester. This is due to the dividend payments and also the growth of our credit activity. We believe we will end the year around these levels. I hope that this answers your question.
Speaker #5: Term deposits are behaving really, really good in also in retail, where we didn't see so much growth in the first quarter, but now we are focusing on this growth, and it's so it's a good lever.
Speaker #5: In our P&L, and yeah, in terms of the capitalized ratio, we are also comfortable. We believe we will be finishing the year around 17%, down from 18.4% at the end of the semester.
Speaker #5: This is due to the dividend payments and also the growth of our credit activity. So we believe to end the year around these levels.
Speaker #5: Yeah, I hope this answers your question.
Speaker #4: No, that is perfect, Carmen. Thank you for the answer. And then on the if I understand correctly, you will slow down a bit in terms of growth, but perhaps you're going to be I mean, the whole system is going to be decelerating.
Diego Cesarini: No, that is perfect, Carmen. Thank you for the answer. If I understand correctly, you will slow down a bit in terms of growth, but perhaps the whole system is going to be decelerating. Is my understanding correct in terms of you will continue to gain market share or at least sustain this strategy?
Speaker #4: So, is my understanding correct in terms of your goal to continue gaining market share or at least sustain this strategy?
Speaker #5: That's correct, Brian. So, we are waiting to see what the system is going to be able to grow. In our case, we maintain our strategy of gaining market share.
Carmen Morillo Arroyo: is correct, Brian. So what we see, what we are waiting to see, what the system is going to be able to grow. So in our case, we maintain our strategy of gaining market share. We are confident on that. And, yeah, so the point is, what is the system going to grow? So we have liquidity, we have capital, we have a strategy, and if the demand is there, we are going to be there.
Speaker #5: We are confident about that. And yeah, so the point is: what is the system going to grow? We have liquidity, we have capital, we have a strategy, and if the demand is there, we are going to be there.
Speaker #4: Perfect. Super clear. Thank you.
Diego Cesarini: That's perfect. Super clear. Thank you.
Speaker #2: Our next question comes from Pedro Leduc from Itaú BVA. Please, Mr. Leduc, your microphone's open.
Belen Fourcade: Our next question comes from Pedro Leduc from ITAU BBVA. Please, Mr. Leduc, your microphone is open.
Speaker #6: Hi, guys. Thank you so much for taking my question. Two quick ones, please. It's still in respect to loan book growth. Could we see perhaps a shift towards more corporate than retail?
Speaker 6: Hi, guys. Thank you so much for taking my question. Two quick ones, please. It is still in respect to loan book growth. Could we see perhaps a shift towards more corporate than retail? It seems like in retail the NPLs are stinging a little bit more. So you still make the 50s, but in a different shape than we are currently seeing. That is the first. The second, if you could try to help us reconcile a bit how you move from the current ROEs towards double digits by year end. I am specifically looking at the provision coverage for bad credit, 115%. It looks historically low, especially with the shape of NPLs that we are seeing. So I am having a hard time reconciling how you can improve profitability, growing loans with probably a little bit higher NPLs and with low coverage.
Speaker #6: It seems like in retail that NPLs are stinging a little bit more. So, you still make the 50s, but in a different shape than we're currently seeing.
Speaker #6: That's the first. And then the second, if you could try to help us reconcile a bit how you move from the current ROEs towards double digits by year-end.
Speaker #6: And I'm specifically looking at the provision coverage for bad credit at 115%. It looks historically low, especially with the shape of NPLs that we're seeing. So, I'm having a hard time reconciling how you can improve profitability by growing loans with probably a little bit higher NPLs and with low coverage.
Speaker #6: I mean, the only answer I can think of is maybe NIIs accelerating a lot in the second half. But if you could help us bridge this, that would be great.
Speaker 6: The only answer I can think about is maybe net interest margin is accelerating a lot in the second half. But if you could help us bridge this, that would be great. Thank you.
Speaker #6: Thank you.
Speaker #5: Okay. Morning, Pedro. Thank you for your questions. Related to the first one, yes, it’s true that we are, so the whole system— not in our case, again, the strategy is remaining the same—talking about retail and also commercial.
Carmen Morillo Arroyo: Morning, Pedro. Thank you for your questions. Related to the first one, it is true that we are, the whole system, not in our case, the strategy is remaining the same, talking about retail and also commercial. What we see is that this deceleration in consumer loans, due to higher NPLs in the whole system. We think we will grow less in this portfolio, but the growth in credit cards is very high. Maybe less consumer loans, a bit more credit cards. Of course, SMEs and commercial and CA companies are the ones to maintain the growth. Maybe, due to the volatility in interest rates and higher levels, it is making the short-term credit slow down a bit.
Speaker #5: But what we see is that the deceleration in consumer loans is due to higher NPLs in the whole system. So we think we will grow less in this portfolio.
Speaker #5: But the growth in credit cards is still very high. So maybe less consumer loans, a bit more credit cards. And, of course, SMEs and commercial and CAD companies are the ones to maintain the growth.
Speaker #5: Maybe due to the volatility in interest rates and higher levels, it's making the short-term credit slow down a bit. But it has to be something conjunctural, and we hope in a couple of months the volatility is over and we can see again a good dynamic in terms of commercial and CAD credits.
Carmen Morillo Arroyo: It has to be something conjunctural, and we hope in a couple of months, the volatility is over and we can see again a good dynamic in terms of commercial and CA credits. You can see a bit of change in the mix of growth, but it shouldn't be that different, I would say. In terms of the path, to go from ROEs, in this semester compared to our guidance, we are not that far if you see the accumulated ROE in the semester. Maybe considering the higher NPLs, what we see is a very good performance in system commissions and in expenses. That is one of the key messages I would highlight. Also, the NIM is behaving in a very stable way.
Speaker #5: So, you can see a bit of change in the mix of growth, but it shouldn't be that different, I would say. And in terms of the path to go from ROEs in this semester compared to our guidance, we are not that far if you see the accumulated ROE in the semester.
Speaker #5: And maybe considering the higher NPLs, what we see is a very good performance in fixed income and commissions, as well as in expenses. That's one of the key messages I would highlight.
Speaker #5: And also, the need is behaving in a very stable way. Considering this volatility, I was talking about maybe you can see some negative impact due to the quicker deposit adequation of the interest rates.
Carmen Morillo Arroyo: Considering this volatility I was talking about, maybe you can see some negative impact, due to the quicker deposit adequation of the interest rates than the credit ones. In our case, our balance sheet is quite well matched between short-term liabilities and credits. In that sense, you shouldn't be considering a big impact there. It has to be something very limited in time. Maybe a month, and then you can see a stable NIM evolution. That is what we see for this five or six more months of the year.
Speaker #5: Then the credit ones. But in our case, our balance sheet is quite well matched between short-term liabilities and credits. So in that sense, you shouldn't be considering a big impact there.
Speaker #5: And it has to be something very limited in time, so maybe a month, and then you can see a stable need evolution. So that's what we see for these five or six more months of the year.
Speaker #4: That's clear. Thank you so much.
Speaker 6: is clear. Thank you so much.
Speaker #2: Our next question comes from Mario Vistresia from Itau. Please, Mr. Vistresia, your microphone's open.
Belen Fourcade: Our next question comes from Mario Estrella from ITAO. Please, Mr. Estrella, your microphone is open.
Speaker #6: Everyone, thank you. Thank you for taking my question. My question is related to the very high real rates that we've seen in the last couple of months, I would say.
Speaker 7: Everyone, thank you. Thank you for taking my question. My question is related to this very high real rate that we have seen in the last couple of months, I would say. So it seems to be a struggle between the banks and the Treasury. The Treasury wants to take more liquidity out of the system, and banks are doing so, but in exchange of really high rates, right? So this struggle has resulted in higher rates. So for me, it is what are the drivers that apparently are making the banks ask for these higher premiums in order to, in every Treasury auction? And what impacts have you seen in loan demand, right? Because we saw the activity data yesterday that came a little bit below consensus. So it seems to me it is related to these higher rates. Or if it is not, please correct me.
Speaker #6: So it seems to be sort of a struggle between the banks and the Treasury. The Treasury wants to take more liquidity out of the system, and banks are like doing so, but in exchange for really high rates, right?
Speaker #6: So, this struggle has resulted in higher rates. For me, it's like, what are the drivers that apparently are making the banks ask for these higher premiums in order to, in every auction of the Treasury?
Speaker #6: And what impacts have you seen in loan demand? Right? Because, I mean, we saw the activity data yesterday that came a little bit below consensus.
Speaker #6: So it seems to me that it's related to these higher rates, or if it's not, I mean, please correct me. So I guess that would be the two questions, right?
Speaker 7: So I guess that would be the two questions, right? I mean, what are the drivers for the banks to ask for more premiums in the auctions? And what are the impacts on the credit demand going forward, right?
Speaker #6: I mean, what are the drivers for the banks to ask for more premiums in the auctions? And what are the impacts on the credit demand going forward, right?
Speaker #7: Hi, Mario. This is Diego Cesarini. How are you? Thanks for the question. I would say that the government is worried about inflation. We all know that it's a main priority for them to bring it down as soon as possible.
Diego Cesarini: Hi, Mario. This is Diego Cesarini. How are you? Thanks for the question. I would say that the government is worried about inflation. We all know that it's a main priority for them to bring it down as soon as possible. In the previous moments before the election, I think that it's crucial for them to keep FX stable in order not to affect inflation. In that sense, what they have been trying to do is making yields, making interest rates higher, in order to keep FX as quiet as possible. It is not that we are asking for more yield in every auction. It's simply that once they raise the levels of the reserve requirements that we have to comply with, of course, we need to collect part of our bonds in order to comply with those requirements.
Speaker #7: And in the moments leading up to the election, I think it’s crucial for them to keep effects stable in order not to affect inflation.
Speaker #7: In that sense, what they have been trying to do is make yields and interest rates higher in order to keep effects as quiet as possible.
Speaker #7: It is not that we are asking for more yield in every auction. It's simply that once they raise the levels of the reserve requirements that we have to comply with, of course, we need to collect part of our bonds in order to comply with those requirements.
Speaker #7: They are making the system work with very scarce levels of short-term liquidity because banks are very liquid. As an example, we have 50% of liquid assets compared with deposits, but we are very liquid.
Diego Cesarini: They are making the system work with the very scarce levels of short-term liquidity because banks are very liquid. As an example, we have 50% of liquid assets compared with deposits, but we are very liquid. What we are now is working with no short-term instruments. We do not have a one-day instrument like we had a couple of months ago. So we need to be very, very tidy in how we manage our daily balances on our accounts. That is a little difficult to do from a technical point of view. That is bringing some troubles, some problems in the daily operations. But as Carmen Morillo Arroyo said, this is something that we see as provisional. We think in a couple of months, things will turn back to normal.
Speaker #7: But what we are now is working with no short-term instruments. We don't have a one-day instrument like we had a couple of months ago.
Speaker #7: So we need to be very, very tidy in how we manage our daily balances on our accounts. That is a little difficult to do from a technical point of view.
Speaker #7: That is bringing some troubles and problems in the daily operations. But as Carmen said, this is not something that we see as provisional.
Speaker #7: We think in a couple of months things will turn back to normal. Regarding loan demand, yes, these levels of interest rates, of course, are affecting loan demand on both segments, but mainly on the commercial side.
Diego Cesarini: Regarding loan demand, yes, these levels of interest rates, of course, are affecting loan demand on both segments, but mainly on the commercial side. Again, we are not far from complying with our yearly target of 50% loan growth, as Carmen Morillo Arroyo mentioned before. Again, we think that this is transitory.
Speaker #7: But again, we are not far from complying with our yearly target of 50% loan growth, as Carmen mentioned before. And again, we think that this is transitory.
Speaker #6: Okay, that's very helpful. Thank you. If I may, a quick follow-up. How are your expectations for fees? Because I saw it went down a little bit this quarter.
Speaker 7: Okay. That's very helpful. Thank you. If I may, a quick follow-up. How are your expectations for fees? Because I saw it went down a little bit this quarter. I understand that that's a business that you want to strengthen going forward. So, what happened this quarter and how do you see it evolving in the next period?
Speaker #6: So, I understand that that's a business that you want to actually strengthen going forward. So, what happened this quarter, and how do you see it evolving in the next period?
Speaker #5: Hi, this is Carmen again. Yeah, so if you take a look at the year-over-year growth, you can see a 20% increase in fixed and commissions.
Carmen Morillo Arroyo: Hi, this is Carmen again. So, if you take a look on the year-over-year growth, you can see a 20% increase in system commissions. When you take a look quarter over quarter, there you have some non-recurrent impacts in the first quarter that explains why we have a drop in the second quarter. I think the most important thing is to look not only against last quarter, but how we are going to perform in the year. The point is that we are working hard on fixed commissions. That is why I mentioned that point, because we know we have a gap when we compare ourselves to other peers or the banking system. We have a plan there, and that is the reason why I think this is one of the levers to have a better performance in that line.
Speaker #5: Then, when you take a look quarter over quarter, you have some non-recurrent impacts in the first quarter. That explains why we have a drop in the second quarter.
Speaker #5: But I think the most important thing is to look not only against last quarter, but how we are going to perform by the year end.
Speaker #5: And the point is that we are working hard on fixed and commission structures. That's why I mentioned that point, because we know we have a gap when we compare ourselves to other peers or the banking system.
Speaker #5: And we have a plan there, and that's the reason why I think this is one of the levers to have a better performance in that line.
Speaker #6: Yeah, super clear. Thank you. Thank you both.
Speaker 7: Yeah, super clear. Thank you. Thank you both.
Speaker #5: Thank you.
Carmen Morillo Arroyo: Thank you.
Speaker #2: Our next question comes from Brian Flores from CT. Please, Mr. Brian, your microphone's open.
Belen Fourcade: Our next question comes from Brian Flores from Citi. Please, Mr. Brian, your microphone is open.
Speaker #4: Hi, team. Thank you for the opportunity to make a follow-up here on Mario's question. I think I understood the effect on credit demand, but I just wanted to understand if this is a net positive or negative for Treasury results.
Diego Cesarini: Hi, team. Thank you for the opportunity to make a follow-up here on Mario's question. I think I understood the effect on credit demand. But I just wanted to understand if this is net positive or negative for Treasury results. Because I know, as you mentioned, it is short-termed, but it should end, and should have an impact for a full quarter, maybe more than everyone was expecting. So I just wanted to check with you if this is net positive or negative vis-à-vis what we had maybe, I do not know, three months ago, in terms of the Treasury results. Is this impacting as a benefit or is it neutral? Any color here, I think, would be great.
Speaker #4: Because I know, as you mentioned, it's short-term, but it should end and should have an impact for the full quarter, maybe more than everyone was expecting.
Speaker #4: So, I just wanted to check with you if this is net positive or negative vis-à-vis what we had maybe, I don't know, three months ago, in terms of the Treasury results.
Speaker #4: Is this impacting us a benefit, or is it neutral? Just any color here, I think, would be great.
Speaker #5: I'm not sure if I got your question, Brian. So you're talking about Treasury's analog results.
Carmen Morillo Arroyo: I'm not sure if I got your question, Brian. So you're talking about Treasury's analogy.
Speaker #4: No, I think Diego mentioned that you're managing liquidity and participating in auctions. So, of course, the rates sometimes are very high, and they could at some point be a benefit.
Diego Cesarini: I think Diego mentioned that you are managing liquidity and participating in Treasury auctions. So of course, the rates sometimes are very high, and they could, at some point, be a benefit. I know the activity here in this segment from your Treasury department should have an impact on results. So that is the question.
Speaker #4: I know the activity here in this segment from your Treasury department should have an impact on results. So, just that is the question.
Speaker #7: Okay, let me take it, Carmen. I would say that, in terms of, as Carmen mentioned before, in terms of short-term results, it's neutral to slightly negative because we have a similar amount of short-term liabilities.
Belen Fourcade: Okay. Let me take it, Carmen. I would say that, in terms of, as Carmen mentioned before, in terms of short-term results, it is neutral to slightly negative because we have a similar amount of short-term liabilities. There we include, of course, our deposits, our time deposits, and our short-term site accounts that pay interest. On the asset side, we have loans and, of course, bonds. When you amount those two amounts, they are very similar, and they are repricing. Maybe liabilities reprice a little faster because, well, of course, site accounts are on a daily basis and time deposits, you know, are most of them 30-day deposits. When you consider our short-term loans and short-term securities, maybe they take between a month. We have one-day loans, so of course, they take between one day and probably two or three months.
Speaker #7: There we include, of course, our deposits, our time deposits, and our short-term site accounts that pay interest. On the asset side, we have loans and, of course, bonds.
Speaker #7: When you compare those two amounts, they are very similar. And they are repricing. Maybe the liabilities reprice a little faster because, of course, sight accounts are on a daily basis, and time deposits, you know, are mostly 30-day deposits.
Speaker #7: And when you consider our short-term loans and short-term securities, maybe they take between one month; we have one-day loans, of course, which take between one day and probably two or three months.
Speaker #7: So, in the very short term, maybe it's slightly negative, but I would say that in the second month, the effect is already offset.
Belen Fourcade: So in the very short term, maybe it is slightly negative, but I would say that in the second month, the effect is already offset. Regarding our bond positions, I would divide it into three components. The first one are these fixed-rate bonds. Our portfolio is very, very short-term. Our average maturity is below 40, 45 days. So there is no impact. We reprice almost immediately. We do not have a significant position on long-term leg caps, which are fixed rates. Then one-third of our portfolio adjusts on a daily basis because it is those dual bonds, which adjust by the TAMAR interest rates, which is the interest rate that we pay for wholesale time deposits. Just as an example, that rate was around 30% one month and a half ago, and yesterday closed at 60%.
Speaker #7: Regarding our bond positions, I would divide them into three components. The first one consists of fixed-rate bonds; our portfolio is very, very short-term. Our average maturity is below 40 to 45 days.
Speaker #7: So there is no impact. We reprice almost immediately. We do not have a significant position on long-term leg ups, which are fixed rates. Then, one-third of our portfolio adjusts on a daily basis because these dual bonds, which adjust by the TAMAR interest rate, which is the interest rate that we pay for wholesale time deposits.
Speaker #7: Just as an example, that rate was around 30% one month and a half ago, and yesterday closed at 60%. So one-third of our portfolio reprices every day, depending on what happens with the price in the secondary market.
Belen Fourcade: So one-third of our portfolio reprices every day regarding what happens with the price in the secondary market. Our valuation does not show that. That goes to the other comprehensive income, the difference. The other third of our position is our inflation-adjusted portfolio, which, of course, if inflation does not go up as interest rates, which is the scenario that we are waiting, we expect inflation to remain very stable. So on that position, yes, we are having and we are not getting there the benefit of interest rates going up. But in general terms, we have a smaller, inflation-adjusted position than the financial system as a whole. So we are comfortable with the situation. It will be a very, very short impact, probably, that we will see it in August, but by September, we are expecting to have a neutral effect.
Speaker #7: But our valuation is does not show that. That goes to the other comprehensive income, the difference. And the other third of our position is our inflation adjusted portfolio, which of course if inflation does not go up as interest rates, which is the scenario that we are waiting, we expect inflation to remain very stable.
Speaker #7: So, on that position, yes, we are having and we are not getting the benefit of interest rates going up. But in general terms, we have a smaller inflation-adjusted position than the financial system as a whole.
Speaker #7: So we are comfortable with the situation. It will be a very, very short impact, probably that we will see in August, but by September, we are expecting to have a neutral effect.
Speaker #4: No, very helpful, Diego. Thank you.
Speaker 6: Very helpful, Diego. Thank you.
Speaker #7: Welcome.
Belen Fourcade: Welcome. Just as a reminder, if you wish to ask a question, please use the raise hand button. Our next question comes from Martín Argento from Delta Asset Management. Mr. Argento, your microphone is open. Please, Mr. Argento, activate your microphone and ask your question.
Speaker #2: Just as a reminder, if you wish to ask a question, please use the raise hand button. Wait while I pull for questions. Our next question comes from Martin Argento from Delta Asset Management.
Speaker #2: Please, Mr. Argento, your microphone's open. Please, please, Mr. Argento, activate your microphone and ask your question.
Speaker #7: Oh, sorry. Do you hear me?
Speaker 8: Oh, sorry. Do you hear me then?
Speaker #2: Yeah, now we can hear you.
Belen Fourcade: Now we can hear you.
Speaker #7: Yes. Okay. Well, following the removal of FX controls in April 2025, could you comment on how relevant FX trading and dollar-related transactions could become for BVA's earnings going forward?
Speaker 8: Yes, okay. Following the removal of FX controls in April 2025, would you comment on how relevant FX trading and dollar-related transactions could become for Banco BBVA Argentina S.A.'s earnings going forward? Should we think about this as some material or recurring revenue source or more as an opportunistic line that may fluctuate with market conditions?
Speaker #7: Should we think about this as a material or recurring revenue source, or more as an opportunistic line that may fluctuate with market conditions?
Speaker #5: Hi, Martin. Related to FX and exchange rates, the scenario we are managing as a bank for this year is that the fiscal surplus, inflation, and commercial balance sheet, along with all the macro tools that the government is using, will continue in this trend.
Carmen Morillo Arroyo: Hi, Martin. Related to FX and exchange rate, the scenario we are managing as a bank for this year is that if the fiscal surplus, inflation, commercial balance sheet, and all the macro tools that the government is using, and we believe they will continue in this trend. If all of this goes in this direction in the following months, we are not expecting the rate to have a quite differential evolution. I would say that, you know, that in a balance sheet deposition, in dollar currency is not so significant. Maybe 15% to 20% of our balance sheet is dollar currency, and we are not expecting something significant coming from this position, together with a year-end FX rate around 1,400 pesos per dollar.
Speaker #5: So if all of this goes in this direction in the following months, we are not expecting the rate to have a quite differential evolution.
Speaker #5: So I would say that in our balance sheet, the position in dollar currency is not so significant. Maybe 15% to 20% of our balance sheet is in dollar currency.
Speaker #5: And we are not expecting something significant coming from this position, together with year-end FX rates around 1.400 pesos per dollar.
Speaker #2: Okay, thanks. Just as a reminder, if you wish to ask a question, please use the raise hand button. Wait while I pull for questions. Thank you.
Speaker 8: Okay, thanks.
Belen Fourcade: Just as a reminder, if you wish to ask a question, please use the raise hand button. Well, who for questions? Thank you. This does conclude the Q&A session. I'll now hand the floor back to Banco BBVA Argentina S.A.'s team for any closing remarks. Please go ahead.
Speaker #2: This concludes the Q&A section. I will now hand the floor back to BBVA's Argentina team for any closing remarks. Please go ahead.
Speaker #8: Okay, thank you all for hearing us today. If you have any further questions, please do not hesitate to get in contact with us. Have a very nice day.
Carmen Morillo Arroyo: Okay. Thank you all for hearing us today. If you have any further questions, please, do not hesitate to get in contact with us. Have a very nice day.
Belen Fourcade: This does conclude today's presentation. We appreciate your participation and wish you a very good day.
Carmen Morillo Arroyo: Goodbye.