Release Date: August 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Net income for the second quarter of 2024 was ARS112.9 billion, increasing 178.8% quarter-over-quarter.
- Retail digital sales measured in units reached 93.1% in the second quarter of 2024, representing 74% of the bank's total sales in monetary value.
- Private sector loans increased by 23.1% in real terms, with significant growth in discounted instruments, credit cards, overdrafts, and consumer loans.
- The bank's consolidated market share of private sector loans improved to 10.54% from 9.01% a year ago.
- Strong solvency indicators with a capital ratio of 25.3% and capital excess over regulatory requirements at 210.3%.
Negative Points
- Operating income in the second quarter of 2024 was ARS446.7 billion, 40.3% lower quarter-over-quarter.
- Net interest income fell by 27.4% quarter-over-quarter, driven by lower income from loans, Repos, and CPI-linked bonds.
- Interest expenses decreased by 49.1% quarter-over-quarter, mainly due to lower checking account expenses and time deposits.
- Loan loss allowances increased by 30.4% in line with the growth in real terms of the loan portfolio.
- Total public sector exposure excluding the central bank increased by 87.7% quarter-over-quarter, representing 26.3% of total assets.
Q & A Highlights
Q: Can you provide an overview of BBVA Argentina's financial performance for the second quarter of 2024?
A: BBVA Argentina's second quarter 2024 net income was ARS112.9 billion, increasing 178.8% quarter-over-quarter. This implied a quarterly ROE of 19.5% and a quarterly ROA of 4.7%. Operating income was ARS446.7 billion, 40.3% lower quarter-over-quarter, mainly due to lower interest income, lower results from write-down of assets, and higher loan loss allowances.
Q: What were the main factors contributing to the decline in operating income?
A: The decline in operating income was primarily due to lower interest income resulting from a decline in the monetary policy rate, lower results from the write-down of assets at amortized cost and at fair value through OCI, and higher loan loss allowances in line with the growth in real terms of the loan portfolio.
Q: How did inflation impact BBVA Argentina's financial results?
A: Inflation in the second quarter of 2024 was 18.6%, much lower than the first quarter's 51.6%. Consequently, the income from net monetary position recorded a 59.9% lower loss than the previous quarter, positively impacting net income. Additionally, inflation caused a decrease in incomes from CPI-linked bonds.
Q: Can you elaborate on the performance of BBVA Argentina's loan portfolio?
A: Private sector loans totaled ARS3.9 trillion, increasing 23.1% in real terms. Growth was driven by a 28.6% increase in discounted instruments, a 14.3% increase in credit cards, a 37.3% increase in overdrafts, and an increase in consumer loans. Loans to the private sector denominated in foreign currency increased 16% quarter-over-quarter.
Q: What were the key drivers behind the changes in interest income and expenses?
A: Interest income decreased due to lower income from loans, Repos, and CPI-linked bonds, driven by a decline in the monetary policy rate from 80% to 40%. Interest expenses decreased by 49.1% quarter-over-quarter, mainly due to lower expenses in checking accounts, time deposits, and investment accounts.
Q: How did BBVA Argentina's fee income and expenses perform in the second quarter of 2024?
A: Net fee income totaled ARS58.8 billion, falling 1.8% quarter-over-quarter. Fee income increased by 9%, driven by greater fee income from credit cards and account maintenance. Fee expenses increased by 22.5%, mainly due to higher processing fees and promotion on debit and credit cards.
Q: What is the current state of BBVA Argentina's funding and liquidity?
A: Total deposits reached ARS5.8 trillion, increasing 2.6% quarter-over-quarter. The liquidity ratio was 69.5%, decreasing versus the first quarter of 2024. Liquidity ratio in local and foreign currency reached 61.4% and 88.6%, respectively. The decline is explained by lower position in Repos and a real growth in total deposits.
Q: How did BBVA Argentina's capital and solvency indicators perform?
A: The capital ratio reached 25.3%, with capital excess over regulatory requirement at 210.3%. The fall in the capital ratio quarter-over-quarter is explained by a 16.4% increase in risk-weighted assets and a 16.3% fall in ordinary capital, related to dividend distribution and the impact of OCI in equity.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
