Report of Foreign Issuer (6-k)

Table of Contents

 

 

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of August 2018

Commission File Number: 001-12568

 

 

BBVA French Bank S.A.

(Translation of registrant’s name into English)

 

 

Reconquista 199, 1006

Buenos Aires, Argentina

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  ☒             Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes  ☐             No  ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes  ☐             No  ☒

Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes  ☐             No  ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

 

 

 

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BBVA Banco Francés S.A.

TABLE OF CONTENTS

 

Item
1.		BBVA Francés reports consolidated second quarter earnings for fiscal year 2018.

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Item 1

 

Buenos Aires, August 23, 2018 - BBVA Francés (NYSE: BFR.N; BCBA: FRA.BA;

LATIBEX: BFR.LA) reports consolidated second quarter results for the

January-December 2018 fiscal year.

The consolidated financial statements as of June 30, 2018 and as of March 31, 2018 are presented in accordance with Communication “A” 6114 of the Central Bank of Argentina (BCRA) (“financial statements under IFRS regulations”). For comparative purposes, the figures of the second quarter of 2017 are presented in accordance with IFRS.

 

 

Highlights of the Quarter

 

 

 

•

BBVA Francés reached a net income of AR$ 2,123.9 million in the second quarter of 2018, 37.4% higher than the net income registered in the previous quarter and 112.9% compared to the second quarter of 2017, restated for comparative purposes.

 

•

The return on average assets (ROA) reached 3.5% and the return on average equity (ROE) was 26.4% compared to 2.9% and 20.3%, respectively in the previous quarter.

 

•

Net operating income reached AR$ 8,111.7 million, increasing 16.1% compared to the previous quarter, and 52.6% compared to the second quarter of 2017.

 

•

Operating expenses reached AR$ 5,212.9 million, showing an increase of 8.7% and 31.2% compared to same periods, respectively.

 

•

Private sector loan portfolio grew 16.3% in the second quarter, and 82.6% in the last twelve months.

 

•

BBVA Francés maintains good asset quality indicators in an environment that shows certain signs of deterioration. As of June 30, 2018, the asset quality ratio (Non-Performing Loans/Total loans) stood at 0.86%, compared to 0.72% in the previous quarter, with a coverage of 223.4% (Total allowances/NPL).

 

•

Total deposits grew 20.6% during the quarter and 53.6% yearly.

 

•

As of June 30, 2018, BBVA Francés had a total capital ratio of 14.6% (Tier I 13.4%), which represents an excess of AR$ 15,003.7 million or 78.1% over the minimum required.

 

•

As of June 30, 2018, liquid assets accounted for 42.6% of the Bank’s total deposits.

 

•

The bank continued to increase its client base, reaching a total of 2.8 million clients

 

•

The Annual Ordinary and Extraordinary Shareholders Meeting, held on April 10, 2018 approved a cash dividend payment for a total amount of AR$ 970 million; such payment was effective on May 9, 2018.

 

•

As of May 17, 2018 the “Comisión Nacional de Valores” (CNV) authorized the extension for five years of the Global Program of Negotiable Bonds and the increase of the maximum amount up to USD 1,500 million or the equivalent in other currency, and the modification of the terms and conditions of the program to allow the emission of bonds in UVAs.

 

 

Other events

 

 

 

•

On July 5, 2018 BBVA Francés sold to REPAR S.A the properties located at Reconquista 40, Bolivar 502, Maipu 356 (unit 16), Perón 362 and México 628 (unit 10) and Reconquista 281, all of them located in the City of Buenos Aires.

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Regulatory Changes

 

 

 

•

In May 2018, the Central Bank of Argentina (BCRA) established, through its Communication “A” 6501, that as of May 7, 2018 the Net Global FX position when converted to pesos at the applicable exchange rate on a daily basis cannot be greater than 10% of the previous month integrated capital (RPC) or the Bank’s own liquid assets, whichever is less. In addition, on June 21, 2018, the limit was decreased to 5%.

 

•

The BCRA also established that, for the period May-July 2018, compliance with the minimum cash requirement would be made on a quarterly basis. For the month of May, compliance with the minimum daily requirement was eliminated.

 

•

On June 18, 2018 the BCRA through its Communication ”A” 6526 increased the minimum cash requirement in two tranches, 3% from 21 June 2018 and 2% from 18 July 2018, such requirement could be integrated with Treasury bonds, which will mature on November 2020 at a rate of 26%. Subsequently, it increased the requirement in other two occasions, by 3% on July 23, 2018 through its Communication “A” 6533, and by another 3% on August 16, 2018, through Communication “A” 6550. In both cases, integration with Treasury bonds is not allowed to comply with the requirement.

 

 

Economic Environment

 

 

 

				Quarter ended
Main Macroeconomic figures				06.30.18				03-31-18				06-30-17
GDP		var % y/y			n/d				3.6	%			2.9	%
Inflation (1) End of period		var % y/y			29.5	%			25.3	%			21.8	%
		var % q/q			8.8	%			6.6	%			5.4	%
CER		Quarterly adjustment			7.4	%			7.0	%			7.0	%
Exchange Rate		Pesos x US$			28.86				20.14				16.60
Reserves		US$			61,881				61,726				47,995
Fiscal Balance		Primary - billion of $			(74,824	)			(31,001	)			(102,942	)
Trade Balance		US$ (billion)			(2,620	)			(2,481	)			(1,438	)
Total Private Loans		var % q/q			15.1	%			8.8	%			11.7	%
		var % y/y			60.9	%			56.2	%			40.4	%
Total Private Deposits		var % q/q			18.8	%			3.5	%			7.1	%
		var % y/y			45.6	%			31.4	%			38.7	%
Interest rate		Monetary policy (eop)			40.0	%			27.3	%			26.3	%
		Badlar (weighted avg. quarterly)			27.1	%			22.8	%			19.5	%

 

(1)	IPC National since 1Q17

The international economy remains subject to the tensions of disparate forces, including good economic performance, as well as potentially negative factors such as protectionist measures and the impact of the increase in the price of oil over inflation. In an environment with higher risk aversion, financial tensions in emerging countries have increased generally, due to the depreciation of currencies and the widening of risk premiums, although countries with higher external financing needs, such as Argentina, have been affected negatively.

This context of closed capital markets resulted in financial tensions in the local currency market since May.

With the aim of achieving an orderly adjustment process, in June 2018, the Government signed a stand-by arrangement with the International Monetary Fund (IMF) for USD 50 billion, subject to compliance with stricter fiscal targets; increased net international reserves and the commitment to reinforce the independence of the BCRA.

Nevertheless, the volatility in the exchange market has continued, with an accumulated depreciation of the peso of 45.6% since December 2017, leading the BCRA to raise the interest rate up to 45% and to deepen monetary astringency through interventions in the secondary market of short-term securities known as Lebacs and the increase of cash reserves.

 

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As a result of the drought during the first moths of the year and of contractionary fiscal and monetary policies, the economy suffered a contraction beginning in the second quarter of 2018.

In addition, the depreciation of the peso caused an acceleration of the inflation that averaged almost 3% monthly in the second quarter of the year.

Regarding the financial system, this new scenario resulted in an abrupt increase in interest rates in time deposits as well as in credit lines and fixed income instruments.

Such increase in rates, added to the higher financial uncertainty and the increase in the cash reserve requirements implemented by the BCRA (1,100 bp) has contributed to a slowdown in the pace of growth of the financial intermediation activity with the private sector in real terms.

It should be noted that in this environment, banking deposits maintained a good performance although slowing the pace of growth, and that the financial system continued with solid levels of liquidity and solvency.

 

 

Presentation of the Information

 

 

 

•

The consolidated financial statements as of June 30, 2018 are presented in accordance with Communication “A” 6114 of the Central Bank of Argentina (BCRA) (financial statements under IFRS regulations). For comparative purposes, the amounts for previous quarters included in the text are presented in accordance with IFRS.

 

•

The information in this press release contains unaudited financial information that consolidates, line item by line item, all of the banking activities of BBVA Francés (Volkswagen Financial Services, Francés Valores and Francés Administradora de Inversiones). As of the first quarter of 2018, the Bank’s share interest in PSA Finance is no longer disclosed on a consolidated basis but is shown as “Investments in associates” (recorded under the equity method), and the corresponding results are included in “Income from associates”, as Rombo Compañia Financiera.

 

•

The balances in foreign currency as of June 30, 2018 were converted into pesos at the reference exchange rate published by the BCRA for that date (AR$ 28.8617/USD).

 

•

The information in this press release may differ from the information published by the BBVA Group for Argentina, which is prepared according to IFRS for all BBVA Group affiliates.

 

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Quarterly Results

 

 

 

														D % Quarter ended 06-30-18
Condensed Income Statement (1)						Quarter ended								vs Quarter ended
In thousands of pesos except EPS. ADS		06-30-18				03-31-18				06-30-17				03-31-18				06-30-17
Net interest income			6,018,130				5,084,027				3,312,411				18.4	%			81.7	%
Net fee income			756,103				679,719				618,335				11.2	%			22.3	%
Net income of financial instruments			(559,281	)			330,347				716,167				-269.3	%			-178.1	%
Result from assets at amortised cost			(68,298	)			1,367				(496	)			n/a				n/a
Foreign exchange difference			2,009,608				695,250				432,105				189.0	%			365.1	%
Other operating income			759,728				1,742,608				662,035				-56.4	%			14.8	%
Provision for loan losses			(804,248	)			(526,194	)			(418,545	)			52.8	%			92.2	%
Net operating income			8,111,742				8,007,124				5,322,012				1.3	%			52.4	%
Personnel expenses			(1,929,968	)			(1,957,189	)			(1,634,027	)			-1.4	%			18.1	%
Administrative expenses			(1,646,632	)			(1,508,192	)			(1,275,036	)			9.2	%			29.1	%
Depreciation and amortization of assets			(207,860	)			(199,042	)			(180,054	)			4.4	%			15.4	%
Other operating expenses			(1,428,480	)			(2,153,710	)			(885,543	)			-33.7	%			61.3	%
Operating Expenses			(5,212,940	)			(5,818,133	)			(3,974,660	)			-10.4	%			31.2	%
Operating income			2,898,802				2,188,991				1,347,352				32.4	%			115.1	%
Income from associates and joint ventures			121,443				39,877				174,566				204.5	%			-30.4	%
Net income before income tax			3,020,245				2,228,868				1,521,918				35.5	%			98.4	%
Income tax from continuing operations			(866,387	)			(662,724	)			(516,842	)			30.7	%			67.6	%
Net income including non-controlling shareholders			2,153,858				1,566,144				1,005,076				37.5	%			114.3	%
Net income attributable to non-controlling shareholders			29,938				20,846				7,658				43.6	%			290.9	%
Net Income			2,123,920				1,545,298				997,418				37.4	%			112.9	%
Other comprehensive income			64,125				(19,189	)			(78,302	)			-434.2	%			-181.9	%
Total net income			2,188,045				1526,109				919,116				43.4	%			138.1	%
Earnings per share (2)			3.47				2.52				1.63				37.4	%			112.9	%
Earnings per ADS (3)			10.40				7.57				4.88				37.4	%			112.9	%

 

(1)	Exchange Rate: $ 28,8617 = u$s 1

(2)	Assumes 612,659,638 ordinary shares for the third

(3)	Each ADS represents three ordinary shares

In the second quarter of 2018, BBVA Francés reached a net income of AR$ 2,123.9 million, registering an increase of 37.4% compared to the previous quarter and of 112.9% compared to the second quarter of 2017. The accumulated net income for the first six months of the year reached AR$ 3,669.2 million, 138.4% over the accumulated result of the first half of 2017.

Restated net income for the second quarter of 2017 reached AR$ 997.4 million compared to the loss of AR$ 283 million recorded twelve months before, the difference is mainly due to the transfer, from the second quarter to the first quarter of 2017, of the provision of AR$ 1,186 million related to the result originated by the application of the inflation adjustment on the 2016 income tax calculation, as was reported in the previous earnings release.

 

														D bp Quarter ended 06/30/18
Main figures		Quarter ended												vs quarter ended
		06-30-18				03-31-18				06-30-17				03-31-18				06-30-17
ROA (Average Assets) (1)			3.5	%			2.9	%			2.4	%			62				117
Accumulated ROA			3.0	%							1.8	%							125
ROE (Average Shareholders’ Equity) (1)			26.4	%			20.3	%			20.0	%			611				644
Accumulated ROE			22.9	%							12.7	%							1,020
NIM (1)(2)			11.6	%			12.2	%			13.7	%			(66	)			(213	)
NIM with foreign exchange difference (1)(2)			15.0	%			14.1	%			15.3	%			90				(33	)
Efficiency ratio (3)			49.4	%			56.7	%			62.7	%			(729	)			(1,323	)
Accumulated Efficiency ratio			52.8	%							64.5	%							(1,173	)

 

(1)	Annualized.

(2)	NIM: ((Net interest income + Gross income tax NII+ Cost of deposits insurance) + (Net income of financial instruments + Results from assets at amortised cost - Non deliverable forward )) / Interest Earning Assets

(3)

(Personnel and administrative expenses + Depreciations and amortizations) / ((Net interest income + Gross Income Tax + Cost of the deposits insurance) + (Fee income + Net income of financial instruments + Results from assets at amortised cost + FX Difference + Fees included in other operating income))

 

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The annualized return on assets (ROA) of the second quarter of 2018 reached 3.5% compared to 2.9% published in the previous quarter, while return on equity (ROE) was 26.4% compared to 20.3% published in the previous quarter.

 

 

Net Operating Income

 

 

 

														D % Quarter ended 06/30/18 vs
Net operating Income		Quarter ended												Quarter ended
in thousands of pesos		06-30-18				03-31-18				06-30-17				03-31-18				06-30-17
Net interest Income			6,018,130				5,084,027				3,312,411				18.4	%			81.7	%
Net fee income			756,103				679,719				618,335				11.2	%			22.3	%
Net income of financial instruments			(559,281	)			330,347				716,167				-269.3	%			-178.1	%
Result from assets at amortised cost			(68,298	)			1,367				(496	)			n/a				n/a
Foreign exchange difference			2,009,608				695,250				432,105				189.0	%			365.1	%
Other operating income			759,728				1,742,608				662,035				-56.4	%			14.8	%
Provision for loan losses			(804,248	)			(526,194	)			(418,545	)			52.8	%			92.2	%
Net operating income			8,111,742				8,007,124				5,322,012				1.3	%			52.4	%

Net operating income reached AR$ 8,111.7 million, increasing 16.1% compared to the previous quarter and 52.6% compared to the second quarter of 2017.

For the purpose of the calculation of the quarterly variation AR$ 1,021.5 million registered in the previous quarter in the line “Other operating income” were deducted, as a consequence of calculating the income tax for the 2017 fiscal year considering the effects of inflation, which are provisioned by the same amount in “Other operating expenses”.

The items that make up net operating income are disclosed in more detail below.

 

•

Net interest Income

 

														D % Quarter ended
Net Interest Income		Quarter Ended												06/30/18 vs Quarter ended
(in thousands of pesos)		06-30-18				03-31-18				06-30-18				03-31-18				06-30-18
Interest Income			9,525,300				7,892,864				5,000,705				20.7	%			90.5	%
Loan interest income			7,402,591				6,294,049				4,541,473				17.6	%			63.0	%
Income from adjustments (CER/UVA)			513,337				332,413				155,399				54.4	%			230.3	%
Income from Public Securities			1,187,403				952,624				118,405				24.6	%			n/a
Others			421,969				313,778				185,428				34.5	%			127.6	%
Interest Expenses			-3,507,170				-2,808,837				-1,688,294				24.9	%			107.7	%
Interest Expenses			-3,250,544				-2,650,433				-1,672,884				22.6	%			94.3	%
Expenses from adjustments (CER/UVA)			-256,626				-158,404				-15,410				62.0	%			n/a
Net Income Interest			6,018,130				5,084,027				3,312,411				18.4	%			81.7	%

Net interest income grew by 18.4% compared to the previous quarter and 81.7% compared to the second quarter of 2017.

Compared to the previous quarter, interest income increased 20.7% whereas interest expenses grew 24.9% mainly due to an abrupt rise in the interest rate that occurred starting in May.

Net interest income recorded a positive performance despite the shorter average term of time deposits, mainly due to the short duration of the fix income portfolio and a large part of the commercial loan portfolio.

NIM

 

Interest-Earning Assets & Interest-Bearing										Quarter ended
Liabilities $ + USD		06-30-18								03-31-18								06-30-17
(Averege in thouhand of AR$)		Capital				Rate				Capital				Rate
Interest-Earning Assets			175,925,115				20.9	%			158,676,684				19.2	%			106,177,951				19.6	%
Interest-Bearing Liabilities			138,721,270				10.0	%			124,753,037				8.9	%			85,211,913				8.0	%
NIM without foreign exchange differences			11.56	%							12.22	%							13.69	%
NIM including foreign exchange differences			14.99	%							14.09	%							15.32	%
NIM $ without foreign exchange differences			14.64	%							15.65	%							16.46	%
NIM USD without foreign exchange differences			3.85	%							2.83	%							1.87	%

 

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The net interest margin (NIM) including the results for foreign exchange differences increased 90 bp in the quarter, up to 14.99%, while net of this effect, it registered a decrease of 66 bp to 11.56%, of which 20 bp corresponds to the change of currency mix, consequence of the greater weight of assets in dollars as a result of the devaluation of the peso.

The NIM in local currency (without FX differences) was 14.7%, decreasing by 101 bp, mainly due to the higher pace of increase in the rate for liabilities and the negative result of the interest rate swaps.

The NIM in foreign currency increased 102 bp, up to 3.85% mainly on higher loans rates.

The following table shows return on assets and cost of liabilities by currency: in pesos and dollars.

 

Interest-Earning Assets & Interest-Bearing										Quarter ended
Liabilities $		06-30-18								03-31-18								06-30-17
(Averege in thouhand of AR$)		Capital				Rate				Capital				Rate				Capital				Rate
Interest-Earning Assets			125,671,511				28.1	%			116,214,892				25.3	%			85,899,552				23.6	%
Public sector instruments			16,097,421				31.6	%			17,074,738				27.1	%			15,203,478				22.4	%
Loans			108,949,580				27.6	%			98,088,733				25.1	%			64,125,816				23.9	%
Other interest-earning assets			624,511				29.3	%			1,051,420				21.5	%			6,570,258				23.6	%
Interest-Bearing Liabilities			80,458593				17.2	%			76,900,411				0.0	%			56,758,527				10.8	%
Saving Accounts			2 5,537,725				0.2	%			26,907,592				0.2	%			20,146,700				0.1	%
Time Deposits			44,114,S43				24.4	%			40,548,320				21.5	%			32,333,089				16.3	%
Current accounts with interest			5,670,911				28.2	%			5,420,745				21.7	%			2,226,348				18.4	%
Debt Securities			1,772,129				30.2	%			1,902,136				26.2	%			1,594,000				22.9	%
Other interest-bearing liabilities			3,062,885				29.2	%			2,121,619				25.5	%			458,390				19.5	%
Interest-Earning Assets & Interest-Bearing										Quarter ended
Liabilities USD		06-30-18								03-31-18								06-30-17
(Averege in thouhand of AR$)		Capital				Rate				Capital				Rate				Capital				Rate
Interest-Earning Assets			50,253,604				4.4	%			42,461,611				3.3	%			20,278,398				2.6	%
Public sector instruments			10,489,064				5.3	%			10,059,974				3.5	%			4,334,166				3.2	%
Loans			38,466,819				4.3	%			31,427,615				3.2	%			14,564,480				2.5	%
Other interest-earning assets			1,257,721				1.1	%			974,023				1.2	%			1,379,752				0.8	%
Interest-Bearing Liabilities			58,262,678				0.2	%			47,852,625				0.2	%			28,452,920				0.1	%
Saving Accounts			46,406,985				0.0	%			38,552,881				0.0	%			22,221,119				0.0	%
Time Deposits			9,831,850				0.5	%			8,279,777				0.8	%			5,939,973				0.3	%
Current accounts with interest			132,734				0.0	%			642,250				0.0	%			0				n/a
Other interest-bearing liabilities			1,891,108				3.7	%			377,717				2.8	%			291,828				4.4	%

 

•

Net fee Income

 

Net fee Income		Quarter ended												D %  Quarter ended 06-30-18  vs quarter ended
(In thousands of pesos)		06-30-18				03-31-18				06-30-17				12-31-17				03-31-17
Net fee income			756,103				679,719				618,335				11.2	%			22.3	%
Fee income			2,278,267				2,034,541				1,576,453				12.0	%			44.5	%
Fee charges on deposits accounts			886,958				313,236				582,860				9.1	%			52.2	%
Credit cards and operations			563,183				477,967				427,5 64				17.3	%			31.7	%
Checks			221,466				204,363				162,799				8.1	%			36.0	%
Capital markets and securities activities			27,307				52,756				61,735				-48.2	%			-55.8	%
Fees related to foreign trade			108,711				77,623				64,470				40.0	%			68.6	%
Services of collection			317,097				256,335				166,992				23.5	%			39.9	%
Generated by subsidiaries			111,828				113,351				82,352				-1.3	%			35.8	%
Other fees			41,717				37,902				27,631				10.1	%			51.0	%
Fee Expenses			(1,522,164	)			(1,354,322	)			(958,118	)			12.4	%			58.9	%

Net fee income grew 11.2% compared to the previous quarter and 22.3% compared to the second quarter of 2017.

Fee Income increased 12% in the second quarter and 44.5% compared to the same quarter of 2017, driven by the higher consumption with credit cards, fees generated by collection services and fees on deposits accounts, which reflects the higher volume of activity and the rise in prices.

 

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BBVA Frances continues to gain market share in credit card consumption, during the quarter it grew 10 bp, reaching 13.2% of the market.

Fee expenses grew 12.4% over the quarter and 58.9% compared to the second quarter of 2017, mainly due to fees related to the loyalty program and higher credit card processing charges.

In the new disclosure format applied beginning with this quarter, certain fee items are accounted for in “Other operating income”.

 

•

Net income from measurement of financial instruments at fair value through profit or loss

 

Net income from measurement of financial instruments		Quarter ended												D %  Quarter ended 06-30-18 vs quarter ended
at fail value through profit or loss (In thousands of pesos)		06-30-18				03-31-18				06-30-17				12-31-17				06-30-17
Net income of financial instruments at fail value			-559,281				330,347				716,167				-269.3	%			-178.1	%
Income from public securities			248,089				187,893				646,760				32.0	%			-61.6	%
Income from private securities			118,936				93,362				43,929				27.4	%			170.7	%
Income from interest rate swaps			(433,324	)			1,649				11,002				n/a				n/a
Non deliverable forward			(502,779	)			39,614				(1,645	)			n/a				n/a
Income from corporate bonds			9,797				7,829				16,122				25.1	%			-39.2	%

Net income from measurement of financial instruments at fair value recorded a loss in the second quarter of 2018 due to interest rate swap transactions and foreign currency forward transactions (NDFs), which was partially offset by the positive result generated by the USD/AR$ spot position of AR$ 1,045.5 million illustrated in the following table.

 

•

Foreign Exchange Difference

 

Foreign Exchange Diffrerence		Quarter ended												D %  Quarter ended
(In thousands of pesos)		06-30-18				03-31-18				06-30-18				03-31-18				06-30-18
Foreign Exchange Difference			2,009,608				695,250				432,105				189.0	%			365.1	%
Buy/Sell			964,124				532,290				397,214				81.1	%			142.7	%
Spot			1,045,484				162,960				34,891				n/a				n/a

Foreign Exchange difference shows a higher result due to both the devaluation of the peso during the quarter as well as greater buying and selling activity.

 

•

Other Operating Income

 

Other Operating Income		Quarter ended												D %  Quarter ended
(In thousands of $)		06-30-18				03-31-18				06-30-17				03-31-18				06-30-17
Operating Income			759,728				1,742,608				662,035				-56.4	%			14.8	%
Safe deposits			111,121				100,082				82,432				11.0	%			34.7	%
Insurance			170,286				167,575				151,393				1.6	%			12.5	%
Fees on USD credit cards consumption			52,388				56,526				72,336				-7.3	%			-27.5	%
Interest on loans and fees related			128,314				81,319				70,821				57.8	%			81.2	%
Other fees			57,670				55,900				47,223				21.1	%			43.3	%
Total other fees			529,779				461,402				424,255				14.8	%			24.9	%
Reverse income tax provision			—				1,021,500				—				n/a
Other operating income			229,949				259,706				237,780				-11.5	%			-3.3	%

Deducting the provision of the result for fiscal tax adjustment of AR$ 1.021,5 million as previously mentioned, other operating income reflects an increase of 5.4% due to higher fees, which grew 14.8% during the period.

 

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Operating Expenses

 

 

 

Operating Expenses		Quarter ended												D % Quarter ended 06/30/18 vs
In thousands of pesos		06-30-18				03-31-18				06-30-17				03-31-18				06-30-17
Personnel expenses			(1,929,968	)			(1,957,189	)			(1,634,027	)			-1.4	%			18.1	%
Administrative expenses			(1,646,632	)			(1,508,192	)			(1,634,027	)			9.2	%			29.1	%
Depreciation and amortization of assets			(207,860	)			(199,042	)			(1,275,036	)			4.4	%			15.4	%
Other operating expenses			(1,428,480	)			(2,153,710	)			(180,054	)			-33.7	%			61.3	%
Operating Expenses			(5,212,940	)			(5,818,133	)			(3,974,660	)			-10.4	%			31.2	%

Operating expenses reached AR$ 5,212.9 million, an increase of 8.7% and 31.2% compared to the previous quarter and to the second quarter of 2017, respectively.

As mentioned, the quarterly variation was calculated without considering AR$ 1,021.5 million recorded in the first quarter of 2018 in other operating expenses, corresponding to the provision generated by calculating the income tax for the 2017 fiscal year considering the effects of inflation.

The items that make up net operating expenses are analyzed in more detail below.

 

•

Personnel expenses and Administrative expenses

 

Administrative and personnel expenses		Quarter ended												D % Quarter ended 30/06/18 vs quarter ended
(In thousands of pesos)		06-30-18				03-31-18				06-30-17				03-31-18				06-30-17
Personnel expenses			(1,929,968	)			(1,957,189	)			(1,634,027	)			-1.4	%			18.1	%
Administrative expenses			(1,646,632	)			(1,508,192	)			(1,275,036	)			9.2	%			29.1	%
Electricity and Communications			(68,331	)			(64,192	)			(56,143	)			6.4	%			21.7	%
Advertising and Promotion			(124,392	)			(112,503	)			(102,945	)			10.6	%			20.8	%
Fees and external administrative services			(76,380	)			(60,036	)			(52,689	)			27.2	%			45.0	%
Taxes			(349,683	)			(380,433	)			(280,111	)			-8.1	%			24.8	%
Rente			(165,446	)			(151,107	)			(105,525	)			9.5	%			56.8	%
Maintainance, conservation and repairs			(175,265	)			(159,145	)			(130,407	)			10.1	%			34.4	%
Security Service			(66,631	)			(77,006	)			(71,328	)			-13.5	%			-6.6	%
Carriage of valuables			(237,258	)			(163,315	)			(179,109	)			45.3	%			32.5	%
Other			(383,246	)			(340,455	)			(296,779	)			12.6	%			29.1	%
Total Employees			6,084				6,075				6,190				0.1	%			-1.7	%
Total Branches			251				251				252				0.0	%			-0.4	%

Personnel expenses decreased by 1.4% compared to the first quarter and increased 18.1% compared to the second quarter of 2017, whereas administrative expenses increased 9.2% and 29.1% in the same periods, respectively.

Administrative expenses grew during the quarter as a result of the rise of transportation of cash (45.3%), consequence of the higher exchange rate volatility in May and June and the need to provide banknotes in foreign currency to the branches due to the increase in the demand.

In addition, maintenance, conservation and repairs line item includes a small impact in technology expenses due to the increase in the foreign exchange rate.

The efficiency ratio in the quarter reached 49.4%, showing an improvement of 729 bp compared to the previous quarter.

 

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•

Other operating expenses

 

														D % Quarter ended 06/30/18 vs
Other Operating expenses		Quarter ended												Quarter ended
(In thousands of $)		06-30-18				03-31-18				06-30-17				03-31-18				06-30-17
Operating expenses			(1,428,480	)			(2,153,710	)			(885,543	)			-33.7	%			61.3	%
Gross income tax			(957,432	)			(725,069	)			(520,006	)			32.0	%			84.1	%
Gross income tax NIl			(827,697	)			(601,957	)			(353,213	)			37.5	%			134.3	%
Gross income tax fees			(204,072	)			(194,440	)			(166,793	)			5.0	%			22.4	%
Cost of deposits insurence			(71,851	)			(65,805	)			(52,577	)			9.2	%			36.7	%
Income tax provision			—				1,021,500				—				n/a
Other operating expenses			(399,197	)			(341,336	)			(312,960	)			17.0	%			27.6	%

Other operating expenses reflects mainly a higher charge by gross income tax, due to the rise in interest rates, fees and the income by foreign exchange difference, during the period.

 

 

Income from associates

 

 

Income from associates and joint ventures shows the result of non-consolidated companies. Over the second quarter it showed an income of AR$ 121.4 million, mainly due to the equity investment in Interbanking, PSA Finance, Rombo Compañia Financiera and Consolidar Seguros.

 

 

Balance and activity

 

 

 

 

Loan portfolio

 

 

 

														D % Quarter ended 06/30/18 vs
Net loans		Quarter ended												quarter ended
(In thousands of pesos)		06-30-18				03-31-18				06-30-17				03-31-18				06-30-17
Private & Financial sector loans in $			114,137,426				105,205,377				71,027,151				8.5	%			60.7	%
Advances			14,190,618				13,597,142				9,698,771				4.4	%			46.3	%
Discounted and purchased notes			17,676,837				16,630,962				9,367,944				6.3	%			88.7	%
Consumer Mortgages			7,357,341				5,881,749				2,117,319				25.1	%			247.5	%
Car secured loans			5,348,745				4,844,257				3,591,838				10.4	%			48.9	%
Personal loans			20,666,082				19,376,800				11,869,020				6.7	%			74.1	%
Credit cards			33,282,575				30,062,625				22,587,011				10.7	%			47.4	%
Loans to financial sector			6,094,169				4,846,056				3,142,645				25.8	%			93.9	%
Other loans			9,688,354				9,191,722				8,265,451				5.4	%			17.2	%
Other receivables			3,423,950				3,627,055				2,409,235				-5.6	%			42.1	%
Unaccrued interest			(919,522	)			(658,285	)			(312,421	)			39.7	%			194.3	%
Less: Allowance for loan losses			(2,671,723	)			(2,194,706	)			(1,709,662	)			21.7	%			56.3	%
Private & Financial sector loans in FX			47,985,806				34,231,309				17,778,669				40.2	%			169.9	%
Commercial Loans			46,390,897				32,669,243				16,323,731				42.0	%			184.2	%
Credit cards			2,007,866				1,812,303				1,526,035				10.8	%			31.6	%
Loans to financial sector			96,539				103,379				110,994				-6.6	%			-13.0	%
Less: Allowance for loan losses			(509,496	)			(353,616	)			(182,091	)			44.1	%			179.8	%
Total Private Loans			162,123,232				139,436,686				88,805,820				16.3	%			82.6	%
Total loans to public sector			142				142				239				0.0	%			-40.6	%
Net Total Loans net of other non resident loans			162,123,374				139,436,828				88,806,059				16.3	%			82.6	%

As of June 30, 2018, the private sector loan portfolio totaled AR$ 162.1 billion, increasing 16.3% during the quarter and 82.6% in the last twelve months.

Loans market share reached 8.24%, including loans from associated companies (VW Financial Services, PSA Finance and Rombo Compañia Financiera), showing an increase of 68 bp in the last 12 months.

Credit growth was affected during the second quarter by the devaluation of the peso and higher interest rates, resulting in a strong increase of loans in dollars (40.2%) mainly due to the re-expression of the new value of the currency and a mild growth in pesos of 8.5%.

With regard to loans to individuals, credit card loans recorded a positive performance, offsetting the slowdown in the demand for mortgages and personal loans.

 

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Commercial loans tended to moderate growth and were focused on shorter terms, although, as a result of the temporary closure of capital markets, it was possible to see more interest from certain companies, especially larger financial companies, over longer terms.

 

% Loans distribution by Industry		% Commercial				% Total loans
Consumer			36.9	%			19.0	%
Basic Materials			13.2	%			6.8	%
Energy			15.7	%			8.1	%
Retailers			12.6	%			6.5	%
Durable Goods			9.3	%			4.8	%
Capital Goods			4.4	%			2.3	%
Construction and infraestructure			3.1	%			1.6	%
Others			4.8	%			2.5	%

 

 

Asset quality ratios

 

 

 

Asset quality ratios		Quarter ended												D % Quarter ended 06/30/18 vs quarter ended
(In thousands of pesos)		06-30-18				03-31-18				06-30-17				03-31-18				06-30-17
Non-performing loans (1)			1,423,719				1,017,379				753,731				39.9	%			88.9	%
Allowance for loan losses			(3,181,219	)			(2,548,322	)			(1,891,753	)			24.8	%			68.2	%
Non-performing loans/net total loans			0.86	%			0.72	%			0.83	%			20.2	%			3.6	%
Non-performing priv. loans/net priv. loans			0.86	%			0.72	%			0.83	%			20.2	%			3.6	%
Allowance for loan losses/non-performing loans			223.44	%			250.48	%			250.99	%			-10.8	%			-11.0	%
Allowance for loan losses/net total loans			1.92	%			1.79	%			2.09	%			7.2	%			-7.7	%

 

(i)	Non-performing loans include: all loans to borrowers classified as “Problem”, “Deficient Servicing”, “High insolvency Risk”, “Difficult Recovery”, “Irrecoverable” and “Irrecoverable for Technical Decsion” according to the new Center Bank debtor classification system.

As of June 30, 2018, the asset quality ratio (non-performing loans/total loans) was 0.86% with a coverage ratio (allowances non-performing loans) of 223.44%.

This ratio increased 15 bp compared to the previous quarter due to some deterioration of the portfolio, while compared to the second quarter of 2017 it showed an increase of only 3 bp.

The drought that affected the country during the first months of the year did not have a significant impact on the affected portfolio.

The cost of risk reached 1.49% registering a 17 bp increase in the quarter.

The following table shows the evolution of provisions:

 

Evolution of provisions		Quarter ended												D % Quarter ended 06/30/18 vs quarter ended
(In thousands of pesos)		06-30-18				03-31-18				06-30-17				03-31-18				06-30-17
Balance at the beginning of the quarter			2,548,322				2,292,035				1,751,093				11.2	%			45.5	%
Increase/decrease			801,330				526,034				354,006				52.3	%			126.4	%
Increase/decrease-Foreign exchange diff.			154,646				22,159				13,410				n/a				n/a
Aplications / Reversals			(323,079	)			(291,906	)			(226,756	)			10.7	%			42.5	%
Balance at the end of the quarter			3,181,219				2,548,322				1,891,753				24.8	%			68.2	%

 

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Public sector exposure

 

 

 

Public Sector Exposure		Quarter Ended												D % Quarter ended 03-31-18 vs quarter ended
(In thousands of pesos)						31-03-18				30-06-17				31-12-17				31-03-17
Bills and Notes from Central Bank			14,291,916				12,316,169				14,502,391				16.0	%			-1.5	%
National Government and provinces debt			14,776,891				9,929,971				7,270,094				48.8	%			103.3	%
Treasury and national government			14,776,891				9,929,971				7,270,094				48.8	%			103.3	%
National Treasury Public Debt $			2,995,774				221,490				2,339,622				1252.6	%			28.0	%
National Treasury Public Debt USD			5,651,068				5,051,412				4,930,472				11.9	%			14.6	%
Treasury Repos USD			6,130,049				4,657,069				—				31.6	%
Provinces			—				—				—				0.0	%			0.0	%
Pesos subtotal			17,287,691				12,537,659				16,842,013				37.9	%			2.6	%
Dollars subtotal			11,781,117				9,708,481				4,930,472				21.3	%			138.9	%
Total Public Sector exposure			29,068,808				22,246,140				21,772,485				30.7	%			33.5	%
% National Government debt /Assets			5.5	%			4.4	%			4.3	%

Total exposure to the public sector totaled AR$ 29.1 billion, increasing 30.7% in the quarter.

Short-term liquidity was allocated in BCRA bills, which increased AR$ 1.9 billion during the quarter. The national government debt represents 5.5% of total assets, and increased AR$ 4.8 billion in the quarter.

The increase in local currency debt comes from the acquisition of a 2-year bond that will be used to comply with the increase of 500 basis points in the minimum cash requirement, disposed by the BCRA in two stages, June and July.

Foreign currency debt has an average term of 6 months and is composed of a Repo with the National Treasury for USD 212 million and short term Letes for USD 195 million. During the quarter these positions decreased by USD 70 million, however, due to the depreciation of the peso, their peso value increased approximately AR$ 2 billion during the period under analysis.

 

 

Deposits

 

 

 

Total deposits		Quarter ended												D % Quarter ended 06/30/18 vs quarter ended
(In thousands of pesos)		06-30-18				03-31-18				03-30-17				03-31-18				06-30-17
Deposits $ denominated			110,782,951				102,338,422				83,930,617				8.3	%			32.0	%
Current accounts			24,855,245				24,518,461				22,684,250				1.4	%			9.6	%
Saving accounts			36,962,990				31,971,917				27,232,686				15.6	%			35.7	%
Time deposits			46,739,438				43,659,792				32,102,594				7.1	%			45.6	%
Peso denominated			42,908,415				40,646,698				31,856,573				5.6	%			34.7	%
CER adjusted time deposits			3,831,023				3,013,094				246,021				27.1	%			n/a
Other			2,225,278				2,188,252				1,911,087				1.7	%			16.4	%
Deposits FX denominated			82,074,322				57,614,261				41,638,489				42.5	%			97.1	%
Current accounts			189,557				145,994				126,632				29.8	%			49.7	%
Saving accounts			67,209,837				46,680,073				30,552,506				44.0	%			120.0	%
Time deposits			12,315,734				8,658,520				6,270,117				42.2	%			96.4	%
Other			2,359,194				2,129,674				4,689,234				10.8	%			-49.7	%
Total deposits			192,857,273				159,952,683				125,569,106				20.6	%			53.6	%

Total deposits reached AR$ 192.9 billion as of June 30, 2018, increasing 20.6% compared to the previous quarter and 53.6% compared with the second quarter of 2017.

Foreign currency deposits remained stable during the quarter, but their balance reflects the depreciation of the peso.

 

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Local currency deposits increased 8.3% mainly due to increases in savings accounts and current accounts with interest.

 

 

Other funding sources

 

 

 

Other funding sources		Quarter ended												D % Quarter ended 06/30/18 vs quarter ended
(In thousands of pesos)		06-30-18				03-31-18				06-30-17				03-31-18				06-30-17
Lines from other banks			5,732,921				829,574				341,534				n/a				n/a
Senior Bonds			1,751,596				1,839,184				1,419,905				-4.8	%			23.4	%
Total other funding sources			7,484,517				2,668,758				1,761,439				180.4	%			324.9	%

The increase in the lines from other banks corresponds mainly to funds to finance foreign trade operations.

 

 

CER/UVA Mismatch

 

 

 

		Quarter ended												D % Trim. finalizado 30/06/18 vs Trim. finalizados
(In thousands of pesos except percentages)		06-30-18				03-31-18				06-30-17				03-31-18				06-30-17
CER adjusted assets			8,636,945				6,034,055				2,218,667				43.1	%			289.3	%
- Public bond portfolio			404,976				446,478				1,656,898				-9.3	%			-75.6	%
- Private sector loans			7,445,968				4,957,098				448,609				50.2	%			1559.8	%
- Other credits			786,001				630,479				113,160				24.7	%			594.6	%
CER adjusted deposits			3,831,023				3,013,094				246,021				27.1	%			1457.2	%
CER mismatch			4,805,922				3,020,961				1,972,646				59.1	%			143.6	%

The mismatch between assets and liabilities adjustable by inflation increased AR$ 1.8 billion or 59.1% in the quarter, as a result of higher adjustable loans, offset by the increase in UVA deposits.

This mismatch is relatively lower than that of the financial system as a whole.

The bank will continue to promote and develop the instruments it deems necessary to limit this mismatch.

 

 

Solvency

 

 

 

Central Bank Requirements		Quarter ended												D % Quarter ended 06/30/18 vs quarter ended
(In thousands of pesos)		06-30-18				03-31-18				06-30-17				03-31-18				06-30-17
CB Minimum Capital Requirements			19,213,740				17,026,890				11,608,879				12.8	%			65.5	%
Allocated to Asset at Risk			16,092,833				14,042,621				9,046,865				14.6	%			77.9	%
Market Risk			154,790				241,847				287,776				-36.0	%			-46.2	%
Operational Risk			2,966,117				2,742,422				2,274,238				8.2	%			30.4	%
Bank Capital			34,217,408				32,595,907				18,632,561				5.0	%			83.6	%
Ordinary Capital Level 1 (*)			33,516,442				32,323,764				17,451,690				3.7	%			92.1	%
Dedusctions Ordinary Capital Level 1			(2,165,117	)			(2,203,850	)			(525,144	)			-1.8	%			312.3	%
Capital Level 2			1,959,093				1,700,390				1,260,472				15.2	%			55.4	%
Aditional Capital Level 1			906,990				775,603				445,543				16.9	%			103.6	%
Excess over Required Capital			15,003,668				15,569,017				7,023,682				-3.6	%			113.6	%
Excess as % of the capital required			78.1	%			91.4	%			60.5	%			-14.6	%			29.1	%
Risk weighted assets			234,312,709				207,723,520				141,817,226				12.8	%			65.2	%
Capital Ratio (Central Bank rules) (*) (**)			14.6	%			15.7	%			13.1	%			-6.9	%			11.1	%
TIER I (***)			13.4	%			14.5	%			11.9	%			-7.7	%			12.1	%

 

(*)	Bank capital / Risk weighted assets

(**)	Includes the 100% of the quarterly result

(***)

Ordinary capital level 1 / Risk weighted assets

The figures expressed in the previous quarters were not adjusted by IFRS

BBVA Frances continues to show adequate solvency ratios. As of June 30, 2018 the capital ratio reached 14.6%, 110 basis points lower than the ratio of March 31, 2018, mainly due to higher risk weighted assets, mainly those denominated in foreign currency as a consequence of the devaluation of the peso.

 

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The Tier 1 ratio was 13.4% and the excess over required capital was AR$ 15,003.7 million.

 

 

Additional information

 

 

 

		Quarter ended												D % Quarter ended 06/30/18 vs Quarter ended
		06-30-18				03-31-18				06-30-17				03-31-18				06-30-17
Exchange rate $/USD			28.86				20.14				16.60				43.3	%			73.9	%
Quarterly CER adjustment			7.4	%			7.0	%			7.0	%			5.0	%			5.3	%

 

 

Disclaimer

 

 

This press release contains or may contain forward-looking statements, including but not limited to estimates of the prospects for the Argentine economy, BBVA Francés’ earnings, business plans, expense and operational structure adjustments, capitalization plan, and trends affecting BBVA Francés’ financial condition and results of operations. Any forward-looking statements included in this press release are based on current expectations and estimates, but actual results and events may differ materially from anticipated future results and events. Certain factors which could cause the actual results and events to differ materially from the expected results or events include: (1) macroeconomic, regulatory or political changes; (2) changes in domestic or international stock market prices, exchange rates or interest rates; (3) changes in the markets for BBVA Francés’ products and services; (4) increasing competition; (5) changes in technology; or (6) changes in the financial condition, creditworthiness or solvency of the customers, debtors or counterparts of BBVA Francés. These forward-looking statements on future events referring only to the date of the document should be taken cautiously. It is advisable to consult the Bank’s Financial Statements and all the documents filed from time to time with the Argentine Securities and Exchange Commission (“CNV”) and the Buenos Aires Stock Exchange

 

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Conference Call

 

 

On Friday August 24, 2018 at 12:30 p.m. (Argentine time) a conference call will be held to comment on the quarter’s results.

Those who wish to participate should contact the following numbers:

0800-444-2930 (from Argentina)

+ 1-844-413-3973 (from United States)

+ 1412-902-6509 (from other countries)

Conference ID: BBVA .

To access the webcast:

http://webcastlite.mziq.com/cover.html?webcastId=cfea5ee6-13f9-4230-8513-eaba5c3b7228

To request the Replay, please call

[phone] (from United States)

[phone] (from other countries)

The replay will be available until August 31, 2018.

Replay Access code: 10123256

 

 

Internet

 

 

This Press Release is available on the web page of BBVA Francés.

www.bbvafrances.com.ar

 

 

Contacts

 

 

Cecilia Acuña

Investor Relations

(5411) 4341-5036

[e-mail]

Diego Cesarini

Financial Management and Investor Relations

[e-mail]

 

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BBVA Banco Francés S,A, and subsidiaries (Grupo Consolidar by the equity method)

BALANCE SHEET (in thousands of pesos)

Communication “A” 6114

 

		06-30-18				03-31-18				06-30-17
Cash and due from banks			54,530,632				36,917,931				37,196,151
Debt securities at fair value through other comprehensive income			2,735,529				1,162,994				4,345,912
Derivatives			104,250				168,314				68,045
Repurchase agreements			6,367,328				7,144,101				3,035,678
Other financial assets			5,897,674				7,142,873				2,996,512
Loans and other financial intermediation			162,123,310				139,436,828				88,806,059
Loans to the private & financial sector			162,123,232				139,436,686				88,805,820
Public Sector loans			78				142				239
Other debt securities			18,544,550				15,578,336				17,595,929
Financial assets pledged as collateral			5,155,840				3,925,255				2,267,527
Current income tax assets			1,056				1,375				278,744
Investments in equity instruments			120,978				145,256				63,696
Investments in associates and joint ventures			1,087,893				921,199				971,108
Property, plant and equipment			9,136,878				9,024,411				8,888,324
Intangible assets			542,054				448,944				354,578
Deferred income tax asset			22,311				57,407				10,091
Other non financial assets			1,350,209				1,457,379				992,093
Non-current assets held for sale			507,630				741,840				—
Total Assets			268,228,122				224,274,443				167,870,447
Deposits			192,857,273				159,952,683				125,569,106
Current accounts			25,044,802				24,664,455				22,810,882
Saving accounts			104,172,827				78,651,990				57,785,192
Time deposits			59,055,172				52,318,312				38,372,711
Rescheduled deposits CEDROS			1,951				1,951				1,951
Other deposits			4,582,521				4,315,975				6,598,370
Liabilities at fair value trhough other comprehensive income			143,495				—				—
Derivatives			2,277,241				245,444				72,425
Repurchase agreements			936,751				579,184				26,514
Other financial liabilities			17,727,818				16,497,979				9,224,236
Financing received the BCRA and other financial insitutions			5,732,921				829,574				341534
Corporate bonds issued			1,751,596				1,839,184				1,419,905
Current income tax liabilities			1,409,535				884,250				502,365
Provisions			3,374,177				3,268,894				2,043,341
Other provisions			3,372,628				3,267,758				2,042,741
For eventual compromises			1,549				1,136				600
Deferred income tax liabilites			343,100				514,787				944,155
Other non-financial liabilities			8,258,653				7,492,249				6,911,172
Total Liabilities			234,812,560				192,104,228				147,054,953
Total Stockholders’ equity			32,861,689				31,645,338				20,528,602
Equity investments			553,873				524,877				286,892
Total liabilities + stockholders’ equity			268,228,122				224,274,443				167,870,447

 

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BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar: by the equity method)

INCOME STATEMENT (in thousands of pesos)

Communication “A” 6114

 

		06-30-18				03-31-18				06-30-17
Interest Income			9,525,300				7,892,864				5,000,705
Interest on loans to the financial sector			351,772				246,176				149,444
Interest on overdraft			1,177,920				917,500				679,137
Interest on documents			1,090,927				865,226				453,878
Interest on mortgages loans			169,956				142,561				85,660
Interest on car secured loans			337,965				316,562				211,286
Interest on credit card loans			1,885,704				1,671,465				1,508,214
Interest on financial leases			129,239				124,947				99,501
Interest on personal loans			1,532,737				1,355,898				919,366
Interest on other loans			724,107				651,892				434,135
From other banking receivables from financial intermediation			2,264				1,822				852
Income from Public Securities			1,187,403				952,624				118,405
CER adjustment			6,705				44,416				138,281
UVA adjustment			506,632				287,997				17,118
Other			421,969				313,778				185,428
Interest Expenses			(3,507,170	)			(2,808,837	)			(1,688,294	)
Interest on Current Account Deposits			(417,615	)			(288,583	)			(95,547	)
Interest on Saving Account Deposits			(26,894	)			(10,820	)			(7,962	)
Interest on Time Deposits			(2,438,015	)			(2,074,916	)			(1,452,261	)
Interest on interfinancing received loans			(18,567	)			(6,892	)			(1,971	)
Interest on other financing from the financial institutions			(49,652	)			(10,001	)			(100	)
Interest on other liabilites from financial intermediation			(256,177	)			(233,765	)			(113,024	)
Other interest			(50	)			(40	)			(290	)
UVA adjustment			(256,626	)			(158,404	)			(15,410	)
Other			(43,574	)			(25,416	)			(1,729	)
Net interest income			6,018,130				5,084,027				3,312,411
Net fee income			756,103				679,719				618,335
Net income of financial instruments			(559,281	)			330,347				716,167
Result from assets at amortised cost			(68,298	)			1,367				(496	)
Foreign exchange difference			2,009,608				695,250				432,105
Other operating income			759,728				1,742,608				662,035
Provision for loan losses			(804,248	)			(526,194	)			(418,545	)
Net operating income			8,111,742				8,007,124				5,322,012
Personnel expenses			(1,929,968	)			(1,957,189	)			(1,634,027	)
Administrative expenses			(1,646,632	)			(1,508,192	)			(1,275,036	)
Depreciations and amortizations			(176,747	)			(168,821	)			(151,534	)
Depreciation on Intangible assets			(31,113	)			(30,221	)			(28,520	)
Other operating expenses			(1,428,480	)			(2,153,710	)			(885,543	)
Operating income			2,898,802				2,188,991				1,347,352
Income from associates and joint ventures			121,443				39,877				174,566
Net income before income tax from continuing operations			3,020,245				2,228,868				1,521,918
Income tax from continuing operations			(866,387	)			(662,724	)			(516,842	)
Net income Including non-controlling shareholders			2,153,858				1,566,144				1,005,076
Net income attributable to non-controlling shareholders			29,938				20,846				7,658
Net income			2,123,920				1,545,298				997,418
Other comprehensive income			64,125				(19,189	)			(78,302	)
Total income attributable to controlling shareholders			2,188,045				1,526,109				919,116

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

				BBVA Banco Francés S.A.
Date: August 23, 2018				By:		/s/ Ernesto Gallardo Jimenez
						Name: Ernesto Gallardo Jimenez
						Title: Chief Financial Officer