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 November 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 third quarter earnings for fiscal year 2018.

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Item 1

 

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

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

January-December 2018 fiscal year.

The consolidated financial statements as of September 30, 2018 and 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 figures of the third quarter of 2017 are presented in accordance with IFRS.

 

 

Highlights of the Quarter

 

 

 

•

BBVA Francés’ net income amounted to AR$ 3,007.8 million for the third quarter of 2018, 41.6% higher than the net income registered for the second quarter of 2018 and 117.7% compared to the third quarter of 2017, restated for comparative purposes.

 

•

The return on average assets (ROA) was 4% and the return on average equity (ROE) was 34.8%, compared to 3.5% and 26.4%, in the previous quarter, respectively.

 

•

Net operating income amounted to AR$ 10,315.9 million, increasing by 27.2% compared to the second quarter of 2018, and by 71.4% compared to the third quarter of 2017. Operating expenses amounted to AR$ 6,185.4 million, showing an increase of 18.7% and 48.9% compared to such periods, respectively.

 

•

In terms of activity, the private sector loan portfolio increased by 10.2% in the third quarter, and by 61.2% in the last twelve months, reaching 8.38% market share, registering an increase of 33 bps compared to the market share of September 2017.

 

•

BBVA Francés maintains good asset quality indicators in an environment that shows certain signs of deterioration. As of September 30, 2018, the asset quality ratio (Non-Performing Loans/Total loans) stood at 0.99%, compared to 0.86% in the second quarter of 2018, with a coverage ratio of 220.5% (Total allowances/NPL).

 

•

Total deposits increased by 28.2% during the quarter and by 90.5% since the end of the third quarter of 2017.

 

•

As of September 30, 2018, BBVA Francés had a total consolidated capital ratio of 14.1%, which represents an excess of AR$ 15,295.1 million or 71.5% over the minimum required. The Tier I ratio reached 12.9%.

 

•

As of September 30, 2018, liquid assets accounted for 52.1% of the bank’s total deposits.

 

•

The bank continued to increase its client base, reaching a total of 2.9 million clients.

 

 

Other events

 

 

 

•

On July 5, 2018 BBVA Francés sold the properties located at Reconquista 40, Bolivar 501, Maipu 356 (unit 16), Perón 362, México 628 (unit 1) and Reconquista 281, to REPAR S.A, all of which are located in the City of Buenos Aires.

 

•

On October 30, 2018, BBVA Francés notarized its headquarters offices, Torre BBVA, located at Av. Leandro N. Alem 815, Buenos Aires. As a consequence of such notarization, USD 4.8 million was paid.

 

•

On November 8, 2018, BBVA Francés issued its Series 25 UVAs bond for AR$ 784.3 million, with 24 months maturity and 9.5% fixed interest rate payable quarterly.

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Regulatory Changes

 

 

 

•

On June 18, 2018 the Central Bank of Argentina (BCRA), through its Communication ”A” 6526, increased the minimum cash balance requirement in two tranches, by 3% since June 21, 2018 and by another 2% since July 18, 2018. Integration with Treasury bonds, maturing on November 2020 at a rate of 26% is allowed.

Subsequently, such requirement was increased on other two occasions, by 3% on July 23, 2018 through BCRA’s Communication “A” 6533, and by another 3% on August 16, 2018, through Communication “A” 6550. In both cases, integration shall be in cash and shall not yield interests.

The BCRA then increased the minimum cash requirements on three occasions, by 5% on September 1, 2018, which could be integrated with Leliq/Nobac, by another 5% on September 16, 2018, which could be only integrated in cash and not yield interests for savings and checking accounts yet could be integrated with Leliq/Nobac only in the case of time deposits, and by an additional 5% on October 1, 2018, which could be integrated with LeliqINobac only in the case of time deposits.

 

•

IAS 29, requires that financial statements of an entity whose functional currency is the currency of a hyperinflationary economy, whether they are based on a historical cost approach or a current cost approach, shall be restated for changes in the general pricing power of the functional currency. In order to determine if an economy is hyperinflationary in accordance with IAS 29, the Standard provides a number of qualitative factors as well as a quantitative factor (whether the cumulative inflation rate over three years approaches or exceeds, 100%.

As a result of the increase in inflation during the first months of 2018, the Argentine economy is considered as hyperinflationary. Therefore, IAS 29 should be applied in connection with annual financial statements or interim financial statements ending after July 1, 2018. Likewise, figures for the past periods presented for comparative purposes should be also be restated.

However, as of the date of these financial statements, the Decree 664/03 from the Executive Branch and Communication “A” 3921 from the BCRA are in effect, preventing the filing of financial statements adjusted for inflation. Therefore, given this decree and the accounting framework established by the BCRA, BBVA Francés has not applied IAS 29 in the preparation of these financial statements.

 

 

Economic Environment

 

 

 

				Quarter ended
Main Macroeconomic figures				09-30-18				06-30-18				09-30-17
GDP		var % y/y			n/d				-4.2	%			3.8	%
Inflation (1) End of period		var % y/y			40.5	%			29.5	%			23.8	%
		var % q/q			14.1	%			8.8	%			5.1	%
CER		Quarterly adjustment			10.1	%			7.4	%			4.3	%
Exchange Rate		Pesos x US$			40.90				28.86				17.31
Reserves		US$			49,003				61,881				50,237
Fiscal Balance		Primary - billion of $			(47,490	)			(74,824	)			(78,093	)
Trade Balance		US$ (billion)			(1,589	)			(2,492	)			(2,544	)
Total Private Loans		var % q/q			11.1	%			14.9	%			12.5	%
		var % y/y			58.7	%			60.7	%			48.6	%
Total Private Deposits		var % q/q			19.0	%			18.6	%			3.8	%
		var % y/y			66.9	%			45.5	%			36.6	%
Interest rate		Monetary policy (eop)			65.0	%			40.0	%			26.3	%
		Badlar (weighted avg. quarterly)			37.1	%			27.1	%			20.7	%

 

(1)	IPC National since 1Q17

The global economy continues to show positive signs, although in a context of increasing uncertainty. Global growth has continued in recent months, despite increased protectionism between the USA and China and the appreciation of the U.S dollar; which reflected an increasing in financial tension in emerging economies. The U.S. Federal Reserve System (in a greater extent) and the European Central Bank continue to make progress toward normalization of the monetary policy, representing a gradual tightening of monetary conditions, which will continue to put some pressure on these economies.

 

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In the domestic environment, the agreement reached between Argentina and the International Monetary Fund (IMF) in June 2018 did not restore confidence as expected and triggered a new round of capital outflows and strong depreciation of the peso during the third quarter of 2018, which only settled down after a renewed commitment to perform greater fiscal adjustments, which will aim to reach balance in 2019. In this context a new agreement with the IMF was reached, going from USD 50 billion to USD 56.7 billion and doubling the funds available for 2018 and 2019.

In addition, following the change in the BCRA President, the inflation-targeting plan was abandoned and a new monetary exchange system was established that seeks to keep the monetary base constant in nominal terms until June 2019 and establishes an exchange rate range of non-intervention, with limited intervention of the BCRA outside such range.

Year to date, the government has over-fulfilled its fiscal goals. The program with the IMF guarantees that Argentina will be able to fulfill its financial program this year with a roll-over of only 50% of the maturities of Letes in U.S. dollars and 100% of those denominated in pesos.

The economic activity was affected by the bad harvest due to the severe drought that occurred in the first months of the year and by the FX crisis. In the second quarter of 2018, GDP decreased 4.2% year-over-year, but the Monthly Estimator of Economic Activity (EMAE for its acronym in Spanish) with data up to August 2018 shows an incipient recovery in seasonally adjusted monthly variations that were positive in July (1.4%) and August (1.3%).

The Inflation rate increased since the end of the first quarter mainly due to the pass-through effect from the currency depreciation to prices. Inflation amounted to 14.1% in the period July-September, thus the National CPI accumulated a variation of 32.4% for the first nine months of 2018.

The labor market also begins to show the effects of a recession. The unemployment rate amounted to 9.6% in September 2018 compared to 7.2% in the fourth quarter of 2017.

In the third quarter of 2018, the trade balance reached a deficit of USD 1.6 billion, a contraction of 37% compared to the third quarter of 2017.

Due to the economy slowdown, the demand for credit has plunged. Thus, during the third quarter, the stock of loans to the non-financial private sector increased by 11.1% compared to the previous quarter and by 58.7% year-over-year, which implies a deceleration in comparison to the increase by 14, 9% and 60.7% of the second quarter for such periods, respectively.

Private sector deposits increased by 19.0% during the quarter and by 66.9% year-over-year, very similar to the second quarter, when private sector deposits increased by 18.6% and by 45.5% for such periods, respectively. It should be noted that deposits remain stable due to the limited impact of the FX situation on the financial sector.

 

 

Presentation of the Information

 

 

 

•

The consolidated financial statements as of September 30, 2018 and 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 the third quarter 2017 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 (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 recorded as “Investments in associates” (recorded under the proportional equity method), and the corresponding results are recorded as “Income from associates”, as with Rombo Compañia Financiera. As of September 25, 2018, the Bank’s share interest in Volkswagen Financial Services is no longer disclosed on a consolidated basis.

 

•

The balances in foreign currency as of September 30, 2018 were converted into pesos at the reference exchange rate published by the BCRA for such date (AR$ 40.8967/USD).

 

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The information in this press release may differ from the information published by the BBVA Group for Argentina, which is prepared according to IFRS 9 and the impact of inflation adjustment according to IAS 29.

 

 

Quarterly Results

 

 

 

														D % Quarter ended 09/30/18
Condensed Income Statement (1)						Quarter ended								vs Quarter ended
In thousands of pesos except EPS, ADS		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Net interest income			6,564,330				6,018,130				3,452,178				9.1	%			90.2	%
Net fee income			1,855,906				756,103				754,664				145.5	%			145.9	%
Net income of financial instruments			138,510				(559,281	)			988,948				n/a				-86.0	%
Result from assets at amortised cost			12,774				(68,298	)			35				n/a				n/a
Foreign exchange difference			1,624,223				2,009,608				634,133				-19.2	%			156.1	%
Other operating income			1,152,946				759,728				785,157				51.8	%			46.8	%
Provision for loan losses			(1,032,752	)			(804,248	)			(596,238	)			28.4	%			73.2	%
Net operating income			10,315,937				8,111,742				6,018,877				27.2	%			71.4	%
Personnel expenses			(2,503,707	)			(1,929,968	)			(1,673,055	)			29.7	%			49.6	%
Administrative expenses			(1,826,091	)			(1,646,632	)			(1,285,047	)			10.9	%			42.1	%
Depreciation and amortization of assets			(219,784	)			(207.860	)			(166,418	)			5.7	%			32.1	%
Other operating expenses			(1,635,777	)			(1,428,480	)			(1,029,978	)			14.5	%			58.8	%
Operating Expenses			(6,185,359	)			(5,212,940	)			(4,154,498	)			18.7	%			48.9	%
Operating income			4,130,578				2,898,802				1,864,379				42.5	%			121.6	%
Income from associates and joint ventures			48,892				121,443				139,237				-59.7	%			-64.9	%
Net income before income tax			4,179,470				3,020,245				2,003,616				38.4	%			108.6	%
Income tax from continuing operations			(1,131,938	)			(866,387	)			(610,956	)			30.7	%			85.3	%
Net income including non-controlling shareholders			3,047,532				2,153,858				1,392,660				41.5	%			118.8	%
Net income attributable to non-controlling shareholders			39,691				29,938				11,174				32.6	%			255.2	%
Net Income			3,007,841				2,123.920				1,381,486				41.6	%			117.7	%
Other comprehensive income			(117,469	)			64,125				(40,009	)			n/a				193.6	%
Total net income			2,890,372				2,188,045				1,341,477				32.1	%			115.5	%
Earnings per share (2)			4.91				3.47				2.25				41.6	%			117.7	%
Earnings per ADS (3)			14.73				10.40				6.76				41.6	%			117.7	%

 

(1)	Exchange Rate: $ 40.8967 = u$s 1

(2)	Assumes 612,659,638 ordinary shares.

(3)	Each ADS represents three ordinary shares

BBVA Francés’ net income amounted to AR$ 3,007.8 million for the third quarter of 2018, registering an increase of 41.6% compared to the second quarter of 2018 and of 117.7% compared to the third quarter of 2017.

The accumulated net income for the first nine months of the year amounted to AR$ 6,677.1 million, registering a return on equity of 27.4% and on assets of 3.4%.

 

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														D bp Quarter ended 09/30/18
Main figures		Quarter ended												vs quarter ended
		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
ROA (Average Assets) (1)			4.0	%			3.5	%			3.1	%			50				86
Accumulated ROA			3.4	%			3.1	%			2.4	%			36				106
ROE (Average Shareholders’ Equity) (1)			34.8	%			26.4	%			22.4	%			840				1,246
Accumulated ROE			27.4	%			23.5	%			18.1	%			394				930
NIM (1)(2)			11.6	%			11.6	%			12.0	%			6				(35	)
NIM with foreign exchange difference (1)(2)			15.0	%			15.0	%			14.0	%			(3	)			96
Efficiency ratio (3)			46.7	%			49.5	%			54.9	%			(281	)			(822	)
Accumulated Efficiency ratio			50.3	%			52.8	%			60.4	%			(250	)			(1,014	)

 

(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))

 

 

Net Operating Income

 

 

 

														D % Quarter ended 09/30/18 vs
Net operating Income		Quarter ended												Quarter ended
In thousands of pesos		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Net interest income			6,564,330				6,018,130				3,452,178				9.1	%			90.2	%
Net fee income			1,855,906				756,103				754,664				145.5	%			145.9	%
Net income of financial instruments			138,510				(559,281	)			988,948				-124.8	%			-86.0	%
Result from assets at amortised cost			12,774				(68,298	)			35				-118.7	%			n/a
Foreign exchange difference			1,624,223				2,009,608				634,133				-19.2	%			156.1	%
Other operating income			1,152,946				759,728				785,157				51.8	%			46.8	%
Provision for loan losses			(1,032,752	)			(804,248	)			(596,238	)			28.4	%			73.2	%
Net operating income			10,315,937				8,111,742				6,018,877				27.2	%			71.4	%

Net operating income amounted to AR$ 10,315.9 million, increasing by 27.2% compared to the second quarter of 2018 and by 71.4% compared to the third quarter of 2017.

As a clarification, a reclassification was performed during the third quarter due to the change in criteria regarding the deferral of credit card emission fees, which were previously recorded as net interest income and are now recorded as net fee income and other operating income.

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

 

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Net interest income

 

														D % Quarter ended
Net Interest Income		Quarter Ended												09/30/18 vs Quarter ended
(in thousands of pesos)		09-30-18				06-30-18				09-30-17				06-30-18				09-30-18
Interest Income			12,299,911				9,525,300				5,245,596				29.1	%			134.5	%
Loan interest income			8,535,228				7,402,591				4,844,840				15.3	%			76.2	%
Income from adjustments (CER/UVA)			977,884				513,337				112,941				90.5	%			765.8	%
Income from Public Securities			2,092,036				1,187,403				84,426				76.2	%			n/a
Others			694,763				421,969				203,389				64.6	%			241.6	%
Interest Expenses			-5,735,581				-3,507,170				-1,793,418				63.5	%			219.8	%
Interest Expenses			-5,513,716				-3,250,544				-1,781,955				69.6	%			209.4	%
Expenses from adjustments (CER/UVA)			-221,865				-256,626				-11,463				-13.5	%			n/a
Net Income Interest			6,564,330				6,018,130				3,452,178				9.1	%			90.2	%

Net interest income increased by 9.1% compared to the previous quarter and by 90.2% compared to the third quarter of 2017.

 

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Without considering the aforementioned fee reclassification, net interest income would have increased by 21.6% and by 112% for such periods, respectively.

Compared to the second quarter of 2018, interest income increased by 37% whereas interest expenses increased by 63.5% mainly due to an abrupt rise in the interest rate that occurred in the quarter and certain deterioration in the funding mix.

Net interest income recorded a positive performance, sustained by the increasing rates of the system, and by an adequate price management in the different products, both in assets as in liabilities, in a volatile environment.

NIM

 

Interest-Earning Assets & Interest-Bearing										Quarter ended
Liabilities $ + USD		09-30-18								06-30-18								09-30-17
(Average in thousands of pesos)		Capital				Rate				Capital				Rate				Capital				Rate
Interest-Earning Assets			195,017,912				26.3	%			175,925,115				21.3	%			123,936,863				18.2	%
Interest-Bearing Liabilities			175,167,474				12.96	%			138,721,270				10.0	%			95,819,752				7.4	%
NIM without foreign exchange differences			11.62	%							11.56	%							11.97	%
NIM including foreign exchange differences			14.96	%							14.99	%							14.00	%
NIM $ without foreign exchange differences			14.27	%							14.64	%							14.32	%
NIM USD without foreign exchange differences			5.37	%							3.85	%							1.83	%

The net interest margin (NIM) including the results for foreign currency exchange differences amounted to 14.96%, maintaining similar levels with respect to the second quarter of 2018; while net of this effect, it registered an increase of 6 bps, amounting to 11.62%.

The NIM in local currency (excluding FX differences) amounted to 14.27%, decreasing by 37 bps, mainly due to the higher growth rate of the liabilities rate and the negative result of interest rate swaps.

The NIM in foreign currency increased by 152 bps, amounting 5.37%, mainly as a result of the increase in the loans rate.

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

 

Interest-Earning Assets & Interest-Bearing										Quarter ended
Liabilities $		09-30-18								06-30-18								09-30-17
(Average in thousands of pesos)		Capital				Rate				Capital				Rate				Capital				Rate
Interest-Earning Assets			136,862,249				35.1	%			125,671,511				28.1	%			94,737,428				23.3	%
Public sector instruments			20,441,917				41.5	%			16,097,421				31.6	%			18,610,366				22.6	%
Loans			115,681,170				33.9	%			108,949,580				27.6	%			69,905,567				23.5	%
Other interest-earning assets			739,163				40.8	%			624,511				29.3	%			6,221,495				23.4	%
Interest-Bearing Liabilities			93,028,375				24.0	%			80,458,593				17.2	%			60,295,707				11.8	%
Saving Accounts			25,874,014				0.2	%			25,837,725				0.2	%			22,684,140				0.1	%
Time Deposits			48,467,831				32.5	%			44,114,943				24.4	%			31,547,072				18.2	%
Current accounts with interest			13,185,778				34.2	%			5,670,911				28.2	%			3,686,389				20.6	%
Debt Securities			1,714,760				39.7	%			1,772,129				30.2	%			1,128,352				23.8	%
Other interest-bearing liabilities			3,785,992				36.3	%			3,062,885				29.2	%			1,249,754				23.4	%
Interest-Earning Assets & Interest-Bearing										Quarter ended
Liabilities USD		09-30-18								06-30-18								09-30-17
(Average in thousands of pesos)		Capital				Rate				Capital				Rate				Capital				Rate
Interest-Earning Assets			58,155,663				5.5	%			50,253,604				4.4	%			29,199,435				2.7	%
Public sector instruments			6,606,976				7.4	%			10,489,064				5.3	%			4,081,066				2.9	%
Loans			50,268,084				5.4	%			38,466,819				4.3	%			20,810,951				2.7	%
Other interest-earning assets			1,280,602				1.2	%			1,297,721				1.1	%			4,307,418				2.7	%
Interest-Bearing Liabilities			82,139,099				0.4	%			58,262,678				0.2	%			35,407,677				0.1	%
Saving Accounts			62,958,906				0.0	%			46,406,985				0.0	%			28,491,001				0.0	%
Time Deposits			14,323,872				0.8	%			9,831,850				0.5	%			6,698,506				0.3	%
Current accounts with interest			109,912				0.0	%			132,734				0.0	%
Other interest-bearing liabilities			4,746,409				5.1	%			1,891,108				3.7	%			218,170				3.9	%

 

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Net fee income

 

Net fee income		Quarter ended												D %  Quarter ended 09/30/18 vs quarter ended
(in thousands of pesos)		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Net fee income			1,855,906				756,103				754,664				145.5	%			145.9	%
Fee income			3,847,287				2,278,267				1,852,853				68.9	%			107.6	%
Fee charges on deposits accounts			934,307				886,958				667,729				5.3	%			39.9	%
Credit cards and operations			1,991,447				563,183				571,621				253.6	%			248.4	%
Checks			256,400				221,466				185,734				15.8	%			38.0	%
Capital markets and securities activities			35,673				27,307				46,592				30.6	%			-23.4	%
Fees related to foreign trade			136,280				108,711				76,818				25.4	%			77.4	%
Services of collection			373,897				317,097				183,104				17.9	%			104.2	%
Generated by subsidiaries			74,784				111,828				85,995				-33.1	%			-13.0	%
Other fees			44,499				41,717				35,260				6.7	%			26.2	%
Fee Expenses			-1,991,381				-1,522,164				-1,098,189				30.8	%			81.3	%

As mentioned above, a reclassification was performed during the third quarter due to the change in criteria regarding the deferral of credit card emission fees and, as a result, net fee income increased by 145.5% compared to the second quarter of 2018 and by 145.9% compared to the third quarter of 2017. Excluding this effect, the increase would have been of 7.9% and of 8.1% for such periods, respectively.

Excluding the effect of the reclassification, fee income increased by 25% compared to the second quarter of 2018 and by 51.5% compared to the third quarter of 2017, driven mainly by grater fees generated by services of collection, for fees charged on deposits accounts and for higher credit cards consumptions, that reflects the higher volume of activity and the higher prices. The quarter includes recurrent annual income, realized during the quarter.

BBVA Francés continues to gain market share in credit card consumption (during the quarter it increased by 51 bps) reaching 13.7% of the market.

Fee expenses increased by 30.8% over the quarter and by 81.3% compared to the third 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 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 09/30/18 vs quarter ended
at fail value through profit or loss (In thousands of pesos)		09-30-18				06-30-18				09-30-17				06-30-17				09-30-17
Net income of financial instruments at fail value			138,510				-559,281				988,948				-124.8	%			-86.0	%
Income from public securities			212,634				248,089				1,030,607				-14.3	%			-79.4	%
Income from private securities			163,077				118,936				(9,665	)			37.1	%			n/a
Income from interest rate swaps			(251,232	)			(433,324	)			(47,905	)			-42.0	%			424.4	%
Non deliverable forward			20,431				(502,779	)			(467	)			-104.1	%			n/a
Income from corporate bonds			(6,400	)			9,797				16,378				-165.3	%			-139.1	%

Net income from measurement of financial instruments at fair value recorded a gain in the third quarter of AR$ 138.5 million compared to a loss of AR$ 559.3 million registered in the second quarter of 2018.

This gain is due to the income from public and private securities, which was partially offset by the loss registered in connection with interest rate swaps.

 

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•

Foreign Exchange Difference

 

Foreign Exchange Diffrerence		Quarter Ended												D %  Quarter ended
(In thousands of pesos)		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Foreign Exchange Difference			1,624,223				2,009,608				634,133				-19.2	%			156.1	%
FX trading			1,268,577				964,124				727,982				31.6	%			74.3	%
long/Short FX net balance			355,646				1,045,484				-93,849				-66.0	%			-479.0	%

Foreign exchange difference registered a higher result compared to the third quarter of 2017 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 pesos)		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Operating Income			1,152,946				759,728				785,157				51.8	%			46.8	%
Safe deposits			112,481				111,029				89,290				1.3	%			26.0	%
Insurance			172,985				168,979				173,376				2.4	%			-0.2	%
Fees on USD credit cards consumption			220,917				50,822				81,453				334.7	%			171.2	%
Interest on loans and fees related			214,465				118,979				113,484				80.3	%			89.0	%
Other fees			105,650				69,140				55,132				52.8	%			91.6	%
Total other fees			826,498				518,950				512,735				59.3	%			61.2	%
Other operating income			326,448				240,778				272,422				35.6	%			19.8	%

Other operating income registered an increase of 51.8% in the quarter and 46.8% over the year, mainly due to the increase in fees generated by the aforementioned reclassification.

 

 

Operating Expenses

 

 

 

Operating Expenses		Quarter ended												D % Quarter ended 09/30/18 vs
In thousands of pesos		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Personnel expenses			(2,503,707	)			(1,929,968	)			(1,673,055	)			29.7	%			49.6	%
Administrative expenses			(1,826,091	)			(1,646,632	)			(1,285,047	)			10.9	%			42.1	%
Depreciation and amortization of assets			(219,784	)			(207,860	)			(166,418	)			5.7	%			32.1	%
Other operating expenses			(1,635,777	)			(1,428,480	)			(1,029,978	)			14.5	%			58.8	%
Operating Expenses			(6,185,359	)			(5,212,940	)			(4,154,498	)			18.7	%			48.9	%

Operating expenses amounted to AR$ 6,185.4 million, registering an increase of 18.7% and 48% compared to the previous quarter and to the third quarter of 2017, respectively.

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 09/30/18 vs quarter ended
(In thousands of pesos)		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Personnel expenses			(2,503,707	)			(1,929,968	)			(1,673,055	)			29.7	%			49.6	%
Administrative expenses			(1,826,091	)			(1,646,632	)			(1,285,047	)			10.9	%			42.1	%
Electricity and Communications			(76,620	)			(68,331	)			(43,408	)			12.1	%			76.5	%
Advertising and Promotion			(88,421	)			(124,392	)			(109,252	)			-28.9	%			-19.1	%
Fees and external administrative services			(81,433	)			(76,380	)			(61,855	)			6.6	%			31.7	%
Taxes			(431,360	)			(349,683	)			(315,103	)			23.4	%			36.9	%
Rents			(222,143	)			(165,446	)			(125,628	)			34.3	%			76.8	%
Maintainance, conservation and repairs			(201,822	)			(175,265	)			(132,530	)			15.2	%			52.3	%
Security Service			(78,428	)			(66,631	)			(85,253	)			17.7	%			-8.0	%
Carriage of valuables			(249,620	)			(237,258	)			(160,235	)			5.2	%			55.8	%
Other			(396,244	)			(383,246	)			(251,783	)			3.4	%			57.4	%
Total Employees			6,095				6,084				6,142				11				1
Total Branches			251				251				251				0				0

 

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Personnel expenses increased by 29.7% compared to the second quarter of 2018 and 49.6% compared to the third quarter of 2017, whereas administrative expenses increased by 10.9% and by 42.1% in such periods, respectively.

The increase in personnel expenses is mainly due to the update in salaries arising from the agreements signed with the labor union and its compensation schemes.

Administrative expenses increased during the quarter mainly due to an increase in rents, mainly as a result of the currency exchange rate effect, and an increase in taxes, as a result of higher activity levels, inflation and the increase in foreign currency exchange rates.

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

The efficiency ratio in the quarter amounted 47.9%, showing a decrease of 281 bps compared to the second quarter of 2018.

 

•

Other operating expenses

 

														D % Quarter ended 09/30/18 vs
Other Operating expenses		Quarter ended												Quarter ended
(In thousands of pesos)		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Operating expenses			(1,635,777	)			(1,428,480	)			(1,029,978	)			14.5	%			58.8	%
Gross income tax			(1,190,211	)			(957,432	)			(597,028	)			24.3	%			99.4	%
Gross income tax NII			(899,410	)			(753,360	)			(397,806	)			19.4	%			126.1	%
Gross income tax fees			(290,801	)			(204,072	)			(199,222	)			42.5	%			46.0	%
Cost of deposits insurence			(86,186	)			(71,851	)			(55,018	)			20.0	%			56.7	%
Other operating expenses			(359,380	)			(399,197	)			(377,932	)			-10.0	%			-4.9	%

Other operating expenses registered an increase in gross income tax, due to the rise in interest rates, fees and the income by foreign currency exchange difference, during the period.

 

 

Income from associates

 

 

Income from associates shows the result of non-consolidated companies. During the third quarter a gain of AR$ 48.9 million was recorded, mainly due to the equity investment in PSA Finance, Rombo Compañia Financiera and Consolidar Seguros. The second quarter of 2018 included income resulting from the participation in Interbanking S.A.

 

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Balance and activity

 

 

 

 

Loan portfolio

 

 

 

														D % Quarter ended 09/30/18 vs
Net loans		Quarter ended												quarter ended
(In thousands of pesos)		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Private & Financial sector loans in $			116,528,630				114,137,222				83,076,333				2.1	%			40.3	%
Advances			16,396,066				14,190,618				10,801,453				15.5	%			51.8	%
Discounted and purchased notes			16,482,797				17,676,632				13,554,898				-6.8	%			21.6	%
Consumer Mortgages			8,718,885				7,357,341				3,026,278				18.5	%			188.1	%
Car secured loans			1,774,642				5,348,745				4,045,025				-66.8	%			-56.1	%
Personal loans			21,923,282				20,666,082				14,052,806				6.1	%			56.0	%
Credit cards			35,449,792				33,282,575				23,993,465				6.5	%			47.7	%
Loans to financial sector			9,587,944				6,094,170				3,432,610				57.3	%			179.3	%
Other loans			6,263,657				9,688,354				9,930,032				-35.3	%			-36.9	%
Other receivables			4,092,402				3,423,950				2,510,421				19.5	%			63.0	%
Unaccrued interest			(1,151,897	)			(919,522	)			(409,973	)			25.3	%			181.0	%
Less: Allowance for loan losses			(3,008,940	)			(2,671,723	)			(1,860,682	)			12.6	%			61.7	%
Private & Financial sector loans in FX			62,109,756				47,986,010				27,529,435				29.4	%			125.6	%
Advances			9,541				11,018				8,534				-13.4	%			11.8	%
Discounted and purchased notes			7,213,658				5,372,185				1,306,379				34.3	%			452.2	%
Credit cards			1,971,601				2,007,866				1,549,060				-1.8	%			27.3	%
Loans to financial sector			136,702				96,538				115,713				41.6	%			18.1	%
Other loans			53,447,923				40,821,518				24,750,909				30.9	%			115.9	%
Other receivables			322,309				186,381				80,115				72.9	%			n/a
Less: Allowance for loan losses			(991,978	)			(509,496	)			(281,275	)			94.7	%			252.7	%
Total Private Loans			178,638,386				162,123,232				110,605,768				10.2	%			61.5	%
Total loans to public sector			177				78				267				126.9	%			-33.7	%
Net Total Loans net of other non resident loans			178,638,563				162,123,310				110,606,035				10.2	%			61.5	%

As of the third quarter, Volkswagen Financial Services Compañia Financiera is no longer recorded on a consolidated basis. Such figures were recorded under car secured loans.

As of September 30, 2018, the private sector loan portfolio amounted to AR$ 178.6 billion, increasing by 10.2% during the quarter and by 61.2% in the last twelve months. If the participation of Volkswagen Financial Services would have been included, the private sector loan portfolio would have increase by 12.4% and 64.8% in such periods, respectively.

As of September 30, 2018 the market share of loans reached 8.38%, including loans from associated companies (VW Financial Services, PSA Finance and Rombo Compañia Financiera), showing an increase of 33 bps in the last 12 months.

Credit growth was affected during the third quarter by the devaluation of the peso and higher interest rates, resulting in a strong increase of loans in U.S dollars (increased by 29.4% in the quarter and by 125.6% in the last twelve months) mainly due to the re-expression of the new value of the currency and a mild growth in pesos of 2.1% and 39.9% respectively. Without taking into account the deconsolidation of Volkswagen, these would have increased 5.3% and 44.6% respectively.

On the one hand, with regard to loans to individuals, positive growth was recorded in connection with credit card and personal loans, while mortgages loans reflected the impact of the increasing inflation.

On the other hand, the increase showed by commercial loans is mainly due to the depreciation of the peso.

 

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Asset quality ratios

 

 

 

Asset quality ratios		Quarter ended												D %  Quarter ended 09/30/18 vs quarter ended
(in thousands of pesos)		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Non-performing loans (1)			1,814,467				1,423,719				762,890				27.4	%			137.8	%
Allowance for loan losses			(4,000,918	)			(3,181,219	)			(2,141,957	)			25.8	%			86.8	%
Non-performing loans/net total loans			0.99	%			0.86	%			0.68	%			0.1	%			0.3	%
Non-performing priv. loans/net priv. loans			0.99	%			0.86	%			0.68	%			0.1	%			0.3	%
Allowance for loan losses/non-performing loans			220.50	%			223.44	%			280.77	%			-2.9	%			-60.3	%
Allowance for loan losses/net total loans			2.19	%			1.92	%			1.90	%			0.3	%			0.3	%

 

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

As of September 30, 2018, the asset quality ratio (non-performing loans/total loans) was 0.99% with a coverage ratio (allowances/non-performing loans) of 220.5%.

BBVA Francés continues to show strong asset quality indicators even in a deteriorating environment. The asset quality ratio increased 13 bps compared to the previous quarter due to some deterioration of the portfolio while, compared to the third quarter of 2017 the ratio increased by 32 bps.

The cost of risk reached 1.71% recording an increase of 22 bps during the quarter.

The following table shows the evolution of provisions:

 

Evolution of provisions		Quarter ended												D % Quarter ended 09/30/18 vs quarter ended
(In thousands of pesos)		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Balance at the beginning of the quarter			3,181,219				2,548,322				1,891,753				24.8	%			68.2	%
Increase/decrease			1,006,313				801,330				503,140				25.6	%			100.0	%
Increase/decrease-Foreign exchange diff.			213,237				154,646				7,461				37.9	%			n/a
Aplications / Reversals			(399,851	)			(323,079	)			(260,397	)			23.8	%			53.6	%
Balance at the end of the quarter			4,000,918				3,181,219				2,141,957				25.8	%			86.8	%

 

 

 

Public sector exposure

 

 

 

Public Sector Exposure		Quarter Ended												D % Quarter ended 09/30/18 vs quarter ended
(In thousands of pesos)		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Bills and Notes from Central Bank			17,519,092				14,291,916				14,659,705				22.6	%			19.5	%
Treasury and national government			23,413,901				14.776.891				11,354,112				58.4	%			106.2	%
National Treasury Public Debt $			5,842,776				2,995,774				2,801,616				95.0	%			108.6	%
National Treasury Public Debt USD			9,517,768				5,651,068				4,222,922				68.4	%			125.4	%
Treasury Repos USD			8,053,358				6,130,049				4,329,575				31.4	%			86.0	%
Pesos subtotal			23,361,868				17,287,691				17,461,321				35.1	%			33.8	%
Dollars subtotal			17,571,125				11,781,117				8,552,497				49.1	%			105.5	%
Total Public Sector exposure			40,932,994				29,068,808				26,013,817				40.8	%			57.4	%
% National Government debt / Assets			7.0	%			5.5	%			6.1	%

Total exposure to the public sector amounted to AR$ 40.9 billion, increasing by 40.8% during the quarter.

 

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Short-term liquidity was allocated in BCRA instruments, which increased by AR$ 3.2 billion or by 22.6% increase during the quarter.

National Government Debt, which represents 7% of the assets, increased AR$ 8.6 billion during the quarter.

The increase in debt in local currency is due to the acquisition of a 2-year bond that will be used to comply with the increase of 500 bps in the minimum cash requirement, disposed by the BCRA in June and July.

Foreign currency debt has an average term of 3 months and is composed of a Repo with the National Treasury for USD 197 million and short term Letes for USD 165.8 million. During the quarter these positions decreased by USD 28 million, however, due to the depreciation of the peso, their peso value increased by approximately AR$ 1.2 billion.

 

 

Deposits

 

 

 

Total deposits		Quarter ended												D % Quarter ended 09/30/18 vs quarter ended
(in thousands of pesos)		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Deposits $ denominated			131,447,950				110,782,893				84,232,941				18.7	%			56.1	%
Current accounts			25,851,282				24,855,245				22,675,842				4.0	%			14.0	%
Saving accounts			49,061,002				36,962,990				26,529,775				32.7	%			84.9	%
Time deposits			54,608,085				46,739,380				32,960,166				16.8	%			65.7	%
Peso denominated			52,232,712				42,908,357				32,800,572				21.7	%			59.2	%
CER adjusted time deposits			2,375,373				3,831,023				159,594				-38.0	%			n/a
Other			1,927,581				2,225,278				2,067,158				-13.4	%			-6.8	%
Deposits FX denominated			115,780,018				82,074,380				45,560,684				41.1	%			154.1	%
Current accounts			524,978				189,557				69,669				176.9	%			n/a
Saving accounts			94,767,387				67,209,837				35,441,394				41.0	%			167.4	%
Time deposits			17,744,720				12,315,792				6.976,320				44.1	%			154.4	%
Other			2,742,933				2,359,194				3,073,301				16.3	%			-10.7	%
Total deposits			247,227,968				192,857,273				129,793,625				28.2	%			90.5	%

Total deposits amounted to AR$ 247.2 billion as of September 30, 2018, increasing by 28.2% compared to the previous quarter and by 90.5% compared to the third quarter of 2017.

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

Deposits in local currency increased by 18.7% mainly due to increases in savings accounts and current accounts with interest.

 

 

Other funding sources

 

 

 

Other funding sources		Quarter ended												D % Quarter ended 09/30/18 vs quarter ended
(in thousands of pesos)		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Lines from other banks			5,757,714				5,732,921				379,735				0.4	%			n/a
Senior Bonds			1,735,343				1,751.596				1,060,593				-0.9	%			63.6	%
Total other funding sources			7,493,057				7,484,517				1,440,328				0.1	%			420.2	%

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

 

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Solvency

 

 

 

Central Bank Requirements		Quarter ended												D % Quarter ended 09/30/18 vs quarter ended
(In thousands of pesos)		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
CB Minimum Capital Requirements			21,388,509				19,213,740				15,653,816				11.3	%			36.6	%
Allocated to Asset at Risk			17,914,664				16,092,833				12,726,716				11.3	%			40.8	%
Market Risk			192,083				154,790				369,204				24.1	%			-48.0	%
Operational Risk			3,256,660				2,966,117				2,557,896				9.8	%			27.3	%
Non compliance with others cautios regulations			25,102				—				—				n/a
Bank Capital			36,683,596				34,211,408				28,020,200				7.2	%			30.9	%
Ordinary Capital Level 1 (*)			36,292,382				33,516,442				26,817,835				8.3	%			35.3	%
Dedusctions Ordinary Capital Level 1			(2,774,583	)			(2,165,117	)			(705,074	)			28.1	%			293.5	%
Capital Level 2			2,143,744				1,959,093				1,578,420				9.4	%			35.8	%
Additional Capital Level 1			1,022,053				906,990				329,019				12.7	%			210.6	%
Excess over Required Capital			15,295,087				15,003,668				12,366,384				1.9	%			23.7	%
Excess as % of the capital required			71.5	%			78.1	%			79.0	%			-8.4	%			-9.5	%
Risk weighted assets			260,520,258				234,312,709				191,039,187				11.2	%			36.4	%
Capital Ratio (Central Bank rules) (*) (**)			14.1	%			14.6	%			14.7	%			-3.6	%			-4.0	%
TIER I (***)			12.9	%			13.4	%			14.0	%			-3.8	%			-8.3	%

 

(*)	Bank capital I Risk weighted assets

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

(***)

Ordinary capital level 1 I Risk weighted assets

BBVA Francés continues to show adequate solvency ratios. As of September 30, 2018 the capital ratio reached 14.1%, 52 bps lower than the ratio of June 30, 2018, mainly due to higher risk weighted-assets, mainly those denominated in foreign currency as a consequence of the devaluation of the peso.

The Tier 1 ratio was 12.9% and the excess over required capital was AR$ 15,295.1 million.

 

 

Additional information

 

 

 

		Quarter ended												D % Quarter ended 09/30/18 vs quarter ended
		09-30-18				06-30-18				09-30-17				06-30-18				09-30-17
Exchange rate $/USD			40.90				28.86				17.32				41.7	%			136.1	%
Quarterly CER adjustment			9.8	%			7.4	%			4.3	%			2.5	%			5.5	%

 

 

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 November 23, 2018 at 15:30 hs (Argentine time) a conference call will be held to comment on the quarter’s results.

Those who wish to participate should use the following dial-in numbers:

+ 54-11-39845677 (from Argentina)

+ 1-844-450-3851 (from the United States)

+ 1-412-317-6373 (from other countries)

Conference ID: BBVA .

To access the webcast:

http://webcastlite.mziq.com/cover.html?webcastId=5b82b6c4-2874-4acc-a236-70270063c596

To request the Replay, please dial -in

[phone] (from the United States)

[phone] (from other countries)

The replay will be available until December 5, 2018.

Replay Access code: 10126428

 

 

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]

 

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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

 

		09-30-18				06-30-18				09-30-17
Cash and due from banks			87,821,856				54,530,632				27,723,142
Debt securities at fair value through other comprehensive income			475,431				2,735,529				5,498,255
Derivatives			63,881				104,250				92,221
Repurchase agreements			9,582,646				6,367,328				5,116,152
Other financial assets			6 ,707,106				5,897,674				5,789,131
Loans and other financial intermediation			178,638,563				162,123,310				110,606,035
Loans to the private & financial sector			178,638,386				162,123,232				110,605,768
Public Sector loans			177				78				267
Other debt securities			30,982,187				18,544,550				14,825,176
Financial assets pledged as collateral			6 ,301,957				5,155,840				3,731,108
Current income tax assets			385				1,056				6,298
Investments in equity instruments			129,234				120,978				68,500
Investments in associates and joint ventures			1,781,225				1,087,893				1,091,497
Property, plant and equipment			9,172,910				9,136,878				9,095,509
Intangible assets			596,310				542,054				407,917
Deferred income tax asset			100,826				22,311				14,263
Other non financial assets			1,375,031				1,350,209				1,133,037
Non-current assets held for sale			252,805				507,630				—
Total Assets			333,982,353				268,228,122				185,198,241
Deposits			247,227,968				192,857,273				129,793,625
Current accounts			26,376,260				25,044,802				22,745,511
Saving accounts			143,828,389				104,172,827				61,971,169
Time deposits			72,352,805				59,055,172				39,936,486
Investment Accounts			—				—				1,112
Rescheduled deposits CEDROS			1,951				1,951				1,951
Other deposits			4,668,563				4,582,521				5,138,508
Liabilities at fair value trhough other comprehensive income			1,345,749				143,495				44,415
Derivatives			4,431,577				2,277,241				161,965
Repurchase agreements			—				936,751				1,243,160
Other financial liabilities			21,934,634				17,727,818				13,344,875
Financing received the BCRA and other financial insitutions			5,757,714				5,732,921				380,642
Corporate bonds issued			1,735,343				1,751,596				1,057,492
Current income tax liabilities			2,548,311				1,409,535				973,245
Provisions			3,448,015				3,374,177				2,182,974
Other provisions			3,446,583				3,372,628				2,181,870
For eventual compromises			1,432				1,549				1,104
Deferred income tax liabilities			48,074				343,100				829,957
Other non-financial liabilities			9,776,753				8,258,653				6,378,518
Total Liabilities			298,254,138				234,812,560				156,390,868
Total Stockholders’ equity			35,699,118				32,861,689				28,509,307
Equity Investments			29,097				553,873				298,066
Total liabilities + stockholders’ equity			333,982,353				268,228,122				185,198,241

 

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

INCOME STATEMENT (in thousands of pesos)

Communication “A” 6114

 

		09-30-18				06-30-18				09-30-17
Interest Income			12,299,911				9,525,300				5,245,596
Interest on loans to the financial sector			451,780				351,772				182,139
Interest on overdraft			1,861,503				1,177,920				737,188
Interest on documents			1,513,877				1,090,927				530.848
Interest on mortgages loans			207,595				169,956				91,288
Interest on car secured loans			360,215				337,965				231,298
Interest on credit card loans			1,395,515				1,885,704				1,437,338
Interest on financial leases			134,487				129,239				101,070
Interest on personal loans			1,624,393				1,532,737				1,033,427
Interest on other loans			983,350				724,107				498,529
From other banking receivables from financial intermediation			2,513				2,264				1,715
CER adjustment			12,124				6,705				78,412
UVA adjustment			965,760				506,632				34,529
Income from Public Securities			2,092,036				1,187,403				84,426
Other			694,763				421,969				203,389
Interest Expenses			(5,735,581	)			(3,507,170	)			(1,793,418	)
Interest on Current Account Deposits			(1,139,396	)			(417,615	)			(191,736	)
Interest on Saving Account Deposits			(26,624	)			(26,894	)			(8,785	)
Interest on Time Deposits			(3,768,514	)			(2,438,015	)			(1,437,926	)
Interest on interfinancing received loans			(26,756	)			(18,567	)			(5,794	)
Interest on other financing from the financial institutions			(117,761	)			(49,652	)			(113	)
Interest on other liabilites from financial intermediation			(416,389	)			(256,177	)			(88,996	)
Other interest			(45	)			(50	)			(166	)
UVA adjustment			(221,865	)			(256,626	)			(11,463	)
Other			(18,231	)			(43,574	)			(48,439	)
Net interest income			6,564,330				6,018,130				3,452,178
Net fee income			1,855,906				756,103				754,664
Net income of financial instruments			138,510				(559,281	)			988,948
Result from assets at amortised cost			12,774				(68,298	)			35
Foreign exchange difference			1,624,223				2,009,608				634,133
Other operating income			1,152,946				759,728				785,157
Provision for loan losses			(1,032,752	)			(804,248	)			(596,238	)
Net operating income			10,315,937				8,111,742				6,018,877
Personnel expenses			(2,503,707	)			(1,929,968	)			(1,673,055	)
Administrative expenses			(1,826,091	)			(1,646,632	)			(1,285,047	)
Depreciations and amortizations			(187,696	)			(176,910	)			(134,022	)
Depreciation on Intangible assets			(32,088	)			(30,950	)			(32,396	)
Other operating expenses			(1,635,777	)			(1,428,480	)			(1,029,978	)
Operating income			4,130,578				2,898,802				1,864,379
Income from associates and joint ventures			48,892				121,443				139,237
Net income before income tax from continuing operations			4,179,470				3,020,245				2,003,616
Income tax from continuing operations			(1,131,938	)			(866,387	)			(610,956	)
Net income Including non-controlling shareholders			3,047,532				2,153,858				1,392,660
Net income attributable to non-controlling shareholders			39,691				29,938				11,174
Net Income			3,007,841				2,123,920				1,381,486
Other comprehensive income			(117,469	)			64,125				(40,009	)
Total income attributable to controlling shareholders			2,890,372				2,188,045				1,341,477

 

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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: November 23, 2018				By:		/s/ Ernesto Gallardo Jimenez
						Name: Ernesto Gallardo Jimenez
						Title: Chief Financial Officer