Banco BBVA Argentina S.A. announces First Quarter 2024 results

Rhea-AI Summary

Banco BBVA Argentina S.A. (NYSE: BYMA; MAE: BBAR) announced its consolidated results for the first quarter of 2024, ended on March 31, 2024.

The inflation-adjusted net income was $34.2 billion, a 53.7% decrease from 4Q23 and a 41.4% decrease from 1Q23. Operating income was $631.2 billion, down 12.9% from 4Q23 but up 106.6% from 1Q23.

Total consolidated financing to the private sector was $2.7 trillion, down 12.7% from 4Q23 and 21.9% from 1Q23. Total consolidated deposits were $4.8 trillion, a 13.5% decrease from 4Q23 and a 21.7% decline year-over-year.

The non-performing loan ratio was 1.23%, with a coverage ratio of 173.77%. The efficiency ratio deteriorated to 65.4%, and the regulatory capital ratio was 35.6%.

The bank's market share of private sector loans was 10.08%, while its market share of private deposits was 7.37%. Total liquid assets represented 91.9% of total deposits.

Positive

• Operating income increased 106.6% year-over-year (YoY) to $631.2 billion.
• BBVA Argentina's market share of private sector loans reached 10.08%.
• Non-performing loan ratio improved to 1.23%, with a 173.77% coverage ratio.
• Regulatory capital ratio stood at 35.6%, with a 336.0% excess over the minimum requirement.
• Total liquid assets represented 91.9% of total deposits.

Negative

• Net income decreased by 53.7% from 4Q23 and by 41.4% from 1Q23, to $34.2 billion.
• Total consolidated financing to the private sector decreased by 12.7% from 4Q23 and by 21.9% YoY, to $2.7 trillion.
• Total consolidated deposits decreased by 13.5% from 4Q23 and by 21.7% YoY, to $4.8 trillion.
• Efficiency ratio deteriorated to 65.4% from 58.6% in 4Q23 and 62.4% in 1Q23.

Insights

Financial Analyst

The significant decline in BBVA Argentina's net income, operating income and financing activities starkly contrasts with the previous quarters. A drop in net income by 53.7% compared to the last quarter of 2023 can be alarming for investors, indicating potential challenges in profitability and efficient cost management. The substantial decrease in total consolidated deposits by 13.5% in one quarter and 21.7% year-over-year, further reflects possible liquidity pressures and loss of consumer confidence. This downturn, coupled with increased prefinancing and financing of exports, suggests a shift in revenue sources possibly due to local economic conditions.

The efficiency ratio, a key measure of a bank’s overhead as a percentage of its revenue, deteriorated to 65.4% from 58.6% in the previous quarter. This indicates rising operational expenses relative to income, which could be a red flag for long-term performance sustainability. Despite maintaining a strong regulatory capital ratio of 35.6%, the bank’s short-term financial health seems challenged by inflationary pressures and economic instability in Argentina.

It's essential for investors to monitor how BBVA Argentina plans to address these declines, whether through strategic adjustments, cost-cutting measures, or diversification of its financing activities.

Market Research Analyst

The sharp decline in BBVA Argentina's credit card usage and other loan types, juxtaposed with an increase in export financing, highlights a possible shift in consumer spending behavior and business strategy. The 17.9% drop in credit card usage could indicate consumer spending cutbacks or shifts towards cash transactions. Additionally, the 27.1% fall in discounted instruments and 19.7% in other loans suggests reduced borrowing, possibly due to higher interest rates or economic uncertainties.

BBVA Argentina’s increase in export financing by 26% suggests a strategic pivot to support the country's export sector, potentially in response to favorable government policies or international trade dynamics. However, this shift may not be sufficient to offset the broad-based declines in other areas. Investors should assess how these changes align with Argentina's broader economic conditions and BBVA’s long-term strategy.

The non-performing loan ratio (NPL) at 1.23% with a strong 173.77% coverage ratio, suggests solid risk management practices despite broader economic challenges. However, the bank's ability to maintain or improve this ratio amidst declining loan volumes remains a critical watch point.

Economic Analyst

Argentina’s economy, marked by high inflation and volatile currency conditions, significantly influences BBVA Argentina's financial results. The practice of reporting inflation-adjusted results per IAS 29 is important for understanding the real impact of inflation on financial performance. The substantial reduction in BBVA's adjusted net income and deposits reflects the broader economic environment where inflation erodes the real value of money, impacting savings and borrowing behaviors.

The bank’s robust regulatory capital ratio of 35.6% offers some reassurance regarding its solvency and ability to absorb potential losses. This high ratio signifies a well-capitalized position that exceeds the minimum regulatory requirements by a significant margin, potentially providing a buffer against economic turbulence.

For retail investors, understanding how BBVA Argentina navigates the inflationary landscape and adjusts its operations to maintain profitability amid economic headwinds will be crucial. The bank’s future performance will likely depend on Argentina's macroeconomic stability and BBVA's strategic responses to these ongoing challenges.

BUENOS AIRES, Argentina, May 22, 2024 /PRNewswire/ -- Banco BBVA Argentina S.A (NYSE; BYMA; MAE: BBAR; LATIBEX: XBBAR) ("BBVA Argentina" or "BBVA" or "the Bank") announced today its consolidated results for the first quarter (1Q24), ended on March 31, 2024. 

As of January 1, 2020, the Bank started to inform its inflation adjusted results pursuant to IAS 29 reporting. To facilitate comparison, figures of comparable quarters of 2023 and 2024 have been updated according to IAS 29 reporting to reflect the accumulated effect of inflation adjustment for each period up to March 31, 2024.

1Q24 Highlights

• BBVA Argentina's inflation adjusted net income in 1Q24 was $34.2 billion, 53.7% lower than the $73.7 billion reported on the fourth quarter of 2023 (4Q23), and 41.4% lower than the $58.3 billion reported on the first quarter of 2023 (1Q23).
  
  
• In 1Q24, BBVA Argentina posted an inflation adjusted average return on assets (ROAA) of 1.6% and an inflation adjusted average return on equity (ROAE) of 6.6%.
  
  
• Operating income in 1Q24 was $631.2 billion, 12.9% lower than the $724.7 billion recorded in 4Q23 and 106.6% over the $305.5 billion recorded in 1Q23.
  
  
• In terms of activity, total consolidated financing to the private sector in 1Q24 totaled $2.7 trillion, falling 12.7% in real terms compared to 4Q23, and 21.9% compared to 1Q23. In the quarter, the variation was mainly driven by a decline in credit cards by 17.9%, in discounted instruments by 27.1% and in other loans by 19.7%. This was offset by an increase in prefinancing and financing of exports by 26.0%. BBVA's consolidated market share of private sector loans reached 10.08% as of 1Q24.
  
  
• Total consolidated deposits in 1Q24 totaled $4.8 trillion, decreasing 13.5% in real terms during the quarter, and 21.7% YoY. Quarterly decrease was mainly explained by a fall by 25.3% and 8.1% in savings and checking accounts respectively. The Bank's consolidated market share of private deposits reached 7.37% as of 1Q24.
  
  
• As of 1Q24, the non-performing loan ratio (NPL) reached 1.23%, with a 173.77% coverage ratio.
  
  
• The accumulated efficiency ratio in 1Q24 was 65.4%, deteriorating compared to 4Q23's 58.6%, and to 1Q23's 62.4%.
  
  
• As of 1Q24, BBVA Argentina reached a regulatory capital ratio of 35.6%, entailing a $1.4 trillion or 336.0% excess over minimum regulatory requirement. Tier I ratio was 35.6%.
  
  
• Total liquid assets represented 91.9% of the Bank's total deposits as of 1Q24.

1Q24 Conference Call
Thursday, May 23 - 12:00 p.m. Buenos Aires time (11:00 a.m. EST)
To participate please dial-in:
+ 54-11-3984-5677 (Argentina)
+ 1-844-450-3851 (United States)
+ 1-412-317-6373 (International)
Web Phone: click here
Conference code: BBVA
Webcast & Replay: click here

To access the full report  English version - Spanish version
To access webcast presentation click here

About BBVA Argentina

BBVA Argentina (NYSE; BYMA; MAE: BBAR; LATIBEX: XBBAR) is a subsidiary of the BBVA Group, the main shareholder since 1996. In Argentina, it is one of the leading private financial institutions since 1886. Nationwide, BBVA Argentina offers retail and corporate banking to a broad customer base, including: individuals, SME's, and large-sized companies.

BBVA Argentina's purpose is to bring the age of opportunities to everyone, based on our customers' real needs, providing the best solutions, and helping them make the best financial decisions through an easy and convenient experience. The institution relies on solid values: "The customer comes first, We think big and We are one team". At the same time, its responsible banking model aspires to achieve a more inclusive and sustainable society.

Investor Relations Contact

Carmen Morillo Arroyo
Chief Financial Officer
Inés Lanusse
Investor Relations Officer
Belén Fourcade
Investor Relations

investorelations-arg@bbva.com
ir.bbva.com.ar

View original content:https://www.prnewswire.com/news-releases/banco-bbva-argentina-sa-announces-first-quarter-2024-results-302153421.html

SOURCE Banco BBVA Argentina S.A.

FAQ

What were BBVA Argentina's financial results for the first quarter of 2024?

BBVA Argentina reported an inflation-adjusted net income of $34.2 billion for 1Q24, down 53.7% from 4Q23 and 41.4% from 1Q23.

How did BBVA Argentina's operating income perform in 1Q24?

Operating income for 1Q24 was $631.2 billion, a 12.9% decrease from 4Q23 but a 106.6% increase from 1Q23.

What was the market share of BBVA Argentina's private sector loans in 1Q24?

BBVA Argentina's market share of private sector loans reached 10.08% in 1Q24.

How did BBVA Argentina's total consolidated deposits change in 1Q24?

Total consolidated deposits were $4.8 trillion in 1Q24, decreasing 13.5% from 4Q23 and 21.7% year-over-year.

What was BBVA Argentina's non-performing loan ratio in 1Q24?

The non-performing loan ratio for BBVA Argentina in 1Q24 was 1.23%, with a coverage ratio of 173.77%.

What is BBVA Argentina's efficiency ratio for 1Q24?

BBVA Argentina's efficiency ratio in 1Q24 was 65.4%, deteriorating from 58.6% in 4Q23 and 62.4% in 1Q23.

What is BBVA Argentina's regulatory capital ratio as of 1Q24?

BBVA Argentina's regulatory capital ratio was 35.6% as of 1Q24, with a 336.0% excess over the minimum regulatory requirement.