PART I [Item 3. Key Information](index=7&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section outlines the principal risks facing the company, categorized into those related to Argentina's volatile economic and political environment, risks specific to the Argentine financial system and BBVA Argentina's operations, and legal and regulatory challenges [Risks Relating to Argentina](index=8&type=section&id=Risks%20Relating%20to%20Argentina) The company's business is significantly affected by Argentina's economic and political instability, including periods of low/negative growth, high inflation, and currency devaluation - The company's business is significantly affected by Argentina's economic and political instability, which includes periods of low/negative growth, **high inflation**, and **currency devaluation**[23](index=23&type=chunk)[24](index=24&type=chunk) - High inflation poses a significant risk, with the Consumer Price Index (CPI) reaching **94.8% in 2022**, requiring the application of IAS 29 for hyperinflationary economies in the financial statements[37](index=37&type=chunk)[38](index=38&type=chunk)[39](index=39&type=chunk) - Argentina's high levels of public spending and fiscal deficits, financed partly by monetary issuance from the Central Bank, could negatively affect the economy and the company's access to financial markets[43](index=43&type=chunk)[45](index=45&type=chunk)[46](index=46&type=chunk) - Exchange controls and restrictions on capital inflows/outflows, reinstated in 2019 and tightened, could materially adversely affect public sector activity and the Bank's business[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) - Fluctuations in the value of the Argentine peso remain a key risk, with the nominal exchange rate rising **72.4% in 2022** while inflation was **94.8%**, indicating a real appreciation of the official exchange rate[70](index=70&type=chunk)[76](index=76&type=chunk) [Risks Relating to the Argentine Financial System and to BBVA Argentina](index=20&type=section&id=Risks%20Relating%20to%20the%20Argentine%20Financial%20System%20and%20to%20BBVA%20Argentina) The Bank faces liquidity issues due to the short-term deposit base, increased competition from less regulated FinTechs, and risks from its sovereign rating and IT system dependencies - The short-term structure of the Argentine financial system's deposit base, mostly transactional and a small fraction of GDP, could lead to **liquidity issues** and limit long-term financial intermediation[98](index=98&type=chunk)[103](index=103&type=chunk) - The Bank faces increased competition from non-bank competitors like FinTechs and BigTechs, which are often less heavily regulated, potentially affecting the Bank's competitive position and operations[115](index=115&type=chunk)[116](index=116&type=chunk) - The Bank's credit ratings are significantly influenced by Argentina's sovereign rating, with recent downgrades or negative outlooks from agencies like Fitch and S&P potentially limiting its access to financing[123](index=123&type=chunk)[125](index=125&type=chunk) - The financial industry's increasing dependency on IT systems exposes the Bank to risks of system failures, cyber-attacks, and electronic fraud, which have been increasing[126](index=126&type=chunk)[127](index=127&type=chunk)[129](index=129&type=chunk) - As a subsidiary of the BBVA Group, the Bank could be adversely affected by activities across the group, such as the ongoing judicial investigation in Spain into BBVA's relationship with Cenyt, which could damage its reputation[119](index=119&type=chunk)[122](index=122&type=chunk)[123](index=123&type=chunk) - The Bank is subject to restrictions on its ability to pay dividends, with the Central Bank suspending distributions and later enabling limited payments with prior authorization[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) [Legal, Regulatory and Compliance Risks](index=30&type=section&id=Legal,%20Regulatory%20and%20Compliance%20Risks) The Bank operates in a highly regulated and unstable environment, facing risks of non-compliance, restrictive regulations, and legal challenges from consumer protection laws and alleged exchange operation breaches - The Bank operates in a highly regulated environment, subject to rules from the Central Bank, CNV, and UIF, where non-compliance can lead to sanctions, including the revocation of its banking license[167](index=167&type=chunk)[168](index=168&type=chunk)[170](index=170&type=chunk) - The regulatory framework for financial institutions is unstable, with numerous restrictive regulations enacted since the Fernández administration took office, affecting interest rates, fees, credit lines, and dividend distributions[172](index=172&type=chunk)[176](index=176&type=chunk)[181](index=181&type=chunk) - The Consumer Protection Law and Credit Card Law may limit the Bank's rights, affecting its ability to determine charges and fees, which could adversely impact business and results of operations[183](index=183&type=chunk)[184](index=184&type=chunk)[185](index=185&type=chunk) - The Bank is exposed to significant compliance risks, including anti-money laundering, anti-corruption laws (like FCPA), and data protection, with criminal proceedings opened by the BCRA related to alleged breaches of exchange operations regulations[188](index=188&type=chunk)[189](index=189&type=chunk)[191](index=191&type=chunk) [Item 4. Information on the Company](index=35&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section details the company's history, business operations, organizational structure, and the regulatory landscape, including recent Argentine economic developments, an overview of the Bank's segments, subsidiaries, statistical information, and the complex Argentine banking regulatory framework [Recent Political and Economic Developments in Argentina](index=35&type=section&id=Recent%20Political%20and%20Economic%20Developments%20in%20Argentina) Argentina's economy experienced high political and economic instability in 2022, with significant inflation and Central Bank rate hikes | Indicator | 2020 | 2021 | 2022 | | :--- | :--- | :--- | :--- | | GDP Growth | -9.9% | 10.3% | 5.2% | | Inflation (CPI) | 36.1% | 50.9% | 94.8% | | Primary Fiscal Deficit (% of GDP) | 6.5% | 2.0% | 2.4% | | Trade Surplus (US$ million) | 12,530 | 14,750 | 6,923 | - In 2022, Argentina's economy experienced high political and economic instability, with three different Ministers of Economy during the year, and Sergio Massa's appointment bringing some calm to markets with a focus on reducing the fiscal deficit and accumulating reserves[210](index=210&type=chunk) - The Central Bank raised the monetary policy rate from **38% in January 2022** to **75% in September 2022** to combat accelerating inflation, resulting in the monetary base growing **42.4% in 2022**[230](index=230&type=chunk)[231](index=231&type=chunk) [A. History and Development of the Company](index=41&type=section&id=A.%20History%20and%20Development%20of%20the%20Company) The company, originally incorporated in 1886, changed its name to Banco BBVA Argentina S.A. in 2019 and has recently engaged in strategic investments and corporate restructuring - Originally incorporated as Banco Francés del Río de la Plata S.A. on **October 14, 1886**, the company changed its name to Banco BBVA Argentina S.A. in **2019**[235](index=235&type=chunk)[236](index=236&type=chunk) - The Bank has recently engaged in strategic investments and corporate restructuring, including the merger with BBVA Francés Valores S.A. in **2021** and participation in the incorporation of digital payment companies Play Digital S.A. (**2020**) and Openpay Argentina S.A. (**2021**)[238](index=238&type=chunk)[239](index=239&type=chunk)[240](index=240&type=chunk) [B. Business Overview](index=42&type=section&id=B.%20Business%20Overview) BBVA Argentina is a leading private financial institution offering retail and corporate banking services nationwide, with significant digital client penetration and a multi-channel distribution network - BBVA Argentina is one of the leading private financial institutions in Argentina, a subsidiary of Banco Bilbao Vizcaya Argentaria S.A. (BBVA), offering retail and corporate banking services nationwide[242](index=242&type=chunk) Financial Highlights (As of Dec 31, 2022) | Metric | As of Dec 31, 2022 | | :--- | :--- | | Total Consolidated Assets | Ps. 1,951.9 billion | | Total Loan Portfolio | Ps. 717.1 billion | | Total Deposits | Ps. 1,313.8 billion | | Total Shareholders' Equity | Ps. 361.4 billion | | Consolidated Net Profit (FY 2022) | Ps. 57.9 billion | - As of December 31, 2022, the Bank had a **6.6% market share** of total private deposits and **9.1% of total private loans** (on a consolidated basis)[246](index=246&type=chunk) - The Bank operates through a multi-channel distribution network including **243 branches**, **881 ATMs**, and **854 self-service terminals**, complemented by a modern internet and mobile banking platform[251](index=251&type=chunk) - Digital client penetration is significant, with **2.3 million active retail digital clients** (**61.8% penetration**) and **2.0 million active retail mobile clients** (**55.4% penetration**) as of December 31, 2022, with digital sales accounting for **83.9% of total retail sales** in units in 2022[260](index=260&type=chunk) [C. Organizational Structure](index=55&type=section&id=C.%20Organizational%20Structure) Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) is the controlling shareholder of BBVA Argentina, holding a majority stake and various interests in financial and investment management subsidiaries and associated companies - As of December 31, 2022, Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) owned **66.55% of BBVA Argentina's capital stock**, making it the controlling shareholder[315](index=315&type=chunk) Key Subsidiaries | Subsidiary | Ownership % | Principal Activity | | :--- | :--- | :--- | | PSA Finance Argentina Cía. Financiera S.A. | 50.00% | Financial institution | | BBVA Asset Management Argentina S.A.U. | 100.00% | Investment fund manager | | Volkswagen Financial Services S.A. | 51.00% | Financial institution | | Consolidar AFJP S.A. (in liquidation) | 53.89% | Pension fund manager | - The Bank holds a **40% interest** in the joint venture Rombo Compañía Financiera S.A., the main finance company for Renault's dealer network[346](index=346&type=chunk)[348](index=348&type=chunk) - The Bank has minority stakes in several associated companies, including BBVA Seguros Argentina S.A. (**12.22%**), Interbanking S.A. (**11.11%**), Play Digital S.A. (**10.88%**), and OpenPay Argentina S.A. (**12.51%**)[350](index=350&type=chunk) [D. Property, plants and equipment](index=64&type=section&id=D.%20Property,%20plants%20and%20equipment) The Bank owns its principal executive offices in Buenos Aires and operates a network of 243 retail branches, with a near-even split between owned and leased properties - The Bank's principal executive offices are located at Av. Córdoba 111, Buenos Aires, Argentina, in a property it owns[364](index=364&type=chunk) - As of December 31, 2022, the Bank's network consisted of **243 retail branches**, with **114 (47%)** located in owned properties and **129 (53%)** in leased properties[365](index=365&type=chunk)[251](index=251&type=chunk) [E. Selected statistical information](index=65&type=section&id=E.%20Selected%20statistical%20information) The Bank's financial performance in 2022 was characterized by significant net interest income, a predominantly fixed-rate loan portfolio, and high average real rates on peso time deposits due to inflation Financial Performance (in thousands of Argentine pesos) | (in thousands of Argentine pesos) | FY 2022 | FY 2021 | FY 2020 | | :--- | :--- | :--- | :--- | | **Total interest-earning assets (Avg. balance)** | 1,372,615,179 | 1,325,476,697 | 1,038,226,803 | | **Total interest-bearing liabilities (Avg. balance)** | 963,538,037 | 994,804,380 | 765,062,471 | | **Net Interest Income** | 338,818,327 | 241,186,669 | 226,548,038 | | **Net Interest Margin** | 24.68% | 18.20% | 21.82% | - The loan portfolio as of December 31, 2022, totaled **Ps. 737.99 billion**, with the majority (**66.74%**) maturing within 3 months, and the largest segment being 'To the non-financial private sector and residents abroad' at **Ps. 733.51 billion**[380](index=380&type=chunk)[381](index=381&type=chunk) - The vast majority of the loan portfolio (**Ps. 723.54 billion** out of Ps. 737.99 billion) is at a **fixed rate** as of December 31, 2022[382](index=382&type=chunk)[383](index=383&type=chunk) - The composition of deposits is dominated by non-interest-bearing checking accounts and interest-bearing savings and time deposits, with the average real rate paid on peso time deposits in 2022 being **54.91%**, up from **36.78%** in 2021, reflecting the high inflation environment[389](index=389&type=chunk)[391](index=391&type=chunk) [F. The Argentine Banking System and its Regulatory Framework](index=75&type=section&id=F.%20The%20Argentine%20Banking%20System%20and%20its%20Regulatory%20Framework) The Argentine banking system is supervised by the Central Bank, which enforces strict capital and liquidity requirements based on Basel III principles, and operates a deposit guarantee system - The Argentine banking system is supervised by the Central Bank (BCRA), which sets technical ratios for indebtedness, liquidity, credit concentration, and foreign exchange positions, and conducts regular inspections[397](index=397&type=chunk)[398](index=398&type=chunk) - Financial institutions must comply with minimum capital requirements based on Basel III principles, including a **4.5% common equity ratio**, **6% Tier 1 capital ratio**, and **8% total capital ratio**, plus a capital conservation buffer of **2.5%**[427](index=427&type=chunk)[428](index=428&type=chunk) - As of December 31, 2022, BBVA Argentina's total capital to risk-weighted assets ratio was **25.1%** under Central Bank rules, significantly exceeding the minimum requirement[449](index=449&type=chunk)[450](index=450&type=chunk) - The Bank must maintain a Liquidity Coverage Ratio (LCR) of at least **1.00**, and as of December 31, 2022, BBVA Argentina's LCR was **348%**, indicating a strong liquidity position[451](index=451&type=chunk)[452](index=452&type=chunk)[454](index=454&type=chunk) - The Deposit Guarantee System, managed by SEDESA, covers deposits up to **Ps. 1.5 million** per person per deposit as of year-end 2022, increasing to **Ps. 6 million** from January 1, 2023[535](index=535&type=chunk)[537](index=537&type=chunk)[539](index=539&type=chunk) [G. Cybersecurity and Fraud Management](index=112&type=section&id=G.%20Cybersecurity%20and%20Fraud%20Management) BBVA's security strategy focuses on cybersecurity, data protection, physical security, and fraud management, reinforced by biometric authentication and a 24x7 global response team - BBVA's security strategy is based on four pillars: cybersecurity, data protection, physical security, and security in business processes/fraud management[544](index=544&type=chunk) - In 2022, security measures were reinforced, including the use of facial biometrics for remote client onboarding and transaction completion, and enhancing security in high-risk business processes[545](index=545&type=chunk)[546](index=546&type=chunk) - The BBVA Group operates a **24x7 Global Computer Emergency Response Team (CERT)** complemented by a local Security Operation Center (SOC) to detect and respond to cyberattacks[550](index=550&type=chunk) [Item 5. Operating and Financial Review and Prospects](index=115&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section provides management's discussion and analysis of the Bank's financial condition and results of operations, covering the impact of Argentina's macroeconomic conditions, recent regulatory changes, and critical accounting policies, detailing a significant increase in net profit for 2022 driven by higher net interest income in a high-inflation environment, and discussing liquidity sources, capital adequacy, and key economic and business trends [A. Operating Results](index=121&type=section&id=A.%20Operating%20Results) The Bank achieved a significant increase in net profit for 2022, driven by strong net interest income growth in a high-inflation environment, while also improving its non-performing loan ratio Consolidated Operating Results (in thousands of Argentine pesos) | (in thousands of Argentine pesos) | FY 2022 | FY 2021 | % Change | | :--- | :--- | :--- | :--- | | **Net Interest Income** | 338,818,327 | 240,283,465 | 41.0% | | **Gross Income** | 368,271,721 | 267,955,970 | 37.4% | | **Profit for the Year** | 57,960,678 | 18,224,239 | 218.0% | | **Profit Attributable to Owners** | 58,841,292 | 18,307,836 | 221.4% | | **Basic EPS (in pesos)** | 96.03 | 29.88 | 221.4% | - Net interest income grew by **41.0%** in 2022 compared to 2021, primarily due to a **50.4% increase** in interest income, driven by higher returns on government securities (LELIQ and CER-linked bonds) in a high-inflation environment, partially offset by a **63.2% increase** in interest expenses mainly from higher rates on time deposits[597](index=597&type=chunk)[604](index=604&type=chunk)[608](index=608&type=chunk) - The loss on net monetary position increased by **65.6%** to **Ps. 133.6 billion** in 2022, reflecting the significant impact of Argentina's **94.8% inflation rate** on the Bank's monetary assets and liabilities[597](index=597&type=chunk)[645](index=645&type=chunk)[647](index=647&type=chunk) - The non-performing loan (NPL) ratio improved, decreasing to **1.13%** at year-end 2022 from **1.87%** at year-end 2021, due to positive credit portfolio performance, particularly in the wholesale segment[644](index=644&type=chunk) [B. Liquidity and Capital Resources](index=135&type=section&id=B.%20Liquidity%20and%20Capital%20Resources) The Bank maintains a strong capital position, with consolidated excess capital of Ps. 207.7 billion, despite a decrease in its deposit base and liquid assets ratio in 2022 - The Bank's primary source of funds is its deposit base, which totaled **Ps. 1,313.8 billion** at December 31, 2022, a decrease from **Ps. 1,379.8 billion** at year-end 2021[664](index=664&type=chunk) - The ratio of liquid assets (cash, cash equivalents, and FVTPL assets) to total deposits was **25.03%** at December 31, 2022, compared to **32.31%** at year-end 2021[663](index=663&type=chunk) - As of December 31, 2022, the Bank had consolidated excess capital of **Ps. 207.7 billion** pursuant to Central Bank rules, demonstrating compliance with capital requirements[680](index=680&type=chunk) - The Bank has a program for issuing corporate bonds up to **US$500 million**, extended until 2028, with its subsidiaries having outstanding principal and interest of **Ps. 191.2 million** as of December 31, 2022, while the Bank itself had no outstanding corporate bonds[664](index=664&type=chunk)[665](index=665&type=chunk) [D. Trend Information](index=143&type=section&id=D.%20Trend%20Information) The Argentine financial system remains under-penetrated, suggesting growth potential if macroeconomic conditions normalize, while the Bank continues to prioritize its digitalization strategy amidst global banking sector turmoil - The Argentine financial system remains small and under-penetrated compared to regional peers, suggesting potential for growth if inflation and interest rates normalize[705](index=705&type=chunk) - The Bank expects loan demand to grow in line with or slightly below inflation in the near term, driven by high interest rates and a lack of investment, with excess liquidity likely continuing to be invested in Central Bank instruments and treasury bonds[710](index=710&type=chunk) - The Bank's digitalization strategy remains a key component of its future plans, aiming to build on the accelerated adoption of digital tools by customers during the pandemic and improve customer satisfaction through tools like the Net Promoter Score[713](index=713&type=chunk) - Recent turmoil in the U.S. and European banking sectors (e.g., Silicon Valley Bank, Credit Suisse) is noted as a potential risk, as the operating environment for financial services can be highly correlated during times of stress[704](index=704&type=chunk) [Item 6. Directors, Senior Management and Employees](index=145&type=section&id=ITEM%206.%20DIRECTORS,%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section provides details on the Bank's leadership and workforce, including the Board of Directors and senior management, their compensation, the structure and function of board committees, and employee statistics - The Board of Directors consists of a minimum of three and a maximum of nine directors elected for three-year terms, with Lorenzo de Cristóbal de Nicolás serving as Chairman as of the report date[714](index=714&type=chunk)[716](index=716&type=chunk) - The aggregate compensation paid to all directors and officers for the fiscal year ended December 31, 2022, was **Ps. 1,444.26 million**[729](index=729&type=chunk) - The Bank has an Audit Committee composed of three independent directors, which assists the Board in monitoring internal controls, financial statements, and external auditors[740](index=740&type=chunk)[741](index=741&type=chunk) Employee Statistics | Employee Category | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | | :--- | :--- | :--- | :--- | | Main office | 4,011 | 3,863 | 3,118 | | Branches | 1,877 | 2,000 | 2,901 | | **Total** | **5,888** | **5,863** | **6,019** | [Item 7. Major Shareholders and Related Party Transactions](index=161&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section details the ownership structure and transactions with related entities, confirming that Banco Bilbao Vizcaya Argentaria, S.A. (BBVA) and its subsidiary BBV América S.L. collectively held a controlling interest of 66.1% of the Bank's ordinary shares as of March 31, 2023, and that all related party transactions were conducted on market terms Beneficial Ownership (as of Mar 31, 2023) | Beneficial Owner | % of Shares Outstanding (as of Mar 31, 2023) | | :--- | :--- | | Banco Bilbao Vizcaya Argentaria S.A. | 39.97% | | BBV América SL (controlled by BBVA) | 26.13% | | The Bank of New York Mellon (as ADS holder) | 16.78% | | Administración Nacional de Seguridad Social | 7.06% | - As of December 31, 2022, BBVA's total equity interest in the Bank was **66.55%**[768](index=768&type=chunk) - All financing and transactions with related parties were conducted in the ordinary course of business on substantially the same terms as those for comparable transactions with unrelated parties and did not involve more than the normal risk of collectability[770](index=770&type=chunk) [Item 8. Financial Information](index=164&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section addresses legal proceedings and the Bank's dividend policy, noting the Bank's involvement in several legal and regulatory actions related to alleged violations of anti-money laundering and exchange regulations, and highlighting that dividend distributions are subject to numerous restrictions and require prior Central Bank authorization - The Bank is involved in several legal proceedings, including actions from the UIF for alleged anti-money laundering violations and criminal proceedings from the BCRA related to alleged breaches of exchange operation regulations[783](index=783&type=chunk)[785](index=785&type=chunk) - Dividend distribution is heavily regulated by the Central Bank (BCRA), which, after a two-year ban, allowed a limited distribution in 2022, and for 2023, initially reinstated a suspension but later amended it to allow distribution of up to **40% of distributable profit** with prior authorization[786](index=786&type=chunk)[791](index=791&type=chunk)[792](index=792&type=chunk) [Item 9. The Offer and Listing](index=165&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) This section provides information on the trading of the Bank's securities, detailing that its shares are listed on the Buenos Aires stock exchange (BYMA) and its American Depositary Shares (ADSs) are listed on the NYSE and Madrid Stock Exchange, along with historical price data and an overview of Argentine market regulation - The Bank's ordinary shares are listed on the BYMA (ticker: **BBAR**), and its ADSs (**1 ADS = 3 ordinary shares**) are listed on the NYSE (ticker: **BBAR**) and the Madrid Stock Exchange (ticker: **XBBAR**)[793](index=793&type=chunk) Historical Share and ADS Prices | Period | BYMA Share Price (ARS) | NYSE ADS Price (USD) | | :--- | :--- | :--- | | **2022 High** | 455.20 | 3.90 | | **2022 Low** | 185.25 | 2.15 | | **2021 High** | 288.90 | 4.48 | | **2021 Low** | 126.45 | 2.54 | [Item 10. Additional Information](index=169&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section covers key corporate and regulatory details, including the Bank's bylaws, material contracts, Argentina's complex exchange controls with restrictions on debt repayment, exports, imports, and dividend transfers, and a summary of Argentine and U.S. federal income tax consequences for shareholders [D. Exchange Controls](index=172&type=section&id=D.%20Exchange%20Controls) Argentina maintains significant exchange controls, impacting foreign debt repayment, export repatriation, import payments, and foreign currency purchases for individuals and legal entities, as well as dividend transfers abroad - Argentina has significant exchange controls, reinstated in September 2019 and tightened since, requiring repayment of foreign debt principal and interest to be settled through the official exchange market and subject to timing restrictions[830](index=830&type=chunk)[832](index=832&type=chunk) - Exporters are required to repatriate and settle foreign currency proceeds within specified timeframes, while importers face a complex approval system (SIRA) that determines their access to the exchange market for goods payments[833](index=833&type=chunk)[835](index=835&type=chunk) - Individuals are limited to purchasing **US$200 per month** for savings, with purchases on credit/debit cards abroad counting towards this limit, and legal entities require prior Central Bank approval to purchase foreign currency for investment purposes[837](index=837&type=chunk)[838](index=838&type=chunk) - The transfer of profits and dividends abroad to non-resident shareholders requires prior approval from the Central Bank, with limited exceptions[839](index=839&type=chunk)[840](index=840&type=chunk) [E. Taxation](index=175&type=section&id=E.%20Taxation) Argentina applies a progressive corporate income tax rate and a withholding tax on dividends, while capital gains from publicly traded shares are generally tax-exempt for non-residents, and the Bank is responsible for paying the Personal Property Tax on behalf of its shareholders - For fiscal years starting on or after January 1, 2021, Argentina applies a progressive corporate income tax rate scale (**25%**, **30%**, **35%**), and dividends paid from profits generated in these years are subject to a **7% withholding tax**[848](index=848&type=chunk) - Capital gains from the sale of shares or ADSs by non-resident beneficiaries are generally tax-exempt, provided the beneficiary does not reside in a non-cooperating jurisdiction and the securities are publicly offered and traded on authorized markets[854](index=854&type=chunk) - The Bank is responsible for paying the Personal Property Tax (at a **0.50% rate**) on behalf of its shareholders, calculated on the value of the shareholders' equity from the last balance sheet[860](index=860&type=chunk) [Item 11. Quantitative and Qualitative Disclosures About Market Risk](index=180&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) This section details the Bank's comprehensive risk management framework, covering credit, financial (market, liquidity, interest rate), and non-financial risks, utilizing a Value at Risk (VaR) model for market risk, conducting stress tests, and managing interest rate sensitivity and foreign exchange risk - The Bank's risk management framework is structured around Credit Risk, Financial Risk (market, liquidity, interest rate), and Non-Financial Risk, with a focus on prudence and anticipation[876](index=876&type=chunk)[878](index=878&type=chunk) - The Bank uses a Value at Risk (VaR) model to estimate the maximum potential loss in its trading portfolio, with the average daily trading VaR for 2022 being **Ps. 141.13 million** and a maximum of **Ps. 263.07 million**[912](index=912&type=chunk)[915](index=915&type=chunk) - As of December 31, 2022, a hypothetical **500 basis point increase** in interest rates would reduce the Bank's net portfolio value by **Ps. 2.34 billion** but increase its net interest income by approximately **Ps. 14.41 billion**[925](index=925&type=chunk)[927](index=927&type=chunk) - The Bank's foreign exchange risk management aims to minimize the impact of currency fluctuations, with a net liability position in foreign currency of **Ps. 5.58 billion** as of December 31, 2022[928](index=928&type=chunk)[678](index=678&type=chunk) PART II [Item 15. Controls and Procedures](index=191&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) This section confirms the effectiveness of the Bank's internal controls, with management concluding that disclosure controls and internal control over financial reporting were effective as of December 31, 2022, a conclusion supported by an unqualified audit opinion from Pistrelli, Henry Martin y Asociados S.R.L. (Ernst & Young) - Management, including the CEO and CFO, evaluated the Bank's disclosure controls and procedures and concluded they were effective as of December 31, 2022[937](index=937&type=chunk) - Management concluded that the Bank's internal control over financial reporting was effective as of December 31, 2022, based on the COSO 2013 framework[939](index=939&type=chunk) - The independent registered public accounting firm, Pistrelli, Henry Martin y Asociados S.R.L. (Member of Ernst & Young Global Limited), issued an unqualified opinion on the effectiveness of the Bank's internal control over financial reporting as of December 31, 2022[940](index=940&type=chunk)[943](index=943&type=chunk) [Item 16C. Principal Accountant Fees and Services](index=193&type=section&id=ITEM%2016C.%20PRINCIPAL%20ACCOUNTANT%20FEES%20AND%20SERVICES) This section details the fees paid to the Bank's independent external auditors, totaling Ps. 258.02 million for Pistrelli, Henry Martin y Asociados S.R.L. (Ernst & Young) in 2022 and Ps. 370.18 million for KPMG in 2021 Auditor Fees (in millions of pesos) | (in millions of pesos) | 2022 (EY) | 2021 (KPMG) | | :--- | :--- | :--- | | Audit fees | 257.30 | 348.05 | | Audit-related fees | 0.72 | 21.72 | | Tax fees | — | — | | All other fees | — | 0.41 | | **Total fees** | **258.02** | **370.18** | [Item 16G. Corporate Governance](index=194&type=section&id=ITEM%2016G.%20CORPORATE%20GOVERNANCE) This section outlines the significant differences between BBVA Argentina's corporate governance practices, governed by Argentine law, and NYSE standards for U.S. companies, including variations in independent director requirements, committee composition, and non-management director meetings - As a non-U.S. company listed on the NYSE, BBVA Argentina may follow its home country corporate governance practices in lieu of most NYSE requirements[958](index=958&type=chunk) - Unlike NYSE standards which require a majority of independent directors, Argentine law does not, though the Bank's Audit Committee is required to have a majority of independent directors[960](index=960&type=chunk)[970](index=970&type=chunk) - Argentine law does not require regularly scheduled executive meetings of non-management directors without management present, a practice mandated by NYSE Section 303A.03[964](index=964&type=chunk) PART III [Item 18. Financial Statements](index=198&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section contains the Bank's audited consolidated financial statements for the fiscal years ended December 31, 2022, 2021, and 2020, prepared in accordance with IFRS as issued by the IASB, including reports from independent registered public accounting firms, consolidated statements, and detailed notes [Report of Independent Registered Public Accounting Firm](index=203&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Independent auditors issued unqualified opinions on the Bank's consolidated financial statements for 2022 and the two-year period ended 2021, with the 2022 audit identifying impairment of financial assets as a critical audit matter - Pistrelli, Henry Martin y Asociados S.R.L. (Ernst & Young) issued an unqualified opinion on the consolidated financial statements for the year ended December 31, 2022, stating they present fairly the financial position in conformity with IFRS-IASB[990](index=990&type=chunk) - KPMG issued an unqualified opinion on the consolidated financial statements for the two-year period ended December 31, 2021[1002](index=1002&type=chunk) - A critical audit matter identified for the 2022 audit was the impairment of financial assets, specifically the allowance for credit losses, due to the complexity and significant estimation involved in the Expected Credit Loss (ECL) model[994](index=994&type=chunk)[995](index=995&type=chunk) [Notes to the Consolidated Financial Statements](index=218&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) The financial statements are prepared under IFRS-IASB in thousands of Argentine pesos, restated for hyperinflation, and the impairment model (IFRS 9) classifies financial instruments into three stages based on credit risk, incorporating forward-looking macroeconomic information for ECL calculation - The financial statements are prepared in accordance with IFRS-IASB and are expressed in thousands of Argentine pesos, restated to the measuring unit current as of December 31, 2022, to reflect the hyperinflationary status of the Argentine economy as required by IAS 29[1057](index=1057&type=chunk)[1063](index=1063&type=chunk) - The impairment model (IFRS 9) classifies financial instruments into three stages based on credit risk, with Stage 1 using a 12-month Expected Credit Loss (ECL), while Stages 2 (significant risk increase) and 3 (impaired) use a lifetime ECL[1102](index=1102&type=chunk) - The Bank's ECL calculation incorporates forward-looking macroeconomic information, using a baseline scenario plus upside and downside scenarios, with Real GDP growth being the primary indicator[1114](index=1114&type=chunk)[1197](index=1197&type=chunk) - The Bank has adopted a new definition of default (NDoD) effective after November 2021 to enhance the definition of credit-impaired assets (Stage 3), which is treated as a change in accounting estimate[1105](index=1105&type=chunk)

Banco BBVA Argentina S.A. (NYSE:BBAR) Q4 2022 Earnings Conference Call March 7, 2023 10:00 AM ET Company Participants Belén Fourcade - Investor Relations Carmen Morillo Arroyo - CFO Ines Lanusse - Investor Relations Officer Conference Call Participants Rodrigo Nistor - Latin Securities Operator Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to BBVA Argentina's Fourth Quarter 2022 Fiscal Year Results Conference Call. We would like to inform you ...

BANCO BBVA ARGENTINA S.A. CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE NINE-MONTH PERIOD ENDED SEPTEMBER 30, 2022 Banco BBVA Argentina S.A. TABLE OF CONTENTS Condensed Interim Financial statements for the nine-month period ended September 30, 2022, comparatively presented. Consolidated Condensed Statement of Financial Position Consolidated Condensed Statement of Income Consolidated Condensed Statement of Other Comprehensive Income Consolidated Condensed Statement of Changes in Shareholders' Equity Consoli ...

Banco BBVA Argentina S.A. (NYSE:BBAR) Q3 2022 Earnings Conference Call November 23, 2022 10:00 AM ET Company Participants Belen Fourcade - Investor Relations Ines Lanusse - Investor Relations Officer Conference Call Participants Operator Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to BBVA Argentina's Third Quarter 2022 Results Conference Call. We would like to inform you that this event is being recorded and all participants will be in a lis ...

Financial Performance - Net interest income increased to 39,228,769 thousand pesos for the three-month period ended March 31, 2022, up from 33,422,315 thousand pesos in the same period of 2021, reflecting a growth of about 17%[9] - Net income for the period attributable to owners of the Parent was 4,186,635 thousand pesos, compared to 4,666,744 thousand pesos in the prior year, indicating a decrease of approximately 10.3%[12] - Total comprehensive income for the period was 5,358,722 thousand pesos, compared to 4,206,473 thousand pesos in the prior year, representing an increase of about 27.4%[14] - The net operating income rose to 52,731,430 thousand pesos, up from 41,877,339 thousand pesos, marking an increase of approximately 25.9%[9] - The basic earnings per share for the period was 6.8330 thousand pesos, down from 7.6166 thousand pesos in the same period last year, a decrease of approximately 10.3%[12] Assets and Liabilities - Total assets decreased from 1,195,742,351 thousand pesos as of December 31, 2021, to 1,169,081,367 thousand pesos as of March 31, 2022, representing a decline of approximately 2.2%[4] - Total liabilities decreased from 1,006,998,723 thousand pesos as of December 31, 2021, to 974,931,136 thousand pesos as of March 31, 2022, a reduction of about 3.2%[6] - Total equity increased from 188,743,628 thousand pesos to 194,150,231 thousand pesos, reflecting an increase of about 2.2%[6] - Cash and cash equivalents at fiscal year-end were reported at 198,968,415 thousand pesos, down from 303,597,848 thousand pesos at the end of the previous year[22] - The total balance of loans and other financing as of March 31, 2022, was 417,951,752, down from 455,797,180 as of December 31, 2021, indicating a reduction of about 8.3%[85] Cash Flows - Cash flows from operating activities resulted in a net outflow of 15,266,108 thousand pesos for the three-month period ended March 31, 2022, compared to an inflow of 71,472,794 thousand pesos for the same period in 2021[20] - Total cash flows used in investing activities amounted to 1,283,702 thousand pesos for the three-month period ended March 31, 2022, compared to 667,236 thousand pesos in 2021[23] - The total cash flows used in financing activities were 1,877,424 thousand pesos for the three-month period ended March 31, 2022, compared to 2,443,362 thousand pesos in 2021[23] Regulatory Environment - The Argentine Government aims to reduce the fiscal deficit to 2.5% of GDP in 2022, 1.9% in 2023, and 0.9% in 2024[37] - The income tax rate for large corporations, including the Bank, increased from 30% to 35% effective from fiscal years beginning on or after January 1, 2021[33] - As of March 31, 2022, minimum capital and minimum cash exceed the thresholds required by the BCRA, with no deficits expected for the following twelve months[45] - The BCRA has imposed new restrictions on accessing the foreign exchange market, affecting the remittance of profits and dividends[34] Credit and Loans - The loan loss allowance for the period was 2,269,249 thousand pesos, compared to 2,968,414 thousand pesos in the previous year, indicating a decrease of about 23.5%[9] - The total balance of credit card loans decreased to 165,510,540 as of March 31, 2022, from 182,390,038 as of December 31, 2021, indicating a decline of about 9.2%[85] - The corporate banking segment saw loans decrease to 34,423,980 as of March 31, 2022, from 36,136,187 as of December 31, 2021, a decline of about 4.7%[196] - Retail loans decreased to 238,110,924 as of March 31, 2022, down from 258,895,454 as of December 31, 2021, reflecting a decrease of approximately 8.0%[196] Expenses and Income - Total administrative expenses amounted to $9.51 billion, a 4.7% increase compared to the previous period[168] - Depreciation and amortization expenses totaled $1.63 billion, reflecting a 5.5% increase from the last reporting period[169] - Other operating expenses reached $471.6 million, indicating a significant rise of 9.0%[170] - Total personnel benefits amounted to $9,064,540 in Q1 2022, compared to $8,615,000 in Q1 2021, indicating an increase of 5.2%[167] Market and Investment - The company plans to expand its market presence and invest in new technologies to drive future growth[1] - The fair value of financial assets and liabilities maturing in less than three months was considered similar to their accounting balance, ensuring accurate valuation assessments[192] - The fair value of financial assets pledged as collateral amounted to $23,106,432 as of March 31, 2022, slightly down from $23,540,145 on December 31, 2021[96] - The total amount disbursed under the 2021/2022 Quota reached $62,449,414, which is a significant increase compared to previous quotas[93]

Financial Data and Key Metrics Changes - BBVA Argentina reported a net income of ARS 15.9 billion for Q2 2022, representing a 235.8% increase quarter-over-quarter, with a quarterly ROE of 28.3% and a quarterly ROA of 4.6% [7] - Operating income for Q2 2022 was ARS 32 billion, up 10.2% from ARS 29 billion in Q1 2022, driven by greater interest income, improved net fee income, and lower operating expenses [7][8] - Net interest income for Q2 2022 was ARS 54.3 billion, increasing 18% quarter-over-quarter and 36.3% year-over-year [8] Business Line Data and Key Metrics Changes - Digital client penetration reached 62% by the end of June 2022, stable compared to the previous year, while mobile client penetration increased to 54% from 52% [6] - Retail digital sales increased from 78.6% in Q2 2021 to 82% in Q2 2022 [6] - Loan loss allowances decreased by 7.7% quarter-over-quarter, attributed to good portfolio behavior, especially in the commercial book [10] Market Data and Key Metrics Changes - Total consolidated financing to the private sector reached ARS 519.3 billion in Q2 2022, a 7.1% increase in real terms compared to Q1 2022 [12] - BBVA Argentina's consolidated market share of private sector loans increased to 8.35% from 8.21% a year ago [13] - Private non-financial sector deposits totaled ARS 959.3 billion, increasing 4.9% quarter-over-quarter but falling 2.8% year-over-year [14] Company Strategy and Development Direction - The bank is focused on digital transformation and enhancing customer acquisition through digital channels, with a commitment to financial inclusion and education [5][6] - BBVA Argentina aims to maintain a competitive position in the financial system despite macroeconomic challenges [6] Management's Comments on Operating Environment and Future Outlook - Management noted a high level of uncertainty regarding future economic policy and market volatility, particularly in the FX market [5] - There is an expectation of loan growth above inflation for the remainder of 2022, driven by increased activity in both commercial and retail sectors [20][22] Other Important Information - The bank's efficiency ratio improved to 71.3% in Q2 2022 from 72.2% in Q1 2022, although it deteriorated compared to 70.1% in Q2 2021 [11] - BBVA Argentina distributed dividends totaling ARS 8.8 billion as of the report date, with a healthy total liquid ratio of 76.9% of total deposits [16] Q&A Session Summary Question: Clarification on the positive tax line and loan demand expectations - Management explained that the positive tax line was due to updated fiscal valuations by inflation, leading to lower deferred taxes [20][21] - Loan demand is expected to grow above inflation for the remainder of 2022, with increased activity noted in the commercial sector [20][22] Question: Expectations for tax rates in the future - Management indicated that the effective tax rate for 2022 would be positive due to one-time effects, with normalization expected in the following quarters [22][24]

Financial Performance - Net interest income for the year ended December 31, 2021, was 123,842,880 thousand pesos, up from 117,518,183 thousand pesos in 2020, representing an increase of approximately 2.8%[10] - Net income for the year attributable to owners of the Parent was 21,183,366 thousand pesos, compared to 16,667,573 thousand pesos in 2020, reflecting a growth of approximately 27.5%[10] - The bank's operating income for 2021 was 61,091,756 thousand pesos, an increase from 58,343,773 thousand pesos in 2020, representing a growth of about 3%[10] - Basic earnings per share for the year ended December 31, 2021, were 34.5732 pesos, compared to 27.2030 pesos in 2020, reflecting an increase of approximately 27.2%[13] - Total comprehensive income for 2021 was 21,740,883 thousand pesos, down from 24,187,813 thousand pesos in 2020, indicating a decrease of about 10.4%[15] - The income before income tax for the year was 21,082,666 thousand pesos, down from 29,025,581 thousand pesos in 2020, representing a decline of about 27.4%[23] Asset and Liability Management - Total assets as of December 31, 2021, amounted to 1,030,194,254 thousand pesos, a slight decrease from 1,038,430,226 thousand pesos in 2020[5] - Total liabilities decreased to 867,581,541 thousand pesos as of December 31, 2021, from 881,821,257 thousand pesos in 2020[8] - Deposits as of December 31, 2021, were 708,336,185 thousand pesos, down from 721,837,845 thousand pesos in 2020, indicating a decrease of about 1.9%[8] - Total equity attributable to owners of the Parent increased to 159,406,245 thousand pesos in 2021 from 153,381,578 thousand pesos in 2020, showing a growth of approximately 3.3%[8] - Cash and cash equivalents at fiscal year-end decreased to $218,344,920 thousand from $229,595,178 thousand, a decline of approximately 5%[25] Regulatory Environment - The Argentine government extended the Public Emergency Law until December 31, 2022, impacting the economic environment in which the bank operates[31] - The income tax rate for large corporations, including the bank, increased from 30% to 35% effective from fiscal years beginning on or after January 1, 2021[31] - The BCRA suspended the distribution of dividends until December 31, 2021, allowing distributions of up to 20% of distributable earnings starting January 1, 2022[36] - Financial institutions are required to maintain outstanding balances under the "Financing line for productive investments of MSMEs" at least 7.5% of non-financial private sector deposits from October 16, 2020, to March 31, 2022[36] Credit Quality and Loan Management - The bank's loan loss allowance for 2021 was 8,267,375 thousand pesos, significantly lower than 14,988,309 thousand pesos in 2020, indicating improved asset quality[10] - The allowance for loan losses as of December 31, 2021, was $2,925,894, down from $4,264,102 in 2020[138] - Total loans and other financing decreased from $421.91 billion in 2020 to $379.04 billion in 2021, a reduction of approximately 10.1%[118] - Consumer loans declined from $42.45 billion in 2020 to $40.95 billion in 2021, a decrease of about 3.5%[118] - Mortgage loans fell from $25.28 billion in 2020 to $22.91 billion in 2021, representing a decrease of approximately 9.4%[118] Investment and Financial Instruments - The total amount receivable from reverse repurchase transactions of BCRA Liquidity Bills was 137,548,495 as of December 31, 2021, significantly increasing from 74,245,015 in the previous year, representing an increase of approximately 85.3%[115] - Investments in equity instruments through profit or loss as of December 31, 2021, totaled 2,181,291, a decrease from 3,809,090 as of December 31, 2020[154] - The total fair value of investments in equity instruments was $2.22 billion in 2021, down from $3.85 billion in 2020, a decline of approximately 43%[199] Cash Flow and Dividends - Cash flows provided by operating activities for the year ended December 31, 2021, were 116,712,111 thousand pesos, a significant recovery from a cash outflow of 20,393,880 thousand pesos in 2020[23] - The company declared cash dividends of 11.42 per share, totaling 8,987,545 thousand pesos, and 10.61 per share, totaling 6,749,594 thousand pesos in 2021[18] - Cash dividends payable increased to $28 billion in 2021 from $21.89 billion in 2020, showing a positive trend in shareholder returns[181] Expenses and Provisions - Total administrative expenses increased from $28.41 billion in 2020 to $32.43 billion in 2021, an increase of approximately 14%[197] - Total provisions decreased from $17.32 billion in 2020 to $5.61 billion in 2021, reflecting a significant reduction in various categories[178] - Provisions for reorganization amounted to $1.34 billion in 2021, down from $3.06 billion in 2020, indicating a strategic alignment with corporate goals[178] Impairment and Asset Management - The impairment loss for real estate assets was reported at 37,694 as of December 31, 2021, with specific impairments of 7,444 for Lavallol and 30,250 for Monte Grande[161] - The impairment loss for non-current assets held for sale was reported at (38,924) for the year ending December 31, 2021, indicating a write-down of property value[168] - The Group assesses non-financial assets for impairment at each reporting date, with recoverable value determined as the higher of value in use and fair value less costs of sale[76]

Banco BBVA Argentina S.A. (NYSE:BBAR) Q1 2022 Results Conference Call May 20, 2022 11:00 AM ET Company Participants Ernesto Gallardo - CFO Ines Lanusse - IRO Belén Fourcade - IR Conference Call Participants Rodrigo Nistor - AR Partners S.A. Carlos Gomez - HSBC Operator Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to BBVA Argentina’s First Quarter 2022 Results Conference Call. We would like to inform you that this event is being recorded and a ...