BBVA(BBAR) - 2021 Q4 - Annual Report

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]