BBVA(US:BBAR)2022-04-11 16:00Financial Position - As of December 31, 2021, the total foreign exchange-denominated asset position was Ps.179,543 million, while the total foreign exchange-denominated liability position was Ps.181,338 million, resulting in a net liability currency position of Ps.1,795 million[712]. - Consolidated excess capital as of December 31, 2021, was Ps.84,868.9 million, compared to Ps.79,950.1 million as of December 31, 2020[713]. - Total capital under Argentine risk-based capital guidelines amounted to Ps.142,146.8 million as of December 31, 2021, with a ratio of average shareholders' equity to average total assets at 16.17%[714]. - Shareholders' equity as of December 31, 2021, was Ps.163,014.6 million, down from Ps.172,893.3 million in 2020[714]. - The average shareholders' equity as a percentage of average total assets was 16.17% in 2021, compared to 17.40% in 2020[718]. - The total liabilities to total shareholders' equity ratio was 5.32x as of December 31, 2021, compared to 5.05x in 2020[718]. - Cash and due from banks as a percentage of total deposits was 30.82% in 2021, down from 31.79% in 2020[718]. - Liquid assets as a percentage of total deposits was 32.31% in 2021, compared to 34.43% in 2020[718]. Economic Environment - The Argentine economy shrank by 9.9% in 2020 due to lockdown measures from the Covid-19 pandemic, with inflation recorded at 36.1%[737]. - The fiscal deficit for the domestic public sector was approximately Ps.1,750 billion, accounting for about 6.5% of GDP in 2020[737]. - Inflation reached 51% in 2021, with the Central Bank's currency controls and fiscal deficit continuing to pose challenges for economic recovery[743]. - The Argentine financial system is expected to stagnate, with private loans and total deposits to GDP ratios projected at approximately 8.7% and 19.6% respectively for 2022[741]. - The Central Bank's monetary policy has resulted in negative real interest rates, impacting both loans and deposits[745]. - Currency controls have created a significant gap between official and financial exchange rates, around 100% by the end of 2021[746]. Credit Ratings - BBVA Argentina's local long-term institutional rating was affirmed at "raBBB-" with a negative outlook as of April 2021[724]. - The bank's credit ratings are influenced by Argentine sovereign credit ratings, which limits access to international financial markets[720]. - BBVA Argentina's national credit ratings were affirmed at "AAA(arg)" and "A1+(arg)" for the long and short term, maintaining a stable outlook as of September 2021, attributed to comfortable liquidity and capitalization levels[726]. Governance and Management - The board of directors consists of a minimum of three and a maximum of nine directors, with members elected for a term of three years[751]. - María Isabel Goiri Lartitegui serves as the chairwoman, with her term ending in December 2023[752]. - Jorge Delfín Luna and Alfredo Castillo Triguero are vice chairmen, with their terms ending in December 2022 and 2023 respectively[752]. - The current CEO, Martín Ezequiel Zarich, has been with the bank since 1987 and was appointed in 2015[758]. - Ernesto Ramón Gallardo Jimenez, appointed in 2017, serves as the Director of Finance[758]. - Juan Christian Kindt, Director of Business Development since 2019, has extensive experience in various managerial roles within the bank[758]. - Leandro Alvarez, appointed in 2020, is the Director of Engineering & Data, focusing on technological advancements[758]. - The board meets at least once per month to ensure effective governance and oversight[751]. - The company has a diverse management team with significant experience in finance and banking sectors[758]. - The board includes independent directors as per the independence criteria set forth by regulatory authorities[753]. Compensation and Committees - The total compensation paid to all directors and officers for the fiscal year ended December 31, 2021, was Ps.778,048 million, which included Ps.251,864 million accrued during 2021 to be paid between 2022 and 2026[762]. - The Nomination and Remunerations Committee, established on March 30, 2009, consists of five members, including Gustavo Fernández and Eduardo González Correas, focusing on compensation policies and executive hiring[761]. - The Supervisory Committee is responsible for monitoring compliance with corporate law and internal regulations, with members having unlimited access to the bank's records[763][764]. - The aggregate amount of director compensation must be approved at the annual ordinary shareholders' meeting, as per Argentine legislation[762]. - The bank's corporate governance system emphasizes the distribution of functions between the Board and various committees, ensuring oversight and compliance[763]. - The Supervisory Committee members are required to maintain professional independence and disclose any relevant professional relationships with the bank[764]. - The bank's directors have extensive backgrounds in various financial and legal sectors, contributing to its governance and operational strategies[768][769]. - The compensation structure includes salaries and bonuses, reflecting the bank's commitment to aligning executive incentives with performance[762]. - The bank's governance practices are designed to enhance transparency and accountability in its operations and decision-making processes[763]. Audit and Risk Management - BBVA Argentina's Audit Committee consists of three independent members, ensuring compliance with regulatory standards[770]. - The Audit Committee meets monthly to monitor internal controls, financial statements, and risk management[771]. - The Audit Committee is responsible for evaluating internal control weaknesses identified by auditors and ensuring the integrity of documentation provided to the market[772]. - The Management Committee establishes business strategies and monitors the annual budget, meeting monthly[782]. - The Compliance Committee promotes a culture of ethics and integrity, meeting monthly to review compliance with the Code of Conduct[788]. - The Risk Management Committee includes various risk management roles and meets regularly to address risk-related issues[789]. - The Asset Laundering and Terrorism Financing Prevention Committee meets quarterly to monitor and define operational policies related to asset laundering prevention[786]. - The Nomination and Remunerations Committee advises on the nomination and compensation of directors and executive officers[780]. - The Audit Committee is tasked with reviewing external auditors' plans and assessing their performance[775]. - The Disclosure Committee ensures timely and accurate information disclosure to shareholders and regulatory entities, meeting quarterly[784]. Employee Relations - As of December 31, 2021, the total number of full-time employees was 5,863, a decrease of 2.6% from 6,019 in 2020 and 7.3% from 6,321 in 2019[798]. - The main office employed 3,863 individuals, while branches accounted for 2,000 employees, indicating a significant reduction in branch staff compared to previous years[798]. - The company has maintained satisfactory relations with its employees, with no conflicts with the national bank union for over 20 years[798]. - The bank has a personnel Training and Development Department that provides training across various areas, including Operations, Technology, and Business[799]. - The bank has not employed a significant number of temporary employees, focusing instead on full-time staff[799]. Risk Management Practices - The Risks Management Committee is tasked with approving transactions that exceed certain risk thresholds and monitoring the evolution of risk metrics[790]. - The bank's operational risk model is implemented to enhance the quality and reliability of internal controls across BBVA Argentina and its affiliates[791].