BBVA(US:BBAR)2025-11-26 16:02Financial Data and Key Metrics Changes - BBVA Argentina's inflation-adjusted net income for Q3 2025 was ARS 38.1 billion, a decrease of 39.7% quarter-over-quarter, resulting in a quarterly ROE and ROA of 4.7% [8][9] - The capital ratio decreased by 170 basis points to 16.7%, primarily due to the temporary impact of sovereign debt valuation, yet remains at ample levels to support growth [7][15] - The liquidity ratio reached 44.3% of deposits, down from 48.7% in the previous quarter [16] Business Line Data and Key Metrics Changes - Total loans to the private sector grew by 6.7% in real terms, with a consolidated market share of 11.39% [6][13] - Deposits increased by 10.2% in real terms, with market share rising to 10.09% [7][14] - Non-performing loan (NPL) ratio for private loans was 3.28%, below the system average, reflecting effective credit risk management [7][13] Market Data and Key Metrics Changes - Deposit rates surged from 30% in July to peaks of 70% in September due to political uncertainty and monetary policy changes [4] - The demand for exchange rate hedging increased, leading to some dollarization of deposits [4] Company Strategy and Development Direction - The company focuses on operational efficiency through strict expense control and active pricing strategies to navigate a volatile interest rate environment [3][5] - BBVA Argentina aims to maintain growth in credit and operational efficiency while managing risks associated with high NPLs [17] Management Comments on Operating Environment and Future Outlook - Management indicated that the high interest rates have negatively impacted intermediation margins and increased provisions for loan losses, but they expect a recovery in 2026 [5][35] - The company anticipates a gradual return of retail loan demand, while commercial loans, particularly in US dollars, are expected to grow significantly [45][55] Other Important Information - The bank's total operating expenses decreased by 3.4% quarter-over-quarter, attributed to proactive efficiency measures [10][11] - The bank continued dividend payments corresponding to the 2024 financial year, reflecting a commitment to shareholder value [17] Q&A Session Summary Question: Guidance on loan and deposit growth - Management confirmed maintaining guidance of 45%-50% real loan growth and 30%-35% deposit growth, with ROE expectations in the high single digits [22][23] Question: Loan growth authenticity amid economic stagnation - Management believes the loan growth is genuine, primarily driven by US dollar loans to companies, while personal loans have seen no growth due to high NPLs [23] Question: Impact of reserve requirements on liquidity and NIM - Management noted recent changes in reserve requirements that will improve liquidity and profitability, expecting NIM to stabilize and potentially increase in Q4 2025 [32][38] Question: Asset quality outlook amid rising NPLs - Management expects NPLs to rise slightly in Q4 but anticipates a decrease in 2026 as the economic environment stabilizes [34][35] Question: Optimal capital level and future capital strategy - Management aims for a capital ratio around 17% for 2025, with a comfortable minimum level slightly below 13% for future growth [46][47] Question: Risks in credit expansion post-election - Management does not foresee issues related to capital or liquidity but emphasizes caution regarding retail NPLs [54] Question: Coverage ratios and cost of risk outlook - Management is comfortable with current coverage ratios of 98%-100% for 2025, projecting improvements in 2026 [62]