• Net Income: ARS99.2 billion, decreasing 21.6% quarter over quarter.
• ROAE: 16.9% for the quarter.
• ROAA: 2.9% for the quarter.
• Net Interest Income: ARS460.3 billion, falling 39.5% quarter over quarter.
• Interest Income: ARS760.2 billion, falling 30.3% compared to the previous quarter.
• Interest Expenses: ARS299.9 billion, increasing 9.3% quarter over quarter.
• Net Fee Income: ARS71.1 billion, increasing 7.9% over the quarter.
• Operating Expenses: ARS316.6 billion, decreasing 17.6% quarter over quarter.
• Efficiency Ratio: 59.2%, up from 55.3% in the previous quarter.
• Private Sector Loans: ARS5.5 trillion, increasing 26.5% quarter over quarter in real terms.
• Total Deposits: ARS8.5 trillion, increasing 30.9% quarter over quarter.
• Capital Ratio: 22.2%.
• Liquid Assets: ARS5.7 trillion, increasing 26.6% quarter over quarter.

• Warning! GuruFocus has detected 6 Warning Sign with BBAR.

Release Date: November 21, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Banco BBVA Argentina SA (NYSE:BBAR) reported a significant increase in digital customer acquisition, reaching 83% by the end of September 2024, up from 80% a year ago.
• Retail digital sales represented 92.6% of total sales in units and 73.7% in monetary value, indicating strong digital engagement.
• The bank's private sector loans increased by 26.5% quarter over quarter in real terms, with notable growth in consumer loans and credit cards.
• Total deposits increased by 30.9% quarter over quarter, with a significant rise in private non-financial sector deposits in foreign currency.
• BBVA Argentina maintained strong solvency indicators with a capital ratio of 22.2% and capital excess over regulatory requirements at 172.4%.

Negative Points

• Inflation-adjusted net income decreased by 21.6% quarter over quarter, impacting the bank's profitability.
• Net interest income fell by 39.5% quarter over quarter due to lower interest income from REPOs and CPI-linked bonds.
• Operating results declined by 41.3% due to lower operating income, primarily from reduced interest income.
• The efficiency ratio increased to 59.2% from 55.3% in the previous quarter, indicating higher relative expenses.
• The bank's exposure to the public sector, excluding the Central Bank, decreased by 6.4%, reflecting reduced public sector engagement.

Q & A Highlights

Q: Can you provide an overview of the economic environment and its impact on BBVA Argentina's performance in the third quarter of 2024? A: Ines Lanusse, IR Contact Officer, explained that the third quarter of 2024 saw significant fiscal consolidation and relative exchange rate stability, contributing to a moderation of inflation. Despite a sharp contraction in the first half of the year, there are signs of economic recovery. BBVA Research forecasts a 4% decline in GDP for 2024, followed by a 6% expansion in 2025. Inflation is expected to reduce to 125% by year-end, down from 211% in the same period of 2023.

Q: How has BBVA Argentina's digital transformation progressed, and what impact has it had on customer acquisition? A: Ines Lanusse highlighted that by the end of September 2024, 83% of new customer acquisitions were through digital channels, up from 80% a year ago. Retail digital sales reached 92.6% in the third quarter, representing 73.7% of the bank's total sales in monetary value. This digital shift is seen as crucial for sustaining and expanding the bank's competitive position.

Q: What were the key financial results for BBVA Argentina in the third quarter of 2024? A: Ines Lanusse reported that the inflation-adjusted net income was ARS99.2 billion, a decrease of 21.6% quarter over quarter. The quarter's ROAE was 16.9%, and ROAA was 2.9%. The decline in operating results was due to lower interest income and FX results, partially offset by decreased operating expenses.

Q: Can you elaborate on the changes in BBVA Argentina's loan portfolio during the third quarter of 2024? A: Ines Lanusse noted that private sector loans totaled ARS5.5 trillion, increasing 26.5% quarter over quarter in real terms. Growth was driven by a 48% increase in discounted instruments, a 51% rise in consumer loans, and a 14.2% increase in credit cards. Loans in foreign currency also increased significantly, mainly due to export financing.

Q: How did BBVA Argentina's funding and deposit base evolve in the third quarter of 2024? A: Ines Lanusse stated that total deposits reached ARS8.5 trillion, increasing 30.9% quarter over quarter. Private non-financial sector deposits in pesos rose by 12.4%, with significant growth in time deposits and checking accounts. Deposits in foreign currency, expressed in pesos, increased by 84.9%, influenced by a fiscal amnesty.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.