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01/11 03:09
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call presents mixed signals. While there is growth in private sector loans and a positive outlook on market share, challenges like increased loan loss allowances and decreased net fee income persist. The Q&A reveals confidence in market strategy and liquidity, but concerns about NPLs and treasury activities remain. The market cap suggests moderate volatility, leading to a neutral prediction.
GDP growth 5.5% year-over-year in 2025, reversing a 1.7% drop in 2024. The growth was attributed to macroeconomic stabilization, fiscal balance, tight monetary policy, and relaxation of foreign exchange restrictions.
Inflation rate Projected to be close to 28% by the end of 2025, continuing a disinflationary trend since 2024.
Market share of total private loans Increased by 107 bps from 10.54% in June 2024 to 11.61% in June 2025. This growth was driven by accelerated credit segment growth and outperforming the market.
Peso loan portfolio Expanded by 43% year-to-date, surpassing the system's 39% growth and the 6-month accumulated inflation level of 15.1% as of June 2025.
Total private deposits Grew 32% in the first 6 months of 2025, surpassing the system's growth of 17% and inflation levels. Market share increased to 9.64% from 7.5% in the previous year.
Net income ARS 59.6 billion in Q2 2025, decreasing 31.1% quarter-over-quarter. The decline was due to lower operating income, including a drop in net income from write-down of assets and deterioration in loan loss allowances, partially offset by gains in foreign exchange and gold.
Net interest income ARS 591.8 billion in Q2 2025, increasing 3.1% quarter-over-quarter. Growth was driven by higher income from loans and CER/UVA adjustments, despite increased deposit costs.
Net fee income ARS 94.1 billion in Q2 2025, decreasing 11.1% quarter-over-quarter. The decline was mainly due to reduced credit card fees and recalculation of provisions linked to the Millas BBVA loyalty program.
Loan loss allowances Increased 42.3% in Q2 2025, driven by real growth in the loan book and deterioration in nonperforming loans.
Total operating expenses ARS 483.1 billion in Q2 2025, decreasing 7.5% quarter-over-quarter. Personnel benefits increased 10.4% quarter-over-quarter but fell 7.3% year-over-year. Administrative expenses dropped 4.8% quarter-over-quarter due to efficiency measures.
Private sector loans ARS 11.3 trillion in Q2 2025, increasing 15.7% quarter-over-quarter. Growth was driven by increases in overdrafts (34.6%), other loans (26.9%), credit cards (8.4%), and consumer loans (11.6%).
Nonperforming loan ratio 2.28% in June 2025, below the system average of 2.55%. The increase in nonperforming retail loans was offset by a decrease in commercial nonperforming loans.
Total deposits ARS 17 trillion in Q2 2025, increasing 12% quarter-over-quarter. Growth was driven by a 34.8% increase in time deposits, despite a 64.1% drop in investment accounts.
Capital ratio 18.4% in Q2 2025, with excess capital integration over regulatory requirements at ARS 1.4 trillion or 123.9%. The drop was due to increased risk-weighted assets and dividend distribution.
Liquid assets ARS 6.4 trillion in Q2 2025, increasing 14.7% quarter-over-quarter, representing 48.7% of total deposits.
New customer acquisition through digital channels: Reached 84.5% by the end of June 2025, compared to 83.5% a year ago.
Retail digital sales: Measured in units reached 95% in Q2 2025, representing 90% of the bank's total sales in monetary value.
Market share of private loans: Increased from 10.54% in June 2024 to 11.61% in June 2025, positioning BBVA Argentina as third among local privately owned banks.
Market share of private deposits: Increased from 7.5% in 2024 to 9.64% in Q2 2025.
Loan portfolio growth: Peso loan portfolio expanded by 43% year-to-date, outpacing the system's 39% growth and inflation of 15.1%.
Efficiency ratio: Stable at 56.5% in Q2 2025 compared to 56.3% in Q1 2025.
Net interest income: Increased by 3.1% quarter-over-quarter to ARS 591.8 billion.
Loan loss allowances: Increased by 42.3% due to real growth in the loan book and deterioration in nonperforming loans.
Regulatory changes: Lifting of exchange controls and implementation of a wide-band floating exchange rate scheme boosted foreign currency trading and cross-border credit growth.
Dividend distribution: Announced ARS 89.4 billion in dividends for the 2024 fiscal year, adjusted for inflation.
Macroeconomic normalization and disinflationary trend: Despite improvements, there are signs of a slowdown in economic recovery, which could impact GDP growth and overall business performance.
Regulatory changes and exchange rate adjustments: While the lifting of exchange controls has boosted activity, it introduces risks related to exchange rate volatility and potential regulatory shifts.
Loan loss allowances and nonperforming loans: Loan loss allowances increased by 42.3% due to credit expansion and deterioration in nonperforming loans, particularly in the retail segment, which could strain financial performance.
Decline in net income and operating results: Net income decreased by 31.1% quarter-over-quarter, driven by lower operating income and higher provisions, which could challenge profitability.
Fee income reduction: Fee income decreased by 11.1% quarter-over-quarter, mainly due to credit card fees and recalculations, potentially impacting revenue streams.
Personnel and administrative expenses: Personnel benefits increased by 10.4% quarter-over-quarter, and while administrative expenses dropped, cost pressures remain a concern.
Public sector exposure: Exposure to the public sector remains significant at 15.8% of total assets, which could pose risks if government financial stability deteriorates.
Nonperforming retail loans: Deterioration in nonperforming credit card and consumer loans aligns with systemic trends, potentially impacting asset quality.
GDP Growth Projection: GDP growth is projected to be 5.5% year-over-year in 2025, reversing the 1.7% drop in 2024 and surpassing previous highs.
Inflation Rate Outlook: Disinflationary convergence is expected to strengthen, with a year-over-year inflation rate close to 28% by the end of 2025.
Impact of Regulatory Changes: The lifting of exchange controls and implementation of a wide-band floating exchange rate scheme are expected to boost cross-border credit growth and investments in the country.
Loan Growth: Loans to the private sector in pesos increased 13.9% in Q2 2025, with significant growth in overdrafts (34.6%), other loans (26.9%), credit cards (8.4%), and consumer loans (11.6%). Loans to the private sector in foreign currency increased 23.6% quarter-over-quarter, driven by export financing and refinancing.
Deposit Growth: Total deposits reached ARS 17 trillion in Q2 2025, increasing 12% quarter-over-quarter. Private nonfinancial sector deposits in pesos increased 11%, while foreign currency deposits expressed in pesos increased 14.1% quarter-over-quarter.
Asset Quality: Nonperforming loan ratio on private loans reached 2.28% in June 2025, below the system average of 2.55%. Commercial nonperforming loans decreased from 0.14% to 0.10%.
Capital and Solvency: Capital ratio reached 18.4%, with excess capital integration over the regulatory requirement at ARS 1.4 trillion or 123.9%.
Digital Transformation: New customer acquisition through digital channels reached 84.5% by June 2025, with retail digital sales representing 95% of total sales in units and 90% in monetary value.
Dividend Distribution: The bank announced the distribution of cash or income dividends corresponding to the 2024 fiscal year for the sum of ARS 89.4 billion, expressed in homogeneous currency as of December 31, 2024. This amount will be adjusted by the consumer price index on the date of each of the 10 payments to be made, with the first 2 payments already successfully completed.
The earnings call reveals mixed signals: strong financial metrics with record high revenue and positive guidance on loan growth, but concerns over rising NPLs and decreased liquidity ratio. The Q&A suggests cautious optimism, with analysts noting genuine loan growth and expected improvement in ROE. However, the lack of clarity on retail NPLs and the temporary decline in capital ratio present risks. Given the market cap of $1.94 billion, the stock is likely to experience neutral movement, with potential for slight positive or negative fluctuations.
The earnings call presents mixed signals. While there is growth in private sector loans and a positive outlook on market share, challenges like increased loan loss allowances and decreased net fee income persist. The Q&A reveals confidence in market strategy and liquidity, but concerns about NPLs and treasury activities remain. The market cap suggests moderate volatility, leading to a neutral prediction.
The earnings call presents a mixed picture: strong financial metrics with increased net income and efficiency, but conservative guidance due to economic uncertainties and regulatory changes. The market might react cautiously due to concerns about inflation risks and competitive pressures. The lack of a share buyback program and unclear management responses in the Q&A further contribute to a neutral sentiment. Given the market cap, the stock is unlikely to experience significant volatility, resulting in a neutral prediction for the stock price movement over the next two weeks.
Despite strong financial performance with increasing net income and reduced operating expenses, the downward revision in loan and deposit growth guidance, coupled with concerns about liquidity due to restrictive monetary policy, tempers optimism. Additionally, the uncertainty in management responses regarding future growth rates and funding timelines adds caution. The market cap indicates a moderate reaction, leading to a neutral stock price movement prediction.
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