By Ken Parks
BUENOS AIRES--Argentine bank BBVA Banco Frances SA (BFR,
FRAN.BA) expects its loan portfolio to grow between 20% and 23%
this year during the slowdown in the economy, according to an
executive.
"During the quarter we saw an important decline in foreign trade
operations that was offset by the increase in the rest of the
portfolio. For the year we expect something like 20%-23% growth,"
Investor Relations Director Cecilia Acuna said during a conference
call Friday to discuss second-quarter results.
Acuna said the bank's deposit base is expected to grow 15% this
year.
Banco Frances's loan portfolio increased almost 49% in 2011, a
year in which the economy grew 8.9%.
The forecast would imply that Banco Frances's loan book will
grow at a similar rate to inflation, which most private sector
economists say is between 20% and 25%. The government's latest data
put annual inflation as measured by the consumer price index at
9.9%.
The economy will likely grow 3.1% this year, according to the
central bank's most recent monthly survey of more than 50
economists, universities and analysts.
While prices for Argentina's grain exports are near historic
levels, a sluggish Brazilian economy has crimped demand for such
domestically manufactured goods as automobiles.
Ms. Acuna said the bank's asset quality is unlikely to suffer
significant deterioration this year.
Asset quality as measured by nonperforming loans as a percentage
of total loans was 0.7% in the quarter, up from 0.5% a year
ago.
"We are below 1% and we expect to remain below that level," she
said.
President Cristina Kirchner has launched a number of stimulus
measures in recent months to keep the domestic economy humming,
including a new rule that will force the banking industry to lend
about 15 billion pesos ($3.3 billion) at below market rates by the
of the year.
Banco Frances will have to make about ARS1.2 billion in loans to
comply with that requirement, she said.
Acuna hinted there might not be enough demand to meet the
government's lending directive.
"The idea is to maintain the risk standards [on those loans],"
she said.
Spain's Banco Bilbao Vizcaya Argentaria SA (BBVA) owns a
controlling interest in Banco Frances, which operates a network of
270 branches and 656 ATMs.
Banco Frances shares were recently trading 0.8% higher at
ARS7.81 in Buenos Aires
-Write to Ken Parks at ken.parks@dowjones.com
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