Table of Contents

 

 

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of May, 2015

Commission File Number: 001-12568

BBVA FRENCH BANK S.A.

(Translation of registrant’s name into English)

Reconquista 199, 1006

Buenos Aires, Argentina

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F       X                 Form 40-F              

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

        Yes                                          No                 X    

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

        Yes                                         No                 X    

Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

        Yes                                          No                 X    

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

 

 

 


Table of Contents

BBVA French Bank S.A.

TABLE OF CONTENTS

 

    Item    

   

1.

  Financial Statements as of March 31, 2015 together with Independent Auditors’ Report


Table of Contents

 

 

 

LOGO

FINANCIAL STATEMENTS AS OF

MARCH 31, 2015 TOGETHER WITH

INDEPENDENT AUDITORS’ REVIEW

REPORT.


Table of Contents

LOGO

- 1 -

 

BALANCE SHEETS AS OF

MARCH 31, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20)

-Stated in thousands of pesos-

 

ASSETS:

      03-31-2015      

 

      12-31-2014      

 

A. CASH AND DUE FROM BANKS:

Cash

  2,807,429      2,857,658   

Due from banks and correspondents

  10,042,886      9,668,573   
     

 

 

       

 

 

 

Argentine Central Bank (BCRA)

  9,934,820      9,325,330   

Other local

  1,837      1,094   

Foreign

  106,229      342,149   
     

 

 

       

 

 

 
  12,850,315      12,526,231   
     

 

 

       

 

 

 

B. GOVERNMENT AND PRIVATE SECURITIES:

Holdings booked at fair value (Exhibit A)

  2,623,186      2,941,865   

Holdings booked at amortized cost (Exhibit A)

  98,391      164   

Instruments issued by the BCRA (Exhibit A)

  11,985,646      8,630,056   

Investments in listed private securities (Exhibit A)

  169      178   

Less: Allowances (Exhibit J)

  201      201   
     

 

 

       

 

 

 
  14,707,191      11,572,062   
     

 

 

       

 

 

 

C. LOANS:

To government sector (Exhibits B, C and D)

  57,208      54,459   

To financial sector (Exhibits B, C and D)

  2,042,625      2,216,310   
     

 

 

       

 

 

 

Interfinancial – (Call granted)

  5,000      30,000   

Other financing to local financial institutions

  1,533,504      1,691,857   

Interest and listed-price differences accrued and pending collection

  504,121      494,453   

To non financial private sector and residents abroad (Exhibits B, C and D)

  40,916,789      39,045,753   
     

 

 

       

 

 

 

Overdraft

  7,180,739      6,861,786   

Discounted instruments

  5,882,870      6,035,048   

Real estate mortgage

  1,512,906      1,466,346   

Collateral Loans

  1,729,071      1,651,228   

Consumer

  6,181,596      6,091,935   

Credit cards

  12,399,432      11,465,609   

Other

  5,468,974      4,953,604   

Interest and listed-price differences accrued and pending collection

  696,336      654,109   

Less: Interest documented together with main obligation

  135,135      133,912   

Less: Allowances (Exhibit J)

  916,797      905,336   
     

 

 

       

 

 

 
  42,099,825      40,411,186   
     

 

 

       

 

 

 

D. OTHER RECEIVABLES FROM FINANCIAL TRANSACTIONS:

Argentine Central Bank (BCRA)

  456,102      384,930   

Amounts receivable for spot and forward sales to be settled

  2,641,928      1,405,562   

Instruments to be received for spot and forward purchases to be settled

  651,129      312,684   

Unlisted corporate bonds (Exhibits B, C and D)

  101,707      48,653   

Non-deliverable forward transactions balances to be settled

  26,831      140,326   

Other receivables not covered by debtor classification regulations

  31,175      14,873   

Other receivables covered by debtor classification regulations (Exhibits B, C and D)

  252,711      257,778   

Less: Allowances (Exhibit J)

  2,521      2,139   
     

 

 

       

 

 

 
  4,159,062      2,562,667   
     

 

 

       

 

 

 

E. RECEIVABLES FROM FINANCIAL LEASES:

Receivables from financial leases (Exhibits B, C and D)

  2,050,496      1,995,716   

Interest accrued pending collection (Exhibits B, C and D)

  29,746      25,961   

Less: Allowances (Exhibit J)

  31,520      28,808   
     

 

 

       

 

 

 
  2,048,722      1,992,869   
     

 

 

       

 

 

 

F. INVESTMENTS IN OTHER COMPANIES:

In financial institutions (Exhibit E)

  584,842      527,403   

Other (Note 5.a.) (Exhibit E)

  191,891      164,615   
     

 

 

       

 

 

 
  776,733      692,018   
     

 

 

       

 

 

 

G. OTHER RECEIVABLES:

Other (Note 5.b.)

  1,517,480      1,595,869   

Other interest accrued and pending collection

  677      744   

Less: Allowances (Exhibit J)

  287,999      291,237   
     

 

 

       

 

 

 
  1,230,158      1,305,376   
     

 

 

       

 

 

 

H. PREMISES AND EQUIPMENT (Exhibit F):

  931,031      924,237   
     

 

 

       

 

 

 

I. OTHER ASSETS (Exhibit F):

  1,230,642      1,144,815   
     

 

 

       

 

 

 

J. INTANGIBLE ASSETS (Exhibit G):

Organization and development expenses

  157,182      144,357   
     

 

 

       

 

 

 
  157,182      144,357   
     

 

 

       

 

 

 

K. SUSPENSE ITEMS:

  8,405      8,542   
     

 

 

       

 

 

 

TOTAL ASSETS:

  80,199,266      73,284,360   
     

 

 

       

 

 

 


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LOGO

- 2 -

 

(Contd.)

BALANCE SHEETS AS OF MARCH 31, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20)

-Stated in thousands of pesos-

 

LIABILITIES:          03-31-2015                  12-31-2014        

L. DEPOSITS (Exhibits H and I):

           

Government sector

        1,831,368            1,017,837   

Financial sector

        49,545            77,482   

Non financial private sector and residents abroad

        53,464,856            50,340,332   
     

 

 

       

 

 

 

Checking accounts

        14,452,786            14,622,588   

Savings deposits

        15,107,041            15,005,261   

Time deposits

        22,067,738            19,279,641   

Investments accounts

        594            483   

Other

        1,517,837            1,129,571   

Interest and listed-price differences accrued payable

        318,860            302,788   
     

 

 

       

 

 

 
        55,345,769            51,435,651   
     

 

 

       

 

 

 

M. OTHER LIABILITIES FROM FINANCIAL TRANSACTIONS:

           

Argentine Central Bank (Exhibit I)

        67,144            73,110   
     

 

 

       

 

 

 

Other

        67,144            73,110   

Banks and International Institutions (Exhibit I)

        349,594            406,031   

Unsubordinated corporate bonds (Exhibit I)

        1,691,964            1,662,789   

Amounts payable for spot and forward purchases to be settled

        651,152            312,751   

Instruments to be delivered for spot and forward sales to be settled (Exhibit O)

        2,684,369            1,457,098   

Financing received from Argentine financial institutions (Exhibit I)

        102,092            --,--     
     

 

 

       

 

 

 

Other financing from local financial institutions

        102,000            --,--     

Interest accrued payable

        92            --,--     

Non-deliverable forward transactions balances to be settled

        --,--              54   

Other (Note 5.c.) (Exhibit I)

        4,008,149            4,091,393   

Interest and listed-price differences accrued payable (Exhibit I)

        65,374            66,653   
     

 

 

       

 

 

 
        9,619,838            8,069,879   
     

 

 

       

 

 

 

N. OTHER LIABILITIES:

           

Other (Note 5.d.)

        3,056,672            2,645,736   
     

 

 

       

 

 

 
        3,056,672            2,645,736   
     

 

 

       

 

 

 

O. ALLOWANCES (Exhibit J):

        887,418            771,073   
     

 

 

       

 

 

 

P. SUSPENSE ITEMS:

        26,747            30,145   
     

 

 

       

 

 

 

TOTAL LIABILITIES:

        68,936,444            62,952,484   
     

 

 

       

 

 

 

STOCKHOLDERS’ EQUITY: (as per the related statements of changes in stockholders’ equity)

        11,262,822            10,331,876   
     

 

 

       

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY:

        80,199,266            73,284,360   
     

 

 

       

 

 

 


Table of Contents

LOGO

- 3 -

 

MEMORANDUM ACCOUNTS

(Translation of financial statements originally issued in Spanish - See note 20)

-Stated in thousands of pesos-

 

   

  03-31-2015  

  

  12-31-2014  

DEBIT ACCOUNTS

        

Contingent

        

–       Guaranties received

    12,347,981      11,585,575

–       Contra contingent debit accounts

    2,019,971      1,750,341
   

 

    

 

    14,367,952      13,335,916
   

 

    

 

Control

        

–       Receivables classified as irrecoverable

    618,531      517,974

–       Other (Note 5.e.)

    140,495,685      120,090,317

–       Contra control debit accounts

    323,527      1,217,512
   

 

    

 

    141,437,743      121,825,803
   

 

    

 

Derivatives (Exhibit O)

        

–       “Notional” amount of non-deliverable forward transactions

    1,646,259      2,984,388

–       Interest rate swap

    934,452      1,097,965

–       Contra derivatives debit accounts

    1,966,081      2,915,793
   

 

    

 

    4,546,792      6,998,146
   

 

    

 

For trustee activities

        

–       Funds in trust

    6,605      6,605
   

 

    

 

    6,605      6,605
   

 

    

 

TOTAL

    160,359,092      142,166,470
   

 

    

 

CREDIT ACCOUNTS

        

Contingent

        

–       Credit lines granted (unused portion) covered by debtor classification regulations (Exhibits B, C and D)

    409,432      640,198

–       Guaranties provided to the BCRA

    485,013      223,973

–       Other guaranties given covered by debtor classification regulations (Exhibits B, C and D)

    482,191      384,982

–       Other guaranties given non covered by debtor classification regulations

    231,574      210,453

–       Other covered by debtor classification regulations (Exhibits B, C and D)

    411,761      290,735

–       Contra contingent credit accounts

    12,347,981      11,585,575
   

 

    

 

    14,367,952      13,335,916
   

 

    

 

Control

        

–       Items to be credited

    54,772      965,725

–       Other

    268,755      251,787

–       Contra control credit accounts

    141,114,216      120,608,291
   

 

    

 

    141,437,743      121,825,803
   

 

    

 

Derivatives (Exhibit O)

        

–       “Notional” amount of non-deliverable forward transactions

    1,966,081      2,915,793

–       Contra derivatives credit accounts

    2,580,711      4,082,353
   

 

    

 

    4,546,792      6,998,146
   

 

    

 

For trustee activities

        

–       Contra credit accounts for trustee activities

    6,605      6,605
   

 

    

 

    6,605      6,605
   

 

    

 

TOTAL

    160,359,092      142,166,470
   

 

    

 

The accompanying notes 1 through 20 and exhibits A through L, N and O and the consolidated financial statements with its notes and exhibits are an integral part of these statements.


Table of Contents

LOGO

- 4 -

 

STATEMENTS OF INCOME FOR THE THREE MONTH PERIODS

ENDED MARCH 31, 2015 AND 2014

(Translation of financial statements originally issued in Spanish – See note 20)

- Stated in thousands of pesos -

 

   

      03-31-2015    

  

      03-31-2014    

A. FINANCIAL INCOME

        

Interest on loans to the financial sector

    142,222      163,476

Interest on overdraft

    488,603      458,904

Interest on discounted instruments

    306,681      299,693

Interest on real estate mortgage

    68,649      53,426

Interest on collateral loans

    100,288      70,957

Interest on credit card loans

    637,018      391,996

Interest on other loans

    731,996      637,791

Interest on other receivables from financial transactions

    50      3,753

Interest on financial leases

    89,344      73,254

Income from secured loans - Decree 1387/01

    3,544      4,145

Net income from government and private securities

    910,565      405,815

Indexation by benchmark stabilization coefficient (CER)

    45,240      95,549

Gold and foreign currency exchange difference

    120,925      582,027

Other

    53,101      479,650
   

 

    

 

    3,698,226      3,720,436
   

 

    

 

B. FINANCIAL EXPENSE

        

Interest on savings deposits

    4,620      4,450

Interest on time deposits

    1,052,007      1,000,998

Interest on interfinancial financing (call borrowed)

    4,579      1,066

Interest on other financing from financial institutions

    2      --,--  

Interest on other liabilities from financial transactions

    107,597      61,616

Other interest

    1,693      2,199

Indexation by CER

    12      69

Contribution to the deposit guarantee fund

    88,205      18,837

Other

    194,271      229,964
   

 

    

 

    1,452,986      1,319,199
   

 

    

 

GROSS INTERMEDIATION MARGIN – GAIN

    2,245,240      2,401,237
   

 

    

 

C. ALLOWANCES FOR LOAN LOSSES

    140,187      113,263
   

 

    

 

D. SERVICE CHARGE INCOME

        

Related to lending transactions

    488,589      336,397

Related to liability transactions

    436,740      341,444

Other commissions

    40,945      33,362

Other (Note 5.f.)

    275,549      207,982
   

 

    

 

    1,241,823      919,185
   

 

    

 

E. SERVICE CHARGE EXPENSE

        

Commissions

    260,580      187,529

Other (Note 5.g.)

    125,114      92,205
   

 

    

 

    385,694      279,734
   

 

    

 


Table of Contents

LOGO

- 5 -

 

(Contd.)

STATEMENTS OF INCOME FOR THE THREE MONTH PERIODS

ENDED MARCH 31, 2015 AND 2014

(Translation of financial statements originally issued in Spanish - See note 20)

- Stated in thousands of pesos -

 

 

   

      03-31-2015    

  

          03-31-2014    

F. ADMINISTRATIVE EXPENSES

        

Payroll expenses

    899,112      675,910

Fees to Bank Directors and Supervisory Committee

    1,613      1,406

Other professional fees

    15,655      14,099

Advertising and publicity

    42,255      49,232

Taxes

    141,951      105,969

Fixed assets depreciation

    44,542      30,375

Organizational expenses amortization

    14,580      13,214

Other operating expenses

    210,566      174,195

Other

    198,859      137,418
   

 

    

 

    1,569,133      1,201,818
   

 

    

 

NET GAIN FROM FINANCIAL TRANSACTIONS

    1,392,049      1,725,607
   

 

    

 

G. OTHER INCOME

        

Income from long-term investments

    84,709      82,225

Punitive interests

    6,379      4,380

Loans recovered and reversals of allowances

    43,393      150,235

Other (Note 5.h.)

    35,882      53,481
   

 

    

 

    170,363      290,321
   

 

    

 

H. OTHER EXPENSE

        

Punitive interests and charges paid to BCRA

    4      6

Charge for uncollectibility of other receivables and other allowances

    91,931      31,589

Amortization of difference arising from judicial resolutions

Depreciation and losses from miscellaneous assets

   

1,708

87

    

3,178

79

Other (Note 5.i)

    85,736      128,158
   

 

    

 

    179,466      163,010
   

 

    

 

NET GAIN BEFORE INCOME TAX

    1,382,946      1,852,918
   

 

    

 

I. INCOME TAX (Note 4.1)

    452,000      490,800
   

 

    

 

NET INCOME FOR THE PERIOD

    930,946      1,362,118
   

 

    

 

The accompanying notes 1 through 20 and exhibits A through L, N and O and the consolidated financial statements with its notes and exhibits are an integral part of these statements.


Table of Contents

LOGO

- 6 -

 

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2015 AND 2014

(Translation of financial statements originally issued in Spanish – See note 20)

- Stated in thousands of pesos -

 

2015

 

    2014

 

 
                   

 

                                                   
                       

Non capitalized
contributions

          

Retained earnings

                         
    Movements  

    Capital    
Stock

 

Issuance

premiums

  Adjustments to
stockholders’
equity (1)
  

    Legal    

        Other           Unappropriated
earnings
      Total     Total  

 

 

 

 

 

 

 

  

 

   

 

 

   

 

 

 
 

1.

  Balance at beginning of fiscal year     536,878     182,511     312,979       1,900,721       4,194,291        3,204,496       10,331,876        7,156,180   
 

2.

  Net income for the period     --,--       --,--       --,--         --,--         --,--          930,946       930,946        1,362,118   
       

 

   

 

   

 

     

 

   

 

 

     

 

   

 

 

   

 

 

 
 

3.

 

Balance at the end of the fiscal year

    536,878     182,511     312,979       1,900,721       4,194,291        4,135,442       11,262,822        8,518,298   
       

 

   

 

   

 

     

 

   

 

 

     

 

   

 

 

   

 

 

 

 

  (1)

Adjustments to stockholders’ equity refer to Adjustment to Capital Stock.

The accompanying notes 1 through 20 and exhibits A through L, N and O and the consolidated financial statements with its notes and exhibits are an integral part of these statements.


Table of Contents

LOGO

- 7 -

 

STATEMENTS OF CASH AND CASH EQUIVALENTS FLOW FOR THE

THREE MONTH PERIODS ENDED MARCH 31, 2015 AND 2014

(Translation of financial statements originally issued in Spanish - See note 20)

-Stated in thousands of pesos-

 

   

    03-31-2015        

         

    03-31-2014        

 

CHANGES IN CASH AND CASH EQUIVALENTS

         

Cash and cash equivalents at the beginning of the fiscal year

      13,051,491        (1       13,604,191  (1) 

Cash and cash equivalents at the end of the period

      13,344,900        (1       11,022,268  (1) 
   

 

 

       

 

 

 

Net increase / (decrease) in cash and cash equivalents

      293,409            (2,581,923
   

 

 

       

 

 

 

REASONS FOR CHANGES IN CASH AND CASH EQUIVALENTS

         

Operating activities

         

Net collections/ (payments) from:

         

-Government and private securities

      (2,224,564         (5,128,886

- Loans

      937,225            2,701,350   
   

 

 

       

 

 

 

to financial sector

      161,793            105,001   

to non-financial public sector

      (17         (16

to non-financial private sector and residents abroad

      775,449            2,596,365   

- Other receivables from financial transactions

      (24,207         153,916   

- Receivables from financial leases

      (55,853         (8,221

- Deposits

      2,563,498            (90,056
   

 

 

       

 

 

 

to financial sector

      (27,937         (18,251

to non-financial public sector

      816,434            (210,577

to non-financial private sector and residents abroad

      1,775,001            138,772   

- Other liabilities from financial transactions

      12,474            252,836   
   

 

 

       

 

 

 

Financing from financial or interfinancial sector (call borrowed)

      102,000            16,000   

Others (except liabilities included in Financing Activities)

      (89,526         236,836   

Collections related to service charge income

      1,244,496            912,312   

Payments related to service charge expense

      (388,605         (278,894

Administrative expenses paid

      (1,505,693         (1,163,286

Organizational and development expenses paid

      (11,519         (4,126

Net collections from punitive interest

      6,375            4,374   

Differences from judicial resolutions paid

      (1,708         (3,178

Collections of dividends from other companies

      67            48   

Other collections related to other income and expenses

      (23,245         (44,388
   

 

 

       

 

 

 

Net cash flows provided by / (used in) operating activities

      528,741            (2,696,199
   

 

 

       

 

 

 

Investment activities

         

Net payments from premises and equipment

      (31,903         (3,100

Net collections from other assets

      (120,519         (148,518

Other collections / (payments) from investment activities

      48,950            (175,243
   

 

 

       

 

 

 

Net cash flows used in investment activities

      (103,472         (326,861
   

 

 

       

 

 

 

Financing activities

         

Net collections / (payments) from:

         

-Unsubordinated corporate bonds

      29,175            403,996   

- Argentine Central Bank

      (5,922         (4,687
   

 

 

       

 

 

 

Other

      (5,922         (4,687

- Banks and international agencies

      (56,437         8,380   

Other collections / (payments) related to financing activities

      (98,676         33,448   
   

 

 

       

 

 

 

Net cash flows (used in) / provided by financing activities

      (131,860         441,137   
   

 

 

       

 

 

 

Net increase / (decrease) in cash and cash equivalents

      293,409            (2,581,923
   

 

 

       

 

 

 

 

(1)

See note 16 “Statements of cash and cash equivalents flow”.

The accompanying notes 1 through 20 and exhibits A through L, N and O and the consolidated financial statements with its notes and exhibits are an integral part of these statements.


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NOTES TO THE FINANCIAL STATEMENTS AS OF MARCH 31, 2015, PRESENTED IN

COMPARATIVE FORM WITH THE BALANCE SHEET AS OF DECEMBER 31, 2014, AND THE

STATEMENTS OF INCOME, CHANGES IN STOCKHOLDERS’ EQUITY AND CASH AND CASH

EQUIVALENTS FLOW AS OF MARCH 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20)

(Stated in thousands of pesos)

 

  1.

CORPORATE SITUATION AND BANK’S ACTIVITIES

1.1  Corporate situation

BBVA Banco Francés S.A. (hereinafter indistinctly referred to as either “BBVA Francés” or the “Bank”) has its headquarter in Buenos Aires, Argentina, and operates a 251-branch network.

As from December, 1996, BBVA Francés is part of Banco Bilbao Vizcaya Argentaria S.A.’s (BBVA) global strategy, which controls the Bank, direct and indirectly, with 75.93% of the corporate stock as of March 31, 2015.

Part of the Bank’s corporate stock is publicly traded and has been registered with the Buenos Aires Stock Exchange, New York Stock Exchange and Madrid Stock Exchange.

 1.2  Capital stock

Changes in the Bank’s capital stock during the last five fiscal years are as follows:

 

Date of

       

 Stockholders’ 

Meeting

deciding on

the issuance

 Registration with the 
Public Registry of
Commerce (RPC)

Form of

  placement  

        Amount        

 

        Total          

 

  Capital Stock as of December 31, 2010:

  536,361      

03-30-2011

09-14-2011 (1) 517       536,878              

03-26-2012

03-27-2014 (2) 50,410      

03-26-2012

03-27-2014 (2) (50,410)       536,878     (3) 

 

  (1)

Due to the merger of Consolidar Comercializadora S.A. into BBVA Francés.

 

  (2)

Due to the merger of Inversora Otar S.A. into BBVA Francés.

 

  (3)

The amount of Capital Stock is fully paid in and authorized for public offering by National Securities Commission (CNV).

1.3 Registration with CNV as Settlement and Clearing Agent - Comprehensive

The new Capital Markets Law Nr. 26,831, enacted on December 28, 2012 and then regulated by CNV’s General Resolution Nr. 622/13 on September 5, 2013 sets forth, in its Section 47 that agents are under a duty to register with the CNV for interacting with the market in any of the modalities established in CNV’s General Resolution Nr. 622/13. The filing to register the Bank as a Settlement and Clearing Agent – Comprehensive started on December 17, 2013 and was completed on September 19, 2014 when the Bank was registered under Number 42.


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1.4 Responsibility of stockholders

BBVA Francés is a corporation established under the laws of the Argentine Republic, and the responsibility of its stockholders is limited to the value of the paid - in shares, in accordance with Law Nr. 19,550. As a result, in compliance with Law Nr. 25,738, it is hereby informed that neither the foreign capital majority stockholders nor the local or foreign stockholders will respond, in excess of the mentioned paid-in stockholding, for the liabilities arising out of the transactions performed by the financial institution.

 

  2.

SIGNIFICANT ACCOUNTING POLICIES

2.1 Restatement of the financial statements in equivalent purchasing power

The financial statements have been taken from the Bank’s books of account in conformity with the standards of the BCRA.

By Communication “A” 3921 of the BCRA and General Resolution Nr. 441/03 of the CNV, in compliance with Decree 664/03 of the Federal Executive, application of the restatement method on financial statements in equivalent purchasing power has been suspended as from March 1, 2003.

Argentina’s professional accounting standards require applying Technical Pronouncement Nr. 6 of the Argentine Federation of Professional Councils in Economic Sciences (F.A.C.P.C.E.) (as amended by Technical Resolution Nr. 19) which sets forth that financial statements are to be restated in constant currency when the country’s economic environment exhibits certain characteristics. A prerequisite for the application of this pronouncement is that inflation as accumulated throughout a 3-year period, measured by the so-called Domestic Wholesale Price Index (IPIM) published by Argentina’s Official Statistics Bureau –the National Statistics and Censuses Institute- attains or exceeds 100%. Inflation accumulated in the period December 31, 2011 to December 31, 2014, measured by the above-mentioned index was 67%. Therefore, at the end of this fiscal year, the prerequisite for restatement into constant currency of the information contained in the financial statements is not satisfied. The above notwithstanding, it should be noted that if this prerequisite were satisfied, the restatement will be mandatory. At the date of issuance of these financial statements, the considerations discussed above still hold valid.

2.2 Comparative information

In accordance with BCRA Communication “A” 4667, the Balance Sheet and the Exhibits that so specify include the comparative information as of December 31, 2014, while the Statements of Income, Changes in Stockholders’ Equity and Cash and cash equivalents flow show comparative information as of March 31, 2014.

2.3 Valuation methods

The main valuation methods used in the preparation of the financial statements have been as follows:

 

  a)

Foreign currency assets and liabilities:

As of March 31, 2015 and the end of the previous fiscal year, such amounts were translated into pesos at the benchmark exchange rate of the BCRA as of the closing date of transactions on the last business day of the period or fiscal year. The exchange differences were charged to income (loss) for the period or fiscal year.

 

  b)

Government and private securities:

 

   

Holdings booked at fair value and instruments issued by the BCRA at fair value: they were valued based on current listed prices or the prevailing present value for each security as of March 31, 2015 and the end of the previous fiscal year. Differences in listed prices were credited/charged to income for the period or fiscal year.

 

   

Holdings booked at amortized cost and instruments issued by the BCRA at amortized cost: as of March 31, 2015 and the end of the previous fiscal year, these were valued using the amount of initial recognition, rose on the basis of the interest accrued as per the internal rate of return.


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Investments in listed private securities, equity and debt instruments: they were valued based on current listed prices as of March 31, 2015 and the end of the previous fiscal year. Differences in listed prices were charged to income for the period or fiscal year.

 

  c)

Loans to Government Sector:

Federal Government secured loans – Decree Nr. 1387/2001:

As of March 31, 2015 and the end of the previous fiscal year, the secured loans were valued at the highest amount resulting from a comparison between the present value as estimated by BCRA and the book value in accordance with the provisions under BCRA’s Communication “A” 5180. In addition, the amount required to take their book values to their fair realizable values is recorded in a balancing account.

 

  d)

Interest accrual:

Interest has been accrued according to a compound interest formula in the periods in which it was generated, except interest on transactions in foreign currency, those whose maturity does not exceed 92 days, and adjustable assets and liabilities which were recognized on a linear basis.

 

  e)

Benchmark stabilization coefficient (CER):

As of March 31, 2015 and the end of the previous fiscal year, receivables and payables have been adjusted to the CER as follows:

 

  -  

Federal government secured loans have been adjusted under Resolution Nr. 50/2002 of the Ministry of Economy, which resolved that the CER business 10 (ten) days prior to the maturity date of the related service will be considered for yield and repayments of the loans.

 

  -  

Federal Government Secured Bonds due in 2020: have been adjusted under Resolution Nr. 539/2002 of the Ministry of Economy, which resolved that the CER business 5 (five) days prior to the maturity date of the related service will be considered for yield and repayment of the bonds.

 

  -  

Deposits and other assets and liabilities: have been adjusted considering the CER prevailing as of March 31, 2015 and the end of the previous fiscal year.

 

  f)

Allowance for loan losses and contingent commitments:

For loans, other receivables from financial transactions, receivables from financial leases, receivables from sale of property assets and contingent commitments: the allowances have been calculated based on the Bank’s estimated loan loss risk in light of debtor compliance and the collaterals supporting the respective transactions, as provided by Communication “A” 2950 and supplemented of the BCRA.

 

  g)

Instruments to be received and to be delivered for spot and forward transactions pending settlement:

 

  -  

In foreign currency: they were valued according to the benchmark exchange rate of the BCRA for each currency determined on the last business day of the end of the period or fiscal year.

 

  -  

Securities: with Holdings of government and private securities and Instruments issued by BCRA at fair value and at amortized cost: as of March 31, 2015 and the end of the previous fiscal year, they were valued according to the method described in 2.3.b).

 

  h)

Amounts receivable and payable for spot and forward transactions pending settlement:

They were valued based on the prices agreed upon for each transaction, plus related premiums accrued as of March 31, 2015 and the end of the previous fiscal year.

 

  i)

Unlisted Corporate Bonds:

They were valued at acquisition cost plus income accrued but not collected as of March 31, 2015 and the end of the previous fiscal year.


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  j)

Receivables from financial leases:

As of March 31, 2015 and the end of the previous fiscal year, they were valued at the present value of the sum of the periodical instalments and the unguaranteed residual value, calculated as per the conditions agreed upon in the respective leases, applying the implicit interest rate thereto.

 

  k)

Investments in other companies:

 

  -  

Investments in controlled financial institutions, supplementary activities and authorized were valued based on the following methods:

 

   

BBVA Francés Valores S.A., Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings), PSA Finance Argentina Compañía Financiera S.A., BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión and Rombo Cía. Financiera S.A.: were valued by applying the equity method at the end of the period or fiscal year.

Although the Bank has a 40% interest ownership in the capital stock and votes of Rombo Cía. Financiera S.A., operational and financial decisions at Rombo Cía. Financiera S.A. are taken together with this company’s majority shareholder on a joint control basis.

 

  -  

Investments in non controlled financial institutions, supplementary activities and authorized were valued according to the following methods:

 

   

Visa Argentina S.A. and Interbanking S.A.: were valued by applying the equity method at the end of the period or fiscal year.

 

   

Bladex S.A.: was valued at acquisition cost in foreign currency plus the nominal value of stock dividends received, converted into pesos based on the method described in 2.3.a).

 

   

Other: valued at acquisition cost, without exceeding their recoverable value.

 

  -  

Other non controlled affiliates were valued based on the following methods:

 

   

BBVA Consolidar Seguros S.A.: was valued by applying the equity method at the end of the period or fiscal year.

 

   

S.W.I.F.T. S.C.R.L.: was valued at acquisition cost in foreign currency plus the nominal value of stock dividends received, converted into pesos based on the method described in 2.3.a).

 

  l)

Premises and equipment and Other assets:

They have been valued at acquisition cost plus increases from prior-year appraisal revaluations, restated as explained in note 2.1, less related accumulated depreciation calculated in proportion to the months of estimated useful life of items concerned (see Exhibit F).

 

  m)

Intangible assets:

They have been valued at acquisition cost less related accumulated amortization calculated in proportion to the months of estimated useful life of the items concerned (see useful life assigned in Exhibit G).

This caption included the differences arising from compliance with court-ordered measures arising from cases challenging the current rules and regulations applicable to deposits with the financial system in the framework of the provisions of Law Nr. 25,561, Decree Nr. 214/02 and supplementary provisions. The assets mentioned (calculated on the basis of the nominal difference between the exchange rate freely determined in the market and applied to the value of the deposit recorded in the books at that date) was amortized within the 60 monthly instalments starting in April 2003 in accordance with Communication “A” 3916 of the BCRA.

As of March 31, 2015 and the end of the previous fiscal, these assets have been fully amortized, with the total accumulated amortization as of those dates amounting to 1,436,187 and 1,434,479, respectively.


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The Bank, however, notifies that such amortization was solely calculated to comply with the regulations of the BCRA and that by no means does it imply a waiver to possible compensation or recovery of the exchange difference resulting from compliance with court orders corresponding to petitions for protection of civil rights or other court action derived from the mandatory conversion of bank deposits into pesos.

Pursuant to the decisions handed down by Argentina’s Supreme Court of Justice (“Massa, Juan Agustín v. Argentine Executive Branch – Executive Order 1570/ et al over action for the protection of constitutional rights (amparo) Law Nr. 16,986” and “Kujarchuk v. Argentine Executive Branch”), a calculation method was established for the payment of bank deposits that was different from the one that had been instituted by the Argentine Executive Branch.

As of March 31, 2015 and the end of the previous fiscal year, the Bank has estimated this contingency and it has recorded allowances for the total amount.

The Bank expects that the Argentine State remedies the significant damage resulting from compliance with court-ordered measures on petitions for protection of civil rights and actions for relief, particularly due to the impact of differences in compensation or recovery as per the rulings in the above-mentioned actions and according to the law in relation to the “pesification” of the underlying deposits. In this regard, the Bank has informed of such financial damages to the relevant authorities, with reservation of rights.

 

  n)

Derivative transactions (see note 12):

 

   

Interest rate swaps and Forward transactions:

 

  1.

Interest rate swaps are recorded at the value resulting from the application of rates differences to residual notional amounts at the end of the period or fiscal year.

 

  2.

Forward transactions receivable/payable in pesos without delivery of the underlying asset are recorded for the amount receivable or payable, as appropriate, arising from the difference between the agreed exchange rate and the exchange rate at the end of the period or fiscal year as applied to stated notional amounts.

 

   

Repo and Reverse Repo transactions

As of March 31, 2015 and the end of the previous fiscal year, the repos whose underlying assets are not subject to the volatilities published by BCRA were valued as per the cost of each transaction and the repos whose underlying assets are subject to volatility were recorded at their quoted value. Accrued premiums were charged to income (loss) for the period or fiscal year.

 

  o)

Employee termination pay:

The Bank expenses employee termination pay as disbursed.

 

  p)

Other liabilities:

They include the debit balances non arising out of transactions relating to the supply and demand of financial resources, plus the adjustments and interest payable accrued as of March 31, 2015 and the end of the previous fiscal year.

 

  q)

Allowance for other contingencies:

It includes the estimated amounts to meet contingencies of probable occurrence that, if occurred, would give rise to a loss for the Bank.

 

  r)

Stockholders’ equity accounts:

They are restated as explained in note 2.1, except for the “Capital Stock” and “Non capitalized contributions” accounts which have been kept at cost. The adjustment resulting from the restatement is included in the “Adjustment to Stockholders´ Equity – Adjustment to Capital Stock” account.


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  s)

Statement of Income Accounts:

 

  -  

As of March 31, 2015 and 2014, accounts accruing monetary transactions [(financial income (expense), service charge income (expense), provision for loan losses, administrative expenses, etc.)] were computed on the basis of their monthly accrual at historical rates.

 

  -  

Accounts reflecting the effect on income resulting from the sale, write-off, or use of non-monetary assets were computed based on the value of such assets, as mentioned in note 2.1.

 

  -  

Income from investments in subsidiaries was computed based on such companies’ income adjusted as explained in note 2.1.

 

  t)

Earning per share:

As of March 31, 2015 and 2014, the Bank calculated the earning per share on the basis of 536,877,850 ordinary shares of $1 par value each. The net income for each period on those dates is as follows:

 

             03-31-2015                    03-31-2014        

Net income for the period

   930,946    1,362,118

Earning per share for the period – (stated in pesos)

   1.73    2.54

 

  u)

Use of accounting estimates:

The preparation of the financial statements in accordance with the standards set forth by the BCRA require the Bank to use assumptions and estimates that affect certain assets such as allowances for doubtful loan and certain liabilities such as provisions for other contingencies as well as the reported amounts of income/loss during the periods. Actual income/loss may differ from such estimates.

 

  3.

DIFFERENCES BETWEEN BCRA ACCOUNTING STANDARDS AND ARGENTINE PROFESSIONAL ACCOUNTING STANDARDS

The Bank has prepared these financial statements by applying the regulations of the BCRA, which do not contemplate some of the valuation criteria established by the Argentine professional accounting standards.

The main differences between the regulations of the BCRA and the Argentine professional accounting standards are detailed below:

 

  a)

Tax effects

As already indicated hereinbelow, in note 4.1., the Bank has received various communications from the BCRA pursuant to which that BCRA indicates that the capitalization of items arising from the application of the deferred tax method is not allowed. In accordance with Argentine professional accounting standards, a deferred tax asset should be recognized to the extent the reversal of temporary differences generates a future decrease in the tax effectively determined. As a result, the allowances set up by the Bank in this respect, for 222,700 and 239,500 as of March 31, 2015 and the end of the previous fiscal year, respectively, should be reversed.

 

  b)

Derivative financial instruments

As explained in notes 2.3.n) and 12, as of March 31, 2015 and the end of the previous fiscal year, the Bank recorded the effects of interest rate swap agreements as established by the BCRA. Should the Bank had applied the Argentine professional accounting standards, the stockholders’ equity would have increased in 8,390 and 7,351, respectively. By contrast, the effect of the application of the professional accounting standards on the income statement for the periods ended March 31, 2015 and 2014 would have been 1,039 (income) and 5,753 (income), respectively.


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  4.

TAX MATTERS

4.1. Income tax

The Bank determined the charge for income tax by applying the statutory 35% rate to taxable income estimated for fiscal year considering the effect of temporary differences between valuation of assets and liabilities for accounting purposes and their taxable bases. The Bank considered as temporary differences those that have a definitive reversal date in subsequent years.

As of March 31, 2015 and 2014, the Bank recorded 452,000 and 490,800, respectively, in the Income tax caption as the estimate of the income tax charge payable to the tax authorities for these fiscal years.

As of March 31, 2015 and the end of the previous fiscal year, the Bank has booked 954,280 and 758,681, respectively, in the caption Other liabilities – Other – Accrued Taxes as a result of having netted the income tax withholdings and other withholdings applied to the Bank until such dates.

Besides, on June 19, 2003, the Bank received a note from the BCRA indicating that the capitalization of items arising from the application of the deferred tax method is not allowed.

On June 26, 2003, the Bank, based on the opinion of its legal counsel, responded the above mentioned note, indicating that in their opinion the rules of the BCRA do not prohibit the application of the deferred tax method generated by the recognition of temporary differences between the accounting and tax result. Subsequently, Resolution 118/03 of the Superintendent of Financial and Exchange Institutions received on October 7, 2003 confirmed the terms of the note dated June 19, 2003. Consequently, as from that date the Bank set up an allowance for the net balance between the deferred tax assets and liabilities.

As of March 31, 2015 and the end of the previous fiscal year, the Bank recorded under Other Receivables (in the line Tax Prepayments) a taxable deferred asset amounting 222,700 and 239,500, respectively. Such amounts are made up as follows:

 

  03-31-2015            12-31-2014           

Deferred tax assets

              558,500                           532,000            

Deferred tax liabilities

  (335,800)              (292,500)           
  

 

 

      

 

 

 

Net deferred assets

  222,700               239,500            

Allowance

  (222,700)              (239,500)           

4.2. Tax on minimum presumed income

Tax on minimum presumed income (TOMPI) was established by Law Nr. 25,063 in the year ended December 31, 1998, for a ten-year term. On December 19, 2008 Law Nr. 26,426 established a one-year extension in TOMPI until December 30, 2009. In turn, Law Nr. 26,545, published in the Official Gazette on December 2, 2009 extended TOMPI for an additional ten-year period. This tax is supplementary to income tax: while the latter is levied on the taxable income for the year, TOMPI is a minimum levy determined by applying the current 1% rate on the potential income of certain productive assets. Therefore, the Bank’s tax obligation for each year will coincide with the highest of these taxes. The above Law provides that institutions governed by Financial Institutions Law must consider as a tax base 20% of their taxable assets, after deducting non-computable ones. However, if TOMPI exceeds income tax in a given year, the excess thereof may be computed as a payment on account of any income tax in excess of TOMPI that may occur in any of the following ten years.

In every year that net operating losses are offset, the tax benefit (the benefit of the effective rate on the net operating loss used) will be realized to the extent that income tax (net of the offsetting) equals or exceeds tax on minimum presumed income, but will be reduced by any excess of the latter over former.

On February 11, 2005, the Argentine Central Bank issued Communication “A” 4295 whereby it enabled, under certain rules, the accounting record of credits on Tax on Minimum Presumed Income.


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As of March 31, 2015 and 2014, the Income tax assessed was higher than the TOMPI. Therefore, a provision was raised for Income tax.

4.3. Other tax issues

 

  a)

On October 24, 2007, the Bank was notified by the Tax Bureau of the City of Buenos Aires of the commencement of a sua sponte tax assessment on a certain basis and partial in nature of the taxable income as regards turnover tax for the fiscal years 2002 and 2003. On November 14, 2007, the Bank filed its defenses to the notice mentioned.

Then, on October 6, 2008, the Bank was given notice of Resolution Nr. 3631-DGR 2008 containing the sua sponte tax assessment for the fiscal years 2002 and 2003. On October 28, 2008, the Bank filed an appeal for review against this resolution, which was rejected on November 7, 2008.

In response to said rejection, on November 28, 2008 an appeal was filed with a higher administrative authority by the Ministry of Economy of the Government of the City of Buenos Aires, which was also dismissed on April 24, 2009.

On April 28, 2009, the Court of Appeals with Federal Jurisdiction over Contentious Administrative Matters, Panel 3 handed down a judgment favourable to a petition filed by the Bank for the judge to suspend the effect of the decision made by administrative authorities until the appeal is decided. The judgment thus ordered that “….subject to a sworn promise to comply … a) the Tax Bureau of the City of Buenos Aires must suspend the sua sponte assessment that has objected to the treatment afforded by BBVA Francés to the bonds received from the National Government in the terms of Decree Nr. 905-02 and the related foreign exchange gains/losses in all matters related to taxation for turnover tax purposes for the fiscal period 2002; b) therefore, the Tax Bureau of the City of Buenos Aires must abstain from demanding that the Bank should pay any amount due that may have arisen from the items above detailed”.

Also in this respect, on May 13, 2009, an action for a declaratory judgment was commenced by the Bank against the Tax Bureau of the City of Buenos Aires, currently being heard by the court with original Federal Jurisdiction over Contentious Administrative Matters Nr. 1, to procure a judgment ascertaining that a) the bonds received by the Bank from the National Government as compensation for the asymmetric conversion into pesos of assets and liabilities imposed by the Executive Order Nr. 905/2002 may not be levied with Turnover Tax in the Autonomous City of Buenos Aires; b) the foreign exchange gains/losses are a direct effect of the modification of the monetary system and therefore should not be levied with Turnover Tax in the Autonomous City of Buenos Aires.

On December 29, 2010, the Judge presiding over the court with original Federal Jurisdiction over Contentious Administrative Matters Nr. 1 handed down a new precautionary measure ordering the Tax Bureau of the City of Buenos Aires to refrain from demanding that BBVA Francés should pay any debt originating in the tax treatment that should be afforded to the bonds received from the National Government as compensation for the asymmetric re-denomination into Pesos under Executive Order Nr. 905/02 and the foreign exchange gains/losses for purposes of Turnover Tax for the fiscal period 2002 in issue until a final judgment has been rendered on the proceedings whereby the action for a declaratory judgment is still pending.

The Bank as well as its legal and tax advisors estimate that the Bank has made a reasonable interpretation of currently applicable rules and regulations concerning the fiscal periods objected to by the Tax Bureau of the City of Buenos Aires and do not expect an adverse financial impact in these respects.

As regards the balance of the amount claimed, the Bank adhered to a scheme of payment in instalments that was settled on October 4, 2010.

 

  b)

On December 23, 2011, the Tax Bureau of the City of Buenos Aires (AGIP) passed its Resolution Nr. 3088-DGR-2011 and notified the Bank of the commencement of a sua sponte tax assessment thereunder alleging presumptive differences owed to the Tax Bureau in the payment of turnover tax for the fiscal years 2004 through 2010. On January 27, 2012, BBVA Francés filed its defense with the Tax Bureau.


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Afterwards, on December 28, 2012, the Bank was notified of Resolution Nr. 3253-DRG-2012 whereby the Tax Bureau of the City of Buenos Aires proceeded with a sua sponte assessment based on facts concerning the taxable basis for purposes of turnover tax for the fiscal years 2004 through 2010.

On February 4, 2013, the Bank filed an appeal for reconsideration against Resolution Nr. 3253-DRG-2012 moving for the annulment of the tax adjustments contained in the sua sponte tax assessment and for an immediate order to archive the case file.

On February 3, 2015, the Bank was notified of the passage of Resolution Nr. 2014-3711-DGR, which conceded the appeal in part.

This Resolution was appealed by lodging a so-called “hierarchical appeal” with the head of the governmental agency in charge of raising public revenue.

The Bank as well as its legal and tax advisors estimate that the Bank has made a reasonable interpretation of currently applicable rules and regulations concerning the fiscal periods objected to by the Tax Bureau of the City of Buenos Aires and do not expect an adverse financial impact in these respects.

 

  c)

On December 20, 2013, the Bank was notified of the Administrative Proceeding Tax Assessment Decision Nr. 4705 handed down by the Tax Bureau of the Province of Buenos Aires, whereby this tax bureau made a sua sponte determination of taxable income associated to turnover tax for the fiscal periods 01/2008 to 12/2008.

Against this Decision, the Bank filed on January 14, 2014 an appeal for the tax bureau to reverse its own decision and requested that the tax adjustments inserted in the sua sponte tax assessment be rendered ineffectual and that in due time these proceedings be archived.

The Bank as well as its legal and tax advisors estimate that the Bank has made a reasonable interpretation of currently applicable rules and regulations concerning the fiscal periods objected to by the Tax Bureau of the Province of Buenos Aires and do not expect an adverse financial impact in these respects.

 

  5.

BREAKDOWN OF MAIN ITEMS AND ACCOUNTS

The breakdown of the items included under Other accounts which exceed 20% of the total amount of each item is as follows:

 

      03-31-2015          12-31-2014      

a)     INVESTMENTS IN OTHER COMPANIES

In controlled companies -supplementary activities

  130,184        108,366       

In other non-controlled companies- unlisted

  49,918        44,460       

In non-controlled companies-supplementary activities

  11,789        11,789       
    

 

 

       

 

 

 

Total

  191,891        164,615       
    

 

 

       

 

 

 

b)     OTHER RECEIVABLES

Guarantee deposits

  460,666        377,029       

Miscellaneous receivables

  299,860        386,476       

Prepayments

  279,199        279,376       

Tax prepayments (1)

  270,735        277,218       

Loans to personnel

  177,740        181,620       

Advances to personnel

  29,113        93,065       

Other

  167        1,085       
    

 

 

       

 

 

 

Total

  1,517,480      1,595,869       
    

 

 

       

 

 

 

 

  (1)

As of March 31, 2015 and the end of the previous fiscal year, it includes the deferred tax asset for 222,700 and 239,500, respectively (see note 4.1.)


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      03-31-2015          12-31-2014     

c)     OTHER LIABILITIES FROM FINANCIAL TRANSACTIONS

  

Accounts payable for consumption

    2,396,328         2,482,573        

Other withholdings and collections at source

    647,949         687,723        

Collections and other operations for the account of third parties

    456,599         419,185        

Money orders payable

    294,039         338,117        

Social security payment orders pending settlement

    94,972         18,816        

Pending Banelco debit transactions

    48,103         73,651        

Loans received from Fondo Tecnológico Argentina (FONTAR) and Banco de Inversión y Comercio Exterior (BICE)

    34,592         32,488        

Funds raised from third parties

    14,295         18,941        

Loans received from Interamerican Development Bank (IDB)

    5,908         6,485        

Accrued commissions payable

    4,425         7,336        

Other

    10,939         6,078        
    

 

 

     

 

 

 

Total

    4,008,149       4,091,393  
    

 

 

     

 

 

 

d)     OTHER LIABILITIES

   

Accrued taxes

    1,194,273         991,889        

Miscellaneous payables

    920,348         678,461        

Accrued salaries and payroll taxes

    540,871         536,553        

Amounts collected in advance

    397,305         434,830        

Other

    3,875         4,003        
    

 

 

     

 

 

 

Total

    3,056,672       2,645,736  
    

 

 

     

 

 

 

e)     MEMORANDUM ACCOUNTS – DEBIT – CONTROL

   

Items in safekeeping

    69,428,314        53,384,165        

Securities representative of investments in custody safekeeping on

behalf of the Guarantee Fund for the Sustainability of the

Pay-as-you-go System managed by the Argentine Republic

    65,638,009        61,071,633        

Checks not yet credited

    4,019,634        3,694,973        

Collections items

    505,623        573,483        

Cash in custody on behalf of the BCRA

    264,591        287,347        

Checks drawn on the Bank pending clearing

    185,540        564,348        

Other

    453,974        514,368        
    

 

 

     

 

 

 

Total

    140,495,685       120,090,317  
    

 

 

     

 

 

 


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      03-31-2015          03-31-2014     
f)     SERVICE CHARGE INCOME    

Commissions for hiring of insurances

    157,598        111,452        

Rental of safe-deposit boxes

    41,496        34,486        

Commissions on debit and credit cards

    21,372        12,586        

Commissions for transportations of values

    10,126        6,609        

Commissions for loans and guaranties

    9,458        10,022        

Commissions for capital market transactions

    7,647        4,080        

Commissions for escrow

    5,370        5,922        

Commissions for salary payment

    2,427        2,500        

Commissions for trust management

    345        341  

Other

    19,710        19,984        
    

 

 

     

 

 

 

Total

    275,549       207,982  
    

 

 

     

 

 

 

g)     SERVICE CHARGE EXPENSE

   

Turn-over tax

    85,567        65,701  

Insurance paid on lease transactions

    33,226        23,609        

Other

    6,321        2,895        
    

 

 

     

 

 

 

Total

    125,114       92,205  
    

 

 

     

 

 

 

h)     OTHER INCOME

   

Related parties expenses recovery

    14,036        5,924     

Income from the Credit Card Guarantee Fund

    11,799        19,192     

Interest on loans to personnel

    7,370        7,633     

Rents

    767        --,--     

Other

    1,910        20,732     
    

 

 

     

 

 

 

Total

    35,882       53,481  
    

 

 

     

 

 

 

i)     OTHER EXPENSE

   

Charges for administrative, disciplinary and criminal penalties (1)

    48,817        --,--     

Deferred income tax (2)

    16,800        108,800     

Private health insurance for former employees

    3,636        2,426      

Insurance losses

    2,962        3,044     

Turn-over tax

    2,191        2,772     

Donations

    1,953        1,999     

Other

    9,377        9,117    
    

 

 

     

 

 

 

Total

    85,736       128,158  
    

 

 

     

 

 

 

(1) See note 6.1.

(2) Offset with a charge for the same amount in “Loans recovered and reversals of allowances” account, under Other income item.


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  6.

PENALTIES IMPOSED ON THE BANK AND ADMINISTRATIVE PROCEEDINGS INSTITUTED BY THE BCRA.

In compliance with the requirement imposed by the Argentine Central Bank’s Communication “A” 5689, issued on January 8, 2015, the following is a detail of the administrative and/or disciplinary penalties as well as the sentences imposed by criminal trial courts, enforced or brought by the Argentine Central Bank, the Financial Information Unit (UIF) and the Argentine Securities Commission (CNV) of which the Bank has been notified:

 

  6.1.

Penalties enforced against the Bank

 

 

On April 21 and 29, 2010, by virtue of Resolutions Nr. 43/10 and 44/10 the Bank was notified of the commencement of two enforcement action proceedings instituted by the Financial Information Unit (UIF) against BBVA Francés arising from two wire transfers received by two customers in their respective sight accounts on November 22, 2007.

It has been the UIF’s understanding that the profile of the customers, as defined, and the supporting documentation submitted by the Bank do not coincide with the possibility of receiving such wire transfers.

In due time, the Bank filed its defenses, offered evidence and petitioned for an acquittal. In addition, the Bank called for the enforcement in this case of the same guarantees available in court proceedings, argued that the statute of limitations applicable to punishable offenses had run out and further claimed that Law Nr. 25,246 is unconstitutional when it comes to the scale of penalties imposed.

On October, 13 and September, 14 2010, the Bank was served with the Resolutions Nr. 181/10 and 169/10 adopted by the UIF whereby BBVA Francés was ordered to pay a fine for an amount equivalent to one time the transactions objected for the amounts of 39,393 and 9,174, respectively.

On the basis of its legal advisors’ opinion, on October 28 and November 25, 2010, the Bank lodged with the Court of Appeals with Federal Jurisdiction over Contentious Administrative Matters a direct appeal against the UIF’s Resolutions in connection with the wire transfers for 9,174 and 39,393, respectively, in accordance with the provisions under Section 25 of Law Nr. 25,246.

The Bank and its legal advisors have concluded that the analysis of the transactions involved has been made in compliance with applicable legal regulations and that no Suspicious Transaction Report (“ROS”, for its Spanish acronym) has proven necessary. For such reason, the Bank does not expect any adverse financial impacts in this respect. The above notwithstanding, as from January 2015 and to comply with the provisions under Communication “A” 5689 of the Argentine Central Bank, the Bank has raised a provision for 48,567.

It must be mentioned that the Regulatory Compliance Officer designated as of that date was also sentenced in both cases.

 

 

“BBVA Banco Francés S.A. – FCI Acciones Globales over complaint File 1196/2008”.

Summary proceedings instituted by the Argentine Securities Commission (CNV) notified on January 6, 2009. The cause of action underlying the complaint is the presumed non-compliance with the conditions for the subscription of a mutual fund (FCI Acciones Globales) as there was a failure to have them embodied and published in the fund’s Management Rules. The complaint points out that the subscription could only be conducted in USD “currency” rather than in USD “notes”. This notwithstanding, the Rules set forth that subscription is in US Dollars and does not distinguish between currency or note USDs, therefore, there was no need for amending the Rules. Pursuant to Resolution Nr. 16,821 notified on May 31, 2012, a decision was made to impose on the Bank a 250 fine. The seven regular members of the Board of Directors as of the date of these events were also sanctioned. An appeal has been lodged against the Resolution that imposes the fine with the Appellate Court in Commercial Matters in and for the City of Buenos Aires. Pursuant to Law Nr. 26,831, a jurisdictional issue has emerged between the Appellate Court in Commercial Matters and the Argentine Administrative and Contentious Appellate Court. The file has been sent to the Supreme Court of Justice which in December 2014 decided that the Appellate Court with jurisdiction in commercial matters is the court that must hear in the case.

The Bank and its legal advisors estimate that the applicable rules and regulations have been reasonably interpreted and that no adverse financial impact is expected in this respect. This notwithstanding, as from January 2015 and to comply with the provisions under Communication “A” 5689 of the Argentine Central Bank, the Bank has raised a provision for 250.


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“BBVA Banco Francés S.A. over breach of Law Nr. 21.526 Section 41”. Financial administrative proceedings conducted by the Argentine Central Bank, whose commencement was notified on December 13, 2007 and identified under Nr. 1213, File Nr. 101.267/07. The charges here are for 12 presumably non-transferable time deposits in foreign currency that were withdrawn previous to their maturity date. Such early termination would amount to a breach of the provisions under Communication “A” 3043 of the Central Bank of the Argentine Republic which sets forth that non-transferable certificates may not be cashed either in whole or in part before their maturity dates. In addition, it is argued that such early withdrawal entailed failure to apply the rules of Executive Decree Nr. 1570/01 to 11 of those certificates and in another case the breach of the rules under such decree and Communication “A” 3372. The period under observation was November 30 through to December 3, 2001 (which was when the certificates were cancelled).

The Bank and the directors notified filed in due time and manner their corresponding defenses which focused on the errors in entering these deposits as non-transferable in the Bank’s computerized applications despite the customers’ not having expressly opted for that condition.

On September 6, 2013, the Argentine Central Bank notified the Bank of Resolution Nr. 592 whereby a fine was imposed for 2,100 which was paid and then charged to P&L on September 13, 2013. Those accused for it were BBVA Banco Francés S.A. and the six regular members of the Board of Directors in office at the time of the facts in issue and one of the officers against whom the proceedings had been commenced was acquitted. An appeal has been lodged against the Resolution that imposes the fine with the Federal Appellate Court with jurisdiction over contentious and administrative matters, that is being heard by Panel Nr. 1 under Nr. 40.513/2013. On March 13, 2015, the Entity was notified by the Federal Appellate Court with jurisdiction over contentious and administrative matters that the judgment had been confirmed.

 

  6.2.

Administrative Proceedings commenced by the BCRA

 

 

“Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on February 22, 2008 and identified under Nr. 3511, File 100.194/05, on grounds of a breach of the Criminal Foreign Exchange Regime of foreign currency by reason of purchases and sales of US Dollars through BCRA in excess of the authorized amounts. These total 44 transactions involving the branches 099, 342, 999 and 320. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) two Territory Managers, (ii) four Branch Managers, (iii) four Heads of Back-Office Management and (iv) twelve cashiers. On August 21, 2014, the trial court acquitted all the accused from all charges. The State Attorney’s Office filed an appeal and the case is now pending resolution from Panel A of the Appellate Court with jurisdiction over criminal and economic matters.

 

 

“Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank, notified on December 28, 2007, identified under Nr. 3531, File Nr. 100.345/06 and Nr. 101.581/07. The summary proceedings focus on considering that some purchases and sales of USD-denominated Government securities through Mercado Abierto Electrónico were in fact foreign exchange transactions and should, instead, have been channeled through So-called “MULC” (initials standing for Single and Free-Floating Foreign Exchange Market). Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Wholesale Banking Director, (ii) the Treasury Manager, (iii) the person responsible for Trading and (iv) the Head of the Back Office. A judgment was passed that acquitted BBVA Banco Francés S.A. and all the accused officers. The State Attorney’s Office filed an appeal against this judgment. An appellate brief was filed in support of the acquittal. On March 13, 2015, the Appellate Court with jurisdiction over criminal and economic matters, confirmed the judgment acquitting the Company and the officers involved. The State Attorney’s Office filed an appeal with the court of cassation and a so-called “extraordinary” appeal.

 

 

“Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank, notified on October 9, 2009 and identified under Nr. 4157, File 100.778/05 objecting certain transactions channeled through the so-called “MULC” (initials standing for Single and Free-Floating Foreign Exchange Market) with individuals and legal entities that were not allowed to operate in the MULC. The period observed is January through April 2004. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) two Foreign Trade area employees. The case is in the sentencing stage.


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“BBVA Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank, notified on November 30, 2009 and identified under Nr. 4181, File N° 100.309/06 which alleges a departure from currently applicable foreign exchange regulations in connection with foreign trade transactions conducted by SULFACID S.A.C.I.F.y C., on charges of failure to comply with currently applicable rules and regulations when the company paid 4 pre-financing installments directly abroad without passing through the channels in the Argentine Republic. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) three Foreign Trade area employees. This is being heard by the Court with Jurisdiction over Financial Crimes Nr. 3, Clerk of Court’s Office Nr. 6 and it is presently in the sentencing stage.

 

 

“Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on December 1, 2010 and identified under Nr. 4517, File N° 40.536/05 where charges focus on simulated foreign exchange transactions through false statements in their processing incurred by personnel in Branch 097- Comodoro Rivadavia -, which would entail failure to comply with the client identification requirements imposed by foreign exchange rules and regulations through Communication “A” 3471, Paragraph 6. Accused of these breaches stand BBVA Banco Francés S.A., the five regular members of the Board of Directors and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Retail Banking Manager, (ii) the Territory Manager, (iii) the Zone Manager, (iv) the Branch Manager, (v) the Back Office Management Head and (vi) one cashier. The period for proffering and producing evidence came to a close and it is about to be sent to the Court with jurisdiction over financial crimes.

 

 

“Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on December 1, 2010 and identified under Nr. 4539, File N° 18.398/05 where charges focus on simulated foreign exchange transactions through false statements in their processing incurred by personnel from five branches in Mar del Plata, which would entail failure to comply with the client identification requirements imposed by foreign exchange rules and regulations through Communication “A” 3471, Paragraph 6. Accused of these breaches stand BBVA Banco Francés S.A., the five regular members of the Board of Directors and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Retail Bank Manager, (ii) the Territorial Manager, (iii) the Zone Manager, (iv) a Commercial Aide to the Zone Manager, (v) five Branch Managers, (vi) four Back-Office Branch Managers, (vii) five Main Cashiers and (viii) one cashier. The procedural stage in which evidence is produced has commenced.

 

 

“BBVA Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on December 1, 2010 and identified under Nr. 4524, File N° 3.406/06 where charges focus on simulated foreign exchange transactions, conducted in the name of a deceased, perpetrated by personnel from the Branch 240 - Mendoza -, which would entail failure to comply with the client identification requirements imposed by foreign exchange rules and regulations through Communication “A” 3471, Paragraph 6. Accused of these breaches stand BBVA Banco Francés S.A., five regular members of the Board of Directors and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Retail Bank Manager, (ii) the Territorial Manager, (iii) the Zone Manager, (iv) the Branch Manager, (v) the Back Office Branch Manager and (vi) the Main Cashier. The period for proffering and producing evidence came to a close and it is about to be sent to the Court with jurisdiction over financial crimes.

 

 

“Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense brought against BBVA Francés notified on July 12, 2011 and identified under Nr. 4693, File N° 101.415/10 on grounds of a breach of the Criminal Foreign Exchange Regime –foreign currency- by reason of “Investments made by Non-Residents Applied to the Purchase of Real Estate” in breach of the provisions under Communication “A” 4359. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) a Foreign Trade Area officer. This is being heard by the Court with Jurisdiction over Financial Crimes Nr. 7, Clerk of Court’s Office Nr. 13 and it is presently in the sentencing stage.

 

 

“Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense brought against BBVA Francés notified on July 6, 2012 and identified under Nr. 5019, File 100.865/06, on grounds of a breach of the Criminal Foreign Exchange Regime due to sales of bank notes in the possession of residents and repatriation of investments by residents associated to the customer Líneas de Transmisión del Litoral S.A., violating the provisions under the Argentine Central Bank’s Communications “A” 4359 and 4377. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) a Foreign Trade Area officer. This is being heard by the Court with Jurisdiction over Financial Crimes Nr. 6, Clerk of Court’s Office Nr. 11.


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“BBVA Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense brought against BBVA Francés notified on August 29, 2012 and identified under Nr. 5079, File 101.575/07, on grounds of a breach of the Criminal Foreign Exchange Regime by reason of having settled new transactions as pre-financing for exports for the benefit of Esso Petrolera Argentina S.R.L., without previously regularizing the pending overdue shipments according to the type of export which breaches Paragraph 8 of Communication “A” 4443 of the Argentine Central Bank. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) a Foreign Trade Area officer. This is being heard by the Court with Jurisdiction over Financial Crimes Nr. 6, Clerk of Court’s Office Nr. 11.

 

 

“BBVA Banco Francés SA Over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on July 26, 2013 and identified under Nr. 5406, File N° 100.443/12 where charges focus on simulated foreign exchange transactions through false statements in their processing incurred by personnel in Branch 087 - Salta -, which would entail failure to comply with the client identification requirements imposed by foreign exchange rules and regulations through Communication “A” 3471, Paragraph 6. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Branch Manager (ii) the Back Office Management Head, (iii) the Main Cashier and (iv) two cashiers. The period for proffering and producing evidence came to a close and the Argentine Central Bank must send it to Salta’s Federal Court.

 

 

“BBVA Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on September 20, 2013 and identified under Nr. 5472, File N° 100.969/09 where the charges consist in allegedly having channeled foreign exchange transactions with “Compañía de Seguros La Mercantil Andina S.A.” in September 2007, that allegedly exceed the monthly limit imposed by Communication “A” 4128, without the Argentine Central Bank’s previous consent. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) a Foreign Trade Area officer. It awaits a resolution from the Argentine Central Bank.

 

 

“BBVA Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on February 21, 2014 and identified under Nr. 5706, File N° 100.134/11. The charges consist in having presumably operated with foreign exchange on January 18, 2010 despite failing to make available to the Argentine Central Bank the excess in its General Foreign Exchange Position incurred on January 15, 2010, allegedly breaching Communications “A” 4646, “A” 4814 and “C” 37587. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Director of Global Markets, (ii) the Head of the Market Management Area and (iii) the Head of the Trading Area. Evidence is being proffered and produced before the Argentine Central Bank.

 

 

“BBVA Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on April 11, 2014 and identified under Nr. 5719, File N° 100.078/14. The charges consist in allegedly failing to comply with the duty to report two transactions conducted by H.C.I. S.A., which would entail failure to comply with Decree 616/05 and the Argentine Central Bank’s Communications “A” 4359, “A” 4377 and “A” 4762 which mandate a mandatory deposit of 30% of all foreign currency inflows from abroad for application to the acquisition of fixed assets. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) a Foreign Trade Area officer. This is being heard by the Court with Jurisdiction over Financial Crimes Nr. 3, Clerk of Court’s Office Nr. 5 and it presently awaits the court’s first ruling.

 

 

“BBVA Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on March 3, 2015 and identified under Nr. 6082, File Nr. 100.091/12. The charge consists in having presumably conducted transactions that exceeded the US$ 2,000,000 limit in the course of the calendar month on behalf of the firm LUFKIN ARGENTINA S.A., plus the allegation of an excess of USD three hundred thousand. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) three Foreign Trade Area officers. On April 24, 2015, a defense was raised and evidence was offered.


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The Bank and its legal advisors estimate that the applicable rules and regulations have been reasonably interpreted and that no adverse financial impacts are expected in these respects.

 

  7.

RESTRICTIONS ON ASSETS

As of March 31, 2015 and the end of the previous fiscal year, there are Bank’s assets, which are restricted as follows:

 

  a)

The Government and Private Securities account includes 292,000 in peso-denominated Discount Bonds due 2033 and 193,000 in bonds issued by the Argentine Government in pesos maturing in 2016 as of March 31, 2015 and 223,960 in peso-denominated Discount Bonds due 2033 as of December 31, 2014, allocated to the guarantee required to act as custodian of investment securities related to Guarantee Fund for the Sustainability of the Pay-as-you-go System managed by the Argentine Republic.

 

  b)

The Bank appropriated 16,900 and 15,358, respectively, in Guaranteed Bonds maturing in 2020, to secure loans arranged under the Credit Global Program to micro, small and medium businesses given by the Interamerican Development Bank (IDB).

 

  c)

The Bank appropriated 214,612 and 195,033, respectively, in Guaranteed Bonds maturing in 2020, to secure loans granted by the so-called “Bicentennial Fund”.

 

  d)

The Bank has also appropriated accounts, deposits and trusts for 920,475 and 762,650, respectively, as security for activities related to credit card operations, automated clearing houses, non-deliverable forwards and lawsuits.

 

  8.

TRANSACTIONS WITH SUBSIDIARIES AND PARENT COMPANIES (ART. 33 OF LAW Nr. 19,550)

The balances as of March 31, 2015 and the end of the previous fiscal year, for transactions performed with subsidiaries and parent companies are as follows:

 

  Balance Sheet   Memorandum Accounts (1)  
  Assets   Liabilities      
Company 2015   2014   2015   2014   2015   2014  

 

  

 

 

 

BBVA

  49,753      94,403      89,926      87,622      71,610      43,591   

BBVA Francés Valores S.A

  58      58      289      805      13,973      13,403   

Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A.

(undergoing liquidation proceedings)

  1      1      316      421      6,870      6,975   

BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos

Comunes de Inversión

  663      780      12,767      12,970      62,314      44,352   

BBVA Consolidar Seguros S.A.

  25,849      24,074      6,045      23,560      23,394      18,311   

PSA Finance Argentina Cía. Financiera S.A.

  1,027,506      1,098,745      2,418      5,371      105,000      150,172   

Rombo Cía. Financiera S.A.

  600,855      685,446      3,320      9,653      318,717      334,653   

 

  (1)

Includes Items in safekeeping, Credit lines granted (unused portion) covered by debtor classification regulations, Guaranties given covered by debtor classification regulations and Derivatives.

 

  9.

BANK DEPOSITS GUARANTEE INSURANCE SYSTEM

The Bank is included in the Deposit Guarantee System established by Law 24,485, Regulatory Decrees Nr. 540/95, Nr. 1,292/96 and 1,127/98 and BCRA’s Communication “A” 5659.

Such law provided for the creation of the Company Seguros de Depósitos Sociedad Anónima (SEDESA) for purposes of managing the Deposit Guarantee Fund (DGF), whose shareholders, in accordance with the changes introduced by Decree Nr. 1,292/96, shall be the BCRA with one share as a minimum and the trustees of the trust created by the financial institutions in the proportion to be determined for each by the BCRA according to their contributions to the DGF.


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That Company was incorporated in August 1995 and the Bank holds a 9.2771% interest in its capital stock.

The Deposit Guarantee System, which is limited, compulsory and onerous, has been created for purposes of covering the bank deposit risks subsidiarily and complementarily to the deposit protection and privilege system established by the Financial Institutions Law.

The guarantee shall cover the repayment of principal disbursed plus interest accrued through the date of revoking of the authorization to operate or through the date of suspension of the institution through application of section 49 of the BCRA’s Charter provided that the latter had been adopted earlier than the former without exceeding the amount of pesos a three hundred and fifty thousand. Regarding operations in the name of two or more people, the guarantee shall be prorated between the holders. In no event shall the total guarantee per person exceed the above-mentioned amount, whatever the number of accounts and/or deposits.

 

  10.

TRUST ACTIVITIES

On January 5, 2001, the BCRA’s Board of Directors issued Resolution Nr. 19/01, providing for the exclusion of Mercobank S.A.’s senior liabilities under the terms of section 35 bis of the Financial Institutions Law, the authorization to transfer the excluded assets to the Bank as trustee of the Diagonal Trust, and the authorization to transfer the excluded liabilities to beneficiary banks. Also, on the mentioned date, the agreement to set up the Diagonal Trust was subscribed by Mercobank S.A. as settle and the Bank as trustee in relation to the exclusion of assets as provided in the resolution above-mentioned. As of March 31, 2015 and the end of the previous fiscal year, the assets of Diagonal Trust amount to 2,428, considering its recoverable value.

Besides, the Bank in its capacity as Trustee in the Corp Banca Trust recorded the selected assets on account of the redemption in kind of participation certificates for 4,177 as of March 31, 2015 and the end of the previous fiscal year.

Such amounts are recorded in memorandum debit accounts “For trustee activities – Funds in trust”.

Besides, the Bank acts as trustee in 13 non-financial trusts, and in no case being personally liable for the liabilities assumed in the performance of the contract obligations; such liabilities will be settled with and up to the full amount of the corpus assets and the proceeds therefrom. The non financial trusts concerned were set up to secure the receivables of several creditors (beneficiaries) and the trustee was entrusted the management, care, preservation and custody of the corpus assets until (i) the requirements to show the noncompliance with the obligations by the debtor (settler) vis-à-vis the creditors (beneficiaries) are met, moment at which such assets will be sold and the proceeds therefrom will be distributed (net of expenses) among all beneficiaries, the remainder (if any) being delivered to the settler, or (ii) all contract terms and conditions are complied with, in which case all the corpus assets will be returned to the settler or to whom it may indicate. The trust assets represent about 147,497 and 155,354 as of March 31, 2015 and the end of the previous fiscal year, respectively, consist of cash, creditors’ rights, real estate and shares.

 

  11.

CORPORATE BONDS

On July 15, 2003, an Extraordinary Stockholders’ Meeting approved the setting up of a Program for the issuance and re-issuance of ordinary non-convertible Corporate Bonds with ordinary guarantee, or such guarantees as may be decided by the Bank, and unsecured Subordinated Corporate Bonds, convertible or not into shares. During the life of the Program, which was 5 (five) years, it was possible to issue and re-issue any number of series and/or classes of Corporate Bonds as long as at all times the maximum amount in circulation after adding together all series and/or classes outstanding under the Program pending redemption does not exceed at any time US$ 300,000,000 (or the equivalent thereof in other currencies). The Program was approved by CNV Resolution Nr. 14,967 dated November 29, 2004.

The Global Program was amended according to the resolutions adopted by the Ordinary and Extraordinary Stockholders’ Meeting held on April 26, 2007; extended for 5 (five) years by resolution adopted by the Ordinary and Extraordinary Stockholders’ Meetings held on March 28, 2008 and on April 9, 2013 (approved by the CNV by Resolutions Nr. 16,010 and Nr. 17,127 dated November 6, 2008 and July 11, 2013, respectively); and the maximum amount of the issuance was successively increased from US$ 300,000,000 to US$ 500,000,000 and from US$ 500,000,000 to US$ 750,000,000 by resolution adopted by the Ordinary and Extraordinary Stockholders’ Meetings held on March 30, 2011 and March 26, 2012, respectively.


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The following is a detail of the Corporate Bonds outstanding as of March 31, 2015 and the end of the previous fiscal year:

 

     Date of    Nominal Value              Interest
Detail    issuance    (in thousands of    Due date    Rate    payments

 

  

 

  

pesos)

  

 

  

 

  

 

Class 4

   07/31/2013    250,000    01/31/2015   

Private Badlar +

nominal 3.69% per annum

   Quarterly

Class 6

   11/08/2013    121,357    05/08/2015   

Private Badlar +

nominal 3.25% per annum

   Quarterly

Class 7

   11/08/2013    250,000    11/08/2016   

Private Badlar +

nominal 4.24% per annum

   Quarterly

Class 8

   02/11/2014    258,880    08/11/2015   

Private Badlar +

nominal 3.80% per annum

   Quarterly

Class 9

   02/11/2014    145,116    02/11/2017   

Private Badlar +

nominal 4.70% per annum

   Quarterly

Class 10

   07/18/2014    233,750    01/18/2016   

Private Badlar +

nominal 2.50% per annum

   Quarterly

Class 11

   07/18/2014    165,900    07/18/2017   

Private Badlar +

nominal 3.75% per annum

   Quarterly

Class 12

   11/13/2014    130,286    05/13/2016   

Private Badlar +

nominal 2.53% per annum

   Quarterly

Class 13

   11/13/2014    107,500    11/13/2017   

Private Badlar +

nominal 3.75% per annum

   Quarterly

Class 14

   02/13/2015    134,300    11/13/2015    25.75% Fix rate    Quarterly

Class 15

   02/13/2015    144,875    11/13/2016   

Private Badlar +

nominal 4% per annum

   Quarterly

The issued Corporate Bonds were fully subscribed and paid in and they will be fully amortized at maturity.

As provided for in the Corporate Bonds Law and the BCRA regulations, the proceeds obtained from the issuance of Classes 4, 6, 7, 8, 9, 10, 11, 12 and 13 were applied to the reimbursement of time deposits. The proceeds obtained from the issuance of Classes 14 and 15 are temporarily invested in bills issued by the Argentine Central Bank.

As of March 31, 2015 and the end of the previous fiscal year, the outstanding principal and accrued interest amounts to 1,753,755 (in connection with Class 6, 7, 8, 9, 10, 11, 12, 13, 14 and 15 of the Corporate Bonds) and 1,725,644 (in connection with Class 4, 6, 7, 8, 9, 10, 11, 12 and 13 of the Corporate Bonds), respectively.

 

  12.

DERIVATIVE FINANCIAL INSTRUMENTS

 

  I.

Transactions as of March 31, 2015:

 

  a)

Interest rate swaps for 886,465 (Fixed Rate versus Badlar), maturing within a period not exceeding 2 years for which the Bank pays a variable amount in accordance with changes in the Badlar, Encuesta rate, and receives a fixed amount based on stated notional amounts and interest rate swaps for 13,000 (Badlar versus Taxed Rate), maturing within a period not exceeding 1 year for which the Bank pays a fixed amount in accordance with changes in the Badlar, Encuesta rate, and receives a variable amount in accordance with changes in the Badlar, Encuesta rate.

These transactions have been valued in accordance with the criteria described in note 2.3.n.1.) recognizing the amount of 14,727 as income for the period.


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The estimated fair value of said instruments amounts to 15,994 (Asset). For fair value estimation purposes, the variable and fixed as yet not matured future flows are discounted, with the swap value being the difference between the current value of the future flows receivable and the current value of the future flows payable.

As of the end of the period, the above transactions were recorded under “Memorandum Accounts – Debit Accounts – Derivatives – Interest rate swap” for 899,465.

 

  b)

Interest rate swap for 34,987 (Fixed Rate versus Badlar), with final maturity in September 2019, for which the Bank pays a variable amount in accordance with changes in the Badlar, Encuesta rate, and receives a fixed amount based on stated notional amounts.

Said transaction was consummated as hedge for potential volatility in the cash flows arising from certain financing deals attributable to changes in the designated benchmark interest rates and it has proven to be effective hedge for the risk mentioned.

The aim pursued by risk management consists in reducing exposure to changes in cash flows arising from financing deals. Thanks to the hedge established, changes in the cash flows arising from the underlying instrument caused by changes in the benchmark interest rate would decrease as a result of having been offset with the changes in the cash flows arising from the hedge instrument.

As of the end of the period the above transaction was recorded under “Memorandum Accounts – Debit Accounts –Derivatives – Interest rate swap” for 34,987.

 

  c)

Non-deliverable forward purchase and sale transactions in foreign currency payable in Pesos, maturing within a period not exceeding 1 year, for 1,646,259 and 1,966,081, which are recorded under “Memorandum Accounts - Debit Accounts - Derivatives – “Notional” amount of non-deliverable forward transactions”, and “Memorandum Accounts - Credit Accounts - Derivatives – “Notional” amount of non-deliverable forward transactions”, respectively.

These transactions have been valued in accordance with the criteria described in note 2.3.n.2.), recognizing the amount of 9,101 as income for the period.

 

  d)

Forward sales of BCRA Bills under reverse repurchase agreements for 1,971,697 and of Government securities for 98,670, which are recorded under “Other liabilities from financial transactions – Instruments to be delivered for spot and forward sales to be settled”.

These transactions have been valued in accordance with the description in note 2.3.g) recognizing the amount of 12,060 as income for the period.

 

  e)

The Bank does not carry any pending balances associated to repos in force at March 31, 2015. However, the transactions conducted at March 31, 2015 have yielded a 929 loss at the end of the period.

 

  II.

Transactions as of December 31, 2014:

 

  a)

Interest rate swaps for 1,061,420 (Fixed Rate versus Badlar), maturing within a period not exceeding 2 years for which the Bank pays a variable amount in accordance with changes in the Badlar, Encuesta rate, and receives a fixed amount based on stated notional amounts.

These transactions have been valued in accordance with the criteria described in note 2.3.n.1.) recognizing the amount of 12,492 as income for the fiscal year.

The estimated fair value of said instruments amounts to 17,218 (Asset). For fair value estimation purposes, the variable and fixed as yet not matured future flows are discounted, with the swap value being the difference between the current value of the future flows receivable and the current value of the future flows payable.

As of the end of the fiscal year, the above transactions were recorded under “Memorandum Accounts – Debit Accounts – Derivatives – Interest rate swap” for 1,061,420.


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  b)

Interest rate swap for 36,545 (Fixed Rate versus Badlar), with final maturity in September 2019, for which the Bank pays a variable amount in accordance with changes in the Badlar, Encuesta rate, and receives a fixed amount based on stated notional amounts.

Said transaction was consummated as hedge for potential volatility in the cash flows arising from certain financing deals attributable to changes in the designated benchmark interest rates and it has proven to be effective hedge for the risk mentioned.

The aim pursued by risk management consists in reducing exposure to changes in cash flows arising from financing deals. Thanks to the hedge established, changes in the cash flows arising from the underlying instrument caused by changes in the benchmark interest rate would decrease as a result of having been offset with the changes in the cash flows arising from the hedge instrument.

As of the end of the fiscal year the above transaction was recorded under “Memorandum Accounts - Debit Accounts –Derivatives – Interest rate swap” for 36,545.

 

  c)

Non-deliverable forward purchase and sale transactions in foreign currency payable in Pesos, maturing within a period not exceeding 1 year, for 2,984,388 and 2,915,793, which are recorded under “Memorandum Accounts - Debit Accounts - Derivatives – “Notional” amount of non-deliverable forward transactions”, and “Memorandum Accounts - Credit Accounts - Derivatives – “Notional” amount of non-deliverable forward transactions”, respectively.

These transactions have been valued in accordance with the criteria described in note 2.3.n.2.), recognizing the amount of 485,423 as income for the fiscal year.

 

  d)

Forward sales of BCRA Bills under reverse repurchase agreements for 676,995 and of Government securities for 234,986, which are recorded under “Other liabilities from financial transactions – Instruments to be delivered for spot and forward sales to be settled”.

These transactions have been valued in accordance with the description in note 2.3.g) recognizing the amount of 43,423 as income for the fiscal year.

 

  e)

The Bank does not carry any pending balances associated to repos in force at December 31, 2014. However, the transactions conducted at December 31, 2014 have yielded a 7,888 loss at the end of the fiscal year.

 

  13.

COMPLIANCE WITH CNV REQUIREMENTS

 

  13.1

Minimum Stockholders’ Equity and Minimum of liquid assets:

According to CNV’s General Resolution Nr. 622/13, the minimum Stockholders’ Equity required to operate as “Settlement and Clearing Agent – Comprehensive” would amount to 15,000 and the minimum of liquid assets required by those rules would be 7,500. This amount comprises Peso-denominated Discount bonds maturing in 2033 and deposited with the account opened at Caja de Valores S.A. entitled “Depositor 1647 Brokerage Account 5446483 BBVA Banco Francés Minimum Counterbalancing Entry”. As of March 31, 2015 and the end of the previous fiscal year, the Bank’s Stockholders’ Equity exceeds the minimum amount imposed by CNV.

13.2 The Bank’s operations as Mutual Funds’ Custodian Agent

As of March 31, 2015 and the end of the previous fiscal year, in its capacity as Custodian Agent of “FBA Ahorro Pesos”, “FBA Renta Pesos”, “FBA Calificado”, “FBA Horizonte”, “FBA Acciones Latinoamericanas”, “FBA Bonos Argentina”, “FBA Acciones Argentinas”, “FBA Bonos Globales” managed by BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión, the Bank holds certificates of deposits, deferred payment checks, shares, corporate bonds, government securities, indexes, securities issued by the BCRA, Cedears, ADRS and shares in mutual funds in safekeeping in the amount of 6,759,627 and 5,917,790, respectively, all of which making up the Fund’s portfolio and booked in “Memorandum Accounts - Debit Accounts -Control - Other”.


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The Investment Funds´ equities are as follows:

 

    EQUITIES AS OF            

    INVESTMENT FUND                    

       03-31-2015                12-31-2014    

FBA Ahorro Pesos

           4,666,100                 3,692,738     

FBA Renta Pesos

           2,644,530                 2,515,529     

FBA Calificado

           291,845                 223,763     

FBA Horizonte

           83,249                 68,071     

FBA Acciones Latinoamericanas

           52,427                 47,804     

FBA Bonos Argentina

           40,451                 23,179     

FBA Acciones Argentinas

           1,074                 793     

FBA Bonos Globales

           177                 164     

FBA Acciones Globales (*)

           --,--                 --,--     
        

 

 

          

 

 

 

Total

           7,779,853                 6,572,041   
        

 

 

          

 

 

 

(*) On September 2, 2013, BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión decided to start the process of liquidation of FBA Acciones Globales. As of the date of issuance of these financial statements, the Collective Investment Product Management Agent has made partial payments to the holders of shares, with the remaining funds having been deposited in a special account at BBVA Francés.

 

  14.

EARNINGS DISTRIBUTIONS

The Bank has in place an earnings distribution policy in line with the Bank’s vocation for sustained stockholder value, that at the same time allows the Bank’s financial condition to perform favourably so as to strive for business growth and the maintenance of consistently high liquidity and solvency standards in compliance with currently applicable rules and regulations.

Restriction on earnings distributions:

 

  a)

On April 7, 2015, the Ordinary and Extraordinary Shareholders’ Meeting was held, approving the allocation of earnings as follows:

 

   

To Legal Reserve: 640,899

   

To Cash dividend: 400,000 (*)

   

To Voluntary reserve for future distributions of income: 2,163,597 (**)

(*)  Subject to BCRA’s approval. See paragraph b) below.

(**)Depending on the amount eventually authorized by BCRA, 400,000 may be added to this amount.

 

  b)

In accordance with the dispositions of point 2.1 of Communication “A” 5273 of “Distribution of Income” of the BCRA issued on January 27, 2012 and of Communication “A” 5689 issued on January 8, 2015, for purposes of calculating the earnings subject to distribution, off-balance sheet deductions must be performed from the sum of the balances recorded in the account Unappropriated retained earnings and in the Voluntary reserve for future distributions of income. In addition, the authorization of the Superintendent of Financial and Exchange Institutions shall be required in order to verify that the procedure established in said resolution for earnings distribution has been properly applied.

 

  15.

ACCOUNTS IDENTIFYING COMPLIANCE WITH MINIMUM CASH

The following are the items computed for Compliance with Minimum Cash Requirements according to the regulations of the BCRA, with their corresponding balances as of March 31, 2015 and the end of the previous fiscal year:


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       03-31-15           12-31-14       

COMPUTABLE COMPLIANCE IN PESOS

Special Guarantee Accounts

  277,841       277,841    

BCRA Checking Account

  5,352,000       4,323,948    

Special social security accounts

  84,377       5,673    
  

 

 

    

 

 

 

TOTAL

  5,714,218       4,607,462    
  

 

 

    

 

 

 

COMPUTABLE COMPLIANCE IN US DOLLARS (Stated in thousands of pesos)

  

Special Guarantee Accounts

  35,738       34,653    

BCRA Checking Account

  4,426,022       4,926,882    
  

 

 

    

 

 

 

TOTAL

  4,461,760       4,961,535    
  

 

 

    

 

 

 

COMPUTABLE COMPLIANCE IN EUROS (Stated in thousands of pesos)

  

BCRA Checking Account

  62,616       68,137    
  

 

 

    

 

 

 

TOTAL

  62,616       68,137    
  

 

 

    

 

 

 

 

  16.

STATEMENTS OF CASH AND CASH EQUIVALENTS FLOW

The Statements of Cash and cash equivalents flow explain the changes in cash and cash equivalents. For such purpose, a detail is supplied of the items that the Bank considers to be cash and cash equivalents:

 

     03-31-15      12-31-14      03-31-14    12-31-13  

a) Cash and due from banks

     12,840,510         12,525,541       10,285,054      12,844,259   

b) Government securities

     --,--           --,--         252,884      88,812   

c) Loans to financial sector, call granted maturity date less than three months as from the end of each period or fiscal year

     504,390         525,950       484,330      671,120   
  

 

 

    

 

 

    

 

  

 

 

 

CASH AND CASH EQUIVALENTS

  13,344,900      13,051,491    11,022,268   13,604,191   
  

 

 

    

 

 

    

 

  

 

 

 

Items b) and c) are considered to be cash equivalents because they are held in order to meet short-term commitments, they are readily convertible in known cash amounts, they are subject to insignificant risk of changes in value and their maturity is less than three months as from the period or fiscal year date.

 

  17.

THE BANK’S DOCUMENTATION AND RECORDS – CNV RESOLUTION Nr. 629/14

CNV issued its General Resolution Nr. 629 on August 14, 2014 to introduce changes in its own rules governing the maintenance and safekeeping of corporate books, accounting records and business documentation. In this respect, it is reported that the Bank has sent the documentation that supports its operations for the periods still open to audit for safekeeping to Administradora de Archivos S.A. (AdeA), domiciled at Ruta 36 Km. 31.5 of Florencio Varela, Province of Buenos Aires.


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In addition, it is put on record that a detail of the documentation delivered for safekeeping, as well as the documentation referred to in Article 5, Sub-article a.3), Section I of Chapter V of Title II of the CNV rules is available at the Bank’s registered office (Technical Rules 2013 as modified).

 

  18.

IFRS CONVERGENCE IMPLEMENTATION PLAN.

As of the date of issuance of these financial statements, the Bank was in the process of implementing the plan geared to convergence with the International Financial Reporting Standards (IFRS) as set forth in the Argentine Central Bank’s Communication “A” 5541 and supplementary rules in this respect, which will be effective as from the financial statements for the fiscal years beginning on January 1, 2018. On March 17, 2015, the Entity’s Board of Directors approved the above-mentioned Plan, which was filed with the Argentine Central Bank on March 30, 2015.

 

  19.

PUBLICATION OF THE FINANCIAL STATEMENTS

As provided by Communication “A” 760, the previous intervention of the BCRA is not required for the publication of these financial statements.

 

  20.

ACCOUNTING PRINCIPLES – EXPLANATION ADDED FOR TRANSLATION INTO ENGLISH

These financial statements are presented on the basis of the accounting standards of the BCRA and, except for the effect of the matters mentioned in note 3 to the stand – alone financial statements and note 2 to the consolidated financial statements, in accordance with the Argentine professional accounting standards. Certain accounting practices applied by the Bank that conform with the standards of the BCRA and with the Argentine professional accounting standards may not conform with the generally accepted accounting principles in other countries.

The effects of the differences, if any, between Argentine professional accounting standards and the generally accepted accounting principles in the countries in which the financial statements are to be used have not been quantified. Accordingly, they are not intended to present financial position, results of operations and cash flows in accordance with generally accepted accounting principles in the countries of the users of the financial statements, other than Argentina.


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EXHIBIT A

DETAIL OF GOVERNMENT AND PRIVATE SECURITIES

AS OF MARCH 31, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20)

- Stated in thousands of pesos -

 

 

          Holding                      
               

Book

balance

   

Book

balance

    Position            
    ID      Market     as of     as of     without     Final  
Description   Caja de 
Valores  
    value or
present value
   

  03-31-2015

   

  12-31-2014

   

options

   

    position   

 

 

   

 

 

   

 

   

 

   

 

   

 

 

GOVERNMENT SECURITIES

                   

Government securities at fair value

                   

Local

                   

In pesos

                   

Secured Bonds due 2020

    2423            1,302,756              1,302,756          1,302,756   

Peso-denominated Discount governed by Argentine Law maturing in 2033

    45696            401,350              364,850          364,850   

Federal Government Bonds in Pesos Badlar + 200 bp due 2016

    5460            303,975              303,975          303,975   

Federal Government Bonds in Pesos Badlar + 200 bp due 2017

    5459            285,335              285,335          285,335   

Other

          10,070              7,250          7,250   
       

 

 

     

 

 

     

 

 

     

 

 

 

Subtotal in pesos

          2,303,486          2,526,105          2,264,166          2,264,166   
       

 

 

     

 

 

     

 

 

     

 

 

 

In foreign currency

                   

Argentine Bond of Saving towards economic development

    5456            167,927              167,927          167,927   

Discount Notes in US Dollars

    5443            57,120              --,--          --,--   

Federal Government Bonds in US Dollars 7% due 2015

    5433            35,248              58          58   

Federal Government Bonds in US Dollars 8,75% due 2024

    5458            31,625              --,--          --,--   

Other

          27,780              55          55   
       

 

 

     

 

 

     

 

 

     

 

 

 

Subtotal in foreign currency

          319,700          415,760          168,040          168,040   
       

 

 

     

 

 

     

 

 

     

 

 

 

Subtotal Government securities at fair value

          2,623,186          2,941,865          2,432,206          2,432,206   
       

 

 

     

 

 

     

 

 

     

 

 

 

Government securities at amortized cost

                   

Local

                   

In pesos

                   

Argentine Treasury Notes maturing in March 2016

    5312        98,227          98,227              98,227          98,227   

Other

      164          164              164          164   
       

 

 

     

 

 

     

 

 

     

 

 

 

Subtotal in pesos

          98,391          164          98,391          98,391   
       

 

 

     

 

 

     

 

 

     

 

 

 

Subtotal Government securities at amortized cost

          98,391          164          98,391          98,391   
       

 

 

     

 

 

     

 

 

     

 

 

 


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EXHIBIT A

(Contd.)    

DETAIL OF GOVERNMENT AND PRIVATE SECURITIES

AS OF DECEMBER 31, 2014 AND 2013

(Translation of financial statements originally issued in Spanish - See note 20)

- Stated in thousands of pesos -

 

            Holding                        
                

Book

balance

    

Book

balance

     Position             
     ID        Market    as of      as of      without      Final  
     Caja de        value or                                            
Description    Valores        present value      03-31-2015          12-31-2014          options           position     

 

    

 

  

 

    

 

    

 

    

 

 

Instruments issued by the BCRA

                         

BCRA Bills

                         

At fair value

                         

Argentine Central Bank Internal Bills due 05-06-15

     46598              1,079,881                1,079,881           1,079,881   

Argentine Central Bank Internal Bills due 06-03-15

     46596              526,959                526,959           526,959   

Argentine Central Bank Internal Bills due 07-08-15

     46605              525,993                525,993           525,993   

Argentine Central Bank Internal Bills due 04-15-15

     46588              521,971                521,971           521,971   

Argentine Central Bank Internal Bills due 04-22-15

     46591              492,234                492,234           492,234   

Argentine Central Bank Internal Bills due 05-20-15

     46594              360,810                360,810           360,810   

Argentine Central Bank Internal Bills due 04-01-15

     46593              113,881                113,881           113,881   

Argentine Central Bank Internal Bills due 04-08-15

     46589              98,202                98,202           98,202   

Other

             62,634                62,634           62,634   
          

 

 

      

 

 

      

 

 

      

 

 

 

Subtotal at fair value

             3,782,565           1,415,875           3,782,565           3,782,565   
          

 

 

      

 

 

      

 

 

      

 

 

 

Repurchase transactions

                         

Argentine Central Bank Internal Bills due 09-16-15

     46615              1,576,725                --,--           --,--   

Argentine Central Bank Internal Bills due 09-30-15

     46620              250,853                --,--           --,--   

Argentine Central Bank Internal Bills due 05-20-15

     46594              96,602                --,--           --,--   

Argentine Central Bank Internal Bills due 04-15-15

     46588              47,517                --,--           --,--   
          

 

 

      

 

 

      

 

 

      

 

 

 

Subtotal repurchase transactions

             1,971,697           676,994           --,--           --,--   
          

 

 

      

 

 

      

 

 

      

 

 

 

At amortized cost

                         

Argentine Central Bank Internal Bills due 08-12-15

     46608              717,979                717,979           717,979   

Argentine Central Bank Internal Bills due 01-13-16

     46637              572,187                572,187           572,187   

Argentine Central Bank Internal Bills due 07-01-15

     46603              517,484                517,484           517,484   

Argentine Central Bank Internal Bills due 11-04-15

     46625              385,244                385,244           385,244   

Argentine Central Bank Internal Bills due 12-09-15

     46631              376,302                376,302           376,302   

Argentine Central Bank Internal Bills due 05-27-15

     46595              375,972                375,972           375,972   

Argentine Central Bank Internal Bills due 02-03-16

     46640              362,926                362,926           362,926   

Argentine Central Bank Internal Bills due 10-28-15

     46624              344,503                344,503           344,503   

Argentine Central Bank Internal Bills due 09-09-15

     46612              292,086                292,086           292,086   

Argentine Central Bank Internal Bills due 03-02-16

     46645              236,385                236,385           236,385   

Argentine Central Bank Internal Bills due 06-24-15

     46601              213,515                213,515           213,515   

Argentine Central Bank Internal Bills due 12-16-15

     46632              208,029                208,029           208,029   

Argentine Central Bank Internal Bills due 06-10-15

     46597              201,133                201,133           201,133   

Argentine Central Bank Internal Bills due 09-16-15

     46615              190,889                190,889           190,889   

Argentine Central Bank Internal Bills in US dollars due 04-22-15

     12030              179,088                179,088           179,088   

Argentine Central Bank Internal Bills due 01-27-16

     46639              162,091                162,091           162,091   

Argentine Central Bank Internal Bills in US dollars due 04-15-15

     12067              153,099                153,099           153,099   

Argentine Central Bank Internal Bills due 07-15-15

     46604              143,757                143,757           143,757   

Argentine Central Bank Internal Bills in US dollars due 04-08-15

     12026              133,067                133,067           133,067   

Argentine Central Bank Internal Bills in US dollars due 04-29-15

     12070              109,882                109,882           109,882   

Argentine Central Bank Internal Bills in US dollars due 06-17-15

     12043              42,603                42,603           42,603   

Argentine Central Bank Internal Bills due 12-23-15

     46634              41,413                41,413           41,413   

Argentine Central Bank Internal Bills due 12-30-15

     46635              41,145                41,145           41,145   

Other

             230,605                404,740           404,740   
          

 

 

      

 

 

      

 

 

      

 

 

 

Subtotal at amortized cost

             6,231,384           6,537,187           6,405,519           6,405,519   
          

 

 

      

 

 

      

 

 

      

 

 

 

Subtotal instruments issued by the BCRA

             11,985,646           8,630,056           10,188,084           10,188,084   
          

 

 

      

 

 

      

 

 

      

 

 

 

TOTAL GOVERNMENT SECURITIES

             14,707,223           11,572,085           12,718,681           12,718,681   
          

 

 

      

 

 

      

 

 

      

 

 

 


Table of Contents

LOGO

- 33 -

 

EXHIBIT A

(Contd.)    

 

DETAIL OF GOVERNMENT AND PRIVATE SECURITIES

AS OF MARCH 31, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20)

- Stated in thousands of pesos -

 

            Holding                        
Description    ID Caja de Valores          Market   
value 
  

Book

balance as

of

 03-31-2015 

        Book
balance as
of
 12-31-2014 
    

  Position  
without
options

    

Final

    position    

 

 

    

 

  

 

   

 

    

 

    

 

 

INVESTMENTS IN LISTED PRIVATE SECURITIES

                         

Other Debt instruments

                         

Local

                         

In pesos

                         

Other

              --,--               7,191           7,191   
           

 

 

     

 

 

      

 

 

      

 

 

 

Subtotal in pesos

              --,--          --,--           7,191           7,191   
           

 

 

     

 

 

      

 

 

      

 

 

 

Subtotal Debt instruments

              --,--          --,--           7,191           7,191   
           

 

 

     

 

 

      

 

 

      

 

 

 

Other Equity instruments

                         

Local

                         

In pesos

                         

Tenaris S.A.

     40115                 132               132           132   

Other

              --,--               5           5   
           

 

 

     

 

 

      

 

 

      

 

 

 

Subtotal in pesos

              132          141           137           137   
           

 

 

     

 

 

      

 

 

      

 

 

 

From abroad

                         

In foreign currency

                         

Other

              37               37           37   
           

 

 

     

 

 

      

 

 

      

 

 

 

Subtotal in foreign currency

              37          37           37           37   
           

 

 

     

 

 

      

 

 

      

 

 

 

Subtotal Equity instruments

              169          178           174           174   
           

 

 

     

 

 

      

 

 

      

 

 

 

TOTAL INVESTMENTS IN LISTED PRIVATE SECURITIES

              169          178           7,365           7,365   
           

 

 

     

 

 

      

 

 

      

 

 

 

TOTAL GOVERNMENT AND PRIVATE SECURITIES

              14,707,392          11,572,263           12,726,046           12,726,046   
           

 

 

     

 

 

      

 

 

      

 

 

 


Table of Contents

LOGO

- 34 -

 

EXHIBIT B

CLASSIFICATION OF FINANCING FACILITIES BY CATEGORIES

AND GUARANTIES RECEIVED AS OF MARCH 31, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20)

-Stated in thousands of pesos-

 

 

      03-31-2015               12-31-2014        

COMMERCIAL PORTFOLIO

Normal performance

  22,773,792          22,084,118       
  

 

 

    

 

 

 

Preferred collaterals and counter guaranties “A”

  1,522,608          1,215,074       

Preferred collaterals and counter guaranties “B”

  826,881          770,416       

Without senior security or counter guaranties

  20,424,303          20,098,628       

With special follow-up

  --,--          7,022       
  

 

 

    

 

 

 

Under observation

  --,--          7,022       
  

 

 

    

 

 

 

Preferred collaterals and counter guaranties “B”

  --,--          540       

Without senior security or counter guaranties

  --,--          6,482       

Non-performing

  --,--          5,048       
  

 

 

    

 

 

 

Without senior security or counter guaranties

  --,--          5,048       

With high risk of uncollectibility

  7,515          --,--       
  

 

 

    

 

 

 

Preferred collaterals and counter guaranties “B”

  592      --,--       

Without senior security or counter guaranties

  6,923          --,--       

Uncollectible

  13,394          27,508       
  

 

 

    

 

 

 

Preferred collaterals and counter guaranties “B”

  3,750          3,750       

Without senior security or counter guaranties

  9,644          23,758       
  

 

 

    

 

 

 

Total

  22,794,701          22,123,696       
  

 

 

    

 

 

 


Table of Contents

LOGO

- 35 -

 

EXHIBIT B

(Contd.)   

 

CLASSIFICATION OF FINANCING FACILITIES BY CATEGORIES

AND GUARANTIES RECEIVED AS OF MARCH 31, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20)

-Stated in thousands of pesos-

 

 

      03-31-2015               12-31-2014        

CONSUMER AND HOUSING PORTFOLIO

Normal performance

  23,337,913      22,255,710   
  

 

  

 

 

    

 

  

 

 

 

Preferred collaterals and counter guaranties “A”

  35,774      41,185   

Preferred collaterals and counter guaranties “B”

  1,967,837      1,890,172   

Without senior security or counter guaranties

  21,334,302      20,324,353   

Low risk

  265,055      221,648   
  

 

  

 

 

    

 

  

 

 

 

Preferred collaterals and counter guaranties “A”

  --,--      68   

Preferred collaterals and counter guaranties “B”

  22,340      23,400   

Without senior security or counter guaranties

  242,715      198,180   

Medium risk

  198,486      196,426   
  

 

  

 

 

    

 

  

 

 

 

Preferred collaterals and counter guaranties “B”

  7,184      10,359   

Without senior security or counter guaranties

  191,302      186,067   

High risk

  131,173      129,534   
  

 

  

 

 

    

 

  

 

 

 

Preferred collaterals and counter guaranties “B”

  18,970      16,183   

Without senior security or counter guaranties

  112,203      113,351   

Uncollectible

  27,281      33,395   
  

 

  

 

 

    

 

  

 

 

 

Preferred collaterals and counter guaranties “B”

  9,772      9,674   

Without senior security or counter guaranties

  17,509      23,721   

Uncollectible, classified as such under regulatory requirements

  57      136   
  

 

  

 

 

    

 

  

 

 

 

Without senior security or counter guaranties

  57      136   
  

 

  

 

 

    

 

  

 

 

 

Total

  23,959,965      22,836,849   
  

 

  

 

 

    

 

  

 

 

 

General Total (1)

  46,754,666      44,960,545   
  

 

  

 

 

    

 

  

 

 

 

(1) Items included: Loans (before allowances); Other receivables from financial transactions: Unlisted corporate bonds and Other receivables covered by debtor classification regulations; Receivables from financial leases (before allowances); Memorandum accounts - Credit - Contingent: Credit lines granted (unused portion) covered by debtor classification regulations, Other guaranties given covered by debtor classification regulations and Other covered by debtor classification regulations.


Table of Contents

LOGO

- 36 -

 

EXHIBIT C

FINANCING FACILITIES CONCENTRATION

AS OF MARCH 31, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20)

- Stated in thousands of pesos -

 

  03-31-2015 12-31-2014

Number of clients

   Outstanding   
balance
     % of total     
portfolio
   Outstanding   
balance
     % of total     
portfolio

10 largest clients

    5,017,901       10.73%       5,084,274       11.31%  

50 next largest clients

    6,403,986       13.70%       6,428,811       14.30%  

100 following clients

    3,941,306       8.43%       3,771,556       8.39%  

Remaining clients

    31,391,473       67.14%       29,675,904       66.00%  
    

 

 

      

 

 

      

 

 

      

 

 

 

Total (1)

      46,754,666       100.00%         44,960,545       100.00%  
    

 

 

      

 

 

      

 

 

      

 

 

 

 

(1)

See (1) in Exhibit B.


Table of Contents

LOGO

- 37 -

 

EXHIBIT D

BREAKDOWN BY FINANCING TERMS AS OF MARCH 31, 2015

(Translation of financial statements originally issued in Spanish - See note 20)

- Stated in thousands of pesos -

 

              Term remaining to maturity                

Description

  Past-due
    portfolio    
          1 month               3 months             6 months             12 months             24 months          More than 24 
months
             Total               

Government sector

      --,--          48          --,--          --,--          --,--          57,160          --,--          57,208     

Financial sector

      --,--          646,236          412,338          327,443          560,183          114,387          7,500          2,068,087     

Non financial private sector and residents abroad

 

     

 

180,896

 

  

 

     

 

21,964,779

 

  

 

     

 

4,810,610

 

  

 

     

 

3,699,014

 

  

 

     

 

3,697,825

 

  

 

     

 

4,843,740

 

  

 

     

 

5,432,507

 

  

 

     

 

44,629,371

 

  

 

 
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

   

TOTAL

   

 

 

 

 

180,896

 

 

  

 

   

 

 

 

 

22,611,063

 

 

  

 

   

 

 

 

 

5,222,948

 

 

  

 

   

 

 

 

 

4,026,457

 

 

  

 

   

 

 

 

 

4,258,008

 

 

  

 

   

 

 

 

 

5,015,287

 

 

  

 

   

 

 

 

 

5,440,007

 

 

  

 

   

 

 

 

 

46,754,666

 

 

  

 

  (1)
   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

   

 

(1)

See (1) in Exhibit B.


Table of Contents

LOGO

- 38 -

 

EXHIBIT E

DETAIL OF INVESTMENTS IN OTHER COMPANIES

AS OF MARCH 31, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish – See note 20)

- Stated in thousands of pesos -

 

 

 
                         

Information about the issuer

 
Concept   Shares     Amount              

Data from last published financial statements

 

 

 

     

 

 

 

Identification

 

Description

 

      Class      

   Unit face value     Votes
per
 share 
     Number          03-31-2015         12-31-2014      

    Main business    

  Period / Fiscal
year end
         Capital     
stock
      Stockholders’  
equity
    Income/
(Loss)
for the
period /
 fiscal year 
 
 

FINANCIAL INSTITUTIONS, SUPPLEMENTARY AND AUTHORIZED

   

       
  Controlled                  
  Local                    

 

thousands

of pesos

  

  

 

33642192049

  BBVA Francés Valores S.A.   Common     500$      1     12,396        33,567        25,208      Stockholder     03-31-2015        6,390        34,606        8,617   

30663323926

  Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings)   Common     1$      1     35,425,947        4,909        4,591      Pensions fund manager     03-31-2015        65,739        9,109        1,366   

30707847367

  PSA Finance Arg. Cía Financiera S.A.   Common     1,000$      1     26,089        302,651        271,156      Financial institution     03-31-2015        52,178        605,301        62,990   

30548590163

  BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión   Common     1$      1     230,398        91,708        78,567      Investment Fund Manager     03-31-2015        243        142,756        13,833   

33707124909

  Rombo Cía. Financiera S.A.   Common     1,000$      1     24,000        279,971        254,095      Financial Institution     03-31-2015        60,000        699,928        64,690   
           

 

 

   

 

 

           
   

Subtotal controlled

  

        712,806        633,617         
           

 

 

   

 

 

           
  Non controlled                  
  Local                  

30598910045

  Visa Argentina S.A.   Common     1$      1     1,571,996        6,428        6,428      Services to companies     05-31-2014        15,000        356,378        295,046   

30690783521

  Interbanking S.A.   Common     1$      1     149,556        5,111        5,111      Services     12-31-2013        1,346        161,375        129,239   
  Other             250        250         
  Foreign                  

30710156561

  Banco Lat. de Comercio Exterior S.A.   Common B     57$      1     20,221        2,220        2,152      Banking institution     12-31-2014        2,394,389        7,791,411        914,551   
           

 

 

   

 

 

           
                       
   

Subtotal noncontrolled

      14,009        13,941         
           

 

 

   

 

 

           
   

Total in financial institutions, supplementary and authorized

   

    726,815        647,558         
           

 

 

   

 

 

           
  IN OTHER COMPANIES                  
  Non controlled                  
  Local                  

30500064230

  BBVA Consolidar Seguros S.A.   Common     1$      1     1,301,847        49,807        44,353      Insurance     03-31-2015        10,651        407,589        104,492   
  Foreign                  

17BE1002

  S.W.I.F.T. S.C.R.L.   Common   1,117$        1     4        111        107      Financial messenger services     12-31-2013        123,809        2,907,399        182,253   
           

 

 

   

 

 

           
   

Subtotal non controlled

      49,918        44,460         
           

 

 

   

 

 

           
   

Total in other companies

  

    49,918        44,460         
           

 

 

   

 

 

           
   

Total investments in other companies

  

    776,733        692,018         
           

 

 

   

 

 

           


Table of Contents

LOGO

- 39 -

 

EXHIBIT F

MOVEMENT OF PREMISES AND EQUIPMENT AND OTHER ASSETS

FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2015 AND

THE FISCAL YEAR ENDED DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20)

- Stated in thousands of pesos -

 

Description

   Net book
value at
    

  Additions  

    

 Transfers 

    

  Decreases  

     Depreciation for
the period
    

 Net book value at 

03-31-2015

    

 Net book value at 

12-31-2014

 
    beginning of 
fiscal year
    

 

    

 

    

 

     Years of
 useful life 
       Amount       

 

    

 

 

PREMISES AND EQUIPMENT

                                            

Real Estate

        389,249            21            19,381            --,--         50            7,433            401,218            389,249   

Furniture and Facilities

        349,477            24,968            53            --,--         10            12,218            362,280            349,477   

Machinery and Equipment

        180,517            7,097            --,--                30         3 & 5            24,487            163,097            180,517   

Automobiles

        4,994            --,--            --,--                154         5            404            4,436            4,994   
     

 

 

       

 

 

       

 

 

       

 

 

          

 

 

       

 

 

       

 

 

 

Total

        924,237            32,086            19,434            184               44,542            931,031            924,237   
     

 

 

       

 

 

       

 

 

       

 

 

          

 

 

       

 

 

       

 

 

 

OTHER ASSETS

                                            

Construction in progress

        139,639            17,380            (19,434)              15,206         --,--            --,--            122,379            139,639   
Advances to suppliers of goods         940,218            125,023            --,--                20,096         --,--            --,--            1,045,145            940,218   

Works of Art

        992            --,--            --,--                --,--         --,--            --,--            992            992   

Leased assets

        2,247            --,--            --,--                --,--         50            12            2,235            2,247   
Property taken as security for loans         2,424            291            --,--                77         50            22            2,616            2,424   
Stationery and office supplies         24,165            3,136            --,--                5,109         --,--            --,--            22,192            24,165   

Other

        35,130            --,--            --,--                --,--         50            47            35,083            35,130   
     

 

 

       

 

 

       

 

 

       

 

 

          

 

 

       

 

 

       

 

 

 

Total

        1,144,815            145,830            (19,434)              40,488               81            1,230,642            1,144,815   
     

 

 

       

 

 

       

 

 

       

 

 

          

 

 

       

 

 

       

 

 

 


Table of Contents

LOGO

- 40 -

 

EXHIBIT G

MOVEMENT OF INTANGIBLE ASSETS

FOR THE THREE MONTH PERIOD ENDED MARCH 31, 2015 AND

THE FISCAL YEAR ENDED DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20)

- Stated in thousands of pesos -

 

Description    Net book
value at
beginning of
fiscal year
   Additions          Amortization for the    
period
         
        

Years of

useful life

     Amount     

Net book value  

at 03-31-2015  

   Net book value 
at 12-31-2014

Organization and development expenses (1)

       144,357          27,405          1 & 5          14,580          157,182          144,357  

Organization and development non-deductible expenses

       --,--          1,708          --,--          1,708          --,--          --,--  
    

 

 

      

 

 

           

 

 

      

 

 

      

 

 

 

Total

       144,357          29,113               16,288          157,182          144,357  
    

 

 

      

 

 

           

 

 

      

 

 

      

 

 

 

(1) This caption mainly includes costs from information technology projects and leasehold improvements.


Table of Contents

LOGO

- 41 -

 

EXHIBIT H

CONCENTRATION OF DEPOSITS

AS OF MARCH 31, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20)

- Stated in thousands of pesos -

 

  03-31-2015 12-31-2014

Number of clients

    Outstanding   
balance
     % of total     
portfolio
     Outstanding     
balance
     % of total     
portfolio

10 largest clients

       5,238,696           9.47%           4,410,087           8.57%   

50 next largest clients

       5,493,903           9.93%           4,770,509           9.27%   

100 following clients

       3,208,971           5.80%           2,909,097           5.66%   

Remaining clients

      

 

41,404,199

 

  

 

      

 

74.80%

 

  

 

      

 

39,345,958

 

  

 

      

 

76.50%

 

  

 

    

 

 

      

 

 

      

 

 

      

 

 

 

 

TOTAL

 

    

 

 

 

 

55,345,769

 

 

 

 

    

 

 

 

 

100.00%

 

 

  

 

    

 

 

 

 

51,435,651

 

 

 

 

    

 

 

 

 

100.00%

 

 

  

 

    

 

 

      

 

 

      

 

 

      

 

 

 


Table of Contents

LOGO

- 42 -

 

EXHIBIT I

BREAKDOWN OF MATURITY TERMS OF DEPOSITS AND

OTHER LIABILITIES FROM FINANCIAL TRANSACTIONS

AS OF MARCH 31, 2015

(Translation of financial statements originally issued in Spanish - See note 20)

- Stated in thousands of pesos -

 

     Terms remaining to maturity       

Description

   1 month      3 months      6 months      12 months      24 months      More than
24 months
     Total  

Deposits

        49,405,017            5,152,959            594,318            169,050            24,425            --,--            55,345,769   
     

 

 

       

 

 

       

 

 

       

 

 

       

 

 

       

 

 

       

 

 

 

Other liabilities from financial transactions

Argentine Central Bank

  4,581      4,091      6,113      12,716      24,476      15,167      67,144   

Banks and International Institutions

  71,437      273,497      7,152      --,--      --,--      --,--      352,086   

Unsubordinated corporate bonds

  18,877      164,271      258,880      368,050      670,277      273,400      1,753,755   

Financing received from local financial institutions

  102,092      --,--      --,--      --,--      --,--      --,--      102,092   

Other

 

 

3,969,987

 

  

 

 

 

2,490

 

  

 

 

 

4,474

 

  

 

 

 

8,175

 

  

 

 

 

14,576

 

  

 

 

 

9,538

 

  

 

 

 

4,009,240

 

  

 

     

 

 

       

 

 

       

 

 

       

 

 

       

 

 

       

 

 

       

 

 

 

Total

 

 

 

 

4,166,974

 

 

  

 

 

 

 

 

444,349

 

 

  

 

 

 

 

 

276,619

 

 

  

 

 

 

 

 

388,941

 

 

  

 

 

 

 

 

709,329

 

 

  

 

 

 

 

 

298,105

 

 

  

 

 

 

 

 

6,284,317

 

 

  

 

     

 

 

       

 

 

       

 

 

       

 

 

       

 

 

       

 

 

       

 

 

 

    

     

 

 

       

 

 

       

 

 

       

 

 

       

 

 

       

 

 

       

 

 

 

TOTAL

 

 

 

 

 

53,571,991

 

 

  

 

 

 

 

 

  5,597,308

 

 

  

 

 

 

 

 

  870,937

 

 

  

 

 

 

 

 

    557,991

 

 

  

 

 

 

 

 

  733,754

 

 

  

 

 

 

 

 

  298,105

 

 

  

 

 

 

 

 

61,630,086

 

 

  

 

     

 

 

       

 

 

       

 

 

       

 

 

       

 

 

       

 

 

       

 

 

 


Table of Contents

LOGO

- 43 -

 

EXHIBIT J

MOVEMENT OF ALLOWANCES

FOR THE THREE MONTH PERIOD ENDEN MARCH 31, 2015

AND THE FISCAL YEAR ENDED DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20)

- Stated in thousands of pesos -

 

                                                                                                                                                                                     

 

 

 

 

 

     

Decreases

 

Book value

 

Description

 

Book value at
 beginning of fiscal 
year

 

Increases

(4)

     

    Reversals    

 

Applications    

 

  03-31-2015  

 

  12-31-2014  

 

DEDUCTED FROM ASSETS

Government securities

–      For impairment value

  201      --,--      --,--      --,--      201      201   

Loans

–      Allowance for doubtful loans

  905,336      140,641      (1)      --,--      129,180      916,797      905,336   
Other receivables from financial transactions

–      Allowance for doubtful receivables and impairment

  2,139      383      (1)      --,--      1      2,521      2,139   

Receivables from financial leases

–      Allowance for doubtful receivables and impairment

  28,808      3,381      (1)      --,--      669      31,520      28,808   

Other receivables

–      Allowance for doubtful receivables (2)

  291,237      13,640      16,814      64      287,999      291,237   
     

 

 

     

 

 

       

 

 

     

 

 

     

 

 

     

 

 

 

Total

  1,227,721      158,045      16,814      129,914      1,239,038      1,227,721   
     

 

 

     

 

 

       

 

 

     

 

 

     

 

 

     

 

 

 

LIABILITIES-ALLOWANCES

–      Contingents commitments (1)

  577      91      --,--      --,--      668      577   

–      Other contingencies

  770,496      75,404      (3)      37      7,930      837,933      770,496   

–      For administrative, disciplinary and criminal penalties

  --,--      48,817      (5)      --,--      --,--      48,817      --,--   
     

 

 

     

 

 

   

 

 

     

 

 

     

 

 

     

 

 

     

 

 

 

Total

  771,073      124,312      37      7,930      887,418      771,073   
     

 

 

     

 

 

       

 

 

     

 

 

     

 

 

     

 

 

 

 

(1)

Recorded in compliance with the provisions of Communication “A” 3918, as supplemented, of the BCRA, taking into account note 2.3.f).

(2)

Includes mainly the potential loan loss risk arising from the amounts booked as Miscellaneous receivables relating to the petitions for the protection of constitutional rights (Amparos) paid and the deferred tax asset (See note 4.1).

(3)

Recorded to cover possible contingencies that were not considered in other accounts (court orders corresponding to petitions for protection of civil rights, labor, commercial and other lawsuits). (See note 2.3.p).

(4)

Includes exchange differences generated as allowances in foreign currency, booked in the “Financial income - Gold and foreign currency exchange difference” account, as follow:

Loans   837   

Other receivables   585   
(5)

See note 6.1.


Table of Contents

LOGO

- 44 -

 

EXHIBIT K

CAPITAL STRUCTURE AS OF MARCH 31, 2015

(Translation of financial statements originally issued in Spanish - See note 20)

- Stated in thousands of pesos -

 

SHARES

CAPITAL STOCK      

Class

Quantity   Votes per
share
Issued  

 

Pending
issuance or

      Paid in      
Outstanding   In portfolio   distribution      

Common

  536,877,850      1   536,833              --,--              45            (1   536,878            (2

(1)   Shares issued and available to stockholders but not as yet withdrawn.

(2)   Fully registered with the Public Registry of Commerce (See note 1.2.).


Table of Contents

LOGO

- 45 -

 

EXHIBIT L

FOREIGN CURRENCY BALANCES AS OF

MARCH 31, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20)

-Stated in thousands of pesos-

 

Accounts         03-31-2015         12-31-2014

 

  

 

                    Total of the period (per type of currency)     
        

 

     
     Total of
the period
   Euro    US Dollars      Pounds
Sterling
   Swiss
Franc
   Yen    Other    Total of the
fiscal year

ASSETS

                                               

Cash and due from banks

      5,290,031       191,714         5,074,125          10,502       259       700       12,731       6,065,743

Government and private securities

      1,122,522       --,--         1,122,485          --,--       --,--       --,--       37       415,797

Loans

      2,530,051       5,416         2,524,635          --,--       --,--       --,--       --,--       2,070,525

Other receivables from financial transactions

      497,280       10         497,270          --,--       --,--       --,--       --,--          324,144

Investments in other companies

      2,331       111         2,220          --,--       --,--       --,--       --,--       2,259

Other receivables

      203,729       140         203,589          --,--       --,--       --,--       --,--       154,616

Suspense items

      171       --,--         171          --,--       --,--       --,--       --,--       378
     

 

     

 

     

 

 

       

 

     

 

     

 

     

 

     

 

TOTAL

      9,646,115       197,391         9,424,495          10,502       259       700       12,768       9,033,462
     

 

     

 

     

 

 

       

 

     

 

     

 

     

 

     

 

LIABILITIES

                                               

Deposits

      6,116,100       77,385         6,038,715          --,--       --,--       --,--       --,--       5,488,117

Other liabilities from financial transactions

      1,765,659       99,363         1,654,787          9,925       131       492       961       1,725,670

Other liabilities

      76,615       6,843         69,772          --,--       --,--       --,--       --,--       55,840

Suspense items

      1,336       --,--         1,336          --,--       --,--       --,--       --,--       1,016
     

 

     

 

     

 

 

       

 

     

 

     

 

     

 

     

 

TOTAL

      7,959,710       183,591         7,764,610          9,925       131       492       961       7,270,643
     

 

     

 

     

 

 

       

 

     

 

     

 

     

 

     

 

MEMORANDUM ACCOUNTS

                                               

Debit accounts (except contra debit accounts)

                                               

Contingent

      3,079,220       185,229         2,893,991          --,--       --,--       --,--       --,--       2,927,981

Control

      44,411,036       107,625         44,301,880          --,--       157       661       713       39,540,975
     

 

     

 

     

 

 

       

 

     

 

     

 

     

 

     

 

TOTAL

      47,490,256       292,854         47,195,871          --,--       157       661       713       42,468,956
     

 

     

 

     

 

 

       

 

     

 

     

 

     

 

     

 

Credit accounts (except contra credit accounts)

                                               

Contingent

      760,777       135,374         624,228          --,--       --,--       1,175       --,--       603,372

Control

      66,963       8,462         58,501          --,--       --,--       --,--       --,--       122,585
     

 

     

 

     

 

 

       

 

     

 

     

 

     

 

     

 

TOTAL

      827,740       143,836         682,729          --,--       --,--       1,175       --,--       725,957
     

 

     

 

     

 

 

       

 

     

 

     

 

     

 

     

 


Table of Contents

LOGO

- 46 -

 

EXHIBIT N

ASSISTANCE TO RELATED CLIENTS AND AFFILIATES

AS OF MARCH 31, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20)

- Stated in thousands of pesos -

 

 

  Status    

 

 
Concept   Normal     With special
follow-up /
Low risk
    With problems /
Medium risk
    With high risk of
uncollectibility / High
risk
    Uncollectible     Classified
uncollectible
as such
under
regulatory
requirements
    Total (1)  
      Not yet
matured
    Past-due     Not yet
matured
    Past-due         03-31-2015     12-31-2014  

 

 

 

 

 

1.     Loans

    1,701,649        --,--        --,--        --,--        --,--        --,--        --,--        --,--        1,701,649             1,824,455   

- Overdraft

    1,673        --,--        --,--        --,--        --,--        --,--        --,--        --,--        1,673        572   

Without senior security or counter guaranty

    1,673        --,--        --,--        --,--        --,--        --,--        --,--        --,--        1,673        572   

- Discounted Instruments

    --,--        --,--        --,--        --,--        --,--        --,--        --,--        --,--        --,--        2,818   

Without senior security or counter guaranty

    --,--        --,--        --,--        --,--        --,--        --,--        --,--        --,--        --,--        2,818   

- Real Estate Mortgage and Collateral Loans

    3,448        --,--        --,--        --,--        --,--        --,--        --,--        --,--        3,448        3,777   

Other collaterals and counter guaranty “B”

    3,448        --,--        --,--        --,--        --,--        --,--        --,--        --,--        3,448        3,777   

- Consumer

    4,729        --,--        --,--        --,--        --,--        --,--        --,--        --,--        4,729        4,889   

Without senior security or counter guaranty

    4,729        --,--        --,--        --,--        --,--        --,--        --,--        --,--        4,729        4,889   

- Credit Cards

    5,132        --,--        --,--        --,--        --,--        --,--        --,--        --,--        5,132        5,137   

Without senior security or counter guaranty

    5,132        --,--        --,--        --,--        --,--        --,--        --,--        --,--        5,132        5,137   

- Other

    1,686,667        --,--        --,--        --,--        --,--        --,--        --,--        --,--        1,686,667        1,807,262   

Without senior security or counter guaranty

    1,686,667        --,--        --,--        --,--        --,--        --,--        --,--        --,--        1,686,667             1,807,262   

2.     Other receivables from financial transactions

    60,446        --,--        --,--        --,--        --,--        --,--        --,--        --,--        60,446             43,699   

3.     Receivables from financial leases and other

    318        --,--        --,--        --,--        --,--        --,--        --,--        --,--        318        402   

4.     Contingent commitments

    51,006        --,--        --,--        --,--        --,--        --,--        --,--        --,--        51,006             57,932   

5.     Investments in other companies and private securities

    749,645        --,--        --,--        --,--        --,--        --,--        --,--        --,--        749,645             665,247   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total

    2,563,064        --,--        --,--        --,--        --,--        --,--        --,--        --,--        2,563,064             2,591,735   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total Allowances

    17,624        --,--        --,--        --,--        --,--        --,--        --,--        --,--        17,624             18,686   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(1) Maximum amount granted to related clients during March 2015 and December 2014, respectively, according to BCRA rules.


Table of Contents

LOGO

- 47 -

 

EXHIBIT O

 

FINANCIAL DERIVATIVES INSTRUMENTS

AS OF MARCH 31, 2015

(Translation of financial statements originally issued in Spanish - See note 20)

- Stated in thousands of pesos -

 

 

 
Type of
contract
   Purpose of
transactions
   Underlying
asset
   Type of Settlement    Traded at / Counterparty   

Weighted
average term as
originally
agreed

(months)

  

Weighted
average
residual
term

(months)

  

Weighted
average term
for
difference
settlements

(days)

   Amount  

 

 

Swaps

   Financial
transactions – own
account
   -    Upon expiration of
differences
   Residents in Argentina –

Financial sector

   23    11    48      873,465     

Swaps

   Financial
transactions – own
account
   -    Upon expiration of
differences
   Residents in Argentina –

Non- financial sector

   12    12    4      13,000     

Swaps

   Financial
transactions – own
account
   -    Daily of differences    MAE    13    12    1      13,000     

Swaps

   Interest rate hedge    -    Upon expiration of
differences
   Residents in Argentina –

Non - financial sector

   122    54    7      34,987     

Futures

   Financial
transactions – own
account
   Foreign
currency
   Daily of differences    MAE    1    1    1      1,531,797     

Futures

   Financial
transactions – own
account
   Foreign
currency
   Daily of differences    ROFEX    1    1    1      630,212     

Futures

   Financial
transactions – own
account
   Foreign
currency
   Upon expiration of
differences
   Residents in Argentina –

Non - financial sector

   3    2    84      1,450,331     

Repo transactions

   Financial
transactions – own
account
   Federal
Government
Bonds
   Upon expiration of
differences
   Residents in Argentina –

Financial sector

   1    1    1      98,670     

Repo transactions

   Financial
transactions – own
account
   Other    Upon expiration of
differences
   Residents in Argentina –

Financial sector

   1    1    1      1,971,697     
                       

 

 

 

TOTAL

                          6,617,159     
                       

 

 

 


Table of Contents

LOGO

- 48 -

 

CONSOLIDATED BALANCE SHEETS AS OF

MARCH 31, 2015 AND DECEMBER 31, 2014

(Art. 33 of Law Nr. 19,550)

(Translation of financial statements originally issued in Spanish - See note 20 to the stand-alone Financial Statements)

-Stated in thousands of pesos-

 

ASSETS:    03-31-2015      12-31-2014  

A. CASH AND DUE FROM BANKS:

           

 Cash

        2,807,446            2,857,676   

 Due from banks and correspondents

        10,089,677            9,702,478   
     

 

 

       

 

 

 

Argentine Central Bank (BCRA)

        9,980,916            9,350,350   

Other local

        1,875            1,196   

Foreign

        106,886            350,932   
     

 

 

       

 

 

 
        12,897,123            12,560,154   
     

 

 

       

 

 

 

B. GOVERNMENT AND PRIVATE SECURITIES (Note 7.a):

           

Holdings booked at fair value

        2,623,838            2,942,473   

Holdings booked at amortized cost

        98,391            164   

Instruments issued by the BCRA

        11,985,646            8,630,056   

Investments in listed private securities

        79,415            60,997   

Less: Allowances

        201            201   
     

 

 

       

 

 

 
        14,787,089            11,633,489   
     

 

 

       

 

 

 

C. LOANS:

           

To government sector (Exhibit 1)

        57,208            54,459   

To financial sector (Exhibit 1)

        1,025,483            1,127,116   
     

 

 

       

 

 

 

Interfinancial – (Call granted)

        5,000            30,000   

Other financing to local financial institutions

        805,528            880,437   

Interest and listed-price differences accrued and pending collection

        214,955            216,679   

To non financial private sector and residents abroad (Exhibit 1)

        43,009,218            41,199,059   
     

 

 

       

 

 

 

Overdraft

        7,180,739            6,861,786   

Discounted instruments

        5,882,870            6,035,048   

Real estate mortgage

        1,512,906            1,466,346   

Collateral Loans

        3,644,048            3,695,487   

Consumer

        6,181,597            6,091,937   

Credit cards

        12,399,432            11,465,609   

Other

        5,609,073            5,025,304   

Interest and listed-price differences accrued and pending collection

        733,688            691,454   

Less: Interest documented together with main obligation

        135,135            133,912   

Less: Allowances

        950,344            937,794   
     

 

 

       

 

 

 
        43,141,565            41,442,840   
     

 

 

       

 

 

 

D. OTHER RECEIVABLES FROM FINANCIAL TRANSACTIONS:

           

Argentine Central Bank (BCRA)

        456,102            384,930   

Amounts receivable for spot and forward sales to be settled

        2,641,928            1,405,562   

Instruments to be received for spot and forward purchases to be settled

        651,129            312,684   

Unlisted corporate bonds (Exhibit 1)

        101,707            48,653   

Non-deliverable forward transactions balances to be settled

        26,028            139,149   

Other receivables not covered by debtor classification regulations

        31,175            14,873   

Other receivables covered by debtor classification regulations (Exhibit 1)

        290,128            311,787   

Less: Allowances

        6,264            5,267   
     

 

 

       

 

 

 
        4,191,933            2,612,371   
     

 

 

       

 

 

 

E. RECEIVABLES FROM FINANCIAL LEASES:

           

Receivables from financial leases (Exhibit 1)

        2,130,877            2,075,497   

Interest accrued pending collection (Exhibit 1)

        31,576            27,585   

Less: Allowances

        32,835            29,840   
     

 

 

       

 

 

 
        2,129,618            2,073,242   
     

 

 

       

 

 

 

F. INVESTMENTS IN OTHER COMPANIES:

           

In financial institutions

        282,191            256,247   

Other (Note 7.b)

        79,921            66,743   
     

 

 

       

 

 

 
        362,112            322,990   
     

 

 

       

 

 

 

G. OTHER RECEIVABLES:

           

Other (Note 7.c)

        1,620,586            1,696,426   

Other interest accrued and pending collection

        677            744   

Less: Allowances

        321,732            324,756   
     

 

 

       

 

 

 
        1,299,531            1,372,414   
     

 

 

       

 

 

 

H. PREMISES AND EQUIPMENT:

        936,505            929,760   
     

 

 

       

 

 

 

I. OTHER ASSETS:

        1,266,069            1,187,961   
     

 

 

       

 

 

 

J. INTANGIBLE ASSETS:

           

Organization and development expenses

        157,514            144,672   
     

 

 

       

 

 

 
        157,514            144,672   
     

 

 

       

 

 

 

K. SUSPENSE ITEMS:

        8,471            8,563   
     

 

 

       

 

 

 

L. OTHER SUBSIDIARIES’ ASSETS (Note 7.d):

        --,--            450   
     

 

 

       

 

 

 

TOTAL ASSETS:

        81,177,530            74,288,906   
     

 

 

       

 

 

 


Table of Contents

LOGO

- 49 -

 

(Contd.)

 

CONSOLIDATED BALANCE SHEETS AS OF

MARCH 31, 2015 AND DECEMBER 31, 2014

(Art. 33 of Law Nr. 19,550)

(Translation of financial statements originally issued in Spanish - See note 20 to the stand-alone Financial Statements)

-Stated in thousands of pesos-

LIABILITIES:   

03-31-2015

    

12-31-2014

 

M. DEPOSITS:

         

Government sector

       1,831,368           1,017,837   

Financial sector

       49,545           77,482   

Non financial private sector and residents abroad

       53,476,758           50,347,558   
    

 

 

      

 

 

 

Checking accounts

       14,447,318           14,614,559   

Savings deposits

       15,097,318           14,995,902   

Time deposits

       22,093,791           19,303,430   

Investments accounts

       594           483   

Other

       1,517,837           1,129,571   

Interest and listed-price differences accrued payable

       319,900           303,613   
    

 

 

      

 

 

 
       55,357,671           51,442,877   
    

 

 

      

 

 

 

N. OTHER LIABILITIES FROM FINANCIAL TRANSACTIONS:

         

Argentine Central Bank

       67,144           73,110   
    

 

 

      

 

 

 

Other

       67,144           73,110   

Banks and International Institutions

       349,594           406,031   

Unsubordinated corporate bonds

       1,825,749           1,868,434   

Amounts payable for spot and forward purchases to be settled

       651,152           312,751   

Instruments to be delivered for spot and forward sales to be settled

       2,684,369           1,457,098   

Financing received from Argentine financial institutions

       233,384           124,424   
    

 

 

      

 

 

 

Interfinancial (call borrowed)

       151,400           49   

Other financings from local financial institutions

       81,870           124,375   

Interest accrued payable

       114           --,--     

Non-deliverable forward transactions balances to be settled

       193           408   

Other (Note 7.e)

       4,187,784           4,278,335   

Interest and listed–price differences accrued payable

       88,209           96,942   
    

 

 

      

 

 

 
       10,087,578           8,617,533   
    

 

 

      

 

 

 

O. OTHER LIABILITIES:

         

Fees payable

       486           122   

Other (Note 7.f)

       3,200,175           2,771,721   
    

 

 

      

 

 

 
       3,200,661           2,771,843   
    

 

 

      

 

 

 

P. ALLOWANCES:

       933,692           818,092   
    

 

 

      

 

 

 

Q. SUSPENSE ITEMS:

       27,003           30,290   
    

 

 

      

 

 

 

R. OTHER SUBSIDIARIES’ LIABILITIES (Note 7.g):

       --,--             337   
    

 

 

      

 

 

 

TOTAL LIABILITIES:

       69,606,605           63,680,972   
    

 

 

      

 

 

 

S. MINORITY INTEREST IN SUBSIDIARIES (Note 4):

       308,103           276,058   
    

 

 

      

 

 

 

STOCKHOLDERS’ EQUITY:

       11,262,822           10,331,876   
    

 

 

      

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY:

       81,177,530           74,288,906   
    

 

 

      

 

 

 


Table of Contents

LOGO

- 50 -

 

MEMORANDUM ACCOUNTS

(Translation of financial statements originally issued in Spanish - See note 20 to the stand-alone Financial Statements)

- Stated in thousands of pesos -

 

    

03-31-2015

    

12-31-2014

 

DEBIT ACCOUNTS

           

Contingent

           

–         Guaranties received

        14,359,832            13,726,776   

–         Contra contingent debit accounts

        2,019,971            1,750,341   
     

 

 

       

 

 

 
        16,379,803            15,477,117   
     

 

 

       

 

 

 

Control

           

–         Receivables classified as irrecoverable

        637,640            539,719   

–         Other (Note 7.h)

        140,501,028            120,436,826   

–         Contra control debit accounts

        323,527            1,363,258   
     

 

 

       

 

 

 
        141,462,195            122,339,803   
     

 

 

       

 

 

 

Derivatives

           

–         “Notional” amount of non-deliverable forward transactions

        1,646,259            2,984,388   

–         Interest rate swap

        858,237            1,003,244   

–         Contra debit derivatives accounts

        1,966,081            2,915,793   
     

 

 

       

 

 

 
        4,470,577            6,903,425   
     

 

 

       

 

 

 

For trustee activities

           

–         Funds in trust

        6,605            6,605   
     

 

 

       

 

 

 
        6,605            6,605   
     

 

 

       

 

 

 

TOTAL

        162,319,180            144,726,950   
     

 

 

       

 

 

 

CREDIT ACCOUNTS

           

Contingent

           

–         Credit lines granted (unused portion) covered by debtor classification regulations (Exhibit 1)

        409,432            640,198   

–         Guaranties provided to the BCRA

        485,013            223,973   

–         Other guaranties given covered by debtor classification regulations (Exhibit 1)

        482,191            384,982   

–         Other guaranties given non covered by debtor classification regulations

        231,574            210,453   

–         Other covered by debtor classification regulations (Exhibit 1)

        411,761            290,735   

–         Contra contingent credit accounts

        14,359,832            13,726,776   
     

 

 

       

 

 

 
        16,379,803            15,477,117   
     

 

 

       

 

 

 

Control

           

–         Items to be credited

        54,772            965,725   

–         Other

        268,755            397,533   

–         Contra control credit accounts

        141,138,668            120,976,545   
     

 

 

       

 

 

 
        141,462,195            122,339,803   
     

 

 

       

 

 

 

Derivatives

           

–         “Notional” amount of non-deliverable forward transactions

        1,966,081            2,915,793   

–         Contra credit derivatives accounts

        2,504,496            3,987,632   
     

 

 

       

 

 

 
        4,470,577            6,903,425   
     

 

 

       

 

 

 

For trustee activities

           

–         Contra credit accounts for trustee activities

        6,605            6,605   
     

 

 

       

 

 

 
        6,605            6,605   
     

 

 

       

 

 

 

TOTAL

        162,319,180            144,726,950   
     

 

 

       

 

 

 

The accompanying notes 1 through to 7 to the consolidated financial statements with subsidiaries and the Exhibit 1 are an integral part of these statements, which in turn are part of the stand-alone Financial Statements of BBVA Banco Francés S.A. and are to be read in conjunction therewith.


Table of Contents

LOGO

- 51 -

 

CONSOLIDATED STATEMENTS OF INCOME

FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2015 AND 2014

(Art. 33 of Law Nr. 19,550)

(Translation of financial statements originally issued in Spanish - See note 20 to the stand-alone Financial Statements)

- Stated in thousands of pesos -

    

03-31-2015

    

03-31-2014

 

A. FINANCIAL INCOME

           

Interest on loans to the financial sector

        70,938            97,764   

Interest on overdraft

        488,603            458,888   

Interest on discounted instruments

        306,681            299,693   

Interest on real estate mortgage

        68,649                 53,426        

Interest on collateral loans

        219,544                 188,802        

Interest on credit card loans

        637,018            391,996   

Interest on other loans

        737,640            647,479   

Interest from other receivables from financial transactions

        50            3,753   

Interest on financial leases

        95,305            78,533   

Income from secured loans - Decree 1387/01

        3,544            4,145   

Net income from government and private securities

        922,100            406,762   

Indexation by CER

        45,240            95,549   

Gold and foreign currency exchange difference

        121,814            585,263   

Other

        52,673            527,269   
     

 

 

       

 

 

 
        3,769,799            3,839,322   
     

 

 

       

 

 

 

B. FINANCIAL EXPENSE

           

Interest on savings deposits

        4,620            4,450   

Interest on time deposits

        1,053,486            999,850   

Interest on interfinancial financing (call borrowed)

        5,365            4,004   

Interest on other financing from financial institutions

        7,756            25,453   

Interest on other liabilities from financial transactions

        119,703            98,602   

Other interest

        1,693            2,199   

Indexation by CER

        12            69   

Contribution to the deposit guaranty fund

        88,294            18,857   

Other

        203,441            236,950   
     

 

 

       

 

 

 
        1,484,370            1,390,434   
     

 

 

       

 

 

 

GROSS INTERMEDIATION MARGIN – GAIN

        2,285,429            2,448,888   
     

 

 

       

 

 

 

C. ALLOWANCES FOR LOAN LOSSES

        143,097            118,744   
     

 

 

       

 

 

 

D. SERVICE CHARGE INCOME

           

Related to lending transactions

        582,811            435,702   

Related to liability transactions

        436,740            341,444   

Other commissions

        62,228            39,289   

Other (Note 7.i)

        275,546            207,980   
     

 

 

       

 

 

 
        1,357,325            1,024,415   
     

 

 

       

 

 

 

E. SERVICE CHARGE EXPENSE

           

Commissions

        263,547            193,554   

Other (Note 7.j)

        133,327            102,100   
     

 

 

       

 

 

 
        396,874              295,654     
     

 

 

       

 

 

 


Table of Contents

LOGO

- 52 -

 

(Contd.)

 

CONSOLIDATED STATEMENTS OF INCOME

FOR THE THRE MONTH PERIODS ENDED MARCH 31, 2015 AND 2014

(Art. 33 of Law Nr. 19,550)

(Translation of financial statements originally issued in Spanish - See note 20 to the stand-alone Financial Statements)

- Stated in thousands of pesos -

 

     03-31-2015      03-31-2014  

F. ADMINISTRATIVE EXPENSES

           

Payroll expenses

        905,900            686,017   

Fees to Bank Directors and Supervisory Committee

        1,699            1,463   

Other professional fees

        19,815            17,705   

Advertising and publicity

        42,518            49,741   

Taxes

        143,958            107,979   

Fixed assets depreciation

        44,592            30,403   

Organizational expenses amortization

        14,603            13,223   

Other operating expenses

        209,978            175,022   

Other

        201,185            138,570   
     

 

 

       

 

 

 
        1,584,248                1,220,123       
     

 

 

       

 

 

 

NET GAIN FROM FINANCIAL TRANSACTIONS

        1,518,535            1,838,782   
     

 

 

       

 

 

 

RESULTS OF MINORITY INTEREST IN SUBSIDIARIES

        (32,046)                (19,638)       
     

 

 

       

 

 

 

G. OTHER INCOME

           

Income from long-term investments

        31,417            30,588   

Punitive interests

        7,021            4,898   

Loans recovered and reversals of allowances

        46,181            152,883   

Other (Note 7.k)

        33,061            49,913   
     

 

 

       

 

 

 
        117,680            238,282   
     

 

 

       

 

 

 

H. OTHER EXPENSE

           

Punitive interests and charges paid to BCRA

        4            6   

Charge for uncollectibility of other receivables and other allowances

        92,285            32,298   

Amortization of difference arising from judicial resolutions

        1,708            3,178   

Depreciation and losses from miscellaneous assets

        387            79   

Other (Note 7.l)

        86,212            129,056   
     

 

 

       

 

 

 
        180,596                164,617       
     

 

 

       

 

 

 

NET GAIN BEFORE INCOME TAX AND TAX ON MINIMUM PRESUMED INCOME

        1,423,573            1,892,809   
     

 

 

       

 

 

 

I. INCOME TAX AND TAX ON MINIMUM PRESUMED INCOME

        492,627            530,691   
     

 

 

       

 

 

 

NET INCOME FOR THE PERIOD

        930,946            1,362,118   
     

 

 

       

 

 

 

The accompanying notes 1 through 7 to the consolidated financial statements with subsidiaries and the Exhibit 1 are an integral part of these statements, which in turn are part of the stand-alone Financial Statements of BBVA Banco Francés S.A. and are to be read in conjunction therewith.


Table of Contents

LOGO

- 53 -

 

CONSOLIDATED STATEMENTS OF CASH AND CASH EQUIVALENTS FLOW

FOR THE THREE MONTH PERIODS ENDED MARCH 31, 2015 AND 2014

(ART. 33 OF LAW Nr. 19,550)

(Translation of financial statements originally issued in Spanish - See note 20 to the stand-alone Financial Statements)

-Stated in thousands of pesos-

 

     03-31-2015          03-31-2014      

CHANGES IN CASH AND CASH EQUIVALENTS

               

Cash and cash equivalents at the beginning of the fiscal year

        12,951,964 (1)            13,603,620 (1)   

Cash and cash equivalents at the end of the period

        13,214,818 (1)            11,024,601 (1)   
     

 

 

         

 

 

   

Net increase /(decrease) in cash and cash equivalents

        262,854              (2,579,019)     
     

 

 

         

 

 

   

REASONS FOR CHANGES IN CASH AND CASH EQUIVALENTS

               

Operating activities

               

Net collections/ (payments) from:

               

- Government and private securities

        (2,231,500)              (5,162,555)     

- Loans

        940,827              2,909,863     
     

 

 

         

 

 

   

 to financial sector

        34,909              198,213     

 to non-financial public sector

        (17)              (16)     

 to non-financial private sector and residents abroad

        905,935              2,711,666     

- Other receivables from financial transactions

        (26,041)              143,340     

- Receivables from financial leases

        (56,376)              (15,892)     

- Deposits

        2,541,464              (154,477)     
     

 

 

         

 

 

   

 to financial sector

        (27,937)              (18,251)     

 to non-financial public sector

        816,434              (210,577)     

 to non-financial private sector and residents abroad

        1,752,967              74,351     

- Other liabilities from financial transactions

        54,357              248,236     
     

 

 

         

 

 

   

 Financing from financial or interfinancial sector (call borrowed)

        151,351              16,000     

 Others (except liabilities included in Financing Activities)

        (96,994)              232,236     

Collections related to service charge income

        1,378,665              1,013,334     

Payments related to service charge expense

        (399,785)              (294,814)     

Administrative expenses paid

        (1,521,288)              (1,181,888)     

Organizational and development expenses paid

        (11,519)              (4,126)     

Net collections from punitive interest

        6,375              4,374     

Differences from judicial resolutions paid

        (1,708)              (3,178)     

Collections of dividends from other companies

        67              48     

Other collections /(payments) related to other income and expenses

        5,517              (17,748)     
     

 

 

         

 

 

   

Net cash flows provided by/(used in) operating activities

        679,055              (2,515,483)     
     

 

 

         

 

 

   

Investment activities

               

Net payments from premises and equipment

        (31,904)              (3,104)     

Net payments from other assets

        (113,100)              (141,799)     

Other collections /(payments) from investment activities

        7,864              (207,945)     
     

 

 

         

 

 

   

Net cash flows used in investment activities

        (137,140)              (352,848)     
     

 

 

         

 

 

   

Financing activities

               

Net collections / (payments) from:

               

- Unsubordinated corporate bonds

        (42,685)              362,218     

- Argentine Central Bank

        (5,922)              (4,687)     
     

 

 

         

 

 

   

Other

        (5,922)              (4,687)     

- Banks and international agencies

        (56,437)              8,380     

- Financing received from local financial institutions

        (42,505)              (56,182)     

Other payments from financing activities

        (131,512)              (20,417)     
  

 

  

 

 

         

 

 

   

Net cash flows (used in)/provided by financing activities

        (279,061)              289,312     
     

 

 

         

 

 

   

    

               
  

 

  

 

 

         

 

 

   

Net increase /(decrease) in cash and cash equivalents

        262,854              (2,579,019)     
     

 

 

         

 

 

   

 

(1)

See note 6 “Statement of cash and cash equivalents flow”.

The accompanying notes 1 through to 7 to the consolidated financial statements with subsidiaries and the Exhibit 1 are an integral part of these statements, which in turn are part of the stand-alone Financial Statements of BBVA Banco Francés S.A. and are to be read in conjunction therewith.


Table of Contents

LOGO

- 54 -

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

WITH SUBSIDIARIES AS OF MARCH 31, 2015, PRESENTED IN COMPARATIVE FORM WITH

THE BALANCE SHEET AS OF DECEMBER 31, 2014, AND THE STATEMENTS OF INCOME

AND CASH AND CASH EQUIVALENTS FLOW AS OF MARCH 31, 2014

(Art. 33 of Law Nr. 19,550)

(Translation of financial statements originally issued in Spanish - See note 22 to the stand-alone Financial Statements)

-Stated in thousands of pesos-

 

  1.

SIGNIFICANT ACCOUNTING POLICIES AND SUBSIDIARIES

General rule

In accordance with the procedures set forth in BCRA’s regulations and Technical Pronouncement Nr. 21 of the Argentine Federation of Professional Councils in Economic Sciences, BBVA Banco Francés S.A. (hereinafter indistinctly referred to as either “BBVA Francés” or the “Bank”) has consolidated - line by line – its balance sheets as of March 31, 2015 and the end of the previous fiscal year, and the statements of income and cash and cash equivalents flow for the three month periods ended March 31, 2015 and 2014, as per the following detail:

 

 

As of March 31, 2015:

 

  a)

With the financial statements of BBVA Francés Valores S.A., PSA Finance Argentina Cía. Financiera S.A. and BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión for the three month periods ended March 31, 2015 and 2014.

 

  b)

With the financial statements of Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings) for the nine month period ended March 31, 2015 and 2014.

 

 

As of December 31, 2014:

 

  a)

With the financial statements of BBVA Francés Valores S.A., PSA Finance Argentina Cía. Financiera S.A. and BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión for the fiscal year ended December 31, 2014.

 

  b)

With the financial statements of Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings) for the six month period ended December 31, 2014.

The results and cash and cash equivalents flow of Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings) have been adjusted for purposes of comparison of the fiscal years of companies consolidating on the basis of a three month period ended on March 31, 2015 and 2014.

Interests in subsidiaries as of March 31, 2015 and the end of the previous fiscal year are listed below:

 

  Shares   Interest percentage in  
  Type   Quantity   Total Capital   Possible Votes  

Companies

      03-31-2015       12-31-2014     03-31-2015   12-31-2014     03-31-2015      12-31-2014   
BBVA Francés Valores S.A.   Common      12,396       12,396       96.9953       96.9953       96.9953       96.9953    
Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings)   Common      35,425,947       35,425,947       53.8892       53.8892       53.8892       53.8892    
PSA Finance Argentina Cía Financiera S.A.   Common      26,089       26,089       50.0000       50.0000       50.0000       50.0000    
BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión (1)   Common      230,398       230,398       95.0000       95.0000       95.0000       95.0000    

 

  (1)

The Entity has a direct ownership interest equivalent to 95% of the Company’s capital stock and an indirect ownership interest equivalent to 4.8498% through BBVA Francés Valores S.A.


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Total assets, liabilities and stockholders’ equity in accordance with the criteria defined in note 2 below, as of March 31, 2015 and the end of the previous fiscal year and net income balances for the three month periods ended March 31, 2015 and 2014, are listed below:

 

     Assets      Liabilities      Stockholders’ Equity      Net income/
gain-(loss)
 

Companies

   03-31-2015      12-31-2014      03-31-2015      12-31-2014      03-31-2015      12-31-2014      03-31-2015      03-31-2014  
BBVA Francés Valores S.A.      36,497          36,176          1,891          10,187          34,606          25,989          8,617          2,580    
Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings)      51,816          50,012          42,707          41,493          9,109          8,519          589          (2,495)    
PSA Finance Argentina Cía Financiera S.A.      2,237,426          2,304,138          1,632,125          1,761,827          605,301          542,311          62,990          41,330    
BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión      177,827          158,905          35,071          29,982          142,756          128,923          13,833          31,432    

 

  2.

VALUATION METHODS

The financial statements of the subsidiaries have been prepared based on similar methods to those applied by the Bank for preparing its own financial statements, in connection with assets and liabilities valuation, income measurement and restatement procedure as explained in note 2 to the stand-alone financial statements of the Bank. The following are the main differences with the Argentine professional accounting standards:

Arising from the application of the accounting standards laid down by BCRA and the Argentine professional accounting standards:

 

   

The commissions paid by PSA Finance Argentina Cía. Financiera S.A. to dealers for granting financing to companies and to the public in general in connection with purchases and sales of automobiles, which in accordance with the rules established by the BCRA are charged up front to the Income Statement, should be accrued throughout the duration of the loans generated by said dealers in accordance with Argentine professional accounting standards. Had this criterion been applied, shareholders’ equity would have been increased by 6,255 and 7,414 as of March 31, 2015 and the end of the previous fiscal year, respectively.

 

   

The Bank has not made disclosures required by Argentine professional accounting standards on discontinued operations or discontinuation in relation to the process of liquidating its subsidiary Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings)

 

  3.

REFORM OF THE INTEGRATED RETIREMENT AND PENSION SYSTEM

Law Nr. 26,425- Dissolution and liquidation of Consolidar A.F.J.P. S.A.:

Law Nr. 26,425, which came into force on December 4, 2008, mandated that the capitalization system that used to be an integral part of the Integrated Retirement and Pension System was to be suppressed and replaced by a single pay-as-you-go system that is now known as the Argentine Integrated Social Security System (SIPA). As a consequence, Consolidar A.F.J.P. S.A. ceased to manage the funds held in the individual capitalization accounts opened by the members and beneficiaries of the Integrated Retirement and Pension System. Said funds were transferred to the Fund to Guarantee the Sustainability of the State-run Social Security System exactly as they had been invested and it is now the Argentine Social Security Authority (ANSES) the only and sole holder of said assets and funds.

Besides, on October 29, 2009, ANSES issued its Resolution Nr. 290/2009 whereby it granted a term of 30 working days to the pension fund managers that could be interested in re-converting their corporate purpose in order to manage the funds held as voluntary term deposits and as agreed-upon deposits in capitalization accounts for them to express their decision to do so.


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Given the above situation and the inability of Consolidar A.F.J.P. S.A. to attain the corporate purpose and conduct the business for which it had been formed, on December 28, 2009, its Extraordinary General Unanimous Shareholders’ Meeting adopted the resolution to dissolve and subsequently liquidate Consolidar A.F.J.P. S.A. effective as of December 31, 2009 on the understanding that such will be the best alternative to safeguard the interests of both the creditors and the shareholders of the Company. In addition, as set forth in the Argentine Companies Law, the Shareholders’ Meeting decided to appoint Accountant Mr. Gabriel Orden and Mr. Rubén Lamandia to act as liquidators of Consolidar A.F.J.P. S.A. As of December 31, 2009 these gentlemen have been designated as the Company’s legal representatives. As of the date of issuance of these financial statements, they are moving forward with all the actions necessary to proceed with the liquidation of Consolidar A.F.J.P. S.A.

On January 28, 2010, the dissolution of Consolidar A.F.J.P. S.A. as well as the list of designated liquidators were registered with the Supervisory Board of Companies (IGJ)

In addition, the Extraordinary General Shareholders’ Meeting of Consolidar A.F.J.P. S.A. approved a voluntary reduction in capital stock for 75,000 on October 19, 2009. In turn, the IGJ conferred its approval to the capital reduction mentioned on January 11, 2010. In this respect, on January 19, 2010 the shareholders were transferred their capital contributions in conformity with the above-mentioned reduction.

BBVA Francés, in its capacity as shareholder requested that Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings) should file a note with the Argentine Ministry of Economy and Public Finance and with the Argentine Social Security Authority to commence discussions within the framework of Law Nr. 26,425 in order to identify one or more resolution alternatives in connection with the consequences resulting from the events caused by the enactment of that Law. This note was filed by Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings) on June 11, 2010.

On December 7, 2010, Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings) filed an action for damages against the National State and the Ministry of Labor, Employment and Social Security with the court of original Federal Jurisdiction over Contentious Administrative Matters Nr. 4, Clerk of Court’s Office Nr. 7, case file Nr. 40,437/2010. The complaint was ratified by BBVA Francés in its capacity as majority shareholder in that Company. On July 15, 2011, Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings) and BBVA Francés filed with the same court an enhanced complaint for determining the amounts claimed as damages. On March 9, 2012, the Court ordered the service of process on the National State. On November 23, 2012, the Court handed down a resolution demanding the production of evidence within a term of forty days. On May 13, 2013, the Court hearing in the case ordered that evidence be produced. The Company is providing depositions, documentary evidence and expert witnesses’ reports. On May 28, 2013, the Company accompanied the statements and the testimony of witnesses, as the case is currently at the evidence production stage.

 

  4.

MINORITY INTEREST IN SUBSIDIARIES

The breakdown of balances in the “Minority interest in subsidiaries” account is as follows:

 

  03-31-2015   12-31-2014
Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings) 4,200 3,928
BBVA Francés Valores S.A. 1,039 781
PSA Finance Argentina Cía Financiera S.A. 302,650 271,155
BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión 214 194
   

 

     

 

Total

             308,103              276,058
   

 

     

 


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  5.

RESTRICTIONS ON ASSETS

 

  a)

BBVA Francés Valores S.A. holds two shares of Mercado de Valores de Buenos Aires S.A, booked in the amount of 18,000 and 10,300, respectively, as of March 31, 2015 and the end of the previous fiscal year. These shares have been pledged in favor of “CHUBB Argentina de Seguros S.A.” in security of the contract this insurance company executed with Mercado de Valores de Buenos Aires S.A. to cover the latter’s guaranteeing any noncompliance of the company with their obligations.

 

  b)

See note 7 to the stand-alone financial statements of the Bank.

 

  6.

STATEMENT OF CASH AND CASH EQUIVALENTS FLOW

The Statements of Cash and cash equivalents flow explains the changes in cash and cash equivalents. For such purpose, a detail is supplied of the items that the Bank considers to be cash and cash equivalents:

 

        03-31-15       12-31-2014       03-31-2014         12-31-2013    

a)

Cash and due from banks

  12,887,318        12,559,464        10,322,833        12,880,744       

b)

Government securities

  --,--          --,--          260,768        115,876       

c)

Loans to financial sectors, call granted maturity date less than three months as from the end of each period or fiscal year   327,500        392,500        441,000        607,000       
    

 

 

    

 

 

    

 

 

    

 

 

 

CASH AND CASH EQUIVALENTS

  13,214,818        12,951,964        11,024,601        13,603,620       
    

 

 

    

 

 

    

 

 

    

 

 

 

Items b) and c) are considered to be cash equivalents because they are held in order to meet short-term commitments, they are readily convertible in known cash amounts, they are subject to insignificant risk of changes in value and their maturity is less than three months as from the end of each period or fiscal year date.

 

  7.

BREAKDOWN OF MAIN ITEMS

The detail of the main items included in financial statements is as follows:

 

 

03-31-2015

 

12-31-2014

a) GOVERNMENT AND PRIVATE SECURITIES

* Holdings booked at fair value

Secured Bonds due in 2020

1,302,756 1,183,905

Peso-denominated Discount governed by Argentine Law maturing in 2033

401,350 467,472

Federal Government Bonds in Pesos Badlar + 200 bp due 2016

303,975 374,000

Federal Government Bonds in Pesos Badlar + 200 bp due 2017

285,335 279,178

Argentine Bond of Saving towards economic development

167,927 152,447

Discount notes in USD due 2033

57,120 --,--

Federal Government Bonds in US Dollars 7% due 2015

35,248 104,850

Federal Government Bonds in US Dollars 8.75% due 2024

31,625 43,384

Secured Bonds due in 2018

     --,--      74,875

US Dollar-linked Argentine Government Bond at 2.40% maturing in 2018

--,-- 66,080

Federal Government Bonds in Pesos Badlar + 250 bp due 2019

--,-- 42,679

Par Securities denominated in Pesos

--,-- 38,319

Consolidation Bonds – sixth series

--,-- 37,716

Other

38,502 77,568
    

 

      

 

Total

2,623,838 2,942,473
    

 

      

 


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03-31-2015

 

12-31-2014

 

* Holdings booked at amortized cost

Argentine Treasury Notes due March 2016

  98,227      --,--   

Other

       164           164   
    

 

 

       

 

 

 

Total

  98,391      164   
    

 

 

       

 

 

 

* Instruments issued by the BCRA

BCRA Bills (LEBAC)

  11,985,646      8,630,056   
    

 

 

       

 

 

 

Total

  11,985,646      8,630,056   
    

 

 

       

 

 

 

* Investments in listed private securities

FBA Ahorro Pesos Investment Fund

  67,120      49,652   

FBA Bonos Argentina Investment Fund

  10,874      10,210   

Other

  1,421      1,135   
    

 

 

       

 

 

 

Total

  79,415      60,997   
    

 

 

       

 

 

 

- Allowances

  (201)      (201)   
    

 

 

       

 

 

 

Total

  14,787,089      11,633,489   
    

 

 

       

 

 

 

b) INVESTMENTS IN OTHER COMPANIES – Other

In other companies - unlisted

  49,918      44,460   

In companies-supplementary activities

  30,003      22,283   
    

 

 

       

 

 

 

Total

  79,921      66,743   
    

 

 

       

 

 

 

c) OTHER RECEIVABLES – Other

Guarantee deposits

  460,666      377,029   

Miscellaneous receivables

  389,696      475,180   

Prepayments

  279,273      279,381   

Tax prepayments

  275,758      281,535   

Loans to personnel

  177,772      181,975   

Advances to personnel

  29,113      93,065   

Other

  8,308      8,261   
    

 

 

       

 

 

 

Total

  1,620,586      1,696,426   
    

 

 

       

 

 

 


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03-31-2015

 

12-31-2014

 

d) OTHER SUBSIDIARIES’ ASSETS

Other related to pension fund management business

           --,--               450   
    

 

 

       

 

 

 

Total

  --,--      450   
    

 

 

       

 

 

 

e) OTHER LIABILITIES FROM FINANCIAL TRANSACTIONS - Other

Accounts payable for consumption

  2,396,328      2,482,573   

Other withholdings and collections at source

  648,030      687,838   

Collections and other operations for the account of third parties

  456,599      419,185   

Money orders payable

  294,039      338,117   

Fees collected in advance

  117,078      121,831   

Social security payment orders pending settlement

  94,972      18,816   

Pending Banelco debit transactions

  48,103      73,651   
Loans received from Fondo Tecnológico Argentina (FONTAR) and Banco de Inversión y Comercio Exterior (BICE)   34,592      32,488   

Funds raised from third parties

  14,295      18,941   

Loans received from Interamerican Development Bank (IDB)

  5,908      6,485   

Accrued commissions payable

  4,425      7,336   

Other

  73,415      71,074   
    

 

 

       

 

 

 

Total

  4,187,784      4,278,335   
    

 

 

       

 

 

 

f) OTHER LIABILITIES – Other

Accrued taxes

  1,314,666      1,093,119   

Miscellaneous payables

  938,203      697,722   

Accrued salaries and payroll taxes

  545,010      541,245   

Amounts collected in advance

  397,305      434,830   

Other

  4,991      4,805   
    

 

 

       

 

 

 

Total

  3,200,175      2,771,721   
    

 

 

       

 

 

 

g) OTHER SUBSIDIARIES’ LIABILITIES

Other related pension fund management business

  --,--      337   
    

 

 

       

 

 

 

Total

  --,--      337   
    

 

 

       

 

 

 

h) MEMORANDUM ACCOUNTS – DEBIT – CONTROL – Other

Securities representative of investment in custody safekeeping on behalf of the Guarantee Fund for the Sustainability of the Pay-as-you-go System managed by the Argentine Republic   65,638,009      61,071,633   

Items in safekeeping

  69,433,657      53,730,674   

Checks not yet credited

  4,019,634      3,694,973   

Collections items

  505,623      573,483   

Cash in custody on behalf of the BCRA

  264,591      287,347   

Checks drawn on the Bank pending clearing

  185,540      564,348   

Other

  453,974      514,368   
    

 

 

       

 

 

 

Total

  140,501,028      120,436,826   
    

 

 

       

 

 

 


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03-31-2015

 

03-31-2014

 

i) SERVICE CHARGE INCOME - Other

Commissions for hiring of insurances

       157,598           111,452   

Rental of safe-deposit boxes

  41,493      34,484   

Commissions on debit and credit cards

  21,372      12,586   

Commissions for transportations of values

  10,126      6,609   

Commissions for loans and guaranties

  9,458      10,022   

Commissions for escrow

  5,370      5,922   

Commissions for capital market transactions

  7,647      4,080   

Commissions for salary payment

  2,427      2,500   

Commissions for trust management

  345      341   

Other

  19,710      19,984   
    

 

 

       

 

 

 

Total

  275,546      207,980   
    

 

 

       

 

 

 

j) SERVICE CHARGE EXPENSE - Other

Turn-over tax

  93,756      75,572   

Insurance paid on lease transactions

  33,226      23,609   

Other

  6,345      2,919   
    

 

 

       

 

 

 

Total

  133,327      102,100   
    

 

 

       

 

 

 

k) OTHER INCOME – Other

Income from the Credit Card Guarantee Fund

  11,799      19,192   

Related parties expenses recovery

  7,922      282   

Interest on loans to personnel

  7,370      7,633   

Rents

  633      --,--   

Other

  5,337      22,806   
    

 

 

       

 

 

 

Total

  33,061      49,913   
    

 

 

       

 

 

 

l) OTHER EXPENSE – Other

Charges for administrative, disciplinary and criminal penalties (1)

  48,817      --,--   

Deferred income tax (2)

  16,800      108,800   

Private health insurance for former employees

  3,636      2,426   

Insurance losses

  2,962      3,044   

Turn-over tax

  2,191      2,772   

Donations

  1,953      1,999   

Other

  9,853      10,015   
    

 

 

       

 

 

 

Total

  86,212      129,056   
    

 

 

       

 

 

 

 

(1) See note 6.1. to the stand-alone financial statements

(2) As of December 31, 2103 offset with a charge for the same amount in “Loans recovered and reversals of allowances” account, under Other income item.

  

   


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EXHIBIT 1

CONSOLIDATED CLASSIFICATION OF FINANCING FACILITIES BY

CATEGORIES AND GUARANTIES RECEIVED

AS OF MARCH 31, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20 to the stand-alone Financial Statements)

-Stated in thousands of pesos-

 

 

      03-31-2015               12-31-2014        

COMMERCIAL PORTFOLIO

Normal performance

  21,808,113      21,065,160   
  

 

 

   

 

 

 

Preferred collaterals and counter guaranties “A”

  1,522,608      1,215,074   

Other collaterals and counter guaranties “B”

  847,576      790,615   

Without senior security or counter guaranties

  19,437,929      19,059,471   

With special follow-up

  --,--      7,022   
  

 

 

   

 

 

 

Under observation

  --,--      7,022          
  

 

 

   

 

 

 

Other collaterals and counter guaranties “B”

  --,--      540   

Without senior security or counter guaranties

  --,--      6,482          

Non-performing

  1,015             5,048          
  

 

 

   

 

 

 

Other collaterals and counter guaranties “B”

  683      --,--   

Without senior security or counter guaranties

  332      5,048          

With high risk of uncollectibility

  7,515      --,--   
  

 

 

   

 

 

 

Other collaterals and counter guaranties “B”

  592      --,--   

Without senior security or counter guaranties

  6,923      --,--   

Uncollectible

  13,394      27,508   
  

 

 

   

 

 

 

Other collaterals and counter guaranties “B”

  3,750      3,750   

Without senior security or counter guaranties

  9,644      23,758   
  

 

 

   

 

 

 

Total

  21,830,037      21,104,738   
  

 

 

   

 

 

 

 


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EXHIBIT 1

(Contd.)   

 

CONSOLIDATED CLASSIFICATION OF FINANCING FACILITIES BY

CATEGORIES AND GUARANTIES RECEIVED

AS OF MARCH 31, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 20 to the stand-alone Financial Statements)

-Stated in thousands of pesos-

 

 

      03-31-2015               12-31-2014        

CONSUMER AND HOUSING PORTFOLIO

Normal performance

  25,398,847             24,380,887          
  

 

 

   

 

 

 

Preferred collaterals and counter guaranties “A”

  35,774             41,185          

Other collaterals and counter guaranties “B”

  3,870,778             3,926,860          

Without senior security or counter guaranties

  21,492,295             20,412,842          

Low risk

  317,469             273,475          
  

 

 

   

 

 

 

Preferred collaterals and counter guaranties “A”

  --,--      68   

Other collaterals and counter guaranties “B”

  69,939      71,350   

Without senior security or counter guaranties

  247,530      202,057   

Medium risk

  212,108      211,868   
  

 

 

   

 

 

 

Other collaterals and counter guaranties “B”

  19,200      24,017   

Without senior security or counter guaranties

  192,908      187,851   

High risk

  149,785      145,310   
  

 

 

   

 

 

 

Other collaterals and counter guaranties “B”

  34,945      29,952   

Without senior security or counter guaranties

  114,840      115,358   

Uncollectible

  41,278      43,657   
  

 

 

   

 

 

 

Other collaterals and counter guaranties “B”

  21,994      18,572   

Without senior security or counter guaranties

  19,284      25,085   

Uncollectible, classified as such under regulatory requirements

  57      136   
  

 

 

   

 

 

 

Without senior security or counter guaranties

  57      136   
  

 

 

   

 

 

 

Total

  26,119,544      25,055,333   
  

 

 

   

 

 

 

General Total (1)

  47,949,581      46,160,071   
  

 

 

   

 

 

 

(1) Items included: Loans (before allowances); Other receivables from financial transactions: Unlisted corporate bonds and Other receivables covered by debtor classification regulations; Receivables from financial leases (before allowances); Memorandum accounts – Credit – Contingent: Credit lines granted (unused portion) covered by debtor classification regulations, Other guaranties given covered by debtor classification regulations and Other covered by debtor classification regulations.


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INFORMATIVE SUMMARY OF ACTIVITY FOR THE THREE MONTH PERIOD

ENDED ON MARCH 31, 2015

(Consolidated amounts – Stated in thousand Pesos)

BBVA Francés has in place a differential management and relationship model based on segments and specialization. Thanks to this model, BBVA Francés obtains an in-depth knowledge of its customers, which is essential to the design of value offerings in line with customers’ needs and the establishment of long-lasting relationships.

The Entity also has a broad distribution model: it is present throughout the country with a network that 282 customer service points, 251 of which are retail branches and 31 are devoted to small and medium enterprises and institutions. Corporate Banking is divided by industry sectors: Retail, Heavy Industries and Energy that provide personalized service to large companies. Besides, the Bank’s distribution network is further supplemented by 13 in-store banks, 2 points of sales, 686 ATMs and 776 self-service terminals.

BBVA Francés continues to evidence its ability to provide recurring income primarily originating in intermediation with the private sector through healthy growth in the Individual and Enterprise Banking divisions whilst Corporate Banking exhibited an optimization of the mix of terms, which provided more income through the spreads.

Regarding the performance of the Bank in terms of activity, the Bank’s portfolio of loans to the private sector totaled 44,034,701 as of March 31, 2015, which points to an 17.7% growth rate in the last twelve months of the year, while during the quarter the growth rate was of 4%.

Such increase is highly leveraged by the Entity’s strong alliance program (LAN, River, Boca, plus other retailers) that not only generates business through an increase in consumption but also allows all the parties involved to loyalize customers and bring new customers on board. The portfolio of credit cards grew by 55% in the past twelve months and by 8.1% in the quarter. In addition BBVA Francés is the largest source of pledge loans in Argentina: one every three pledge loans is granted through the Entity.

In turn, the credit facilities for investment projects conceived for micro, small and medium enterprises have been essential. We attained the objective set, which allowed us to grow in installments by extending terms according to the strategy laid out. The increase in the commercial portfolio in the past year grew by 13.2%, and by 4.2% in the quarter.

As to portfolio quality, the Bank has been able to maintain the best indicators in the Argentine financial system within an environment that has shown signs of deterioration. The portfolio quality ratio (Non-performing loans/Total loans) was 0.89% with a level of coverage (Total loan loss provisions/Non-performing loans) of 233% at the end of the period.

As of March 31, 2015, the portfolio of Government securities, net of repurchase agreements, totaled 2,623,395 and represented 3.2% of the Bank’s Total assets. Besides, the instruments issued by the Argentine Central Bank, net of repurchase agreements, totaled 10,013,949 as of that date and since they are short-term, they are used in order to allocate liquidity.

As to liabilities, total clients’ resources totaled 55,357,671, indicative of 23.4% growth in the last twelve months. By kind of product, in the same period, sight deposits grew by 37.9% and term deposits grew by 12.4%. Whilst total deposits in the quarter grew by 7.6% with term deposits increasing by 14.5% whilst sight balances diminishing slightly during the period.

BBVA Francés maintains sufficient levels of liquidity and solvency. As of March 31, 2015, liquid assets (Cash and cash equivalents plus Government and Private securities) represented 50% of the Bank’s deposits. Besides, the capital ratio was at 17.1% of risk-weighted assets. The Bank surpassed capital minimum requirements by 5,849,692.

BBVA Francés posted 930,946 in net income during the first quarter of the year, which points to a 31.7% drop compared to the income for the first quarter of 2014, whilst the quarter saw a 14.3% increase.

On a line to line analysis, the Financial income - net totaled 2,285,429 at the end of March, 2015, which points to 6.7% decrease in comparison with the same quarter of 2014. It is important to mention that the first quarter of 2014 included the increase in the line Foreign exchange gains and other, which includes forward transactions in foreign currency, as a consequence of the depreciation in the exchange rate that took place in January that year.. Meanwhile, during the first quarter of 2015 there was a 15.5 % increase resulting mainly from the income from the portfolio of private and Government securities.


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Income from services – net totaled 960,451, which points to 31.8% compared to the amount as of March 31, 2014, whilst, compared to the previous quarter, the increase was 4.5%. These increases were mainly driven by credit card consumptions and increases in the activity level recorded in deposit accounts, as well as in the commissions provided by PSA Finance. Whilst expenses from services reflect an increase in the fees paid associated to promotions with credit cards.

Administrative expenses, again, recorded a balance of 1,584,248 at the end of March 2015, growing by 29.8% compared to the same period of the prior year whilst in the course of the quarter there was a 7.2% increase. The increase in personnel expenses registers the agreements with the working union and the increase of 3% of the staff, whilst overhead reflects the impact of the growth in the level of activity as well as in the level of prices.

Outlook

For 2015, BBVA Francés will continue to focus its business on intensifying efforts on the high income segment, boosting transactionality, developing a streamlined plan in all manageable lines and continuing to increase the payroll accounts portfolio. As concerns financial management, BBVA Francés retains the objective consisting in structural strength on the basis of a healthy, well capitalized balance sheet, with mitigated risk and an adequate funding structure accompanied by a comfortable liquidity situation.

It is equally important to point out that the Entity continues to undergo a transformation towards a more digital model, required to take on the challenges encountered by the financial industry: increased regulation, higher transparency and responsibility levels and intensified competition due to the changes in customer preferences stemming from the technological revolution.


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CONSOLIDATED BALANCE SHEET STRUCTURE COMPARED TO THE SAME PERIODS EN PRIOR FISCAL YEARS

(Stated in thousands of pesos)

 

      03-31-2015            03-31-2014            03-31-2013            03-31-2012            03-31-2011       

Total Assets

  81,177,530       64,771,464       46,140,571       39,787,328       35,468,139    

Total Liabilities

  69,606,605      56,061,130      40,534,806      35,589,254      32,220,623   

Minority Interest in subsidiaries

  308,103      192,036      129,677      89,299      197,250   

Stockholders’ Equity

  11,262,822      8,518,298      5,476,088      4,108,775      3,050,266   
Total Liabilities + Minority Interest in subsidiaries + Stockholders’ Equity   81,177,530      64,771,464      46,140,571      39,787,328      35,468,139   


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CONSOLIDATED STATEMENT OF INCOME STRUCTURE COMPARED TO THE SAME PERIODS IN PRIOR FISCAL YEARS

(Stated in thousands of pesos)

 

      03-31-2015            03-31-2014            03-31-2013                 03-31-2012       03-31-2011       

Financial income

  2,285,429       2,448,888       1,104,045       781,916       653,263    

Allowances for loan losses

  (143,097)      (118,744)      (94,100)      (58,881)      (41,576)   

Income from services

  906,451      728,761      544,674      417,191      303,762   

Administrative expenses

  (1,584,248)      (1,220,123)      (920,158)      (692,538)      (551,165)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net gain from financial transactions

  1,518,535      1,838,782      634,461      447,688      364,284   
Miscellaneous income and expenses – net   (62,916)      73,665      2,213      55,595      (68,523)   
Results of minority interest in subsidiaries   (32,046)      (19,638)      (11,697)      (7,189)      (18,057)   

Income tax

  (492,627)      (530,691)      (280,825)      (255,576)      (82,222)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income for the period

  930,946      1,362,118      344,152      240,518      195,482   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


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CONSOLIDATED CASH FLOWS STRUCTURE COMPARED TO THE SAME PERIODS IN PRIOR FISCAL YEARS

(Stated in thousands of pesos)

 

      03-31-2015            03-31-2014            03-31-2013            03-31-2012            03-31-2011       
Net cash flow provided by / (used in) operating activities   679,055       (2,515,483   (414,254   388,312       428,934    
Net cash flow used in investment activities   (137,140   (352,848   (152,731   (38,724   (72,843
Net cash flow used in financing activities   (279,061   289,312      (416,861   (57,535   (30,334
Financial results and results from holdings of cash and cash equivalents (including interest)   --,--      --,--      54      --,--      --,--   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
Total cash (used) / provided during the period   262,854      (2,579,019   (983,792   292,053      325,757   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


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STATISTICAL RATIOS COMPARED TO THE SAME PERIODS IN PRIOR FISCAL YEARS

(year-over-year variations in balances)

 

    03-31-2015/14        03-31-2014/13      03-31-2013/12   03-31-2012/11   03-31-2011/10  

Total Loans

  17.71%       22.74%       28.70%       29.58%       49.13%    

Total Deposits

  23.38%      28.29%      17.69%      23.63%      29.52%   

Net Income

  (31,65%)      295.79%      43.09%      23.04%      22.43%   

Stockholders’ Equity

  32.22%       55.55%      33.28%      34.70%      (0.92%)   


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RATIOS COMPARED TO THE SAME PERIODS IN PRIOR FISCAL YEARS

 

      03-31-2015            03-31-2014            03-31-2013            03-31-2012            03-31-2011       

Solvency (1)

  16.11%       15.14%       13.47%       11.52%       9.41%    

Liquidity (2)

  50.01%      43.46%      34.10%      42.06%      58.99%   

Tied-up capital (3)

  2.91%      2.49%      1.64%      1.66%      1.77%   

Indebtedness (4)

  6.21      6.60      7.43      8.68      10.63   

 

(1) Total Shareholders’ equity/Liabilities (including minority interests in subsidiaries)

(2) Sum of Cash and cash equivalents and Government and Private securities/Deposits

(3) Sum of Premises and equipment, other assets and Intangible assets/Assets

(4) Total Liabilities (including minority interests in subsidiaries)/Shareholders’ equity


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INDEPENDENT AUDITORS’ REVIEW REPORT

(Interim financial statements)

To the President and the Board of Directors of

BBVA BANCO FRANCÉS S.A.

Reconquista 199

City of Buenos Aires

Report on interim financial statements

 

1.

Identification of the interim financial statements subject to review

We have reviewed:

 

  a)

the accompanying interim financial statements of BBVA BANCO FRANCÉS S.A. (“BBVA Francés” or the “Bank”), which comprise the balance sheet as of March 31, 2015 and the statement of income, statement of changes in stockholders´ equity and cash and cash equivalents flow for the three-month period then ended and the supplemental information included in their notes 1 to 20, and the Exhibits “A” through “L”, “N” and “O”; and

 

  b)

the accompanying interim consolidated financial statements of BBVA Francés and its subsidiaries (listed in note 1 to the consolidated financial statements), which comprise the consolidated balance sheet as of March 31, 2015 and the consolidated statement of income and the consolidated cash and cash equivalents flow for the three-month period then ended, and the supplemental information included in their notes 1 to 7 and the Exhibit 1.

The figures and other information for the year ended December 31, 2014 and for the three-month period ended March 31, 2014 are an integral part of these interim financial statements and are intended to be read only in relation to those financial statements.

 

2.

Bank’s Board of Directors responsibility for the interim Financial Statements

The Bank’s Board of Directors is responsible for the preparation and fair presentation of such accompanying interim financial statements in conformity with accounting standards established by the Argentine Central Bank (B.C.R.A.) applicable to financial institutions, as well as responsible of internal control considered necessary to enable the presentation of financial statements free from material misstatement.

 

3.

Auditors’ Responsibility

Our responsibility is to issue a conclusion on the accompanying interim financial statements based on our review. We conducted our review in accordance with standards for review of interim financial statements for interim periods set forth in section IV of the Technical Pronouncement N° 37 of the Argentine Federation of Professional Councils in Economic Sciences and the “Minimum Standards applicable for External Audits” established by the Argentine Central Bank (B.C.R.A.) for the limited reviews of interim financial statements. Those standards require that we comply with ethical requirements.

A review of interim financial statements is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an opinion on the financial position of the Bank as of March 31, 2014, on the results of its operations, the changes in its stockholders´ equity and its cash and cash equivalents flow for the three-month period then ended.


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4.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial statements of BBVA Francés both stand alone and consolidated with its subsidiaries companies corresponding to the three-month period ended on March 31, 2015, are not presented in all material respects, in accordance with accounting standards established by B.C.R.A.

 

5.

Emphasis on certain issues disclosed in the financial statements

The interim stand-alone and consolidated financial statements referred to in paragraphs a) and b) of caption 1 of this report have been prepared by the Bank in accordance with the accounting standards established by the B.C.R.A., which differ from the Argentine professional accounting standards concerning the matters indicated in note 3 to the stand-alone financial statements and in note 2 to the consolidated financial statements. This issue does not modify the conclusion expressed in caption 4.

 

6.

English translation of statutory financial statements

This report and the financial statements referred to in caption 1 have been translated into English for the convenience of English-speaking readers. As further explained in note 20 to the accompanying stand-alone financial statements, the financial statements (both the stand-alone and the consolidated financial statements) are the English translation of those originally prepared by the Bank in Spanish and presented in accordance with the accounting standards of B.C.R.A. and except for the matters described in caption 5, with the Argentine professional accounting standards. The effects of the differences between the accounting standards of B.C.R.A. and the Argentine professional accounting standards, and the accounting principles generally accepted in the countries in which the financial statements are to be used have not been quantified. Accordingly, the accompanying financial statements are not intended to present the financial position, results of operations, stockholders’ equity or cash and cash equivalents flow in accordance with accounting principles generally accepted in the countries of users of the financial statements, other than Argentina.

City of Buenos Aires, May 8, 2015.

 

MARCELO BASTANTE

Partner

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

BBVA French Bank S.A.

Date:

May 18, 2015

By:

/s/ Ignacio Sanz y Arcelus

Name:

Ignacio Sanz y Arcelus

Title:

Chief Financial Officer

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