SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Issuer

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

of the Securities Exchange Act of 1934

For the month of May 2016

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

 

 

 


BBVA Banco Francés S.A.

TABLE OF CONTENTS

 

Item

    
1.    BBVA Francés reports consolidated first quarter earnings for fiscal year 2016.


LOGO

Buenos Aires, May 11, 2016 - BBVA Frances (NYSE: BFR.N; BCBA: FRAN.BA;

LATIBEX: BFR.LA) reports consolidated first quarter earnings for fiscal year

2016.

 

 

Highlights

 

 

    BBVA Francés net income for the period ended March 31, 2016 reached AR$ 1,165.1 million, representing a 25.1% increase compared with the same quarter of 2015 and a 2.0% decrease compared with the prior quarter.

 

    Net financial income increased by 30.4% compared with the same quarter of 2015, mainly due to higher income derived from intermediation within the private sector, from the public bond portfolio and from foreign exchange differences. Net financial income for the period increased by 4.4% compared with the fourth quarter of 2015.

 

    In terms of activity, the private sector loan portfolio totaled AR$ 59.1 billion, increasing by 37.3% compared with the first quarter of 2015 and by 4.7% during the quarter.

 

    BBVA Francés continues to maintain outstanding risk indicators in the Argentine financial system. The non-performing loan ratio (non-performing loans/total loans) reached 0.69% as of March 31, 2016, while the coverage ratio (provisions/non-performing loans) reached 283.67%.

 

    Total deposits reached AR$ 80.1 billion as of March 31, 2016, increasing by 44.7% in the last twelve months and by 4.2% during the quarter.

 

    BBVA Francés maintains adequate levels of liquidity and solvency. As of March 31, 2016 liquid assets (cash and due from banks plus Argentina Central Bank (BCRA) bills and notes) represented 45.8% of the Bank’s total deposits. The capital ratio reached 15.8% of weighted risk assets; with an excess of capital of AR$ 7.1 billon, which is 90.3% higher than the minimum regulatory requirements.

 

    On March 21, 2016, the Central Bank of Argentina (BCRA) through its Communication “A” 5927 removed all fees on saving accounts, as well as on the associated debit cards. In addition it also removed all fees on electronic transfers by individuals without any cap, which can now be made every day at any time.

 

    On the same date and through Communication “A” 5928 the BCRA authorized a 20% increase in all banking charges, eliminating since September 2016 the regulatory pricing. Such Communication also established that no income derived from Insurance on Debit Balance will be charged in any credit transaction.


 

Other Events

 

 

    On February 16, 2016, the Supreme Court rejected the appeal filed by the Anti-Money Laundering Agency (“Unidad de Información Financiera” UIF), in case No. 181/10, therefore upholding the ruling of the IV Chamber, of the Court of Appeals (“Cámara Contencioso Administrativa Federal”), that revoked the UIF resolution and annulling the fine originally imposed to BBVA Francés.

 

    At the Ordinary and Extraordinary Shareholders’ Meeting held on April 26, 2016, the shareholders approved by majority the distribution of cash dividends totaling AR$ 900 million. The payment is subject to the authorization of the BCRA. In addition, AR$ 2.1 billion was allocated to the discretionary reserve for future distributions results.

 

    On April 7, 2016, the BCRA through Communication “A” 5943 increased the amount of deposits covered by the Deposit Guarantee Fund (from AR$ 350,000 to AR$ 450,000), effective as of May 1, 2016. Furthermore, it also decreased the monthly amount that the financial entities must allocate to the Deposit Guarantee Fund, to the equivalent of 0.015% of the deposits monthly average of the daily balances of the second month immediately preceding.

 

    It is worth mentioning the agreement reached by Argentina with most of the holdouts, resolving the public debt defaulting issue outstanding since 2002. Argentina issued USD 16,500 billion of sovereign debt in April 2016, representing its first international bond issuance since 2002. The offering was four times oversubscribed.

Argentina made payments to the litigant funds on April 22, 2016 for USD 9.3 billion. It is estimated that the aggregate amount of payments to holdouts would be approximately USD 10.5 billion, representing a release of 44% of the aggregate amount of the outstanding claims.

On May 4, 2016, payment was made for bond coupons with jurisdiction overseas, whose payment had been suspended by the injunction issued by a judge of New York on June 30, 2014. This payment reached USD 2,694.5 million.

 

 

Economic Environment

 

In December 2015 the National Government declared, after taking office, the situation of “statistic emergency” as a consequence of the inconsistencies detected in the information released by the Instituto Nacional de Estadistica y Censos (statistic national agency (INDEC)). This measure implies the temporary suspension of the release of new economic figures until the situation has been regularized. As a consequence, several indicators mentioned in the paragraphs below are not updated.

Regarding economic activity, INDEC has recently published the revised preliminary GDP for 2015. Economic activity increased by 2.1% during last year, losing momentum during the fourth quarter when it only increased by 0.9% on an annual basis There is no official GDP data for the first quarter 2016.

The latest information issued by INDEC of the National and Urban Consumer Price Index (IPC-NU) corresponded to October 2015 and showed accumulated inflation of 11.9% for the January-October period; and of 14.3% compared with October 2014. In order to fill the lack of CPI information until new figures are released by INDEC, we took as a proxy the CPI of Autonomous City of Buenos Aires (CPI-CABA), calculated by the statistics agency of CABA government. Such index increased by 11.8% during the first quarter of 2016 and by 35.0% year over year.

The national public sector fiscal balance recorded a primary deficit of AR$ 49.6 billion during the first quarter of the year, representing a 12.2% increase compared with the deficit or AR$ 44.2 billion reached during the same period of the previous year. These numbers do not include incomes from rents of BCRA and ANSES (Argentine Institute of Social Security).

 

 

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Primary public sector spending increased by 28.3% and public sector revenues showed an increase of 31.1% during the first quarter.

Public debt Interest payments increased by 19.1% during the period and income from rents of BCRA and ANSES increased by 78.7 %. As a result, the total deficit reached AR$ 34.6 billion, representing a 21.9% decreased compared with the same period of 2015.

In the first quarter of 2016 tax revenues increased by 32.1% year-over-year. Income tax increased by 32.6%, export duties by 19% and Value added tax by 35.2% during the same period.

In the external sector, the accumulated trade deficit reached USD 0.4 billion during the first quarter of 2016, 68.3% lower than the deficit recorded during the same period of 2015. From January to March 2016, the trade balance recorded total exports of USD 12.4 billion (representing a 0.2% increase year-over-year) and total imports by USD 12.8 billion (representing a 0.3% decrease year-over-year).

In first quarter of 2016 the BCRA’s stock of international reserves increased by USD 4.0 billion, reaching a total balance of USD 29.6 billion. During such quarter, the BCRA sold the equivalent of USD 43 million in the foreign exchange market.

The BCRA maintains the bilateral currency swap agreement entered into with the People’s Bank of China. Further, since February 2016, the BCRA has added USD 5.0 billion from a repo transaction with private banks.

The Badlar interest rate for private banks increased by 322 b.p. in the first quarter of 2016, averaging 27.4% compared with the 24.2% average rate in the fourth quarter of 2015.

The stock of private sector loans in pesos decreased in the first quarter or 2016 by 0.28% compared with the balance of fourth quarter of 2015, while private sector loans in dollars increased by 35.3%.

Total deposits in the financial system increased by 3.4% in the first quarter of 2016. In the same period, private sector deposits denominated in pesos increased by 2.5% and those denominated in dollars increased by 11.7%.

 

 

The Bank

 

BBVA Francés begins the year strengthening its efforts in line with the BBVA Group’ global proposal. In this sense, the Bank renews it purpose under the slogan “bring the age of opportunities to everyone”,

with the aim of generating a positive impact in the client’s experience within the financial industry.

Regarding commercial activities, BBVA Francés was present during the summer season in the most important tourist centers offering exclusive experiences for clients and non-clients, focusing the promotional actions on spreading the benefits of Frances Go, the app for smartphones launched in 2015.

In addition, the Bank continued to promote the benefits of its alliance with LATAM, offering the exchange of LATAM Pass’ kilometers for national and international flights, as well as for a broad catalogue of products.

Furthermore, the #futbolnonstop campaign invites all BBVA Francés clients to continue make purchases with their BBVA Francés Visa credit cards in order to participate in the draw for tickets to the best soccer events of the season and for attending the Olympic Games of Rio 2016.

With the launch of the new “Talleres Card” under the framework of the sponsorship agreement entered into with Club Atletico Talleres de Córdoba, BBVA Francés continues to develop its strategy of being recognized as the soccer Bank.

Last March, the Bank participated in the 10° edition of Expoagro, the most important exhibition of the agro sector in the country. BBVA Francés was present with an institutional stand, completely renovated in line with the concept of modernity and digitalization, where specialist advisers attended all the queries about the different products and services that BBVA Francés offers to the agro business segment: the package Agro LATAMPASS insurance, pledge loans and loans at 0 interest rates with the BBVA Francés Agro credit card to buy inputs, seeds and cattle, with the possibility to pay in July 2017.

Regarding the development of the social responsibility program, during the period, the Bank established contact with the educational centers that are members of the BBVA Francés Financial Educations Program of Integration Scholarships, of which 1,440 students will benefit during 2016.

The Bank continues its “SMEs Management Strengthening” training program together with some of the most prestigious business schools in Argentina.

In addition, the Bank launched the 27° edition of the “Prize to the Agro Entrepreneur”. The prize has become a classic of the agro sector, providing recognition and encouragement to those who innovate and improved the profitability of their business as a result.

 

 

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Presentation of Financial Information

 

 

    Foreign currency balances as of March 31, 2016 have been translated into pesos at the reference exchange rate published by the BCRA at such date (AR$ 14.5817/ US$).

 

    This press release contains unaudited financial information that consolidates all of the banking activities of BBVA Francés and its subsidiaries on a line-by-line basis. The Bank’s interest in the Consolidar Group – BBVA Consolidar Seguros S. A. and Consolidar AFJP (in liquidation)-, is shown as
   

“Investments in other companies” (recorded under the equity method) and the corresponding results are included in “Income from Equity Investments”.

 

    Information contained in this press release may differ from the information published by the BBVA Group for Argentina, which is prepared according to Spanish accounting standards for all BBVA Group affiliates.
 

 

 

Financial Information

 

 

                       D % quarter ended 03-31-16 vs  
Condensed Income Statement (1)    Quarter ended     quarter ended  
(in thousands of pesos except income per share, ADS and percentages)    03-31-16     12-31-15     03-31-15     12-31-15     03-31-15  

Net Financial Income

     2,980,043        2,854,922        2,285,033        4.4     30.4

Provision for loan losses

     (161,351     (197,541     (143,097     -18.3     12.8

Net income from services

     931,083        960,726        960,451        -3.1     -3.1

Administrative expenses

     (2,095,807     (1,889,227     (1,581,333     10.9     32.5

Operating income

     1,653,968        1,728,880        1,521,054        -4.3     8.7

Income (Loss) from equity investments

     44,802        46,960        31,735        -4.6     41.2

Income (Loss) from Minority interest

     (39,994     (34,593     (31,774     15.6     25.9

Other Income/Expenses

     56,471        1,780        (97,601     3072.5     -157.9

Income tax and Minimum Presumed Tax

     (550,163     (554,766     (492,468     -0.8     11.7

Net income for the period

     1,165,084        1,188,261        930,946        -2.0     25.2

Net income per share (2)

     2.17        2.21        1.73        -2.0     25.2

Net income per ADS (3)

     6.51        6.64        5.20        -2.0     25.2

 

(1) Exchange rate: AR$ 14,5817 Ps = 1 USD
(2) Assumes 536,877,850 ordinary shares
(3) Each ADS represents three ordinary shares

 

During the first quarter of 2016, the Bank’s net income totaled AR$ 1,165.1 million, increasing by 25.2% compared with the same quarter of 2015, while decreasing by 2.0% compared to the prior quarter.

Net financial income grew by 30.4% compared with the first quarter of 2015. Such increase was mainly due to higher intermediation with the private sector as well as higher gains derived from the public bonds portfolio. Compared with the previous quarter, the increase in net financial income was of 4.4% due to higher income derived from CER adjustment and from foreign exchange differences.

Provisions for loan losses increased compared with the first quarter of 2015 due to the higher volume of lending and the deterioration of the loan portfolio.

Compared with the previous quarter, provisions for loan losses showed a decline of 18.3%, mainly due to lower provisions resulting from lower lending volume.

During the second quarter of 2015, the Bank redefined the charges triggered by credit and debit card transactions, reclassifying them from administrative expenses to service charge expenses, in line with the standards applied in the industry.

Other/income expenses totaled AR$ 56.5 million for the period ended March 31, 2016. It is worth mentioning that this line item included for the first quarter of 2015 certain administrative penalties in accordance with the Communication “A” 5689 issued on January 8, 2015 by the BCRA. Such penalties were thereafter revoked by the IV Chamber of the Court of Appeals.

 

 

- 4 -


                       D % quarter ended 03-31-16 vs  
Main figures          Quarter ended           quarter ended  
(in thousands of pesos except percentages)    03-31-16     12-31-15     03-31-15     12-31-15     03-31-15  

Return on Average Assets (1)

     4.1     4.7     4.8     -12.0     -13.9

Return on Average Shareholders’ Equity (1)

     32.6     36.2     34.5     -10.0     -5.5

Net fee Income as a % of Operating Income

     23.8     25.2     29.6     -5.5     -19.6

Net fee Income as a % of Administrative Expenses

     44.4     50.9     60.7     -12.6     -26.9

Adm. Expenses as a % of Recurrent Income (2)

     53.6     49.5     48.7     8.2     10.0

 

(1) Annualized.
(2) Adm.Expenses / (Net financial income + Net income from services)

 

 

Net Financial Income

 

Net financial income arising from the intermediation with the private sector increased by 7.7% compared with the first quarter of 2015. Compared with the previous quarter it did not register a significant variation, mainly due to an increase in the cost of funds.

Income from securities and short-term investments included non-recurring income originated by variations in the valuation of public securities. Such results totaled a loss of AR$ 204.8 million during the

quarter under analysis, whereas for the same quarter of 2015 and for the previous quarter, it registered gains of AR$ 267.1 million and of AR$ 382.1 million, respectively.

Both, the line items “CER Adjustment” and “Foreign exchange difference” reflected important gains compared with the same quarter of 2015 and the previous quarter, mainly due to the depreciation of the Argentine peso in December 2015.

 

 

 

                          D % quarter ended 03-31-16 vs  
Net financial income    Quarter ended      quarter ended  
(in thousands of pesos except percentages)    03-31-16      12-31-15      03-31-15      12-31-15     03-31-15  

Net financial income

     2,980,043         2,854,922         2,285,033         4.4     30.4

Net income from financial intermediation

     1,229,373         1,236,777         1,141,287         -0.6     7.7

CER adjustment

     161,393         41,249         45,228         291.3     256.8

Income from securities and short term investments

     980,137         1,133,458         921,729         -13.5     6.3

Interest on Government guaranteed loans

     9,072         4,089         3,544         121.9     156.0

Foreign exchange difference

     369,257         31,654         121,789         1066.5     203.2

Others

     230,811         407,695         51,456         -43.4     348.6

 

 

Income from Public and Private Securities

 

The Bank has the discretion to mark-to-market its total public bonds portfolio; because of that, such

income includes the unrealized losses/gains from variations in the valuations of the portfolio.

 

 

                         D % quarter ended 03-31-16  
Income from securities and short-term investments    Quarter ended      vs quarter ended  
(in thousands of pesos except percentages)    03-31-16     12-31-15      03-31-15      12-31-15     03-31-15  

Income from securities and short-term investments

     980,137        1,133,458         921,729         -13.5     6.3

Holdings booked at fair value

     (21,714     601,465         368,080         -103.6     -105.9

Bills and Notes from the Central Bank

     958,961        512,661         537,885         87.1     78.3

Other fixed income securities

     42,890        19,332         15,765         121.9     172.1

CER adjustment

     161,520        41,264         45,240         291.4     257.0

 

 

Net Income from Services

 

Net income from services, not taking into account the previously mentioned reclassification, increased by 7.5% compared with the first quarter of 2015 and decreased by 2.1% compared with the previous quarter.

 

 

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In the year-to-year comparison, growth was due mainly to higher consumption with credit cards, higher fees associated with insurance and higher fees generated by an increase in the stock of deposit accounts, as well as due to the fees generated by PSA Finance. Such growth was partially offset by an increase in service charge expenses related to promotions associated with the LATAM Pass kilometers program.

The decrease experienced during the quarter was mainly explained by the seasonal behavior of credit cards consumption, which was lower during the period.

 

 

Net income from services          Quarter ended     D % quarter ended 03-31-16 vs
quarter ended
 
(in thousands of pesos except percentages)    03-31-16     12-31-15     03-31-15     12-31-15     03-31-15  

Net income from services

     931,083        960,726        960,451        -3.1     -3.1

Service charge income

     1,481,111        1,547,202        1,302,855        -4.3     13.7

Service charges on deposits accounts

     338,874        327,449        266,581        3.5     27.1

Credit cards and operations

     548,511        601,513        514,163        -8.8     6.7

Insurance

     146,228        150,501        157,517        -2.8     -7.2

Capital markets and securities activities

     6,695        22,617        12,288        -70.4     -45.5

Fees related to foreign trade

     58,033        47,933        35,300        21.1     64.4

Other fees

     382,769        397,189        317,005        -3.6     20.7

Services Charge expense

     (550,027     (586,476     (342,404     -6.2     60.6

 

 

Administrative Expenses

 

Administrative expenses increased by 32.6% compared with the first quarter of 2015 and by 11.0% compared with the previous quarter. Not considering the previously mentioned reclassification, the increase compared with the same quarter of 2015 would have been of 39.8%.

The increase in personnel expenses mainly reflected advances for future salary increases and a higher number of employees compared with both other quarters under analysis.

General expenses increased by 43.9% annually and by 8.4% during the quarter. The annual increase was mainly due to the fact that higher advertising and promotion charges were registered in line with the commercial campaigns made by the Bank, as well as to higher electricity and communications charges due to the tariffs adjustment, in addition to the impact of

the increase in prices, the effect of the devaluation and a higher volume of activity.

During the quarter, higher expenses in electricity and communication were partially offset by lower advertising and promotions charges.

As of March 31, 2016, the Bank had 5,884 employees, representing an increase of 5.2% compared with the first quarter of 2015. In addition. The branch office network totaled 301 offices, including 251 consumer branch offices and 34 branch offices specializing in SMEs and institutions. Corporate banking is divided by industries: consumption, heavy industries and oil and gas, providing personalized attention to large corporations. Complementing its distribution network, the Bank had 14 in-company branches, 1 point of sale outlet and 1 express point, 695 ATM’s and 796 self-service terminals (ATS).

 

 

 

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Administrative expenses   

Quarter ended

   

D % quarter ended 03-31-16 vs

quarter ended

 
(in thousands of pesos except percentages)    03-31-16     12-31-15     03-31-15     12-31-15     03-31-15  

Administrative expenses

     (2,095,807     (1,889,227     (1,581,333     10.9     32.5

Personnel expenses

     (1,219,519     (1,079,365     (905,375     13.0     34.7

Electricity and Communications

     (38,972     (29,050     (26,166     34.2     48.9

Advertising and Promotion

     (67,952     (72,742     (42,518     -6.6     59.8

Fees and external administrative services

     (33,323     (35,726     (20,499     -6.7     62.6

Taxes

     (198,595     (193,002     (143,921     2.9     38.0

Organization and development expenses

     (18,926     (18,890     (14,603     0.2     29.6

Amortizations

     (54,142     (50,160     (44,592     7.9     21.4

Other

     (464,378     (410,292     (383,659     13.2     21.0

 

 

Other Income / Expenses

 

Other income/expenses totaled a gain of AR$ 56.5 million during the first quarter of 2016, including AR$ 48.8 million of administrative penalties in accordance to the BCRA regulation (Communication “A” 5689) issued on January 8, , 2015. During the first quarter of 2016 the IV Chamber of the Court of Appeals revoked such penalty in the amount of AR$ 39 million.

 

Income from Equity Investments

 

Income from equity investments sets forth net income from related companies that are not consolidated. During the first quarter of 2016, a gain of AR$ 44.8 million was recorded, mainly due to the stake held by BBVA Francés in Rombo Compañía Financiera.

 

 

 

Balance and activity

 

 

 

Total Public Sector Exposure

 

Exposure to the public sector’s National Treasury increased by 50.1% compared with the first quarter of 2015 and by 23.2% compared with the previous quarter, mainly due to the purchases of bonds.

The Bank’s portfolio of BCRA bills and notes both showed an increase, during the period under analysis and in the last twelve months, in accordance to the liquidity policy implemented by the Bank.

As of March 31, 2016, the public sector’s National Treasure assets represented 3.8% of the Bank’s total assets. Total exposure to the BCRA’s bills and notes net of holdings linked to reverse repo transactions, represented 10.6% of the Bank’s total assets.

Total exposure to the public sector includes public debt of the National Treasury through public securities and guaranteed loans, as well as the BCRA’s bills and notes.

 

 

 

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Exposure to the Public Sector   

Quarter ended

    D % quarter ended 03-31-16
vs quarter ended
 
(in thousands of pesos except percentages)    03-31-16     12-31-15     03-31-15     12-31-15     03-31-15  

Public Sector—National Government

     4,433,717        3,597,597        2,953,117        23.2     50.1

Public Sector Loans

     74,853        66,799        57,208        12.1     30.8

Total bond portfolio

     4,359,082        3,531,010        2,797,440        23.5     55.8

Holdings book at fair value

     4,015,178        3,220,093        2,524,516        24.7     59.0

Holdings book at amortized cost

     164        164        98,391        0.0     -99.8

Unlisted

     343,740        310,753        174,533        10.6     96.9

Allowances

     (218     (212     (201     2.8     8.5

Reverse repo

     —          —          98,670        n/a        -100.0

Public Sector—National Government own portfolio

     4,433,717        3,597,597        2,854,447        23.2     55.3

Bills and Notes from Central Bank

     13,302,958        11,086,580        11,985,646        20.0     11.0

Own portfolio

     12,321,088        11,086,580        10,013,949        11.1     23.0

Reverse repo w/Central Bank

     981,870        —          1,971,697        n/a        -50.2

Total exposure to the Public Sector

     17,736,675        14,684,177        14,938,763        20.8     18.7

Total exposure to the Public Sector without repos

     16,754,805        14,684,177        12,868,396        14.1     30.2

 

 

Loan Portfolio

 

The private sector loan portfolio totaled AR$ 59.1 billion as of March 31, 2016, representing an increase of 37.3% and 4.7% compared with the first quarter of 2015 and with the previous quarter, respectively.

In the last twelve months, consumer loans increased by 35.2%, Such increase was mainly due to an outstanding performance of credit cards, which registered an increase of 46.6% during the period,

whereas car loans and personal loans also registered increases of around 20%.

Commercial loans increased by 39.8% in the same period, mainly due to a higher portfolio of advances and foreign trade operations.

During the quarter, consumer loans were kept at the same level, whereas the commercial loan portfolio increased by 12% mainly due to higher loans to large corporations.

 

 

Net loans    Quarter ended     D % quarter ended 03-31-16
vs quarter ended
 
(in thousands of pesos except percentages)    03-31-16     12-31-15     03-31-15     12-31-15     03-31-15  

Private & Financial sector loans

     59,134,567        56,496,522        43,084,357        4.7     37.3

Advances

     8,195,034        6,739,426        7,180,739        21.6     14.1

Discounted and purchased notes

     8,979,534        9,559,666        5,882,870        -6.1     52.6

Consumer Mortgages

     1,988,051        2,122,955        1,512,906        -6.4     31.4

Car secured loans

     4,493,535        4,567,505        3,644,048        -1.6     23.3

Personal loans

     7,428,791        7,343,933        6,181,597        1.2     20.2

Credit cards

     18,176,278        18,322,958        12,399,432        -0.8     46.6

Loans to financial sector

     1,367,594        1,530,454        810,528        -10.6     68.7

Other loans

     8,658,592        6,510,536        5,609,073        33.0     54.4

Unaccrued interest

     (212,823     (216,365     (135,135     -1.6     57.5

Adjustment and accrued interest & exchange difference

     1,241,172        1,127,744        948,643        10.1     30.8

Less: Allowance for loan losses

     (1,181,191     (1,112,290     (950,344     6.2     24.3

Loans to public sector

     74,853        66,799        57,208        12.1     30.8

Loans to public sector

     8,734        8,823        8,773        -1.0     -0.4

Adjustment and accrued interest & exchange difference

     66,119        57,976        48,435        14.0     36.5

Net total loans

     59,209,420        56,563,321        43,141,565        4.7     37.2

 

- 8 -


 

Asset Quality

 

As of March 31, 2016, the asset quality ratio (non-performing loans/total loans) was 0.69%, while the coverage ratio (provisions/non-performing loans) reached 283.67%.

 

The NPL ratio decreased compared with the first quarter of 2015 although it increased compared with the previous quarter, mainly as a result of higher non-performing loans as well as an increase in the performing portfolio.

 

 

Asset quality ratios    Quarter ended     D % quarter ended 03-31-16 vs
quarter ended
 
(in thousands of pesos except percentages)    03-31-16     12-31-15     03-31-15     12-31-15     03-31-15  

Non-performing loans (1)

     416,402        370,000        406,138        12.5     2.5

Allowance for loan losses

     (1,181,191     (1,112,290     (950,344     6.2     24.3

Non-performing loans/net total loans

     0.69     0.64     0.92     7.5     -25.1

Non-performing private loans/net private loans

     0.69     0.64     0.92     7.5     -25.1

Allowance for loan losses/non-performing loans

     283.67     300.62     234.00     -5.6     21.2

Allowance for loan losses/net total loans

     1.96     1.93     2.16     1.4     -9.3

 

(1) Non-performing loans include:all loans to borrowers classified as “Problem”, “Deficient Servicing”,“High Insolvency Risk”, “Difficult Recovery”, “Irrecoverable” and “Irrecoverable for Technical Decision” according to the new Central Bank debtor classification system.

 

The following table shows the evolution of provisions for loan losses, including charges relating to

transactions recorded under “Other receivables” from financial intermediation.

 

 

Evolution of provisions    Quarter ended     D % quarter ended 03-31-16 vs
quarter ended
 
(in thousands of pesos except percentages)    03-31-16     12-31-15     03-31-15     12-31-15     03-31-15  

Balance at the beginning of the quarter

     1,119,687        1,024,797        943,061        9.3     18.7

Increase / decrease

     161,351        197,541        143,097        -18.3     12.8

Provision increase / decrease—Exchange rate difference

     5,318        12,237        837        -56.5     -535.4

Aplications / Reversals

     (97,598     (114,888     (130,387     -15.0     -25.1

Balance at the end of the quarter

     1,188,758        1,119,687        956,608        6.2     24.3

 

 

Deposits

 

Total deposits reached AR$ 80.1 billion as of March 31, 2016, representing an increase of 44.7% in the last twelve months and of 4.2% during the quarter.

During the year, time deposits registered a significant increase of 47.1%, while sight accounts also increased by 44.1 %.

It is worth mentioning that total peso-denominated deposits increased by 28.7% in the last twelve months.

 

Compared with the previous quarter, total deposits increased by 4.2%, driven by a 3.9% increase in term deposits, while sight accounts grew by 3.3%.

Foreign currency denominated deposits increased by 173.1% and by 33% compared with the same quarter of 2015 and with the previous quarter, respectively. Foreign currency denominated deposits totaled AR$ 16.7 billion (equivalent to US$ 1.2 billion) as of March 31, 2016, representing 20.9% of the Bank’s total deposits.

 

 

- 9 -


Total deposits    Quarter ended      D % quarter ended 03-31-16 vs
quarter ended
 
(in thousands of pesos except percentages)    03-31-16      12-31-15      03-31-15      12-31-15     03-31-15  

Total deposits

     80,099,181         76,863,436         55,355,670         4.2     44.7

Current accounts

     19,361,280         21,201,742         16,193,981         -8.7     19.6

Peso denominated

     18,674,131         20,593,528         15,380,061         -9.3     21.4

Foreign currency

     687,149         608,214         813,920         13.0     -15.6

Saving accounts

     25,737,565         22,452,261         15,097,425         14.6     70.5

Peso denominated

     15,359,809         14,972,121         11,717,780         2.6     31.1

Foreign currency

     10,377,756         7,480,140         3,379,645         38.7     207.1

Time deposits

     33,155,157         31,895,955         22,538,963         3.9     47.1

Peso denominated

     27,911,716         27,705,124         20,866,807         0.7     33.8

CER adjusted time deposits

     1,126         1,072         419         5.0     168.7

Foreign currency

     5,242,315         4,189,759         1,671,737         25.1     213.6

Investment Accounts

     5,586         34,807         594         -84.0     n/a   

Peso denominated

     5,586         34,807         594         -84.0     n/a   

Other

     1,839,593         1,278,671         1,524,707         43.9     20.7

Peso denominated

     1,441,097         995,207         1,273,909         44.8     13.1

Foreign currency

     398,496         283,464         250,798         40.6     58.9

Rescheduled deposits + CEDROS

     2,234         2,234         2,234         0.0     0.0

Peso denominated

     2,234         2,234         2,234         0.0     0.0

Total deposits + Rescheduled deposits & CEDROS

     80,101,415         76,865,670         55,357,904         4.2     44.7

 

 

Other Funding Sources

 

Other funding sources totaled AR$ 3.1 billion, as of March 31, 2016 increasing 24% in the last twelve months, while it decrease 17.9% compared to the previous quarter.

In the last twelve months, negotiable obligations were issued by the Bank and by PSA Finance and some series of bonds matured during the period.

Additionally, dollar funding increased during the period, mainly through funding lines aimed at financing exports.

Of the total senior bonds outstanding, AR$ 1.6 billion corresponded to those issued by BBVA Francés and AR$ 51.7 million to PSA Finance.

 

 

Other funding sources    Quarter ended      D % quarter ended 03-31-16 vs
quarter ended
 
(in thousands of pesos except percentages)    03-31-16      12-31-15      03-31-15      12-31-15     03-31-15  

Lines from other banks

     1,485,135         1,863,498         601,260         -20.3     147.0

Senior Bonds

     1,608,592         1,902,562         1,894,585         -15.5     -15.1

Total other funding sources

     3,093,727         3,766,060         2,495,845         -17.9     24.0

 

 

Capitalization

 

As of March 31, 2016, the Bank’s total shareholders’ equity totaled AR$ 14.8 billion, while the excess over the BCRA minimum capital requirements was AR$

7.1 billion or 90.1%. On the same date, the capital ratio reached 15.8% of assets adjusted to risk.

 

 

- 10 -


                       D % quarter ended 03-31-16 vs  
Capitalization    Quarter ended     quarter ended  
(in thousands of pesos except percentages)    03-31-16     12-31-15     03-31-15     12-31-15     03-31-15  

Capital Stock

     536,878        536,878        536,878        0.0     0.0

Issuance premiums

     182,511        182,511        182,511        0.0     0.0

Adjustments to stockholders equity

     312,979        312,979        312,979        0.0     0.0

Subtotal

     1,032,368        1,032,368        1,032,368        0.0     0.0

Reserves on Profits

     8,899,508        8,899,508        6,095,012        0.0     46.0

Unappropriated retained earnings

     4,949,571        3,784,487        4,135,442        30.8     19.7

Total stockholders’ equity

     14,881,447        13,716,363        11,262,822        8.5     32.1
                       D % quarter ended 03-31-16 vs  
Central Bank Requirements    Quarter ended     quarter ended  
(in thousands of pesos except percentages)    03-31-16     12-31-15     03-31-15     12-31-15     03-31-15  

Central Bank Minimum Capital Requirements

     7,813,073        7,128,504        5,428,888        9.6     43.9

Central Bank Minimum Capital Requirements (a, b)

     7,682,943        7,064,858        5,263,970        8.7     46.0

Increase in capital requirements related to custody

     130,130        63,646        164,918        104.5     -21.1

a) Central Bank Minimum Capital Requirements

     7,682,943        7,064,858        5,314,226        8.7     44.6

Allocated to Asset at Risk

     5,769,780        5,134,942        3,777,492        12.4     52.7

DCR (derivative conterparter risk)

     —          14,393        6,914        -100.0     -100.0

Non Compliance of Other Credit Regulations

     —          —          50,256        n/a        -100.0

Market Risk

     162,912        287,600        149,434        -43.4     9.0

Operational Risk

     1,750,251        1,627,923        1,330,130        7.5     31.6

b) Minimum capital required for the Guarantee Fund for the Sustainability of the Pas-as-you-go System maneged by the Argentine Republic and registrar of mortgage notes

     520,520        400,000        659,672        30.1     -21.1

5% of the securities in custody and book-entry notes

     520,520        400,000        659,672        30.1     -21.1

Bank Capital Calculated under Central Bank Rules

     14,934,191        13,704,185        11,278,580        9.0     32.4

Ordinary Capital Level 1

     14,401,947        13,206,449        10,875,059        9.1     32.4

Dedusctions Ordinary Capital Level 1

     (311,162     (281,230     (169,521     10.6     83.6

Capital Level 2

     843,406        778,966        573,042        8.3     47.2

Excess over Required Capital

     7,121,118        6,575,681        5,849,692        8.3     21.7

Capital Ratio (Central Bank rules)

     15.9     15.5     17.1     2.4     -7.2

Excess over Required Capital as a % of Shareholders’ Equity

     47.9     47.9     51.9     -0.2     -7.9

 

 

Additional Information

 

 

 

                       D % quarter ended 03-31-16 vs  
     Quarter ended     quarter ended  
(in thousands of pesos except percentages)    03-31-16     12-31-15     03-31-15     12-31-15     03-31-15  

Exchange rate

     14.58        13.01        8.82        12.1     65.3

Quarterly CER adjustment

     10.5     4.1     3.1     153.2     235.5

This press release contains or may contain certain forward-looking statements within the meaning of the United States Securities Litigation Reform Act of 1995, including, among other things, concerning the prospects of the Argentine economy, BBVA Francés’ earnings, business plans, cost-reduction plans, and capitalization plan, and trends affecting BBVA Francés’ financial condition or results of operations. Any forward-looking statements included in this press release are based on current expectations and estimates, but actual results and events may differ materially from anticipated future results and events. Certain factors which could cause the actual results and events to differ materially from the expected results or events include: (1) changes in domestic or international stock market prices, exchange rates or interest rates; (2) macroeconomic, regulatory, political or governmental changes; (3) changes in the markets for BBVA Francés’ products and services; (4) increased competition; (5) changes in technology; or (6) changes in the financial condition, creditworthiness or solvency of the customers, debtors or counterparties of BBVA Francés. Additional factors that could cause the actual results or events to differ materially from the expected results or events are described in the reports filed by BBVA Francés with the United States Securities and Exchange Commission (“SEC”), including, but not limited to, BBVA Francés’ annual report on Form 20-F and exhibits thereto. BBVA Francés does not undertake to revise or update any of the information contained herein under any circumstances, including if at any moment following dissemination of such information it is no longer accurate or complete.

 

- 11 -


 

Conference Call

 

A conference call to discuss first quarter earnings will be held on Thursday, May 12, 2016, at 12:00 pm New York time – 13:00 pm Buenos Aires time. If you are interested in participating, please dial (888) 572 7033 within the U.S. or +1 (719) 325 2491 outside the U.S. at least 5 minutes prior to our scheduled conference time. Confirmation code: 4032488 . This conference will be recorded. To ask for a digital replay, please dial (888) 203 1112 within U.S or +1 (719) 457 0820, using the same confirmation code. The replay will be available until June 13, 2016.

 

Internet

 

This press release is also available at BBVA Francés web site: www.bbvafrances.com.ar

 

 

Contacts

 

Cecilia Acuña

Investor Relations

(5411) 4341-5036

ceciliaviviana.acuna@bbva.com

 

 

- 12 -


BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar: by the equity method)

BALANCE SHEET (in thousands of pesos)

 

     03-31-16     12-31-15     09-30-15     03-31-15  

Cash and due from banks

     23,414,132        27,970,169        13,937,749        12,897,039   

Government and Private Securities

     17,448,966        14,416,484        15,652,920        14,779,848   

Holdings booked at fair value

     4,015,178        3,220,093        2,583,782        2,524,516   

Holdings booked at amortized cost

     —          —          —          98,391   

Reverse repo

     164        164        164        98,670   

Listed Private Securities

     130,884        109,859        89,259        72,826   

Bills and Notes from the Central Bank

     13,302,958        11,086,580        12,979,915        11,985,646   

Less: Allowances

     (218     (212     (200     (201

Loans

     59,209,420        56,563,321        49,981,675        43,141,565   

Loans to the private & financial sector

     59,134,567        56,496,522        49,918,078        43,084,357   

Advances

     8,195,034        6,739,426        7,813,118        7,180,739   

Discounted and purchased notes

     8,979,534        9,559,666        7,708,000        5,882,870   

Secured with mortgages

     1,988,051        2,122,955        1,806,419        1,512,906   

Car secured loans

     4,493,535        4,567,505        4,127,086        3,644,048   

Personal loans

     7,428,791        7,343,933        6,805,408        6,181,597   

Credit cards

     18,176,278        18,322,958        14,672,406        12,399,432   

Loans to financial sector

     1,367,594        1,530,454        1,246,674        810,528   

Other loans

     8,658,592        6,510,536        6,010,784        5,609,073   

Less: Unaccrued interest

     (212,823     (216,365     (161,426     (135,135

Plus: Interest & FX differences receivable

     1,241,172        1,127,744        908,499        948,643   

Less: Allowance for loan losses

     (1,181,191     (1,112,290     (1,018,890     (950,344

Public Sector loans

     74,853        66,799        63,597        57,208   

Principal

     8,734        8,823        8,822        8,773   

Plus: Interest & FX differences receivable

     66,119        57,976        54,775        48,435   

Other banking receivables

     6,753,374        3,728,874        5,559,493        4,191,933   

Repurchase agreements

     982,677        —          1,910,161        2,046,557   

Unlisted private securities

     212,856        200,894        86,868        101,707   

Other banking receivables

     5,565,408        3,535,377        3,568,371        2,049,933   

Less: provisions

     (7,567     (7,397     (5,907     (6,264

Investments in other companies

     426,278        363,861        336,070        367,021   

Intangible assets

     259,976        236,861        211,624        157,514   

Organization and development charges

     259,976        236,861        211,624        157,514   

Other assets

     7,762,404        7,412,813        6,453,052        5,595,936   

Total Assets

     115,274,550        110,692,383        92,132,583        81,130,856   

Deposits

     80,101,415        76,865,670        63,216,454        55,357,904   

Current accounts

     19,361,280        21,201,742        17,703,627        16,193,981   

Saving accounts

     25,737,565        22,452,261        17,302,839        15,097,425   

Time deposits

     33,155,157        31,895,955        26,762,368        22,538,963   

Investment Accounts

     5,586        34,807        88,774        594   

Rescheduled deposits CEDROS

     2,234        2,234        2,234        2,234   

Other deposits

     1,839,593        1,278,671        1,356,612        1,524,707   

Other banking Liabilities

     15,015,019        15,031,971        11,618,140        10,087,578   

Other provisions

     1,021,902        999,929        961,630        896,150   

Other contingencies

     1,021,206        999,319        960,988        895,482   

Guarantees

     696        610        642        668   

Other liabilities

     3,888,356        3,749,284        3,513,683        3,222,499   

Minority interest

     366,411        329,166        294,574        303,903   

Total Liabilities

     100,393,103        96,976,020        79,604,481        69,868,034   

Total Stockholders’ equity

     14,881,447        13,716,363        12,528,102        11,262,822   

Total liabilities + stockholders’ equity

     115,274,550        110,692,383        92,132,583        81,130,856   

 

- 13 -


BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar: by the equity method)

INCOME STATEMENT (in thousands of pesos)

 

     03-31-16     12-31-15     09-30 -15     03-31-15  

Financial income

     5,495,068        4,998,740        4,160,006        3,769,403   

Interest on Cash and Due from Banks

     —          —          —          —     

Interest on Loans Granted to the Financial Sector

     112,598        109,505        76,198        70,938   

Interest on Overdraft

     691,193        600,669        614,867        488,603   

Interest on Discounted and purchased notes

     522,801        463,881        350,163        306,681   

Interest on Mortgages

     101,694        98,158        83,853        68,649   

Interest on Car Secured Loans

     270,463        264,203        238,125        219,544   

Interest on Credit Card Loans

     984,737        811,113        679,705        637,018   

Interest on Financial Leases

     116,114        113,406        103,447        95,305   

Interest on Other Loans

     919,114        900,677        836,913        737,640   

From Other Banking receivables

     152        30        108        50   

Interest on Government Guaranteed Loans Decree 1387/01

     9,072        4,089        4,082        3,544   

Income from Securities and Short Term Investments

     980,137        1,133,458        891,912        921,729   

CER

     161,520        41,264        50,113        45,240   

Foreign exchange difference

     369,257        31,654        122,243        121,789   

Other

     256,216        426,633        108,277        52,673   

Financial expenses

     (2,515,025     (2,143,818     (1,833,403     (1,484,370

Interest on Current Account Deposits

     —          —          —          —     

Interest on Saving Account Deposits

     (7,957     (7,003     (5,987     (4,620

Interest on Time Deposits

     (1,842,388     (1,576,170     (1,321,401     (1,053,486

Interest on Other Banking Liabilities

     (181,920     (161,272     (149,052     (132,824

Other interests (includes Central Bank)

     (1,234     (1,470     (1,469     (1,693

CER

     (127     (15     (19     (12

Bank Deposit Guarantee Insurance system mandatory contributions

     (128,161     (107,580     (102,137     (88,294

Mandatory contributions and taxes on interest income

     (327,833     (271,370     (231,747     (202,224

Other

     (25,405     (18,938     (21,591     (1,217

Net financial income

     2,980,043        2,854,922        2,326,603        2,285,033   

Provision for loan losses

     (161,351     (197,541     (115,201     (143,097

Income from services, net of other operating expenses

     931,083        960,726        953,272        960,451   

Administrative expenses

     (2,095,807     (1,889,227     (1,645,376     (1,581,333

Income (loss) from equity investments

     44,802        46,960        69,341        31,735   

Net Other income

     56,471        1,780        (10,472     (97,601

Income (loss) from minority interest

     (39,994     (34,593     (30,439     (31,774

Income before tax

     1,715,247        1,743,027        1,547,728        1,423,414   

Income tax

     (550,163     (554,766     (549,658     (492,468

Net income

     1,165,084        1,188,261        998,070        930,946   

 

- 14 -


BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar consolidated on a line by line basis)

 

     03-31-16      12-31-15      09-30-15      03-31-15  

Cash and due from banks

     23,414,261         27,970,286         13,937,826         12,897,123   

Government Securities

     17,489,778         14,422,191         15,658,390         14,787,089   

Loans

     59,209,420         56,563,321         49,981,675         43,141,565   

Other Banking Receivables

     6,753,374         3,728,874         5,559,493         4,191,933   

Assets Subject to Financial Leasing

     2,346,370         2,407,451         2,339,833         2,129,618   

Investments in other companies

     416,473         353,377         331,131         362,112   

Other assets

     5,689,131         5,290,698         4,368,786         3,668,090   

Total Assets

     115,318,807         110,736,198         92,177,134         81,177,530   

Deposits

     80,101,011         76,864,493         63,214,992         55,357,671   

Other banking liabilities

     15,015,019         15,032,048         11,618,166         10,087,578   

Minority interest

     374,801         338,136         298,800         308,103   

Other liabilities

     4,946,529         4,785,158         4,517,074         4,161,356   

Total Liabilities

     100,437,360         97,019,835         79,649,032         69,914,708   

Total Stockholders’ Equity

     14,881,447         13,716,363         12,528,102         11,262,822   

Stockholders’ Equity + Liabilities

     115,318,807         110,736,198         92,177,134         81,177,530   

Net Income

 

     03-31-16     12-31-15     09-30 -15     03-31-15  

Net Financial Income

     2,983,692        2,856,420        2,328,398        2,285,429   

Provision for loan losses

     (161,351     (197,541     (115,201     (143,097

Net Income from Services

     931,083        960,726        953,272        960,451   

Administrative expenses

     (2,101,298     (1,891,536     (1,646,213     (1,584,248

Net Other Income

     101,996        54,482        58,164        (62,916

Income Before Tax

     1,754,122        1,782,551        1,578,420        1,455,619   

Income Tax

     (550,303     (554,953     (549,809     (492,627

Net income

     1,203,819        1,227,598        1,028,611        962,992   

Minoritary Interest

     (38,735     (39,337     (30,541     (32,046

Net income for Quarter

     1,165,084        1,188,261        998,070        930,946   

 

- 15 -


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 Banco Francés S.A.
Date: May 11, 2016     By:   /s/ Ignacio Sanz y Arcelus
      Name: Ignacio Sanz y Arcelus
      Title: Chief Financial Officer
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