Banco BBVA Argentina S.A. — 2023 Form 20-F Summary
Reporting period: Fiscal year ended December 31, 2023; filed April 17, 2024. This is an annual report, not a standalone fourth-quarter filing. Financial statements are audited consolidated IFRS-IASB statements. Because Argentina is hyperinflationary, amounts are generally restated to pesos with purchasing power as of December 31, 2023; figures are not nominal year-end pesos unless specified.
Business context
BBVA Argentina provides retail, SME, corporate and investment banking, with financing subsidiaries and other financial-service interests. BBVA owned 66.55% of the Bank at year-end. The Bank reported 4.1 million active customers, 243 branches and 6,009 employees.
Key financial metrics
| Metric | 2023 | 2022 | Change |
|---|---|---|---|
| Total assets | Ps.6,110.1 billion | Ps.6,078.5 billion | +0.5% |
| Loans and advances, net | Ps.1,975.5 billion | Ps.2,233.1 billion | -11.5% |
| Deposits | Ps.3,639.3 billion | Ps.4,091.3 billion | -11.0% |
| Net interest income | Ps.1,627.2 billion | Ps.1,055.1 billion | +54.2% |
| Gross income | Ps.1,800.8 billion | Ps.1,146.8 billion | +57.0% |
| Net operating income | Ps.312.2 billion | Ps.174.1 billion | +79.3% |
| Profit before tax | Ps.313.3 billion | Ps.172.6 billion | +81.5% |
| Net profit | Ps.157.3 billion | Ps.180.5 billion | -12.9% |
| Total equity | Ps.1,414.8 billion | Ps.1,125.4 billion | +25.7% |
Interest income rose 62.5% to Ps.3,183.9 billion, while interest expense increased 72.1% to Ps.1,556.7 billion. The reported weighted net interest margin was 37.97%, up from 24.68%. The return on average equity declined to 12.52% from 17.64%; return on average assets was 2.57% versus 2.97%.
Operating cash flow was Ps.601.2 billion; investing cash outflow was Ps.43.0 billion and financing cash outflow Ps.26.5 billion. Cash and cash equivalents ended at Ps.1,142.7 billion, up Ps.220.3 billion; exchange-rate effects added Ps.572.9 billion and inflation effects reduced cash by Ps.884.3 billion.
Total liabilities were Ps.4,695.3 billion. The Bank reported capital of Ps.1,140.6 billion under BCRA rules and excess capital of Ps.804.0 billion; its BCRA capital ratio was 29.2%. The liquidity coverage ratio was 271%, compared with 348% in 2022.
Material changes versus 2022
- Net profit fell despite higher net interest income and operating income. The net monetary-position loss nearly doubled to Ps.828.8 billion from Ps.416.0 billion, and income tax expense was Ps.156.1 billion versus a Ps.7.9 billion benefit in 2022.
- The peso loan portfolio contracted: the filing reports a 16.1% decrease in private-sector peso loans, with declines in credit cards, consumer loans and other lending. Foreign-currency private-sector loans increased 48.2%, largely from export financing.
- Deposits declined in the restated consolidated balance sheet. Separately, system-wide private-sector deposits grew 116.4% in nominal terms; those nominal system statistics are not directly comparable with the Bank’s inflation-restated IFRS figures.
- Non-performing loans declined to Ps.35.2 billion from Ps.39.2 billion, but the NPL ratio rose to 1.29% from 1.13%. The reported coverage ratio fell to 165.3% from 242.22%.
- Public-sector exposure was Ps.2,308.8 billion, approximately 38% of total assets, including Ps.1,332.7 billion of BCRA instruments and Ps.976.1 billion of Argentine government securities.
Outlook, commentary and risks
The filing provides no quantified 2024 earnings or margin guidance. Management expects continued volatility while the Milei administration pursues fiscal adjustment and deregulation, and says the Bank will prioritize liquidity, solvency, risk management, customer growth and digitalization. The Bank expects local-currency activity to begin a gradual recovery, particularly in the second half of 2024, but notes uncertainty around policy implementation and economic stabilization.
- Argentina’s CPI inflation was 211.4% in 2023 and the peso depreciated 356.4% against the U.S. dollar. GDP contracted 1.7%, and the severe drought was estimated to reduce foreign-currency inflows by about US$20 billion.
- High inflation, exchange controls, currency devaluation, regulated interest rates and changes to BCRA policy could affect margins, asset values and customer repayment. The BCRA cut its policy rate from 133% to 70% after year-end; the Bank says lower remuneration on its central-bank exposure adversely affects it.
- Public-sector concentration, sovereign credit risk, short-term deposits and a mismatch between inflation-linked UVA loans and deposits are significant financial risks.
- Other disclosed exposures include credit losses, competition, cybersecurity and fraud, regulatory change, consumer and class-action litigation, and climate-related risks. The filing describes tax disputes over inflation-adjustment deductions for 2018 and 2020, and regulatory proceedings involving exchange operations and alleged anti-money-laundering compliance violations.
- The Bank reported that internal control over financial reporting was effective at December 31, 2023; the auditor gave unqualified opinions on the financial statements and internal controls. The financial-statement audit identified expected-credit-loss estimation as a critical audit matter.
- The Board proposed a Ps.169.231 billion nominal dividend for shareholder approval, subject to prior BCRA authorization. The BCRA’s 2024 rule permits distribution of up to 60% of distributable profit in installments, subject to authorization.
Most important facts for investors to verify
- Reconcile the reported liquidity ratios: the filing gives liquid assets to deposits of 37.99% in its liquidity discussion but 59.53% in a selected-ratios table, with the latter table describing liquid assets similarly. Confirm the definitions and calculation.
- Review the concentration, valuation, maturities and impairment assumptions for the Ps.2,308.8 billion public-sector exposure, especially BCRA instruments and Argentine government securities.
- Assess whether the lower NPL coverage ratio and increased NPL ratio adequately reflect credit deterioration amid inflation, recession and shrinking peso lending.
- Separate reported operating performance from IAS 29 inflation restatement, currency translation effects and the unusually large net monetary-position loss; compare like-for-like restated measures.
- Confirm BCRA authorization and shareholder approval for the proposed dividend, and the amount and timing ultimately payable.
- Track outcomes of the tax and regulatory proceedings, and any developments in exchange controls, interest-rate rules and the government’s stabilization program.