BFR Bbva Banco Frances S.A.

 

 

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 February 2018

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  ☒             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  ☒

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  ☒

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  ☒

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

 

 

 

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BBVA Banco Francés S.A.

TABLE OF CONTENTS

 

Item
1.		BBVA Francés reports consolidated fourth quarter earnings for fiscal year 2017.

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Buenos Aires, February 14, 2018 - BBVA Francés (NYSE: BFR.N; BCBA:

FRA.BA; LATIBEX: BFR.LA) reports consolidated fourth quarter results for

the January-December 2017 fiscal year.

 

 

Highlights of the Quarter

 

 

 

•

BBVA Francés ended 2017 achieving the targets set in terms of growth. It increased its customer base, both in the case of individuals and legal persons, and it also gained market share in loans.

 

•

As of December 31, 2017, the Bank recorded an AR$ 3,878.3 million accumulated profit, reaching an average 18.2% return on equity and an average 2.1% return on assets.

 

•

In July 2017, BBVA Francés carried out a primary follow-on equity offering in Argentina and abroad, issuing 75,781,788 new ordinary shares, which amounts to USD 400 million, and such funds will be used to develop its growth plan.

 

•

Net financial income grew 21.2% year on year, mainly driven by the increase in the credit activity with the private sector, by better results generated by the foreign exchange difference and by higher volume of the Bank’s own funds, in addition to lower interests paid due to a fall in rates on average year on year. This was partially offset by lower revenues coming from the public securities portfolio.

 

•

A differential factor that affected BBVA Francés compared to the average banking system was the excess in the stock of physical bills during the first months of the year, with the financial cost that this implies. This situation returned to normal as from the second semester.

 

•

Net Income from Services grew 30% in 2017. Services charge expenses rose at a higher pace, 41.2%, mainly due to charges paid for promotions for purchases made with credit cards and to campaigns to attract new customers. Income from services grew 35.3% as a result of higher fees generated by deposit accounts, which grew due to a higher volume of activity and to an increase in prices, of fees generated by credit cards, with a rise in the use of the Bank’s cards compared to rest of the banking system, which offset the regulatory fall of 50 basis points of the charge and, finally, by the charges for collection services, which increased 65.2% during the year as a consequence of the actions taken by the Bank with the purpose of making the product more profitable.

 

•

During the year, the administrative expenses grew 32.1%, mainly reflecting the rise in personnel expenses, as a consequence of a salary increase agreed with the union and the application of a legal provision to compensate the difference between the real inflation of 24.8% and the highest inflation estimated in the bargaining agreement, 19.5%, in addition to other compensations paid and costs associated to the restructuring plan implemented in the year. The general expenses reflect a higher increase in amortizations, which went up due to technological investment and to the incorporation of the new headquarters. The rest of the expenses grew as a result of a higher volume of activities, a general price rise, the peso depreciation and the rise in utilities tariffs.

 

•

The Bank is implementing a series of plans under the transformation strategy. It should be highlighted that during the year, transactions through personal tellers in the branches went down, thus making it possible to reallocate resources to commercial tasks. The mailing of bank statements in paper also decreased as a result of a customer digitalization campaign.

 

•

In terms of activity, the private loan portfolio totaled AR$ 128.3 billion, which means an increase of 66.4% compared to the balances as of December 2016, implying a rise of 71 basis points of

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consolidated market share, which stood at 8.3% at the year close. Such increase is mainly caused by the rise in financing to companies, which grew 74.4%, whereas the retail business grew 50.9%, mainly caused by an outstanding performance of both mortgages, with a 126.2% increase and personal loans, with a 74.2% increase, while the credit cards and car loans business continued strengthening.

 

•

The asset quality ratio (NPL/Total loans) stood at 0.69% with a coverage (Total allowances/NPL) of 253.07% as of December 31, 2017, representing the best indicators of the Argentine financial system.

 

•

As to liabilities, total deposits amounted to AR$ 154.1 billion, increasing 34.4% over the past twelve months, over which period, sights accounts grew 60.6%, whereas time deposits rose 25.1%. In currency terms, the deposits in pesos rose 33.1% and in dollars, 36.8%, over the past twelve months.

 

•

BBVA Francés maintained adequate liquidity and solvency levels. As of December 31, liquid assets (cash plus Central Bank bills and notes) accounted for 35.3% of the Bank’s deposits. On the other hand, the capital ratio reached 14.7%, with a capital excess of AR$ 12.4 billion, 79% over the minimum amount required. Considering the conservation buffer (3.5%), the capital excess would amount to AR$ 5.7 billion.

 

Condensed Income Statement (1) in thousands of pesos except income per share, income per ADS and percentages		FY 2017				FY 2016				D %
Net Financial Income			15,039,960				12,411,466				21.2	%
Provision for loan losses			(1,560,720	)			(1,054,828	)			48.0	%
Net income from services			5,618,318				4,322,799				30.0	%
Administrative expenses			(12,604,460	)			(9,541,495	)			32.1	%
Operating income			6,493,098				6,137,942				5.8	%
Income (loss) from equity investments			399,409				184,200				116.8	%
Income (Loss) from Minority interest			(103,375	)			(112,407	)			-8.0	%
Other Income/Expenses			(646,428	)			(116,689	)			454.0	%
Income tax			(2,264,439	)			(2,449,374	)			-7.6	%
Net income for the period			3,878,265				3,643,672				6.4	%
Net income per share (2)			6.3				6.8				-6.7	%
Net income per ADS (3)			19.0				20.4				-6.7	%

 

(1)	Exchange rate:AR$ 15,8502 Ps =1USD

(2)	Assumes 612,659,638 ordinary shares as of December 31,2017 and 536,877,850 ordinary shares as of December 31,2016.

(3)	Each ADSrepresents three ordinary shares

 

 

Regulatory Changes

 

 

After October elections, the Government proposed a structural reform agenda with effects in the mid term. These reforms include the fiscal compact with the provinces and the changes in taxation, social security and labor laws, the last one still pending discussion and enactment by Congress.

 

•

Fiscal Compact with the Provinces: A commitment to reduce expenses and taxes to assure the solvency of the provinces’ public accounts in the mid term. It was also agreed that the provinces would withdraw cross claims with the Nation. The Province of Buenos Aires withdrew its legal claims for the so-called Greater Buenos Aires Fund in exchange for 10% of the the income tax proceeds.

 

•

Tax Reform: It includes amendments to several taxes, mainly the income tax, the bank debits and credits tax, the turnover tax and a decrease in employer’s taxes. A new tax will be levied on financial income. The reform would imply a gradual fall in the tax burden with the purpose of fostering investment, increasing competitiveness, boosting employment and heading towards a more equitable, less distorted tax system.

 

•

Social Security Reform: It includes the change in the movement ratio formula for the adjustment of pensions, the beneficiaries of the so-called Universal Allocation per Child subsidy, the subsidy for families, etc. The minimum pension is set at 82% of the adjustable minimum living wage for beneficiaries who have reached 30 years’ payments and are not included in any late payment plan. Private sector workers who are not self-employed may opt to retire at the age of 70.

 

- 2 -

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Additionally, by the end of December, the government announced a change in the inflation target scheme and postponed the 5% target to the year 2020. As a consequence, the new inflation target for 2018 will be 15%, 10% in 2019 and 5% in 2020.

 

 

Economic Environment

 

 

 

				Quarter ended
Main Macroeconomic figures				12-31-17				09-30-17				30-06-17				31-03-17				12-31-16
GDP		var % y/y			—				4.2	%			2.9	%			0.4	%			-1.9	%
Inflation (1)		var % y/y			24.8	%			23.8	%			21.8	%			32.2	%			39.4	%
End of period		var % q/q			6.1	%			5.1	%			5.4	%			6.1	%			5.3	%
CER		Quarterly adjustment			5.0	%			4.3	%			7.0	%			4.6	%			4.5	%
Exchange Rate		Pesos x US$			18.77				17.31				16.60				15.38				15.85
Reserves		US$			55,055				50,237				47,995				50,522				39,308
Fiscal Balance		Primary - billion of $			(181,763	)			(78,093	)			(102,942	)			(41,344	)			(133,937	)
Trade Balance		US$ (billion)			(3,311	)			(2,544	)			(1,438	)			(1,179	)			104
Total Private Loans		var % q/q			14.3	%			12.5	%			11.7	%			5.7	%			12.0	%
		var % y/y			51.8	%			48.6	%			40.4	%			35.6	%			31.5	%
Total Private Deposits		var % q/q			14.3	%			3.8	%			7.1	%			1.8	%			20.7	%
		var % y/y			29.3	%			36.6	%			38.7	%			38.5	%			43.4	%
Badlar interest rate		Weighted avg. quarterly			22.4	%			20.7	%			19.5	%			19.8	%			21.1	%

 

(1)	IPC National since 1Q 17 / IPC CABA 4Q 16 - 3Q 16

The Argentina’s economy kept momentum over the third quarter of 2017, growing 0.9% quarter on quarter (in deseasonalized terms). The actual Gross Domestic Product (GDP) had a 4.2% variation compared to the third quarter of 2016, driven by private investment and consumption, which grew 13.9% and 4.2% in that period, respectively.

The activity growth is consistent with the information provided by other more frequent estimators, thus, the November data, which is the last available publication of the Monthly Economic Activity Estimator (EMAE, Spanish acronym), showed a 0.4% increase month on month (deseasonalized series) and 3.9% year on year. Following the same trend, the industry grew 3.5% in November y.o.y., with an accumulated 1.9% in eleven months, according to the Monthly Industry Estimator (EMI, Spanish acronym).

Inflation for the fourth quarter was 6.1%, and thus, the CPI accumulated a 24.8% variation in the year. Whereas the core inflation slightly slowed down to 4.3% from 4.9% of the third quarter, regulated prices rallied, standing at 12.6%, driven by the adjustments in utilities fares.

From the end of September to the end of December of 2017, the Central Bank increased the monetary policy rate from 26.25% to 28.75%. Additionally, over the last week, the monetary authority announced a change in the inflation target scheme, as mentioned above.

The peso depreciated 8.4% in the fourth quarter, driving the dollar from AR$ 17.32 by the end of September to AR$ 18.77 by the end of December, which means a devaluation of 18.4% in 2017.

By the end of the year, international reserves reached USD 55.1 billion, which implies a rise of USD 4.8 billion as from the balances at the end of September 2017.

The balance of trade in the fourth quarter of 2017 had a deficit of USD 3.3 billion, which highlights the difference with the USD 104 million surplus reached over a year ago. This difference resulted from a strong rise in imports and almost stagnant exports. The sales to the rest of the world amounted to USD 14.4 billion in that quarter in relation to the last quarter of 2016 (1.4%), whereas imports amounted to USD 17.7 billion that is a 25.6% rise for the same period.

 

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Like the first three quarters of the year, the 4.2% fiscal target was largely reached in relation to the GDP. In the fourth quarter, the primary deficit added AR$ 181.8 billion, which accounts for 3.9% of the GDP. This means a 35.7% rise over a year ago. Economic subsidies, which basically include energy and transportation, and which amount to 45% of the primary fiscal deficit for October-December, fell 29.3% compared to the same period the previous year, in which period, they accounted for 86.4% of the primary fiscal deficit.

 

 

Presentation of the Information

 

 

 

•

The balances in foreign currency as of December 31, 2017 were converted into pesos at the exchange rate of reference published by the Central Bank for that date (AR$ 18.77/USD).

 

•

The information in this press release contains unaudited financial information that consolidates, line item by line item, all of the banking activities of BBVA Francés. The Bank’s share interest in BBVA Consolidar Seguros 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 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.

 

 

Disclaimer

 

 

This press release contains or may contain forward-looking statements, including but not limited to estimates of the prospects for the Argentine economy, BBVA Francés’ earnings, business plans, expense and operational structure adjustments, capitalization plan, and trends affecting BBVA Francés’ financial condition and 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) macroeconomic, regulatory or political changes; (2) changes in domestic or international stock market prices, exchange rates or interest rates; (3) changes in the markets for BBVA Francés’ products and services; (4) increasing competition; (5) changes in technology; or (6) changes in the financial condition, creditworthiness or solvency of the customers, debtors or counterparts of BBVA Francés. These forward-looking statements on future events referring only to the date of the document should be taken cautiously. It is advisable to consult the Bank’s Financial Statements and all the documents filed from time to time with the Argentine Securities and Exchange Commission (“CNV”) and the Buenos Aires Stock Exchange.

 

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Quarterly Results

 

 

 

																						% quarter ended 12-31-17 vs
Condensed Income Statement (1)		Quarter ended																				quarter ended
In thousands of $ except income per share, ADS		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16				09-30-17				12-31-16
Net Financial Income			4,572,762				3,970,483				3,432,939				3,063,776				3,252,260				15.2	%			40.6	%
Provision for loan losses			(377,352	)			(503,013	)			(356,386	)			(323,969	)			(331,013	)			-25.0	%			14.0	%
Net income from services			1,631,538				1,561,617				1,191,061				1,234,102				1,076,422				4.5	%			51.6	%
Administrative expenses			(3,523,829	)			(3,155,954	)			(3,027,058	)			(2,897,619	)			(2,860,570	)			11.7	%			23.2	%
Operating income			2,30 3,119				1,873,133				1,240 ,556				1,0 76,290				1,137,0 99				23.0	%			102.5	%
Income (Loss) from equity investments			106,570				118,217				155,131				19,491				17,083				-9.9	%			523.8	%
Income (Loss) from Minority interest			(27,496	)			(18,425	)			(29,601	)			(27,853	)			(13,547	)			49.2	%			103.0	%
Other Income/Expenses			(211,459	)			(121,621	)			(1,168,459	)			855,111				(141,517	)			-73.9	%			n/a
Income Tax / Minimum Presumed Tax			(749,824	)			(716,724	)			(480,622	)			(317,269	)			(416,713	)			4.6	%			79.9	%
Net income for the period			1,420 ,910				1,134,580				-282,995				1,60 5,770				582,40 5				25.2	%			144.0	%
Net income per share (2)			2.32				1.85				(0.53	)			2.99				1.08				25.2	%			113.8	%
Net income per ADS (3)			6.96				5.56				(1.58	)			8.97				3.25				25.2	%			113.8	%
Net Income not considerig fiscal provision			1,420 ,910				1,134,580				90 2,80 5				419,970				582,40 5				25.2	%			144.0	%

 

(1)	Exchange rate: AR$ 18.77 Ps = 1USD

(2)	Assumes 612,659,638 ordinary shares

(3)	Each ADS represents three ordinary shares

In the fourth quarter of 2017, BBVA Francés reached a net income of AR$ 1,420.9 million, which means a 25.2% increase quarter on quarter and a 144% increase compared to the same quarter of 2016.

 

																						% Quarter ended 12/31/17
Main figures		Quarter ended																				vs quarter ended
		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16				09-30-17				12-31-16
ROA (Average Assets) (1)			2.8	%			2.5	%			2.1	%			1.0	%			3.0	%			11.3	%			-8.6	%
ROE (Average Shareholders’ Equity) (1)			22.2	%			21.7	%			22.1	%			10.5	%			14.3	%			2.5	%			55.6	%
NIM (1)(2)			10.6	%			10.7	%			11.4	%			-1.2	%			12.4	%			-0.3	%			-13.9	%
Net fee income / Net operating Income (3)			26.3	%			28.2	%			25.8	%			28.7	%			24.9	%			-6.8	%			5.7	%
Coverage ratio (4)			46.3	%			49.5	%			39.3	%			42.6	%			37.6	%			-6.4	%			23.0	%
Efficiency ratio (5)			56.8	%			57.0	%			65.5	%			67.4	%			66.1	%			-0.4	%			-14.1	%

 

(1)	Annualized, without considering the extraordinary results corresponding to 1st and 2nd quarter 2017.

(2)	Net interest Margin: Financial Income-Financial Expenses (include Gross Income Tax and SEDESA) / Average Interest-Earning Assets (net of foreign exchange difference)

(3)	Operative income: Net financial income + Net income from services

(4)	Net income from services / Adm.Expenses

(5)	Adm.Expenses / (Net financial income + Net income from services)

 

 

Net Financial Income

 

 

 

																						% quarter ended 12-31-17 vs
Net financial income (in thousands of pesos)		Quarter ended																				quarter ended
		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16				09-30-17				12-31-16
Financial Income			7,352,134				6,322,0 99				5,637,429				5,280 ,611				5,540 ,183				16.3	%			32.7	%
Income from financial intermediation			5,167,344				4,368,178				4,039,850				4,060,877				4,096,831				18.3	%			26.1	%
CER adjustment			188,447				112,942				155,398				100,285				97,613				66.9	%			93.1	%
Income Securities and short term inv.			988,022				1,032,478				778,964				593,345				807,994				-4.3	%			22.3	%
Foreign exchange difference			727,555				634,046				431,991				306,004				458,312				14.7	%			58.7	%
Others			280,766				174,455				231,226				220,100				79,433				60.9	%			253.5	%
Financial Expenses			-2,779,372				-2,351,616				-2,204,490				-2,216,835				-2,287,923				18.2	%			21.5	%
Net Financial Income			4,572,762				3,970 ,483				3,432,939				3,0 63,776				3,252,260				15.2	%			40 .6	%

Net financial income increased by 15.2% in the last quarter and 40.6% compared to the same quarter of 2016. The quarterly variation is mainly due to a higher volume of intermediation with the private sector and to a higher volume of the Bank’s own funds, which was partially offset by higher financial expenses caused by an increase in the average rate of deposits arising from the monetary policy implemented by the Central Bank.

 

- 5 -

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On the other hand, the income from inflation-adjusted assets grew in the quarter as a result of a higher rise in the index, compared to the previous quarter.

The results derived from foreign exchange difference showed a positive evolution. The results for holdings increased AR$ 94.5 million in the quarter reaching AR$ 202.3 million, whereas the trading results totaled AR$ 525.3 million, which reflected a slight fall of AR$ 1 million.

The net interest margin (NIM) excluding the results for foreign exchange difference decreased 3 basis points in the quarter, from 10.67% to 10.64% as a consequence of the higher pace of growth in the dollar activity. Whereas the NIM with foreign exchange difference results grew 18 basis points to 12.89%.

The NIM in pesos increased 20 basis points quarter on quarter. Even thought there was an increase in the liabilities rate, it was partially offset by a better funding mix, with higher weight of sight accounts; in addition to the increase in the assets rates.

The NIM in foreign currency went up 52 basis points, mainly driven by a rise in the performance of the loan portfolio.

 

Interest-Earning Assets & Interest-Bearing										Quarter ended
Liabilities $ + USD		12-31-17								09-30-17								12-31-16
(Averege in thouhand of AR$)																		Capital				Rate
Interest-Earning Assets			140 ,720 ,279				18.7	%			123,936,863				18.2	%			89,256,623				22.9	%
Interest-Bearing Liabilities			10 5,396,185				8.0	%			95,819,752				7.4	%			71,140 ,219				10.2	%
NIM without foreign exchange differences			10 .6	%							10 .7	%							12.4	%
NIM including foreign exchange differences			12.9	%							12.7	%							14.5	%

A table of return on assets and cost of liabilities is included by currency: pesos and dollars. Such ratios are calculated non-considering the results for foreign exchange difference.

 

Interest-Earning Assets & Interest-Bearing										Quarter ended
Liabilities $		12-31-17								09-30-17								12-31-16
(Average in thouhand of AR$)										Capital				Rate				Capital				Rate
Interest-Earning Assets			10 4,30 6,132				24.2	%			94,737,428				23.3	%			76,60 7,0 74				26.1	%
Public Bonds			14,254,745				26.8	%			18,610,366				22.6	%			13,417,210				26.0	%
Loans			82,344,943				23.7	%			69,90 5,567				23.5	%			60 ,686,387				26.1	%
Other interest-earning assets			7,706,444				24.5	%			6,221,495				23.4	%			2,503,477				28.5	%
Interest-Bearing Liabilities			65,213,962				12.9	%			60 ,295,70 7				11.8	%			50 ,827,0 45				14.1	%
Saving Accounts			24,329,949				0.2	%			22,684,140				0.1	%			17,566,687				0.2	%
Time Deposits			33,970,213				19.9	%			31,547,072				18.2	%			30,312,244				21.1	%
Current accounts with interest			4,027,291				22.4	%			3,686,389				20.6	%			0				0.0	%
Debt Securities			1,033,559				25.7	%			1,128,352				23.8	%			1,777,296				0
Other interest-bearing liabilities			1,852,950				24.8	%			1,249,754				23.4	%			1,170,818				24.1	%
NIM $			14.5	%							14.3	%							15.1	%

 

Interest-Earning Assets & Interest-Bearing										Quarter ended
Liabilities USD		12-31-17								09-30-17								12-31-16
(Averege in thouhand of AR$)										Capital				Rate				Capital				Rate
Interest-Earning Assets			36,414,148				2.8	%			29,199,435				2.7	%			12,725,323				3.2	%
Public Bonds			4,358,378				3.0	%			4,081,066				2.9	%			439,619				2.6	%
Loans			25,623,737				2.7	%			20,810,951				2.7	%			10,608,212				3.6	%
Other interest-earning assets			6,432,032				3.3	%			4,307,418				2.7	%			1,677,492				0.5	%
Interest-Bearing Liabilities			39,085,565				0 .1	%			35,407,677				0 .1	%			20,313,174				0 .3	%
Saving Accounts			31,743,308				0.0	%			28,491,001				0.0	%			14,127,948				0.0	%
Time Deposits			7,067,956				0.4	%			6,698,506				0.3	%			5,393,842				0.6	%
Other interest-bearing liabilities			274,301				2.7	%			218,170				3.9	%			791,384				4.2	%
NIM USD			2.3	%							1.8	%							2.0	%

 

- 6 -

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Result for Public and Private

Securities

 

 

 

Income from securities and short-term investments		Quarter ended																				D % Quarter ended 12/31/17 vs quarter ended
(in thousands of pesos)		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16				09-30-17				12-31-16
Income Securities and short term inv.			988,022				1,032,478				778,964				592,264				801,184				-4.3	%			23.3	%
Income Interest Margin			772,793				1,071,955				777,079				445,641				659,167				-27.9	%			17.2	%
Bills and Notes from the Central Bank			762,721				1,012,485				716,362				368,754				574,204				-24.7	%			32.8	%
Other bonds			10,072				59,470				60,718				76,887				84,963				-83.1	%			-88.1	%
Holdings booked at fair value			(1,730	)			46,915				56,036				68,489				83,217				-103.7	%			-102.1	%
Holdings booked at amortized cost			11,802				12,555				4,682				8,397				1,746				-6.0	%			n/a
Income Financial Operations			126,916				(69,542	)			(45,905	)			114,066				87,426				-282.5	%			45.2	%
Bills and Notes from the Central Bank			34,043				(53,786	)			12,579				18,608				11,132				-163.3	%			n/a
Other bonds			92,873				(15,756	)			(58,484	)			95,458				76,294				-689.4	%			21.7	%
Holdings booked at fair value			94,284				(15,758	)			(58,539	)			95,343				76,517				-698.3	%			23.2	%
Holdings booked at amortized cost			(1,411	)			2				55				115				(223	)			-70150.6	%			533.2	%
Other fixed income securities			88,314				30,064				47,789				32,557				54,590				193.7	%			61.8	%
CER adjustment			188,447				112,942				155,398				100,285				97,614				66.9	%			93.1	%

The financial margin generated by assets of the public sector fell 27.9% in the quarter, mainly as a consequence of lower results generated by the Central Bank’s bills portfolio, basically due to a lower holding of these assets on average.

However, the results for financial operations are mainly caused by a higher result generated by the Bogar 20 portfolio, which had a better performance in the quarter.

 

 

Net Income from Services

 

 

 

Net income from services		Quarter ended																				% quarter ended 12-31-17 vs quarter ended
(in thousands of pesos)		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16				09-30-17				12-31-16
Net income from services			1,631,538				1,561,617				1,191,061				1,234,102				1,076,422				4.5	%			51.6	%
Service charge income			3,171,500				2,937,973				2,485,825				2,481,746				2,398,519				7.9	%			32.2	%
Service charges on deposits accounts			691,093				636,398				568,815				498,412				430,468				8.6	%			60.5	%
Credit cards and operations			1,126,879				1,106,882				883,586				987,996				1,000,246				1.8	%			12.7	%
Insurance			161,271				173,382				151,393				168,532				170,554				-7.0	%			-5.4	%
Capital markets and securities activities			25,131				31,823				31,306				16,936				16,533				-21.0	%			52.0	%
Fees related to foreign trade			94,424				90,866				77,239				67,389				70,283				3.9	%			34.3	%
Safety deposit box			94,965				89,290				82,482				74,202				74,569				6.4	%			27.4	%
Services of collection			75,555				58,567				48,661				42,022				39,283				29.0	%			92.3	%
Generated by subsidiaries			455,783				365,836				324,080				298,607				205,153				24.6	%			122.2	%
Other fees			446,400				384,929				318,263				327,651				391,430				16.0	%			14.0	%
Services Charge expense			(1,539,962	)			(1,376,356	)			(1,294,764	)			(1,247,644	)			(1,322,097	)			11.9	%			16.5	%

Net income from services rose 4.5% compared to the previous quarter and 51.6% compared to the same quarter of 2016. The previous quarter includes recurring annual income registered over that quarter. Without considering this effect, the variation amounts to 14.8%.

Service charge income grew 7.9% and 32.2% during the same periods, with a remarkable increase in the charges generated by deposit accounts which grew both due to a higher activity and to the price increase, as well as the charges generated by credit cards where the consumption volume rose 6% gaining market share, in addition to the increase in charges for collection services which went up 29% and 92.3% quarter on quarter and over a year ago, respectively.

On the other hand, the service charge expenses grew 11.9% in the quarter and 16.5% compared to the same quarter of 2016. Such increase is mainly due to higher charges paid for the LATAM Pass program.

 

- 7 -

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Administrative Expenses

 

 

 

																						% quarter ended 12-31-17 vs
Administrative expenses		Quarter ended																				quarter ended
(in thousands of pesos)		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16				09-30-17				12-31-16
Administrative expenses			(3,523,829	)			(3,155,954	)			(3,027,058	)			(2,897,619	)			(2,860,570	)			11.7	%			23.2	%
Personnel expenses			(2,060,607	)			(1,749,326	)			(1,706,425	)			(1,635,877	)			(1,694,758	)			17.8	%			21.6	%
General expenses			(1,463,222	)			(1,406,628	)			(1,320,633	)			(1,261,742	)			(1,165,812	)			4.0	%			25.5	%
Electricity and Communications			(47,285	)			(43,911	)			(56,482	)			(52,036	)			(59,685	)			7.7	%			-20.8	%
Advertising and Promotion			(118,293	)			(112,517	)			(104,197	)			(82,525	)			(106,078	)			5.1	%			11.5	%
Fees and external administrative services			(71,582	)			(66,939	)			(56,993	)			(49,289	)			(45,649	)			6.9	%			56.8	%
Taxes			(316,281	)			(317,367	)			(282,287	)			(279,474	)			(265,956	)			-0.3	%			18.9	%
Organization and development expenses			(31,290	)			(32,414	)			(28,539	)			(24,846	)			(20,555	)			-3.5	%			52.2	%
Amortizations			(141,558	)			(131,348	)			(112,281	)			(87,628	)			(73,633	)			7.8	%			92.2	%
Rents			(130,705	)			(126,231	)			(106,084	)			(112,106	)			(108,211	)			3.5	%			20.8	%
Maintainance, conservation and repairs			(145,473	)			(132,731	)			(130,637	)			(134,038	)			(104,528	)			9.6	%			39.2	%
Security Service			(78,239	)			(85,253	)			(71,328	)			(71,101	)			(66,610	)			-8.2	%			17.5	%
Carriage of valuables			(178,757	)			(160,235	)			(179,109	)			(164,900	)			(145,398	)			11.6	%			22.9	%
Other			(203,759	)			(197,682	)			(192,696	)			(203,799	)			(169,509	)			3.1	%			20.2	%
Total Employees			6,082				6,142				6,190				6,219				6,265				-1.0	%			-2.9	%
Total Branches			251				251				252				252				251				0.0	%			0.0	%

Administrative expenses increased 11.7% in the last three months and 23.2% compared to the same quarter of 2016

Regarding personnel expenses, they increased 17.8% during the quarter, including higher charges as a result of applying a provision to raise the value for the difference between the current inflation 24.8% and the highest inflation estimated in the labor agreement of 19.5% and other compensations paid. Without considering that effect, the personnel expenses would have registered an increase of 4.7% in the period. Additionally, costs related to the reorganization of some business lines were incurred in the quarter.

On the other hand, general expenses increased 4% over the previous quarter and 25.5% compared to the same quarter of 2016.

During the period, there were higher charges, mainly in amortizations, including technological investment and the incorporation of the corporate headquarters, as well as in taxes due to a rise in the activity.

The efficiency ratio in the quarter reached 56.8%, showing a slight improvement compared to the previous quarter, driven by both higher income as well as higher restriction in expenses.

Under the transformation strategy, it should be highlighted that, during the year, transactions through tellers in the branches went down 20%, thus making it possible to reallocate resources to more profitable tasks. The mailing of bank statements in paper also decreased as a result of a customer digitalization campaign.

 

 

Other Income / Expenditures

 

 

Other Income / Expenditures recorded an AR$ 211.5 million loss in the last quarter of 2017 driven by fewer credits recovered and higher allowances for other contingencies.

 

 

Income from Equity Investments

 

 

Income from equity investments shows net income from related companies that are not consolidated. Over the fourth quarter of 2017, there was an AR$ 106.5 million profit, mainly due to the equity investment in Francés Administradora de Inversores and in Francés Valores.

 

- 8 -

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Balance and Activity

 

 

 

 

Loan portfolio

 

 

 

																						% quarter ended 12-31-17 vs
Net loans		Quarter ended																				quarter ended
(in thousands of pesos)		12-31-17				09-30-17				06-31-17				03-31-17				12-31-16				09-30-17				12-31-16
Private & Financial sector loans in $			99.674.815				84.226.386				71.820.037				68.429.094				66.472.453				18,3	%			49,9	%
Advances			11.394.582				10.533.948				9.495.624				9.463.160				9.540.668				8,2	%			19,4	%
Discounted and purchased notes			16.762.454				13.261.590				9.128.070				9.227.187				9.810.847				26,4	%			70,9	%
Consumer Mortgages			4.274.738				2.937.234				2.071.739				1.892.840				1.889.443				45,5	%			126,2	%
Car secured loans			8.867.373				8.062.140				6.986.809				6.368.608				5.628.320				10,0	%			57,5	%
Personal loans			16.318.544				13.786.796				11.646.873				10.522.971				9.368.939				18,4	%			74,2	%
Credit cards			28.405.180				23.889.556				22.516.560				21.775.867				21.539.673				18,9	%			31,9	%
Loans to financial sector			3.211.622				2.204.909				2.217.403				1.739.275				1.715.873				45,7	%			87,2	%
Other loans			11.186.647				10.345.952				8.621.253				8.200.489				7.512.590				8,1	%			48,9	%
Unaccrued interest			(593.669	)			(410.090	)			(312.439	)			(315.649	)			(329.346	)			44,8	%			80,3	%
Adj. & accrued int. & exchange diff. receivable			1.842.056				1.484.684				1.166.756				1.164.083				1.286.851				24,1	%			43,1	%
Less: Allowance for loan losses			(1.994.712	)			(1.870.333	)			(1.718.611	)			(1.609.737	)			(1.491.405	)			6,7	%			33,7	%
Private & Financial sector loans in FX			28.627.775				23.861.543				17.635.160				12.901.265				10.642.999				20,0	%			169,0	%
Advances			14.203				8.534				7.952				7.233				5.897				66,4	%			140,9	%
Discounted and purchased notes			1.660.291				1.306.379				941.959				858.646				1.085.875				27,1	%			52,9	%
Credit cards			1.600.754				1.549.060				1.463.325				1.301.292				981.170				3,3	%			63,1	%
Loans to financial sector			93.156				114.563				109.892				127.133				130.914				n/a				n/a
Other loans			25.552.454				21.162.903				15.293.021				10.755.116				8.565.890				20,7	%			198,3	%
Less: Allowance for loan losses			(293.083	)			(279.896	)			(180.989	)			(148.155	)			(126.747	)			4,7	%			131,2	%
Total Private Loans			128.302.590				108.087.929				89.455.197				81.330 .359				77.115.452				18,7	%			66,4	%
Total loans to public sector			218				267				239				156				98.819				-18,4	%			-99,8	%
Net Total Loans net of other non resident loans			128.302.808				108.088.196				89.455.436				81.330 .515				77.214.271				18,7	%			66,2	%
Other non resident loans (*)			3.588.006				3.588.006				62.710				1.581.090				34.064				n/a				n/a
Net total loans			128.366.202				111.676.202				89.518.146				82.911.605				78.889.921				14,9	%			62,7	%

 

(*)	Correspond to balances related to overnight operations celebrated with foreign correspondent banks

The private sector loan portfolio amounted to AR$ 128.3 billion, which means a rise both in the quarter and over the last twelve months, with variations reaching 18.7% and 66.4%, respectively.

As a result of the implemented growth strategy, the private loans market share of BBVA Francés grew 51 basis points over the year. Such market share reached 7.2% as of December 31, 2017, whereas the private loans market share that includes the associated companies which are part of the consolidated balance sheet, PSA Finance and Volkswagen, reached 8.3%, implying a growth of 71 basis points.

In the quarter, both peso and dollar loans rose at a similar pace, 18.3% and 20%, respectively.

Dynamism in financing companies both in local and foreign currency should be highlighted. Foreign trade operations, advances and discounted and purchases notes were the lines with the highest increase, but lease options and collateral lines also regained momentum.

In consumer loans, an increase in mortgages stands out, 45.5% in the quarter, as well as personal loans and car loans, which rose 18.4% and 10%, respectively.

 

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Public Sector Exposure

 

 

 

																						% quarter ended 12-31-17 vs
Public Sector Exposure		Quarter ended																				quarter ended
(in thousands of pesos)		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16				09-30-17				12-31-16
Public Sector - National Government			7,024,971				7,464,832				7,920,788				6,889,933				5,276,924				-5.9	%			33.1	%
Public Sector Loans			218				267				239				156				98,819				-18.4	%			-99.8	%
Total bond portfolio			7,024,978				7,464,790				7,920,772				6,889,994				5,178,318				-5.9	%			35.7	%
Holdings book at fair value			5,431,774				5,746,588				6,955,704				5,646,590				4,274,229				-5.5	%			27.1	%
Holdings book at amortized cost			1,593,204				1,718,202				965,068				1,243,404				904,089				-7.3	%			n/a
Allowances			(225	)			(225	)			(223	)			(217	)			(213	)			0.0	%			5.6	%
Bills and Notes from Central Bank			14,856,313				14,488,774				14,393,353				7,200,514				7,310,231				2.5	%			103.2	%
Total exposure to the Public			21,881,284				21,953,606				22,314,142				14,090,447				12,587,155				-0.3	%			73.8	%
Portfolio Received for Repos			11,671,395				8,079,583				3,199,988				9,893,778				64,872				n/a				n/a
Public Bonds			9,864,568				8,872,119				37,061				—				—				n/a				n/a
BCRA Instruments			1,806,827				(792,536	)			3,162,927				9,893,778				64,872				n/a				n/a

Exposure to the National Government Public Sector in bonds and loans, including Central Bank bills totaled AR$ 21.9 billion by the end of the year, showing a slight decrease of 0.3%% quarter on quarter and rose 73.8% over the last twelve months.

Over the year, the Bank celebrated repo transactions with the Argentine Republic of USD 250 million, due in December 2018 and March 2019, which are accounted in the “Repurchase Agreement” line in Other Banking Receivables.

As of December 31, 2017, the National Government’s public debt accounted for 5% of the Bank’s total assets. The exposure of the Central Bank bills and notes portfolio, net of repo transactions, amounted to 6.6% over total assets.

 

 

Portfolio Quality

 

 

 

Asset quality ratios		Quarter ended																				% quarter ended 12-31-17 vs quarter ended
(in thousands of pesos)		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16				09-30-17				12-31-16
Non-performing loans (1)			904,012				793,264				780,886				707,907				616,075				14.0	%			46.7	%
Allowance for loan losses			(2,287,795	)			(2,150,229	)			(1,899,600	)			(1,757,892	)			(1,618,152	)			6.4	%			41.4	%
Non-performing loans/net total loans			0.69	%			0.70	%			0.85	%			0.84	%			0.77	%			-0.7	%			-9.6	%
Non-performing priv. loans/net priv. loans			0.69	%			0.70	%			0.85	%			0.84	%			0.77	%			-0.7	%			-9.7	%
Allowance for loan losses/non-performing lo			253.07	%			271.06	%			243.26	%			248.32	%			262.66	%			-6.6	%			-3.6	%
Allowance for loan losses/net total loans			1.75	%			1.89	%			2.08	%			2.08	%			2.01	%			-7.3	%			-12.9	%

As of December 31, 2017, the asset quality ratio (non-performing loans/total loans) stood at 0.69%, with a coverage ratio (allowances/non-performing loans) of 253.07%.

The non-performing loan ratio improved compared to the quarters under analysis, mainly due to the important growth in the loan portfolio.

On the other hand, the cost of risk reached 1.3%. This decrease was caused by lower generic allowances recorded over the period.

The following table shows the evolution of allowances for loan losses, including charges from transactions booked under “Other receivables due to financial intermediation”.

 

- 10 -

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Deposits

 

 

 

Total deposits		Quarter ended																				% quarter ended 12-31-17 vs quarter ended
(in thousands of pesos)		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16				09-30-17				12-31-16
Deposits $ denominated			99,701,266				84,005,882				84,035,746				82,248,799				74,902,584				18.7	%			33.1	%
Current accounts			24,845,591				22,306,350				22,693,886				21,484,467				21,419,738				11.4	%			16.0	%
Saving accounts			35,129,036				26,517,781				27,221,181				23,190,831				21,273,125				32.5	%			65.1	%
Time deposits			37,389,316				33,114,593				32,209,592				35,197,959				30,079,381				12.9	%			24.3	%
Peso denominated			36,910,121				32,954,999				31,964,459				35,001,533				30,076,548				12.0	%			22.7	%
CER adjusted time deposits			479,195				159,594				245,133				196,426				2,833				200.3	%			n/a
Investment Accounts			—				1,112				213				85,194				85,194				-100.0	%			-100.0	%
Other			2,337,323				2,066,046				1,910,874				2,290,348				2,045,146				13.1	%			14.3	%
Deposits FX denominated			54,349,163				45,942,472				41,638,489				40,573,257				39,719,184				18.3	%			36.8	%
Current accounts			163,674				451,457				126,632				89,817				782,954				-63.7	%			-79.1	%
Saving accounts			43,913,177				35,441,394				30,552,506				23,779,226				21,318,030				23.9	%			106.0	%
Time deposits			8,032,972				6,976,320				6,270,117				5,961,593				6,220,811				15.1	%			29.1	%
Other			2,239,340				3,073,301				4,689,234				10,742,621				11,397,389				-27.1	%			-80.4	%
Total deposits			154,050,429				129,948,354				125,674,235				122,822,056				114,621,768				18.5	%			34.4	%

Total deposits amounted to AR$ 154.1 billion, growing 18.5% and 34.4% during the quarter and in the last twelve months, respectively.

Over the year, sights accounts rose 60.6% and time deposits rose 25.1%.

Deposits in pesos grew 18.7% in the quarter and 33.1% in the year. Transactional deposits in pesos went up 22.8% quarter on quarter and 40.5% annually, with time deposits growing 12.9% and 24.3% in the same periods.

At the end of December 2017, deposits in foreign currency reached AR$ 54.3 billion (equal to USD 2.9 billion), accounting for 35.3% of the Bank’s total deposits.

 

 

Other Sources of Funds

 

 

 

Other funding sources		Quarter ended																				% quarter ended 12-31-17 vs quarter ended
(in thousands of pesos)		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16				30-09-17				31-12-16
Lines from other banks			1,955,611				1,863,146				1,382,049				1,435,605				1,502,786				5.0	%			30.1	%
Senior Bonds			2,881,947				1,680,030				2,115,473				2,056,274				2,211,078				71.5	%			30.3	%
Total other funding sources			4,837,558				3,543,176				3,497,522				3,491,879				3,713,864				36.5	%			30 .3	%

 

 

Mismatch of Reference Stabilization

Coefficient (CER)

 

 

 

		Quarter ended																				D % Quarter ended 12/31/17 vs quarter ended
(in thousands of pesos except percentages)		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16				09-30-17				12-31-16
CER adjusted assets			4,956,165				3,275,440				2,218,667				2,616,315				2,818,625				51.3	%			75.8	%
- Public bond portfolio			1,589,929				1,761,986				1,656,898				2,418,040				2,643,768				-9.8	%			-39.9	%
- Private sector loans			2,883,960				1,265,246				448,609				146,371				47,525				127.9	%			5968.3	%
- Public sector loans			0				0				0				0				99,356				n/a				-100.0	%
- Other credits			482,276				248,208				113,160				51,904				27,976				94.3	%			n/a
CER adjusted deposits			479,195				159,594				245,133				196,426				2,833				200.3	%			n/a
CER mismatch			4,476,970				3,115,846				1,973,534				2,419,889				2,815,792				43.7	%			59.0	%

 

- 11 -

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Capitalization

 

 

The Shareholders’ Equity amounted to AR$ 26.1 billion as of December 31, 2017, with an excess of capital over the minimum required by the Central Banks of AR$ 12.4 billion. The capital ratio for the period was 14.7%.

 

Central Bank Requirements		Quarter ended																				% quarter ended 12-31-17 vs quarter ended
(in thousands of pesos)		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16				09-30-17				12-31-16
CB Minimum Capital Requirements			15,653,816				14,393,076				11,608,879				11,206,375				10,577,441				8.8	%			48.0	%
CB Minimum Capital Requirements(a,b)			15,653,816				14,393,076				11,608,879				11,206,375				10,321,905				8.8	%			51.7	%
Increase in capital req. related to custody			—				—				—				—				255,536				n/a				-100.0	%
a) CB Minimum Capital Requirements			15,653,816				14,393,076				11,608,879				11,206,375				10,321,905				8.8	%			51.7	%
Allocated to Asset at Risk			12,726,716				11,661,200				9,046,865				8,785,277				7,926,163				9.1	%			60.6	%
Market Risk			369,204				317,338				287,776				270,773				291,744				16.3	%			26.6	%
Operational Risk			2,557,896				2,414,538				2,274,238				2,150,325				2,103,998				5.9	%			21.6	%
b) Min. Cap. required for the G.F.S. of the Pas-as-you-go System managed by the Argentine Republic and registrar of mortgage notes			—				—				—				—				1,022,144				n/a				-100.0	%
1% of the securities in custody and book-entry notes			—				—				—				—				1,022,144				n/a				-100.0	%
Bank Capital			28,020,200				26,576,668				18,632,561				18,843,971				17,420,859				5.4	%			60.8	%
Ordinary Capital Level 1			26,817,835				25,334,453				17,451,690				17,674,906				16,698,101				5.9	%			60.6	%
Dedusctions Ordinary Capital Level 1			(705,074	)			(634,085	)			(525,144	)			(465,878	)			(390,238	)			11.2	%			80.7	%
Capital Level 2			1,578,420				1,522,575				1,260,472				1,169,850				1,112,996				3.7	%			41.8	%
Aditional Capital Level 1			329,019				353,725				445,543				465,093				—				-7.0	%			n/a
Excess over Required Capital			12,366,384				12,183,592				7,023,682				7,637,596				6,843,418				1.5	%			80.7	%
Capital Ratio (Central Bank rules)			14.7	%			15.1	%			13.1	%			13.8	%			13.8	%			-3.1	%			6.2	%
Excess over Required Capital as a % of Shareholders´Equity			47.5	%			49.4	%			41.6	%			44.5	%			41.6	%			-4.0	%			14.2	%

 

 

Additional Information

 

 

 

		Quarter ended																				% quarter ended 12-31-17 vs quarter ended
		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16				09-30-17				12-31-16
Exchange rate $/USD			18.77				17.32				16.60				15.38				15.85				8.4	%			18.4	%
Quarterly CER adjustment			5.0	%			4.3	%			7.0	%			4.6	%			4.5	%			16.0	%			10.7	%

 

- 12 -

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Conference Call

 

 

On Thursday February 15, 2018 at 12:30 p.m. (Argentine time) a conference call will be held to comment on the quarter’s results.

Those who wish to participate should contact the following numbers:

0800-444-2930 (from Argentina)

+ 1-844-413-3973 (from United States)

+ 1412-902-6509 (from other countries)

Conference ID: BBVA.

To access the webcast:

http://webcast.engage-x.com/Cover.aspx?PlatformId=prWb5Dn7%2BBGIbBVGiJskWQ%3D%3D

To request the Replay, please call

+1-877-344-7529 (from United States)

+1-412-317-0088 (from other countries)

The replay will be available until Thursday, February 22, 2018.

Replay Access code: 10116495

 

 

Internet

 

 

This Press Release is available on the web page of BBVA Francés.

www.bbvafrances.com.ar

 

 

Contacts

 

 

Cecilia Acuña

Investor Relations

(5411) 4341-5036

ceciliaviviana.acuna@bbva.com

Diego Cesarini

Financial Management and Investor Relations

dcesarini@bbva.com

---

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

BALANCE SHEET (in thousands of pesos)

 

		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16
Cash and due from banks			37,664,273				27,947,327				37,048,209				41,149,362				48,226,105
Government and Private Securities			34,019,578				30,346,401				25,749,754				24,205,939				12,706,389
Holdings booked at fair value			15,296,342				14,618,707				6,992,766				5,646,590				4,274,229
Holdings booked at amortized cost			1,593,204				1,718,202				965,068				1,243,404				904,089
Listed Private Securities			467,117				313,479				235,863				221,870				153,181
Bills and Notes from the Central Bank			16,663,140				13,696,238				17,556,280				17,094,292				7,375,103
Less: Allowances			(225	)			(225	)			(223	)			(217	)			(213	)
Loans			128,366,202				111,676,202				89,518,146				82,911,605				78,889,921
Loans to the private & financial sector			128,365,984				111,675,935				89,517,907				82,911,449				78,791,102
Advances			11,408,785				10,542,482				9,503,576				9,470,393				9,546,565
Discounted and purchased notes			18,422,745				14,567,969				10,070,029				10,085,833				10,896,722
Secured with mortgages			4,274,738				2,937,234				2,071,739				1,892,840				1,889,443
Car secured loans			8,867,373				8,062,140				6,986,809				6,368,608				5,628,320
Personal loans			16,318,544				13,786,796				11,646,873				10,522,971				9,368,939
Credit cards			30,005,934				25,438,616				23,979,885				23,077,159				22,520,843
Loans to financial sector			3,304,778				2,319,472				2,327,295				1,866,408				1,846,787
Other loans (*)			36,802,495				35,096,861				23,976,984				20,536,695				17,754,130
Less: Unaccrued interest			(593,669	)			(410,090	)			(312,439	)			(315,649	)			(329,346	)
Plus: Interest & FX differences receivable			1,842,056				1,484,684				1,166,756				1,164,083				1,286,851
Less: Allowance for loan losses			(2,287,795	)			(2,150,229	)			(1,899,600	)			(1,757,892	)			(1,618,152	)
Public Sector loans			218				267				239				156				98,819
Principal			146				266				237				155				8,786
Plus: Interest & FX differences receivable			72				1				2				1				90,033
Other banking receivables			13,255,165				19,387,164				9,771,087				26,190,719				2,427,906
Repurchase agreements			6,396,424				5,135,311				3,039,700				9,784,973				—
Unlisted private securities			292,352				302,091				340,851				249,926				325,925
Other banking receivables			6,574,335				13,957,633				6,398,959				16,163,059				2,110,753
Less: provisions			(7,946	)			(7,871	)			(8,423	)			(7,239	)			(8,772	)
Investments in other companies			664,084				606,150				514,077				539,825				510,878
Intangible assets			435,863				407,765				354,534				331,419				315,811
Goodwill			3,117				3,206				3,296				3,386				3,476
Organization and development charges			432,746				404,559				351,238				328,033				312,335
Other assets			11205119				9651880				9,459,638				8,999,121				8,638,393
Total Assets			225,610,284				200,022,889				172,415,445				184,327,990				151,715,403
Deposits			154,050,429				129,948,354				125,674,235				122,822,056				114,621,768
Current accounts			25,009,265				22,757,807				22,820,518				21,574,284				22,202,692
Saving accounts			79,042,213				61,959,175				57,773,687				46,970,057				42,591,155
Time deposits			45,422,288				40,090,913				38,479,709				41,159,552				36,300,192
Investment Accounts			—				1,112				213				85,194				85,194
Rescheduled deposits CEDROS			1,951				1,951				1,951				1,951				1,959
Other deposits			4,574,712				5,137,396				6,598,157				13,031,018				13,440,576
Other banking Liabilities			35,117,533				36,514,676				21,152,694				37,891,164				13,785,069
Other provisions			2,776,104				2,775,198				2,587,759				1,317,224				1,375,154
Other contingencies			2,774,987				2,774,094				2,587,159				1,316,606				1,374,573
Guarantees			1,117				1,104				600				618				581
Other liabilities			6,999,147				5,562,823				5,564,345				4,607,529				4,856,020
Minority interest			610,523				583,026				564,602				535,212				617,357
Total Liabilities			199,553,736				175,384,077				155,543,635				167,173,185				135,255,368
Total Stockholders´ equity			26,056,548				24,638,812				16,871,810				17,154,805				16,460,035
Total liabilities + stockholders’ equity			225,610,284				200,022,889				172,415,445				184,327,990				151,715,403

 

(*)	Includes balances related to overnight operations celebrated with foreign correspondent banks

 

- 14 -

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

INCOME STATEMENT (in thousands of pesos)

 

		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16
Financial income			7,352,134				6,322,099				5,637,429				5,280,611				5,540,183
Interest on Loans Granted to the Financial Sector			168,982				124,005				109,189				90,605				113,359
Interest on Overdraft			896,503				737,188				679,137				769,018				843,578
Interest on Discounted and purchased notes			749,762				530,848				453,878				463,665				503,617
Interest on Mortgages			116,239				93,877				86,063				88,634				92,677
Interest on Car Secured Loans			300,039				292,115				296,662				298,138				280,469
Interest on Credit Card Loans			1,146,324				1,020,160				1,029,208				1,064,647				1,048,804
Interest on Financial Leases			116,764				110,867				110,471				107,085				108,107
Interest on Other Loans			1,670,184				1,457,403				1,274,390				1,178,537				1,106,035
From Other Banking receivables			2,547				1,715				852				548				185
Interest on Government Guaranteed Loans Decree 1387/01			—				—				—				1,081				6,810
Income from Securities and Short Term Investments			988,022				1,032,478				778,964				592,264				801,184
CER			188,447				112,942				155,398				100,285				97,613
Foreign exchange difference			727,555				634,046				431,991				306,004				458,312
Other			280,766				174,455				231,226				220,100				79,433
Financial expenses			(2,779,372	)			(2,351,616	)			(2,204,490	)			(2,216,835	)			-2,287,923
Interest on Current Account Deposits			(227,419	)			(191,736	)			(95,546	)			(14,811	)			—
Interest on Saving Account Deposits			(10,310	)			(8,785	)			(7,962	)			(7,760	)			(7,817	)
Interest on Time Deposits			(1,704,065	)			(1,443,836	)			(1,457,271	)			(1,534,706	)			(1,618,512	)
Interest on Other Banking Liabilities			(263,472	)			(193,608	)			(207,362	)			(215,259	)			(222,302	)
Other interests (includes Central Bank)			(68	)			(231	)			(312	)			(629	)			(674	)
CER			(12,062	)			(11,463	)			(15,410	)			(1,915	)			(126	)
Bank Deposit Guarantee Insurance system mandatory contributions			(57,365	)			(55,066	)			(52,593	)			(48,777	)			(40,376	)
Mandatory contributions and taxes on interest income			(471,193	)			(400,531	)			(358,932	)			(355,405	)			(352,205	)
Other			(33,418	)			(46,360	)			(9,102	)			(37,573	)			(45,911	)
Net financial income			4,572,762				3,970,483				3,432,939				3,063,776				3,252,260
Provision for loan losses			(377,352	)			(503,013	)			(356,386	)			(323,969	)			(331,013	)
Income from services, net of other operating expenses			1,631,538				1,561,617				1,191,061				1,234,102				1,076,422
Administrative expenses			(3,523,829	)			(3,155,954	)			(3,027,058	)			(2,897,619	)			(2,860,570	)
Income (loss) from equity investments			106,570				118,217				155,131				19,491				17,083
Net Other income			(211,459	)			(121,621	)			(1,168,459	)			855,111				(141,517	)
Income (loss) from minority interest			(27,496	)			(18,425	)			(29,601	)			(27,853	)			(13,547	)
Income before tax			2,170,734				1,851,304				197,627				1,923,039				999,118
Income tax			(749,824	)			(716,724	)			(480,622	)			(317,269	)			(416,713	)
Net income			1,420,910				1,134,580				(282,995	)			1,605,770				582,405

 

- 15 -

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

 

		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16
Cash and due from banks			37,664,382				27,947,332				37,048,209				41,149,363				48,226,107
Government Securities			34,048,445				30,376,295				25,780,524				24,238,431				12,738,809
Loans			128,366,202				111,676,199				89,518,146				82,911,605				78,889,921
Other Banking Receivables			13,255,165				19,387,164				9,771,087				26,190,719				2,427,906
Assets Subject to Financial Leasing			2,366,434				2,213,865				2,177,021				2,088,865				2,046,971
Investments in other companies			658,594				600,609				509,594				535,221				507,625
Other assets			9,283,380				7,855,448				7,643,197				7,250,043				6,915,372
Total Assets			225,642,602				200,056,912				172,447,778				184,364,247				151,752,711
Deposits			154,050,302				129,947,789				125,674,032				122,822,030				114,621,753
Other banking liabilities			35,117,665				36,514,712				21,152,694				37,891,313				13,785,682
Minority interest			615,220				587,767				568,437				539,151				620,141
Other liabilities			9,802,867				8,367,832				8,180,805				5,956,948				6,265,100
Total Liabilities			199,586,054				175,418,100				155,575,968				167,209,442				135,292,676
Total Stockholders´Equity			26,056,548				24,638,812				16,871,810				17,154,805				16,460,035
Stockholders´Equity + Liabilities			225,642,602				200,056,912				172,447,778				184,364,247				151,752,711

NET INCOME

 

		12-31-17				09-30-17				06-30-17				03-31-17				12-31-16
Net Financial Income			4,574,615				3,972,703				3,433,241				3,066,449				3,253,700
Provision for loan losses			(377,352	)			(503,013	)			(356,386	)			(323,969	)			(331,013	)
Net Income from Services			1,631,538				1,561,617				1,191,061				1,234,102				1,076,422
Administrative expenses			(3,527,314	)			(3,157,604	)			(3,029,516	)			(2,899,037	)			(2,856,270	)
Net Other Income			(103,300	)			(3,069	)			(1,011,209	)			874,626				(132,186	)
Income Before Tax			2,198,187				1,870,634				227,191				1,952,171				1,010,653
Income Tax			(749,824	)			(716,724	)			(480,689	)			(317,392	)			(416,849	)
Net income			1,448,363				1,153,910				(253,498	)			1,634,779				593,804
Minoritary Interest			(27,453	)			(19,330	)			(29,497	)			(29,009	)			(11,399	)
Net income for Quarter			1,420,910				1,134,580				(282,995	)			1,605,770				582,405

 

- 16 -

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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 Banco Francés S.A.
Date: February 14, 2018				By:		/s/ Ernesto Gallardo Jimenez
				Name:		Ernesto Gallardo Jimenez
				Title:		Chief Financial Officer

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