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 2009
Commission File Number: 001-12568
BBVA French Bank S.A.
(Translation of registrants 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.
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1. |
Press release entitled BBVA Banco Francés reports fourth quarter earnings for fiscal year 2008 | 1 |
CONTACT:
Daniel Sandigliano Investor Relations Phone: (5411) 4341-5036 E-mail: daniel.sandigliano@bancofrances.com.ar
Cecilia Acuña Investor Relations Phone: (5411) 4348-0000 ext. 25384 E-mail: cecilia.acuna@bancofrances.com.ar |
February 12, 2009
BBVA BANCO FRANCÉS (NYSE: BFR.N; BCBA: FRA.BA; LATIBEX: BFR.LA)
REPORTS CONSOLIDATED FOURTH QUARTER EARNINGS FOR FISCAL YEAR 2008
Annual Executive Summary
During fiscal year 2008, BBVA Banco Francés results grew 36.8% with respect to the results obtained in the previous fiscal year. Net income reached Ps. 321.5 million in the last twelve months representing a 15.6% rate of return on equity (ROE). The improvement in the results of the Bank was the result of greater businesses volumes which allowed an improvement in the income from the private sector.
Private sector financings grew by 10.0% during fiscal year 2008, below the growth shown in the previous fiscal year. This drop in the rate of growth of credit activity is related to a reduction in the money demand during the course of the year. The retail segment led the increases during the year with important growth in all types of loans. Financings to business corporation segment grew at a smaller rate than the increase of loans to individuals during the same period.
The deepening of the international crisis in the last part of the year along with the argentine pension regime reform requiring the transfer of private pension founds to the state, derived in a slowdown of the economic activity and a raise in the country risk. In this sense, valuations of argentine government securities were affected. For this reason, BBVA Banco Francés decided to make a revaluation of its government securities portfolio and a revision of its reserve policy. In the month of December extraordinary adjustments were made in the valuations of government securities, Bogar 2020, by $ 322.1 million. To such aim, a relocalization of the generic provisions excess in the loan portfolio by $ 70.0 million and a specific treatment to provisions relating to other contingencies by $ 128.2 million was carried out.
It is important to emphasize that the international financial crisis that is affecting in a generalized manner the global financial organizations, has not had the same impact in the local financial system due to the absence of exposure to assets commonly denominated as toxics and existing in other countries.
The Net Financial Income, without considering the mentioned valuation adjustment in public assets, reached Ps. 1,378, 9 million, a 39.9% increase over the comparable income during previous fiscal year. Furthermore, the operating income for 2008 without the described adjustment, reached Ps. 885.1 million, growing by 43.5% with respect to the comparable result in 2007. On the other hand, the greater transactional volume is reflected in an annual growth of 31.1% in the income from services.
The strength in the quality of portfolio ratios continues differentiating BBVA Banco Francés in the local financial system, where it continues as the leading bank. As of December 31, 2008, the nonperforming loans represented 0.97% of total loans, whereas the coverage ratio for non-performing loans with provisions reached 177.0%.
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In term of liabilities, deposits grew by 15.2% in 2008, surpassing the 11.2% increase registered in the financial system during the same period. In this sense, on demand deposits were those with greater growth, increasing their participation in total deposits and allowing BBVA Banco Francés to reach a less expensive structure of deposits.
BBVA Banco Francés has a comfortable liquidity position y and a great solvency level. As of December 31, 2008, liquid assetsavailable cash and due from banks plus Central Bank Instrumentsrepresented 34.2% of total deposits. On the same date, total shareholders equity reached Ps. 2,076 million, whereas excess capital over the minimum required pursuant to Central Bank regulation, was Ps. 888.6 million, representing 42.8% of total shareholders equity.
Condensed Income Statement (1)
in thousands of pesos except income per share, income per ADS and percentages |
FY 2008 | FY 2007 | % Change | ||||||
Net Financial Income |
707,476 | 939,930 | -24.73 | % | |||||
Provision for loan losses |
(36,708 | ) | (62,262 | ) | -41.04 | % | |||
Net income from services |
748,779 | 571,354 | 31.05 | % | |||||
Administrative expenses |
(1,135,834 | ) | (877,800 | ) | 29.40 | % | |||
Operating income |
283,713 | 571,222 | -50.33 | % | |||||
Income (loss) from equity investments |
63,106 | 41,784 | 51.03 | % | |||||
Income (Loss) from Minority interest |
(5,203 | ) | (627 | ) | 729.82 | % | |||
Other Income/Expenses |
(7,532 | ) | (368,086 | ) | -97.95 | % | |||
Income tax |
(12,574 | ) | (9,244 | ) | 36.02 | % | |||
Net income for the period |
321,510 | 235,049 | 36.78 | % | |||||
Net income per share (2) |
0.68 | 0.50 | 36.78 | % | |||||
Net income per ADS (3) |
2.05 | 1.50 | 36.78 | % |
(1) | Exchange rate: 3.4537 Ps. = 1 US$ |
(2) | Assumes 471,361,306 ordinary shares outstanding. |
(3) | Each ADS represents three ordinary shares. |
Quarter Executive Summary
| Income from private sector continued growing. During the fourth trimester of the year, the financial income, after the valuation adjustment in public assets, grew by 21.6% with respect to the previous quarter and by 31.0% with respect to the same quarter of 2007, while income from services grew by 13.7% with respect to the previous quarter and by 39.8% with respect to the same quarter of 2007. |
| The private sector financings grew by 0.7% during the fourth quarter of 2008. The retail segment showed an increase, mainly in credit card financings and from personal and car loans. On the contrary, financings in the business corporations segment decreased during the same period. |
| During the fourth quarter of the year, BBVA Banco Francés deposits grew by 10.3%, while deposits in the financial system dropped by 2.9% during the same period. The balances in on demand deposit accounts showed the greater growth, increasing their participation in the total of deposits. As of December 31, 2008, these deposits represented 54.8% of the total, allowing BBVA Banco Francés to reduce the impact of higher interest rates levels. |
| Total exposure to the Public Sector, net of holdings linked to reverse repo transactions with the BCRA, was reduced by 15.3% during the last three months of 2008 and by 33.5% during the 2008 year. As of December 31, 2008, the exposure to Public Sector National Treasure, net of holdings linked to reverse repo transactions with the BCRA, represented 8.5% of the Banks total assets. |
| Net Income during the fourth quarter was affected by the impact from extraordinary events which reduced the profit during this period. For a better analysis, the following pro forma table presents the adjustments made during the fourth quarter of 2008. |
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Condensed Income Statement PROFORMA
Quarter ended | |||||||||
in thousands of pesos |
12/31/2008 Before adjustments |
Extraordinary adjustments |
12/31/2008 Standardized |
||||||
Net Financial Income |
310,808 | (322,057 | ) | (11,249 | ) | ||||
Provision for loan losses |
(34,184 | ) | 70,000 | 35,816 | |||||
Net income from services |
218,876 | | 218,876 | ||||||
Administrative expenses |
(319,283 | ) | | (319,283 | ) | ||||
Operating income |
176,217 | (252,057 | ) | (75,840 | ) | ||||
Income (loss) from equity investments |
14,071 | (31,094 | ) | (17,023 | ) | ||||
Income (Loss) from Minority interest |
(2,467 | ) | | (2,467 | ) | ||||
Other Income/Expenses |
(13,514 | ) | 128,196 | 114,682 | |||||
Income tax and Minimum Presumed Tax |
(3,573 | ) | | (3,573 | ) | ||||
Net income for the period |
170,734 | -154,955 | 15,779 |
Forth quarter of fiscal year 2008
During the fourth quarter of 2008, the pace of growth in economic activity showed a deceleration. Economic activity indicators, such as industrial activity and construction, increased by less than the Monthly Estimator of Economic Activity which rose by 5.8% year over year during the fourth quarter of 2008.
Economic activity deceleration and lower agricultural prices had a negative impact on tax collections and the primary fiscal surplus of the National Public Sector. Fiscal revenues rose on average by 24.9% year over year during the fourth quarter. Value added tax and export duties were the most affected. The primary fiscal surplus of the National Public Sector decreased by 26.3% compared to the same period of 2007.
Inflation, as measured by the CPI index of the Greater Buenos Aires area (which is used to calculate CER adjustment for sovereign bonds) averaged 7.8% year over year during the fourth quarter.
Due to the deepening of the international crisis and high market volatility, commencing during October demand for foreign currency increased. The Central Bank sold USD 2.2 billion in the FX market during the forth quarter and International Reserves decreased to USD 46.4 billion at the end of December, a drop of USD 0.7 billion during the period. The Exchange rate (referencia BCRA) closed at Ps. 3.45 per USD at the end of December, 10.3% above levels from the end of September.
BADLAR rates at private banks rose from 12% in September 2008 to a 19% monthly average in December. Nevertheless, in order to ensure the supply of liquidity, the Central Bank reduced the stock of bills y notes, which decreased by Ps. 11.9 billion during the quarter, and expanded the money supply by purchasing sovereign bonds.
Private sector deposits decreased by 2.0% on average during the fourth quarter of 2008, but this decrease is partially explained by the transfer of deposits held by private pension funds (AFJPs) to the ANSES. Loans to the private sector, in pesos and in foreign currency, increased by 3.7%, a deceleration compared to the previous quarters. Loans to consumer in pesos were the most dynamic.
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The Bank
During the year 2008 the international financial crisis and some local factors resulted in a growth deceleration that has been registering in the intermediation business. In this sense it is important to emphasize that BBVA Banco Francés has known to adapt to the new market conditions, redefining their strategy with the firm objective to pass this crisis and to come out fortified.
In this year, BBVA Banco Francés increased its private sector loan portfolio by 10%, with the retail segment having an outstanding performance growing by 44%, mainly through personal and secured loans, along with credit cards. Also, an effective liquidity management allowed to increase the private margin of the bank compensating the smaller growth in the portfolio volumes.
On the other hand, another fundamental pillar in the strategy by the Bank being implemented is the risk management, and in this sense the Bank continuous with the lowest nonperforming ratio of the system, which as of December 31, 2008 was 0.97% with a coverage level of 177.0%.
In terms of liabilities, BBVA Banco Francés was concentrated in capturing retail funds, with the objective of achieving a lower cost structure. In this point, it is important to emphasize that within the total of deposits, transactional deposits increased their participation during the last year as a result of the implemented strategy.
For year 2009, the prevailing scenario presents new opportunities for BBVA Banco Francés, which will be undertaken starting from high levels of liquidity and solvency, reduced delinquency, good results and a long term relation created with its clients.
Presentation of Financial Information
| Foreign currency balances as of December 31, 2008 have been translated into pesos at the reference exchange rate of Ps. 3.4537 per U.S. dollar, published by the Argentine Central Bank. |
| This press release contains unaudited information that consolidates all of the banking activities of BBVA Banco Francés and its subsidiaries on a line-by-line basis. The Banks interest in the Consolidar Group is shown as Investments in other companies (booked by the equity method) and the corresponding results are included in Income from equity investments. |
| It is important to highlight the fact that information contained in this press release may differ from the information published by BBVA Group for Argentina, which is prepared according to Spanish accounting standards for all BBVA Group affiliates. |
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FINANCIAL INFORMATION
Condensed Income Statement (1)
in thousands of pesos except income per share, income per ADS and percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
|||||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | |||||||||||
Net Financial Income |
(11,249 | ) | 255,608 | 237,276 | -104.40 | % | -104.74 | % | |||||||
Provision for loan losses |
35,816 | (30,108 | ) | (25,221 | ) | -218.96 | % | -242.01 | % | ||||||
Net income from services |
218,876 | 192,471 | 156,607 | 13.72 | % | 39.76 | % | ||||||||
Administrative expenses |
(319,283 | ) | (286,323 | ) | (268,675 | ) | 11.51 | % | 18.84 | % | |||||
Operating income |
(75,840 | ) | 131,648 | 99,987 | -157.61 | % | -175.85 | % | |||||||
Income (loss) from equity investments |
(17,023 | ) | 249 | 18,658 | -6936.55 | % | -191.24 | % | |||||||
Income (Loss) from Minority interest |
(2,467 | ) | (2,411 | ) | 1,157 | 2.32 | % | -313.22 | % | ||||||
Other Income/Expenses |
114,682 | (8,062 | ) | (106,082 | ) | -1522.50 | % | -208.11 | % | ||||||
Income tax and Minimum Presumed Tax |
(3,573 | ) | (3,937 | ) | (3,162 | ) | -9.25 | % | -13.00 | % | |||||
Net income for the period |
15,779 | 117,487 | 10,558 | -86.57 | % | 49.45 | % | ||||||||
Net income per share (2) |
0.03 | 0.25 | 0.02 | -86.57 | % | 49.45 | % | ||||||||
Net income per ADS (3) |
0.10 | 0.75 | 0.07 | -86.57 | % | 49.45 | % |
(1) | Exchange rate: 3.4537 Ps. = 1 US$ |
(2) | Assumes 471,361,306 ordinary shares outstanding. |
(3) | Each ADS represents three ordinary shares. |
In the section captioned as Quarter Executive Summary a table containing pro forma information is presented to provide a better analysis of the fourth quarter of the year results.
During the fourth quarter of the 2008 year, Net Financial Income after the valuation adjustment in public securities reached Ps. 310.8 million, growing by 21.6% with respect to the previous quarter and by 31.0% with respect the similar quarter of year 2007.
This improvement in the Net Financial Income is related to the private sector and due to the growth increase of the loan portfolio with this sector, together with an improvement of the banks spreads as a consequence of a greater growth in financings to small and medium businesses and to the retail segment.
Provisions for loan loses, net of the relocalization of the generic provisions excess in the loan portfolio, reached Ps. 34.2 million during the fourth quarter of the year, an increase of 13.5% compared to the previous quarter.
During this last quarter, Net Income from Services continued growing. These increased by 13.7% with respect to the previous quarter and by 39.8% with respect to the same quarter of 2007. This increase is a consequence of the greater activity level.
With respect to Administrative Expenses, during the fourth quarter of the year these increased by 11.5% with respect to previous quarter and by 18.8% with respect to the same quarter of year 2007, mainly due to increases in personnel expenses and advertising and promotion expenses, driven by the higher activity and investment level and a more active promotion strategy.
Result from equity investments presents an extraordinary result relating to the extraordinary adjustments derived from the reform of the argentine pension system and due to the equity participation in the Consolidar Group companies.
Finally, Other Income/Expenses line item shows the recovered credits and the loss from legal injunctions paid during the period together with the reverse of provisions made due to the giving of specific treatment to provisions for other contingencies.
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in thousands of pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
|||||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | |||||||||||
Return on Average Assets (1) |
0.29 | % | 2.38 | % | 0.22 | % | -87.89 | % | 29.98 | % | |||||
Return on Average Shareholders Equity (1) |
2.97 | % | 22.02 | % | 2.05 | % | -86.53 | % | 44.56 | % | |||||
Net fee Income as a % of Operating Income |
105.42 | % | 42.95 | % | 39.76 | % | 145.42 | % | 165.14 | % | |||||
Net fee Income as a % of Administrative Expenses |
68.55 | % | 67.22 | % | 58.29 | % | 1.98 | % | 17.61 | % | |||||
Adm. Expenses as a % of Operating Income (2) (3) |
59.52 | % | 60.04 | % | 68.21 | % | -0.87 | % | -12.74 | % |
(1) | Annualized. |
(2) | Adm.Expenses / (Net financial income + Net income from services) |
(3) | Net considering the excess in the adjustment of the value of public portfolio. |
Net Financial Income
The decrease in the Net Financial Income is mainly due to the higher adjustment in public assets valuation during the last quarter of the year. This negative effect was partially offset by an increase in interest earned from financial intermediation and the income from currency transaction.
It is important to mention that during the fourth quarter of the year, financial income net of the valuation adjustment in public assets grew by 21.6% with respect to the previous quarter and by 31.0% with respect to the same quarter of year 2007. The increase with respect to the third quarter of the year is due to an improvement in the banks spreads as well as a greater participation of small and medium businesses and retail segments in total financings. Meanwhile the growth with respect to the same quarter of 2007 is related to an expansion of the private sector loan portfolio together with the mentioned improvement in the spreads.
During the quarter under analysis, income related to foreign currency exchange, included in Foreign exchange difference, totalized Ps. 46.0 million, which is 18.5% more than those registered in the previous quarter.
in thousands of pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
||||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | ||||||||||
Net financial income |
(11,249 | ) | 255,608 | 237,276 | -104.40 | % | -104.74 | % | ||||||
Income from financial intermediation |
112,689 | 107,356 | 47,788 | 4.97 | % | 135.81 | % | |||||||
CER adjustment |
32,829 | 38,553 | 44,299 | -14.85 | % | -25.89 | % | |||||||
Income from securities and short term investments |
(316,695 | ) | (1,935 | ) | 61,320 | 16266.67 | % | -616.46 | % | |||||
Net Income from options |
(111 | ) | 11 | | 100.00 | % | 100.00 | % | ||||||
Interest on Government guaranteed loans |
15,210 | 15,011 | 16,012 | 1.33 | % | -5.01 | % | |||||||
Foreign exchange difference |
56,967 | 40,400 | 32,948 | 41.01 | % | 72.90 | % | |||||||
Others |
87,862 | 56,212 | 34,909 | 56.30 | % | 151.69 | % |
Income from Public and Private Securities
Income from Public and Private Securities during the fourth quarter of 2008 were affected by the valuation adjustment of public assets that reached Ps. 385.0 million, well above the adjustment of Ps. 75.7 million made during the third quarter of the year, and of Ps. 45.8 million during the same quarter of 2007.
With respect to other Income from Public and Private Securities, reductions in the results from the portfolio from available for sale and Central Bank instruments are mainly due to a smaller volume of holdings of these instruments together with lower yields.
The variations in the CER adjustment are due to a lower CER index.
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in thousands of pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
|||||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | |||||||||||
Income from securities and short-term investments |
(316,695 | ) | (1,935 | ) | 61,320 | 16269.95 | % | -616.46 | % | ||||||
Trading account |
9,466 | 11,564 | 8,730 | -18.14 | % | 8.43 | % | ||||||||
Available for sale |
33,243 | 34,028 | 47,819 | -2.31 | % | -30.48 | % | ||||||||
Bills and Notes from the Central Bank |
15,890 | 17,630 | 43,128 | 9.87 | % | -63.16 | % | ||||||||
Other fixed income securities |
(375,294 | ) | (65,156 | ) | (38,356 | ) | 475.99 | % | 878.44 | % | |||||
CER adjustment |
14,939 | 17,601 | 23,663 | -15.12 | % | -36.87 | % | ||||||||
CER adjustmentTrading account |
| | | | | ||||||||||
CER adjustmentInvestment account |
| | | | | ||||||||||
CER adjustmentOther fixed securities |
14,939 | 17,601 | 23,663 | -15.12 | % | -36.87 | % |
Net income from services
In the fourth quarter of the year, net income from services grew by 13.7% with respect to the previous quarter and by 39.8% with respect to the same quarter of 2007. In annual terms, net income from services during fiscal year 2008 increased by 29.2% with respect to the previous fiscal year.
The quarterly expansion is mainly explained by the increases registered in credit card fees, account maintenance fees and insurance sales, all as a result of an increase in the commercial activity.
On the other hand, during the year 2008, the greater businesses volume explains the increases in fees related with the retail segment, mainly those relating to on demand accounts, credit cards and insurance fees, together with those tied to foreign trade operations.
in thousands of pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
|||||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | |||||||||||
Net income from services |
218,876 | 192,471 | 156,607 | 13.72 | % | 39.76 | % | ||||||||
Service charge income |
289,896 | 247,043 | 194,423 | 17.35 | % | 49.11 | % | ||||||||
Service charges on deposits accounts |
95,699 | 85,712 | 68,519 | 11.65 | % | 39.67 | % | ||||||||
Credit Cards and operations |
76,509 | 58,346 | 44,569 | 31.13 | % | 71.66 | % | ||||||||
Insurance |
32,233 | 22,665 | 14,878 | 42.21 | % | 116.64 | % | ||||||||
Capital markets and securities activities |
3,557 | 5,855 | 4,554 | -39.24 | % | -21.90 | % | ||||||||
Fees related to Foreign trade |
14,184 | 14,526 | 11,276 | -2.35 | % | 25.79 | % | ||||||||
Other fees |
67,715 | 59,939 | 50,627 | 12.97 | % | 33.75 | % | ||||||||
Services Charge expense |
(71,020 | ) | (54,572 | ) | (37,816 | ) | 30.14 | % | 87.81 | % |
Administrative Expenses
During the last quarter of the year, Administrative Expenses grew by 11.5% with respect to the previous quarter and by 18.8% with respect to the same quarter of 2007. In annual terms, during fiscal year 2008 these expenses increased by 29.4% in comparison with year 2007.
With respect to the previous quarter, a seasonal increase in personnel expenses is observed as a result of higher year end expenses and a greater cost of contracted sale force. Also increases in advertising and promotion expenses were registered due to a more active promotions strategy, higher electricity and communications expenses due to the activity growth, and higher organization expenses and amortizations due to the greater level of infrastructure investment and information technology developments.
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On the other hand, compared with the same period of the previous year, the main increases were registered in personnel expenses, organization expenses, amortizations, professional fees and taxes. These increases are explained by a greater activity and investment level. The personnel expenses grew mainly due to wage increases, larger number of employees and a greater cost in the contracted sale force.
As of December 31, 2008, the total Banks employee base was of 4,264 individuals (including the Banks subsidiaries, except for the Consolidar Group). The branch office network totaled 268 offices, including 237 consumer branch offices, 27 branch offices specialized in the middle-market segment, 13 in-company branches, 4 branch offices for large corporate and institutional clients and 3 points of sale. During the present year, the Bank opened 5 new retail branch offices within the country, 1 in-company branch and 1 point of sale, with the purpose of reinforcing its presence in the cities with higher economic growth.
in thousands of pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
|||||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | |||||||||||
Administrative expenses |
(319,283 | ) | (286,323 | ) | (268,675 | ) | 11.51 | % | 18.84 | % | |||||
Personnel expenses |
(186,297 | ) | (169,798 | ) | (167,506 | ) | 9.72 | % | 11.22 | % | |||||
Electricity and Communications |
(6,932 | ) | (6,589 | ) | (5,848 | ) | 5.21 | % | 18.54 | % | |||||
Advertising and Promotion |
(21,754 | ) | (16,801 | ) | (22,250 | ) | 29.48 | % | -2.23 | % | |||||
Honoraries |
(8,550 | ) | (7,549 | ) | (6,545 | ) | 13.26 | % | 30.63 | % | |||||
Taxes |
(9,929 | ) | (8,438 | ) | (4,716 | ) | 17.67 | % | 110.54 | % | |||||
Organization and development expenses |
(3,304 | ) | (2,958 | ) | (2,953 | ) | 11.70 | % | 11.89 | % | |||||
Amortizations |
(10,100 | ) | (9,438 | ) | (9,124 | ) | 7.01 | % | 10.70 | % | |||||
Other |
(72,417 | ) | (64,752 | ) | (49,733 | ) | 11.84 | % | 45.61 | % |
Other Income/Expenses
During the fourth quarter of 2008, Other Income/Expenses line shows the recovered credits and the loss from legal injunctions paid during the period together with the reverse of provisions made due to the giving of specific treatment to provisions for other contingencies. During the same quarter of 2007, this line item included the amortization of the asset related with legal injunctions of Ps. 74.7 million and the charge for reserves for other contingencies.
It is important to note that during the first quarter of 2008, BBVA Banco Fancés completed the amortization of the asset related with legal injunctions, that such amortization was booked in accordance with Central Banks regulation and that it does not imply that the Bank waives its right to demand a future compensation or the recovery of the difference in the exchange rate ordered by the legal injunctions.
Income from equity investments
Income from Equity Investments sets forth net income from related companies that are not consolidated, mainly the Consolidar Group. The stake in the Consolidar Group recorded losses of Ps. 19.2 million during the quarter.
It is important to mention that Consolidar AFJPs result during the fourth quarter of the year was a loss of Ps. 25.6 million. This result includes extraordinary charges resulting from the pension system reform in the amount of Ps. 57.7 million (Ps. 31.1 million in BBVA Banco Francés books), mainly arising from indemnities to personnel, accelerated amortizations, non-recoverable credits, extraordinary expenses and smaller income from fees as a result the December transfer of founds to the ANSES.
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Public Sector Exposure
in thousands of pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
|||||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | |||||||||||
Public SectorNational Government |
1,927,938 | 2,445,893 | 2,724,879 | -21.18 | % | -29.25 | % | ||||||||
- Loans to the Federal government & Provinces |
1,365,552 | 1,376,353 | 1,415,763 | -0.78 | % | -3.55 | % | ||||||||
- Total bond portfolio |
1,097,974 | 1,204,758 | 1,174,701 | -8.86 | % | -6.53 | % | ||||||||
Unlisted |
1,004,833 | 978,339 | 903,897 | 2.71 | % | 11.17 | % | ||||||||
Available for sale |
91,669 | 212,865 | 239,513 | -56.94 | % | -61.73 | % | ||||||||
Other government bonds |
1,472 | 13,554 | 31,291 | -89.14 | % | -95.30 | % | ||||||||
Reverse repo w/Central Bank |
334,688 | | | 100.00 | % | 100.00 | % | ||||||||
- Trustees |
217,043 | 212,301 | 195,374 | 2.23 | % | 11.09 | % | ||||||||
- Allowances |
(752,631 | ) | (347,519 | ) | (60,959 | ) | 116.57 | % | 1134.65 | % | |||||
Bills and Notes from Central Bank |
2,928,104 | 2,110,884 | 2,344,567 | 38.71 | % | 24.89 | % | ||||||||
- Own portfolio |
1,668,928 | 1,406,203 | 2,179,178 | 18.68 | % | -23.41 | % | ||||||||
- Reverse repo w/Central Bank |
1,259,176 | 704,681 | 165,389 | 78.69 | % | 661.34 | % | ||||||||
Total exposure to the Public Sector |
4,856,042 | 4,556,777 | 5,069,446 | 6.57 | % | -4.21 | % | ||||||||
Total exposure to the Public Sector without repos |
3,262,178 | 3,852,096 | 4,904,057 | -15.31 | % | -33.48 | % |
Total exposure to the Public Sector net of holdings liked to reverse repo transactions with BCRA were reduced by 15.3% during the last quarter of 2008 and by 33.5% during the 2008 year. The quarterly variation is mainly explained by the valuation adjustment in public assets and the smaller value of the available for sale portfolio, while the annual decrease is due to the described lower valuations and the reduction in the Banks own portfolio of Central Bank Bills and Notes. These variations were partially offset by the increase in holdings of guaranteed loans and Bogar 2020 arising from the corresponding update of the CER index.
As of December 31, 2008, the exposure to the Public Sector National Treasure, net of holdings linked to reverse repo transactions with the BCRA, represented 8.5% of the Banks total assets. Meanwhile the exposure to the Public Sector, net of holdings linked to reverse repo transactions with the BCRA, represented 17.3% of the Banks total assets.
The Central Bank Bills and Notes portfolio, net of holdings linked to reverse repo transactions, grew by 18.4% during the last three months, whereas it showed a decrease of 23.6% during the 2008 year. These variations are related to the management of transitory liquidity.
Total exposure to the Public Sector includes national debt of the national treasure through public securities, guaranteed loans and trustees, and also, the Central Bank Bills and Notes.
- 9 -
Government and Private Securities Portfolio
in thousands of pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
|||||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | |||||||||||
Holdings |
3,713,676 | 3,066,629 | 3,573,520 | 21.10 | % | 3.92 | % | ||||||||
Trading |
2,778,420 | 1,359,092 | 1,242,787 | 104.43 | % | 123.56 | % | ||||||||
Unlisted Goverment Securities |
1,004,833 | 978,339 | 903,897 | 2.71 | % | 11.17 | % | ||||||||
Available for Sale |
577,502 | 978,211 | 1,372,584 | -40.96 | % | -57.93 | % | ||||||||
Other fixed income securities |
105,552 | 98,506 | 115,211 | 7.15 | % | -8.38 | % | ||||||||
Allowances |
(752,631 | ) | (347,519 | ) | (60,959 | ) | 116.57 | % | 1134.65 | % | |||||
Repurchase Agreements |
(1,593,864 | ) | (704,681 | ) | (165,389 | ) | 126.18 | % | 863.70 | % | |||||
Trading (Reverse repo) |
| | | 0.00 | % | 0.00 | % | ||||||||
Trading (Reverse repo) |
(1,593,864 | ) | (704,681 | ) | (165,389 | ) | 126.18 | % | 863.70 | % | |||||
Net Position |
2,119,812 | 2,361,948 | 3,408,131 | -10.25 | % | -37.80 | % | ||||||||
Trading |
1,184,556 | 654,411 | 1,077,398 | 81.01 | % | 9.95 | % | ||||||||
Unlisted Goverment Securities |
1,004,833 | 978,339 | 903,897 | 2.71 | % | 11.17 | % | ||||||||
Available for Sale |
577,502 | 978,211 | 1,372,584 | -40.96 | % | -57.93 | % | ||||||||
Other fixed income securities |
105,552 | 98,506 | 115,211 | 7.15 | % | -8.38 | % | ||||||||
Allowances |
(752,631 | ) | (347,519 | ) | (60,959 | ) | 116.57 | % | 1134.65 | % |
Net Position in other fixed income securities as of December 31st, 2008 includes Ps. 105.5 million of private bonds
The Government and Private Securities net position was reduced by 10.3% during the last quarter of 2008 and by 37.8% during the 2008 year as a result of the valuation adjustment in public assets and the lower value of the available for sale portfolio. In addition, the annual reduction is also due to a decrease in the Central Bank instruments holdings.
The decrease in the Available for the Sale portfolio is due to a smaller value of the securities included in this category and maturities of Central Bank Bills and Notes, while the increase in the Trading is due to new incorporations of Central Bank Bills and Notes.
Loan portfolio
Total private sector loan portfolio grew by 10.0% during the 2008 year. The strategy implemented by BBVA Banco Francés continued focused in bolstering its private lending activity, mainly to the retail and middle market segments. The increase registered during the last quarter was of 0.65%.
While the pace of growth in the private lending activity showed a slowdown during the last quarter, the Bank reinforced its efforts in the retail segment. During the last quarter of 2008, loan growth was driven by credit card finances, which grew by Ps. 229.0 million, whereas personal and secured loans grew by Ps. 69.6 million and Ps. 54.2 million, respectively. On the other hand, for the middle market and the large corporate segment, discounted notes and other loans, mainly those related with exports operations decreased by 12.9% and by 5.1%, respectively, whereas advances and draw downs decreased by 3.9%.
Considering the last twelve months, the expansion in the financings to the retail segment was supported by the increase of personal and secured loans and credit cards, which grew by Ps. 518.6 million, Ps. 258.2 million and Ps. 436.9 million, respectively. In the middle market and corporate segment, advances grew by 6.6%, whereas discounted notes and other loans, mainly those related with exports operations decreased by 13.2% and by 16.5% respectively.
- 10 -
The table below shows the composition of the loan portfolio in quarter balances:
in thousands of pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
|||||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | |||||||||||
Private & Financial sector loans |
9,898,442 | 9,834,091 | 9,002,814 | 0.65 | % | 9.95 | % | ||||||||
Advances |
1,413,526 | 1,471,487 | 1,326,474 | -3.94 | % | 6.56 | % | ||||||||
Discounted and purchased notes |
1,241,508 | 1,424,584 | 1,430,787 | -12.85 | % | -13.23 | % | ||||||||
Consumer Mortgages |
946,804 | 953,448 | 772,036 | -0.70 | % | 22.64 | % | ||||||||
Car secured loans |
511,374 | 457,189 | 253,130 | 11.85 | % | 102.02 | % | ||||||||
Personal loans |
1,855,767 | 1,786,215 | 1,337,179 | 3.89 | % | 38.78 | % | ||||||||
Credit cards |
1,239,588 | 1,010,571 | 802,647 | 22.66 | % | 54.44 | % | ||||||||
Loans to financial sector |
491,820 | 486,909 | 487,039 | 1.01 | % | 0.98 | % | ||||||||
Other loans |
2,228,099 | 2,347,432 | 2,666,750 | -5.08 | % | -16.45 | % | ||||||||
Unaccrued interest |
(24,304 | ) | (17,077 | ) | (13,756 | ) | 42.32 | % | 76.68 | % | |||||
Adjustment and accrued interest & exchange differences receivable |
190,749 | 159,034 | 139,256 | 19.94 | % | 36.98 | % | ||||||||
Less: Allowance for loan losses |
(196,489 | ) | (245,701 | ) | (198,728 | ) | -20.03 | % | -1.13 | % | |||||
Loans to public sector |
1,365,552 | 1,376,353 | 1,415,763 | -0.78 | % | -3.55 | % | ||||||||
Loans to public sector |
553,120 | 583,740 | 669,767 | -5.25 | % | -17.42 | % | ||||||||
Adjustment and accrued interest & exchange differences receivable |
812,432 | 792,613 | 745,996 | 2.50 | % | 8.91 | % | ||||||||
Net total loans |
11,263,994 | 11,210,444 | 10,418,577 | 0.48 | % | 8.11 | % |
Asset Quality
BBVA Banco Francés continued being the leader in the local financial system with an asset quality ratio (non-performing loans over total loans) of 0.97% and a coverage ratio (provisions over of non-performing loans) of 177.0% as of December 31, 2008.
It is important to mention that BBVA Banco Francés has the highest coverage ratio of the Argentine Financial System as of December 31, 2008. The non-performing ratio, excluding the BBVA Banco Francés subsidiaries, at the end of 2008 was of 0.90%.
in thousands of pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
|||||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | |||||||||||
Nonaccrual loans (1) |
111,026 | 95,147 | 62,978 | 16.69 | % | 76.29 | % | ||||||||
Allowance for loan losses |
(196,489 | ) | (245,701 | ) | (198,728 | ) | -20.03 | % | -1.13 | % | |||||
Nonaccrual loans/net total loans |
0.97 | % | 0.83 | % | 0.59 | % | 16.64 | % | 63.32 | % | |||||
Allowance for loan losses/nonaccrual loans |
176.98 | % | 258.23 | % | 315.55 | % | -31.47 | % | -43.92 | % | |||||
Allowance for loan losses/net total loans |
1.71 | % | 2.14 | % | 1.87 | % | -20.06 | % | -8.40 | % |
(1) | Nonaccrual 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.
- 11 -
in thousands of pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
|||||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | |||||||||||
Balance at the beginning of the quarter |
248,135 | 226,961 | 183,599 | 9.33 | % | 35.15 | % | ||||||||
Increase / decrease |
(35,816 | ) | 30,108 | 25,221 | -218.96 | % | -242.01 | % | |||||||
Provision increase / decreaseExchange rate difference |
2,694 | 945 | 22 | 185.08 | % | -12145.45 | % | ||||||||
Decrease |
(15,511 | ) | (9,879 | ) | (8,213 | ) | 57.01 | % | 88.86 | % | |||||
Balance at the end of the quarter |
199,502 | 248,135 | 200,629 | -19.60 | % | -0.56 | % |
Changes in charges for loan losses are related to the creation or release of reserves relating to the normal loan portfolio as a consequence of the growth or reduction in financings to the private sector. The decreases in the reserves are related to write-offs in the portfolio.
Deposits
During the last quarter of the year 2008, deposits grew by 10.3%, whereas during the same period, deposits in the financial system decreased by 2%. During the year 2008, the expansion was of 15.2%.
On demand deposit account balances experienced the greatest increase, not only during the last quarter of 2008 but also during the full year, increasing its participation in the total deposits. As of December 31, 2008, these deposits represented 54.8% of the total deposits, allowing BBVA Banco Francés to reduce the negative impact of higher levels of interest rates.
Deposits in current accounts lead the increase with growth of 37.3% during the fourth quarter of 2008 and of 56.6% during the full 2008 year. Deposits in saving accounts grew by 4% in the fourth quarter and by 10.1% in the full year; whereas time deposits increased by 2.7% during the quarter and by 2% during the year. On the other hand, the decreasing trend of CER adjusted time deposits continued during this quarter, which represented less than 1% of the total deposits by the end of fiscal year 2008.
Foreign currency-denominated deposits grew by 30.7% during the fourth quarter and by 43.5% during the year 2008. As of December 31, 2008, foreign currency-denominated deposits amounted to Ps. 3,529 million (equivalent to USD 1,021.7 million), representing 20.5% of total deposits.
- 12 -
in thousands of pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | ||||||||
Total deposits |
17,159,319 | 15,553,073 | 14,894,468 | 10.33 | % | 15.21 | % | |||||
Current accounts |
4,743,074 | 3,454,744 | 3,028,835 | 37.29 | % | 56.60 | % | |||||
Peso denominated |
4,218,204 | 3,451,579 | 3,023,606 | 22.21 | % | 39.51 | % | |||||
Foreign currency |
524,870 | 3,165 | 5,229 | 16483.57 | % | 9937.67 | % | |||||
Saving accounts |
4,664,305 | 4,485,715 | 4,237,766 | 3.98 | % | 10.07 | % | |||||
Peso denominated |
3,338,069 | 3,287,457 | 3,198,958 | 1.54 | % | 4.35 | % | |||||
Foreign currency |
1,326,236 | 1,198,258 | 1,038,808 | 10.68 | % | 27.67 | % | |||||
Time deposits |
7,497,724 | 7,302,332 | 7,354,180 | 2.68 | % | 1.95 | % | |||||
Peso denominated |
5,921,364 | 5,916,972 | 5,797,308 | 0.07 | % | 2.14 | % | |||||
CER adjusted time deposits |
15,326 | 23,165 | 254,205 | -33.84 | % | -93.97 | % | |||||
Foreign currency |
1,561,034 | 1,362,195 | 1,302,667 | 14.60 | % | 19.83 | % | |||||
Investment Accounts |
10,322 | 18,238 | 13,152 | -43.40 | % | -21.52 | % | |||||
Peso denominated |
10,322 | 18,238 | 13,152 | -43.40 | % | -21.52 | % | |||||
Foreign currency |
| | | | | |||||||
Other |
243,894 | 292,044 | 260,535 | -16.49 | % | -6.39 | % | |||||
Peso denominated |
127,220 | 155,162 | 147,669 | -18.01 | % | -13.85 | % | |||||
Foreign currency |
116,674 | 136,882 | 112,866 | -14.76 | % | 3.37 | % | |||||
Rescheduled deposits (*) CEDROS |
101,598 | 121,093 | 177,753 | -16.10 | % | -42.84 | % | |||||
Peso denominated |
101,598 | 121,093 | 177,753 | -16.10 | % | -42.84 | % | |||||
Foreign currency |
| | | | | |||||||
Total deposits + Rescheduled deposits & CEDROS |
17,260,917 | 15,674,166 | 15,072,221 | 10.12 | % | 14.52 | % |
(*) |
The payment of Rescheduled Deposits concluded in August 2005, in accordance with its original schedule, except those deposits that have a pending legal injunction. |
Other Funding Sources
Other funding sources decreased by 32.8% during the last quarter of 2008, while the decrease for the full year was of 38.6%. These variations are mainly explained due to lower lines from other banks for financing transactions linked to foreign trade. At the end of December 2008, 86.5% of balances from other funding sources were foreign currency denominated funds.
in thousands of pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | ||||||||
Lines from other banks |
389,832 | 580,069 | 634,701 | -32.80 | % | -38.58 | % | |||||
Senior Bonds |
| | | | | |||||||
Other banking liabilities |
389,832 | 580,069 | 634,701 | -32.80 | % | -38.58 | % | |||||
Subordinated Debt |
| | | | | |||||||
Total other funding sources |
389,832 | 580,069 | 634,701 | -32.80 | % | -38.58 | % |
Capitalization
As of December 31, 2008 with a total shareholders equity of Ps. 2,076 million, BBVA Banco Francés had an excess of capital over Central Bank requirements of Ps. 888.6 million. Such excess represented 42.8% of Total Shareholders Equity, representing an important solvency level.
During the last quarter of 2008, the Unrealized Valuation Difference registered an increase of Ps. 119.9 million as a result of the deterioration in the value of public bonds booked as Available for sale.
- 13 -
in thousands of pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
|||||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | |||||||||||
Capital Stock |
471,361 | 471,361 | 471,361 | 0.00 | % | 0.00 | % | ||||||||
Non-capitalized contributions |
175,132 | 175,132 | 175,132 | 0.00 | % | 0.00 | % | ||||||||
Adjustments to stockholders equity |
312,979 | 312,979 | 312,979 | 0.00 | % | 0.00 | % | ||||||||
Subtotal |
959,472 | 959,472 | 959,472 | 0.00 | % | 0.00 | % | ||||||||
Reserves on Profits |
594,391 | 594,391 | 547,381 | 0.00 | % | 8.59 | % | ||||||||
Unapropiated retained earnings |
703,280 | 687,501 | 592,780 | 2.30 | % | 18.64 | % | ||||||||
Unrealized valuation difference |
(181,119 | ) | (61,175 | ) | (42,796 | ) | 196.07 | % | 0.00 | % | |||||
Total stockholders equity |
2,076,024 | 2,180,189 | 2,056,837 | -4.78 | % | 0.93 | % |
The variations in the minimum capital required by the BCRA during the last twelve months is mainly explained by higher requirements caused by the increase in the private sector financings and an increase in the Alpha coefficient, partially offset by lower requirements due to a decrease in the market risk as a consequence of a lower risk exposure.
in thousands of pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
|||||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | |||||||||||
Central Bank Minimum Capital Requirements |
1,467,176 | 1,501,496 | 1,337,004 | -2.29 | % | 9.74 | % | ||||||||
Central Bank Minimum Capital Requirements (a, b) |
1,373,016 | 1,379,009 | 1,175,292 | -0.43 | % | 16.82 | % | ||||||||
Market Risk |
52,360 | 70,688 | 108,280 | -25.93 | % | -51.64 | % | ||||||||
Increase in capital requirements related to custody |
41,800 | 51,799 | 53,432 | -19.30 | % | -21.77 | % | ||||||||
a) Central Bank Minimum Capital Requirements |
1,373,016 | 1,379,009 | 1,175,292 | -0.43 | % | 16.82 | % | ||||||||
Allocated to Asset at Risk |
892,463 | 880,057 | 760,014 | 1.41 | % | 17.43 | % | ||||||||
Allocated to Immobilized Assets |
86,167 | 95,307 | 94,852 | -9.59 | % | -9.16 | % | ||||||||
Interest Rate Risk |
158,065 | 168,038 | 174,544 | -5.93 | % | -9.44 | % | ||||||||
Loans to Public Sector and Securities in Investment |
236,321 | 235,607 | 145,882 | 0.30 | % | 61.99 | % | ||||||||
Non Compliance of Other Credit Regulations |
| | | | | ||||||||||
b) Minimum capital required for Pension Funds (AFJPs) to act as securities custodian and registrar of mortgage notes |
836,005 | 1,035,971 | 1,068,636 | -19.30 | % | -21.77 | % | ||||||||
5% of the securities in custody and book-entry notes |
836,005 | 1,035,971 | 1,068,636 | -19.30 | % | -21.77 | % | ||||||||
Bank Capital Calculated under Central Bank Rules |
2,355,781 | 2,330,063 | 2,233,040 | 1.10 | % | 5.50 | % | ||||||||
Core Capital |
1,946,516 | 1,935,633 | 1,864,585 | 0.56 | % | 4.39 | % | ||||||||
Minority Interest |
304,884 | 261,470 | 236,018 | 16.60 | % | 29.18 | % | ||||||||
Supplemental Capital |
165,802 | 239,248 | 235,272 | -30.70 | % | -29.53 | % | ||||||||
Deductions |
(61,421 | ) | (106,288 | ) | (102,835 | ) | -42.21 | % | -40.27 | % | |||||
Excess over Required Capital |
888,605 | 828,567 | 896,036 | 7.25 | % | -0.83 | % |
Recent Developments
A swap of National government Guaranteed Loans for new debt instruments issued by the National Government (Bonar 2014) with 5 year maturity took place in January 2009. For BBVA Banco Francés the swap was made by a reference value of Ps. 1,018.4 million. Pursuant to the BCRA regulations, there will not be an initial impact in the valuation of the assets received.
- 14 -
Additional information
in pesos except percentages |
Quarter ended | % Change Qtr ended 12/31/08 vs. Qtr ended |
|||||||||||||
12/31/08 | 09/30/08 | 12/31/07 | 09/30/08 | 12/31/07 | |||||||||||
- Exchange rate |
3.4537 | 3.1302 | 3.1510 | 10.33 | % | 9.61 | % | ||||||||
- Quarterly CER adjustment |
1.31 | % | 1.50 | % | 2.30 | % | -12.76 | % | -43.22 | % |
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, Banco Francéss earnings, business plans, cost-reduction plans, and capitalization plan, and trends affecting BBVA Banco Francéss 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 Banco Francéss 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 Banco 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 Banco Francés with the United States Securities and Exchange Commission (SEC), including, but not limited to, BBVA Banco Francéss annual report on Form 20-F and exhibits thereto. BBVA Banco 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.
Conference call: A conference call to discuss this fourth quarter earnings will be held on Friday, February 13th, at 10:00 AM New York time 1.00 PM Buenos Aires time. If you are interested in participating, please dial (888) 637 7746 within the U.S. or +1 (913) 981 5546 outside the U.S. at least 5 minutes prior to our conference. Confirmation code: 4393068.
A conference call replay facility will be available from February 13th through February 27th, 2009. In order to listen to this digital replay, please call (888) 203 1112 within the U.S. or +1 (719) 457 0820 outside the U.S. Access Code: 4393068.
Internet: This press release is also available in http://www.bancofrances.com.ar
- 15 -
BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar: by the equity method)
ASSETS : (in thousands of pesos) | 12/31/08 | 09/30/08 | 06/30/08 | 12/31/07 | ||||||||
Cash and due from banks |
4,239,157 | 3,388,364 | 3,203,003 | 3,127,740 | ||||||||
Government and Private Securities |
3,615,920 | 2,977,262 | 2,456,963 | 3,490,994 | ||||||||
- Trading account (listed securities) |
1,461 | 9,040 | 104,438 | 31,288 | ||||||||
- Available for sale |
577,502 | 978,211 | 1,286,084 | 1,372,584 | ||||||||
- Reverse repo w/Central Bank |
334,688 | | | | ||||||||
- Unlisted |
1,004,833 | 978,345 | 963,770 | 903,903 | ||||||||
- Listed Private Securities |
7,796 | 9,139 | 10,326 | 32,764 | ||||||||
- Bills and Notes from the Central Bank |
2,442,271 | 1,350,046 | 364,093 | 1,211,414 | ||||||||
Less: Allowances |
(752,631 | ) | (347,519 | ) | (271,748 | ) | (60,959 | ) | ||||
Loans |
11,263,994 | 11,210,444 | 10,567,226 | 10,418,577 | ||||||||
- Loans to the private & financial sector |
9,898,442 | 9,834,091 | 9,199,992 | 9,002,814 | ||||||||
- Advances |
1,413,526 | 1,471,487 | 1,333,598 | 1,326,474 | ||||||||
- Discounted and purchased notes |
1,241,508 | 1,424,584 | 1,263,407 | 1,430,787 | ||||||||
- Secured with mortgages |
946,804 | 953,448 | 911,719 | 772,036 | ||||||||
- Car secured loans |
511,374 | 457,189 | 384,124 | 253,130 | ||||||||
- Personal loans |
1,855,767 | 1,786,215 | 1,679,196 | 1,337,179 | ||||||||
- Credit cards |
1,239,588 | 1,010,571 | 923,070 | 802,647 | ||||||||
- Loans to financial sector |
491,820 | 486,909 | 502,642 | 487,039 | ||||||||
- Other loans |
2,228,099 | 2,347,432 | 2,291,087 | 2,666,750 | ||||||||
Less: Unaccrued interest |
(24,304 | ) | (17,077 | ) | (16,090 | ) | (13,756 | ) | ||||
Plus: Interest & FX differences receivable |
190,749 | 159,034 | 151,983 | 139,256 | ||||||||
Less: Allowance for loan losses |
(196,489 | ) | (245,701 | ) | (224,744 | ) | (198,728 | ) | ||||
- Public Sector loans |
1,365,552 | 1,376,353 | 1,367,234 | 1,415,763 | ||||||||
Principal |
553,120 | 583,740 | 598,223 | 669,767 | ||||||||
Plus: Interest & FX differences receivable |
812,432 | 792,613 | 769,011 | 745,996 | ||||||||
Other banking receivables |
2,391,717 | 1,396,491 | 958,510 | 916,300 | ||||||||
- Repurchase agreements |
1,667,345 | 655,336 | 90,391 | 150,154 | ||||||||
- Unlisted private securities |
63,324 | 58,041 | 55,588 | 58,277 | ||||||||
- Unlisted Private securities :Trustees |
34,421 | 31,326 | 28,750 | 24,170 | ||||||||
- Other banking receivables |
629,640 | 654,222 | 785,998 | 685,600 | ||||||||
- Less: provisions |
(3,013 | ) | (2,434 | ) | (2,217 | ) | (1,901 | ) | ||||
Investments in other companies |
428,305 | 452,879 | 490,239 | 411,979 | ||||||||
Intangible assets |
48,075 | 44,012 | 32,161 | 91,680 | ||||||||
- Goodwill |
| | | 12,200 | ||||||||
- Organization and development charges |
48,075 | 44,012 | 32,161 | 21,991 | ||||||||
- Assets related to legal injunctions |
| | | 57,489 | ||||||||
Other assets |
1,196,426 | 1,201,050 | 1,160,853 | 1,043,623 | ||||||||
TOTAL ASSETS |
23,183,594 | 20,670,502 | 18,868,955 | 19,500,893 | ||||||||
LIABILITIES: | 12/31/08 | 09/30/08 | 06/30/08 | 12/31/07 | ||||||||
Deposits |
17,260,917 | 15,674,166 | 14,574,892 | 15,072,221 | ||||||||
- Current accounts |
4,743,074 | 3,454,744 | 3,122,874 | 3,028,835 | ||||||||
- Saving accounts |
4,664,305 | 4,485,715 | 4,255,842 | 4,237,766 | ||||||||
- Time deposits |
7,497,724 | 7,302,332 | 6,739,312 | 7,354,180 | ||||||||
- Investment Accounts |
10,322 | 18,238 | 14,042 | 13,152 | ||||||||
- Rescheduled depositsCEDROS |
101,598 | 121,093 | 136,268 | 177,753 | ||||||||
- Other deposits |
243,894 | 292,044 | 306,554 | 260,535 | ||||||||
Other banking Liabilities |
3,129,562 | 2,089,996 | 1,552,169 | 1,746,844 | ||||||||
Other provisions |
236,811 | 344,863 | 352,113 | 321,543 | ||||||||
- Other contingencies |
236,454 | 344,504 | 351,700 | 321,130 | ||||||||
- Guarantees |
357 | 359 | 413 | 413 | ||||||||
Other liabilities |
445,672 | 349,148 | 271,178 | 288,965 | ||||||||
Minority interest |
34,608 | 32,140 | 29,729 | 14,483 | ||||||||
TOTAL LIABILITIES |
21,107,570 | 18,490,313 | 16,780,081 | 17,444,056 | ||||||||
TOTAL STOCKHOLDERS EQUITY |
2,076,024 | 2,180,189 | 2,088,874 | 2,056,837 | ||||||||
Total liabilities + stockholders equity |
23,183,594 | 20,670,502 | 18,868,955 | 19,500,893 | ||||||||
- 16 -
BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar: by the equity method)
INCOME STATEMENT | 12/31/08 | 09/30/08 | 06/30/08 | 12/31/07 | ||||||||
Financial income |
282,293 | 492,612 | 394,347 | 451,547 | ||||||||
- Interest on Cash and Due from Banks |
571 | 3,090 | 3,170 | 5,554 | ||||||||
- Interest on Loans Granted to the Financial Sector |
26,492 | 21,304 | 18,380 | 16,509 | ||||||||
- Interest on Overdraft |
89,205 | 68,514 | 57,260 | 52,013 | ||||||||
- Interest on Discounted and purchased notes |
55,879 | 44,772 | 37,536 | 36,924 | ||||||||
- Interest on Mortgages |
31,055 | 28,826 | 24,743 | 19,707 | ||||||||
- Interest on Car Secured Loans |
19,761 | 15,713 | 11,269 | 5,809 | ||||||||
- Interest on Credit Card Loans |
34,570 | 27,624 | 24,199 | 16,804 | ||||||||
- Interest on Other Loans |
139,721 | 128,702 | 118,614 | 92,321 | ||||||||
- From Other Banking receivables |
4,105 | 4,691 | 5,384 | 6,702 | ||||||||
- Interest on Government Guaranteed Loans |
||||||||||||
Decreet 1387/01 |
15,210 | 15,011 | 14,719 | 16,012 | ||||||||
- Income from Securities and Short Term |
||||||||||||
Investments |
(316,695 | ) | (1,935 | ) | (66,976 | ) | 61,320 | |||||
- Net Income from options |
(111 | ) | 11 | | | |||||||
- CER |
33,116 | 39,070 | 62,352 | 51,921 | ||||||||
- CVS |
| | | | ||||||||
- Foreign exchange difference |
56,967 | 40,400 | 47,892 | 32,977 | ||||||||
- Other |
92,447 | 56,819 | 35,805 | 36,974 | ||||||||
Financial expenses |
(293,542 | ) | (237,004 | ) | (190,765 | ) | (214,271 | ) | ||||
- Interest on Current Account Deposits |
(8,532 | ) | (8,009 | ) | (5,957 | ) | (5,825 | ) | ||||
- Interest on Saving Account Deposits |
(2,346 | ) | (2,275 | ) | (2,104 | ) | (1,951 | ) | ||||
- Interest on Time Deposits |
(240,262 | ) | (191,627 | ) | (146,047 | ) | (166,701 | ) | ||||
- Interest on Other Banking Liabilities |
(9,006 | ) | (8,910 | ) | (10,035 | ) | (10,493 | ) | ||||
- Other interests (includes Central Bank) |
(1,707 | ) | (1,902 | ) | (1,591 | ) | (1,654 | ) | ||||
- CER |
(287 | ) | (517 | ) | (2,208 | ) | (7,622 | ) | ||||
- Bank Deposit Guarantee Insurance system mandatory contributions |
(6,889 | ) | (6,528 | ) | (6,653 | ) | (6,296 | ) | ||||
- Foreign exchange difference |
| | 10 | (29 | ) | |||||||
- Mandatory contributions and taxes on interest income |
(19,928 | ) | (16,629 | ) | (14,945 | ) | (11,635 | ) | ||||
- Other |
(4,585 | ) | (607 | ) | (1,235 | ) | (2,065 | ) | ||||
Net financial income |
(11,249 | ) | 255,608 | 203,582 | 237,276 | |||||||
Provision for loan losses |
35,816 | (30,108 | ) | (22,243 | ) | (25,221 | ) | |||||
Income from services, net of other operating expenses |
218,876 | 192,471 | 173,367 | 156,607 | ||||||||
Administrative expenses |
(319,283 | ) | (286,323 | ) | (272,766 | ) | (268,675 | ) | ||||
Income (loss) from equity investments |
(17,023 | ) | 249 | 38,513 | 18,658 | |||||||
Net Other income |
114,682 | (8,062 | ) | (3,190 | ) | (106,082 | ) | |||||
Income (loss) from minority interest |
(2,467 | ) | (2,411 | ) | (578 | ) | 1,157 | |||||
Income before tax |
19,352 | 121,424 | 116,685 | 13,720 | ||||||||
Income tax |
(3,573 | ) | (3,937 | ) | (2,749 | ) | (3,162 | ) | ||||
Net income |
15,779 | 117,487 | 113,936 | 10,558 | ||||||||
- 17 -
BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar consolidated on a line by line basis)
ASSETS | 12/31/08 | 09/30/08 | 06/30/08 | 12/31/07 | ||||||||
Cash and due from banks |
4,243,080 | 3,453,787 | 3,252,067 | 3,169,314 | ||||||||
Government Securities |
5,233,660 | 4,533,015 | 4,110,004 | 5,181,253 | ||||||||
Loans |
12,507,489 | 12,619,747 | 11,832,074 | 11,390,121 | ||||||||
Other Banking Receivables |
2,442,925 | 1,443,429 | 985,440 | 956,184 | ||||||||
Assets Subject to Financial Leasing |
379,120 | 381,254 | 363,492 | 323,522 | ||||||||
Investments in other companies |
96,640 | 99,574 | 140,448 | 77,986 | ||||||||
Other assets |
922,551 | 959,475 | 924,223 | 924,619 | ||||||||
TOTAL ASSETS |
25,825,465 | 23,490,281 | 21,607,748 | 22,022,999 | ||||||||
LIABILITIES | 12/31/08 | 09/30/08 | 06/30/08 | 12/31/07 | ||||||||
Deposits |
17,079,203 | 15,648,108 | 14,512,848 | 15,009,758 | ||||||||
Other banking liabilities |
3,135,153 | 2,118,476 | 1,565,960 | 1,750,021 | ||||||||
Minority interest |
248,139 | 261,471 | 257,939 | 2,970,365 | ||||||||
Other liabilities |
3,286,946 | 3,282,037 | 3,182,127 | 236,018 | ||||||||
TOTAL LIABILITIES |
23,749,441 | 21,310,092 | 19,518,874 | 19,966,162 | ||||||||
TOTAL STOCKHOLDERS EQUITY |
2,076,024 | 2,180,189 | 2,088,874 | 2,056,837 | ||||||||
STOCKHOLDERS EQUITY + LIABILITIES |
25,825,465 | 23,490,281 | 21,607,748 | 22,022,999 | ||||||||
NET INCOME | 12/31/08 | 09/30/08 | 06/30/08 | 12/31/07 | ||||||||
Net Financial Income |
107,969 | 352,279 | 258,928 | 330,761 | ||||||||
Provision for loan losses |
35,816 | (30,108 | ) | (22,243 | ) | (25,221 | ) | |||||
Net Income from Services |
246,027 | 240,216 | 212,620 | 268,931 | ||||||||
Administrative expenses |
(411,471 | ) | (350,482 | ) | (333,198 | ) | (339,996 | ) | ||||
Net Other Income |
30,744 | (79,327 | ) | 5,143 | (210,260 | ) | ||||||
Income Before Tax |
9,085 | 132,578 | 121,250 | 24,215 | ||||||||
Income Tax |
(6,638 | ) | (11,559 | ) | (6,982 | ) | (8,936 | ) | ||||
Net income |
2,447 | 121,019 | 114,268 | 15,279 | ||||||||
Minoritary Interest |
13,332 | (3,532 | ) | (332 | ) | (4,721 | ) | |||||
Net income for Quarter |
15,779 | 117,487 | 113,936 | 10,558 | ||||||||
- 18 -
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 12, 2009 | By: | /s/ Martín E. Zarich | ||
Name: | Martín E. Zarich | |||
Title: | Chief Financial Officer |