22 1 1 2 2 3 3 33 1 1 2 2 3 3 4 representative offices: brasil, russia, turkey, shangai, beijing,...
TRANSCRIPT
June 2014
BBVA Francés
22
Index
BBVA Group1
Macroeconomic Outlook and Financial System2
BBVA Francés3
33
BBVA Group1
Macroeconomic Outlook and Financial System2
BBVA Francés3
4
Business model based on
Diversification, Clients, Prudence and Principles
Representative Offices: Brasil, Russia, Turkey, Shangai, Beijing, Australia, India and United Arab Emirates.
5
A balanced diversification, with leading franchises in all markets in which it operates:
• Good risk performance• Cost control• Transformation of the distribution model
• Strong business activity • Excellent risk indicators
• Buoyant business in a low-growth environment
• Solid recurring income• Revenues increasing faster than expenses
South America
• Strong business activity leads to higher income
• Growth potential in the Andean region
Eurasia • Solid contribution to the Group
Spain
USA
Mexico
USA
66
Earnings: positive trend in recurrent revenues…
7
Risk: asset quality continues to improve
88
BBVA Group1
Macroeconomic Outlook and Financial System2
BBVA Francés3
9
2009 2010 2011 2012 2013 2014e
0.05%
9.14%8.55%
0.95%
2.95%
-1.00%
2014: Eventhough Argentina had taken measures to solve certain macro pendings, the fail in the agreement with the “holdouts” results in a selective default….
Source: INDEC and own estimations.
A
6.1
9.87.2
10.9 10.8 10.9
3.7 3.4 2.6 1.8 1.4 1.3
CPIMonthly CPI.Nu
Jun-14
15.0
2014e
25.0
CPI-Nu: the new index launched in January, with
national coverage (87% of the country, 13.000 sales
outlets), reflects a higher level of inflation.
Real GDP Growth (%) Inflation (%)
Source: INDEC
…. the goverment continues to take measures in order to overcome the situation.
10
Main figures: Evolution
Source: INDEC and own estimations.
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e
6.3
16.715.7
12.1 11.7 12.311.1
12.6
17.0
11.610.3
12.4
8.3 9.0
Trade Balance (billion of USD)
Export prices maintain the surplus in the trade
balance, even though the deficit in the energy
sector and tourism.
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e
Unemployment (%)
Source: INDEC
Badlar private banks (%)
Soruce: BCRA
2014e
7.6
2014e
25.0
Exchange Rate ($/U$S)
Source: BCRA
2014e9.8
2014e
2014e 2014e
11
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e
16,0%
14,7%
Private Sector Deposits/GDP Private Sector Loans/GDP
Source: BCRA
Financial System, small but there is an opportunity to
growth.Private deposits and loans in terms of GDP
25.8%
20.8% 16.0
%
14.4%
12
Impressive expansion of the retail loan portfolio
Source: BCRA.
Mar-03 Feb-04 Jan-05 Dec-05 Nov-06 Oct-07 Sep-08 Aug-09 Jul-10 Jun-11 May-12 Apr-13 Mar-140
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
200,000
220,000
240,000
260,000
280,000
300,000
Mortgages Car Loans Personal Loans Credit Cards
Loans performance in the financial systemFigures in Million of Pesos + 27
% y/y
1313
BBVA Group1
Macroeconomic Outlook and Financial System2
BBVA Francés3
14
BBVA Francés History
Banco Frances was one of the first companies listed on the BCBA, quoting since 1888.
Its shares are also listed on the New York Stock Exchange since November 1993 and LATIBEX since
December 1999.
19801886 1990 1996
Customer base expansion (adding S&Me companies and individuals)
Banco Francés del Río de la Plata
Incorporation of investment banking, capital markets and international banking, while expanding its branch network throughout the country
BBVA GROUP BECOMES THE CONTROLLING SHAREHOLDER
Merger with Banco de Crédito Argentino
20131997
BBVA Francés acquired 23 floors of the building to be constructed by Consultatio, where the “Torre BBVA” will be established.
15
Operative Structure: wide network
3
104
1 2
5
16
2
6
96
1
2
1
12
54
3
2
2
3
16
2
2
4
1
Tierra del Fuego
Capital Federal
5,338 Employees
Retail
Branches Clients
245 1,852,089 clients
Middle Market
30 19,098 companies
Corporate 7 business units 851 large corporations
Auto Financ
ingPSA
FinanceRombo
BrokerBBVA
Francés Valores
S.AMutual Funds
BBVA Francés Asset
Management S.A.
InsuranceBBVA
Consolidar
Insurance
16
Nación
Santander
Provincia
Galicia
Macro
BBVA Francés
Ciudad
HSBC
Patagonia
Credicoop
20.54
8.25
7.90
7.36
6.44
6.25
4.49
4.15
3.54
3.18
An important player with capacity to increase its participation
72% of total77% of total
Financial system as of March 2014Private MS as of June 2014
Nación
Provincia
Santander
Galicia
BBVA Francés
Macro
HSBC
Credicoop
Ciudad
Patagonia
27.29
9.86
7.20
6.91
5.70
5.29
3.89
3.83
3.72
3.09
6.50%6.88% Market sharePrivate Deposits
Private Loans
17
Equity Ownership
ADRs(NYSE)
Domestic Stocks
75.89%
9.53%
14.58%
Chart TitleMinority
Shareholders 24.11%
Since 1996
Mkt Cap $ 21,045 MM
P/E $ 52.7
BV/ Share $ 16.56
Data as of June 30, 2014
18
Earnings
Risks
Strong fundamentals
Adecuate funding structure
Best risk indicators in the
system
Strong regulatory ratios
Mantaining upward trend
in earnings
SolvencyExpenses
19
Liquid assets/DepositsLiquidit
y
Earnings Risk
Solvency
Coverage218.19%
NPL
0.97%
Capital Ratio: 15.8%
ROA: 2.4%ROE: 18.3%
Recurring net income
+17.6%
2Q 2014: Main Indicators
40%
20
AssetsLiabilities +
Equity
8,608
37,910
7,732
11,488
8,889
11,349
48,050
Solid balance sheet structure
Figures in million of pesos
Cash and Banks
Private Loans
Deposits
Others
Net Worth
BCRA Notes
Public sector assets
68,287 68,287
Others
Leverage 6.7 x
Private Loans to Total Deposits 78.9%
Liquid Assets to Total Deposits 40.0%
17%
11%
56%
4%
13%
70%
17%
13%
21
51%
28%
21%
Jun.12 Jun.13 Jun.14
23,739
31,508
37,910
Private loan portfolio with a diversified structure.
Figures in million of pesos
Credit Cards 23%
Personal Loans16%
Car Loans 9%Mortgages 3%
Corporate
Middle-Market
Retail
+20%+33
%
Average Lending Rate
($)26.43%
Jun.12 Jun.13 Jun.14
3,740
5,473 6,060
Jun.12 Jun.13 Jun.14
4,178 5,381
5,975
Market Share (%) 20.11 20.17 18.90
Market Share (%) 6.35 6.24 5.74
(*) Car loans include joint ventures
Figures in million of pesos
Personal Loans
Car Loans (*)
Retail: maintaining the leadership in car loans
+ 29 % + 11 %2Q13 vs 2Q12 2Q14 vs 2Q13
y/y
+ 46 % + 11 %2Q13 vs 2Q12 2Q14 vs 2Q13
y/y
Credit cards: the strategy is gain market share, making the product more profitable
Market ShareAdvertising + Promotions /
Income
11.03%11.31%
11.83%
Jun.12 Jun.13 Jun.14
21
103.4%
51.4% 50.5%
Jun.12 Jun.13 Jun.14
Middle-Market
Commercial loans with a good performance
Market Share (%) 9.29 9.73 9.57
Figures in million of pesos
Corporate
Market Share (%) 17.98 17.65 16.13
Focused on the most
profitable products:
Overdraft , financial
loans and leasing.
Maintaining the leadership.
22
Jun. 12 Jun. 13 Jun.14
6,349 8,649
10,775
Jun. 12 Jun. 13 Jun.14
6,0877,525 7,870
25
Jun.12 Jun.13 Jun.14
1,769 1,270 2,407
3,595
2,242
5,779 Others
Bills and Notes from Central Bank
Public bonds
The bank complies with Rule 3991 from the Central Bank, which restricts public sector exposure to 35% of total assets as of July ‘07
Total exposure to the Public Sector without repos 5,568 3,760 8,235
Public Sector National Government /Total Assets
5.0% 3.1% 3.6%
Figures in million of pesos
Important participation of bills & notes issued by the Central Bank in the public portfolio.
2626
Asset quality remains at good levels, but showing signs of deterioration.
NPL peer group and Financial System(March-2014)
NPL by business areas
Retail 1.94%
Middle-Market
0.52%
Corporate 0.00%
Jun.12 Jun.13 Jun.140%
100%
200%
300%
400%
500%
0%
1%
2%
268.60% 240.16% 218.19%
0.71%0.80%
0.97%
Coverage Ratio Non-Performing Ratio
2.02%
1.70%
1.73%
1.10%
0.75%
1.52%
Peer 3
Peer 2
Peer 4
Peer 1
BBVA (*)
Financial System
27
Current ac-
counts30%
Saving ac-
counts26% Time
deposits42%
Others2%
Deposits: growing at a faster pace…
Figures in million of pesos
Jun.12 Jun.13 Jun.14
30,050 36,921
48,050
Sight accounts
56% 62%
38%
TD < 1MM
TD > 1MM
Average cost of funds
($)11.28%
+30%
+23%
2828
Negotiable Obligations
Global Program for the issuance of notes of up to US$ 750,000,000.
Class Issuance Maturity Cupon F.V.
IV 07-31-13 18 months (2015)
BADLAR + 3.69% $ 250 MM
VI 08-11-13 18 months (2015)
BADLAR + 3.25% $ 121.4 MM
VII 08-11-13 36 months (2016)
BADLAR + 4.24% $ 250 MM
VIII 02-11-14 18 months (2015)
BADLAR + 3.80% $ 258.8 MM
IX 02-11-14 36 months (2017)
BADLAR + 4.70% $ 145.1 MM
X 18-07-14 18 months(2016)
BADLAR + 2.50% $ 233.8 MM
XI 18-07-14 36 months (2017)
BADLAR + 3.75% $ 165.9 MM
2929
2Q-2014 2Q-2013
Figures in million of pesosRecurring Non
Recurring Total Recurring
Net Financial Income 1,531.4 (95.4) 1,436.0 1,100.2
Provision for Loan Losses (151.7) (151.7) (114.5)
Net Income from Services 813.9 813.9 607.8
Administrative Expenses (1,319.9) (1,319.9) (938.5)
Operating Income 873.7 (95.4) 778.3 655.0
Income before tax 867.9 (95.4) 772.5 662.6
Income tax (378.9) (5.5) (373.5) (246.7)
Net Income 489.0 (100.9) 399.0 415.9
Generation of recurring gains
+17.6% y/y
30
Jun.12 Jun.13 Jun.14
9091,100
1,531
Good performance of the net interest margin
Figures in million of pesos
Recurring net financial income
Jun.12 Jun.13 Jun.1413.40%13.60%13.80%14.00%14.20%14.40%14.60%14.80%15.00%15.20%15.40%
14.7%
14.0%
15.2%
Private SpreadAverage spread ($)
+39%
+21%
-54 pb +102 pb2Q13 vs 2Q12 2Q14 vs 2Q13
y/y
Jun.12 Jun.13 Jun.14
438608
814
Fees maintain a good pace of growth.
Figures in million of pesos
Jun.12 Jun.13 Jun.14
423547
748
Jun.12 Jun.13 Jun.14
297
391
572
Net Income from Services
Personnel expenses grew 37% compared to 2Q-13, reflecting mainly the salary increase and a higher number of employees.
General expenses grew due to an increase in the activity volume, higher prices and the impact of the 1Q devaluation on FX contracts.
Personnel expenses
General expenses
+ 39% + 34%2Q13 vs 2Q12 2Q14 vs 2Q13
y/y
32
Efficiency and coverage ratios
Efficiency Ratio (1)
Coverage ratio (2)
(1) Adm.Expenses / (Net financial income + Net income from services) Removing the non-recurring effects.
(2) Net fee Income as a % of Administrative Expenses
Jun.12 Jun.13 Jun.14
53.5%
54.9%
56.3%
Jun.12 Jun.13 Jun.14
60.8%
64.8%
61.7%
+ 148 pb + 135 pb2Q13 vs 2Q12 2Q14 vs 2Q13
y/y
+ 396 pb - 306 pb 2Q13 vs 2Q12 2Q14 vs 2Q13
y/y
33
2Q13* FY 2013 2Q14*
18.2%
32.9%
18.3%
*Annualized
Maintaining high levels of profits
ROE
2Q13* FY 2013 2Q14*
2.1%
4.0%
2.4%
*Annualized
intermediation with the private sector
Good asset qualityEfficient operating
structure
Balance sheet strength
(Capital & Liquidity)
ROA
June 2014
BBVA Francés