Cambiar logo! BBVA Francés. BBVA Francés. Corporate Presentation. Corporate Presentation. 2 Quarter QUARTER 2017

Transcription

1 Cambiar logo! BBVA Francés BBVA Francés Corporate Presentation Corporate Presentation 2 Quarter QUARTER 2017

2 Macroeconomic environment Financial System BBVA Francés Strategy Financial performance Annex 07 BBVA Group

3 01 Macroeconomic environment

4 Economy growing since 3Q16 GDP Growth (% yoy) Base 2004 Quarterly GDP (% yoy) 2,4% 2,6% 2,8% 3,0% 3,0% 2,8% 0,6% 0,3% -2,5% -2,2% e 2018e 2019e -3,7% -3,7% -1,9% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 (Source: BCRA, INDEC and own estimations 4

5 jun-16 jul-16 ago-16 sep-16 oct-16 nov-16 dic-16 ene-17 feb-17 mar-17 abr-17 may-17 jun-17 jul-17 Decreasing trend in inflation Inflation (% yoy) End of period CPI monthly variation (%) 4% 50% 45% 40% 35% 30% 25% 20% 15% 45% 40% 35% 30% 25% 20% 15% 3% 2% 1% 40% 30% 20% 10% 10% 5% 10% 5% 0% 0% 0% Inflation BCRA Target 0% m/m y/y Source: CPI CABA (from Jan-13 to Mar-16) INDEC: CPI GBA (from Apr-16 to Dec-16) IPC Nacional INDEC (Jan-17 to Jul-17) Source: INDEC CPI GBA: Jun-16 from to Dec-16/ CPI National from Jan-17 to Jul-17 5

6 Fiscal Performance: lower subsidies will help to meet targets Primary fiscal result % of GDP Primary result observed and targets Figures in billion AR$ ,4% -4,0% -4,3% -4,2% -3,2% -2,2% Source: Ministry of Economy Targets Subsidies to economic sectors % of GDP 0,2% 0,4% 1,3% 0,2% 0,4% 0,8% 0,1% 0,4% 0,6% Q17 2Q17 3Q17 4Q17 Quarterly target accumulated Observed Source: Ministry of Economy Public debt per creditor (% GDP) 54% 45% 43% 19% 27% 23% 25% 21% 28% Jan-Jun 2015 Jan-Jun 2016 Jan-Jun 2017 Energy Transport State owned companies Source: ASAP, Indec and BBVA Research Public Agencies Private Sector Source: Ministry of Finance 6

7 External sector: imports, mainly in capital goods and energy, growing as the economy recovers Exports and Imports % change yoy 60% 30% 00% -30% Exports Source: Indec Imports 1% Current Account % of GDP 0% -1% -1,4% -2% -2,7% -3% -2,8% -4% -4,1% -5% est. Trade Balance Real services Interest & Dividends Current Account Source: Indec International reserves Figures in million USD FX rate and REM forecast AR$/USD 18,2 19,9 20, ,5 Source: Central Bank Source: Central Bank REM forecast FX rate 7

8 02 Financial System

9 A system with strong ratios of liquidity, solvency Capital Capital Integration / RWA according to BCRA regulation Liquidity Cash + net repos with BCRA+BCRA bills / Total Deposits 49,0% 14,7% 13,3% 16,7% 45,4% 46,7% Quarterly evolution 16,5% 16,7% 16,8% 16,6% 16,1% 47,0% 47,2% 47,1% 49,0% 52,3% 46,0% 15,4% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 Source: BCRA Financial System Report 9

10 and healthy asset quality indicators NPL Cost of risk 2,0% 1,7% 1,8% 1,4% 1,2% 1,3% Quarterly evolution 1,8% 1,9% 1,9% 1,8% 1,9% 2,0% 1,2% 1,2% 1,3% 1,3% 1,5% 1,5% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 10

11 Profitability, though recovering, still low in real terms ROE and Inflation Quarterly figures 38,0% 39,4% 26,6% 29,5% 32,7% 26,9% 32,4% 29,7% 20,5% 26,4% 40,0% 30,0% 20,0% 10,0% Q2017 ROE Inflation 0,0% 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 ROE Inflation ROE: accumulated net income / monthly average equity, annualized ROE: quarterly net income / quarterly average equity, annualized Quarterly inflation: quarterly average inflation, annualized Source: BCRA and IPC CABA (from January 2013 to April 2016) IPC GBA INDEC (from May 2016 to May 2017) IPC Nacional INDEC (from June 2017) 11

12 A small financial system, but with a good infrastructure to face growth Latam Private Loans and Total Deposits in terms of GDP Branches and ATMs / 100,000 adult population 84,1% 78,5% 70,0 51,4 68,2 45,2% 48,9% 35,8 36,2 39,4% 23,6% 33,1% 14,0 17,0 15,0 12,9% Loans to the Private Sector Deposits Argentina Chile Colombia Perú Branches ATMs Argentina Chile Colombia Perú (*) Figures as of December 2016 (*) Figures as of December

13 Argentina has the less concentrated financial system in the region Total loans 90% 80% 70% 60% 50% 40% 30% 20% 10% 17% 32% 21% 19% 30% 19% The Argentine Financial System has 80 entities. That compares with 47 in Mexico, 25 in Colombia and 16 in Peru. 0% Argentina Uruguay Colombia Chile Perú Brazil CR1 CR2 CR3 CR5 Source: Central Banks 13

14 Private loans trend Total Private Loans growth Retail and Commercial Loans (ARS + USD) Figures in million AR$ % 150% 100% 50% 0% 50% 45% 40% 35% 30% 25% 20% Total Nom Var Total % Var YoY ARS % YoY USD % Var YoY Retail % Var YoY Total % Var YoY Commercial % Var YoY 14

15 Private deposits trend Total Private Deposits growth Sight Deposits and Time Deposits (ARS + USD) 140% 120% 100% 80% 60% 40% 20% 0% 80% 70% 60% 50% 40% 30% 20% 10% 0% Total % Var YoY USD % Var YoY ARS % Var YoY SD % Var YoY TD % Var YoY Total % Var YoY 15

16 jul-16 ago-16 sep-16 oct-16 nov-16 dic-16 ene-17 feb-17 mar-17 abr-17 may-17 jun-17 jul-17 Interest rates and NIM Financial System NIM Net financial income without foreign exchange differences / average earning assets 35% 50% 30% 25% 45% 40% 35% 12,9% 13,4% 13,0% 12,3% 20% 15% 10% 05% 30% 25% 20% 15% 10% 05% Inflation 9,7% 9,2% 10,5% 11,3% 00% 00% Private Badlar Lebac<35d 16

17 03 BBVA Francés

18 A universal bank with a countrywide presence 1 2 Salta 1 Catamarca Jujuy 3 Tucumán 2 Arial negrita San Juan 12pt, blanco Mendoza Neuquén La Rioja 3 Río Negro Chubut Santa Cruz 2 Tierra del Fuego Sgo. del Estero 15 San Luis La Pampa Córdoba 2 86 Chaco 11 1 Formosa 2 Corrientes Santa Fe 6 Entre Ríos 82 C.A.B.A Buenos Aires # Clients 2,462,668 Retail 2,421,265 C&IB 779 Middle Market 40,624 Branches 252 ATMs 755 ATSs 819 Employees 6,190 Key Financial metrics 2Q-17 Assets Net loans Total deposits Shareholders equity Figures in billion USD Exchange rate $16,6/USD

19 BBVA Francés, 3rd largest private bank by deposits and 4th by loans Private loans Private Deposits SANTANDER GALICIA MACRO BBVA FRANCES HSBC ICBC PATAGONIA SUPERVIELLE ITAU CITI 11,4 9,9 8,2 7,6 4,3 3,8 3,2 2,8 1,5 1,7 53,1% of total SANTANDER GALICIA BBVA FRANCES MACRO HSBC ICBC PATAGONIA SUP CITI ITAU 12,2 9,4 7,5 6,7 4,2 3,1 3,1 2,2 1,6 1,5 51,4% of total Mutual Funds: 6.5% Peer Group and total mutual funds market share s of June BBVA Francés private loans market share includes JVs Branches: 5.7% Branches Market share as of April

20 York Stock Exchange, since 1993, and Latibex, since Equity Ownership Ownership structure Grupo BBVA 66,55% 6,6% 6,9% Free Float 33,45% 19,8% # Shares $ 56,238 MM US$ 3,388 MM NYSE US$ 4.1 MM BCBA $ 15.6 MM 536,877, from primary follow-on equity offering additional shares (Green shoe) 612,659,638 ByMA ANSES NYSE 612,659,638 BBVA Frances has been listed on the BCBA since Its shares have been also listed on the New

21 04 Strategy

22 Plenty of growth opportunities in the Argentine banking sector Just to mention some key drivers with potential room to grow Mortgages Saving and Investments SMEs Undeveloped market Fiscal amnesty and currency stabilization Engine of Argentina s growth Energy and Infrastructure 15 years without investment Potential for rapid banking penetration given low credit to GDP rations and improving economic outlook 22

23 Efficiency improvements stemming from scale and new customer experience New macro environment results in need for growth and transformation DECREASING INFLATION COMMODITIZED PRODUCTS Margin compression Need fordifferenciation: Imperative for growth Customer experience Transformation Multichannel Strategy Digital approach

24 Our strategy will be focused on: Increasing market share in a growth environment, mainly through our organic strategy, but analyzing any M&A opportunity that could add value Continuing with our digital and partner based client adquisition strategy Streghtening our presence in the retail and the SMEs segments. Fostering the multichannel and digital capacity over physical presence. Transforming Customer Experience and Processes Creating Opportunities 24

25 Diversified business model, based on multichannel platform and exclusive partnerships ATMs/ ATSs Physical Infrastructure Branches Call Center Alliances Auto financing PSA Finance Renault- VW Finance Mutual Funds BBVA Francés Asset Management Web Broker BBVA Francés Valores Digital Channels Mobile Sponsors JVs Exclusive partnerships Insurance BBVA Seguros

26 Clients evolution Total clients Figures in million 2,24 2,18 2,33 2, ,900 clients 2,46 New retail clients Figures in thousand Q16 3Q16 4Q16 1Q17 2Q e 2018e % Digital Sales Digital sales / Total sales % Digital clients Digital clients / Total retail clients 20,9% 26,8% 31,4% 40,7% 40% 40% 41% 34% Q17 2Q Q17 2Q17 26

27 S W O T Strengths Weaknesses Opportunities Threats Organic growth strategy Solid risk ratios Low market share in personal loans. Perspectives of Economic Growth Peers with aggresive advertising campaigns Multichannel strategy: Countrywide presence Digital Channels Car Loans JVs Commercial Alliances Transformation as key to Efficiency Less expensive and fast client acquisition Improving cross sell but still low. Room to improve service quality Presence in lower tier SMEs Low banking penetration Mortgages and SMEs. Increase in concentration Increase activity with Public Agencies. Solid Risk Management Increase competition from new players and FinTechs Lack of long-term funding Low cost funding base Brand Image Recent Capital Raising 27

28 05 Financial performance

29 Activity 2Q 2017 Balance Sheet (billion $ and YoY) Loans Deposits AR$ % AR$ % Strong balance sheet. Leverage 9.2x LtD 71.2% Adequate leverage, with a growing Private loan to Deposits ratio, which increased 372 bp during the quarter NPL 0.85% Coverage 243.3% Maintaining the best asset quality ratios in the Argentine financial system Liquidity and Solvency Liquidity(*) Capital ratio Tier I 43.4% 13.1% 11.9% Adequate levels of liquidity and solvency (*) Includes bills issued by the Central Bank 29

30 Loans Private Loans structure Private Loans Figures in million AR$ YoY +35.8% Commercial 50% Retail 50% Credit Cards 54% Personal Loans 26% Car Loans 16% Mortgages 5% Private Loans by currency Jun.16 Sep.16 Dec.16 Mar.17 Jun.17 USD 20% Market Share % Pesos 80% In the 2Q 17 total loan portfolio grew 8%. (AR$ loans 5% and USD loans 22%)

31 Retail Banking shows an important growth in personal and car loans Personal Loans (Figures in million AR$) Car Loans (*) (Figures in million AR$) YoY +53.6% YoY +77.3% Jun.16 Sep.16 Dec.16 Mar.17 Jun.17 Market Share % Jun.16 Sep.16 Dec.16 Mar.17 Jun (*) Car Loans contain joint ventures activity: PSA Finance, VW Finance and Rombo Compañía Financiera (Rombo figures are not included into BBVA Francés Balance Sheet) (*) In August,2017, there was a reclasification in certain types of financing that had been previously incorporated in the car loans. For this reason the total amount for car loans was modified in each period.

32 Retail Banking: highlighting participation in the Credit Cards market and growing position in Mortgages loans Credit Cards (Figures in million AR$) YoY +23.5% Mortgages (Monthly sales) (Figures in million AR$) Jun.16 Sep.16 Dec.16 Mar.17 Jun.17 Loans Card Stock Loans QoQ + 3.9% Card Stock QoQ + 2.1% Market Share Consumption % n Jan.17 Feb.17 Mar.17 Apr.17 May.17 Jun.17 Bank currently holding around 6% share of sales (targets 10% zone)

33 Commercial Banking Figures in million AR$ Market share as of June 2017 Distribution by industry Infrastructure; 4% Capital goods; 5% Others; 3% Commercial Market Share Market 7.2% Share 9.8% Durable goods; 5% Energy; 9% Basic Materials; 16% Retailers; 17% Consumer; 39% Jun.16 Sep.16 Dec.16 Mar.17 Jun.17 Commercial Loans by currency USD 37% Pesos 63% Commercial loans increased 8.5% q/q and 41.1% y/y, with an important participation in dollar loans, mainly due to a higher volume of foreign trade operations.

34 Risk Manangement: maintaining an outstanding asset quality 500% 400% Coverage - NPL ratio Cost of Risk 5% 4% NPL peer group and Financial System Figures as of March % 247,8% 251,6% 262,7% 248,3% 243,3% 3% System 1,79 200% 1,09% 1,15% 1,22% 1,31% 1,30% 2% BBVA 0,81 Opportunity 100% 0% 0,85% 0,83% 0,77% 0,84% 0,85% Jun.16 Sep.16 Dec.16 Mar.17 Jun.17 1% 0% Peer 1 Peer 2 1,33 1,52 Coverage NPL Cost of Risk Peer 3 1,76 NPL by segment Jun-17 Retail 1.75% Middle Market 0.35% Corporate 0.0%

35 Public bonds and Central Bank bills portfolio Figures in million AR$ Private Portfolio BCRA Bills & Notes (own portfolio) Public Bonds and loans Jun.16 Sep.16 Dec.16 Mar.17 Jun.17 Jun.16 Sep.16 Dec.16 Mar.17 Jun.17 Total exposure to the Public Sector without repos Public Sector National Government / Total Assets 16,190 13,215 13,066 14,562 22, % 2.6% 3.5% 3.7% 4.9% BCRA Bills / Total Assets 8.8% 7.2% 4.8% 3.9% 8.3% 35

36 Stable and diversified funding structure, based on retail and SMEs customers Total Deposits Figures in million AR$ Jun.16 Sep.16 Dec.16 Mar.17 Jun.17 YoY +35.4% Sight accounts 64% Deposits structure Saving accounts 46% Current accounts 18% Time deposits 31% Others 5% TD>1MM 74% 21% TD<1MM Market Share % This mix provides a cheaper funding structure than most of our competitors.

37 Capital: adequate leves of solvency Capital ratio(*) Tier I 11.9% 15,6% 14,8% 13,8% 13,8% 13,1% 17,3% +3.5% Additional Buffer 11.5% 8% Minimum Capital Requirement Jun.16 Sep.16 Dec.16 Mar.17 Jun.17 Post-capital raised (*) Capital ratio according to the Central Bank regulation On August 10, 2017, BBVA Francés paid out dividends for an amount of $911 million, equal to % of the share capital or $ per share.

38 Results 2Q 2017 Main Figures AR$ and q/q Good performance of the net financial income, driven by a decrease in local currency bills in branches and growth in activity. Net Income * AR$ 902,8 MM +115% Net Financial Income AR$ 3,433 MM +12.0% Net Income from Services Adm. Expenses Income from commissions continued to show positive development, the quarter was affected by the impact of the reduction in merchant discount rate implemented in April 2017, which will begin to regularize in the next quarter through renegotiation of alliances. Efficiency Ratio improved slightly, but stills remains well above historical levels and the Bank targets. Coming quarters should bring further improvement. AR$ 1,191 MM AR$ 3,027MM (*) Net income without fiscal provision effect - 3.5% +4.5% (*) Ratios as of 2Q 2017 annualized and calculated considering net income without fiscal provision effect Ratios Ratios ROE* 21.3% ROA* 2.0% NIM 11.4% EFFICIENCY 65.5% COVERAGE 39.3% q/q q/q +10.1% +1.0% -0.3% -2.0% -3,3% Successful client acquisition strategy through digital channels still adding short term pressure on results, as costs are registered upfront and benefits will be seen in coming quarters.38

39 Net Interest Margin and NIM Figures in million AR$ 13,0% 11,7% 11,4% Net Financial Income Total NIM (AR$+USD) Q17 2Q Total NIM AR$ 14,6% 13,7% 13,6% Q17 2Q17 1,8% 1,9% Jun.16 Sep.16 Dec.16 Mar.17 Jun.17 1,2% Total NIM USD Q17 2Q17 Financial margin shows a positive performance. Lending rates keep facing downward pressure, but it is offset by a decrease in the cost of funding and a pick up in foreign currency loans.

40 Fees and Expenses Figures in million AR$ Net Income from Services YoY 17.4% Administrative Expenses YoY 36.9% Jun.16 Sep.16 Dec.16 Mar.17 Jun.17 Good performance in 2Q17, mainly by those associated with deposits accounts, which grew 14% during the quarter- Fees generated by credit cards reflect an increase in consumption volumes of 6%, above the market. Jun.16Sep.16Dec.16Mar.17Jun.17 Personnel expenses grew 4% and 30.8% compared to 1Q.17 and 2Q.17, respectively. General Expenses increased mainly due to high costs of carriage of valuables, amortizations, electricity and communications. But they reflect the impact of decrease in MDR fee, that will be gradually offset in coming quarters through renegotiation of alliances The efficiency ratio improved 190 b.p. compared to 1Q.17, reflecting the progress in the actions implemented by the Bank. 40

41 Main indicators ROE * ROA * 32,9 36,6 31,5 24,1 10,1 21,3 3,9 4,8 4,1 2,8 1,0 2, Q17 2Q Q17 2Q17 (*) 2Q17: ratios accumulated and annualized without considering income tax provision effect Efficiency Administrative expenses/net Financial Income + Net Income from Services 51,9% 51,1% 50,2% 57,0% 67,4% 65,5% Coverage Net Income from Services/Administrative Expenses 64,4% 59,9% 58,8% 45,3% 42,6% 39,3% Q 17 2Q Q 17 2Q 17 41

42 06 Annex

43 BBVA Francés P&L Breakdown Figures in million $ 2Q-16 3Q-16 4Q-16 1Q- 17* 2Q-17* Q/Q Y/Y Net Financial Income 3,343 2,836 3,252 3,064 3,433 12% 2.7% Provision for Loan Loses (336) (226) (331) (324) (356) 10% 6% Net Income from Services 1,014 1,301 1,076 1,234 1, % 17,4% Administrative Expenses (2,212) (2,373) (2,861) (2,898) (3,027) 4.5% 36.9% Operating Income 1,809 1,538 1,137 1,076 1, % -31.4% Income (Loss) from equity investments Income (Loss) from Minority interest n/a 51.8% (34) (24) (14) (28) (30) 6.3% -13.2% Other Income/Expenses (27) (4) (142) (331) 17 n/a n/a Income Tax (887) (596) (417) (317) (481) 51,5% -45.8% Net Income % -6.3% (*) 1Q-17 and 2Q-17 non considering lncome tax provision effect 43

44 BBVA Francés balance sheet structure Figures in million $ 2Q-16 3Q-16 4Q-16 1Q-17 2Q-17 Q/Q Y/Y Cash and Banks 26,524 30,296 48,226 41,149 37,048-10% 40% BCRA Bills & Notes 16,934 9,742 7,375 17,094 17,556 3% 4% Public sector assets 4, ,331 7,112 8,193 15% 89% Private Loans 65,946 71,103 78,791 82,912 89,518 8% 36% Others 17,895 16,362 11,992 36,061 20,100-44% 13% TOTAL ASSETS 131, , , , ,415-6% 31% Deposits 92,827 91, , , ,674 2% 35% Others 23,773 23,107 20,634 44,351 29,870-33% 26% TOTAL LIABILITIES 116, , , , ,544-7% 33% TOTAL NET WORTH 14,945 15,878 16,460 17,155 16,872-2% 13% TOTAL LIABILITIES + NET WORTH 131, , , , ,415-6% 31% 44

45 Share performance 100 points base as of August, Market Data (*) Mkt Cap (MM u$s) Avg ADR volume (MM u$s) Floating * (*) without ANSES FRAN GGAL BMA 3,546 5,930 7, % 36.1% 30% ago-12 ene-13 jun-13 nov-13 abr-14 sep-14 feb-15 jul-15 dic-15 may-16 oct-16 mar-17 ago-17 FRAN GGAL BMA MERVAL (*) Market Cap as of August 31, Last month average volume. Floating does not consider ANSES s participation. 45

46 Ratings Rating Agency Instrument Rating Outlook Fix SCR* Shares 1 Neutral Negotiable Obligations Global Program (U$S 750 million) Subordinated Senior Debt Senior Debt Short Term Senior Debt Long Term AAA (Arg) AA+ (Arg) A1+ (Arg) AAA (Arg) S&P Institutional Rating Long Term rabbb Neutral Institutional Rating Long Term Negotiable Obligations Global Program (U$S 750 million) raa-2 rabbb Neutral *In November 2013, Fitch Argentina sold 70% of its capital stock to a local investor group and changed its name to Fix Scr. This new group will be responsible for the local credit rating. 46

47 07 BBVA Group

48 BBVA in the world North America United States México South America Argentina Bolivia Brazil Chile Colombia Paraguay Perú Uruguay Venezuela Europe Germany Belgium Spain France Holland Italy Luxembourg Malta Portugal U.K. Romanía Russia Switzerland Turkey Asia-Pacífic Australia China EAU Hong Kong India Indonesia Japan South Corea Singapore Taiwán >30 8,421 31, ,321 billion in total assets millon customers countries branches ATMs employees Data at the end of June

49 Leading franchises in all markets Net atributtable profit Breakdown million 18% 11% 1SM ,306 Mm 14% 15% An important contribution from emerging markets 40% 3% Mexico Spain USA Turkey South America Resto Eurasia Note: Spain includes the áreas Banking activity in Spain and Non Core Real Estate. Figures excludes Corporate Center 49