Banco de Inversión y Comercio Exterior S.A.

Transcription

1 Banco de Inversión y Comercio Exterior S.A. Financial Statements At December 31, 2016 Quantitative and qualitative information on Market Discipline is available on

2 Financial Statements At December 31, 2016 Contents Balance Sheet Income Statement Memorandum Accounts Statement of Changes in Stockholders Equity Statement of Cash Flow and Cash Equivalents Exhibits Auditors Report Surveillance Committee s Report

3 1 Balance Sheet For the year ended December 31, 2016 In comparative format with the year ended December 31, 2015 (Amounts stated in thousands of pesos) ASSETS A. CASH (Exhibit L) Financial institutions and correspondent banks - B.C.R.A. 224, ,321 - Others Argentina 14,491 17,764 - From abroad 260, , , ,913 B. PUBLIC AND PRIVATE SECTOR SECURITIES (Exhibits A and L) - Holdings of trading securities 673, ,368 - Holdings carried at cost plus yield 35,130 27,657 - Bills issued by the Argentine Central Bank 1,435, ,567 2,144,500 1,364,592 C. LOANS (Note 3.1 and Exhibit L) - Non-financial public sector 294, ,096 - Financial sector Other financing to domestic financial institutions 1,994, ,795 Accrued interest, adjustments and quotation differences receivable 46,332 26,949 - Non-financial private sector and residents abroad Notes 2,882,356 1,946,128 Mortgage 1,985,434 1,446,850 Pledge 193,471 16,007 Interest, adjustments and accrued exchange differences receivable 37,559 33,850 - Allowances (Exhibit J) (123,616) (111,365) 7,311,195 3,735,310 D. OTHER BANKING RECEIVABLES (Exhibit L) - Argentine Central Bank (Notes 27 and 28) 29,995 44,695 - Receivables from unsettled spot and forward purchases (Note 28) 865, ,595 - Securities to be received for spot and forward purchases to be settled Other items not included under debtor classification standards (Notes 3.2 and 8) 392, Other item included under debtor classification standards (Note 3.2) Negotiable Obligations Accrued interest and adjustments receivable included under debtor classification standards Allowances (Exhibit J) (94,868) (77,995) 1,193, ,152 F. EQUITY INTERESTS IN OTHER COMPANIES - Others (Note 3.3 and Exhibits E and L) 753, ,974 - Allowances (Exhibit J) (4,225) (3,375) 749, ,599 G. MISCELLANEOUS RECEIVABLES (Exhibit L) - Receivables for assets sold 2,037 3,148 - Others (Note 3.4) 163, ,934 - Accrued interest and adjustments receivable for assets sold Allowances (Note 4.2 and Exhibit J) - (81,570) 165, ,531 H. PROPERTY AND EQUIPMENT (Exhibit F) 6,202 5,554 I. SUNDRY ASSETS (Exhibit F) 319 4,890 J. INTANGIBLE ASSETS (Exhibit G) 6,703 1,184 - Organization and development expenses 6,703 1,184 K. ITEMS PENDING APPROPRIATION (Exhibit L) TOTAL ASSETS 12,076,287 6,879,985

4 2 Balance Sheet (Contd.) LIABILITIES L. DEPOSITS (Note 24, Exhibits H, I and L) - Non-financial public sector 423, ,265 - Non-financial public sector and residents abroad Term Deposits 689, ,379 Interest, adjustments and accrued exchange differences payable 2,707 4,644 1,115,738 1,314,288 M. OTHER BANKING LIABILITIES (Exhibit L) - Argentine Central Bank -Others (Exhibit I) 6,263 15,081 - Banks and international organizations (Exhibit I) 2,065,055 1,327,439 -Unsubordinated negotiable obligations (Note 30 and Exhibit I) 2,155, Securities to be received under spot and forward purchases to be settled 865, ,291 - Financing from local financial institutions - Other financing from local financial institutions (Exhibit I) 293, Others (Note 3.5 and Exhibit I) 1,309, ,171 - Interest, adjustments and accrued exchange differences payable (Exhibit I) 55, ,401 6,749,938 1,803,383 N. MISCELLANEOUS LIABILITIES - Others (Note 3.6 and Exhibit L) 229, , , ,549 O. PROVISIONS (Note and Exhibit J) 81,382 29,366 TOTAL LIABILITIES 8,176,292 3,360,586 STOCKHOLDERS' EQUITY (see related statement) 3,899,995 3,519,399 Total Liabilities and Stockholders' Equity 12,076,287 6,879,985

5 3 Income Statement For the year ended December 31, 2016 Compared to the year ended December 31, 2015 (Amounts stated in thousands of pesos) A. FINANCIAL INCOME - Interest on cash Interest on loans to the financial sector 161,240 52,024 - Interest on notes 359, ,601 - Interest on mortgage loans 288, ,604 - Interest on pledge loans 5,501 1,633 - Interest on other loans Net result of government and corporate securities 153, ,444 - Adjustment by the CER 8,871 4,940 - Gold and foreign exchange quotation difference 163, ,322 - Others (Note 3.7) 73,232 40,250 1,213,438 1,150,107 B. FINANCIAL EXPENSES - Interest on term deposits (186,081) (138,390) - Interest on interbank loans received (Call money loans) (1,782) - - Interest on other financing from financial institutions (65,713) (40,758) - Other interest (1,797) (2,178) - Net result from public and private sector securities (12,955) (13,764) - Adjustment by the CER (28,519) (13,082) - From other banking liabilities (3,776) (6,894) - Others (Note 3.8) (81,587) (38,952) (382,210) (254,018) GROSS BANKING MARGIN 831, ,089 C. ALLOWANCE FOR LOAN LOSSES (146,423) (121,982) D. INCOME FROM SERVICES - Linked with lending operations 11,337 2,084 - Other fees 7,276 8,501 - Others (Note 3.9) 20,884 27,672 39,497 38,257 E. OPERATING EXPENSES - Commissions (4,958) (6,215) (4,958) (6,215) G. ADMINISTRATIVE EXPENSES - Personnel expenses (231,701) (160,920) - Directors and Syndics fees (17,073) (7,194) - Other fees (10,621) (6,319) - Advertising and publicity (2,439) (291) - Taxes (17,705) (10,623) - Depreciation of bank premises and equipment (Exhibit F) (1,254) (1,060) - Amortization of organization and development expenses (Exhibit G) (1,464) (708) - Other operating expenses (35,862) (24,936) - Others (18,755) (8,913) (336,874) (220,964) NET RESULT FROM BANKING ACTIVITIES 382, ,185 Carried forward 382, ,185

6 4 Income Statement (Contd.) Brought forward 382, ,185 I. OTHER INCOME - Result of long-term investments 30,479 16,842 - Penalty interest 3,927 2,717 - Release of allowance on loan recoveries 76,040 53,352 - Other (Note 3.10) 125,211 1, ,657 74,054 J. OTHER EXPENSES - Charges for uncollectibility of sundry credits and other provisions (71,371) (1,862) - Others (101) (506) - Penalty interest - BCRA (17) (2) (71,489) (2,370) NET INCOME BEFORE INCOME TAX 546, ,869 L. INCOME TAX (166,042) (174,473) NET INCOME FOR THE PERIOD 380, ,396

7 5 Memorandum Accounts For the year ended December 31, 2016 In comparative format with the year ended December 31, 2015 (Amounts stated in thousands of pesos) MEMORANDUM ACCOUNTS DEBTOR ACCOUNTS Contingent (Exhibit L) - Credits obtained (unused balances) 2,054,124 1,193,456 - Guarantees received 4,671,474 3,063,759 - Other not included in the Standard of Debtors classification (Note 3.11) 12,993,755 10,661,303 - Contingent debtor contra-accounts 165, ,954 15,077,472 15,077,472 Derivatives (Exhibit O) - Put options - 12,709-12,709 Control (Exhibit L) - Uncollectible debtors 188,205 92,488 - Others (Note 3.12) 1,211,229 1,259,950 - Control debtor contra-accounts ,399,652 1,352,630 From fiduciary activity (Exhibit L) - Trust funds (Note 7) 30,897,459 23,434,788 30,897,459 23,434,788 CREDITOR ACCOUNTS Contingent (Exhibit L) - Guarantees provided to the BCRA (29,995) (44,965) - Other guarantees provided not included under debtor classification standards (135,823) (113,989) - Contingent creditor contra-accounts (19,719,353) (14,918,518) (19,885,171) (15,077,472) Derivatives (Exhibit O) - Derivative creditor contra-accounts - (12,709) - (12,709) Control (Exhibit L) - Others (218) (192) - Contingent creditor contra-accounts (1,399,434) (1,352,438) (1,399,652) (1,352,630) From fiduciary activity (Exhibit L) (30,897,459) (23,434,788) - Trust funds (30,897,459) (23,434,788)

8 6 Statement of Changes in Stockholders Equity For the year ended December 31, 2016 Compared to the year ended December 31, 2015 (Amounts stated in thousands of pesos) Non-capitalized contributions Reserves on profits Movements Capital stock Irrevocable contributions for future capital increases Adjustments to stockholders' equity Legal Others Unrealized valuation differences Unappropriated retained earnings Total at Total at Balances at the beginning of year 2,726, , ,396 3,519,399 3,037, Sub-total 2,726, , ,396 3,519,399 3,037, Distribution of retained earnings approved by the Meeting of Shareholders held on May 23, 2014 (Note 15) - Legal Reserve , (96,479) Stock dividends 385, (385,917) Other 5 (6) Net Income for the year Profit , , , Balances at December 31, ,111, , ,597 3,899,995 3,519,399

9 7 Statement of Cash Flow and Cash Equivalents For the year ended December 31, 2016 Compared to the year ended December 31, 2015 (Amounts stated in thousands of pesos) Changes in cash and cash equivalents Cash at the beginning of year 378, ,007 Cash modified at beginning of year 378, ,007 Cash at the end of the period (Note 15) 499, ,913 Net increase / (decrease) in cash (in constant currency) 120,986 88,906 Causes of changes (in constant currency) Operating activities Net collections / (payments) for: - Public and Private Sector Securities (535,929) 73,631 - Loans - Financial sector (1,551,994) 30,347 - Non-financial public sector (192,631) (25,237) - Non-financial private sector and residents abroad (1,105,153) (481,276) - Other banking receivables (608,441) (26,938) - Deposits - Non-financial public sector (237,729) 232,245 - Non-financial private sector and residents abroad (133,193) 142,535 - Other banking liabilities - Others (except for the obligations included in Financing Activities) 1,812,087 65,009 Collections of income from services 39,436 38,257 Payments of expenses for services (4,958) (6,215) Administrative expenses paid (417,208) (258,857) Net collections for penalty interest 4,049 2,842 Other collections related to sundry income and losses 230,699 69,084 Net collections / (payments) for other operating activities - Increase in sundry debtors ,296 - Payment of withholdings from third parties 16,473 4,847 Payment of income tax / tax on minimum notional income (188,091) (156,182) Net cash flow used in operating activities (2,872,049) (280,612) Investment activities Net payments for fixed assets (1,897) (1,094) Net collections for sundry assets (1,407) (1,010) Other collections / (payments) for investment activities - Contribution of government securities towards the BCRA 14,982 (5,566) - Revaluation of equity interest in other companies (97,331) (172,119) - Participation in financial trust in pesos 86, ,715 - Participation in financial trust in dollars 21,341 (3,596) Net cash flow used in investment activities 21,743 (42,670) Financing activities - Net collections / ( Payments) for: - Argentine Central Bank Others (12,594) (16,111) - International Banks and Agencies 606, ,322 - Financing from local financial institutions 354, Unsubordinated negotiable obligations 2,011,445 26,601 Net cash flow provided by financing activities 2,959, ,812 Financial and holding results of cash and cash equivalents (Including interest and monetary result ) 11,623 22,376 Net (decrease) / increase in cash 120,986 88,906

10 8 For the year ended December 31, 2016 In comparative format with the year ended December 31, 2015 NOTE 1 - ACCOUNTING STANDARDS 1.1. Currency The amounts disclosed in the financial statements arise from accounting records carried in all formal respects in conformity with legal requirements and the regulations of the Argentine Central Bank (BCRA). Amounts are stated in thousands of pesos ($) as required by current regulations Principal valuation and disclosure criteria Comparative information Following BCRA Communication A 4265, the Balance Sheet, the Statement of Income, the Statement of Changes in Shareholders Equity, the Statement of Cash Flows and Equivalents, and the Exhibits, except for Exhibits D, I, K and O that so state, include information in comparative format with data at December 31, For comparative purposes, reclassifications were made for consistent disclosure Valuation of assets and liabilities in foreign currency Assets and liabilities in foreign currency have been valued at the exchange rate of reference established by the Argentine Central Bank (Communiqué A 3500) on the last business day of the fiscal year Method applied to accrue interest and adjustments Interest payable on loans and interest payable on deposits is accrued pursuant to current regulations. The Reference Stabilization Coefficient (CER) has been accrued on the corresponding items as established by current regulations.

11 9 NOTE 1 - ACCOUNTING STANDARDS (Contd.) 1.2. Principal valuation and disclosure criteria (Contd.) Valuation of government and corporate securities Argentine Central Bank bills for repo transactions have been valued at cost at December 31, 2016 and 2015, increased by accrued income not yet collected. By application of BCRA rules at December 31, 2016 and 2015, government securities (including securities used in repo transactions) with volatility reported for each period by the governing body are recorded at market value, and securities with no reported volatility are valued at present value, for they are reported in the present value table of the BCRA, except for GDP-linked marketable securities in US dollars falling due in 2035 (Argentine Law) at December 31, 2016, and GDP-linked marketable securities in US dollars falling due in 2035 (New York Law) at December 31, 2015, which, failing to comply with those requirements, have been valued at market value, and BCRA Bills in US dollars at December 31, 2015, which for the same reason have been valued at cost plus yield (See detail in Exhibit A). At December 31, 2016 and 2015, Peruvian Government Bonds (Bonos Perú) held in own portfolio were valued at cost value exponentially increased at their internal rate of return Valuation of loans Loans originally granted in foreign currency (existing at February 3, 2002 and converted into pesos) were adjusted applying C.E.R., and they include the interest accrued and pending collection, net of the corresponding provisions for uncollectibility risk, if applicable. Credit assistance to customers for exports and imports pre-financing and financing, increased by accrued interest pending collection at the end of the year, net of allowances for loan losses, where applicable, were converted as indicated in Note The remaining loans have been valued at their original principal amount, net of settlements plus accrued interest pending collection at the end of the year, net of the respective allowances for loan losses, where applicable. The Entity suspends accrual of interest when there are doubts as to total or partial collection. Interest income is subsequently recognized to the extent interest is collected and as long as there is certainty as to total recovery of the loan.

12 10 NOTE 1 - ACCOUNTING STANDARDS (Contd.) 1.2. Principal valuation and disclosure criteria (Contd.) Valuation of loans (Contd.) On May 24, 2006, the Board of Directors of BICE decided to apply the treatment of consumer loan portfolio to commercial loans, up to the limit set by BCRA exclusively for purposes of classification of debtors in conformity with BCRA regulations, indicating that all loans granted by BICE are of a commercial nature Valuation of equity interests in other companies Equity interests in other companies have been valued at cost since they do not exceed the Equity Value calculated on the stockholders equity of the latest balance sheet available of the issuing company, except for the contributions to the risk funds detailed in Notes 6.2 and 6.4, which have been stated at the recoverable value reported by the issuing companies at year end Valuation of property and equipment and sundry assets Property and equipment have been valued at their cost, less accumulated depreciation. Depreciation is calculated on the basis of useful lives in months, using the straight-line method, Property and equipment accounting value does not exceed recoverable value. Sundry assets have been valued at their cost of addition to assets Valuation of intangible assets Intangible assets have been valued at their cost, less corresponding accumulated depreciation, Depreciation is carried out over five years. Leasehold improvements were valued at their cost, net of accumulated depreciation. Depreciation is computed over the term of the lease contract Valuation of options The put option of securities has been valued at their exercise price.

13 11 NOTE 1 - ACCOUNTING STANDARDS (Contd.) 1.2. Principal valuation and disclosure criteria (Contd.) Valuation of Term Deposits Fixed term deposits are valued at the original capital increased by the unpaid accrued interest at the end of the year Income tax Income tax expensed is that estimated to be payable in accordance with current tax legislation Turnover tax Turnover tax expensed is that estimated to be paid in accordance with applicable laws. (See Note 5) Dismissal indemnities Dismissal indemnities are expensed when paid Provision for other contingencies Includes the estimated amounts to cover contingencies of probable occurrence which, if occur, would generate a loss for the bank. The balance of provisions for other contingencies at December 31, 2016 and 2015 is $81,382 and $29,366, respectively, and they are understood as set up by BICE to cover unforeseen contingencies in another account, both tax and social security contingencies, among others, based on information made available by the Bank Management at the date of issue of these financial statements Differences between Argentine Central Bank regulations and professional accounting standards applicable in the Autonomous City of Buenos Aires. These financial statements have been prepared in accordance with the accounting standards established by the BCRA and the Professional Accounting Standards in force in the Autonomous City of Buenos Aires (CABA) issued by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE) through CD Resolutions 93/2005, 42/2006, 34/2008, 85/2008, 25/2009, 52/2009, 21/2011, 22/2011, 57/2011, 127/2011 and 56/2013,

14 12 NOTE 1 - ACCOUNTING STANDARDS (Contd.) 1.2. Principal valuation and disclosure criteria (Contd.) Differences between Argentine Central Bank regulations and professional accounting standards applicable in the Autonomous City of Buenos Aires. (Contd.) adopted by the Professional Council in Economic Sciences of the Autonomous City of Buenos Aires (CPCECABA). Below is a detail of the main differences between the Argentine Central Bank regulations and professional accounting standards in force in the Autonomous City of Buenos Aires: a. Valuation criteria a.1. Restatement to constant currency These financial statements have been restated as mentioned in Note 2. This criterion, mentioned in the second paragraph of that Note, is not in accordance with accounting standards, under which since the 1 st of October 2003, application of the restatement to constant monetary units established by Technical Pronouncement No. 6 Financial statements in constant currency (restated text of CD Resolution 087/2003) must be discontinued. However, this deviation has produced no material effect on the financial statements. a.2. Accounting for income tax according to the deferred tax method The Bank determines income tax at the statutory rate applicable to the estimated taxable income, without considering the effect of any timing differences between the accounting and taxable results. Under professional accounting standards in force in the Autonomous City of Buenos Aires, income tax must be recognized according to the deferred tax method and, therefore, deferred tax assets or liabilities calculated on those timing differences must be recognized. In addition, unused tax loss carry-forwards or fiscal credits subject to deduction from taxable income in future fiscal years should be recognized as deferred assets, provided that taxable income is likely to be generated. Application of this criterion, based on projections prepared by BICE, would determine a deferred tax asset of $33,344 thousand at December 31, 2016.

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16 14 NOTE 1 - ACCOUNTING STANDARDS (Contd.) 1.2. Principal valuation and disclosure criteria (Contd.) Differences between Argentine Central Bank regulations and professional accounting standards applicable in the Autonomous City of Buenos Aires (Contd.) a.3 Valuation of government securities Peruvian Government Bonds held by the Bank have been valued at cost exponentially increased at their internal rate of return. These valuation criteria differ from professional accounting standards which require that government bonds be valued at their market value. Application of this criterion would determine a lower balance of $ 11,071 thousand at December 31, a.4 Disclosure standards BICE does not disclose its assets and liabilities classified into current and non-current, considering the date on which assets are expected to be converted into cash or cash equivalents and liabilities are expected to become due payable, as required by current professional accounting standards. NOTE 2 - RESTATEMENT OF FINANCIAL STATEMENTS Under Argentine professional accounting standards, financial statements are to be prepared recognizing the changes in the purchasing power of the currency pursuant to the provisions of Technical Pronouncements Nos. 6 and 17, as amended by Technical Pronouncement No. 39 and interpretation No.8, issued by the Argentine Federation of Professional Councils in Economic Sciences (FACPCE). These standards establish that the adjustment for inflation is to be applied in an inflationary context, characterized, among other factors, by the existence of a cumulative rate of inflation over three years that is approaching, or exceeds, 100%, considering for such purpose the domestic wholesale price index (IPIM) published by the National Institute of Statistics and Census (INDEC). When that rate is reached, the respective financial statements shall be restated as from the moment the adjustment has been suspended.

17 15 NOTE 2 - RESTATEMENT OF FINANCIAL STATEMENTS (Contd.) The Bank s financial statements recognize the variation in the purchasing power of the currency up to February 28, 2003, with the adjustment for inflation being discontinued as from that date, as required by Executive Branch Decree No. 664/03, Section 268 of General Resolution No. 7/2005 of the Superintendency of Commercial Companies, BCRA Communication A 3921 and General Resolution No. 441/03 of the National Securities Commission. MD Resolution No. 41/03 of the Professional Council in Economic Sciences established discontinuation of the recognition of the variations in the purchasing power of the currency as from October 1, NOTE 3 - BREAKDOWN OF ITEMS To provide further information on these financial statements the following accounts are shown in greater detail (all balances are stated in thousands of pesos): ASSETS LOANS Non-financial public sector Regime for investment project financing 128,027 3,966 Financial leasing agreements financing regime 151,706 79,358 Investment Financing Regime - SMEs and Cooperatives 14,993 18, , ,096 Financial sector Other financing granted to domestic financial institutions Regime for investment project financing 1,779, ,329 Financial leasing project financing regime 215, ,466 1,994, ,795 Accrued interest, adjustments and exchange differences receivable Regime for investment project financing 43,532 24,865 Financial leasing project financing regime 2,800 2,084 46,332 26,949 Non-financial private sector and residents abroad Notes Regime for investment project financing 120,434 49,769 Pre-export financing, export financing and co-financing program 942, , OC/AR IDB line financing regime San Juan 10,616 5,481 Investment Financing Program Combined rate 720 5,869 Investment Financing Program Tourism and Hotel trade 632 1,054

18 16 NOTE 3 - BREAKDOWN OF ITEMS (Contd.) FONTAR Line Program 3,498 5,256 Investment Financing Program Renewable Energy 289, ,300 SMEs and Cooperatives Line Financing 248, ,716 Joint working capital financing for SMEs and Cooperatives 3,078 8,146 Financing of investment co-financing 6,212 66,293 Financing of Advances on Investments to Public Sector Energy and Technological companies 246, ,121 Investment Financing Program Combined subsidized rate Neuquén 2,008 2,881 SEPYME 202/12 Financing 404, ,670 SEPYME 202/12 Working capital financing 5,795 4,165 Financing at subsidized rate - Mendoza II 1,503 - Financing at subsidized rate - Mendoza PFEX - 6,763 Agreement with INCAA 3,901 5,140 Financing of working capital related to investments 8,830 4,103 Leasing Financing Private Sector 42,383 15,595 Province of Mendoza FIEX loan at subsidized rate MECON Financing 4,623 5,723 MECON working capital financing PROCER Financing 2,900 - SMEs Line of Credit - SEPYME Agreement 303,706 - SMEs Line of Credit SME Agreement 86,357 - PCP S. Financiero Financing under SEPYME Agreement 88,714 - Financing Program PBP 15,000 - Refinancing 39,922-2,882,356 1,946,128 Mortgage loans Regime for investment project financing ,287 FONTAR line program for technological modernization 8,275 15, OC/AR IDB line financing regime San Juan IDB line financing regime Mendoza Investment Financing Program at subsidize rate Province of Mendoza Investment Financing Program Combined rate 52, ,716 Investment Financing Program Tourism and Hotel trade 18,335 24,066 Investment Financing Program SMEs and Cooperatives 723, ,306 Investment Financing Program Capital assets - 64 Bicentenary Financing Program 6,100 14,916 SEPYME 202/12 Financing Program 215, ,031 SEPYME 202/12 H Working capital financing 1,418 3,593 Joint working capital financing for SMEs and Cooperatives 5, Program to finance working capital related to SMEs and Coop. 7,213 5,064

19 17 NOTE 3 - BREAKDOWN OF ITEMS (Contd.) Mortgage loans (Contd.) Province of Mendoza III financing at subsidized rate 10,506 11,500 SMEs Line of Credit - SEPYME Agreement 303,706 - SMEs Line of Credit SME Agreement 15,679 - SEPYME PCP Agreement 7,000-1,985,454 1,446,850 Pledge loans Regime for investment project financing 165,514 6,799 Investment Financing Program Combined rate - 1,100 SMEs and Cooperatives Line Financing 4,447 4,288 Entre Ríos Environmental Improvement Program Province of Mendoza loan at subsidized rate 3,000 3,500 SMEs Line of Credit - SEPYME Agreement 1,476 SMEs Line of Credit SME Agreement 9,834 SEPYME PCP Agreement 9, ,471 16,007 Interest, Adjustments and accrued exchange differences receivable 37,559 33,850 Allowances (123,616) (111,365) Total LOANS 7,311,195 3,735, OTHER BANKING RECEIVABLES Other not included under debtor classification standards Financial Trusts debt instruments 392, , , ,907 Others included under debtor classification standards Unpaid past due VAT installments Recoverable turnover tax past due and unpaid installments 5 7 Sundry EQUITY INTERESTS IN OTHER COMPANIES Others Equity interests in other companies C.A.F. 505, ,860 Equity interests in other companies M.A.E Equity interests in other companies Cuyo Aval S.G.R Equity interests in other companies Garantizar S.G.R. 1 1 Contribution to Garantizar fund risk 234, ,795 Contribution to Cuyo Aval risk fund 13,016 12, , ,974

20 18 NOTE 3 - BREAKDOWN OF ITEMS (Contd.) 3.4. MISCELLANEOUS RECEIVABLES Others Advances on Directors fees 12,636 5,308 Advances to personnel Tax advances 128, ,262 Prepayments 14,384 2,288 Rental guarantee 1,308 1,299 Sundry debtors Receivables from the National Treasury Secretariat (*) - 81,570 Tax and rates credit balance 34 - Sundry debtors Others 5,520 7, , ,934 (*) Credits fully covered by an allowance. (See Note 4.2) LIABILITIES 3.5. OTHER BANKING LIABILITIES Others Other withholdings and collections 18,768 5,530 Sundry subject to minimum cash requirements 1,241, ,365 Sundry not subject to minimum cash requirements Collections and other operations on behalf of third parties 34,993 3,047 Others OC/AR IDB Loan 13,757 6,724 Correspondent Bank ,309, , MISCELLANEOUS LIABILITIES Others Payroll and payroll taxes payable 4,194 11,275 Withholdings on salaries 3,423 2,478 Taxes payable 193, ,571 Sundry creditors 27,831 18, , ,549 INCOME STATEMENT 3.7. FINANCIAL INCOME Others Premiums for assets swaps to the financial sector 73,232 40,250 73,232 40, FINANCIAL EXPENSES Others Turnover tax 81,587 38,952 81,587 38,952

21 19 NOTE 3 - BREAKDOWN OF ITEMS (Contd.) INCOME FROM SERVICES Others Fees for trust management 20,844 27,672 20,844 27, OTHER INCOME Others Other adjustments and interest for sundry receivables Others 124, ,211 1,143 MEMORANDUM ACCOUNTS DEBIT ACCOUNTS Contingents Others not included under debtor classification standards Country-to-country Debt 10,661,303 10,661,303 12,993,755 10,661, DEBIT ACCOUNTS Control Others Imports collections 25, ,638 Letters of credit 1,185,765 1,094,312 1,211,229 1,259,950 NOTE 4 GLOBAL MULTISECTOR CREDIT PROGRAM EXIMBANK 4.1. DEBT WITH THE NATIONAL TREASURY SECRETARIAT At December 31, 2015, in accordance with section 1 of Decree No. 471/2002, the subsidiary debt with the National Treasury generated by foreign credit lines granted to the Government by EXIMBANK Japan (currently Japan Bank for International Cooperation, JBIC ) was considered as an obligation of the public sector and therefore it was converted at the rate of $ 1,40 per US$ 1 and adjusted by the CER. The debt with the National Treasury Secretariat, subsidiary to the line granted to the National Government by the IDB (Inter-American Development Bank), was recorded in US dollars PAYMENTS FOR ACCOUNT AND ON BEHALF OF THE NATIONAL GOVERNMENT Payments to the Japan Bank for International Cooperation ( JBIC formerly Eximbank) on account and on behalf of the National Government is related to the credit line mentioned in Note 4.1, and was made according to instructions received from the Ministry of Economy, generating a receivable in foreign currency that was applied to the payment of principal and interest on the Bank s subsidiary debt owed to the National Government. (See Note 4.1)

22 20 NOTE 4 GLOBAL MULTISECTOR CREDIT PROGRAM EXIMBANK (Contd.) 4.2. PAYMENTS FOR ACCOUNT AND ON BEHALF OF THE NATIONAL GOVERNMENT (Contd.) At December 31, 2015, the surplus resulting from application upon maturity during the year and calculated as indicated in note 4.1, had been shown under Sundry receivables. The pertinent claim for that receivable was made and it was decided, following a prudent criterion, to fully cover it by a provision. The liabilities with the National Government corresponding to that loan recorded at December 31, 2015 includes: a) the balance of the spread between interest accrued by BICE in favor of the National Treasury and that paid for and on its behalf to Eximbank; b) the balance recorded by BICE in favor of the National Treasury for differences between amortization of principal on the debt, made in yens, in favor of the former Eximbank for and on behalf of the National Government, and principal amortization, in favor of the National Treasury, in US dollars; c) the accrued CER payable to the National Treasury on unpaid balances corresponding to interest and principal extends from February 3, 2002 (pesification) to the current date; d) the balance corresponding to the last principal and interest payment, which fell due on September 21, 2005 was not paid to the Japan Bank for International Cooperation (formerly Eximbank). On June 28, 2016, BICE received from the Public Debt Administration Bureau of the National Public Credit Office with the Ministry of Treasury and Public Finance DADP Note No. 1092/2016, requiring BICE to pay the equivalent in $ of JPY 10,244 thousand ($1,481 thousand at June 30, 2016) as refund of the amount actually paid (3 principal installments, interest and compensatory interest) by the Ministry of Treasury and Public Finance on behalf of BICE and for its account, between July 28, 2014 and May 24, 2016, on the grounds of unpaid debt under the Loan entered into on November 10, 1994 with the current Japan Bank for International Cooperation (JBIC) for JPY 6,553,500 thousand, alluded to in that Note, within the framework of the Joint Declaration on Arrears Clearance with the Argentine Republic signed on May 29, 2014 with the representatives of the Paris Club creditor countries for the refinancing of Argentina s debt in arrears at April 30, DADP Note No. 1092/2016 reports a total debt balance of JPY 29,563 thousand restructured on April 30, 2014, payable by BICE. BICE deposited the amount of $1,510 thousand, equivalent to JPY 10,244 thousand, on August 18, 2016, as required in the above-mentioned Note, and requested that the Public Debt Administration Bureau of the National Public Credit Office with the Ministry of Treasury and Public Finance communicates to BICE the new restructured total debt balance, deducting the payment made. On December 26, 2016, Note No APN-DADP#MH was received from the

23 21 Public Debt Administration Office confirming BICE that the total debt, including principal and NOTE 4 GLOBAL MULTISECTOR CREDIT PROGRAM EXIMBANK (Contd.) 4.2. PAYMENTS FOR ACCOUNT AND ON BEHALF OF THE NATIONAL GOVERNMENT (Contd.) interest at that date, amounted to JPY 21,689 thousand, and that once said amount has been paid off, all BICE obligations and all pending proceedings regarding this issue shall have been settled. The debt mentioned above was fully repaid on December 27, 2016 and therefore the remaining receivables and liabilities associated with the loan were derecognized from accounts. The results of this derecognition from accounts were included in Sundry profits - Others (See Note 3.10). NOTE 5 TURNOVER TAX DIFFERENCE In November 2007, the Revenue Bureau (DGR) made a debt assessment against BICE for differences in the calculation of turnover tax for the fiscal years 2002 and 2003, specifically for CER index and result of asymmetrical compensation, in the summary proceedings filed by the DGR through RAG No. 3795/DGR/2007. In December 2008, BICE was notified of RAG 4643/DGR/2008 whereby the rebuttal made had been rejected. This decision led to BICE filing a motion for reconsideration on December 30, 2008, which was also rejected by RAG No. 264/DGR/2009 dated January 30, Against this decision, BICE filed on February 25, 2009 a special appeal which was dismissed under Resolution No. 310-AGIP-2009 notified to BICE on May 22, 2009; under this Resolution, payment of the sum of $11,239 thousand for principal due on turnover tax and $7,305 thousand for fine for tax omission was also claimed. Furthermore, BICE was notified that said payment was to be made within a term of 15 business days in arrears, upon expiration of which the penalties prescribed by law would apply. Thus, the administrative stage had been completed and the following lawsuits were initiated: - BICE vs. GCBA-AGIP DGR RES. 310/2009, PROCEEDING FOR COGNIZANCE AND DETERMINATION OF THE CASE (File No ) On June 17, 2009, BICE filed a complaint against the Buenos Aires City Government (Government Administration of Public Revenue), challenging the tax debt assessment procedure for the periods, items, and amounts described above. On September 18, 2013, the Federal Administrative Litigation Court of First Instance No. 5, Court Clerk's Office No. 9, partially sustained the complaint, admitting BICE s petition to

24 22 exclude from the turnover tax base the revenues from the bonds for asymmetrical pesification, NOTE 5 TURNOVER TAX DIFFERENCE (Contd) and rejecting the petition to exclude from the tax base the following items: (i) local exchange differences for obligations denominated in foreign currency; (ii) exchange difference generated by loans from abroad; (iii) interest paid on loans from abroad. It also rejected the petition to leave without effect the economic sanction for tax omission (fine) of 65%, ordering to reduce that fine by 5%, and awarded 80% of costs of suit against BICE, and 20%, against GCBA. On February 28, 2014, BICE complained of the first instance court judgment, setting forth the grounds for its appeal with an appellate court. On June 2, 2016, Panel I of the Federal Administrative Litigation Court rejected BICE's appeal and kept the awarded costs of suit at 80% and 20%. On June 23, 2016, BICE filed an extraordinary federal appeal against the Court ruling, which was rejected by Panel I of Federal Administrative Litigation Court on October 11, 2016, with the award of court costs. BICE filed with the Argentine Supreme Court a motion for admission of the denied appeal on October 24, On November 29, 2016, BICE submitted a writing informing that it had adhered to the tax moratorium established by Law 5616 and, as a result, it abandoned the action, the right and the motion for admission of the denied appeal. The Argentine Supreme Court served notice of said presentation upon GCBA on December 7, GCBA vs. BICE on TAX ENFORCEMENT (File No /2009, currently No /2014) On July 3, 2009, the GCBA filed tax enforcement proceedings claiming payment of the sum of $11,239 thousand, plus interest and costs of suit. On June 30, 2015, it was resolved to stay the tax foreclosure proceeding until a final judgment is rendered in the records of the case (File No /2009). On December 21, 2016, BICE submitted a writing informing that it had adhered to the moratorium established by Law 5616; for this reason, on December 12, 2016 it paid the amount of $16,717 thousand in cash, fully repaying the debt generated by the tax enforcement, and such payment was applied to the provision set up in prior years. On December 29, 2016, BICE submitted a writing informing that on that date and under the terms set forth by Sections 12 and 13 of GCBA Decree 42/2002 and Section 6 of Resolution 469/AGIP/2016, it had paid the sum of $1,672 thousand, in respect of GCBA representatives fees.

25 23 NOTE 5 TURNOVER TAX DIFFERENCE (Contd) On October 27, 2016, the DGR of the GCBA Governmental Administration of Public Revenue requested from the Bank information on all the taxes administered by it, and in the case of turnover tax, it requested the working papers from December 2015 to September NOTE 6 DETAIL OF INTERESTS IN OTHER COMPANIES 6.1 BANCO DE DESARROLLO DE AMERICA LATINA - CAF BICE is a party to the Development Bank of Latin America (CAF), according to the agreement for the assignment of rights and obligations signed in 2003 with the Argentine Government, with an original contribution of U$S 24,990 thousand. At December 31, 2016 and 2015, total holding of BICE amounted to 3,762 Class B shares, for a value of US$ 5 thousand each. Such holding does not exceed the equity value. The valuation of this investment, converted to pesos according to the guidelines set out in Note 1.2.2, amounts to $505,621 and $414,680 at December 31, 2016 and 2015, respectively, and has been disclosed under Equity interests in other companies (See Exhibit E and Note 3.3). On September 4, 2013, BICE entered into a Credit Line Agreement with Corporación Andina de Fomento (CAF) for a maximum amount of US$ 50,000 thousand, under the revolving credit line methodology, to provide financing for up to five years, comprising two tranches: (i) US$ 30,000 thousand for financing for a term of up to ten years; and (ii) US$ 20,000 thousand for the issuance of guarantees. The credit line will be in effect during one year after signing the Agreement, with its term being extended through a side letter dated November 13, 2015, until October 31, 2016 and allowing the issuance of guarantees and sureties until July 31, 2016, under the terms of clause Twenty Six of the Agreement. On December 14, 2016, the credit line was modified through a side letter for a maximum amount of US$ 75,000 thousand with its term extended until July 31, 2017, under the terms of clause Twenty Six of the Agreement. At December 31, 2016 and 2015, the liability mentioned above is recorded under Other Banking Liabilities - Banks and international organizations for the total amount of US$ 75,239 thousand and US$ 21,628 thousand, respectively. 6.2 GARANTIZAR S.G.R. On July, 2004 BICE was admitted to Garantizar S.G.R. by the Board of Directors in its capacity as protecting partner, subscribing class B shares for a total of $ 1 thousand, which are shown

26 24 under Equity interests in Other Companies (See Exhibit E and Note 3.3), and contributing at December 31, 2016, $ 187,500 thousand to the risk fund of the above company. NOTE 6 DETAIL OF INTERESTS IN OTHER COMPANIES (Contd.) Garantizar SGR, under the terms of BCRA Communiqué A 2411, has been registered with the Reciprocal Guarantee Companies Register (Law No ) kept by the Superintendency of Financial and Exchange Institutions for such purpose. Contributions made plus the amount of contributions expired and renewed pending reimbursement, adjusted on the basis of the latest information received from the above company, make up a total of $ 234,586 and $ 215,795 thousand at December 31, 2016 and 2015, respectively (See Exhibit E and note 3.3). Furthermore, following a prudent criterion, BICE recorded a loan loss allowance on the above loan, based on a recoverability analysis provided by Garantizar S.G.R. on the Contingent Risk Funds past due to date. At December 31, 2016 and 2015, the allowance amounted to $ 4,225 and $ 3,375 thousand, respectively (See Exhibit J) 6.3 MERCADO ABIERTO ELECTRÓNICO S.A. At the meeting held on April 13, 2005 the Board of Directors of BICE decided to authorize the purchase of one (1) share of $ 1,2 thousand nominal value in the over-the-counter market (Mercado Abierto Electrónico S.A.) from Banco Nacional de Desarrollo (Equity in liquidation) for $ 26 thousand on April 13, 2005 shown, at December 31, 2016 and 2015, in Equity interests in Other Companies (See Exhibit E and note 3.3) 6.4 CUYO AVAL S.G.R. In December 2012 the Board of Directors resolved to approve BICE s becoming protecting partner of Cuyo Aval S.G.R., by subscribing 100 Class B shares for a total amount of $ 10 thousand, disclosed under Equity interests in other companies (See Exhibit E and note 3.3), and by making a contribution for $ 10,000 thousand towards that company s risk fund at December 31, 2016 and As called for by BCRA Communication A 2411, Cuyo Aval S.G.R. is registered with the Reciprocal Guarantee Companies Registration (Law No ), kept by the Superintendency of Financial and Exchange Institutions (SEFyC) for such purpose. Contributions made, adjusted based on the latest information received from the above company, total $ 13,016 and $ 12,282 thousand at December 31, 2016 and 2015, respectively. (See Exhibit E and note 3.3). NOTE 7 - TRUSTS IN WHICH BICE ACTS AS TRUSTEE

27 25 Balances at December 31, 2016 arise from accounting records of the trusts at that date. The obligations arising from the different trusts will be exclusively fulfilled with the trust assets. NOTE 7 - TRUSTS IN WHICH BICE ACTS AS TRUSTEE (Contd.) The responsibility of BICE as trustee is limited to compliance with the provisions of Law No of trusts and of the pertinent trust agreement, and it shall not be liable with its own equity unless in the event of negligence or fraud in the fulfillment of its obligations which should be determined as such by a firm judgment issued by a competent court. BICE acts as trustee and in no case shall it respond with its assets, as provided for by Trusts Law No and its amendments Trusts that do not contractually require filing of audited financial statements TRUST PURPOSE FIDUCIARY AGENT AGREEMENT SIGNED ON TRUST ASSETS (Thousands of $) 12/31/ /31/ Guarantee and Assignment of Guarantee Trust Guarantee the payment of the price of the supply to be paid by CAMMESA to ENARSA Energía Argentina S.A. and CAMMESA 6/24/ , , Trusts that have been in liquidation process as of December 31, TRUST PURPOSE FIDUCIARY AGENT ET Río Coronda ET Western Rosario Interconnection Trust Managing funds to be appropriated to the construction stage of the COM Contract Transportadora Río Coronda S.A. AGREEMENT SIGNED ON TRUST ASSETS (Thousands of $) 12/31/ /31/ /10/2010-1, Conect-ar Chaco Trust Use of trust assets for payments required for the development of the project ARSAT and ECOM S.A. 09/06/ Conect-ar Santiago del Estero Trust Use of trust assets for payments required for the development of the project ARSAT and ENERSE SAPEM 05/07/ Conect-ar Formosa Trust Use of trust assets for payments required for the development of the project ARSAT and REFSA 06/01/

28 26 NOTE 7 - TRUSTS IN WHICH BICE ACTS AS TRUSTEE (Contd.) 7.3 Trusts whose Financial Statements for the year ended December 31, 2016 are in the process of being audited TRUST PURPOSE FIDUCIARY AGENT AGREEMENT SIGNED ON TRUST ASSETS (Thousands of $) 12/31/ /31/ Conect-ar Misiones Trust Use of trust assets for payments required for the development of the project ARSAT and Marandú Comunicaciones S.E. 03/21/ Pico Truncado - Río Turbio - Río Gallegos Interconnection Trust Calafate Interconnection Section (*) Managing funds to be appropriated to the construction stage of the COM Contract Concesionaria Líneas Eléctricas del Sur S.A. 7/19/ , ET Rincón Santa María - ET Resistencia Línea II Interconnection Trust (*) Use of trust assets for payments required for the development of the project Integración Eléctrica Sur Argentina S.A. 7/31/2014 4,009 4, kv Bahia Blanca - Mar del Plata Interconnection Trust kv connection to Villa Gesell and Supplementary works - Northern section Pico Truncado - Río Turbio - Río Gallegos - ET Esperanza Interconnection Trust (*) Enlargement of the 500/132 KW La Rioja Sur Transformer Station and complementary works Trust for the Administration of Transportation Works for Energy supply (*) Trust for the Management of Proyecto Extensión de Vida Central Nuclear Embalse Energy Sector Research Program Trust (*) Use of trust assets for payments required for the development of the project Managing funds to be appropriated to the construction stage of the COM Contract Use of trust assets for payments required for the development of the project Managing of funds to be appropriated to the payment of the full execution of the works added to the trust. Managing funds to be appropriated to the building and equipment of the Plant Ensure project completion, in particular with respect to technical research locations to be implemented and the respective guarantees, as well as compliance with payment Transportadora Mar del Plata S.A. Compañía Americana de Transmisión Eléctrica S.A. Transportel Patagónica S.A. Compañía Administradora del Mercado Mayorista Eléctrico S.A. (C.A.M.M.E.S.A.) 11/28/ ,163 35,417 7/19/ /07/ ,417 11,821 05/30/2008 1,367, ,105 N.A.S.A. 12/06/ , ,396 C.A.M.M.E.S.A. 11/1/ ,484 26,417

29 27 TRUST PURPOSE FIDUCIARY AGENT instructions AGREEMENT SIGNED ON TRUST ASSETS (Thousands of $) 12/31/ /31/2015 NOTE 7 - TRUSTS IN WHICH BICE ACTS AS TRUSTEE (Contd.) 7.3 Trusts whose Financial Statements for the year ended December 31, 2016 are in the process of being audited (Contd.) TRUST PURPOSE FIDUCIARY AGENT AGREEMENT SIGNED ON TRUST ASSETS (Thousands of $) 12/31/ /31/2015 (*) 10. Central Hidroeléctrica Punta Negra Trust (*) Managing funds to be appropriated to the building and equipment of the Plant Energía Provincial Sociedad del Estado 12/22/ , , Manuel Belgrano Power Plant Trust Timbúes Power Plant Trust Guillermo Brown Power Plant Trust #500 kv Bahia Blanca - Mar del Plata Interconnection Trust kv connection to Villa Gesell and Supplementary works - Southern Section Investment and Development Project Trust: 2003 National Industrial Telecommunications Complex PROICSA Trust component IV Managing the funds to be appropriated to payments for the construction, operation and maintenance of the power plant. Managing the funds to be appropriated to payments for the construction, operation and maintenance of the power plant. Managing the funds to be appropriated to payments for the construction, operation and maintenance of the power plant. Use of trust assets for payments required for the development of the project Granting of loans to individuals or legal persons engaged in activities inherent to projects aimed at rebuilding and developing the National Industrial Telecommunications Complex Managing funds to be appropriated to the construction stage of the COM Contract C.A.M.M.E.S.A. 04/04/2006 4,387,390 3,637,464 C.A.M.M.E.S.A. 04/04/2006 4,769,096 3,897,445 C.A.M.M.E.S.A. 04/11/2011 8,607,901 6,310,500 Integración Eléctrica Sur Argentina S.A. Subscribers of Participation Certificates Ministry of Agriculture, Livestock and Fishing 11/28/ ,567 8,700 9/22/2003 6,329 5,238 12/30/ ,917 33,644