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 March 2019
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 ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):
Yes ☐ No ☒
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):
Yes ☐ No ☒
Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes ☐ No ☒
If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A
BBVA Banco Francés S.A.
Item |
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1. | BBVA Francés reports consolidated fourth quarter earnings for fiscal year 2018. |
Buenos Aires, March 11, 2019BBVA Francés (NYSE: BFR.N; BCBA: FRA.BA;
LATIBEX: BFR.LA) reports consolidated fourth quarter results for the
January-December 2018 fiscal year.
The quarterly and annual consolidated financial statements are presented according to Communication A 6114 of the Central Bank of Argentina (BCRA) (financial statements under IFRS regulations) which was implemented on January 1, 2018. For comparative purposes, 2017 figures are also presented in accordance with IFRS.
Highlights of the year
| BBVA Francés recorded a net income of AR$ 9,613.7 million as of December 31, 2018, registering a 114.6% increase over the result of 2017, 28.5% average return on equity and 3.4% average return on assets. |
| Net operating income amounted to AR$ 37,618.2 million, increasing 56.5% compared to the previous year, while operating expenses amounted to AR$ 24,666.2 million, showing an increase of 34.5% during the period. |
| Revenues were supported by the growth in net interest income, which increased 79.9% during the year, mainly due to the rise in interest rates, by net fee income results, which grew at a similar pace and by the result generated by foreign exchange difference, which includes both, the impact of the devaluation and of foreign exchange transactions, all partially offset by the increase of provisions for loan losses. |
| Regarding expenses, personnel expenses grew 30.3% in the year, below inflation, mainly as a result of the staggered payment of the salary increase, while administrative expenses grew 39.1% in the same period. |
| Accumulated efficiency ratio was 49.6% at the end of 2018 registering a decrease compared to 60.6% during the last quarter of 2017. |
| In terms of activity, it is important to mention that the balances as of December 2017 included the Banks stake in Volkswagen Financial Services Compañia Financiera, presented on a consolidated basis. The private sector loan portfolio increased by 42.2% in the last twelve months, although including the aforementioned portfolio, growth would have reached 47.9%. The consolidated market share with related companies was 8.71% at the end of the year, earning 40 basis points (bp) compared to the December 2017 quota. |
| As of December 31, 2018, the asset quality ratio (Non-Performing Loans/Total loans) reached 1.92%, with a coverage of 119.19% (Total allowances/NPL). It is important to note that although asset quality indicators show some deterioration, they remain at the lowest levels in the financial system. |
| Total deposits rose 68.6% during the year, growing at a faster pace than loans, basically driven by the interest rate hike and the disbanding of the Lebac portfolio implemented during the year by the Central Bank of Argentina (BCRA). |
| On November 8, 2018, BBVA Francés issued its Series 25 UVAs bond for AR$ 784.3 million, with 24 months maturity and 9.5% fixed interest rate payable quarterly. |
| As of December 31, 2018, BBVA Francés had a total consolidated capital ratio of 14.3%, which represents an excess of AR$ 16,155.7 million or 74.1% over the minimum required. The Tier I ratio reached 13.5%. |
| Liquid assets accounted for 55.2% of the banks total deposits as of December 31, 2018. |
| The bank continued to increase its client base, reaching a total of 2.9 total clients. |
| On October 30, 2018, BBVA Francés recorded the deed to its headquarters offices, Torre BBVA, located at Av. Leandro N. Alem 815, Buenos Aires. As a consequence of such notarized recording, USD 4.8 million was paid. |
Condensed Income Statement (1) In thousands of pesos except income per share, income per ADS |
FY 2018 | FY 2017 | D% | |||||||||
Net interest income |
26,129,314 | 14,523,074 | 79.9 | % | ||||||||
Net fee income |
4,795,923 | 2,566,013 | 86.9 | % | ||||||||
Net income of financial instruments |
106,620 | 2,639,026 | -96.0 | % | ||||||||
Result from assets at amortised cost |
(121,400 | ) | 6,723 | n/a | ||||||||
Foreign exchange difference |
5,306,709 | 2,099,742 | 152.7 | % | ||||||||
Other operating income |
4,862,125 | 3,906,097 | 24.5 | % | ||||||||
Provision for loan losses |
(3,461,077 | ) | (1,704,000 | ) | 103.1 | % | ||||||
Net operating incomc |
37,618,214 | 24,036,675 | 56.5 | % | ||||||||
Personnel expenses |
(8,961,174 | ) | (6,875,018 | ) | 30.3 | % | ||||||
Administrative expenses |
(7,177,071 | ) | (5,160,421 | ) | 39.1 | % | ||||||
Depreciation and amortization of assets |
(876,371 | ) | (650,873 | ) | 34.6 | % | ||||||
Other operating expenses |
(7,651,564 | ) | (5,659,371 | ) | 35.2 | % | ||||||
Operating Expenses |
(24,666,180 | ) | (18,345,683 | ) | 34.5 | % | ||||||
Operating income |
12,952,034 | 5,690,992 | 127.6 | % | ||||||||
Income from associates and joint ventures |
780,554 | 433,939 | 79.9 | % | ||||||||
Net incomc before incomc tax |
13,732,588 | 6,124,931 | 124.2 | % | ||||||||
Income tax from continuing operations |
(4,027,412 | ) | (1,607,976 | ) | 150.5 | % | ||||||
Net income including non-controlling shareholders |
9,705,176 | 4,516,955 | 114.9 | % | ||||||||
Net income attributable to non-controlling shareholders |
91,489 | 37,161 | 146.2 | % | ||||||||
Net income |
9,613,687 | 4,479,793 | 114.6 | % | ||||||||
Other comprehensive income |
(21,058 | ) | (87,427 | ) | -75.9 | % | ||||||
Total net income |
9,592,629 | 4,392,366 | 118.4 | % | ||||||||
Earnings per share (2) |
15.69 | 7.86 | 99.6 | % | ||||||||
Earnings per ADS (3) |
47.08 | 23.58 | 99.6 | % |
(1) | Exchange Rate: $ 37.8083 = u$s 1 |
(2) | Assumes 612,659,638 ordinary shares. |
(3) | Each ADS represents three ordinary shares |
Other events
| On February 1, 2019 within the framework of the Divestment Commitment assumed by Prisma Medios de Pago S.A. and its shareholders to the antitrust regulatory authority (Comisión Nacional de Defensa de la Competencia), 2,344,064 common book-entry shares with a par value of $ 1 each and one vote per share, owned by the Bank in Prisma Medios de Pago S.A. were transfer to AI ZENITH (Netherlands) B.V. (company associated with Advent International Global Private Equity), equivalent to 51% of the Banks shareholding in said company. |
The estimated total price adjusted at the closing date is USD 78.3 million, of which the Bank received USD 46.5 million. Payment of the USD 31.8 million difference will be deferred over the next five years. 30% of said amount will be paid in AR pesos adjusted by the CER at 15% nominal annual rate and 70% will be paid in USD at a nominal annual rate of 10%.
- 2 -
| On February 28, 2019, BBVA Francés issued its Series 26 bond for AR$ 529.4 million, with 9 month maturity and a fixed 43% interest rate payable at maturity, and its Series 27 bond for AR$ 1,090 million, with 18 months maturity at Badlar + 6.25% with quarterly payments. |
| On March 8, 2019, the Board of BBVA Francés decided to submit to the Shareholders Meeting the proposed merger by absorption of BBVA Francés Valores S.A, with the objective of optimizing operating costs by unifying resources and processes. |
| The Board of BBVA Francés, based on the results for the year ended December 31, 2018, has resolved to propose to the Shareholders Meeting, the payment of dividends in cash for the total amount of $ 2,407 million, under the new BCRA regulations, prior authorization is not required. |
Regulatory Changes
| The BCRA, through its Communication A 6641 dated February 1, 2019, redefined the structure of minimum cash requirements, establishing for sight deposits a minimum requirement of 30% integrated in cash, 5% integrated in BOTES 2020 and 10% integrated in Leliq. For time deposits up to 29 days, these percentages are 17%, 5% and 13% respectively. These requirements are reduced as the term of the deposits increases, reaching 0% reserve requirement for deposits longer than 90 days. |
| On February 7, 2019, the BCRA established that the net daily position that financial entities hold in Leliqs and repo transactions in local currency against the BCRA could not exceed the highest between the regulatory capital (referred to as Responsabilidad Patrimonial Computable or RPC) or the 65% of the daily average of total deposits in pesos, excluding the ones from the financial sector, both from the previous month. For entities that are above these limits at the date of publication of this communication, they will be allowed to gradually decrease their position from 100% to the limit of 65% with deadline April 30, 2019. |
| As a result of the increase in inflation in the last years, the Argentine economy is considered hyperinflationary. Therefore, IAS 29 should be applied in connection with annual financial statements or interim financial statements ending after July 1, 2018. |
The application of the guidelines established by the IAS 29 are exempt, and its validity will be effective from January 1, 2020, as established by the BCRA through its Communication A 6651 issued on February 22, 2019. Therefore BBVA Frances has not applied such requirements and will not restate its financial statements until such date.
Economic Environment
Quarter ended | ||||||||||||||
Main Macroeconomic figures |
12-31-18 | 09-30-18 | 12-31-17 | |||||||||||
GDP |
var % y/y | n/d | -3.5 | % | 3.9 | % | ||||||||
Inflation (1) End of period |
var % y/y | 47.6 | % | 40.5 | % | 24.8 | % | |||||||
var % q/q | 11.5 | % | 14.1 | % | 6.1 | % | ||||||||
CER |
Quarterly adjustment | 16.3 | % | 10.1 | % | 5.0 | % | |||||||
Exchange Rate |
Pesos x US$ | 37.81 | 40.90 | 18.77 | ||||||||||
Reserves |
US$ | 65,806 | 49,003 | 55,055 | ||||||||||
Fiscal Balance |
Primary - billion of $ | (185,672 | ) | (47,490 | ) | (181,763 | ) | |||||||
Trade Balance |
US$ (billion) | 2,631 | (1,589 | ) | (3,311 | ) | ||||||||
Total Private Loans |
var % q/q | -4.2 | % | 11.0 | % | 14.2 | % | |||||||
var % y/y | 33.0 | % | 58.6 | % | 51.7 | % | ||||||||
Total Private Deposits |
var % q/q | 11.0 | % | 18.6 | % | 14.2 | % | |||||||
var % y/y | 61.5 | % | 66.2 | % | 29.2 | % | ||||||||
Interest rate |
Monetary policy (eop) | 59.3 | % | 65.0 | % | 28.8 | % | |||||||
Badlar (weighted avg. quarterly) | 50.2 | % | 37.1 | % | 22.4 | % |
From August 8, 2018, the reference rate of the monetary policy is the one of the Leliq rate. From October 1, 2018, the reference rate is defined as the average rate resulting from daily operations of Leliq with financial institutions.
- 3 -
In 2018, economic activity was affected by the poor harvest due to the severe drought that occurred at the beginning of the year, and then due to the FX crisis. In the third quarter of 2018, the GDP showed a yearly decrease of 3.5%. The Monthly Economic Activity Indicator (EMAE) with data as of December, decreased 7% over the year, but increased 0.7% seasonally adjusted, compared to November.
In 2018, the fiscal balance reached a primary deficit of 2.4% of GDP, which implied the over-fulfillment of the 2.7% fiscal target agreed with the IMF.
The public sector fiscal balance accumulated a primary deficit of AR$ 339 billion, a 16% decrease compared to the AR$ 404 billion deficit from 2017. Taking into account the interest payments over the public debt, the deficit accumulated AR$389 billion, increasing 72.9% over the year.
The inflation rate accelerated from the end of the first quarter mainly due to the pass-through of the currency devaluation to prices, and hit the record of 14.1% in the third quarter, decelerating slightly in the last quarter, reaching 11.5% and accumulating 47.6% in the year.
The labor market also began to show the effects of the recession, with an increase in the unemployment rate in September 2018 (latest available data) to 9.6% from 7.2% at the end of 2017.
In the fourth quarter of 2018, the trade balance reached a surplus of USD 2.6 billion in contrast with the USD 3.3 billion deficit recorded in the same period of last year.
Due to the deceleration in the activity level demand for credit declined sharply. Thus, during the fourth quarter of 2018, the stock of loans to the private sector decreased by 4.2% compared to the 11% increase in the previous quarter. In annual terms, the stock of loans to the private sector increased 33%, considerably less than the 52.6% recorded in the third quarter of the year.
Private sector deposits increased 11% in the quarter and 61.5% in the last twelve months, mainly boosted by local currency deposits, which grew 18.7% and 41.1%, respectively. Its important to highlight the stability of deposits, which evidences the scarce transmission of the FX crisis to the financial sector.
Presentation of the Information
| The consolidated financial statements as of December 30, 2018 and as of September 30, 2018 are presented in accordance with Communication A 6114 of the Central Bank of Argentina (BCRA) (financial statements under IFRS regulations). For a better comparison the exposed figures for the fourth quarter of 2017 were adequate according to the current accounting framework. |
| The information in this press release contains unaudited financial information that consolidates, line item by line item, all of the banking activities of BBVA Francés (Francés Valores and Francés Administradora de Inversiones). As of the first quarter of 2018, the Banks share interest in PSA Finance is no longer disclosed on a consolidated basis but is recorded as Investments in associates (recorded under the proportional equity method), and the corresponding results are recorded as Income from associates, as with Rombo Compañia Financiera. As of September 25, 2018, the Banks share interest in Volkswagen Financial Services is no longer disclosed on a consolidated basis. |
| The balances in foreign currency as of December 31, 2018 were converted into pesos at the reference exchange rate published by the BCRA for such date (AR$ 37.8083/USD). |
| The information in this press release may differ from the information published by the BBVA Group for Argentina, which is prepared according to IFRS 9 and the impact of inflation adjustment according to IAS 29. |
- 4 -
Quarterly Results
Condensed Income Statement (1) | Quarter ended | D% Quarter ended 12/31/18 vs Quarter ended |
||||||||||||||||||
In thousands of pesos except EPS, ADS |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Net interest income |
8,462,827 | 6,564,330 | 4,111,895 | 28.9 | % | 105.8 | % | |||||||||||||
Net fee income |
1,504,195 | 1,855,906 | 638,005 | -19.0 | % | 135.8 | % | |||||||||||||
Net income of financial Instruments |
197,044 | 138,510 | 783,930 | 42.3 | % | -74.9 | % | |||||||||||||
Result from assets at amortised cost |
(67,243 | ) | 12,774 | | -626.4 | % | n/a | |||||||||||||
Foreign exchange difference |
977,628 | 1,624,223 | 727,560 | -39.8 | % | 344 | % | |||||||||||||
Other operating income |
1,206,843 | 1,152,946 | 652,281 | 4.7 | % | 85.0 | % | |||||||||||||
Provision for loan losses |
(1,097,883 | ) | (1,032,752 | ) | (308,991 | ) | 6.3 | % | 255.3 | % | ||||||||||
Net operating income |
11,183,411 | 10,315,937 | 6,604,680 | 8.4 | % | 69.3 | % | |||||||||||||
Personnel expenses |
(2,570,310 | ) | (2,503,707 | ) | (2,005,951 | ) | 2.7 | % | 28.1 | % | ||||||||||
Administrative expenses |
(2,196,156 | ) | (1,826,091 | ) | (1,369,329 | ) | 20.3 | % | 60.4 | % | ||||||||||
Depreciation and amortization of assets |
(249,685 | ) | (219,784 | ) | (181,933 | ) | 13.6 | % | 37.2 | % | ||||||||||
Other operating expenses |
(2,433,597 | ) | (1,635,777 | ) | (1,388,180 | ) | 48.8 | % | 75.3 | % | ||||||||||
Operating Expenses |
(7,449,748 | ) | (6,185,359 | ) | (4,945,393 | ) | 20.4 | % | 50.6 | % | ||||||||||
Operating income |
3,733,663 | 4,130,578 | 1,659,287 | -9.6 | % | 125.0 | % | |||||||||||||
Income from associates and joint ventures |
570,342 | 48,892 | 47,278 | 1066.5 | % | 1106.4 | % | |||||||||||||
Net income before incomc tax |
4,304,005 | 4,179,470 | 1,706,565 | 3.0 | % | 152.2 | % | |||||||||||||
Income tax from continuing operations |
(1,366,363 | ) | (1,131,938 | ) | (357,150 | ) | 20.7 | % | 282.6 | % | ||||||||||
Net income including non-controlling shareholders |
2,937,642 | 3,047,532 | 1,349,415 | -3.6 | % | 117.7 | % | |||||||||||||
Net income attributable to non-controlling shareholders |
1,014 | 39,691 | 9,958 | | | |||||||||||||||
Net income |
2,936,628 | 3,007,841 | 1,339,457 | -2.4 | % | 119.2 | % | |||||||||||||
Other comprehensive income |
51,475 | (117,469 | ) | 17,720 | n/a | 190.5 | % | |||||||||||||
Total net income |
2,988,103 | 2,890,372 | 1,357,177 | 3.4 | % | 120.2 | % | |||||||||||||
Earnings per share (2) |
4.79 | 4.91 | 2.19 | -2.4 | % | 119.2 | % | |||||||||||||
Earnings per ADS (3) |
14.38 | 14.73 | 6.56 | -2.4 | % | 119.2 | % |
(1) | Exchange Rate: $37.8083 = u$s 1 |
(2) | Assumes 612,659,638 ordinary shares. |
BBVA Francés net income amounted to AR$ 2,937.6 million for the fourth quarter of 2018, registering an increase of 119.2% compared to the fourth quarter of 2017, and decreasing 2.4% compared to the third quarter of 2018.
Main figures | Quarter ended | Dbp Quarter ended 12/31/18 vs Quarter ended |
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12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | ||||||||||||||||
ROA (Average Assets) (1) |
3.4 | % | 4.0 | % | 2.7 | % | (58 | ) | 71 | |||||||||||
Accumulated ROA |
3.4 | % | 3.4 | % | 2.4 | % | 1 | 101 | ||||||||||||
ROE (Average Shareholders Equity) (1) |
31.38 | % | 34.8 | % | 18.2 | % | (343 | ) | 1,321 | |||||||||||
Accumulated ROE |
28.5 | % | 27.4 | % | 18.2 | % | 106 | 1,032 | ||||||||||||
NIM (1)(2) |
13.22 | % | 11.6 | % | 11.7 | % | 160 | 150 | ||||||||||||
NIM with foreign exchange difference (1)(2) |
15.47 | % | 15.0 | % | 13.9 | % | 51 | 156 | ||||||||||||
Efficiency ratio (3) |
48.0 | % | 46.6 | % | 58.8 | % | 142 | (1,079 | ) | |||||||||||
Accumulated Efficiency ratio |
49.6 | % | 50.3 | % | 60.0 | % | (68 | ) | (1,041 | ) |
(1) | Annualized. |
(2) | NIM: ((Net interest income + Gross income tax NII+ Cost of deposits insurance) + (Net income of financial instruments + Results from assets at amortised cost - Non deliverable forward )) / Interest Earning Assets |
(3) | (Personnel and administrative expenses + Depreciations and amortizations) / ((Net interest income + Gross Income Tax + Cost of the deposits insurance) + (Fee income + Net income of financial instruments + Results from assets at amortised cost + FX Difference + Fees included in other operating income)) |
- 5 -
Net Operating Income
Net operating income | Quarter ended | D% Quarter ended 12/31/18 vs Quarter ended |
||||||||||||||||||
In thousands of pesos |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Net interest income |
8,462,827 | 6,564,330 | 4,111,895 | 28.9 | % | 105.8 | % | |||||||||||||
Net fee income |
1,504,195 | 1,855,906 | 638,005 | -19.0 | % | 135.8 | % | |||||||||||||
Net income of financial instruments |
197,044 | 138,510 | 783,930 | 42.3 | % | -74.9 | % | |||||||||||||
Result from assets at amortised cost |
(67,243 | ) | 12,774 | | -626.4 | % | n/a | |||||||||||||
Foreign exchange difference |
977,628 | 1,624,223 | 727,560 | -39.8 | % | 34.4 | % | |||||||||||||
Other operating income |
1,206,843 | 1,152,946 | 652,281 | 4.7 | % | 85.0 | % | |||||||||||||
Provision for loan losses |
(1,097,883 | ) | (1,032,752 | ) | (308,991 | ) | 6.3 | % | 255.3 | % | ||||||||||
Net operating income |
11,183,411 | 10,315,937 | 6,604,680 | 8.4 | % | 69.3 | % |
Net operating income amounted to AR$ 11,183.4 million, increasing by 8.4% compared to the third quarter of 2018 and by 69.3% compared to the last quarter of 2017.
As a clarification, a reclassification was performed during the third quarter due to the change in criteria regarding the deferral of credit card emission fees, which were previously recorded as net interest income and are now recorded as net fee income and other operating income.
The items that make up net operating income are disclosed in more detail below.
| Net interest income |
Net Interest Income | Quarter Ended | D% Quarter ended 12/31/18 vs Quarter ended |
||||||||||||||||||
(In thousands of pesos) |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Interest Income |
17,731,588 | 12,299,911 | 6,246,089 | 44.2 | % | 183.9 | % | |||||||||||||
Loan interest income |
10,591,572 | 8,535,228 | 5,637,629 | 24.1 | % | 87.9 | % | |||||||||||||
Income from adjustments (CER/UVA) |
2,095,561 | 977,884 | 188,447 | 114.3 | % | 1012.0 | % | |||||||||||||
Income from Public Securities |
4,401,601 | 2,092,036 | 58,433 | 110.4 | % | n/a | ||||||||||||||
Others |
642,854 | 694,763 | 361,580 | -7.5 | % | 77.8 | % | |||||||||||||
Interest Expenses |
-9,268,761 | -5,735,581 | -2,134,194 | 61.6 | % | 334.3 | % | |||||||||||||
Interest Expenses |
-8,819,963 | -5,513,716 | -2,122,132 | 60.0 | % | 315.6 | % | |||||||||||||
Expenses from adjustments (CER/UVA) |
-448,798 | -221,865 | -12,062 | 102.3 | % | n/a | ||||||||||||||
Net Income Interest |
8,462,827 | 6,564,330 | 4,111,895 | 28.9 | % | 105.8 | % |
Net interest income increased by 28.9% compared to the previous quarter and by 105.8% compared to the third quarter of 2017.
Compared to the third quarter of 2018, interest income increased by 44.2% whereas interest expenses increased by 61.6% mainly due to an abrupt rise in interest rates that occurred during the quarter and certain deterioration in the funding mix.
Net interest income registered a positive performance, sustained by the increasing rates of loans and government securities and the increase in inflation, jointly with an effective price management in the different products, both in assets and in liabilities, in a volatile environment.
NIM
Interest-Earning Assets & Interest-Bearing Liabilities $ + USD |
12-31-2018 | Quarter ended 09-30-18 |
12-31-17 | |||||||||||||||||||||
(Average in thousands of pesos) |
Capital | Rate | Capital | Rate | Capital | Rate | ||||||||||||||||||
Interest-Earning Assets |
217,129,504 | 33.0 | % | 195,017,912 | 26.4 | % | 145,446,734 | 19.1 | % | |||||||||||||||
Interest-Bearing Liabilities |
200,277,049 | 18.26 | % | 175,167,474 | 12.96 | % | 106,789,199 | 8.2 | % | |||||||||||||||
NIM without foreign exchange differences |
13.22 | % | 11.62 | % | 11.71 | % | ||||||||||||||||||
NIM including foreign exchange differences |
15.47 | % | 14.96 | % | 13.91 | % | ||||||||||||||||||
NIM $ without foreign exchange differences |
17.38 | % | 14.37 | % | 14.66 | % | ||||||||||||||||||
NIM USD without foreign exchange differences |
4.02 | % | 5.14 | % | 2.35 | % |
- 6 -
The net interest margin (NIM) including the results for foreign currency exchange differences amounted to 15.47%, registering an increase in comparison to the 14.96% showed in the previous quarter; while net of this effect, it registered an increase from 11.62% to 13.22%
The NIM in local currency (excluding FX differences) amounted to 17.38%, reflecting a significant increase compared to 14.37% in the previous quarter, mainly due to the strong increase in lending rates, for both loans and public sector instruments which were compensated with higher liability rates
The NIM in foreign currency decreased 112 bps, amounting 4.02%, mainly as a result of the decrease in loan rates.
The following table shows return on assets and cost of liabilities by currency: in pesos and in US dollars.
Interest-Earning Assets & Interest-Bearing | Quarter ended | |||||||||||||||||||||||
Liabilities $ | 12-31-18 | 09-30-18 | 12-31-17 | |||||||||||||||||||||
(Average in thousands of pesos) |
Capital | Rate | Capital | Rate | Capital | Rate | ||||||||||||||||||
Interest-Earning Assets |
149,500,133 | 45.9 | % | 136,862,249 | 35.3 | % | 109,039,974 | 24.4 | % | |||||||||||||||
Public sector instruments |
33,205,496 | 55.4 | % | 20,441,917 | 43.1 | % | 14,249,479 | 26.8 | % | |||||||||||||||
Loans |
115,744,267 | 43.1 | % | 115,681,170 | 33.9 | % | 93,767,215 | 24.0 | % | |||||||||||||||
Other interest-earning assets |
550,371 | 50.0 | % | 739,163 | 40.8 | % | 1,023,280 | 23.7 | % | |||||||||||||||
Interest-Bearing Liabilities |
107,301,171 | 33.8 | % | 93,028,375 | 24.0 | % | 66,586,750 | 13.1 | % | |||||||||||||||
Saving Accounts |
25,939,217 | 0.2 | % | 25,874,014 | 0.2 | % | 24,317,876 | 0.2 | % | |||||||||||||||
Time Deposits |
59,059,496 | 44.9 | % | 48,467,831 | 32.5 | % | 34,088,782 | 19.9 | % | |||||||||||||||
Current accounts with interest |
18,001,228 | 41.5 | % | 13,185,778 | 34.2 | % | 4,025,590 | 22.5 | % | |||||||||||||||
Debt Securities |
2,169,727 | 57.7 | % | 1,714,760 | 39.7 | % | 1,032,839 | 25.7 | % | |||||||||||||||
Other interest-bearing liabilities |
2,131,504 | 45.6 | % | 3,785,992 | 36.3 | % | 3,121,663 | 24.1 | % | |||||||||||||||
NIM$ |
17.38% | 14.37% | 14.66% | |||||||||||||||||||||
Interest-Earning Assets & Interest-Bearing | Quarter ended | |||||||||||||||||||||||
Liabilities USD | 12-31-18 | 09-30-18 | 12-31-17 | |||||||||||||||||||||
(Average In thousands of pesos) |
Capital | Rate | Capital | Rate | Capital | Rate | ||||||||||||||||||
Interest-Earning Assets |
67,629,371 | 4.7 | % | 58,155,663 | 5.5 | % | 36,406,760 | 3.2 | % | |||||||||||||||
Public sector instruments |
7,613,872 | 5.3 | % | 6,606,976 | 7.4 | % | 8,547,216 | 3.8 | ||||||||||||||||
Loans |
58,412,232 | 4.7 | % | 50,268,084 | 5.4 | % | 25,735,735 | 3.3 | % | |||||||||||||||
Other interest-earning assets |
1,603,267 | 1.3 | % | 1,280,602 | 1.2 | % | 2,123,808 | 0.7 | % | |||||||||||||||
Interest-Bearing Liabilities |
92,975,878 | 0.4 | % | 82,139,099 | 0.4 | % | 40,202,449 | 0.1 | % | |||||||||||||||
Saving Accounts |
71,129,594 | 0.0 | % | 62,958,906 | 0.0 | % | 31,739,478 | 0.0 | % | |||||||||||||||
Time Deposits |
16,177,943 | 0.6 | % | 14,323,872 | 0.8 | % | 1,122,036 | 0.2 | % | |||||||||||||||
Current accounts with interest |
448,104 | 0.0 | % | 109,912 | 0.0 | % | 7,066,901 | 0.6 | % | |||||||||||||||
Other interest-bearing liabilities |
5,220,237 | 4.4 | % | 4,746,409 | 5.1 | % | 274,034 | 2.7 | % | |||||||||||||||
NIM USD |
4.02% | 5.14% | 2.35% |
| Net fee income |
Net fee Income | Quarter ended |
D% Quarter ended 12/31/18 vs quarter ended |
||||||||||||||||||
(in thousands of pesos) |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Net fee income |
1,504,195 | 1,855,906 | 638,005 | -19.0 | % | 135.8 | % | |||||||||||||
Fee income |
3,562,964 | 3,847,287 | 1,935,777 | -7.4 | % | 84.1 | % | |||||||||||||
Fee charges on deposits accounts |
1,069,235 | 934,307 | 726,162 | 14.4 | % | 47.2 | % | |||||||||||||
Credit cards and operations |
1,440,625 | 1,991,447 | 505,236 | -27.7 | % | 185.1 | % | |||||||||||||
Checks |
301,939 | 256,400 | 225,396 | 17.8 | % | 34.0 | % | |||||||||||||
Capital markets and securities activities |
40,156 | 35,673 | 47,010 | 12.6 | % | -14.6 | % | |||||||||||||
Fees related to foreign trade |
165,003 | 136,280 | 78,725 | 21.1 | % | 109.6 | % | |||||||||||||
Services of collection |
446,457 | 373,897 | 218,137 | 19.4 | % | 104.7 | % | |||||||||||||
Generated by subsidiaries |
72,603 | 74,784 | 98,850 | -2.9 | % | -26.6 | % | |||||||||||||
Other fees |
26,945 | 44,499 | 36,261 | -39.4 | % | -25.7 | % | |||||||||||||
Fee Expenses |
-2,058,769 | -1,991,381 | -1,297,772 | 3.4 | % | 58.6 | % |
Net fee income decreased 19% compared to the previous quarter, and increased 135.8% compared to the fourth quarter of 2017, partially as a consequence of the aforementioned reclassification.
Fee income decreased by 7.4% compared to the third quarter of 2018, mainly due to lower fees on credit cards and operations. In addition, recurrent annual income, accounted for during the previous quarter was included in this line item. This was partially offset with the increase in fees charged on deposits accounts and fees on collection services. Compared to the last quarter of 2017, fee income increased 84.1%.
- 7 -
Its important to clarify that, despite the lower fees on credit cards and operations, BBVA Francés continued to gain market share in credit card consumption (it increased by 40 bp during the quarter) reaching 13.97% of the market.
Fee expenses increased by 3.4% over the quarter and by 58.6% compared to the last quarter of 2017, mainly due to fees related to the loyalty program and customer acquisition campaigns, offset by lower costs on card processing.
In the new disclosure format applied beginning this quarter, certain fee items are accounted for in Other operating income.
| Net income from measurement of financial instruments at fair value through profit or loss |
Net Income from measurement of financial Instruments |
Quarter ended |
D% Quarter ended 12/31/18 vs quarter ended |
||||||||||||||||||
at fail value through profit or loss (in thousands of pesos) |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Net income of financial instruments at fail value |
197,044 | 138,510 | 783,930 | 42.3 | % | -74.9 | % | |||||||||||||
Income from public securities |
338,665 | 212,634 | 765,493 | 59.3 | % | -55.8 | % | |||||||||||||
Income from private securities |
(264,903 | ) | 163,077 | (43,893 | ) | -262.4 | % | 503.5 | % | |||||||||||
Income from interest rate swaps |
(154,737 | ) | (251,232 | ) | (20,527 | ) | -38.4 | % | 424.1 | % | ||||||||||
Non deliverable forward |
255,661 | 20,431 | 77,124 | 1151.3 | % | 231.5 | % | |||||||||||||
Income from corporate bonds |
22,358 | (6,400 | ) | 14,733 | -449.3 | % | 51.8 | % |
Net income from measurement of financial instruments at fair value recorded a gain in the last quarter of AR$ 197 million compared to a gain of AR$ 138.5 million registered in the third quarter of 2018.
The increase is mainly due to higher income from public securities and to the growth in the non-deliverable forward, which was partially offset by the loss registered in income from interest rate swaps.
| Foreign exchange difference |
Foreign Exchange Difference | Quarter Ended | D % Quarter ended 12/31/18 | ||||||||||||||||||
(in thousands of pesos) |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Foreign Exchange Difference |
977,628 | 1,624,223 | 727,560 | -39.8 | % | 34.4 | % | |||||||||||||
FX trading |
1,392,557 | 1,268,577 | 525,440 | 9.8 | % | 165.0 | % | |||||||||||||
long/Short FX net balance |
-414,929 | 355,646 | 202,120 | -216.7 | % | -305.3 | % |
Foreign exchange difference registered the income generated by foreign currency buying and selling activity, which was partially offset by a loss resulting from the appreciation of the local currency.
| Other operating income |
Other Operating Income | Quarter ended | D % Quarter ended 12/31/18 | ||||||||||||||||||
(in thousands of pesos) |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Operating Income |
1,206,843 | 1,152,946 | 652,281 | 4.7 | % | 85.0 | % | |||||||||||||
Safe deposits |
113,798 | 112,481 | 94,965 | 1.2 | % | 19.8 | % | |||||||||||||
Insurance |
196,278 | 172,985 | 161,270 | 13.5 | % | 21.7 | % | |||||||||||||
Fees on USD credit cards consumption |
132,134 | 220,917 | 86,185 | -40.2 | % | 53.3 | % | |||||||||||||
Interest on loans and fees related |
178,668 | 214,465 | 120,730 | -16.7 | % | 48.0 | % | |||||||||||||
Other fees |
130,737 | 122,358 | 62,537 | 6.8 | % | 109.1 | % | |||||||||||||
Total other fees |
751,615 | 843,206 | 525,687 | -10.9 | % | 43.0 | % | |||||||||||||
Other operating income |
455,228 | 309,740 | 126,594 | 47.0 | % | 259.6 | % |
- 8 -
Other operating income registered an increase of 4.7% in the quarter and 85% over the year. Total other fees decrease 10.9% in the quarter mainly due to lower credit card consumption in foreign currency.
Operating Expenses
Operating Expenses | Quarter ended | D% Quarter ended 12/31/18 vs | ||||||||||||||||||
In thousands of pesos |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Personnel expenses |
(2,570,310 | ) | (2,503,707 | ) | (2,005,951 | ) | 2.7 | % | 28.1 | % | ||||||||||
Administrative expenses |
(2,196,156 | ) | (1,826,091 | ) | (1,369,329 | ) | 20.3 | % | 60.4 | % | ||||||||||
Depreciation and amortization of assets |
(249,685 | ) | (219,784 | ) | (181,933 | ) | 13.6 | % | 37.2 | % | ||||||||||
Other operating expenses |
(2,433,597 | ) | (1,635,777 | ) | (1,388,180 | ) | 48.8 | % | 75.3 | % | ||||||||||
Operating Expenses |
(7,449,748 | ) | (6,185,359 | ) | (4,945,393 | ) | 20.4 | % | 50.6 | % |
Operating expenses amounted to AR$ 7,449.7 million, registering an increase of 20.4% and 50.6% compared to the previous quarter and to the third quarter of 2017, respectively.
The items that make up net operating expenses are analyzed in more detail below.
| Personnel expenses and administrative expenses |
Administrative and personnel expenses | Quarter ended | D % Quarter ended 12/31/18 vs quarter ended |
||||||||||||||||||
(in thousands of pesos) |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Personnel expenses |
(2,570,310 | ) | (2,503,707 | ) | (2,005,951 | ) | 2.7 | % | 28.1 | % | ||||||||||
Administrative expenses |
(2,196,156 | ) | (1,826,091 | ) | (1,369,329 | ) | 20.3 | % | 60.4 | % | ||||||||||
Electricity and Communications |
(119,859 | ) | (76,620 | ) | (46,873 | ) | 56.4 | % | 155.7 | % | ||||||||||
Advertising and Promotion |
(66,638 | ) | (88,421 | ) | (113,582 | ) | -24.6 | % | -41.3 | % | ||||||||||
Fees and external administrative services |
(106,908 | ) | (81,433 | ) | (64,423 | ) | 31.3 | % | 65.9 | % | ||||||||||
Taxes |
(500,439 | ) | (431,360 | ) | (311,467 | ) | 16.0 | % | 60.7 | % | ||||||||||
Rents |
(241,748 | ) | (222,143 | ) | (130,098 | ) | 8.8 | % | 85.8 | % | ||||||||||
Maintainance, conservation and repairs |
(224,436 | ) | (201,822 | ) | (145,242 | ) | 11.2 | % | 54.5 | % | ||||||||||
Security Service |
(71,750 | ) | (78,428 | ) | (78,239 | ) | -8.5 | % | -8.3 | % | ||||||||||
Carriage of valuables |
(417,277 | ) | (249,620 | ) | (178,757 | ) | 67.2 | % | 133.4 | % | ||||||||||
Other |
(447,101 | ) | (396,244 | ) | (300,648 | ) | 12.8 | % | 48.7 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Employees |
6,107 | 6,095 | 6,082 | 12 | 25 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Branches |
252 | 251 | 251 | 0 | 0 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
Personnel expenses increased by 2.7% compared to the third quarter of 2018 and 28.1% compared to the last quarter of 2017, whereas administrative expenses increased by 20.3% and by 60.4% in such periods, respectively.
The variation in personnel expenses is mainly due to the update in salaries arising from the agreements signed with the labor union and its compensation schemes, and to higher training costs due to the implementation of the new organizational methodology: Agile.
Administrative expenses increased during the quarter mainly due to an increase in taxes, as a result of higher activity levels, the increase in foreign currency exchange rates and higher charges on carriage of valuables and electricity and communications due to the increase in tariffs.
The efficiency ratio in the quarter amounted 48%, showing a decrease of 1,079 bps compared to the fourth quarter of 2017.
- 9 -
| Other operating expenses |
D% Quarter ended 12/31/18 vs | ||||||||||||||||||||
Other Operating expenses | Quarter ended | Quarter ended | ||||||||||||||||||
(In thousands of pesos) |
12-31-18 | 09-30-18 | 12-31-17 | 06-30-18 | 09-30-17 | |||||||||||||||
Operating expenses |
(2,433,597 | ) | (1,635,777 | ) | (1,388,180 | ) | 48.8 | % | 75.3 | % | ||||||||||
Gross income tax |
(1,278,288 | ) | (1,190,211 | ) | (681,458 | ) | 7.4 | % | 87.6 | % | ||||||||||
Gross Income tax NII |
(1,000,700 | ) | (899,410 | ) | (466,808 | ) | 11.3 | % | 114.4 | % | ||||||||||
Gross income tax fees |
(277,588 | ) | (290,801 | ) | (214,650 | ) | -4.5 | % | 29.3 | % | ||||||||||
Cost of deposits insurence |
(102,795 | ) | (86,186 | ) | (57,314 | ) | 19.3 | % | 79.4 | % | ||||||||||
Other operating expenses |
(1,052,514 | ) | (359,380 | ) | (649,408 | ) | 192.9 | % | 62.1 | % |
Other operating expenses registered an increase in gross income tax, as a result of the increase in interest rates, fees and income from foreign currency exchange difference. In addition, an adjustment was recorded in other operating expenses, to reflect the rate differential between the applied rate and the market rate in credit card financing operations.
Income from associates
Income from associates shows the result of non-consolidated companies. During the fourth quarter a gain of AR$ 570.3 million was recorded, mainly due to the equity investment in BBVA Seguros, Volkswagen Financial Services, PSA Finance and Rombo Compañía Financiera.
Balance and activity
Loan portfolio
D% Quarter ended 12/31/18 vs | ||||||||||||||||||||
Net loans | Quarter ended | quarter ended | ||||||||||||||||||
(In thousands of pesos) |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Private & Financial sector loans, in $ |
120,781,796 | 116,528,630 | 98,790,429 | 3.6 | % | 22.3 | % | |||||||||||||
Advances |
11,781,284 | 16,396,066 | 11,693,061 | -28.1 | % | 0.8 | % | |||||||||||||
Discounted and purchased notes |
18,382,585 | 16,482,797 | 17,160,711 | 11.5 | % | 7.1 | % | |||||||||||||
Consumer Mortgages |
10,110,286 | 8,718,885 | 4,457,821 | 16.0 | % | 126.8 | % | |||||||||||||
Car secured loans |
1,660,242 | 1,774,642 | 4,539,300 | -6.4 | % | -63.4 | % | |||||||||||||
Personal loans |
23,586,938 | 21,923,282 | 16,638,201 | 7.6 | % | 41.8 | % | |||||||||||||
Credit cards |
40,622,378 | 35,449,792 | 28,544,070 | 14.6 | % | 42.3 | % | |||||||||||||
Loans to financial sector |
9,417,009 | 9,587,944 | 4,555,025 | -1.8 | % | 106.7 | % | |||||||||||||
Other loans |
6,340,846 | 6,263,657 | 11,125,057 | 1.2 | % | -43.0 | % | |||||||||||||
Other receivables |
3,593,650 | 4,092,402 | 2,659,552 | -12.2 | % | 35.1 | % | |||||||||||||
Unaccrued interest |
(1,560,431 | ) | (1,151,897 | ) | (593,526 | ) | 35.5 | % | 162.9 | % | ||||||||||
Less: Allowance for loan losses |
(3,152,991 | ) | (3,008,940 | ) | (1,988,843 | ) | 4.8 | % | 58.5 | % | ||||||||||
Private & Financial sector loans in FX |
60,640,344 | 62,109,756 | 28,806,643 | -2.4 | % | 110.5 | % | |||||||||||||
Commercial Loans |
59,606,255 | 60,993,431 | 27,413,387 | -2.3 | % | 117.4 | % | |||||||||||||
Advances |
8,029 | 9,541 | 14,203 | -15.8 | % | -43.5 | % | |||||||||||||
Discounted and purchased notes |
7,492,197 | 7,213,658 | 1,660,291 | 3.9 | % | 351.3 | % | |||||||||||||
Credit cards |
1,886,633 | 1,971,601 | 1,600,754 | -4.3 | % | 17.9 | % | |||||||||||||
Loans to financial sector |
252,704 | 136,702 | 94,089 | 84.9 | % | 168.6 | % | |||||||||||||
Other loans |
51,803,409 | 53,447,923 | 25,615,848 | -3.1 | % | 102.2 | % | |||||||||||||
Other receivables |
302,620 | 322,309 | 123,045 | -6.1 | % | 145.9 | % | |||||||||||||
Less: Allowance for loan losses |
(1,105,248 | ) | (991,978 | ) | (301,587 | ) | 11.4 | % | 266.5 | % | ||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Private Loans |
181,422,140 | 178,638,386 | 127,597,072 | 1.6 | % | 42.2 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total loans to public sector |
207 | 177 | 218 | 16.9 | % | -5.0 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Net Total Loans net of other non resident loans |
181,422,347 | 178,638,563 | 127,597,290 | 1.6 | % | 42.2 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
As of the third quarter, Volkswagen Financial Services Compañia Financiera is no longer recorded on a consolidated basis. Such figures were recorded under car secured loans.
- 10 -
As of December 31, 2018, the private sector loan portfolio amounted to AR$ 181.4 billion, maintaining similar levels to those of the previous quarter, and increasing by 42.2% in the last twelve months. Including Volkswagen Financial Services, the private sector loan portfolio would have increased by 47.9% in the year.
As of December 31, 2018 the market share of loans reached 8.71%, including loans from associated companies (VW Financial Services, PSA Finance and Rombo Compañia Financiera), showing an increase of 40 bp in the last 12 months.
Credit growth was affected due to the devaluation of the peso and higher interest rates.
Loans in AR$ increased 3.6% in the quarter and 22.3% in the last twelve months (4.3% and 29.7% respectively including VW), while U.S dollar denominated loans decreased 2.4% in the quarter and increased 110.5% in the last twelve months, mainly due to the re-expression to the new value of the currency, meanwhile, measured in U.S dollars they increased around 6% in both periods.
In retail banking, positive growth was recorded in connection with credit card and personal loans, while mortgages loans reflected the impact of the increasing inflation.
The increase shown by commercial loans compared to the previous quarter was mainly due to the depreciation of the peso.
Asset quality ratios
Asset quality ratios | Quarter ended | D% Quarter ended 12/31/18 vs quarter ended |
||||||||||||||||||
(In thousands of pesos) |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Non-performing loans (1) |
3,572,782 | 1,814,467 | 873,007 | 96.9 | % | 309.3 | % | |||||||||||||
Allowance for loan losses |
(4,258,239 | ) | (4,000,918 | ) | (2,290,430 | ) | 6.4 | % | 85.9 | % | ||||||||||
Non-performing loans/net total loans |
1.92 | % | 0.99 | % | 0.67 | % | 0.9 | % | 1.3 | % | ||||||||||
Non-performing priv. loans/net priv. loans |
1.92 | % | 0.99 | % | 0.67 | % | 0.9 | % | 1.3 | % | ||||||||||
Allowance for loan losses/non-performing loans |
119.19 | % | 220.50 | % | 262.36 | % | -101.3 | % | -143.2 | % | ||||||||||
Allowance for loan losses/net total loans |
2.29 | % | 2.19 | % | 1.76 | % | 0.1 | % | 0.5 | % |
(1) Non-performing 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.
As of December 30, 2018, the asset quality ratio (non-performing loans/total loans) was 1.92% with a coverage ratio (allowances/non-performing loans) of 119.2%. This indicators show some deterioration in the loan portfolio, mainly due to specific cases in the commercial portfolio.
The cost of risk reached 1.88% recording an increase of 17 bps during the quarter.
The following table shows the evolution of provisions:
Evolution of provisions | Quarter ended | D% Quarter ended 12/31/18 vs quarter ended |
||||||||||||||||||
(In thousands of pesos) |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Balance at the beginning of the quarter |
4,000,918 | 3,181,219 | 2,141,957 | 25.8 | % | 86.8 | % | |||||||||||||
Increase/decrease |
1,047,424 | 1,006,313 | 383,121 | 4.1 | % | 173.4 | % | |||||||||||||
Increase/decrease-Foreign exchange diff. |
(73,127 | ) | 213,237 | 24,445 | -134.3 | % | n/a | |||||||||||||
Aplications / Reversals |
(716,976 | ) | (399,851 | ) | (259,093 | ) | 79.3 | % | 176.7 | % | ||||||||||
Balance at the end of the quarter |
4,258,239 | 4,000,918 | 2,290,430 | 6.4 | % | 85.9 | % |
- 11 -
Public sector exposure
Public Sector Exposure | Quarter Ended |
D% Quarter ended 12/31/18 vs quarter ended |
||||||||||||||||||
(In thousands of pesos) |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Bills and Notes from Central Bank |
13,815,040 | 17,519,092 | 15,576,034 | -21.1 | % | -11.3 | % | |||||||||||||
Treasury and national government |
23,822,802 | 22,599,243 | 11,428,426 | 5.4 | % | 108.5 | % | |||||||||||||
National Treasury Public Debt $ |
7,952,858 | 5,842,776 | 2,344,722 | 36.1 | % | 239.2 | % | |||||||||||||
National Treasury Public Debt USD |
3,198,818 | 8,703,110 | 4,743,166 | -63.2 | % | -32.6 | % | |||||||||||||
Treasury Repos USD |
12,671,125 | 8,053,358 | 4,340,538 | 57.3 | % | 191.9 | % | |||||||||||||
Pesos subtotal |
21,767,898 | 23,361,868 | 17,920,756 | -6.8 | % | 21.5 | % | |||||||||||||
Dollars subtotal |
15,869,944 | 16,756,467 | 9,083,704 | -5.3 | % | 74.7 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total Public Sector exposure |
37,637,842 | 40,118,336 | 27,004,460 | -6.2 | % | 39.4 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
% National Government debt / Assets |
6.7 | % | 6.8 | % | 5.4 | % |
Total exposure to the public sector amounted to AR$ 37.6 billion, decreasing by 6.2% during the quarter.
Short-term liquidity was allocated in BCRA instruments, which decreased by AR$ 3.7 billion or 21.1% during the quarter and 11.3% in the year.
National Government Debt, which represents 6.7% of assets increased by AR$ 1.223.6 million during the quarter, as a consequence of the increase in the local currency debt and the renovation and extension of the repo with the National Treasury for USD 355 million, which was offset by the USD 128 million decrease in the short-term Letes during the quarter to a total USD 84.6 million.
Deposits
Total deposits | Quarter ended |
D% Quarter ended 12/31/18 vs quarter ended |
||||||||||||||||||
(In thousands pesos) |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Deposits $ denominated |
164,320,011 | 151,692,489 | 99,585,301 | 8.3 | % | 65.0 | % | |||||||||||||
Current accounts |
29,559,030 | 25,968,449 | 24,815,717 | 13.8 | % | 19.1 | % | |||||||||||||
Saving accounts |
46,487,308 | 49,039,885 | 35,134,581 | -5.2 | % | 32.3 | % | |||||||||||||
Time deposits |
84,087,508 | 72,175,509 | 37,297,680 | 16.5 | % | 125.4 | % | |||||||||||||
Peso denominated |
81,019,308 | 69,800,136 | 36,818,485 | 16.1 | % | 120.1 | % | |||||||||||||
CER adjusted time deposits |
3,068,200 | 2,375,373 | 479,195 | 29.2 | % | 540.3 | % | |||||||||||||
Other |
4,186,165 | 4,508,646 | 2,337,323 | -7.2 | % | 79.1 | % | |||||||||||||
Deposits FX denominated |
95,189,050 | 95,535,479 | 54,349,370 | -0.4 | % | 75.1 | % | |||||||||||||
Current accounts |
375,546 | 407,811 | 163,881 | -7.9 | % | 129.2 | % | |||||||||||||
Saving accounts |
94,468,865 | 94,788,504 | 43,913,177 | -0.3 | % | 115.1 | % | |||||||||||||
Time deposits |
196,201 | 177,296 | 8,032,972 | 10.7 | % | -97.6 | % | |||||||||||||
Other |
148,438 | 161,868 | 2,239,340 | -8.3 | % | -93.4 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total deposits |
259,509,061 | 247,227,968 | 153,934,671 | 5.0 | % | 68.6 | % | |||||||||||||
|
|
|
|
|
|
|
|
|
|
Total deposits amounted to AR$ 259.1 billion as of December 31, 2018, increasing by 5% compared to the previous quarter and by 68.6% compared to the same quarter of 2017.
Foreign currency deposits denominated in pesos remained stable during the quarter and increased 75.1% in the last twelve months. Deposits denominated in foreign currency increased 7.8% in the quarter and decreased 13% compared to last quarter of 2017.
Deposits in local currency increased by 8.3% in the quarter and 65% in the year.
- 12 -
Other funding sources
Other funding sources | Quarter ended |
D% Quarter ended 12/31/18 vs quarter ended |
||||||||||||||||||
(In thousands of pesos) |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
Lines from other banks |
5,527,525 | 5,757,714 | 691,295 | -4.0 | % | n/a | ||||||||||||||
Senior Bonds |
2,473,690 | 1,735,343 | 2,052,490 | 42.5 | % | 20.5 | % | |||||||||||||
Total other funding sources |
8,001,215 | 7,493,057 | 2,743,785 | 6.8 | % | 191.6 | % |
The increase in lines from other banks corresponds mainly to funds to finance foreign trade operations.
On November 8, 2018, the Bank issued series 25 of its bonds (Obligaciones Negociables) in UVAs (Unidades de Valor Adquisitivo), which were fully subscripted for a total amount of AR$ 784.3 million with 24 months maturity, a 9.5% fixed interest rate and quarterly interest payments.
Solvency
Central Bank Requirements | Quarter ended |
D% Quarter ended 12/31/18 vs quarter ended |
||||||||||||||||||
(In thousands of pesos) |
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | |||||||||||||||
CB Minimum Capital Requirements |
21,791,415 | 21,388,509 | 15,653,816 | 1.9 | % | 39.2 | % | |||||||||||||
Allocated to Asset at Risk |
18,103,885 | 17,914,664 | 12,726,716 | 1.1 | % | 42.3 | % | |||||||||||||
Market Risk |
92,786 | 192,083 | 369,204 | -51.7 | % | -74.9 | % | |||||||||||||
Operational Risk |
3,594,744 | 3,256,660 | 2,557,896 | 10.4 | % | 40.5 | % | |||||||||||||
Non compliance with others cautios regulations |
| 25,102 | | n/a | n/a | |||||||||||||||
Bank Capital |
37,947,122 | 36,683,596 | 28,020,200 | 3.4 | % | 35.4 | % | |||||||||||||
Ordinary Capital Level 1 (*) |
39,194,657 | 36,292,382 | 26,817,835 | 8.0 | % | 46.2 | % | |||||||||||||
Dedusctions Ordinary Capital Level 1 |
(3,188,440 | ) | (2,774,583 | ) | (705,074 | ) | 14.9 | % | 352.2 | % | ||||||||||
Capital Level 2 |
1,940,905 | 2,143,744 | 1,578,420 | -9.5 | % | 23.0 | % | |||||||||||||
Aditional Capital Level 1 |
| 1,022,053 | 329,019 | -100.0 | % | -100.0 | % | |||||||||||||
Excess over Required Capital |
16,155,707 | 15,295,087 | 12,366,384 | 5.6 | % | 30.6 | % | |||||||||||||
Excess as % of the capital required |
74.1 | % | 71.5 | % | 79.0 | % | 3.7 | % | -6.2 | % | ||||||||||
Risk weighted assets |
265,801,467 | 260,520,258 | 191,039,187 | 2.0 | % | 39.1 | % | |||||||||||||
Capital Ratio (Central Bank rules) (*)(**) |
14.3 | % | 14.1 | % | 14.7 | % | 1.4 | % | -2.7 | % | ||||||||||
TIER l (***) |
13.5 | % | 13.3 | % | 13.8 | % | 2.2 | % | -2.1 | % |
(*) | Bank capital / Risk weighted assets |
(**) | Includes the 100% of the quarterly result |
(***) | Ordinary capital level 1 / Risk weighted assets |
BBVA Francés continues to show adequate solvency ratios. As of December 31, 2018 the capital ratio reached 14.3%, similar to the ratio as of September 30, 2018.
The Tier 1 ratio was 13.5% and the excess capital over the regulatory required capital was AR$ 16,155.7 million.
Additional information
Quarter ended | D% Quarter ended 12/31/18 vs quarter ended |
|||||||||||||||||||
12-31-18 | 09-30-18 | 12-31-17 | 09-30-18 | 12-31-17 | ||||||||||||||||
Exchange rate $/USD |
37.81 | 40.90 | 18.77 | -7.6 | % | 101.4 | % | |||||||||||||
Quarterly CER adjustment |
16.3 | % | 10.1 | % | 5.0 | % | 6.2 | % | 11.3 | % |
- 13 -
Disclaimer
This press release contains or may contain forward-looking statements, including but not limited to estimates of the prospects for the Argentine economy, BBVA Francés earnings, business plans, expense and operational structure adjustments, capitalization plan, and trends affecting BBVA Francés financial condition and results of operations. Any forward-looking statements included in this press release are based on current expectations and estimates, but actual results and events may differ materially from anticipated future results and events. Certain factors which could cause the actual results and events to differ materially from the expected results or events include: (1) macroeconomic, regulatory or political changes; (2) changes in domestic or international stock market prices, exchange rates or interest rates; (3) changes in the markets for BBVA Francés products and services; (4) increasing competition; (5) changes in technology; or (6) changes in the financial condition, creditworthiness or solvency of the customers, debtors or counterparts of BBVA Francés. These forward-looking statements on future events referring only to the date of the document should be taken cautiously. It is advisable to consult the Banks Financial Statements and all the documents filed from time to time with the Argentine Securities and Exchange Commission (CNV) and the Buenos Aires Stock Exchange
Conference Call
On Monday March 11, 2019 at 12:30 hs (Argentine time) a conference call will be held to comment on the quarters results.
Those who wish to participate should use the following dial-in numbers:
+ 54-11-39845677 (from Argentina)
+ 1-844-450-3851 (from the United States)
+ 1-412-317-6373 (from other countries)
Conference ID: BBVA.
To access the webcast:
https://webcastlite.mziq.com/cover.html?webcastId=da8b26e9-873d-400b-a286-795c4167784a
To request the Replay, please dial -in
+1-877-344-7529 (from the United States)
+855-669-9658 (from Canada)
+1-412-317-0088 (from other countries)
The replay will be available until March 20, 2019.
Replay Access code: 10128206
Internet
This Press Release is available on the web page of BBVA Francés.
www.bbvafrances.com.ar
Contacts
Cecilia Acuña
Investor Relations
(5411) 4341-5036
ceciliaviviana.acuna@bbva.com
- 14 -
BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar: by the equity method)
BALANCE SHEET (in thousands of pesos)
Communication A 6114
12-31-18 | 09-30-18 | 12-31-17 | ||||||||||
Cash and due from banks |
99,105,461 | 87,821,856 | 38,235,942 | |||||||||
Debt securities at fair value through other comprehensive income |
7,508,099 | 475,431 | 5,795,638 | |||||||||
Derivatives |
591,418 | 63,881 | 142,745 | |||||||||
Repurchase agreements |
12,861,116 | 9,582,646 | 6,329,939 | |||||||||
Other financial assets |
9,647,525 | 6,707,106 | 2,664,139 | |||||||||
Loans and other financial intermediation |
181,422,347 | 178,638,563 | 127,597,290 | |||||||||
Loans to the private & financial sector |
181,422,140 | 178,638,386 | 127,597,072 | |||||||||
Advances |
11,789,313 | 16,405,607 | 11,707,264 | |||||||||
Discounted and purchased notes |
25,874,782 | 23,696,455 | 18,821,002 | |||||||||
Secured with mortgages |
10,110,286 | 8,718,885 | 4,457,821 | |||||||||
Car secured loans |
1,660,242 | 1,774,642 | 4,539,300 | |||||||||
Personal loans |
23,586,938 | 21,923,282 | 16,638,201 | |||||||||
Credit cards |
42,509,011 | 37,421,393 | 30,144,824 | |||||||||
Loans to financial sector |
9,669,713 | 9,724,646 | 4,649,114 | |||||||||
Other (*) |
58,144,255 | 59,711,580 | 36,740,905 | |||||||||
Other receivables |
3,896,270 | 4,414,711 | 2,782,597 | |||||||||
Less: Unaccrued interest |
(1,560,431 | ) | (1,151,897 | ) | (593,526 | ) | ||||||
Less: Allowance for loan losses |
(4,258,239 | ) | (4,000,918 | ) | (2,290,430 | ) | ||||||
Public Sector loans |
207 | 177 | 218 | |||||||||
Principal |
200 | 176 | 146 | |||||||||
Interests and adjustments |
7 | 1 | 72 | |||||||||
Other debt securities |
23,742,631 | 30,982,187 | 16,298,834 | |||||||||
Financial assets pledged as collateral |
4,703,064 | 6,301,957 | 3,250,464 | |||||||||
Current income tax assets |
385 | 385 | 9,340 | |||||||||
Investments in equity instruments |
129,538 | 129,234 | 127,287 | |||||||||
Investments in associates and joint ventures |
1,752,322 | 1,781,225 | 889,433 | |||||||||
Property, plant and equipment |
9,816,117 | 9,172,910 | 9,511,535 | |||||||||
Intangible assets |
510,912 | 596,310 | 344,447 | |||||||||
Deferred income tax asset |
194,036 | 100,826 | 21,053 | |||||||||
Other non financial assets |
2,135,859 | 1,375,031 | 1,530,269 | |||||||||
Non-current assets held for sale |
493,373 | 252,805 | 196,379 | |||||||||
Total Assets |
354,614,203 | 333,982,353 | 212,944,734 | |||||||||
Deposits |
259,509,061 | 247,227,968 | 153,934,671 | |||||||||
Current accounts |
29,934,576 | 26,376,260 | 24,979,598 | |||||||||
Saving accounts |
140,956,173 | 143,828,389 | 79,047,758 | |||||||||
Time deposits |
84,283,709 | 72,352,805 | 45,330,652 | |||||||||
Investment Accounts |
| | | |||||||||
Rescheduled deposits CEDROS |
1,951 | 1,951 | 1,951 | |||||||||
Other deposits |
4,332,652 | 4,668,563 | 4,574,712 | |||||||||
Liabilities at fair value through other comprehensive income |
692,270 | 1,345,749 | | |||||||||
Derivatives |
1,377,259 | 4,431,577 | 229,775 | |||||||||
Repurchase agreements |
14,321 | | 285,410 | |||||||||
Other financial liabilities |
28,189,392 | 21,934,634 | 14,002,353 | |||||||||
Financing received the BCRA and other financial institutions |
5,527,525 | 5,757,714 | 691,295 | |||||||||
Corporate bonds issued |
2,473,690 | 1,735,343 | 2,052,490 | |||||||||
Current income tax liabilities |
3,676,444 | 2,548,311 | 1,469,886 | |||||||||
Provisions |
3,620,723 | 3,448,015 | 2,127,857 | |||||||||
Other provisions |
3,619,240 | 3,446,583 | 2,126,740 | |||||||||
For eventual compromises |
1,483 | 1,432 | 1,117 | |||||||||
Deferred income tax liabilities |
57,725 | 48,074 | 455,851 | |||||||||
Other non-financial liabilities |
10,894,016 | 9,776,753 | 7,458,086 | |||||||||
Total Liabilities |
316,032,426 | 298,254,138 | 182,707,674 | |||||||||
Total Stockholders equity |
38,551,665 | 35,699,118 | 29,929,036 | |||||||||
Equity investments |
30,112 | 29,097 | 308,024 | |||||||||
Total liabilities + stockholders equity |
354,614,203 | 333,982,353 | 212,944,734 |
- 15 -
BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar: by the equity method)
INCOME STATEMENT (in thousands of pesos)
Communication A 6114
12-31-18 | 09-30-18 | 12-31-17 | ||||||||||
Interest Income |
17,731,588 | 12,299,911 | 6,246,089 | |||||||||
Interest on loans to the financial sector |
926,199 | 451,780 | 227,911 | |||||||||
Interest on overdraft |
2,100,546 | 1,861,503 | 896,504 | |||||||||
Interest on documents |
2,022,162 | 1,513,877 | 749,754 | |||||||||
Interest on mortgages loans |
240,762 | 207,595 | 113,303 | |||||||||
Interest on car secured loans |
103,982 | 360,215 | 267,971 | |||||||||
Interest on credit card loans |
2,690,676 | 1,395,515 | 1,510,119 | |||||||||
Interest on financial leases |
134,513 | 134,487 | 102,154 | |||||||||
Interest on personal loans |
1,703,271 | 1,624,393 | 1,203,078 | |||||||||
Interest on other loans |
665,768 | 983,350 | 564,288 | |||||||||
From other banking receivables from financial intermediation |
3,693 | 2,513 | 2,547 | |||||||||
CER adjustment |
24,386 | 12,124 | 96,200 | |||||||||
UVA adjustment |
2,071,175 | 965,760 | 92,247 | |||||||||
Income from Public Securities |
4,401,601 | 2,092,036 | | |||||||||
Other |
642,854 | 694,763 | 361,580 | |||||||||
Interest Expenses |
(9,268,761 | ) | (5,735,581 | ) | (2,134,194 | ) | ||||||
Interest on Current Account Deposits |
(1,904,843 | ) | (1,139,396 | ) | (227,419 | ) | ||||||
Interest on Saving Account Deposits |
(51,867 | ) | (26,624 | ) | (10,310 | ) | ||||||
Interest on Time Deposits |
(6,267,054 | ) | (3,768,514 | ) | (1,697,659 | ) | ||||||
Interest on interfinancing received loans |
(5,074 | ) | (26,756 | ) | (4,319 | ) | ||||||
Interest on other financing from the financial institutions |
20,225 | (117,761 | ) | (2,285 | ) | |||||||
Interest on other liabilites from financial intermediation |
(605,343 | ) | (416,389 | ) | (130,112 | ) | ||||||
Other interest |
(8 | ) | (45 | ) | (67 | ) | ||||||
UVA adjustment |
(448,798 | ) | (221,865 | ) | (12,062 | ) | ||||||
Other |
(5,999 | ) | (18,231 | ) | (49,961 | ) | ||||||
Net interest income |
8,462,827 | 6,564,330 | 4,111,895 | |||||||||
Net fee income |
1,504,195 | 1,855,906 | 638,005 | |||||||||
Net income of financial instruments |
197,044 | 138,510 | 783,930 | |||||||||
Result from assets at amortised cost |
(67,243 | ) | 12,774 | | ||||||||
Foreign exchange difference |
977,628 | 1,624,223 | 727,560 | |||||||||
Other operating income |
1,206,843 | 1,152,946 | 652,281 | |||||||||
Provision for loan losses |
(1,097,883 | ) | (1,032,752 | ) | (308,991 | ) | ||||||
Net operating income |
11,183,411 | 10,315,937 | 6,604,680 | |||||||||
Personnel expenses |
(2,570,310 | ) | (2,503,707 | ) | (2,005,951 | ) | ||||||
Administrative expenses |
(2,196,156 | ) | (1,826,091 | ) | (1,369,329 | ) | ||||||
Depreciation on Intangible assets |
30,646 | (32,088 | ) | 31,149 | ||||||||
Other operating expenses |
(2,433,597 | ) | (1,635,777 | ) | (1,388,180 | ) | ||||||
Operating income |
3,733,663 | 4,130,578 | 1,659,287 | |||||||||
Income from associates and joint ventures |
570,342 | 48,892 | 47,278 | |||||||||
Net income before income tax from continuing operations |
4,304,005 | 4,179,470 | 1,706,565 | |||||||||
Income tax from continuing operations |
(1,366,363 | ) | (1,131,938 | ) | (357,150 | ) | ||||||
Net income Including non-controlling shareholders |
2,937,642 | 3,047,532 | 1,349,415 | |||||||||
Net income attributable to non-controlling shareholders |
| 39,691 | 9,958 | |||||||||
Net income |
2,936,628 | 3,007,841 | 1,339,457 | |||||||||
Other comprehensive income |
51,475 | (117,469 | ) | 17,720 | ||||||||
Total income attributable to controlling shareholders |
2,988,103 | 2,890,372 | 1,357,177 |
- 16 -
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: March 11, 2019 | By: | /s/ Ernesto Gallardo Jimenez | ||||
Name: Ernesto Gallardo Jimenez | ||||||
Title: Chief Financial Officer |
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