BBVA(US:BBAR)2023-11-22 23:00Financial Data and Key Metrics Changes - BBVA Argentina's net income for Q3 2023 was ARS 9.9 billion, a decrease of 75.9% quarter-over-quarter, resulting in a quarterly ROE of 5.1% and a quarterly ROA of 0.9% [8][10] - Operating income in Q3 2023 was ARS 167.3 billion, down 1% from ARS 169 billion in Q2 2023 [8][9] - Net interest income for Q3 2023 was ARS 270.2 billion, an increase of 8.1% quarter-over-quarter [11] - Interest income totaled ARS 586.9 billion, up 17.3% compared to Q2 2023, while interest expenses increased by 26.5% to ARS 316.6 billion [12] Business Line Data and Key Metrics Changes - Retail digital sales reached 93.8% in Q3 2023, representing 72.7% of total sales in monetary value [7] - New customer acquisition through digital channels was 66% in Q3 2023, down from 72% in Q3 2022 [7] - Loan loss allowances decreased by 48.4% due to the release of provisions related to credit cards [14] Market Data and Key Metrics Changes - Private sector loans totaled ARS 1.4 trillion, decreasing 4.8% quarter-over-quarter [17] - Loans to the private sector in pesos fell by 5.3% in Q3 2023, driven by a 9.4% decline in credit cards [17] - BBVA Argentina's market share of private sector loans improved to 9.35% from 8.47% a year ago [18] Company Strategy and Development Direction - The bank aims to increase market share aggressively, particularly in personal loans, despite the challenging economic environment [25] - The strategy focuses on gaining franchise and market share, with a commitment to grow more than the system [25] Management's Comments on Operating Environment and Future Outlook - The management noted that inflation increased from 23.8% in Q2 2023 to 34.8% in Q3 2023, impacting results significantly [10] - The bank expects GDP to contract by 4% in 2024, with inflation projected to be around 155% [6][37] - Management believes that the current inflationary pressures can be mitigated in the fourth quarter of 2023 [23] Other Important Information - The bank's total liquidity ratio remained healthy at 76.6% of total deposits as of September 30, 2023 [19] - The efficiency ratio for Q3 2023 was 82.4%, up from 52% in Q2 2023, indicating higher expenses relative to income [16] Q&A Session Summary Question: Impact of inflation on results - Management acknowledged that inflation was higher in Q3 compared to Q2, affecting equity protection and costs [22][23] Question: Market share increase in loans - Management confirmed that the increase in market share from 8.5% to 9.4% was a strategic decision to grow aggressively in a contracting market [24][25] Question: Increase in checking accounts - The increase in checking accounts was attributed to the bank's strategy to increase wholesale deposits for opportunistic placements [28] Question: Dollarization impact - Management does not foresee dollarization as a possibility in the near term and emphasized the bank's strategies to protect equity against inflation [34][35] Question: Inflation outlook - Management projected year-end inflation around 200% for 2023 and 155% for 2024, with expectations of higher inflation in early 2024 [37]