Summary of BBVA Argentina Q2 2026 Earnings Call

1Key Financial Results and Metrics

Net Income: Inflation-adjusted net income reached ARS 131.6 billion, a 44.6% increase quarter-over-quarter.

Return on Equity (ROE): Improved to 12.2% from 8.3% in Q1 2026.

Net Interest Margin (NIM): Remained stable at 14%, with NIM net of monetary position loss improving from 14% to 14.7%.

Efficiency Ratio: Improved to 45% as a result of cost management.

Loan Portfolio: Total financing to the private sector at ARS 17.1 trillion, with local currency loans up 2% and foreign currency loans up 2.5%.

Nonperforming Loan (NPL) Ratio: Increased to 6.09%, reflecting elevated delinquency levels, while the financial system's NPL ratio rose to 7.22%.

Liquidity Ratio: Strong at 45.5%, with a regulatory capital ratio of 18.8%.

2Strategic Updates and Business Highlights

Economic Environment: Inflation is declining, supporting credit recovery and consumption. Over $15 billion in projects under the RIGI framework are expected to enhance capital inflows.

Debt Management: The treasury improved its debt maturity profile, extending local currency maturities to 2028 and 2029.

Lending Activity: Early signs of recovery in lending, particularly in mortgages and commercial segments.

Deposit Growth: Total deposits reached ARS 19.2 trillion, with a stable private deposit market share.

3Forward Guidance and Outlook

Loan Growth: Expected to grow around 10% in real terms for 2026, with a focus on secured lending and SMEs.

Cost of Risk: Anticipated to stabilize and improve, with a target of around 6.5% by year-end.

Asset Quality: NPLs expected to stabilize and improve, with a target of around 5.5% by year-end.

Profitability: Continued expectation for ROE in the low teens for the full year, supported by higher business volumes and fee contributions.

4Bad News, Challenges, or Points of Concern

Elevated NPL Levels: The NPL ratio increased, indicating ongoing asset quality concerns, particularly in retail loans.

Delinquency Issues: Despite improvements in early-stage delinquencies, overall delinquency levels remain high.

Market Volatility: Potential for volatility in margins and profitability due to fluctuating interest rates and inflation.

5Notable Q&A Insights

Asset Quality Concerns: Management indicated that the deterioration in asset quality primarily affects retail loans, with corporate segments performing well.

NPL Trends: Expected slight improvement in NPLs in Q3, with a more significant recovery in Q4.

Regulatory Changes: The government’s new policy allowing banks to lend USD loans up to 15% of deposits was welcomed but not seen as a major driver for BBVA's growth strategy.

Portfolio Mix: Management highlighted a shift towards mortgages and car loans, with expectations for these segments to grow in the coming quarters. This summary encapsulates the key points from BBVA Argentina's Q2 2026 earnings call, providing a balanced view of the company's financial performance, strategic direction, and challenges ahead.