Summary of BBVA Argentina Q1 2026 Earnings Call

1Key Financial Results and Metrics

Net Income: ARS 85.2 billion, a 31.2% increase quarter-over-quarter.

Return on Equity (ROE): Improved to 8.3%.

Net Interest Income: Grew by 5.9% to ARS 879.9 billion.

Net Interest Margin (NIM): Expanded to 18.6%.

Efficiency Ratio: 51.4%, reflecting ongoing expense management.

Total Financing to Private Sector: ARS 15.7 trillion; local currency loans fell 6.5%, while foreign currency loans rose 6.8% (23.3% increase in dollar terms).

Deposits: Totaled ARS 17.5 trillion; private deposits saw a minor seasonal dip to 9.93% market share but increased 78 basis points year-over-year.

Nonperforming Loan (NPL) Ratio: Increased to 5.60%, primarily due to retail card and consumer portfolios; commercial delinquency remained low at 0.50%.

Cost of Risk: Decreased from 8.11% to 6.14%.

Liquidity Ratio: Strong at 45.5%.

Capital Position: Regulatory capital ratio at 18.8%, well above minimum requirements.

2Strategic Updates and Business Highlights

The bank's business model showed resilience amidst a transitioning macroeconomic environment, with reduced interest rate volatility and improved liquidity management.

Continued focus on capturing market share, with a consolidated loan market share increase to 12.15%.

The Central Bank approved a dividend distribution of ARS 69 billion, reinforcing the commitment to shareholder value.

The bank is strategically managing its corporate structure and expenses to enhance efficiency.

3Forward Guidance and Outlook

BBVA Argentina anticipates a cautious recovery in private credit, expecting loan growth to be revised down to 15%-20% in real terms for 2026, down from an initial 25%-30% estimate.

The bank expects asset quality to stabilize and potentially improve in the second quarter, with NPLs projected to decrease slightly by year-end.

ROE guidance for 2026 remains in the low to mid-teens, with expectations for continued improvement as economic conditions normalize.

4Bad News, Challenges, or Points of Concern

The NPL ratio is a concern, particularly in the retail segment, indicating ongoing credit quality challenges.

The bank's efficiency ratio remains high, though management expects improvements throughout the year.

Loan demand in local currency has been weak, particularly in the first quarter, impacting deposit growth and necessitating a cautious approach to credit origination.

Regulatory pressures, including high reserve requirements, continue to pose challenges, although liquidity is currently not a concern.

5Notable Q&A Insights

Management expressed a cautious optimism regarding asset quality, noting improvements in origination policies and a potential stabilization in NPLs.

Loan growth expectations have been adjusted downward due to a slow start to the year, but management sees potential for improvement in the second half.

There is a recognition of the need for a broader recovery in the economic environment to support stronger credit demand.

The bank is not aggressively competing for deposits, indicating a focus on maintaining liquidity without incurring excessive costs.

Management highlighted the importance of ongoing reforms in Argentina and their potential positive impact on the financial system and the bank's performance. Overall, BBVA Argentina is navigating a complex economic landscape with a focus on maintaining stability, improving asset quality, and strategically positioning itself for future growth.