BBVA Argentina reported second-quarter net income of AR$131.6 billion, a 45% increase from AR$91.0 billion in the prior quarter, as expense reductions and gains from monetary positions outweighed a 17.45% revenue shortfall.
Revenue for the period totaled $630.29 million against a $763.5 million forecast, missing estimates by AR$133.2 billion. Despite the shortfall, profitability improved on a 5% quarterly reduction in operating expenses to AR$596.2 billion and a 13.8% rise in first-half monetary position losses. Accumulated net income for the first half reached AR$222.5 billion.
Profitability metrics strengthened, with quarterly return on equity climbing to 12.2% from 8.3% in Q1, while annualized ROE reached 10.3%. Return on assets rose to 1.8% on a quarterly basis and 1.5% annualized, up from 1.2% previously. Adjusted net interest margin improved to 14.66% from 13.98%, though net interest income declined 2.9% to AR$912.2 billion.
Asset quality deteriorated, with the non-performing loan ratio increasing to 10.19% from 9.75%, exceeding the financial system average of 7.22%. NPL coverage fell to 79.91% from 88.41%, while the cost of risk reached 6.54% on a quarterly basis. Private loans grew 2.1% in real terms to AR$17.078 trillion, with the bank’s market share rising to 12.0%.
Capital adequacy remained robust at 18.8%, well above regulatory requirements, while liquid assets covered 45% of total deposits. The loans-to-deposits ratio stood at 85%, with public sector exposure stable at 17.9% of assets.
Management guided for full-year loan growth of about 10% in real terms and deposit growth of 5% to 10%, with efficiency ratios expected to fall below 45% and cost of risk declining to around 6.5%. ROE is projected to remain in the low teens, while NPL ratios are targeted to improve to about 5.5% by year-end.
