Form 6-K
Table of Contents

 

 

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 February 2010

Commission File Number: 001-12568

 

 

BBVA French Bank S.A.

(Translation of registrant’s 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      X            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      X    

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      X    

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      X    

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

 

 

 


Table of Contents

BBVA Banco Francés S.A.

TABLE OF CONTENTS

 

Item

    
1.    Press release entitled “BBVA Banco Francés reports fourth quarter earnings for fiscal year 2009”.


Table of Contents

LOGO

Buenos Aires, February 22, 2010 - BBVA Banco Francés (NYSE: BFR.N; BCBA: FRA.BA; LATIBEX: BFR.LA) reports consolidated fourth quarter earnings for fiscal year 2009

 

 

Annual Highlights

 

 

   

During the year 2009 BBVA Banco Francés was distinguished as the Best Argentine Bank by Euromoney magazine, emphasizing its leadership in terms of risk assumed and in earnings growth.

 

   

BBVA Banco Francés continues to demonstrate its ability to generate recurring income. During the year 2009, such earnings reached AR$ 414.0 million and extraordinary earnings totaled AR$ 304.5 million, increasing the total return on equity (ROE) for the year 2009 to 28.7%.

 

   

Recurring income improvement relied on the growth of private sector financial revenues and fee income, partially offset by significant growth in the income tax charge and higher provision for loan losses charges and administrative expenses. Regarding non-recurring results, these are due to the increase in the public assets valuations and the constitution of anti-cyclical allowances for the loans portfolio.

 

   

The growth of recurring net interest income and net fee income demonstrate the ability of BBVA Banco Francés to generate gains. The improvement in the net interest margin is due to higher revenues from the private loan portfolio while net fee income increase is a consequence of higher business volume.

 

   

During the year 2009, the private sector loan portfolio grew 7.7%, without taking into account loans to the financial sector and net of the variation in allowances for loan loses. It’s important to highlight the evolution of credit card financings in the retail segment along with the growth in advances and other loans in both the large corporations and small and medium-sized enterprises (SMEs) segments. The decrease in the rate of growth of lending activity relates to a reduction in the demand for funding, especially in the first half of the year. However, the trend changed in the last quarter of the year which showed a higher rate of growth.

 

   

Asset quality ratios continue to differentiate BBVA Banco Francés in the financial system. As of December 31, 2009, non-performing loans represented 1.11% of total loans while the coverage ratio of non-performing loans with provisions was 277.9%.

 

   

In terms of liabilities, total deposits rose 6.6% during the year 2009. Meanwhile recurrent deposits grew 9.4% in the last twelve months. The higher increase was registered in sight deposits, which increased 10.8% in this mentioned period. As of December 31, 2009, such balances represented 57.0% of total deposits.

 

   

During the year 2009, BBVA Banco Francés maintained adequate levels of liquidity and solvency. As of December 31, 2009, total stockholders’ equity reached AR$ 2.9 billion while the excess of capital over the Central Bank regulatory requirements, reached AR$ 1,398.5 million, or 47.8% of the Bank’s total stockholders’ equity.

 

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Condensed Income Statement (1)

                  
in thousands of pesos except income per share, income per ADS and percentages    FY 2009     FY 2008     % Change  

Net Financial Income

   2,064,039      707,476      191.7

Provision for loan losses

   (245,966   (36,708   570.1

Net income from services

   925,012      748,779      23.5

Administrative expenses

   (1,562,326   (1,135,834   37.5

Operating income

   1,180,759      283,713      316.2

Income (loss) from equity investments

   41,450      63,106      -34.3

Income (Loss) from Minority interest

   (17,851   (5,203   243.1

Other Income/Expenses

   (123,457   (7,532   n.a.   

Income tax

   (362,439   (12,574   n.a.   

Net income for the period

   718,462      321,510      123.5

Net income per share (2)

   1.47      0.68      116.0

Net income per ADS (3)

   4.42      2.05      116.0

 

(1) Exchange rate: 3.7967 Ps. = 1 US$
(2) Assumes 487,611,306 average ordinary shares outstanding for fiscal year 2009 and 471,361,306 ordinary shares outstanding for fiscal year 2008.
(3) Each ADS represents three ordinary shares.

Net income for fiscal year 2009 includes non-recurrent effects mainly generated by the improvement in the public assets valuations.

The following “pro forma” table presents non-recurrent earnings.

 

Condensed Income Statement (1)

   Fiscal Year 2009  
in thousands of pesos except income per share, income per ADS and percentages    Recurrent     Non Recurrent     Total  

Net Financial Income

   1,581,490      482,549      2,064,039   

Provision for loan losses

   (151,122   (94,844   (245,966

Net income from services

   925,012      —        925,012   

Administrative expenses

   (1,562,326   —        (1,562,326

Operating income

   793,053      387,706      1,180,759   

Income (loss) from equity investments

   41,450      —        41,450   

Income (Loss) from Minority interest

   (17,851   —        (17,851

Other Income/Expenses

   (104,190   (19,267   (123,457

Income tax

   (298,510   (63,929   (362,439

Net income for the period

   413,952      304,510      718,462   

Net income per share (2)

   0.85      0.62      1.47   

Net income per ADS (3)

   2.55      1.87      4.42   

 

(1) Exchange rate: 3.7967 Ps. = 1 US$
(2) Assumes 487,611,306 average ordinary shares outstanding for fiscal year 2009 and 471,361,306 ordinary shares outstanding for fiscal year 2008.
(3) Each ADS represents three ordinary shares.

 

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Highlights

 

 

   

During the fourth quarter of 2009, BBVA Banco Francés recurring gain reached AR$ 147.0 million, 23% higher than the third quarter of 2009. In addition, the Bank obtained non recurrent earnings of AR$ 114.2 million, generated by the increase in the public assets valuations.

 

   

Recurring earnings growth is mainly due to a higher net interest income together with lower provisions for loan loses, partially offset by higher administrative expenses. The net interest margin improvement is a consequence of the private sector income growth and the accruing of interest and CER adjustment of public assets.

 

   

As of December 31, 2009, the private sector loan portfolio exceeded AR$ 10.3 billion. During the fourth quarter lending activity growth accelerated, showing an increase of 3.1% in loans to the private and financial sectors. The expansion was led by credit card financings and personal loans in the consumer segment together with discounted notes and other loans in the corporate segment.

 

   

During the fourth quarter of 2009, the portfolio asset quality continued to improve. The non-performing ratio for the private sector decreased almost to last year’s ratio, mainly due to a lower non-performing loans portfolio. As of December 31, 2009, non-performing loans represented 1.11% of total loans and the coverage ratio of non-performing loans with provisions reached 277.9%.

 

   

BBVA Banco Francés’ total deposits increased 1.8% in the fourth quarter. The highest increase was registered in sight deposits, which grew 5.3% in the fourth quarter. The expansion of sight deposits was due to the increase in savings accounts, which grew 28.3% in the year 2009 and 10.1% in the fourth quarter.

 

 

Economic Environment

 

During October and November 2009, economic activity continued at the recovery pace initiated in the second quarter of the year. The Monthly Estimator of Economic Activity (EMAE) showed an increase of 1.4% compared to the same two months of the previous year, while, in seasonally adjusted terms, recorded a growth of 1.3% compared to the value of the previous quarter.

During the fourth quarter of 2009, fiscal revenues increased 16% compared to the same quarter of the previous year. Tax collections continued to benefit from Social Security taxes since VAT and Income Tax grew 11.8% and 11.2% respectively in the same period.

During the fourth quarter of 2009, the primary fiscal surplus of the national public sector was AR$ 8.583 million; extraordinary incomes, as SDR (special drawing rights) from the IMF and resources from the Anses sustainability guarantee fund, were booked in this period. Primary spending showed an increase of 30.6% in annual terms during the last quarter of 2009.

Inflation, as measured by the Consumer Price Index (which is used to calculate the CER adjustment for some sovereign assets) averaged 2.6% during the fourth quarter of 2009.

The BCRA intervention in the FX market was a net purchase of US$ 3.894 million during the quarter. The exchange rate (according to the BCRA) closed at AR$ 3.80 per U.S. dollar, a decrease of 1.2% compared to September 30, 2009. The international reserve stock reached US$ 47,967 million, showing an increase of US$ 2.619 million during the quarter.

The Badlar rate at private banks was 9.8% at the end of the quarter, the downward trend during the quarter was due to the financial system liquidity and the recovery of the positive intervention from the Central Bank in the FX market.

Total deposits in the financial system increased 3.4% on average in the fourth quarter of 2009, while private sector deposits rose 6.7% which represented an acceleration with respect to the previous quarter’s performance. Private sector loans showed an increase of 3.8% during the fourth quarter, reflecting an improvement compared to the third quarter of 2009.

 

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The Bank

 

BBVA Banco Francés maintains its leadership position in the Argentine financial system thanks to its considerable ability to adapt to market conditions.

During the year 2009, its universal bank strategy allowed it to increase financings in its three market segments without neglecting its risk policy.

In terms of liabilities, the priority for the Bank was to focus on retail funds, increasing transactional participation as a percentage of total deposits.

In a year of changes, efficiency was another of the fundamental pillars of BBVA Banco Francés strategy, which required an evaluation of expenses and a strengthening of our transactional business.

The current business environment offers new opportunities for the Bank, which has strong levels of liquidity and solvency, the best non-performing ratio in the financial system, good earnings and a solid relationship with its clients.

 

 

Presentation of Financial Information

 

 

 

Foreign currency balances as of December 31, 2009 have been translated into pesos at the reference exchange rate of AR$3.7967 per U.S. dollar, published by the BCRA.

 

 

This press release contains unaudited information that consolidates all of the banking activities of BBVA Banco Francés and its subsidiaries on a line-by-line basis. The Bank’s share in the Consolidar Group is shown as investments in other companies (booked by the equity method) and the corresponding results are included in income from equity investments.

 

 

Information contained in this press release may differ from the information published by the BBVA Group for Argentina, which is prepared according to Spanish accounting standards for all BBVA Group affiliates.

 

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Financial Information

 

 

Condensed Income Statement (1)

   Quarter ended     % Change Qtr ended
12/31/09 vs. Qtr ended
 
in thousands of pesos except income per share, income per ADS and percentages    12/31/09     09/30/09     12/31/08     09/30/09     12/31/08  

Net Financial Income

   611,471      757,708      (11,249   -19.3   n.a.   

Provision for loan losses

   (30,665   (135,956   35,816      -77.4   -185.6

Net income from services

   244,158      245,429      218,876      -0.5   11.6

Administrative expenses

   (433,571   (390,798   (319,283   10.9   35.8

Operating income

   391,393      476,383      (75,840   -17.8   n.a.   

Income (Loss) from equity investments

   6,156      (2,173   (17,023   -383.3   -136.2

Income (Loss) from Minority interest

   (4,010   (4,494   (2,467   -10.8   62.5

Other Income/Expenses

   (12,757   (47,658   114,682      -73.2   -111.1

Income tax and Minimum Presumed Tax

   (119,533   (112,565   (3,573   6.2   n.a.   

Net income for the period

   261,249      309,493      15,779      -15.6   n.a.   

Net income per share (2) 

   0.49      0.66      0.03      -15.6   n.a.   

Net income per ADS (3) 

   1.46      1.97      0.10      -15.6   n.a.   

 

(1) Exchange rate: 3.7967 Ps. = 1 US$
(2) Assumes 531,361,306 ordinary shares outstanding as of 12/31/09 and as of 09/30/09 and 471,361,306 ordinary shares outstanding as of 12/31/08.
(3) Each ADS represents three ordinary shares.

Net income for the fourth quarter of 2009 includes non-recurrent effects generated by the improvement in the public assets valuations.

The following “pro forma” table presents non-recurrent earnings.

 

Condensed Income Statement PROFORMA

   Quarter ended as of 12/31/2009  
in thousands of pesos    Recurrent     Non Recurrent     Total  

Net Financial Income

   460,374      151,097      611,471   

Provision for loan losses

   (30,665   —        (30,665

Net income from services

   244,158      —        244,158   

Administrative expenses

   (433,571   —        (433,571

Operating income

   240,296      151,097      391,393   

Income (loss) from equity investments

   6,156      —        6,156   

Income (Loss) from Minority interest

   (4,010   —        (4,010

Other Income/Expenses

   (12,757   —        (12,757

Income tax and Minimum Presumed Tax

   (82,670   (36,863   (119,533

Net income for the period

   147,015      114,234      261,249   

Recurrent net financial income increased 8.0% from AR$ 426.3 million in the previous quarter. This increase is a consequence of the private sector income growth together with higher interest accrual and CER adjustment of public assets, partially offset by lower income related to foreign currency exchange and from reverse repo operations with the Central Bank.

Provisions for loan losses decreased 25.4% compared to the recurrent provision of the previous quarter.

During the fourth quarter of 2009, net income from services maintained the same level of the previous quarter as a consequence of higher fees related to promotions in operations with credit and debit cards. However, net income from services increased 11.6% as compared to the previous quarter due to higher business volume.

Administrative expenses for the fourth quarter of 2009 increased 10.9% as compared to the previous quarter and 35.8% compared to the same quarter in 2008, mainly due to an increase in personnel expenses.

 

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Recurrent operating income totaled AR$ 240.3 million, not showing a significant variation compared to the previous quarter and increasing 36.4% over the same earnings of the fourth quarter of 2008.

Finally, the higher figures in the provision for net income tax compared to the fourth quarter of 2008, is due to the Bank completing the process of absorbing those failures generated in previous years during the second quarter of 2009.

 

in thousands of pesos except percentages    Quarter ended     % Change Qtr ended
12/31/09 vs. Qtr ended
 
   12/31/09     09/30/09     12/31/08     09/30/09     12/31/08  

Return on Average Assets (1)

   4.51   5.23   0.29   -13.7   n.a.   

Return on Average Shareholders’ Equity (1) (2)

   21.2   19.6   32.1   8.2   -34.0

Net fee Income as a % of Operating Income (4)

   34.7   36.5   41.3   -5.2   -16.1

Net fee Income as a % of Administrative Expenses

   56.3   62.8   68.6   -10.3   -17.9

Adm. Expenses as a % of Operating Income (3) (4)

   61.5   58.2   60.3   5.8   2.1

 

(1) Annualized.
(2) Calculated with the quarter’s ordinary income.
(3) Adm.Expenses / (Net financial income + Net income from services)
(4) Operating Income without considering the adjustment of the value of public portfolio.

 

 

Net Financial Income

 

Net financial income, without taking into account the impact generated by the increase in the public assets valuations, totaled AR$ 460.4 million during the fourth quarter of 2009, increasing 8.0% compared to the previous quarter.

Private sector income continued to show sustained growth, increasing 1.8% compared to the previous quarter. Such increase is mainly explained by the private sector loan portfolio increase, particularly the more dynamic sectors together with strong management of funds.

During the fourth quarter of 2009, an improvement in interest accrual and CER adjustment of public assets was partially offset by lower income related to foreign currency exchange and from reverse repo operations with the Central Bank.

Income related to foreign currency exchange, included as foreign exchange difference, totaled AR$ 29.2 million, showing a decrease over previous quarters.

 

in thousands of pesos except percentages    Quarter ended     % Change Qtr ended
12/31/09 vs. Qtr ended
 
   12/31/09    09/30/09    12/31/08     09/30/09     12/31/08  

Net financial income

   611,471    757,708    (11,249   -19.3   n.a.   

Income from financial intermediation

   184,735    181,489    112,689      1.8   63.9

CER adjustment

   180    152    32,829      18.4   -99.5

Income from securities and short term investments

   255,202    484,027    (316,695   -47.3   n.a.   

Interest on Government guaranteed loans

   92,069    2,785    15,210      n.a.      505.3

Foreign exchange difference

   29,164    36,030    56,967      -19.1   -48.8

Others

   50,121    53,225    87,751      -5.8   -42.9

 

 

Income from Public and Private Securities

 

Income from public and private securities, without considering the impact generated by the increase in the public bonds valuations, totaled AR$ 196.2 million during the fourth quarter of 2009, 28.6% higher than those recorded in the previous quarter.

During the fourth quarter of 2009, improvement in interest accrual and CER adjustment was observed in both unlisted securities and the available-for-sale portfolio.

 

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In addition, Central Bank bills and notes results increased 54.8% with respect to the previous quarter due to the increase of these instruments in the portfolio.

 

in thousands of pesos except percentages    Quarter ended     % Change Qtr ended
12/31/09 vs. Qtr ended
 
   12/31/09    09/30/09    12/31/08     09/30/09     12/31/08  

Income from securities and short-term investments

   227,663    464,676    (316,695   -51.0   n.a.   

Trading account

   99,394    160,888    9,466      -38.2   n.a.   

Available for sale

   9,490    9,524    33,243      -0.4   -71.5

Bills and Notes from the Central Bank

   81,490    52,652    15,890      54.8   412.8

Other fixed income securities

   37,289    241,612    (375,294   n.a.      -109.9

CER adjustment

   27,540    19,352    14,939      42.3   84.3

CER adjustment - Trading account

   —      —      —        —        —     

CER adjustment - Investment account

   —      —      —        —        —     

CER adjustment - Other fixed securities

   27,540    19,352    14,939      42.3   84.3

 

 

Net Income from Services

 

During the fourth quarter of 2009, net income from services maintained the same level of the previous quarter as a consequence of higher fees related to promotions in operations with credit and debit cards. However, net income from services increased 11.6% as compared to the previous quarter due to higher business volume.

Credit card fees and those related to foreign trade operations increased compared to the previous quarter and to the same quarter of 2008 due to higher business volume. However, fees related to sight accounts stopped their growth during the last quarter of the year.

The increase in service charge expenses is due to higher fees related to promotions and discounts in operations with credit and debit cards.

 

in thousands of pesos except percentages    Quarter ended     % Change Qtr ended
12/31/09 vs. Qtr ended
 
   12/31/09     09/30/09     12/31/08     09/30/09     12/31/08  

Net income from services

   244,158      245,429      218,876      -0.5   11.6

Service charge income

   319,747      304,284      289,896      5.1   10.3

Service charges on deposits accounts

   105,674      104,959      95,699      0.7   10.4

Credit cards and operations

   87,635      78,280      76,509      12.0   14.5

Insurance

   30,319      28,363      32,233      6.9   -5.9

Capital markets and securities activities

   5,802      3,474      3,557      67.0   63.1

Fees related to foreign trade

   14,706      17,269      14,184      -14.8   3.7

Other fees

   75,611      71,939      67,715      5.1   11.7

Services Charge expense

   (75,589   (58,855   (71,020   28.4   6.4

 

 

Administrative Expenses

 

During the fourth quarter of 2009, administrative expenses increased by 10.9% compared to the previous quarter and 35.8% compared to the same quarter in 2008. This increase is mainly explained by increases in personnel and general expenses.

During the fourth quarter of 2009, personnel expenses increased compared to the previous quarter due to new hires in the sales force, higher seasonal benefits charges and the increase of voluntary retirement charges. In addition, compared to the fourth quarter of 2008, personnel expenses increased as a consequence of salary increases after an agreement with a labor union in 2009.

 

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The increase in general expenses compared to the previous quarter is due to higher investment in advertising and promotion together with credit card related promotion campaigns and increased technology network expenses, especially software maintenance and development.

Higher charges in taxes, amortization and organization expenses registered in general expenses and were partially offset by lower advertising and promotion charges, compared to the same quarter of the previous year.

The increase in taxes is explained by a change in the accounting criteria. In previous years, charges for financial transactions were accounted under other expenses. The increase in amortization and organization expenses is a consequence of higher investment in remodeling and opening of branches.

As of December 31, 2009, the Bank and its subsidiaries (except the Consolidar Group) had 4,095 employees. The branch office network totaled 271 offices, including 240 consumer branch offices, 27 branch offices specializing in the middle-market segment, 15 in-company branches, four branch offices for large corporate and institutional clients and two points of sale.

 

in thousands of pesos except percentages    Quarter ended     % Change Qtr ended
12/31/09 vs. Qtr ended
 
   12/31/09     09/30/09     12/31/08     09/30/09     12/31/08  

Administrative expenses

   (433,571   (390,798   (319,283   10.9   35.8

Personnel expenses

   (269,049   (239,577   (186,297   12.3   44.4

Electricity and Communications

   (7,669   (7,366   (6,932   4.1   10.6

Advertising and Promotion

   (20,348   (17,342   (21,754   17.3   -6.5

Honoraries

   (9,032   (8,798   (8,550   2.7   5.6

Taxes

   (25,281   (24,002   (9,929   5.3   154.6

Organization and development expenses

   (4,396   (4,157   (3,304   5.7   33.1

Amortizations

   (12,423   (11,874   (10,100   4.6   23.0

Other

   (85,373   (77,682   (72,417   9.9   17.9

 

 

Other Income / Expenses

 

Other income/expenses totaled a loss of AR$ 12.8 million during the fourth quarter of 2009, mainly including a loss from legal injunctions paid together with provisions for other contingencies and recovered credits.

 

 

Income from Equity Investments

 

Income from equity investments sets forth net income from related companies that are not consolidated. During the fourth quarter of 2009 there was a gain of AR$ 6.2 million, mainly due to the Bank’s stake in the Consolidar Group and in Rombo Cía Financiera.

 

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Balance and Activity

 

 

 

Total Public Sector Exposure

 

Public sector national government debt grew 1.3% during the last quarter of 2009 and 9.1% in the last twelve months. Such increase is mainly explained by higher quotations in public bonds partially offset by capital amortizations, which occurred during 2009.

It is important to mention that as of December 31, 2009, the total portfolio of public assets is booked at fair value. The unrealized valuation of public bonds labeled as “available for sale” decreased to AR$ 14.1 million.

During the fourth quarter of 2009, Central Bank bills and notes portfolio grew by 48.0% in order to allocate liquidity.

As of December 2009, public sector national treasure assets, net of holdings linked to reverse repo transactions, represented 10.2% of the Bank’s total assets. Meanwhile, the total exposure including the portfolio of BCRA bills and notes, reached 23.9% of the Bank’s total assets.

Total exposure to the public sector includes public debt of the national treasury through public securities, guaranteed loans and trustees, and BCRA bills and notes.

 

in thousands of pesos except percentages    Quarter ended     % Change Qtr ended
12/31/09 vs. Qtr ended
 
   12/31/09     09/30/09     12/31/08     09/30/09     12/31/08  

Public Sector - National Government

   2,468,842      2,437,382      2,262,626      1.3   9.1

- Loans to the Federal government & Provinces

   315,960      312,339      1,365,552      1.2   -76.9

- Total bond portfolio

   2,388,243      2,483,711      1,432,662      -3.8   66.7

Unlisted

   1,961,046      2,001,129      1,004,833      -2.0   95.2

Available for sale

   350,596      285,145      91,669      23.0   282.5

Other government bonds

   576      1,543      1,472      -62.6   -60.8

Reverse repo w/Central Bank

   76,024      195,895      334,688      -61.2   -77.3

- Trustees

   214,566      215,785      217,043      -0.6   -1.1

- Allowances

   (449,927   (574,454   (752,631   -21.7   -40.2

Bills and Notes from Central Bank

   3,186,328      2,226,133      2,928,104      43.1   8.8

- Own portfolio

   3,186,328      2,153,101      1,668,928      48.0   90.9

- Reverse repo w/Central Bank

   0      73,031      1,259,176      -100.0   -100.0

Total exposure to the Public Sector

   5,655,170      4,663,514      5,190,730      21.3   8.9

Total exposure to the Public Sector without repos

   5,579,146      4,394,588      3,596,866      27.0   55.1

 

 

Loan Portfolio

 

During 2009, loans to the private and financial sectors grew 4.4%. Nevertheless without considering financings to the financial sector, growth in the private sector loan portfolio reached 7.7% net of the variation in allowances for loan losses.

During the fourth quarter lending activity growth accelerated, showing an increase of 3.1% in loans to the private and financial sectors. The expansion was led by credit card financings and personal loans in the consumer segment together with discounted notes and other loans in the middle market segment.

In annual terms, credit card financings showed a strong performance in the retail segment and increases in advances and other loans to both the small and mid-size companies segment and the large corporations segment.

It is important to highlight that the Bank maintains a very well diversified loan portfolio.

In the last twelve months, retail portfolio participation on total private sector loans has remained at a 45% level.

 

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The table below shows the composition of the loan portfolio balance at the end of each quarter.

 

in thousands of pesos except percentages    Quarter ended     % Change Qtr ended
12/31/09 vs. Qtr ended
 
   12/31/09     09/30/09     12/31/08     09/30/09     12/31/08  

Private & Financial sector loans

   10,336,588      10,030,646      9,898,442      3.1   4.4

Advances

   1,703,751      2,108,709      1,413,526      -19.2   20.5

Discounted and purchased notes

   1,068,567      946,848      1,241,508      12.9   -13.9

Consumer Mortgages

   838,410      869,012      946,804      -3.5   -11.4

Car secured loans

   480,694      484,777      511,374      -0.8   -6.0

Personal loans

   1,819,382      1,768,773      1,855,767      2.9   -2.0

Credit cards

   1,464,163      1,240,854      1,239,588      18.0   18.1

Loans to financial sector

   335,367      384,148      491,820      -12.7   -31.8

Other loans

   2,806,667      2,411,673      2,228,099      16.4   26.0

Unaccrued interest

   (16,471   (16,425   (24,304   0.3   -32.2

Adjustment and accrued interest & exchange differences receivable

   173,744      167,804      190,749      3.5   -8.9

Less: Allowance for loan losses

   (337,686   (335,527   (196,489   0.6   71.9

Loans to public sector

   315,960      312,339      1,365,552      1.2   -76.9

Loans to public sector

   117,464      99,376      553,120      18.2   -78.8

Adjustment and accrued interest & exchange differences receivable

   198,496      212,963      812,432      -6.8   -75.6

Net total loans

   10,652,548      10,342,985      11,263,994      3.0   -5.4

 

 

Asset Quality

 

As of December 31, 2009, the asset quality ratio (non-performing loans over total loans) was 1.11% and the coverage ratio (provisions over of non-performing loans) reached 277.9%.

During the fourth quarter, asset quality continued to improve. The non-performing ratio for the private sector decreased almost to the same level of a year ago, mainly due to a lower non-performing loans portfolio.

The Bank maintains a conservative risk policy that allows it to continue to have the best asset quality ratio of the Argentine financial system with an extraordinary level of coverage.

 

in thousands of pesos except percentages    Quarter ended     % Change Qtr ended
12/31/09 vs. Qtr ended
 
   12/31/09     09/30/09     12/31/08     09/30/09     12/31/08  

Non-performing loans (1)

   121,500      133,283      110,699      -8.8   9.8

Allowance for loan losses

   (337,686   (335,527   (196,489   0.6   71.9

Non-performing loans/net total loans

   1.11   1.25   0.97   -11.4   14.5

Non-performing private loans/net private loans

   1.14   1.29   1.10   -11.5   3.8

Allowance for loan losses/non-performing loans

   277.93   251.74   177.50   10.4   56.6

Allowance for loan losses/net total loans

   3.07   3.14   1.71   -2.2   79.2

 

(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.

The following table shows the evolution of provisions for loan losses, including charges relating to transactions recorded under other receivables from financial intermediation.

 

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in thousands of pesos except percentages    Quarter ended     % Change Qtr ended
12/31/09 vs. Qtr ended
 
   12/31/09     09/30/09     12/31/08     09/30/09     12/31/08  

Balance at the beginning of the quarter

   339,736      233,046      248,135      45.8   36.9

Increase / decrease

   30,665      135,956      -35,816      -77.4   -185.6

Provision increase / decrease - Exchange rate difference

   -236      294      2,694      -180.3   108.8

Decrease

   (27,263   (29,560   (15,511   -7.8   75.8

Balance at the end of the quarter

   342,902      339,736      199,502      0.9   71.9

 

 

Deposits

 

Total deposits rose 6.6% during 2009 and 1.8% in the fourth quarter of 2009. Meanwhile recurrent deposits grew 9.4% in 2009 and 3.0% in the fourth quarter of 2009.

The higher increase was registered in sight accounts which grew 10.8% as compared to a year ago and 5.3% in the fourth quarter of 2009. Recurrent deposits in current accounts increased 16.8% in the last twelve months. As of December 31, 2009 current deposits represented 57.0% of total deposits.

Regarding sight deposits, saving accounts increased 28.3% in the year 2009 and 10.1% in the fourth quarter of 2009.

Time deposits remained stable during the year, increasing by 1% despite the decrease in the Badlar rate.

It is important to highlight that during the fourth quarter peso denominated deposits showed an increase of 5.8%, whereas deposits denominated in foreign currency decreased by 8.9% in the same period.

As of December 31, 2009, deposits in foreign currency reached AR$ 4,546 million (equivalent to US$ 1,197 million), representing 24.9% of the Bank’s total deposits.

 

in thousands of pesos except percentages    Quarter ended    % Change Qtr ended
12/31/09 vs. Qtr ended
 
   12/31/09    09/30/09    12/31/08    09/30/09     12/31/08  

Total deposits

   18,284,543    17,968,831    17,159,319    1.8   6.6

Current accounts

   4,439,513    4,466,340    4,743,074    -0.6   -6.4

Peso denominated

   4,047,009    3,674,002    4,218,204    10.2   -4.1

Foreign currency

   392,504    792,338    524,870    -50.5   -25.2

Saving accounts

   5,982,525    5,434,830    4,664,305    10.1   28.3

Peso denominated

   3,848,977    3,377,039    3,338,069    14.0   15.3

Foreign currency

   2,133,548    2,057,791    1,326,236    3.7   60.9

Time deposits

   7,559,265    7,693,792    7,497,724    -1.7   0.8

Peso denominated

   5,685,119    5,736,530    5,921,364    -0.9   -4.0

CER adjusted time deposits

   971    1,475    15,326    -34.2   -93.7

Foreign currency

   1,873,175    1,955,787    1,561,034    -4.2   20.0

Investment Accounts

   19,022    4,856    10,322    291.7   84.3

Peso denominated

   19,022    4,856    10,322    291.7   84.3

Other

   284,218    369,013    243,894    -23.0   16.5

Peso denominated

   137,256    183,533    127,220    -25.2   7.9

Foreign currency

   146,962    185,480    116,674    -20.8   26.0

Rescheduled deposits + CEDROS (*)

   66,331    72,882    101,598    -9.0   -34.7

Peso denominated

   66,331    72,882    101,598    -9.0   -34.7

Total deposits + Rescheduled deposits & CEDROS

   18,350,874    18,041,713    17,260,917    1.7   6.3

 

(*)

The payment of Rescheduled Deposits concluded in August 2005, in accordance with its original schedule, except those deposits that have a pending legal injunction.

 

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Other Funding Sources

 

Other funding sources decreased by 9.4% during the fourth quarter of 2009 and 81.4% during the year 2009.

These variations are mainly explained by the Bank’s decision to decrease balances held at other banks.

By the end of the third quarter of 2009, 81.3% of the balances shown in the table below were foreign-currency denominated.

 

in thousands of pesos except percentages    Quarter ended    % Change Qtr ended
12/31/09 vs. Qtr ended
 
   12/31/09    09/30/09    12/31/08    09/30/09     12/31/08  

Lines from other banks

   72,330    66,086    389,832    9.4   -81.4

Senior Bonds

   —      —      —      —        —     

Other banking liabilities

   72,330    66,086    389,832    9.4   -81.4

Subordinated Debt

   —      —      —      —        —     

Total other funding sources

   72,330    66,086    389,832    9.4   -81.4

 

 

Capitalization

 

As of December 31, 2009 BBVA Banco Francés’ total stockholders’ equity totaled AR$ 2.9 billion, growing 11.5% during the last quarter of 2009 and 41.0% during 2009.

This increase was mainly due to gains obtained during the period together with a decrease in the unrealized valuation due to the positive performance of public bonds accounted in “available for sale” during 2009.

By the end of 2009, the excess of capital over the Central Bank regulatory requirements reached AR$ 1,398.5 million, or 47.8% of the Bank’s total stockholders’ equity.

 

in thousands of pesos except percentages    Quarter ended     % Change Qtr ended
12/31/09 vs. Qtr ended
 
   12/31/09     09/30/09     12/31/08     09/30/09     12/31/08  

Capital Stock

   536,361      536,361      471,361      0.0   13.8

Issuance premiums

   175,132      175,132      175,132      0.0   0.0

Adjustments to stockholders equity

   312,979      312,979      312,979      0.0   0.0

Subtotal

   1,024,472      1,024,472      959,472      0.0   6.8

Reserves on Profits

   658,693      658,693      594,391      0.0   10.8

Unappropriated retained earnings

   1,257,440      996,190      703,280      26.2   78.8

Unrealized valuation difference

   (14,133   (54,523   (181,119   -74.1   -92.2

Total stockholders’ equity

   2,926,472      2,624,832      2,076,024      11.5   41.0

The variations in the minimum capital required by the BCRA during the last year are mainly explained by higher requirements as a consequence of a higher level of activity and by the positive performance in public assets valuations.

 

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in thousands of pesos except percentages    Quarter ended     % Change Qtr ended
12/31/09 vs. Qtr ended
 
   12/31/09     09/30/09     12/31/08     09/30/09     12/31/08  

Central Bank Minimum Capital Requirements

   1,665,875      1,577,815      1,467,176      5.6   13.5

Central Bank Minimum Capital Requirements (a, b)

   1,515,324      1,448,343      1,373,016      4.6   10.4

Market Risk

   86,074      66,683      52,360      29.1   64.4

Increase in capital requirements related to custody

   64,477      62,789      41,800      2.7   54.3

a) Central Bank Minimum Capital Requirements

   1,515,324      1,448,343      1,373,016      4.6   10.4

Allocated to Asset at Risk

   971,214      978,133      892,463      -0.7   8.8

Allocated to Immobilized Assets

   100,065      97,198      86,167      2.9   16.1

Interest Rate Risk

   175,978      130,159      158,065      35.2   11.3

Loans to Public Sector and Securities in Investment

   268,067      242,853      236,321      10.4   13.4

Non Compliance of Other Credit Regulations

   —        —        —        —        —     

b) Minimum capital required for Pension Funds (AFJPs) to act as securities custodian and registrar of mortgage notes

   1,289,541      1,255,786      836,005      2.7   54.3

5% of the securities in custody and book-entry notes

   1,289,541      1,255,786      836,005      2.7   54.3

Bank Capital Calculated under Central Bank Rules

   3,064,366      2,748,342      2,355,781      11.5   30.1

Core Capital

   2,222,143      2,222,143      1,946,516      0.0   14.2

Minority Interest

   288,959      300,176      304,884      -3.7   -5.2

Supplemental Capital

   631,549      293,041      165,802      115.5   280.9

Deductions

   (78,285   (67,018   (61,421   16.8   27.5

Excess over Required Capital

   1,398,491      1,170,527      888,605      19.5   57.4

Capital Ratio (Central Bank rules)

   18.6   16.9   14.8   9.8   25.9

Excess over Required Capital as a % of Shareholders’ Equity

   47.8   44.6   42.8   7.2   11.6

 

 

Additional Information

 

 

in pesos except percentages    Quarter ended     % Change Qtr ended
12/31/09 vs. Qtr ended
 
   12/31/09     09/30/09     12/31/08     09/30/09     12/31/08  

- Exchange rate

   3.7967      3.8427      3.4537      -1.2   9.9

- Quarterly CER adjustment

   2.39   1.79   1.31   33.6   82.4

This press release contains or may contain certain forward-looking statements within the meaning of the United States Securities Litigation Reform Act of 1995, including, among other things, concerning the prospects of the Argentine economy, Banco Francés’ earnings, business plans, cost-reduction plans, and capitalization plan, and trends affecting BBVA Banco Francés’ financial condition or 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) changes in domestic or international stock market prices, exchange rates or interest rates; (2) macroeconomic, regulatory, political or governmental changes; (3) changes in the markets for BBVA Banco Francés’ products and services; (4) increased competition; (5) changes in technology; or (6) changes in the financial condition, creditworthiness or solvency of the customers, debtors or counterparties of BBVA Banco Francés. Additional factors that could cause the actual results or events to differ materially from the expected results or events are described in the reports filed by BBVA Banco Francés with the United States Securities and Exchange Commission (SEC), including, but not limited to, BBVA Banco Francés’ annual report on Form 20-F and exhibits thereto. BBVA Banco Francés does not undertake to revise or update any of the information contained herein under any circumstances, including if at any moment following dissemination of such information it is no longer accurate or complete.

 

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Conference call

 

A conference call to discuss the fourth quarter earnings will be held on Tuesday, February 23, 2010, at 10:00 AM New York time – 12:00 PM Buenos Aires time. If you are interested in participating, please dial (800) 289-0546 within the U.S. or +1 (913) 312-0729 outside the U.S. at least 5 minutes prior to our conference. Confirmation code: 7178341.

A conference call replay facility will be available from February 23 through March 9, 2010. In order to listen to this digital replay, please call (888) 203-1112 within the U.S. or +1 (719) 457-0820 outside the U.S. Access Code: 7178341

 

 

Internet

 

This press release is also available on www.bancofrances.com.ar

 

 

Contacts

 

Daniel Sandigliano

Investor Relations

(5411) 4341-5036

daniel.sandigliano@bancofrances.com.ar

Cecilia Acuña

Investor Relations

(5411) 4348-0000 ext. 25384

cecilia.acuna@bancofrances.com.ar

 

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BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar: by the equity method)

 

ASSETS : (in thousands of pesos)

   12/31/09     09/30/09     06/30/09     12/31/08  

Cash and due from banks

   5,166,121      5,526,059      5,920,981      4,239,157   

Government and Private Securities

   5,130,730      4,141,214      4,084,939      3,615,920   

- Trading account (listed securities)

   8,352      1,542      527      1,461   

- Available for sale

   640,175      466,775      403,514      577,502   

- Reverse repo w/Central Bank

   68,250      195,895      386,496      334,688   

- Unlisted

   1,961,046      2,001,129      2,039,920      1,004,833   

- Listed Private Securities

   6,086      5,824      4,632      7,796   

- Bills and Notes from the Central Bank

   2,896,748      2,044,503      2,214,437      2,442,271   

Less: Allowances

   (449,927   (574,454   (964,587   (752,631

Loans

   10,652,548      10,342,985      10,446,428      11,263,994   

- Loans to the private & financial sector

   10,336,588      10,030,646      10,132,287      9,898,442   

- Advances

   1,703,751      2,108,709      1,926,166      1,413,526   

- Discounted and purchased notes

   1,068,567      946,848      890,872      1,241,508   

- Secured with mortgages

   838,410      869,012      901,569      946,804   

- Car secured loans

   480,694      484,777      493,064      511,374   

- Personal loans

   1,819,382      1,768,773      1,786,040      1,855,767   

- Credit cards

   1,464,163      1,240,854      1,214,953      1,239,588   

- Loans to financial sector

   335,367      384,148      456,997      491,820   

- Other loans

   2,806,667      2,411,673      2,506,585      2,228,099   

Less: Unaccrued interest

   (16,471   (16,425   (15,284   (24,304

Plus: Interest & FX differences receivable

   173,744      167,804      200,901      190,749   

Less: Allowance for loan losses

   (337,686   (335,527   (229,576   (196,489

- Public Sector loans

   315,960      312,339      314,141      1,365,552   

Principal

   117,464      99,376      108,340      553,120   

Plus: Interest & FX differences receivable

   198,496      212,963      205,801      812,432   

Other banking receivables

   884,467      1,191,546      2,244,090      2,391,717   

- Repurchase agreements

   76,397      265,463      1,298,115      1,667,345   

- Unlisted private securities

   88,131      75,870      69,461      63,324   

- Unlisted Private securities :Trustees

   39,357      37,844      36,287      34,421   

- Other banking receivables

   685,798      816,578      843,697      629,640   

- Less: provisions

   (5,216   (4,209   (3,470   (3,013

Investments in other companies

   399,496      413,668      463,131      428,305   

Intangible assets

   55,097      52,252      50,702      48,075   

- Organization and development charges

   55,097      52,252      50,702      48,075   

Other assets

   1,083,195      1,266,948      1,179,166      1,196,426   
                        

TOTAL ASSETS

   23,371,654      22,934,672      24,389,437      23,183,594   
                        

LIABILITIES:

   12/31/09     09/30/09     06/30/09     12/31/08  

Deposits

   18,350,874      18,041,713      18,717,115      17,260,917   

- Current accounts

   4,439,513      4,466,340      5,690,486      4,743,074   

- Saving accounts

   5,982,525      5,434,830      5,169,427      4,664,305   

- Time deposits

   7,559,265      7,693,792      7,343,592      7,497,724   

- Investment Accounts

   19,022      4,856      5,331      10,322   

- Rescheduled deposits - CEDROS

   66,331      72,882      81,658      101,598   

- Other deposits

   284,218      369,013      426,621      243,894   

Other banking Liabilities

   1,195,048      1,382,675      2,673,701      3,129,562   

Other provisions

   318,659      309,571      282,926      236,811   

- Other contingencies

   318,231      309,207      282,569      236,454   

- Guarantees

   428      364      357      357   

Other liabilities

   528,205      527,497      426,323      445,672   

Minority interest

   52,396      48,384      43,889      34,608   
                        

TOTAL LIABILITIES

   20,445,182      20,309,840      22,143,954      21,107,570   
                        

TOTAL STOCKHOLDERS’ EQUITY

   2,926,472      2,624,832      2,245,483      2,076,024   
                        

Total liabilities + stockholders’ equity

   23,371,654      22,934,672      24,389,437      23,183,594   
                        

 

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BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar: by the equity method)

 

INCOME STATEMENT

   12/31/09     09/30/09     06/30/09     12/31/08  
(in thousands of pesos)                         

Financial income

   819,349      980,933      663,139      282,293   

- Interest on Cash and Due from Banks

   —        —        —        571   

- Interest on Loans Granted to the Financial Sector

   20,138      25,036      16,614      26,492   

- Interest on Overdraft

   85,868      102,554      93,241      89,205   

- Interest on Discounted and purchased notes

   36,877      35,720      37,518      55,879   

- Interest on Mortgages

   29,768      30,280      30,287      31,055   

- Interest on Car Secured Loans

   23,289      22,833      22,238      19,761   

- Interest on Credit Card Loans

   48,285      42,966      46,335      34,570   

- Interest on Other Loans

   148,105      144,990      151,135      139,721   

- From Other Banking receivables

   259      300      355      4,105   

- Interest on Government Guaranteed Loans Decree 1387/01

   92,069      2,785      6,458      15,210   

- Income from Securities and Short Term Investments

   255,202      484,027      91,876      (316,695

- Net Income from options

   —        —        —        (111

- CER

   247      213      159      33,116   

- Foreign exchange difference

   29,164      36,030      43,122      56,967   

- Other

   50,078      53,199      123,801      92,447   

Financial expenses

   (207,878   (223,225   (277,050   (293,542

- Interest on Current Account Deposits

   (4,702   (4,840   (6,533   (8,532

- Interest on Saving Account Deposits

   (2,540   (2,623   (2,398   (2,346

- Interest on Time Deposits

   (166,980   (179,867   (185,100   (240,262

- Interest on Other Banking Liabilities

   (2,172   (2,649   (3,885   (9,006

- Other interests (includes Central Bank)

   (715   (744   (887   (1,707

- CER

   (67   (61   (85   (287

- Bank Deposit Guarantee Insurance system mandatory contributions

   (7,904   (8,560   (8,104   (6,889

- Mandatory contributions and taxes on interest income

   (22,841   (23,907   (28,285   (19,928

- Other

   43      26      (41,773   (4,585

Net financial income

   611,471      757,708      386,089      (11,249

Provision for loan losses

   (30,665   (135,956   (47,127   35,816   

Income from services, net of other operating expenses

   244,158      245,429      218,543      218,876   

Administrative expenses

   (433,571   (390,798   (361,309   (319,283

Income (loss) from equity investments

   6,156      (2,173   23,515      (17,023

Net Other income

   (12,757   (47,658   (25,917   114,682   

Income (loss) from minority interest

   (4,010   (4,494   (4,417   (2,467

Income before tax

   380,782      422,058      189,377      19,352   

Income tax

   (119,533   (112,565   (127,531   (3,573
                        

Net income

   261,249      309,493      61,846      15,779   
                        

 

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BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar consolidated on a line by line basis)

 

     (in thousands of pesos)        

ASSETS

   12/31/09     09/30/09     06/30/09     12/31/08  

Cash and due from banks

   5,255,412      5,690,389      6,071,288      4,243,080   

Government Securities

   7,214,232      6,076,182      5,679,364      5,233,660   

Loans

   11,751,889      11,438,169      11,766,704      12,507,489   

Other Banking Receivables

   931,465      1,235,986      2,372,805      2,442,925   

Assets Subject to Financial Leasing

   311,784      339,183      305,585      379,120   

Investments in other companies

   106,289      105,379      103,429      96,640   

Other assets

   820,522      1,006,382      997,902      922,551   
                        

TOTAL ASSETS

   26,391,593      25,891,670      27,297,077      25,825,465   
                        

LIABILITIES

   12/31/09     09/30/09     06/30/09     12/31/08  

Deposits

   18,334,845      18,027,372      18,676,206      17,079,203   

Other banking liabilities

   1,224,668      1,386,702      2,678,669      3,135,153   

Minority interest

   213,182      246,351      271,001      248,139   

Other liabilities

   3,692,426      3,606,413      3,425,718      3,286,946   
                        

TOTAL LIABILITIES

   23,465,121      23,266,838      25,051,594      23,749,441   
                        

TOTAL STOCKHOLDERS’ EQUITY

   2,926,472      2,624,832      2,245,483      2,076,024   
                        

STOCKHOLDERS’ EQUITY + LIABILITIES

   26,391,593      25,891,670      27,297,077      25,825,465   
                        

NET INCOME

   12/31/09     09/30/09     06/30/09     12/31/08  

Net Financial Income

   713,915      857,469      527,857      107,969   

Provision for loan losses

   (30,665   (135,956   (47,127   35,816   

Net Income from Services

   244,459      244,897      217,655      246,027   

Administrative expenses

   (459,938   (409,200   (363,525   (411,471

Net Other Income

   (85,893   (140,535   (127,475   30,744   
                        

Income Before Tax

   381,878      416,675      207,385      9,085   
                        

Income Tax

   (119,216   (116,635   (130,259   (6,638
                        

Net income

   262,662      300,040      77,126      2,447   
                        

Minoritary Interest

   (1,413   9,453      (15,280   13,332   
                        

Net income for Quarter

   261,249      309,493      61,846      15,779   
                        

 

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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: February 22, 2010     By:   /S/    MARTÍN E. ZARICH        
    Name:   Martín E. Zarich
    Title:   Chief Financial Officer