BBVA Banco Frances Q2 Earnings Call Highlights

Q2 net income rose 44.6% sequentially to ARS 131.6 billion on an inflation-adjusted basis, while return on equity improved to 12.2% from 8.3% in Q1.

BBVA expects its loan book to grow about 10% in real terms during 2026 , supported by mortgages, auto loans, commercial lending and foreign-currency loans.

Early signs of a lending recovery emerged, although growth remains constrained by elevated delinquencies. Asset quality remains the main risk: nonperforming loans increased to 6.09%, driven by retail portfolios, but management expects the ratio to stabilize and decline toward 5.5% by year-end as newer loan vintages improve.

BBVA Banco Frances NYSE: BBAR reported inflation-adjusted net income of ARS 131.6 billion for the second quarter of 2026, up 44.6% from the prior quarter, as Argentina’s lower-inflation environment supported relatively stable operating income. The bank’s quarterly return on equity rose to 12.2% from 8.3% in the first quarter.

During the earnings call, Investor Relations Manager Belén Fourcade said Argentina’s continuing disinflation, progress on public debt maturities and more than $13 billion in reserve purchases were contributing to a stronger macroeconomic outlook. She also cited more than $15 billion of projects announced or approved under the country’s RIGI investment-incentive framework during the quarter.

“The second quarter showed early signs of a recovery in lending activity,” Fourcade said, though she noted that lending was still affected by elevated delinquency levels. Loan growth and balance-sheet position Total financing to the private sector ended the quarter at ARS 17.1 trillion. Local-currency loans increased 2% sequentially, while foreign-currency private-sector loans rose 2.5%, equivalent to 2% growth in hard-currency terms. Mortgage lending continued to gain momentum, and the bank said it was capturing business largely through commercial lending and foreign-currency loans. The bank’s consolidated loan market share was 12%, representing a gain of 15 basis points over the past 12 months. Total deposits reached ARS 19.2 trillion. Its private-deposit market share was unchanged sequentially at 9.91% but increased 26 basis points year over year.

Chief Financial Officer Carmen Morillo Arroyo said the bank expects its loan book to grow about 10% in real terms during 2026. She said BBVA sees lending opportunities in secured retail products and customers with visible income, as well as companies and small and medium-sized businesses in more dynamic sectors of the economy. For 2027, Morillo Arroyo said it was too early to provide detailed guidance, but she expects the banking system to expand by roughly 10% to 15% in real terms and said BBVA aims to grow faster than the market.

Diego Cesarini, investor relations officer and head of asset and liability management, said commercial loans account for about 57% of the portfolio. While commercial loan growth has moderated, he said retail lending was beginning to recover, led by mortgages and auto loans, with consumer and credit-card lending potentially following as credit quality improves. Asset quality remains a focus BBVA’s nonperforming loan ratio stood at 6.09% at the end of June, up 49 basis points from the prior quarter. That compared with a 7.22% nonperforming loan ratio for Argentina’s financial system, which rose 54 basis points between March and June. The bank’s quarterly cost of risk was 7.13%, broadly in line with the first-quarter level after adjusting for nonrecurring effects. Morillo Arroyo said asset-quality deterioration was concentrated in retail portfolios, particularly personal loans and credit cards, while the bank was seeing “ze...