BBVA Argentina's Q3 2025: Contradictions Emerge on Loan Growth and Retail Lending, Capital Levels and Subordinated Debt, Deposit Growth and Coverage Ratios, Loan Growth and Market Share, and Inflation and Economic Outlook

Date of Call: November 26, 2025

Financials Results

• Revenue: Net interest income ARS 585.5 billion, down 6.6% quarter-over-quarter

Guidance:

• Real loan growth reiterated at 45%–50% YoY.
• Deposits guidance raised to ~30%–35% real (management view).
• 2025 ROE expected in high single digits; 2026 trending to low‑to‑mid teens.
• Capital ratio expected to finish ~17% (Q3 dip viewed as temporary).
• Coverage targeted ~98%–100% in 2025, improving in 2026.
• Expectation of easing reserve requirements to free liquidity and aid NIMs.

Business Commentary:

• Earnings and Operational Efficiency:
• BBVA Argentina reported an inflation-adjusted net income of ARS 38.1 billion in Q3, marking a 39.7% decrease quarter-over-quarter.
• This decline was primarily due to lower operating income stemming from deteriorating loan loss allowances, lower net interest income, and a drop in net income from financial instruments. The company managed to partially offset these with improved net fee income and other operating income.

• The decrease in net income was attributed to the volatile interest rate environment, regulatory changes, and political uncertainty, which negatively impacted intermediation margins.

• Loan and Deposit Growth:

• Private loans to the sector grew by 6.7% in real terms quarter-over-quarter, with the bank's consolidated market share reaching 11.39%.
• Deposits saw a real-term increase of 10.2%, resulting in a market share of 10.09%, marking the first time BBVA Argentina reached double-digit deposit market share.

• The growth in loans, particularly in U.S. dollar loans, was driven by commercial lending, while deposit growth was supported by an increase in time deposits and interest-bearing checking accounts.

• Asset Quality and Delinquency:

• The NPL ratio for BBVA Argentina's private loans reached 3.28% in September 2025, remaining below the system average.
• The increase in delinquency rates was due to a deterioration in nonperforming credit card and consumer loans, although commercial nonperforming loans remained low at 0.10%.

• The rise in delinquency rates was linked to the rapid increase in interest rates and the high political uncertainty impacting consumer spending and financial stability.

• Capital and Liquidity Ratios:

• The bank's capital ratio stood at 16.7%, decreasing 170 basis points from the previous quarter, primarily due to the temporary impact of sovereign debt valuation.
• The liquidity ratio remained at a comfortable level of 44.3% of deposits, reflecting the bank's strong financial position despite the challenging macroeconomic environment.

• The decrease in the capital ratio was mainly due to an increase in risk-weighted assets, while liquidity was affected by the lower valuation of public securities, which impacted overall liquidity levels.

• Monetary Policy and Reserve Requirements:

• The Central Bank implemented a more restrictive monetary policy, increasing reserve requirements and changing compliance schemes, which led to a sharp rise in interest rates.
• The daily compliance scheme for reserve requirements was changed to a 75% compliance level from December 1, mitigating inefficiencies and providing banks with more liquidity for growth.
• BBVA Argentina expects the Central Bank to reduce reserve requirements further, supporting loan growth and profitability in the coming months.

  Sentiment Analysis:

  Overall Tone: Neutral

  • Management emphasized resilience and operational efficiency amid volatility: "sustain its growth strategy"; reported inflation‑adjusted net income ARS 38.1bn, down 39.7% qoq; NPLs 3.28% (below system); capital 16.7% (down 170 bps qoq, described as temporary); Central Bank reserve easing seen as improving liquidity and profitability.

Q&A:

• Question from Brian Flores (Citigroup Inc., Research Division): Are you reiterating guidance (real loan growth 45%–50% YoY, deposits 25% real previously) and prior ROE/Tier‑1 targets? Also, how much of recent loan growth is genuine vs. refinancing?
  Response: Management reiterated loan growth 45%–50% real, said deposits ~30%–35% (vs prior 25%), expects 2025 ROE in high single digits and year‑end capital ~17%; growth is genuine and driven by US dollar corporate lending while retail/personal loans are flat.

• Question from Brian Flores (Citigroup Inc., Research Division): Is 2026 a transition toward the previously mentioned sustainable mid‑double‑digit ROE?
  Response: Yes — 2026 expected to improve to low‑to‑mid teens ROE (a recovery vs 2025), though not necessarily at sustainable peak levels immediately.

• Question from Daer Labarta (Goldman Sachs Group, Inc., Research Division): Update on daily reserve requirements (possible reductions) and impact on liquidity/NIM in 4Q/2026? Also outlook on asset quality — will retail NPLs reverse quickly?
  Response: Central Bank eased rules (from Dec 1 daily compliance set at 75% of requirement and lower sight‑deposit ratios), materially improving liquidity and profitability; NPLs may tick up slightly in 4Q but should peak and improve in 2026 with cost of risk elevated near term.

• Question from Daer Labarta (Goldman Sachs Group, Inc., Research Division): Given reserve relief and rates falling from peaks, how will NIM evolve from here?
  Response: Excluding Q3's extraordinary volatility, NIMs were stable through the year; management expects NIM improvement in 4Q and limited downward pressure in 2026 due to pricing power and continued loan demand.

• Question from Carlos Gomez‑Lopez (HSBC Global Investment Research): When will damage from high rates fade and demand return? Also, what's the optimal/stabilization capital level after the fall to 16.7%?
  Response: Retail demand will recover slowly; commercial (especially USD) lending already showing strong demand and will drive growth; capital expected to finish ~17% and management's comfortable minimum is just below ~13%, with capacity to issue Tier‑2 if needed.

• Question from Carlos Gomez‑Lopez (HSBC Global Investment Research): Was the Q3 rise in capital consumption due to regulatory change?
  Response: No regulatory change — the Q3 capital dip was primarily the temporary effect of sovereign bond valuation at the quarter's low; ratio recovered in October.

• Question from Pedro Ofenhagenen (Latin Securities): What risks or pressure points do you see in the new credit expansion post‑election and into 2026; any segments more sensitive?
  Response: No capital or liquidity constraints; main risk is retail NPLs (worst likely by end‑2025/early‑2026) so retail growth will be cautious, while commercial/dollar lending is the primary growth opportunity.

• Question from Mateus Raffaelli (Itaú Corretora de Valores S.A., Research Division): How should we think about coverage ratios and cost of risk amid high growth and rising NPLs; will coverage stabilize or decline further?
  Response: Coverage normalized from historically high levels; management comfortable with ~98%–100% coverage for 2025 (not expecting significant further decline) and expects higher coverage in 2026; cost of risk elevated now but projected to decline next year.

Contradiction Point 1

Loan Growth and Retail Lending

It highlights differing perspectives on the growth and drivers of loan growth, particularly regarding retail lending and personal loans, which are crucial for assessing the bank's overall financial health and strategy.

Are you confirming the 45%-50% annual real loan growth with 25% real deposit growth? Also, how much of the loan growth is organic versus refinancing? - Brian Flores(Citigroup Inc., Research Division)

2025Q3: We believe the growth is fully genuine. Part of the loan growth is from U.S. dollar loans, and we have been more prudent with retail loans, particularly personal loans and credit cards, due to NPL growth. - Carmen Arroyo(CFO)

Are you reaffirming the 45%-50% annual real loan growth and 25% real deposit growth? How much of the loan growth is new versus refinancing? - Brian Flores(Citi)

2025Q3: Loan growth is genuine, driven by US dollar loans and support from companies. Personal loans and credit cards have not grown due to NPL concerns. - Carmen Morillo Arroyo(CFO)

Contradiction Point 2

Capital Levels and Subordinated Debt

It involves differing statements on the bank's optimal capital level and its plans for issuing subordinated debt, which are critical for assessing the bank's financial stability and long-term strategy.

What is your optimal capital level after decreasing from 33% to 16.7%? - Carlos Gomez-Lopez(HSBC Global Investment Research)

2025Q3: We feel comfortable with capital ratios above 13%, considering growth and market share. We do not foresee issuing subordinated debt anytime soon. - Diego Cesarini

How long will high interest rates impact credit demand? What is the optimal capital level for the bank? - Carlos Gomez Lopez(HSBC)

2025Q3: Capital level will remain around 17% in 2025 and stabilize above 13% in future years. There is no immediate concern about capital levels. - Carmen Morillo Arroyo(CFO), Diego Cesarini

Contradiction Point 3

Deposit Growth and Coverage Ratios

It involves differing statements on deposit growth plans and coverage ratios, which are crucial for assessing the bank's funding strategy and risk management.

Are you reiterating 45%-50% year-over-year real loan growth and 25% real deposit growth? - Brian Flores(Citigroup Inc., Research Division)

2025Q3: We are maintaining the guidance of 45% to 50% real loan growth, deposits growing more than 25%. - Carmen Arroyo(CFO)

Are you reiterating 45%-50% real loan growth year over year and 25% real deposit growth? - Brian Flores(Citi)

2025Q3: We are maintaining our guidance for 45%-50% real-term loan growth and 30%-35% deposit growth. - Carmen Morillo Arroyo(CFO)

Contradiction Point 4

Loan Growth and Market Share

It involves changes in financial forecasts, specifically regarding loan growth expectations and market share strategy, which are critical indicators for investors and stakeholders.

Are you reiterating loan growth of 45% to 50% year-over-year and deposit growth of 25% in real terms? What is the expected ROE and Tier 1 ratio? - Brian Flores (Citigroup Inc., Research Division)

2025Q3: We are maintaining the guidance of 45% to 50% real loan growth, deposits growing more than 25%, and for ROE, we expect high single digits. - Carmen Arroyo(CFO)

Are there any updates to guidance? How sustainable is the increasing market share, and will the company focus on any particular segment? - Brian Flores (Citigroup Inc., Research Division)

2025Q2: BBVA sees guidance around 50% growth in real terms for the bank in 2025, maintaining a low double-digit ROE. The strategy is to maintain market share growth despite system growth. - Carmen Morillo Arroyo(CFO)

Contradiction Point 5

Inflation and Economic Outlook

It highlights differing outlooks on inflation and economic growth, which are critical for financial planning and strategy.

What's your outlook for asset quality, and how long will the credit cycle last? - Daer Labarta (Goldman Sachs Group, Inc., Research Division)

2025Q3: We expect inflation to moderate over the coming months, and we anticipate a significant improvement in the NPL ratios by early next year. - Diego Cesarini(Alternate Head of Market Relations)

Can you repeat your economic team's expectation for inflation this year? - Carlos Gomez-Lopez (HSBC)

2024Q4: We are expecting 30% for inflation, being a bit more conservative than the market consensus. - Carmen Morillo Arroyo(CFO)