Banco Bbva Argentina SA (BBAR) 2005 Q3 法說會逐字稿

[Audio begins in progress] ….5.8 million pesos gained which compares to an 8.1 million pesos loss and a 30.3 million pesos gain registered in the same quarter for the previous fiscal year and in the June 2005 quarter respectively.

The bank was able to offset the negative effects related to the sale of public sector [inaudible] loans and bonds carried out in the third quarter which represented a 35.5 million pesos loss in addition to the 54 million pesos charges derived from the amortization of the loss related to the payment of [inaudible].

In this third quarter, net financial income increased 15% as compared to the previous quarter mainly due to a higher loss registered in the previous quarter stemming from the sale of certain CER adjusted government bonds [inaudible]. Following the repayment of the 1.8 million pesos loan granted by the Central Bank during the liquidity crisis, the bank remained with a 3.7 billion pesos long CER position similar to that of September 2004. Accordingly the bank benefited from [inaudible] within an environment of negative real interest rates while the increase in private sector loan portfolio had a positive impact in the net spread as compared to the same quarter of the previous fiscal year.

Turning now to the level of activity, total deposits of the bank outperformed the evolution of the financial system reaching an 11% market share in private sector deposits in September 2005. Total deposits of the bank increased almost 7% during this third quarter on [excluding] [inaudible] mainly driven by savings accounts and [term] deposits and to a lesser extent by CER deposits. Let me remind you that Banco Frances now claims its leadership in CER adjusted deposits which is an attractive product for customers as it represents an alternative to maintain the [purchasing] power.

As far as [scale] deposits, the decrease in this [inaudible] is mainly related to the payment of amounts ordered by legal [inaudible] and the scheduled maturity of [inaudible] which concluded in August 2005 in accordance with the original schedule. As for foreign currency denominated deposits, such funds grew 53.8% in the last 12 month period amounted to $392 million, that is 1,145 million pesos, as at September 30, 2005.

Turning to risk assets, a further expansion of private business jointly with the decrease in public sector portfolio led us to improve the ratio of private assets to total assets from 25% a year ago to 40% by the end of the present quarter. Net private sector loan portfolio showed a remarkable performance in all of the defined market segments with an 8% growth [as we went] into almost 250 million pesos in the last quarter. Growth was led by commercial loans in the form of notes discounted, advances and foreign trade transactions in middle market companies and large corporations, and personal loans, credit cards and [car] secure loans in the retail segments.

On the other hand, with respect to total exposure to public sector previously mentioned during the present quarter, taking advantage of the improvement in public sector asset valuation, we sold long term debt and used the proceeds to repay the 1.8 billion pesos we [discount] from the Central Bank. Long term public sector exposure totaled 5.8 million pesos in the present quarter compared to 7.7 million pesos a year ago.

Now let's move on to fee income. Once again the bank was able to maintain its strong performance in the transaction of this [inaudible]. As mentioned in our press release the second quarter net fee income was positively impacted by sales related to the [inaudible] restructuring process where Banco Frances, together with [inaudible], was appointed as regional dealer bank for the [inaudible] market. Should we exclude [present] effects, net income from services of this third quarter would increase 3.7% as compared to the previous one, mainly explained by an increase in operational volume. It is important to note that income from foreign exchange [inaudible] sales is not accounted for in net income from services but in net financial income. As at September 30, 2005 [inaudible] income amounted to approximately 18.9 million pesos.

As regards to administrative expenses, higher expenses are mainly explained by an increase in personnel and advertising and promotion expenses. The increase in personnel as compared to the previous quarter is mainly related to salary adjustments agreed with the labor union last May which fully impacted the present quarter, whilst the previous quarter only included the effect of two months. Jointly with an adjustment in the balance provision [inaudible] related to a higher productivity level. With respect to advertising and promotion expenses, the increase is mainly explained by a more aggressive business strategy in an environment of higher activity levels. As at September 30, 2005 the bank had 3,661 employees and a network of 229 consumer branches complemented by alternative [channels].

As for other income expenses, let me remind you that under this account we registered a 54 million pesos charge related to the amortization of the loss derived from the payment of the [inaudible] injunction, the registration of general provisions and the [inaudible] provisions to cover the taxable deferred assets stemming from the use of the deferred tax method. The lower loss registered during the present quarter as compared to the September 2004 quarter is mainly explained by lower general provision charges and, as said in the accounting criteria, in the provisions registered to cover the tax of deferred assets, stemming from the use of the deferred tax method.

Let me conclude with some reassurance that speak about our strengths and our growth potential. As at September 2005 Banco Frances is positioned as the first private bank in [inaudible] with a strong positioning in transactional business, a 1.4% [inaudible] that is 2.9% on considering just private sector portfolio, and a coverage of 105%. A 77% efficiency ratio measured by net fee income plus trading fees plus a percentage of administrative expenses excluding amortization. A 1 billion pesos excess capital of a requirement and a return on equity accumulated of 6.6% that is 27.2% excluding the effect of [inaudible] [intangibles].

Thank you very much for your attention. And we are now ready to answer your questions.

Thank you, the question and answer session will be conducted electronically today. [OPERATOR INSTRUCTIONS]. Miss [Arvel Vila] it appears there are no questions at this time so I'll turn the conference back over to you for any additional or closing comments.

Okay thank you once again for joining us. If you should have any other questions you can call us at our office. Thank you.