Banco BBVA Argentina S.A. (NYSE:BBAR) Q2 2023 Results Conference Call August 24, 2023 11:00 AM ET

Company Participants

Carmen Arroyo - CFO

Inés Lanusse - Investor Relations Officer

Belén Fourcade - Investor Relations

Conference Call Participants

Carlos Gomez - HSBC

Operator

Good morning, ladies and gentlemen, and thank you for waiting. At this time, we would like to welcome everyone to BBVA Argentina's Second Quarter 2023 Fiscal Year Results Conference Call. We would like to inform you that this event is being recorded and all participants will be in a listen-only mode during the company presentation. After company remarks are completed, there will be a question-and-answer session. At that time, further instructions will be given [Operator Instructions]. First of all, let me point out that there are some statements made during this conference call that may be forward-looking statements within the meaning of the safe harbor provisions found in Section 27A of the Securities Act of 1933 under US federal securities law. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Additional information concerning these factors is contained in BBVA Argentina's annual report on Form 20-F for the fiscal year 2022 and filed with the US Securities and Exchange Commission.

Today with us, we have Ms. Carmen Arroyo, CFO; Ms. Inés Lanusse, IRO; and Ms. Belén Fourcade, Investor Relations. Ms. Fourcade, you may begin your conference.

Belén Fourcade

Good morning. And welcome to BBVA Argentina's second quarter 2023 fiscal year results conference call. Today's webinar will be supported by a slide presentation available on our Investor Relations Web site on the Financial Information section. Speaking during today's call will be Inés Lanusse, our Investor Relations Officer; and Carmen Mauricio Arroyo, our Chief Financial Officer, who will be available for the Q&A session. Please note that starting January 1, 2020, as per Central Bank regulation, we have begun reporting results applying hyperinflation accounting pursuant to IFRS rule IAS 29. For ease of comparability, 2022 and 2023 figures have been restated to reflect the accumulated effect of the inflation adjustment for each period through June 30, 2023. Now let me turn the call over to Inés.

Inés Lanusse

Thank you, Belén. And thank you all for joining us today. As we are all aware, on Sunday, August 13th, Javier Milei, the candidate for La Libertad Avanza was the most voted in the primary presidential elections quite above from what surveys were estimating. This implies a higher uncertainty scenario facing the general elections of October, and it is expected that higher volatility will persist. At the same time, the unfavorable macroeconomic conditions have continued to deteriorate, increasing the risk of economic and financial turbulence ahead of the presidential elections scheduled for the last quarter of the year. GDP is expected to fall by around 3.5% this year according to the BBVA Research due to the impact of a negative weather shock on the production and export of agricultural goods coupled with increasing exchange rate restrictions and political uncertainty. In this context, it’s impact on the external and fiscal account has contributed to accelerate the exchange rate depreciation and inflation which, in annual terms, reached 113.4% as of July 2023. Referring to BBVA Argentina general performance, a better operating income as of June 2023 was a product of an improvement in interest income boosted especially by government securities and liquidity instruments and better fee income.