Banco BBVA Argentina (BBAR) Q4 2024 earnings summary

Executive summary

• Fiscal and monetary consolidation, along with exchange rate stability, led to inflation moderation and signs of economic recovery in Argentina during 2024, with GDP expected to expand by 5.5% in 2025 and inflation forecasted to converge to 30% or less.

• Net income for 4Q24 was AR$64.7bn, down 39.6% quarter-over-quarter and 38.9% year-over-year; full-year 2024 net income was AR$357.7bn, nearly flat year-over-year.

• Operating income in 4Q24 fell 48% year-over-year; full-year operating income dropped 25.8% year-over-year.

• Digital transformation advanced, with 88% of new customers acquired through digital channels and retail digital sales reaching 93% of units in Q4 2024.

• Macroeconomic backdrop included 118% annual inflation and a 121.7% year-over-year FX depreciation.

Financial highlights

• Q4 2024 inflation-adjusted net income was AR$64.7bn, down 39.6% quarter-over-quarter; quarterly ROE was 9.5% and ROA 1.7%.

• Full-year 2024 net income was AR$357.7bn, 0.4% lower year-over-year; annualized ROE was 12.5% and ROA 2.5%.

• Net interest income for 2024 totaled AR$2.93tn, down 17.3% year-over-year; 4Q24 net interest income was AR$482.5bn, down 3% quarter-over-quarter and 55.3% year-over-year.

• Operating expenses in 4Q24 were AR$452.8bn, down 1.8% year-over-year; for 2024, expenses fell 25.8%.

• Efficiency ratio was 68.6% in Q4 2024, up from 59.2% in 3Q24 and 58.6% a year ago; full-year 2024 ratio was 61.8%.

Outlook and guidance

• Expecting private loan growth of 60%-65% in real terms for 2025, outpacing the system's 40%-45% growth.

• Inflation forecast for 2025 is 30%, with monetary policy rate expected to end at 24%, FX rate at AR$1,300, and GDP growth at 5.5%.

• Profitability (ROE) expected in the 12%-13% range for 2025, with mid-teens sustainable longer term.

• Main uncertainty remains around exchange rate evolution, regulatory changes, and macroeconomic volatility.