22 1 1 2 2 3 3 33 1 1 2 2 3 3 4 Representative Offices: Brasil, Russia, Turkey, Shangai, Beijing,...

June 2014

BBVA Francés

22

Index

BBVA Group1

Macroeconomic Outlook and Financial System2

BBVA Francés3

33

BBVA Group1


BBVA Francés3

4

Business model based on

Diversification, Clients, Prudence and Principles

Representative Offices: Brasil, Russia, Turkey, Shangai, Beijing, Australia, India and United Arab Emirates.

5

A balanced diversification, with leading franchises in all markets in which it operates:

• Good risk performance• Cost control• Transformation of the distribution model

• Strong business activity • Excellent risk indicators

• Buoyant business in a low-growth environment

• Solid recurring income• Revenues increasing faster than expenses

South America

• Strong business activity leads to higher income

• Growth potential in the Andean region

Eurasia • Solid contribution to the Group

Spain

USA

Mexico

USA

66

Earnings: positive trend in recurrent revenues…

7

Risk: asset quality continues to improve

88

BBVA Group1


BBVA Francés3

9

2009 2010 2011 2012 2013 2014e

0.05%

9.14%8.55%

0.95%

2.95%

-1.00%

2014: Eventhough Argentina had taken measures to solve certain macro pendings, the fail in the agreement with the “holdouts” results in a selective default….

Source: INDEC and own estimations.

A

6.1

9.87.2

10.9 10.8 10.9

3.7 3.4 2.6 1.8 1.4 1.3

CPIMonthly CPI.Nu

Jun-14

15.0

2014e

25.0

CPI-Nu: the new index launched in January, with

national coverage (87% of the country, 13.000 sales

outlets), reflects a higher level of inflation.

Real GDP Growth (%) Inflation (%)

Source: INDEC

…. the goverment continues to take measures in order to overcome the situation.

10

Main figures: Evolution

Source: INDEC and own estimations.

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e

6.3

16.715.7

12.1 11.7 12.311.1

12.6

17.0

11.610.3

12.4

8.3 9.0

Trade Balance (billion of USD)

Export prices maintain the surplus in the trade

balance, even though the deficit in the energy

sector and tourism.

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e

Unemployment (%)

Source: INDEC

Badlar private banks (%)

Soruce: BCRA

2014e

7.6

2014e

25.0

Exchange Rate ($/U$S)

Source: BCRA

2014e9.8

2014e

2014e 2014e

11

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014e

16,0%

14,7%

Private Sector Deposits/GDP Private Sector Loans/GDP

Source: BCRA

Financial System, small but there is an opportunity to

growth.Private deposits and loans in terms of GDP

25.8%

20.8% 16.0

%

14.4%

12

Impressive expansion of the retail loan portfolio

Source: BCRA.

Mar-03 Feb-04 Jan-05 Dec-05 Nov-06 Oct-07 Sep-08 Aug-09 Jul-10 Jun-11 May-12 Apr-13 Mar-140

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

200,000

220,000

240,000

260,000

280,000

300,000

Mortgages Car Loans Personal Loans Credit Cards

Loans performance in the financial systemFigures in Million of Pesos + 27

% y/y

1313

BBVA Group1


BBVA Francés3

14

BBVA Francés History

Banco Frances was one of the first companies listed on the BCBA, quoting since 1888.

Its shares are also listed on the New York Stock Exchange since November 1993 and LATIBEX since

December 1999.

19801886 1990 1996

Customer base expansion (adding S&Me companies and individuals)

Banco Francés del Río de la Plata

Incorporation of investment banking, capital markets and international banking, while expanding its branch network throughout the country

BBVA GROUP BECOMES THE CONTROLLING SHAREHOLDER

Merger with Banco de Crédito Argentino

20131997

BBVA Francés acquired 23 floors of the building to be constructed by Consultatio, where the “Torre BBVA” will be established.

15

Operative Structure: wide network

3

104

1 2

5

16

2

6

96

1

2

1

12

54

3

2

2

3

16

2

2

4

1

Tierra del Fuego

Capital Federal

5,338 Employees

Retail

Branches Clients

245 1,852,089 clients

Middle Market

30 19,098 companies

Corporate 7 business units 851 large corporations

Auto Financ

ingPSA

FinanceRombo

BrokerBBVA

Francés Valores

S.AMutual Funds

BBVA Francés Asset

Management S.A.

InsuranceBBVA

Consolidar

Insurance

16

Nación

Santander

Provincia

Galicia

Macro

BBVA Francés

Ciudad

HSBC

Patagonia

Credicoop

20.54

8.25

7.90

7.36

6.44

6.25

4.49

4.15

3.54

3.18

An important player with capacity to increase its participation

72% of total77% of total

Financial system as of March 2014Private MS as of June 2014

Nación

Provincia

Santander

Galicia

BBVA Francés

Macro

HSBC

Credicoop

Ciudad

Patagonia

27.29

9.86

7.20

6.91

5.70

5.29

3.89

3.83

3.72

3.09

6.50%6.88% Market sharePrivate Deposits

Private Loans

17

Equity Ownership

ADRs(NYSE)

Domestic Stocks

75.89%

9.53%

14.58%

Chart TitleMinority

Shareholders 24.11%

Since 1996

Mkt Cap $ 21,045 MM

P/E $ 52.7

BV/ Share $ 16.56

Data as of June 30, 2014

18

Earnings

Risks

Strong fundamentals

Adecuate funding structure

Best risk indicators in the

system

Strong regulatory ratios

Mantaining upward trend

in earnings

SolvencyExpenses

19

Liquid assets/DepositsLiquidit

y

Earnings Risk

Solvency

Coverage218.19%

NPL

0.97%

Capital Ratio: 15.8%

ROA: 2.4%ROE: 18.3%

Recurring net income

+17.6%

2Q 2014: Main Indicators

40%

20

AssetsLiabilities +

Equity

8,608

37,910

7,732

11,488

8,889

11,349

48,050

Solid balance sheet structure

Figures in million of pesos

Cash and Banks

Private Loans

Deposits

Others

Net Worth

BCRA Notes

Public sector assets

68,287 68,287

Others

Leverage 6.7 x

Private Loans to Total Deposits 78.9%

Liquid Assets to Total Deposits 40.0%

17%

11%

56%

4%

13%

70%

17%

13%

21

51%

28%

21%

Jun.12 Jun.13 Jun.14

23,739

31,508

37,910

Private loan portfolio with a diversified structure.


Credit Cards 23%

Personal Loans16%

Car Loans 9%Mortgages 3%

Corporate

Middle-Market

Retail

+20%+33

%

Average Lending Rate

($)26.43%


3,740

5,473 6,060


4,178 5,381

5,975

Market Share (%) 20.11 20.17 18.90

Market Share (%) 6.35 6.24 5.74

(*) Car loans include joint ventures


Personal Loans

Car Loans (*)

Retail: maintaining the leadership in car loans

+ 29 % + 11 %2Q13 vs 2Q12 2Q14 vs 2Q13

y/y

+ 46 % + 11 %2Q13 vs 2Q12 2Q14 vs 2Q13

y/y

Credit cards: the strategy is gain market share, making the product more profitable

Market ShareAdvertising + Promotions /

Income

11.03%11.31%

11.83%


21

103.4%

51.4% 50.5%


Middle-Market

Commercial loans with a good performance

Market Share (%) 9.29 9.73 9.57


Corporate

Market Share (%) 17.98 17.65 16.13

Focused on the most

profitable products:

Overdraft , financial

loans and leasing.

Maintaining the leadership.

22

Jun. 12 Jun. 13 Jun.14

6,349 8,649

10,775

Jun. 12 Jun. 13 Jun.14

6,0877,525 7,870

25


1,769 1,270 2,407

3,595

2,242

5,779 Others

Bills and Notes from Central Bank

Public bonds

The bank complies with Rule 3991 from the Central Bank, which restricts public sector exposure to 35% of total assets as of July ‘07

Total exposure to the Public Sector without repos 5,568 3,760 8,235

Public Sector National Government /Total Assets

5.0% 3.1% 3.6%


Important participation of bills & notes issued by the Central Bank in the public portfolio.

2626

Asset quality remains at good levels, but showing signs of deterioration.

NPL peer group and Financial System(March-2014)

NPL by business areas

Retail 1.94%

Middle-Market

0.52%

Corporate 0.00%

Jun.12 Jun.13 Jun.140%

100%

200%

300%

400%

500%

0%

1%

2%

268.60% 240.16% 218.19%

0.71%0.80%

0.97%

Coverage Ratio Non-Performing Ratio

2.02%

1.70%

1.73%

1.10%

0.75%

1.52%

Peer 3

Peer 2

Peer 4

Peer 1

BBVA (*)

Financial System

27

Current ac-

counts30%

Saving ac-

counts26% Time

deposits42%

Others2%

Deposits: growing at a faster pace…



30,050 36,921

48,050

Sight accounts

56% 62%

38%

TD < 1MM

TD > 1MM

Average cost of funds

($)11.28%

+30%

+23%

2828

Negotiable Obligations

Global Program for the issuance of notes of up to US$ 750,000,000.

Class Issuance Maturity Cupon F.V.

IV 07-31-13 18 months (2015)

BADLAR + 3.69% $ 250 MM

VI 08-11-13 18 months (2015)

BADLAR + 3.25% $ 121.4 MM

VII 08-11-13 36 months (2016)

BADLAR + 4.24% $ 250 MM

VIII 02-11-14 18 months (2015)

BADLAR + 3.80% $ 258.8 MM

IX 02-11-14 36 months (2017)

BADLAR + 4.70% $ 145.1 MM

X 18-07-14 18 months(2016)

BADLAR + 2.50% $ 233.8 MM

XI 18-07-14 36 months (2017)

BADLAR + 3.75% $ 165.9 MM

2929

2Q-2014 2Q-2013

Figures in million of pesosRecurring Non

Recurring Total Recurring

Net Financial Income 1,531.4 (95.4) 1,436.0 1,100.2

Provision for Loan Losses (151.7) (151.7) (114.5)

Net Income from Services 813.9 813.9 607.8

Administrative Expenses (1,319.9) (1,319.9) (938.5)

Operating Income 873.7 (95.4) 778.3 655.0

Income before tax 867.9 (95.4) 772.5 662.6

Income tax (378.9) (5.5) (373.5) (246.7)

Net Income 489.0 (100.9) 399.0 415.9

Generation of recurring gains

+17.6% y/y

30


9091,100

1,531

Good performance of the net interest margin


Recurring net financial income

Jun.12 Jun.13 Jun.1413.40%13.60%13.80%14.00%14.20%14.40%14.60%14.80%15.00%15.20%15.40%

14.7%

14.0%

15.2%

Private SpreadAverage spread ($)

+39%

+21%

-54 pb +102 pb2Q13 vs 2Q12 2Q14 vs 2Q13

y/y


438608

814

Fees maintain a good pace of growth.



423547

748


297

391

572

Net Income from Services

Personnel expenses grew 37% compared to 2Q-13, reflecting mainly the salary increase and a higher number of employees.

General expenses grew due to an increase in the activity volume, higher prices and the impact of the 1Q devaluation on FX contracts.

Personnel expenses

General expenses

+ 39% + 34%2Q13 vs 2Q12 2Q14 vs 2Q13

y/y

32

Efficiency and coverage ratios

Efficiency Ratio (1)

Coverage ratio (2)

(1) Adm.Expenses / (Net financial income + Net income from services) Removing the non-recurring effects.

(2) Net fee Income as a % of Administrative Expenses


53.5%

54.9%

56.3%


60.8%

64.8%

61.7%

+ 148 pb + 135 pb2Q13 vs 2Q12 2Q14 vs 2Q13

y/y

+ 396 pb - 306 pb 2Q13 vs 2Q12 2Q14 vs 2Q13

y/y

33

2Q13* FY 2013 2Q14*

18.2%

32.9%

18.3%

*Annualized

Maintaining high levels of profits

ROE

2Q13* FY 2013 2Q14*

2.1%

4.0%

2.4%

*Annualized

intermediation with the private sector

Good asset qualityEfficient operating

structure

Balance sheet strength

(Capital & Liquidity)

ROA

June 2014

BBVA Francés

22 1 1 2 2 3 3 33 1 1 2 2 3 3 4 Representative Offices: Brasil, Russia, Turkey, Shangai, Beijing,...

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