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Form 6-K BBVA BANCO FRANCES SA For: Nov 19

November 20, 2015 8:23 AM EST
Table of Contents

 

 

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of November, 2015

Commission File Number: 001-12568

BBVA FRENCH BANK S.A.

(Translation of registrant’s name into English)

Reconquista 199, 1006

Buenos Aires, Argentina

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

 

  Form 20-F          X          Form 40-F                   

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

 

        Yes                                  No                X       

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

 

        Yes                                  No                X       

Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

 

        Yes                                  No                X       

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

 

 

 


Table of Contents

BBVA French Bank S.A.

TABLE OF CONTENTS

 

Item     

1.

   Financial Statements as of September 30, 2015 together with Independent Auditors´ Report


Table of Contents

 

 

  LOGO  
 

FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2015 TOGETHER WITH INDEPENDENT AUDITORS’ REVIEW REPORT.

 


Table of Contents

LOGO

 

- 1 -

 

 

 

BALANCE SHEETS AS OF

SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

-Stated in thousands of pesos-

 

ASSETS:   

    09-30-2015    

  

    12-31-2014    

A. CASH AND DUE FROM BANKS:

           

Cash

      2,626,792       2,857,658

Due from banks and correspondents

           11,286,693       9,668,573
     

 

     

 

Argentine Central Bank (BCRA)

      11,112,721       9,325,330

Other local

      2,508       1,094

Foreign

      171,464       342,149
     

 

     

 

      13,913,485       12,526,231
     

 

     

 

B. GOVERNMENT AND PRIVATE SECURITIES:

           

Holdings booked at fair value (Exhibit A)

      2,583,782       2,941,865

Holdings booked at amortized cost (Exhibit A)

      164       164

Instruments issued by the BCRA (Exhibit A)

      12,979,915       8,630,056

Investments in listed private securities (Exhibit A)

      169       178

Less: Allowances (Exhibit J)

      200       201
     

 

     

 

      15,563,830            11,572,062
     

 

     

 

C. LOANS:

           

To government sector (Exhibits B, C and D)

      63,597       54,459

To financial sector (Exhibits B, C and D)

      2,015,255       2,216,310
     

 

     

 

Interfinancial – (Call granted)

      --,--       30,000

Other financing to local financial institutions

      1,643,450       1,691,857

Interest and listed-price differences accrued and pending collection

      371,805       494,453

To non financial private sector and residents abroad (Exhibits B, C and D)

      47,393,537       39,045,753
     

 

     

 

Overdraft

      7,813,118       6,861,786

Discounted instruments

      7,708,000       6,035,048

Real estate mortgage

      1,806,419       1,466,346

Collateral Loans

      2,228,923       1,651,228

Consumer

      6,805,407       6,091,935

Credit cards

      14,672,406       11,465,609

Other

      5,840,309       4,953,604

Interest and listed-price differences accrued and pending collection

      680,381       654,109

Less: Interest documented together with main obligation

      161,426       133,912

Less: Allowances (Exhibit J)

      986,873       905,336
     

 

     

 

      48,485,516       40,411,186
     

 

     

 

D. OTHER RECEIVABLES FROM FINANCIAL TRANSACTIONS:

           

Argentine Central Bank (BCRA)

      702,311       384,930

Amounts receivable for spot and forward sales to be settled

      3,132,717       1,405,562

Instruments to be received for spot and forward purchases to be settled

      1,197,197       312,684

Unlisted corporate bonds (Exhibits B, C and D)

      86,868       48,653

Non-deliverable forward transactions balances to be settled

      118,962       140,326

Other receivables not covered by debtor classification regulations

      2,594       14,873

Other receivables covered by debtor classification regulations (Exhibits B, C and D)

      285,777       257,778

Less: Allowances (Exhibit J)

      2,448       2,139
     

 

     

 

      5,523,978       2,562,667
     

 

     

 

E. RECEIVABLES FROM FINANCIAL LEASES:

           

Receivables from financial leases (Exhibits B, C and D)

      2,260,480       1,995,716

Interest accrued pending collection (Exhibits B, C and D)

      30,371       25,961

Less: Allowances (Exhibit J)

      29,146       28,808
     

 

     

 

      2,261,705       1,992,869
     

 

     

 

F. INVESTMENTS IN OTHER COMPANIES:

           

In financial institutions (Exhibit E)

      517,428       527,403

Other (Note 5.a.) (Exhibit E)

      258,053       164,615
     

 

     

 

      775,481       692,018
     

 

     

 

G. OTHER RECEIVABLES:

           

Other (Note 5.b.)

      2,078,415       1,595,869

Other interest accrued and pending collection

      607       744

Less: Allowances (Exhibit J)

      368,841       291,237
     

 

     

 

      1,710,181       1,305,376
     

 

     

 

H. PREMISES AND EQUIPMENT (Exhibit F):

      1,031,104       924,237
     

 

     

 

I. OTHER ASSETS (Exhibit F):

      1,366,468       1,144,815
     

 

     

 

J. INTANGIBLE ASSETS (Exhibit G):

           

Organization and development expenses

      211,338       144,357
     

 

     

 

      211,338       144,357
     

 

     

 

K. SUSPENSE ITEMS:

      6,189       8,542
     

 

     

 

TOTAL ASSETS:

      90,849,275       73,284,360
     

 

     

 


Table of Contents

LOGO

 

- 2 -

 

 
    (Contd.)

 

BALANCE SHEETS AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

-Stated in thousands of pesos-

 

LIABILITIES:  

      09-30-2015      

  

      12-31-2014      

L. DEPOSITS (Exhibits H and I):

          

Government sector

     1,174,111       1,017,837

Financial sector

     137,352       77,482

Non financial private sector and residents abroad

     61,856,517       50,340,332
    

 

     

 

Checking accounts

     16,615,351       14,622,588

Savings deposits

     17,313,340       15,005,261

Time deposits

     26,058,866       19,279,641

Investments accounts

     88,774       483

Other

     1,352,843       1,129,571

Interest and listed-price differences accrued payable

     427,343       302,788
    

 

     

 

     63,167,980       51,435,651
    

 

     

 

M. OTHER LIABILITIES FROM FINANCIAL TRANSACTIONS:

          

Argentine Central Bank (Exhibit I)

     55,392       73,110
    

 

     

 

Other

     55,392       73,110

Banks and International Institutions (Exhibit I)

     685,576       406,031

Unsubordinated corporate bonds (Exhibit I)

     1,516,102       1,662,789

Amounts payable for spot and forward purchases to be settled

     1,108,247       312,751

Instruments to be delivered for spot and forward sales to be settled (Exhibit O)

     3,233,502       1,457,098

Financing received from Argentine financial institutions (Exhibit I)

     40,019       --,--
    

 

     

 

Other financing from local financial institutions

     40,000       --,--

Interest accrued payable

     19       --,--

Non-deliverable forward transactions balances to be settled

     13       54

Other (Note 5.c.) (Exhibit I)

     4,170,143       4,091,393

Interest and listed-price differences accrued payable (Exhibit I)

     66,267       66,653
    

 

     

 

     10,875,261       8,069,879
    

 

     

 

N. OTHER LIABILITIES:

          

Dividends payable

     400,000       --,--

Other (Note 5.d.)

     2,885,989       2,645,736
    

 

     

 

     3,285,989       2,645,736
    

 

     

 

O. ALLOWANCES (Exhibit J):

     947,891       771,073
    

 

     

 

P. SUSPENSE ITEMS:

     44,052       30,145
    

 

     

 

TOTAL LIABILITIES:

     78,321,173       62,952,484
    

 

     

 

STOCKHOLDERS’ EQUITY: (as per the related statements of changes in stockholders’ equity)

     12,528,102       10,331,876
    

 

     

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY:

     90,849,275       73,284,360
    

 

     

 


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LOGO

 

- 3 -

 

 

 

MEMORANDUM ACCOUNTS

(Translation of financial statements originally issued in Spanish - See note 21)

-Stated in thousands of pesos-

 

   

      09-30-2015    

  

      12-31-2014    

DEBIT ACCOUNTS

        

Contingent

        

–      Guaranties received

    15,483,969      11,585,575

–      Contra contingent debit accounts

    1,870,136      1,750,341
   

 

    

 

    17,354,105      13,335,916
   

 

    

 

Control

        

–      Receivables classified as irrecoverable

    603,748      517,974

–      Other (Note 5.e.)

    105,417,303      120,090,317

–      Contra control debit accounts

    2,035,345      1,217,512
   

 

    

 

    108,056,396      121,825,803
   

 

    

 

Derivatives (Exhibit O)

        

–      “Notional” amount of non-deliverable forward transactions

    5,657,272      2,984,388

–      Interest rate swap

    672,591      1,097,965

–      Contra derivatives debit accounts

    5,126,400      2,915,793
   

 

    

 

    11,456,263      6,998,146
   

 

    

 

For trustee activities

        

–      Funds in trust

    --,--      6,605
   

 

    

 

    --,--      6,605
   

 

    

 

TOTAL

    136,866,764      142,166,470
   

 

    

 

CREDIT ACCOUNTS

        

Contingent

        

–      Credit lines granted (unused portion) covered by debtor classification regulations (Exhibits B, C and D)

    580,555      640,198

–      Guaranties provided to the BCRA

    199,013      223,973

–      Other guaranties given covered by debtor classification regulations (Exhibits B, C and D)

    318,790      384,982

–      Other guaranties given non covered by debtor classification regulations

    218,682      210,453

–      Other covered by debtor classification regulations (Exhibits B, C and D)

    553,096      290,735

–      Contra contingent credit accounts

    15,483,969      11,585,575
   

 

    

 

    17,354,105      13,335,916
   

 

    

 

Control

        

–      Items to be credited

    1,295,799      965,725

–      Other

    739,546      251,787

–      Contra control credit accounts

    106,021,051      120,608,291
   

 

    

 

    108,056,396      121,825,803
   

 

    

 

Derivatives (Exhibit O)

        

–      “Notional” amount of non-deliverable forward transactions

    5,126,400      2,915,793

–      Contra derivatives credit accounts

    6,329,863      4,082,353
   

 

    

 

    11,456,263      6,998,146
   

 

    

 

For trustee activities

        

–      Contra credit accounts for trustee activities

    --,--      6,605
   

 

    

 

    --,--      6,605
   

 

    

 

TOTAL

    136,866,764      142,166,470
   

 

    

 

The accompanying notes 1 through 21 and exhibits A through L, N and O and the consolidated financial statements with its notes and exhibits are an integral part of these statements.


Table of Contents

LOGO

 

- 4 -

 

 

 

STATEMENTS OF INCOME FOR THE NINE MONTH PERIODS

ENDED SEPTEMBER 30, 2015 AND 2014

(Translation of financial statements originally issued in Spanish – See note 21)

- Stated in thousands of pesos -

 

   

      09-30-2015    

  

      09-30-2014      

A. FINANCIAL INCOME

        

Interest on loans to the financial sector

    398,889      480,939

Interest on overdraft

    1,594,971      1,541,460

Interest on discounted instruments

    976,247      900,901

Interest on real estate mortgage

    225,738      170,660

Interest on collateral loans

    324,219      223,473

Interest on credit card loans

    2,006,123      1,369,713

Interest on other loans

    2,351,574      2,001,550

Interest on other receivables from financial transactions

    216      3,795

Interest on financial leases

    278,931      228,470

Income from secured loans - Decree 1387/01

    11,591      12,727

Net income from government and private securities

    2,402,143      1,153,756

Indexation by benchmark stabilization coefficient (CER)

    147,642      252,211

Gold and foreign currency exchange difference

    347,300      755,865

Other

    267,038      541,955
   

 

    

 

    11,332,622      9,637,475
   

 

    

 

B. FINANCIAL EXPENSE

        

Interest on savings deposits

    15,679      14,104

Interest on time deposits

    3,580,363      3,172,480

Interest on interfinancial financing (call borrowed)

    17,481      6,408

Interest on other financing from financial institutions

    2      5

Interest on other liabilities from financial transactions

    321,782      231,899

Other interest

    4,728      6,296

Indexation by CER

    46      142

Contribution to the deposit guarantee fund

    284,637      58,824

Other

    645,888      582,141
   

 

    

 

    4,870,606      4,072,299
   

 

    

 

GROSS INTERMEDIATION MARGIN – GAIN

    6,462,016      5,565,176
   

 

    

 

C. ALLOWANCES FOR LOAN LOSSES

    432,036      413,511
   

 

    

 

D. SERVICE CHARGE INCOME

        

Related to lending transactions

    1,599,046      1,146,126

Related to liability transactions

    1,431,991      1,087,394

Other commissions

    140,100      111,388

Other (Note 5.f.)

    815,128      666,711
   

 

    

 

    3,986,265      3,011,619
   

 

    

 

E. SERVICE CHARGE EXPENSE

        

Commissions

    1,193,846      571,384

Other (Note 5.g.)

    398,969      304,980
   

 

    

 

    1,592,815      876,364
   

 

    

 


Table of Contents

LOGO

 

- 5 -

 

 
    (Contd.)

 

STATEMENTS OF INCOME FOR THE NINE MONTH PERIODS

ENDED SEPTEMBER 30, 2015 AND 2014

(Translation of financial statements originally issued in Spanish - See note 21)

- Stated in thousands of pesos -

 

   

      09-30-2015    

  

      09-30-2014    

F. ADMINISTRATIVE EXPENSES

        

Payroll expenses

    2,656,151      2,381,270

Fees to Bank Directors and Supervisory Committee

    4,568      3,723

Other professional fees

    59,609      39,433

Advertising and publicity

    168,198      162,956

Taxes

    476,441      346,683

Fixed assets depreciation

    149,062      97,517

Organizational expenses amortization

    47,850      42,881

Other operating expenses

    667,069      562,036

Other

    430,859      442,285
   

 

    

 

    4,659,807      4,078,784
   

 

    

 

NET GAIN FROM FINANCIAL TRANSACTIONS

    3,763,623      3,208,136
   

 

    

 

G. OTHER INCOME

        

Income from long-term investments

    307,864      282,432

Punitive interests

    22,402      18,554

Loans recovered and reversals of allowances

    102,441      98,159

Other (Note 5.h.)

    187,387      157,031
   

 

    

 

    620,094      556,176
   

 

    

 

H. OTHER EXPENSE

        

Punitive interests and charges paid to BCRA

    19      15

Charge for uncollectibility of other receivables and other allowances

    299,925      157,909

Amortization of difference arising from judicial resolutions

    5,718      11,139

Depreciation and losses from miscellaneous assets

    274      249

Other (Note 5.i)

    120,555      59,861
   

 

    

 

        
    426,491      229,173
   

 

    

 

NET GAIN BEFORE INCOME TAX

    3,957,226      3,535,139
   

 

    

 

I. INCOME TAX (Note 4.1)

    1,361,000      1,145,000
   

 

    

 

NET INCOME FOR THE PERIOD

    2,596,226      2,390,139
   

 

    

 

The accompanying notes 1 through 21 and exhibits A through L, N and O and the consolidated financial statements with its notes and exhibits are an integral part of these statements.


Table of Contents

LOGO

 

- 6 -

 

 

 

STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2015 AND 2014

(Translation of financial statements originally issued in Spanish – See note 21)

- Stated in thousands of pesos -

 

2015

 

    2014

 

 
                   

 

                                                   
                   

Non capitalized
contributions

          

Retained earnings

                         

Movements

 

    Capital    

Stock

 

Issuance

premiums

  Adjustments to
stockholders’
equity (1)
  

    Legal    

        Other           Unappropriated
earnings
      Total         Total    

 

 

 

 

 

 

 

  

 

   

 

 

   

 

 

 
 

1.

  Balance at beginning of fiscal year     536,878     182,511     312,979       1,900,721       4,194,291        3,204,496       10,331,876        7,156,180   
 

2.

  Stockholders´ Meeting held on April 7, 2015                                
 

- Dividends paid in cash

 

--,--

   

--,--

   

--,--

     

--,--

      --,--       

(400,000)

      (400,000)        (28,800)   
 

- Legal reserve

 

--,--

   

--,--

   

--,--

     

640,899

      --,--       

(640,899)

      --,--        --,--   
 

- Voluntary reserve for future distributions of income

 

--,--

   

--,--

   

--,--

     

--,--

      2,163,597       

(2,163,597)

      --,--        --,--   
 

3.

 

Net income for the period

    --,--     --,--     --,--       --,--       --,--        2,596,226       2,596,226        2,390,139   
       

 

   

 

   

 

     

 

   

 

 

     

 

   

 

 

   

 

 

 
 

4.

 

Balance at the end of the fiscal year

    536,878     182,511     312,979       2,541,620       6,357,888        2,596,226       12,528,102        9,517,519   
       

 

   

 

   

 

     

 

   

 

 

     

 

   

 

 

   

 

 

 

 

  (1)

Adjustments to stockholders’ equity refer to Adjustment to Capital Stock.

The accompanying notes 1 through 21 and exhibits A through L, N and O and the consolidated financial statements with its notes and exhibits are an integral part of these statements.


Table of Contents

LOGO

 

- 7 -

 

 

 

STATEMENTS OF CASH AND CASH EQUIVALENTS FLOW FOR THE

NINE MONTH PERIODS ENDED SEPTEMBER 30, 2015 AND 2014

(Translation of financial statements originally issued in Spanish - See note 21)

-Stated in thousands of pesos-

 

   

      09-30-2015      

          

      09-30-2014      

        

CHANGES IN CASH AND CASH EQUIVALENTS

             

Cash and cash equivalents at the beginning of the fiscal year

      13,051,491         (1)          13,604,191         (1)   

Cash and cash equivalents at the end of the period

      14,223,135         (1)          13,300,398         (1)   
   

 

 

        

 

 

    

Net increase / (decrease) in cash and cash equivalents

      1,171,644             (303,793)      
   

 

 

        

 

 

    

REASONS FOR CHANGES IN CASH AND CASH EQUIVALENTS

             

Operating activities

             

Net payments from:

             

- Government and private securities

      (1,589,625)             (4,617,128)      

- Loans

      207,597             3,354,941      
   

 

 

        

 

 

    

to financial sector

      (137,893)             289,378      

to non-financial public sector

      (66)             (414)      

to non-financial private sector and residents abroad

      345,556             3,065,977      

- Other receivables from financial transactions

      (353,382)             15,461      

- Receivables from financial leases

      (268,836)             (211,781)      

- Deposits

      7,182,990             2,067,495      
   

 

 

        

 

 

    

to financial sector

      59,870             (13,737)      

to non-financial public sector

      157,482             1,060,741      

to non-financial private sector and residents abroad

      6,965,638             1,020,491      

- Other liabilities from financial transactions

      77,940             1,046,984      
   

 

 

        

 

 

    

Financing from financial or interfinancial sector (call borrowed)

      40,000             --,--        

Others (except liabilities included in Financing Activities)

      37,940             1,046,984      

Collections related to service charge income

      3,990,220             3,012,943      

Payments related to service charge expense

      (1,591,814)             (873,191)      

Administrative expenses paid

      (4,437,605)             (3,896,898)      

Organizational and development expenses paid

      (50,361)             (28,129)      

Net collections from punitive interest

      22,383             18,539      

Differences from judicial resolutions paid

      (5,718)             (11,139)      

Collections of dividends from other companies

      49,840             54,716      

Other collections related to other income and expenses

      168,855             187,723      
   

 

 

        

 

 

    

Net cash flows provided by operating activities

      3,402,484             120,356      
   

 

 

        

 

 

    

Investment activities

             

Net payments from premises and equipment

      (164,281)             (147,199)      

Net collections from other assets

      (369,562)             (463,331)      

Other payments from investment activities

      (320,429)             (147,696)      
   

 

 

        

 

 

    

Net cash flows used in investment activities

      (854,272)             (758,226)      
   

 

 

        

 

 

    

Financing activities

             

Net (payments) / collections from:

             

- Unsubordinated corporate bonds

      (146,687)             803,646      

- Argentine Central Bank

      (17,570)             (15,336)      
   

 

 

        

 

 

    

Other

      (17,570)             (15,336)      

- Banks and international agencies

      279,545             386,637      

Dividends payable

      --,--               (28,800)      

Other payments related to financing activities

      (1,491,856)             (812,250)      
   

 

 

        

 

 

    

Net cash flows (used in) / provided by financing activities

      (1,376,568)             333,897      
   

 

 

        

 

 

    
             
   

 

 

        

 

 

    

Net increase / (decrease) in cash and cash equivalents

      1,171,644             (303,793)      
   

 

 

        

 

 

    

 

(1)

See note 16 “Statements of cash and cash equivalents flow”.

The accompanying notes 1 through 21 and exhibits A through L, N and O and the consolidated financial statements with its notes and exhibits are an integral part of these statements.


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NOTES TO THE FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 2015, PRESENTED IN COMPARATIVE FORM WITH THE BALANCE SHEET AS OF DECEMBER 31, 2014, AND THE STATEMENTS OF INCOME, CHANGES IN STOCKHOLDERS’ EQUITY AND CASH AND CASH EQUIVALENTS FLOW AS OF SEPTEMBER 30, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

(Stated in thousands of pesos)

 

  1.

CORPORATE SITUATION AND BANK’S ACTIVITIES

1.1 Corporate situation

BBVA Banco Francés S.A. (hereinafter indistinctly referred to as either “BBVA Francés” or the “Bank”) has its headquarter in Buenos Aires, Argentina, and operates a 251-branch network.

As from December, 1996, BBVA Francés is part of Banco Bilbao Vizcaya Argentaria S.A.’s (BBVA) global strategy, which controls the Bank, direct and indirectly, with 75.95% of the corporate stock as of September 30, 2015.

Part of the Bank’s corporate stock is publicly traded and has been registered with the Buenos Aires Stock Exchange, New York Stock Exchange and Madrid Stock Exchange.

1.2 Capital stock

Changes in the Bank’s capital stock during the last five fiscal years are as follows:

 

Date of

                   

 Stockholders’ 
Meeting
deciding on
the issuance

  

 Registration with the 
Public Registry of
Commerce (RPC)

  

Form of

  placement  

  

    Amount    

  

        Total        

    

  Capital Stock as of December 31, 2010:

   536,361   

03-30-2011

   09-14-2011    (1)    517       536,878   

03-26-2012

   03-27-2014    (2)    50,410         

03-26-2012

   03-27-2014    (2)    (50,410)      536,878    (3)

 

  (1)

Due to the merger of Consolidar Comercializadora S.A. into BBVA Francés.

 

  (2)

Due to the merger of Inversora Otar S.A. into BBVA Francés.

 

  (3)

The amount of Capital Stock is fully paid in and authorized for public offering by National Securities Commission (CNV).

1.3 Registration with CNV as Settlement and Clearing Agent - Comprehensive

The Capital Markets Law Nr. 26,831, enacted on December 28, 2012 and then regulated by CNV’s General Resolution Nr. 622/13 on September 5, 2013 sets forth, in its Section 47 that agents are under a duty to register with the CNV for interacting with the market in any of the modalities established in CNV’s General Resolution Nr. 622/13. On September 9 and 19, 2014, the Bank was finally registered as Mutual Funds’ Custodian Agent, and Settlement and Clearing Agent – Comprehensive, respectively, under numbers 4 and 42.


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1.4 Responsibility of stockholders

BBVA Francés is a corporation established under the laws of the Argentine Republic, and the responsibility of its stockholders is limited to the value of the paid - in shares, in accordance with Law Nr. 19,550. As a result, in compliance with Law Nr. 25,738, it is hereby informed that neither the foreign capital majority stockholders nor the local or foreign stockholders will respond, in excess of the mentioned paid-in stockholding, for the liabilities arising out of the transactions performed by the financial institution.

 

  2.

SIGNIFICANT ACCOUNTING POLICIES

2.1 Restatement of the financial statements in equivalent purchasing power

The financial statements have been taken from the Bank’s books of account in conformity with the standards of the BCRA.

By Communication “A” 3921 of the BCRA and General Resolution Nr. 441/03 of the CNV, in compliance with Decree 664/03 of the Federal Executive, application of the restatement method on financial statements in equivalent purchasing power has been suspended as from March 1, 2003.

Argentina’s professional accounting standards require applying Technical Pronouncement Nr. 6 of the Argentine Federation of Professional Councils in Economic Sciences (F.A.C.P.C.E.) (as amended by Technical Resolution Nr. 19) which sets forth that financial statements are to be restated in constant currency when the country’s economic environment exhibits certain characteristics. A prerequisite for the application of this pronouncement is that inflation as accumulated throughout a 3-year period, measured by the so-called Domestic Wholesale Price Index (IPIM) published by Argentina’s Official Statistics Bureau –the National Statistics and Censuses Institute- attains or exceeds 100%. Inflation accumulated in the period September 30, 2012 to September 30, 2015, measured by the above-mentioned index is 66%. Therefore, the prerequisite for restatement into constant currency of the information contained in the financial statements is not satisfied. The above notwithstanding, it should be noted that if this prerequisite were satisfied, the restatement will be mandatory.

2.2 Comparative information

In accordance with BCRA Communication “A” 4667, the Balance Sheet and the Exhibits that so specify include the comparative information as of December 31, 2014, while the Statements of Income, Changes in Stockholders’ Equity and Cash and cash equivalents flow show comparative information as of September 30, 2014.

2.3 Valuation methods

The main valuation methods used in the preparation of the financial statements have been as follows:

 

  a)

Foreign currency assets and liabilities:

As of September 30, 2015 and the end of the previous fiscal year, such amounts were translated into pesos at the benchmark exchange rate of the BCRA as of the closing date of transactions on the last business day of the period or fiscal year. The exchange differences were charged to income (loss) for the period or fiscal year.

 

  b)

Government and private securities:

 

   

Holdings booked at fair value and instruments issued by the BCRA at fair value: they were valued based on current listed prices or the prevailing present value for each security as of September 30, 2015 and the end of the previous fiscal year. Differences in listed prices were credited/charged to income for the period or fiscal year.

 

   

Holdings booked at amortized cost and instruments issued by the BCRA at amortized cost: as of September 30, 2015 and the end of the previous fiscal year, these were valued using the amount of initial recognition, rose on the basis of the interest accrued as per the internal rate of return.


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Investments in listed private securities, equity and debt instruments: they were valued based on current listed prices as of September 30, 2015 and the end of the previous fiscal year. Differences in listed prices were charged to income for the period or fiscal year.

 

  c)

Loans to Government Sector:

Federal Government secured loans – Decree Nr. 1387/2001:

As of September 30, 2015 and the end of the previous fiscal year, the secured loans were valued at the highest amount resulting from a comparison between the present value as estimated by BCRA and the book value in accordance with the provisions under BCRA’s Communication “A” 5180. In addition, the amount required to take their book values to their fair realizable values is recorded in a balancing account.

 

  d)

Interest accrual:

Interest has been accrued according to a compound interest formula in the periods in which it was generated, except interest on transactions in foreign currency, those whose maturity does not exceed 92 days, and adjustable assets and liabilities which were recognized on a linear basis.

 

  e)

Benchmark stabilization coefficient (CER):

As of September 30, 2015 and the end of the previous fiscal year, receivables and payables have been adjusted to the CER as follows:

 

  -  

Federal government secured loans have been adjusted under Resolution Nr. 50/2002 of the Ministry of Economy, which resolved that the CER business 10 (ten) days prior to the maturity date of the related service will be considered for yield and repayments of the loans.

 

  -  

Federal Government Secured Bonds due in 2020: have been adjusted under Resolution Nr. 539/2002 of the Ministry of Economy, which resolved that the CER business 5 (five) days prior to the maturity date of the related service will be considered for yield and repayment of the bonds.

 

  -  

Deposits and other assets and liabilities: have been adjusted considering the CER prevailing as of September 30, 2015 and the end of the previous fiscal year.

 

  f)

Allowance for loan losses and contingent commitments:

For loans, other receivables from financial transactions, receivables from financial leases, receivables from sale of property assets and contingent commitments: the allowances have been calculated based on the Bank’s estimated loan loss risk in light of debtor compliance and the collaterals supporting the respective transactions, as provided by Communication “A” 2950 and supplemented of the BCRA.

 

  g)

Instruments to be received and to be delivered for spot and forward transactions pending settlement:

 

  -  

In foreign currency: they were valued according to the benchmark exchange rate of the BCRA for each currency determined on the last business day of the end of the period or fiscal year.

 

  -  

Securities: with Holdings of government and private securities and Instruments issued by BCRA at fair value and at amortized cost: as of September 30, 2015 and the end of the previous fiscal year, they were valued according to the method described in 2.3.b).

 

  h)

Amounts receivable and payable for spot and forward transactions pending settlement:

They were valued based on the prices agreed upon for each transaction, plus related premiums accrued as of September 30, 2015 and the end of the previous fiscal year.

 

  i)

Unlisted Corporate Bonds:

They were valued at acquisition cost plus income accrued but not collected as of September 30, 2015 and the end of the previous fiscal year.


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  j)

Receivables from financial leases:

As of September 30, 2015 and the end of the previous fiscal year, they were valued at the present value of the sum of the periodical instalments and the unguaranteed residual value, calculated as per the conditions agreed upon in the respective leases, applying the implicit interest rate thereto.

 

  k)

Investments in other companies:

 

  -  

Investments in controlled financial institutions, supplementary activities and authorized were valued based on the following methods:

 

   

BBVA Francés Valores S.A., Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings), PSA Finance Argentina Compañía Financiera S.A., BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión and Rombo Cía. Financiera S.A.: were valued by applying the equity method at the end of the period or fiscal year.

Although the Bank has a 40% interest ownership in the capital stock and votes of Rombo Cía. Financiera S.A., operational and financial decisions at Rombo Cía. Financiera S.A. are taken together with this company’s majority shareholder on a joint control basis.

 

  -  

Investments in non controlled financial institutions, supplementary activities and authorized were valued according to the following methods:

 

   

Prisma Medios de Pago S.A. (formerly Visa Argentina S.A.) and Interbanking S.A.: were valued by applying the equity method at the end of the period or fiscal year.

 

   

Bladex S.A.: was valued at acquisition cost in foreign currency plus the nominal value of stock dividends received, converted into pesos based on the method described in 2.3.a).

 

   

Other: valued at acquisition cost, without exceeding their recoverable value.

 

  -  

Other non controlled affiliates were valued based on the following methods:

 

   

BBVA Consolidar Seguros S.A.: was valued by applying the equity method at the end of the period or fiscal year.

 

   

S.W.I.F.T. S.C.R.L.: was valued at acquisition cost in foreign currency plus the nominal value of stock dividends received, converted into pesos based on the method described in 2.3.a).

 

  l)

Premises and equipment and Other assets:

They have been valued at acquisition cost plus increases from prior-year appraisal revaluations, restated as explained in note 2.1, less related accumulated depreciation calculated in proportion to the months of estimated useful life of items concerned (see Exhibit F), without exceeding their recoverable value.

 

  m)

Intangible assets:

They have been valued at acquisition cost less related accumulated amortization calculated in proportion to the months of estimated useful life of the items concerned (see useful life assigned in Exhibit G).

This caption included the differences arising from compliance with court-ordered measures arising from cases challenging the current rules and regulations applicable to deposits with the financial system in the framework of the provisions of Law Nr. 25,561, Decree Nr. 214/02 and supplementary provisions. The assets mentioned (calculated on the basis of the nominal difference between the exchange rate freely determined in the market and applied to the value of the deposit recorded in the books at that date) was amortized within the 60 monthly instalments starting in April 2003 in accordance with Communication “A” 3916 of the BCRA.

As of September 30, 2015 and the end of the previous fiscal, these assets have been fully amortized, with the total accumulated amortization as of those dates amounting to 1,440,197 and 1,434,479, respectively.


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The Bank, however, notifies that such amortization was solely calculated to comply with the regulations of the BCRA and that by no means does it imply a waiver to possible compensation or recovery of the exchange difference resulting from compliance with court orders corresponding to petitions for protection of civil rights or other court action derived from the mandatory conversion of bank deposits into pesos.

Pursuant to the decisions handed down by Argentina’s Supreme Court of Justice (“Massa, Juan Agustín v. Argentine Executive Branch – Executive Order 1570/ et al over action for the protection of constitutional rights (amparo) Law Nr. 16,986” and “Kujarchuk v. Argentine Executive Branch”), a calculation method was established for the payment of bank deposits that was different from the one that had been instituted by the Argentine Executive Branch.

As of September 30, 2015 and the end of the previous fiscal year, the Bank has estimated this contingency and it has recorded allowances for the total amount.

The Bank expects that the Argentine State remedies the significant damage resulting from compliance with court-ordered measures on petitions for protection of civil rights and actions for relief, particularly due to the impact of differences in compensation or recovery as per the rulings in the above-mentioned actions and according to the law in relation to the “pesification” of the underlying deposits. In this regard, the Bank has informed of such financial damages to the relevant authorities, with reservation of rights.

 

  n)

Derivative transactions (see note 12):

 

   

Interest rate swaps and Forward transactions:

 

  1.

Interest rate swaps are recorded at the value resulting from the application of rates differences to residual notional amounts at the end of the period or fiscal year.

 

  2.

Forward transactions receivable/payable in pesos without delivery of the underlying asset are recorded for the amount receivable or payable, as appropriate, arising from the difference between the agreed exchange rate and the exchange rate at the end of the period or fiscal year as applied to stated notional amounts.

 

   

Repo and Reverse Repo transactions

As of September 30, 2015 and the end of the previous fiscal year, the repos whose underlying assets are not subject to the volatilities published by BCRA were valued as per the cost of each transaction and the repos whose underlying assets are subject to volatility were recorded at their quoted value. Accrued premiums were charged to income (loss) for the period or fiscal year.

 

  o)

Employee termination pay:

The Bank expenses employee termination pay as disbursed.

 

  p)

Other liabilities:

They include the debit balances non arising out of transactions relating to the supply and demand of financial resources, plus the adjustments and interest payable accrued as of September 30, 2015 and the end of the previous fiscal year.

 

  q)

Allowance for other contingencies:

It includes the estimated amounts to meet contingencies of probable occurrence that, if occurred, would give rise to a loss for the Bank.

 

  r)

Stockholders’ equity accounts:

They are restated as explained in note 2.1, except for the “Capital Stock” and “Non capitalized contributions” accounts which have been kept at cost. The adjustment resulting from the restatement is included in the “Adjustment to Stockholders´ Equity – Adjustment to Capital Stock” account.


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  s)

Statement of Income Accounts:

 

  -  

As of September 30, 2015 and 2014, accounts accruing monetary transactions [(financial income (expense), service charge income (expense), provision for loan losses, administrative expenses, etc.)] were computed on the basis of their monthly accrual at historical rates.

 

  -  

Accounts reflecting the effect on income resulting from the sale, write-off, or use of non-monetary assets were computed based on the value of such assets, as mentioned in note 2.1.

 

  -  

Income from investments in subsidiaries was computed based on such companies’ income adjusted as explained in note 2.1.

 

  t)

Earning per share:

As of September 30, 2015 and 2014, the Bank calculated the earning per share on the basis of 536,877,850 ordinary shares of $1 par value each. The net income for each period on those dates is as follows:

 

           09-30-2015                  09-30-2014      

Net income for the period

     2,596,226         2,390,139

Earning per share for the period – (stated in pesos)

     4.84             4.45

 

  u)

Use of accounting estimates:

The preparation of the financial statements in accordance with the standards set forth by the BCRA require the Bank to use assumptions and estimates that affect certain assets such as allowances for doubtful loan and certain liabilities such as provisions for other contingencies as well as the reported amounts of income/loss during the periods. Actual income/loss may differ from such estimates.

 

  3.

DIFFERENCES BETWEEN BCRA ACCOUNTING STANDARDS AND ARGENTINE PROFESSIONAL ACCOUNTING STANDARDS

The Bank has prepared these financial statements by applying the regulations of the BCRA, which do not contemplate some of the valuation criteria established by the Argentine professional accounting standards.

The main differences between the regulations of the BCRA and the Argentine professional accounting standards are detailed below:

 

  a)

Tax effects

As already indicated hereinbelow, in note 4.1., the Bank has received various communications from the BCRA pursuant to which that BCRA indicates that the capitalization of items arising from the application of the deferred tax method is not allowed. In accordance with Argentine professional accounting standards, a deferred tax asset should be recognized to the extent the reversal of temporary differences generates a future decrease in the tax effectively determined. As a result, the allowances set up by the Bank in this respect, for 298,500 and 239,500 as of September 30, 2015 and the end of the previous fiscal year, respectively, should be reversed.

 

  b)

Derivative financial instruments

As explained in notes 2.3.n) and 12, as of September 30, 2015 and the end of the previous fiscal year, the Bank recorded the effects of interest rate swap agreements as established by the BCRA. Should the Bank had applied the Argentine professional accounting standards, the stockholders’ equity would have increased in 3,833 and 7,351, respectively. By contrast, the effect of the application of the professional accounting standards on the income statement for the periods ended September 30, 2015 and 2014 would have been 3,518 (loss) and 47,677 (income), respectively.


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  4.

TAX MATTERS

4.1. Income tax

The Bank determined the charge for income tax by applying the statutory 35% rate to taxable income estimated for fiscal year considering the effect of temporary differences between valuation of assets and liabilities for accounting purposes and their taxable bases. The Bank considered as temporary differences those that have a definitive reversal date in subsequent years.

As of September 30, 2015 and 2014, the Bank recorded 1,361,000 and 1,145,000, respectively, in the Income tax caption as the estimate of the income tax charge payable to the tax authorities for these fiscal years.

As of September 30, 2015 and the end of the previous fiscal year, the Bank has booked 601,934 and 758,681, respectively, in the caption Other liabilities – Other – Accrued Taxes as a result of having netted the income tax withholdings and other withholdings applied to the Bank until such dates.

Besides, on June 19, 2003, the Bank received a note from the BCRA indicating that the capitalization of items arising from the application of the deferred tax method is not allowed.

On June 26, 2003, the Bank, based on the opinion of its legal counsel, responded the above mentioned note, indicating that in their opinion the rules of the BCRA do not prohibit the application of the deferred tax method generated by the recognition of temporary differences between the accounting and tax result. Subsequently, Resolution 118/03 of the Superintendent of Financial and Exchange Institutions received on October 7, 2003 confirmed the terms of the note dated June 19, 2003. Consequently, as from that date the Bank set up an allowance for the net balance between the deferred tax assets and liabilities.

As of September 30, 2015 and the end of the previous fiscal year, the Bank recorded under Other Receivables (in the line Tax Prepayments) a taxable deferred asset amounting 298,500 and 239,500, respectively. Such amounts are made up as follows:

 

     09-30-2015                 12-31-2014           

Deferred tax assets

                 606,900                                532,000            

Deferred tax liabilities

     (308,400)                   (292,500)           
  

 

 

      

 

 

 

Net deferred assets

     298,500                    239,500            

Allowance

     (298,500)                   (239,500)           

4.2. Tax on minimum presumed income

Tax on minimum presumed income (TOMPI) was established by Law Nr. 25,063 in the year ended December 31, 1998, for a ten-year term. On December 19, 2008 Law Nr. 26,426 established a one-year extension in TOMPI until December 30, 2009. In turn, Law Nr. 26,545, published in the Official Gazette on December 2, 2009 extended TOMPI for an additional ten-year period. This tax is supplementary to income tax: while the latter is levied on the taxable income for the year, TOMPI is a minimum levy determined by applying the current 1% rate on the potential income of certain productive assets. Therefore, the Bank’s tax obligation for each year will coincide with the highest of these taxes. The above Law provides that institutions governed by Financial Institutions Law must consider as a tax base 20% of their taxable assets, after deducting non-computable ones. However, if TOMPI exceeds income tax in a given year, the excess thereof may be computed as a payment on account of any income tax in excess of TOMPI that may occur in any of the following ten years.

In every year that net operating losses are offset, the tax benefit (the benefit of the effective rate on the net operating loss used) will be realized to the extent that income tax (net of the offsetting) equals or exceeds tax on minimum presumed income, but will be reduced by any excess of the latter over former.

On February 11, 2005, the Argentine Central Bank issued Communication “A” 4295 whereby it enabled, under certain rules, the accounting record of credits on Tax on Minimum Presumed Income.

As of September 30, 2015 and 2014, the Income tax assessed was higher than the TOMPI. Therefore, a provision was raised for Income tax.


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4.3. Other tax issues

 

  a)

On October 24, 2007, the Bank was notified by the Tax Bureau of the City of Buenos Aires of the commencement of a sua sponte tax assessment on a certain basis and partial in nature of the taxable income as regards turnover tax for the fiscal years 2002 and 2003. On November 14, 2007, the Bank filed its defenses to the notice mentioned.

Then, on October 6, 2008, the Bank was given notice of Resolution Nr. 3631-DGR 2008 containing the sua sponte tax assessment for the fiscal years 2002 and 2003. On October 28, 2008, the Bank filed an appeal for review against this resolution, which was rejected on November 7, 2008.

In response to said rejection, on November 28, 2008 an appeal was filed with a higher administrative authority by the Ministry of Economy of the Government of the City of Buenos Aires, which was also dismissed on April 24, 2009.

On April 28, 2009, the Court of Appeals with Federal Jurisdiction over Contentious Administrative Matters, Panel 3 handed down a judgment favourable to a petition filed by the Bank for the judge to suspend the effect of the decision made by administrative authorities until the appeal is decided. The judgment thus ordered that “….subject to a sworn promise to comply … a) the Tax Bureau of the City of Buenos Aires must suspend the sua sponte assessment that has objected to the treatment afforded by BBVA Francés to the bonds received from the National Government in the terms of Decree Nr. 905-02 and the related foreign exchange gains/losses in all matters related to taxation for turnover tax purposes for the fiscal period 2002; b) therefore, the Tax Bureau of the City of Buenos Aires must abstain from demanding that the Bank should pay any amount due that may have arisen from the items above detailed”.

Also in this respect, on May 13, 2009, an action for a declaratory judgment was commenced by the Bank against the Tax Bureau of the City of Buenos Aires, currently being heard by the court with original Federal Jurisdiction over Contentious Administrative Matters Nr. 1, to procure a judgment ascertaining that a) the bonds received by the Bank from the National Government as compensation for the asymmetric conversion into pesos of assets and liabilities imposed by the Executive Order Nr. 905/2002 may not be levied with Turnover Tax in the Autonomous City of Buenos Aires; b) the foreign exchange gains/losses are a direct effect of the modification of the monetary system and therefore should not be levied with Turnover Tax in the Autonomous City of Buenos Aires.

On December 29, 2010, the Judge presiding over the court with original Federal Jurisdiction over Contentious Administrative Matters Nr. 1 handed down a new precautionary measure ordering the Tax Bureau of the City of Buenos Aires to refrain from demanding that BBVA Francés should pay any debt originating in the tax treatment that should be afforded to the bonds received from the National Government as compensation for the asymmetric re-denomination into Pesos under Executive Order Nr. 905/02 and the foreign exchange gains/losses for purposes of Turnover Tax for the fiscal period 2002 in issue until a final judgment has been rendered on the proceedings whereby the action for a declaratory judgment is still pending.

The Bank as well as its legal and tax advisors estimate that the Bank has made a reasonable interpretation of currently applicable rules and regulations concerning the fiscal periods objected to by the Tax Bureau of the City of Buenos Aires and do not expect an adverse financial impact in these respects.

As regards the remaining balance of the amount claimed, the Bank adhered to a scheme of payment in instalments that was settled on October 4, 2010.

 

  b)

On December 23, 2011, the Tax Bureau of the City of Buenos Aires (AGIP) passed its Resolution Nr. 3088-DGR-2011 and notified the Bank of the commencement of a sua sponte tax assessment thereunder alleging presumptive differences owed to the Tax Bureau in the payment of turnover tax for the fiscal years 2004 through 2010. On January 27, 2012, BBVA Francés filed its defense with the Tax Bureau.

Afterwards, on December 28, 2012, the Bank was notified of Resolution Nr. 3253-DRG-2012 whereby the Tax Bureau of the City of Buenos Aires proceeded with a sua sponte assessment based on facts concerning the taxable basis for purposes of turnover tax for the fiscal years 2004 through 2010.


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On February 4, 2013, the Bank filed an appeal for reconsideration against Resolution Nr. 3253-DRG-2012 moving for the annulment of the tax adjustments contained in the sua sponte tax assessment and for an immediate order to archive the case file.

On February 3, 2015, the Bank was notified of the passage of Resolution Nr. 2014-3711-DGR, which conceded the appeal in part.

This Resolution was appealed by lodging a so-called “hierarchical appeal” with the head of the governmental agency in charge of raising public revenue.

On September 28, 2015, the Bank was notified that the hierarchical appeal had been repealed, thus putting an end to the administrative stage. Following such repeal, the Bank will bring the applicable court proceedings.

The Bank as well as its legal and tax advisors estimate that the Bank has made a reasonable interpretation of currently applicable rules and regulations concerning the fiscal periods objected to by the Tax Bureau of the City of Buenos Aires and do not expect an adverse financial impact in these respects.

 

  c)

On December 20, 2013, the Bank was notified of the Administrative Proceeding Tax Assessment Decision Nr. 4705 handed down by the Tax Bureau of the Province of Buenos Aires, whereby this tax bureau made a sua sponte determination of taxable income associated to turnover tax for the fiscal periods 01/2008 to 12/2008.

Against this Decision, the Bank filed on January 14, 2014 an appeal for the tax bureau to reverse its own decision and requested that the tax adjustments inserted in the sua sponte tax assessment be rendered ineffectual and that in due time these proceedings be archived.

The Bank as well as its legal and tax advisors estimate that the Bank has made a reasonable interpretation of currently applicable rules and regulations concerning the fiscal periods objected to by the Tax Bureau of the Province of Buenos Aires and do not expect an adverse financial impact in these respects.

 

  5.

BREAKDOWN OF MAIN ITEMS AND ACCOUNTS

The breakdown of the items included under Other accounts which exceed 20% of the total amount of each item is as follows:

 

         09-30-2015            12-31-2014    

a)     INVESTMENTS IN OTHER COMPANIES

         

In controlled companies -supplementary activities

       169,020          108,366  

In other non-controlled companies- unlisted

       67,275          44,460  

In non-controlled companies-supplementary activities

       21,758          11,789  
    

 

 

      

 

 

 

Total

       258,053          164,615  
    

 

 

      

 

 

 

b)     OTHER RECEIVABLES

         

Miscellaneous receivables

       642,298          386,476  

Guarantee deposits

       549,803          377,029  

Prepayments

       379,429          279,376  

Tax prepayments (1)

       327,810          277,218  

Loans to personnel

       170,334          181,620  

Advances to personnel

       7,527          93,065  

Other

       1,214          1,085  
    

 

 

      

 

 

 

Total

       2,078,415          1,595,869  
    

 

 

      

 

 

 

 

  (1)

As of September 30, 2015 and the end of the previous fiscal year, it includes the deferred tax asset for 298,500 and 239,500, respectively (see note 4.1.)


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         09-30-2015             12-31-2014     

c)     OTHER LIABILITIES FROM FINANCIAL TRANSACTIONS

  

Accounts payable for consumption

       2,483,940          2,482,573  

Other withholdings and collections at source

       815,462          687,723  

Collections and other operations for the account of third parties

       389,440          419,185  

Money orders payable

       237,978          338,117  

Social security payment orders pending settlement

       108,966          18,816  

Pending Banelco debit transactions

       56,406          73,651  

Loans received from Fondo Tecnológico Argentina (FONTAR) and Banco de Inversión y Comercio Exterior (BICE)

       47,092          32,488  

Funds raised from third parties

       13,486          18,941  

Accrued commissions payable

       8,337          7,336  

Loans received from Interamerican Development Bank (IDB)

       7,488          6,485  

Other

       1,548          6,078  
    

 

 

      

 

 

 

Total

       4,170,143          4,091,393  
    

 

 

      

 

 

 

d)     OTHER LIABILITIES

  

Accrued taxes

       897,689          991,889  

Miscellaneous payables

       806,127          678,461  

Amounts collected in advance

       617,995          434,830  

Accrued salaries and payroll taxes

       561,843          536,553  

Other

       2,335          4,003  
    

 

 

      

 

 

 

Total

       2,885,989          2,645,736  
    

 

 

      

 

 

 

e)     MEMORANDUM ACCOUNTS – DEBIT – CONTROL

  

Items in safekeeping

       75,919,863          53,384,165  

Securities representative of investments in custody safekeeping on

behalf of the Guarantee Fund for the Sustainability of the

Pay-as-you-go System managed by the Argentine Republic

       21,682,124          61,071,633  

Checks not yet credited

       5,294,009          3,694,973  

Checks drawn on the Bank pending clearing

       812,042          564,348  

Collections items

       706,142          573,483  

Cash in custody on behalf of the BCRA

       632,970          287,347  

Other

       370,153          514,368  
    

 

 

      

 

 

 

Total

       105,417,303          120,090,317  
    

 

 

      

 

 

 


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         09-30-2015             09-30-2014     

f)     SERVICE CHARGE INCOME

         

Commissions for hiring of insurances

       437,484          375,479  

Rental of safe-deposit boxes

       136,798          107,209  

Commissions on debit and credit cards

       68,133          36,709  

Commissions for loans and guaranties

       33,124          28,654  

Commissions for transportations of values

       31,213          20,066  

Commissions for capital market transactions

       17,653          9,086  

Commissions for escrow

       15,881          15,077  

Commissions for salary payment

       7,597          6,914  

Commissions for trust management

       1,300          1,459  

Other

       65,945          66,058  
    

 

 

      

 

 

 

Total

       815,128          666,711  
    

 

 

      

 

 

 

g)     SERVICE CHARGE EXPENSE

         

Turn-over tax

       272,337          210,148  

Insurance paid on lease transactions

       107,785          83,158  

Other

       18,847          11,674  
    

 

 

      

 

 

 

Total

       398,969          304,980  
    

 

 

      

 

 

 

h)     OTHER INCOME

         

Deferred income tax (1)

       59,000          14,300  

Related parties expenses recovery

       45,126          39,265  

Income from the Credit Card Guarantee Fund

       44,149          44,481  

Interest on loans to personnel

       21,750          23,246  

Other

       17,362          35,739  
    

 

 

      

 

 

 

Total

       187,387          157,031  
    

 

 

      

 

 

 

 

(1) Offset with a charge for the same amount in “Charge for uncollectibility of other receivables and other allowances” account, under Other expense item.

 

   

i)     OTHER EXPENSE

         

Charges for administrative, disciplinary and criminal penalties (2)

       48,817          --,--  

Donations

       15,287          11,039  

Private health insurance for former employees

       10,906          7,279  

Insurance losses

       10,894          7,681  

Turn-over tax

       7,191          7,774  

Other

       27,460          26,088  
    

 

 

      

 

 

 

Total

       120,555          59,861  
    

 

 

      

 

 

 

(2) See note 6.1.

 

  6.

PENALTIES IMPOSED ON THE BANK AND ADMINISTRATIVE PROCEEDINGS INSTITUTED BY THE BCRA.

In compliance with the requirement imposed by the Argentine Central Bank’s Communication “A” 5689, issued on January 8, 2015, the following is a detail of the administrative and/or disciplinary penalties as well as the sentences imposed by criminal trial courts, enforced or brought by the Argentine Central Bank, the Financial Information Unit (UIF) and the Argentine Securities Commission (CNV) of which the Bank has been notified:


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  6.1.

Penalties enforced against the Bank

 

 

On April 21 and 29, 2010, by virtue of Resolutions Nr. 43/10 and 44/10 the Bank was notified of the commencement of two enforcement action proceedings instituted by the Financial Information Unit (UIF) against BBVA Francés arising from two wire transfers received by two customers in their respective sight accounts on November 22, 2007.

It has been the UIF’s understanding that the profile of the customers, as defined, and the supporting documentation submitted by the Bank do not coincide with the possibility of receiving such wire transfers.

In due time, the Bank filed its defenses, offered evidence and petitioned for an acquittal. In addition, the Bank called for the enforcement in this case of the same guarantees available in court proceedings, argued that the statute of limitations applicable to punishable offenses had run out and further claimed that Law Nr. 25,246 is unconstitutional when it comes to the scale of penalties imposed.

On October, 13 and September, 14 2010, the Bank was served with the Resolutions Nr. 181/10 and 169/10 adopted by the UIF whereby BBVA Francés was ordered to pay a fine for an amount equivalent to one time the transactions objected for the amounts of 39,393 and 9,174, respectively.

On the basis of its legal advisors’ opinion, on October 28 and November 25, 2010, the Bank lodged with the Court of Appeals with Federal Jurisdiction over Contentious Administrative Matters a direct appeal against the UIF’s Resolutions in connection with the wire transfers for 9,174 and 39,393, respectively, in accordance with the provisions under Section 25 of Law Nr. 25,246.

On July 16, 2015, the Court of Appeals with Federal Jurisdiction over Contentious Administrative Matters, Panel IV repealed UIF’s Resolution No. 181/10, and thus the fine previously imposed was rendered ineffective. On September 22, 2015, the court decided to reject the extraordinary appeals filed by the UIF against such decision. The UIF lodged an appeal with the Supreme Court of Justice claiming that its prior appeals had been unfairly rejected. Such decision has not yet become irrevocable.

The Bank and its legal advisors have concluded that the analysis of the transactions involved has been made in compliance with applicable legal regulations and that no Suspicious Transaction Report (“ROS”, for its Spanish acronym) has proven necessary. For such reason, the Bank does not expect any adverse financial impacts in this respect. The above notwithstanding, as from January 2015 and to comply with the provisions under Communication “A” 5689 of the Argentine Central Bank, the Bank has raised a provision for 48,567.

It must be mentioned that the Regulatory Compliance Officer designated as of that date was also sanctioned in both cases.

 

 

“BBVA Banco Francés S.A. – FCI Acciones Globales over complaint File 1196/2008”. Summary proceedings instituted by the Argentine Securities Commission (CNV) notified on January 6, 2009. The subject matter of the complaint is alleged breach of the CNV Rules and Law 24,083. The cause of action underlying the complaint is the presumed non-compliance with the conditions for the subscription of a mutual fund (FCI Acciones Globales) as there was a failure to have them embodied and published in the fund’s Management Rules. The complaint points out that the subscription could only be conducted in USD “currency” rather than in USD “notes”. This notwithstanding, the Rules set forth that subscription is in US Dollars and does not distinguish between currency or note USDs, therefore, there was no need for amending the Rules. Pursuant to Resolution Nr. 16,821 notified on May 31, 2012, a decision was made to impose on the Bank a 250 fine. The seven regular members of the Board of Directors as of the date of these events were also sanctioned. An appeal has been lodged against the Resolution that imposes the fine with the Appellate Court in Commercial Matters in and for the City of Buenos Aires. Pursuant to Law Nr. 26,831, a jurisdictional issue has emerged between the Appellate Court in Commercial Matters and the Argentine Administrative and Contentious Appellate Court. The file has been sent to the Supreme Court of Justice which in December 2014 decided that the Appellate Court with jurisdiction in commercial matters is the court that must hear in the case.

The Bank and its legal advisors estimate that the applicable rules and regulations have been reasonably interpreted and that no adverse financial impact is expected in this respect. This notwithstanding, as from January 2015 and to comply with the provisions under Communication “A” 5689 of the Argentine Central Bank, the Bank has raised a provision for 250.


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  6.2.

Administrative Proceedings commenced by the BCRA

 

 

“Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on February 22, 2008 and identified under Nr. 3511, File 100.194/05, on grounds of a breach of the Criminal Foreign Exchange Regime of foreign currency by reason of purchases and sales of US Dollars through BCRA in excess of the authorized amounts. These total 44 transactions involving the branches 099, 342, 999 and 320. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) two Territory Managers, (ii) four Branch Managers, (iii) four Heads of Back-Office Management and (iv) twelve cashiers. On August 21, 2014, the trial court acquitted all the accused from all charges. The State Attorney’s Office filed an appeal and the Panel A of the Appellate Court with jurisdiction over criminal and economic matters confirmed the Bank’s and the involved officers’ acquittal from all charges. The State Attorney’s Office lodged an extraordinary appeal which was granted and, as of the date of these financial statements, is being heard by the Supreme Court of Justice.

 

 

“Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank, notified on October 9, 2009 and identified under Nr. 4157, File 100.778/05 objecting certain transactions channeled through the so-called “MULC” (initials standing for Single and Free-Floating Foreign Exchange Market) with individuals and legal entities that were not allowed to operate in the MULC. The period observed is January through April 2004. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) two Foreign Trade area employees. The case is in the sentencing stage.

 

 

“BBVA Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank, notified on November 30, 2009 and identified under Nr. 4181, File N° 100.309/06 which alleges a departure from currently applicable foreign exchange regulations in connection with foreign trade transactions conducted by SULFACID S.A.C.I.F.y C., on charges of failure to comply with currently applicable rules and regulations when the company paid 4 pre-financing installments directly abroad without passing through the channels in the Argentine Republic. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) three Foreign Trade area employees. This is being heard by the Court with Jurisdiction over Financial Crimes Nr. 3, Clerk of Court’s Office Nr. 6 and it is presently in the sentencing stage.

 

 

“Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on December 1, 2010 and identified under Nr. 4517, File N° 40.536/05 where charges focus on simulated foreign exchange transactions through false statements in their processing incurred by personnel in Branch 097- Comodoro Rivadavia -, which would entail failure to comply with the client identification requirements imposed by foreign exchange rules and regulations through Communication “A” 3471, Paragraph 6. Accused of these breaches stand BBVA Banco Francés S.A., the five regular members of the Board of Directors and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Retail Banking Manager, (ii) the Territory Manager, (iii) the Zone Manager, (iv) the Branch Manager, (v) the Back Office Management Head and (vi) one cashier. On September 30, 2015, the Federal Court of Comodoro Rivadavia rendered judgment and ordered that no further action be taken in the case.

 

 

“Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on December 1, 2010 and identified under Nr. 4539, File N° 18.398/05 where charges focus on simulated foreign exchange transactions through false statements in their processing incurred by personnel from five branches in Mar del Plata, which would entail failure to comply with the client identification requirements imposed by foreign exchange rules and regulations through Communication “A” 3471, Paragraph 6. Accused of these breaches stand BBVA Banco Francés S.A., the five regular members of the Board of Directors and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Retail Bank Manager, (ii) the Territorial Manager, (iii) the Zone Manager, (iv) a Commercial Aide to the Zone Manager, (v) five Branch Managers, (vi) four Back-Office Branch Managers, (vii) five Main Cashiers and (viii) one cashier. The procedural stage in which evidence is produced has commenced.


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“BBVA Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on December 1, 2010 and identified under Nr. 4524, File N° 3.406/06 where charges focus on simulated foreign exchange transactions, conducted in the name of a deceased, perpetrated by personnel from the Branch 240 - Mendoza -, which would entail failure to comply with the client identification requirements imposed by foreign exchange rules and regulations through Communication “A” 3471, Paragraph 6. Accused of these breaches stand BBVA Banco Francés S.A., five regular members of the Board of Directors and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Retail Bank Manager, (ii) the Territorial Manager, (iii) the Zone Manager, (iv) the Branch Manager, (v) the Back Office Branch Manager and (vi) the Main Cashier. The period for proffering and producing evidence came to a close and the matter is being heard by the Federal Court of Mendoza.

 

 

“Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense brought against BBVA Francés notified on July 12, 2011 and identified under Nr. 4693, File N° 101.415/10 on grounds of a breach of the Criminal Foreign Exchange Regime –foreign currency- by reason of “Investments made by Non-Residents Applied to the Purchase of Real Estate” in breach of the provisions under Communication “A” 4359. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) a Foreign Trade Area officer. This is being heard by the Court with Jurisdiction over Financial Crimes Nr. 7, Clerk of Court’s Office Nr. 13 and it is presently in the sentencing stage.

 

 

“Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense brought against BBVA Francés notified on July 6, 2012 and identified under Nr. 5019, File 100.865/06, on grounds of a breach of the Criminal Foreign Exchange Regime due to sales of bank notes in the possession of residents and repatriation of investments by residents associated to the customer Líneas de Transmisión del Litoral S.A., violating the provisions under the Argentine Central Bank’s Communications “A” 4359 and 4377. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) a Foreign Trade Area officer. This is being heard by the Court with Jurisdiction over Financial Crimes Nr. 6, Clerk of Court’s Office Nr. 11.

 

 

“BBVA Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense brought against BBVA Francés notified on August 29, 2012 and identified under Nr. 5079, File 101.575/07, on grounds of a breach of the Criminal Foreign Exchange Regime by reason of having settled new transactions as pre-financing for exports for the benefit of Esso Petrolera Argentina S.R.L., without previously regularizing the pending overdue shipments according to the type of export which breaches Paragraph 8 of Communication “A” 4443 of the Argentine Central Bank. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) a Foreign Trade Area officer. This is being heard by the Court with Jurisdiction over Financial Crimes Nr. 6, Clerk of Court’s Office Nr. 11.

 

 

“BBVA Banco Francés SA Over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on July 26, 2013 and identified under Nr. 5406, File N° 100.443/12 where charges focus on simulated foreign exchange transactions through false statements in their processing incurred by personnel in Branch 087 - Salta -, which would entail failure to comply with the client identification requirements imposed by foreign exchange rules and regulations through Communication “A” 3471, Paragraph 6. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Branch Manager (ii) the Back Office Management Head, (iii) the Main Cashier and (iv) two cashiers. The period for proffering and producing evidence came to a close and the Argentine Central Bank must send it to Salta’s Federal Court.

 

 

“BBVA Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on September 20, 2013 and identified under Nr. 5472, File N° 100.969/09 where the charges consist in allegedly having channeled foreign exchange transactions with “Compañía de Seguros La Mercantil Andina S.A.” in September 2007, that allegedly exceed the monthly limit imposed by Communication “A” 4128, without the Argentine Central Bank’s previous consent. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) a Foreign Trade Area officer. It awaits a resolution from the Argentine Central Bank.


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“BBVA Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on February 21, 2014 and identified under Nr. 5706, File N° 100.134/11. The charges consist in having presumably operated with foreign exchange on January 18, 2010 despite failing to make available to the Argentine Central Bank the excess in its General Foreign Exchange Position incurred on January 15, 2010, allegedly breaching Communications “A” 4646, “A” 4814 and “C” 37587. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Director of Global Markets, (ii) the Head of the Market Management Area and (iii) the Head of the Trading Area. Evidence is being proffered and produced before the Argentine Central Bank.

 

 

“BBVA Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on April 11, 2014 and identified under Nr. 5719, File N° 100.078/14. The charges consist in allegedly failing to comply with the duty to report two transactions conducted by H.C.I. S.A., which would entail failure to comply with Decree 616/05 and the Argentine Central Bank’s Communications “A” 4359, “A” 4377 and “A” 4762 which mandate a mandatory deposit of 30% of all foreign currency inflows from abroad for application to the acquisition of fixed assets. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) a Foreign Trade Area officer. This is being heard by the Court with Jurisdiction over Financial Crimes Nr. 3, Clerk of Court’s Office Nr. 5 and it presently awaits the court’s first ruling.

 

 

“BBVA Banco Francés S.A. over breach of Law Nr. 19,359”. Administrative Proceedings for Foreign Exchange Offense investigated by the Argentine Central Bank notified on March 3, 2015 and identified under Nr. 6082, File Nr. 100.091/12. The charge consists in having presumably conducted transactions that exceeded the US$ 2,000,000 limit in the course of the calendar month on behalf of the firm LUFKIN ARGENTINA S.A., plus the allegation of an excess of USD three hundred thousand. Accused of these breaches stand BBVA Banco Francés S.A. and the following Bank officers who served in the capacities described below at the date when the breaches were perpetrated: (i) the Foreign Trade Manager and (ii) three Foreign Trade Area officers. On April 24, 2015, a defense was raised and evidence was offered.

The Bank and its legal advisors estimate that the applicable rules and regulations have been reasonably interpreted and that no adverse financial impacts are expected in these respects.

 

  7.

RESTRICTIONS ON ASSETS

As of September 30, 2015 and the end of the previous fiscal year, there are Bank’s assets, which are restricted as follows:

 

  a)

The Government and Private Securities account includes 199,000 in bonds issued by the Argentine Government in pesos maturing in 2016 as of September 30, 2015 and 223,960 in peso-denominated Discount Bonds due 2033 as of December 31, 2014, allocated to the guarantee required to act as custodian of investment securities related to Guarantee Fund for the Sustainability of the Pay-as-you-go System managed by the Argentine Republic.

 

  b)

The Bank appropriated 15,958 and 15,358, respectively, in Guaranteed Bonds maturing in 2020, to secure loans arranged under the Credit Global Program to micro, small and medium businesses given by the Interamerican Development Bank (IDB).

 

  c)

The Bank appropriated 202,662 and 195,033, respectively, in Guaranteed Bonds maturing in 2020, to secure loans granted by the so-called “Bicentennial Fund”.

 

  d)

The Bank has also appropriated accounts, deposits and trusts for 1,261,786 and 762,650, respectively, as security for activities related to credit card operations, automated clearing houses, non-deliverable forwards and lawsuits.


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  8.

TRANSACTIONS WITH SUBSIDIARIES AND PARENT COMPANIES (ART. 33 OF LAW Nr. 19,550)

The balances as of September 30, 2015 and the end of the previous fiscal year, for transactions performed with subsidiaries and parent companies are as follows:

 

     Balance Sheet      Memorandum Accounts (1)  
     Assets      Liabilities         

Company

   2015      2014      2015      2014      2015      2014  

BBVA

     29,692         94,403         299,042         87,622         71,753         43,591   

BBV América S.L.

     --,--         --,--         119,253         --,--         11,424,262         8,406,791   

BBVA Francés Valores S.A

     12         58         149         805         13,131         13,403   
Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings)      1         1         1,537         421         4,048         6,975   
BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión      878         780         12,803         12,970         79,520         44,352   

BBVA Consolidar Seguros S.A.

     18,690         24,074         13,872         23,560         29,327         18,311   

PSA Finance Argentina Cía. Financiera S.A.

     653,906         1,098,745         4,564         5,371         23,338         150,172   

Rombo Cía. Financiera S.A.

     1,045,309         685,446         18,192         9,653         312,952         334,653   

 

  (1)

Includes Items in safekeeping, Credit lines granted (unused portion) covered by debtor classification regulations, Guaranties given covered by debtor classification regulations and Derivatives.

 

  9.

BANK DEPOSITS GUARANTEE INSURANCE SYSTEM

The Bank is included in the Deposit Guarantee System established by Law 24,485, Regulatory Decrees Nr. 540/95, Nr. 1,292/96 and 1,127/98 and BCRA’s Communication “A” 5659.

Such law provided for the creation of the Company Seguros de Depósitos Sociedad Anónima (SEDESA) for purposes of managing the Deposit Guarantee Fund (DGF), whose shareholders, in accordance with the changes introduced by Decree Nr. 1,292/96, shall be the BCRA with one share as a minimum and the trustees of the trust created by the financial institutions in the proportion to be determined for each by the BCRA according to their contributions to the DGF.

That Company was incorporated in August 1995 and the Bank holds a 9.2771% interest in its capital stock.

The Deposit Guarantee System, which is limited, compulsory and onerous, has been created for purposes of covering the bank deposit risks subsidiarily and complementarily to the deposit protection and privilege system established by the Financial Institutions Law.

The guarantee shall cover the repayment of principal disbursed plus interest accrued through the date of revoking of the authorization to operate or through the date of suspension of the institution through application of section 49 of the BCRA’s Charter provided that the latter had been adopted earlier than the former without exceeding the amount of pesos a three hundred and fifty thousand. Regarding operations in the name of two or more people, the guarantee shall be prorated between the holders. In no event shall the total guarantee per person exceed the above-mentioned amount, whatever the number of accounts and/or deposits.

 

  10.

TRUST ACTIVITIES

On January 5, 2001, the BCRA’s Board of Directors issued Resolution Nr. 19/01, providing for the exclusion of Mercobank S.A.’s senior liabilities under the terms of section 35 bis of the Financial Institutions Law, the authorization to transfer the excluded assets to the Bank as trustee of the Diagonal Trust, and the authorization to transfer the excluded liabilities to beneficiary banks. Also, on the mentioned date, the agreement to set up the Diagonal Trust was subscribed by Mercobank S.A. as settle and the Bank as trustee in relation to the exclusion of assets as provided in the resolution above-mentioned. As of September 30, 2015 and the end of the previous fiscal year, the assets of Diagonal Trust amount to 2,427 and 2,428, respectively, considering its recoverable value.

Besides, the Bank in its capacity as Trustee in the Corp Banca Trust recorded the selected assets on account of the redemption in kind of participation certificates for 4,177 as of September 30, 2015 and the end of the previous fiscal year.

Besides, the Bank acts as trustee in 13 non-financial trusts, and in no case being personally liable for the liabilities assumed in the performance of the contract obligations; such liabilities will be settled with and up to the full amount of the corpus assets and the proceeds therefrom. The non financial trusts concerned were set up


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to secure the receivables of several creditors (beneficiaries) and the trustee was entrusted the management, care, preservation and custody of the corpus assets until (i) the requirements to show the noncompliance with the obligations by the debtor (settler) vis-à-vis the creditors (beneficiaries) are met, moment at which such assets will be sold and the proceeds therefrom will be distributed (net of expenses) among all beneficiaries, the remainder (if any) being delivered to the settler, or (ii) all contract terms and conditions are complied with, in which case all the corpus assets will be returned to the settler or to whom it may indicate. The trust assets represent about 143,131 and 155,354 as of September 30, 2015 and the end of the previous fiscal year, respectively, consist of cash, creditors’ rights, real estate and shares.

 

  11.

CORPORATE BONDS

On July 15, 2003, an Extraordinary Stockholders’ Meeting approved the setting up of a Program for the issuance and re-issuance of ordinary Corporate Bonds (non-convertible into shares) with ordinary guarantee, or such guarantees as may be decided by the Bank, and unsecured Subordinated Corporate Bonds, convertible or not into shares. During the life of the Program, which was 5 (five) years, it was possible to issue and re-issue any number of series and/or classes of Corporate Bonds as long as at all times the maximum amount in circulation after adding together all series and/or classes outstanding under the Program pending redemption does not exceed at any time US$ 300,000,000 (or the equivalent thereof in other currencies). The Program was approved by CNV Resolution Nr. 14,967 dated November 29, 2004.

The Global Program was amended according to the resolutions adopted by the Ordinary and Extraordinary Stockholders’ Meeting held on April 26, 2007; extended for 5 (five) years by resolution adopted by the Ordinary and Extraordinary Stockholders’ Meetings held on March 28, 2008 and on April 9, 2013 (approved by the CNV by Resolutions Nr. 16,010 and Nr. 17,127 dated November 6, 2008 and July 11, 2013, respectively); and the maximum amount of the issuance was successively increased from US$ 300,000,000 to US$ 500,000,000 and from US$ 500,000,000 to US$ 750,000,000 by resolution adopted by the Ordinary and Extraordinary Stockholders’ Meetings held on March 30, 2011 and March 26, 2012, respectively.

The following is a detail of the Corporate Bonds outstanding as of September 30, 2015 and the end of the previous fiscal year:

 

Detail

 

  

Date of

issuance

 

  

Nominal Value

(in thousands of

pesos)

 

  

Due date

 

  

Rate

 

  

Interest

payments

 

Class 4

   07/31/2013    250,000    01/31/2015   

Private Badlar +

nominal 3.69% per annum

   Quarterly

Class 6

   11/08/2013    121,357    05/08/2015   

Private Badlar +

nominal 3.25% per annum

   Quarterly

Class 7

   11/08/2013    250,000    11/08/2016   

Private Badlar +

nominal 4.24% per annum

   Quarterly

Class 8

   02/11/2014    258,880    08/11/2015   

Private Badlar +

nominal 3.80% per annum

   Quarterly

Class 9

   02/11/2014    145,116    02/11/2017   

Private Badlar +

nominal 4.70% per annum

   Quarterly

Class 10

   07/18/2014    233,750    01/18/2016   

Private Badlar +

nominal 2.50% per annum

   Quarterly

Class 11

   07/18/2014    165,900    07/18/2017   

Private Badlar +

nominal 3.75% per annum

   Quarterly

Class 12

   11/13/2014    130,286    05/13/2016   

Private Badlar +

nominal 2.53% per annum

   Quarterly

Class 13

   11/13/2014    107,500    11/13/2017   

Private Badlar +

nominal 3.75% per annum

   Quarterly

Class 14

   02/13/2015    134,300    11/13/2015    25.75% Fix rate    Quarterly

Class 15

   02/13/2015    144,875    11/13/2016   

Private Badlar +

nominal 4% per annum

   Quarterly

Class 16

   07/30/2015    204,375    07/30/2017   

Private Badlar +

nominal 3.75% per annum

   Quarterly


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The issued Corporate Bonds were fully subscribed and paid in and they will be fully amortized at maturity.

As provided for in the Corporate Bonds Law and the BCRA regulations, the proceeds obtained from the issuance of Classes 4, 6, 7, 8, 9, 10, 11, 12 and 13 were applied to the reimbursement of time deposits, the proceeds from the issuance of Classes 14 and 15 were applied to the grant of working capital loans and those obtained from the issuance of Class 16 were applied to the reimbursement Corporate Bonds Class 8.

As of September 30, 2015 and the end of the previous fiscal year, the outstanding principal and accrued interest amounts to 1,576,421 (in connection with Class 7, 9, 10, 11, 12, 13, 14, 15 and 16 of the Corporate Bonds) and 1,725,644 (in connection with Class 4, 6, 7, 8, 9, 10, 11, 12 and 13 of the Corporate Bonds), respectively.

 

  12.

DERIVATIVE FINANCIAL INSTRUMENTS

 

  I.

Transactions as of September 30, 2015:

 

  a)

Interest rate swaps for 627,719 (Fixed Rate versus Badlar), maturing within a period not exceeding 2 years for which the Bank pays a variable amount in accordance with changes in the Badlar, Encuesta rate, and receives a fixed amount based on stated notional amounts and interest rate swaps for 13,000 (Badlar versus Taxed Rate), maturing within a period not exceeding 1 year for which the Bank pays a fixed amount in accordance with changes in the Badlar, Encuesta rate, and receives a variable amount in accordance with changes in the Badlar, Encuesta rate.

These transactions have been valued in accordance with the criteria described in note 2.3.n.1.) recognizing the amount of 36,926 as income for the period.

The estimated fair value of said instruments amounts to 8,835 (Asset). For fair value estimation purposes, the variable and fixed as yet not matured future flows are discounted, with the swap value being the difference between the current value of the future flows receivable and the current value of the future flows payable.

As of the end of the period, the above transactions were recorded under “Memorandum Accounts - Debit Accounts – Derivatives – Interest rate swap” for 640,719.

 

  b)

Interest rate swap for 31,872 (Fixed Rate versus Badlar), with final maturity in September 2019, for which the Bank pays a variable amount in accordance with changes in the Badlar, Encuesta rate, and receives a fixed amount based on stated notional amounts.

Said transaction was consummated as hedge for potential volatility in the cash flows arising from certain financing deals attributable to changes in the designated benchmark interest rates and it has proven to be effective hedge for the risk mentioned.

The aim pursued by risk management consists in reducing exposure to changes in cash flows arising from financing deals. Thanks to the hedge established, changes in the cash flows arising from the underlying instrument caused by changes in the benchmark interest rate would decrease as a result of having been offset with the changes in the cash flows arising from the hedge instrument.

As of the end of the period the above transaction was recorded under “Memorandum Accounts - Debit Accounts –Derivatives – Interest rate swap” for 31,872.

 

  c)

Non-deliverable forward purchase and sale transactions in foreign currency payable in Pesos, maturing within a period not exceeding 1 year, for 5,657,272 and 5,126,400, which are recorded under “Memorandum Accounts - Debit Accounts - Derivatives – “Notional” amount of non-deliverable forward transactions”, and “Memorandum Accounts - Credit Accounts - Derivatives – “Notional” amount of non-deliverable forward transactions”, respectively.

These transactions have been valued in accordance with the criteria described in note 2.3.n.2.), recognizing the amount of 116,219 as income for the period.


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  d)

Forward sales of BCRA Bills under reverse repurchase agreements for 1,903,863, which are recorded under “Other liabilities from financial transactions – Instruments to be delivered for spot and forward sales to be settled”.

These transactions have been valued in accordance with the description in note 2.3.g) recognizing the amount of 51,206 as income for the period.

 

  e)

The Bank does not carry any pending balances associated to repos in force at September 30, 2015. However, the transactions conducted at September 30, 2015 have yielded a 24,566 loss at the end of the period.

 

  II.

Transactions as of December 31, 2014:

 

  a)

Interest rate swaps for 1,061,420 (Fixed Rate versus Badlar), maturing within a period not exceeding 2 years for which the Bank pays a variable amount in accordance with changes in the Badlar, Encuesta rate, and receives a fixed amount based on stated notional amounts.

These transactions have been valued in accordance with the criteria described in note 2.3.n.1.) recognizing the amount of 12,492 as income for the fiscal year.

The estimated fair value of said instruments amounts to 17,218 (Asset). For fair value estimation purposes, the variable and fixed as yet not matured future flows are discounted, with the swap value being the difference between the current value of the future flows receivable and the current value of the future flows payable.

As of the end of the fiscal year, the above transactions were recorded under “Memorandum Accounts - Debit Accounts – Derivatives – Interest rate swap” for 1,061,420.

 

  b)

Interest rate swap for 36,545 (Fixed Rate versus Badlar), with final maturity in September 2019, for which the Bank pays a variable amount in accordance with changes in the Badlar, Encuesta rate, and receives a fixed amount based on stated notional amounts.

Said transaction was consummated as hedge for potential volatility in the cash flows arising from certain financing deals attributable to changes in the designated benchmark interest rates and it has proven to be effective hedge for the risk mentioned.

The aim pursued by risk management consists in reducing exposure to changes in cash flows arising from financing deals. Thanks to the hedge established, changes in the cash flows arising from the underlying instrument caused by changes in the benchmark interest rate would decrease as a result of having been offset with the changes in the cash flows arising from the hedge instrument.

As of the end of the fiscal year the above transaction was recorded under “Memorandum Accounts - Debit Accounts – Derivatives – Interest rate swap” for 36,545.

 

  c)

Non-deliverable forward purchase and sale transactions in foreign currency payable in Pesos, maturing within a period not exceeding 1 year, for 2,984,388 and 2,915,793, which are recorded under “Memorandum Accounts - Debit Accounts – Derivatives – “Notional” amount of non-deliverable forward transactions”, and “Memorandum Accounts - Credit Accounts - Derivatives – “Notional” amount of non-deliverable forward transactions”, respectively.

These transactions have been valued in accordance with the criteria described in note 2.3.n.2.), recognizing the amount of 485,423 as income for the fiscal year.

 

  d)

Forward sales of BCRA Bills under reverse repurchase agreements for 676,995 and of Government securities for 234,986, which are recorded under “Other liabilities from financial transactions – Instruments to be delivered for spot and forward sales to be settled”.

These transactions have been valued in accordance with the description in note 2.3.g) recognizing the amount of 43,423 as income for the fiscal year.


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  e)

The Bank does not carry any pending balances associated to repos in force at December 31, 2014. However, the transactions conducted at December 31, 2014 have yielded a 7,888 loss at the end of the fiscal year.

 

  13.

COMPLIANCE WITH CNV REQUIREMENTS

 

  13.1

Minimum Stockholders’ Equity and Minimum of liquid assets:

According to CNV’s General Resolution Nr. 622/13, the minimum Stockholders’ Equity required to operate as “Settlement and Clearing Agent – Comprehensive” and “Mutual Funds’ Custodian Agent” would amount to 19,500 and the minimum of liquid assets required by those rules would be 8,000. This amount comprises Federal Government Bonds in Pesos Badlar + 200 bp maturing in 2016 and deposited with the account opened at Caja de Valores S.A. entitled “Depositor 1647 Brokerage Account 5446483 BBVA Banco Francés Minimum Counterbalancing Entry”. As of September 30, 2015 and the end of the previous fiscal year, the Bank’s Stockholders’ Equity exceeds the minimum amount imposed by CNV.

 

  13.2

The Bank’s operations as Mutual Funds’ Custodian Agent

As of September 30, 2015 and the end of the previous fiscal year, in its capacity as Custodian Agent of “FBA Ahorro Pesos”, “FBA Renta Pesos”, “FBA Calificado”, “FBA Bonos Argentina”, “FBA Horizonte”, “FBA Acciones Latinoamericanas”, and “FBA Bonos Globales” managed by BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión, the Bank holds certificates of deposits, repos, shares, corporate bonds, government securities, indexes, deferred payment checks, securities issued by the BCRA, Cedears, ADRS, shares in mutual funds and financial trusts in safekeeping in the amount of 9,635,975 and 5,917,790, respectively, all of which making up the Fund’s portfolio and booked in “Memorandum Accounts - Debit Accounts -Control - Other”.

The Investment Funds´ equities are as follows:

 

             EQUITIES AS OF  

  INVESTMENT FUND                    

               09-30-2015                  12-31-2014  

  FBA Ahorro Pesos

     7,835,508         3,692,738   

  FBA Renta Pesos

     2,474,733         2,515,529   

  FBA Calificado

     231,445         223,763   

  FBA Bonos Argentina

     228,858         23,179   

  FBA Horizonte

     107,932         68,071   

  FBA Acciones Latinoamericanas

     41,295         47,804   

  FBA Acciones Argentinas

     894         793   

  FBA Bonos Globales

     190         164   
  

 

 

    

 

 

 

  Total

     10,920,855         6,572,041   
  

 

 

    

 

 

 

 

  14.

EARNINGS DISTRIBUTIONS

The Bank has in place an earnings distribution policy in line with the Bank’s vocation for sustained stockholder value, that at the same time allows the Bank’s financial condition to perform favourably so as to strive for business growth and the maintenance of consistently high liquidity and solvency standards in compliance with currently applicable rules and regulations.

Restriction on earnings distributions:

 

  a)

On April 7, 2015, the Ordinary and Extraordinary Shareholders’ Meeting was held, approving the allocation of earnings as follows:

 

   

To Legal Reserve: 640,899

   

To Cash dividend: 400,000 (*)

   

To Voluntary reserve for future distributions of income: 2,163,597 (**)


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(*) Subject to BCRA’s approval. See paragraph b) below.

(**)Depending on the amount eventually authorized by BCRA, 400,000 may be added to this amount.

 

  b)

In accordance with the dispositions of point 2.1 of Communication “A” 5273 of “Distribution of Income” of the BCRA issued on January 27, 2012 and of Communication “A” 5689 issued on January 8, 2015, for purposes of calculating the earnings subject to distribution, off-balance sheet deductions must be performed from the sum of the balances recorded in the account Unappropriated retained earnings and in the Voluntary reserve for future distributions of income. In addition, the authorization of the Superintendent of Financial and Exchange Institutions shall be required in order to verify that the procedure established in said resolution for earnings distribution has been properly applied. At the date of issuance of these financial statements, the above-mentioned distribution of dividends is pending approval by the BCRA.

 

  15.

ACCOUNTS IDENTIFYING COMPLIANCE WITH MINIMUM CASH

The following are the items computed for Compliance with Minimum Cash Requirements according to the regulations of the BCRA, with their corresponding balances as of September 30, 2015 and the end of the previous fiscal year:

 

         09-30-15              12-31-14      

COMPUTABLE COMPLIANCE IN PESOS

     

Special Guarantee Accounts

     511,241         277,841   

BCRA Checking Account

     6,501,909         4,323,948   

Special social security accounts

     94,622         5,673   
  

 

 

    

 

 

 

TOTAL

     7,107,772         4,607,462   
  

 

 

    

 

 

 

COMPUTABLE COMPLIANCE IN US DOLLARS (Stated in thousands of pesos)

  

Special Guarantee Accounts

     38,167         34,653   

BCRA Checking Account

     4,453,002         4,926,882   
  

 

 

    

 

 

 

TOTAL

     4,491,169         4,961,535   
  

 

 

    

 

 

 

COMPUTABLE COMPLIANCE IN EUROS (Stated in thousands of pesos)

  

  

BCRA Checking Account

     53,517         68,137   
  

 

 

    

 

 

 

TOTAL

     53,517         68,137   
  

 

 

    

 

 

 

 

  16.

STATEMENTS OF CASH AND CASH EQUIVALENTS FLOW

The Statements of Cash and cash equivalents flow explain the changes in cash and cash equivalents. For such purpose, a detail is supplied of the items that the Bank considers to be cash and cash equivalents:


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         09-30-15              12-31-14              09-30-14              12-31-13           

a) Cash and due from banks

     13,913,485         12,525,541         12,469,867         12,844,259      

 

b) Government securities

     --,--         --,--         521,731         88,812      
              

c) Loans to financial sector, call granted maturity date less than three months as from the end of each period or fiscal year

     309,650         525,950         308,800         671,120      
              
  

 

 

    

 

 

    

 

 

    

 

 

    

 

CASH AND CASH EQUIVALENTS

     14,223,135         13,051,491         13,300,398         13,604,191      
  

 

 

    

 

 

    

 

 

    

 

 

    

Items b) and c) are considered to be cash equivalents because they are held in order to meet short-term commitments, they are readily convertible in known cash amounts, they are subject to insignificant risk of changes in value and their maturity is less than three months as from the period or fiscal year date.

 

  17.

THE BANK’S DOCUMENTATION AND RECORDS – CNV RESOLUTION Nr. 629/14

CNV issued its General Resolution Nr. 629 on August 14, 2014 to introduce changes in its own rules governing the maintenance and safekeeping of corporate books, accounting records and business documentation. In this respect, it is reported that the Bank has sent the documentation that supports its operations for the periods still open to audit for safekeeping to Administradora de Archivos S.A. (AdeA), domiciled at Ruta 36 Km. 31.5 of Florencio Varela, Province of Buenos Aires.

In addition, it is put on record that a detail of the documentation delivered for safekeeping, as well as the documentation referred to in Article 5, Sub-article a.3), Section I of Chapter V of Title II of the CNV rules is available at the Bank’s registered office (Technical Rules 2013 as modified).

 

  18.

IFRS CONVERGENCE IMPLEMENTATION PLAN.

As of the date of issuance of these financial statements, the Bank was in the process of implementing the plan geared to convergence with the International Financial Reporting Standards (IFRS) as set forth in the Argentine Central Bank’s Communication “A” 5541 and supplementary rules in this respect, which will be effective as from the financial statements for the fiscal years beginning on January 1, 2018. On March 17, 2015, the Entity’s Board of Directors approved the above-mentioned Plan, which was filed with the Argentine Central Bank on March 30, 2015. Moreover, on September 29, 2015, the Bank’s Board of Directors learned about the report on the progress made during the six-month period, which was filed with the Argentine Central Bank on September 30, 2015.

 

  19.

PURCHASE OF STOCK IN VOLKSWAGEN CREDIT COMPAÑÍA FINANCIERA S.A.

On May 20, 2015, the Bank executed a Stock Purchase Agreement with Grupo Volkswagen. Pursuant to this Stock Purchase Agreement, the Bank will acquire 51% of the capital stock of Volkswagen Credit Compañía Financiera S.A., equivalent to 23,970,000 non-endorsable, registered, ordinary shares with par value $ 1 and the right to one vote per share. The transaction will be consummated after the consent by the Argentine Central Bank is received.

For the acquisition of these shares, a maximum price has been established at 53,040 which must be paid by the Bank at the closing of the transaction.

 

  20.

PUBLICATION OF THE FINANCIAL STATEMENTS

As provided by Communication “A” 760, the previous intervention of the BCRA is not required for the publication of these financial statements.


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  21.

ACCOUNTING PRINCIPLES – EXPLANATION ADDED FOR TRANSLATION INTO ENGLISH

These financial statements are presented on the basis of the accounting standards of the BCRA and, except for the effect of the matters mentioned in note 3 to the stand – alone financial statements and note 2 to the consolidated financial statements, in accordance with the Argentine professional accounting standards. Certain accounting practices applied by the Bank that conform with the standards of the BCRA and with the Argentine professional accounting standards may not conform with the generally accepted accounting principles in other countries.

The effects of the differences, if any, between Argentine professional accounting standards and the generally accepted accounting principles in the countries in which the financial statements are to be used have not been quantified. Accordingly, they are not intended to present financial position, results of operations and cash flows in accordance with generally accepted accounting principles in the countries of the users of the financial statements, other than Argentina.


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EXHIBIT A

DETAIL OF GOVERNMENT AND PRIVATE SECURITIES

AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

- Stated in thousands of pesos -

 

          Holding                
              

Book

balance

     Book
balance
     Position         
     ID    Market    as of      as of      without      Final  

Description

   Caja de
Valores
   value or
present value
   09-30-2015      12-31-2014      options      position  

GOVERNMENT SECURITIES

                 

Government securities at fair value

                 

Local

                 

In pesos

                 

Secured Bonds maturing in 2020

   2423         1,230,210            1,230,210         1,230,210   

Peso-denominated Discount governed by Argentine Law maturing in 2033

   45696         385,720            385,720         385,720   

Federal Government Bonds in Pesos Badlar + 200 bp maturing in 2016

   5460         310,005            310,005         310,005   

Federal Government Bonds in Pesos Badlar + 200 bp maturing in 2017

   5459         295,765            295,765         295,765   

Argentine Treasury Bonds 18 months maturing 09-30-16

   5313         100,051            100,051         100,051   

Other

           6,401            6,401         6,401   
        

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal in pesos

           2,328,152         2,526,105         2,328,152         2,328,152   
        

 

 

    

 

 

    

 

 

    

 

 

 

In foreign currency

                 

Argentine Bond of Saving towards economic development

   5456         199,504            199,504         199,504   

Federal Government Bonds in US Dollars 0.75% maturing in 2017

   5465         33,635            33,630         33,630   

Federal Government Bonds in US Dollars 2.4% maturing in 2018

   5462         22,440            22,440         22,440   

Other

           51            102         102   
        

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal in foreign currency

           255,630         415,760         255,676         255,676   
        

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal Government securities at fair value

           2,583,782         2,941,865         2,583,828         2,583,828   
        

 

 

    

 

 

    

 

 

    

 

 

 

Government securities at amortized cost

                 

Local

                 

In pesos

                 

Other

           164            164         164   
        

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal in pesos

           164         164         164         164   
        

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal Government securities at amortized cost

           164         164         164         164   
        

 

 

    

 

 

    

 

 

    

 

 

 


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EXHIBIT A

(Contd.)

 

DETAIL OF GOVERNMENT AND PRIVATE SECURITIES

AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

- Stated in thousands of pesos -

 

            Holding                
                

Book

balance

    

Book

balance

     Position         
     ID      Market    as of      as of      without      Final  
Description    Caja de
Valores
     value or
present value
       09-30-2015              12-31-2014              options              position        

 

    

 

  

 

 

    

 

 

    

 

 

    

 

 

 

Instruments issued by the BCRA

                 

BCRA Bills

                 

At fair value

                 

Argentine Central Bank Internal Bills due 12-16-15

     46632            1,051,350            1,051,350         1,051,350   

Argentine Central Bank Internal Bills due 01-13-16

     46637            1,029,878            1,029,878         1,029,878   

Argentine Central Bank Internal Bills due 02-24-16

     46644            724,396            724,396         724,396   

Argentine Central Bank Internal Bills due 11-11-15

     46627            468,182            468,182         468,182   

Argentine Central Bank Internal Bills due 12-09-15

     46631            434,524            434,524         434,524   

Argentine Central Bank Internal Bills due 12-30-15

     46635            432,403            432,403         432,403   

Argentine Central Bank Internal Bills due 11-04-15

     46625            415,713            415,713         415,713   

Argentine Central Bank Internal Bills due 10-28-15

     46624            325,724            325,724         325,724   

Argentine Central Bank Internal Bills due 10-21-15

     46623            250,735            250,735         250,735   

Other

           137,957            137,957         137,957   
        

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal at fair value

           5,270,862         1,415,875         5,270,862         5,270,862   
        

 

 

    

 

 

    

 

 

    

 

 

 

Repurchase transactions

                 

Argentine Central Bank Internal Bills due 05-11-16

     46656            1,903,863            --,--         --,--   
        

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal repurchase transactions

           1,903,863         676,994         --,--         --,--   
        

 

 

    

 

 

    

 

 

    

 

 

 

At amortized cost

                 

Argentine Central Bank Internal Bills due 03-02-16

     46645            933,293            933,293         933,293   

Argentine Central Bank Internal Bills due 02-17-16

     46643            620,900            620,900         620,900   

Argentine Central Bank Internal Bills due 01-20-16

     46638            612,264            612,264         612,264   

Argentine Central Bank Internal Bills due 03-16-16

     46648            533,175            533,175         533,175   

Argentine Central Bank Internal Bills due 02-03-16

     46640            414,683            414,683         414,683   

Argentine Central Bank Internal Bills due 06-01-16

     46659            315,577            315,577         315,577   

Argentine Central Bank Internal Bills due 04-13-16

     46652            305,064            305,064         305,064   

Argentine Central Bank Internal Bills due 07-27-16

     46639            254,121            254,121         254,121   

Argentine Central Bank Internal Bills in US dollars due 11-04-15 Segment “V”

     12076            205,852            205,852         205,852   

Argentine Central Bank Internal Bills in US dollars due 10-28-15 Segment “V”

     12074            186,957            186,957         186,957   

Argentine Central Bank Internal Bills in US dollars due 11-11-15 Segment “V”

     12078            178,186            178,186         178,186   

Argentine Central Bank Internal Bills in US dollars due 10-07-15 Segment “V”

     12066            162,392            162,392         162,392   

Argentine Central Bank Internal Bills due 01-06-16

     46636            145,134            145,134         145,134   

Argentine Central Bank Internal Bills in US dollars due 12-09-15 Segment “N”

     13053            98,087            98,087         98,087   

Argentine Central Bank Internal Bills in US dollars due 10-14-15 Segment “V”

     12068            95,021            95,021         95,021   

Argentine Central Bank Internal Bills due 03-09-16

     46646            89,487            89,487         89,487   

Argentine Central Bank Internal Bills in US dollars due 12-09-15 Segment “V”

     12085            79,478            79,478         79,478   

Argentine Central Bank Internal Bills in US dollars due 11-04-15 Segment “N”

     13042            63,208            63,208         63,208   

Argentine Central Bank Internal Bills in US dollars due 10-21-15 Segment “V”

     12071            51,714            51,714         51,714   

Argentine Central Bank Internal Bills in US dollars due 10-07-15 Segment “N”

     13030            50,639            50,639         50,639   

Argentine Central Bank Internal Bills in US dollars due 12-23-15 Segment “N”

     13057            43,684            43,684         43,684   

Argentine Central Bank Internal Bills in US dollars due 12-23-15 Segment “V”

     12088            42,948            42,948         42,948   

Argentine Central Bank Internal Bills in US dollars due 05-26-16

     46658            42,255            42,255         42,255   

Argentine Central Bank Internal Bills in US dollars due 06-08-16

     46660            41,869            41,869         41,869   

Other

           239,202            239,202         239,202   
        

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal at amortized cost

           5,805,190         6,537,187         5,805,190         5,805,190   
        

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal instruments issued by the BCRA

           12,979,915         8,630,056         11,076,052         11,076,052   
        

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL GOVERNMENT SECURITIES

           15,563,861         11,572,085         13,660,044         13,660,044   
        

 

 

    

 

 

    

 

 

    

 

 

 


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- 33 -

 

   
     

 

EXHIBIT A

(Contd.)

 

DETAIL OF GOVERNMENT AND PRIVATE SECURITIES

AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

- Stated in thousands of pesos -

 

            Holding                
Description    ID Caja de Valores      Market
value
  

Book
balance as

of

09-30-2015

    

Book
balance as

of

12-31-2014

     Position
without
    options    
    

Final

    position    

 

 

    

 

  

 

 

    

 

 

    

 

 

    

 

 

 
INVESTMENTS IN LISTED PRIVATE SECURITIES                  

Other Equity instruments

                 

Local

                 

In pesos

                 

Tenaris S.A.

     40115            130            130         130   

Other

           3            --,--         --,--   
        

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal in pesos

           133         141         130         130   
        

 

 

    

 

 

    

 

 

    

 

 

 

From abroad

                 

In foreign currency

                 

Other

           36            36         36   
        

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal in foreign currency

           36         37         36         36   
        

 

 

    

 

 

    

 

 

    

 

 

 

Subtotal Equity instruments

           169         178         166         166   
        

 

 

    

 

 

    

 

 

    

 

 

 
TOTAL INVESTMENTS IN LISTED PRIVATE SECURITIES            169         178         166         166   
        

 

 

    

 

 

    

 

 

    

 

 

 
TOTAL GOVERNMENT AND PRIVATE SECURITIES            15,564,030         11,572,263         13,660,210         13,660,210   
        

 

 

    

 

 

    

 

 

    

 

 

 


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- 34 -

 

 

 

EXHIBIT B

CLASSIFICATION OF FINANCING FACILITIES BY CATEGORIES

AND GUARANTIES RECEIVED AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

-Stated in thousands of pesos-

 

 

         09-30-2015                  12-31-2014        

COMMERCIAL PORTFOLIO

           

Normal performance

        25,626,010            22,084,118   
     

 

 

       

 

 

 

Preferred collaterals and counter guaranties “A”

        1,256,236            1,215,074   

Preferred collaterals and counter guaranties “B”

        1,049,127            770,416   

Without senior security or counter guaranties

        23,320,647            20,098,628   

With special follow-up

        24,764            7,022   
     

 

 

       

 

 

 

Under observation

        17,379            7,022   
     

 

 

       

 

 

 

Preferred collaterals and counter guaranties “B”

        6,743            540   

Without senior security or counter guaranties

        10,636            6,482   

Negotiations for recovery or re-financing agreements underway

        7,385            --,--   
     

 

 

       

 

 

 

Preferred collaterals and counter guaranties “B”

        828            --,--   

Without senior security or counter guaranties

        6,557            --,--   

Non-performing

        --,--            5,048   
     

 

 

       

 

 

 

Without senior security or counter guaranties

        --,--            5,048   

With high risk of uncollectibility

        13,134            --,--   
     

 

 

       

 

 

 

Preferred collaterals and counter guaranties “B”

        592            --,--   

Without senior security or counter guaranties

        12,542            --,--   

Uncollectible

        5,501            27,508   
     

 

 

       

 

 

 

Preferred collaterals and counter guaranties “B”

        5,000            3,750   

Without senior security or counter guaranties

        501            23,758   
     

 

 

       

 

 

 

Total

        25,669,409            22,123,696   
     

 

 

       

 

 

 


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- 35 -

 

   
     

 

EXHIBIT B

(Contd.)

 

CLASSIFICATION OF FINANCING FACILITIES BY CATEGORIES

AND GUARANTIES RECEIVED AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

-Stated in thousands of pesos-

 

 

         09-30-2015                  12-31-2014        

CONSUMER AND HOUSING PORTFOLIO

           

Normal performance

        27,402,334            22,255,710   
     

 

 

       

 

 

 

Preferred collaterals and counter guaranties “A”

        22,549            41,185   

Preferred collaterals and counter guaranties “B”

        2,296,380            1,890,172   

Without senior security or counter guaranties

        25,083,405            20,324,353   

Low risk

        183,758            221,648   
     

 

 

       

 

 

 

Preferred collaterals and counter guaranties “A”

        --,--            68   

Preferred collaterals and counter guaranties “B”

        14,149            23,400   

Without senior security or counter guaranties

        169,609            198,180   

Medium risk

        166,011            196,426   
     

 

 

       

 

 

 

Preferred collaterals and counter guaranties “B”

        4,793            10,359   

Without senior security or counter guaranties

        161,218            186,067   

High risk

        142,242            129,534   
     

 

 

       

 

 

 

Preferred collaterals and counter guaranties “B”

        13,223            16,183   

Without senior security or counter guaranties

        129,019            113,351   

Uncollectible

        24,511            33,395   
     

 

 

       

 

 

 

Preferred collaterals and counter guaranties “B”

        8,630            9,674   

Without senior security or counter guaranties

        15,881            23,721   

Uncollectible, classified as such under regulatory requirements

        61            136   
     

 

 

       

 

 

 

Without senior security or counter guaranties

        61            136   
     

 

 

       

 

 

 

Total

        27,918,917            22,836,849   
     

 

 

       

 

 

 

General Total (1)

        53,588,326            44,960,545   
     

 

 

       

 

 

 

(1) Items included: Loans (before allowances); Other receivables from financial transactions: Unlisted corporate bonds and Other receivables covered by debtor classification regulations; Receivables from financial leases (before allowances); Memorandum accounts - Credit - Contingent: Credit lines granted (unused portion) covered by debtor classification regulations, Other guaranties given covered by debtor classification regulations and Other covered by debtor classification regulations.


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- 36 -

 

 

 

EXHIBIT C

FINANCING FACILITIES CONCENTRATION

AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

- Stated in thousands of pesos -

 

     09-30-2015      12-31-2014  

Number of clients

   Outstanding
balance
     % of total
    portfolio    
     Outstanding
balance
     % of total
    portfolio    
 

10 largest clients

     6,097,168         11.38%         5,084,274         11.31%   

50 next largest clients

     6,440,281         12.02%         6,428,811         14.30%   

100 following clients

     4,259,480         7.95%         3,771,556         8.39%   

Remaining clients

     36,791,397         68.65%         29,675,904         66.00%   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total (1)

     53,588,326         100.00%         44,960,545         100.00%   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

See (1) in Exhibit B.


Table of Contents

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- 37 -

 

 

 

EXHIBIT D

BREAKDOWN BY FINANCING TERMS AS OF SEPTEMBER 30, 2015

(Translation of financial statements originally issued in Spanish - See note 21)

- Stated in thousands of pesos -

 

          Term remaining to maturity            

Description

  Past-due
  portfolio  
      1 month         3 months         6 months         12 months         24 months        More than 24 
months
         Total           

Government sector

    --,--        98        --,--        --,--        --,--        63,499        --,--        63,597     

Financial sector

    --,--        481,902        203,246        437,967        254,064        666,689        --,--        2,043,868     

Non financial private sector and

residents abroad

 

   

 

138,865

 

  

 

   

 

25,026,438

 

  

 

   

 

5,528,039

 

  

 

   

 

4,679,956

 

  

 

   

 

4,016,732

 

  

 

   

 

5,476,648

 

  

 

   

 

6,614,183

 

  

 

   

 

51,480,861

 

  

 

 
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

TOTAL

    138,865        25,508,438        5,731,285        5,117,923        4,270,796        6,206,836        6,614,183        53,588,326      (1)
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

(1)

See (1) in Exhibit B.


Table of Contents

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- 38 -

 

 

 

EXHIBIT E

DETAIL OF INVESTMENTS IN OTHER COMPANIES

AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish – See note 21)

- Stated in thousands of pesos -

 

 

 
                         

Information about the issuer

 
Concept   Shares     Amount              

Data from last published financial statements

 

 

 

     

 

 

 

Identification

 

Description

 

  Class  

   Unit face value     Votes
per
 share 
       Number          09-30-2015         12-31-2014      

    Main business    

  Period / Fiscal
year end
         Capital     
stock
      Stockholders’  
equity
    Income/
(Loss)
for the
period /
 fiscal year 
 
  FINANCIAL INSTITUTIONS, SUPPLEMENTARY AND AUTHORIZED        
  Controlled                      
  Local                      

 

thousands

of pesos

  

  

 

33642192049

  BBVA Francés Valores S.A.   Common     500$        1        12,396        35,484        25,208      Stockbroker     09-30-2015        6,390        36,583        10,593   

30663323926

  Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings)   Common     1$        1        35,425,947        4,939        4,591      Pensions fund manager     09-30-2015        65,739        9,165        222   

30707847367

  PSA Finance Arg. Cía Financiera S.A.   Common     1,000$        1        26,089        293,203        271,156      Financial institution     09-30-2015        52,178        586,405        192,077   

30548590163

  BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión   Common     1$        1        230,398        128,597        78,567      Investment Fund Manager     09-30-2015        243        181,587        52,663   

33707124909

  Rombo Cía. Financiera S.A.   Common     1,000$        1        24,000        221,854        254,095      Financial Institution     09-30-2015        60,000        554,637        171,399   
           

 

 

   

 

 

           
   

Subtotal controlled

  

      684,077        633,617             
           

 

 

   

 

 

           
  Non controlled                      
  Local                      

30598910045

  Prisma Medios de Pago S.A. (exVisa Argentina S.A.)   Common     1$        1        1,571,996        14,206        6,428      Services to companies     05-31-2015        15,000        432,442        371,110   

30690783521

  Interbanking S.A.   Common     1$        1        149,556        7,304        5,111      Services     12-31-2014        1,346        232,398        186,398   
  Other             248        250             
  Foreign                      

30710156561

  Banco Lat. de Comercio Exterior S.A.   Common B     57$        1        20,221        2,371        2,152      Banking institution     12-31-2014        2,394,389        7,791,411        914,551   
           

 

 

   

 

 

           
    Subtotal noncontrolled          24,129        13,941             
           

 

 

   

 

 

           
   

Total in financial institutions, supplementary

and authorized

  

  

    708,206        647,558             
           

 

 

   

 

 

           
  IN OTHER COMPANIES                      
  Non controlled                      
  Local                      

30500064230

  BBVA Consolidar Seguros S.A.   Common     1$        1        1,301,847        67,157        44,353      Insurance     09-30-2015        10,651        549,565        95,228   
  Foreign                      

17BE1002

  S.W.I.F.T. S.C.R.L.   Common     1,283$        1        4        118        107      Financial messenger services     12-31-2014        141,590        3,342,790        297,550   
           

 

 

   

 

 

           
    Subtotal non controlled          67,275        44,460             
           

 

 

   

 

 

           
    Total in other companies          67,275        44,460             
           

 

 

   

 

 

           
    Total investments in other companies        775,481        692,018             
           

 

 

   

 

 

           


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- 39 -

 

 

 

EXHIBIT F

MOVEMENT OF PREMISES AND EQUIPMENT AND OTHER ASSETS

FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2015 AND

THE FISCAL YEAR ENDED DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

- Stated in thousands of pesos -

 

Description

   Net book
value at
beginning of
fiscal year
   Additions    Transfers    Decreases    Depreciation for
the period
   Net book value at
09-30-2015
   Net book value at
12-31-2014
               Years of
useful life
   Amount      

PREMISES AND EQUIPMENT

                                       

Real Estate

       389,249          46          84,403          --,--          50          30,368          443,330          389,249  

Furniture and Facilities

       349,477          89,942          7,826          --,--          10          39,991          407,254          349,477  

Machinery and Equipment

       180,517          54,562          19,465          30          3 & 5          77,604          176,910          180,517  

Automobiles

       4,994          172          --,--          457          5          1,099          3,610          4,994  
    

 

 

      

 

 

      

 

 

      

 

 

           

 

 

      

 

 

      

 

 

 

Total

       924,237          144,722          111,694          487               149,062          1,031,104          924,237  
    

 

 

      

 

 

      

 

 

      

 

 

           

 

 

      

 

 

      

 

 

 

OTHER ASSETS

                                       

Construction in progress

       139,639          53,314          (91,649)           56,020          --,--          --,--          45,284          139,639  

Advances to suppliers of goods

       940,218          384,093          --,--          47,332          --,--          --,--          1,276,979          940,218  

Works of Art

       992          --,--          --,--          --,--          --,--          --,--          992          992  

Leased assets

       2,247          --,--          --,--          --,--          50          36          2,211          2,247  

Property taken as security for loans

       2,424          681          --,--          1,030          50          96          1,979          2,424  

Stationery and office supplies

       24,165          17,034          --,--          17,125          --,--          --,--          24,074          24,165  

Other

       35,130          --,--          (20,045)           --,--          50          136          14,949          35,130  
    

 

 

      

 

 

      

 

 

      

 

 

           

 

 

      

 

 

      

 

 

 

Total

       1,144,815          455,122          (111,694)           121,507               268          1,366,468          1,144,815  
    

 

 

      

 

 

      

 

 

      

 

 

           

 

 

      

 

 

      

 

 

 


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- 40 -

 

 

 

EXHIBIT G

MOVEMENT OF INTANGIBLE ASSETS

FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2015 AND

THE FISCAL YEAR ENDED DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

- Stated in thousands of pesos -

 

Description   Net book
value at
beginning of
fiscal year
    Additions     Amortization for the
period
             
     

Years of

useful life

  Amount    

Net book value

at 09-30-2015

    Net book value
at 12-31-2014
 
             

Organization and development expenses (1)

    144,357        114,831      1 & 5     47,850        211,338        144,357   
Organization and development non-deductible expenses     --,--        5,718      --,--     5,718        --,--        --,--   
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

 

Total

    144,357        120,549          53,568        211,338        144,357   
 

 

 

   

 

 

     

 

 

   

 

 

   

 

 

 

 

(1)

This caption mainly includes costs from information technology projects and leasehold improvements.


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EXHIBIT H

CONCENTRATION OF DEPOSITS

AS SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

- Stated in thousands of pesos -

 

     09-30-2015      12-31-2014  

Number of clients

     Outstanding  
balance
       % of total  
portfolio
       Outstanding  
balance
       % of total  
portfolio
 

10 largest clients

     4,946,391         7.83%         4,410,087         8.57%   

50 next largest clients

     5,629,313         8.91%         4,770,509         9.27%   

100 following clients

     2,897,060         4.59%         2,909,097         5.66%   

Remaining clients

     49,695,216         78.67%         39,345,958         76.50%   
  

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL

     63,167,980         100.00%         51,435,651         100.00%   
  

 

 

    

 

 

    

 

 

    

 

 

 


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EXHIBIT I

BREAKDOWN OF MATURITY TERMS OF DEPOSITS AND

OTHER LIABILITIES FROM FINANCIAL TRANSACTIONS

AS OF SEPTEMBER 30, 2015

(Translation of financial statements originally issued in Spanish - See note 21)

- Stated in thousands of pesos -

 

     Terms remaining to maturity         

Description

   1 month      3 months      6 months      12 months      24 months      More than
24 months
     Total  

Deposits

     56,149,172         6,095,121         739,966         181,361         2,360         --,--         63,167,980   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Other liabilities from financial transactions

                    

Argentine Central Bank

     2,858         4,387         6,724         13,544         23,755         4,124         55,392   

Banks and International Institutions

     116,242         354,507         219,526         --,--         --,--         --,--         690,275   

Unsubordinated corporate bonds

     28,496         166,123         233,750         130,286         910,266         107,500         1,576,421   

Financing received from local financial institutions

     40,019         --,--         --,--         --,--         --,--         --,--         40,019   

Other

     4,116,788         4,219         7,190         13,486         22,632         7,077         4,171,392   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Other liabilities from financial transactions

     4,304,403         529,236         467,190         157,316         956,653         118,701         6,533,499   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL

     60,453,575         6,624,357         1,207,156         338,677         959,013         118,701         69,701,479   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


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EXHIBIT J

MOVEMENT OF ALLOWANCES

FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 2015

AND THE FISCAL YEAR ENDED DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

- Stated in thousands of pesos -

 

 

  

 

    

 

           Decreases      Book value  

Description

   Book value at
beginning of fiscal
year
     Increases
(4)
           Reversals

 

     Applications

 

     09-30-2015      12-31-2014  

DEDUCTED FROM ASSETS

                   

Government securities

                   

–      For impairment value

     201         --,--           --,--         1         200         201   

Loans

                   

–      Allowance for doubtful loans

     905,336         434,594         (1     --,--         353,057         986,873         905,336   

Other receivables from financial transactions

                   

–      Allowance for doubtful receivables and impairment

     2,139         310         (1     --,--         1         2,448         2,139   

Receivables from financial leases

                   

–      Allowance for doubtful receivables and impairment

     28,808         8,570         (1     --,--         8,232         29,146         28,808   

Other receivables

                   

–      Allowance for doubtful receivables (2)

     291,237         78,053           39         410         368,841         291,237   
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

 

 

 

Total

     1,227,721         521,527           39         361,701         1,387,508         1,227,721   
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

 

 

 

LIABILITIES-ALLOWANCES

                   

–      Contingents commitments (1)

     577         65           --,--         --,--         642         577   

–      Other contingencies

     770,496         215,252         (3     516         86,800         898,432         770,496   

–      For administrative, disciplinary and criminal penalties

     --,--         48,817         (5     --,--         --,--         48,817         --,--   
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

 

 

 

Total

     771,073         264,134           516         86,800         947,891         771,073   
  

 

 

    

 

 

      

 

 

    

 

 

    

 

 

    

 

 

 

 

(1)

Recorded in compliance with the provisions of Communication “A” 3918, as supplemented, of the BCRA, taking into account note 2.3.f).

(2)

Includes mainly the potential loan loss risk arising from the amounts booked as Miscellaneous receivables relating to the petitions for the protection of constitutional rights (Amparos) paid and the deferred tax asset (See note 4.1).

(3)

Recorded to cover possible contingencies that were not considered in other accounts (court orders corresponding to petitions for protection of civil rights, labor, commercial and other lawsuits). (See note 2.3.p).

(4)

Includes exchange differences generated as allowances in foreign currency, booked in the “Financial income - Gold and foreign currency exchange difference” account, as follow:

 

Loans                                                                                          2,868

 

Other receivables                                                                       2,015

(5)

See note 6.1.


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EXHIBIT K

CAPITAL STRUCTURE AS OF SEPTEMBER 30, 2015

(Translation of financial statements originally issued in Spanish - See note 21)

- Stated in thousands of pesos -

 

SHARES

   CAPITAL STOCK    
          Votes per    Issued   

Pending

issuance or

            

Class

   Quantity    share    Outstanding    In portfolio    distribution        Paid in  

Common

   536,877,850    1    536,833    --,--            45   (1)    536,878   (2)

(1)   Shares issued and available to stockholders but not as yet withdrawn.

(2)   Fully registered with the Public Registry of Commerce (See note 1.2.).


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EXHIBIT L

FOREIGN CURRENCY BALANCES AS OF

SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

-Stated in thousands of pesos-

 

Accounts    09-30-2015      12-31-2014  

 

    

 

 

 
            Total of the period (per type of currency)         
     Total of
the period
     Euro      US Dollars      Pounds
Sterling
     Swiss
Franc
     Yen      Other      Total of the
fiscal year
 

ASSETS

                       

Cash and due from banks

     5,329,597         170,661         5,128,683         18,317         266         889         10,781         6,065,743   

Government and private securities

     1,717,574         --,--         1,717,538         --,--         --,--         --,--         36         415,797   

Loans

     2,919,089         3,356         2,915,733         --,--         --,--         --,--         --,--         2,070,525   

Other receivables from financial transactions

     1,000,136         52,706         947,237         --,--         193         --,--         --,--         324,144   

Investments in other companies

     2,489         118         2,371         --,--         --,--         --,--         --,--         2,259   

Other receivables

     191,051         194         190,857         --,--         --,--         --,--         --,--         154,616   

Suspense items

     325         --,--         325         --,--         --,--         --,--         --,--         378   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL

     11,160,261         227,035         10,902,744         18,317         459         889         10,817         9,033,462   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

LIABILITIES

                       

Deposits

     6,774,089         97,025         6,677,064         --,--         --,--         --,--         --,--         5,488,117   

Other liabilities from financial transactions

     2,383,917         106,337         2,258,431         18,165         308         432         244         1,725,670   

Other liabilities

     104,841         13,130         91,711         --,--         --,--         --,--         --,--         55,840   

Suspense items

     2,153         --,--         2,153         --,--         --,--         --,--         --,--         1,016   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL

     9,265,000         216,492         9,029,359         18,165         308         432         244         7,270,643   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

MEMORANDUM ACCOUNTS

                       

Debit accounts (except contra debit accounts)

                       

Contingent

     3,497,179         223,535         3,273,644         --,--         --,--         --,--         --,--         2,927,981   

Control

     17,271,424         280,699         16,988,825         336         628         440         496         39,540,975   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL

     20,768,603         504,234         20,262,469         336         628         440         496         42,468,956   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Credit accounts (except contra credit accounts)

                       

Contingent

     796,600         118,049         678,551         --,--         --,--         --,--         --,--         603,372   

Control

     60,981         10,595         50,386         --,--         --,--         --,--         --,--         122,585   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

TOTAL

     857,581         128,644         728,937         --,--         --,--         --,--         --,--         725,957   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


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EXHIBIT N

ASSISTANCE TO RELATED CLIENTS AND AFFILIATES

AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21)

- Stated in thousands of pesos -

 

 

   Status  
Concept    Normal      With special
follow-up /
Low risk
     With problems /
Medium risk

 

     With high risk of
uncollectibility / High
risk
     Uncollectible      Classified
uncollectible
as such
     Total (1)

 

 
         Not yet
matured
     Past-due      Not yet
matured
     Past-due             under
regulatory
requirements
    

09-30-2015

 

    

12-31-2014

 

 

 

 

1. Loans

     1,572,784         --,--         --,--         --,--         --,--         --,--         --,--         --,--         1,572,784         1,824,455   

-  Overdraft

     1,058         --,--         --,--         --,--         --,--         --,--         --,--         --,--         1,058         572   

Without senior security or counter guaranty

     1,058         --,--         --,--         --,--         --,--         --,--         --,--         --,--         1,058         572   

-   Discounted Instruments

     --,--         --,--         --,--         --,--         --,--         --,--         --,--         --,--         --,--         2,818   

Without senior security or counter guaranty

     --,--         --,--         --,--         --,--         --,--         --,--         --,--         --,--         --,--         2,818   

-   Real Estate Mortgage and Collateral Loans

     3,721         --,--         --,--         --,--         --,--         --,--         --,--         --,--         3,721         3,777   

Other collaterals and counter guaranty “B”

     3,721         --,--         --,--         --,--         --,--         --,--         --,--         --,--         3,721         3,777   

-   Consumer

     3,552         --,--         --,--         --,--         --,--         --,--         --,--         --,--         3,552         4,889   

Without senior security or counter guaranty

     3,552         --,--         --,--         --,--         --,--         --,--         --,--         --,--         3,552         4,889   

-   Credit Cards

     6,909         --,--         --,--         --,--         --,--         --,--         --,--         --,--         6,909         5,137   

Without senior security or counter guaranty

     6,909         --,--         --,--         --,--         --,--         --,--         --,--         --,--         6,909         5,137   

-   Other

     1,557,544         --,--         --,--         --,--         --,--         --,--         --,--         --,--         1,557,544         1,807,262   

Without senior security or counter guaranty

     1,557,544         --,--         --,--         --,--         --,--         --,--         --,--         --,--         1,557,544         1,807,262   

2.   Other receivables from financial transactions

     51,759         --,--         --,--         --,--         --,--         --,--         --,--         --,--         51,759         43,699   

3.   Receivables from financial leases and other

     516         --,--         --,--         --,--         --,--         --,--         --,--         --,--         516         402   

4.   Contingent commitments

     127,437         --,--         --,--         --,--         --,--         --,--         --,--         --,--         127,437         57,932   

5.   Investments in other companies and private

      securities

     747,850         --,--         --,--         --,--         --,--         --,--         --,--         --,--         747,850         665,247   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     2,500,346         --,--         --,--         --,--         --,--         --,--         --,--         --,--         2,500,346         2,591,735   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total Allowances

     16,172         --,--         --,--         --,--         --,--         --,--         --,--         --,--         16,172         18,686   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

(1) Maximum amount granted to related clients during September 2015 and December 2014, respectively, according to BCRA rules.


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EXHIBIT O

FINANCIAL DERIVATIVES INSTRUMENTS

AS OF SEPTEMBER 30, 2015

(Translation of financial statements originally issued in Spanish - See note 21)

- Stated in thousands of pesos -

 

 

 

Type of

contract

  Purpose of
transactions
  Underlying
asset
  Type of Settlement   Traded at / Counterparty  

Weighted
average term as
originally
agreed

(months)

 

Weighted
average
residual
term

(months)

 

Weighted
average term
for
difference
settlements

(days)

  Amount  

 

 
Swaps   Financial
transactions – own
account
  -   Upon expiration of
differences
  Residents in Argentina –

Financial sector

  21   10   48     614,719   
Swaps   Financial
transactions – own
account
  -   Upon expiration of
differences
  Residents in Argentina –

Non- financial sector

  12   6   6     13,000   
Swaps   Financial
transactions – own
account
  -   Daily of differences   MAE   13   6   1     13,000   
Swaps   Interest rate hedge   -   Upon expiration of
differences
  Residents in Argentina –

Non - financial sector

  122   48   8     31,872   
Futures   Financial
transactions – own
account
  Foreign
currency
  Daily of differences   MAE   7   5   1     5,915,903   
Futures   Financial
transactions – own
account
  Foreign
currency
  Daily of differences   ROFEX   4   2   1     745,159   
Futures   Financial
transactions – own
account
  Foreign
currency
  Upon expiration of
differences
  Residents in Argentina –

Non - financial sector

  8   6   228     4,122,610   
Repo transactions   Financial
transactions – own
account
  Other   Upon expiration of
differences
  Residents in Argentina –

Financial sector

  1   1   1     1,903,863   
               

 

 

 
TOTAL                   13,360,126   
               

 

 

 


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CONSOLIDATED BALANCE SHEETS AS OF

SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Art. 33 of Law Nr. 19,550)

(Translation of financial statements originally issued in Spanish - See note 21 to the stand-alone Financial Statements)

-Stated in thousands of pesos-

 

ASSETS:          09-30-2015                  12-31-2014        

A. CASH AND DUE FROM BANKS:

           

Cash

        2,626,811            2,857,676   

Due from banks and correspondents

        11,311,015            9,702,478   
     

 

 

       

 

 

 

Argentine Central Bank (BCRA)

        11,136,304            9,350,350   

Other local

        2,551            1,196   

Foreign

        172,160            350,932   
     

 

 

       

 

 

 
        13,937,826            12,560,154   
     

 

 

       

 

 

 

B. GOVERNMENT AND PRIVATE SECURITIES (Note 7.a):

           

Holdings booked at fair value

        2,585,485            2,942,473   

Holdings booked at amortized cost

        164            164   

Instruments issued by the BCRA

        12,979,915            8,630,056   

Investments in listed private securities

        93,026            60,997   

Less: Allowances

        200            201   
     

 

 

       

 

 

 
        15,658,390            11,633,489   
     

 

 

       

 

 

 

C. LOANS:

           

To government sector (Exhibit 1)

        63,597            54,459   

To financial sector (Exhibit 1)

        1,437,740            1,127,116   
     

 

 

       

 

 

 

Interfinancial – (Call granted)

        --,--            30,000   

Other financing to local financial institutions

        1,246,674            880,437   

Interest and listed-price differences accrued and pending collection

        191,066            216,679   

To non financial private sector and residents abroad (Exhibit 1)

        49,499,228            41,199,059   
     

 

 

       

 

 

 

Overdraft

        7,813,118            6,861,786   

Discounted instruments

        7,708,000            6,035,048   

Real estate mortgage

        1,806,419            1,466,346   

Collateral Loans

        4,127,086            3,695,487   

Consumer

        6,805,408            6,091,937   

Credit cards

        14,672,406            11,465,609   

Other

        6,010,784            5,025,304   

Interest and listed-price differences accrued and pending collection

        717,433            691,454   

Less: Interest documented together with main obligation

        161,426            133,912   

Less: Allowances

        1,018,890            937,794   
     

 

 

       

 

 

 
        49,981,675            41,442,840   
     

 

 

       

 

 

 

D. OTHER RECEIVABLES FROM FINANCIAL TRANSACTIONS:

           

Argentine Central Bank (BCRA)

        702,311            384,930   

Amounts receivable for spot and forward sales to be settled

        3,132,717            1,405,562   

Instruments to be received for spot and forward purchases to be settled

        1,197,197            312,684   

Unlisted corporate bonds (Exhibit 1)

        86,868            48,653   

Non-deliverable forward transactions balances to be settled

        118,960            139,149   

Other receivables not covered by debtor classification regulations

        2,594            14,873   

Other receivables covered by debtor classification regulations (Exhibit 1)

        324,753            311,787   

Less: Allowances

        5,907            5,267   
     

 

 

       

 

 

 
        5,559,493            2,612,371   
     

 

 

       

 

 

 

E. RECEIVABLES FROM FINANCIAL LEASES:

           

Receivables from financial leases (Exhibit 1)

        2,338,145            2,075,497   

Interest accrued pending collection (Exhibit 1)

        32,218            27,585   

Less: Allowances

        30,530            29,840   
     

 

 

       

 

 

 
        2,339,833            2,073,242   
     

 

 

       

 

 

 

F. INVESTMENTS IN OTHER COMPANIES:

           

In financial institutions

        224,225            256,247   

Other (Note 7.b)

        106,906            66,743   
     

 

 

       

 

 

 
        331,131            322,990   
     

 

 

       

 

 

 

G. OTHER RECEIVABLES:

           

Other (Note 7.c)

        2,113,813            1,696,426   

Other interest accrued and pending collection

        607            744   

Less: Allowances

        404,022            324,756   
     

 

 

       

 

 

 
        1,710,398            1,372,414   
     

 

 

       

 

 

 

H. PREMISES AND EQUIPMENT:

        1,036,490            929,760   
     

 

 

       

 

 

 

I. OTHER ASSETS:

        1,404,085            1,187,961   
     

 

 

       

 

 

 

J. INTANGIBLE ASSETS:

           

Organization and development expenses

        211,624            144,672   
     

 

 

       

 

 

 
        211,624            144,672   
     

 

 

       

 

 

 

K. SUSPENSE ITEMS:

        6,189            8,563   
     

 

 

       

 

 

 

L. OTHER SUBSIDIARIES’ ASSETS (Note 7.d):

        --,--            450   
     

 

 

       

 

 

 

TOTAL ASSETS:

        92,177,134            74,288,906   
     

 

 

       

 

 

 


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- 49 -

 

 
    (Contd.)

 

CONSOLIDATED BALANCE SHEETS AS OF

SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Art. 33 of Law Nr. 19,550)

(Translation of financial statements originally issued in Spanish - See note 21 to the stand-alone Financial Statements)

-Stated in thousands of pesos-

 

LIABILITIES:   

        09-30-2015        

  

        12-31-2014        

M. DEPOSITS:

           

Government sector

      1,174,111       1,017,837

Financial sector

      137,352       77,482

Non financial private sector and residents abroad

      61,903,529       50,347,558
     

 

     

 

Checking accounts

      16,608,463       14,614,559

Savings deposits

      17,301,572       14,995,902

Time deposits

      26,123,259       19,303,430

Investments accounts

      88,774       483

Other

      1,352,843       1,129,571

Interest and listed-price differences accrued payable

      428,618       303,613
     

 

     

 

          63,214,992       51,442,877
     

 

     

 

N. OTHER LIABILITIES FROM FINANCIAL TRANSACTIONS:

           

Argentine Central Bank

      55,392       73,110
     

 

     

 

Other

      55,392       73,110

Banks and International Institutions

      685,576       406,031

Unsubordinated corporate bonds

      1,642,369       1,868,434

Amounts payable for spot and forward purchases to be settled

      1,108,247       312,751

Instruments to be delivered for spot and forward sales to be settled

      3,233,502       1,457,098

Financing received from Argentine financial institutions

      431,431       124,424
     

 

     

 

Interfinancial (call borrowed)

      70,000       49

Other financings from local financial institutions

      361,396       124,375

Interest accrued payable

      35       --,--

Non-deliverable forward transactions balances to be settled

      43       408

Other (Note 7.e)

      4,347,203       4,278,335

Interest and listed–price differences accrued payable

      114,403       96,942
     

 

     

 

      11,618,166       8,617,533
     

 

     

 

O. OTHER LIABILITIES:

           

Dividends payable

      473,991       --,--

Fees payable

      302       122

Other (Note 7.f)

      2,998,412       2,771,721
     

 

     

 

      3,472,705       2,771,843
     

 

     

 

P. ALLOWANCES:

      1,000,277       818,092
     

 

     

 

Q. SUSPENSE ITEMS:

      44,092       30,290
     

 

     

 

R. OTHER SUBSIDIARIES’ LIABILITIES (Note 7.g):

      --,--       337
     

 

     

 

TOTAL LIABILITIES:

      79,350,232       63,680,972
     

 

     

 

S. MINORITY INTEREST IN SUBSIDIARIES (Note 4):

      298,800       276,058
     

 

     

 

STOCKHOLDERS’ EQUITY:

      12,528,102       10,331,876
     

 

     

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY:

      92,177,134       74,288,906
     

 

     

 


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- 50 -

 

 

 

MEMORANDUM ACCOUNTS

(Translation of financial statements originally issued in Spanish - See note 21 to the stand-alone Financial Statements)

- Stated in thousands of pesos -

 

    

      09-30-2015      

    

      12-31-2014      

 

DEBIT ACCOUNTS

           

Contingent

           

–       Guaranties received

        17,477,028            13,726,776   

–       Contra contingent debit accounts

        1,870,136            1,750,341   
     

 

 

       

 

 

 
        19,347,164            15,477,117   
     

 

 

       

 

 

 

Control

           

–       Receivables classified as irrecoverable

        623,983            539,719   

–       Other (Note 7.h)

        105,417,310            120,436,826   

–       Contra control debit accounts

        2,035,345            1,363,258   
     

 

 

       

 

 

 
        108,076,638            122,339,803   
     

 

 

       

 

 

 

Derivatives

           

–       “Notional” amount of non-deliverable forward transactions

        5,657,272            2,984,388   

–       Interest rate swap

        652,182            1,003,244   

–       Contra debit derivatives accounts

        5,126,400            2,915,793   
     

 

 

       

 

 

 
        11,435,854            6,903,425   
     

 

 

       

 

 

 

For trustee activities

           

–       Funds in trust

        --,--            6,605   
     

 

 

       

 

 

 
        --,--            6,605   
     

 

 

       

 

 

 

TOTAL

        138,859,656            144,726,950   
     

 

 

       

 

 

 

CREDIT ACCOUNTS

           

Contingent

           

–       Credit lines granted (unused portion) covered by debtor classification regulations (Exhibit 1)

        580,555            640,198   

–       Guaranties provided to the BCRA

        199,013            223,973   

–       Other guaranties given covered by debtor classification regulations (Exhibit 1)

        318,790            384,982   

–       Other guaranties given non covered by debtor classification regulations

        218,682            210,453   

–       Other covered by debtor classification regulations (Exhibit 1)

        553,096            290,735   

–       Contra contingent credit accounts

        17,477,028            13,726,776   
     

 

 

       

 

 

 
        19,347,164            15,477,117   
     

 

 

       

 

 

 

Control

           

–       Items to be credited

        1,295,799            965,725   

–       Other

        739,546            397,533   

–       Contra control credit accounts

        106,041,293            120,976,545   
     

 

 

       

 

 

 
        108,076,638            122,339,803   
     

 

 

       

 

 

 

Derivatives

           

–       “Notional” amount of non-deliverable forward transactions

        5,126,400            2,915,793   

–       Contra credit derivatives accounts

        6,309,454            3,987,632   
     

 

 

       

 

 

 
        11,435,854            6,903,425   
     

 

 

       

 

 

 

For trustee activities

           

–       Contra credit accounts for trustee activities

        --,--            6,605   
     

 

 

       

 

 

 
        --,--            6,605   
     

 

 

       

 

 

 

TOTAL

        138,859,656            144,726,950   
     

 

 

       

 

 

 

The accompanying notes 1 through to 7 to the consolidated financial statements with subsidiaries and the Exhibit 1 are an integral part of these statements, which in turn are part of the stand-alone Financial Statements of BBVA Banco Francés S.A. and are to be read in conjunction therewith.


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- 51 -

 

 

 

CONSOLIDATED STATEMENTS OF INCOME

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2015 AND 2014

(Art. 33 of Law Nr. 19,550)

(Translation of financial statements originally issued in Spanish - See note 21 to the stand-alone Financial Statements)

- Stated in thousands of pesos -

 

    

        09-30-2015        

  

        09-30-2014        

A. FINANCIAL INCOME

           

Interest on loans to the financial sector

      213,648       274,681

Interest on overdraft

      1,594,971       1,541,444

Interest on discounted instruments

      976,247       900,901

Interest on real estate mortgage

      225,738       170,660

Interest on collateral loans

      683,688       589,638

Interest on credit card loans

      2,006,123       1,369,713

Interest on other loans

      2,367,858       2,023,070

Interest from other receivables from financial transactions

      216       3,795

Interest on financial leases

      296,811       245,513

Income from secured loans - Decree 1387/01

      11,591       12,727

Net income from government and private securities

      2,422,837       1,167,292

Indexation by CER

      147,642       252,211

Gold and foreign currency exchange difference

      349,951       760,205

Other

      267,220       592,452
     

 

     

 

      11,564,541       9,904,302
     

 

     

 

B. FINANCIAL EXPENSE

           

Interest on savings deposits

      15,679       14,104

Interest on time deposits

      3,585,992       3,178,676

Interest on interfinancial financing (call borrowed)

      20,927       14,537

Interest on other financing from financial institutions

      35,676       59,950

Interest on other liabilities from financial transactions

      356,181       326,978

Other interest

      4,728       6,296

Indexation by CER

      46       142

Contribution to the deposit guaranty fund

      284,837       58,885

Other

      673,117       606,080
     

 

     

 

      4,977,183       4,265,648
     

 

     

 

GROSS INTERMEDIATION MARGIN – GAIN

      6,587,358       5,638,654
     

 

     

 

C. ALLOWANCES FOR LOAN LOSSES

      439,476       422,340
     

 

     

 

D. SERVICE CHARGE INCOME

           

Related to lending transactions

      1,872,646       1,450,471

Related to liability transactions

      1,431,991       1,087,394

Other commissions

      220,361       136,975

Other (Note 7.i)

      815,120       666,704
     

 

     

 

      4,340,118       3,341,544
     

 

     

 

E. SERVICE CHARGE EXPENSE

           

Commissions

      1,201,798       580,084

Other (Note 7.j)

      423,990       330,887
     

 

     

 

      1,625,788       910,971
     

 

     

 


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- 52 -

 

 
    (Contd.)

 

CONSOLIDATED STATEMENTS OF INCOME

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2015 AND 2014

(Art. 33 of Law Nr. 19,550)

(Translation of financial statements originally issued in Spanish - See note 21 to the stand-alone Financial Statements)

- Stated in thousands of pesos -

 

    

        09-30-2015        

  

        09-30-2014        

F. ADMINISTRATIVE EXPENSES

           

Payroll expenses

      2,678,468       2,404,697

Fees to Bank Directors and Supervisory Committee

      4,826       3,911

Other professional fees

      69,767       48,342

Advertising and publicity

      168,944       164,639

Taxes

      483,689       353,862

Fixed assets depreciation

      149,207       97,620

Organizational expenses amortization

      47,919       42,911

Other operating expenses

      665,410       563,958

Other

      435,380       448,917
     

 

     

 

      4,703,610       4,128,857
     

 

     

 

NET GAIN FROM FINANCIAL TRANSACTIONS

      4,158,062       3,518,030
     

 

     

 

RESULTS OF MINORITY INTEREST IN SUBSIDIARIES

      (96,734)       (74,407)
     

 

     

 

G. OTHER INCOME

           

Income from long-term investments

      151,251       159,724

Punitive interests

      24,294       20,389

Loans recovered and reversals of allowances

      109,102       103,261

Other (Note 7.k)

      180,605       145,883
     

 

     

 

      465,252       429,257
     

 

     

 

H. OTHER EXPENSE

           

Punitive interests and charges paid to BCRA

      19       15

Charge for uncollectibility of other receivables and other allowances

      305,604       159,441

Amortization of difference arising from judicial resolutions

      5,718       11,139

Depreciation and losses from miscellaneous assets

      1,175       549

Other (Note 7.l)

      122,861       61,968
     

 

     

 

      435,377       233,112
     

 

     

 

NET GAIN BEFORE INCOME TAX AND TAX ON MINIMUM PRESUMED INCOME

      4,091,743       3,639,768
     

 

     

 

I. INCOME TAX AND TAX ON MINIMUM PRESUMED INCOME

      1,495,517       1,249,629
     

 

     

 

NET INCOME FOR THE PERIOD

      2,596,226       2,390,139
     

 

     

 

The accompanying notes 1 through 7 to the consolidated financial statements with subsidiaries and the Exhibit 1 are an integral part of these statements, which in turn are part of the stand-alone Financial Statements of BBVA Banco Francés S.A. and are to be read in conjunction therewith.


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- 53 -

 

 

 

CONSOLIDATED STATEMENTS OF CASH AND CASH EQUIVALENTS FLOW

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2015 AND 2014

(ART. 33 OF LAW Nr. 19,550)

(Translation of financial statements originally issued in Spanish - See note 21 to the stand-alone Financial Statements)

-Stated in thousands of pesos-

 

    

        09-30-2015        

       

      09-30-2014        

    

CHANGES IN CASH AND CASH EQUIVALENTS

                 

Cash and cash equivalents at the beginning of the fiscal year

      12,951,964      (1)       13,603,620      (1)

Cash and cash equivalents at the end of the period

      14,052,826      (1)       13,314,787    (1)
     

 

        

 

  

Net increase /(decrease) in cash and cash equivalents

      1,100,862          (288,833)   
     

 

        

 

  

REASONS FOR CHANGES IN CASH AND CASH EQUIVALENTS

                 

Operating activities

                 

Net payments from:

                 

 - Government and private securities

      (1,602,064)          (4,601,567)   

 - Loans

      (114,323)          3,837,553   
     

 

        

 

  

to financial sector

      (613,737)          312,224   

to non-financial public sector

      (66)          (414)   

to non-financial private sector and residents abroad

      499,480          3,525,743   

 - Other receivables from financial transactions

      (355,324)          6,002   

 - Receivables from financial leases

      (266,591)          (218,103)   

 - Deposits

      7,168,461          2,043,846   
     

 

        

 

  

to financial sector

      59,870          (13,737)   

to non-financial public sector

      157,482          1,060,741   

to non-financial private sector and residents abroad

      6,951,109          996,842   

- Other liabilities from financial transactions

      97,685          1,169,187   
     

 

        

 

  

  Financing from financial or interfinancial sector (call borrowed)

      69,951          102,800   

  Others (except liabilities included in Financing Activities)

      27,734          1,066,387   

Collections related to service charge income

      4,360,204          3,312,913   

Payments related to service charge expense

      (1,624,787)          (907,798)   

Administrative expenses paid

      (4,481,682)          (3,946,909)   

Organizational and development expenses paid

      (50,361)          (28,129)   

Net collections from punitive interest

      22,383          18,539   

Differences from judicial resolutions paid

      (5,718)          (11,139)   

Collections of dividends from other companies

      49,840          54,716   

Other collections /(payments) related to other income and expenses

      312,910          336,027   
     

 

        

 

  

Net cash flows provided by operating activities

      3,510,633          1,065,138   
     

 

        

 

  

Investment activities

                 

Net payments from premises and equipment

      (164,289)          (152,287)   

Net payments from other assets

      (364,934)          (484,106)   

Other payments from investment activities

      (485,719)          (354,465)   
     

 

        

 

  

Net cash flows used in investment activities

      (1,014,942)          (990,858)   
     

 

        

 

  

Financing activities

                 

Net (payments) / collections from:

                 

 - Unsubordinated corporate bonds

      (226,065)          570,718   

 - Argentine Central Bank

      (17,570)          (15,336)   
     

 

        

 

  

Other

      (17,570)          (15,336)   

 - Banks and international agencies

      279,545          386,637   

 - Financing received from local financial institutions

      237,021          (267,271)   

Dividends payable

      --,--          (28,800)   

Other payments from financing activities

      (1,667,760)          (1,009,061)   
     

 

        

 

  

Net cash flows used in financing activities

      (1,394,829)          (363,113)   
     

 

        

 

  
     

 

        

 

  

Net increase /(decrease) in cash and cash equivalents

      1,100,862          (288,833)   
     

 

        

 

  

(1) See note 6 “Statement of cash and cash equivalents flow”.

The accompanying notes 1 through to 7 to the consolidated financial statements with subsidiaries and the Exhibit 1 are an integral part of these statements, which in turn are part of the stand-alone Financial Statements of BBVA Banco Francés S.A. and are to be read in conjunction therewith.


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- 54 -

 

 

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

WITH SUBSIDIARIES AS OF SEPTEMBER 30, 2015, PRESENTED IN COMPARATIVE FORM

WITH THE BALANCE SHEET AS OF DECEMBER 31, 2014, AND THE STATEMENTS OF

INCOME AND CASH AND CASH EQUIVALENTS FLOW AS OF SEPTEMBER 30, 2014

(Art. 33 of Law Nr. 19,550)

(Translation of financial statements originally issued in Spanish - See note 21 to the stand-alone Financial Statements)

-Stated in thousands of pesos-

 

  1.

SIGNIFICANT ACCOUNTING POLICIES AND SUBSIDIARIES

General rule

In accordance with the procedures set forth in BCRA’s regulations and Technical Pronouncement Nr. 21 of the Argentine Federation of Professional Councils in Economic Sciences, BBVA Banco Francés S.A. (hereinafter indistinctly referred to as either “BBVA Francés” or the “Bank”) has consolidated - line by line – its balance sheets as of September 30, 2015 and the end of the previous fiscal year, and the statements of income and cash and cash equivalents flow for the nine month periods ended September 30, 2015 and 2014, as per the following detail:

 

 

As of September 30, 2015:

 

  a)

With the financial statements of BBVA Francés Valores S.A., PSA Finance Argentina Cía. Financiera S.A. and BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión for the nine month periods ended September 30, 2015 and 2014.

 

  b)

With the financial statements of Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings) for the three month periods ended September 30, 2015 and 2014.

 

 

As of December 31, 2014:

 

  a)

With the financial statements of BBVA Francés Valores S.A., PSA Finance Argentina Cía. Financiera S.A. and BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión for the fiscal year ended December 31, 2014.

 

  b)

With the financial statements of Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings) for the six month period ended December 31, 2014.

The results and cash and cash equivalents flow of Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings) have been adjusted for purposes of comparison of the fiscal years of companies consolidating on the basis of a nine month period ended on September 30, 2015 and 2014.

Interests in subsidiaries as of September 30, 2015 and the end of the previous fiscal year are listed below:

 

     Shares      Interest percentage in  
     Type    Quantity      Total Capital      Possible Votes  

Companies

        09-30-2015      12-31-2014      09-30-2015      12-31-2014      09-30-2015      12-31-2014  
BBVA Francés Valores S.A.    Common      12,396         12,396         96.9953         96.9953         96.9953         96.9953   
Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings)    Common      35,425,947         35,425,947         53.8892         53.8892         53.8892         53.8892   
PSA Finance Argentina Cía Financiera S.A.    Common      26,089         26,089         50.0000         50.0000         50.0000         50.0000   
BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión (1)    Common      230,398         230,398         95.0000         95.0000         95.0000         95.0000   

 

  (1)

The Entity has a direct ownership interest equivalent to 95% of the Company’s capital stock and an indirect ownership interest equivalent to 4.8498% through BBVA Francés Valores S.A.


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- 55 -

 

 

 

Total assets, liabilities and stockholders’ equity in accordance with the criteria defined in note 2 below, as of September 30, 2015 and the end of the previous fiscal year and net income balances for the nine month periods ended September 30, 2015 and 2014, are listed below:

 

     Assets

 

     Liabilities

 

     Stockholders’ Equity

 

     Net income/
gain-(loss)
 

Companies

   09-30-2015      12-31-2014      09-30-2015      12-31-2014      09-30-2015      12-31-2014      09-30-2015      09-30-2014  
BBVA Francés Valores S.A.      37,684         36,176         1,101         10,187         36,583         25,989         10,593         5,855   
Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings)      50,952         50,012         41,787         41,493         9,165         8,519         646         (4,937)   

PSA Finance Argentina

Cía Financiera S.A.

     2,228,466         2,304,138         1,642,061         1,761,827         586,405         542,311         192,077         152,876   
BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión      197,781         158,905         16,194         29,982         181,587         128,923         52,663         45,601   

 

  2.

VALUATION METHODS

The financial statements of the subsidiaries have been prepared based on similar methods to those applied by the Bank for preparing its own financial statements, in connection with assets and liabilities valuation, income measurement and restatement procedure as explained in note 2 to the stand-alone financial statements of the Bank. The following are the main differences with the Argentine professional accounting standards:

Arising from the application of the accounting standards laid down by BCRA and the Argentine professional accounting standards:

 

   

PSA Finance Argentina Cía. Financiera S.A. assesses its income tax liability applying the effective tax rate to the estimated taxable income, without considering the effect of temporary differences between the valuation of assets and liabilities for accounting and tax purposes. In accordance with Argentine professional accounting standards, a deferred tax asset should be recognized where the reversal of temporary differences will result in a future decrease in the assessed tax liability. In addition, unused tax losses or tax credits deductible from future taxable income should be recognized as deferred assets, to the extent their recoverability is likely. Should this criterion have been applied, shareholder’s equity disclosed in the consolidated financial statements would have increased by 7,169 and 6,689 as of September 30, 2015 and the end of the previous fiscal year, respectively.

 

   

The commissions paid by PSA Finance Argentina Cía. Financiera S.A. to dealers for granting financing to companies and to the public in general in connection with purchases and sales of automobiles, which in accordance with the rules established by the BCRA are charged up front to the Income Statement, should be accrued throughout the duration of the loans generated by said dealers in accordance with Argentine professional accounting standards. Had this criterion been applied, shareholders’ equity would have been increased by 4,292 and 7,414 as of September 30, 2015 and the end of the previous fiscal year, respectively.

 

   

The Bank has not made disclosures required by Argentine professional accounting standards on discontinued operations or discontinuation in relation to the process of liquidating its subsidiary Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings)

 

  3.

REFORM OF THE INTEGRATED RETIREMENT AND PENSION SYSTEM

Law Nr. 26,425- Dissolution and liquidation of Consolidar A.F.J.P. S.A.:

Law Nr. 26,425, which came into force on December 4, 2008, mandated that the capitalization system that used to be an integral part of the Integrated Retirement and Pension System was to be suppressed and replaced by a single pay-as-you-go system that is now known as the Argentine Integrated Social Security System (SIPA). As a consequence, Consolidar A.F.J.P. S.A. ceased to manage the funds held in the


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individual capitalization accounts opened by the members and beneficiaries of the Integrated Retirement and Pension System. Said funds were transferred to the Fund to Guarantee the Sustainability of the State-run Social Security System exactly as they had been invested and it is now the Argentine Social Security Authority (ANSES) the only and sole holder of said assets and funds.

Besides, on October 29, 2009, ANSES issued its Resolution Nr. 290/2009 whereby it granted a term of 30 working days to the pension fund managers that could be interested in re-converting their corporate purpose in order to manage the funds held as voluntary term deposits and as agreed-upon deposits in capitalization accounts for them to express their decision to do so.

Given the above situation and the inability of Consolidar A.F.J.P. S.A. to attain the corporate purpose and conduct the business for which it had been formed, on December 28, 2009, its Extraordinary General Unanimous Shareholders’ Meeting adopted the resolution to dissolve and subsequently liquidate Consolidar A.F.J.P. S.A. effective as of December 31, 2009 on the understanding that such will be the best alternative to safeguard the interests of both the creditors and the shareholders of the Company. In addition, as set forth in the Argentine Companies Law, the Shareholders’ Meeting decided to appoint Accountant Mr. Gabriel Orden and Mr. Rubén Lamandia to act as liquidators of Consolidar A.F.J.P. S.A. As of December 31, 2009 these gentlemen have been designated as the Company’s legal representatives. As of the date of issuance of these financial statements, they are moving forward with all the actions necessary to proceed with the liquidation of Consolidar A.F.J.P. S.A.

On January 28, 2010, the dissolution of Consolidar A.F.J.P. S.A. as well as the list of designated liquidators were registered with the Supervisory Board of Companies (IGJ)

In addition, the Extraordinary General Shareholders’ Meeting of Consolidar A.F.J.P. S.A. approved a voluntary reduction in capital stock for 75,000 on October 19, 2009. In turn, the IGJ conferred its approval to the capital reduction mentioned on January 11, 2010. In this respect, on January 19, 2010 the shareholders were transferred their capital contributions in conformity with the above-mentioned reduction.

BBVA Francés, in its capacity as shareholder requested that Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings) should file a note with the Argentine Ministry of Economy and Public Finance and with the Argentine Social Security Authority to commence discussions within the framework of Law Nr. 26,425 in order to identify one or more resolution alternatives in connection with the consequences resulting from the events caused by the enactment of that Law. This note was filed by Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings) on June 11, 2010.

On December 7, 2010, Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings) filed an action for damages against the National State and the Ministry of Labor, Employment and Social Security with the court of original Federal Jurisdiction over Contentious Administrative Matters Nr. 4, Clerk of Court’s Office Nr. 7, case file Nr. 40,437/2010. The complaint was ratified by BBVA Francés in its capacity as majority shareholder in that Company. On July 15, 2011, Consolidar A.F.J.P. S.A. (undergoing liquidation proceedings) and BBVA Francés filed with the same court an enhanced complaint for determining the amounts claimed as damages. On March 9, 2012, the Court ordered the service of process on the National State. On November 23, 2012, the Court handed down a resolution demanding the production of evidence within a term of forty days. On May 13, 2013, the Court hearing in the case ordered that evidence be produced. The Company is providing depositions, documentary evidence and expert witnesses’ reports. On May 28, 2013, the Company accompanied the statements and the testimony of witnesses, as the case is currently at the evidence production stage.


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  4.

MINORITY INTEREST IN SUBSIDIARIES

The breakdown of balances in the “Minority interest in subsidiaries” account is as follows:

 

    

    09-30-2015    

  

    12-31-2014    

Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A. (undergoing liquidation proceedings)       4,226       3,928
BBVA Francés Valores S.A.       1,099       781
PSA Finance Argentina Cía Financiera S.A.       293,202       271,155
BBVA Francés Asset Management S.A. Sociedad Gerente de Fondos Comunes de Inversión       273       194
     

 

     

 

Total

      298,800       276,058
     

 

     

 

 

  5.

RESTRICTIONS ON ASSETS

 

  a)

BBVA Francés Valores S.A. holds two shares of Mercado de Valores de Buenos Aires S.A, booked in the amount of 17,600 and 10,300, respectively, as of September 30, 2015 and the end of the previous fiscal year. These shares have been pledged in favor of “CHUBB Argentina de Seguros S.A.” in security of the contract this insurance company executed with Mercado de Valores de Buenos Aires S.A. to cover the latter’s guaranteeing any noncompliance of the company with their obligations.

 

  b)

See note 7 to the stand-alone financial statements of the Bank.

 

  6.

STATEMENT OF CASH AND CASH EQUIVALENTS FLOW

The Statements of Cash and cash equivalents flow explains the changes in cash and cash equivalents. For such purpose, a detail is supplied of the items that the Bank considers to be cash and cash equivalents:

 

     09-30-15      12-31-2014      09-30-2014      12-31-2013       

a) Cash and due from banks

     13,937,826         12,559,464         12,538,623         12,880,744      

 

b) Government securities

 

    

 

--,--

 

  

 

    

 

--,--

 

  

 

    

 

546,164

 

  

 

    

 

115,876

 

  

 

  

c) Loans to financial sectors, call granted maturity

    date less than three months as from the end

    of each period or fiscal year

     115,000         392,500         230,000         607,000      
  

 

 

    

 

 

    

 

 

    

 

 

    

 

CASH AND CASH EQUIVALENTS

     14,052,826         12,951,964         13,314,787         13,603,620      
  

 

 

    

 

 

    

 

 

    

 

 

    

Items b) and c) are considered to be cash equivalents because they are held in order to meet short-term commitments, they are readily convertible in known cash amounts, they are subject to insignificant risk of changes in value and their maturity is less than three months as from the end of each period or fiscal year date.


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  7.

BREAKDOWN OF MAIN ITEMS

The detail of the main items included in financial statements is as follows:

 

    

    09-30-2015    

  

    12-31-2014    

a) GOVERNMENT AND PRIVATE SECURITIES

           

* Holdings at fair value

           

Secured Bonds due in 2020

      1,230,210       1,183,905

Peso-denominated Discount governed by Argentine Law maturing in 2033

      385,720       467,472

Federal Government Bonds in Pesos Badlar + 200 bp due 2016

      310,005       374,000

Federal Government Bonds in Pesos Badlar + 200 bp due 2017

      295,765       279,178

Argentine Bond of Saving towards economic development

      199,504       152,447

Argentine Treasury Bonds 18 months maturing 09-30-16

      100,051       --,--

Federal Government Bonds in US Dollars 0.75% due 2017

      33,635       --,--

US Dollar-linked Argentine Government Bond at 2.40% maturing in 2018

      22,440       66,080

Secured Bonds due in 2018

      6,401       74,875

Federal Government Bonds in US Dollars 7% due 2015

      --,--       104,850

Federal Government Bonds in US Dollars 8.75% due 2024

      --,--       43,384

Federal Government Bonds in Pesos Badlar + 250 bp due 2019

      --,--       42,679

Par Securities denominated in Pesos

      --,--       38,319

Consolidation Bonds – sixth series

      --,--       37,716

Other

      1,754       77,568
     

 

     

 

Total

      2,585,485       2,942,473
     

 

     

 

* Holdings booked at amortized cost

           

Other

      164       164
     

 

     

 

Total

      164       164
     

 

     

 

* Instruments issued by the BCRA

           

BCRA Bills (LEBAC)

      12,979,915       8,630,056
     

 

     

 

Total

      12,979,915       8,630,056
     

 

     

 

* Investments in listed private securities

           

FBA Ahorro Pesos Investment Fund

      79,464       49,652

FBA Bonos Argentina Investment Fund

      12,310       10,210

Other

      1,252       1,135
     

 

     

 

Total

      93,026       60,997
     

 

     

 

- Allowances

      (200)       (201)
     

 

     

 

Total

      15,658,390       11,633,489
     

 

     

 


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      09-30-2015      

  

      12-31-2014      

b) INVESTMENTS IN OTHER COMPANIES – Other

           

In other companies - unlisted

      67,275       44,460

In companies-supplementary activities

      39,631       22,283
     

 

     

 

Total

      106,906       66,743
     

 

     

 

c) OTHER RECEIVABLES – Other

           

Miscellaneous receivables

      660,082       475,180

Guarantee deposits

      549,803       377,029

Prepayments

      379,465       279,381

Tax prepayments

      336,137       281,535

Loans to personnel

      170,334       181,975

Advances to personnel

      7,527       93,065

Other

      10,465       8,261
     

 

     

 

Total

      2,113,813       1,696,426
     

 

     

 

d) OTHER SUBSIDIARIES’ ASSETS

           

Other related to pension fund management business

      --,--       450
     

 

     

 

Total

      --,--       450
     

 

     

 

e) OTHER LIABILITIES FROM FINANCIAL TRANSACTIONS - Other

           

Accounts payable for consumption

      2,483,940       2,482,573

Other withholdings and collections at source

      815,791       687,838

Collections and other operations for the account of third parties

      389,440       419,185

Money orders payable

      237,978       338,117

Fees collected in advance

      118,390       121,831

Social security payment orders pending settlement

      108,966       18,816

Pending Banelco debit transactions

      56,406       73,651

Loans received from Fondo Tecnológico Argentina (FONTAR) and Banco de

Inversión y Comercio Exterior (BICE)

      47,092       32,488

Funds raised from third parties

      13,486       18,941

Accrued commissions payable

      8,337       7,336

Loans received from Interamerican Development Bank (IDB)

      7,488       6,485

Other

      59,889       71,074
     

 

     

 

Total

      4,347,203       4,278,335
     

 

     

 

f) OTHER LIABILITIES – Other

           

Accrued taxes

      987,534       1,093,119

Miscellaneous payables

      823,362       697,722

Amounts collected in advance

      617,995       434,830

Accrued salaries and payroll taxes

      566,047       541,245

Other

      3,474       4,805
     

 

     

 

Total

      2,998,412       2,771,721
     

 

     

 


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      09-30-2015      

  

      12-31-2014      

g) OTHER SUBSIDIARIES’ LIABILITIES

           

Other related pension fund management business

      --,--       337
     

 

     

 

Total

      --,--       337
     

 

     

 

h) MEMORANDUM ACCOUNTS – DEBIT – CONTROL – Other

           

Items in safekeeping

      75,919,870       53,730,674

Securities representative of investment in custody safekeeping on behalf

of the Guarantee Fund for the Sustainability of the Pay-as-you-go System

managed by the Argentine Republic

      21,682,124       61,071,633

Checks not yet credited

      5,294,009       3,694,973

Checks drawn on the Bank pending clearing

      812,042       564,348

Collections items

      706,142       573,483

Cash in custody on behalf of the BCRA

      632,970       287,347

Other

      370,153       514,368
     

 

     

 

Total

      105,417,310       120,436,826
     

 

     

 

    

      09-30-2015      

  

      09-30-2014      

i) SERVICE CHARGE INCOME - Other

           

Commissions for hiring of insurances

      437,484       375,479

Rental of safe-deposit boxes

      136,790       107,202

Commissions on debit and credit cards

      68,133       36,710

Commissions for loans and guaranties

      33,124       28,654

Commissions for transportations of values

      31,213       20,066

Commissions for capital market transactions

      17,653       9,086

Commissions for escrow

      15,881       15,077

Commissions for salary payment

      7,597       6,914

Commissions for trust management

      1,300       1,459

Other

      65,945       66,057
     

 

     

 

Total

      815,120       666,704
     

 

     

 

j) SERVICE CHARGE EXPENSE - Other

           

Turn-over tax

      297,285       235,983

Insurance paid on lease transactions

      107,785       83,158

Other

      18,920       11,746
     

 

     

 

Total

      423,990       330,887
     

 

     

 

k) OTHER INCOME – Other

           

Deferred income tax (1)

      59,000       14,300

Related parties expenses recovery

      45,126       22,075

Income from the Credit Card Guarantee Fund

      44,149       44,481

Interest on loans to personnel

      21,750       23,246

Other

      10,580       41,781
     

 

     

 

Total

      180,605       145,883
     

 

     

 


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      09-30-2015      

  

      09-30-2014      

l) OTHER EXPENSE – Other

           

Charges for administrative, disciplinary and criminal penalties (2)

      48,817       --,--

Donations

      15,287       11,039

Private health insurance for former employees

      10,906       7,279

Insurance losses

      10,894       7,681

Turn-over tax

      7,191       7,774

Other

      29,766       28,195
     

 

     

 

Total

      122,861       61,968
     

 

     

 

(2) See note 6.1. to the stand-alone financial statements


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EXHIBIT 1

CONSOLIDATED CLASSIFICATION OF FINANCING FACILITIES BY

CATEGORIES AND GUARANTIES RECEIVED

AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21 to the stand-alone Financial Statements)

-Stated in thousands of pesos-

 

 

 

   09-30-2015      12-31-2014  

COMMERCIAL PORTFOLIO

     

Normal performance

     25,101,848         21,065,160   
  

 

 

    

 

 

 

Preferred collaterals and counter guaranties “A”

     1,256,236         1,215,074   

Other collaterals and counter guaranties “B”

     1,069,414         790,615   

Without senior security or counter guaranties

     22,776,198         19,059,471   

With special follow-up

     24,764         7,022   
  

 

 

    

 

 

 

Under observation

     17,379         7,022   
  

 

 

    

 

 

 

Other collaterals and counter guaranties “B”

     6,743         540   

Without senior security or counter guaranties

     10,636         6,482   

Negotiations for recovery or re-financing agreements underway

     7,385         --,--   
  

 

 

    

 

 

 

Other collaterals and counter guaranties “B”

     828         --,--   

Without senior security or counter guaranties

     6,557         --,--   

Non-performing

     1,015         5,048   
  

 

 

    

 

 

 

Other collaterals and counter guaranties “B”

     683         --,--   

Without senior security or counter guaranties

     332         5,048   

With high risk of uncollectibility

     13,134         --,--   
  

 

 

    

 

 

 

Other collaterals and counter guaranties “B”

     592         --,--   

Without senior security or counter guaranties

     12,542         --,--   

Uncollectible

     5,501         27,508   
  

 

 

    

 

 

 

Other collaterals and counter guaranties “B”

     5,000         3,750   

Without senior security or counter guaranties

     501         23,758   
  

 

 

    

 

 

 

Total

             25,146,262                 21,104,738   
  

 

 

    

 

 

 


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EXHIBIT 1

(Contd.)

 

CONSOLIDATED CLASSIFICATION OF FINANCING FACILITIES BY

CATEGORIES AND GUARANTIES RECEIVED

AS OF SEPTEMBER 30, 2015 AND DECEMBER 31, 2014

(Translation of financial statements originally issued in Spanish - See note 21 to the stand-alone Financial Statements)

-Stated in thousands of pesos-

 

 

   09-30-2015      12-31-2014  

CONSUMER AND HOUSING PORTFOLIO

     

Normal performance

     29,491,504         24,380,887   
  

 

 

    

 

 

 

Preferred collaterals and counter guaranties “A”

     22,549         41,185   

Other collaterals and counter guaranties “B”

     4,197,105         3,926,860   

Without senior security or counter guaranties

     25,271,850         20,412,842   

Low risk

     225,021         273,475   
  

 

 

    

 

 

 

Preferred collaterals and counter guaranties “A”

     --,--         68   

Other collaterals and counter guaranties “B”

     51,394         71,350   

Without senior security or counter guaranties

     173,627         202,057   

Medium risk

     177,543         211,868   
  

 

 

    

 

 

 

Other collaterals and counter guaranties “B”

     14,868         24,017   

Without senior security or counter guaranties

     162,675         187,851   

High risk

     155,642         145,310   
  

 

 

    

 

 

 

Other collaterals and counter guaranties “B”

     24,752         29,952   

Without senior security or counter guaranties

     130,890         115,358   

Uncollectible

     38,880         43,657   
  

 

 

    

 

 

 

Other collaterals and counter guaranties “B”

     20,949         18,572   

Without senior security or counter guaranties

     17,931         25,085   

Uncollectible, classified as such under regulatory requirements

     138         136   
  

 

 

    

 

 

 

Other collaterals and counter guaranties “B”

     77         --,--   

Without senior security or counter guaranties

     61         136   
  

 

 

    

 

 

 

Total

     30,088,728         25,055,333   
  

 

 

    

 

 

 

General Total (1)

             55,234,990                 46,160,071   
  

 

 

    

 

 

 

(1) Items included: Loans (before allowances); Other receivables from financial transactions: Unlisted corporate bonds and Other receivables covered by debtor classification regulations; Receivables from financial leases (before allowances); Memorandum accounts – Credit – Contingent: Credit lines granted (unused portion) covered by debtor classification regulations, Other guaranties given covered by debtor classification regulations and Other covered by debtor classification regulations.


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INFORMATIVE SUMMARY OF ACTIVITY FOR THE NINE MONTH PERIOD

ENDED ON SEPTEMBER 30, 2015

(Consolidated amounts – Stated in thousand Pesos)

BBVA Francés has put into practice the strategic guidelines set forth early in the year in projects that have enabled it to enhance the quality of its customer service, improve efficiency levels, boost digital sales, deepen transaction processing, and optimize control mechanisms, taking care of the franchise and what it stands for in the Argentine financial system.

The Bank has a broad distribution network: it is present throughout the country with a network that 301 customer service points, 251 of which are retail branches and 34 are devoted to small and medium enterprises and institutions. Corporate Banking is divided by industry sectors: Retail, Heavy Industries and Energy that provide personalized service to large companies. Besides, the Bank’s distribution network is further supplemented by 14 in-store banks, 2 points of sales, 694 ATMs and 801 self-service terminals.

Regarding the performance of the Bank in terms of activity, the Bank’s portfolio of loans to the private sector totaled 50,936,968 as of September 30, which points to a 23.1% growth rate in the last twelve months of the year and 6.1% in the quarter. Such growth was mostly driven by consumer finance, which rose by 34.4% and 9%, respectively, during said periods. Credit cards outperformed all other products, accounting for a 56.4% year-over-year increase and a 10% increase during the quarter.

As concerns the commercial portfolio, it grew by 11.4% in the past year, while remaining at a similar level as the previous quarter.

As to portfolio quality, the Bank has been able to maintain the best risk indicators in the Argentine financial system even within an environment that has shown signs of deterioration. The portfolio quality ratio (Non-performing loans/Total loans) was 0.71% with a level of coverage (Total loan loss provisions/Non-performing loans) of 269.48% at the end of the period.

As of September 30, 2015, the portfolio of Government securities, net of repurchase agreements, totaled 2,585,485 and represented 2.8% of the Bank’s Total assets, while the instruments issued by the Argentine Central Bank, net of repurchase agreements, totaled 11,076,052 as of that date and since they are short-term, they are used in order to allocate liquidity.

As to liabilities, total clients’ resources totaled 63,214,992, indicative of 27.1% growth in the last twelve months. By kind of product, in the same period, and only considering deposits from the private sector, sight deposits grew by 31.6% and term deposits grew by 39.5%. Whilst total deposits in the quarter grew by 5.3% with term deposits increasing by 10.8% and sight balances increasing by 2.7%.

BBVA Francés maintains sufficient levels of liquidity and solvency. As of September 30, 2015, liquid assets (Cash and cash equivalents plus Government and Private securities) represented 46.8% of the Bank’s deposits. Besides, the capital ratio was at 17.8% of risk-weighted assets. The Bank surpassed capital minimum requirements by 6,301,537.

BBVA Francés has accumulated net income at September 30, 2015 in the amount of 2,596,226. Income for the third quarter was, in turn, 998,070, which points to a 58.7% increase compared to the same quarter of 2014. When compared to the previous quarter, income increased by 49.6%.

On a line to line analysis, the Financial income - net totaled 6,587,358 at the end of the third quarter of 2015, which points to 33% increase in comparison with the same quarter of the previous year and of 18% in comparison with the previous quarter, mainly due to an increase in the volume of intermediation with the private sector plus higher income from Government securities during the quarter under analysis. However, financial income – net decreased during the quarters ended September 30, 2014 and June 30, 2015.

Income from services – net totaled 2,714,330, increasing by 7.4% in comparison with the same period of the previous fiscal year and by 19.1% in comparison with the second quarter of 2015.

Administrative expenses, again, recorded a balance of 4,703,610 at the end of September 2015, growing by 4.1% compared to the same period of the prior year and by 11.7% during the quarter.


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The personnel expenses registers the increase of salaries derived from the agreements with the working union and the increase of the staff, whilst overhead reflects the impact of the growth in the level of activity as well as in the level of prices.

Outlook

During the last quarter of the year, and in line with its strategic priorities, BBVA Francés will continue to focus on driving a broad range of actions leading to value creation and differentiation.

 

   

Be a leader in customer satisfaction

   

Lead by example in Digital Banking

   

Position BBVA Francés as the most competitive and profitable franchise


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CONSOLIDATED BALANCE SHEET STRUCTURE COMPARED TO THE SAME PERIODS EN PRIOR FISCAL YEARS

(Stated in thousands of pesos)

 

       09-30-2015          09-30-2014          09-30-2013          09-30-2012          09-30-2011    
Total Assets      92,177,134         74,947,272         54,978,499         41,584,172         36,467,322   
Total Liabilities      79,350,232         65,182,951         48,529,926         36,617,481         33,017,956   
Minority Interest in subsidiaries      298,800         246,802         156,324         109,689         79,491   
Stockholders’ Equity      12,528,102         9,517,519         6,292,249         4,857,002         3,369,875   

Total Liabilities + Minority Interest in

subsidiaries + Stockholders’ Equity

     92,177,134         74,947,272         54,978,499         41,584,172         36,467,322   


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CONSOLIDATED STATEMENT OF INCOME STRUCTURE COMPARED TO THE SAME PERIODS IN PRIOR FISCAL YEARS

(Stated in thousands of pesos)

 

       09-30-2015          09-30-2014          09-30-2013          09-30-2012          09-30-2011    

Financial income

     6,587,358         5,638,654         3,390,837         2,687,626         1,488,936   

Allowances for loan losses

     (439,476)         (422,340)         (311,521)         (156,033)         (92,466)   

Income from services

     2,714,330         2,430,573         1,831,070         1,329,835         1,035,882   

Administrative expenses

     (4,703,610)         (4,128,857)         (2,904,710)         (2,194,323)         (1,677,861)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net gain from financial transactions

     4,158,602         3,518,030         2,005,676         1,667,105         754,491   

Miscellaneous income and expenses – net

     29,875         196,145         41,269         16,446         134,567   

Results of minority interest in subsidiaries

     (96,734)         (74,407)         (38,343)         (25,951)         (5,842)   

Income tax

     (1,495,517)         (1,249,629)         (848,289)         (668,855)         (376,021)   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Net income for the period

     2,596,226         2,390,139         1,160,313         988,745         507,195   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 


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CONSOLIDATED CASH FLOWS STRUCTURE COMPARED TO THE SAME PERIODS IN PRIOR FISCAL YEARS

(Stated in thousands of pesos)

 

       09-30-2015         09-30-2014         09-30-2013         09-30-2012         09-30-2011    
Net cash flow provided by / (used in) operating activities      3,510,633        1,065,138        1,149,903        1,133,705        5,570,077   

Net cash flow used in investment activities

     (1,014,942     (990,858     (992,969     (425,122     (299,713

Net cash flow used in financing activities

     (1,394,829     (363,113     (801,303     (578,978     (3,803,518
Financial results and results from holdings of cash and cash equivalents (including interest)      --,--        --,--        54        --,--        2   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total cash provided / (used) during the period

     1,100,862        (288,833     (644,315     129,605        1,466,848   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


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STATISTICAL RATIOS COMPARED TO THE SAME PERIODS IN PRIOR FISCAL YEARS

(year-over-year variations in balances)

 

    

  09-30-2015/14  

  

  09-30-2014/13  

  

  09-30-2013/12  

  

  09-30-2012/11  

  

  09-30-2011/10  

Total Loans  

   23.07%    20.81%    31.24%    22.61%    40.84%

Total Deposits

   27.10%    25.72%    27.34%    9.28%    31.29%

Net Income

   8.62%    105.99%    17.35%    94.94%    (36.62%)

Stockholders’ Equity

   31.63%    51.26%    29.55%    44.13%    2.27%


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RATIOS COMPARED TO THE SAME PERIODS IN PRIOR FISCAL YEARS

 

    

  09-30-2015  

  

  09-30-2014  

  

  09-30-2013  

  

  09-30-2012  

  

  09-30-2011  

Solvency (1)

   15.73%    14.55%    12.92%    13.22%    10.18%

Liquidity (2)

   46.82%    44.63%    34.59%    37.45%    42.53%

Tied-up capital (3)

   2.88%    2.69%    2.32%    1.71%    1.83%

Indebtedness (4)

   6.36    6.87    7.74    7.56    9.82

(1) Total Shareholders’ equity/Liabilities (including minority interests in subsidiaries)

(2) Sum of Cash and cash equivalents and Government and Private securities/Deposits

(3) Sum of Premises and equipment, other assets and Intangible assets/Assets

(4) Total Liabilities (including minority interests in subsidiaries)/Shareholders’ equity


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INDEPENDENT AUDITORS’ REVIEW REPORT

(Interim financial statements)

To the President and the Board of Directors of

BBVA BANCO FRANCÉS S.A.

Reconquista 199

City of Buenos Aires

Report on interim financial statements

 

1.

Identification of the interim financial statements subject to review

We have reviewed:

 

  a)

the accompanying interim financial statements of BBVA BANCO FRANCÉS S.A. (“BBVA Francés” or the “Bank”), which comprise the balance sheet as of September 30, 2015 and the statement of income, statement of changes in stockholders´ equity and cash and cash equivalents flow for the nine-month period then ended and the supplemental information included in their notes 1 to 20, and the Exhibits “A” through “L”, “N” and “O”; and

 

  b)

the accompanying interim consolidated financial statements of BBVA Francés and its subsidiaries (listed in note 1 to the consolidated financial statements), which comprise the consolidated balance sheet as of September 30, 2015 and the consolidated statement of income and the consolidated cash and cash equivalents flow for the nine-month period then ended, and the supplemental information included in their notes 1 to 7 and the Exhibit 1.

The figures and other information for the year ended December 31, 2014 and for the nine-month period ended September 30, 2014 are an integral part of these interim financial statements and are intended to be read only in relation to those financial statements.

 

2.

Bank responsibility for the interim Financial Statements

The Bank is responsible for the preparation and fair presentation of such accompanying interim financial statements in conformity with accounting standards established by the Argentine Central Bank (B.C.R.A.) applicable to financial institutions, as well as responsible of internal control considered necessary to enable the presentation of financial statements free from material misstatement.


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3.

Auditors’ Responsibility

Our responsibility is to issue a conclusion on the accompanying interim financial statements based on our review. We conducted our review in accordance with standards on review of interim financial statements established in section IV of the Technical Pronouncement N° 37 of the Argentine Federation of Professional Councils in Economic Sciences and the “Minimum Standards applicable for External Audits” established by the Argentine Central Bank (B.C.R.A.) for the limited reviews of interim financial statements. Those standards require that we comply with ethical requirements.

A review of interim financial statements is substantially less in scope than an audit and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an opinion on the financial position of the Bank as of September 30, 2015, on the results of its operations, the changes in its stockholders´ equity and its cash and cash equivalents flow for the nine-month period then ended.

 

4.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial statements of BBVA Francés both stand alone and consolidated with its subsidiaries companies corresponding to the nine-month period ended on September 30, 2015, are not presented fairly, in all material respects, in accordance with accounting standards established by B.C.R.A.

 

5.

Emphasis on certain issues disclosed in the financial statements

The interim stand-alone and consolidated financial statements referred to in paragraphs a) and b) of caption 1 of this report have been prepared by the Bank in accordance with the accounting standards established by the B.C.R.A., which differ from the Argentine professional accounting standards concerning the matters indicated in note 3 to the stand-alone financial statements and in note 2 to the consolidated financial statements. This issue does not modify the conclusion expressed in caption 4.

 

6.

English translation of statutory financial statements

This report and the financial statements referred to in caption 1 have been translated into English for the convenience of English-speaking readers. As further explained in note 21 to the accompanying stand-alone financial statements, the financial statements (both the stand-alone and the consolidated financial statements) are the English translation of those originally prepared by the Bank in Spanish and presented in accordance with the accounting standards of B.C.R.A. and except for the matters described in caption 5, with the Argentine professional accounting standards. The effects of the differences between the accounting standards of B.C.R.A. and the Argentine professional accounting standards, and the accounting principles generally accepted in


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the countries in which the financial statements are to be used have not been quantified. Accordingly, the accompanying financial statements are not intended to present the financial position, results of operations, stockholders’ equity or cash and cash equivalents flow in accordance with accounting principles generally accepted in the countries of users of the financial statements, other than Argentina.

City of Buenos Aires, November 9, 2015.

MARCELO BASTANTE

Partner

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

  BBVA French Bank S.A.

Date: November 19, 2015

   

By:

 

/s/ Ignacio Sanz y Arcelus

     

Name:

 

  Ignacio Sanz y Arcelus

     

Title:

 

  Chief Financial Officer



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