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Introduction & Market Context
BBVA Argentina (NYSE:BBAR) presented its first quarter 2025 financial results on May 22, revealing improved performance despite Argentina’s challenging macroeconomic environment. The bank reported significant growth in net income and profitability metrics while continuing to advance its digital transformation strategy.
The presentation comes as Argentina continues to face substantial economic headwinds, with year-over-year inflation at 55.9% and quarterly inflation at 8.6%. Despite these challenges, BBVA Argentina has managed to grow its loan portfolio and increase market share in key segments.
The bank’s stock closed at $21.82 on May 21, down 0.73% for the session, but showed signs of recovery in after-hours trading, gaining 0.82% to reach $22.00.
Quarterly Performance Highlights
BBVA Argentina reported a net income of AR$ 81.6 billion for Q1 2025, representing a 16% increase from the AR$ 70.2 billion reported in Q4 2024 and a substantial 53% year-over-year improvement.
The bank’s profitability metrics showed notable improvement, with Return on Equity (ROE) reaching 11.4% in Q1 2025, up from 9.5% in the previous quarter and 6.6% a year earlier – a significant 480 basis points year-over-year increase. Return on Assets (ROA) also improved to 2.0%, up from 1.7% in Q4 2024 and 1.6% in Q1 2024.
As shown in the following chart of BBVA Argentina’s profitability indicators:
The bank’s Q1 2025 financial performance was driven by improvements in net interest income and net fee income, partially offset by financial margin pressures. Operating expenses showed improvement, declining 13.8% quarter-over-quarter and 12.2% year-over-year, contributing to an efficiency ratio of 56.3% in Q1 2025, an improvement of 1,376 basis points from the previous quarter.
The following waterfall chart illustrates the key factors contributing to BBVA Argentina’s Q1 2025 net income:
These results represent a significant turnaround from the bank’s Q3 2024 performance, when it reported a 21.6% quarter-over-quarter decline in inflation-adjusted net income to AR$ 99.2 billion.
Digital Transformation Progress
BBVA Argentina continues to make substantial progress in its digital transformation efforts, with digital sales reaching 92.51% of total retail sales in Q1 2025, up from 91.01% in Q4 2024 and 85.28% in Q1 2024.
The bank’s digital client acquisition has also shown impressive growth, with 86% of new retail customers acquired through digital channels in Q1 2025, compared to 83% in Q4 2024 and 81% in Q1 2024 – representing a 550 basis points increase year-over-year.
The number of digital and mobile active clients continues to grow steadily, with digital clients increasing to 2.52 million (up 5% year-over-year) and mobile clients reaching 2.27 million (up 7% year-over-year).
As illustrated in the following chart of BBVA Argentina’s digital sales and client acquisition metrics:
This digital momentum aligns with the bank’s strategic priorities, which include "radically adopting the customer perspective" and "maximizing the potential of AI and innovation."
Loan Portfolio and Asset Quality
BBVA Argentina reported strong growth in its loan portfolio, with private sector loans showing an 11% increase quarter-over-quarter and a remarkable 123% increase year-over-year in inflation-adjusted terms.
The composition of the loan portfolio remained relatively stable, with commercial loans accounting for 57% and retail loans for 43% in Q1 2025. The bank’s market share in private sector loans reached 11.28% in Q1 2025, up from 11.27% in Q4 2024 and 10.10% in Q1 2024.
However, asset quality metrics showed some deterioration, with the Non-Performing Loan (NPL) ratio increasing to 2.43% in Q1 2025 from 2.00% in Q4 2024, though still comparing favorably to the financial system’s NPL ratio of 1.77%. The coverage ratio decreased to 164.32% in Q1 2025 from 177.00% in Q4 2024.
The following chart illustrates BBVA Argentina’s loan portfolio composition and asset quality metrics:
Deposits and Capital Position
BBVA Argentina’s private sector deposits reached AR$ 10.855 billion in Q1 2025, representing a 2% increase from Q4 2024 and a 47% increase year-over-year in inflation-adjusted terms.
The bank’s market share in private deposits improved to 9.15% in Q1 2025, up from 8.60% in Q4 2024 and 7.37% in Q1 2024, indicating strengthening competitive positioning in the Argentine banking sector.
BBVA Argentina maintained a strong capital position, with a capital ratio of 21.50% in Q1 2025, up from 19.50% in Q4 2024, though down from 35.60% in Q1 2024. The bank attributed the year-over-year decline to credit portfolio growth and dividend distribution.
The following chart shows BBVA Argentina’s deposit composition and capital ratio trends:
Strategic Initiatives
BBVA Argentina outlined six strategic priorities aimed at strengthening its leadership position in the Argentine banking sector:
1. Radically adopting the customer perspective
2. Growing in all business segments
3. Promoting sustainability as an engine of growth
4. Promoting a mindset that creates value and optimizes capital use
5. Maximizing the potential of AI and innovation
6. Strengthening empathy and succeeding as a winning team
These priorities reflect BBVA (BME:BBVA)’s core values of "Customer comes first," "We think big," and "We are one team," and align with the bank’s purpose of "Support your drive to go further."
Forward-Looking Statements
Looking ahead, BBVA Argentina appears positioned for continued growth despite the challenging macroeconomic environment in Argentina. The bank’s strong digital transformation progress, growing market share in loans and deposits, and solid capital position provide a foundation for future performance.
However, investors should remain cautious given Argentina’s persistent economic challenges, including high inflation and interest rates. The slight deterioration in asset quality metrics also bears watching in future quarters.
BBVA Research had previously projected a 4% GDP decline in 2024 with a recovery to 6% growth in 2025, along with improving inflation expectations. The bank’s performance in Q1 2025 suggests it is navigating these challenges effectively while continuing to execute on its strategic priorities.
Full presentation:
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