This article first appeared on GuruFocus .
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Net Income:Inflation-adjusted net income of PHP131.6 billion for the second quarter of 2026, a 44.6% increase quarter-over-quarter.
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ROE:Quarterly ROE improved to 12.2% in the second quarter, up from 8.3% in the first quarter.
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Net Interest Margin (NIM):Reported NIM remained stable quarter-over-quarter and year-over-year; NIM net of monetary position loss improved from 14% to 14.87%.
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Efficiency Ratio:Quarterly efficiency ratio stood at 45% in the second quarter, with expectations to end the full year below 45%.
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Total Financing to Private Sector:Closed the quarter at PHP17.1 trillion; local currency loans increased 2% and foreign currency private loans grew 2.5% sequentially.
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Total Deposits:Reached PHP19.2 trillion; private deposit market share remained flat at 9.91%, up 26 basis points year-over-year.
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NPL Ratio:Stood at 6.09%, up 49 basis points during the quarter; the financial system ratio was 7.22% by the end of June.
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Cost of Risk:Quarterly cost of risk reached 7.13%, broadly in line with the first quarter figure when adjusted for non-recurring effects; full-year 2026 expected around 6.5%.
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Liquidity Ratio:Closed at 45.5%.
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Capital Ratio:Regulatory capital ratio of 18.8%, representing 128.7% excess of minimum regulatory requirements.
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Loan Market Share:Consolidated loan market share stood at 12%, a total gain of 15 basis points over the last 12 months.
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Fee Income:Net fees are up around 35% year-over-year.
Release Date: August 28, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Banco BBVA Argentina SA ( NYSE:BBAR ) reported a 44.6% quarter-over-quarter increase in inflation-adjusted net income, boosting its quarterly ROE to 12.2%.
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The bank's efficiency ratio improved to 45% in Q2 2026, with expectations to end the full year below 45% due to ongoing cost discipline.
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Banco BBVA Argentina SA ( NYSE:BBAR ) maintains a robust capital position with a regulatory capital ratio of 18.8%, representing a 128.7% excess over minimum requirements.
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The bank is seeing early signs of improvement in asset quality, with new loan vintages performing better and early-stage delinquencies improving, particularly in payroll loans.
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Banco BBVA Argentina SA ( NYSE:BBAR ) is well-positioned for growth, expecting its loan book to grow around 10% in real terms in 2026, supported by a strong liquidity ratio of 45.5%.
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Net fees are up around 35% year-over-year, reflecting strong growth in fee-generating businesses, which is expected to remain a key contributor to revenue.
Negative Points
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Banco BBVA Argentina SA ( NYSE:BBAR )'s NPL ratio increased to 6.09% in Q2 2026, up 49 basis points quarter-over-quarter, reflecting elevated delinquency levels.
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The bank's quarterly cost of risk remained high at 7.13%, and it expects the full-year 2026 cost of risk to be around 6.5%.
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Net interest income is under pressure due to lower interest rates on the asset side, with expectations of moderate margin pressure as rates continue to decline.
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The bank's coverage ratio fell to around 80%, which management considers the bottom, and it will need to gradually rebuild provisions as asset quality improves.
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Banco BBVA Argentina SA ( NYSE:BBAR ) expects the real NIM to fall around 100-125 basis points by year-end due to declining inflation and interest rates, even as nominal NIM stabilizes.
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The economic recovery is uneven across sectors, and the bank remains cautious about growing in certain retail segments like personal loans and credit cards until performance improves.
Q & A Highlights
Q: What explains the deterioration in asset quality, and how should the improvement trend for cost of risk and NPLs evolve through the rest of 2026? A: Carmen Arroyo (CFO) clarified that the corporate segment shows zero deterioration and is outperforming the market. The deterioration is concentrated in retail, specifically personal loans and credit cards, where the bank remains cautious on growth. New vintages are performing better due to stricter underwriting. The bank expects the peak in NPLs and cost of risk to be in Q2 2026, with a slightly better performance in Q3 and a more pronounced improvement in Q4, leading to a full-year cost of risk of around 6.5%.
Q: Can you provide more color on the magnitude of the improvement in early-stage delinquencies and any early expectations for 2027? A: Carmen Arroyo (CFO) noted that while it is too early for definitive conclusions, the bank sees constant monthly improvements in credit cards and personal loans. For example, credit card delinquency levels have dropped from around 6% a year ago to near 2.2% this year. In the payroll portfolio, delinquency levels are already similar to December 2024. For 2027, the bank expects the system to grow 10% to 15% in real terms, with BBVA aiming to outperform that level.
Q: What is the expected portfolio mix for the coming quarters, particularly regarding mortgage growth and the new government FGS funding program? Also, what are the NIM expectations? A: Diego Cesarini (IRO) stated that the commercial portfolio represents ~57% of the total, but growth there has stalled. The bank expects retail to recover, led by mortgages and car loans, which currently make up ~27% of the retail portfolio. BBVA has been selling ~20% of new mortgage origination and views the new government program positively. On NIMs, the real NIM (net of inflation) is likely at its peak; the bank expects nominal NIMs to fall around 200 basis points by year-end, but this will be partially offset by lower inflation, resulting in a real NIM decline of only 100-125 basis points.
Q: Can investors use Stage 2 loans as a metric to track asset quality improvement? Also, what is your view on the new regulation allowing USD loans to non-USD-generating clients? A: Carmen Arroyo (CFO) confirmed that Stage 2 data is a good indicator, as the bank sees better performance in retail portfolios month-over-month. Diego Cesarini (IRO) added that the bank welcomes the new USD lending regulation, but it already had this capacity via bond issuances. BBVA will not use this broadly and will continue to assess case-by-case, as it already has strong demand from exporters and project finance.
Q: What is the deposit growth guidance for the full year, and will the public sector bond portfolio continue to grow? A: Carmen Arroyo (CFO) stated that funding is not a constraint; the bank will manage deposits based on asset-side opportunities, with growth potentially around 5-10%. Diego Cesarini (IRO) explained that the increase in the public sector portfolio is temporary, driven by a lack of loan traction and attractive opportunities in dual bonds (which pay the max of inflation or rate). Two-thirds of the portfolio is in these floating-rate bonds, which the bank believes will provide value for NII over the next 1-3 years.
Q: What is the target for the coverage ratio, and when can we expect it to rebuild? A: Carmen Arroyo (CFO) reiterated that the ~80% coverage ratio is the bottom. The bank expects to gradually rebuild coverage as asset quality improves, though reaching 100% may not happen in the next quarter, but should improve in the following quarters.
Q: What are the key drivers for the expected improvement in profitability and efficiency for the second half of 2026? A: Carmen Arroyo (CFO) highlighted that the quarterly ROE improved to 12.2% in Q2 from 8.3% in Q1. For the full year, the bank guides to a real ROE in the low-teens. This will be supported by higher business volumes, positive fee contributions (up ~35% YoY), continued efficiency improvements (targeting an efficiency ratio below 45% for the year), and a gradual normalization of credit costs.
Q: What is the outlook for loan growth and the macroeconomic environment for the remainder of 2026? A: Carmen Arroyo (CFO) stated that the macro outlook remains constructive, with inflation expected to end 2026 at around 29%. The bank expects its loan book to grow around 10% in real terms for 2026, with opportunities in secured retail lending and in companies/SMEs in dynamic sectors. The bank's strong capital position (18.8% regulatory ratio) and liquidity (45.5%) position it well to capture growth opportunities.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
