Good morning, ladies and gentlemen and thank you for waiting. At this time, we would like to welcome everyone to BBVA Argentina's First Quarter 2020 Results Conference Call. [Operator Instructions]. First of all, let me stress that some of the statements made during this conference call may be forward-looking statements within the meaning of the Safe Harbor provisions found in Section 27A of the Securities Act of 1933 under U.S. Federal Securities Law. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Additional information concerning these factors is contained in BBVA Argentina's annual report on Form 20-F for the fiscal year 2019 filed with the U.S. Securities and Exchange Commission. Today with us we have; Mr. Ernesto Gallardo CFO; Mrs. Ines Lanusse, IRO; and Mr. Javier Kelly, Investor Relations Manager. Mr. Kelly, you may begin your conference.

Hello, everyone, and welcome to the BBVA Argentina Earnings conference call for a discussion of our first quarter 2020 results. Before we begin our formal remarks allow me to remind you that certain statements made during the course of the discussion may constitute forward-looking statements which are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to materially differ including factors that may be beyond the company's control. For a description of these risks, please refer to our filings with the SEC and our earnings release which are available at our Investor Relations website ir.bbva.com.ar. Speaking at today's call will be Ines Lanusse. Also joining us today is Ernesto Gallardo, our Chief Financial Officer who will be available for the Q&A session. Please note that starting this quarter as per Central Bank's regulation we will begin reporting results applying hyperinflation accounting in accordance with IFRS rule IAS 29. For ease of comparability, figures for all quarters of 2019 have been restated applying IAS 29 to reflect the accumulated effect of the inflation adjustment for each period through March 31, 2020. Now let me turn the call over to Ines.

Thank you, Javier, and thank you all for joining us on our first quarter 2020 earnings conference call. We hope you and your beloved ones are healthy and safe on these challenging times. BBVA Argentina is going through a complex scenario combining on one hand the health of the emergency represented by the COVID-19 pandemic; and on the other hand, an economy immersed in a recession worsening by the high levels of inflation. The Argentine government like most of the countries affected by COVID-19 implemented a quarantine that is still in force, although in different phases depending on the situation in each of the country's provinces. In this context, BBVA Argentina has focused primarily on caring for the health of its employees and also that of its clients. More than 90% of the employees in the central areas are working remotely and all the necessary protective measures have been implemented in the branch network for both employees and customers. And it is in this moment where the digital transformation efforts initiated by the bank years ago takes on special relevance by allowing our clients in a situation as complex as a quarantine to carry out their operations through the digital channels at their disposals through the app and/or at the bank's website. The penetration of digital clients reached 67.8% from 66.5% and the penetration of mobile clients reached 56.1% from 53.8% in the prior quarter. And while the recovery comes, BBVA Argentina considers that it is in an advantaged competition positioned to face the current challenges, a solid liquidity position supported by mostly transactional funding with low cost and an adequate capital levels well above regulatory requirements. Also in this context, the bank has collaborated with measures to support the productive sector and society promoted by the national government and…

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Gabriel Nóbrega of Citi. Please go ahead. Gabriel Nóbrega: Hi, everyone. Good morning. Thank you for the opportunity to ask questions. I would actually like to ask two questions regarding asset quality. First, are you seeing any overall sectors on being that we're already in June, which are starting to present maybe higher levels of delinquency, how are you managing that as well? And I have a second question regarding provisions. Being that you implemented the expected loss model of already this quarter it was also joined with the new regulation by the Central Bank allowing you to give a waiver of 60 days before classifying a loan as nonperforming. So my question here is that, we will probably see the NPL ratio deterioration being postponed more maybe towards the end of the year. So, I was wondering if have you thought about already making extraordinary provisions related to COVID-19? And does the Central Bank actually allow you to do this or you have to do the losses as they come along in your expected loss model? Thank you.

Hi Gabriel, thank you for your question. Okay. Regarding your first question probably the sector we are monitoring the most is the energy sector. Transportation and leisure is also something we are also concentrated. In a way, NPLs are very low compared to the system. Also because of this exception the Central Bank has done giving extra 60 days for loans that were maturing. To give you an idea the NPL without these exceptions would have been 3.54% and if we would not include this exception the Central Bank is doing on our NPL, we're expecting our NPL to go to the end of year around 4.5%. Also regarding NPL, it's worth noticing that we still have Molca. Molca will be write-off at the -- in June at the end -- in the second quarter. So, you could see this exception of NPLs continue. The NPL without Molca without considering the increase in loans would decrease even more to 1.75%. And your second question regarding provisioning, we are not doing any extra provisioning regarding COVID. We are provisioning goals in line with IFRS 9. So, there's nothing extra to be done. The only exception that Central Bank has done is that the difference you had from your provisioning as of November 30 to the one you had to implement with IFRS 9 is included in capital. You have an extra buffer as Capital One. Gabriel Nóbrega: All right. That's very clear. Thank you.

You're welcome.

The next question is from Alonso Garcia of Credit Suisse. Please go ahead.

Thank you. Good morning everyone. Thank you for taking my question. I just wanted to ask exactly about the exact impact of IFRS 9 this quarter. I mean what was the size of the initial impact of implementation? And I just wanted to clarify if figures for 4Q 2019 and 1Q 2019 were expressed under IFRS 9 and expected loss provisioning or not? Just to have a clear view and be able to compare the numbers vis-à-vis 1Q 2020? That would be my first question. Thank you.

Hi, Alonso, this is Javier. How are you doing? The provision -- the initial provision for IFRS 9 that was implemented in January this year is ARS2.1 billion. Can you repeat the rest of your question please?

Yes, if you expressed or restated your 4Q 2019 and 1Q 2019 provision in numbers to make them IFRS 9, or are they still under the previous provision in methodologies?

No, it has been all restated to show in IFRS 9.

Okay. Thank you. My second question would be -- I mean could you please comment on the degree of adherence of your customers to your relief programs? I mean how much of your clients have adhered to these programs in consumer in mortgages in SMEs? And based on that when do you expect to see a pickup in provisions? Would that be in 2Q, do we have to wait until 3Q or maybe 4Q of this year?

Yes, hi Alonso how are you doing? This is Ines. The credit refinancing was not something that many of our customers participated. And we didn't see an increase -- a very high increase on our customers taking this possibility to extend their loan. Regarding coverage, which I think it calls – that was the second part of your question, it is important to mention that if we will do the write-off of Molca in the second quarter, you should see an increase in coverage. But again, that has to do with the decrease you're going to see in Molca and it's also tied to what finally happens with Central Bank exceptions regarding NPLs.

Okay. And just to be clear, Molca is already 100% provision, right? So increasing coverage will be just because it will stop being considered as an NPL? Inés Lanusse: Exactly. It's 100% provision. You need to – according to Central Bank regulations, you need to wait six months to be able to write it off from your balance sheet.

Okay. And just to be clear the pickup in provisions will depend on the extension of the programs by Central Bank. That's correct? Inés Lanusse: Exactly. It's a combination of both the expansion of the exception of Central Bank and what happens with Molca.

Okay. Perfect. Thanks very much.

[Operator Instructions] Our next question is from Carlos Gomez of HSBC New York. Please go ahead.

Hello. Thank you for taking my question. Can you give us an idea about what you expect for the year in terms of asset growth, loan growth and also this is very hard to say in terms of profitability in real terms? And second, since your loan growth is negative in real term, you keep accumulating capital, you are not able to distribute at this point. How do you intend to protect that capital? Is it by real estate investments in the past, or are there any other options that you are considering? Thank you. Inés Lanusse: Okay. I'll answer the first part of your question regarding loan growth – regarding loan growth and deposit growth. Ernesto will tackle the second part. For loan growth for 2020 in nominal terms we are projecting growth both pesos and dollars around 53%. We are projecting an inflation of 47%. We are projecting loan growth to be above what we're projecting for the system which we're thinking – we're projecting around 52 – sorry 42%. Year-to-date, the last numbers until May 22, we've been growing – sorry year-to-date 18.8% versus 7.5% of the system. So we're growing above the system already. Regarding deposits, we're projecting deposits to grow around 55% in nominal terms, again with an inflation of 47%. And also growing above the system, which we're projecting deposits to grow around 46%. Year-to-date, again as of May 22, we have been growing 13% compared to the system around 24%.

The other question was related to the inflation exposure?

No what you intend to do with the capital, which keeps accumulating at some point, I guess you need to do something with it. In the past you have used real estate as a way to protect its value over time is that a possibility now?

Yes. You can imagine that this is one of the few possibilities that we have in order to protect our net income inflation adjusted. It's clear that with the – now it's not possible to pay dividends. So we will keep them in our capital. But as soon as – remember that as soon as you declare that you are the [Foreign Language] Inés Lanusse: General shareholders.

General Shareholders Committee agrees to pay dividends then you have to take out that amount for your capital. So at some point you have a protection. If you declare that you are going to pay dividends, even if you cannot do it because you have this provision probably – this rule sorry, coming from the Central Bank. So this is one thing. The other thing is that, it's not possible to make right now many strategies to protect your exposure to inflation. One is to invest in real estate and this is something that I can imagine that, we and other banks we will be analyzing maybe right now, maybe in the coming months. This is something that we have to think about it because it's one possibility. So the possibility is to invest in some assets that are inflation-linked like some treasury bonds that are linked to the inflation to the UVA or maybe other type of loans that are related to UVA the inflation rate here. So maybe you can try to increase the portion of your portfolio that this inflation linked like mortgages or some consumer loans that are linked to inflation or again to buy some assets coming – well treasury bonds linked inflation. This is the only way. You don't have too many other alternatives.

Right. And we understand that. And if I may follow-up, I think there is time. I mean this first quarter you posted a very decent profitability. I think the system in general did, but the trend in interest rate is down. Inflation is down for now, but we all fear it might rebound in the future. Would you say that your real profitability or your nominal profitability in the first quarter is replicable for the end of the year or your expectations are lower for the other nine months?

I think, it's replicable. I mean what we have seen is that -- the first thing is that, right now we have really an inflation rate that is well below we were expecting six months ago. Of course this is maybe pandemia situation because all of us we are expecting to see inflation rate going up in the next months. But for the time being, we have an inflation rate that is at a very low very low number. I mean 1.5% was the inflation rate for April and we're expecting to see something like that in May and then probably something around this or maybe a little bit above that in May. So good -- let's say, good numbers in terms of inflation for this quarter. We don't know what is going to happen with inflation in the second half of the year. But if we have higher numbers the good news is that, we had the first six months with a very low inflation rate number which is good for our; let's say, accumulation of inflation in our results. Let me say it like that. So this is one very important thing to see or to think what is going to happen with our profitability for the next months. And the other point is interest rates going down. Well they went -- they already went down. 38% is the monetary policy rate. And what we had in the last months was an activity that was hit by the pandemia by the COVID and interest rates going down as you mentioned and financial system with plenty of liquidity. It means, having that let's say such a liquidity this also generates an environment of interest rates; let's say, below in some -- in many cases below the monetary policy rate.…

Okay. Thank you for the explanation.

[Operator Instructions] And we have a question from Emiliano Fiori [ph] of Itau Bank.

Thanks. I would like to ask about the impact of the inflation in the balance sheet. The account [Foreign Language], if you explain a bit more about how to – how you construct that number? Thank you.

Hi, Emiliano, this is Javier. How you call it the position monetary is constructed by the effect of the non-monetary assets, right? So what you're seeing – you have – first, I would say, impact of ARS 15 billion that adjust the equity for December, when you apply IAS 29. And then you correct that – you update that by the inflation of the period and that's the final effect of the IAS 29 for December. Now with regard to –

I think you can make this calculation through the monetary assets and liabilities or your non-monetary assets and liabilities. For me the best – the easiest way to understand, this is to do it through the non-monetary assets and liabilities. And the non-monetary assets basically are the fixed assets everything real estate and something like that. This is your natural hedge for the inflation exposure you have. And what is the exposure you have, basically your capital. This is what you have exposed to the inflation risk to capital. So the gap between the let's say fixed rated assets like non-interest assets -- non-monetary assets and the capital is the risk exposed to inflation. And the way to do the -- to calculate the impact is you have to think about the -- that you have a transitional year, which was 2019 and you have to let's say calculate the impact of your exposure since the beginning of 2019 until the end of 2019 for the whole year, and then you start at the end of 2019. So you start at the beginning of 2020 with the impact of the inflation on your exposure. Meaning by exposure, capital less non-monetary assets basically real estate et cetera. So the impact of this adjustment was ARS15 billion. Once you have your capital expressed considering the inflation during the 2019 then you start to adjust by inflation your exposure basically your capital. And then the impact for the first three months of the inflation on your capital exposure was ARS6 billion. So basically, the total impact of the inflation adjustment on the capital was ARS16 billion. Sorry, sorry ARS21 billion, excuse me, ARS21 billion, ARS15 billion plus ARS6 billion.

Okay. Thank you.

This concludes the question-and-answer session. At this time, I would like to turn the floor back to Mrs. Lanusse for closing remarks.

Thank you, operator, and thank you all for joining us today. We appreciate your interest in our company. We look forward to meeting more of you over the upcoming months and providing financial and business updates next quarter. As usual if you have any further questions, please do not hesitate to reach us and we'll be happy to follow-up. Thank you and enjoy the rest of the day.

Thank you. This concludes today's presentation. You may disconnect your line at this time.