Irsa Investments & Representations Inc 20-F/A, filed Jun 30, 2025
Irsa Investments & Representations Inc (IRS)
20-F/A
2025-06-30
For: 2025-06-30
View Original
Added on
August 22, 2026
About this 20-F/A
Irsa Investments & Representations Inc filed this 20-F/A on June 30, 2025, covering the fiscal year ended June 30, 2025.
United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F/A
Amendment No. 1
☐ REGISTRATION STATEMENT PURSUANT TO SECTION
12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For
the fiscal year ended June 30, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15
(d) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR
15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934
Date of
event requiring this shell company report ___
Commission file number 001-13542
IRSA Inversiones y Representaciones Sociedad
Anónima
(Exact
name of Registrant as specified in its charter)
IRSA Investments and Representations Inc.
(Translation
of Registrant’s name into English)
Republic of Argentina
(Jurisdiction
of incorporation or organization)
Carlos M. Della Paolera 261, 9th Floor
(C1001ADA)
City of Buenos Aires, Argentina
(Address of principal executive offices)
Matías Iván Gaivironsky, Chief Financial and
Administrative Officer
Tel.: +54(11) 4323-7449 - ir@irsa.com.ar
Carlos M. Della Paolera 261, 9th Floor, (C1001ADA) - City of Buenos
Aires, Argentina
(Name,
Telephone, E-mail and/or Facsmile number and Address of Company
Contact Person)
Securities
registered or to be registered pursuant to Section 12 (b) of the
Act.
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Title of each class
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Trading Symbol
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Name of each exchange on which registered
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Global
Depositary Shares, each representing ten shares of Common
Stock
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IRS
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New
York Stock Exchange
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Common
Stock, par value ARS 10.00 per share
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New
York Stock Exchange*
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*Not
for trading, but only in connection with the registration of Global
Depositary Shares, pursuant to the requirements of the Securities
and Exchange Commission.
Securities
registered or to be registered pursuant to Section 12 (g) of the
Act: None
Securities
for which there is a reporting obligation pursuant to Section 15
(d) of the Act: None
Indicate
the number of outstanding shares of each of the issuer’s
classes of capital or common stock as of the close of the period
covered by the Annual Report: 741,459,162.
Indicate
by check mark if the registrant is a well-known seasoned issuer, as
defined in Rule 405 of the Securities Act:
☐ Yes ☒ No
If this
report is an annual or transition report, indicate by check mark if
the registrant is not required to file reports pursuant to Section
13 or 15 (d) of the Securities Exchange Act of 1934.
☒ Yes ☐ No
Note:
Checking the box above will not relieve any registrant required to
file reports pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 from their obligations under those
Sections
Indicate
by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for
the past 90 days: ☒
Yes ☐ No
Indicate
by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to
Rule 405 of Regulation S-T (§232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the
registrant was required to submit such files).
☒ Yes ☐
No
Indicate
by check mark whether the registrant is a large accelerated filer,
an accelerated filer, a non-accelerated filer or an emerging growth
company. See definition of “large accelerated filer,”
“accelerated filer” and “emerging growth
company” in Rule 12b-2 of the Exchange Act.:
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Large
accelerated filer☐
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Accelerated
filer ☒
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Non-accelerated
filer☐
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Emerging
growth company ☐
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If
an emerging growth company that prepares its financial statements
in accordance with U.S. GAAP, indicate by check mark if the
registrant has elected not to use the extended transition period
for complying with any new or revised financial accounting
standards provided pursuant to Section 13(a) of the Exchange Act.
☐
†
The term “new or revised financial accounting standard”
refers to any update issued by the Financial Accounting Standards
Board to its Accounting Standards Codification after April 5,
2012.
Indicate
by check mark whether the registrant has filed a report on and
attestation to its management’s assessment of the
effectiveness of its internal control over financial
reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or
issued its audit report. ☒
If
securities are registered pursuant to Section 12(b) of the Act,
indicate by check mark whether the financial statements of the
registrant included in the filing reflect the correction of an
error to previously issued financial statements. ☐
Indicate
by checkmark whether any of those error corrections are
restatements that required a recovery analysis of incentive-based
compensation received by any of the registrant’s executive
officers during the relevant period pursuant to §240.10D-1(b).
☐
Indicate
by check mark which basis of accounting the registrant has used to
prepare the financial statements included in this
filing:
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U.S.
GAAP ☐
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International
Financial Reporting Standards as issued by the International
Accounting Standards Board included in this filing: ☒
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Other
☐
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If “Other” has been checked in response to
the previous question, indicate by check mark which financial
statement item the registrant has elected to
follow:
Item 17
☐ Item 18 ☐
If this
is an Annual Report, indicate by check mark whether the registrant
is a shell company (as defined in Rule 12b-2 of the Exchange
Act):
☐ Yes ☒ No
(APPLICABLE
ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST
FIVE YEARS)
Indicate
by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of
securities under a plan confirmed by the court. Yes ☐ No ☐
Please send copies of notices and communications from the
Securities and Exchange Commission to:
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Carolina
Zang
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Juan M.
Naveira
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Zang
Bergel & Viñes Abogados
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Simpson
Thacher & Bartlett LLP
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Florida
537, 18th
Floor
C1005AAK
City of Buenos Aires, Argentina.
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425
Lexington Avenue
New
York, NY 10017
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EXPLANATORY NOTE
The
Company is filing this Amendment No. 1 (this
“Amendment”) to its annual report on Form 20-F for the
fiscal year ended June 30, 2024, as filed with the U.S. Securities
and Exchange Commission (the “SEC”) on October 23, 2024
(the “2024 Form 20-F”). The Company is filing this
Amendment to provide separate audited consolidated financial
statements and related notes of Banco Hipotecario S.A. as of and
for the fiscal years ended December 31, 2024 (the “Financial
Statements of Banco Hipotecario”), including the report of
independent auditor relating thereto, as required under Rule 3-09
of Regulation S-X under the U.S. Securities Exchange Act of 1934,
as amended.
This
Amendment consists solely of the cover page, this explanatory note,
the Financial Statements of Banco Hipotecario, and certifications
of our chief executive officer and chief financial officer. Other
than as expressly set forth herein, this Amendment does not, and
does not purport to, amend, update or restate the information in
any part of the 2024 Form 20-F or reflect any events that have
occurred after the 2024 Form 20-F was filed on October 23, 2024.
The filing of this Amendment, and the inclusion of newly executed
certifications, should not be understood to mean that any other
statements contained in the 2024 Form 20-F are true and complete as
of any date subsequent to October 23, 2024.
This
Amendment should be read in conjunction with the 2024 Form 20-F and
our other filings with the SEC.
PART
III
ITEM 19. Exhibits
INDEX OF EXHIBITS
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Exhibit No.
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Description of Exhibit
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1.1(20)
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Amended
and restated “Estatutos” of the registrant,
which serve as the registrant’s articles of incorporation and
bylaws, and an English translation thereof.
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2.1(1)
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Deposit
Agreement among us, The Bank of New York Mellon, as Depositary, and
the holders from time to time of Global Depositary Receipts issued
there under.
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2.2(18)
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Warrant
Agent Agreement dated as of April 29, 2021, between IRSA
Inversiones y Representaciones Sociedad Anónima, and
Computershare, Inc. and Computershare Trust Company N.A.,
collectively as warrant agent.
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2.3(20)
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Indenture
between IRSA Inversiones y Representaciones Sociedad Anónima,
as Issuer, The Bank of New York Mellon as Trustee, Co-Registrar,
Principal Paying Agent and Transfer Agent, and Banco Santander
Argentina S.A. as Registrar, Paying Agent, Transfer Agent and
Representative of the Trustee in Argentina, dated as of July 8,
2022, pursuant to which USD 171,202,815 of 8.750% Senior Notes due
2028 were issued.
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2.4(21)
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First
Supplemental Indenture between IRSA Inversiones y Representaciones
Sociedad Anónima, as Issuer, The Bank of New York Mellon, as
Trustee, Co-Registrar, Principal Paying Agent and Transfer Agent,
and Banco Santander Argentina S.A. as Registrar, Paying Agent,
Transfer Agent and Representative of the Trustee in Argentina,
dated as of December 30, 2022.
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4.1(2)
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Agreement
for the exchange of Corporate Service between us, IRSA and CRESUD
dated June 30, 2004.
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4.2(4)
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English
translation of the Amendment to the Agreement for the exchange of
Corporate Service between us, IRSA and CRESUD dated August 23,
2007.
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4.3(5)
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English
translation of the Second Agreement for the Implementation of the
Amendment to the Corporate Services Master Agreement, dated August
14, 2008.
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4.4(6)
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English
translation of the Third Agreement for the Implementation of the
Amendment to the Corporate Services Master Agreement, dated
November 27, 2009.
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4.5(7)
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English
translation of the Amendment to the Agreement for the exchange of
Corporate Service between us, IRSA and CRESUD, dated March 12,
2010.
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4.6(8)
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English
translation of the Amendment to the Agreement for the exchange of
Corporate Service between us, IRSA and CRESUD, dated July 11,
2011.
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4.7(9)
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English
translation of the Fifth Agreement for the implementation of
Amendments to the Corporate Services Master Agreement, October 15,
2012.
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4.8(10)
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English
translation of the Sixth Agreement for the Implementation of the
Amendment to the Corporate Services Master Agreement dated November
12, 2013.
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4.9(11)
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English
translation of the Second Amendment to the exchange of Operating
Services Agreement between the Company, CRESUD and Alto
Palermo, dated February 24, 2014.
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4.10(12)
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English
translation of the Seventh Agreement for the Implementation of the
Amendment to the Corporate Services Master Agreement dated February
18, 2015.
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4.11(13)
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English
translation of the Eighth Agreement for the Implementation of the
Amendment to the Corporate Services Master Agreement dated November
12, 2015.
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4.12(14)
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English
translation of the Ninth Agreement for the Implementation of the
Amendment to the Corporate Services Master Agreement dated May 5,
2017.
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4.13(15)
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English
translation of the Tenth Agreement for the Implementation of the
Amendment to the Corporate Services Master Agreement dated June 29,
2018.
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4.14(16)
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English
translation of the Eleventh Agreement for the Implementation of the
Amendment to the Corporate Services Master Agreement dated June 28,
2019.
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4.15(17)
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English
translation of the Twelfth Agreement
for the Implementation of the Amendment to the Agreement for the
Exchange of Corporate Services between us, IRSA and CRESUD,
dated June 30, 2020.
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4.16(19)
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English
translation of the Thirteenth Agreement for the Implementation of the Amendment
to the Agreement for the Exchange of Corporate Services between us,
IRSA and CRESUD, dated June 30, 2021.
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4.17(20)
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English
translation of the Fourteenth Agreement for the Implementation of
the Amendment to the Agreement for the Exchange of Corporate
Services between IRSA and CRESUD, dated July 12, 2022.
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4.18(20)
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English
translation of the Fifteenth Agreement for the Implementation of
the Amendment to the Agreement for the Exchange of Corporate
Services between IRSA and CRESUD, dated July 14, 2023.
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4.19(22)
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English
translation of the Sixteenth Agreement for the Implementation of
the Amendment to the Agreement for the Exchange of Corporate
Services between IRSA and CRESUD, dated August 20,
2024.
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8.1(22)
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List of
Subsidiaries.
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11.1(3)
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Code of
Ethics of the Company.
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12.1*
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Certification
pursuant to Section 302 of the Sarbanes-Oxley Act
2002.
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12.2*
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Certification
pursuant to Section 302 of the Sarbanes-Oxley Act
2002.
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13.1*
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Certification
pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
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13.2*
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Certification
pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002.
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97(22)
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Incentive
Compensation Clawback Policy.
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99.1(22)
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Consent of independent appraiser Newmark.
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99.2(22)
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Summary of investment properties by type as of June 30, 2024 (in
accordance with Regulation S-X 12-28 (1)).
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99.3*
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Audited
consolidated financial statements of Banco Hipotecario S.A. as of
and for the fiscal years ended December 31, 2024 and
2023.
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*
Indicates documents
filed herewith.
(1)
Incorporated herein
by reference to the same-numbered exhibit to the registrant’s
registration statement on Form 20-F (File N°
000-30982).
(2)
Incorporated herein
by reference to the registrant’s registration statement on
Form 6-K (SEC File N° 000-30982).
(3)
Incorporated herein
by reference to the registrant’s registration statement on
Form 6-K reported on August 1, 2005.
(4)
Incorporated herein
by reference to the Annual Report on Form 20-F (File
N° 1280-30982) filed with the SEC on December 27,
2007.
(5)
Incorporated herein
by reference to the Annual Report on Form 20-F (File
N° 1280-30982) filed with the SEC on December 30,
2008.
(6)
Incorporated herein
by reference to the Annual Report on Form 20-F (File
N° 1280-30982) filed with the SEC on December 30,
2009.
(7)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on December 30, 2010.
(8)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on December 28, 2011.
(9)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on October 26, 2012.
(10)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on October 31, 2014.
(11)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on November 17, 2015.
(12)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on November 17, 2015.
(13)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on November 1, 2016.
(14)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on October 31, 2017.
(15)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on October 31, 2018.
(16)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on October 31, 2019.
(17)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on November 16, 2020.
(18)
Incorporated by
reference to the registrant’s registration statement on Form
8-A filed on May 26, 2021.
(19)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on October 20, 2021.
(20)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on October 26, 2022.
(21)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on October 20, 2023.
(22)
Incorporated herein
by reference to the Annual Report on Form 20-F (File N°
1280-30982) filed with the SEC on October 23, 2024.
SIGNATURES
The
registrant hereby certifies that it meets all of the requirements
for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this Amendment No. 1 to the 2024 Form 20-F
on its behalf.
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IRSA Inversiones y Representaciones Sociedad
Anónima
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Date:
June 27, 2025
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By:
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/s/
Matías I. Gaivironsky
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Name:
Matías I. Gaivironsky
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Title:
Chief Financial and Administrative Officer
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Exhibit 12.1
SECTION 302 CERTIFICATION
I,
Eduardo S. Elsztain, certify that:
1. I
have reviewed this Amendment No. 1 (the “Amendment”) to
the annual report on Form 20-F of IRSA Inversiones y
Representaciones S.A. (the “Company”) for the fiscal
year ended June 30, 2024 (as amended by Amendment No. 1, the
“2024 Form 20-F”);
2. Based
on my knowledge, the Amendment does not contain any untrue
statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by the 2024 Form
20-F;
3. Based
on my knowledge, the financial statements, and other financial
information included in the 2024 Form 20-F, fairly present in all
material respects the financial position, results of operations and
cash flows of the registrant as of, and for, the periods presented
in the 2024 Form 20-F;
4. The
Company’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the Company and
have:
a. Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure that material information relating to the Company, including
its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which the 2024
Form 20-F is being prepared;
b. Designed
such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
c. Evaluated
the effectiveness of the Company’s disclosure controls and
procedures and presented in the 2024 Form 20-F our conclusions
about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by the 2024 Form 20-F based on
such evaluation;
d. Disclosed
in the 2024 Form 20-F any change in the Company’s internal
control over financial reporting that occurred during the period
covered by the 2024 Form 20-F that has materially affected, or is
reasonably likely to materially affect, the Company’s
internal control over financial reporting; and
5. The
Company’s other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the Company’s auditors and the audit
committee of the Company’s board of directors (or persons
performing the equivalent functions):
a. All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Company’s ability
to record, process, summarize and report financial information;
and
b. Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s
internal control over financial reporting.
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IRSA Inversiones y Representaciones Sociedad
Anónima
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Date:
June 27, 2025
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By:
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/s/
Eduardo S. Elsztain
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Name:
Eduardo S. Elsztain
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Title:
Chief Executive Officer
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Exhibit 12.2
SECTION 302 CERTIFICATION
I,
Matias Gaivironsky, certify that:
1. I
have reviewed this Amendment No. 1 (the “Amendment”) to
the annual report on Form 20-F of IRSA Inversiones y
Representaciones S.A. (the “Company”) for the fiscal
year ended June 30, 2024 (as amended by Amendment No. 1, the
“2024 Form 20-F”);
2. Based
on my knowledge, the Amendment does not contain any untrue
statement of a material fact or omit to state material fact
necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading
with respect to the period covered by the 2024 Form
20-F;
3. Based
on my knowledge, the financial statements, and other financial
information included in the 2024 Form 20-F, fairly present in all
material respects the financial position, results of operations and
cash flows of the registrant as of, and for, the periods presented
in the 2024 Form 20-F;
4. The
Company’s other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and
internal control over financial reporting (as defined in Exchange
Act Rules 13a-15(f) and 15d-15(f)) for the Company and
have:
a. Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to
ensure that material information relating to the Company, including
its consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which the 2024
Form 20-F is being prepared;
b. Designed
such internal control over financial reporting, or caused such
internal control over financial reporting to be designed under our
supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally
accepted accounting principles;
c. Evaluated
the effectiveness of the Company’s disclosure controls and
procedures and presented in the 2024 Form 20-F our conclusions
about the effectiveness of the disclosure controls and procedures,
as of the end of the period covered by the 2024 Form 20-F based on
such evaluation;
d. Disclosed
in the 2024 Form 20-F any change in the Company’s internal
control over financial reporting that occurred during the period
covered by the 2024 Form 20-F that has materially affected, or is
reasonably likely to materially affect, the Company’s
internal control over financial reporting; and
5. The
Company’s other certifying officer and I have disclosed,
based on our most recent evaluation of internal control over
financial reporting, to the Company’s auditors and the audit
committee of the Company’s board of directors (or persons
performing the equivalent functions):
a. All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the Company’s ability
to record, process, summarize and report financial information;
and
b. Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the Company’s
internal control over financial reporting.
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IRSA Inversiones y Representaciones Sociedad
Anónima
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Date:
June 27, 2025
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By:
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/s/
Matías I. Gaivironsky
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Name:
Matías I. Gaivironsky
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Title:
Chief Financial and Administrative Officer
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Exhibit 13.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18
U.S.C.
SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF
THE
SARBANES-OXLEY ACT OF 2002
In
connection with the Annual Report on Form 20-F of IRSA Inversiones
y Representaciones S.A. (the “Company”) for the fiscal
year ended June 30, 2024, as filed with the Securities and Exchange
Commission on October 23, 2024 (as amended by Amendment No. 1
thereto, the “Report”), Eduardo S. Elsztain, as Chief
Executive Officer of the Company, hereby certifies, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002, that;
(1) The
Report fully complies with the requirements of Section 13 (a) or 15
(d) of the Securities and Exchange Act of 1934; and
(2) The
information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
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IRSA Inversiones y Representaciones Sociedad
Anónima
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Date:
June 27, 2025
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By:
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/s/
Eduardo S. Elsztain
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Name:
Eduardo S. Elsztain
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Title:
Chief Executive Officer
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This
certification accompanies the Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not, except as to the extent
required by the Sarbanes-Oxley Act of 2002, be deemed filed by the
Company for purposes of Section 18 of the Securities and Exchange
Act of 1934, as amended.
Exhibit 13.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18
U.S.C.
SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF
THE
SARBANES-OXLEY ACT OF 2002
In
connection with the Annual Report on Form 20-F of IRSA Inversiones
y Representaciones S.A. (the “Company”) for the fiscal
year ended June 30, 2024, as filed with the Securities and Exchange
Commission on October 23, 2024 (as amended by Amendment No. 1
thereto, the “Report”), Matias Gaivironsky, as Chief
Financial and Administrative Officer of the Company, hereby
certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002,
that;
(1) The
Report fully complies with the requirements of Section 13 (a) or 15
(d) of the Securities and Exchange Act of 1934; and
(2) The
information contained in the Report fairly presents, in all
material respects, the financial condition and results of
operations of the Company.
|
|
IRSA Inversiones y Representaciones Sociedad
Anónima
|
|
|
|
|
|
|
|
|
Date:
June 27, 2025
|
By:
|
/s/
Matías I. Gaivironsky
|
|
|
|
|
Name:
Matías I. Gaivironsky
|
|
|
|
|
Title:
Chief Financial and Administrative Officer
|
|
This
certification accompanies the Report pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002 and shall not, except as to the extent
required by the Sarbanes-Oxley Act of 2002, be deemed filed by the
Company for purposes of Section 18 of the Securities and Exchange
Act of 1934, as amended.
Consolidated Financial Statements as of December 31,
2024
CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31,
2024
TABLE OF CONTENTS
|
Cover
|
|
Consolidated
Statement of Financial Position
|
|
Consolidated
Statement of Income and Other Comprehensive Income
|
|
Consolidated
Statement of Changes in Shareholders’ Equity
|
|
Consolidated
Statement of Cash Flows
|
|
Notes
to the Consolidated Financial Statements
|
|
1.
General Information and purpose of these consolidated financial
statements
|
|
2.
Economic context
|
|
3.
Basis of accounting and material accounting policies
|
|
4. Use
of judgment and estimates
|
|
5. Cash
and cash equivalents
|
|
6.
Financial assets at fair value through profit or loss
|
|
7.
Financial assets at amortized cost
|
|
8.
Investment in Joint ventures
|
|
9.
Property and equipment
|
|
10.
Intangible assets
|
|
11.
Investment property
|
|
12.
Other non-financial assets
|
|
13.
Financial liabilities at fair value through profit or
loss
|
|
14.
Financial liabilities at amortized cost
|
|
15.
Income tax
|
|
16.
Other non-financial liabilities
|
|
17.
Provisions and Contingencies
|
|
18.
Share capital
|
|
19.
Reserves
|
|
20.
Retained earnings
|
|
21.
Interest income
|
|
22.
Interest expense
|
|
23. Fee
and commissions income
|
|
24. Fee
and commission expense
|
|
25.
Gains on financial assets and financial liabilities at fair value
through profit or loss
|
|
26.
Foreign currency exchange rate differences
|
|
27.
Other operating income
|
|
28.
Employee benefits
|
|
29.
Administrative expenses
|
|
30.
Other operating expense
31.
Insurance service result
|
|
32.
Reconciliation of movements of liabilities to cash flows arising
from financing activities
|
|
33.
Operating segments
|
|
34.
Off-balance sheet accounts
|
|
35.
Subsidiaries
|
|
36.
Transactions and balances with related parties
|
|
37.
Financial risk factors
|
|
38.
Capital management
|
|
39.
Deposit guarantee system
|
|
40.
Subsequent events
|
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As of
December 31, 2024 and 2023
In
thousands of Argentine Pesos (Note 3.2)
|
ITEM
|
NOTES
|
12/31/2024
|
12/31/2023
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
5
|
278,913,103
|
215,136,516
|
|
|
|
|
|
|
Financial assets at fair value through profit or loss
|
|
|
|
|
Debt
securities
|
6.1
|
1,203,263,389
|
313,326,942
|
|
Derivative
instruments
|
6.2
|
139,485
|
877,133
|
|
Financial
assets pledged as collateral
|
6.4
|
185,244,863
|
24,089,864
|
|
Other
financial assets
|
6.3
|
5,698,401
|
20,425,866
|
|
Investments
in equity instruments
|
6.5
|
16,292,587
|
12,572,550
|
|
|
|
|
|
|
Financial assets at amortized cost
|
|
|
|
|
Loans
and other financing arrangements
|
7.1
|
686,679,809
|
310,324,173
|
|
Debt
securities
|
7.2
|
207,401,376
|
72,360,674
|
|
Reverse
Repurchase transactions
|
7.3
|
15,245,679
|
2,069,045,156
|
|
Financial
assets pledged as collateral
|
7.4
|
40,567,405
|
16,218,145
|
|
Other
financial assets
|
7.5
|
49,138,992
|
55,442,990
|
|
Insurance
contracts assets
|
|
2,329,948
|
1,857,835
|
|
Reinsurance
contracts assets
|
|
71,766
|
150,833
|
|
|
|
|
|
|
Investments in joint ventures
|
8
|
61,938,400
|
69,695,249
|
|
|
|
|
|
|
Property and equipment
|
9
|
84,458,068
|
87,163,228
|
|
|
|
|
|
|
Intangible assets
|
10
|
6,809,131
|
4,886,934
|
|
|
|
|
|
|
Investment property
|
11
|
12,772,629
|
13,546,030
|
|
|
|
|
|
|
Deferred income tax assets
|
15.3
|
1,112,078
|
493,278
|
|
|
|
|
|
|
Other non-financial assets
|
12
|
7,068,917
|
8,262,475
|
|
|
|
|
|
|
TOTAL ASSETS
|
2,865,146,026
|
3,295,875,871
|
|
The
accompanying explanatory notes are an integral part of these
consolidated financial statements.
1
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONT.)
As of
December 31, 2024 and 2023
In
thousands of Argentine Pesos (Note 3.2)
|
ITEM
|
NOTES
|
12/31/2024
|
12/31/2023
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
Financial liabilities at fair value through profit or
loss
|
|
|
|
|
Short
positions in securities
|
13.1
|
28,313,132
|
60,168,188
|
|
Derivative
instruments
|
13.2
|
40,016
|
-
|
|
|
|
|
|
|
Financial liabilities at amortized cost
|
|
|
|
|
Deposits
|
14.1
|
1,758,985,403
|
2,460,911,116
|
|
Other
financial liabilities
|
14.2
|
159,148,564
|
107,741,852
|
|
Loans
from the BCRA (*) and other financial institutions
|
|
2,690,568
|
5,994,442
|
|
Repurchase
transactions
|
14.3
|
155,090,490
|
-
|
|
Debt
securities issued
|
14.4
|
82,775,976
|
83,448,243
|
|
Insurance
contracts liabilities
|
|
3,706,879
|
4,227,346
|
|
Reinsurance
contracts liabilities
|
|
1,769,416
|
1,565,131
|
|
|
|
|
|
|
Income tax liabilities
|
|
|
|
|
Current
|
15.2
|
63,899,830
|
7,095,801
|
|
Deferred
|
15.2
|
17,243,525
|
23,997,330
|
|
|
|
|
|
|
Other non-financial liabilities
|
16
|
91,202,995
|
66,256,322
|
|
|
|
|
|
|
Provisions
|
17
|
9,755,018
|
6,528,586
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
2,374,621,812
|
2,827,934,357
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
Share
capital
|
18
|
1,500,000
|
1,500,000
|
|
Inflation adjustment to Share capital
|
18
|
291,984,498
|
291,984,498
|
|
Reserves
|
19
|
106,530,609
|
41,059,512
|
|
Retained earnings
|
20
|
71,940,181
|
121,067,596
|
|
|
|
|
|
|
Total equity, excluding non-controlling interests
|
|
471,955,288
|
455,611,606
|
|
Non-controlling interests
|
|
18,568,926
|
12,329,908
|
|
|
|
|
|
|
TOTAL EQUITY
|
490,524,214
|
467,941,514
|
|
|
TOTAL LIABILITIES AND EQUITY
|
2,865,146,026
|
3,295,875,871
|
|
(*)
Argentine Central Bank
The
accompanying explanatory notes are an integral part of these
consolidated financial statements.
2
CONSOLIDATED STATEMENT OF INCOME
AND OTHER COMPREHENSIVE INCOME
For the
fiscal years ended December 31, 2024 and 2023
In
thousands of Argentine Pesos (Note 3.2)
|
Item
|
Note
|
12/31/2024
|
12/31/2023
|
|
|
|
|
|
|
Interest
income calculated using the effective interest method
|
21
|
1,006,766,788
|
1,353,741,399
|
|
Interest
expense
|
22
|
(968,851,402)
|
(1,471,080,532)
|
|
Insurance
Interest income
|
|
11,395,837
|
41,235,823
|
|
Net interest income (expense)
|
|
49,311,223
|
(76,103,310)
|
|
|
|
|
|
|
Fee and
commission income
|
23
|
50,136,355
|
64,326,230
|
|
Fee and
commission expense
|
24
|
(2,517,256)
|
(2,806,744)
|
|
Net fee and commission income
|
|
47,619,099
|
61,519,486
|
|
|
|
|
|
|
Gains
on financial assets and liabilities at fair value through profit or
loss
|
25
|
636,424,796
|
765,652,048
|
|
Gains
on financial assets and liabilities at fair value through profit or
loss for insurance
|
|
10,880,178
|
28,733,664
|
|
Foreign
currency exchange differences
|
26
|
(17,426,100)
|
(53,584,579)
|
|
Foreign
currency exchange differences for insurance
|
|
2,282,554
|
11,063,148
|
|
Insurance
revenue
|
31
|
45,613,067
|
58,706,395
|
|
Insurance
service expenses
|
31
|
(32,402,915)
|
(35,738,553)
|
|
Revenue
|
|
742,301,902
|
760,248,299
|
|
|
|
|
|
|
Other
operating income
|
27
|
32,428,128
|
44,194,599
|
|
|
|
|
|
|
|
|
|
|
|
Employee
benefits
|
28
|
(164,835,340)
|
(151,304,856)
|
|
Administrative
expenses
|
29
|
(52,833,911)
|
(58,531,483)
|
|
Depreciation
and impairment of non-financial assets
|
|
(8,354,357)
|
(9,252,713)
|
|
Losses
on derecognition of financial assets at amortized cost
|
|
-
|
(17,456,242)
|
|
Impairment
of financial assets
|
7.6
|
(31,823,476)
|
(10,698,834)
|
|
Loss on
net monetary position
|
|
(202,761,248)
|
(191,519,179)
|
|
Loss on
net monetary position for insurance
|
|
(35,557,203)
|
(72,648,551)
|
|
Other
operating expenses
|
30
|
(143,803,199)
|
(163,686,620)
|
|
Net income before income tax
|
|
134,761,296
|
129,344,420
|
|
|
|
|
|
|
Income
tax expense
|
15.1
|
(54,726,573)
|
(14,550,271)
|
|
|
|
|
|
|
NET INCOME FOR THE YEAR
|
80,034,723
|
114,794,149
|
|
|
Other comprehensive income
|
-
|
-
|
|
|
NET INCOME AND OTHER COMPREHENSIVE INCOME
|
80,034,723
|
114,794,149
|
|
|
Net income for the year attributable to:
|
|
|
|
|
Holders
of ordinary shares of the Bank
|
74,051,042
|
112,587,848
|
|
|
Non-controlling
interests
|
5,983,681
|
2,206,301
|
|
The
accompanying explanatory notes are an integral part of these
consolidated financial statements.
3
CONSOLIDATED STATEMENT OF INCOME
AND OTHER COMPREHENSIVE INCOME (CONT.)
For the
fiscal years ended December 31, 2024 and 2023
In
thousands of Argentine Pesos (Note 3.2)
|
Earnings per Share
|
12/31/2024
|
12/31/2023
|
|
|
|
|
|
NUMERATOR
|
|
|
|
Net
income for the year attributable to holders of ordinary shares of
the Bank
|
74,051,042
|
112,587,848
|
|
|
|
|
|
Net
income for the year attributable to holders of ordinary shares of
the Bank adjusted to reflect the effect of dilution
|
74,051,042
|
112,587,848
|
|
|
|
|
|
DENOMINATOR
|
|
|
|
Weighted average of
outstanding ordinary shares for the fiscal year
|
1,477,692
|
1,474,938
|
|
|
|
|
|
Weighted average of
outstanding ordinary shares for the fiscal year adjusted to reflect
the effects of dilution
|
1,477,692
|
1,474,938
|
|
|
|
|
|
BASIC EARNINGS PER SHARE
|
50.113
|
76.334
|
|
DILUTED EARNINGS PER SHARE
|
50.113
|
76.334
|
The
accompanying explanatory notes are an integral part of these
consolidated financial statements.
|
|
Share capital
|
|
Reserves
|
|
|
|
|
||
|
Changes
|
Outstanding shares
|
Treasury shares
|
Inflation adjustment on Share capital
|
Legal
|
Voluntary
|
Retained earnings
|
Total equity attributable to holders of ordinary shares of the
Bank
|
Total equity attributable to non-controlling interests
|
Total equity
|
|
Balances as of 12.31.2023
|
1,476,063
|
23,937
|
291,984,498
|
41,059,512
|
-
|
121,067,596
|
455,611,606
|
12,329,908
|
467,941,514
|
|
Distribution
of unappropriated retained earnings – approved by the
Shareholders’ Meeting held on 03/27/2024 (*)
|
|
|
|
|
|
|
|
|
|
|
●
Legal
Reserve
|
-
|
-
|
-
|
24,635,692
|
|
(24,635,692)
|
-
|
-
|
-
|
|
●
Voluntary
Reserve
|
-
|
-
|
-
|
-
|
40,835,405
|
(40,835,405)
|
-
|
-
|
-
|
|
●
Dividends
distribution
|
-
|
-
|
-
|
-
|
-
|
(57,707,360)
|
(57,707,360)
|
-
|
(57,707,360)
|
|
Share-based
payments under compensation plan (Note 18)
|
3,275
|
(3,275)
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Other
changes
|
-
|
-
|
-
|
-
|
-
|
-
|
-
|
255,337
|
255,337
|
|
Net
income for the year
|
-
|
-
|
-
|
-
|
-
|
74,051,042
|
74,051,042
|
5,983,681
|
80,034,723
|
|
Balances as of 12.31.2024
|
1,479,338
|
20,662
|
291,984,498
|
65,695,204
|
40,835,405
|
71,940,181
|
471,955,288
|
18,568,926
|
490,524,214
|
The
accompanying explanatory notes are an integral part of these
consolidated financial statements.
(*) See
Note 20.
4
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
(CONT.)
for the
fiscal years ended December 31, 2024 and 2023
In
thousands of Argentine Pesos (Note 3.2)
|
|
Share Capital
|
|
|
|
|
|
|
|
|
Changes
|
Outstanding shares
|
Treasury shares
|
Inflation adjustment on share Capital
|
Legal Reserve
|
Retained earnings
|
Total equity attributable to holders of ordinary shares of the
Bank
|
Total equity attributable to non-controlling interests
|
Total equity
|
|
Balances as of 12.31.2022
|
1,473,832
|
26,168
|
291,984,498
|
-
|
49,539,260
|
343,023,758
|
9,352,976
|
352,376,734
|
|
Absorption
of unappropriated retained earnings – approved by the
Shareholders’ Meeting held on 03/30/2023
|
-
|
-
|
-
|
41,059,512
|
(41,059,512)
|
-
|
-
|
-
|
|
Share-based
payments under compensation plan (Note 18)
|
2,231
|
(2,231)
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Distribution
of subsidiary dividends
|
-
|
-
|
-
|
-
|
-
|
-
|
770,631
|
770,631
|
|
Net
income for the year
|
-
|
-
|
-
|
-
|
112,587,848
|
112,587,848
|
2,206,301
|
114,794,149
|
|
Balances as of 12.31.2023
|
1,476,063
|
23,937
|
291,984,498
|
41,059,512
|
121,067,596
|
455,611,606
|
12,329,908
|
467,941,514
|
The
accompanying explanatory notes are an integral part of these
consolidated financial statements.
5
CONSOLIDATED STATEMENT OF CASH FLOWS
for the fiscal years ended December 31, 2024 and 2023
In thousands of Argentine Pesos (Note 3.2)
|
ITEM
|
12/31/2024
|
12/31/2023
|
|
|
|
|
|
Net
income for the year
|
80,034,723
|
114,794,149
|
|
Adjustments
to obtain cash flows from operating activities
|
|
|
|
Income
tax expense
|
54,726,573
|
14,550,271
|
|
Loss on
net monetary position
|
238,318,451
|
264,167,730
|
|
Depreciation and
impairment of assets
|
8,354,357
|
9,252,713
|
|
Loan
loss, net of reversed allowances
|
28,061,602
|
9,226,174
|
|
Increase in
provisions
|
22,035,637
|
14,928,837
|
|
Net
interest expense
|
(49,311,223)
|
76,103,310
|
|
Net
income from measurement of financial instruments at fair value
through profit or loss
|
(646,686,114)
|
(793,447,621)
|
|
Loss
from valuation of investment property and property and
equipment
|
8,530,250
|
17,289,825
|
|
(Net
increase) / net decrease from operating assets
|
|
|
|
Debt
securities at fair value through profit or loss
|
(413,884,001)
|
760,610,964
|
|
Derivative
instruments
|
1,324,830
|
(719,326)
|
|
Reverse
repurchase transactions
|
927,176,511
|
(1,839,194,390)
|
|
Loans
and other financing arrangements
|
|
|
|
Non-financial
public sector
|
(2,108)
|
(253)
|
|
Financial
sector
|
(39,195,564)
|
(8,112,971)
|
|
Non-financial
private sector and foreign residents
|
(525,526,629)
|
(146,345,170)
|
|
Debt
securities at amortized cost
|
(174,172,377)
|
(11,495,290)
|
|
Financial assets
pledged as collateral
|
(207,302,286)
|
(31,072,254)
|
|
Investments in
equity instruments
|
(10,519,102)
|
(9,890,909)
|
|
Other
assets
|
(151,586,172)
|
(194,439,453)
|
|
Net
increase / (net decrease) from operating liabilities
|
|
|
|
Deposits
|
|
|
|
Non-financial
public sector
|
149,814,189
|
49,296,377
|
|
Financial
sector
|
(390)
|
249
|
|
Non-financial
private sector and foreign residents
|
475,607,613
|
1,745,330,241
|
|
Liabilities at fair
value through profit or loss
|
683,087
|
60,168,188
|
|
Derivative
instruments
|
169,183
|
(1,351,150)
|
|
Repurchase
transactions
|
154,784,765
|
-
|
|
Other
liabilities
|
221,969,777
|
156,846,726
|
|
|
|
|
|
Interest
paid
|
(963,034,559)
|
(1,445,099,708)
|
|
Interest
received
|
1,006,845,016
|
1,337,919,580
|
|
Dividends
|
65,310
|
42,675
|
|
Income
tax paid
|
(324,630)
|
(253,795)
|
|
Total
cash flows generated by operating activities
|
196,956,719
|
149,105,719
|
The
accompanying explanatory notes are an integral part of these
consolidated financial statements.
6
CONSOLIDATED STATEMENT OF CASH FLOWS (CONT.)
for the fiscal years ended December 31, 2024 and 2023
In thousands of Argentine Pesos (Note 3.2)
|
ITEM
|
12/31/2024
|
12/31/2023
|
|
Cash
flows from investing activities
|
|
|
|
Payments
|
|
|
|
Purchase of
property and equipment, intangible assets and other
assets
|
(6,261,268)
|
(6,217,171)
|
|
Collections
|
|
|
|
Sale of
property and equipment and other assets
|
1,925,640
|
79,146
|
|
Total
cash flows used in investing activities
|
(4,335,628)
|
(6,138,025)
|
|
Cash
flows from financing activities
|
|
|
|
Payments
|
|
|
|
Dividends
|
(55,151,453)
|
-
|
|
Debt
securities issued
|
(28,215,891)
|
(24,989,317)
|
|
Loans
to domestic financial institutions
|
(29,826,665)
|
(9,488,867)
|
|
Other
financial liabilities
|
(8,353,133)
|
(10,790,177)
|
|
Collections
|
|
|
|
Debt
securities issued
|
65,347,500
|
-
|
|
Loans
from domestic financial institutions
|
21,027,366
|
7,456,773
|
|
Total
cash flows used in financing activities
|
(35,172,276)
|
(37,811,588)
|
|
|
|
|
|
Effect
of exchange rate variations
|
22,670,693
|
49,666,505
|
|
|
|
|
|
Effect
of loss on net monetary position of cash
|
(116,342,921)
|
(127,508,215)
|
|
|
|
|
|
TOTAL
VARIATION IN CASH FLOWS
|
|
|
|
Net
increase for the year
|
63,776,587
|
27,314,396
|
|
Cash at
beginning of year
|
215,136,516
|
187,822,120
|
|
Cash at
year end
|
278,913,103
|
215,136,516
|
The
accompanying explanatory notes are an integral part of these
consolidated financial statements.
7
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
1. GENERAL INFORMATION
Banco
Hipotecario S.A. (hereinafter, the “Bank” or “the
Entity”) is a corporation (“Sociedad
anónima”) incorporated under the laws of Argentina. The
Bank’s registered office is Reconquista 151 – City of
Buenos Aires – Argentina.
The
Bank is the result of the privatization of the then Banco
Hipotecario Nacional (an institution established in 1886), pursuant
to Law No. 24855 passed on July 2, 1997 and enacted by the National
Executive Branch (PEN) through Decree No. 677 dated July 22, 1997,
and regulatory Decree No. 924/97, whereby Banco Hipotecario
Nacional was declared "subject to privatization" under the terms of
Law No. 23696 and transformed into a corporation. The new entity
arising from this transformation does business under the name of
"Banco Hipotecario Sociedad Anónima", and as a commercial bank
in accordance with Financial Institutions Law No. 21526. The Bank
provides retail and corporate banking services. In addition,
through its subsidiaries, it provides life and personal accident
insurance.
These
consolidated financial statements include the Bank and its
subsidiaries, that is, companies and structured entities controlled
by the Bank (collectively, the “Group”).
The
Bank’s subsidiaries are detailed in Note 34.
Part of
the Bank's share capital is publicly traded and has been registered
with the Buenos Aires Stock Exchange.
1.1 Purpose of these consolidated financial statements
These
consolidated financial statements have been prepared in accordance
with IFRS Accounting Standards. They were authorized for issue by
the Bank’s board of directors on June 30, 2025.
The
Bank is a significant not consolidated subsidiary of IRSA Inversiones y Representaciones S.A.
(“IRSA”), a Company whose shares are publicly traded on
the New York Stock Exchange. Consequently, these consolidated
financial statements have been prepared to fulfill IRSA’s
reporting requirements of the Securities and Exchange
Commission.
2. CHANGES IN THE MACROECONOMIC CONTEXT AND
FINANCIAL AND CAPITAL SYSTEMS
The Group operates in an economic context whose main variables have
shown volatility, such as the continued level of the accumulated
inflation rate.
In particular, and concerning financial assets, the Argentina
government took measures regarding the extension of maturities
and/or restructuring of government securities.
As of the date of these financial statements, the Group maintains
public sector debt instruments affected by the measures referred to
above.
Furthermore, the BCRA has implemented various measures,
including:
|
a)
|
Repurchasing
Bills issued by the BCRA (LELIQ) from financial
entities;
|
|
b)
|
Ceiling
rates on credit card financing arrangements and floor rates on time
deposits;
|
|
c)
|
A
financing line for Micro, Small & Medium Entities' (MSME)
productive investments that financial institutions are required to
hold;
|
|
d)
|
Replacement
of repurchase transactions by open market operations with National
Treasury securities;
|
The
events described in this Note affect the Group's operations, as
well as the calculation of credit losses and the valuation of
public sector debt instruments.
The
Group’s Management continuously monitors the evolution of the
aforementioned circumstances in order to define possible actions to
be taken and identify possible impacts on its equity and financial
position, which would require disclosure in the financial
statements.
3. BASIS OF ACCOUNTING AND MATERIAL ACCOUNTING
POLICIES
The
consolidated financial statements are prepared on a going concern
basis, as management is satisfied that the Group has adequate
resources to continue as a going concern for the foreseeable
future. In making this assessment, management has considered a wide
range of information including projections of profitability,
regulatory capital requirements and funding needs. The assessment
also includes consideration of reasonably possible downside
economic scenarios and their potential impacts on the
profitability, capital and liquidity of the Group.
The
Group has consistently applied the following accounting policies to
all periods presented in these consolidated financial statements,
except if mentioned otherwise.
8
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
3.1. Functional and presentation currency
The
Argentine Peso is the functional and presentation currency of the
Bank and its subsidiaries. All amounts are stated in thousands of
Argentine pesos, unless otherwise stated.
Since
the Argentine economy is considered a hyperinflationary economy in
accordance with International Accounting Standard No. 29
“Financial Reporting in Hyperinflationary Economies”
(“IAS 29”), these consolidated financial statements are
stated in terms of the current measurement unit at the end of the
reporting year.
3.2. Hyperinflationary accounting
IAS 29
requires that the financial statements of an entity whose
functional currency is that of a hyperinflationary economy be
stated in terms of the current measurement unit at the end of the
reporting period.
The
standard sets out a number of factors that should be considered to
conclude that an economy is hyperinflationary, including a
cumulative inflation rate for three consecutive years close to, or
in excess of, 100%. Therefore, pursuant to IAS 29, the Argentine
peso is considered a currency of a hyperinflationary economy as
from July 1, 2018.
Such
restatement should be made as if the economy had always been
hyperinflationary, using a general price index that reflects the
changes in the purchasing power of the currency. In order to make
such restatement, the Argentine Federation of Professional Councils
of Economic Sciences publishes the applicable index which is based
on:
|
●
|
For
items subsequent to December 2016: Consumer Price Index
(“CPI”) published by the National Institute of
Statistics and Census (“INDEC”); and
|
|
●
|
For
items prior to December 2016: Wholesale Domestic Price Index
published by the INDEC.
|
The CPI
increased 117.8% and 211.41%, during 2024 and 2023,
respectively.
Under
IAS 29, assets and liabilities that are not stated in the measuring
unit current at the end of the reporting period should be adjusted
by applying the general price index. The adjusted value of a
non-monetary item is reduced, in accordance with IFRS Accounting
Standards, when it exceeds its recoverable value.
In
applying IAS 29 to the consolidated statement of financial
position, the Group has applied the following methodology and
criteria:
|
●
|
Non-monetary
assets were restated by applying the general price index. The
restated amounts were reduced to their recoverable values, by
applying the relevant IFRS, where appropriate.
|
|
●
|
Monetary
assets were not restated.
|
|
●
|
Assets
and liabilities contractually related to changes in prices, such as
index-linked securities and loans, were measured on the basis of
the relevant contract.
|
|
●
|
The
measurement of Investments accounted for under the equity method,
have been determined based on financial information of the
associates and joint ventures prepared in accordance with IAS
29.
|
|
●
|
Deferred
income tax assets and liabilities were recalculated on the basis of
the restated amounts.
|
|
●
|
The
impact of implementation of IAS 29 at the beginning of the first
period of application (January 1, 2019) was recognized in equity,
where all equity items, other than Retained earnings, were restated
by applying the general price index, as from the date of
contribution or origination. In subsequent years, all equity items
were restated by applying the general price index as from the
beginning of the year or the contribution date, if
later.
|
In
applying IAS 29 to the consolidated statements of income and cash
flows, the Group has applied the following methodology and
criteria:
|
●
|
All
items of the consolidated statements of income and cash flows were
restated in terms of the measuring unit current at the end of the
reporting period.
|
|
●
|
The
gain or loss on net monetary position is recognized in the
consolidated statement of income.
|
|
●
|
Monetary
gains or losses generated by cash and cash equivalents are
disclosed in the statement of cash flows separately from cash flows
from operating, investing, and financing activities, as a
reconciling item between cash and cash equivalents at the beginning
and at the end of the period.
|
The
prior period comparative for the year ended December 31, 2023,
information was restated in terms of the measuring unit current as
of December 31, 2024, by applying the change in the consumer price
index between December 31, 2023 to December 31, 2024.
9
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
3.3. Consolidation
Subsidiaries
Subsidiaries
are entities, including structured entities, controlled by the
Group. The Group controls an entity if it is exposed to, or has the
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity. The Group reassesses whether it has control if there
are changes to one or more of the elements of control. This
includes circumstances in which protective rights held (e.g. those
resulting from a lending relationship) become substantive and lead
to the Group having power over an investee.
Subsidiaries
are consolidated from the date on which control commences until the
date on which control ceases.
The
Group consolidates subsidiaries’ financial statements
prepared at the end and for the same period of the Bank's financial
statements. Such financial statements which are prepared under
local GAAP, are adjusted to the same accounting policies applied by
the Bank. These adjustments are subject to the Bank’s
management monitoring and control procedures to confirm its
accuracy. The most significant adjustments include deferred tax
calculation under IAS 12, lease reporting under IFRS 16 and the
determination of actuarial reserves under IFRS 17.
Securitization vehicles
Certain
securitization vehicles sponsored by the Group under its
securitization program are run according to predetermined criteria
that are part of the initial design of the vehicles. The Group is
exposed to variability of returns from the vehicles through its
holding in debt securities in the vehicles. Outside the day-to-day
servicing of the receivables (which is carried out by the Group
under a servicing contract), key decisions are usually required
only when receivables in the vehicles go into default. In assessing
whether it has control, the Group considers whether it manages the
key decisions that most significantly affect these vehicles’
returns. As a result, the Group has concluded that it controls some
of these vehicles (please refer to Note 35).
Mutual funds
The
Group acts as a fund manager to a number of mutual funds.
Determining whether the Group controls such mutual funds usually
focuses on the assessment of the aggregate economic interests of
the Group in the fund (comprising any carried interests and
expected management fees) and the virtual lack of investors’
rights to remove the fund manager.
This
analysis considers not only the direct and indirect interests held
by the Group on the fund but also the composition of the rest of
the investors in order to conclude if the Group has power over the
fund, in which case it is consolidated.
When
the financial interests of the Group in a mutual fund is less than 22%, the Group
concludes that it acts as an agent for the investors and,
therefore, it does not consolidate such mutual fund. Otherwise,
when the interests of the Group in a mutual fund exceeds 37%, the
Group concludes that it has control over the fund, and it is
consolidated.
When
the Group has an interests over 22% but less than 37%, in order to
conclude whether the Group controls the mutual fund, other features
are taken into account such as the proportion of investors required
to vote together and whether other investors are highly dispersed.
(please refer to Note 35).
Non-controlling interests
Non-controlling
interests are measured initially at their proportionate share of
the acquiree’s identifiable net assets at the date of
acquisition.
Changes
in the Group’s interests in a subsidiary that do not result
in a loss of control are accounted for as equity
transactions.
Loss of control
When
the Group loses control over a subsidiary, it derecognizes the
assets and liabilities of the subsidiary, and any related
Non-controlling interests and other components of equity. Any
resulting gain or loss is recognized in profit or loss. Any
interest retained in the former subsidiary is measured at fair
value when control is lost.
Transactions eliminated on consolidation
Intra-group
balances and transactions, and any unrealized income and expenses
(except for foreign currency transaction gains or losses) arising
from intra-group transactions, are eliminated. Unrealized losses
are eliminated in the same way as unrealized gains, but only to the
extent that there is no evidence of impairment.
10
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
3.4. Investments in Joint Ventures
Interests in joint ventures are accounted for under the equity
method. They are initially recognized at cost, which includes
transaction costs. Subsequent to initial recognition, the
consolidated financial statements include the Group’s share
of the profit or loss and other comprehensive income (when
applicable) of equity-accounted investees, until the date on which
significant influence or joint control ceases.
3.5. Segment reporting
An
operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur
expenses (including revenues and expenses relating to transactions
with other components of the Group), whose operating profits or
losses are regularly reviewed by the Group’s Chief Operating
Decision Maker (“CODM”) to make decisions about
resources to be allocated to the segment and assess its
performance, and for which discrete financial information is
available.
Operating
segments are reported consistently with the internal reports
submitted to:
|
(i)
|
Key management personnel, being the CODM since they are the utmost
authority in charge of making operating decisions and allocating
resources and assessing the performance of the operating segments;
and
|
|
(ii)
|
The Board of Directors, responsible for making the Group's
strategic decisions.
|
Operating segment results are directly attributable to a segment as
well as those that can be allocated on a reasonable basis.
Unallocated items comprise mainly certain administrative expenses,
loss on net monetary position, and income tax expense.
3.6. Foreign currency
Transactions
in foreign currency are translated into Argentine Pesos (functional
currency of all components of the Group) at the exchange rates at
the transaction date.
Monetary
assets and liabilities denominated in foreign currencies are
translated into the functional currency at the exchange rate at the
reporting date. Non-monetary assets and liabilities that are
measured at fair value in a foreign currency are translated at the
exchange rate when the fair value was determined. Non-monetary
items that are measured based on historical cost in a foreign
currency are translated at the exchange rate at the date of the
transaction. Foreign currency differences are recognized in the
consolidated statement of income.
3.7. Financial instruments
Initial recognition
The Group initially recognizes loans and advances, deposits, debt
securities issued, and subordinated liabilities on the date on
which they are originated. All other financial instruments
(including regular-way purchases and sales on financial assets) are
recognized on the trade date, which is the date on which the Group
becomes a party to the contractual provisions of the
instrument.
A financial asset or financial liability is measured initially at
fair value plus, for items not at fair value through profit or
loss, transaction costs that are directly attributable to its
acquisition or issue. The fair value of a financial instrument on
initial recognition is generally its transaction
price.
In circumstances where the fair value differs from the transaction
price, the Group recognizes the difference as follows:
|
●
|
If the fair value is evidenced by a quoted price in an active
market for an identical asset or liability, or based on a valuation
method that uses only data from observable markets, the difference
between the fair value at initial recognition and the transaction
price is recognized as profit or loss.
|
|
●
|
In other cases, the difference is deferred as a profit or loss only
to the extent that there is a change in any factor (including time)
that the market participants would consider when determining the
price of the asset or liability.
|
The Group recognizes purchases of financial instruments with the
commitment to resell at a certain price as a loan granted in the
line “Reverse repurchase agreements” in the
Consolidated statement of financial position. The difference
between the purchase and sale prices of those instruments is
recorded as interest accrued during the term of the transactions
using the effective interest method.
11
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
The underlying assets received for reverse repurchases transactions
are considered under Off-Balance Sheet Items. In case the Group
sells the security, a related liability is recognized under the
caption “Short positions in securities”.
Financial assets
Classification
On initial recognition, the Group classifies financial assets as
measured at amortized cost, at fair value through other
comprehensive income (FVOCI) or at fair value through profit or
loss (FVTPL), based on the objective of the Group’s business
model under which the financial assets are held and the
characteristics of contractual cash flows of the financial
asset.
A financial asset is measured at amortized cost if it meets both of
the following conditions:
|
●
|
The asset is held within a business model whose objective is to
hold assets to collect contractual cash flows; and
|
|
●
|
The contractual terms of the financial asset give rise to cash
flows that are solely payments of principal and interest
(“SPPI”) on the principal amount
outstanding.
|
A financial asset is measured at FVOCI only if it meets both of the
following conditions:
|
●
|
The financial asset is held within a business model whose objective
is achieved by both collecting contractual cash flows and selling
financial assets; and
|
|
●
|
The contractual terms of the financial asset give rise to cash
flows that are SPPI on the principal amount
outstanding.
|
For a financial asset measured at FVOCI, gains and losses are
recognized in OCI, except for the following, which are recognized
in profit or loss in the same manner as for financial assets
measured at amortized cost:
|
●
|
Interest revenue using the effective interest method;
|
|
●
|
Expected credit losses (“ECL”) and reversals;
and
|
|
●
|
Foreign exchange gains and losses.
|
When a financial asset measured at FVOCI is derecognized, the
cumulative gain or loss previously recognized in OCI is
reclassified from equity to profit or loss.
The Group does not apply the option of designating financial assets
at fair value.
All other financial assets are classified as measured at FVTPL.
Financial assets at fair value through profit or loss
include:
|
●
|
Instruments held for trading;
|
|
●
|
Instruments whose contractual terms do not represent cash flows
SPPI on principal amount outstanding;
|
|
●
|
Derivative financial instruments; and
|
|
●
|
Investments in equity instruments
|
Modifications of financial assets
If the terms of a financial asset are modified, then the Group
evaluates whether the cash flows of the modified asset are
substantially different.
If the cash flows are substantially different, then the contractual
rights to cash flows from the original financial asset are deemed
to have expired. In this case, the original financial asset is
derecognized, and a new financial asset is recognized at fair value
plus any eligible transaction costs.
If cash flows are modified when the borrower is in financial
difficulties, then the objective of the modification is usually to
maximize recovery of the original contractual terms rather than to
originate a new asset with substantially different terms. If the
Group plans to modify a financial asset in a way that would result
in forgiveness of cash flows, then it first considers whether a
portion of the asset should be written off before the modification
takes place. This approach impacts the result of the quantitative
evaluation and means that the derecognition criteria are not
usually met in such cases.
If such a modification is carried out because of financial
difficulties of the borrower, then the gain or loss is presented
together with impairment losses. In other cases, it is presented as
interest income calculated under the effective interest rate
method.
12
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
Derecognition of financial assets
The Group derecognizes a financial asset when the contractual
rights to cash flows from the financial asset expire or it
transfers the rights to receive the contractual cash flows in a
transaction in which substantially all of the risks and rewards of
ownership of the financial asset are transferred or in which the
Group neither transfers nor retains substantially all of the risks
and rewards of ownership and it does not retain control of the
financial asset.
The Group enters into transactions whereby it transfers assets
recognized on its statement of financial position, but retains
either all or substantially all of the risks and rewards of the
transferred assets or a portion of them. In such cases, the
transferred assets are not derecognized. Examples of such
transactions are securities lending and sale-and-repurchase
transactions, where the inflows of the sale are recognized against
a financial liability (“Repurchase Transactions”) and
the underlying securities are reclassified as “Financial
assets pledged as collateral”.
In transactions where the Group neither retains nor transfers
substantially all of the risks and rewards of ownership of a
financial asset, and it retains control over the asset, the Group
continues to recognize the asset to the extent of its continuing
involvement, determined by the extent to which it is exposed to
changes in the value of the transferred asset.
The Group writes off a financial asset, in whole or in part, when
it has exhausted all practical recovery efforts and has concluded
that there is no reasonable expectation of recovery. Indicators
that there is no reasonable expectation of recovery include (i)
ceasing enforcement activity, and (ii) situations where the
Group’s recovery method is foreclosing on collateral and the
value of the collateral is such that there is no reasonable
expectation of recovery in full. The Group may write off financial
assets which are still subject to enforcement
activity.
Financial liabilities
Classification
The
Group classifies its financial liabilities, other than derivative
financial instruments, guarantees issued and loan commitments as
measured at amortized cost. Derivative financial instruments are
measured at fair value through profit or loss.
Financial
guarantees are contracts pursuant to which the Group is required to
make specified payments to reimburse the holder for a loss incurred
due to a specified debtor's failure to honor its payment
obligations in accordance with the contractual terms of a debt
instrument.
The
liability arising from financial guarantees issued is initially
recognized at fair value. Such liability is subsequently measured
at the higher of the loss allowance determined in accordance with
IFRS 9 and the amount initially recognized less, when appropriate,
the cumulative amount of income recognized in accordance with
principles of IFRS 15.
Modifications of financial liabilities
The Group derecognizes a financial liability when its terms are
modified, and the cash flows of the modified liability are
substantially different. In this case, a new financial liability
based on the modified terms is recognized at fair value. The
difference between the carrying amount of the financial liability
derecognized and the consideration paid is recognized in profit or
loss. Consideration paid includes non-financial assets transferred,
if any, and the assumption of liabilities, including the new
modified financial liability.
If the modification of a financial liability is not accounted for
as derecognition, then the amortized cost of the liability is
recalculated by discounting the modified cash flows at the original
effective interest rate and the resulting gain or loss is
recognized in profit or loss. For floating-rate financial
liabilities, the original effective interest rate used to calculate
the modification gain or loss is adjusted to reflect current market
terms at the time of the modification. Any costs and fees incurred
are recognized as an adjustment to the carrying amount of the
liability and amortized over the remaining term of the modified
financial liability by re-computing the effective interest rate on
the instrument.
Derecognition of financial liabilities
The Group derecognizes financial liabilities upon settlement; that
is, when the financial liability has been settled or paid off, or
the contract has expired.
Financial Assets and Financial Liabilities Offsetting
Financial assets and liabilities are offset by reporting the net
amount in the consolidated statement of financial position only
when there is a legally enforceable right to offset the recognized
amounts, and there is an intention to settle on a net basis or
realize the asset and settle the liability
simultaneously.
13
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
3.8. Impairment of financial assets
Expected Credit Losses
The
Group recognizes an “Allowance for credit risks” on the
following financial instruments that are not measured at FVTPL, by
applying the Expected credit losses (“ECLs”)
method:
|
●
|
Loans;
|
|
●
|
financial assets that are debt instruments;
|
|
●
|
lease receivables;
|
|
●
|
financial guarantee contracts issued; and
|
|
●
|
loan commitments issued.
|
The Group measures the ECLs from a financial instrument in a manner
that reflects:
|
●
|
an unbiased
probability-weighted amount which is determined by assessing a
range of possible outcomes;
|
|
●
|
the time value of money; and
|
|
●
|
reasonable and supportable information that is available without
undue cost or effort on the reporting date, about past events,
current conditions and forecasts of future economic
conditions.
|
Measurement of expected credit losses (ECL) - Inputs, assumptions
and calculation methods
ECLs are measured over a 12-month period or during the
instrument’s lifetime, depending on whether a significant
increase in credit risk has occurred since initial recognition or
if an asset is deemed credit impaired. ECLs are the discounted
product of the Probability of Default (“PD”), Exposure
at default (“EAD”) and Loss given default
(“LGD”), defined as follows:
●
PD represents the probability of a debtor's defaulting on a
financial liability (as per the foregoing "Definition of default
and credit impairment"), whether over the following 12 months or
the financial asset remaining life ("Lifetime PD").
●
EAD is based on the amounts the Group expects to be overdue at the
time of the default, during the subsequent 12 months, or otherwise
during the financial asset remaining life ("Lifetime EAD"). For
instance, for revolving commitments, the Group includes the current
drawn down balance, plus any additional amount expected to be drawn
down, up to the current contractual limit at the time of default,
if finally occurring.
●
LGD represents the Group's expected loss on any given exposure at
default. LGD will vary depending on the type of counterparty,
nature and aging of the claim and also depending on the
availability of collateral or other form of credit enhancement. LGD
is stated as a percentage of loss per EAD unit and is calculated
over a 12-month base period or throughout the instrument lifetime,
where the 12-month LGD is the percentage of loss expected to be
incurred, if default occurs within the next 12 months, while
lifetime LGD is the percentage of loss expected to be incurred if
default occurs during the financial instrument
lifetime.
ECLs are determined by forecasting the PD, LGD and EAD for each
future month, and for each individual exposure or collective
segment. These three components are multiplied and adjusted for the
survival probability (i.e., no early payment or no default has
occurred on the exposure in a previous month). This formula results
in an ECL for each future month, which is then discounted at the
reporting date and aggregated. The discount rate used in the ECL
calculation is the original effective interest rate or other
similar rate.
Lifetime PD is developed by applying a maturity profile to the
current 12-month PD. The maturity profile analyzes how defaults
occur within a portfolio since initial recognition and throughout
the lifetime of the borrowings. The maturity profile is based on
observed historical data and is supposed to be the same across all
assets within a portfolio and within a credit rating
band.
12-month EAD and Lifetime EAD are determined on the basis of the
expected payment profile, which varies according to the type of
product:
|
●
|
For
non-revolving products, EAD is based on contractual payments owed
by borrower during a 12-month period or throughout
Lifetime.
|
|
●
|
For
revolving products, EAD is calculated considering the drawn down
balance (used up limit) and adding a "credit conversion factor" to
calculate the extent to which borrower's outstanding debt will
increase upon default.
|
12-month
LGD and Lifetime LGD are determined on the basis of factors
affecting post-default recoveries, with product type and the
current days in arrears band remaining constant. LGD is influenced
by the entity's collection strategy, including sales and
indebtedness cost.
14
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
Under the model used for the Commercial Portfolio, the recovery
rate is defined on the basis of the collateral/instrument
associated with the transaction. In determining the coverage ratio
associated with each collateral, recovery ratio schedules have been
developed based on collateral quality.
If a customer identified as a "relevant exposure" under the Risk
Management Policy is moved to stages 2 or 3, LGD could be
calculated individually, relying on information available to the
Group at the time of the analysis, which allows it to estimate the
expected recovery on such exposure.
The Group includes forward-looking economic information in the
calculation of 12-month PD and Lifetime PD.
Grouping of instruments for losses measurement
To assess the ECLs on a collective basis, the Group makes a
grouping of exposures based on shared risks characteristics, such
that risk exposures within the group are homogeneous.
The Group has identified the following categories of
debtors:
|
●
|
Consumer portfolio: includes credit cards, consumer loans and
mortgages.
|
|
●
|
Commercial portfolio: includes corporate and small and medium size
entities (SMEs) customers.
|
|
●
|
Securities portfolio: includes public and private debt securities
acquired in the secondary market or through primary
bidding.
|
a. Consumer portfolio
In estimating ECLs of the consumer portfolio, instruments are
grouped based on their inherent risk characteristics, and
subsequently segmented considering similar credit risk
characteristics, which are indicative of debtor's payment ability,
according to applicable contractual conditions, in order to
determine its PD and LGD parameters on a collective basis. Credit
risk characteristics may include the following factors, among
others:
|
●
|
Type of transaction,
|
|
|
|
●
|
Customer's credit scoring (rating),
|
|
|
|
●
|
Time in arrears,
|
|
|
|
●
|
Segment based on financial asset aging and/or purchase or
origination terms and conditions.
|
The Group's Consumer Banking Credit team periodically monitors and
reviews that financial instruments are adequately
pooled.
b. Commercial portfolio
ECLs are estimated on an individual and on a collective basis. The
Group determines the PD and LGD parameters for its Commercial
portfolio on a collective basis, considering the customer’s
risk rating.
For customers with relevant exposures, the assessment is made on an
individual basis.
Each customer is assigned a PD based on that customer's Credit
Rating and segment. On the other hand, the LGD parameter is related
to the transaction based on the segment and collateral
quality.
The correct segmentation of the commercial portfolio financial
instruments is monitored and reviewed periodically by the Wholesale
Banking Credit Risk team.
c. Securities portfolio
ECLs are estimated on an individual and on a collective basis. The
Group determines the LGD parameters for its Securities portfolio on
a collective basis. PDs are based on ratings from third party
credit rating agencies.
PD is assigned to each instrument, based primarily on that
security’s Credit Rating and considering segmentation
variables such as denomination currency, payment currency,
governing law, and whether the counterparty is in the public or
private sector.
Stage classification
The
Group classifies financial instruments into three categories based
on changes in their credit risk since initial recognition, as
summarized below:
15
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
● Stage 1: comprises financial assets
that have not experienced a significant increase in credit
risk;
● Stage 2: includes financial assets
for which a significant increase in credit risk has been identified
since its initial recognition, but that are not credit-impaired;
and,
●
Stage 3: comprises financial assets with objective evidence of
impairment (default).
The calculation of the allowances for credit risk in each of these
three categories is done as follows:
●
ECL within a 12-month period: for financial instruments in
“Stage 1”, the Group will measure ECLs as the expected
credit losses resulting from possible default events within the
next 12 months.
●
Lifetime ECL: for financial instruments in “Stage 2”
and “Stage 3,” the Group measures the ECLs resulting
from possible default events over the remaining life of the
financial asset.
ECL measurement considers forward-looking information.
Purchased or originated credit-impaired (“POCI”)
financial assets are financial assets which are credit impaired at
initial recognition. ECLs from these financial instruments are
considered “Stage 3” and measured over the assets
lifetime..
Financial assets in “Stage 1” and “Stage 2”
accrue interest at the effective interest rate on their gross book
amount. Financial assets in “Stage 3” accrue interest
at the effective interest rate of the carrying amount net of
allowance for credit losses as from the time such assets are moved
to that stage.
The following chart summarizes impairment criteria for financial
assets other than purchased or originated credit-impaired financial
assets:
|
Changes in credit quality since initial recognition
|
||
|
Stage 1
|
Stage 2
|
Stage 3
|
|
(initial recognition)
|
(significant increase in credit risk since initial
recognition)
|
(credit impaired)
|
|
|
|
|
|
ECLs for the 12 months after the reporting date
|
ECLs during the financial instrument lifetime
|
|
Below is a description of the key judgments and assumptions the
Group has relied upon for ECL measurement purposes:
Significant increase in credit risk
In determining whether a financial instrument has experienced a
significant increase in credit risk since initial recognition, the
Group performs several analyses depending on the portfolio
(consumer, commercial or securities) and the product.
|
a.
|
Consumer portfolio
|
For the most representative products within the consumer portfolio
—consumer loans and credit cards— a significant
increase in credit risk is deemed to exist if debtor meets one or
both of the following conditions:
|
●
|
contractual payments are over 30 days past due, based on the
historical behavior of the portfolio through the analysis of the
changes in transactions that have reached this stage, leading to
default situations, and/or
|
|
●
|
an increase of the product expected credit loss exceeding a
threshold previously set for the relevant default
probabilities.
|
To establish such thresholds, the Group has implemented a
methodology which consists of a statistical analysis of historical
information of its consumer loans’ behavior. This methodology
is based on a quantitative analysis of the historical variation of
the probability of default (PD) of loans since their initial
recognition, identifying those combinations of absolute and
relative thresholds per product and segment representing a
significant increase in the risk, even without considering days
past due at the time of observation. Such thresholds have been set
in line with the current PD model and the risk segmentation
previously defined for these products.
16
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
The following table shows the PD threshold at the initial
recognition of a transaction and the related minimum increase in
bps for such transaction at measurement date to be consider to have
experienced a significant increase in its credit risk.
|
PD Threshold for initial recognition
|
Minimum increase in PD that is considered significant at the
reporting date (in basis points –
“bps”)
|
|
Product Credit Cards
|
|
|
<= 0.94%
|
490 bps
|
|
> 0.94% and <= 1.82%
|
814 bps
|
|
> 1.82% and <= 5.12%
|
2284 bps
|
|
> 5.12% and <= 6.73%
|
3002 bps
|
|
Product Consumer Loans
|
|
|
<= 1.5%
|
534 bps
|
|
> 1.5% and <= 3%
|
1068 bps
|
|
> 3% and <= 4.5%
|
1602 bps
|
|
> 4.5% and <= 6%
|
2135 bps
|
|
> 5% and <= 7.5%
|
2669 bps
|
|
Product Mortgage Loans
|
|
|
<= 0.1%
|
280 bps
|
|
> 0.1% and <= 3.1%
|
1143 bps
|
|
> 3.1% and <= 6.1%
|
2249 bps
|
|
> 6.1% and <= 9.1%
|
3356 bps
|
|
> 9.1% and <= 12.1%
|
4462 bps
|
|
> 12.1% and <= 15.1%
|
5568 bps
|
|
> 15.1% and <= 18.1%
|
6674 bps
|
|
> 18.1% and <= 21.1%
|
7781 bps
|
|
b.
|
Commercial portfolio
|
A significant increase in credit risk is deemed to exist primarily
if debtor's contractual payments are over 30 days past due,
determined on the basis of the historical behavior of the
Group’s portfolio through the analysis of the changes in
transactions that have reached this stage, leading to default
situations.
For debtors with “investment grade” credit quality
according to the group’s credit rating methodology, a
significant increase in credit risk exists when credit rating is
downgraded two or more notches causing the loss of the investment
grade, even though payments are not over 30 days past
due.
|
c.
|
Securities portfolio
|
With regard to the securities portfolio, the significant increase
in risk is determined at the issuer level,
considering:
|
●
|
A decrease in credit rating of any issuer’s instrument of at
least two notches, and / or
|
|
●
|
An increase in market perception credit risks evidenced by a
significant fall in market prices.
|
Definition of default and impaired credit
|
a.
|
Consumer portfolio
|
For
financial instruments within the consumer portfolio, except for
mortgage loans, the Group considers default has occurred when
contractual payments are over 90 days past due.
Mortgage
loans have associated arrears dynamics which differs from other
financial instruments. Consequently, the Group, based on
statistical analysis of a transition between tranches of arrears
has concluded the higher probability of default occurs over 180
days past due.
17
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
In
addition, when Default products are refinanced, the new loan is
considered as POCI, and it is assigned to Stage 3, with PD=100%
during its entire lifetime, regardless of whether it was in arrears
or not.
|
b.
|
Commercial portfolio
|
For
financial instruments within the commercial portfolio, the Group
considers default has occurred when one or more of the following
conditions are met:
●
Financial instruments over 90 days past due under their respective
contractual terms;
●
Escalation of collection proceedings to the Collections department
(commencement of recovery efforts); and
●
Declaration of suspension of payments.
The aforementioned criteria are consistently applied to all
financial instruments and are in line with the definition of
default used by the Group for credit risk management purposes. This
definition is consistently applied for PD, Exposure at Default
(“EAD”) and LGD modelling purposes.
|
c.
|
Securities portfolio
|
For debt securities the Group considers default has occurred
whenever a counterparty misses a contractual payment according to
the terms stipulated in its prospectus.
Forward-looking information considered in expected credit loss
models
The Group’s ECL model incorporates Argentine macroeconomic
forward-looking information to determine the default probabilities
by performing certain historical regression analyses and
identifying the key economic variables affecting credit risk and
expected credit losses for each portfolio segment,
including:
|
●
|
GDP
|
|
●
|
Inflation
|
|
●
|
BADLAR
|
|
●
|
Monetary
policy rate
|
|
●
|
US
dollar exchange rate
|
These economic variables and their associated impact on PD vary
according to the segment under analysis. On a monthly basis, the
Group's Strategic and Commercial Planning team makes available
forecasts of these economic variables ("baseline economic
scenario"), which depict the Group’s best estimate of the
Argentine economic trends. The impact of these variables on default
probabilities has been determined based on econometric regression
models calibrated with the Group’s own information. Models
are reviewed and recalibrated, at least annually, or more
frequently if performance ceases to be in line with the estimated
portfolio behavior. The process involves identifying observable
quantitative variables, the absolute, relative or modified extent
of which could explain customers' credit behavior; calibrating as
many regression models as potential combinations of variables exist
and, finally, selecting the model with best predictive power,
subject to the fulfillment of minimum statistical requirements
ensuring robustness, as well as the economic sense of the stated
ratios.
The Group's Strategic and Commercial Planning team also develops
other potential scenarios, together with their respective
probabilities of occurrence. The number of scenarios used, and
their attributes are annually established based on an analysis of
the main products to ensure that the linearity effect between the
future economic scenario and its associated ECLs is achieved.
Scenario weightings are determined by a combination of statistical
analyses and expert judgment, taking into account the range of
possible outcomes best represented by each selected scenario. Like
in any other economic forecast, projections and probabilities of
occurrence are subject to a high degree of intrinsic uncertainty.
As such, actual results may substantially differ from these
forecasts.
As of December 31, 2024, ECLs recognized in the financial
statements reflected the effects of 3 potential scenarios,
appropriately representing nonlinearities. The Group considers that
these forecasts represent its best estimate of possible outcomes
and has assessed non-linear and asymmetric impacts within the
Group’s several portfolios to determine that the chosen
scenarios are representative of the range of potential scenarios.
Below is a detail of the macroeconomic variables of the scenarios
used and their weightings:
18
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
Variable
|
Scenario
|
2025
|
2026
|
|
GDP
|
Baseline
|
5.00%
|
3.00%
|
|
|
Best case
|
7.06%
|
4.03%
|
|
|
Worst case
|
1.33%
|
(0.60)%
|
|
Inflation
|
Baseline
|
19.09%
|
8.51%
|
|
|
Best case
|
15.02%
|
6.76%
|
|
|
Worst case
|
23.29%
|
10.29%
|
|
BADLAR
|
Baseline
|
19.00%
|
10.00%
|
|
|
Best case
|
15.03%
|
7.45%
|
|
|
Worst case
|
23.40%
|
13.08%
|
|
Monetary policy rate
|
Baseline
|
18.50%
|
9.00%
|
|
|
Best case
|
14.63%
|
6.70%
|
|
|
Worst case
|
22.78%
|
11.77%
|
|
Unemployment rate
|
Baseline
|
6.13%
|
5.71%
|
|
|
Best case
|
5.82%
|
5.42%
|
|
|
Worst case
|
6.44%
|
5.99%
|
|
Exchange rate
|
Baseline
|
19.66%
|
42.25%
|
|
|
Best case
|
13.10%
|
6.87%
|
|
|
Worst case
|
23.51%
|
10.94%
|
YoY variation - Based on historical data and forecasts
|
|
Baseline
|
Best case
|
Worst case
|
|
Weighting
|
60%
|
20%
|
20%
|
3.9. Cash and cash equivalents
Cash and cash equivalents include cash on hand and unrestricted
deposits held in banks and are measured at amortized
cost.
3.10. Financial assets at fair value through profit or
loss
Debt securities held for trading are instruments that the Group
acquires principally for the purposes of selling in the near term
or holds on a portfolio that is managed together for short-term
profit or position taking. It also includes instruments whose
contractual terms do not give rise to cash flows that are SPPI on
the principal amount outstanding.
Derivatives held for trading and for risk management purposes are
measured at fair value through profit or loss.
Investment in equity instruments in entities where the Group has no
control, joint control or significant influence are measured at
fair value through profit or loss.
3.11. Financial assets at amortized cost
Loans and other financing arrangements are initially
recognized at fair value plus incremental direct transaction costs,
and subsequently at their amortized cost under the effective
interest method.
Financial assets that are held to collect the contractual cash
flows and which contain contractual terms that give rise on
specified dates to cash flows that are solely payments of principal
and interest are measured at amortized cost. Such financial assets
include most loans and other financing arrangements and some debt
securities.
Securities purchased under commitments to resell (“reverse
repurchase transactions”) are not recognized on the
consolidated statement of financial position and an asset is
recorded in respect of the initial consideration paid. Reverse
repurchase transactions are measured at amortized cost, where the
difference between the purchase and resale price is treated as
interest and recognized in net interest income over the life of the
agreement.
19
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
Securities are sold subject to a commitment to repurchase them at a
predetermined price (“repurchase transactions”), they
remain on the consolidated statement of financial position included
in “Financial assets pledged as collateral” and a
liability is recorded in “Repurchase transactions” line
for the consideration received.
3.12. Leases
At inception of a contract, the Group assesses if the contract is,
or contains, a lease. A contract is, or contains a lease if it
conveys the right to control the use of an identified asset during
a period of time in exchange for consideration.
Group acting as lessee
At
commencement or on a modification of a contract that contains a
lease component, the Group recognizes an asset for the right-of-use
and a lease liability. The right-of-use is initially measured at
cost, which comprises the initial amount of the lease liability
adjusted for any lease payments made at or before the commencement
date, plus any initial direct costs and an estimate of costs to
dismantle and remove any improvements made to branches or office
premises.
The
lease liability is initially measured at the present value of the
lease payments to be made over the lease term, discounted using the
interest rate implied in the lease or, if that cannot be readily
determined, the Group’s incremental borrowing rate. Lease
payments included in the measurement of the lease liability
comprise the following:
●
fixed payments (including
in-substance fixed payments), less any lease incentives
receivable;
●
variable lease payments
that depend on an index or a rate;
●
amounts the lessee
expects to pay under residual value guarantees;
●
the exercise price under
a purchase option that the Group is reasonably certain to exercise,
lease payments in an optional renewal period if the Group is
reasonably certain to exercise an extension option;
and
●
penalty payments for
early termination of the lease, unless the Group is reasonably
certain not to terminate early.
The
right-of-use asset is subsequently depreciated under the
straight-line method from the commencement date to the end of the
lease term. In addition, the right-of-use asset is periodically
reduced by impairment losses, if any, and adjusted for certain
remeasurements of the lease liability.
The
lease liability is measured at amortized cost under the effective
interest method. It is remeasured when there is a change in future
lease payments arising from a change in an index or rate, if there
is a change in the Group’s estimate of the amount expected to
be payable under a residual value guarantee, if the Group changes
it assessment of whether it will exercise a purchase, extension or
termination option or if there is a revised in-substance fixed
lease payment. In these cases, the corresponding adjustment is made
to the carrying amount of the right-to-use asset.
The Group has elected not to recognize right-to-use assets and
lease liabilities for leases of low-value assets and short-term
leases. The Group recognizes the lease payments associated with
these leases as an expense on a straight-line basis over the lease
term.
Group acting as lessor
When
the Group acts as lessor, it determines whether the contract is a
finance or an operating lease.
To
classify each lease, the Group assesses whether the lease transfers
substantially all of the risks and rewards incidental to the
ownership of the underlying asset. If so, then the lease is
classified as a finance lease. Otherwise, it is classified as an
operating lease. As part of the assessment, the Group considers
certain indicators such as whether the lease is for the major part
of the economic life of the asset.
At the
commencement date of a finance lease, as a lessor, the Group
recognizes assets held under a finance lease in its statement of
financial position and presents them as a receivable at an amount
equal to the net investment in the lease.
At the
commencement date of an operating lease, as a lessor, the Group
recognizes lease payments received under an operating lease in the
consolidated income statement under the line "Other operating
income" on a straight-line basis.
3.13. Property and equipment
These
assets are measured at cost less accumulated depreciation and
accumulated impairment losses, if any.
Subsequent
expenditure is capitalized only if it is probable that the future
economic benefits associated with the expenditure will flow to the
Group. Ongoing repairs and maintenance are expensed as
incurred.
20
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
Depreciation
is calculated on a straight-line basis, using annual rates
sufficient to extinguish the value of the assets at the end of
their estimated useful life. Land and works in progress are not
depreciated.
Below
is a detail of the useful life of each of the items of Property and
Equipment:
|
Item
|
Useful life (in years)
|
|
- Real
estate
|
50
|
|
-
Furniture and fixtures
|
10
|
|
-
Machinery and equipment
|
Machinery:
5
Equipment:
3
|
|
-
Vehicles
|
5
|
|
-
Miscellaneous assets
|
5
|
Property
and equipment residual values, useful lives and depreciation
methods are reviewed and adjusted, as needed, at each year-end or
when indicators of impairment exist.
The
carrying amount of property and equipment is immediately reduced to
its recoverable value when the carrying amount exceeds the
estimated recoverable value.
Gains
and losses from the disposal of items of property and equipment are
calculated by comparing the proceeds from the disposal to the
carrying amount of the respective asset and are recognized in the
consolidated statement of income.
3.14. Investment property
Investment
property is initially measured at cost and subsequently at fair
value with any change therein recognized in profit or loss within
Operating income or expense, as applicable.
Investment
properties are not depreciated. Fair value is based on appraisals
carried out by accredited independent appraisers highly experienced
in the location and category of the real estate.
Any
gain or loss on disposal of investment property, calculated as the
difference between the net proceeds from disposal and the carrying
amount of the item, is recognized in profit or loss.
When
the use of a property changes such that it is reclassified as
property and equipment, its fair value at the date of
reclassification becomes its cost of subsequent
accounting.
3.15. Intangible assets
Acquired Licenses and software
Licenses
and software acquired are measured at cost net of accumulated
amortization and accumulated impairment losses, if any.
Amortization is calculated based on the straight-line method during
the term of the license / software, which does not exceed 5
years.
Internally developed software
Expenditure
on internally developed software is recognized as an asset when the
Group is able to demonstrate that the product is technically and
commercially feasible, its intention and ability to complete the
development and use the software in a manner that will generate
future economic benefits, and that it can reliably measure the
costs to complete the development. The capitalized costs of
internally developed software include all costs directly
attributable to developing the software. Internally developed
software is stated at capitalized costs less accumulated
amortization and any accumulated impairment losses. Amortization is
determined on a straight-line basis during the estimated useful
life, which does not exceed five years.
Costs
related to the maintenance of software are recognized as expense
when incurred.
3.16. Impairment of non-financial assets
At each
reporting date, the Group reviews the carrying amounts of its
non-financial assets (other than investment properties and deferred
tax assets) to determine whether there is any indication of
impairment. If any such indication exists, then the asset’s
recoverable amount is estimated. Additionally, non-financial assets
with indefinite useful life are tested for impairment on an annual
basis.
For
impairment testing, assets are grouped together into the smallest
group of assets that generates cash inflows from continuing use
that is largely independent of the cash inflows of other assets or
cash generating units (CGUs).
21
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
The
recoverable amount of an asset or CGU is greater than its value in
use and its fair value less costs of sell. Value in use is based on
the estimated future cash flows, discounted to their present value
using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to
the asset or CGU.
An
impairment loss is recognized when the carrying amount of an asset
or CGU exceeds its recoverable amount.
3.17. Financial liabilities at fair value through profit or
loss
Debt securities received for reverse repurchases transactions are
not recognized in the consolidated statement of financial position.
However, in case the Group sells those securities, the related
liability is recognized under the caption “Short positions in
securities”.
Derivatives held for trading and for risk management purposes are
measured at fair value through profit or loss.
3.18. Financial liabilities at amortized cost
Loans and other financing arrangements, debt securities
issued and subordinated liabilities are the Group’s sources
of debt funding. They are initially recognized at fair value plus
incremental direct transaction costs, and subsequently at their
amortized cost under the effective interest method.
Securities are sold subject to a commitment to repurchase them at a
predetermined price (“repurchase transactions”), they
remain on the consolidated statement of financial position included
in “Financial assets pledged as collateral” and a
liability is recorded in “Repurchase transactions” line
for the consideration received. The difference between the sale and
repurchase price is treated as interest and recognized in net
interest income over the life of the agreement.
In case the Group buys back its own debt, such debt is derecognized
from the consolidated financial statements and the difference
between the book value of the financial liability and the amount
paid is recognized as financial income or expense.
Financial
guarantees are contracts pursuant to which the Group is required to
make specified payments to reimburse the holder for a loss incurred
due to a specified debtor's failure to honor its payment
obligations in accordance with the contractual terms of a debt
instrument.
Financial guarantees issued or commitments to provide a loan at a
below-market interest rate are initially measured at fair value.
Subsequently, they are measured at the higher of the ECL and the
amount initially recognized less, when appropriate, the recognized
cumulative amount of fee income. Other loan commitments issued are
measured at the sum of the ECL and the amount of fees received,
less the cumulative amount of income recognized.
3.19. Other non-financial liabilities
Employee benefits
Short-term
employee benefits are recognized in profit or loss when the
employee provides the related service. A liability is recognized
for the expected amount to be paid if the Group has a present legal
or constructive obligation to pay this amount as a result of past
service provided by the personnel and the obligation can be
estimated reliably.
Obligations
related to contributions to defined contribution plans are
recognized in profit or loss as the employee provides the related
service and are presented as Social security charges.
Employment
termination benefits are recognized when the Group can no longer
withdraw the offer related to such benefits.
Taxes payable
Taxes
payable includes national, provincial and local taxes and other
levies, which are recognized in accordance with IFRIC 21
Levies.
Customer loyalty program
Liabilities for the customer loyalty program are measured at
estimated fair value, considering an expected redemption rate
determined on the basis of statistics, considering historical
information available.
Miscellaneous accounts payable
Miscellaneous accounts payable are recognized when the counterparty
has fulfilled its contractual obligations and are measured at
amortized cost.
22
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
3.20. Provisions and Contingencies
The Group recognizes a provision when the Group has a current
obligation (legal or constructive) as a result of a past event; it
is probable (i.e., more likely than not) that an outflow of
resources embodying future economic benefits will be required to
settle the obligation; and the amount can be reliably
estimated.
The Group is deemed to have a constructive obligation where the
entity has assumed certain responsibilities as a consequence of
past practices or public policies, and as a result, the entity has
created valid expectations in third parties that it will discharge
those responsibilities.
The Group recognizes the following provisions:
|
●
|
For labor, civil and commercial lawsuits: To assess lawsuits
provisions, the existing risks and uncertainties are considered,
taking into consideration the opinion of the Group's external and
internal legal advisors. Based on the analysis carried out, the
Group recognizes a provision for the amount considered as the best
estimate of the potential expense necessary to settle the present
obligation at each reporting date.
|
|
●
|
For miscellaneous risks: These provisions are set up to address
contingencies that may trigger obligations for the Group. In
assessing this provision, the Group considers the opinion of its
legal and other professional advisors, and a provision is
recognized for the best estimate of the potential expense necessary
to settle the present obligation at each reporting
date.
|
Contingencies (that are not more likely than not) are not
recognized.
3.21. Share capital and Inflation adjustment on share
capital
Share capital is presented at nominal value and the related
inflation adjustment is presented under Inflation adjustment on
share capital.
Transaction costs directly attributable to the issuance of ordinary
shares are recognized as a reduction of the contributions received,
net of the related income tax.
Treasury shares are deducted from equity. Gains or losses from
purchase, sale, issue or cancellation are recognized in equity and
do not affect profit or loss.
3.22. Interest income and interest expenses
Interest income and expenses are recognized in respect of all debt
instruments using the effective rate method. The effective interest
rate is the rate that exactly discounts estimated future cash
payments and collections during the expected lifetime of the
financial instrument to the gross carrying amount of the financial
assets; or the amortized cost of the financial
liability.
The calculation of the effective interest rate includes transaction
costs, commissions and other items paid or received that are an
integral part of the effective interest rate. Transaction costs
include incremental costs that are directly attributable to the
acquisition of a financial asset or the issuance of a financial
liability, such as payments received for the preparation and
processing of the documents required to complete the transaction,
and payments received for the extension of credit facilities
expected to be used by the customer.
The ‘amortized cost’ of a financial asset or financial
liability is the amount at which the financial asset or financial
liability is measured on initial recognition minus the principal
repayments, plus or minus the cumulative amortization using the
effective interest method of any difference between that initial
amount and the maturity amount and, for financial assets, adjusted
for any allowance for credit risks.
The ‘gross carrying amount of a financial asset’ is the
amortized cost of a financial asset before adjusting for any
allowance for credit risks.
In calculating interest income and expense, the effective interest
rate is applied to the gross carrying amount of the asset (when the
asset is not credit-impaired) or to the amortized cost of the
liability.
For financial assets that have become credit-impaired subsequent to
initial recognition, interest income is calculated by applying the
effective interest rate to the amortized cost of the financial
asset. If the asset is no longer credit-impaired, then the
calculation of interest income reverts to the gross
basis.
23
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
3.23. Fee and commission income / expenses
Fees and commissions resulting from transactions with customers,
mainly related to maintenance and administration fees on current,
saving accounts, credit cards, securities custody and foreign
exchange transactions, are recognized
|
●
|
at a point in time (in relation to fees for services, fees for
investment funds management, sales commissions), or
|
|
●
|
over the performance obligation period (in relation to annual fee
for credit cards, issuance of financial guarantees).
|
Fees and commissions income on the origination of syndicated loans
are recognized in the Consolidated Statement of Income at the point
in time when the service is performed, to the extent that the Group
does not retain a portion thereof, or such effective rate is
maintained under the same conditions as the other participants.
Commissions and fees income related to negotiations in third
parties’ transactions are not part of the effective rate
either, and they are recognized at the point in time when the
transactions are executed.
The
Bank has a customer loyalty program in place under which customers
earn points on their credit and debit card purchases which may be
subsequently redeemed for products. This program is a separable
performance obligation in the contract with the customer, as a
consequence the Bank recognizes the related expenses as a reduction
commission income. The customer loyalty program obligation is
measured at fair value at the end of each reporting period and is
recognized under the caption Other non-financial
liabilities.
The Bank estimates the fair value of the points awarded to
customers using statistical techniques. The data used for models
include assumptions regarding exchange percentages, the combination
of products that would be available for exchange in the future and
customer preferences.
3.24. Capitalization of borrowing costs
Borrowing costs directly attributable to the construction of an
asset that necessarily takes a substantial period of time to get
ready for use or sale, such as investment property or property and
equipment are capitalized as part of the cost of the asset.
Borrowing costs include interest cost and foreign exchange
differences as they are deemed financial costs adjustments. Other
borrowing costs are recognized as an expense as
incurred.
3.25. Income tax
Income tax expense for the year
comprises current and deferred tax. Income tax is recognized in the
consolidated statement of income, except for items required to be
recognized directly in other comprehensive income or directly in
equity.
Current income tax
Current income tax includes the income tax payable, and any
adjustment to the tax payable related to previous years. The
current amount of tax payable is the best estimate of the amount
that is expected to be paid that reflects uncertainty related to
income taxes, if any. It is measured at the applicable tax rate
enacted or substantially enacted at the reporting date. The Group
periodically assesses the position assumed in tax returns in
connection with circumstances in which the tax laws are subject to
interpretation.
Current tax assets and liabilities are offset only when it is
legally permissible, and it is intended to be settled on a net
basis.
Deferred income tax
Deferred income tax recognizes the tax effect of temporary
differences between the carrying amount of assets and liabilities
and their related tax bases used for tax purposes.
Deferred tax is not recognized for:
|
●
|
Temporary differences on the initial recognition of assets or
liabilities in a transaction that is not a business combination and
at the time of the transaction affects neither accounting nor
taxable profit or loss.
|
|
●
|
Temporary differences related to investments in subsidiaries to the
extent that the Group is able to control the timing of the reversal
of the temporary differences and it is probable that they will not
reverse in the foreseeable future; and
|
|
●
|
Taxable temporary differences arising on the initial recognition of
goodwill.
|
Deferred tax liabilities are recognized for the tax effect of all
taxable temporary differences.
24
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
Deferred tax assets are recognized for the tax effect of deductible
temporary differences and unused tax loss carryforwards to the
extent that it is probable that future taxable profits will be
available against which they can be utilized.
Deferred tax is measured at the tax rates that are expected to be
applied to temporary differences when they reverse, using tax rates
enacted or substantively enacted at the reporting date, and
reflects uncertainty related to income taxes, if there is
any.
The measurement of deferred tax reflects the tax consequences that
would follow from the manner in which the Group expects, at the
reporting date, to recover or settle the carrying amount of its
assets and liabilities. For this purpose, the carrying amount of
investment property measured at fair value is presumed to be
recovered through sale.
Deferred tax assets and liabilities are offset when a legal right
exists to offset current tax assets against current tax liabilities
and the deferred tax assets and the deferred tax liabilities relate
to the same taxable entity.
3.26. Assets and liabilities arising from insurance and reinsurance
contracts
The Group applies IFRS 17 “Insurance contracts”,
since January 1, 2023.
Insurance contracts
An insurance contract is a contract under which the Group (the
insurer) has accepted insurance risk from another party (the
policyholder) by agreeing to compensate the policyholder if a
specified uncertain future event (the insured event) adversely
affects the policyholder.
In making this assessment, all material rights and obligations,
including those arising from laws or regulations, are considered on
a contract-by-contract basis. The Group uses its judgment to assess
whether a contract transfers insurance risk (i.e., whether there is
a scenario with commercial substance in which the Group has the
possibility of a loss on a present value basis) and whether the
insurance risk accepted is significant.
Separation of components
Contracts that have a legal form of insurance but do not transfer
significant insurance risk and expose the Group to financial risks
are classified as financial instruments under IFRS 9. The Group has
assessed whether its contracts accept significant insurance risk
from another party by agreeing to compensate the insurance
policyholder if an uncertain future event occurs that adversely
affects it.
Aggregation level
Insurance contracts are grouped based on the types of products they
include, onerousness of the lines of business and year of
underwriting; since they have similar risks, they are managed
together and no portfolio of contracts may contain contracts issued
more than one year apart.
The Group classifies a portfolio of insurance contracts as onerous
or non-onerous based on the expected profitability at the policy or
contract level at the time of recognition.
Recognition of insurance and reinsurance contracts
Reinsurance contracts are those held under which it transfers
significant insurance risk related to underlying insurance
contracts.
IFRS 17 includes three measurement models, reflecting a different
degree of policyholder involvement in the investment performance or
overall performance of the insurance entity: the General
Measurement Model (GMM, also known as the Building Block Approach
(BBA)), the Variable Fee Approach (VFA) and the Premium Allocation
Approach (PAA). The Group applies PAA since all its insurance
contracts have a remaining coverage liability lower than one
year.
Measurement of Insurance and Reinsurance Contracts
Premium Allocation Approach (PAA)
According to contract terms and evaluations, the Group defined to
apply the simplified approach (PAA) since the remaining coverage
liability of such contracts has a coverage period of one year or
less.
Under the simplified approach, the Group assumes that such
contracts are not onerous at initial recognition, unless facts and
circumstances indicate otherwise. If facts and circumstances
indicate that some contracts are onerous, an additional assessment
is made to distinguish onerous from non-onerous contracts. The
Group assesses the likelihood of changes in the applicable facts
and circumstances in subsequent periods to determine whether the
contracts have a significant possibility of becoming
onerous.
25
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
Under this model, the remaining coverage liability consists of the
premiums as received (understood as written), less the
corresponding insurance acquisition, plus or minus the allocation
to income of the premiums or expected acquisition cash flows,
respectively. The allocation to income is made on a straight-line
basis over the period of coverage of the contract, in the event
that the accrual of income is also straight-line. The Group has
chosen to defer acquisition costs, although there is an option to
recognize such costs as they are incurred.
The Group does not adjust the remaining coverage liability for
insurance contracts issued for the effect of the time value of
money because the insurance premiums expire within the coverage
period of the contracts, which is one year or less.
Groups of contracts measured under the simplified model have an
incurred claims liability calculated based on the General Model
principles. Future cash flows are adjusted for the time value of
money, as most insurance contracts issued by the Group measured
under the PAA typically have a settlement period longer than one
year. In addition, the risk adjustment for non-financial risk is
applied to the present value of estimated future cash flows in
order to reflect the compensation the Group requires for bearing
the uncertainty about the amount and timing of non-financial risk
cash flows as the Group fulfills insurance contracts.
Discount rate
IFRS 17 requires a measurement of the present value of future cash
flows, for which it is necessary to define discount rates that
reflect the time value of money. Without precise guidelines, the
standard refers to bottom-up and top-down approaches,
respectively.
The bottom-up approach is based on a risk-free curve to which an
illiquidity premium is added; the top-down approach is based on a
measure of return on a linked portfolio of assets, from which the
associated credit risk is subtracted.
The Group has defined a methodology for the determination of
discount rates, taking into account the general indications of the
standard. Given the economic environment, the Group has taken as a
general criterion to apply expected inflation rates as a proxy of
expected nominal discount rates.
Risk margin
The risk adjustment for non-financial risk is the compensation the
Group requires for bearing the uncertainty about the amount and
timing of cash flows arising from insurance risk and other
non-financial risks such as lapse risk and expense risk. It
measures the degree of variability of expected future cash flows
and the Group's specific price for assuming that risk and reflects
the Group's degree of risk aversion. The Group currently applies
percentile method to calculate the risk adjustment, consistent with
the general principles of IFRS 17 and market practice.
Reinsurance
In general, the Group values reinsurance contracts under the
Simplified Model, valuing the asset for remaining coverage of
contracts with a coverage period equal to or less than one year, or
in those contracts with a duration of more than one year, but which
are not expected to result in a valuation significantly different
from that of the General Model. This method also includes the asset
for claims incurred.
Insurance service results
Insurance revenue reflects the consideration to which the Group
expects to be entitled in exchange for providing insurance coverage
and other insurance contract services. Insurance service expenses
comprise the cost of claims incurred and other insurance service
expenses incurred, and losses on onerous groups of contracts and
reversals of such losses.
Financial income or financial expense related to the insurance
operation are included “Net interest income/expense” in
the Consolidated statement of income and other comprehensive
income.
3.27. Earnings per share
The Group presents basic and diluted Earnings per share (EPS) data
for its ordinary shares. Basic EPS is calculated by dividing the
Net income for the year attributable to the holders of ordinary
shares of the Bank by weighted average number of ordinary shares
outstanding during the period.
Diluted EPS is determined by adjusting the Net income for the year
attributable to the holders of ordinary shares of the Bank and the
weighted average number of ordinary shares outstanding by the
effects of all dilutive potential ordinary shares.
26
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
3.28. Accounting standards issued but not yet
effective
A
number of new accounting standards and amendments to accounting
standards are effective for annual periods beginning after January
1, 2024 and earlier application is permitted. However, the Group
has not early adopted the new and amended accounting standards in
preparing these consolidated financial statements.
Classification and Measurement of Financial Instruments (Amendments
to IFRS 9 and IFRS 7)
In May 2024, the International Accounting Standards Board (IASB)
issued Amendments to the
classification and Measurement of Financial
Instruments which amended
IFRS 9 and IFRS 7. The requirements will be effective for
annual reporting periods beginning on or after January 1, 2026 with
early application permitted, and are related to:
|
●
|
settling
financial liabilities using electronic payments systems;
and
|
|
●
|
assessing
contractual cash flow characteristics of financial assets,
including those with sustainability-linked features.
|
The
Group is in the process of assessing the impact of the new
amendments.
IFRS 18 Presentation and Disclosures in Financial
Statements
IFRS 18 will replace IAS 1 Presentation of Financial Statements and
applies for annual reporting periods beginning on or after
January 1, 2027. The new standard introduces the following key new
requirements.
|
●
|
Entities
are required to classify all income and expenses into five
categories in the statement of profit or loss, namely the
operating, investing, financing, discontinued operations and income
tax categories. Entities are also required to present a
newly-defined operating profit subtotal. Entities’ new profit
will not change.
|
|
●
|
Management-defined
performance measures (MPMs) are disclosed in a single note in the
financial statements.
|
|
●
|
Enhanced
guidance is provided on how to group information in the financial
statements.
|
In
addition, all entities are required to use the operating profit
subtotal as the starting point for the statement of cash flows when
presenting operating cash flows under the indirect
method.
The
Group is still in the process of assessing the impact of the new
standard, particularly with respect to the structure of the
Group’s statement of profit or loss, the statement of cash
flows and the additional disclosures required for MPMs. The Group
is also assessing the impact on how information is grouped in the
financial statements, including for items currently labelled as
“other”.
Other accounting standards
The Lack of
Exchangeability (Amendments to IAS 21) is not expected to have a significant impact on
the Group’s consolidated financial
statements.
4. USE OF JUDGEMENTS AND
ESTIMATES
For the preparation of these consolidated financial statements,
Management applies its professional judgement and makes estimates
and assumptions that affect the application of the Group’s
accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from
these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to estimates are recognized
prospectively.
4.1. Judgements
Information about judgements made in applying accounting policies
that have the most significant impact on the amounts recognized in
the consolidated financial statements relates to the impairment of
financial assets. The measurement of expected credit losses
requires the use of complex models and significant assumptions
about future economic conditions and credit behavior of a customer
or group of customers. See Notes 3.16 and 8.3.
4.2. Assumptions and estimation uncertainties
The following notes contain information about assumptions and
estimation uncertainties at the reporting date that have a
significant risk of resulting in a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year is included in the following notes:
27
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
●
|
Note 8.2 – Financial instruments: measurement of fair value
of financial instruments with significant unobservable inputs
(instruments in Level 2 and 3 hierarchy).
|
|
●
|
Notes 3.8, 8.3 and 9 – Impairment of financial assets:
determination of inputs into the ECL measurement model, including
key assumptions used in estimating recoverable cash flows and
incorporation of forward-looking information.
|
|
●
|
Notes 12.3 – Investment property: concerning the measurement
of fair values.
|
|
●
|
Note 14 – Income tax - recognition of deferred tax asset:
availability of future taxable profit against which deductible
temporary differences and tax losses carried forward can be
utilized.
|
|
●
|
Note 16 – Provisions - recognition and measurement of
contingencies particularly the provision for lawsuits: key
assumptions about the likelihood and magnitude of an outflow of
resources.
|
4.3. Fair value measurement
Fair value is the price that would be received to sell an asset or
paid to transfer a liability in an orderly transaction between
market participants at the measurement date.
When available, the Group measures the fair value of a financial
instrument using the quoted price in an active market. A market is
considered active if transactions take place with sufficient
frequency and in sufficient volumes to provide pricing information
on an ongoing basis.
If there is no quoted price in an active market, then the Group
uses valuation techniques maximizing the use of relevant market
data and minimizing the use of unobservable inputs. The election of
a valuation technique encompasses all factors market participants
would take into consideration for the purposes of setting the
transaction price.
Fair values are categorized into different levels in the fair value
hierarchy based on the inputs used in the measurement techniques,
as follows:
|
●
|
Level 1: quoted prices in active markets (unadjusted) for identical
assets or liabilities.
|
|
●
|
Level 2: valuation models using observable market data as
significant inputs.
|
|
●
|
Level 3: valuation models using unobservable market data as
significant inputs.
|
5. CASH AND CASH EQUIVALENTS
|
|
12/31/2024
|
12/31/2023
|
|
Cash on hand
|
33,052,372
|
35,588,808
|
|
Financial institutions and correspondents
|
245,857,174
|
179,546,739
|
|
Other
|
3,557
|
969
|
|
Total Cash and cash equivalents
|
278,913,103
|
215,136,516
|
6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT
OR LOSS
6.1. Debt securities
|
|
12/31/2024
|
12/31/2023
|
|
Government
securities
|
1,138,562,082
|
205,136,776
|
|
Corporate
securities
|
158,156
|
77,525,885
|
|
BCRA
bills
|
64,543,151
|
30,664,281
|
|
Total
|
1,203,263,389
|
313,326,942
|
6.2. Derivative instruments
|
|
12/31/2024
|
12/31/2023
|
|
Call
options taken
|
134,350
|
121,480
|
|
Foreign
currency forward transactions to be settled in pesos
|
5,135
|
755,653
|
|
Total
|
139,485
|
877,133
|
28
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
6.3. Other financial assets
|
|
12/31/2024
|
12/31/2023
|
|
Investment
in mutual funds
|
5,698,401
|
20,425,866
|
|
|
5,698,401
|
20,425,866
|
6.4. Financial assets pledge as collateral
'
|
|
12/31/2024
|
12/31/2023
|
|
National Treasury Public Securities
|
185,244,863
|
13,536,438
|
|
Instruments Issued by the BCRA
|
-
|
10,553,426
|
|
Total
|
185,244,863
|
24,089,864
|
6.5. Investment in equity instruments
|
|
12/31/2024
|
12/31/2023
|
|
Listed shares
|
13,173,560
|
10,973,757
|
|
Shares in other companies
|
962,958
|
609,728
|
|
ADRs (American depositary Receipts)
|
2,156,069
|
989,065
|
|
Total
|
16,292,587
|
12,572,550
|
6.6. Fair value hierarchy of financial assets measured at fair
value through profit or loss
|
Instrument portfolio as of 12/31/2024
|
Balance
|
Level 1 FV
|
Level 2 FV
|
Level 3 FV
|
|
Debt securities at fair value through profit or loss
|
1,203,263,389
|
1,033,184,971
|
170,078,418
|
-
|
|
Derivative instruments
|
139,485
|
-
|
139,485
|
-
|
|
Financial assets pledged as collateral
|
185,244,863
|
185,244,863
|
-
|
|
|
Other financial assets
|
5,698,401
|
5,698,401
|
-
|
-
|
|
Investments in equity instruments
|
16,292,587
|
14,917,449
|
1,375,138
|
-
|
|
Total
|
1,410,638,725
|
1,239,045,684
|
171,593,041
|
-
|
|
Instrument portfolio as of
12/31/2023
|
Balance
|
Level 1 FV
|
Level 2 FV
|
Level 3 FV
|
|
Debt securities at fair value through profit or loss
|
313,326,942
|
292,074,823
|
21,252,119
|
-
|
|
Derivative instruments
|
877,133
|
-
|
877,133
|
-
|
|
Financial assets pledged as collateral
|
24,089,864
|
13,536,438
|
10,553,426
|
|
|
Other financial assets
|
20,425,866
|
20,425,866
|
-
|
-
|
|
Investments in equity instruments
|
12,572,550
|
11,598,740
|
973,810
|
-
|
|
Assets
|
371,292,355
|
337,635,867
|
33,656,488
|
-
|
The Group monitors the availability of market information to
evaluate the classification of financial instruments at the
different fair value levels, as well as the resulting determination
of inter-level transfers at the end of each reporting
period.
The
transfers between levels are outlined below:
Transfers from Level 1 to Level 2
The
following instruments measured at fair value were transferred from
Level 1 to Level 2 of the fair value hierarchy:
29
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
|
31/12/2024
|
|
Title of Debt Province of Mendoza due date 21/06/25
|
25,482
|
|
Bono
Rep. Arg. due date 23/05/27
|
1,761,646
|
These
holdings were included in Level 1 as of December 31, 2023. As of
December 31, 2024, fair value was calculated using valuation models
that use market data as significant inputs. As of December 31,
2023, there were no transfers between levels 1, 2 or
3.
7. FINANCIAL ASSETS AT AMORTIZED
COST
7.1. Loans and other financing arrangements
|
|
12/31/2024
|
12/31/2023
|
|
Non-financial public sector
|
2,226
|
275
|
|
Other financial institutions
|
42,429,543
|
8,181,670
|
|
Call
Granted
|
849,834
|
-
|
|
Other
loans to local financial institutions
|
41,579,709
|
8,181,670
|
|
Accrued
interest and adjustments receivable
|
(732,890)
|
(456,728)
|
|
Non-financial private sector and foreign residents
|
644,248,040
|
302,142,228
|
|
Overdraft
facilities
|
24,219,597
|
6,741,448
|
|
Promissory
notes
|
21,398,095
|
20,944,490
|
|
Mortgage
loans
|
131,984,160
|
79,558,685
|
|
Pledge
loans
|
2,797,631
|
34,062
|
|
Consumer
loans
|
65,689,596
|
18,315,422
|
|
Credit
cards
|
190,870,534
|
108,554,027
|
|
Finance
leases
|
1,178,270
|
3,387,692
|
|
Loans
to entity's personnel
|
11,984,848
|
3,310,547
|
|
Unallocated
collections
|
(31,947)
|
(20,531)
|
|
Government securities loans
|
49,128,574
|
25,388,562
|
|
Financing for MSMEs
|
74,492,935
|
23,921,799
|
|
Call
loans to companies
|
19,556,182
|
24,330,039
|
|
Other
|
67,243,993
|
-
|
|
Accrued
interest receivable
|
9,490,665
|
6,694,625
|
|
Allowance
for loan losses
|
(16,264,428)
|
(12,324,014)
|
|
Total
|
686,679,809
|
310,324,173
|
7.2. Debt securities
|
|
12/31/2024
|
12/31/2023
|
|
Government securities
|
197,658,842
|
45,911,960
|
|
Corporate securities
|
24,688,046
|
30,493,509
|
|
Allowance
for credit risks
|
(14,945,512)
|
(4,044,795)
|
|
Total
|
207,401,376
|
72,360,674
|
7.3. Reverse repurchase transactions
|
|
12/31/2024
|
12/31/2023
|
|
Government
securities
|
15,245,679
|
3,094,227
|
|
BCRA
bills
|
-
|
2,065,950,929
|
|
Total
|
15,245,679
|
2,069,045,156
|
The notional values of securities tied to reverse repurchase
transactions follows:
30
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
|
12/31/2024
|
12/31/2023
|
|
Government securities
|
17,471,835
|
3,503,817
|
|
BCRA bills
|
-
|
2,864,749,421
|
|
Total
|
17,471,835
|
2,868,253,238
|
7.4. Financial assets pledge as collateral
|
|
12/31/2024
|
12/31/2023
|
|
National Treasury Public Securities
|
7,195,663
|
1,420,933
|
|
Special guarantee accounts
|
24,682,747
|
8,366,335
|
|
Escrow Deposits
|
8,688,995
|
6,430,877
|
|
Total
|
40,567,405
|
16,218,145
|
7.5. Other financial assets
|
|
12/31/2024
|
12/31/2023
|
|
Receivables
from transactions pending settlement
|
38,175,432
|
45,824,559
|
|
Miscellaneous
receivables
|
|
|
|
Funds
to be offset
|
1,304,064
|
1,504,130
|
|
Other
|
10,293,433
|
8,355,400
|
|
Allowance
for credit risks
|
(633,937)
|
(241,099)
|
|
Total
|
49,138,992
|
55,442,990
|
7.6. Allowance for credit risks
The
Group has recognized allowance for loan losses over financial
assets at amortized cost as follows:
|
|
12/31/2024
|
12/31/2023
|
|
Debt
securities
|
14,945,512
|
4,044,795
|
|
Loans
and other financing arrangements
|
16,264,428
|
12,324,014
|
|
Other
financial assets
|
633,937
|
241,099
|
|
Subtotal
|
31,843,877
|
16,609,908
|
|
Provision for ECL
on unfunded commitments and financial guarantees (Note
17)
|
1,672,123
|
1,178,754
|
|
Total
Allowance for credit risks
|
33,516,000
|
17,788,662
|
Maximum exposure to credit risk
Below is a detail of the credit risk exposure of financial
instruments in respect of which the Group has recognized expected
credit loss allowances. The gross book value of the financial
assets included in the table represents the maximum credit risk
exposure associated with such assets.
31
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
|
12/31/2024
|
||||
|
Consumer Portfolio
|
Stage 1 12 months
|
Stage 2 Lifetime
|
Stage 3 Lifetime
|
Purchased or originated credit-impaired financial
asset
|
Total
|
|
Days in arrears
|
|
|
|
|
|
|
Mortgage loans
|
|
|
|
|
132,189,902
|
|
0
|
117,265,065
|
1,036,755
|
-
|
-
|
118,301,815
|
|
1 – 30
|
8,197,687
|
83,004
|
-
|
-
|
8,280,691
|
|
31 – 90
|
-
|
1,608,971
|
-
|
-
|
1,608,971
|
|
91+
|
-
|
1,212,549
|
-
|
-
|
1,212,549
|
|
Default
|
-
|
-
|
2,785,871
|
-
|
2,785,871
|
|
Consumer loans
|
|
|
|
|
62,542,687
|
|
0
|
53,342,874
|
196,779
|
-
|
426,362
|
53,966,015
|
|
1 – 30
|
3,196,966
|
2,039,022
|
-
|
147,824
|
5,383,812
|
|
31 – 90
|
-
|
1,828,189
|
-
|
101,381
|
1,929,570
|
|
Default
|
-
|
-
|
1,263,290
|
-
|
1,263,290
|
|
Credit cards
|
|
|
|
|
190,870,534
|
|
0
|
181,901,132
|
371,246
|
-
|
-
|
182,272,378
|
|
1 – 30
|
2,812,008
|
1,244,581
|
-
|
-
|
4,056,589
|
|
31 – 90
|
-
|
2,085,347
|
-
|
-
|
2,085,347
|
|
Default
|
-
|
-
|
2,456,220
|
-
|
2,456,220
|
|
Other
|
|
|
|
|
671,497,216
|
|
0
|
664,580,455
|
6,380,612
|
5,402
|
-
|
670,966,469
|
|
1 – 30
|
317,902
|
25,149
|
-
|
-
|
343,051
|
|
31 – 90
|
-
|
16,503
|
-
|
-
|
16,503
|
|
91+
|
-
|
130
|
16,190
|
-
|
16,320
|
|
Default
|
-
|
-
|
154,873
|
-
|
154,873
|
|
Total financial instruments
|
1,031,614,084
|
18,128,837
|
6,681,846
|
675,567
|
1,057,100,334
|
|
Allowance for loan losses
|
(5,059,842)
|
(2,382,475)
|
(4,932,458)
|
(187,413)
|
(12,562,188)
|
|
Financial instruments, net
|
1,026,554,242
|
15,746,362
|
1,749,388
|
488,154
|
1,044,538,146
|
|
|
12/31/2024
|
||||
|
Commercial Portfolio(*)
–
Corporates
|
Stage 1 12 months
|
Stage 2 Lifetime
|
Stage 3 Lifetime
|
Purchased or originated credit-impaired financial
asset
|
Total
|
|
Days in arrears
|
|
|
|
|
|
|
0
|
521,637,573
|
-
|
5,607,128
|
-
|
527,244,701
|
|
1 – 30
|
2,814
|
203
|
1,819,983
|
-
|
1,823,000
|
|
31 – 90
|
-
|
4,342
|
217
|
-
|
4,559
|
|
91+
|
-
|
-
|
2,792,469
|
-
|
2,792,469
|
|
Total financial instruments
|
521,640,387
|
4,545
|
10,219,797
|
-
|
531,864,729
|
|
Allowance for loan losses
|
(16,038,751)
|
(34)
|
(4,436,155)
|
-
|
(20,474,940)
|
|
Financial instruments, net
|
505,601,636
|
4,511
|
5,783,642
|
-
|
511,389,789
|
(*) It includes overdraft facilities, promissory notes, mortgage
loans, pledge loans, finance leases and other.
32
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
|
12/31/2024
|
||||
|
SMEs
Portfolio– Total active
|
Stage 1
12 months
|
Stage 2 Lifetime
|
Stage 3 Lifetime
|
Purchased or originated credit-impaired financial
assets
|
Total
|
|
Days in arrears
|
|
|
|
|
|
|
0
|
68,759,581
|
1,316,093
|
5,618
|
-
|
70,081,292
|
|
1 – 30
|
1,835,949
|
76,645
|
28,725
|
-
|
1,941,319
|
|
31 – 90
|
-
|
29,174
|
765
|
-
|
29,939
|
|
91+
|
-
|
-
|
70,712
|
-
|
70,712
|
|
Total financial instruments
|
70,595,530
|
1,421,912
|
105,820
|
-
|
72,123,262
|
|
Allowance for loan losses
|
(391,717)
|
(23,552)
|
(63,603)
|
-
|
(478,872)
|
|
Financial instruments, net
|
70,203,813
|
1,398,360
|
42,217
|
-
|
71,644,390
|
Collateral and other credit enhancements
Collateral is an instrument by which a borrower (a Group’s
customer) or a third party agrees to make a payment, upon default
of an assumed obligation. The Group accepts collateral as further
assurance of payment when a customer applies for a loan or is
granted a product that requires a high credit rating, which the
customer does not have. The collateral of a transaction is an input
of the Group’s Commercial Portfolio ECL.
The group has prepared two LGD tables according to the
obligor’s segment and type of collateral.
For the Corporate segment, the Group’s collateral is
classified into the following categories:
|
●
|
Type 1 or self-liquidating collateral such as cash and other liquid
assets. A type of collateral which allows access to funds without
the need of intervention from the obligor or otherwise legal
recourse. The recovery rate (1-LGD) associated with this type is
100% the EAD discounted at the effective rate of the transaction by
an average time to recovery. This definition is in line with
BCRA’s Preferred “A” definition of
collateral.
|
|
●
|
Type 2 collateral, which primarily gives a right over real assets
(such as a mortgage) or other assets from a third party. This
definition is mostly in line with BCRA’s Preferred
“B” definition of collateral. The LGD associated with
this type is 10%.
|
|
●
|
Type 3 collateral, which corresponds to collateral of difficult
realization or clean exposures (no collateral whatsoever). The LGD
associated for this type is 45% of EAD.
|
For the SME Segment, the Group’s collateral is classified
into the following categories:
|
●
|
Type 1 or self-liquidating collateral such as cash and other liquid
assets. A type of collateral which allows access to funds without
the need of intervention from the obligor or otherwise legal
recourse. The recovery rate (1-LGD) associated with this type is
100% the EAD discounted at the effective rate of the transaction by
an average time to recovery. This definition is mostly in line with
BCRA’s Preferred “A” definition of
collateral.
|
|
●
|
Type 2 collateral, which primarily gives a right over real assets
(such as a mortgage) or other assets from a third party. The LGD
associated for this type is 10% of EAD.
|
|
●
|
Type 3 collateral, which primarily gives a right over assets from
the obligor or a third party but are deemed to be subject to a
greater uncertainty in recovery as it depends on the continuity of
cashflows from the obligor or the solvency of a third party. The
LGD associated for this type is 80% of EAD.
|
|
●
|
Type 4 collateral, which corresponds to collateral of difficult
realization or clean exposures (no collateral whatsoever). The LGD
associated for this type is 90% of EAD.
|
The Group has a dedicated collateral management area, tasked with
reviewing legal compliance and the appropriate delivery of
collateral, including wording, signatures and powers, as well as
collateral registration in internal systems. The main assets
admitted by the Group as collateral include real estate, vehicles,
sureties, guarantees, liquid funds, stand-by letters of credit, and
reciprocal guarantee companies. Depending on the type of
collateral, guarantors may be individuals or legal entities (for
mortgages, pledges, sureties, guarantees and liquid funds) and
top-tier international financial institutions (for stand-by letters
of credit).
The Group monitors collateral related to financial assets deemed
credit-impaired, since foreclosure of such collateral is more
probable to mitigate potential credit losses.
33
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
Below is a detail of the book value and fair value of the Group's
collateral as of December 31, 2024:
|
Impaired credit
|
Gross exposure
|
Allowance for loan losses
|
Book value
|
Collateral fair value
|
|
Overdraft facilities
|
499,537
|
312,244
|
187,293
|
-
|
|
Promissory notes
|
938
|
750
|
188
|
-
|
|
Mortgage loans
|
2,786,290
|
2,750,718
|
35,572
|
6,002,462
|
|
Consumer loans
|
1,938,857
|
1,019,976
|
918,881
|
-
|
|
Credit cards
|
2,456,220
|
1,194,732
|
1,261,488
|
-
|
|
Finance leases
|
20,876
|
2,088
|
18,788
|
10,352
|
|
Call loan rate to companies
|
4,063,228
|
2,213,488
|
1,849,740
|
-
|
|
Other
|
5,917,084
|
2,125,633
|
3,791,451
|
53,100
|
|
Total impaired credit
|
17,683,030
|
9,619,629
|
8,063,401
|
6,065,914
|
Allowance for credit risk
The
allowance for credit risk recognized for the year is affected by
several factors, which may be classified into two major
groups:
Changes
in exposure within each Stage:
|
●
|
Due to
the origination of new financial instruments, as well as financial
instruments derecognized during the year (credit repayment and
termination of checking account and card services), resulting in
the recognition of increases in or reversals of the allowance
during the period/year;
|
|
●
|
Exposure
adjustments due to an increase in UVA or in the peso-dollar
exchange rate;
|
|
●
|
Impacts
due to the time elapsed as a consequence of present value
adjustments;
|
|
●
|
Transfers
to and from Stages due to changes in the perceived credit risk of
the instruments and the ensuing "increase" (or "decrease") in
12-month and Lifetime expected credit losses
(“ECL”).
|
Changes
in the calculation methodology and parameters during the year,
resulting from the periodical adjustment of inputs and maintenance
of models:
|
●
|
Impacts
on ECL measurement due to changes in models and
assumptions
|
|
●
|
Changes
in ECLs attributable to the adjustment to the model main
parameters:
|
|
o
|
Probability
of Default (“PD”)
|
|
o
|
Loss
given default (“LGD”)
|
|
o
|
Exposure
at default (“EAD” / Credit conversion factor
(“CCF”)
|
|
●
|
Adjustments
to the macroeconomic projections used in forward-looking
models.
|
The
following table shows the changes observed in the allowances for
loan losses from December 31, 2023 to December 31,
2024:
34
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
|
Stage 1
|
Stage 2
|
Stage 3
|
|
|
|
Consumer Portfolio
|
12-month ECLs
|
Lifetime ECLs
|
Lifetime ECLs
|
Purchased or originated credit- impaired financial
assets
|
Total
|
|
Allowance for credit risk as of 12/31/2023
|
3,211,393
|
1,306,762
|
1,900,149
|
86,805
|
6,505,109
|
|
Inflation adjustment
|
3,781,853
|
1,538,890
|
2,237,684
|
102,225
|
7,660,652
|
|
New originated or purchased financial instruments during the
year
|
1,630,446
|
681,804
|
1,035,665
|
65,457
|
3,413,372
|
|
Changes in PDs/LGDs/EADs
|
(2,240,847)
|
(1,821,935)
|
(777,147)
|
37,662
|
(4,802,267)
|
|
Changes in the model assumptions and methodology
|
-
|
-
|
-
|
-
|
-
|
|
Foreign currency differences and other changes
|
138,857
|
533,182
|
1,033,471
|
7,191
|
1,712,701
|
|
Inter-stage transfers
|
|
|
|
|
|
|
From
Stage 1 to Stage 2
|
-
|
1,089,899
|
-
|
-
|
1,089,899
|
|
From
Stage 1 to Stage 3
|
-
|
-
|
1,199,973
|
-
|
1,199,973
|
|
From
Stage 2 to Stage 1
|
(866,842)
|
-
|
-
|
-
|
(866,842)
|
|
From
Stage 3 to Stage 1
|
(255,172)
|
-
|
-
|
-
|
(255,172)
|
|
From
Stage 2 to Stage 3
|
-
|
-
|
243,931
|
-
|
243,931
|
|
From
Stage 3 to Stage 2
|
-
|
(176,031)
|
-
|
-
|
(176,031)
|
|
Net amount recognized in profit or loss
|
2,188,295
|
1,845,809
|
4,973,577
|
212,535
|
9,220,216
|
|
Derecognitions
|
(339,846)
|
(770,096)
|
(1,941,268)
|
(111,927)
|
(3,163,137)
|
|
Allowance for credit risk as of 12/31/2024
|
5,059,842
|
2,382,475
|
4,932,458
|
187,413
|
12,562,188
|
|
|
Stage 1
|
Stage 2
|
Stage 3
|
|
|
|
Corporate Portfolio
|
12-month ECLs
|
Lifetime ECLs
|
Lifetime ECLs
|
Purchased or originated credit impaired financial
assets
|
Total
|
|
Allowance for credit risk as of 12/31/2023
|
1,052,202
|
3
|
384,234
|
-
|
1,436,439
|
|
Inflation adjustment
|
1,239,111
|
4
|
452,488
|
-
|
1,691,603
|
|
New originated or purchased financial instruments during the
year
|
1,820,120
|
6,857
|
22,171
|
-
|
1,849,148
|
|
Changes in PDs/LGDs/EADs
|
12,056,140
|
(6,828)
|
904,204
|
-
|
12,953,516
|
|
Changes in the model assumptions and methodology
|
-
|
-
|
-
|
-
|
-
|
|
Foreign currency differences and other changes
|
(64,295)
|
(2)
|
(2,827)
|
-
|
(67,124)
|
|
Inter-stage transfers
|
|
|
|
|
|
|
From Stage 1 to Stage 3
|
-
|
-
|
2,675,885
|
-
|
2,675,885
|
|
From Stage 2 to Stage 1
|
(1)
|
-
|
-
|
-
|
(1)
|
|
From Stage 3 to Stage 1
|
(52,354)
|
-
|
-
|
-
|
(52,354)
|
|
Net amount recognized in profit or loss
|
14,998,721
|
31
|
4,051,921
|
-
|
19,050,673
|
|
Derecognitions
|
(12,172)
|
-
|
-
|
-
|
(12,172)
|
|
Allowance for credit risk as of 12/31/2024
|
16,038,751
|
34
|
4,436,155
|
-
|
20,474,940
|
35
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
|
Stage 1
|
Stage 2
|
Stage 3
|
|
|
|
SMEs Portfolio
|
12-month ECLs
|
Lifetime ECLs
|
Lifetime ECLs
|
Purchased or originated impaired credits
|
Total
|
|
Allowance for credit risk as of 12/31/2023
|
185,306
|
227
|
41,714
|
-
|
227,247
|
|
Inflation adjustment
|
218,223
|
268
|
49,123
|
-
|
267,614
|
|
New originated or purchased financial instruments during the
year
|
1,202,666
|
17,809
|
554,984
|
-
|
1,775,459
|
|
Changes in PDs/LGDs/EADs
|
(1,191,946)
|
4,244
|
(590,796)
|
-
|
(1,778,498)
|
|
Changes in the model assumptions and methodology
|
-
|
-
|
-
|
-
|
-
|
|
Foreign currency differences and other changes
|
(22,224)
|
(530)
|
(39)
|
-
|
(22,793)
|
|
Inter-stage transfers
|
|
|
|
|
|
|
From
Stage 1 to Stage 2
|
-
|
1,739
|
-
|
-
|
1,739
|
|
From
Stage 1 to Stage 3
|
-
|
-
|
5,806
|
-
|
5,806
|
|
From
Stage 2 to Stage 1
|
(263)
|
-
|
-
|
-
|
(263)
|
|
From
Stage 3 to Stage 1
|
(45)
|
-
|
-
|
-
|
(45)
|
|
From
Stage 2 to Stage 3
|
-
|
-
|
2,811
|
-
|
2,811
|
|
From
Stage 3 to Stage 2
|
-
|
(205)
|
-
|
-
|
(205)
|
|
Net amount recognized in profit or loss
|
206,411
|
23,325
|
21,889
|
-
|
251,625
|
|
Derecognitions
|
-
|
-
|
-
|
-
|
-
|
|
Allowance for credit risk as of 12/31/2024
|
391,717
|
23,552
|
63,603
|
-
|
478,872
|
36
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
The
following table shows the changes observed in the allowances for
loan losses under the IFRS approach from December 31, 2022 to
December 31, 2023:
|
|
Stage 1
|
Stage 2
|
Stage 3
|
|
|
|
Consumer Portfolio
|
12-month ECLs
|
Lifetime ECLs
|
Lifetime ECLs
|
Purchased or originated credit- impaired financial
assets
|
Total
|
|
Allowance for credit risk as of 12/31/2022
|
2,788,376
|
494,473
|
638,657
|
128,925
|
4,050,431
|
|
Inflation adjustment
|
16,120,510
|
2,858,710
|
3,692,284
|
745,357
|
23,416,861
|
|
New originated or purchased financial instruments during the
year
|
643,045
|
524,736
|
713,951
|
49,604
|
1,931,336
|
|
Changes in PDs/LGDs/EADs
|
(11,383,945)
|
(2,417,558)
|
(1,501,290)
|
(392,974)
|
(15,695,767)
|
|
Changes in the model assumptions and methodology
|
-
|
- |
-
|
-
|
-
|
|
Foreign currency differences and other changes
|
178,675
|
526,927
|
631,155
|
18,647
|
1,355,404
|
|
Inter-stage transfers
|
|
|
|
|
|
|
From
Stage 1 to Stage 2
|
-
|
1,585,210
|
-
|
-
|
1,585,210
|
|
From
Stage 1 to Stage 3
|
-
|
-
|
977,709
|
-
|
977,709
|
|
From
Stage 2 to Stage 1
|
(578,885)
|
-
|
-
|
-
|
(578,885)
|
|
From
Stage 3 to Stage 1
|
(411,168)
|
-
|
-
|
-
|
(411,168)
|
|
From
Stage 2 to Stage 3
|
-
|
-
|
419,121
|
-
|
419,121
|
|
From
Stage 3 to Stage 2
|
-
|
(40,040)
|
-
|
-
|
(40,040)
|
|
Net amount recognized in profit or loss
|
4,568,232
|
3,037,985
|
4,932,930
|
420,634
|
12,959,781
|
|
Derecognitions
|
(363,365)
|
(686,803)
|
(1,433,754)
|
(360,529)
|
(2,844,451)
|
|
Allowance for credit risk as of 12/31/2023
|
6,993,243
|
2,845,655
|
4,137,833
|
189,030
|
14,165,761
|
|
|
Stage 1
|
Stage 2
|
Stage 3
|
|
|
|
Corporate Portfolio
|
12-month ECLs
|
Lifetime ECLs
|
Lifetime ECLs
|
Purchased or originated credit impaired financial
assets
|
Total
|
|
Allowance for credit risk as of 12/31/2022
|
244,492
|
813
|
435,009
|
-
|
680,314
|
|
Inflation adjustment
|
1,413,488
|
4,700
|
2,514,929
|
-
|
3,933,117
|
|
New originated or purchased financial instruments during the
year
|
395,681
|
3,205
|
1,102
|
-
|
399,988
|
|
Changes in PDs/LGDs/EADs
|
2,674,641
|
(4,393)
|
1,836,404
|
-
|
4,506,652
|
|
Changes in the model assumptions and methodology
|
-
|
-
|
-
|
-
|
-
|
|
Foreign currency differences and other changes
|
(2,436,980)
|
(7,667)
|
(20,857)
|
-
|
(2,465,504)
|
|
Inter-stage transfers
|
|
|
|
|
|
|
From Stage 1 to Stage 2
|
-
|
3,349
|
-
|
-
|
3,349
|
|
From Stage 1 to Stage 3
|
-
|
-
|
240
|
-
|
240
|
|
From Stage 3 to Stage 1
|
(9)
|
-
|
-
|
-
|
(9)
|
|
From Stage 2 to Stage 3
|
-
|
-
|
41
|
-
|
41
|
|
Net amount recognized in profit or loss
|
2,046,821
|
(806)
|
4,331,859
|
-
|
6,377,874
|
|
Derecognitions
|
-
|
-
|
(3,930,146)
|
-
|
(3,930,146)
|
|
Allowance for credit risk as of 12/31/2023
|
2,291,313
|
7
|
836,722
|
-
|
3,128,042
|
37
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
|
Stage 1
|
Stage 2
|
Stage 3
|
|
|
|
SMEs Portfolio
|
12-month ECLs
|
Lifetime ECLs
|
Lifetime ECLs
|
Purchased or originated impaired credits
|
Total
|
|
Allowance for credit risk as of 12/31/2022
|
123,800
|
118
|
52,970
|
-
|
176,888
|
|
Inflation adjustment
|
715,728
|
682
|
306,237
|
-
|
1,022,647
|
|
New originated or purchased financial instruments during the
year
|
305,150
|
124
|
76,111
|
-
|
381,385
|
|
Changes in PDs/LGDs/EADs
|
5,388,188
|
8,287
|
(325,202)
|
-
|
5,071,273
|
|
Changes in the model assumptions and methodology
|
-
|
-
|
-
|
-
|
-
|
|
Foreign currency differences and other changes
|
(6,129,332)
|
(8,582)
|
(21,208)
|
-
|
(6,159,122)
|
|
Inter-stage transfers
|
|
|
|
|
|
|
From
Stage 1 to Stage 2
|
-
|
159
|
-
|
-
|
159
|
|
From
Stage 1 to Stage 3
|
-
|
-
|
1,821
|
-
|
1,821
|
|
From
Stage 2 to Stage 1
|
52
|
-
|
-
|
-
|
52
|
|
From
Stage 3 to Stage 1
|
(57)
|
-
|
-
|
-
|
(57)
|
|
From
Stage 2 to Stage 3
|
-
|
-
|
109
|
-
|
109
|
|
From
Stage 3 to Stage 2
|
-
|
(294)
|
-
|
-
|
(294)
|
|
Net amount recognized in profit or loss
|
279,729
|
376
|
37,868
|
-
|
317,973
|
|
Derecognitions
|
-
|
-
|
-
|
-
|
-
|
|
Allowance for credit risk as of 12/31/2023
|
403,529
|
494
|
90,838
|
-
|
494,861
|
|
|
12/31/2024
|
12/31/2023
|
|
Allowance
for credit risk
|
|
|
|
Consumer
portfolio
|
12,562,188
|
14,165,761
|
|
Corporate
portfolio
|
20,474,940
|
3,128,042
|
|
SMEs
Portfolio
|
478,872
|
494,861
|
|
Total
|
33,516,000
|
17.788,664
|
|
|
12/31/2024
|
12/31/2023
|
|
Amounts
recognized in profit or loss
|
|
|
|
Consumer
portfolio
|
9,220,216
|
12,959,781
|
|
Corporate
portfolio
|
19,050,673
|
6,377,874
|
|
SMEs
Portfolio
|
251,625
|
317,973
|
|
Total
|
28,522,514
|
19,655,628
|
|
|
|
|
|
Impairment of
financial assets
|
31,823,476
|
10,698,834
|
|
Reversal of
allowances (Note 27)
|
(3,761,874)
|
(1,472,660)
|
|
Charge for ECL on
unfunded commitments and financial guarantees (Note
30)
|
2,506,267
|
1,365,000
|
|
Foreign
currency differences and other changes
|
2,045,355
|
9,064,454
|
|
Total
|
28,522,514
|
19,655,628
|
Exposure to credit risk
The
exposure to credit risk, measured under IFRS 9 as of December 31,
2024 and 2023 is as follows:
|
|
Stage 1
|
Stage 2
|
Stage 3
|
|
|
|
Consumer Portfolio
|
12-month ECLs
|
Lifetime ECLs
|
Lifetime ECLs
|
Purchased or originated credit- impaired financial
assets
|
Total
|
|
Balance as of 12/31/2023
|
226,361,107
|
5,218,657
|
2,251,529
|
368,999
|
234,200,292
|
|
Inflation adjustment
|
266,571,051
|
6,145,680
|
2,651,482
|
434,547
|
275,802,760
|
|
New originated or purchased financial instruments during the
year
|
197,152,846
|
4,732,904
|
1,763,262
|
204,521
|
203,853,533
|
|
Changes without inter-stage transfers
|
273,646,979
|
(6,520,028)
|
(2,037,513)
|
(280,897)
|
264,808,541
|
|
Foreign currency differences and other changes
|
62,607,006
|
2,386,558
|
2,133,665
|
60,324
|
67,187,553
|
|
Inter-stage transfers
|
|
|
|
|
|
|
From
Stage 1 to Stage 2
|
-
|
6,789,937
|
-
|
-
|
6,789,937
|
|
From
Stage 1 to Stage 3
|
-
|
-
|
1,310,454
|
-
|
1,310,454
|
|
From
Stage 2 to Stage 1
|
5,450,235
|
-
|
-
|
-
|
5,450,235
|
|
From
Stage 3 to Stage 1
|
164,706
|
-
|
-
|
-
|
164,706
|
|
From
Stage 2 to Stage 3
|
-
|
-
|
550,235
|
-
|
550,235
|
|
From
Stage 3 to Stage 2
|
-
|
145,225
|
-
|
-
|
145,225
|
|
Reimbursement and derecognition
|
(339,846)
|
(770,096)
|
(1,941,268)
|
(111,927)
|
(3,163,137)
|
|
Balance as of 12/31/2024
|
1,031,614,084
|
18,128,837
|
6,681,846
|
675,567
|
1,057,100,334
|
38
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
|
Stage 1
|
Stage 2
|
Stage 3
|
|
|
|
Corporate Portfolio
|
12-month ECLs
|
Lifetime ECLs
|
Lifetime ECLs
|
Purchased or originated credit impaired financial
assets
|
Total
|
|
Balance as of 12/31/2023
|
115,103,820
|
181
|
2,359,828
|
-
|
117,463,829
|
|
Inflation adjustment
|
135,550,434
|
213
|
2,779,019
|
-
|
138,329,666
|
|
New originated or purchased financial instruments during the
year
|
138,151,067
|
4,466
|
3,405,967
|
-
|
141,561,500
|
|
Changes without inter-stage transfers
|
125,866,183
|
(304)
|
5,329,462
|
-
|
131,195,341
|
|
Foreign currency differences and other changes
|
6,862,225
|
(78)
|
(1,337,904)
|
-
|
5,524,243
|
|
Inter-stage transfers
|
|
|
|
|
|
|
From
Stage 1 to Stage 2
|
-
|
67
|
-
|
-
|
67
|
|
From
Stage 1 to Stage 3
|
-
|
-
|
(2,316,575)
|
-
|
(2,316,575)
|
|
From
Stage 2 to Stage 1
|
(3)
|
-
|
-
|
-
|
(3)
|
|
From
Stage 3 to Stage 1
|
118,833
|
-
|
-
|
-
|
118,833
|
|
Reimbursement and derecognitions
|
(12,172)
|
-
|
-
|
-
|
(12,172)
|
|
Balance as of 12/31/2024
|
521,640,387
|
4,545
|
10,219,797
|
-
|
531,864,729
|
|
|
Stage 1
|
Stage 2
|
Stage 3
|
|
|
|
SMEs Portfolio
|
12-month ECLs
|
Lifetime ECLs
|
Lifetime ECLs
|
Purchased or originated impaired credits
|
Total
|
|
Balance as of 12/31/2023
|
17,717,460
|
21,611
|
53,410
|
-
|
17,792,481
|
|
Inflation adjustment
|
20,864,724
|
25,450
|
62,897
|
-
|
20,953,071
|
|
New originated or purchased financial instruments during the
year
|
54,445,265
|
1,312,771
|
39,147
|
-
|
55,797,183
|
|
Changes without inter-stage transfers
|
(11,260,234)
|
(41,905)
|
(47,573)
|
-
|
(11,349,712)
|
|
Foreign currency differences and other changes
|
(11,181,776)
|
(2,030)
|
3,198
|
-
|
(11,180,608)
|
|
Inter-stage transfers
|
|
|
|
|
|
|
From
Stage 1 to Stage 2
|
-
|
105,893
|
-
|
-
|
105,893
|
|
From
Stage 1 to Stage 3
|
-
|
-
|
(8,095)
|
-
|
(8,095)
|
|
From
Stage 2 to Stage 1
|
10,192
|
-
|
-
|
-
|
10,192
|
|
From
Stage 3 to Stage 1
|
(101)
|
-
|
-
|
-
|
(101)
|
|
From
Stage 2 to Stage 3
|
-
|
-
|
2,836
|
-
|
2,836
|
|
From
Stage 3 to Stage 2
|
-
|
122
|
-
|
-
|
122
|
|
Balance as of 12/31/2024
|
70,595,530
|
1,421,912
|
105,820
|
-
|
72,123,262
|
The
exposure to credit risk, measured under IFRS 9 as of December 31,
2022 and 2023 is as follows:
39
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
|
Stage 1
|
Stage 2
|
Stage 3
|
|
|
|
Consumer Portfolio
|
12-month ECLs
|
Lifetime ECLs
|
Lifetime ECLs
|
Purchased or originated credit- impaired financial
assets
|
Total
|
|
Balance as of 12/31/2022
|
85,689,991
|
2,124,197
|
786,510
|
536,404
|
89,137,102
|
|
Inflation adjustment
|
495,401,757
|
12,280,675
|
4,547,071
|
3,101,126
|
515,330,629
|
|
New originated or purchased financial instruments during the
year
|
44,576,957
|
1,765,682
|
1,025,266
|
181,946
|
47,549,851
|
|
Changes without inter-stage transfers
|
(185,219,003)
|
(9,683,569)
|
(2,467,954)
|
(2,793,810)
|
(200,164,336)
|
|
Foreign currency differences and other changes
|
50,735,090
|
1,956,112
|
1,261,363
|
138,408
|
54,090,973
|
|
Inter-stage transfers
|
|
|
|
|
|
|
From
Stage 1 to Stage 2
|
-
|
3,554,865
|
-
|
-
|
3,554,865
|
|
From
Stage 1 to Stage 3
|
-
|
-
|
633,912
|
-
|
633,912
|
|
From
Stage 2 to Stage 1
|
1,857,735
|
-
|
-
|
-
|
1,857,735
|
|
From
Stage 3 to Stage 1
|
252,996
|
-
|
-
|
-
|
252,996
|
|
From
Stage 2 to Stage 3
|
-
|
-
|
550,598
|
-
|
550,598
|
|
From
Stage 3 to Stage 2
|
-
|
53,178
|
-
|
-
|
53,178
|
|
Reimbursement and derecognitions
|
(363,365)
|
(686,803)
|
(1,433,754)
|
(360,529)
|
(2,844,451)
|
|
Balance as of 12/31/2023
|
492,932,158
|
11,364,337
|
4,903,012
|
803,545
|
510,003,052
|
|
|
Stage 1
|
Stage 2
|
Stage 3
|
|
|
|
Corporate Portfolio
|
12-month ECLs
|
Lifetime ECLs
|
Lifetime ECLs
|
Purchased or originated credit impaired financial
assets
|
Total
|
|
Balance as of 12/31/2022
|
7,747,515
|
73,807
|
2,251,130
|
-
|
10,072,452
|
|
Inflation adjustment
|
44,790,910
|
426,701
|
13,014,517
|
-
|
58,232,129
|
|
New originated or purchased financial instruments during the
year
|
36,016,129
|
303
|
28,183
|
-
|
36,044,615
|
|
Changes without inter-stage transfers
|
101,619,288
|
(500,508)
|
(25,980,029)
|
-
|
75,138,750
|
|
Foreign currency differences and other changes
|
60,061,547
|
-
|
19,754,497
|
-
|
79,816,044
|
|
Inter-stage transfers
|
|
|
|
|
|
|
From
Stage 1 to Stage 2
|
-
|
91
|
-
|
-
|
91
|
|
From
Stage 1 to Stage 3
|
-
|
-
|
518
|
-
|
518
|
|
From
Stage 2 to Stage 1
|
418,853
|
-
|
-
|
-
|
418,853
|
|
From
Stage 3 to Stage 1
|
15
|
-
|
-
|
-
|
15
|
|
From
Stage 2 to Stage 3
|
-
|
-
|
176
|
-
|
176
|
|
Reimbursement and derecognitions
|
-
|
-
|
(3,930,146)
|
-
|
(3,930,146)
|
|
Balance as of 12/31/2023
|
250,654,258
|
394
|
5,138,847
|
-
|
255,793,499
|
40
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
|
Stage 1
|
Stage 2
|
Stage 3
|
|
|
|
SMEs Portfolio
|
12-month ECLs
|
Lifetime ECLs
|
Lifetime ECLs
|
Purchased or originated impaired credits
|
Total
|
|
Balance as of 12/31/2022
|
13,102,330
|
26,720
|
68,789
|
|
13,197,839
|
|
Inflation adjustment
|
75,748,839
|
154,477
|
397,692
|
-
|
76,301,007
|
|
New originated or purchased financial instruments during the
year
|
27,202,852
|
4,277
|
84,569
|
-
|
27,291,697
|
|
Changes without inter-stage transfers
|
(77,485,346)
|
(180,306)
|
(713,477)
|
-
|
(78,379,130)
|
|
Foreign currency differences and other changes
|
-
|
-
|
267,085
|
-
|
267,085
|
|
Inter-stage transfers
|
|
|
|
|
|
|
From
Stage 1 to Stage 2
|
-
|
41,556
|
-
|
-
|
41,556
|
|
From
Stage 1 to Stage 3
|
-
|
-
|
11,531
|
-
|
11,531
|
|
From
Stage 2 to Stage 1
|
13,447
|
-
|
-
|
-
|
13,447
|
|
From
Stage 3 to Stage 1
|
63
|
-
|
-
|
-
|
63
|
|
From
Stage 2 to Stage 3
|
-
|
-
|
120
|
-
|
120
|
|
From
Stage 3 to Stage 2
|
-
|
338
|
-
|
-
|
338
|
|
Balance as of 12/31/2023
|
38,582,184
|
47,061
|
116,307
|
-
|
38,745,552
|
7.7 Fair value of financial assets at amortized cost
|
Instrument portfolio as of 12/31/2024
|
Balance
|
Total FV
|
Level 1 FV
|
Level 2 FV
|
Level 3 FV
|
|
Assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
278,913,103
|
(*)
|
-
|
-
|
-
|
|
Loans and other financing arrangements
|
686,679,809
|
684,395,896
|
-
|
-
|
684,395,896(1)
|
|
Debt securities
|
207,401,376
|
212,638,077
|
8,902,491
|
203,735,586
|
-
|
|
Reverse repurchase transactions
|
15,245,679
|
(*)
|
-
|
-
|
-
|
|
Financial
assets pledged as collateral
|
40,567,405
|
40,518,330
|
40,518,330
|
-
|
-
|
|
Other financial assets
|
51,540,705
|
(*)
|
-
|
-
|
-
|
(*) It
is considered that the fair value of instruments is similar to
their book value.
(1)
Determined by applying the income approach, considering market
interest rates for mortgages (between 29% and 33% depending on the
duration), personal loans (between 66% and 104% depending on the
duration) (credit cards 84%), SME and corporate (34% and
44%).
|
Instrument portfolio as of 12/31/2023
|
Balance
|
Total FV
|
Level 1 FV
|
Level 2 FV
|
Level 3 FV
|
|
Assets
|
|
|
|
|
|
|
Cash and cash equivalents
|
215,136,516
|
(*)
|
-
|
-
|
-
|
|
Loans and other financing arrangements
|
310,324,173
|
305,047,754
|
-
|
-
|
305,047,754(1)
|
|
Debt securities
|
72,360,674
|
69,335,107
|
8,671,689
|
60,663,418
|
-
|
|
Reverse repurchase transactions
|
2,069,045,156
|
(*)
|
-
|
-
|
-
|
|
Financial
assets pledged as collateral
|
16,218,145
|
15,893,322
|
15,893,322
|
-
|
-
|
|
Other financial assets
|
57,451,657
|
(*)
|
-
|
-
|
-
|
(*) It
is considered that the fair value of instruments is similar to
their book value.
(1)
Determined by the applying income aproach, considering market
interest rates for mortgages (between 40% and 107% depending on the
duration), personal loans (between 133% and 157% depending on the
duration), credit cards (120%), SME and corporate (127% and
141%).
Valuation Techniques
The techniques used to measure the fair value of financial
instruments maximizes the use of observable and available
information at the measurement date, in order to obtain the price
that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at
the measurement date, regardless of whether that price is directly
observable or was estimated using a different valuation
technique.
41
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
When measuring the fair value of a specific asset or liability, an
entity takes into account the specific characteristics of the asset
or liability being measured that a market participant would take
into account when pricing the asset or liability at issuance date,
including:
|
●
|
The conditions and location of the asset or liability
|
|
●
|
The principal (or most advantageous) market for the asset or
liability
|
|
●
|
Any restrictions on the sale and use of the asset or
liability
|
Fair value is not adjusted for transaction costs, for such costs
are not an intrinsic characteristic of the asset or liability, but
are rather specific to each transaction and the means by which it
was completed.
As of December 31, 2024, the techniques used to measure the fair
value of the securities recognized in the financial statements are
summarized below:
|
●
|
Valuation at the market price for identical assets or liabilities
observable at the measurement date.
|
|
●
|
Valuation at the market price of an asset or liability with similar
characteristics.
|
|
●
|
Valuation as per model based on the current value of the asset or
liability projected cash flows based on contractual conditions, by
reference to implied interest rates or yield curves of assets and
liabilities with similar characteristics, observable at the
measurement date.
|
Based on the valuation model inputs, fair values will be classified
into the following levels:
|
●
|
Level 1: Fair values correspond to quoted prices (unadjusted) in
active markets that the Group can access at the measurement date,
considering that such prices provide the most reliable evidence of
fair value. Even if the market's normal daily trading volume is not
sufficient to absorb the quantity held and placing orders to sell
the position in a single transaction might affect the quoted
price.
|
|
●
|
Level 2: Fair values are estimated based on observable inputs other
than the quoted market prices considering:
|
|
●
|
Quoted prices for similar assets or liabilities in markets that are
or are not active.
|
|
●
|
Inputs other than quoted prices that are observable for the asset
or liability, for example:
|
|
●
|
Observable interest rates and yield curves
|
|
●
|
Implied volatilities
|
|
●
|
Credit spreads
|
|
●
|
Market-corroborated inputs
|
The
models currently used by the Group place reliance on the yield
curves of benchmark instruments grouped by currency and issuer's
quality, which are used to discount the cash flows from the
securities that require Level 2 fair value
measurement.
The
Group currently uses 4 yield curves: one for peso-denominated
sovereign securities, one for “CER-linked” sovereign
securities (securities indexed up by CPI variation), one for
dollar-denominated sovereign securities and one for dollar-linked
and dollar-denominated private sector securities. The securities
taken as a benchmark proved to have frequent quoted prices in
recent months, leading to conclude that they reasonably reflect
market participants' expectations.
In
addition, the Group has relied on the monetary policy rate to
measure Argentine Central Bank bills without a benchmark quoted
price at the measurement date (LEFIs).
●
Level 3: Fair values measured based significantly on unobservable
inputs.
8. INVESTMENTS IN JOINT
VENTURES
“EDIFICIO DEL PLATA TRUST”
The
Bank owned a building in Buenos Aires downtown named
“Edificio del Plata” (EDP), which was previously
classified as “investment property”.
On
November 10, 2023, a management trust agreement at cost was created
for the development of the refurbishment project of EDP, which
consists of the construction of residential units, commercial
premises (gastronomic use) and complementary parking lots, being
IRSA Inversiones y Representaciones S.A. the Money Trustor and
Developer.
On
December 28, 2023, the Bank executed the deed transferring
ownership of the building as a contribution to the Trust in
exchange for a 28.5% share in the proceeds from the sale of the
residential units and other premises.
42
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
An
Executive Committee has been established to manage the Trust,
comprised of the Developer, the Bank and two Money Trustors (other
than the Developer). Decisions are made unanimously, but in the
absence of an agreement, decisions are made by majority of votes,
with members being entitled to one vote each, regardless of their
respective interests. In case of a tie, the Developer’s vote
will count twice.
The
transfer price of the building was made at its market value based
on the appraisal report dated December 27, 2023 by Newmark, an
external appraiser, which was considered as the cost of the Bank
share in EDP Trust.
The
Bank’s interest in EDP Trust is measured at the 28.5% share
of the estimated selling price of the residential and other
premises, amounting to 61,938,400 as of December 31, 2024 based on
Newmark’s appraisal at that date.
43
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
9. PROPERTY AND EQUIPMENT
|
|
|
|
|
|
|
Depreciation
|
|
|||
|
Item
|
Costat 01/01/24
|
Additions
|
Disposals
|
Transfers
|
Impairment losses
|
Accumulated at 01/01/24
|
Disposal
|
For the year
|
Accumulated at 12/31/24
|
Carrying amount at 12/31/24
|
|
Real
estate
|
89,599,654
|
-
|
-
|
709,807
|
(705,988)
|
(11,816,881)
|
-
|
(1,886,360)
|
(13,703,241)
|
75,900,232
|
|
Furniture
and facilities
|
20,824,212
|
369,088
|
(38,405)
|
|
-
|
(18,408,556)
|
47,236
|
(790,404)
|
(19,151,724)
|
2,003,171
|
|
Machinery
and equipment
|
97,443,708
|
2,637,428
|
(1,886,762)
|
|
-
|
(94,600,702)
|
2,530,186
|
(2,489,315)
|
(94,559,831)
|
3,634,543
|
|
Vehicles
|
45,791
|
-
|
-
|
|
-
|
(45,791)
|
-
|
-
|
(45,791)
|
-
|
|
Miscellaneous
|
3,142,936
|
43,042
|
(473)
|
|
-
|
(2,869,646)
|
44
|
(81,526)
|
(2,951,128)
|
234,377
|
|
Right
of use of leased personal property
|
1,893,249
|
-
|
-
|
|
-
|
(1,893,249)
|
-
|
-
|
(1,893,249)
|
-
|
|
Right
of use of leased real estate
|
16,093,730
|
2,181,086
|
(2,680,034)
|
496,587
|
-
|
(13,451,621)
|
2,332,663
|
(2,286,666)
|
(13,405,624)
|
2,685,745
|
|
Works
in progress
|
1,206,394
|
-
|
-
|
(1,206,394)
|
-
|
-
|
-
|
-
|
-
|
-
|
|
Total property and equipment
|
230,249,674
|
5,230,644
|
(4,605,674)
|
-
|
(705,988)
|
(143,086,446)
|
4,910,129
|
(7,534,271)
|
(145,710,588)
|
84,458,068
|
(a) The
useful life of machinery is 5 years and the useful life of
equipment is 3 years.
(b) The
useful life is the term of each lease agreement.
|
|
|
|
|
|
Depreciation
|
|
|||
|
Item
|
Costat 01/01/23
|
Additions
|
Disposals
|
Impairment losses
|
Accumulated at 01/01/23
|
Disposal
|
For the year
|
Accumulated at 12/31/23
|
Carrying amount at 12/31/23
|
|
Real
estate
|
86,641,336
|
-
|
-
|
(2,958,317)
|
(9,518,206)
|
-
|
(2,298,676)
|
(11,816,882)
|
77,782,771
|
|
Furniture
and facilities
|
20,395,230
|
444,793
|
(15,807)
|
-
|
(17,287,736)
|
-
|
(1,120,825)
|
(18,408,561)
|
2,415,654
|
|
Machinery
and equipment
|
95,213,344
|
2,256,684
|
(26,321)
|
-
|
(92,259,727)
|
5,760
|
(2,346,736)
|
(94,600,703)
|
2,843,004
|
|
Vehicles
|
45,791
|
-
|
-
|
-
|
(45,791)
|
-
|
-
|
(45,791)
|
-
|
|
Miscellaneous
|
2,979,124
|
202,986
|
(37,018)
|
-
|
(2,760,862)
|
-
|
(110,940)
|
(2,871,802)
|
273,290
|
|
Right
of use of leased personal property
|
1,893,250
|
-
|
-
|
-
|
(1,833,896)
|
-
|
(59,354)
|
(1,893,250)
|
-
|
|
Right
of use of leased real estate
|
16,673,893
|
2,657,097
|
(3,247,522)
|
-
|
(13,378,960)
|
2,749,599
|
(2,812,001)
|
(13,441,362)
|
2,642,106
|
|
Works
in progress
|
-
|
1,206,403
|
-
|
-
|
-
|
-
|
-
|
-
|
1,206,403
|
|
Total property and equipment
|
223,841,968
|
6,767,963
|
(3,326,668)
|
(2,958,317)
|
(137,085,178)
|
2,755,359
|
(8,748,532)
|
(143,078,351)
|
87,163,228
|
(a) The
useful life of machinery is 5 years and the useful life of
equipment is 3 years.
(b) The
useful life is the term of each lease agreement.
44
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
10. INTANGIBLE ASSETS
|
|
12/31/2024
|
12/31/2023
|
|
Balance at the beginning of the period
|
4,886,934
|
4,258,860
|
|
Additions
|
3,211,710
|
2,106,317
|
|
Amortization for the period
|
(1,289,513)
|
(1,478,243)
|
|
Total
|
6,809,131
|
4,886,934
|
11. INVESTMENT PROPERTY
|
|
12/31/2024
|
12/31/2023
|
|
Balance at the beginning of the period
|
13,546,030
|
11,630,572
|
|
Additions
|
-
|
-
|
|
Changes in fair value
|
(773,401)
|
1,915,458
|
|
Total
|
12,772,629
|
13,546,030
|
The
fair value of all investment property is based on appraisals
performed by an independent appraiser with accredited professional
qualification and expertise in the location and category of the
investment property (level 3 fair value). Changes in fair value are
recognized in profit or loss.
Investment
property appraisal was based on the market approach, i.e.,
considering market prices per constructed square meter of similar
pieces of property and the characteristics inherent to the property
being appraised, including aging, condition, maintenance, and
construction quality.
Significant
input data used, detailed by zone and their interrelation with the
fair value as of December 31, 2024 follows:
|
Main calculation variables, non-observable
|
Interrelation between main variables and fair value
|
AMBA (Metropolitan Area of Buenos Aires)
|
Provinces of Buenos Aires and La Pampa
|
Rest of the country
|
|
Price
per square meter (in thousands of pesos)
|
The
higher the price per square meter, the greater the fair
value
|
Between
824 and 1.330
|
Between
915 and 1.544
|
Between
1.310 and 2.794
|
|
Aging
|
The
greater the age, the lower the fair value
|
Between
45 and 63 years
|
Between
44 and 99 years
|
Between
33 and 103 years
|
|
State
of preservation
|
The
better the state of preservation, the higher the fair
value
|
Good
|
Between
regular and good
|
Between
good and very good
|
The figures included in income/(loss) from Investment Property for
the year are as follows :
|
|
12/31/2024
|
12/31/2023
|
|
Rentals
|
135,193
|
284,994
|
|
Direct
expenses from property management
|
(6,814)
|
(4,170)
|
Net
income from investment property as of December 31, 2024 and 2023
amounts to ARS 128,379 and ARS 280,824, respectively, and is
recognized in “Other operating income”,
“Administrative expenses” and “Other operating
expenses” in the consolidated statement of
income.
12. OTHER NON-FINANCIAL ASSETS
|
|
12/31/2024
|
12/31/2023
|
|
Tax prepayments
|
2,635,389
|
2,813,089
|
|
Prepaid fees to Directors and Supervisory Committee members (Note
27)
|
1,896,593
|
1,247,798
|
|
Other prepayments
|
1,936,160
|
3,594,012
|
|
Other
|
600,775
|
607,576
|
|
Total
|
7,068,917
|
8,262,475
|
45
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
13. FINANCIAL LIABILITIES AT FAIR VALUE THROUGH
PROFIT OR LOSS
13.1. Short positions in securities
|
|
12/31/2024
|
12/31/2023
|
|
Third
party securities in pesos
|
17,580,848
|
1,532,102
|
|
Third
party securities in foreign currency
|
10,732,284
|
58,636,086
|
|
Total
|
28,313,132
|
60,168,188
|
13.2. Derivative instruments
|
|
12/31/2024
|
12/31/2023
|
|
Foreign
currency forward transactions to be settled in pesos
|
40,016
|
-
|
|
Total
|
40,016
|
-
|
13.3. Fair value hierarchy of financial liabilities at fair value
through profit or loss
|
Instrument portfolio as of 12/31/2024
|
Balance
|
Level 1 FV
|
Level 2 FV
|
Level 3 FV
|
|
Short positions in securities
|
28,313,132
|
28,313,132
|
-
|
-
|
|
Derivative instruments
|
40,016
|
-
|
40,016
|
-
|
|
Total
|
28,353,148
|
28,313,132
|
40,016
|
-
|
|
Instrument portfolio as of
12/31/2023
|
Balance
|
Level 1 FV
|
Level 2 FV
|
Level 3 FV
|
|
Short positions in securities
|
60,168,188
|
60,168,188
|
-
|
-
|
|
Total
|
60,168,188
|
60,168,188
|
-
|
-
|
14. FINANCIAL LIABILITIES AT AMORTIZED
COST
14.1. Deposits
|
|
12/31/2024
|
12/31/2023
|
|
Non-financial public sector
|
183,863,868
|
74,548,621
|
|
Financial sector
|
164
|
1,207
|
|
Non-financial private sector and foreign residents
|
1,575,121,371
|
2,386,361,288
|
|
Total
|
1,758,985,403
|
2,460,911,116
|
Please
refer to Note 39 on the Deposit guarantee system.
14.2. Other financial liabilities
|
|
12/31/2024
|
12/31/2023
|
|
Credit card consumptions
|
71,130,643
|
33,584,325
|
|
Payables from transactions pending settlement
|
66,443,711
|
34,628,915
|
|
Proceeds from transfers of financial assets not
derecognized
|
11,262,464
|
29,890,590
|
|
Finance leases
|
2,538,506
|
2,610,467
|
|
Other
|
7,773,240
|
7,027,555
|
|
Total
|
159,148,564
|
107,741,852
|
Proceeds from transfers of financial assets not
derecognized
The
Bank has transferred the following financial assets that do not
qualify for derecognition.
46
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
Issuer
|
Financial trust
|
Registered on
|
Initial trust debt amount
|
Estimated termination date of the series
|
|
|
|
|
|
Series
|
Amount in thousands UVA (*)
|
|
|
BHSA
|
CHA UVA Series I
|
Apr-18
|
A
|
8,645 UVA
|
oct-23
|
|
|
|
|
B
|
5,763 UVA
|
Apr-28
|
|
|
|
|
CP
|
4,802 UVA
|
may-32
|
(*) UVA
(Unit of Purchase Power): Loans that are denominated in
“UVA”, which is an amount that is monthly indexed up by
the CPI variation.
Finance leases
|
Real estate
|
12/31/2024
|
12/31/2023
|
|
Up to one year
|
1,352,067
|
2,027,251
|
|
From one to five years
|
1,086,328
|
583,216
|
|
More than five years
|
100,111
|
-
|
|
|
2,538,506
|
2,610,467
|
Amounts
recognized in the consolidated statement of income:
|
|
12/31/2024
|
12/31/2023
|
|
Depreciation of rights of use
|
2,286,666
|
2,871,355
|
|
Interest on lease liabilities
|
2,344,196
|
2,081,874
|
|
Expenses related to short-term leases
|
623,764
|
448,280
|
14.3. Repurchase transactions
|
|
12/31/2024
|
12/31/2023
|
|
Government
securities
|
155,088,090
|
-
|
|
Cash
|
2,400
|
-
|
|
Total
|
155,090,490
|
-
|
The notional values of securities tied to reverse repurchase
transactions follows:
|
|
12/31/2024
|
12/31/2023
|
|
Government
securities
|
177,633,409
|
-
|
14.4. Debt securities issued
The
table below shows the Group's issues of simple, non-convertible
debt securities:
|
|
Issued amount
|
Issue date
|
Maturity date
|
Annual interest rate
|
12/31/2024
|
12/31/2023
|
|
|
(in
thousands)
|
|
|
|
|
|
|
Banco Hipotecario
S.A.(1)
|
|
|
|
|
|
|
|
Clase
IV
|
US$78.336
|
14/10/2020
|
14/10/2025
|
9,75%
|
16,353,560
|
55,472,368
|
|
Clase
VI
|
US$15.948
|
4/5/2022
|
4/5/2024
|
0,00%
|
-
|
27,975,875
|
|
Clase
VIII
|
$45.347.500
|
20/12/2024
|
20/12/2025
|
Tamar +
2,75%
|
45,569,494
|
-
|
|
BACS Banco de Crédito y
Securitización SA (2)
|
|
|
|
|
|
|
|
Clase
XVIII
|
$20.000.000
|
22/11/2024
|
22/11/2025
|
Badlar
+ 5,98%
|
20,852,922
|
-
|
|
TOTAL
|
|
|
|
|
82,775,976
|
83,448,243
|
Tamar:
Argentine Wholesale Rate (TAMAR), calculated based on time deposits
of 1 billion pesos or more, with maturities of 30 to 35
days.
Badlar:
Buenos Aires Large-Amount Deposit Rate, Interest rate paid on time
deposits of more than one million pesos, as averaged by financial
institutions.
47
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
(1) The
Annual Shareholders’ Meeting held on June 28, 2019 approved
the creation of a new Global Negotiable Obligations Program for the
issuance of debt securities, non-convertible into shares, secured
or unsecured, for up to USD 1,000,000,000 or an equal amount in
Pesos, which was amended and extended several times by subsequent
Annual Shareholders’ Meetings and Board Resolutions. The
current amount authorized to be issued under this program is up to
USD 100,000,000 (or its equivalent in other
currencies).
(2) On
March 26, 2012, BACS’s Annual Shareholders’ Meeting
approved the creation of a Global Program for the issuance of
simple debt securities, non-convertible into shares, secured or
unsecured, secured by third parties, subordinated or
unsubordinated, for an aggregate nominal value of up to USD
150,000,000 and the subsequent admission to the public offering of
negotiable obligations.
14.5. Fair value hierarchy of financial liabilities at amortized
cost
|
Instrument portfolio as of 12/31/2024
|
Balance
|
Total FV
|
Level 1 FV
|
Level 2 FV
|
Level 3 FV
|
|
Deposits
|
(1,758,985,403)
|
(1,641,010,059)
|
-
|
(1,641,010,059)
|
-
|
|
Repurchase transactions
|
(155,090,490)
|
(*)
|
-
|
-
|
|
|
Other financial liabilities
|
(159,148,564)
|
(159,697,732)
|
-
|
(159,697,732)
|
-
|
|
Financing received from BCRA
|
(2,690,568)
|
(*)
|
-
|
-
|
-
|
|
Debt securities issued
|
(82,775,976)
|
(82,903,008)
|
-
|
(82,903,008)
|
-
|
(*) It
is considered that the fair value of instruments is similar to
their book value.
|
Instrument portfolio as of 12/31/2023
|
Balance
|
Total FV
|
Level 1 FV
|
Level 2 FV
|
Level 3 FV
|
|
Deposits
|
(2,460,911,116)
|
(2,415,861,304)
|
-
|
(2,415,861,304)
|
-
|
|
Other financial liabilities
|
(107,741,852)
|
(108,112,605)
|
-
|
(108,112,605)
|
-
|
|
Financing received from BCRA
|
(5,994,442)
|
(*)
|
-
|
-
|
-
|
|
Debt securities issued
|
(83,448,243)
|
(82,399,211)
|
-
|
(82,399,211)
|
-
|
(*) It
is considered that the fair value of instruments is similar to
their book value.
15. INCOME TAX
Income tax rate
In accordance with Law No. 27630, as from January 31, 2024, the
income tax rate is a progressive rate ranging from 25% to 35%,
which is determined based on the net taxable income according to
the table established by this law, the amounts of which are
adjusted annually, considering the variation in the
CPI.
As of December 31, 2024, the rate applicable to the Bank for the
measurement of the current tax is 35% (35% as of December 31,
2023), while deferred tax balances were measured by applying the
rate expected to be effective when temporary differences reverse.
Additionally, the rate applicable to dividends on profits is
7%.
Tax inflation adjustment
Law 27430, as amended, provides that, as from fiscal years
beginning on or after January 1, 2018, the inflation adjustment
calculated based on the procedure described in the Income Tax Law
shall be deducted or included in the taxable income/loss, to the
extent that the CPI at a general level accumulated over the 36
months prior to the end of the year that is calculated exceeds
100%, a situation that took place as from December 31,
2019.
Based on the transition methodology provided for by the tax
regulations, the tax inflation adjustment, either benefit or loss,
is recognized in six annual installments in taxable income/loss as
from the year corresponding to the calculation. As from the year
beginning January 1, 2021, the effect of tax inflation adjustment
is recognized in taxable income/loss for the same fiscal
year.
15.1. Income tax expense
|
|
12/31/2024
|
12/31/2023
|
|
Current income tax – Expense
|
(62,099,178)
|
(12,660,949)
|
|
Deferred Income tax – Expense
|
7,372,605
|
(1,889,322)
|
|
Total
|
(54,726,573)
|
(14,550,271)
|
48
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
15.2. Current tax
|
|
12/31/2024
|
12/31/2023
|
|
Income tax credit
|
329,902
|
720,359
|
|
Income
tax provision
|
(65,627,160)
|
(8,921,652)
|
|
Income tax prepayments
|
1,397,428
|
1,105,492
|
|
Net current income tax liabilities
|
(63,899,830)
|
(7,095,801)
|
15.3 Deferred income tax
|
|
12/31/2024
|
12/31/2023
|
|
Deferred
income tax assets
|
1,112,078
|
493,278
|
|
Deferred
income tax liabilities
|
(17,243,525)
|
(23,997,330)
|
|
Net deferred income tax liabilities
|
(16,131,447)
|
(23,504,052)
|
The
table below shows the changes in deferred income tax assets and
liabilities:
|
Deferred tax assets / (liabilities)
|
Balance as of 12/31/2023
|
Changes recognized in profit or loss
|
Balance as of 12/31/2024
|
|
Allowance for loan losses
|
1,563,057
|
4,325,017
|
5,888,074
|
|
Property and equipment and Investment property
|
(34,848,526)
|
1,348,411
|
(33,500,115)
|
|
Foreign-currency assets and liabilities valuation
|
(257,473)
|
40,633
|
(216,840)
|
|
Provisions
|
2,516,004
|
8,754,405
|
11,270,409
|
|
Valuation of financial instruments
|
6,549,107
|
3,373,863
|
9,922,970
|
|
Investment in joint venture
|
-
|
(10,476,690)
|
(10,476,690)
|
|
Tax inflation adjustment
|
1,307,147
|
(1,084,581)
|
222,566
|
|
Tax losses carryforward
|
153,647
|
753,975
|
907,622
|
|
Other
|
(487,015)
|
337,572
|
(149,443)
|
|
Total deferred income tax liabilities, net
|
(23,504,052)
|
7,372,605
|
(16,131,447)
|
|
Deferred tax assets / (liabilities)
|
Balance as of 12/31/2022
|
Changes recognized in profit or loss
|
Balance as of 12/31/2023
|
|
Allowance for loan losses
|
2,089,608
|
(526,550)
|
1,563,057
|
|
Property and equipment and Investment property
|
(62,384,754)
|
27,536,228
|
(34,848,526)
|
|
Foreign-currency assets and liabilities valuation
|
(61,100)
|
(196,373)
|
(257,473)
|
|
Provisions
|
3,689,793
|
(1,173,790)
|
2,516,004
|
|
Valuation of financial instruments
|
5,855,550
|
693,558
|
6,549,107
|
|
Tax inflation adjustment
|
6,678,311
|
(5,371,164)
|
1,307,147
|
|
Tax losses carryforward
|
23,104,227
|
(22,950,579)
|
153,647
|
|
Other
|
(586,363)
|
99,348
|
(487,015)
|
|
Total deferred income tax liabilities, net
|
(21,614,728)
|
(1,889,322)
|
(23,504,052)
|
Information about the tax loss carryforward recognized
follows:
|
Originated
in
|
Balance as of 12/31/2024
|
Expiry date
|
|
2021
|
856,860
|
2026
|
|
2022
|
50,762
|
2027
|
|
Total
|
907,622
|
|
The
table below shows a reconciliation of the income tax liability
recognized in profit or loss as of December 31, 2024 and 2023 and
the income tax liability resulting from applying the effective tax
rate to taxable income:
49
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
|
12/31/2024
|
12/31/2023
|
|
Income for the year before income tax
|
134,761,296
|
129,344,420
|
|
Income
tax rate
|
35%
|
35%
|
|
Tax using the income tax rate
|
(47,166,454)
|
(45,270,547)
|
|
Permanent differences at the tax rate:
|
|
|
|
-
Non-deductible expenses
|
(6,291,365)
|
(1,581,391)
|
|
- Tax
exempt income
|
3,073,016
|
2,654,932
|
|
Effect
of different methodologies for determined net income adjusted per
inflation as per accounting and tax purposes
|
(4,341,770)
|
28,778,492
|
|
Allowance
for impairment of net deferred assets
|
-
|
868,243
|
|
Total income tax expense for the year
|
(54,726,573)
|
(14,550,271)
|
15.4. Uncertainty over income tax treatments
The
Entity has adjusted for inflation the accumulated tax losses from
previous fiscal periods for the purpose of their deduction in the
income tax return for the fiscal year 2023.
The
position of the Entity is mainly based on the jurisprudence arising
from the ruling of the Supreme Court of Justice of the Nation,
Candy, dated July 3, 2009, in the arguments presented by the
Attorney General of the Nation in her report regarding the
Telefónica de Argentina S.A. case and another c/EN-AFIP-DGI
s/DGI - complaint appeal dated June 9, 2020.
BACS
Banco de Crédito y Securitización S.A. (BACS) has
adjusted for inflation the accumulated tax losses for the fiscal
years 2021 to 2022 for the purpose of their deduction in the income
tax return for the fiscal year 2023, in accordance with Article 25
of the Income Tax Law. It is worth mentioning that, as of December
31, 2024, BACS has almost entirely absorbed the remaining tax
losses, which were adjusted for inflation based on the variation of
the CPI for the purpose of their computation in the income tax
return for the fiscal years 2023 and 2024.
Based
on the guidelines of IFRIC 23 “Uncertainty over Income Tax
Treatments” and in accordance with the opinions of the
Group's legal and tax advisors, Management has concluded that it is
more likely than not that the Tax Authorities will accept the tax
treatment and, therefore, the taxable profit (tax loss) is
recognized consistently with the tax treatment used in the income
tax returns.
16. OTHER NON-FINANCIAL
LIABILITIES
|
|
12/31/2024
|
12/31/2023
|
|
Employee benefits
|
|
|
|
Salaries and social security contributions payable
|
31,704,564
|
28,744,307
|
|
Personnel expenses
|
3,623,743
|
2,830,927
|
|
Termination benefits payable
|
22,405,096
|
1,824,244
|
|
Directors’ and Supervisory Committee members’ fees
(Note 27)
|
9,193,929
|
9,075,593
|
|
Taxes payable
|
|
|
|
Other taxes payable
|
5,934,634
|
9,095,899
|
|
Tax withholdings and collections payable
|
7,287,293
|
6,672,828
|
|
Customers’ loyalty programs
|
570,175
|
103,247
|
|
Dividends payable
|
163,583
|
1,337
|
|
Miscellaneous payables
|
10,319,978
|
7,907,940
|
|
Total other non-financial liabilities
|
91,202,995
|
66,256,322
|
50
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
17. PROVISIONS AND
CONTINGENCIES
Changes
in provisions as of December 31, 2024 are as follows:
|
|
|
|
Decreases
|
|
|
|
|
Provisions
|
Balances as of 12/31/2023
|
Increases
|
Reversals
|
Uses
|
Monetary gain (loss) from provisions
|
Balances as of 12/31/2024
|
|
Provision for lawsuits
|
5,286,894
|
2,612,286
|
-
|
(918,078)
|
(2,859,081)
|
4,122,021
|
|
Provision for ECL on unfunded commitments and financial
guarantees
|
1,178,754
|
2,169,548
|
(1,038,725)
|
-
|
(637,454)
|
1,672,123
|
|
Others
|
62,938
|
4,546,408
|
-
|
(614,436)
|
(34,036)
|
3,960,874
|
|
Total
|
6,528,586
|
9,328,242
|
(1,038,725)
|
(1,532,514)
|
(3,530,571)
|
9,755,018
|
|
|
|
|
Decreases
|
|
|
|
|
Provisions
|
Balances as of 12/31/2022
|
Increases
|
Reversals
|
Uses
|
Monetary gain (loss) from provisions
|
Balances as of 12/31/2023
|
|
Provision for lawsuits
|
5,940,008
|
7,339,491
|
-
|
(3,960,067)
|
(4,032,538)
|
5,286,894
|
|
Provision for ECL on unfunded commitments and financial
guarantees
|
1,117,489
|
968,083
|
(148,179)
|
-
|
(758,639)
|
1,178,754
|
|
Others
|
195,994
|
-
|
-
|
-
|
(133,056)
|
62,938
|
|
Total
|
7,253,491
|
8,307,574
|
(148,179)
|
(3,960,067)
|
(4,924,233)
|
6,528,586
|
A
summary of contingent liabilities arising from legal proceedings,
regulatory and other matters against Group consist of Legal claims
(labour) $ 1,324,414, and Other $ 87,884.
18. SHARE CAPITAL
Banco
Hipotecario S.A. has a share capital of 1,500,000, fully subscribed
and paid-in, represented by 1,500,000,000 ordinary shares, with a
nominal value of AR$ 1 each, split into the following
classes:
|
Class
|
Shares
|
Nominal Value
|
Share Capital
|
|
|
|
|
|
|
A
|
664,376,845
|
1
|
664,376.85
|
|
C
|
75,000,000
|
1
|
75,000.00
|
|
D
|
760,623,155
|
1
|
760,623.15
|
|
|
1,500,000,000
|
|
1,500,000.00
|
|
●
|
Class A
shares: Entitled to one vote per share. These shares were held by
the Argentine Government as part of the privatization process and
were subsequently transferred to the Trust Fund to support the
Regional Infrastructure Federal Fund;
|
|
●
|
Class C
shares: Entitled to one vote per share. These shares may not exceed
5 % of the Bank's share capital and they are freely transferable.
While Class C shares exceed 3 % of the Bank's share capital,
holders of Class C shares are entitled to elect one member of the
Bank's Board of Directors; and
|
|
●
|
Class D
shares: While Class A shares exceed 42 % of the Bank’s share
capital. Class D shares are entitled to 3 votes per share. No
individual or legal entity belonging to the same economic group may
own more than five per cent (5 %) of the Bank's share capital. When
Class D shares exceed 25 % of the Bank's share capital, holders of
Class D shares, are entitled to elect the majority of the members
of the Bank's Board of Directors.
|
51
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
Employee Share Ownership Plan
Law No.
24855, whereby Banco Hipotecario Nacional was declared
“subject to privatization” and transformed into a
corporation ("sociedad
anónima"), provided for the creation of the
“Employee Share
Ownership Plan ("PPP"). The PPP is a mechanism envisaged by Law No.
23696 to allow employees of an entity subject to privatization to
acquire shares of the privatized entity.
The
Bank's PPP was implemented by Executive Decree No. 2127/2012,
pursuant to which the individuals included in the Bank's payroll as
of September 27, 1997 became entitled to participate in the PPP, by
entering into a “General Transfer Agreement” between
the employee, the Government and the Trustee (Banco de la
Nación Argentina). All 57,009,279 Class “B” shares
were assigned to the PPP.
The
payment of the shares to the Government was made by offsetting
contributions to the Adjustable Supplementary Pension Fund,
capitalizing the dividends from the awarded shares, and out of half
the proceeds from the profit-sharing bonus.
The
Bank's bylaws provided for the payment of a profit-sharing bonus in
respect of profits for fiscal year 2012 through fiscal year 2022
included. The profit-sharing bonus was calculated as 0.50% of the
Bank's profits for the year, determined at the date of the Annual
Shareholder's Meeting at which the financial statements are
approved.
On
February 22, 2023, Banco de la Nación Argentina reported the
settlement of the total balance of the liability with the National
Government related to the aforementioned Program, as well as the
removal of the pledge on 57,009,279 Class "B" Shares.
The
Special Class "B" Shareholders Meeting of the PPP held on December
1, 2022 approved the necessary steps to the conversion of the
57,009,279 Class B ordinary shares, with 1 vote per share and
nominal value of AR$ 1 into Class D ordinary shares, with 3 votes
per share and a nominal value of AR$ 1. Banco de la Nación
Argentina delivered these shares to each of the PPP
beneficiaries.
Treasury shares
On
November 22, 2017 (the "grant date"), the Board of Directors
implemented the Employee Compensation Program, as approved at the
shareholders' meetings held on April 24, 2013, April 24, 2014, and
June 4, 2017.
Employees
of the Bank, BACS, BHN Sociedad de Inversión S.A., BHN Vida
S.A., BHN Seguros Generales S.A. and BH Valores S.A. (merged into
the Bank in 2019) became entitled to a number of shares, pursuant
to the program conditions at the grant date.
The
benefit was calculated considering the fair value of the Bank's
shares at the grant date.
If the
beneficiary meets the program conditions at the termination of
his/her employment relationship, then the beneficiary receives the
related Class "D" shares, and the amount of these shares is
reclassified from "treasury shares" to "outstanding shares," in
both cases under the caption Share capital.
Dividends
from deliverable shares are made available to beneficiaries as soon
as the payment of such dividends is approved at the Shareholders'
Meeting.
19. RESERVES
Legal reserve
According to the regulations set forth by BCRA, 20% of net income
for the fiscal year, net of previous years’ adjustments, if
any, is required to be appropriated to the legal
reserve.
Voluntary reserve
BCRA
establishes the general procedure for financial institutions to
distribute profits without affecting their liquidity and solvency,
which includes a specific methodology for calculating the
distributable amount.
On the
other hand, CNV requires that the Shareholders' Meeting considering
the annual Financial Statements to resolve the allocation of any
positive accumulated results of the Entity. Due to the
abovementioned BCRA regulation, in the Shareholders’ Meeting
a voluntary reserve for future distribution of earnings is
constituted.
52
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
20. RETAINED EARNINGS
Distribution of Retained earnings
On
March 27, 2024, the Shareholders' Meeting approved the distribution
of retained earnings as of December 31, 2023, to Legal reserve,
Voluntary reserve and cash dividends. On May 3, 2024, the BCRA
authorized the distribution of dividends for a nominal amount of
26,500,000 (expressed in unit current at December 31,2023,
57,707,360 in unit current at December 31, 2024). The dividends
were paid in 3 consecutive monthly installments in May, June and
July 2024, whose amounts were determined by applying specific BCRA
guidance, resulting in an actual payment of 55,151,453 (in unit
current at December 31, 2024).
Restrictions on the distribution of profits
For
statutory purposes, the Bank prepares financial statements in
accordance with BCRA accounting standards. Dividend distributions
are determined by the Shareholders based on these statutory
financial statements.
Pursuant
to the provisions in the regulation in force issued by the BCRA,
financial institutions shall apply an annual 20% of the year's
profits from its statutory financial statements to increase legal
reserves.
Furthermore,
pursuant to the requirements in General Resolution No. 622 issued
by the CNV, the Shareholders’ Meeting considering the
financial statements with positive accumulated results from the
statutory financial statements shall specifically provide for the
allocation of those results.
Specifically,
the mechanism to be followed by financial institutions to assess
distributable amounts is defined by the BCRA through the
regulations in force on the “Distribution of earnings”,
provided certain conditions are not met, such as the registration
for financial assistance for lack of liquidity granted by that
entity, deficiencies in capital or minimum cash contributions and
the existence of a certain type of penalty set forth by various
regulators and weighted as significant and/or failure to implement
corrective measures, among other conditions.
On
September 20, 2017, BCRA issued Communication "A" 6327, which
establishes that financial entities will not be able to make profit
distributions with the profit that is originated by the first
application of the BCRA accounting standards based on IFRS, and
must constitute a special reserve that can only be used for
capitalization or to absorb eventual negative balances of the item
"Retained earnings".
The
Bank shall verify that, after the proposed distribution of profits
there is a capital margin over risk-weighted assets, in addition to
the minimum capital requirements set forth under applicable
regulations, paid out of level 1 ordinary capital, net of
deductible items.
In
addition, the technical ratio of minimum capital requirements shall
be met to distribute profits. The technical ratio shall be assessed
excluding the aforementioned items from assets and unappropriated
retained earnings/losses. Any existing deductible item regarding
minimum capital requirements, payment and/or position shall not be
computed.
As from
January 2016, the BCRA provided for a capital maintenance margin in
addition to the minimum capital requirement equivalent to 2.5% of
risk-weighted asset. Said margin shall be fully paid in out of
level 1 ordinary capital, net of deductible items. The distribution
of profits shall be limited when the level and composition of the
Entity's Regulatory Capital (Responsabilidad Patrimonial Computable)
is within the capital maintenance margin range.
At
present, financial institutions shall secure the BCRA’s
previous consent to distribute profits.
Communication
“A” 7427 provided that, from January 1, 2022 to
December 31, 2022, financial institutions may only distribute
profits for up to 20 % of the amount that would have otherwise been
distributed if the rules on “Distribution of profits”
had been applied. Besides, as from January 1, 2022, financial
institutions that have secured the BCRA's previous consent will be
required to make such distribution in 12 equal, monthly and
consecutive installments.
On
March 9, 2023, Communication "A" 7719 was issued, allowing from
that date to December 31, 2023 the distribution of profits, with
the prior authorization of the BCRA, in 6 equal, monthly and
consecutive installments for up to 40% of the amount that would
have been distributed if the provisions of section 6 on
"Distribution of Profits" had been applied.
Finally,
on March 21, 2024, through Communication “A” 7984,
allowed the distribution of up to 60% of the amount that would have
corresponded to applying the provisions of section 6 of the
regulations until December 31, 2024. Through Communication
“A” 7997 of April 30, 2024, it was established that the
distribution be made in 3 equal, monthly and consecutive
installments.
53
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
21. INTEREST INCOME
|
|
12/31/2024
|
12/31/2023
|
|
Interest on cash and bank deposits
|
123,239
|
580,228
|
|
Interest on loans to the financial sector
|
415,622
|
652,392
|
|
Interest on overdraft facilities
|
10,402,987
|
10,732,943
|
|
Interest on promissory notes
|
21,732,606
|
23,713,647
|
|
Interest on mortgage loans
|
7,323,783
|
8,443,113
|
|
Interest on consumer loans
|
20,488,077
|
25,685,905
|
|
Interest on pledge loans
|
142,104
|
41,704
|
|
Interest on credit card loans
|
46,516,571
|
66,618,888
|
|
Interest on finance leases
|
731,371
|
3,783,818
|
|
Interest on other loans
|
22,954,751
|
26,616,039
|
|
Interest on government and corporate securities
|
13,319,058
|
72,280,402
|
|
Indexation
clauses based on the variation of CPI
|
197,139,700
|
91,005,656
|
|
Interest
on reverse repurchase transactions
|
665,475,002
|
1,023,556,294
|
|
Other
|
1,917
|
30,370
|
|
Total
|
1,006,766,788
|
1,353,741,399
|
22. INTEREST EXPENSE
|
|
12/31/2024
|
12/31/2023
|
|
Interest on checking accounts deposits
|
(550,050,127)
|
(892,869,029)
|
|
Interest on savings account deposits
|
(236,454)
|
(387,615)
|
|
Interest on time deposits
|
(386,179,331)
|
(551,914,708)
|
|
Interest on inter-financial loans received
|
(198,968)
|
(93,840)
|
|
Interest on debt securities
|
(11,275,478)
|
(12,024,202)
|
|
Indexation
clauses based on the variation of CPI
|
(16,749,160)
|
(12,612,613)
|
|
Other
|
(4,161,884)
|
(1,178,525)
|
|
Total
|
(968,851,402)
|
(1,471,080,532)
|
23. FEE AND COMMISSION INCOME
|
Fee and commission income
|
12/31/2024
|
12/31/2023
|
|
Credit card commissions
|
26,870,847
|
41,539,868
|
|
Linked to lending transactions
|
19,240,076
|
19,429,651
|
|
Linked to borrowing transactions
|
279,404
|
363,223
|
|
Other commissions
|
3,746,028
|
2,993,488
|
|
Total
|
50,136,355
|
64,326,230
|
24. FEE AND COMMISSION EXPENSE
|
Fee and commission expense
|
12/31/2024
|
12/31/2023
|
|
Linked
to loans
|
(373,712)
|
(600,395)
|
|
Linked
to securities
|
(1,679,747)
|
(1,716,755)
|
|
Other
|
(463,797)
|
(489,594)
|
|
Total
|
(2,517,256)
|
(2,806,744)
|
54
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
25. GAINS ON FINANCIAL ASSETS AND LIABILITIES AT
FAIR VALUE THROUGH PROFIT OR LOSS
|
|
12/31/2024
|
12/31/2023
|
|
Income from government securities
|
604,712,099
|
707,719,384
|
|
income from financial trusts
|
173,096
|
1,114,046
|
|
Income from other corporate securities
|
29,730,050
|
57,247,046
|
|
Loss (income) from other securities
|
1,809,551
|
(428,428)
|
|
Total
|
636,424,796
|
765,652,048
|
26. FOREIGN CURRENCY EXCHANGE RATE
DIFFERENCES
|
|
12/31/2024
|
12/31/2023
|
|
Dollar
denominated net transactions
|
(12,300,276)
|
(28,119,302)
|
|
Derivative
instruments
|
(5,289,468)
|
(26,900,757)
|
|
Euro
denominated net transactions
|
163,644
|
1,435,480
|
|
Total
|
(17,426,100)
|
(53,584,579)
|
27. OTHER OPERATING INCOME
|
|
12/31/2024
|
12/31/2023
|
|
Loan
servicing
|
11,077,119
|
10,651,216
|
|
Commissions
from borrowing transactions
|
3,554,549
|
4,385,649
|
|
Fee
from fiduciary services
|
8,276,428
|
14,710,780
|
|
Penalty
interest
|
903,164
|
1,087,052
|
|
Loans
recovered
|
699,749
|
2,407,791
|
|
Reversal
of allowances
|
3,761,874
|
1,472,660
|
|
Rentals
|
1,012,483
|
301,320
|
|
Increase
in fair value of Investment property
|
-
|
1,915,458
|
|
Income
from sale of property and equipment and other non-financial
assets
|
-
|
2,958,317
|
|
Interest
from miscellaneous receivables
|
1,734,102
|
1,866,993
|
|
Other
income
|
1,408,660
|
2,437,363
|
|
Total
|
32,428,128
|
44,194,599
|
28. EMPLOYEE BENEFITS
|
|
12/31/2024
|
12/31/2023
|
|
Salaries and social security contributions payable
|
(92,557,685)
|
(97,269,620)
|
|
Severance
payments and bonuses
|
(63,673,446)
|
(47,461,814)
|
|
Personnel expenses
|
(8,604,209)
|
(6,573,422)
|
|
Total
|
(164,835,340)
|
(151,304,856)
|
55
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
29. ADMINISTRATIVE EXPENSES
|
|
12/31/2024
|
12/31/2023
|
|
Fees and compensation for services
|
(15,574,267)
|
(22,514,062)
|
|
Directors’ and Supervisory Committee’s members’
fees
|
(7,927,366)
|
(7,045,738)
|
|
Advertising, promotion and research expenses
|
(3,044,259)
|
(3,587,751)
|
|
Taxes and duties
|
(7,272,875)
|
(6,745,719)
|
|
Maintenance and repairs
|
(5,147,310)
|
(4,918,316)
|
|
Electricity, gas and telephone services
|
(3,766,916)
|
(4,182,884)
|
|
Insurance
|
(1,095,000)
|
(959,770)
|
|
Representation and mobility expenses
|
(1,227,063)
|
(1,222,582)
|
|
Office supplies
|
(204,717)
|
(180,250)
|
|
Rentals
|
(603,537)
|
(368,418)
|
|
Security services
|
(4,115,638)
|
(3,796,550)
|
|
Security transport
|
(1,680,011)
|
(2,024,764)
|
|
Miscellaneous
|
(1,174,952)
|
(984,679)
|
|
Total
|
(52,833,911)
|
(58,531,483)
|
30. OTHER OPERATING EXPENSES
|
|
12/31/2024
|
12/31/2023
|
|
Turnover
tax
|
(58,772,882)
|
(76,958,819)
|
|
Loan
servicing
|
(24,491,339)
|
(23,902,105)
|
|
Deposit
services
|
(8,465,498)
|
(7,426,453)
|
|
Other
taxes
|
(5,217,861)
|
(6,035,007)
|
|
Debit
and credit card rebates
|
(2,851,459)
|
(1,639,583)
|
|
Loan
rebates
|
(843,632)
|
(1,290,308)
|
|
Contribution
to the deposit insurance fund
|
(3,298,175)
|
(3,145,167)
|
|
Interest
on finance leases
|
(2,190,564)
|
(2,026,625)
|
|
Other
provisions (1)
|
(22,035,637)
|
(14,928,837)
|
|
Donations
|
(495,674)
|
(594,547)
|
|
Impairment
of Edificio del Plata
|
-
|
(22,163,600)
|
|
Reduction
of fair value of Investment property
|
(773,401)
|
-
|
|
Impairment
of investments in Joint ventures
|
(7,756,849)
|
-
|
|
Other
expenses
|
(6,610,228)
|
(3,575,569)
|
|
Total
|
(143,803,199)
|
(163,686,620)
|
(1) It includes the
charge for ECL on unfunded commitments and financial guaranties
amounting to 2,506,267, 8,484,138 for other provisions and
11,045,232 for termination benefits payable as of December 31,
2024. As of December 31, 2023, it includes the charge for ECL on
unfunded commitments and financial guaranties
amounting to 1,365,000, 9,872,533 for other provisions and
3,691,304 for termination benefits payable.
56
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
31. INSURANCE SERVICE RESULT
|
|
12/31/2024
|
12/31/2023
|
|
Insurance
revenue
|
|
|
|
Life
|
20,227,161
|
29,160,538
|
|
General
insurance
|
25,385,906
|
29,545,857
|
|
Total insurance revenue
|
45,613,067
|
58,706,395
|
|
|
|
|
|
Insurance
service expenses
|
|
|
|
Claims and benefits
|
(3,787,850)
|
(3,720,494)
|
|
Commissions
|
(1,447,026)
|
(1,752,626)
|
|
Employee benefits
|
(15,533,098)
|
(18,116,292)
|
|
Taxes
|
(4,893,296)
|
(8,240,954)
|
|
Service Fees
|
(1,960,980)
|
(1,396,091)
|
|
Depreciation and amortization
|
(1,183,761)
|
(1,006,124)
|
|
Other
|
(3,596,904)
|
(1,505,973)
|
|
Total insurance service expenses
|
(32,402,915)
|
(35,738,553)
|
|
|
|
|
|
Total insurance service result
|
13.210.152
|
22.967.842
|
32. RECONCILIATION OF MOVEMENTS OF LIABILITIES TO
CASH FLOWS ARISING FROM FINANCING ACTIVITIES
|
|
|
Cash flows
|
|
|
|
|
|
Balance as of 12/31/2023
|
Collections
|
Payments
|
Other non-cash changes (1)
|
Balance as of 12/31/2024
|
|
Debt securities issued
|
83,448,243
|
65,347,500
|
(28,215,891)
|
(37,803,876)
|
82,775,976
|
|
Loans
from the BCRA and other financial institutions
|
5,994,442
|
21,027,366
|
(29,826,665)
|
5,495,425
|
2,690,568
|
|
Total
|
89,442,685
|
86,374,866
|
(58,042,556)
|
(32,308,451)
|
85,466,544
|
(1)
Including loss on net monetary position, interest and foreign
currency difference (loss of 7,325,932).
|
|
|
Cash flows
|
|
|
|
|
|
Balance as of 12/31/2022
|
Collections
|
Payments
|
Other non-cash changes (1)
|
Balance as of 12/31/2023
|
|
Debt securities issued
|
97,659,383
|
-
|
(24,989,317)
|
10,778,177
|
83,448,243
|
|
Loans
from the BCRA and other financial institutions
|
2,001,298
|
7,456,773
|
(9,488,867)
|
6,025,238
|
5,994,442
|
|
Total
|
99,660,681
|
7,456,773
|
(34,478,184)
|
16,803,415
|
89,442,685
|
(1)
Including loss on net monetary position, interest and foreign
currency difference (loss of
32,962,023).
57
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
33. OPERATING SEGMENTS
The
Group determines operating segments, based on management reports
used to monitor performance and allocate resources by the Board of
Directors and key management personnel, and updates such segments
as they change.
The
Group considers its business is comprised of its product and
service offering; thus, it identifies operating segments as
follows:
(a) Finance: It involves the placement of
the Group’s liquidity according to the other segments needs
and it include transactions with financial sector customers,
investment activities, derivative instruments and funding
transactions.
(b) Wholesale Banking: This segment
includes corporate banking, financial advisory services, asset
management and loans to large customers.
(c) Retail Banking: It includes loans
granted and other credit products, such as deposit taking from
individuals. It also includes insurance operations.
The
column “Other” includes balances of assets, liabilities
and income/loss not allocated to the operating segments mentioned
above.
The
column “Adjustments” includes consolidation adjustments
corresponding to transactions among Group members not including
third parties and the non-controlling interest.
The
results of operations of the Group's several operating segments are
monitored separately to make decisions on resource allocation and
on the evaluation of each segment's performance. The performance of
each operating segment is reviewed on the basis of operating income
or loss and is measured consistently with the operating income and
loss reported in the consolidated statement of income.
When a
transaction occurs, transfer prices among operating segments are
set on an arm's length basis similarly to transactions carried out
with third parties. Income, expenses and income (losses) resulting
from transfers among operating segments are then eliminated on
consolidation.
58
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
The
relevant segment reporting at the indicated dates is as
follows:
|
|
12/31/2024
|
|||||||
|
|
Finance
|
Retail Banking
|
Wholesale Banking
|
Other
|
Adjustments
|
Consolidated
|
||
|
|
|
Retail Banking
|
Insurance
|
BHSA (1)
|
BACS (2)
|
|
|
|
|
Total
assets
|
1,825,628,659
|
436,255,723
|
69,969,401
|
187,616,488
|
184,001,852
|
233,224,083
|
(71,550,180)
|
2,865,146,026
|
|
Total
liabilities
|
(1,125,749,791)
|
(524,426,398)
|
(18,533,030)
|
(403,486,737)
|
(157,661,388)
|
(157,197,443)
|
12,432,975
|
(2,374,621,812)
|
|
|
12/31/2023
|
|||||||
|
|
Finance
|
Retail Banking
|
Wholesale Banking
|
Other
|
Adjustments
|
Consolidated
|
||
|
|
|
Retail Banking
|
Insurance
|
BHSA
|
BACS
|
|
|
|
|
Total
assets
|
2,364,776,019
|
381,913,384
|
81,499,351
|
128,568,192
|
328,913,881
|
110,204,112
|
(99,999,068)
|
3,295,875,871
|
|
Total
liabilities
|
(1,778,597,752)
|
(410,907,579)
|
(18,273,051)
|
(204,917,773)
|
(308,102,322)
|
(137,614,238)
|
30,478,358
|
(2,827,934,357)
|
(1)
BHSA: Banco Hipotecario S.A.
(2)
BACS: BACS Banco de crédito y securitización
S.A.
|
|
12/31/2024
|
|||||||
|
|
Finance
|
Retail Banking
|
Wholesale Banking
|
Other
|
Adjustments
|
Consolidated
|
||
|
|
|
Retail Banking
|
Insurance
|
BHSA
|
BACS
|
|
|
|
|
Net interest income/(expense)
|
(24,438,017)
|
56,310,234
|
11,451,421
|
(6,542,197)
|
14,424,548
|
(3,701,402)
|
1,806,636
|
49,311,223
|
|
Net commission income/(expense)
|
(1,944,138)
|
49,221,310
|
.
|
4,994,113
|
1,313
|
-
|
(4,653,499)
|
47,619,099
|
|
Insurance service result
|
-
|
-
|
13,210,152
|
-
|
-
|
-
|
-
|
13,210,152
|
|
Net income/(expense) from measurement of financial instruments at
fair value through profit or loss
|
567,945,477
|
20,747,992
|
7,768,863
|
14,551,735
|
27,172,854
|
-
|
(1,762,125)
|
636,424,796
|
|
Net income/(expense) from measurement of financial instruments at
fair value through profit or loss for insurance
|
-
|
-
|
10,880,178
|
-
|
-
|
-
|
-
|
10,880,178
|
|
Foreign currency exchange rate difference
|
(12,233,937)
|
-
|
5,161
|
-
|
270,721
|
-
|
(5,468,045)
|
(17,426,100)
|
|
Foreign currency exchange rate difference insurance
|
-
|
-
|
2,282,554
|
-
|
-
|
-
|
-
|
2,282,554
|
|
Other operating income/(loss)
|
335,650
|
20,119,944
|
199,780
|
1,269,067
|
10,490,687
|
740,528
|
(727,528)
|
32,428,128
|
|
Total net operating income/(loss)
|
529,665,035
|
146,399,480
|
45,798,109
|
14,272,718
|
52,360,123
|
(2,960,874)
|
(10,804,561)
|
774,730,030
|
|
Other
operating expense
|
(43,354,610)
|
(48,374,376)
|
(31,729)
|
(4,070,307)
|
(11,772,614)
|
(36,234,247)
|
34,684
|
(143,803,199)
|
|
Impairment of financial assets
|
-
|
(11,291,442)
|
-
|
(19,871,958)
|
(660,076)
|
-
|
-
|
(31,823,476)
|
|
Income/(loss) by segment
|
486,310,425
|
86,733,662
|
45,766,380
|
(9,669,547)
|
39,927,433
|
(39,195,121)
|
(10,769,877)
|
599,103,355
|
|
Employee
benefits
|
|
|
|
|
|
|
|
(164,835,340)
|
|
Administrative expenses
|
|
|
|
|
|
|
|
(52,833,911)
|
|
Depreciation and impairment of non-financial assets
|
|
|
|
|
|
|
|
(8,354,357)
|
|
Loss on net monetary position
|
|
|
|
|
|
|
|
(202,761,248)
|
|
Loss on net monetary position for insurance
|
|
|
|
|
|
|
|
(35,557,203)
|
|
Income tax expense
|
|
|
|
|
|
|
|
(54,726,573)
|
|
Net income attributable to non-controlling interests
|
|
|
|
|
|
|
|
(5,983,681)
|
|
Net income attributable to holders of the ordinary shares of the
Bank
|
|
|
|
|
|
|
|
74,051,042
|
59
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
|
12/31/2023
|
|||||||
|
|
Finance
|
Retail Banking
|
Wholesale Banking
|
Other
|
Adjustments
|
Consolidated
|
||
|
|
|
Retail Banking
|
Insurance
|
BHSA
|
BACS
|
|
|
|
|
Net interest income/(expense)
|
(43,071,211)
|
(52,877,253)
|
41,020,782
|
(31,757,979)
|
15,195,097
|
(5,856,542)
|
1,243,796
|
(76,103,310)
|
|
Net commission income/(expense)
|
(2,318,024)
|
65,545,160
|
-
|
3,703,478
|
102
|
-
|
(5,411,230)
|
61,519,486
|
|
Insurance service result
|
-
|
-
|
22,967,842
|
|
|
|
|
22,967,842
|
|
Net income from measurement of financial instruments at fair value
through profit or loss
|
606,292,370
|
67,628,337
|
3,650,098
|
61,539,966
|
27,515,066
|
-
|
(973,789)
|
765,652,048
|
|
Net income from measurement of financial instruments at fair value
through profit or loss for insurance
|
-
|
-
|
28,733,664
|
-
|
-
|
-
|
-
|
28,733,664
|
|
Losses on derecognition of financial assets at amortized
cost
|
(16,911,203)
|
-
|
(566,946)
|
-
|
21,907
|
-
|
-
|
(17,456,242)
|
|
Foreign currency exchange rate difference
|
(79,387,928)
|
-
|
7,965
|
-
|
7,128,721
|
-
|
18,666,663
|
(53,584,579)
|
|
Foreign currency exchange rate difference for
insurance
|
-
|
-
|
11,063,148
|
|
|
|
|
11,063,148
|
|
Other operating income/(loss)
|
4,117,793
|
23,638,050
|
203,970
|
116,001
|
9,478,397
|
7,152,808
|
(512,420)
|
44,194,599
|
|
Total net operating income/(loss)
|
468,721,797
|
103,934,294
|
107,080,523
|
33,601,466
|
59,339,290
|
1,296,266
|
13,013,020
|
786,986,656
|
|
Other
operating expense
|
(49,866,244)
|
(49,078,306)
|
-
|
(4,637,830)
|
(19,411,317)
|
(40,716,913)
|
23,990
|
(163,686,620)
|
|
Impairment of financial assets
|
-
|
(7,988,788)
|
-
|
(2,566,649)
|
(143,397)
|
-
|
-
|
(10,698,834)
|
|
Income/(loss) by segment
|
418,855,553
|
46,867,200
|
107,080,523
|
26,396,987
|
39,784,576
|
(39,420,647)
|
13,037,010
|
612,601,202
|
|
Employee
benefits
|
|
|
|
|
|
|
|
(151,304,856)
|
|
Administrative expenses
|
|
|
|
|
|
|
|
(58,531,483)
|
|
Depreciation and impairment of assets
|
|
|
|
|
|
|
|
(9,252,713)
|
|
Loss on net monetary position
|
|
|
|
|
|
|
|
(191,519,179)
|
|
Loss on net monetary position for insurance
|
|
|
|
|
|
|
|
(72,648,551)
|
|
Income tax expense
|
|
|
|
|
|
|
|
(14,550,271)
|
|
Net income attributable to non-controlling interests
|
|
|
|
|
|
|
|
(2,206,301)
|
|
Net income attributable to holders of ordinary shares of the
Bank
|
|
|
|
|
|
|
|
112,587,848
|
The
operating income (loss) from the Group’s operating segments
is monitored separately to decide how to allocate resources and
assess each segment’s individual performance. The performance
of such operating segments is assessed on the basis of the
operating income or losses and is measured consistently with the
operating income and losses reported in the consolidated statement
of income. However, employee benefits, administrative expenses,
gains (losses) on net monetary position, and income tax are managed
on a consolidated basis. Therefore, these items have not been
allocated to operating segments.
60
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
Information on geographic areas
The
Group's operations are entirely conducted in
Argentina.
34. OFF-BALANCE SHEET ACCOUNTS
|
Off-balance sheet accounts
|
12/31/2024
|
12/31/2023
|
|
Unused credit card balances
|
650,739,440
|
298,912,325
|
|
Agreed loans
|
23,985,855
|
39,013,100
|
|
Guarantees granted
|
8,897,267
|
9,870,272
|
35. SUBSIDIARIES
Below
is the information on the Bank's subsidiaries, all of which are
registered in Argentina:
|
|
Line of business
|
Ownership interest
|
|
|
|
|
12/31/2024
|
12/31/2023
|
|
Corporation
|
|
|
|
|
|
|
|
|
|
BACS Banco de Crédito y Securitización S.A.
|
Banking
|
62.28%
|
62.28%
|
|
BHN Sociedad de Inversión S.A.
|
Holding
|
99.99%
|
99.99%
|
|
BHN Vida S.A.
|
Insurance
|
99.99%
|
99.99%
|
|
BHN Seguros Generales
|
Insurance
|
99.99%
|
99.99%
|
|
BACS Administradora de activos S.A.S.G.F.C.I.
|
Asset management
|
85.00%
|
85.00%
|
|
|
|
|
|
|
Structured entity
|
|
|
|
|
CHA Financial Trust – Series IX to XIV
|
Financial trust
|
100%
|
100%
|
|
Toronto Trust Gestion - Mutual Fund
|
Mutual fund
|
100%
|
100%
|
|
Toronto Trust Argentina 2021
|
Mutual fund
|
23.97%(1)
|
37.46%
|
BACS
Banco de Crédito y Securitización S.A. is an investment
bank engaged in designing financial solutions for businesses,
including securitizations and credit portfolio
management.
BHN
Sociedad de Inversión S.A.is the holding entity of BHN Vida
S.A. and BHN Seguros Generales S.A.
BHN
Vida S.A. is an insurance company providing group life, casualty
and health insurances.
BHN
Seguros Generales S.A. is an insurance company providing a wide
range of insurance: property, auto, surety, etc.
BACS
Administradora de Activos S.A.S.G.F.C.I. is mutual fund
manager.
|
(1)
|
The
Group has concluded that it has control over this fund since the
other investors are highly dispersed.
|
36. TRANSACTIONS AND BALANCES WITH RELATED
PARTIES
Directors’ Fees
Director’s
compensation is composed by fees and/or remuneration both fixed and
variable based to individual performance and the Group’s
results of operations.
Director’s
fees are limited by the Bank's by-laws to five per cent (5 %) of
Net income for the year when no there is no cash dividends, and
increased on a proportional basis to cash dividends, if available,
until reaching fifteen per cent (15 %) of Net income.
61
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
Key Management Personnel
Key
Management personnel is comprised by the Board of Director of the
General Manager and Senior Management (eleven Area Managers which
designated and removed by the Board of Directors and perform their
duties following policies and instructions of the
Board).
Key
Management Personnel remuneration (apart from Director’s
fees) is comprised by fixed amount determined by reference to their
background, skills and experience, and a variable bonus tied to
individual performance and the Group’s results of
operations.
Balances and transactions
Below
is a detail of balances and transactions with related parties as of
December 31, 2024:
|
|
ASSETS
|
LIABILITIES
|
|||||
|
Related Party
|
Other debt securities
|
Derivative instruments
|
Equity instruments
|
Loans and other financing arrangements
|
Other financial assets
|
Other non-financial assets(Note 12.3)
|
Other non-financial liabilities
|
|
IRSA
(1)
|
202,827
|
74,584
|
469,292
|
1,333,768
|
88,172
|
-
|
-
|
|
Zang
Bergel & Viñes (2)
|
-
|
-
|
-
|
-
|
-
|
-
|
52,476
|
|
Key
management personnel
|
-
|
-
|
-
|
-
|
-
|
1,896,593
|
9,193,929
|
|
Total
|
202,827
|
74,584
|
469,292
|
1,333,768
|
88,172
|
1.896.593
|
9.246.405
|
|
Related Party
|
Interest income
|
Employee benefits
|
Administrative expenses
|
|
IRSA
(1)
|
310,539
|
-
|
-
|
|
Zang, Bergel & Viñes (2)
|
-
|
-
|
16,026
|
|
Key
personnel
|
-
|
15,152,070
|
12,917,890
|
|
Total
|
310,539
|
15,152,070
|
12,933,916
|
Below
is a detail of the balances and transactions with related parties
as of December 31, 2023:
|
|
ASSETS
|
LIABILITIES
|
|||||
|
Related Party
|
Other debt securities
|
Derivative instruments
|
Equity instruments
|
Loans and other financing arrangements
|
Other financial assets
|
Other non-financial assets (Note 12.3)
|
Other financial liabilities
|
|
IRSA
(1)
|
1,425,021
|
97,634
|
945,294
|
331,602
|
67,757
|
-
|
-
|
|
Zang
Bergel & Viñes (2)
|
-
|
-
|
-
|
-
|
-
|
-
|
64,848
|
|
Key
management personnel
|
-
|
-
|
-
|
-
|
-
|
1,247,798
|
9,075,593
|
|
Total
|
1,425,021
|
97,634
|
945,294
|
331,602
|
67,757
|
1,247,798
|
9,140,441
|
|
Related Party
|
Interest income
|
Employee benefits
|
Administrative expenses
|
|
IRSA (1)
|
2,188,440
|
-
|
-
|
|
Zang Bergel & Viñes (2)
|
-
|
-
|
60,251
|
|
Key
management personnel
|
-
|
8,273,803
|
14,660,662
|
|
Total
|
2,188,440
|
8,273,803
|
14,720,913
|
|
(1)
|
IRSA
Inversiones y Representaciones S.A. (IRSA) and its subsidiaries own
29.22% of share capital as of December 31, 2024 (29.92% at 2023)
which entitles them to 43.52% of votes as of December 31, 2024
(46.56% at 2023).
|
62
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
(2)
|
Zang,
Bergel & Viñes is a law firm that provides legal advisory
to the Group. Mr. Saúl Zang, a partner of such firm is a
member of the Board of Directors of the Group’s
subsidiaries.
|
37. FINANCIAL RISK FACTORS
Comprehensive Risk Management
The
Bank relies on a comprehensive process to manage risks that
includes identifying, assessing, tracking, controlling and
mitigating all significant risks.
The
comprehensive process for managing risks is geared towards having
the Board of Directors and Senior Management involved in the
management of all significant risks and having them oversee such
management and understand the nature and level of risk taken on by
the entity and how such risk relates to capital adequacy. In
addition, it is in line with the best practices in risk management
and, in particular, with the BCRA's guidelines for financial
institutions' risk management.
To make
sure that its significant risks are properly managed, the Bank
relies on a management framework and on management mechanisms
appropriate to its size, complexity, economic weight and risk
profile.
a) Credit Risk:
Credit Risk Management - Retail Banking
Retail
Banking credit risk management is based on the Bank's annual
planning process. As a result of such process, the Bank sets
business goals, that is, the volume of loans to be granted during
the year through each Retail Banking lending product (mortgage and
consumer loans and credit cards). The risk management strategy
implies that credit risk management is intended to define and
establish the guiding principles of the Bank's loan origination,
servicing and follow-up activities in order to prevent, detect and
mitigate those risks in due time. It encompasses defining the
profile of customers to whom the Bank is willing to lend, as well
as identifying the target market, quality standards and expected
profitability, and the overall characteristics the Bank seeks to
achieve in its credit portfolio. The establishment of risk limits
is conceived as a dynamic process leading to the determination of
the Bank's risk appetite. Given the fact that the credit strategy
should provide continuity and should take into account
circumstantial aspects and their resulting changes in the overall
credit portfolio composition and quality, through its credit
policies and procedures, the Bank defines detailed aspects to
execute its credit risk strategy, such as origination criteria
(including terms and conditions), credit powers and authority,
product types, origination channels, underlying collateral, and the
organization's structure, In line with its business goals and
considering the aforementioned forecasts, the Bank sets a credit
risk appetite; in other words, tolerance limits or levels based on
indicators such as the non-performing portfolio ratio and the
annual loss rate (write-off). Through this planning process, which
includes a definition session with the involvement of senior
management and another session to present the plan to the Board,
the Bank develops a Business Plan and Risk Strategy, both documents
that embody the aforementioned goals and limits for the Board's
approval.
Credit
Risk Management refers to the function and procedure to identify,
measure, mitigate and monitor credit risk, taking into
consideration the entire business cycle, from the definition of the
target market and the origination of a financing arrangement, up to
the customer retention and loan recovery or write-off upon a
default. Within this framework, the granting of new loans is guided
by Credit Policies and Scoring Models. The policies, which
establish credit eligibility requirements and line allocation
criteria, are set out by the Retail Credit Risk Department,
reporting to the Planning and Control Area, and are approved by the
Risk Management Committee and the Board of Directors on an annual
basis. The models are subject to the validation process,
established in the Scoring Model Validation Policy approved by the
Board. Such policy sets out the responsibilities and criteria to be
applied in validating models, oriented at maintaining a standard in
their predictive capacity, as well as their frequency, following
the industry best practices.
Loans
are granted on the basis of a Decision Engine in which the scoring
models and most conditions set out in credit policies are arranged.
This ensures the accurate application of the established policies
in general and, in turn, enables further assessment of the
applications in accordance with the analysts’ judgment,
whether to reject or approve them by exception. There is a limit
for exceptions, which is set out in the Credit Policy and reviewed
on an annual basis.
In
order to identify, measure and monitor compliance with credit risk
policies, the Bank has developed certain key indicators associated
with the main risks identified. These indicators allow the Bank to
monitor the composition, concentration and quality of several
credit portfolios, broken down by business sectors, segments,
origination channels, products, etc. This information is documented
in several reports, which analyze several aspects, such as
financing level, arrears ratios, roll rates, vintage, benchmarking,
portfolio impairment, non-performing loans, provisions under IFRS
9, and exposure to pre-established risk thresholds. The main
indicators are part of the Risk Dashboard.
63
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
Both
portfolio maintenance, which is mainly related to credit cards, and
arrears management are governed by the aforementioned Credit
Policies and Scoring Models. Regarding card portfolio maintenance,
the policy mainly sets out the guidelines to manage credit
facilities and access to product attributes, including, for
instance, cash advances. Regarding arrears management, the policies
govern the commencement of several recovery stages –early
arrears, advanced arrears, and court proceedings – and
recovery means, settlement options (debt restructuring, reductions,
etc.), and risk control or recovery actions (restraint,
disqualification, account closing, etc.) enabled for each stage.
Both processes are monitored by the Area Manager through reports
prepared by several divisions.
For
purposes of credit risk management itself, that is, for unexpected
losses, the Bank relies on stress tests to monitor changes in the
portfolio vis-a-vis different adverse forward-looking scenarios
designed, at least, at two years. Stress testing results determine
the decisions to be made concerning adjustments to risk mitigating
policies, while they are also useful to assess capital adequacy and
allowance coverage. On the other hand, PDs and LGDs are used to
calculate economic capital, and are estimated for both businesses
and individuals, based on historical information. In estimating
LGDs, the Bank takes into account all recoveries after a default,
both in respect of the active portfolio and off-balance sheet
accounts.
Credit Risk Management – Wholesale Banking
Effective
credit risk management requires a suitable credit risk culture;
therefore, the risk policies and risk management strategy in place
are key elements to build such a culture, oriented at managing and
mapping credit risk to the other risks on a comprehensive
basis.
Wholesale
Banking credit risk management is based on the Bank's annual
planning process. During such process, the Bank designs the plan
and business strategy for each Wholesale Banking segment
(Corporate, SMEs, Real Estate Projects, Financial Institutions,
Public Sector, and Intermediaries), establishing, in general terms,
the desired growth levels and positioning, degree of sectoral
assistance, concentration levels, product mix to be boosted, and
credit quality level to be maintained in respect of expected
profitability, among other things. Credit portfolio concentration,
as a potential source of losses, is regarded in credit manuals as a
special point for attention. Credit concentration takes place when
the Bank is too exposed to a substantial number of similar risks,
such as a single borrower, a group of related borrowers, an
industrial or business sector, a geographic region, a certain
credit facility or a given risk-mitigating factor.
Risk
appetite is also defined for each segment, and tolerance limits or
levels are established and constantly monitored in order to
anticipate any undesired departure. Such limits result in
indicators, such as, 12-month likelihood of default, concentration
level by borrower within the portfolio, and concentration level by
business sector within the portfolio.
The
outcome of such planning, which involves the Bank's Senior
Management and Directors, is embodied in the Business Plan and Risk
Strategy final document, in which each of the aforementioned items
is exposed in detail and is submitted to the Board for
approval.
Within
this framework, credit decisions involving new lending, renewals,
or portfolio follow-up are made following the guidelines set out in
the comprehensive risk management policy as well as in the
respective credit manuals developed for each business segment. Such
policies are established by Wholesale Banking Credit Risk and
approved by the Risk Management Committee and the Board on an
annual basis. The Bank also has a documented mechanism in place to
set prices/rates based on risk; in other words, the risk-reward
relationship is always at the core of every lending
decision.
The
Bank has a risk rating system specific to Wholesale Banking, which
seeks to support key credit risk parametric estimates to measure
credit risk, through a credit analysis performed by an analyst
specialized in the industry or sector at issue, according to the
business segment and risk associated with the transaction. This
rating system ensures transparency and consistency in terms of
lending decisions which, together with the policies and manuals in
place, lead to set the loan granting minimum standards based on
credit ratings. Credit risk rating methodologies and parameters are
reviewed and validated, at least, on an annual basis.
Ratings
are also subject to permanent changes as a result of perceived
changes in the borrower's risk arising from updated information,
with each change in ratings being submitted to an Internal Review
Commission comprised of subject-matter specialists.
The
Wholesale Banking Credit Risk area is in charge of performing an
independent analysis of any application that involves credit risk.
All applications for commercial loans are reviewed and assessed on
the basis of their respective exposure, in order to guarantee an
appropriate assessment, correct approval, and ongoing monitoring
and active management of risks.
The
starting point of this review process is an assessment of the
borrower's or counterparty's credit risk, where key factors are
assessed, including borrower's management, historical and projected
financial position, industry, trends, etc.
64
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
As a
result of such assessment, a specific credit rating is assigned,
with an associated likelihood of default. In addition, the
transaction is analyzed with special focus on collateral, maturity,
and general arrangement.
The
Wholesale Banking Credit Risk area renders an opinion, which is
submitted to the Credit Committee. Executive Committee or the Board
of Directors for approval, depending on the amount involved in the
transaction, as set forth in the respective credit
manuals.
The
Bank monitors the portfolio at the individual borrower level, on an
ongoing basis and within the minimum terms set forth in the credit
manuals, and assesses credit aspects, in addition to the customer's
behavior with the Bank, payment history, use of checking account,
etc. Regarding arrears management, the policies govern the
commencement of several recovery stages – early arrears,
advanced arrears, and court proceedings – and establish the
recovery means, settlement options (debt restructuring, reductions,
further collateral, etc.), and risk control or recovery actions
enabled for each stage.
The
Bank develops indicators and reports on them on an ongoing basis to
monitor the performance of several business segments. The main
indicators in this regard are part of the Risk Dashboard. In
addition, the Bank develops several monthly and quarterly reports
covering all risks associated with the portfolio on the basis of
and in accordance with the business segment
specificity.
The
Bank has also developed methodologies for the periodical
performance of stress tests and Economic Capital calculation. In
connection with the stress tests aimed at measuring the impact of
Wholesale Banking portfolio credit risk in the face of several
potential values the defined risk factors may take, a rigorous and
detailed analysis at the level of each individual customer is
performed; in other words, the potential impact the borrower or
counterparty may have is measured and then reviewed at an aggregate
level. Individual stress tests have also been designed to reinforce
the methodology and simulate ad hoc scenarios. Such stress tests
have defined contingency plans, which are triggered according to
the size of the projected event.
Below
is a detail of the credit quality of the Group's financial
assets:
Impairment of financial instruments
See
Notes 8.3 and 9.
Loans written-off
Loans
written-off during the period ended December 31, 2024 and 2023
amounted to AR$ 64,916,034 and AR$118,280,562,
respectively.
b) Market risk
The
Bank monitors market risk, which is defined as the risk of
sustaining potential losses in both balance sheet and off-balance
sheet positions as a result of adverse fluctuations in the market
price for listed financial assets subject to trading, including,
for instance, government and corporate debt securities, shares,
currencies, derivative products, and debt instruments issued by the
BCRA.
Market
risk is comprised of: 1) risks inherent to equity and debt
securities and other financial instruments (price risk), and 2)
currency mismatch risk both within balance sheet and off-balance
sheet positions (exchange rate risk). Market risk includes risks
associated with both “linear” and
“non-linear” instruments (derivatives).
As
required by the rules issued by the BCRA, a Trading Portfolio has
been defined for market risk monitoring. A Trading Portfolio is
defined as a portfolio comprising positions in financial
instruments held for trading in the short term, in order to make a
profit from price fluctuations.
The
portfolio is managed according to the following strategic
guidelines:
●
Analysis of several macroeconomic and market variables, with its
ensuing impact on prices for financial assets.
●
Weighing of several classes of assets, optimization of the
portfolio risk-return profile, taking into account several classes
of assets and the interrelation among them.
●
Analysis of the assets which, in the entity's view, are under or
overvalued within each group and the potential for arbitrage within
each of them.
●
Compliance with both internal and external liquidity
requirements.
65
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
The
trading book should be measured at fair market value for purposes
of the capital requirement calculation. If the Bank has instruments
within its portfolio with no market quotation, whether by reason of
unavailability of a closing price or due to the fact that such
price is not representative as a result of an illiquid position, it
will estimate the fair value of the quotation.
“Fair
values” are estimated by applying a calculation method,
assumptions and parameters proposed by the Market Risk area, based
on customary market practices, and are periodically agreed upon and
reviewed by the Area Manager. The quotation will be estimated by
discounting expected future cash flows at a representative market
rate for such instrument, except for shares, in which case a
comparable valuation method will be applied. The Internal Audit
area, in compliance with the BCRA's rules, periodically reviews the
fairness of the criteria used in the estimate and the
calculation.
The
methodology employed by the Bank in quantifying market risk is
based on the “Value at Risk” (VaR), that is, an
estimate of maximum probable losses in a given horizon, with an
associated likelihood of no less than 99%. For positions with
associated price risk, the Bank has set a minimum time horizon or
holding period of ten sessions. Monitoring takes place on a daily
basis through an internally developed system. The Bank has
established “VaR” limits which are observed for
exposures to each of the aforementioned risks. There are also
exposure limits per type of instrument, namely: debt securities
from the non-financial public sector, local private debt
securities, local private trust securities, local equity,
currencies and gold, such limits are annually reviewed by the
Finance Committee as part of the preparation of the new Business
Plan and the related Risk Strategy. In order to verify the
robustness of the models employed in estimating price risk, the
Bank periodically conducts retrospective tests or
“backtesting”. The Bank also conducts individual stress
tests in order to estimate potential extreme losses not likely to
be captured by parametric models.
The
tables below show the Group's exposure to market risk as measured
by the trading book VaR at year-end:
|
|
Market Risk in the Trading Book
|
|||||||||
|
|
Balances as of 12/31/2024
|
Balances as of 12/31/2023
|
||||||||
|
|
BH
|
BACS
|
BHSA and BHNI
|
Consolidated (Diversified)
|
Diversification effect
|
BH
|
BACS
|
BHSA and BHNI
|
Consolidated (Diversified)
|
Diversification effect
|
|
Market Value
|
1,351,565,233
|
24,389,065
|
18,293,841
|
1,394,248,139
|
|
96,648,736
|
1,359,932
|
11,425,539
|
109,434,207
|
|
|
VaR
(99 %)
|
56,500,573
|
1,135,820
|
843,886
|
58,082,768
|
397,511
|
31,776,444
|
433,103
|
2,845,838
|
30,351,920
|
4,703,465
|
|
Risk / Net Worth
|
14.60%
|
4.62%
|
2.09%
|
13.02%
|
0.03%
|
20.29%
|
5.37%
|
11.42%
|
16.55%
|
7.32%
|
The
estimates of Value at Risk (price and foreign exchange risks) also
help to determine the economic capital to be set aside for market
risk.
Regarding
market risk, the Finance and Risk Management Committees discuss and
decide upon the main strategies to be followed in managing the
security portfolio, the structural gap in foreign currency, and
hedging alternatives; they are also in charge of defining the
tolerance level to be assumed by the Bank. The Market and
Operational Risk Area is responsible for identifying, measuring,
controlling and monitoring price and foreign exchange
risks.
The
tables below show the Group's exposure to foreign exchange risk at
year-end by type of currency:
|
|
Balances as of 12/31/2024
|
Balances as of 12/31/2023
|
||||||
|
|
Financial assets
|
Financial liabilities
|
Derivative instruments
|
Net Position
|
Financial assets
|
Financial liabilities
|
Derivative instruments
|
Net Position
|
|
Dollar
|
327,075,199
|
(291,149,150)
|
(3,092,245)
|
32,833,804
|
346,404,267
|
(321,102,031)
|
(13,363,649)
|
11,938,587
|
|
Euro
|
798,445
|
(4,962)
|
-
|
793,483
|
1,516,149
|
(8,491)
|
-
|
1,507,658
|
|
Total
|
327,873,644
|
(291,154,112)
|
(3,092,245)
|
33,627,287
|
347,920,416
|
(321,110,522)
|
(13,363,649)
|
13,446,245
|
Derivative
instruments are measured at the fair value of the respective
currency at year-end.
The
table above only includes Monetary Assets and Liabilities since
investments in non-monetary instruments do not give rise to market
risk exposure.
66
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
The
following is a sensitivity analysis of income (loss) and equity to
reasonable changes in the preceding exchange rates relative to the
Bank's functional currency, considering an instant variation in
exposure at year-end:
|
Currency
|
Variation
|
12/31/2024
|
12/31/2023
|
||
|
Income (loss)
|
Equity
|
Income (loss)
|
Equity
|
||
|
|
|
|
|
||
|
Dollar
|
40%
|
13,133,522
|
13,133,522
|
4,775,434
|
4,775,434
|
|
-40%
|
(13,133,522)
|
(13,133,522)
|
(4,775,434)
|
(4,775,434)
|
|
|
Euro
|
40%
|
317,393
|
317,393
|
603,064
|
603,064
|
|
-40%
|
(317,393)
|
(317,393)
|
(603,064)
|
(603,064)
|
|
c) Interest rate risk:
The
Bank makes a periodic follow up of the interest rate risk, both in
relation to the effects of variations in the interest rate on net
financial income as well as on the Bank’s economic value,
that is, on the current value of its assets and
liabilities.
As it
relates to the interest rate risk management, the Bank monitors the
amounts and contractual conditions of each new origination as well
as the current portfolio (stock of loans, deposits, swaps, hedges,
and securities, among others) to prevent potential departures from
the defined risk appetite. The Bank also conducts an ongoing
analysis of several hedging alternatives in order to reduce
interest rate gaps.
The
Office of the Market and Operational Risk Manager is the area
entrusted with the duties of identifying, measuring, controlling
and monitoring interest rate risk. The Finance Committee and the
Risk Management Committee are also involved in risk management,
with their respective responsibilities.
Interest
rate risk is quantified through two statistical approaches:
“Net Interest Income at Risk” and “Economic Value
at Risk”. The first of these two approaches assesses
potential departures in interest income as a result of changes in
interest rates, while the second approach assesses the potential
impairment of the portfolio present value, as a consequence of
potential fluctuations in the term structure of interest rates.
Both approaches also include “baseline risk,” which
arises from the imperfect correlation in lending and borrowing rate
adjustments for instruments with similar revaluation
features.
In
addition to the two approaches mentioned above, the Bank also
conducts a gap analysis (interval and cumulative gap) both in Pesos
and US dollars in order to quantify interest rate risk exposure on
several future dates, and under several sensitivity analyses and
stress tests. In addition, as a sensitivity measure, the impacts on
the expected results and on the expected current results of the
portfolio in the event of changes of +/- 100 basis points in
interest rates are evaluated.
The
Interest Rate Risk Report is prepared on a monthly basis. Such
report includes a description of the risk levels assumed by the
Bank under both approaches, term gaps (gap analysis), base risk
(due to foreign exchange hedge with futures), individual stress
analysis and relevant events of the month.
Each
measure has an associated limit, which is reviewed on an annual
basis as part of the preparation of the new Business Plan and its
related Risk Strategy.
The
following is a summary of the Group’s interest rate gap
position on non-trading portfolios. The interest rate repricing gap
table analyses the full-term structure of interest rate mismatches
within the Group’s statement of financial position on either
(i) the next repricing date or the maturity date if floating rate
or (ii) the maturity date if fixed rate.
67
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
31
December 2024
|
Carrying amount
|
Less than 1 month and floating rate
|
1-3 months
|
3-6 months
|
6-12 months
|
12-24 months
|
More than 2 years
|
|
Reverse
repurchase transactions
|
15,245,679
|
15,245,679
|
-
|
-
|
-
|
-
|
-
|
|
Loans
and other finacing
|
686,679,809
|
153,221,655
|
74,266,671
|
53,987,399
|
75,041,194
|
65,499,213
|
264,663,677
|
|
Investment
securities
|
207,401,376
|
200,298
|
14,044,043
|
1,180,860
|
181,125,419
|
3,490,438
|
7,360,317
|
|
|
909,326,864
|
168,667,632
|
88,310,714
|
55,168,259
|
256,166,613
|
68,989,651
|
272,023,995
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
(1,758,985,403)
|
(1,574,431,455)
|
(55,566,556)
|
(74,136,631)
|
(15,219,160)
|
(20,708,234)
|
(18,923,368)
|
|
Debt
securities issued
|
(82,775,976)
|
-
|
(7,723,567)
|
-
|
(58,876,025)
|
(16,176,384)
|
-
|
|
Repurchase
Transactions
|
(155,090,490)
|
(155,090,490)
|
-
|
-
|
-
|
-
|
-
|
|
|
(1,996,851,869)
|
(1,729,521,945)
|
(63,290,123)
|
(74,136,631)
|
(74,095,184)
|
(36,884,618)
|
(18,923,368)
|
|
|
(1,087,525,005)
|
(1,560,854,313)
|
25,020,591
|
(18,968,372)
|
182,071,429
|
32,105,033
|
253,100,627
|
|
31
December 2023
|
Carrying amount
|
Less than 1 month and floating rate
|
1-3 months
|
3-6 months
|
6-12 months
|
12-24 months
|
More than 2 years
|
|
Reverse
repurchase transactions
|
2.069.045.156
|
2.069.045.156
|
-
|
-
|
-
|
-
|
-
|
|
Loans
and other finacing
|
310.324.173
|
76,761,172
|
38,446,632
|
20,565,273
|
22,175,944
|
17,121,373
|
135,253,779
|
|
Investment
securities
|
72.360.674
|
-
|
159,341
|
1,268,099
|
1,825,399
|
10,794,594
|
58,313,241
|
|
|
2.451.730.003
|
2,145,806,328
|
38,605,973
|
21,833,372
|
24,001,343
|
27,915,967
|
193,567,020
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
(2,460,911,116)
|
(2,396,105,967)
|
(18,123,269)
|
(772,323)
|
(153,584)
|
(31,218)
|
(45,724,755)
|
|
Debt
securities issued
|
(83,448,243)
|
-
|
-
|
(58,114,904)
|
(12,666,669)
|
(12,666,670)
|
-
|
|
|
(2,544,359,359)
|
(2,396,105,967)
|
(18,123,269)
|
(58,887,227)
|
(12,820,253)
|
(12,697,888)
|
(45,724,755)
|
|
|
(92,629,356)
|
(250,299,639)
|
20,482,704
|
(37,053,855)
|
11,181,090
|
15,218,079
|
147,842,265
|
Funding
liquidity risk is defined as the likelihood that the Group may not
be able to efficiently fulfill its current or future expected and
unexpected cash flows, with margin call/execution, without
interfering with its day-to-day operations or financial
position.
On the
other hand, market liquidity risk is defined as the likelihood that
an entity may not be able to offset or sell a market position due
to:
● The fact that the volume of the
assets comprising such position in the secondary market is not
sufficient;
● The occurrence of disruptive events
in the market hindering the normal performance of operations and/or
its performance at reasonable prices.
68
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
The
preceding definitions refer to liquidity risk in local currency, as
well as to the risk related to positions in other currencies,
including, but not limited to, foreign exchange mismatches. To such
end, structural mismatch is defined as the difference between the
commitments for securities issued in and/or adjusted for foreign
currency and the assets denominated in and/or adjusted for the same
currency. It also includes the risks stemming from positions which,
due to regulatory issues, are not accounted for in the financial
statements, as it is the case of certain derivative
instruments.
Liquidity
management refers not only to liquidity risk in local currency but
also to liquidity risk related to positions in other currencies,
including, but not limited to, currency mismatches.
Liquidity
risk management is defined as such actions planned for and/or
carried out in order to maintain liquidity risk within the scope of
the Board's definition. Such actions stem from the Finance Area's
intrinsic mission of efficiently managing the liquid and financial
resources.
In
order for control over liquidity risk to be effective, the Bank has
established a scheme of limits and early warnings to keep the
Finance Committee abreast of potential increases in risks and/or
unexpected changes in the tolerance level. Once a certain risk
threshold has been reached, the Finance Committee is expected to
assess the actions to be taken.
Similarly,
the Bank monitors compliance with the Liquidity Coverage Ratio
(LCR) and Net Stable Funding Ratio (NSFR) minimum requirements; in
both cases, keeping the Finance Committee and the Director in
charge of monitoring liquidity inform of changes in such
ratios.
The
Finance Committee establishes the liquidity risk aversion level to
be assumed by the Bank, and the Finance Area manages the currency
liquidity mismatch risk following the guidelines set out by the
Finance Committee and the Director in charge of
liquidity.
69
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
Maturity
analysis for financial liabilities as of December 31,
2024.
|
|
Remaining
terms to maturity
|
|
|||||
|
Item
|
1
month
|
3
months
|
6
months
|
12
months
|
24
months
|
More
than 24 months
|
Total
|
|
Deposits
|
|
|
|
|
|
|
|
|
Non-financial
public sector
|
165,564,096
|
2,304,883
|
-
|
21,082,071
|
-
|
1,076,126
|
190,027,176
|
|
Financial
sector
|
165
|
-
|
-
|
-
|
-
|
-
|
165
|
|
Non-financial
private sector and foreign residents
|
1,353,832,528
|
543,131,402
|
131,900,140
|
5,945,259
|
129,367
|
194,786
|
2,035,133,482
|
|
Liabilities at fair
value through profit or loss
|
27,867,232
|
-
|
-
|
-
|
445,900
|
-
|
28,313,132
|
|
Derivates
Instruments
|
-
|
-
|
-
|
-
|
-
|
40,016
|
40,016
|
|
Repurchase
transactions
|
155,090,490
|
-
|
-
|
-
|
-
|
-
|
155,090,490
|
|
Other
financial liabilities
|
151,078,846
|
976,173
|
1,240,711
|
2,511,174
|
4,220,552
|
230,243
|
160,257,699
|
|
Loans
from the BCRA and other financial institutions
|
3,883,669
|
428,688
|
1,638,994
|
-
|
-
|
-
|
5,951,351
|
|
Debt
securities issued
|
-
|
3,468,244
|
788,571
|
86,482,590
|
-
|
-
|
90,739,405
|
|
TOTAL
|
1,857,317,026
|
550,309,390
|
135,568,416
|
116,021,094
|
4,795,819
|
1,541,171
|
2,665,552,916
|
Maturity
analysis for financial liabilities as of December 31,
2023.
|
|
Remaining terms to maturity
|
|
|||||
|
Item
|
1 month
|
3 months
|
6 months
|
12 months
|
24 months
|
More than 24 months
|
Total
|
|
Deposits
|
|
|
|
|
|
|
|
|
Non-financial
public sector
|
73,468,772
|
8,932,614
|
-
|
-
|
-
|
1,601,266
|
84,002,652
|
|
Financial
sector
|
1,209
|
-
|
-
|
-
|
-
|
-
|
1,209
|
|
Non-financial
private sector and foreign residents
|
2,278,043,843
|
121,111,813
|
2,943,946
|
1,688,043
|
161,374
|
134,197
|
2,404,083,216
|
|
Liabilities at fair
value through profit or loss
|
59,695,715
|
-
|
-
|
-
|
472,473
|
-
|
60,168,188
|
|
Other
financial liabilities
|
81,730,642
|
1,400,486
|
2,117,903
|
4,609,076
|
9,663,409
|
16,972,948
|
116,494,464
|
|
Loans
from the BCRA and other financial institutions
|
1,855,257
|
941,793
|
3,973,417
|
-
|
-
|
-
|
6,770,467
|
|
Negotiable
obligations issued
|
-
|
-
|
30,767,152
|
30,272,781
|
30,272,781
|
-
|
91,312,714
|
|
TOTAL
|
2,494,795,438
|
132,386,706
|
39,802,418
|
36,569,900
|
40,570,037
|
18,708,411
|
2,762,832,910
|
The
next table shows the sensitivity of the income statement and net
worth to the interest rate, before income taxes and under a ceteris
paribus assumption.
The
sensitivity of the income statement is measured as the effect of
changes in the interest rate on the net interest income for one
year, before considering income taxes, and on the basis of the
financial assets and liabilities as measured at December 31, 2024
and 2023.
70
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
The
sensitivity of the Group’s net worth is measured as the
effect of changes in the interest rate on the present value of
financial assets and liabilities as measured at December 31, 2024
and 2023, and before considering income taxes.
|
|
Measured at December 31, 2024
|
|||||
|
Currency
|
Change (in basis points)
|
Net Worth Sensitivity (2)
|
Income Statement Sensitivity
|
|||
|
Foreign
Currency (1)
|
+/-
|
50
|
+/-
|
4,716
|
+/-
|
10,238
|
|
Foreign
Currency (1)
|
+/-
|
75
|
+/-
|
7,075
|
+/-
|
15,357
|
|
Foreign
Currency (1)
|
+/-
|
100
|
+/-
|
9,433
|
+/-
|
20,476
|
|
Foreign
Currency(1)
|
+/-
|
150
|
+/-
|
14,150
|
+/-
|
30,715
|
|
Local
Currency
|
+/-
|
50
|
+/-
|
1,645,220
|
+/-
|
353,300
|
|
Local
Currency
|
+/-
|
75
|
+/-
|
2,467,831
|
+/-
|
529,951
|
|
Local
Currency
|
+/-
|
100
|
+/-
|
3,290,441
|
+/-
|
706,601
|
|
Local
Currency
|
+/-
|
150
|
+/-
|
4,935,662
|
+/-
|
1,059,902
|
(1) Both calculations were
done on the basis of the Group’s own transference
rates.
(2) Net Worth losses in local
currency are associated with a rise in interest rates, while for
foreign currency losses are associated with lower interest
rates.
|
|
Measured at December 31, 2023
|
|||||
|
Currency
|
Change (in basis points)
|
Net Worth Sensitivity (2)
|
Income Statement Sensitivity
|
|||
|
Foreign
Currency (1)
|
+/-
|
50
|
+/-
|
16,876
|
+/-
|
8,946
|
|
Foreign
Currency (1)
|
+/-
|
75
|
+/-
|
25,315
|
+/-
|
13,420
|
|
Foreign
Currency (1)
|
+/-
|
100
|
+/-
|
33,753
|
+/-
|
17,893
|
|
Foreign
Currency(1)
|
+/-
|
150
|
+/-
|
50,630
|
+/-
|
26,840
|
|
Local
Currency
|
+/-
|
50
|
+/-
|
74,141
|
+/-
|
96,784
|
|
Local
Currency
|
+/-
|
75
|
+/-
|
111,212
|
+/-
|
145,176
|
|
Local
Currency
|
+/-
|
100
|
+/-
|
148,283
|
+/-
|
193,568
|
|
Local
Currency
|
+/-
|
150
|
+/-
|
222,424
|
+/-
|
290,352
|
(1) Both calculations were
done on the basis of the Group’s own transference
rates.
(2) Net Worth losses in local
currency are associated with a rise in interest rates, while for
foreign currency losses are associated with lower interest
rates.
LIMITS, EARLY WARNINGS AND MONITORING VARIABLES
High liquidity and minimum liquidity requirement
In
order to maintain a risk level in line with the tolerance threshold
approved by the Board of Directors, the Bank has set minimum limits
(“Minimum Liquidity Requirement”) for the liquid and/or
readily realizable position (“High
Liquidity”).
Limits to foreign currency positions
The
Finance Committee sets maximum limits to purchased or sold
positions in foreign currency and, to the extent necessary, to
foreign exchange derivative instruments or other financial
commitments in foreign currency.
Exposure limit by type of instrument
The
Finance Committee defines an exposure limit by type or category of
instrument and/or security applicable for the entire
year.
Deposit concentration and stability
In
order to build a stable and quality deposit base, the Bank takes
actions to foster and give priority to the balanced growth of
deposits, diversifying the customer base, geographic areas, and
type of deposits. In order to be aware of liquidity risk
implications and changes in liquidity projections as a result of
deposit concentration, the Bank sets alert levels and defines the
actions to be taken.
As of
December 31, 2024, 51% of deposits correspond to the 10 major
accounts, which are mutual funds, and financial services
corporations.
71
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
Contingent liquidity requirements for special
operations
The
Finance Committee approves and oversees the agreed-upon financial
conditions and the contingencies associated with off-balance sheet
operations and/or positions.
Liquidity Coverage Ratio (LCR)
Through
Communication “A” 5724 issued in March 2015, the BCRA
imposed a daily monitoring requirement, with monthly and quarterly
reporting to the BCRA.
Net Stable Funding Ratio (NSFR)
Through
Communication “A” 6306, the BCRA established a new
indicator to be monitored on a daily basis and reported quarterly
to the BCRA.
The
goal of the NSFR is for financial institutions to be able to
monitor to what extent they may fund their activities out of
sufficiently stable sources to mitigate the risk of future stress
scenarios resulting from their funding.
The
table below shows the Bank's liquidity coverage ratios (LCR) for
the fiscal years ended December 31, 2024 and 2023:
|
|
12/31/2024
|
12/31/2023
|
|
Average
for the year
|
116%
|
121%
|
|
Higher
|
128%
|
100%
|
|
Lower
|
109%
|
173%
|
The
breakdown of financial assets and liabilities by maturity are
disclosed in Schedule D “Consolidated breakdown of Loans and
Other Financing Arrangements by Maturity Dates” and Schedule
I “Consolidated breakdown of Financial Liabilities by
Maturity Dates” to these financial statements,
respectively.
38. CAPITAL MANAGEMENT
The
Group's capital management goals are:
● Fulfilling the requirements
established by the BCRA
● Supporting the Bank's operations to
prevent any situation that may endanger them.
According
to the BCRA’s guidelines, financial institutions are required
to maintain certain capital ratios to mitigate the associated
risks. The Bank has met the minimum capital requirement determined
in accordance with the BCRA’s rules. The capital risk
management is cross-sectional with respect to the other risks,
Senior management is responsible for monitoring, overseeing,
adjusting and ensuring compliance with its stated goals concerning
capital management.
Regulatory
Capital (Responsabilidad
Patrimonial Computable) is comprised by Core Capital and
Supplementary Capital. The table below shows a breakdown of the
respective balances:
|
|
12/31/2024
|
12/31/2023
|
|
Core
Capital
|
|
|
|
Tier 1
Ordinary Capital
|
472,334,509
|
414,635,631
|
|
(Deductible
items)
|
(28,334,735)
|
(16,577,158)
|
|
Tier 1
Additional Capital
|
1,007,471
|
511,431
|
|
Supplementary
Capital
|
|
|
|
Tier 2
Capital
|
1,732,870
|
793,698
|
|
Regulatory Capital (Responsabilidad Patrimonial
Computable)
|
446,740,115
|
399,363,602
|
Below
is a detail of the determined capital requirement:
72
Notes to the consolidated financial statementsas of December 31,
2024 and December 31, 2023
In thousands of Argentine Pesos (Note 3.2)
|
|
12/31/2024
|
12/31/2023
|
|
Credit
risk
|
65,729,867
|
42,338,240
|
|
Market
risk
|
35,319,648
|
13,736,042
|
|
Operational
risk
|
46,827,598
|
30,006,682
|
|
Core requirement
|
147,877,113
|
86,080,964
|
|
Payment
|
446,740,115
|
399,363,602
|
|
Surplus
|
298,863,002
|
313,282,638
|
39. DEPOSIT GUARANTEE SYSTEM
Law
24485 and Decree 540/95 created the Deposit Insurance System for
the purpose of providing coverage for bank deposits in addition to
the privileges and protection system provided for under the
Financial Institutions Law. That law provided for the incorporation
of “Seguros de Depósitos Sociedad Anónima”
(SEDESA) for the purpose of managing the Deposits Guarantee Fund
(DGF).
Through
Communication “A” 7685, the BCRA stablished the cap for
deposit insurance in 25,000, as from April 1, 2024.
Sight
deposits with interest rates over reference rates and time deposits
and fixed-term investments with rates exceeding 1.3 times the
reference rate are excluded from the coverage. Also, time deposits
and fixed-term investments are excluded when these limits on
interest rates are distorted by additional incentives or
yields.
Financial
institutions are required to contribute to the DGF for an amount of
0.015% over the monthly average its related deposits. In addition
to the normal contribution, and an additional contribution is
required weighting several factors.
As of
December 31, 2024 and 2023, the contribution to the DGF amounted to
3,298,175 and 3,145,167, respectively, and it is recorded under
“Other operating expenses” as of each
period.
40. SUBSEQUENT EVENTS
Due to the characteristics of the "Edificio del Plata Trust”,
the decision-making body thereof had the option to determine
whether income tax will be allocated to the Trust or the
Trustors-Beneficiaries. On April 30, 2025, the Executive Committee
of the "Edificio del Plata Trust” decided the allocation of
the Trust's taxable income/loss to each Trustor-Beneficiary that
will be responsible for the tax and must include in their tax
returns the related portion of the Trust's taxable income/loss. On
May 12, 2025, TMF Trust Company (Argentina) S.A. as Trustee sent a
note to Banco Hipotecario S.A. allocating its portion of the
taxable income/loss of the Trust which consisted of a tax loss
amounting to 13,191,587, generated by the tax inflation adjustment
of the real estate contributed to the Trust. This amount was
considered as a deduction in the Entity’s 2024 income tax
return whereas the accounting impact was recorded as a lower income
tax expense in May 2025.
On February 21, 2025 Banco Hipotecario S.A. issued debt securities
class IX with the following terms:
|
|
Nominal value
|
Issuance date
|
Due date
|
Annual interest rate
|
|
Clase IX
|
$50.000.000
|
02/21//25
|
02/21/26
|
Tamar + 2,75%
|
Capital
of these debt securities will be fully paid at due date. Interests
are to be paid on a quarterly basis, commencing on May 21,
2025.
73
Independent
Auditors’ Report
To the
Shareholders and Board of Directors Banco Hipotecario
S.A.
Report on the Audit of the Consolidated Financial
Statements
Opinion
We have
audited the consolidated financial statements of Banco Hipotecario
S.A. and its subsidiaries (the Bank), which comprise the
consolidated statement of financial position as of December 31,
2024, and the related consolidated statements of income and other
comprehensive income, changes in equity, and cash flows for the
year then ended, and the related notes to the consolidated
financial statements.
In our
opinion, the accompanying consolidated financial statements present
fairly, in all material respects, the financial position of the
Bank as of December 31, 2024, and its results of its operations and
its cash flows for the year then ended in accordance with
International Financial Reporting Standards (IFRS) Accounting
Standards as issued by the International Accounting Standards Board
(IASB).
Basis for Opinion
We
conducted our audit in accordance with auditing standards generally
accepted in the United States of America (GAAS). Our
responsibilities under those standards are further described in the
Auditors’ Responsibilities for the Audit of the Consolidated
Financial Statements section of our report. We are required to be
independent of the Bank and to meet our other ethical
responsibilities, in accordance with the relevant ethical
requirements relating to our audit. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.
Other Matter
The
consolidated financial statements of the Bank for the year ended
December 31, 2023, were audited by another auditor, who expressed
an unmodified opinion on those consolidated financial statements on
June 18, 2024. As described in Note 3.2, the Bank has adjusted the
prior period comparative year ended December 31, 2023, consolidated
financial statements to conform with the accounting requirements in
accordance with IAS 29, Financial
Reporting in Hyperinflationary Economies (IAS 29).
Accordingly, the audit opinion issued on June 18, 2024, by the
other auditor on the 2023 consolidated financial statements, did
not express an opinion on the adjustments required by IAS 29. These
required adjustments to conform the comparative period presentation
were audited by us.
Responsibilities of Management for the Consolidated Financial
Statements
Management is
responsible for the preparation and fair presentation of the
consolidated financial statements in accordance with IFRS
Accounting Standards as issued by the IASB, and for the design,
implementation, and maintenance of internal control relevant to the
preparation and fair presentation of consolidated financial
statements that are free from material misstatement, whether due to
fraud or error.
In
preparing the consolidated financial statements, management is
required to evaluate whether there are conditions or events,
considered in the aggregate, that cast significant doubt about the
Bank’s ability to continue as a going concern for at least
twelve months after the date that the consolidated financial
statements are authorized for issuance.
74
Auditors’ Responsibilities for the Audit of the Consolidated
Financial Statements
Our
objectives are to obtain reasonable assurance about whether the
consolidated financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditors’ report that includes our opinion. Reasonable
assurance is a high level of assurance but is not absolute
assurance and therefore is not a guarantee that an audit conducted
in accordance with GAAS will always detect a material misstatement
when it exists. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
Misstatements are considered material if there is a substantial
likelihood that, individually or in the aggregate, they would
influence the judgment made by a reasonable user based on the
consolidated financial statements.
In
performing an audit in accordance with GAAS, we:
● Exercise
professional judgment and maintain professional skepticism
throughout the audit.
● Identify
and assess the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error, and design and
perform audit procedures responsive to those risks. Such procedures
include examining, on a test basis, evidence regarding the amounts
and disclosures in the consolidated financial
statements.
● Obtain an
understanding of internal control relevant to the audit in order to
design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing an opinion on the
effectiveness of the Bank’s internal control. Accordingly, no
such opinion is expressed.
● Evaluate
the appropriateness of accounting policies used and the
reasonableness of significant accounting estimates made by
management, as well as evaluate the overall presentation of the
consolidated financial statements.
● Conclude
whether, in our judgment, there are conditions or events,
considered in the aggregate, that raise significant doubt about the
Bank’s ability to continue as a going concern for a
reasonable period of time.
We are
required to communicate with those charged with governance
regarding, among other matters, the planned scope and timing of the
audit, significant audit findings, and certain internal control
related matters that we identified during the audit.
Buenos
Aires, State, Argentina
June
30, 2025
KPMG
75