BBVA Argentina (BYMA/NYSE:BMA) posted a net gain of ARS 6.8 billion in 2Q19, almost 220% higher y-o-y, and 13% q-o-q. It is worth recalling that the net income of 1Q19 included a one-off profit from the sale of 51% of the bank’s stake in Prisma and the market valuation of the remaining 49%; excluding such impact, the growth in the quarter would have been 74%.
Net interest margin rose 117% in the last 12 months and 26% in the quarter. In terms of its composition, and as it has been the case in recent quarters, a relevant portion of 2Q19 profit stemmed securities income (616% YoY; 80% QoQ), which today accounts for 37% of the bank’s total financial income. On the contrary, in the commercial banking business, loan interest income grew only 3% in the quarter (53% YoY) and accounts for 49% of total financial income.
Such performance is in part the result of a stagnant credit market. While deposits rose only 2% between quarters (48% YoY), private-sector credit showed almost no growth (0.7% QoQ) and grew below inflation in annual terms (15% YoY). The ratio of non-performing loans to total credit stood at 2.7% as of June 2019 (0.9% in 2Q18; 2.2% in 1Q19), with loan-loss coverage of 113%; although there is a clear worsening of asset quality figures, they remain within the lowest levels among its domestic peers.