Edgar Filing: BBVA BANCO FRANCES SA

BBVA Banco Francés S.A.

Date: June 1, 2018

/s/ Ernesto Gallardo Jimenez

Name: Ernesto Gallardo Jimenez

Title: Chief Financial Officer

Form 6-K

FORM 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Report of Foreign Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of June 2018

Commission File Number: 001-12568

BBVA French Bank S.A.

(Translation of registrant’s name into English)

Reconquista 199, 1006

Buenos Aires, Argentina

(Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):

Yes ☐ No ☒

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):

Yes ☐ No ☒

Indicate by check mark whether by furnishing the information contained in this Form, the Registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:

Yes ☐ No ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): N/A

BBVA Banco Francés S.A.

TABLE OF CONTENTS


Item

1.		BBVA Francés reports consolidated first quarter earnings for fiscal year 2018.

LOGO

Buenos Aires, June 1, 2018 - BBVA Francés (NYSE: BFR.N; BCBA:

FRA.BA; LATIBEX: BFR.LA) reports consolidated first quarter results for

the January-December 2018 fiscal year.

The consolidated financial statements as of March 31, 2018 are the first quarterly financial statements presented in accordance with Communication “A” 6114 of the Central Bank of Argentina (BCRA) (“financial statements under IFRS regulations”). For comparative purposes, the amounts for previous quarters included in the text are presented in accordance with IFRS, but the amounts included in the tables remain in the same format as presented for last quarter of 2017.

Highlights of the Quarter

•

BBVA Francés reached a net income in the first quarter of 2018 of AR$ 1,545.3 million, 18.9% lower than the net income registered in the previous quarter and 178.3% higher compared to the first quarter of 2017, in both cases restated for comparative purposes.

•

The previous quarter’s net income restated for IFRS (AR$ 1,905 million vs AR$ 1,420 million previously released) is mainly explained by a lower deferred income tax charge, due to the application of the reduced income tax rate approved by Congress last December.

•

The ROA, return on assets, reached 2.9% and the ROE, return on equity was 20.3% compared to 2.8% and 22.2%, respectively in the previous quarter, without considering the IFRS adjustment. It is important to mention that the equity increase originated mainly in the revaluation of real estate had a negative impact of approximately 300 bp in the ROE ratio.

•

Net financial income increased 6.6% compared to the previous quarter and 52% in the last twelve months, mainly due to the higher volume of activity.

•

Net income from services increased 1.3% during the first quarter of 2018 and 36.2% compared to the same quarter of 2017. The quarterly variation was mainly due to higher revenues from deposits and collections services, while credit and debit card fees decreased by 4.1% as a result of the reduction in the merchant discount rate partially offset by higher volume.

•

Administrative expenses grew 3.2% during the quarter and 25.8% compared to the same quarter of 2017, reaching an efficiency ratio of 57.4%, 150 bp lower that the restated ratio of the previous quarter.

•

The asset quality ratio (Non-Performing Loans/Total loans) stood at 0.72% with a coverage (Total allowances/NPL) of 250.5% as of March 31, 2018. The cost of risk was 1.32%, 1 bp lower than the previous quarter.

•

The private loan portfolio increased 8.9% during the first quarter of the year, in line with the market, and 69.4% in the last twelve months (vs 56% for the system). The performance of mortgages and consumer loans portfolios stood out during the quarter, increasing 31.9% and 16.5%; respectively.

•

Total deposits grew 3.9% during the quarter and 30.3% compared to the quarter ended March 31, 2017, both in line with the market.

•

As of March 31, 2018, BBVA Francés maintained a capital ratio of 15.7%, 100 bp over the level at December 31, 2017, which exceeds the minimum required by AR$ 15.6 billion.

•

As of March 31, 2018, liquid assets accounted for 38% of the Bank’s deposits.

•

The Bank continued to increase its client base, adding 133,600 net clients during the quarter; and reaching a total of 2.76 million clients.

Other events

•

The Annual Ordinary and Extraordinary Shareholders Meeting, held on April 10, 2018 approved a cash dividend payment for a total amount of AR$ 970 million, such payment was effective on May 9, 2018.

•

The Shareholders’ Meeting also approved an increase in the amount and extension of the global program of negotiable bonds form USD 750 million to USD 1,500 million, including the possibility of UVA denominated issuances and the creation of a global program of short-term debt securities with repayment terms of up to one year (the “VCPs”) for up to USD 250 million.

•

BBVA Francés decided to determine the income tax for the 2017 fiscal year, ending in May 2018, considering the effects of inflation. At the same time, a declarative action of certainty was presented, requesting the inapplicability of the rules that suspend the inflation adjustment, based on the confiscatory effect arising thereof. Furthermore, it is hereby informed that upon request by the BCRA, in its memorandum dated May 29, 2017, with regard to the Income Tax Affidavit corresponding to the 2016 fiscal year. BBVA Francés established a AR$ 1,021.5 million provision to cover the possible contingency derived from the decision adopted concerning 2017 fiscal year Income Tax.

Regulatory Changes

•

In May 2018, the BCRA established ,through its Communication “A” 6501 , that as of May 7, 2018 the Net Global FX position when converted to pesos at the applicable exchange rate on a daily basis cannot be greater than 10% of the previous month integrated capital (RPC) or the Bank’s own liquid assets, whichever is less.

•

The BCRA also established that for the period May-July 2018, compliance with the minimum cash requirement will be made on a quarterly basis. For the month of May, compliance with the minimum daily requirement was eliminated.

Economic Environment


		Quarter ended
Main Macroeconomic figures		03-31-18			12-31-17			03-31-17
GDP	var % y/y		n/d			3.9	%		0.4	%
Inflation (1)	var % y/y		25.3	%		24.8	%		32.2	%
End of period	var % q/q		6.6	%		6.1	%		6.1	%
CER	Quarterly adjustment		7.0	%		5.0	%		4.6	%
Exchange Rate	Pesos x US$		20.14			18.77			15.38
Reserves	US$		61,726			55,055			50,522
Fiscal Balance	Primary - billion of $		(31,001	)		(181,763	)		(41,344	)
Trade Balance	US$ (billion)		(2,500	)		(3,311	)		(1,179	)
Total Private Loans	var % q/q		8.8	%		14.2	%		5.7	%
	var % y/y		56.2	%		51.7	%		35.6	%
Total Private Deposits	var % q/q		3.4	%		14.2	%		1.8	%
	var % y/y		31.3	%		29.2	%		38.5	%
Badlar interest rate	Weighted avg. quarterly		22.8	%		22.4	%		19.8	%

(1)	IPC National since 1Q 17

- 2 -

Presentation of the Information

•

The consolidated financial statements as of March 31, 2018 are the first quarterly financial statements presented in accordance with Communication “A” 6114 of the Central Bank of Argentina (BCRA) (financial statements under IFRS regulations). For comparative purposes, the amounts for previous quarters included in the text are presented in accordance with IFRS, but the amounts included in the tables remain in the same format as presented for the last quarter of 2017.

•

The information in this press release contains unaudited financial information that consolidates, line item by line item, all of the banking activities of BBVA Francés (Volkswagen Financial Services, Francés Valores and Francés Administradora de Inversiones). As of this quarter, the Bank’s share interest in PSA Finance is no longer disclosed on a consolidated basis but is shown as “Investments in Other Companies” (recorded under the equity method), and the corresponding results are included in “Income from Equity Investments”, as Rombo Compañia Financiera.

•

The balances in foreign currency as of March 31, 2018 were converted into pesos at the reference exchange rate published by the BCRA for that date (AR$ 20.14/USD).

•

The information in this press release may differ from the information published by the BBVA Group for Argentina, which is prepared according to Spanish accounting standards for all BBVA Group affiliates.

Disclaimer

This press release contains or may contain forward-looking statements, including but not limited to estimates of the prospects for the Argentine economy, BBVA Francés’ earnings, business plans, expense and operational structure adjustments, capitalization plan, and trends affecting BBVA Francés’ financial condition and results of operations. Any forward-looking statements included in this press release are based on current expectations and estimates, but actual results and events may differ materially from anticipated future results and events. Certain factors which could cause the actual results and events to differ materially from the expected results or events include: (1) macroeconomic, regulatory or political changes; (2) changes in domestic or international stock market prices, exchange rates or interest rates; (3) changes in the markets for BBVA Francés’ products and services; (4) increasing competition; (5) changes in technology; or (6) changes in the financial condition, creditworthiness or solvency of the customers, debtors or counterparts of BBVA Francés. These forward-looking statements on future events referring only to the date of the document should be taken cautiously. It is advisable to consult the Bank’s Financial Statements and all the documents filed from time to time with the Argentine Securities and Exchange Commission (“CNV”) and the Buenos Aires Stock Exchange.

- 3 -

Quarterly Results


Condensed Income Statement (1)	Quarter ended									D% Quarter ended 03-31-18 vs quarter ended
In thousands of $ except income per share, ADS	03-31-18			12-31-17			03-31-17			12-31-17			03-31-17
Net Financial Income		5,522,263			5,181,930			3,628,743			6.6	%		52.2	%
Provision for loan losses		(526,051	)		(372,954	)		(314,425	)		41.0	%		67.3	%
Net income from services		859,786			848,740			631,398			1.3	%		36.2	%
Administrative expenses		(3,663,781	)		(3,550,414	)		(2,912,140	)		3.2	%		25.8	%
Operating income		2,192,217			2,107,302			1,033,576			4.0	%		112.1	%
Income (Loss) from equity investments		39,877			52,077			72,856			-23.4	%		-45.3	%
Other Income/Expenses		(3,226	)		(165,607	)		(299,000	)		98.1	%		n/a
Income Tax / Minimum Presumed Tax		(662,724	)		(78,771	)		(243,885	)		741.3	%		171.7	%
Net income for the period		1,566,144			1,915,001			563,547			-18.2	%		177.9	%
Income (Loss) from Minority interest		20,846			9,956			8,372			109.4	%		149.0	%
Net income		1,545,298			1,905,045			555,175			-18.9	%		178.3	%
Net income per share (2)		2.52			3.11			1.03			-18.9	%		143.9	%
Net income per ADS (3)		7.57			9.33			3.10			-18.9	%		143.9	%
Other comprehensive incomes		5,175			16,213			(6,414	)		-68.1	%		-180.7	%

Total comprehensive net income		1,550,473			1,921,258			548,761			-19.3	%		182.5	%

(1)	Exchange rate: AR$ 20.14 Ps = 1 USD

(2)	Assumes 612,659,638 ordinary shares for the third and fourth quarter of 2017 and 536,877,850 for the rest of the

(3)	Each ADS represents three ordinary shares

In the first quarter of 2018, BBVA Francés reached a net income of AR$ 1,545.3 million, registering a decrease of 18.9% decrease compare to the previous quarter and a 178.3% increase compared to the first quarter of 2017.

The previous quarter’s net income restated to IFRS (AR$ 1,905 million vs AR$ 1,420 million previously released) is mainly explained by a lower deferred income tax charge, due to the application of the reduced income tax rate approved by Congress last December.

Regarding the restated net income for the first quarter of 2017, it reached AR$ 555.2 million compared to the AR$ 1,605.7 million released twelve months before, mainly due to the inclusion of a provision of AR$ 1,186 million; provision due to the gain originated by the inflation adjustment application on the 2016 income tax calculation, such provision was previously recorded in the second quarter of 2017.


										% Quarter ended 12/31/17
Main figures	Quarter ended									vs quarter ended
	03-31-18			12-31-17			03-31-17			12-31-17			03-31-17
ROA (Average Assets) (1)		2.9	%		3.8	%		1.4	%		-24.4	%		106.0	%
ROE (Average Shareholders’ Equity) (1)		20.3	%		25.9	%		12.7	%		-21.7	%		59.9	%
NIM		12.3	%		12.6	%		14.0	%		-1.8	%		-12.1	%
Net fee income / Net operating Income (2)		13.5	%		14.1	%		14.8	%		-4.3	%		-9.1	%
Coverage ratio (3)		23.5	%		23.9	%		21.7	%		-1.8	%		8.2	%
Efficiency ratio (4)		57.4	%		58.9	%		68.4	%		-2.5	%		-16.0	%

(1) Annualized, without considering the extraordinary results corresponding to 1st and 2nd quarter 2017.

(2) Net interest Margin: Financial Income-Financial Expenses (include Gross Income Tax and SEDESA) / Average Interest-Earning Assets (net of foreign exchange difference)

(3) Net income from services / Adm.Expenses

(4) Adm.Expenses / (Net financial income + Net income from services)

During the first quarter of 2018, the annualized return on assets (ROA) reached 2.9% compared to 2.8% published in the fourth quarter of 2017 (restated to 3.8% under IFRS), while return on equity (ROE) was 20.3% compared to 22.3% published in the previous quarter (restated to 25.9% under

- 4 -

IFRS) although it should be noted that the increase in equity due to revaluation of the Bank’s real estate properties from the application of IFRS had a negative impact of approximately 300 bp in the ROE ratio.

Net Financial Income


Net financial income	Quarter ended						D% Quarter ended 03-31-18 vs quarter ended
(in thousands of pesos)	03-31-18		12-31-17		03-31-17		12-31-17			03-31-17
Financial Income		8,920,787		7,825,343		5,750,791		14.0	%		55.1	%
Income from financial intermediation		6,294,049		5,640,746		4,488,627		11.6	%		40.2	%
CER adjustment		44,416		96,200		95,932		-53.8	%		-53.7	%
UVA adjustment		287,997		92,247		4,353		212.2	%		6516.1	%
Income Securities and short term inv.		1,275,235		995,171		597,346		28.1	%		113.5	%
Foreign exchange difference		695,269		727,711		306,126		-4.5	%		127.1	%
Others		323,821		273,268		258,407		18.5	%		25.3	%
Financial Expenses		-3,398,524		-2,643,413		-2,122,048		28.6	%		60.2	%
Net Financial Income		5,522,263		5,181,930		3,628,743		6.6	%		52.2	%

Net financial income grew by 6.6% compared to the previous quarter and 52.2% compared to the first quarter of 2017.

Financial income increased 14% during the first quarter mainly due to a higher volume of intermediation with the private sector, the UVA adjustment on the portfolio of private loans and higher income from public securities, whereas the foreign exchange difference decreased by 4.5%. Financial expenses grew 28.6% due to the increase in the interest rated for time deposits in pesos (240 bp) and a higher participation of these liabilities compared to sight accounts.

NIM

Interest-Earning Assets & Interest-Bearing

Quarter ended

Liabilities $ + USD

03-31-18

12-31-17

03-31-17

(Averege in thouhand of AR$)

Capital

Rate

Capital

Rate

Capital

Rate

Interest-Earning Assets

158,676,684

19.2

140,720,279

18.7

96,291,026

21.1

Interest-Bearing Liabilities

124,753,037

8.9

105,396,185

8.0

80,036,663

8.7

NIM without foreign exchange differences

12.34

12.56

14.03

The net interest margin (NIM) excluding the results for foreign exchange difference decreased 22 bp in the quarter, from 12.56% to 12.34%, with a decline of 20 bp in the local currency and an increase of 26 bp in the USD balance.

The total NIM had a slight negative impact cost due to the currency mix, a consequence of a greater activity in USD compared to AR$.

The interest rate for time deposits in pesos registered an increase of 240 bp in the quarter due to their short term duration while the interest rates for loans increased by 140 bp, reflecting a higher average duration.

The following table shows return on assets and cost of liabilities by currency: in pesos and dollars.

- 5 -


Interest-Earning Assets & Interest-Bearing							Quarter ended
Liabilities $	03-31-18						12-31-17						03-31-17
(Average in thouhand of AR$)	Capital			Rate			Capital			Rate			Capital			Rate
Interest-Earning Assets		116,214,892			25.3	%		104,306,132			24.2	%		79,754,949			24.9	%
Public Bonds		17,074,738			27.1	%		14,254,745			26.8	%		10,195,793			25.7	%
Loans		98,088,733			25.1	%		82,344,943			23.7	%		63,688,772			24.8	%
Other interest-earning assets		1,051,420			21.9	%		7,706,444			24.5	%		5,870,383			24.6	%
Interest-Bearing Liabilities		75,384,640			14.5	%		65,213,962			12.9	%		54,803,079			12.6	%
Saving Accounts		26,907,592			0.2	%		24,329,949			0.2	%		19,404,565			0.2	%
Time Deposits		40,548,320			21.5	%		33,970,213			19.9	%		32,364,738			19.2	%
Current accounts with interest		5,420,745			21.7	%		4,027,291			22.4	%		389,255			15.4	%
Debt Securities		1,902,136			26.2	%		1,033,559			25.7	%		1.670,383			23.4	%
Other interest-bearing liabilities		2,121,619			25.5	%		1,852,950			24.8	%		974,137			21.8	%
NIM $		15.81	%					16.05	%					16.58	%


Interest-Earning Assets & Interest-Bearing							Quarter ended
Liabilities USD	03-31-18						12-31-17						03-31-17
(Averege in thouhand of AR$)	Capital			Rate			Capital			Rate			Capital			Rate
Interest-Earning Assets		42,461,792			3.3	%		36,414,148			2.8	%		16,536,078			2.6	%
Public Bonds		10,059,974			3.9	%		4,358,378			3.0	%		2,882,160			3.0	%
Loans		31,427,615			3.2	%		25,623,737			2.7	%		11,992,220			2.8	%
Other interest-earning assets		974,023			1.2	%		6,432,032			3.3	%		1,661,698			0.5	%
Interest-Bearing Liabilities		47,852,625			0.2	%		40,207,601			0.1	%		25,233,584			0.2	%
Saving Accounts		38,552,881			0.0	%		31,743,308			0.0	%		18,699,704			0.0	%
Time Deposits		8,279,777			0.8	%		7,067,956			0.6	%		6,151,515			0.4	%
Current accounts with interest		642,250						1,122,036			0.2	%		0			0.0	%
Other interest-bearing liabilities		377,717			2.8	%		274,301			2.7	%		382,365			4.6	%
NIM USD		2.83	%					2.35	%					1.76	%

Income from Public and Private

Securities


Income from securities and short-term Investments	Quarter ended						D% Quarter ended 03-31-18 vs quarter ended
(In thousands of pesos)	03-31-18		12-31-17		03-31-17		12-31-17			03-31-17
Income Securities and short term inv.		1,275,235		995,171		597,346		28.1	%		113.5	%
Income Interest Margin		1,068,345		779,942		450,723		37.0	%		137.0	%
Bills and Notes from the Central Bank		1,023,584		769,870		373,836		33.0	%		173.8	%
Other bonds		44.761		10,072		76,887		344.4	%		-41.8	%
Income Financial Operations		72,765		126,916		114,066		-42.7	%		36.2	%
Bills and Notes from the Central Bank		22,570		34,043		18,608		-33.7	%		-41.8	%
Other bonds		50,196		92,873		95,458		-46.0	%		-47.4	%
Other fixed income securities		134,125		88,314		32,557		51.9	%		312.0	%
CER adjustment		44,416		96,200		95,932		-53.8	%		-53.7	%

The gross financial margin generated by assets of the public sector increased by 28.1% and 113.5% compared to the previous quarter and to the first quarter of 2017, respectively, mainly as a consequence of higher results generated by the Central Bank’s bills portfolio, basically due to a higher holding of these assets on average and higher interest rates.

During the quarter. The Bank sold the Bogar 20 portfolio, an inflation-adjusted bond, which totaled AR$ 1.5 billion as of December 2017.

- 6 -

Net Income from Services


Net income from services	Quarter ended									D% Quarter ended 03-31-18 vs quarter ended
(in thousands of pesos)	03-31-18			12-31-17			03-31-17			12-31-17			03-31-17
Net income from services		859,786			848,740			631,398			1.3	%		36.2	%
Service charge income		2,480,667			2,421,613			1,896,614			2.4	%		30.8	%
Service charges on deposits accounts		858,258			743,821			528,901			15.4	%		62.3	%
Credit cards and operations		702,739			732,608			629,466			-4.1	%		11.6	%
Insurance		167,575			161,271			168,532			3.9	%		-0.6	%
Capital markets and securities activities		15,383			22,231			16,783			-30.8	%		-8.3	%
Fees related to foreign trade		94,785			94,424			67,511			0.4	%		40.4	%
Safety deposit box		100,082			94,965			74,202			5.4	%		34.9	%
Services of collection		84,467			66,988			35,394			26.1	%		138.6	%
Generated by subsidiaries		113,398			99,247			70,900			14.3	%		59.9	%
Other fees		343,980			406,058			304,924			-15.3	%		12.8	%
Services Charge expense		(1,620,881	)		(1,572,873	)		(1,265,216	)		3.1	%		28.1	%

Net income from services increased 1.3% compared to the previous quarter and 36.2% compared to the first quarter of 2017.

Service charge income grew 2.4% and 30.8% during the same periods, driven by an 15.4% increase in charges generated by deposit accounts as well as a 26.1% in charges generated by collection services, while credit cards fees decreased by 4.1% due to the decrease in the merchant discount rate, which was partially offset by a higher volume of activity. BBVA Francés increased its market share in consumption with VISA and Mastercard cards to 13.1% as of March 31, 2018, compared to 12.7% in December 2017.

Service charge expenses increased 3.1% during the quarter as the decline in the fees paid for our loyalty programs (-16%) were partially offset by higher processing fees.

Administrative Expenses


Administrative expenses	Quarter ended									D% Quarter ended 03-31-18 vs quarter ended
(In thousands of pesos)	03-31-18			12-31-17			03-31-17			12-31-17			03-31-17
Administrative expenses		(3,663,781	)		(3,550,414	)		(2,912,140	)		3.2	%		25.8	%
Personnel expenses		(2,082,707	)		(2,115,689	)		(1,655,893	)		-1.6	%		25.8	%
General expenses		(1,581,074	)		(1.434,725	)		(1,256,247	)		10.2	%		25.9	%
Electricity and Communications		(64,192	)		(46,873	)		(51,758	)		36.9	%		24.0	%
Advertising and Promotion		(112,503	)		(113,582	)		(82,019	)		-0.9	%		37.2	%
Fees and external administrative services		(61,674	)		(62,822	)		(42,444	)		-1.8	%		45.3	%
Taxes		(380,362	)		(311,393	)		(277,609	)		22.1	%		37.0	%
Organization and development expenses		(30,221	)		(31,274	)		(24,827	)		-3.4	%		21.7	%
Amortizations		(168,179	)		(143,360	)		(97,017	)		16.9	%		73.4	%
Rents		(151,107	)		(130,098	)		(111,547	)		16.1	%		35.5	%
Maintainance, conservation and repairs		(159,145	)		(145,242	)		(133,842	)		9.6	%		18.9	%
Security Service		(77,006	)		(78,239	)		(71,101	)		-1.6	%		8.3	%
Carriage of valuables		(163,315	)		(178,757	)		(164,900	)		-8.6	%		-1.0	%
Other		(213,370	)		(192,530	)		(199,183	)		10.8	%		7.1	%

Total Employees		6,075			6,082			6,219			-0.1	%		-2.3	%

Total Branches		251			251			252			0.0	%		-0.4	%

Administrative expenses increased 3.2% during the previous three months and 25.8% compared to the first quarter of 2017.

- 7 -

Personnel expenses decreased by 1.6% during the quarter. Although this line item already includes an advance for the salary increase corresponding to 2018, the decrease compared to the previous quarter is explained by the higher charges recorded in the 2017 fourth quarter as a result of the application of the trigger clause due to the difference between the 2017 24.8% inflation rate and the 19.5% cap set in the labor agreement with the union and other compensation originating from such agreement and paid during the period.

General expenses increased 10.2% compared to the previous quarter and 25.9% compared to the same quarter of 2017.

During the period, there were higher charges, mainly in municipal and debit and credit taxes (+22.1% vs previous quarter), due to higher volume of income and level of activity.

Other line items that performed above the average were amortizations, including technological investment and the revaluation of the Bank’s real estate assets, as well as electricity and communications, due to the increase in rates.

The carriage of valuables line continued to show a good evolution (-8.6%), as a result of improvements in the efficiency of processes introduced since the first half of 2017.

The efficiency ratio in the quarter reached 57.4%, showing an improvement of 150 bp compared to the previous quarter restated to IFRS.

Income from Equity Investments

Income from equity investments shows net income from related companies that are not consolidated. Over the first quarter of 2018, there was a AR$ 39.9 million profit that was recorded mainly due to the equity investment in PSA Finance, Rombo Compañía Financiera and Consolidar Seguros.

- 8 -

Balance and Activity

Loan portfolio


										D% Quarter ended 03-31-18 vs
Net loans	Quarter ended									quarter ended
(in thousands of pesos)	03-31-18			12-31-17			03-31-17			12-31-17			03-31-17
Private & Financial sector loans in $		105,211,430			99,281,543			67,789,871			6.0	%		55.2	%
Advances		13,597,142			11,693,061			9,667,107			16.3	%		40.7	%
Discounted and purchased notes		16,630,923			17,160,671			9,472,353			-3.1	%		75.6	%
Consumer Mortgages		5,881,749			4,457,821			1,924,583			31.9	%		205.6	%
Car secured loans		4,844,257			4,539,300			3,272,969			6.7	%		48.0	%
Personal loans		19,376,800			16,638,201			10,737,654			16.5	%		80.5	%
Credit cards		30,062,625			28,544,070			21,911,156			5.3	%		37.2	%
Loans to financial sector		4,846,056			4,555,025			2,659,191			6.4	%		82.2	%
Other loans		9,197,815			11,125,057			7,890,462			-17.3	%		16.6	%
Other receivables		3,627,055			3,152,815			2,170,073			15.0	%		67.1	%
Unaccrued interest		(658,285	)		(593,669	)		(315,649	)		10.9	%		108.5	%
Less: Allowance for loan losses		(2,194,707	)		(1,990,809	)		(1,600,028	)		10.2	%		37.2	%
Private & Financial sector loans in FX		34,140,656			28,745,750			12,947,463			18.8	%		163.7	%
Advances		8,223			14,203			7,233			-42.1	%		13.7	%
Discounted and purchased notes		2,179,343			1,660,474			858,838			31.2	%		153.8	%
Credit cards		1,812,303			1,600,754			1,301,292			13.2	%		39.3	%
Loans to financial sector		103,379			94,089			128,411			n/a			n/a
Other loans		30,271,696			25,552,454			10,755,116			18.5	%		181.5	%
Other receivables		119,327			125,002			47,638			-4.5	%		n/a
Less: Allowance for loan losses		(353,615	)		(301,226	)		(151,065	)		17.4	%		134.1	%
Total Private Loans		139,352,086			128,027,293			80,737,334			8.8	%		72.6	%
Total loans to public sector		142			218			196			-34.9	%		-27.6	%
Net Total Loans net of other non resident loans		139,352,228			128,027,511			80,737,530			8.8	%		72.6	%
Other non resident loans (*)		84,600			63,394			34,064			33.5	%		-94.6	%
Net total loans		139,436,828			128,090,905			82,318,579			8.9	%		69.4	%

(*)	Correspond to balances related to overnight operations celebrated with foreign correspondent banks

As of March 31, 2018, the private sector loan portfolio totaled to AR$ 139.4 billion, increasing 8.9% during the quarter and 69.4% in the last twelve months. BBVA Frances maintained its 8.3% market share of loans during the quarter and increased 62 bp compared to the first quarter of 2017, including loans from associated companies (VW Financial Services, PSA Finance and Rombo Compañia Financiera).

Peso and dollar-denominated loans grew during the first quarter by 6% and 8.8%, respectively.

The performance of finance to individuals was a highlight during the period, increasing 11.1% during the quarter and 58.3% compared to the first quarter of 2017, driven mainly by the increase in mortgages and in personal loans, which grew 31.9% and 16.5% during the quarter and 205.6% and 80.5% in the year, respectively.

Commercial loans grew 7.3% in the last three months and 78.4% compared to the previous year, boosted by foreign currency loans (export firms) that increased 19.1% and 179.2%, respectively. Whereas in local currency it remained at similar level compared to the previous quarter, due to lower seasonal growth of this type of loans and amortization of the productive investment loans portfolio. Compared to the first quarter of the previous year, it grew 47.4%.

- 9 -

Public Sector Exposure


							D% Quarter ended 03-31-18 vs
Public Sector Exposure	Quarter Ended						quarter ended
(In thousands of pesos)	03-31-18		12-31-17		03-31-17		12-31-17			03-31-17
Public Sector - National Government		9,929,970		11,331,010		6,467,265		-12.4	%		53.5	%
Public Sector - National Governments $		221,490		2.247,306		2,959,792		-90.1	%		-92.5	%
Public Sector - National Government USD		5,051,412		4,743,166		3,507,473		6.5	%		44.0	%
Repo National Goverment		4,657,069		4,340,538		—		7.3	%		n/a
Bills and Notes from Central Bank		11,671,911		15,286,917		7,256,189		-23.6	%		60.9	%

Public Sector exposure $		11,893,400		17,534,223		10,215,981		-32.2	%		16.4	%
Public Sector exposure USD		296,606		647,131		481,995		-54.2	%		-38.5	%

Total Public Sector exposure		21,601,881		26,617,927		13,723,454		- 18.8	%		57.4	%

Private debt		296,606		647,131		481,995		-54.2	%		-38.5	%
Total Public and Private exposure		21,898,487		27,265,058		14,205,449		-19.7	%		54.2	%

Exposure to the Public Sector totaled AR$ 21.6 billion by the end of the year, showing a decrease of 18.8% or AR$ 5 billion, due to a lower portfolio of BCRA instruments for AR$ 3.5 billion and the sale of the Bogar 20 portfolio for AR$ 1.5 billion.

As of March 31, 2018, exposure to the National Government’s public debt totaled AR$ 9.9 billion, which accounted for 4.4% of the Bank’s total assets compared to 5.3% at the end of the previous quarter; 98% of such portfolio corresponds to investments in short term foreign currency assets with an average term of six months.

The exposure of the Central Bank bills and notes portfolio, amounted to AR$ 11.7 billion with an average term of one month.

Portfolio Quality


Asset quality ratios	Quarter ended									D% Quarter ended 03-31-18 vs quarter ended
(In thousands of pesos)	03-31-18			12-31-17			03-31-17			12-31-17			03-31-17
Non-performing loans (1)		1,017,379			873,007			680,628			16.5	%		49.5	%
Allowance for loan losses		(2,548,322	)		(2,292,035	)		(1,751,093	)		11.2	%		45.5	%
Non-performing loans/net total loans		0.72	%		0.67	%		0.81	%		7.0	%		-11.5	%
Non-performing priv. loans/net priv. loans		0.72	%		0.67	%		0.81	%		7.0	%		-11.5	%
Allowance for loan losses/non-performing loans		250.48	%		262.54	%		257.28	%		-4.6	%		-2.6	%
Allowance for loan losses/net total loans		1.79	%		1.76	%		2.08	%		2.1	%		-13.8	%

(1)	Non-performing loans include: all loans to borrowers classified as “Problem”. “Deficient Servicing”. “High Insolvency Risk”. “Difficult Recovery”. “Irrecoverable” and “Irrecoverable for Technical Decision” according to the new Central Bank debtor classification system.

As of March 31, 2018, the asset quality ratio (non-performing loans/total loans) was 0.72%, with a coverage ratio (allowances/non-performing loans) of 250.5%.

The ratio increased 5 bp compared to the previous quarter due to some deterioration in the retail portfolio, whereas compared to the first quarter of 2017, the ratio reflected an improvement mainly due to the significant growth of the loan portfolio. The cost of risk reached 1.32%, a reduction of 1 bp compared to the previous quarter.

The following table shows the evolution of allowances for loan losses.

- 10 -


Evolution of provisions	Quarter ended									D% Quarter ended 03-31-18 vs quarter ended
(In thousands of pesos)	03-31-18			12-31-17			03-31-17			12-31-17			03-31-17
Balance at the beginning of the quarter		2,292,035			2,141,948			1,615,152			7.0	%		41.9	%
Increase/decrease		526,034			383,121			318,218			37.3	%		65.3	%
Increase/decrease-Foreign exchange diff.		22,159			24,445			(4,188	)		-9.4	%		629.1	%
Aplications / Reversals		(291,906	)		(257,479	)		(178,089	)		13.4	%		63.9	%
Balance at the end of the quarter		2,548,322			2,292,035			1,751,093			11.2	%		45.5	%

Deposits


Total deposits	Quarter ended						D% Quarter ended 03-31-18 vs quarter ended
(In thousands of pesos)	03-31-18		12-31-17		03-31-17		31-12-17			31-03-17
Deposits $ denominated		102,343,549		99,585,301		82,194,610		2.8	%		24.5	%
Current accounts		24,518,461		24,815,717		21,468,037		-1.2	%		14.2	%
Saving accounts		31,971,917		35,134,581		23,201,860		-9.0	%		37.8	%
Time deposits		43,664,919		37,297,630		35,149,171		17.1	%		24.2	%
Peso denominated		40,678,320		36,829,241		34,949,912		10.5	%		16.4	%
CER adjusted time deposits		2,986,599		468,439		199,259		537.6	%		n/a
Investment Accounts		—		—		85,194		n/a			n/a
Other		2,188,252		2,337,323		2,290,348		-6.4	%		-4.5	%
Deposits FX denominated		57,609,134		54,349,370		40,573,257		6.0	%		42.0	%
Current accounts		145,994		163,881		89,817		-10.9	%		62.5	%
Saving accounts		46,680,073		43,913,177		23,779,226		6.3	%		96.3	%
Time deposits		8,653,393		8,032,972		5,961,593		7.7	%		45.2	%
Other		2,129,674		2,239,340		10,742,621		-4.9	%		-80.2	%

Tolal deposits		159,952,683		153,934,671		122,767,867		3.9	%		30.3	%

As of March 31, 2018 total deposits amounted to AR$ 160 billion, growing 3.9% and 30.3% during the quarter and in the last twelve months, respectively, both in line with the market.

Sight accounts remained at similar level compared to the previous quarter, while it grew 50.7% in the last twelve months. On the other hand, time deposits grew 15.4% during the quarter and 27.3% in the year.

Deposits in pesos grew 2.8% in the quarter. Transactional deposits declined 5.8% mainly due to the seasonal decrease in savings accounts after the significant growth occurred in December as a consequence of the half-annual extra salary, while time deposits grew 17.1% due to higher balances in both retail and corporate deposits, with an outstanding performance of UVAs time deposits.

It is important to mention that even though BBVA Francés had launched the UVAs time deposits during 2017, these started to show a better performance since the first quarter of 2018, represented 7% of total time deposits in AR$.

Deposits in foreign currency grew 6% during the quarter reflecting the peso devaluation, and they account for 36% of the Bank’s total deposits.

- 11 -

Other Sources of Funds


Other funding sources	Quarter ended						D% Quarter ended 03-31-18 vs quarter ended
(In thousands of pesos)	03-31-18		12-31-17		03-31-17		12-31-17			03-31-17
Lines from other banks		829,574		687,495		311,276		20.7	%		166.5	%
Senior Bonds		1,839,184		2,055,599		1,644,356		-10.5	%		11.8	%
Total other funding sources		2,668,758		2,743,094		1,955,632		-27	%		36.5	%

Mismatch of CER/UVA


	Quarter ended						D% Trim. finalizado 31/03/18 vs Trim.
(in thousands of pesos except percentages)	03-31-18		12-31-17		03-31-17		12-31-17			03-31-17
CER/UVA adjusted assets		6,034,055		4,956,165		2,616,315		21.7	%		130.6	%
- Public bond portfolio		446,478		1,589,929		2,418,040		-71.9	%		-81.5	%
- Private sector loans		4,957,098		2,883,960		146,371		71.9	%		3286.7	%
- Other credits		630,479		482,276		51,904		30.7	%		1114.7	%
CER/UVA adjusted deposits		3,013,094		479,195		196,426		528.8	%		1434.0	%
CER/UVA mismatch		3,020,961		4,476,970		2,419,889		-32.5	%		24.8	%

The mismatch between assets and liabilities adjustable for inflation decreased by AR$ 1,5 billion or 32.5% in the quarter, as a result of the sale of the Bogar 20 and the increased volume of UVAs deposits AR$ 2,5 million.

Capitalization


Central Bank Requirements	Quarter ended									D% Quarter ended 03-31-18 vs quarter ended
(In thousands of pesos)	03-31-18			12-31-17			03-31-17			31-12-17			31-03-17
CB Minimum Capital Requirements		17,026,890			15,653,816			11,206,375			8.8	%		51.9	%
Allocated to Asset at Risk		14,042,621			12,726,716			8,785.277			10.3	%		59.8	%
Market Risk		241,847			369,204			270,773			-34.5	%		-10.7	%
Operational Risk		2,742,422			2,557,896			2,150,325			7.2	%		27.5	%
Bank Capital		32,586,251			4,834,539			4,056,041			574.0	%		703.4	%
Ordinary Capital Level 1		32,314,108			369,204			270,773			8652.4	%		11834.0	%
Dedusctions Ordinary Capital Level 1		(2,203,850	)		2,557,896			2,150,325			-186.2	%		-202.5	%
Capital Level 2		1,700,390			1,578,420			1,169,850			7.7	%		45.4	%
Aditional Capital Level 1		775,603			329,019			465,093			135.7	%		66.8	%
Excess over Required Capital		15,559,361			(10,819,277	)		(7,150,334	)		-243.8	%		-317.6	%
Excess as % of the capital required		91.4	%		-69.1	%		-63.8	%		-232.2	%		-243.2	%
Risk weighted assets		207,723,520			191,039,187			136,881,200			8.7	%		51.8	%
Capital Ratio (Central Bank rules)		15.7	%		14.7	%		13.8	%		7.0	%		14.0	%
TIER I		14.5	%		13.7	%		12.6	%		6.0	%		15.3	%

BBVA Francés continues to show an adequate level of solvency. As of March 31, 2018 the capital ratio was 15.7%, 100 bp higher compared to the ratio of December 31, 2017, mainly due of the impact of the real estate revaluation (+200 bp) partially offset by a higher level of deductions, as a consequence of the incorporation of the liabilities balance of the deferred tax (-65 pb).

The ratio Tier 1 was 14.5%, and the excess of capital over the minimum required by the Central Banks of AR$ 15.6 billion.

- 12 -

Additional Information


	Quarter ended									D% Quarter ended 03-31-18 vs quarter ended
	03-31-18			12-31-17			03-31-17			12-31-17			03-31-17
Exchange rate $/USD		20.14			18.77			15.38			7.3	%		31.0	%
Quarterly CER adjustment		7.0	%		5.0	%		4.6	%		41.3	%		51.6	%

Conference Call

On Monday June 4, 2018 at 12:30 p.m. (Argentine time) a conference call will be held to comment on the quarter’s results.

Those who wish to participate should contact the following numbers:

0800-444-2930 (from Argentina)

+ 1-844-413-3973 (from United States)

+ 1412-902-6509 (from other countries)

Conference ID: BBVA.

To access the webcast:

http://webcastlite.mziq.com/cover.html?webcastId=84b6e4df-9417-4325-9532-710beca472f6

To request the Replay, please call

+1-877-344-7529 (from United States)

+1-412-317-0088 (from other countries)

The replay will be available until June 14, 2018.

Replay Access code: 10119533

Internet

This Press Release is available on the web page of BBVA Francés.

www.bbvafrances.com.ar

Contacts

Cecilia Acuña

Investor Relations

(5411) 4341-5036

[email protected]

Diego Cesarini

Financial Management and Investor Relations

[email protected]

- 13 -

BBVA Banco Francés S.A. and subsidiaries

BALANCE SHEET (in thousands of pesos)

Communication “A” 6114

03-31-18

12-31-17

03-31-17

Cash and due from banks

36,917,931

38,235,942

40,964,989

Debt securities at fair value through other comprehensive income

1,162,994

5,798,747

1,391,025

Derivatives

168,314

142,745

81,098

Repurchase agreements

7,144,101

6,329,939

9,772,474

Other financial assets

7,142,873

2,631,498

8,018,682

Loans and other financial intermediation

139,436,828

128,090,905

82,318,579

Loans to the private & financial sector

139,436,686

128,090,687

82,318,424

Advances

13,605,365

11,707,264

9,674,340

Discounted and purchased notes

18,810,266

18,821,145

10,331,191

Secured with mortgages

5,881,749

4,457,821

1,924,583

Car secured loans

4,844,257

4,539,300

3,272,969

Personal loans

19,376,800

16,638,201

10,737,654

Credit cards

31,874,928

30,144,824

23,212,448

Loans to financial sector

4,949,435

4,649,114

2,787,602

Other (*)

39,554,111

36,740,905

20,226,668

Other receivables

3,746,382

3,277,817

2,217,711

Less: Unaccrued interest

(658,285

)

(593,669

)

(315,649

)

Less: Allowance for loan losses

(2,548,322

)

(2,292,035

)

(1,751,093

)

Public Sector loans

142

218

155

Other debt securities

15,578,336

16,298,649

12,534,538

Financial assets pledged as collateral

3,925,255

3,250,464

2,105,339

Current income tax assets

1,375

9,340

251,472

Investments in equity instruments

145,256

127,287

80,388

Investments in associates and joint ventures

921,199

889,436

901,008

Property, plant and equipment

9,024,411

9,419,862

8,352,186

Intangible assets

448,944

436,120

331,354

Deferred income tax asset

57,407

58,524

46,300

Other non financial assets

1,457,379

1,530,260

1,492,240

Non-current assets held for sale

741,840

196,379

—

Total Assets

224,274,443

213,446,097

168,641,672

Deposits

159,952,683

153,934,671

122,767,867

Current accounts

24,664,455

24,979,598

21,557,854

Saving accounts

78,651,990

79,047,758

46,981,086

Time deposits

52,318,312

45,330,652

41,110,764

Investment Accounts

—

85,194

Rescheduled deposits CEDROS

1,951

Other deposits

4,315,975

4,574,712

13,031,018

Derivatives

245,444

229,775

29,794

Repurchase agreements

579,184

285,410

—

Other financial liabilities

16,497,979

14,006,153

14,760,011

Financing received the BCRA and other financial insitutions

829,574

687,495

311,276

Corporate bonds issued

1,839,184

2,055,599

1,644,356

Current income tax liabilities

884,250

1,469,886

231,640

Provisions

3,268,894

2,127,857

2,003,399

Deferred income tax liabilites

514,787

505,078

856,326

Other non-financial liabilities

7,492,249

7,741,277

6,218,958

Total Liabilities

192,104,228

183,043,201

148,823,627

Total Stockholders’ equity

31,645,338

30,094,865

19,538,595

Equity investments

524,877

308,031

279,450

Total liabilities + stockholders’ equity

224,274,443

213,446,097

168,641,672

(*)	Includes balances related to overnight operations celebrated with foreign correspondent banks

- 14 -

BBVA Banco Francés S.A. and subsidiaries

INCOME STATEMENT (in thousands of pesos)

Communication “A” 6114


	03-31-03			12-31-17			03-31-17
Financial income		7,914,035			6,279,947			5,296,190
Interest on loans to the financial sector		246,176			227,912			139,247
Interest on overdraft		917,500			896,504			769,018
Interest on documents		865,226			749,754			463,665
Interest on mortgages loans		142,561			113,303			87,054
Interest on car secured loans		316,562			267,971			195,269
Interest on credit card loans		1,671,465			1,510,119			1,465,047
Interest on financial leases		124,947			102,154			97,430
Interest on personal loans		1,355,898			1,206,194			822,971
Interest on other loans		651,892			564,288			448,378
From other banking receivables from financial intermediation		1,822			2,547			548
Interest on Government Guaranteed Loans Decree 1387/01		—			—			1,081
Income from Securities and Short Term Investments		1,005,015			212,482			501,744
CER adjustment		44,416			96,200			95,932
UVA adjustment		287,997			92,247			4,353
Other		282,558			238,272			204,453
Financial expenses		(2,808,837	)		(2,134,194	)		(1,711,106	)
Interest on Current Account Deposits		(288,583	)		(227,419	)		(14,811	)
Interest on Saving Account Deposits		(10,820	)		(10,310	)		(7,760	)
Interest on Time Deposits		(2,074,916	)		(1,697,659	)		(1,533,688	)
Interest on interfinancing received loans		(6,892	)		(4,319	)		(8,848	)
Interest on other financing from the financial institutions		(10,001	)		(2,285	)		(25	)
Interest on other liabilites from financial intermediation		(233,765	)		(130,112	)		(120,992	)
Other interest		(40	)		(67	)		(422	)
UVA adjustment		(158,404	)		(12,062	)		(1,915	)
Other		(25,416	)		(49,961	)		(22,645	)
Net income from services		679,719			638,005			555,009
Net operating income		2,222,207			1,892,740			1,862,959
Net income from measurement of financial instruments at fail value thr		309,176			827,170			130,666
Result from assets at amortised cost		1,367			—			—
Foreign exchange difference		695,250			727,711			305,895
Other operating income		1,742,608			646,850			1,806,624
Provision for loan losses		(526,194	)		(308,991	)		(380,226	)
Operating income		(5,818,133	)		(4,734,803	)		(5,268,476	)
Personnel expenses		(1,957,189	)		(2,005,951	)		(1,559,287	)
Administrative expenses		(1,508,192	)		(1,369,329	)		(1,231,009	)
Depreciations and amortizations		(168,821	)		(150,659	)		(97,641	)
Depreciation on Intangible assets		(30,221	)		(31,274	)		(24,827	)
Other operating expenses		(2,153,710	)		(1,177,590	)		(2,355,712	)
Income from associates and joint ventures		39,877			52,077			72,856
Net income before income tax from continuing operations		2,228,868			1,993,772			807,432
Income tax from continuing operations		(662,724	)		(78,771	)		(243,885	)
Net income Including non-controlling shareholders		1,566,144			1,915,001			563,547
Net income attributable to non-controlling shareholders		20,846			9,956			8,372
Net income		1,545,298			1,905,045			555,175
Other comprehensive income		5,175			16,213			(6,414	)
Total comprehensive net income		1,550,473			1,921,258			548,761

- 15 -

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.