Edgar Filing: BBVA BANCO FRANCES SA

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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 August 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 second quarter earnings for fiscal year 2018.

Item 1

LOGO

Buenos Aires, August 23, 2018 - BBVA Francés (NYSE: BFR.N; BCBA: FRA.BA;

LATIBEX: BFR.LA) reports consolidated second quarter results for the

January-December 2018 fiscal year.

The consolidated financial statements as of June 30, 2018 and as of March 31, 2018 are presented in accordance with Communication “A” 6114 of the Central Bank of Argentina (BCRA) (“financial statements under IFRS regulations”). For comparative purposes, the figures of the second quarter of 2017 are presented in accordance with IFRS.

Highlights of the Quarter

•

BBVA Francés reached a net income of AR$ 2,123.9 million in the second quarter of 2018, 37.4% higher than the net income registered in the previous quarter and 112.9% compared to the second quarter of 2017, restated for comparative purposes.

•

The return on average assets (ROA) reached 3.5% and the return on average equity (ROE) was 26.4% compared to 2.9% and 20.3%, respectively in the previous quarter.

•

Net operating income reached AR$ 8,111.7 million, increasing 16.1% compared to the previous quarter, and 52.6% compared to the second quarter of 2017.

•

Operating expenses reached AR$ 5,212.9 million, showing an increase of 8.7% and 31.2% compared to same periods, respectively.

•

Private sector loan portfolio grew 16.3% in the second quarter, and 82.6% in the last twelve months.

•

BBVA Francés maintains good asset quality indicators in an environment that shows certain signs of deterioration. As of June 30, 2018, the asset quality ratio (Non-Performing Loans/Total loans) stood at 0.86%, compared to 0.72% in the previous quarter, with a coverage of 223.4% (Total allowances/NPL).

•

Total deposits grew 20.6% during the quarter and 53.6% yearly.

•

As of June 30, 2018, BBVA Francés had a total capital ratio of 14.6% (Tier I 13.4%), which represents an excess of AR$ 15,003.7 million or 78.1% over the minimum required.

•

As of June 30, 2018, liquid assets accounted for 42.6% of the Bank’s total deposits.

•

The bank continued to increase its client base, reaching a total of 2.8 million clients

•

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.

•

As of May 17, 2018 the “Comisión Nacional de Valores” (CNV) authorized the extension for five years of the Global Program of Negotiable Bonds and the increase of the maximum amount up to USD 1,500 million or the equivalent in other currency, and the modification of the terms and conditions of the program to allow the emission of bonds in UVAs.

Other events

•

On July 5, 2018 BBVA Francés sold to REPAR S.A the properties located at Reconquista 40, Bolivar 502, Maipu 356 (unit 16), Perón 362 and México 628 (unit 10) and Reconquista 281, all of them located in the City of Buenos Aires.

Regulatory Changes

•

In May 2018, the Central Bank of Argentina (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. In addition, on June 21, 2018, the limit was decreased to 5%.

•

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

•

On June 18, 2018 the BCRA through its Communication ”A” 6526 increased the minimum cash requirement in two tranches, 3% from 21 June 2018 and 2% from 18 July 2018, such requirement could be integrated with Treasury bonds, which will mature on November 2020 at a rate of 26%. Subsequently, it increased the requirement in other two occasions, by 3% on July 23, 2018 through its Communication “A” 6533, and by another 3% on August 16, 2018, through Communication “A” 6550. In both cases, integration with Treasury bonds is not allowed to comply with the requirement.

Economic Environment


		Quarter ended
Main Macroeconomic figures		06.30.18			03-31-18			06-30-17
GDP	var % y/y		n/d			3.6	%		2.9	%
Inflation (1) End of period	var % y/y		29.5	%		25.3	%		21.8	%
	var % q/q		8.8	%		6.6	%		5.4	%
CER	Quarterly adjustment		7.4	%		7.0	%		7.0	%
Exchange Rate	Pesos x US$		28.86			20.14			16.60
Reserves	US$		61,881			61,726			47,995
Fiscal Balance	Primary - billion of $		(74,824	)		(31,001	)		(102,942	)
Trade Balance	US$ (billion)		(2,620	)		(2,481	)		(1,438	)
Total Private Loans	var % q/q		15.1	%		8.8	%		11.7	%
	var % y/y		60.9	%		56.2	%		40.4	%
Total Private Deposits	var % q/q		18.8	%		3.5	%		7.1	%
	var % y/y		45.6	%		31.4	%		38.7	%
Interest rate	Monetary policy (eop)		40.0	%		27.3	%		26.3	%
	Badlar (weighted avg. quarterly)		27.1	%		22.8	%		19.5	%

(1)	IPC National since 1Q17

The international economy remains subject to the tensions of disparate forces, including good economic performance, as well as potentially negative factors such as protectionist measures and the impact of the increase in the price of oil over inflation. In an environment with higher risk aversion, financial tensions in emerging countries have increased generally, due to the depreciation of currencies and the widening of risk premiums, although countries with higher external financing needs, such as Argentina, have been affected negatively.

This context of closed capital markets resulted in financial tensions in the local currency market since May.

With the aim of achieving an orderly adjustment process, in June 2018, the Government signed a stand-by arrangement with the International Monetary Fund (IMF) for USD 50 billion, subject to compliance with stricter fiscal targets; increased net international reserves and the commitment to reinforce the independence of the BCRA.

Nevertheless, the volatility in the exchange market has continued, with an accumulated depreciation of the peso of 45.6% since December 2017, leading the BCRA to raise the interest rate up to 45% and to deepen monetary astringency through interventions in the secondary market of short-term securities known as Lebacs and the increase of cash reserves.

- 2 -

As a result of the drought during the first moths of the year and of contractionary fiscal and monetary policies, the economy suffered a contraction beginning in the second quarter of 2018.

In addition, the depreciation of the peso caused an acceleration of the inflation that averaged almost 3% monthly in the second quarter of the year.

Regarding the financial system, this new scenario resulted in an abrupt increase in interest rates in time deposits as well as in credit lines and fixed income instruments.

Such increase in rates, added to the higher financial uncertainty and the increase in the cash reserve requirements implemented by the BCRA (1,100 bp) has contributed to a slowdown in the pace of growth of the financial intermediation activity with the private sector in real terms.

It should be noted that in this environment, banking deposits maintained a good performance although slowing the pace of growth, and that the financial system continued with solid levels of liquidity and solvency.

Presentation of the Information

•

The consolidated financial statements as of June 30, 2018 are 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.

•

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 the first quarter of 2018, the Bank’s share interest in PSA Finance is no longer disclosed on a consolidated basis but is shown as “Investments in associates” (recorded under the equity method), and the corresponding results are included in “Income from associates”, as Rombo Compañia Financiera.

•

The balances in foreign currency as of June 30, 2018 were converted into pesos at the reference exchange rate published by the BCRA for that date (AR$ 28.8617/USD).

•

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

- 3 -

Quarterly Results


										D% Quarter ended 06-30-18
Condensed Income Statement (1)				Quarter ended						vs Quarter ended
In thousands of pesos except EPS. ADS	06-30-18			03-31-18			06-30-17			03-31-18			06-30-17
Net interest income		6,018,130			5,084,027			3,312,411			18.4	%		81.7	%
Net fee income		756,103			679,719			618,335			11.2	%		22.3	%
Net income of financial instruments		(559,281	)		330,347			716,167			-269.3	%		-178.1	%
Result from assets at amortised cost		(68,298	)		1,367			(496	)		n/a			n/a
Foreign exchange difference		2,009,608			695,250			432,105			189.0	%		365.1	%
Other operating income		759,728			1,742,608			662,035			-56.4	%		14.8	%
Provision for loan losses		(804,248	)		(526,194	)		(418,545	)		52.8	%		92.2	%
Net operating income		8,111,742			8,007,124			5,322,012			1.3	%		52.4	%
Personnel expenses		(1,929,968	)		(1,957,189	)		(1,634,027	)		-1.4	%		18.1	%
Administrative expenses		(1,646,632	)		(1,508,192	)		(1,275,036	)		9.2	%		29.1	%
Depreciation and amortization of assets		(207,860	)		(199,042	)		(180,054	)		4.4	%		15.4	%
Other operating expenses		(1,428,480	)		(2,153,710	)		(885,543	)		-33.7	%		61.3	%
Operating Expenses		(5,212,940	)		(5,818,133	)		(3,974,660	)		-10.4	%		31.2	%
Operating income		2,898,802			2,188,991			1,347,352			32.4	%		115.1	%
Income from associates and joint ventures		121,443			39,877			174,566			204.5	%		-30.4	%
Net income before income tax		3,020,245			2,228,868			1,521,918			35.5	%		98.4	%
Income tax from continuing operations		(866,387	)		(662,724	)		(516,842	)		30.7	%		67.6	%
Net income including non-controlling shareholders		2,153,858			1,566,144			1,005,076			37.5	%		114.3	%
Net income attributable to non-controlling shareholders		29,938			20,846			7,658			43.6	%		290.9	%
Net Income		2,123,920			1,545,298			997,418			37.4	%		112.9	%
Other comprehensive income		64,125			(19,189	)		(78,302	)		-434.2	%		-181.9	%
Total net income		2,188,045			1526,109			919,116			43.4	%		138.1	%
Earnings per share (2)		3.47			2.52			1.63			37.4	%		112.9	%
Earnings per ADS (3)		10.40			7.57			4.88			37.4	%		112.9	%

(1)	Exchange Rate: $ 28,8617 = u$s 1

(2)	Assumes 612,659,638 ordinary shares for the third

(3)	Each ADS represents three ordinary shares

In the second quarter of 2018, BBVA Francés reached a net income of AR$ 2,123.9 million, registering an increase of 37.4% compared to the previous quarter and of 112.9% compared to the second quarter of 2017. The accumulated net income for the first six months of the year reached AR$ 3,669.2 million, 138.4% over the accumulated result of the first half of 2017.

Restated net income for the second quarter of 2017 reached AR$ 997.4 million compared to the loss of AR$ 283 million recorded twelve months before, the difference is mainly due to the transfer, from the second quarter to the first quarter of 2017, of the provision of AR$ 1,186 million related to the result originated by the application of the inflation adjustment on the 2016 income tax calculation, as was reported in the previous earnings release.


										Dbp Quarter ended 06/30/18
Main figures	Quarter ended									vs quarter ended
	06-30-18			03-31-18			06-30-17			03-31-18			06-30-17
ROA (Average Assets) (1)		3.5	%		2.9	%		2.4	%		62			117
Accumulated ROA		3.0	%					1.8	%					125
ROE (Average Shareholders’ Equity) (1)		26.4	%		20.3	%		20.0	%		611			644
Accumulated ROE		22.9	%					12.7	%					1,020
NIM (1)(2)		11.6	%		12.2	%		13.7	%		(66	)		(213	)
NIM with foreign exchange difference (1)(2)		15.0	%		14.1	%		15.3	%		90			(33	)
Efficiency ratio (3)		49.4	%		56.7	%		62.7	%		(729	)		(1,323	)
Accumulated Efficiency ratio		52.8	%					64.5	%					(1,173	)

(1)	Annualized.

(2)	NIM: ((Net interest income + Gross income tax NII+ Cost of deposits insurance) + (Net income of financial instruments + Results from assets at amortised cost - Non deliverable forward )) / Interest Earning Assets

(3)

(Personnel and administrative expenses + Depreciations and amortizations) / ((Net interest income + Gross Income Tax + Cost of the deposits insurance) + (Fee income + Net income of financial instruments + Results from assets at amortised cost + FX Difference + Fees included in other operating income))

- 4 -

The annualized return on assets (ROA) of the second quarter of 2018 reached 3.5% compared to 2.9% published in the previous quarter, while return on equity (ROE) was 26.4% compared to 20.3% published in the previous quarter.

Net Operating Income


										D% Quarter ended 06/30/18 vs
Net operating Income	Quarter ended									Quarter ended
in thousands of pesos	06-30-18			03-31-18			06-30-17			03-31-18			06-30-17
Net interest Income		6,018,130			5,084,027			3,312,411			18.4	%		81.7	%
Net fee income		756,103			679,719			618,335			11.2	%		22.3	%
Net income of financial instruments		(559,281	)		330,347			716,167			-269.3	%		-178.1	%
Result from assets at amortised cost		(68,298	)		1,367			(496	)		n/a			n/a
Foreign exchange difference		2,009,608			695,250			432,105			189.0	%		365.1	%
Other operating income		759,728			1,742,608			662,035			-56.4	%		14.8	%
Provision for loan losses		(804,248	)		(526,194	)		(418,545	)		52.8	%		92.2	%
Net operating income		8,111,742			8,007,124			5,322,012			1.3	%		52.4	%

Net operating income reached AR$ 8,111.7 million, increasing 16.1% compared to the previous quarter and 52.6% compared to the second quarter of 2017.

For the purpose of the calculation of the quarterly variation AR$ 1,021.5 million registered in the previous quarter in the line “Other operating income” were deducted, as a consequence of calculating the income tax for the 2017 fiscal year considering the effects of inflation, which are provisioned by the same amount in “Other operating expenses”.

The items that make up net operating income are disclosed in more detail below.

•

Net interest Income


							D% Quarter ended
Net Interest Income	Quarter Ended						06/30/18 vs Quarter ended
(in thousands of pesos)	06-30-18		03-31-18		06-30-18		03-31-18			06-30-18
Interest Income		9,525,300		7,892,864		5,000,705		20.7	%		90.5	%
Loan interest income		7,402,591		6,294,049		4,541,473		17.6	%		63.0	%
Income from adjustments (CER/UVA)		513,337		332,413		155,399		54.4	%		230.3	%
Income from Public Securities		1,187,403		952,624		118,405		24.6	%		n/a
Others		421,969		313,778		185,428		34.5	%		127.6	%
Interest Expenses		-3,507,170		-2,808,837		-1,688,294		24.9	%		107.7	%
Interest Expenses		-3,250,544		-2,650,433		-1,672,884		22.6	%		94.3	%
Expenses from adjustments (CER/UVA)		-256,626		-158,404		-15,410		62.0	%		n/a
Net Income Interest		6,018,130		5,084,027		3,312,411		18.4	%		81.7	%

Net interest income grew by 18.4% compared to the previous quarter and 81.7% compared to the second quarter of 2017.

Compared to the previous quarter, interest income increased 20.7% whereas interest expenses grew 24.9% mainly due to an abrupt rise in the interest rate that occurred starting in May.

Net interest income recorded a positive performance despite the shorter average term of time deposits, mainly due to the short duration of the fix income portfolio and a large part of the commercial loan portfolio.

NIM


Interest-Earning Assets & Interest-Bearing							Quarter ended
Liabilities $ + USD	06-30-18						03-31-18						06-30-17
(Averege in thouhand of AR$)	Capital			Rate			Capital			Rate
Interest-Earning Assets		175,925,115			20.9	%		158,676,684			19.2	%		106,177,951		19.6	%
Interest-Bearing Liabilities		138,721,270			10.0	%		124,753,037			8.9	%		85,211,913		8.0	%
NIM without foreign exchange differences		11.56	%					12.22	%					13.69	%
NIM including foreign exchange differences		14.99	%					14.09	%					15.32	%
NIM $ without foreign exchange differences		14.64	%					15.65	%					16.46	%
NIM USD without foreign exchange differences		3.85	%					2.83	%					1.87	%

- 5 -

The net interest margin (NIM) including the results for foreign exchange differences increased 90 bp in the quarter, up to 14.99%, while net of this effect, it registered a decrease of 66 bp to 11.56%, of which 20 bp corresponds to the change of currency mix, consequence of the greater weight of assets in dollars as a result of the devaluation of the peso.

The NIM in local currency (without FX differences) was 14.7%, decreasing by 101 bp, mainly due to the higher pace of increase in the rate for liabilities and the negative result of the interest rate swaps.

The NIM in foreign currency increased 102 bp, up to 3.85% mainly on higher loans rates.

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


Interest-Earning Assets & Interest-Bearing						Quarter ended
Liabilities $	06-30-18					03-31-18					06-30-17
(Averege in thouhand of AR$)	Capital		Rate			Capital		Rate			Capital		Rate
Interest-Earning Assets		125,671,511		28.1	%		116,214,892		25.3	%		85,899,552		23.6	%
Public sector instruments		16,097,421		31.6	%		17,074,738		27.1	%		15,203,478		22.4	%
Loans		108,949,580		27.6	%		98,088,733		25.1	%		64,125,816		23.9	%
Other interest-earning assets		624,511		29.3	%		1,051,420		21.5	%		6,570,258		23.6	%
Interest-Bearing Liabilities		80,458593		17.2	%		76,900,411		0.0	%		56,758,527		10.8	%
Saving Accounts		2 5,537,725		0.2	%		26,907,592		0.2	%		20,146,700		0.1	%
Time Deposits		44,114,S43		24.4	%		40,548,320		21.5	%		32,333,089		16.3	%
Current accounts with interest		5,670,911		28.2	%		5,420,745		21.7	%		2,226,348		18.4	%
Debt Securities		1,772,129		30.2	%		1,902,136		26.2	%		1,594,000		22.9	%
Other interest-bearing liabilities		3,062,885		29.2	%		2,121,619		25.5	%		458,390		19.5	%


Interest-Earning Assets & Interest-Bearing						Quarter ended
Liabilities USD	06-30-18					03-31-18					06-30-17
(Averege in thouhand of AR$)	Capital		Rate			Capital		Rate			Capital		Rate
Interest-Earning Assets		50,253,604		4.4	%		42,461,611		3.3	%		20,278,398		2.6	%
Public sector instruments		10,489,064		5.3	%		10,059,974		3.5	%		4,334,166		3.2	%
Loans		38,466,819		4.3	%		31,427,615		3.2	%		14,564,480		2.5	%
Other interest-earning assets		1,257,721		1.1	%		974,023		1.2	%		1,379,752		0.8	%
Interest-Bearing Liabilities		58,262,678		0.2	%		47,852,625		0.2	%		28,452,920		0.1	%
Saving Accounts		46,406,985		0.0	%		38,552,881		0.0	%		22,221,119		0.0	%
Time Deposits		9,831,850		0.5	%		8,279,777		0.8	%		5,939,973		0.3	%
Current accounts with interest		132,734		0.0	%		642,250		0.0	%		0		n/a
Other interest-bearing liabilities		1,891,108		3.7	%		377,717		2.8	%		291,828		4.4	%

•

Net fee Income


Net fee Income	Quarter ended									D% Quarter ended 06-30-18 vs quarter ended
(In thousands of pesos)	06-30-18			03-31-18			06-30-17			12-31-17			03-31-17
Net fee income		756,103			679,719			618,335			11.2	%		22.3	%
Fee income		2,278,267			2,034,541			1,576,453			12.0	%		44.5	%
Fee charges on deposits accounts		886,958			313,236			582,860			9.1	%		52.2	%
Credit cards and operations		563,183			477,967			427,5 64			17.3	%		31.7	%
Checks		221,466			204,363			162,799			8.1	%		36.0	%
Capital markets and securities activities		27,307			52,756			61,735			-48.2	%		-55.8	%
Fees related to foreign trade		108,711			77,623			64,470			40.0	%		68.6	%
Services of collection		317,097			256,335			166,992			23.5	%		39.9	%
Generated by subsidiaries		111,828			113,351			82,352			-1.3	%		35.8	%
Other fees		41,717			37,902			27,631			10.1	%		51.0	%
Fee Expenses		(1,522,164	)		(1,354,322	)		(958,118	)		12.4	%		58.9	%

Net fee income grew 11.2% compared to the previous quarter and 22.3% compared to the second quarter of 2017.

Fee Income increased 12% in the second quarter and 44.5% compared to the same quarter of 2017, driven by the higher consumption with credit cards, fees generated by collection services and fees on deposits accounts, which reflects the higher volume of activity and the rise in prices.

- 6 -

BBVA Frances continues to gain market share in credit card consumption, during the quarter it grew 10 bp, reaching 13.2% of the market.

Fee expenses grew 12.4% over the quarter and 58.9% compared to the second quarter of 2017, mainly due to fees related to the loyalty program and higher credit card processing charges.

In the new disclosure format applied beginning with this quarter, certain fee items are accounted for in “Other operating income”.

•

Net income from measurement of financial instruments at fair value through profit or loss


Net income from measurement of financial instruments	Quarter ended								D% Quarter ended 06-30-18 vs quarter ended
at fail value through profit or loss (In thousands of pesos)	06-30-18			03-31-18		06-30-17			12-31-17			06-30-17
Net income of financial instruments at fail value		-559,281			330,347		716,167			-269.3	%		-178.1	%
Income from public securities		248,089			187,893		646,760			32.0	%		-61.6	%
Income from private securities		118,936			93,362		43,929			27.4	%		170.7	%
Income from interest rate swaps		(433,324	)		1,649		11,002			n/a			n/a
Non deliverable forward		(502,779	)		39,614		(1,645	)		n/a			n/a
Income from corporate bonds		9,797			7,829		16,122			25.1	%		-39.2	%

Net income from measurement of financial instruments at fair value recorded a loss in the second quarter of 2018 due to interest rate swap transactions and foreign currency forward transactions (NDFs), which was partially offset by the positive result generated by the USD/AR$ spot position of AR$ 1,045.5 million illustrated in the following table.

•

Foreign Exchange Difference


Foreign Exchange Diffrerence	Quarter ended						D% Quarter ended
(In thousands of pesos)	06-30-18		03-31-18		06-30-18		03-31-18			06-30-18
Foreign Exchange Difference		2,009,608		695,250		432,105		189.0	%		365.1	%
Buy/Sell		964,124		532,290		397,214		81.1	%		142.7	%
Spot		1,045,484		162,960		34,891		n/a			n/a

Foreign Exchange difference shows a higher result due to both the devaluation of the peso during the quarter as well as greater buying and selling activity.

•

Other Operating Income


Other Operating Income	Quarter ended						D% Quarter ended
(In thousands of $)	06-30-18		03-31-18		06-30-17		03-31-18			06-30-17
Operating Income		759,728		1,742,608		662,035		-56.4	%		14.8	%
Safe deposits		111,121		100,082		82,432		11.0	%		34.7	%
Insurance		170,286		167,575		151,393		1.6	%		12.5	%
Fees on USD credit cards consumption		52,388		56,526		72,336		-7.3	%		-27.5	%
Interest on loans and fees related		128,314		81,319		70,821		57.8	%		81.2	%
Other fees		57,670		55,900		47,223		21.1	%		43.3	%
Total other fees		529,779		461,402		424,255		14.8	%		24.9	%
Reverse income tax provision		—		1,021,500		—		n/a
Other operating income		229,949		259,706		237,780		-11.5	%		-3.3	%

Deducting the provision of the result for fiscal tax adjustment of AR$ 1.021,5 million as previously mentioned, other operating income reflects an increase of 5.4% due to higher fees, which grew 14.8% during the period.

- 7 -

Operating Expenses


Operating Expenses	Quarter ended									D% Quarter ended 06/30/18 vs
In thousands of pesos	06-30-18			03-31-18			06-30-17			03-31-18			06-30-17
Personnel expenses		(1,929,968	)		(1,957,189	)		(1,634,027	)		-1.4	%		18.1	%
Administrative expenses		(1,646,632	)		(1,508,192	)		(1,634,027	)		9.2	%		29.1	%
Depreciation and amortization of assets		(207,860	)		(199,042	)		(1,275,036	)		4.4	%		15.4	%
Other operating expenses		(1,428,480	)		(2,153,710	)		(180,054	)		-33.7	%		61.3	%
Operating Expenses		(5,212,940	)		(5,818,133	)		(3,974,660	)		-10.4	%		31.2	%

Operating expenses reached AR$ 5,212.9 million, an increase of 8.7% and 31.2% compared to the previous quarter and to the second quarter of 2017, respectively.

As mentioned, the quarterly variation was calculated without considering AR$ 1,021.5 million recorded in the first quarter of 2018 in other operating expenses, corresponding to the provision generated by calculating the income tax for the 2017 fiscal year considering the effects of inflation.

The items that make up net operating expenses are analyzed in more detail below.

•

Personnel expenses and Administrative expenses


Administrative and personnel expenses	Quarter ended									D% Quarter ended 30/06/18 vs quarter ended
(In thousands of pesos)	06-30-18			03-31-18			06-30-17			03-31-18			06-30-17
Personnel expenses		(1,929,968	)		(1,957,189	)		(1,634,027	)		-1.4	%		18.1	%
Administrative expenses		(1,646,632	)		(1,508,192	)		(1,275,036	)		9.2	%		29.1	%
Electricity and Communications		(68,331	)		(64,192	)		(56,143	)		6.4	%		21.7	%
Advertising and Promotion		(124,392	)		(112,503	)		(102,945	)		10.6	%		20.8	%
Fees and external administrative services		(76,380	)		(60,036	)		(52,689	)		27.2	%		45.0	%
Taxes		(349,683	)		(380,433	)		(280,111	)		-8.1	%		24.8	%
Rente		(165,446	)		(151,107	)		(105,525	)		9.5	%		56.8	%
Maintainance, conservation and repairs		(175,265	)		(159,145	)		(130,407	)		10.1	%		34.4	%
Security Service		(66,631	)		(77,006	)		(71,328	)		-13.5	%		-6.6	%
Carriage of valuables		(237,258	)		(163,315	)		(179,109	)		45.3	%		32.5	%
Other		(383,246	)		(340,455	)		(296,779	)		12.6	%		29.1	%

Total Employees		6,084			6,075			6,190			0.1	%		-1.7	%

Total Branches		251			251			252			0.0	%		-0.4	%

Personnel expenses decreased by 1.4% compared to the first quarter and increased 18.1% compared to the second quarter of 2017, whereas administrative expenses increased 9.2% and 29.1% in the same periods, respectively.

Administrative expenses grew during the quarter as a result of the rise of transportation of cash (45.3%), consequence of the higher exchange rate volatility in May and June and the need to provide banknotes in foreign currency to the branches due to the increase in the demand.

In addition, maintenance, conservation and repairs line item includes a small impact in technology expenses due to the increase in the foreign exchange rate.

The efficiency ratio in the quarter reached 49.4%, showing an improvement of 729 bp compared to the previous quarter.

- 8 -

•

Other operating expenses


										D% Quarter ended 06/30/18 vs
Other Operating expenses	Quarter ended									Quarter ended
(In thousands of $)	06-30-18			03-31-18			06-30-17			03-31-18			06-30-17
Operating expenses		(1,428,480	)		(2,153,710	)		(885,543	)		-33.7	%		61.3	%
Gross income tax		(957,432	)		(725,069	)		(520,006	)		32.0	%		84.1	%
Gross income tax NIl		(827,697	)		(601,957	)		(353,213	)		37.5	%		134.3	%
Gross income tax fees		(204,072	)		(194,440	)		(166,793	)		5.0	%		22.4	%
Cost of deposits insurence		(71,851	)		(65,805	)		(52,577	)		9.2	%		36.7	%
Income tax provision		—			1,021,500			—			n/a
Other operating expenses		(399,197	)		(341,336	)		(312,960	)		17.0	%		27.6	%

Other operating expenses reflects mainly a higher charge by gross income tax, due to the rise in interest rates, fees and the income by foreign exchange difference, during the period.

Income from associates

Income from associates and joint ventures shows the result of non-consolidated companies. Over the second quarter it showed an income of AR$ 121.4 million, mainly due to the equity investment in Interbanking, PSA Finance, Rombo Compañia Financiera and Consolidar Seguros.

Balance and activity

Loan portfolio


										D% Quarter ended 06/30/18 vs
Net loans	Quarter ended									quarter ended
(In thousands of pesos)	06-30-18			03-31-18			06-30-17			03-31-18			06-30-17
Private & Financial sector loans in $		114,137,426			105,205,377			71,027,151			8.5	%		60.7	%
Advances		14,190,618			13,597,142			9,698,771			4.4	%		46.3	%
Discounted and purchased notes		17,676,837			16,630,962			9,367,944			6.3	%		88.7	%
Consumer Mortgages		7,357,341			5,881,749			2,117,319			25.1	%		247.5	%
Car secured loans		5,348,745			4,844,257			3,591,838			10.4	%		48.9	%
Personal loans		20,666,082			19,376,800			11,869,020			6.7	%		74.1	%
Credit cards		33,282,575			30,062,625			22,587,011			10.7	%		47.4	%
Loans to financial sector		6,094,169			4,846,056			3,142,645			25.8	%		93.9	%
Other loans		9,688,354			9,191,722			8,265,451			5.4	%		17.2	%
Other receivables		3,423,950			3,627,055			2,409,235			-5.6	%		42.1	%
Unaccrued interest		(919,522	)		(658,285	)		(312,421	)		39.7	%		194.3	%
Less: Allowance for loan losses		(2,671,723	)		(2,194,706	)		(1,709,662	)		21.7	%		56.3	%
Private & Financial sector loans in FX		47,985,806			34,231,309			17,778,669			40.2	%		169.9	%
Commercial Loans		46,390,897			32,669,243			16,323,731			42.0	%		184.2	%
Credit cards		2,007,866			1,812,303			1,526,035			10.8	%		31.6	%
Loans to financial sector		96,539			103,379			110,994			-6.6	%		-13.0	%
Less: Allowance for loan losses		(509,496	)		(353,616	)		(182,091	)		44.1	%		179.8	%

Total Private Loans		162,123,232			139,436,686			88,805,820			16.3	%		82.6	%

Total loans to public sector		142			142			239			0.0	%		-40.6	%

Net Total Loans net of other non resident loans		162,123,374			139,436,828			88,806,059			16.3	%		82.6	%

As of June 30, 2018, the private sector loan portfolio totaled AR$ 162.1 billion, increasing 16.3% during the quarter and 82.6% in the last twelve months.

Loans market share reached 8.24%, including loans from associated companies (VW Financial Services, PSA Finance and Rombo Compañia Financiera), showing an increase of 68 bp in the last 12 months.

Credit growth was affected during the second quarter by the devaluation of the peso and higher interest rates, resulting in a strong increase of loans in dollars (40.2%) mainly due to the re-expression of the new value of the currency and a mild growth in pesos of 8.5%.

With regard to loans to individuals, credit card loans recorded a positive performance, offsetting the slowdown in the demand for mortgages and personal loans.

- 9 -

Commercial loans tended to moderate growth and were focused on shorter terms, although, as a result of the temporary closure of capital markets, it was possible to see more interest from certain companies, especially larger financial companies, over longer terms.


% Loans distribution by Industry	% Commercial			% Total loans
Consumer		36.9	%		19.0	%
Basic Materials		13.2	%		6.8	%
Energy		15.7	%		8.1	%
Retailers		12.6	%		6.5	%
Durable Goods		9.3	%		4.8	%
Capital Goods		4.4	%		2.3	%
Construction and infraestructure		3.1	%		1.6	%
Others		4.8	%		2.5	%

Asset quality ratios


Asset quality ratios	Quarter ended									D% Quarter ended 06/30/18 vs quarter ended
(In thousands of pesos)	06-30-18			03-31-18			06-30-17			03-31-18			06-30-17
Non-performing loans (1)		1,423,719			1,017,379			753,731			39.9	%		88.9	%
Allowance for loan losses		(3,181,219	)		(2,548,322	)		(1,891,753	)		24.8	%		68.2	%
Non-performing loans/net total loans		0.86	%		0.72	%		0.83	%		20.2	%		3.6	%
Non-performing priv. loans/net priv. loans		0.86	%		0.72	%		0.83	%		20.2	%		3.6	%
Allowance for loan losses/non-performing loans		223.44	%		250.48	%		250.99	%		-10.8	%		-11.0	%
Allowance for loan losses/net total loans		1.92	%		1.79	%		2.09	%		7.2	%		-7.7	%

(i)	Non-performing loans include: all loans to borrowers classified as “Problem”, “Deficient Servicing”, “High insolvency Risk”, “Difficult Recovery”, “Irrecoverable” and “Irrecoverable for Technical Decsion” according to the new Center Bank debtor classification system.

As of June 30, 2018, the asset quality ratio (non-performing loans/total loans) was 0.86% with a coverage ratio (allowances non-performing loans) of 223.44%.

This ratio increased 15 bp compared to the previous quarter due to some deterioration of the portfolio, while compared to the second quarter of 2017 it showed an increase of only 3 bp.

The drought that affected the country during the first months of the year did not have a significant impact on the affected portfolio.

The cost of risk reached 1.49% registering a 17 bp increase in the quarter.

The following table shows the evolution of provisions:


Evolution of provisions	Quarter ended									D% Quarter ended 06/30/18 vs quarter ended
(In thousands of pesos)	06-30-18			03-31-18			06-30-17			03-31-18			06-30-17
Balance at the beginning of the quarter		2,548,322			2,292,035			1,751,093			11.2	%		45.5	%
Increase/decrease		801,330			526,034			354,006			52.3	%		126.4	%
Increase/decrease-Foreign exchange diff.		154,646			22,159			13,410			n/a			n/a
Aplications / Reversals		(323,079	)		(291,906	)		(226,756	)		10.7	%		42.5	%
Balance at the end of the quarter		3,181,219			2,548,322			1,891,753			24.8	%		68.2	%

- 10 -

Public sector exposure


Public Sector Exposure	Quarter Ended									D% Quarter ended 03-31-18 vs quarter ended
(In thousands of pesos)				31-03-18			30-06-17			31-12-17			31-03-17
Bills and Notes from Central Bank		14,291,916			12,316,169			14,502,391			16.0	%		-1.5	%
National Government and provinces debt		14,776,891			9,929,971			7,270,094			48.8	%		103.3	%
Treasury and national government		14,776,891			9,929,971			7,270,094			48.8	%		103.3	%
National Treasury Public Debt $		2,995,774			221,490			2,339,622			1252.6	%		28.0	%
National Treasury Public Debt USD		5,651,068			5,051,412			4,930,472			11.9	%		14.6	%
Treasury Repos USD		6,130,049			4,657,069			—			31.6	%
Provinces		—			—			—			0.0	%		0.0	%
Pesos subtotal		17,287,691			12,537,659			16,842,013			37.9	%		2.6	%
Dollars subtotal		11,781,117			9,708,481			4,930,472			21.3	%		138.9	%

Total Public Sector exposure		29,068,808			22,246,140			21,772,485			30.7	%		33.5	%

% National Government debt /Assets		5.5	%		4.4	%		4.3	%

Total exposure to the public sector totaled AR$ 29.1 billion, increasing 30.7% in the quarter.

Short-term liquidity was allocated in BCRA bills, which increased AR$ 1.9 billion during the quarter. The national government debt represents 5.5% of total assets, and increased AR$ 4.8 billion in the quarter.

The increase in local currency debt comes from the acquisition of a 2-year bond that will be used to comply with the increase of 500 basis points in the minimum cash requirement, disposed by the BCRA in two stages, June and July.

Foreign currency debt has an average term of 6 months and is composed of a Repo with the National Treasury for USD 212 million and short term Letes for USD 195 million. During the quarter these positions decreased by USD 70 million, however, due to the depreciation of the peso, their peso value increased approximately AR$ 2 billion during the period under analysis.

Deposits


Total deposits	Quarter ended						D% Quarter ended 06/30/18 vs quarter ended
(In thousands of pesos)	06-30-18		03-31-18		03-30-17		03-31-18			06-30-17
Deposits $ denominated		110,782,951		102,338,422		83,930,617		8.3	%		32.0	%
Current accounts		24,855,245		24,518,461		22,684,250		1.4	%		9.6	%
Saving accounts		36,962,990		31,971,917		27,232,686		15.6	%		35.7	%
Time deposits		46,739,438		43,659,792		32,102,594		7.1	%		45.6	%
Peso denominated		42,908,415		40,646,698		31,856,573		5.6	%		34.7	%
CER adjusted time deposits		3,831,023		3,013,094		246,021		27.1	%		n/a
Other		2,225,278		2,188,252		1,911,087		1.7	%		16.4	%
Deposits FX denominated		82,074,322		57,614,261		41,638,489		42.5	%		97.1	%
Current accounts		189,557		145,994		126,632		29.8	%		49.7	%
Saving accounts		67,209,837		46,680,073		30,552,506		44.0	%		120.0	%
Time deposits		12,315,734		8,658,520		6,270,117		42.2	%		96.4	%
Other		2,359,194		2,129,674		4,689,234		10.8	%		-49.7	%

Total deposits		192,857,273		159,952,683		125,569,106		20.6	%		53.6	%

Total deposits reached AR$ 192.9 billion as of June 30, 2018, increasing 20.6% compared to the previous quarter and 53.6% compared with the second quarter of 2017.

Foreign currency deposits remained stable during the quarter, but their balance reflects the depreciation of the peso.

- 11 -

Local currency deposits increased 8.3% mainly due to increases in savings accounts and current accounts with interest.

Other funding sources


Other funding sources	Quarter ended						D% Quarter ended 06/30/18 vs quarter ended
(In thousands of pesos)	06-30-18		03-31-18		06-30-17		03-31-18			06-30-17
Lines from other banks		5,732,921		829,574		341,534		n/a			n/a
Senior Bonds		1,751,596		1,839,184		1,419,905		-4.8	%		23.4	%
Total other funding sources		7,484,517		2,668,758		1,761,439		180.4	%		324.9	%

The increase in the lines from other banks corresponds mainly to funds to finance foreign trade operations.

CER/UVA Mismatch


	Quarter ended						D% Trim. finalizado 30/06/18 vs Trim. finalizados
(In thousands of pesos except percentages)	06-30-18		03-31-18		06-30-17		03-31-18			06-30-17
CER adjusted assets		8,636,945		6,034,055		2,218,667		43.1	%		289.3	%
- Public bond portfolio		404,976		446,478		1,656,898		-9.3	%		-75.6	%
- Private sector loans		7,445,968		4,957,098		448,609		50.2	%		1559.8	%
- Other credits		786,001		630,479		113,160		24.7	%		594.6	%
CER adjusted deposits		3,831,023		3,013,094		246,021		27.1	%		1457.2	%
CER mismatch		4,805,922		3,020,961		1,972,646		59.1	%		143.6	%

The mismatch between assets and liabilities adjustable by inflation increased AR$ 1.8 billion or 59.1% in the quarter, as a result of higher adjustable loans, offset by the increase in UVA deposits.

This mismatch is relatively lower than that of the financial system as a whole.

The bank will continue to promote and develop the instruments it deems necessary to limit this mismatch.

Solvency


Central Bank Requirements	Quarter ended									D% Quarter ended 06/30/18 vs quarter ended
(In thousands of pesos)	06-30-18			03-31-18			06-30-17			03-31-18			06-30-17
CB Minimum Capital Requirements		19,213,740			17,026,890			11,608,879			12.8	%		65.5	%
Allocated to Asset at Risk		16,092,833			14,042,621			9,046,865			14.6	%		77.9	%
Market Risk		154,790			241,847			287,776			-36.0	%		-46.2	%
Operational Risk		2,966,117			2,742,422			2,274,238			8.2	%		30.4	%
Bank Capital		34,217,408			32,595,907			18,632,561			5.0	%		83.6	%
Ordinary Capital Level 1 (*)		33,516,442			32,323,764			17,451,690			3.7	%		92.1	%
Dedusctions Ordinary Capital Level 1		(2,165,117	)		(2,203,850	)		(525,144	)		-1.8	%		312.3	%
Capital Level 2		1,959,093			1,700,390			1,260,472			15.2	%		55.4	%
Aditional Capital Level 1		906,990			775,603			445,543			16.9	%		103.6	%
Excess over Required Capital		15,003,668			15,569,017			7,023,682			-3.6	%		113.6	%
Excess as % of the capital required		78.1	%		91.4	%		60.5	%		-14.6	%		29.1	%
Risk weighted assets		234,312,709			207,723,520			141,817,226			12.8	%		65.2	%
*Capital Ratio (Central Bank rules) () ()		14.6	%		15.7	%		13.1	%		-6.9	%		11.1	%
TIER I ()*		13.4	%		14.5	%		11.9	%		-7.7	%		12.1	%

(*)	Bank capital / Risk weighted assets

(**)	Includes the 100% of the quarterly result

(***)

Ordinary capital level 1 / Risk weighted assets

The figures expressed in the previous quarters were not adjusted by IFRS

BBVA Frances continues to show adequate solvency ratios. As of June 30, 2018 the capital ratio reached 14.6%, 110 basis points lower than the ratio of March 31, 2018, mainly due to higher risk weighted assets, mainly those denominated in foreign currency as a consequence of the devaluation of the peso.

- 12 -

The Tier 1 ratio was 13.4% and the excess over required capital was AR$ 15,003.7 million.

Additional information


	Quarter ended									D% Quarter ended 06/30/18 vs Quarter ended
	06-30-18			03-31-18			06-30-17			03-31-18			06-30-17
Exchange rate $/USD		28.86			20.14			16.60			43.3	%		73.9	%
Quarterly CER adjustment		7.4	%		7.0	%		7.0	%		5.0	%		5.3	%

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

- 13 -

LOGO

Conference Call

On Friday August 24, 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=cfea5ee6-13f9-4230-8513-eaba5c3b7228

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 August 31, 2018.

Replay Access code: 10123256

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

ceciliaviviana.acuna@bbva.com

Diego Cesarini

Financial Management and Investor Relations

dcesarini@bbva.com

- 14 -

BBVA Banco Francés S,A, and subsidiaries (Grupo Consolidar by the equity method)

BALANCE SHEET (in thousands of pesos)

Communication “A” 6114

06-30-18

03-31-18

06-30-17

Cash and due from banks

54,530,632

36,917,931

37,196,151

Debt securities at fair value through other comprehensive income

2,735,529

1,162,994

4,345,912

Derivatives

104,250

168,314

68,045

Repurchase agreements

6,367,328

7,144,101

3,035,678

Other financial assets

5,897,674

7,142,873

2,996,512

Loans and other financial intermediation

162,123,310

139,436,828

88,806,059

Loans to the private & financial sector

162,123,232

139,436,686

88,805,820

Public Sector loans

142

239

Other debt securities

18,544,550

15,578,336

17,595,929

Financial assets pledged as collateral

5,155,840

3,925,255

2,267,527

Current income tax assets

1,056

1,375

278,744

Investments in equity instruments

120,978

145,256

63,696

Investments in associates and joint ventures

1,087,893

921,199

971,108

Property, plant and equipment

9,136,878

9,024,411

8,888,324

Intangible assets

542,054

448,944

354,578

Deferred income tax asset

22,311

57,407

10,091

Other non financial assets

1,350,209

1,457,379

992,093

Non-current assets held for sale

507,630

741,840

—

Total Assets

268,228,122

224,274,443

167,870,447

Deposits

192,857,273

159,952,683

125,569,106

Current accounts

25,044,802

24,664,455

22,810,882

Saving accounts

104,172,827

78,651,990

57,785,192

Time deposits

59,055,172

52,318,312

38,372,711

Rescheduled deposits CEDROS

1,951

Other deposits

4,582,521

4,315,975

6,598,370

Liabilities at fair value trhough other comprehensive income

143,495

—

Derivatives

2,277,241

245,444

72,425

Repurchase agreements

936,751

579,184

26,514

Other financial liabilities

17,727,818

16,497,979

9,224,236

Financing received the BCRA and other financial insitutions

5,732,921

829,574

341534

Corporate bonds issued

1,751,596

1,839,184

1,419,905

Current income tax liabilities

1,409,535

884,250

502,365

Provisions

3,374,177

3,268,894

2,043,341

Other provisions

3,372,628

3,267,758

2,042,741

For eventual compromises

1,549

1,136

600

Deferred income tax liabilites

343,100

514,787

944,155

Other non-financial liabilities

8,258,653

7,492,249

6,911,172

Total Liabilities

234,812,560

192,104,228

147,054,953

Total Stockholders’ equity

32,861,689

31,645,338

20,528,602

Equity investments

553,873

524,877

286,892

Total liabilities + stockholders’ equity

268,228,122

224,274,443

167,870,447

- 15 -

BBVA Banco Francés S.A. and subsidiaries (Grupo Consolidar: by the equity method)

INCOME STATEMENT (in thousands of pesos)

Communication “A” 6114


	06-30-18			03-31-18			06-30-17
Interest Income		9,525,300			7,892,864			5,000,705
Interest on loans to the financial sector		351,772			246,176			149,444
Interest on overdraft		1,177,920			917,500			679,137
Interest on documents		1,090,927			865,226			453,878
Interest on mortgages loans		169,956			142,561			85,660
Interest on car secured loans		337,965			316,562			211,286
Interest on credit card loans		1,885,704			1,671,465			1,508,214
Interest on financial leases		129,239			124,947			99,501
Interest on personal loans		1,532,737			1,355,898			919,366
Interest on other loans		724,107			651,892			434,135
From other banking receivables from financial intermediation		2,264			1,822			852
Income from Public Securities		1,187,403			952,624			118,405
CER adjustment		6,705			44,416			138,281
UVA adjustment		506,632			287,997			17,118
Other		421,969			313,778			185,428
Interest Expenses		(3,507,170	)		(2,808,837	)		(1,688,294	)
Interest on Current Account Deposits		(417,615	)		(288,583	)		(95,547	)
Interest on Saving Account Deposits		(26,894	)		(10,820	)		(7,962	)
Interest on Time Deposits		(2,438,015	)		(2,074,916	)		(1,452,261	)
Interest on interfinancing received loans		(18,567	)		(6,892	)		(1,971	)
Interest on other financing from the financial institutions		(49,652	)		(10,001	)		(100	)
Interest on other liabilites from financial intermediation		(256,177	)		(233,765	)		(113,024	)
Other interest		(50	)		(40	)		(290	)
UVA adjustment		(256,626	)		(158,404	)		(15,410	)
Other		(43,574	)		(25,416	)		(1,729	)
Net interest income		6,018,130			5,084,027			3,312,411
Net fee income		756,103			679,719			618,335
Net income of financial instruments		(559,281	)		330,347			716,167
Result from assets at amortised cost		(68,298	)		1,367			(496	)
Foreign exchange difference		2,009,608			695,250			432,105
Other operating income		759,728			1,742,608			662,035
Provision for loan losses		(804,248	)		(526,194	)		(418,545	)
Net operating income		8,111,742			8,007,124			5,322,012
Personnel expenses		(1,929,968	)		(1,957,189	)		(1,634,027	)
Administrative expenses		(1,646,632	)		(1,508,192	)		(1,275,036	)
Depreciations and amortizations		(176,747	)		(168,821	)		(151,534	)
Depreciation on Intangible assets		(31,113	)		(30,221	)		(28,520	)
Other operating expenses		(1,428,480	)		(2,153,710	)		(885,543	)
Operating income		2,898,802			2,188,991			1,347,352
Income from associates and joint ventures		121,443			39,877			174,566
Net income before income tax from continuing operations		3,020,245			2,228,868			1,521,918
Income tax from continuing operations		(866,387	)		(662,724	)		(516,842	)
Net income Including non-controlling shareholders		2,153,858			1,566,144			1,005,076
Net income attributable to non-controlling shareholders		29,938			20,846			7,658
Net income		2,123,920			1,545,298			997,418
Other comprehensive income		64,125			(19,189	)		(78,302	)
Total income attributable to controlling shareholders		2,188,045			1,526,109			919,116

- 16 -

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.

BBVA Banco Francés S.A.

Date: August 23, 2018

/s/ Ernesto Gallardo Jimenez

Name: Ernesto Gallardo Jimenez

Title: Chief Financial Officer