BBVA Argentina Capital Optimization

Project Description  

On March 31, 2025, MIGA issued a guarantee of up to USD450 million to Banco Bilbao Vizcaya Argentaria, S.A. (BBVA or the Group) for a period of up to 3 years covering the risk of expropriation of the mandatory reserves held by its subsidiary in Argentina, Banco BBVA Argentina S.A. (BBVA Argentina or the Subsidiary) at the Central Bank of Argentina. 

BBVA is a global financial services group founded in 1857. The bank is present in more than 25 countries, has a strong leadership position in the Spanish market, is the largest financial institution in Mexico and it has leading franchises in South America and Turkey. BBVA contributes with its activity to the progress and welfare of all its stakeholders: shareholders, clients, employees, providers and society in general. In this regard, BBVA supports families, entrepreneurs and companies in their plans, and helps them to take advantage of the opportunities provided by innovation and technology. Likewise, BBVA offers its customers a unique value proposition, leveraged on technology and data, helping them improve their financial health with personalized information on financial decision-making. As of December 2024, the group employed 125,916 people across 5,749 branches and served more than 77.2 million customers. Further information on the BBVA Group can be found on https://shareholdersandinvestors.bbva.com/.  

BBVA Argentina is a subsidiary of the BBVA Group, the main shareholder since 1996. In Argentina, it has been one of the leading private financial institutions since 1886. At present the Group is the largest shareholder, holding 66.6% of total shares. The Subsidiary provides a broad range of financial and non-financial services to 3.6 million customers across 235 branches.  

Environmental Categorization  

BBVA Argentina offers retail and corporate banking to a broad customer base, including individuals, MSMEs, and large-sized companies. The MIGA guarantee will support BBVA Argentina’s lending operations in climate activities and MSME projects, including support to women-owned MSMEs. The sectors and types of transactions supported are considered to be mostly medium risk, with potentially limited adverse E&S risks and impacts that are site-specific, reversible and can be addressed through mitigation measures. Transactions in high-risk sectors with significant E&S risks and impacts are expected to be few. This project is thus categorized as FI-2 in accordance with MIGA’s Policy on Environmental and Social Sustainability (2013). 

The main E&S risks of this project are associated with BBVA Argentina’s ability to identify, assess and manage the E&S risks of its financing activities and the Subsidiary’s labor practices. The applicable E&S requirements for the MIGA project portfolio will be: (i) MIGA’s Exclusion List; (ii) applicable national environmental and social laws and regulations in Argentina; and (iii) the MIGA Performance Standards (for eligible corporate loans).  

MIGA analyzed BBVA Argentina’s portfolio by types of transactions, tenor, size, industry sectors, and exposure to MIGA’s Exclusion List. As of December 2024, BBVA Argentina’s portfolio included the following business segments – corporate finance (mostly short-term lending), trade finance and financial institutions. The main sectors supported include telecommunications; wholesale and retail trade; oil, gas and mining; financial services (including insurance and collective investment vehicles) chemicals; and food and beverage. BBVA Argentina currently has limited exposure to activities on the MIGA Exclusion List. The Subsidiary also has exposure to oil and gas activities. MIGA's guarantees will support climate activities and MSME loans, excluding upstream oil and gas and coal-related activities. BBVA Group has policies outlining its commitment to decarbonize its loan portfolio by 2030 and achieve Net Zero by 2050. 

MIGA assessed BBVA Argentina’s E&S policies and procedures in line with the requirements of MIGA Performance Standard 1: Assessment and Management of E&S Risks and Impacts (PS1) and also assessed the bank’s labor practices in line with MIGA Performance Standard 2: Labor and Working Conditions (PS2). 

In relation to E&S risk management, BBVA Group has been an Equators Principles financial intermediary since 2004. The Group has E&S policies – Sustainability General Policy and the Environmental and Social Framework; these are mainly focused on management of E&S risks associated with high-risk sectors and are applicable to all subsidiaries. The BBVA procedures also include the application of the Performance Standards for Equator Principles transactions. Although BBVA Argentina has a Sustainability Policy and procedures for managing climate risk, the bank does not have a formal E&S risk management system. For this project, BBVA Argentina will   develop and implement an Environmental and Social Management System (ESMS) for screening transactions against the MIGA Exclusion List, applicable E&S laws and the Performance Standards (based on MIGA’s criteria for applying the Performance Standards). BBVA Argentina will also develop and implement an external communication mechanism for receiving and addressing E&S concerns raised by third parties regarding projects financed by BBVA Argentina. 

MIGA reviewed the Subsidiary’s emergency response procedures and found them to be in line with the requirements of MIGA PS1. In relation to PS2, MIGA’s assessment revealed that BBVA Argentina’s labor policies and procedures are in line with the requirements of PS2 and national labor laws in Argentina. The Subsidiary’s policies and procedures cover amongst other aspects, terms of employment, performance management, benefits and remuneration, employees’ rights and responsibilities, occupational health and safety, harassment, non-discrimination and grievance mechanism. 

For the proposed guarantee, BBVA Argentina will report annually to MIGA regarding the implementation of the E&S procedures for the project portfolio, as well as its labor practices.  

Development Impact  

The aim of MIGA’s  guarantee is to help BBVA optimize the Group’s risk- weighted assets (RWA) on a consolidated basis. Through the MIGA guarantee, the parent bank will pass the benefits of the RWA relief at the Group level to its operating subsidiary. The RWA capacity that is freed up by MIGA’s guarantee will be utilized to support BBVA Argentina’s lending operations in climate activities and MSMEs, including support to women-owned MSMEs.   

The project is aligned with the World Bank Group (WBG) Country Partnership Framework (CPF) FY19-22, under the focus area of “Leveraging private financing for development”. It is aligned as well with the WBG Performance and Learning Review (PLR) for Argentina, which extended the strategy period to FY24 to align with the political cycle. The ​​guarantee is also in line with MIGA’s FY24-26 Strategy and Business Outlook under its strategic direction of addressing the global challenge of climate change, by supporting climate finance lending for BBVA’s Subsidiary in Argentina. Furthermore, the project is aligned with the WBG Gender Strategy 2024-2030, given that part of the RWA relief will be used toward new lending to women-owned MSMEs. BBVA Argentina has agreed to a Gender Action Plan (GAP) that aims to build the bank’s gender finance capacity.