Economic Environment

Economic activity showed signs of deceleration in the first quarter of 2012, as the Monthly Estimator of Economic Activity (“EMAE”; a monthly proxy for GDP) increased 5.4% during the fist two months of the year, in annual terms, down from 7.3% in the fourth quarter of 2011.

Inflation, as measured by the official Consumer Price Index for Greater Buenos Aires (which is used to calculate the CER index, to which for some sovereign bonds are adjusted to) increased by 2.5% in the first quarter of 2012, slightly above the 2.2% growth of the previous quarter.

The primary fiscal surplus of the national public sector was AR$ 2,179 million in the first quarter of 2012, decreasing 55.2% compared to the same quarter of 2011. This deterioration of the fiscal balance is the result of a 29.7% increase of total public revenues in the first quarter of 2012, while fiscal expenditures increased at the higher rate of 34.4% during the same period. Pensions, wages and capital expenditures contributed most to the increase in fiscal spending during the first quarter while transfers to the private sector showed less dynamic behavior, increasing only 17.9% during the last quarter. Regarding revenues, only Social Security contributions showed an above-average increase, while income tax growth was 29.5%.

The accumulated trade surplus in the first quarter of 2012 reached USD 2,969 million, 89.2% higher than the balance recorded in the fist quarter of 2011. The positive performance of the trade balance is the result of total exports growth of 8.2%, while total imports remained at a level similar to the previous quarter.

The exchange rate (BCRA reference rate) closed at AR$ 4.3785 per U.S. dollar on March 30, 2012, increasing 1.75% compared to the AR$ 4.3032 registered on December 30, 2011.

In the first quarter of 2012, the Central Bank stock of international reserves increased by USD 915 million to USD 47.291 million on 30 March, 2012. During the first quarter of 2012, the Central Bank purchased USD 3,577 million in the FX market, while in the last quarter of 2011 it had bought USD 2,229 million.

The Badlar interest rate for private banks fell in the first quarter of 2012, averaging 14.4% in the quarter.

This is the result of the recover in the liquidity conditions of the financial system.

During the quarter, private sector loans denominated in AR$ rose 4.7%, while total deposits denominated in ARS$ in the financial system increased by 7.0%, and private sector deposits denominated in AR$ grew 8.5% in the same period. Private sector deposits denominated in USD, in contrast, decreased by 2.5% in the quarter; showing a negative growth rate but a substantially better than the fall rate of 16.5% of the last quarter of 2011.

The Bank

During the first quarter of 2012, BBVA Francés continued working towards its main goal: being the leading universal bank, providing the most benefit and convenience to its customers and stimulating commercial activity.

Through specific actions, the Bank seeks to accelerate quality improvements in all services provided, improving its customers’ experience in every contact with the Bank. Its purpose is a banking business with a different attitude: focusing on customers as the core of every action, acting swiftly and effectively, resolving all needs and inquiries during the first contact, and being innovative.

In order to meet this target, BBVA Francés worked on the following action plans: implementation of a new service and claim resolution model, new installation and equipment upgrades and improvements to branch telephone services, availability of credit card statement summaries and improvement in product promotions. In addition, the Bank created new customer portfolio segmentation and emphasized post-sale customer service.

BBVA Francés continues to support SMEs understanding their importance in the development of Argentina’s economy. To that end, the Bank carried out free seminars and workshops for client and non-customer companies concerning new regulations related to imports and exports. This allowed it to achieve a leadership position and differentiation regarding training and technical advice in the foreign trade business.

BBVA Francés successfully participated in “Expoagro 2012”, introducing new benefits of the BBVA Francés Agro LANPASS card, as well as 0% rate commercial

agreements for the 2012-2013 campaign and financing plans such as “buy today and pay in July 2013”.

In the retail segment and continuing its strengthening of strategic alliances, the Bank signed agreements in January 2012 with the two most important argentine soccer clubs, Boca Juniors and River Plate, becoming their strategic sponsor. The Bank seeks to consolidate its leadership as BBVA has already achieved as sponsor of the BBVA Liga Iberoamerica. In addition to approaching new customers and retaining existing customers’ loyalty, the sponsorship achieves maximum brand exposure and provides the best benefits linked to both clubs.

BBVA Francés continued implementing its business model, focused mainly on improving the relationship with customers. During the summer BBVA Francés had a strong presence in the Atlantic Coast with numerous exclusive benefits and creative events in the Mar del Plata, Pinamar and Cariló beaches. The Bank also continued strengthening its credit cards and offering the best benefits derived from its more significant strategic alliances: T4F, LANPASS and Peugeot. Similarly, keeping focus on high-income clients, the VIP 2012 Events Cycle continued to hold many special events allowing customers to enjoy the best concerts and fashion shows on the Argentine Coast.

In line with the strong growth achieved by the automotive market, and demonstrating the Bank’s capacity to adapt quickly and discover new opportunities, BBVA Francés launched a new promotion for automobile insurance granted by La Meridional, La Caja and Zurich that provides significant discounts to customers buying new home, life, personal accident, and/or personal accident for household employees insurance through BBVA Consolidar Seguros. The Bank continuous to consolidate its leadership in this market thanks to the excellent performance of its subsidiaries PSA Finance Compañía Financiera and Rompo Compañía Financiera.

Presentation of Financial Information

As of March 31, 2012, BBVA Francés total net income reached AR$ 240.5 million.

During the quarter, the following non recurring gains took place:

The following “pro forma” table presents the non-recurring earnings.

In order to standardize the comparison with previous quarters, the analysis of the variations is made in terms of recurring results.

As of March 31, 2012, BBVA Francés’ recurring net income reached AR$ 295.1 million, increasing 14.2% compared to the same quarter in 2011, while it did not register a significant variation compared to the previous quarter.

The increase in net financial income was due to significant growth in the volume of intermediation with the private business sector and in the private spread, which increased 34.9% and 7.3% compared to the same quarter of 2011 and the previous quarter; respectively.

During the first quarter of 2012, provision for loan losses registered an increase compared to the same quarter of 2011 and to the previous quarter, mainly due to a slight deterioration of the loan portfolio.

Net income from services maintained its growing trend, increasing 37.3% in the last twelve months and 3.8% in the first quarter of 2012.

Administrative expenses also increased 29.4% compared to the same quarter of 2011 and 5.5% compared to the previous quarter.

It is important to emphasize that, as of March 31, 2011, Other/income expenses registered the results generated by Consolidar Compañía de Seguros de Retiro S.A. and Consolidar Aseguradora de Riesgos del Trabajo S.A.

Other/income expenses registered a gain during the quarter, mainly due to higher credits recovered in the period.

Net Financial Income

As previously mentioned, the significant expansion in the volume of loans and the improvement of the spreads allowed the solid growth of net financial income originated in the intermediation with the private sector, which grew 15.8% compared to the previous quarter.

Net financial income result includes the non-recurring income originated by variations in the valuation of public securities. Such results totaled losses of AR$ 20.9 million and AR$ 88.9 million in the first quarter of 2012 and 2011 respectively, whereas the quarter ended on December 31, 2011 showed a gain of AR$ 231.1 million.

Income from Public and Private Securities

The Bank has the discretion to mark-to-market its total public bonds portfolio; because of that, such income

includes the unrealized losses/gains from variations in the valuations of the portfolio.

Net Income from Services

Net Income from services grew 37.3% and 3.8% compared to the same quarter of the previous year and to the fourth quarter of 2011, respectively.

The increase in the last twelve months was driven by higher consumption with credit cards, higher fees from originated deposits and insurance services.

Service charge expenses grew mainly due to the increase in promotions related to the LANPASS kilometers program.

Compared to the previous quarter, net income from services did not show a significant variation, while fees charged for services of deposits accounts and insurance sales increased. Commissions generated by purchases with credit and debit cards decreased because the previous quarter reflected the seasonal shopping behavior during Christmas and holidays. Service charge expenses decreased as a result of lower costs in promotions.

Administrative Expenses

Administrative expenses increased 29.4% during the last twelve months and 5.5% in the first quarter of 2012.

Personnel expenses grew 28.6% in the last twelve months, mainly due to the wage increase agreed with the labor unions for the year 2011, and increased 10.4% during the first quarter of 2012, mainly due to the provision recorded for the agreements with the labor unions for the year 2012.

General expenses increased 30.5% in the last twelve months, due to higher tax charges and charges directly related to the higher activity level.

General expenses remained at a similar level to the last quarter due to higher expenditures on taxes, electricity and others, offset by lower charges in advertising and benefits compared to the last quarter of 2011, which had extraordinary charges related to summer promotions.

As of March 31, 2012, the Bank and its subsidiaries had 5,025 employees, showing an 8.6% increase during the last twelve months. The branch office network totaled 268 offices, including 240 consumer branch offices and 28 branch offices specializing in the middle-market segment. Corporate banking included 7 business units grouped by industry. Complementing its distribution network, the Bank has 14 in-company branches and 2 point of sale outlets, 654 ATM’s and 695 quick deposit boxes (“QDBs”).

Other Income / Expenses

Other income/expenses totaled a gain of AR$ 42.5 million during the first quarter of 2012, mainly due to the sale of the Bank’s stake in the building located at Independencia Street 169 in the city of Buenos Aires.

Income from Equity Investments

Income from equity investments sets forth net income from related companies that are not consolidated. During the first quarter of 2012, a gain of AR$ 11.2 million was recorded, mainly due to the sale of Consolidar ART and BBVA Francés’ stake in Rombo Compañía Financiera.

Total Public Sector Exposure

Exposure to the public sector’s National treasury decreased compared to the same quarter of 2011 and to the previous quarter, mainly due to the sale of part of the portfolio and lower valuations.

Bank’s portfolio of BCRA bills and notes increased 20.9% during the first quarter of 2012.

As of March 31, 2012, public sector national treasure assets represented 5.1% of the Bank’s total assets. Total exposure to BCRA’s bills and notes net of holdings linked to reverse repo transactions, represented 8% of the Bank’s total assets.

Total exposure to the public sector includes public debt of the national treasury through public securities, guaranteed loans and trustees, as well as, the BCRA’s bills and notes.

Loan Portfolio

As of March 31, 2012, the private sector loan portfolio totaled AR$ 23.2 billion, growing 41.6% in the last twelve months and 1.4% in the last quarter.

During the last twelve months, the growth of consumption and capital investment were the basis for the outstanding performance of the different branches. The middle market segment was the main driver of such expansion, increasing its portfolio 43.3%, while the retail portfolio grew 41.3% and finances to large corporations 36.6%.

The increase in discounted notes, loans to finance

foreign trade operations, mainly to finance exports, and leasing were the drivers of the expansion in the middle market segment. Growth in personal loans, credit cards and car loans led the growth in the consumer segment, while other loans and advances drove the increase in wholesale banking.

Compared to the previous quarter, the increase was principally due to the expansion of the retail portfolio, mainly car loans, personal loans and credit cards, while advances grew both for both middle market businesses and the corporate segment, these increases were partially offset by lower loans to finance foreign trade operations.

Asset Quality

BBVA Francés continues to be a leader in the financial system in terms of asset quality.

The asset quality ratio (non-performing loans/total loans) was 0.58% as of March 31, 2012, while the coverage ratio (provisions/non-performing loans) reached 352.1%. A slight deterioration in the portfolio of loans was recorded during the quarter.

The following table shows the evolution of provisions for loan losses, including charges relating to

transactions recorded under “Other receivables” from financial intermediation.

Deposits

Total deposits reached AR$ 29.7 billion as of March 31, 2012, an increase of 23.4% and 1.6% compared to the same quarter of 2011 and to the previous quarter, respectively.

In the last twelve months, both time deposits as well as sight accounts registered significant growth, increasing 23.6% and 22.4%, respectively.

Deposits did not show a significant variation during the first quarter of 2012.

Currency deposits denominated in pesos increased 29.6% in the last twelve months and 2.2% in the last quarter.

Deposits denominated in foreign currency maintained the same levels compared to the last twelve months and to the previous quarter. By the end of March 31, 2012 deposits denominated in foreign currency reached AR$ 5.2 billion (equivalent to US$ 1.2 billion), representing 17.6% of the Bank’s total deposits.

Other Funding Sources

Other funding sources totaled AR$ 1.3 billion as of March 31, 2012, increasing 6.1% compared to the previous quarter. Such growth was due to the issuances of negotiable obligations by both the Bank and PSA Finance.

In August 2011, PSA Finance issued its Series 3 Notes for AR$ 70 million, maturing on August 2013.

PSA Finance then issued its Series 5 Notes for AR$70 million, maturing in 18 months and its Series 6 Notes for AR$ 30 million, maturing in 9 months.

In addition, on January 2012 BBVA Francés issued its second series of negotiable obligations, which achieved a high level of demand and allowed the expansion of the issue amount from the AR$ 125 million initially planned to AR$ 148.9 million.

40.2% of the balances shown in the table below were denominated in foreign-currency at the end of the first quarter of 2012.

Capitalization

As of March 31, 2012, the Bank’s total shareholder’s equity totaled AR$ 4.1 billion, while the excess over BCRA Minimum Capital Requirements was AR$ 1.6 billon. On the same date, the capital ratio reached 16.3% of assets adjusted to risk.

It should be noted that 516,544 ordinary shares were issued as part of the Consolidar Comercializadora merger in September 2011.

On January 27, 2012, the BCRA increased the capital requirements for financial institutions operating in Argentina, effective as of February 1, 2012.

“Communication A 5272”, requires an increase of capital related to the operational risk and “Communication A 5273” requires an additional buffer equivalent to 75% of the total capital requirement solely for the purpose of distributing profits. As a consequence of the above mentioned resolutions, BBVA Francés will not distribute dividends for the period 2011.

At the Shareholders’ Meeting held on March 26, 2012 the Bank resolved to create an optional reserve for future distributions of results of AR$ 1.6 billion was created.