|                                                        
|--------------------------------------------------------
|SECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
|                                                        
|FORM 20-F                                               

|   |                                                                                               
|-- | ----------------------------------------------------------------------------------------------
|o  | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934
|OR
|x  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934          
|   | For the fiscal year ended December 31, 2005                                                   
|OR
|o  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934      
|   | For the transition period from           to                                                   
|OR
|o  | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934   
|   | Date of event requiring this shell company report                                             
|   | For the transition period from           to                                                   

|                                                                               
|-------------------------------------------------------------------------------
|Commission file number: 001-12568                                              
|                                                                               
|                                                                               
|BBVA BANCO FRANCÉS S.A.                                                        
|(Exact name of Registrant as specified in its charter)                         
|                                                                               
|BBVA FRENCH BANK                                                               
|(Translation of Registrants name into English)                                
|                                                                               
|Republic of Argentina                                                          
|(Jurisdiction of incorporation or organization)                                
|                                                                               
|                                                                               
|Reconquista 199                                                                
|(C1003ABB) Buenos Aires. Republic of Argentina                                 
|(Address of principal executive offices)                                       
|                                                                               
|                                                                               
|Securities registered or to be registered pursuant to Section 12(b) of the Act:

|Title of each class                                                                                                   |  | Name of each exchange on which registered
|--------------------------------------------------------------------------------------------------------------------- |  | -----------------------------------------
|                                                                                                                      |  |                                          
|American Depositary Shares, each representing the right to receive three ordinary shares, par value Ps.1.00 per share |  | New York Stock Exchange                  
|Ordinary shares, par value Ps.1.00 per share                                                                          |  | New York Stock Exchange*                 

|* | The ordinary shares are not listed for trading, but are listed only in connection with the registration of the American Depositary Shares, pursuant to requirements of the New York Stock
Exchange.
|- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|                                                                                                    
|----------------------------------------------------------------------------------------------------
|Securities registered or to be registered pursuant to Section 12(g) of the Act: None                
|Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None     
|The number of outstanding shares of each of the classes of capital or common stock of the registrant
|as of the close of the period covered by the annual report:                                         

|Title of class                               |  | Number of shares outstanding
|-------------------------------------------- |  | ----------------------------
|                                             |  |                             
|Ordinary Shares, par value Ps.1.00 per share |  | 471,361,306                 

|Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.oYesxNo                                                                                                            
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13                                                                                         
|or 15(d) of the Securities Exchange Act of 1934.oYesxNo                                                                                                                                                                                   
|Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange                                                                                            
|Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been                                                                                           
|subject to such filing requirements for the past 90 days:xYesoNo                                                                                                                                                                          
|Indicate by check mark if the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of accelerated filer and large accelerated
filer in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o
    
    Accelerated filer x
    
    Non-accelerated filer o


|Indicate by check mark which financial statement item the registrant has elected to follow:oItem 17xItem 18
|-----------------------------------------------------------------------------------------------------------

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|If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).oYesxNo
|----------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                    
|                                                                                                                                                    



|                                      |  | TABLE OF CONTENTS                                                   |  |     
|------------------------------------- |  | ------------------------------------------------------------------- |  | ----
|                                      |  |                                                                     |  |     
|                                      |  |                                                                     |  | Page
|                                     
|FORWARD-LOOKING STATEMENTS            |  | 1                                                                  
|                                     
|PRESENTATION OF FINANCIAL INFORMATION |  | 1                                                                  
|                                     
|CERTAIN TERMS AND CONVENTIONS         |  | 2                                                                  
|                                      |  | PART I                                                              |  |     
|                                     
|ITEM 1.                               |  | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS               |  | 3   
|ITEM 2.                               |  | OFFER STATISTICS AND EXPECTED TIMETABLE                             |  | 3   
|ITEM 3.                               |  | KEY INFORMATION                                                     |  | 3   
|ITEM 4.                               |  | INFORMATION ON THE COMPANY                                          |  | 15  
|ITEM 5.                               |  | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                        |  | 90  
|ITEM 6.                               |  | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                          |  | 116 
|ITEM 7.                               |  | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                   |  | 132 
|ITEM 8.                               |  | FINANCIAL INFORMATION                                               |  | 135 
|ITEM 9.                               |  | THE OFFER AND LISTING                                               |  | 136 
|ITEM 10.                              |  | ADDITIONAL INFORMATION                                              |  | 139 
|ITEM 11.                              |  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK          |  | 148 
|ITEM 12.                              |  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES              |  | 151 
|                                     
|                                      |  | PART II                                                             |  |     
|                                     
|ITEM 13.                              |  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                     |  | 152 
|ITEM 14.                              |  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF |  | 152 
|                                      |  | PROCEEDS                                                            |  |     
|ITEM 15.                              |  | CONTROLS AND PROCEDURES                                             |  | 152 
|ITEM 16 A.                            |  | AUDIT COMMITTEE FINANCIAL EXPERT                                    |  | 152 
|ITEM 16 B.                            |  | CODE OF ETHICS                                                      |  | 152 
|ITEM 16 C.                            |  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                              |  | 153 
|ITEM 16 D.                            |  | EXEMPTIONS FROM LISTING REQUIREMENTS FOR AUDIT COMMITTEES           |  | 153 
|ITEM 16 E.                            |  | PURCHASES OF EQUITY SECURITIES BY ONE ISSUER AND AFFILIATED PERSONS |  | 153 
|                                     
|                                      |  | PART III                                                            |  |     
|                                     
|ITEM 17.                              |  | FINANCIAL STATEMENTS                                                |  | 154 
|ITEM 18.                              |  | FINANCIAL STATEMENTS                                                |  | 154 
|ITEM 19.                              |  | EXHIBITS                                                            |  | 154 

---



FORWARD-LOOKING STATEMENTS

This Form 20-F contains words, such as believe, expect, estimate, intend, plan, may and
anticipate and similar expressions, that identify forward-looking statements, which reflect our views about future events and financial performance. Actual results could differ materially as a result of factors beyond our control,
including but not limited to:

- Changes in general economic, business or political or other conditions in the Republic of Argentina (Argentina) or changes
in general economic or business conditions in Latin America;
- Changes in capital markets in general that may affect policies or attitudes toward lending to Argentina or Argentine companies;
- Increased costs and decreased income related to macroeconomic variables such us exchange rates and the Consumer Price Index
(CPI);
- Unanticipated increases in financing and other costs or the inability to obtain additional debt or equity financing on attractive
terms; and
- The factors discussed underRisk Factors.

Accordingly, readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Banco Francés
undertakes no obligation to update or revise these forward-looking statements or to publicly release the results of any revisions to these forward-looking statements. The accompanying information in this annual report, including, without limitation,
the information under Information on the Company, Operating and Financial Review and Prospects and Quantitative and Qualitative Disclosures About Market Risk identifies important factors that could cause material
differences between any forward-looking statements and actual results.

PRESENTATION OF FINANCIAL INFORMATION

General

Banco Francés is an Argentine bank and maintains its financial books and records in Argentine pesos and prepares its financial statements in conformity with
the accounting rules of the Banco Central de la República Argentina (the Central Bank) related thereto (Argentine Banking GAAP), which differ in some respects from generally accepted accounting principles in Argentina
(see Note 4. to our Consolidated Financial Statements) and the accounting principles in the United States (U.S. GAAP). See Note 17. to our Consolidated Financial Statements for a description of the principal differences between Argentine
Banking GAAP and U.S. GAAP, as they relate to us, and a reconciliation to U.S. GAAP of net income and total stockholders equity. In this annual report, references to $, US$ and dollars are to United
States dollars, references to Ps. or pesos are to Argentine pesos. Percentages and certain dollar and peso amounts have been rounded for ease of presentation. Unless otherwise stated, all market share and other industry
information has been derived from information published by the Central Bank.

The Consolidated Financial Statements are presented in accordance with the guidelines of Technical Resolution No. 4 of the Argentine Federation of Economic Sciences
Professional Association (Federación Argentina de Consejos Profesionales de Ciencias EconómicasFACPCE), modified by Technical Resolution No. 19, and the disclosure standards set by the Central Bank.

The Bank presents its financial statements in equivalents purchasing power. These financial statements recognize the effects of the changes in the purchasing power
of the currency through February 28, 2003, following the restatement method established by FACPCE Technical Resolution No. 6 (modified by Technical Resolution No. 19), using an adjustment rate derived from the Argentine internal Wholesale Price
Index published by the National Institute of Statistics and Census (INDEC) of Argentine.

According to the above mentioned method, the accounting measurements were restated by the purchasing power changes through August 31, 1995. As of that date, based in
the prevailing economic stability conditions and according with the National Securities Commission (CNV) General Resolution No. 272 and Central Bank Communication A 2365, the accounting measures were not restated through
December 31, 2001. In view of CNV General Resolution No. 415 and Central Bank Communication A 3702, the method was reinstated effective as of January 1, 2002, considering the previous accounting measures restated as of December 31, 2001.

1

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By Communication A 3921 of the Central Bank and General Resolution No. 441/03 of the CNV, in compliance with Decree No. 664/03 of the Federal Executive,
application of the restatement method to financial statements in equivalent purchasing power has been suspended as of March 1, 2003. Accordingly, BBVA Banco Francés S.A. applied the mentioned restatement method until February 28, 2003.

Unless otherwise indicated, financial information contained in this annual report reflects the consolidation of the following subsidiaries at and for the fiscal
years indicated below:

|                                                                |  | December 31,
|--------------------------------------------------------------- |  | ------------
|                                                                |  |             
|Entity                                                          |  | 2005        
|                                                                |  |             
|Banco Francés Cayman Ltd. and subsidiary(1)                     |  |             
|PSA Finance Argentina Compañía Financiera S.A.                  |  | X           
|Consolidar AFJP S.A.                                            |  | X           
|Consolidar Compañía de Seguros de Vida S.A. and subsidiary(3)   |  | X           
|Consolidar Compañía de Seguros de Retiro S.A. and subsidiary(3) |  | X           
|Francés Valores Sociedad de Bolsa S.A.                          |  | X           
|Credilogros Compañía Financiera S.A. and subsidiary(2)          |  | X           
|Atuel Fideicomisos S.A. and subsidiary                          |  | X           

|   
|---
|(1)
|(2)
|(3)

On January 7, 2002, Argentina abandoned the peso-dollar parity introduced in April 1991 under Law No. 23,928 (the Convertibility Law). Following the
initial devaluation and the setting of an official rate exchange at Ps.1.4 per US$1.0, the peso was allowed to float, and as of June 15, 2006 traded at approximately Ps.3.0778 per US$1.0. SeeKey InformationExchange Ratesfor information regarding the evolution of rates of exchange since fiscal year 2000.

Impact of Argentine Crisis on Presentation of Financial Information

Changes to Argentine law have had a significant impact on our operations. The events described in this annual report, including the conversion of certain of our
dollar-denominated assets and liabilities into peso-denominated assets and liabilities and the devaluation of the peso, took place after December 31, 2001, and are reflected in our financial statements for the fiscal year ended December 31, 2002.
Because of the changes in Argentine law and their impact on our operations, any comparison of our financial statements for periods ended after December 31, 2001 with those for periods ended on or prior to December 31, 2001 are meaningless.

CERTAIN TERMS AND CONVENTIONS

As used in this Form 20-F, Banco Francés, the Bank, the Company and terms such as we, us and
our mean BBVA Banco Francés S.A. and its consolidated subsidiaries unless the context otherwise requires.

2

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- PART I -

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

Recent Events in Argentina

Substantially all of our operations, property and customers are located in Argentina. Therefore, the performance of our loan portfolio, our financial condition and
the results of our operations depend primarily on the macroeconomic and political conditions prevailing in Argentina. In response to the Argentine political and economic crisis that began in the last quarter of 2001, the Government has undertaken
numerous far-reaching initiatives that, especially in 2002, have radically changed the macroeconomic and regulatory environment in Argentina generally, and for the financial industry in particular.

Selected Financial Data

The information in this section has been selected from the Consolidated Financial Statements as of the dates and for the fiscal years indicated and gives effect to
the measures adopted by the Government since December 31, 2001. This information should be read in conjunction with, and is qualified in its entirety by reference to,Risk
FactorsandRecent Events in Argentina, Consolidated Financial Statements, and related notes. The selected financial data for the fiscal years ended December 31, 2005, December 31, 2004, December 31, 2003, December 31, 2002, and December 31, 2001 are derived from the
financial statements. For information concerning the preparation and presentation of the financial statements, seePresentation of Financial Information.

Changes to Argentine law have had a significant impact on our operations. Such changes in the law and their impact on our operations have rendered meaningless any
comparison of our financial statements of ours for periods ended after December 31, 2001 with those for periods ended on or prior to December 31, 2001.

SeeKey InformationRecent Events in Argentina,Risk FactorsFactors Related to Argentina, andRisk FactorsFactor Related to Banco Francés.

3

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|                                                          |  | For the Fiscal Year Ended December 31,
|--------------------------------------------------------- |  | --------------------------------------
|                                                          |  |                                       
|                                                          |  | 2005                                  
|                                                          |  |                                       
|                                                          |  | (in thousands of pesos)(1)            
|CONSOLIDATED INCOME STATEMENT                             |  |                                       
|Amounts in accordance with Argentine Banking GAAP         |  |                                       
|Financial income                                          |  | 1,654,152                             
|Financial expenses                                        |  | (608,949                              
|                                                          |  |                                       
|Gross Intermediation Margin                               |  | 1,045,203                             
|Provision for loan losses                                 |  | (114,628                              
|Service charge income                                     |  | 721,167                               
|Service charge expenses                                   |  | (77,764                               
|Operating expenses                                        |  | (775,835                              
|Net other income / (Net other expenses)                   |  | (645,076                              
|                                                          |  |                                       
|(Loss) / Income before income tax                         |  | 153,067                               
|Income tax                                                |  | (18,712                               
|Monetary Loss                                             |  | -                                     
|                                                          |  |                                       
|Net (Loss) / Income                                       |  | 134,355                               
|                                                          |  |                                       
|Net (Loss) / Income on Minority Interests in Subsidiaries |  | (17,151                               
|                                                          |  |                                       
|Final Consolidated (Loss) / Income                        |  | 117,204                               
|                                                          |  |                                       
|                                                         
|Net Operating Revenue(3)                                  |  | 1,688,606                             
|Operating Income(4)                                       |  | 798,143                               
|                                                         
|Net (Loss) / Income per Ordinary Shares(2) (11)           |  | 0.25                                  
|Net (Loss) / Income per ADS (2) (11)                      |  | 0.75                                  
|Cash dividends per Ordinary Share(11)                     |  | 0.05728                               
|Cash dividends per ADS(11)                                |  | 0.17184                               
|Net Operating Income per Ordinary Shares(2) (11)          |  | 1.69                                  
|Net Operating Income per ADS (2) (11)                     |  | 5.07                                  
|Average Ordinary Shares outstanding (000s) Primary(11)    |  | 471,361                               
|                                                         
|Net (Loss) / Income per Ordinary Shares(2) (12)           |  | 0.25                                  
|Net (Loss) / Income per ADS (2) (12)                      |  | 0.75                                  
|Cash dividends per Ordinary Share(12)                     |  | 0.05728                               
|Cash dividends per ADS(12)                                |  | 0.17184                               
|Net Operating Income per Ordinary Shares (2) (12)         |  | 1.69                                  
|Net Operating Income per ADS (2) (12)                     |  | 5.07                                  
|Average Ordinary Shares outstanding (000s) Primary(12)    |  | 471,361                               
|                                                         
|Amounts in accordance with U.S. GAAP:                     |  |                                       
|Net (loss) Income(13)                                     |  | 1,634,612                             
|                                                         
|Net (loss) Income per Ordinary Share (2) (11)             |  | 3.47                                  
|Net (loss) Income per ADS (2) (11)                        |  | 10.41                                 
|Average Ordinary Shares outstanding (000s) Primary(11)    |  | 471,361                               
|                                                         
|Net (loss) Income per Ordinary Share (2) (12)             |  | 3.47                                  
|Net (loss) Income per ADS (2) (12)                        |  | 10.41                                 
|Average Ordinary Shares outstanding (000s) Primary(12)    |  | 471,361                               

4

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|                                                              |  | For the Fiscal Year Ended December 31,
|------------------------------------------------------------- |  | --------------------------------------
|                                                              |  |                                       
|                                                              |  | 2005                                  
|                                                              |  |                                       
|                                                              |  | (in thousands of pesos)(1)            
|CONSOLIDATED BALANCE SHEET                                    |  |                                       
|Amounts in accordance with Argentine Banking GAAP             |  |                                       
|Cash and due from banks                                       |  | 1,611,506                             
|Government and private securities                             |  | 3,504,311                             
|Loans, net of allowances                                      |  | 8,481,476                             
|Other assets                                                  |  | 2,386,455                             
|                                                              |  |                                       
|Total assets                                                  |  | 15,983,748                            
|                                                              |  |                                       
|                                                             
|Deposits                                                      |  | 10,613,086                            
|Other liabilities and minority interest in subsidiaries       |  | 3,569,115                             
|                                                              |  |                                       
|Total liabilities and minority interest in subsidiaries       |  | 14,182,201                            
|                                                              |  |                                       
|                                                             
|Capital stock                                                 |  | 471,361                               
|Issuance premiums                                             |  | 175,132                               
|Adjustments to stockholders equity                           |  | 312,979                               
|Retained earnings                                             |  | 428,698                               
|Unrealized valuation difference                               |  | 230,282                               
|Unappropriated earnings                                       |  | 183,095                               
|                                                              |  |                                       
|Total stockholders equity                                    |  | 1,801,547                             
|                                                              |  |                                       
|                                                             
|Amounts in accordance with U.S. GAAP                          |  |                                       
|Total Assets(13)                                              |  | 15,421,682                            
|Total Stockholders equity(13)                                |  | 246,268                               
|                                                             
|SELECTED RATIOS IN ACCORDANCE WITH                            |  |                                       
|ARGENTINE BANKING GAAP                                        |  |                                       
|                                                             
|Profitability and Performance                                 |  |                                       
|Return on average total assets(5)                             |  | 0.73                                  
|Return on average stockholders equity(6)                     |  | 6.72                                  
|Services charge income as a percentage of operating expenses  |  | 92.95                                 
|Operating expenses as a percentage of average total assets(7) |  | 4.85                                  
|                                                             
|Capital                                                       |  |                                       
|Stockholders equity as a percentage of total assets          |  | 11.27                                 
|Total liabilities as a multiple of stockholders equity       |  | 7.87                                  
|                                                             
|Credit Quality                                                |  |                                       
|Allowances for loan losses as a percentage of total loans     |  | 2.13                                  
|Non-performing loans as a percentage of gross loans(8)        |  | 1.08                                  
|Allowances for loan losses as a percentage of non-performing  |  |                                       
|loans(8)                                                      |  | 197.80                                

|    
|----
|(1) 
|(2) 
|(3) 
|(4) 
|(5) 
|(6) 
|(7) 
|(8) 
|(9) 
|(10)
|(11)
|(12)

5

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|(13) | Restated from its original version to apply the adjustments required by US GAAP to prior years income to these Consolidated Financial Statements (see Note 17.15.).
|---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------

Cash Dividends

The table below shows the cash dividends paid on each ordinary share and the equivalent of those dividends expressed in terms of dividends per American Depositary
Share, each representing three ordinary shares (the ADSs), in each case adjusted for all stock dividends during the relevant periods. The Central Bank requires that we maintain 20% of our net income in legal reserves.

|                         |  | Cash Dividends
Per Ordinary Share |  |        | Cash Dividends Per
ADS |       
|------------------------ |  | --------------------------------- |  | ------ | ---------------------- | ------
|                         |  |                                   |  |        |                        |       
|                         |  | Ps.(1)                            |  | US$(2) |                        | Ps.(1)
|                         |  |                                   |  |        |                        |       
|December 31, 2005(3) (4) |  | 0.05728                           |  |        | 0.17619                |       
|December 31, 2004(3)     |  |                                  |  |        |                       |       
|December 31, 2003(3)     |  |                                  |  |        |                       |       
|December 31, 2002(3)     |  |                                  |  |        |                       |       
|December 31, 2001(3)     |  |                                  |  |        |                       |       

|   
|---
|(1)
|(2)
|(3)
|(4)

Exchange Rates

The following table shows the annual high, low, average and year-end free and controlled exchange rates for dollars for the periods indicated. The Federal Reserve
Bank of New York does not report a noon buying rate for pesos.

|Year /Period     |  | High       |  | Low        |  | Average(1)
|---------------- |  | ---------- |  | ---------- |  | ----------
|                 |  |            |  |            |  |           
|May 2006(3)      |  | Ps. 3.0868 |  | Ps. 3.0367 |  | Ps. 3.0535
|April 2006(3)    |  | Ps. 3.0828 |  | Ps. 3.0367 |  | Ps. 3.0663
|March 2006(3)    |  | Ps. 3.0845 |  | Ps. 3.0650 |  | Ps. 3.0763
|February 2006(3) |  | Ps. 3.0757 |  | Ps. 3.0625 |  | Ps. 3.0689
|January 2006(3)  |  | Ps. 3.0637 |  | Ps. 3.0305 |  | Ps. 3.0460
|2005 (3)         |  | Ps. 3.0523 |  | Ps. 2.8592 |  | Ps. 2.9232
|December 2005(3) |  | Ps. 3.0523 |  | Ps. 2.9700 |  | Ps. 3.0145
|2004 (3)         |  | Ps. 3.0718 |  | Ps. 2.8037 |  | Ps. 2.9415
|2003 (3)         |  | Ps. 3.3625 |  | Ps. 2.7485 |  | Ps. 2.9493
|2002 (3)         |  | Ps. 3.8675 |  | Ps. 1.0000 |  | Ps. 2.9793
|2001 (2)         |  | Ps. 1.0000 |  | Ps. 1.0000 |  | Ps. 1.0000

|   
|---
|(1)
|(2)
|(3)

The exchange rate on June 15, 2006 was Ps.3.0778 = US$1.00.

Fluctuations in the exchange rate between pesos and dollars affect the dollar equivalent of the peso price of the ordinary shares on the Buenos Aires Stock Exchange
(Bolsa de Comercio de Buenos Aires  the BCBA) and as a result, would most likely affect the market price of the ADSs. Fluctuations in exchange rates also affect dividend income measured in dollars. The Bank of New York, as
depositary for the ADSs is required, subject to the terms of the deposit agreement, to convert pesos to dollars at the prevailing exchange rate at the time of making any dividend payments or other distributions. The following table shows the rate of
devaluation of the peso vis-à-vis the dollar, the rate of exchange (number of pesos per dollar prevailing in the Argentine foreign exchange market) and the rate of inflation for wholesale prices for fiscal year ended December 31, 2005 and for
the four most recent fiscal years. Since the repeal of the Convertibility Law in January 2002, the peso has devalued approximately 207.78% vis-à-vis the dollar.

|                  |  | For the Fiscal Year Ended December 31,
|----------------- |  | --------------------------------------
|                  |  |                                       
|                  |  | 2005                                  
|                  |  |                                       
|Devaluation Rate  |  | 1.94                                  
|Exchange Rate     |  | 3.0315                                
|Inflation Rate(1) |  | 10.59                                 

|(1) | The inflation rate presented is the general WPI published by the INDEC.
|--- | -----------------------------------------------------------------------

6

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Risk Factors

Factors Related to Argentina

Overview

We are an Argentine corporation (sociedad anónima) and most of our operations, properties and customers are located in Argentina.
Accordingly, the quality of our assets, our financial condition and our results of operations depend primarily on macroeconomic and political conditions prevailing in Argentina. Our country has experienced an economic and political crisis in past
years, marked by a severe recession and the abandonment of U.S. dollar-peso parity, which led to a significant devaluation of the peso against foreign currencies. These conditions have had an adverse effect on Banco Francéss financial
condition and results of operations, but currently, and after a strong economy comeback, the Bank is in a steady recovery process, but no assurance can be given that this trend will continue.

In the last quarter of 2001, following almost four years of recession, high levels of external indebtedness, and the highest country risk ratings level yet,
Argentina found itself in a critical economic situation marked by a significant decrease in banking deposit levels, high interest rates, a significant decline in the demand of products and services, and a substantial increase in unemployment. The
economic debacle was accompanied by a political crisis that led to the resignation of President Fernando De la Rúa in December 2001, which was followed by a quick succession of interim presidents in the course of ten days, which then ended
with the election by the Legislative Assembly of Senator Eduardo Duhalde (senator of the Justicialist Party) as president in January 2002. During his term in office, President Duhalde adopted a number of measures designed to help stabilize the
economy, including ratifying the suspension of payments of a portion of Argentinas sovereign debt.

By late 2001, significant deposits were withdrawn from financial institutions as a result of the lack of confidence in the countrys economic future and the
Governments ability to sustain the parity of the peso with the U.S. dollar. This run on deposits had a material adverse effect on the Argentine financial system as a whole, including Banco Francés. For the most part, banks suspended the
disbursement of new loans and focused on collection activities to be able to pay their depositors. However, the general unavailability of external or local credit created a liquidity crisis that hindered collections by financial institutions thus
adversely affecting their ability to refund deposits.

On December 1, 2001, in light of the severe withdrawal of deposits from the financial system, the Government established tight restrictions on cash withdrawals from
banks and imposed controls on the transfer of funds outside of Argentina. The restrictions on cash withdrawals from banks, known as the corralito, were lifted by December, 2002.

The rapid and radical nature of the changes in the Argentine social, political, economic and legal environment, and the absence of a clear political consensus in
favor of the Government or any particular set of economic policies, created an atmosphere of great uncertainty. The measures adopted by the government during 2002 led to economic crisis and resulted in a profound change to the Argentine monetary and
foreign exchange regime, and to the regulatory framework for all business sectors in Argentina. This strongly impacted economic activity, contracting GDP by 10.9% during the year, and significantly depreciated the peso, which, in turn, led to a
41.4% and 118.2% increase in retail and wholesale prices, respectively. The Government implemented measures aimed at addressing the effects of amending the Convertibility Law and the asymmetric conversion into pesos of foreign currency denominated
debts and bank deposits subject to Argentine law, were also designed to allow the Government to recover access to financing, reduce Government spending, restore liquidity to the financial system, reduce unemployment, and generally stimulate the
economy. Beginning in July 2002 the demand for pesos began to grow. The peso began to appreciate, the consumer inflation rate decreased sharply and deposits began to flow back into the financial system, attracted in part by high interest rates.
Employment in the private sector also showed a modest increase in the second part of the year as a result of growth in the tradable goods sector. Industrial activity, driven by exports and import substitution, began to recover in April 2002 and
reached a monthly growth rate of 1.7% in the last quarter of the year.

On May 25, 2003, Néstor Kirchner became the new President of Argentina, for a term that is scheduled to expire on December 10, 2007. Since 2003, there has
been a favorable evolution in the Argentine economy, ending the economic recession that lasted over four years. The following economic indicators are worth mentioning: i) The GDP increased by 8.8%, 9.0% and 9.2% during 2003, 2004 and 2005
respectively; ii) unemployment rate declined from 20.7% to 10.1% between the 4th quarters of 2002 and 2005; iii) total deposits in the financial system grew approximately 80.5% between December 2002 and December 2005; iv) the foreign exchange rate
after depreciating to Ps.2.96 per U.S. dollar at the end of 2003, remained relatively stable at around 3 pesos per dollar;

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v) a steadier financial context with an increase in the deposits made in financial institutions; and vi) a marked increase in
the market value of Government securities. More significantly, in February 2005 the Argentine Government announced its plan to restructure its bonds which have been in default since 2001, approximately US$80 billion. The Government offered to
exchange the outstanding bonds for bonds worth roughly 35% of the original bonds. In March 2005, the Government announced that 76% of bondholders accepted its offer and tendered their bonds. The Government subsequently announced that it would not make payments on bonds that were not tendered. In June 2005 the Government issued and
delivered the new bonds in exchange for the defaulted bonds. These new bonds were originally scheduled to be issued and delivered in April 2005, but the completion of the exchange offer was delayed due to litigation by hold-out creditors. Although
the economic policies implemented by the Kirchner administration have succeeded in the short and mid-terms, there still remain major issues to be resolved, such as contracts with privatized public utilities and continuing default with respect to the
pre-existing sovereign debt of the Argentine government that did not participate in the governments exchange offer consummated in June 2005.

Four years have elapsed since the beginning of the crisis in Argentinas financial system, and despite encouraging developments in the Argentine economy,
such as the stabilization of economic variables, there are still a considerable number of macroeconomic and political issues that affect the complete normalization and may have an adverse effect on the banking system and the economy as a whole,
including an increase in the inflation.

The devaluation of the peso and other economic measures adopted by previous governments, and sustained by the current Government, have stimulated economic
growth. After a period of high recession and contraction of the economy, the ceasing of payments of Argentinas debts, the devaluation of the peso, and the increase of poverty, Argentina was able to reverse the negative trends and
resume growth. The gradual closing of the output gap, together with specific price adjustments of certain regulated and semi-regulated goods and services, contributed to registering 6.1% retail inflation in 2004, significantly higher that the 3.7%
recorded in 2003. In 2005, the inflation accelerated further, increasing to 12.3%. It is possible that Argentina may experience higher inflation in the future that could limit economic growth and have a material adverse effects on Argentinas
financial system, and our results of operations and financial condition.

Furthermore, the Kirchner administrations principal challenge is to generate confidence, and create conditions that allow for long-term and sustainable growth.
It cannot be assured that the necessary reforms will be implemented to foster economic growth, keep inflation under control and reestablish political confidence and such circumstances would likely have an adverse effect on the economy

Payment to the IMF reduces backing in international reserves, and may affect the countrys ability in case of facing a new scenario of future financial
crisis.

At the beginning of December 2005, President Kirchner announced the Executive intention to make an early prepayment all of the Governments debt outstanding
with the IMF. The administration announced that it intended to use excess foreign reserves available at the Central Bank of approximately US$8 billion. On January 3, 2006, the Argentine Government, made an early and total payment of all amounts
due to the IMF for an approximate amount of US$S9.55 billion. This reduction of Argentinas international reserves weakens its capacity to face international shocks and may limit access to international capital markets and foreign currency.
The depletion of the Central Banks reserves could also inhibit the Central Banks ability to intervene in the foreign exchange market in order to stabilize the peso in case of an attack on the currency. Conversely, the attempt to
recompose the level of international reserves held prior to the payment to the IMF could lead to substantial increase in Central Bank intervention in the FX market thereby accelerating growth in the monetary aggregates and raising inflationary
pressures. Notwithstanding, as of end of May 2006, the Central Bank had recovered almost 60% of its reserves prior to the IMF payment, which means that approximately US$5.6 billion entered the foreign reserves of the Central Bank.

The incomplete restructuring of Argentinas sovereign debt may affect the future of economic performance

The Argentine debt exchange offer closed on February 25, 2005. On March 18 2005, the Argentine government announced the final results of the debt restructuring
process, with a rate of participation by bondholders of approximately 76.15% and an aggregate tendered amount of US$62.3 billion. Despite the high levels of acceptance of the offer, the amounts not tendered for exchange totaled approximately
US$20 billion, which creates uncertainty as to the final resolution of the sovereign debt problem and its impact on the future performance of the Argentine economy. The settlement of the debt exchange was completed on June 2005 due to a delay
resulting from legal action by certain bondholders who did not participate in the exchange offer and attempted to attach the tendered bonds. Some of these bondholders have legal actions against the Argentine government, therefore the Treasury
Department of the United States and the IMF have insisted that the Argentine government provide a clear strategy directed to those bondholders who did not participate in the exchange offer.

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This circumstance, might lead to a prolonged period where no new alternatives are offered to hold-outs and a significant proportion of Argentine public
debt remains in default. Therefore, sovereign credit ratings will not improve significantly, while the risk of an attachment being made on an Argentine international payment subsists and might adversely affect access to international financing for
the banking system.

The devaluation of the peso diminished the ability of Argentine companies, with foreign currency denominated debt to make payments on such debt. Accordingly, no
assurance can be given that this issue will not have a material and adverse effect on Argentinas economic and financial condition in the future.

The economic policies of the Argentine government as well as any future decrease in the value of the peso against the US dollar might have an adverse impact on the
financial condition and the results of operations of Argentine companies. The peso has devalued in the past and may fluctuate significantly in the future. Law No.25.561, or the public Emergency and Foreign Exchange Regime Reform Law (the
Public Emergency Law), promulgated on January 6, 2002, terminated over a decade of one-to-one parity between the US dollar and the peso and authorized the Argentine government to set the exchange rate. Subsequent to the devaluation of
the peso in early 2002, a floating exchange rate regime was adopted and significant fluctuations in the value of the peso may be offset by repeated interventions of the Central Bank through sales of US dollars. In the past 3 years, however, the peso
has remained relatively stable and Central Bank intervention through the purchase of US dollars has prevented a further appreciation of the peso. The Public Emergency Law has been extended until December 31, 2006.

However, it can be no assurance that the policies implemented by the Argentine government in the future will stabilize the value of the peso against foreign
currencies and therefore, the peso may continue to be subject to significant fluctuations and depreciations in the future, which might significantly and adversely affect the financial condition and the results of operations of Argentine companies.

The stability of the foreign exchange market have led the Government to relax currency exchange controls. However, no assurance can be given that currency
exchange controls will not again be tightened and that such circumstance will not have a material adverse effect on the results and the solvency of the financial system.

During the first quarter of 2002 and as the economic crisis deepened, the Government established a series of currency restrictions and foreign exchange controls.
These measures included a prohibition of fund transfers abroad as a general matter, except in connection with foreign trade transactions, payment of purchases or withdrawals made through credit or debit cards and settlement of financial
transactions, as well as the requirement of Central Banks approval to transfer funds outside of Argentina for purposes of paying principal and interest on financial loans. Since then, the currency restrictions and foreign exchange controls
have been gradually relaxed in light of the increasing stability in the foreign exchange market. SeeAdditional Information  Exchange Controls.While the foreign exchange system has become more flexible under current regulations, there can be no assurance that the Government will not again tighten these restrictions or otherwise change the
current foreign exchange system or that one or more of the types of transactions described in this annual report will not be severely restricted. Such restrictions could have a material adverse effect on the Argentine financial system, and on our
results of operations and financial condition.

Financial institutions, have made payments related to currency exchange rate differences in the refunding of deposits as ordered by the courts, for which
financial institutions have not been compensated. Such payments have had a material and may continue to have an adverse effect on the liquidity and the solvency of the financial system and on its financial condition.

The measures adopted by the Federal Executive with respect to the political, economic, financial and foreign exchange emergency triggered a number of legal actions
filed by individuals and companies, in the form of constitutional protection actions (judicial injunctions resulting in the immediate release of frozen deposits), against the Federal Government, the BCRA and Financial Institutions as the petitioners
mainly arguing that the Law on Public Emergency and its supplementary provisions are unconstitutional. Based, mainly in the Kiper against Federal Government and Others case, dictated by the Supreme Court, the courts massively started to
dictate through constitutional protection actions, the partial reimbursement of bank deposits in US dollars or Argentine pesos at the floating exchange rate.

On March 11, 2002, the Argentine Association of Government-owned and Private Banks and the Argentine Bank Association filed a per saltum appeal with the
Argentine Supreme Court under section 195 bis and following of the Argentine Code of Civil and Commercial Procedure (according to the modification introduced by Law No. 25,561). The appeal was filed for the benefit of government-owned
and private banks members of such associations and was based on the Argentine institutional and systemic crisis, and on the need to comply with effective regulations to achieve an ordered and gradual solution for the restrictions affecting the
financial system and guaranteeing a plurality of interest.

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The Supreme Court of Justice (CSJN) has handed down the following decisions in relation to the claims filed as a result of the emergency situation
described above:

- On March 5, 2003, the action for the protection of constitutional rights brought against the Federal Government by the Province of San
Luis, the Banco de la Nación Argentina and the BCRA was declared to be unconstitutional, ordering the return of the amounts deposited in either US dollars or the equivalent in pesos
at the free market rate of exchange.
- On July 13, 2004, in the case Cabrera, Gerónimo Rafael v. Argentine Executive Branch on action for the protection of constitutional rights (amparo), it rejected the claim of a depositor on the grounds that the depositor had exercised his rights within the framework of the emergency
laws and collected a portion of his deposit in pesos without reserving the right to claim the difference in U.S. dollars at the exchange rate prevailing in the open market.
- On September 14, 2004, in the case entitled CAMPBELL, María Enriqueta Vda. De Tufiño y otro c/ P.E.N. - Banco de Salta S.A. Grupo Macro s/ AMPARO- Medida cautelar, the CSJN rejected the claim of a depositor which was filed before the Court of original Jurisdiction and the Court of
appeal, declaring the unconstitutionality of the emergency rule questioned regarding the pesification of the deposit funds in foreign currency.
- On October 26, 2004, in the case entitled BUSTOS, ALBERTO ROQUE Y OTROS c/ P.E.N. Y OTROS s/ AMPARO, the CSJN revoked a
decision on the protection of constitutional rights (amparo), declaring that such action is not adequate for such claim and upheld the constitutionality of the rule by which the Argentine
economy was pesificated due to the economic, financial and exchange emergency situation which the country is going through, also confirmed by Congress Law. The revoked decision of the Original Jurisdiction does not state how the Judge of this jurisdiction will resolve the fulfillment of the Court and for
such reason proceed to the refund of the amount already paid due to the legal claims ordered by a Grade Judge.

Moreover, in connection with the above commented cases, on February 3, 2004, the ABA, which groups all national banks of foreign-capital, filed with the Ministry of
Economy a request for compensation of the exchange gain/loss resulting from compliance with judicial injunctions related to constitutional protection actions commenced by holders of deposits denominated in US Dollars prior to the alteration of the
convertibility regime. The Bank has consented to such filing.

As of the date hereof, most Argentine banks continue to be subject to precautionary measures and execution of judgments rendered by first or second instance courts
as well as to decisions that adhered to the Supreme Court rulings in respect to the constitutionality of pesification and adhering to the own acts theory (as described in the mentioned cases: Cabrera, Gerónimio Rafael v. Argentine
Executive Branch on action for the protection of constitutional rights, CAMPBELL, María Enriqueta Vda. De Tufiño y otro c/P.E.N.  Banco de Salta S.A. Grupo Macro s/Amparo-Medida Cautelar, and BUSTOS,
ALBERTO ROQUE Y OTROS c/P.E.N. Y OTROS s/AMPARO.

Enforcement of the precautionary measures ordered by different courts in constitutional protection actions imply for the financial system substantial losses of
capital. The Bank has informed of these losses to the Ministry Economy and the BCRA and has sought to reserve all of its legal rights.

To date the authorities have not ruled on possible compensation for the financial system in relation to these matters.

Furthermore, pursuant to Communication A 3916 dated April 3, 2003, the BCRA resolved to allow the capitalization of the differences arising from
compliance with court orders in cases challenging regulations in force in accordance with Law 25,561, Decree 214/02 and complementary regulations in relation to deposits within the financial system. This asset (calculated according to the difference
in nominal terms between the deposit at the free market exchange rate at the moment of each payment compared to the book vale of 1.40 pesos per dollar plus CER to that date) is being amortized in 60 monthly installments as of April 2003.

Class actions against financial entities for an indeterminate amount, may affect the profitability of the financial system.

At the moment certain public and private organizations have attempted collective actions against financial institutions in Argentina. Class actions are established
in Argentina in the National Constitution but have not been regulated for their use. Nevertheless courts have admitted class actions in the absence of specific regulation, covering the legal void. These courts have

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admitted diverse lawsuits against
financial entities initiated in defense of collective interests, based on arguments of objection of overcharging on products, applied interest rates, advice in the sale of public securities, etc.

Economic conditions in Argentina could potentially restrict the access to the capital markets and third-party funding.

In view of the combination of macroeconomic and regulatory developments in Argentina principally during 2002 and the adverse effect of those events on the financial
condition, Argentine entities encountered significant difficulties in accessing the capital markets and alternative long term financing. No assurance can be given that Argentine entities will be able to access the securities markets or that they may
reply on third-party funding, either locally or internationally, in amounts sufficient to meet future projects obligations. In addition, no assurance can be given to investors that the current macroeconomic environment in Argentina will be
maintained in the long term, thereby adversely affecting Argentine entities ability to generate funds sufficiently to meet their current and future debt obligations.

Government measures designed to exercise greater control over funds entering the country may disrupt the enterprises ability to access the international capital
markets

Argentinas executive branch enacted Decree No. 616/2005 to regulate funds coming into and flowing out of Argentina. The government has publicly announced that
these measures are intended to maintain stability and support the economic recovery of the country. These measures require that 30% of the funds remitted to Argentina must be deposited in an account with a local financial institution as a US dollar
deposit for one year, without accruing interest. Financial sector and nonfinancial private sector inflows originated from foreign financial borrowings that are invested in nonfinancial assets and must be fully repaid (principal and interest) within
24 months from the date of the borrowing, are not subject to the foregoing deposit requirement. These measures may adversely affect the Argentine entities ability to access the international capital markets and to effectively invest the funds raised
in any such financing which could materially adversely affect Argentine entities financial condition and results of operations.

Factors Related to Banco Francés

Banco Francés has a significant portfolio of public bonds, and loans to, the Argentine Government and Argentine provinces, including recently restructured
debts. Because of our high level of exposure, a failure by the federal or provincial governments to meet their obligations in accordance with their terms would have a material adverse effect on our financial condition.

As of December 31, 2005 Banco Francés and its subsidiariess holdings of public sector debt totaled approximately Ps.7,972.6 billion, consisting mainly
of: (i) External and Internal Restructured debt: Ps.3,808.0 million in secured loans; Ps.105.3 million in guaranteed bonds; and Ps.3.3 million in other provincial loans (ii) External Debt restructured: Ps.652.0 million in Argentine Peso denominated
Bonds and Ps.88.1 million in Argentine Dollar denominated Bonds; (iii) Internal debt in the restructuring process: Ps.812.2 million in Provincial Development Trust Fund (*); and (iv) Post default public debt: Ps.74.1 million in bonds issued to compensate for the pesification, which we refer to as Boden 2012, and Ps.180.8 million in
other bonds and Ps.2,248.8 million in Central Bank bills and notes. Of the outstanding public sector debt, only the External and Internal debt in the restructuring process mentioned in (iii) were in default.As a result of the Governments debt
restructuring, the Bank and its subsidiaries received for the defaulted portfolio Dollar denominated Discount bonds and Peso denominated Discount bonds, to be accounted for at the lower of: (a)the accounting value of the assets exchanged; or (b)the
face value of the new bonds (adjusted by CER up to March 17, 2005 in the cases of Discount Bonds in pesos) plus its future nominal interest cash flows (in accordance to Communication A 4270 and its amendments).

Although Banco Francés and its subsidiaries their reduced significantly its public sector exposure during 2005, Banco Francés continues to have a
significant portfolio of bonds and loans of the Argentine Government. Due to its high level of exposure, any Government proposal that changes the terms and conditions of repayment of the sovereign debt could have a material adverse effect on our
financial condition. A new default by the Government in respect of a substantial amount of its debt would have a material adverse effect on our financial condition.

(*) As of May 31, 2006 the restructuration process has successfully ended and the Bank swapped this debt receiving Secured Bonds due 2020.

The asymmetric conversion of foreign currency assets and liabilities into pesos has created a structural mismatch of terms and rates of assets and liabilities
that materially and adversely affected the Banks results of operations in 2003. Banco Francés has a high level of exposure to the risks associated with this mismatch, which may have a material adverse effect on the Banks future
profitability in the event real interest rates significantly increase from the current levels.

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Banco Francés finds itself among the private banks in Argentina with the highest volumes of assets and liabilities with mismatched terms and interest rates
derived from the asymmetric conversion of foreign currency assets and liabilities into pesos. During fiscal year 2005 the Bank has fully paid the rediscounts received from the Central Bank with the proceeds of the sale of public sector bonds and
loans with longer duration than such liability, thus reducing the term mismatch. Furthermore, the following actions have reduced our exposure: (i) the increases in CER adjusted deposits; (ii) the sale of bonds of, and loans to the
Argentine Government and the Argentine provinces from our portfolio; and (iii) the subscription of the necessary bonds to be delivered to depositors who had accepted the Governments swap option
plans, with CER adjusted assets accounted for in the books of the Bank. Despite these reductions in exposure, the Bank maintains a Ps.3.2 billion long CER position as of December 31, 2005. During fiscal year 2005 the remaining imbalance positively
affected the Banks results of operations, within an environment of negative real interest rates. Nevertheless, no assurance can be given in connection with the future relative behavior of interest rates vis-à-vis the consumer price
index. If the real interest rates significantly increase, such increase could have an adverse effect on our profitability in the future.

Banco Francés, has made payments related to currency exchange rate differences in the refunding of deposits as ordered by the courts, for which the Bank
had not been compensated. Such payments have had a material and may continue to have an adverse effect on the liquidity and the solvency of the Bank.

Banco Francés continued to be made part of Lawsuits (amparos). The Bank expects to present its defenses in line with the normative dictated by the
Government.

The judgments of the CSJN mentioned previously have not reduced the number of court orders issued by the inferior courts in the different jurisdictions of the
country where the trials are taking place.

Banco Francés paid Ps.44 million of negative exchange rate difference during 2005 in compliance with court orders in lawsuits brought by the Banks
customers, regarding deposit refunds.

Banco Francés has been served with notice of provisional remedies, issued mainly in proceedings against the pesification, that require deposits to be refunded
in cash in amounts larger than those established by current law and regulations, or require the release of rescheduled deposits, or that declare the inapplicability of regulations issued by the Congress, the Federal Executive or the Central Bank. As
of the date of this report, neither Federal courts nor Buenos Aires City or Provincial courts have ruled on the merits of the such legal actions. Consequently, the final outcome of these legal actions is still unknown. These legal actions have had a
material and may continue to have an adverse effect on the results and the financial condition of Banco Francés.

Argentine corporate disclosure, governance, and accounting standards may provide different information than would be provided under U.S. standards.

The securities laws of Argentina that govern publicly listed companies such as ours impose disclosure requirements that are more limited than those in the United
States in important respects. The Argentine securities markets are not as highly regulated and supervised as the U.S. securities markets. There are also important differences between accounting and financial reporting standards applicable to
financial institutions in Argentina and to those in the U.S. As a result, financial statements and reported earnings of Argentine financial institutions generally differ from those reported based on U.S. accounting and reporting standards. SeeOperating and Financial Review and ProspectsUS and Argentine Banking GAAP Reconciliationfor a
description of the principal differences between Argentine banking GAAP and U.S. GAAP and how they affect our financial statements and the reconciliation to U.S. GAAP of net income and total stockholders equity for the periods ended and as of
the dates therein indicated.

Lawsuits brought against us outside Argentina, the enforcement of foreign judgments and complaints based on foreign legal concepts may be
unsuccessful.

We are a commercial bank organized under the laws of Argentina. Most of our shareholders, directors, members of the supervisory committee, and officers and certain
experts named herein reside outside the United States (principally in Argentina). Substantially all of our assets are located outside the United States. If any shareholder were to bring a lawsuit against our directors, officers or experts in the
United States, it may be difficult for them to effect service of legal process within the United States upon these persons or to enforce against them, in the United States courts, judgments obtained in the United States based upon the civil
liability provisions of the federal securities laws of the United States.

Under
Argentine law, enforcement of foreign judgments is recognized provided that the
requirements of Articles 517 through 519 of the Federal Code of Civil and Commercial
Procedure are complied with. Among other requirements, the foreign judgment must
not violate the principles of public policy of Argentine law, as determined by
an Argentine court. In addition, there is doubt as to

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whether an action could
    be brought successfully in Argentina on the basis of liability based solely upon
the civil liability provisions of the United States federal securities laws.

Because we are a financial institution, any insolvency proceeding against us would be subject to the powers and intervention by the Central Bank, which may limit
remedies otherwise available and extend the duration of the proceedings.

Under Argentine law, the liquidation and commencement of bankruptcy proceedings against financial institutions, until their banking license has been revoked by the
Central Bank, may only be commenced by the Central Bank. If Banco Francés were unable to pay its debts as they come due, the Central Bank would intervene and revoke its banking license, and file a bankruptcy petition before a commercial
court. If the Central Bank intervenes, the reorganization proceeding could take longer and it is likely that the shareholders remedies would be restricted. During any such process, the Central Bank would have to consider its interests as a
regulator, and could well prioritize the claims of other creditors and third parties against the Bank. As a result of any such intervention, the shareholders may realize substantially less on the claims than they would in a bankruptcy
proceeding in Argentina, the United States or any other country.

The special rules that govern the priority of different stakeholders of financial institutions in Argentina, which give priority to depositors with respect to
most other creditors, may negatively affect other stakeholders in case of judicial liquidation or bankruptcy of the Bank.

Argentine Law No. 24,485 in force since April 18, 1995, as amended by Law No. 25,089, provides that in case of judicial liquidation or bankruptcy of the Bank, all
depositors, irrespective of the type, amount or currency of their deposits, will have general and absolute preferential rights with respect to all other creditors, except for certain labor credits and credits secured with pledge or mortgage, to be
paid with 100% of the funds deriving from the liquidation of the Banks assets. In addition, depositors of any kind of deposits have special preferential rights over the remaining creditors of the Bank, except for certain labor credits, to be
paid with (i) any of the Banks funds which may be held by the Central Bank as total reserves, (ii) any remaining funds of the Bank in existence as of the date on which the Banks license is revoked, or (iii) any funds derived from the
compulsory transfer of certain assets of the Bank according to instructions of the Central Bank, in the following order of priority: (a) deposits made by legal entities up to Ps.5,000 per entity, or its equivalent in foreign currency, (b) deposits
for terms exceeding 90 days, and (c) all other deposits on a pro rata basis.

Factors Related to Banco Francéss Subsidiaries

- Consolidar AFJP S.A.

Overview

From the viewpoint of the Retirement and Pension Fund Administrators (Administradoras de Fondos de Jubilaciones y Pensiones or AFJPs), the mandatory
conversion of foreign currency denominated assets into pesos resolved by law in 2002 introduced a unilateral mechanism that enabled the different actors in the financial system to breach their contractual commitments, thus creating a series of
distortions for which there is no easy solution.

Regulatory changes occurred during 2002 brought about serious consequences that continued to pervade the Argentine pension system during 2005, such as the decline
in the value of the pension funds dollar terms as a result of the mandatory conversion into pesos of foreign currency denominated bonds of Argentine governmental and private issuers and the default declared in respect of domestic debt securities; an
increase in the risk associated with the position of AFJPs as fund managers; and delays in the procedures to obtain pension benefits payable by the Government due to administrative backlog and the Governments lack of resources to fulfill such
obligations.

Exposure of AFJPs decreased by approximately 10%, and AFJPs investment portfolio assets grew considerably.

Since the government of president Néstor Kirchner took office in May 2003, the Government has been
promoting a reform in the pension system but the AFJPs have not been given an opportunity to participate in the process.

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For
    more information about relevant developments affecting our subsidiaries engaged
    in the AFJP business, seeInformation on the Company  Recent Political and Economic
Developments in Argentina.

The restructuring process and other disruptions in the operations of AFJPs have exposed AFJPs to a heightened risk of litigation that may have a material adverse
  effect on their financial condition and results of operations.

The pesification of foreign currency denominated assets and liabilities greatly reduced the value of the assets in the pension funds managed by AFJPs in dollar
terms. The loss of value of AFJPs portfolios was aggravated by the restructuring of the Governments sovereign debt.

During the last sixteen months, just one lawsuit has been filed against AFJPs but it has been rejected by Court. However, new legal actions directed against the
AFJPs, their managers and directors could affect the assets of the AFJPs, which would have an adverse effect on the financial condition of AFJPs.

The Government is promoting a reform of the pension system that may have far-reaching consequences for AFJPs.

The Government is currently promoting a reform of the pension system. Although the scope of the envisaged changes is still unclear, the Government has indicated that
any proposed modification would not replace the AFJP based system with a distribution system.

During 2005 no concrete measures were adopted towards the reform of the pension system. Nonetheless, no assurance can be given that the definitive reform plans will
not have a material adverse effect on the AFJP ́s industry.

- Consolidar Compañía de Seguros
    de Vida S.A.

The economic performance of our subsidiary Consolidar Compañía de Seguros de VidaS.A. has been negatively affected by the economic crisis. Future
regulations  may also have a material adverse effect on its financial condition and results of operations.

For pension life insurance companies, the Governments default on its debt obligations, together with the devaluation and the conversion of their portfolios
into pesos, has had an impact on their assets, which consists mostly of securities issued by the Argentine federal and local governments denominated in dollars, such as guaranteed loans, which were also converted into pesos. These companies need to
match their assets in close relationship with their technical liabilities, which, in this case, must be paid-in in pesos adjusted according to AFJP quota values. For this reason, certain regulatory reforms of the pension system may also have a
material adverse effect on pension life insurance companies.

- Consolidar Compañía de Seguros
    de Retiro S.A.

The devaluation of the peso and the conversion into pesos of all the foreign currency agreements has negatively affected and may continue to have a material
adverse effect on our subsidiary Consolidar Compañía de Seguros de Retiro S.A.

Retirement insurance agreements comprise two well-defined stages. The first is the stage of savings and capitalization, when the capital is accumulated. During the
second stage the insurance company makes periodic payments to the insured party. During the capital accumulation stage, the contracts recognize the insured partys right to redeem the accumulated capital at any time prior to the beginning of
annuity payments.

The accumulated capital amounts of policy holders were affected by the devaluation of the peso and the conversion into pesos. The regulations for such conversion
only recognized the insured partys right to claim the value in pesos at a rate of one peso per U.S. dollar plus the adjustment of such amount according to the CER.

The insurers, in turn, were unable to return the agreed amounts as the Governments default on its debt, the devaluation and conversion into pesos had directly
affected their investments, which consist of deposits and private or public securities in foreign currency.

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As
a consequence, policy holders started to seek reimbursements from the insurance
companies. Consolidar immediately responded by promoting a dialog with its clients,
which resulted in a very low level of litigation.

To
    minimize the damaging effects of the asymmetric conversion into pesos, Decree
    No. 558/02 enabled the insurers to offer to the insured parties redemption
    schemes contemplating a number of options. Following the new regulation,
    Consolidar submitted for approval of the Argentine Insurance Superintendency
    different option plans for the redemption or maintenance of policies issued
    in dollars, which have been approved. At present these option plans are being offered to policyholders, and have already been accepted by more than 85% of the original portfolio, both in the number
  of policies and in amounts.

The investments made with reserves after the devaluation of the peso and the conversion of assets into pesos, the appreciation of the peso, and expectations
generated by institutional changes, have resulted in a decrease of the claims for redemption as a result of an attitude of cautious confidence in the current market practices on the part of the insured parties.

Possible claims derived from the conversion of life annuity agreements in dollars into Argentine pesos may have a material adverse effect on the financial
condition and results of operations of Consolidar Compañía de Seguros de Retiro S.A.

Pension-related life annuity agreements originally denominated in dollars as of January 31, 2002 were converted into pesos at the rate of Ps.1.40 per U.S. dollar
plus an inflation adjustments according to CER index by decision of the National Insurance Superintendence. Initially, beneficiaries had in their accounts a greater amount in pesos as a result of the conversion, which increased their purchasing
power. As a result there were a minimal number of claims.

Even if these amounts were additionally increased by later gains made on such investments and exceeded any salary adjustment granted by the public sector as well as
the inflation for the period, Consolidar Compañía de Seguros de Retiro S.A. has started to receive claims from insured parties. These claims, to this date, continue to be not material in comparison to the total policy portfolio. As of
December 31, 2005 there had been a total of 164 claims in a universe of 3.660 active life income accounts, representing 2.6% of the related portfolio.

The favorable evolution of the exchange rate, as well as the revaluation of public and private securities in default are elements that tend to reduce the probability
of further claims and legal actions against Consolidar Compañía de Seguros de Retiro S.A. However, an increase in the number of claims and legal actions could have a material adverse effect on our financial condition and results of
operations.

ITEM 4. INFORMATION ON THE COMPANY

RECENT POLITICAL AND ECONOMIC DEVELOPMENTS IN ARGENTINA

Argentine Economic Scenario

The key economic event during 2005 was the restructuring of the public debt in default launched by the Government in February pursuant to which the Argentine
government offered its creditors three types of bonds in exchange for the Argentine sovereign debt they hold, as well as bonds in lieu of past due interest on such sovereign debt. The exchange offer encompassed 81,836 million dollars in securities
held by residents and non residents, and achieved an acceptance rate of 76.15% . The new bonds issued after the exchange (par, discount & quasi-par) amounted to 35,261 million dollars, among which 44% were denominated in pesos. The reduction in
the debts face value and the improvement in currencies composition following the exchange, resulted in a significant contraction of the interest burdens and an extension of the maturity profile, with the first amortization of the principal of
the restructured debt taking place in 2024.

There was no slow-down in the pace of economic activity and for the third consecutive year, the economy grew by 9.2% . According to the Monthly Estimator of Economic
Activity (EMAE), economic activity increased by 8.6% year over year during the first quarter of 2006. However, due to a lower employment/GDP elasticity, improvements in the unemployment rate were not as strong as in the previous year. The unemployment rate
fell to 10.1% during 2005 fourth quarter, two percentage points below 2004 fourth quarter.

With an economy growing at high rates, inflationary pressures started to appear during the first quarter of the year. Inflation measured in terms of the consumer
price index averaged a 1% monthly increase during the year, with core inflation at a 1.1% monthly average. Regulated prices (mainly public utilities ́ tariffs) had a moderating impact on inflation in spite of which, the year ended with a 12.3%
increase in prices, almost twice the rate of the previous year. The strong increase in food prices during the second half of the

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year drove the government
to increase export taxes on meat and dairy products and to reach an agreement
with the main supermarket chains in December to reduce prices from a list of
selected products (mainly food, cleaning and toiletries) by 15%.

Greater
    optimism following the successful debt restructuring resulted in the return
    of positive capital flows to Argentina which added to the dollar surplus
    stemming from the trade balance. Increased export dynamics, mainly in manufactured
    industrial goods,was
    reflected in a 15% accrued growth of volumes exported in 2005. Thus, the
    trade surplus for the year closed at 11,322 million dollars, only 6.5% below
    2004s, despite the 28% growth of
  imports.

In this environment of abundant foreign exchange supply and with the public sector as the main buyer of dollars with the purpose of honoring debt commitments with
multilateral organizations, the exchange rate that showed seasonal fluctuations similar to those of previous year, and closed 2005 at 3.03 pesos per dollar, slightly above December 2004 levels.

During 2005 the Government was able to sustain fiscal solvency and the primary result of the non financial public sector reached 19,661 million pesos, more than 13%
above previous years surplus. Tax collection showed a 21.3% increase at year-end, and taxes with an increased relative participation were mainly represented by Income tax (due to the maintenance of non-taxable minimum incomes and restrictions
to companies for inflation adjustment) and social security taxes (due to improvements in employment and formality in labor markets). In general, improvements in collection were the result of an increased inflation, economic activity growth and
reduction of tax evasion. As of the second half of the year primary expenses started to grow at a rate stronger than that of revenues and this performance continued during the first quarter of 2006. The items that showed more increases were
transfers to provinces due to the tax Co-participation régime and capital expenses.

The year 2005 was characterized by the higher interest payments and debt amortizations, of approximately 12,000 million dollars, that the government had to
face due to different reasons, including the completion of the debt restructuring process and the lack of agreement with the IMF during the year. In order to honor these commitments, the government used the primary surplus of the year and of
previous years. In addition, some peso-denominated debt issuance (Boden 14) were placed for 3,000 million pesos and dollar-denominated (Boden 12) for 2,986 million dollars, consequently achieving the renewal of part of the maturities. By
mid-December, the government decided to pay off, completely and in advance, its 9,500 million dollar debt with the IMF making use of accrued international reserves at the Central Bank. This transaction was carried out at the beginning of January
2006, replacing those reserves at the Central Bank by a dollar-denominated government security with similar yield.

IMF Financing

In light of the fact that presidential elections would be held on April 27, 2003, a stand-by agreement with the IMF was based on a short-term transitional program
(January 1  August 31) aimed at maintaining macroeconomic stability during the political transition. After the transitional program, a new 36-month stand-by agreement in an amount of approximately US$12.5 billion (equivalent to
amortizations payments falling due during the period) was signed with the IMF on September 10, 2003. Under the terms of that agreement, the World Bank and the IDB would maintain the levels of their exposure to Argentina and the Government would pay
interest on all its indebtedness with international financial institutions from its own resources.

Fiscal and monetary targets agreed on with the IMF were met in excess during the first semester of 2004, even though structural reforms such as the reform of tax
revenue-sharing method between Government and Provinces and the renegotiation of public services contracts showed a lack of significant progress. In August 2004, the Argentine Government decided to temporarily call off the agreement with the IMF,
until the defaulted public debt restructuring process was completed. From then on, Argentina started to pay not only the interests payable to the IMF (as it was doing in accordance with the agreement) but also principal payments, thus reducing the
total debt with the entity.

After the completion of the debt restructuring process in June 2005, discussions with the IMF were resumed but no agreement was reached, so Argentina continued to
make full payments on principal falling due during the whole of 2005. By mid-December, the government decided to cancel, completely and in advance, its 9,500 million dollar debt with the IMF making use of accumulated international reserves at the
Central Bank. This transaction was carried out at the beginning of January 2006 and Argentina will no longer be subject to quarterly revisions by the IMF since there is no program currently underway. Since Argentina maintains its membership in the
IMF, it will continue to be monitored by the IMF on a yearly basis according to the provisions of article IV of the IMF charter.

International Monetary Situation



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One
of the main characteristics of 2005 was the positive balance of world economic
growth despite the increases in oil prices. The coincidence of both factors timing
could be the result of an increase in world demand, that would be the cause of
a significant trade flow dynamism and an increase in raw material prices, mainly
energy and metals. This global economic framework of high growth favorably impacted
on Argentina, given the high prices of commodities and oil in particular, of
which Argentina is a net exporter. Furthermore, strong growth in Southeast Asia,
namely China, also had a positive impact on the domestic economy, due to the
fact that being one of the worlds largest economies it maintained a remarkable
dynamism in investment, consistent with an expansion model that seeks the development
of exporting platforms.

The relative increase of work-force resulted in a lower growth of wages, partially offseting the increase in energy expenses and curbing inflationary pressures. This
  allowed central banks to maintain a high liquidity in times of strong economic growth, without building up inflationary expectations in the medium term. Long-term interest rates remained low, as a result of the high credibility of central banks in
  combating inflationary pressures.

In this environment, the US Federal Reserve continued with its policy of gradual increases of the Federal Funds rate, from 2.25% at beginning of the year to 3.75% at
2005 year-end. On the other hand, in Europe, with more uncertainty regarding growth, the European Central Bank (BCE) maintained official rates unchanged almost throughout the year, starting the tightening cycle only in December with a
hike of 25 basis points.

The interest rate differentials became, together with positive productivity differentials as compared to other areas, a support for the dollar, despite the high
current account deficit of the US economy. During 2005, the US dollar strengthened by 14% both as compared to the Euro and to the Yen. Conversely, in the region, Latin American currencies, such as the Real (Brazil), Chilean peso and Mexican peso,
appreciated in relation to the US dollar. In particular, the Brazilian real appreciated by 12%, reaching an exchange rate of R$2.325 per dollar at the end of 2005.

The Financial System

During 2005, and after 4 consecutive years, the financial system began to show positive earnings in the aggregate. Improvements were sustained by the gradual
recovery in interest margins and a reduction of the costs associated to the 2002 crisis. The increase in the financial margin resulted mainly from the mismatch of CER (CPI inflation) vs. nominal interest rates in a context of rising inflation and
negative real interest rates.

Another
outstanding factor was the strong growth of loans to the private sector, one
of the more dynamic variables in the financial system, and the strong rediscount
 amortizations. In this sense the abundant liquidity allowed the banks to cancel
in advance almost 30% of their liabilities with the Central Bank.

In the financial system on average, there still persists a high exposure to public assets and this situation is being corrected very slowly due to the fact that at
the same time during 2005 the financial system placed a large proportion of its excess liquidity in bills and notes issued by the Central Bank. Simultaneously, the solvency of the banking system improved during the year due to the capitalization of
several institutions by their majority shareholders.

Deposits and Loans

Total deposits of the financial system, in pesos and in dollars, grew by approximately 18%, at a slower pace than in the previous year. Deposits of public sector
only grew 8% (these had doubled in 2004), while deposits of the private sector showed a very positive performance, with an increase over 21%. This change in deposit distribution was the result of the reduced savings capacity of the government,
despite its relevant primary fiscal surplus, due to the higher volume of both local and foreign debt maturing during the year.

In the private sector, term deposits increased their share in total deposits after growing 21% during 2005, probably due to the gradual rise in interest rates, while
deposits in checking accounts continued growing significantly, showing an approximate variation of 28%. On the other hand, 2005 represented the end of Cedros (re-scheduled deposits), with the last series maturing during that period.

The most dynamic financial variable of 2005 were loans to the private sector, accounting for 35% increase, associated both to a higher demand fueled by improvements
in the economic situation, and to a healthier condition of the overall financial system.

Interest Rates



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Interest
rates for deposits maintained an upward trend during the year, consistent with
the evolution of the inflation rate. The average rate of 30-day deposits in pesos
rose by 200 basis points during the year, reaching a 5% average in December,
while wholesale rates showed a more significant increase of 350 basis points.
However, these continued to be negative in real terms, in view of the overall
liquidity of the financial system, considering both the integration of legal
reserves requirements and holdings of BCRA bills and notes. The Central Banks
policy as regards Argentine Central Bank Bills (Lebac) was to continue
to shorten terms and to avoid validating increases in interest rates, due to
the continuous need to absorb pesos through these instruments originating in
the exchange rate policy. Therefore, the stock of Central Banks bills and
notes increased 75% during the year. On the other hand, as regards the
repo market, the Central Bank consolidated the system by establishing a corridor
for rates on direct and reverse repo operations.

International Reserves

The Central Bank maintained a policy of reserve accumulation during the year which contributed to sustain the nominal exchange rate. An increase of approximately
8,500 million dollars in reserves was accomplished, taking advantage of the significant trade surplus and additional capital inflows fueled by the end of the debt restructuring process by mid-year. This was possible despite the fact that, due to the
lack of agreement with the IMF, the government had to pay in full all the interest and capital amortizations becoming due during the year. At the end of 2005, the government decided to devote part of the international reserves to the prepayment of
the overall debt of 9,530 million dollars to the IMF, a transaction that was settled at the beginning of 2006.

Circulation and Monetary Base

Monetary base grew by 10% on average during the year. Similarly to previous years, monetary base expansion derived mainly from the external sector. The basic target
of the monetary program was accomplished after a significant absorption effort, not only through Lebac and Nobac tenders, but also through the contribution of the financial system that reduced rediscounts with Central Bank, in accordance both with
the predetermined schedule and through advanced cancellations. The public sector continued to contribute to the monetary base contraction by purchasing dollars with its fiscal surplus in order to honor its debt obligations denominated in
dollars.

During the year, the Central Bank reduced reserve requirements for the financial system on several occasions, since the remarkable expansion of the demand for
currency in circulation (which grew by 30%, more than the previous year) was jeopardizing the fulfillment of the monetary base growth targets established in the Monetary Program.

HISTORY AND DEVELOPMENT OF THE COMPANY

Banco Francés, an Argentine corporation (a sociedad anónima or S.A.), was duly incorporated under the name Banco Francés
del Río de la Plata S.A. on October 14, 1886. We have our registered office in the Argentina, Reconquista 199, C1003ABB Buenos Aires, telephone number 54-11-4346-4000. Our agent in the United States for U.S. federal securities law purposes is
CT Corporation System, currently with offices at 111 Eighth Avenue, New York, New York 10011.

Our original bylaws (Estatutos) were approved on November 20, 1886, by a decree recorded in the Public Registry of Commerce of Buenos Aires City on
December 6, 1886, under Number 1065 on Folio 359, Book 5, Volume A of National By-laws. Our bylaws, including all amendments introduced to this date, were recorded in the Public Registry of Commerce (the Governmental regulatory agency of
corporations). The last amendment was recorded on December 19, 2005 under No. 16335, Book 30 of Corporations (sociedades anónimas). Pursuant to current corporate bylaws, the Bank will terminate its activities on
December 31, 2080, unless this term is extended by the shareholders. At the ordinary and extraordinary shareholders meeting held on April 27, 2000, a resolution was passed to change our name to BBVA Banco Francés S.A. On October 4,
2000, the Public Registry of Commerce registered the change from Banco Francés S.A. to our new name, and the amendment to our bylaws that reflected the name change.

The Bank is supervised by the Central Bank of Argentina, an entity that establishes valuation and accounting criteria, the rules on liquidity and capital
requirements as well as the informative systems of Argentine financial institutions. The Bank is also subject to inspections by the Central Bank, on which basis a rating is assigned to the Bank. SeeInformation on the CompanyThe Argentine Banking System and its Regulatory Framework.

On August 11, 1997, we acquired 71.75% of the capital stock of Banco de Crédito Argentino S.A. (Banco de Crédito) for the purchase price of
Ps.401.8 million. The difference between the amount paid and the net equity value acquired of approximately Ps.203 million was booked as goodwill, the majority of which was subsequently reversed against shares issuance premium. We completed this
merger of the two banks by final registration with the Public Registry of Commerce, on March 5, 1998. To effect the merger,

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Banco
    Francés issued 14,174,432 ordinary shares to the existing shareholders
    of Banco de Crédito through a capital increase. Each Banco de Crédito
    shareholder received one ordinary share for each 3.926 Banco de Crédito
    shares held.

As
    a result of the acquisition of Banco de Crédito, we gained control
    of Consolidar Compañía de Seguros de Retiro S.A., Consolidar
    Compañía de Seguros de Vida S.A. and Consolidar Administradora
    de Fondos de Jubilaciones y Pensiones S.A. (Consolidar AFJP)
    (the Consolidar entities or the Consolidar Group),
    and also acquired control of Crédito Argentino Sociedad de Bolsa S.A.
which was liquidated in 2000.

On November 5, 1999, Banco Francés S.A. and Banco Bilbao Vizcaya (today Banco Bilbao Vizcaya Argentaria S.A. or BBVA), executed a share purchase
agreement, pursuant to which Banco Francés acquired 99.99% of the shares of Corp Banca S.A., an Argentine bank, for the amount of Ps.51.9 million, and 99.99% of Atuel Fideicomisos S.A., a trust company, for the amount of Ps.79,000. The
difference between the purchase price of the transactions and the incorporation value of both companies was charged to goodwill under the Intangible Assets account for an amount of Ps.24.5 million. In addition, after the transfer of
assets and liabilities, we added to the goodwill value additional charges amounting to Ps.5.7 million related to a decrease in the assets incorporated, as resulted from the more precise assessment made after the acquisition, employee termination
payments to Corp Banca S.A. personnel within the organizational restructuring process initiated before the acquisition and other expenses incurred in the acquisition process. On November 22, 1999, as part of a corporate reorganization, all assets
and liabilities of Corp Banca S.A. were transferred to Banco Francés, with full integration of operations and systems.

On May 20, 1999, the Central Bank approved the creation of Credilogros Compañía Financiera S.A. (Credilogros), which was registered with
the Public Registry of Commerce on June 24, 1999. On November 10, 1999, Banco Francés and Credilogros executed a contract for the sale of certain assets and liabilities of Banco Francés. Such assets and liabilities were transferred to
Credilogros pursuant to the agreement on August 2, 1999. On December 28, 1999, Banco Francés and Finanzia Banco de Crédito S.A. (Finanzia) executed a purchase agreement, pursuant to which Banco Francés transferred to
Finanzia the rights and exclusive property rights to the brands used by Credilogros for the development of its business for a purchase price of Ps.9.6 million. In October 2000, Finanzia sold exclusive property rights to the brands used by
Credilogros to Credilogros at a total price of Ps.9.6 million.

In June 1, 2002 Finanzia Banco de Crédito S.A. sold 29.95% of its interest in Credilogros to BBVA for 23,782,680 Euros. Such transaction was approved by the
Central Bank on April 3, 2003, under Resolution No. 37.

On March 9, 2005, Banco Francés sold to Banco de Servicios y Transacciones S.A. and Grupo de Servicios y Transacciones S.A. all of its participation interest
in Credilogros which represented 69.52% of the capital stock of such entity (see Note 1.4. to the Consolidated Financial Statements). This operation is subject to approval from the Central Bank (see Note 1.4. to the Consolidated Financial
Statements).

On March 29, 2000 our affiliate Rombo Compañía Financiera S.A. (Rombo Compañía Financiera) was registered with the Public
Registry of Commerce. On April 24, 2000 the Central Bank authorized Rombo Compañía Financiera to conduct business as a finance company by Communication B 6684.

On October 17, 2000, as part of BBVA groups business reorganization plan started after the merger of BBVA, Banco Exterior de América S.A. (Uruguay)
(wholly owned by BBVA) merged with and into Banco Francés Uruguay S.A. (wholly owned by us). As a result of such merger, Banco Francés Uruguay has changed its corporate name to Banco Bilbao Vizcaya Argentaria Uruguay S.A., or BBVA
Banco Uruguay (BBVA Uruguay).

In May 2002 Banco Francés sold its 60.88% interest in BBVA Uruguay to BBVA for the amount of US$55 million. This transaction was approved by the Central
Bank of Uruguay.

Credilogros and Banque PSA Finance formed PSA Finance Argentina Cía. Financiera S.A. (PSA Finance), in which Credilogros held a 50% interest, in
November 2001. On February 21, 2002, the Central Bank authorized PSA Finance to begin its activities as a finance company through Communication B 7134. PSA Finance, which has a single office located in Buenos Aires, is in the business of
granting loans in the retail market for the acquisition of new and used cars offered by the Peugeot Argentina S.A. dealership network. Rather than funding itself with deposits, term investments or corporate bonds, PSA Finance obtains financing
through loans granted by the Bank and other domestic financial institutions. On October 31, 2003, subject to the approval of the Central Bank. Banco Francés acquired 50% of the shares of PSA Finance from Credilogros for Ps.11.9 million and
Credilogros applied the proceeds to repay a loan from Banco Francés for a total of Ps.11.7 million plus interest. On December 16, 2004, the Central Bank issued Resolution No. 371, approving the transfer of 50% of PSA Finance capital stock to
Banco Francés.

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On
February 3, 2004, the Bank made an irrevocable contribution of capital in its
subsidiary Atuel Fideicomisos S.A. for Ps.13.0 million. Also, on February 4,
2004, the Bank acquired 5% of the capital stock of Francés Administradora
de Inversiones S.A. from Banco Francés (Cayman) Limited for Ps.580,000
while the remaining 95% was acquired by Atuel Fideicomisos S.A.

Banco
    Francés (Cayman) Ltd., was as of December 31, 2003 a wholly owned
    subsidiary formed in 1998. As of December 31, 2003, this subsidiary, with
    total assets of US$950.8 million registered a gain of US$121.6 million.
    Within the framework of the regularization and reorganization plan filed
    by the Bank with the BCRA, and Resolution No. 52/04 of the Superintendence
    of Financial and Exchange Institutions, dated March 17, 2004, on March 18,
    2004, the Bank sold to BBVA S.A. its 100% interest in Banco Francés
    (Cayman) Limited. See Note 1.5. to our Consolidated Financial Statements.
    The sale price amounted to US$238.5 million,
    and it was collected through Federal Government secured loans previously
    purchased by BBVA S.A. from Banco Francés (Cayman) Limited. Banco Francés has recorded such secured
  loans in conformity with Communication A 3911 and supplementary regulations. The negative result of the transaction was recorded as follows: Ps.200 million of the negative result from the transaction was absorbed and charged to the
  account Unrealized valuation difference under stockholders equity,
  as authorized by Resolution No. 52/04 of the Superintendence of Financial and
  Exchange Institutions, and Ps.11 million was charged to income (loss) for the
  year ended December 31, 2004.

BUSINESS OVERVIEW

Our strong corporate culture, with our customers and our team of professionals as cornerstones, enhances our franchise differentiation. Banco Francés is the
third largest bank in Argentina in terms of deposits, and the fourth largest in total assets according to statistics published by the Central Bank (Information of Financial Institutions, as of November, 2005). As of December 31, 2005 we had, on a
consolidated basis, a total of Ps.10.6 billion in deposits, Ps.16.0 billion in total assets and a market capitalization of Ps.3.4 billion.

We were one of the first companies listed on the Buenos Aires Stock Exchange. Our shares have been listed in the New York Stock Exchange since 1993, and in the
LATIBEX (Mercado de Valores Latinoamericanos), based in Madrid since December 1999.

Substantially, all of our operations, property and customers are located in Argentina. Accordingly, following the 2002 crisis and the package of government measures,
our financial condition and results of operations were deeply affected. Since December 2001 our business activity contracted compared to historical levels and our lack of liquidity led to a suspension of most new originations of all types of loans.
Our structural strengths, our reaction capacity, and our adjustment to the new economic environment were the pillars of our performance in 2002. We responded to the deepening of the crisis by prioritizing liquidity, substituting foreign currency
funds with domestic currency funds and satisfying the growing demand for transactional business, while adjusting the operating structure to the new business profile.

Following a four-year recession period, the economy recovered during 2003 and deposits flowed back into the system. The adequate 2004- policy management, reflected
in the primary fiscal surplus, the trade surplus and a conservative monetary policy, led us to maintain such economic growth, with stable prices and exchange rates. These conditions remained in place during 2005 and the Argentine economy further
expanded while banks strengthened their focus on lending activities within an environment of negative real interest rates that helped to improve their financial margin.

Accordingly, during fiscal year 2005, Banco Francés successfully bolstered its credit activity aiming at rebuilding its traditional loan portfolio
composition, more focused on the private sector than on public sector assets. With a commercial strategy oriented towards our core business, we increased our deposit base by 18%, reaching a 10.5% market share (source: Central Bank) and expanded our
net private sector loan portfolio 71%; while maintaining our strength in the transactional business. Furthermore, taking advantage of the sustained recovery of prices of public sector debt in the secondary market, we sold 2,937 million pesos of
public sector assets and paid the outstanding balance of loans received from the Central Bank as financial support during the liquidity crisis of 2002. These actions improved our asset and liability structure, with no significant impact on our
income statement. The consolidation of our financial margin was attained due to an efficient pricing policy combined with a higher intermediation volume and an increasing CER index variation, given our long CER adjusted position.

As part of our business, we conduct capital markets and securities operations directly in the over-the-counter market and indirectly on the Buenos Aires Stock
Exchange. The emerging recovery of these activities allowed for successful closings of securities transactions. According to statistics published by the Argentine Mutual Funds Association, we had a 7.21% market share in the mutual fund portfolio
management industry in Argentina through Francés Administradora de Inversiones S.A.. We also participate in the pension fund industry through our 53.89% equity interest in Consolidar AFJP, a pension fund manager which, as of
December 31, 2005, managed Ps.12.8 billion in pension fund holdings, with an 18.81% market share in the aggregate contributions to all AFJPs, according to statistics published by the Pension Funds Association.

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Furthermore,
we have traditionally accepted deposits and made loans in pesos and in certain
other currencies, primarily in dollars. Following the 2002 crisis, dollar deposits
and loans were suspended in Argentina. During 2003, with the stabilization of
the exchange rate and according to new regulations from the Central Bank, we
began to accept dollar deposits and to grant dollar-denominated loans in relation
to foreign trade transactions, which continued to be subject to Central Bank
restrictions in 2005. As of December 31, 2005, approximately 7.56% of our loans
and 12.11% of our deposits were denominated in dollars.

The following table presents financial information for our principal business segments for the year ended December 31, 2005.

|                                      |  | As of December 31, 2005
    (in thousands of pesos)
|------------------------------------- |  | ---------------------------------------------------
|                                      |  |                                                    
|                                      |  | Banking and
Financial                              
|                                      |  |                                                    
|Total assets                          |  | 13,990,688                                         
|Total income(2)                       |  | 2,222,450                                          
|Total expenses(3)                     |  | (2,124,334                                         
|Gain / (Loss) on minority interest in |  |                                                    
|subsidiaries                          |  | (2,850                                             
|                                      |  |                                                    
|Total Net (Loss) / Income             |  | 95,266                                             
|                                      |  |                                                    

|   
|---
|(1)
|(2)
|(3)

Our branch system operates as a distribution network for all the products and services that we offer to our customers. Our 230 branches are complemented by other
distribution channels, such as 527 automatic teller machines or ATMs, as of December 2005, a telephone banking service, which answered on average over 700,000 calls per month in 2005, and an Internet banking service called Francés Net, which
serves over 166,000 active clients. We are a member of Banelco S.A., a corporation owned by seven partner banks, and that includes 18 participating banks, and our ATMs are part of the Banelco Network (Red Banelco). The customers of all the
participating banks have access to the Banelco Network, which comprises over 3,393 ATMs throughout Argentina, approximately 16% of which belong to Banco Francés.

Our universal commercial strategy aims to achieve a leading position in all of different market segments.

Banco Francés - Background

Since 1886, BBVA Banco Francés, previously known as Banco Francés del Río de la Plata S.A., has been recognized as a leading provider of
financial services to large corporations. It was only in the early 1980s that we broadened our customer base to include medium and small companies as well as individual consumers. In response to demands from the corporate market and following
the structural changes brought about by the stabilization process in Argentina since 1991, we added to our traditional commercial banking products a full range of services, such as investment banking, capital market transactions and international
banking.

In the 1980s and 1990s in order to achieve a wider market penetration, we expanded our branch network by opening branches throughout Argentina.

In December 1996, when BBVA became our principal shareholder, we reaffirmed our universal banking strategy, with the goal of increasing the most profitable business
segments of medium and low-income individuals and small and medium-size businesses in the middle market. To this end, in August 1997, we acquired 71.752% of Banco de Crédito Argentino (the Crédito acquisition), a retail
bank focused on the middle market and consumer banking sectors. This merger allowed us to maximize the strengths of each bank and to implement an ambitious leadership plan that included an expansion plan-starting with a strong initial positioning in each market.

The
liquidity crisis that started in December 2001 and the ensuing economic and political
instability led to a deep contraction in the intermediation volume. In response,
we changed our short-term commercial strategy toward the transactional business,
adjusted our operating structure and implemented a strict cost control plan.
Actions were also focused on recovering asset quality levels, which had been
strongly impacted by the crisis. By mid-2003 the economy began to recover and
we returned to offering the full range of

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financial services,
including credit facilities, albeit restricted to short-term financing. Since
2004 we gradually strengthened our credit activity in the midst of economic solvency,
and consolidated our transactional business. During fiscal year 2005 we kept
our focus on the core business, reaffirming our leading position in the market
in terms of deposits, strongly growing in private sector loans and achieving
asset quality standards better than those previous to the crisis, while we maintained
our strength in the transactional business. Meanwhile we carried out significant
improvements in the assets and liabilities structure, including a reduction of
public sector assets and the repayment of the financial assistance granted by
the Central Bank, during 2002 crisis, which accrued a fixed interest rate plus
CPI adjustment. Furthermore, most recently, we marked to market part of the National
Government bonds, aiming to strengthening our financial conditions.

Banking
      and Financial Services

Our financial condition and results of operations for the fiscal year 2005 we are still impacted by the effects of 2002 crisis. Following the strong contraction in
financial activity and the redefinition of our commercial strategy toward the transactional business, as an alternative source of income since the second semester of 2003, we resumed our lending activity. During 2005 we reinforced our efforts on
expanding our intermediation volume while we continued rendering banking services, which included cash management of means of payment (with emphasis on electronic means), the bank account services for transactional purposes and operation of credit
cards and transactional deposit taking.

Credit facilities included short and medium-term financing, such as overdrafts on demand accounts, personal loans and credit card financing in the retail segment and
notes discounted, working capital financing and investment-banking products, such as trustees, in the corporate segment.

In addition, the structural term and rate mismatch in assets and liabilities, caused by measures taken by the Government during 2002 and 2003, made our profitability
strongly dependent on the relative behavior of the CPI vis-à-vis interest rates, because we have a long CER adjusted position. A significant part of the Banks risk assets are variable rate assets, adjusted by CER plus an interest rate.
Most liabilities accrue interest at a fixed rate except for certain discount loans granted to Banco Francés by the Central Bank which were repaid last November 2nd, a Ps.306 million remaining portfolio of rescheduled deposits, known as
CEDROS and new CPI adjusted time deposits, totaling Ps.1.5 billion as of December 31, 2005. Accordingly, during fiscal year 2005 we benefited from our long CER position in an environment of negative real interest rate, while we focused on rebuilding
our private portfolio pursuing a medium long-term strategy. Furthermore, we also reduced our public sector exposure in order to comply with regulations that limit public sector holdings to 40% of total assets. Public sector loans decreased 33.26% -
from Ps.6.9 billion in December 2004 to Ps.4.6 billion by the end of present fiscal year.

The following table sets forth our estimates of the relative proportions of loans and deposits attributable to our principal markets.

|              |  | Loans                                      
|------------- |  | -------------------------------------------
|              |  |                                            
|              |  | December 31, 2005                          
|              |  |                                            
|              |  | (in thousands of pesos, except percentages)
|Public Sector |  | 4,623,626                                  
|Corporate     |  | 1,786,387                                  
|Middle market |  | 880,266                                    
|Retail        |  | 1,191,197                                  
|              |  |                                            
|Total         |  | 8,481,476                                  
|              |  |                                            
|             
|             
|              |  | Deposits                                   
|              |  |                                            
|              |  | December 31, 2005                          
|              |  |                                            
|              |  | (in thousands of pesos, except percentages)
|Corporate     |  | 2,788,669                                  
|Middle market |  | 1,106,171                                  
|Retail        |  | 6,718,246                                  
|              |  |                                            
|Total         |  | 10,613,086                                 
|              |  |                                            

Corporate Banking. The Corporate Banking Division specializes in business with large international and domestic companies
having minimum annual sales of Ps.75 million or companies that belong to an international group. This division has three branches dedicated to serving groups of companies from Argentina, Europe, and the United States and the rest of the world.

22

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In
the fiscal year 2005, BBVA Banco Francés consolidated its leadership in
the corporate segment, reporting a remarkable performance in the lending activity
as well as in the transactional business.

Following
    the favorable macroeconomic evolution and the increasing activity level in
    this market segment, the Corporate Banking division efficiently managed the
    needs and requirements of more than 750 customers. The total loan portfolio
    reached 1,786 million pesos, reflecting a 63.4% growth, which succeeded not
    only in satisfying market needs but also in creating demand.

It
    should be noted that such growth was attained with a strict control of the
    risk assumed and by the offer of different types of financing lines, such
    as export prefinancing programmes, structured financing transactions and
    working capital loans.

It is also worth mentioning the positive evolution of foreign trade business. In spite of the complex regulatory framework that characterized this business, our
  remarkable performance, turned the Bank into a reference for companies, both in terms of credit assistance and advisory service.

The Banks capacity to generate transactional services, key to a model of full relation, is based on the geographical, domestic and regional coverage, and on an
integrated supply of products and services. This business, which showed a significant growth in net fee income, reported a 42% increase in operating volume in the last year, also positions the Bank as the clients main entity.

Capital Markets. The restructuring of public debt in default carried out at the beginning of fiscal year 2005 impacted both in
investment banking activity and in a further development of the capital market. The exchange offer, in which the Bank took part as regional lead manager for Argentina (together with Banco Nación Argentina and Banco de Galicia), encompassed
81,836 million dollars in securities held by residents and non-residents and achieved an acceptance rate of 76.15% . The level of bond swap under Argentine legislation was of 86.25%, and the value bonds swapped under the system of total clearing,
pursuant to all legislations, totaled 23,701 million dollars.

The 2005 fiscal year featured lower capital markets activity. However, by the year end, Banco Francés launched the Fideicomiso Financiero Radar Series 5
(Radar Series 5 Financial Trust) for a total of 841.2 million pesos. This trust was constituted by Préstamos Garantizados Global 2008 (Global 2008 Secured Loans) from the Banks Treasury. Lead managed and placed
by the Bank in Argentina and by Citigroup, this turned out to be the highest issuance by a trust in 2005.

In the variable income or equity business, which registered lower activity this year, the Bank participated as advisor for Renault D.I.C. in the takeover bid over
those shares of Renault Argentina S.A. not controlled by the Renault Group. The operation closed in December and the Renault Group reached 99.06% stockholding. BBVA Banco Francés and Francés Valores S.A. were lead manager and exchange
agent, respectively.

During the fiscal year 2005 the Investment Banking Group continued to perform its financial advisory business, both in financial assessment for terms over one year
or first-tier companies, as well as in the analysis of projects and in the business of financing Mergers and Acquisitions.

Trading and Brokerage. As of December 31, 2005, we routinely traded (on behalf of our customers and for our own account)
corporate and Government bonds, money market instruments and foreign currency. In the fiscal year 2005, we were one of the most important brokers in the bond market through the MAE (Mercado Abierto Electrónico, an OTC market) and securities
market through Francés Valores, an affiliate company registered in Mercado de Valores de Buenos Aires S.A. (MERVAL).

We typically earn both brokerage commissions and a spread on over-the-counter transactions, depending on the type of transaction involved. Our proprietary trading,
as well as third party brokerage trading, is supported by research and analysis provided by our research department.

Middle Market Banking. The Middle Market division handles our relations with small and medium-sized companies,i.e.,those with annual sales of up to Ps.75 million. The Bank has the first network in Argentina specialized in serving the small and
medium-sized company segment.

For the second consecutive year, small and medium-sized companies have shown increasing need for financing, both to cover their working capital requirements and to
incorporate capital assets. Our Middle Market banking is supported by a 27-business unit structure dedicated to the exclusive service to small and medium-sized companies, has extended specialized service in response to the growing demand for credit
and to requirements for transactional products of over 6,700 customers.

23

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In
this sense, our loan portfolio amounted to 880 million pesos, reporting an 90.12%
interannual growth. Liabilities managed by the Bank showed, in turn, a 8.10%
increase, reaching 1,106 million pesos.

The
    evolution of fees and foreign exchange trading also constituted key elements
    to management during 2005, reporting a 25% growth with respect to the level
    reached the previous year, totalling 66 million pesos.

Likewise,
    as in the previous year, the levels of activity in those segments linked
    to foreign trade and agriculture was prominent.

As
    to human resources, the whole commercial staff took part in the process of certificación
    en riesgos (Risk Certification) implemented during the
    course of the year, and studied specialization and training in risk management
    in depth.

In turn, training continued in specific resources in the agricultural business and to foreign trade technical experts in business units in the interior of the
  country.

Retail Banking. The Retail Banking division is in charge of commercial relations with individuals and small companies.

As of December 31, 2005, this division served about 1.4 million individuals through a network of 230 branches. In late December 2005, intermediation volume accounted
for over 8 billion pesos, with a 51.8% increase in loans and a 27.3% growth in deposits.

For the purpose of boosting growth in business on each market segment, Retail Banking employs a consolidated management model, articulated on the following main
principles:

- Consistent customer focus with quality service and product innovation serving as the two main cornerstones of the value proposal.
- Permanent customer orientation, with an attitude towards service and strategic products as the two main pillars of the value proposal.

We continued to focus on innovation of strategic products with higher value and quality aiming to reinforce relationships with existing customers and to attract
new customers and balancing the processes of efficient service and effective sales.

The following are our main operating items in 2005:

Personal and Mortgage Loans:The personal loans plan have been extended with improved credit support, by means of a personalized
offer. Management was focused upon the Salary Plan segment lending up to five salaries, and with pre-approved mass commercial actions, which facilitate sales. Furthermore, we began to grant new loans through alternative channels, planning to expand
such action to include our website in 2006.

In 2005 we were able to double our sales, to 290 million pesos, as well as our loan portfolio, which grew by 165 million pesos in the year.

As to Mortgage Loans, we consolidated and increased the set of products offered to cover all financing and purpose possibilities that may arise. This broad range of
alternatives is called Flexible Mortgage. The financial system showed a decreasing trend in the stock of mortgages, which did not level out until the second quarter; however we were able to maintain our portfolio, representing a 150% growth in
sales.

Deposits:In terms of deposit, throughout the year we have carried out different commercial actions, which led to an increase
in portfolio of approximately 1,430 million pesos.

As a result, concrete commercial actions including El Libretón were promoted, offering a variety of attractive prizes, and promoting saving
campaigns, proving brand and product awareness and acceptability.

Insurance:In 2005, the insurance business broadened its offer to the segment of private customers and businesses, reinforcing
its prominent position.

24

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In
car insurance, we worked in alliances with the main insurance companies in the
country, being able to offer a better product in the market.

Besides
    the current products and according to the needs perceived, we provided thematic
    insurance together with our thematic cards, incorporated a provision for cessation and
    / or unemployment over account debit balances, credit cards,
    and loans and broadened our coverage of personal accident insurance.

Payrolls:One
    of the key products managed by the Bank has been the direct deposit of salary
    plans, which continued its growth and attracted more companies to utilize
    this service. This development positioned the Bank among the market leaders:
    as of December 2005, over 6,000 companies with approximately 403,300
    employees- credited their salaries through our branch office network.

Vip
      BBVA:The
      Banca Vip (Vip Banking) division continued its positive trend
      and reinforced its presence in the high value segments of individual customers.
      In spite of the constant changes in the financial market, customers showed
      a favorable response toward
      the tailor-made services offered by Banco Francés, including personalized
      contact and products with benefits. The segment grew 25%, amounting to
      23,000 active customers at the end of the present fiscal year.

Among the commercial actions, the most prominent was Cuenta Premier, a set of tri-monetary accounts and two credit cards: Visa and Mastercard, with a further benefit
of the Plan Puntos system over purchases made by either card (debit and/or credit) and the exclusive discount plan.

E-Banking:

ATMs:As in previous years, we maintain a leading position over our competitors in the number of transactions through ATMs.
Banco Francés holds the highest operational volume, reaching an annual average of 3.8 million transactions, mainly due to our high level of availability (95.5% on average), again leading the rest of the system.

During the present fiscal year Banca Automática (Automated Banking) satisfactorily passed the maintenance audit carried out by IRAM, thus
ratifying its International Quality Certificate ISO9001:2000.

With respect to the transaction migration plan, the 670 Francés Autoservicio (Self-service) terminals played a fundamental role as a direct derivation channel
for branches. These account for 12% of migrating cash transactions, improving 10% over last year.

Advertising on ATMs continued its success allowing for the spread of non-banking advertisements as well as those for own products, thus validating the service as an
important tool for promotion.

Internet - Francés Net:Stemming from the high quality of internet service demanded by customers used to operating
through this channel, Francés Net has registered the highest rates of acceptability and growth rate, reporting over 5 million monthly transactions made by more than 160,000 customers.

During 2005, 3.2 million pesos in investment transactions in shares, bonds, mutual funds and time deposits, transfers, payments and purchases were operated through
Tienda Virtual.Purchases deserve a special mention, since this method is the first safe means of payment over the Internet through a debit account, allowing payment transactions online and providing total security in transactions.

During the last 12-month period transactions grew over 70%, from a total of 2.9 million to more than 5 million. This rate of growth is continuing with new clients
joining as they discover the advantages of Home Banking as well as new transactions for all users.

Means of payment:The year 2005 saw the relaunching of means of payment in Banco Francés:

- The product was strongly
promoted in the market through differentiation strategies. With a more aggressive
investment in advertising
 and promotion campaigns, the Bank linked itself to chains dealing in household
appliances, cell phones, fuel, clothing
and supermarkets, to offer substantial discounts and interest-free  installment-payment
plans to those paying for their
purchases by these means.
- Personalized activities (micromarketing) were carried out seeking to increase volume activity, average consumer spending and adherence
of services to automatic debit.

25

---



- Several commercial
      strategies implying area discount plans were carried out in businesses
      with regional presence in the interior
      of the country.

An
    improvement in the product brought about an increase in sales and activity,
    in an extremely competitive market. Sales reached 85,000 plastic cards, 117%
    over last year, consumer spending increased 40% and the stock of active cards
    25%.

Credit
      Cards and Debit Cards:Since
      the economic crisis of 2001, the first major credit product to regain acceptance
      was the credit card, which was easy for consumers to acquire and for financial
      institutions to sell. The economic jump of this product started in 2004
      and steadfastly increased in 2005, with big players investing strongly
      in publicity and promotion. Debit cards were promoted along credit cards,
      as a way of increasing not only sales but also consumption volume.

Credit
    and debit cards generate income for the Bank in the form of renewal fees,
    maintenance fees, retailer transaction fees, merchant processing fees, and,
    in the case of credit cards, financing and penalty charges.

We issue mainly Visa and MasterCard credit cards, with the latter brand launched in 2005 to give our clients two strong options and increase
  the use of our credit cards, and debit-only cards (i.e. Visa Electron). We had a total credit card base of 783,966 as of December 31, 2005. We hold the third largest Visa card market share, gaining one position from 2004, with 10.48% of the
  consumption volume market and 10.00% in current credit cards. Our Visa Electron client base as of December 31, 2005 consists of approximately 1.16 million debit-only cards, representing 15.30% market share, and generates 19.35% of the consumption
  volume market making us the second largest player in that arena.

In 2005, we continued offering securities brokerage services to our individual clients whereby over-the-counter transactions are executed directly through us, and
Stock Exchange related transactions through Francés Valores. We similarly offer the services of Francés Inversiones, a telephone banking advisory service, and Francés Net, an electronic service, through which our clients may
conduct securities and other transactions. Although clients are not charged for these services, we collect fees for brokerage services performed on behalf of any customer.

Trust Banking. Since 1996, we have organized a wide variety of trusts for large, medium and small customers in the private
sector, for governmental entities and for multilateral organizations. Our Trust Banking division excelled in organizing guarantee trust funds for export pre-financing, bringing together producers and investors. Trust banking transactions decreased
8.3% as compared to fiscal year 2004, generating an 11.1% drop in receivable fees. This decrease was due to the maturity of trust agreements, in especially with the Provincial Development Trust Fund. Our commercial strategy was focused on
strengthening the synergies between the activities of the Trust Banking division and other banking activities, aiming to maximize profitability.

Asset and Pension Fund Management

BBVA Banco Francés continued to be a reference in investments advisory services and management, whether directly through portfolio management or indirectly
through the offer of Mutual Funds that are part of the group of funds known as the FBA Management.

Mutual Funds

Francés Administradora de Inversiones S.A, in its capacity of Fund Manager, continued during 2005 to manage FBA Management products. This resulted in good
performance of investments both from individual and institutional customers, and for FBA products to rank in leading positions in terms of yield as compared to competitors, in the following categories: variable income funds Argentina (FBA
Calificado), Latinamerican Flexible Dollar Fixed Income Funds (FBA Bonos) and Dollar Mixed Income (FBA Total).

The FBA family grew from an equity management of 521.52 million pesos at the end of 2004 to 799.86 million pesos upon the closing of 2005 fiscal year, with a market
share of 7.21%(1) of total mutual funds.

In respect to fixed term funds, FBA Renta Pesos, which is the only fund that allows subscriptions and redemptions, ended the year with a net worth of 176.51 million
pesos. Like in the previous fiscal year, the rest of the fixed term funds (FBA Ahorro Pesos, FBA Renta Dólares, FBA Ahorro Dólares) continued allowing only the redemption option all year round.

In
mutual funds asset management, FBA Management Fondos de Mercado showed a significant
growth: from Ps.325.09(1) million
under management in December 2004 to Ps.595.55(1) million
by 2005 year-end, with a 7.92%(1) market share.
It should be noted that while total Market Funds showed an 82.89%(1) increase
in net worth, during the period, the Market Funds of the FBA

26

---



family increased their
net worth by 149.53%(1). Among the different funds,
FBA Calificado had a remarkable performance ending with a 327.24 million pesos
net worth compared to 195.42 million pesos in 2004. Likewise, FBA Horizonte increased
its net worth from 10.57 million pesos in 2004 to 159.78 million pesos in December
2005.

As of December 31, 2005, our mutual funds had the following Net Asset Values:

Name of Mutual Fund
 
 Thousands
of PesosFBA Acciones Globales
 
 41,821FBA Total
 
 11,839FBA Renta
 
 15,817FBA Renta Pesos
 
 176,512FBA Renta Dólares
 
 4,761FBA Bonos
 
 9,780FBA Calificado
 
 327,246FBA International
 
 526FBA Ahorro Dólares
 
 15,443FBA Ahorro Pesos
 
 550FBA Renta Fija
 
 24,452FBA Renta Premium
 
 8,952FBA Horizonte
 
 159,783FBA Europa
 
 1,031FBA EE.UU.
 
 781FBA Renta Corto Plazo
 
 567Total
 
 799,861


(1) Source:Cámara
Argentina de Fondos Comunes de Inversión

Portfolio Management

During the 2005 fiscal year, Banco Francés renewed its commitment to customized portfolio management, an exclusive service for companies and high-income
individuals, by providing professional and efficient investment management, tailored to each customers particular needs and investor profile.

Financial institutions and insurance companies are permitted to invest in pension and retirement fund management companies in Argentina. Such funds, which are
modeled after those currently in existence in Chile, are funded strictly by pension and retirement contributions made by Argentine employees. As of December 31, 2005, we owned 53.89% of Consolidar AFJP, a pension fund manager that is operated
jointly with BBVA. As of December 31, 2005, Consolidar AFJP managed Ps.12.8 billion in pension fund holdings (with a 18.81% market share in collections).

Insurance

We provide advisory services to our customers in the selection of the adequate coverage of risks related to life, personal accident and home insurance and ATMs
theft insurance, with a range of products offered by certain insurance companies.

Additionally, as part of our overall business, we have equity interests in some of the following companies: 12.22% of the capital stock of BBVA Seguros S.A., 65.96%
of Consolidar Compañía de Seguros de Vida S.A. (a company that offers life insurance to the persons with retirement accounts at Consolidar AFJP), 66.67% of Consolidar Compañía de Seguros de Retiro S.A. (a company that

27

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offers
    retirement plans) and 12.5% of Consolidar ART S.A. (a workers compensation
    insurance company that offers labor risk insurance to corporations pursuant
    to a statutory framework established by the Labor Risks Law). BBVA holds
the remaining shares in these four companies.

At
    December 31, 2005, Consolidar Retiro reached a 22.81% market share in the
    number beneficiaries. Labor risk insurance provider, Consolidar ART increased
    its insured clients from 56,535 companies and 794,021 employees in December
    2004 to 62,442 companies and 865,867 employees by 2005 year-end (equivalent
    to a 10.45% and 9.05% respective growth.)

International
      Operations

Since
    the economic and financial crisis that started at the end of year 2001 the
    access to international markets for Argentine companies have been very limited.

Notwithstanding
    this constraint we have been able to assist our clients with traditional
    foreign trade services, including letters of credit, collections, bank drafts,
    fund transfers and foreign currency transactions.

During fiscal year 2005 we have signed an agreement with Inter American Development Bank (IADB) that will guarantee trade related transactions up to three years. Also we have signed a similar
  program with International Finance Corporation (IFC) with similar characteristics. As of the end of fiscal year 2005 BBVA Banco Francés was the only Argentine bank to have signed such agreements.

These aforementioned agreements signify our confidence in our ability to assist and service the increasing demand for imports of capital goods.

Cost Controls and Efficiency Improvements

During fiscal year 2005, we continued to maintain a strict control on administrative expenses, keeping expenses in line with the inflation target for the period. Leveraged by increasing recurrent
earnings, we were able to substantially improve the efficiency ratio (measured as administrative expenses over ordinary margin) lower than 50%.

Furthermore, our corporate guidelines include an efficiency follow-up model that was applied during 2005 to strictly control immobilized assets as well as the reinvestment of assets not related
to the business.

The following table shows the revenue derived from the business areas described above for the fiscal years ended December 31, 2005, 2004 and 2003:

|                          |  | As of December 31, 2005     |  
|------------------------- |  | --------------------------- | -
|                          |  |                             |  
|                          |  | Banking Financial           |  
|                          |  |                             |  
|                          |  | BBVA Banco
    Francés S.A. |  
|                          |  |                             |  
|                          |  |                             |  
|Total assets              |  | 13,839,847                  |  
|                          |  |                             |  
|Financial income          |  | 1,412,036                   |  
|Service charge income     |  |                             |  
|and other income          |  | 757,620                     |  
|Total income(1)           |  | 2,169,656                   |  
|                          |  |                             |  
|Financial expenses        |  | (617,332                    | )
|Allowances for doubtful   |  |                             |  
|loans                     |  | (109,265                    | )
|Operating expenses        |  | (564,742                    | )
|Other expenses            |  | (791,684                    | )
|Total expenses(2)         |  | (2,083,023                  | )
|                          |  |                             |  
|Loss on minority interest |  |                             |  
|in subsidiaries           |  | (1                          | )
|                          |  |                             |  
|Total net income / (loss) |  | 86,632                      |  
|                          |  |                             |  
|                          |  |                             |  

28

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|                                  |  | As of December
          31, 2004 |  
|--------------------------------- |  | --------------------------------- | -
|                                  |  |                                   |  
|                                  |  | Banking Financial                 |  
|                                  |  |                                   |  
|                                  |  | BBVA Banco
      Francés S.A.     |  
|                                  |  |                                   |  
|                                  |  |                                   |  
|Total assets                      |  | 14,275,608                        |  
|                                  |  |                                   |  
|Financial income                  |  | 951,586                           |  
|Service charge income             |  |                                   |  
|and other
          income        |  | 675,257                           |  
|Total income(1)                   |  | 1,626,843                         |  
|                                  |  |                                   |  
|Financial expenses                |  | (461,014                          | )
|Allowances for doubtful           |  |                                   |  
|loans                             |  | (49,464                           | )
|Operating expenses                |  | (474,568                          | )
|Other expenses                    |  | (719,669                          | )
|Total expenses(2)                 |  | (1,704,715                        | )
|                                  |  |                                   |  
|Loss on minority interest         |  |                                   |  
|in subsidiaries                   |  | (7                                | )
|                                  |  |                                   |  
|Total net income
        / (loss) |  | (77,879                           | )
|                                  |  |                                   |  

|                          |  | As of December
        31, 2003 |  
|------------------------- |  | ------------------------------- | -
|                          |  |                                 |  
|                          |  | Banking Financial               |  
|                          |  |                                 |  
|                          |  | BBVA Banco
    Francés S.A.     |  
|                          |  |                                 |  
|                          |  |                                 |  
|                          |  |                                 |  
|Total assets(3)           |  | 12,248,072                      |  
|                          |  |                                 |  
|Financial income          |  | 1,163,181                       |  
|Service charge income     |  |                                 |  
|and other income(3)       |  | 1,094,203                       |  
|Total income(1)           |  | 2,257,384                       |  
|                          |  |                                 |  
|Financial expenses        |  | (1,181,831                      | )
|Allowances for doubtful   |  |                                 |  
|loans                     |  | (73,203                         | )
|Operating expenses        |  | (539,465                        | )
|Other expenses(3)         |  | (972,796                        | )
|Total expenses(2)         |  | (2,767,295                      | )
|                          |  |                                 |  
|Gain on minority interest |  |                                 |  
|in subsidiaries(3)        |  | -                               |  
|                          |  |                                 |  
|Net monetary loss         |  | 1,548                           |  
|                          |  |                                 |  
|Total net income / (loss) |  | (508,363                        | )
|                          |  |                                 |  

|   
|---
|(1)
|(2)
|(3)

Information technology

During the year 2005, we focused on four main subjects:

- Update of the whole technological infrastructure at branch offices,
- Biannual plan for the updating and upgrading of the central technological infrastructure, including high, middle and low platforms.
- Strong support to the business during the launch of products, and
- Corporate projects related to internal control and risk management.

As for the 2002 crisis, in a setting in which the financial sector was adversely affected, the Bank concentrated on dealing with the crisis and holding down costs; this led to the postponement of
infrastructure update projects.

29

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In view
    of the clear recovery in the levels of activity and profitability registered
    since 2004, the launching of a significant number of technological updating
    projects was reconsidered. These projects were already necessary to ensure
    operating continuity and go along with growth in business.

The
    most important project taken up this year was the update of the whole technological
    infrastructure at our branches, which includes communications, servers, user
    desktop and peripherals. This project not only involves the change of hardware,
    but also the implementation of a new and completely innovative technological
    architecture and the replacement of existing proprietary terminals with ones
    in compliance with JAVA standards. Some of the benefits associated with its
    implementation are:

- Substantially improved efficiency, with significant
      reduction in processing time at branches,
- Reduction of equipment maintenance costs,
- Cost savings on software leases,
- Improved information security,
- Higher availability in jobs,

- Facilitates implementation of new applications and tools, and
- Lays the foundations for further incorporation of technology into the processes of branches.

In the first semester of 2006, deployment of new technology will be completed at all branches.

An ambitious biannual plan gained momentum during 2005, which consisted of updating and expanding the of central processing resources of high, middle and low platforms.

Among the main actions implemented are:

- Extension of processing capacity of Mainframe.
- Change in storage technology and extension of its capacity.
- Reengineering of intermediate platform with SUN technology.
- High availability for Windows-Intel platform.
- Changes in communication infrastructure.

Actions regarding the
support of business areas

- The sales process flow was automated, which will allow decentralization of product provisioning over the branches networks,
- Alternative channels were given new and significant functionality,
- The mass sale process was redesigned,
- Continued implementation of document digitalization technology for various processes,
- Optimized foreign trade business using image technology and strengthened transactions available over Francés Net,
- Full reengineering of the net collection system,
- Deployed NetCash (a new corporate product for banking
over the Internet), and

30

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- Continued progress on relaunchingthe
      following products:

| |  | Credit cards (models and processes)                            
|- |  | ---------------------------------------------------------------
|  |  |                                                                
| |  | Mortgage loans                                                 
|  |  |                                                                
| |  | Insurance                                                      
|  |  |                                                                
| |  | Foreign currency (processes, accounts,
        channels, costs)
|  |  |                                                                
| |  | New financial products                                         

In terms
    of internal control and risk management, the year was marked by the continuation
    of large corporate projects, which have entered into more advanced stages:

- Sarbanes Oxley
- Basle II  RAR

- Business Continuity Plan
- Prevention of money laundering

Lastly, also worthy of mention is the realization of infrastructure to facilitate growing commercial plans (opening of branches, remodeling, Mortgage center, banca Vip), and the construction of
new facilities to house and protect the magnetic media of the Computing Center

ORGANIZATIONAL STRUCTURE

Banco Bilbao Vizcaya Argentaria S.A. (BBVA)

As of December 31, 2005 and 2004, BBVA owned approximately 75.59% and 75.97%, respectively, of Banco Francés capital stock.

BBVA is the result of a merger by absorption of Argentaria, Caja Postal y Banco Hipotecario, S.A., formerly a Spanish retail banking, asset management and insurance provider, into Banco Bilbao
Vizcaya, S.A. The merger was approved by the shareholders of both institutions on December 18, 1999. As of December 31, 2005, BBVA, through its subsidiaries, has a presence in 14 American countries and several countries throughout Europe, with 3,578
branch offices in Spain and 3,832 branch offices outside Spain, and 31,154 employees in Spain and 63,527 employees outside of Spain.

BBVA is a global financial group, organized in four major business areas: Retail Banking in Spain and Portugal, Wholesale and Investment Banking, Banking in America (includes Mexico) and
Corporate Activities.

The tangible benefits provided by the BBVA Group to the Bank are the following:

- Sharing of technology;
- Development of new banking products that have been customized for the Argentine market;
- Leveraging BBVAs global client relationships to serve those clients operating in Argentina; and
- BBVAs participation in Banco Francés as a shareholder is both long term and strategic.

Subsidiaries of Banco Francés

We conduct our securities trading operations on the BCBA through our brokerage affiliate, Francés Valores Sociedad de Bolsa S.A., or Francés Valores. Among other subsidiaries
engaged in a range of financial businesses, it is important to mention Consolidar AFJP, a pension fund administrator, which as of December 31, 2005, managed Ps.12.8 billion in pension fund holdings, with a

31

---



18.83% market share in collections
    in Argentina. Banco Francés currently has a 53.89% equity interest
    in Consolidar AFJP, with the remaining interest held by BBVA.

Until
    recently we provided certain financial services to customers in the lower-income
    segment through our subsidiary Credilogros. On March 9, 2005 we entered into
    sale-purchase agreement with Banco de Servicios y Transacciones and Grupo
    de Servicios y Transacciones S.A., whereby we sold our equity investment
    in Credilogros. Prior to that transaction, the capital stock structure of
    Credilogros, as of December 31, 2005, was as follows:

Banco Francés
      69.5271
      %Banco Bilbao Vizcaya
          Argentaria S.A.
      29.9475
      %Inversora Otar S.A.
      0.5254
      %


Rombo
    Compañía Financiera S.A., with a single branch located in Buenos
    Aires, grants loans on the retail market to finance the purchase of new and
    second hand cars offered by the Renault dealership network. During 2005,
    total transactions increased from 4,468 to 7,174, with total financing  including
    leasing operations  amounting to approximately Ps.100 million. Out
    of total transactions, 320 correspond to financing the purchase of Nissan
    cars, 717 to second hand cars and the remaining 6,010 to Renault cars. We
    hold a 40% equity interest in this company, which capital stock consists
of 20,000,000 shares of common stock with a par value of Ps.1 each.

PSA Finance is located in Buenos Aires. This financial entity was organized in 2001 and its original shareholders were Credilogros Compañia Financiera S.A. (50%) and Banque PSA Finance
(50%), a company owned by the PSA French group. The companys business is to finance brand new Peugeot and Citroën vehicles, as well as second-hand vehicles of all brands, through motor-vehicle secured loans or leasing transactions. On
October 31, 2003, subject to the approval of the Central Bank, Banco Francés acquired 50% of the shares of PSA Finance from Credilogros for Ps.11.9 million and the latter settled the call received from Banco Francés for a total of
Ps.11.7 million plus interest.

Until March 2004, we offered financial services in the Cayman Island through Banco Francés (Cayman) Ltd. On March 18, 2004 we sold our interest in Banco Francés (Cayman) Ltd. to
BBVA.

Until May 2002, we offered financial services in Uruguay through BBVA Uruguay. On May 13, 2002 we sold our 60.88% interest in BBVA Uruguay to BBVA.

The following chart reflects Banco Francéss subsidiaries as of December 31, 2005:




|   
|---
|(1)
|(2)

32

---



The following information is related
    to subsidiaries and affiliates as of December 31, 2005:

|Subsidiary or Associated Company                        |  | Country ofIncorporation/
      Residence |  | Banco Francés
      Ownership
      and Voting Power |  | Principal Activity     |  | Stockholders
      Equity
      (in millions of
      pesos) (4)
|------------------------------------------------------- |  | ---------------------------------------- |  | ---------------------------------------------------- |  | ---------------------- |  | -----------------------------------------------------------------
|                                                        |  |                                          |  |                                                      |  |                        |  |                                                                  
|Atuel Fideicomisos S.A.
        and subsidiary(1)(3)    |  | Argentina                                |  | 99.99%                                               |  | Trust services         |  | 13.5                                                             
|                                                        |  |                                          |  |                                                      |  | Stock exchange         |  |                                                                  
|Francés Valores
        Sociedad de Bolsa S.A.(1)(3)    |  | Argentina                                |  | 99.97%                                               |  | brokerage              |  | 8.7                                                              
|Credilogros Compañía
        Financiera S.A.(1)(3)      |  | Argentina                                |  | 69.53%                                               |  | Financial Institution  |  | 38.8                                                             
|Consolidar Cía.
        de Seguros de Retiro S.A.(1)(3) |  | Argentina                                |  | 66.67%                                               |  | Insurance              |  | 46.7                                                             
|Consolidar Seguros de
        Vida S.A.(1)(3)           |  | Argentina                                |  | 65.96%                                               |  | Insurance              |  | 82.7                                                             
|                                                        |  |                                          |  |                                                      |  | Pension and Retirement |  |                                                                  
|Consolidar AFJP S.A.(1)(3)                              |  | Argentina                                |  | 53.89%                                               |  | Fund Administrators    |  | 263.2                                                            
|PSA Compañía
        Financiera S.A.(1)(3)              |  | Argentina                                |  | 50.00%                                               |  | Financial Institution  |  | 24.1                                                             
|Rombo Compañía
        Financiera S.A.(3)               |  | Argentina                                |  | 40.00%                                               |  | Financial Institution  |  | 30.2                                                             
|                                                        |  |                                          |  |                                                      |  | Workers Compensation   |  |                                                                  
|Consolidar ART S.A.(3)                                  |  | Argentina                                |  | 12.50%                                               |  | Insurance              |  | 151.9                                                            
|BBVA Consolidar Seguros
        S.A.(3)                 |  | Argentina                                |  | 12.22%                                               |  | Insurance Company      |  | 43.7                                                             
|Assurex S.A.(2)                                         |  | Argentina                                |  | 12.50%                                               |  | Insurance Broker       |  | 0.1                                                              

|   
|---
|(1)
|(2)
|(3)
|(4)

Equity Investments

The following are all positions that we hold in non-financial institutions wherever such a position represented an ownership in excess of 2% of the invested companies equity as of December
31, 2005.

|Investment                 |  | Country        |  | % of Shares Owned |  | Principal Activity                         |  | Total
Stockholders
Equity 
(in millions of 
pesos)
|-------------------------- |  | -------------- |  | ----------------- |  | ------------------------------------------ |  | ---------------------------------------------------
|                           |  |                |  |                   |  |                                            |  |                                                    
|Coelsa S.A.(1)             |  | Argentina      |  | 10.00%            |  | Clearing house                             |  | 1.5                                                
|Interbanking S.A.(1)       |  | Argentina      |  | 9.09%             |  | Information services for financial markets |  | 12.3                                               
|Argencontrol S.A.(2)       |  | Argentina      |  | 7.71%             |  | Agent Mandatary                            |  | 0.9                                                
|Sedesa S.A.(1)             |  | Argentina      |  | 8.12%             |  | Deposit Guarantee Fund                     |  | 11.8                                               
|Banelco S.A.(4)            |  | Argentina      |  | 11.43%            |  | Nationwide ATM network & credit card       |  |                                                    
|                           |  |                |  |                   |  | Administration                             |  | 48.4                                               
|Visa Argentina S.A.(3)     |  | Argentina      |  | 5.00%             |  | Credit card issuer                         |  | 23.2                                               
|AIG Latin American Fund(5) |  | Virgin Islands |  | 19.48%            |  | Investment Funds                           |  | 27.6                                               

|   
|---
|(1)
|(2)
|(3)
|(4)
|(5)

PROPERTY, PLANTS AND EQUIPMENT

Banco Francés is domiciled in Argentina and has its principal executive offices at Reconquista 199, C1003ABB Buenos Aires, Argentina. The principal executive offices, which we own, are
approximately 16,000 square meters in area.

At December 31, 2005, our branch network consisted of 230 branches, of which 114 were located in properties that we own and 116 were located in properties leased to us. The branches are located
throughout all of the 23 Argentine provinces as well as the City of Buenos Aires.

33

---



SELECTED STATISTICAL INFORMATION

The
    following information is included for analytical purposes and should be read
    in conjunction with the Consolidated Financial Statements as well asOperating
    and Financial Review and Prospects.
    This information has been prepared from our financial records, which are
    maintained in accordance with the regulations established by the Central
    Bank and do not reflect adjustments necessary to state the information in
    accordance with U.S. GAAP. See Note 17. to the Consolidated Financial Statements
    for a summary of the significant differences between Argentine Banking GAAP
    and U.S. GAAP.

The
    dollar-denominated assets and liabilities reflect balances held by Banco
    Francés and Banco Francés (Cayman) Ltd. (for fiscal years ended
    up to December 2003). Banco Francés (Cayman) Ltd operated exclusively
    in dollars, while Banco Francés operates both in dollars and in pesos.

Average Balance Sheets and Income
      From Interest-Earning Assets and Interest-Bearing Liabilities

For
    the fiscal year ended December 31, 2003, the average balances of interest-earning
    assets and interest-bearing liabilities, including the related interest earned
    or paid, was calculated on a monthly basis restated into February 2003 pesos
    in the case of the financial information of Banco Francés and its
    Argentine subsidiaries. Average balances have been separated between those
    denominated in pesos and in dollars.

For
    the fiscal years ended December 31, 2004 and 2005, the average balances of
    interest-earning assets and interest-bearing liabilities, including the related
    interest earned or paid, were calculated on a monthly basis in the case of
    the financial information of Banco Francés and its Argentine subsidiaries.
    Average balances have been separated between those denominated in pesos and
    in dollars.

The
    nominal interest rate is the amount of interest earned or paid during the
period divided by the related average balance.

The nominal average
rates for each fiscal year were converted to average real rates as follows:

| |                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                            
| | Where:                                                                                                                                                     
| |                                                                                                                                                            
| | Rp: real average rate for
                    Argentine peso-denominated (in the case of Banco Francés),
          assets and liabilities of Banco Francés,
| |                                                                                                                                                            
| | Rd: real average rates for
                    dollar-denominated assets and liabilities of Banco Francés
          and Banco Francés (Cayman) Ltd,        
| |                                                                                                                                                            
| | Np: nominal peso average
                    rate in peso-denominated (in the case of Banco Francés),
          assets and liabilities for the period;     
| |                                                                                                                                                            
| | Nd: nominal dollar average
                    rate in dollar-denominated assets and liabilities for the
          period;                                 
| |                                                                                                                                                            
| | D: devaluation rate of the Argentine
                    peso (in the case of Banco Francés), to the dollar
          for the period; and                  
| |                                                                                                                                                            
| | I: Argentine inflation rate (WPI) (in
          the case of Banco Francés).                                                                                

The formula for the average real rates for dollar-denominated assets and liabilities (Rd), when compared with the corresponding nominal rates, reflects the loss, or gain, in purchasing power of
the dollar caused by the difference between peso, devaluation and inflation in Argentina, for each period.

34

---



Included
    in interest earned are the net gains on our portfolio of Government securities
    and related differences in market quotations. We manage our trading activities
    in Government Securities as an integral part of our business. We do not,
    as a matter of practice, distinguish between interest income and gain or
    loss on our Government Securities portfolio. Non-accrual loans have been
    included in the related average loan calculation.

Negative
    interest rates in real terms occur in periods when the inflation rate in
    each country exceeds the nominal interest rate in pesos or exceeds the combination
    of the nominal interest rate on dollar-denominated assets or liabilities
    and the devaluation rate.

The
    following illustrates the calculation of the real interest rate in pesos
    for a dollar-denominated asset yielding a nominal annual interest rate of
    20.0% (Nd=0.20) using different combinations of devaluation and inflation
    rates. If devaluation is 15.0% per annum (D=0.15) and inflation runs at a
    rate of 25.0% per annum (I=0.25), the result is as follows:



which in this case means that, because
    inflation exceeds devaluation, the real interest rate in pesos is less than
    the nominal interest rate in dollars. In this example, if the devaluation
    rate had been 30.0% per annum, and the other assumptions had remained the
    same, then the real interest rate in pesos would have been 24.8% per annum,
    which is more than the nominal interest rate in dollars. If the inflation
    rate were to exceed 38.0% per annum, then the real interest rate in pesos
on this dollar denominated asset would become negative.

35

---



Average Balance Sheets, Interest Earned on Interest-Earning Assets and Interest Paid on Interest-Bearing Liabilities

The following tables show average balances, interest amounts and real rates for our interest-earning assets and interest-bearing liabilities for the fiscal years ended December 31, 2005, 2004 and
2003. Average balances do not include the adjustments to prior years income (loss) mentioned in Note 3.5.18. to the Consolidated Financial Statements. These adjustments do not have an impact on Interest-earning assets or Interest-bearing
liabilities.

|                               |  | Fiscal
                         Years ended December 31,             | 
|------------------------------ |  | -------------------------------------------------------------------- | 
|                               |  |                                                                      | 
|                               |  |                                                                      | 
|                               |  |                                                                      | 
|                               |  | Average
          balance(1)                                         | 
|                               |  |                                                                      | 
|                               |  | (in
                         thousands of pesos, except percentages) | 
|ASSETS                         |  |                                                                      | 
|Interest-earning assets        |  |                                                                      | 
|Government securities(3)       |  |                                                                      | 
|Pesos                          |  | 2,103,943                                                            | 
|Dollars                        |  | 542,603                                                              | 
|                               |  |                                                                      | 
|Total                          |  | 2,646,546                                                            | 
|                               |  |                                                                      | 
|Loans(4)                       |  |                                                                      | 
|Private Sector                 |  |                                                                      | 
|Pesos                          |  | 2,640,539                                                            | 
|Dollars                        |  | 695,066                                                              | 
|                               |  |                                                                      | 
|Total                          |  | 3,335,605                                                            | 
|                               |  |                                                                      | 
|Public Sector                  |  |                                                                      | 
|Pesos                          |  | 6,150,407                                                            | 
|Dollars                        |  | 49,099                                                               | 
|                               |  |                                                                      | 
|Total                          |  | 6,199,506                                                            | 
|                               |  |                                                                      | 
|Deposits with the Central Bank |  |                                                                      | 
|Pesos                          |  | 729,166                                                              | 
|Dollars                        |  | 431,764                                                              | 
|                               |  |                                                                      | 
|Total                          |  | 1,160,930                                                            | 
|                               |  |                                                                      | 
|Other assets                   |  |                                                                      | 
|Pesos                          |  | 1,164,771                                                            | 
|Dollars                        |  | 101,121                                                              | 
|                               |  |                                                                      | 
|Total                          |  | 1,265,892                                                            | 
|                               |  |                                                                      | 
|Total interest-earning assets  |  |                                                                      | 
|Pesos                          |  | 12,788,826                                                           | 
|Dollars                        |  | 1,819,653                                                            | 
|                               |  |                                                                      | 
|Total                          |  | 14,608,479                                                           | 
|                               |  |                                                                      | 

36

---



|                                        |  | Fiscal Years
                         ended December 31,             |  
|--------------------------------------- |  | -------------------------------------------------------------------- | -
|                                        |  |                                                                      |  
|                                        |  |                                                                      |  
|                                        |  |                                                                      |  
|                                        |  | Average
          balance(1)                                         |  
|                                        |  |                                                                      |  
|                                        |  | (in
                         thousands of pesos, except percentages) |  
|Non interest-earning assets             |  |                                                                      |  
|Cash and due from banks                 |  |                                                                      |  
|Pesos                                   |  | 323,807                                                              |  
|Dollars                                 |  | 315,285                                                              |  
|                                        |  |                                                                      |  
|Total                                   |  | 639,092                                                              |  
|                                        |  |                                                                      |  
|Investments in other                    |  |                                                                      |  
|companies                               |  |                                                                      |  
|Pesos                                   |  | 62,218                                                               |  
|Dollars                                 |  | 783                                                                  |  
|                                        |  |                                                                      |  
|Total                                   |  | 63,001                                                               |  
|                                        |  |                                                                      |  
|Property and equipment and              |  |                                                                      |  
|miscellaneous and intangible assets and |  |                                                                      |  
|items pending of allocation             |  |                                                                      |  
|Pesos                                   |  | 1,201,801                                                            |  
|                                        |  |                                                                      |  
|Total                                   |  | 1,201,801                                                            |  
|                                        |  |                                                                      |  
|Allowance for loan losses               |  |                                                                      |  
|Pesos                                   |  | (172,559                                                             | )
|Dollars                                 |  | (69,057                                                              | )
|                                        |  |                                                                      |  
|Total                                   |  | (241,616                                                             | )
|                                        |  |                                                                      |  
|Other assets                            |  |                                                                      |  
|Pesos                                   |  | 541,249                                                              |  
|Dollars                                 |  | 63,143                                                               |  
|                                        |  |                                                                      |  
|Total                                   |  | 604,392                                                              |  
|                                        |  |                                                                      |  
|Total non interest-earning              |  |                                                                      |  
|assets                                  |  |                                                                      |  
|Pesos                                   |  | 1,956,516                                                            |  
|Dollars                                 |  | 310,154                                                              |  
|                                        |  |                                                                      |  
|Total                                   |  | 2,266,670                                                            |  
|                                        |  |                                                                      |  
|TOTAL ASSETS                            |  |                                                                      |  
|Pesos                                   |  | 14,745,342                                                           |  
|Dollars                                 |  | 2,129,807                                                            |  
|                                        |  |                                                                      |  
|Total                                   |  | 16,875,149                                                           |  
|                                        |  |                                                                      |  

|   
|---
|(1)
|(2)
|(3)
|(4)

37

---



|                                             |  | Fiscal
          Years ended December 31,             | 
|-------------------------------------------- |  | ----------------------------------------------------- | 
|                                             |  |                                                       | 
|                                             |  |                                                       | 
|                                             |  |                                                       | 
|                                             |  | Average
balance(1)                                    | 
|                                             |  |                                                       | 
|                                             |  | (in
          thousands of pesos, except percentages) | 
|LIABILITIES                                  |  |                                                       | 
|Interest-bearing liabilities                 |  |                                                       | 
|Savings accounts                             |  |                                                       | 
|Pesos                                        |  | 2,189,515                                             | 
|Dollars                                      |  | 583,270                                               | 
|                                             |  |                                                       | 
|Total                                        |  | 2,772,785                                             | 
|                                             |  |                                                       | 
|Time deposits                                |  |                                                       | 
|Pesos                                        |  | 4,852,674                                             | 
|Dollars                                      |  | 379,025                                               | 
|                                             |  |                                                       | 
|Total                                        |  | 5,231,699                                             | 
|                                             |  |                                                       | 
|Borrowing from the Central Bank              |  |                                                       | 
|Pesos                                        |  | 1,247,803                                             | 
|Dollars                                      |  | 1,503                                                 | 
|                                             |  |                                                       | 
|Total                                        |  | 1,249,306                                             | 
|                                             |  |                                                       | 
|Borrowings from other financial
institutions |  |                                                       | 
|Pesos                                        |  | 38,267                                                | 
|Dollars                                      |  | 257,832                                               | 
|                                             |  |                                                       | 
|Total                                        |  | 296,099                                               | 
|                                             |  |                                                       | 
|Corporate Bonds                              |  |                                                       | 
|Pesos                                        |  |                                                      | 
|Dollars                                      |  | 317,516                                               | 
|                                             |  |                                                       | 
|Total                                        |  | 317,516                                               | 
|                                             |  |                                                       | 
|Other liabilities                            |  |                                                       | 
|Pesos                                        |  | 391,081                                               | 
|Dollars                                      |  | 37,018                                                | 
|                                             |  |                                                       | 
|Total                                        |  | 428,099                                               | 
|                                             |  |                                                       | 
|Total Interest-bearing liabilities           |  |                                                       | 
|Pesos                                        |  | 8,719,340                                             | 
|Dollars                                      |  | 1,576,164                                             | 
|                                             |  |                                                       | 
|Total                                        |  | 10,295,504                                            | 
|                                             |  |                                                       | 

38

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|                              |  | Fiscal
                         Years ended December 31,             | 
|----------------------------- |  | -------------------------------------------------------------------- | 
|                              |  |                                                                      | 
|                              |  |                                                                      | 
|                              |  |                                                                      | 
|                              |  | Average
          balance(1)                                         | 
|                              |  |                                                                      | 
|                              |  | (in
                         thousands of pesos, except percentages) | 
|Non-interest bearing          |  |                                                                      | 
|liabilities and Stockholders |  |                                                                      | 
|equity                        |  |                                                                      | 
|Demand accounts               |  |                                                                      | 
|Pesos                         |  | 1,636,017                                                            | 
|Dollars                       |  | 13,007                                                               | 
|                              |  |                                                                      | 
|Total                         |  | 1,649,024                                                            | 
|                              |  |                                                                      | 
|Other liabilities             |  |                                                                      | 
|Pesos                         |  | 2,789,191                                                            | 
|Dollars                       |  | 210,525                                                              | 
|                              |  |                                                                      | 
|Total                         |  | 2,999,716                                                            | 
|                              |  |                                                                      | 
|Minority Interest             |  |                                                                      | 
|Pesos                         |  | 182,288                                                              | 
|                              |  |                                                                      | 
|Total                         |  | 182,288                                                              | 
|                              |  |                                                                      | 
|Stockholders equity           |  |                                                                      | 
|Pesos                         |  | 1,748,617                                                            | 
|                              |  |                                                                      | 
|Total                         |  | 1,748,617                                                            | 
|                              |  |                                                                      | 
|Total noninterest bearing    |  |                                                                      | 
|liabilities and stockholders  |  |                                                                      | 
|equity                        |  |                                                                      | 
|Pesos                         |  | 6,356,113                                                            | 
|Dollars                       |  | 223,532                                                              | 
|                              |  |                                                                      | 
|Total                         |  | 6,579,645                                                            | 
|                              |  |                                                                      | 
|TOTAL LIABILITIES             |  |                                                                      | 
|AND STOCKHOLDERS              |  |                                                                      | 
|EQUITY                        |  |                                                                      | 
|Pesos                         |  | 15,075,453                                                           | 
|Dollars                       |  | 1,799,696                                                            | 
|                              |  |                                                                      | 
|Total                         |  | 16,875,149                                                           | 
|                              |  |                                                                      | 

|   
|---
|(1)
|(2)

39

---



The following tables show average balances, interest amounts and nominal rates for our interest-earning assets and interest-bearing liabilities for the fiscal years ended December 31, 2005, 2004
and 2003.

|                              |  | Fiscal
                         Years ended December 31,             | 
|----------------------------- |  | -------------------------------------------------------------------- | 
|                              |  |                                                                      | 
|                              |  |                                                                      | 
|                              |  |                                                                      | 
|                              |  | Average
          balance(1)                                         | 
|                              |  |                                                                      | 
|                              |  | (in
                         thousands of pesos, except percentages) | 
|ASSETS                        |  |                                                                      | 
|Interest-earning assets       |  |                                                                      | 
|Government securities(3)      |  |                                                                      | 
|Pesos                         |  | 2,103,943                                                            | 
|Dollars                       |  | 542,603                                                              | 
|                              |  |                                                                      | 
|Total                         |  | 2,646,546                                                            | 
|                              |  |                                                                      | 
|Loans(4)                      |  |                                                                      | 
|Private Sector                |  |                                                                      | 
|Pesos                         |  | 2,640,539                                                            | 
|Dollars                       |  | 695,066                                                              | 
|                              |  |                                                                      | 
|Total                         |  | 3,335,605                                                            | 
|                              |  |                                                                      | 
|Public Sector                 |  |                                                                      | 
|Pesos                         |  | 6,150,407                                                            | 
|Dollars                       |  | 49,099                                                               | 
|                              |  |                                                                      | 
|Total                         |  | 6,199,506                                                            | 
|                              |  |                                                                      | 
|Deposits with the Central     |  |                                                                      | 
|Bank                          |  |                                                                      | 
|Pesos                         |  | 729,166                                                              | 
|Dollars                       |  | 431,764                                                              | 
|                              |  |                                                                      | 
|Total                         |  | 1,160,930                                                            | 
|                              |  |                                                                      | 
|Other assets                  |  |                                                                      | 
|Pesos                         |  | 1,164,771                                                            | 
|Dollars                       |  | 101,121                                                              | 
|                              |  |                                                                      | 
|Total                         |  | 1,265,892                                                            | 
|                              |  |                                                                      | 
|Total interest-earning assets |  |                                                                      | 
|Pesos                         |  | 12,788,826                                                           | 
|Dollars                       |  | 1,819,653                                                            | 
|                              |  |                                                                      | 
|Total                         |  | 14,608,479                                                           | 
|                              |  |                                                                      | 

40

---



|                                        |  | Fiscal Years
          ended December 31,             |  
|--------------------------------------- |  | ----------------------------------------------------- | -
|                                        |  |                                                       |  
|                                        |  |                                                       |  
|                                        |  |                                                       |  
|                                        |  | Average
balance(1)                                    |  
|                                        |  |                                                       |  
|                                        |  | (in
          thousands of pesos, except percentages) |  
|Non interest-earning assets             |  |                                                       |  
|Cash and due from banks                 |  |                                                       |  
|Pesos                                   |  | 323,807                                               |  
|Dollars                                 |  | 315,285                                               |  
|                                        |  |                                                       |  
|Total                                   |  | 639,092                                               |  
|                                        |  |                                                       |  
|Investments in other                    |  |                                                       |  
|companies                               |  |                                                       |  
|Pesos                                   |  | 62,218                                                |  
|Dollars                                 |  | 783                                                   |  
|                                        |  |                                                       |  
|Total                                   |  | 63,001                                                |  
|                                        |  |                                                       |  
|Property and equipment and              |  |                                                       |  
|miscellaneous and intangible assets and |  |                                                       |  
|items pending of allocation             |  |                                                       |  
|Pesos                                   |  | 1,201,801                                             |  
|                                        |  |                                                       |  
|Total                                   |  | 1,201,801                                             |  
|                                        |  |                                                       |  
|Allowance for loan losses               |  |                                                       |  
|Pesos                                   |  | (172,559                                              | )
|Dollars                                 |  | (69,057                                               | )
|                                        |  |                                                       |  
|Total                                   |  | (241,616                                              | )
|                                        |  |                                                       |  
|Other assets                            |  |                                                       |  
|Pesos                                   |  | 541,249                                               |  
|Dollars                                 |  | 63,143                                                |  
|                                        |  |                                                       |  
|Total                                   |  | 604,392                                               |  
|                                        |  |                                                       |  
|Total non interest-earning              |  |                                                       |  
|assets                                  |  |                                                       |  
|Pesos                                   |  | 1,956,516                                             |  
|Dollars                                 |  | 310,154                                               |  
|                                        |  |                                                       |  
|Total                                   |  | 2,266,670                                             |  
|                                        |  |                                                       |  
|TOTAL ASSETS                            |  |                                                       |  
|Pesos                                   |  | 14,745,342                                            |  
|Dollars                                 |  | 2,129,807                                             |  
|                                        |  |                                                       |  
|Total                                   |  | 16,875,149                                            |  
|                                        |  |                                                       |  

|   
|---
|(1)
|(2)
|(3)
|(4)

41

---



|                                             |  | Fiscal
                         Years ended December 31,             | 
|-------------------------------------------- |  | -------------------------------------------------------------------- | 
|                                             |  |                                                                      | 
|                                             |  |                                                                      | 
|                                             |  |                                                                      | 
|                                             |  | Average
          balance(1)                                         | 
|                                             |  |                                                                      | 
|                                             |  | (in
                         thousands of pesos, except percentages) | 
|LIABILITIES                                  |  |                                                                      | 
|Interest-bearing liabilities                 |  |                                                                      | 
|Savings accounts                             |  |                                                                      | 
|Pesos                                        |  | 2,189,515                                                            | 
|Dollars                                      |  | 583,270                                                              | 
|                                             |  |                                                                      | 
|Total                                        |  | 2,772,785                                                            | 
|                                             |  |                                                                      | 
|Time deposits                                |  |                                                                      | 
|Pesos                                        |  | 4,852,674                                                            | 
|Dollars                                      |  | 379,025                                                              | 
|                                             |  |                                                                      | 
|Total                                        |  | 5,231,699                                                            | 
|                                             |  |                                                                      | 
|Borrowing from the Central Bank              |  |                                                                      | 
|                                             |  |                                                                      | 
|Pesos                                        |  | 1,247,803                                                            | 
|Dollars                                      |  | 1,503                                                                | 
|                                             |  |                                                                      | 
|Total                                        |  | 1,249,306                                                            | 
|                                             |  |                                                                      | 
|Borrowings from other financial
institutions |  |                                                                      | 
|Pesos                                        |  | 38,267                                                               | 
|Dollars                                      |  | 257,832                                                              | 
|                                             |  |                                                                      | 
|Total                                        |  | 296,099                                                              | 
|                                             |  |                                                                      | 
|Corporate bonds                              |  |                                                                      | 
|Pesos                                        |  |                                                                     | 
|Dollars                                      |  | 317,516                                                              | 
|                                             |  |                                                                      | 
|Total                                        |  | 317,516                                                              | 
|                                             |  |                                                                      | 
|Other liabilities                            |  |                                                                      | 
|Pesos                                        |  | 391,081                                                              | 
|Dollars                                      |  | 37,018                                                               | 
|                                             |  |                                                                      | 
|Total                                        |  | 428,099                                                              | 
|                                             |  |                                                                      | 
|Total Interest-bearing liabilities           |  |                                                                      | 
|Pesos                                        |  | 8,719,340                                                            | 
|Dollars                                      |  | 1,576,164                                                            | 
|                                             |  |                                                                      | 
|Total                                        |  | 10,295,504                                                           | 
|                                             |  |                                                                      | 

42

---



|                              |  | Fiscal
                         Years ended December 31,             | 
|----------------------------- |  | -------------------------------------------------------------------- | 
|                              |  |                                                                      | 
|                              |  |                                                                      | 
|                              |  |                                                                      | 
|                              |  | Average
          balance(1)                                         | 
|                              |  |                                                                      | 
|                              |  | (in
                         thousands of pesos, except percentages) | 
|Non interest-bearing          |  |                                                                      | 
|liabilities and Stockholders |  |                                                                      | 
|equity                        |  |                                                                      | 
|Demand deposits               |  |                                                                      | 
|Pesos                         |  | 1,636,017                                                            | 
|Dollars                       |  | 13,007                                                               | 
|                              |  |                                                                      | 
|Total                         |  | 1,649,024                                                            | 
|                              |  |                                                                      | 
|Other liabilities             |  |                                                                      | 
|Pesos                         |  | 2,789,191                                                            | 
|Dollars                       |  | 210,525                                                              | 
|                              |  |                                                                      | 
|Total                         |  | 2,999,716                                                            | 
|                              |  |                                                                      | 
|Minority Interest             |  |                                                                      | 
|Pesos                         |  | 182,288                                                              | 
|                              |  |                                                                      | 
|Total                         |  | 182,288                                                              | 
|                              |  |                                                                      | 
|Stockholders equity           |  |                                                                      | 
|Pesos                         |  | 1,748,617                                                            | 
|                              |  |                                                                      | 
|Total                         |  | 1,748,617                                                            | 
|                              |  |                                                                      | 
|Total non-interest-bearing    |  |                                                                      | 
|liabilities and stockholders  |  |                                                                      | 
|equity                        |  |                                                                      | 
|Pesos                         |  | 6,356,113                                                            | 
|Dollars                       |  | 223,532                                                              | 
|                              |  |                                                                      | 
|Total                         |  | 6,579,645                                                            | 
|                              |  |                                                                      | 
|TOTAL LIABILITIES             |  |                                                                      | 
|AND STOCKHOLDERS              |  |                                                                      | 
|EQUITY                        |  |                                                                      | 
|Pesos                         |  | 15,075,453                                                           | 
|Dollars                       |  | 1,799,696                                                            | 
|                              |  |                                                                      | 
|Total                         |  | 16,875,149                                                           | 
|                              |  |                                                                      | 

|   
|---
|(1)
|(2)

43

---



Changes in Interest Income and Interest Expense; Volume and Rate Analysis

The following tables allocate, by currency of denomination, changes in our interest income and interest expense between changes in the average volume of interest-earning assets and
interest-bearing liabilities and changes in their respective nominal interest rates for the fiscal year ended December 31, 2005 compared to the fiscal year ended December 31, 2004, for the fiscal year ended December 31, 2004 compared to the fiscal
year ended December 31, 2003 and for the fiscal year ended December 31, 2003 compared to the fiscal year ended December 31, 2002. Volume and rate variances have been calculated based on movements in average balances over the period and changes in
nominal interest rates on average interest-earning assets and average interest-bearing liabilities. The net change attributable to changes in both volume and rate has been allocated to volume. Trading and yield on government trading and investment
accounts results are included in the computation of interest income in all fiscal years.

|                          |  | December 2005/December
        2004Increase (Decrease) Due toChanges in |   | December 2004/December
        2003Increase (Decrease) Due toChanges in |         | December 2003/December
        2002Increase (Decrease) Due toChanges in
|------------------------- |  | ----------------------------------------------------------------------- | - | ----------------------------------------------------------------------- | ------- | -----------------------------------------------------------------------
|                          |  |                                                                         |   |                                                                         |         |                                                                        
|                          |  | Volume                                                                  |   |                                                                         | Rate    |                                                                        
|                          |  |                                                                         |   |                                                                         |         |                                                                        
|                          |  | (in thousands of
        pesos, except percentages)                     |  
|ASSETS                    |  |                                                                         |   |                                                                         |         |                                                                        
|Interest-earning assets   |  |                                                                         |   |                                                                         |         |                                                                        
|Government securities     |  |                                                                         |   |                                                                         |         |                                                                        
|Pesos                     |  | 102,995                                                                 |   |                                                                         | (65,428 | )                                                                      
|Dollars                   |  | (3,776                                                                  | ) |                                                                         | (23,264 | )                                                                      
|                          |  |                                                                         |   |                                                                         |         |                                                                        
|Total                     |  | 99,219                                                                  |   |                                                                         | (88,692 | )                                                                      
|                          |  |                                                                         |   |                                                                         |         |                                                                        
|Loans                     |  |                                                                         |   |                                                                         |         |                                                                        
|Private sector            |  |                                                                         |   |                                                                         |         |                                                                        
|Pesos                     |  | 110,544                                                                 |   |                                                                         | (36,310 | )                                                                      
|Dollars                   |  | 10,599                                                                  |   |                                                                         | 4       |                                                                        
|                          |  |                                                                         |   |                                                                         |         |                                                                        
|Total                     |  | 121,143                                                                 |   |                                                                         | (39,306 | )                                                                      
|                          |  |                                                                         |   |                                                                         |         |                                                                        
|Public sector             |  |                                                                         |   |                                                                         |         |                                                                        
|Pesos                     |  | (60,163                                                                 | ) |                                                                         | 403,920 |                                                                        
|Dollars                   |  |                                                                        |   |                                                                         |        |                                                                        
|                          |  |                                                                         |   |                                                                         |         |                                                                        
|Total                     |  | (60,163                                                                 | ) |                                                                         | 403,920 |                                                                        
|                          |  |                                                                         |   |                                                                         |         |                                                                        
|Deposits with the Central |  |                                                                         |   |                                                                         |         |                                                                        
|Bank                      |  |                                                                         |   |                                                                         |         |                                                                        
|Pesos                     |  | 14,829                                                                  |   |                                                                         | 1,962   |                                                                        
|Dollars                   |  | 7,927                                                                   |   |                                                                         |        |                                                                        
|                          |  |                                                                         |   |                                                                         |         |                                                                        
|Total                     |  | 22,756                                                                  |   |                                                                         | 1,962   |                                                                        
|                          |  |                                                                         |   |                                                                         |         |                                                                        
|Other assets              |  |                                                                         |   |                                                                         |         |                                                                        
|Pesos                     |  | 27,786                                                                  |   |                                                                         | 13,448  |                                                                        
|Dollars                   |  | (24,670                                                                 | ) |                                                                         | 23,426  |                                                                        
|                          |  |                                                                         |   |                                                                         |         |                                                                        
|Total                     |  | 3,116                                                                   |   |                                                                         | 36,874  |                                                                        
|                          |  |                                                                         |   |                                                                         |         |                                                                        
|Total interest-earning    |  |                                                                         |   |                                                                         |         |                                                                        
|assets                    |  |                                                                         |   |                                                                         |         |                                                                        
|Pesos                     |  | 195,991                                                                 |   |                                                                         | 317,592 |                                                                        
|Dollars                   |  | (9,920                                                                  | ) |                                                                         | 166     |                                                                        
|                          |  |                                                                         |   |                                                                         |         |                                                                        
|Total                     |  | 186,071                                                                 |   |                                                                         | 317,758 |                                                                        
|                          |  |                                                                         |   |                                                                         |         |                                                                        

44

---



|                             |  | December 2005/December
          2004Increase (Decrease) Due toChanges in |   | December 2004/December
          2003Increase (Decrease) Due toChanges in |         | December 2003/December
          2002Increase (Decrease) Due toChanges in
|---------------------------- |  | ------------------------------------------------------------------------- | - | ------------------------------------------------------------------------- | ------- | -------------------------------------------------------------------------
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|                             |  | Volume                                                                    |   |                                                                           | Rate    |                                                                          
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|                             |  | (in thousands
          of pesos, except percentages)                     |  
|LIABILITIES                  |  |                                                                           |   |                                                                           |         |                                                                          
|Interest-bearing liabilities |  |                                                                           |   |                                                                           |         |                                                                          
|Savings accounts             |  |                                                                           |   |                                                                           |         |                                                                          
|Pesos                        |  | 324                                                                       |   |                                                                           | (5,440  | )                                                                        
|Dollars                      |  | 142                                                                       |   |                                                                           | (69     | )                                                                        
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|Total                        |  | 466                                                                       |   |                                                                           | (5,509  | )                                                                        
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|Time deposits                |  |                                                                           |   |                                                                           |         |                                                                          
|Pesos                        |  | 60,297                                                                    |   |                                                                           | 95,764  |                                                                          
|Dollars                      |  | 2,059                                                                     |   |                                                                           | 260     |                                                                          
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|Total                        |  | 62,356                                                                    |   |                                                                           | 96,024  |                                                                          
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|Borrowings from the          |  |                                                                           |   |                                                                           |         |                                                                          
|Central Bank                 |  |                                                                           |   |                                                                           |         |                                                                          
|Pesos                        |  | (96,169                                                                   | ) |                                                                           | 97,454  |                                                                          
|Dollars                      |  | (2                                                                        | ) |                                                                           | (16     | )                                                                        
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|Total                        |  | (96,171                                                                   | ) |                                                                           | 97,438  |                                                                          
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|Borrowings from other        |  |                                                                           |   |                                                                           |         |                                                                          
|financial institutions       |  |                                                                           |   |                                                                           |         |                                                                          
|Pesos                        |  | (1,113                                                                    | ) |                                                                           | 869     |                                                                          
|Dollars                      |  | (10,953                                                                   | ) |                                                                           | 10,636  |                                                                          
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|Total                        |  | (12,066                                                                   | ) |                                                                           | 11,505  |                                                                          
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|Corporate Bonds              |  |                                                                           |   |                                                                           |         |                                                                          
|Pesos                        |  |                                                                          |   |                                                                           | (1,232  | )                                                                        
|Dollars                      |  | (4,382                                                                    | ) |                                                                           | 9,065   |                                                                          
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|Total                        |  | (4,382                                                                    | ) |                                                                           | 7,833   |                                                                          
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|Other liabilities            |  |                                                                           |   |                                                                           |         |                                                                          
|Pesos                        |  | (11,081                                                                   | ) |                                                                           | 17,177  |                                                                          
|Dollars                      |  | (125                                                                      | ) |                                                                           | (2,150  | )                                                                        
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|Total                        |  | (11,206                                                                   | ) |                                                                           | 15,027  |                                                                          
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|Total interest-bearing       |  |                                                                           |   |                                                                           |         |                                                                          
|liabilities                  |  |                                                                           |   |                                                                           |         |                                                                          
|Pesos                        |  | (47,742                                                                   | ) |                                                                           | 204,592 |                                                                          
|Dollars                      |  | (13,261                                                                   | ) |                                                                           | 17,726  |                                                                          
|                             |  |                                                                           |   |                                                                           |         |                                                                          
|Total                        |  | (61,003                                                                   | ) |                                                                           | 222,318 |                                                                          
|                             |  |                                                                           |   |                                                                           |         |                                                                          

45

---



The following table analyzes, by currency of denomination, our levels of average interest-earning assets and net interest income, and illustrates the comparative margins and spreads for each of
the fiscal years indicated.

|                                |  | Fiscal Years ended December
    31,             |  
|------------------------------- |  | ----------------------------------------------- | -
|                                |  |                                                 |  
|                                |  | 2005                                            |  
|                                |  |                                                 |  
|                                |  | (in thousands of
    pesos, except percentages) |  
|Average interest-earning assets |  |                                                 |  
|Pesos                           |  | 12,788,826                                      |  
|Dollars                         |  | 1,819,653                                       |  
|                                |  |                                                 |  
|Total                           |  | 14,608,479                                      |  
|                                |  |                                                 |  
|Net interest income(1)          |  |                                                 |  
|Pesos                           |  | 971,991                                         |  
|Dollars                         |  | 33,011                                          |  
|                                |  |                                                 |  
|Total                           |  | 1,005,002                                       |  
|                                |  |                                                 |  
|Net interest margin(2)          |  |                                                 |  
|Pesos                           |  | 7.60                                            | %
|Dollars                         |  | 1.81                                            | %
|                                |  |                                                 |  
|Weighted average rate           |  | 6.88                                            | %
|                                |  |                                                 |  
|Yield spread nominal basis(3)   |  |                                                 |  
|Pesos                           |  | 5.62                                            | %
|Dollars                         |  | 1.52                                            | %
|                                |  |                                                 |  
|Weighted average rate           |  | 5.22                                            | %
|                                |  |                                                 |  

|   
|---
|(1)
|(2)
|(3)

Return on Equity and Assets

The following table presents certain selected financial information and ratios of Banco Francés for the fiscal years indicated.

|                                                                     |  | Fiscal Years ended
          December 31,             |  
|-------------------------------------------------------------------- |  | ----------------------------------------------------- | -
|                                                                     |  |                                                       |  
|                                                                     |  | 2005                                                  |  
|                                                                     |  |                                                       |  
|                                                                     |  | (in thousands of
          pesos, except percentages) |  
|Net (loss) / income                                                  |  | 117,204                                               |  
|Average total assets(1)                                              |  | 16,012,710                                            |  
|Average stockholders equity(1)                                      |  | 1,742,945                                             |  
|Stockholders equity at the end of the fiscal year                   |  | 1,801,547                                             |  
|Net income as a percentage of:                                       |  |                                                       |  
|Average total assets                                                 |  | 0.73                                                  | %
|Average stockholders equity                                         |  | 6.72                                                  | %
|Declared cash dividends(4)                                           |  | 27,000                                                |  
|Dividend payout ratio(2)                                             |  | 23.04                                                 | %
|Average stockholders equity as a percentage of Average Total Assets |  | 10.88                                                 | %

|   
|---
|(1)
|(2)
|(3)
|(4)

46

---



We own, manage and trade a portfolio of securities issued by the Argentine and other governments and private issuers. The following table sets out our investments in Argentine and other
governments and private securities as of December 31, 2005, 2004 and 2003 by type and currency of denomination.

|                                                  |  | Fiscal Years ended
    December 31, |  
|------------------------------------------------- |  | ----------------------------------- | -
|                                                  |  |                                     |  
|                                                  |  | 2005                                |  
|                                                  |  |                                     |  
|                                                  |  | (in thousands of pesos)             |  
|Government Securities                             |  |                                     |  
|In Pesos:                                         |  |                                     |  
|Investment Accounts                               |  |                                     |  
|Argentine Treasury Bills                          |  |                                    |  
|Argentine Bonds                                   |  | 360,516                             |  
|Holding for Trading or Financial Transactions     |  |                                     |  
|Debt Consolidation BondsSocial Security (BOCON)  |  | 45,238                              |  
|Argentine Bonds                                   |  | 456,637                             |  
|Argentine Treasury Bills                          |  |                                    |  
|Other Debt Bonds                                  |  | 1,077                               |  
|Instruments issued by the Argentine Central Bank  |  |                                     |  
|Argentine Central Bank Bills (LEBAC)              |  | 1,160,312                           |  
|Argentine Central Bank Notes (NOBAC)              |  | 1,088,526                           |  
|Unlisted Government Securities                    |  |                                     |  
|Argentine Bonds (BOGAR 2018)                      |  |                                    |  
|Argentine Provinces Bonds                         |  |                                    |  
|Tax credit certificates due in 2003/2006          |  | 6                                   |  
|Other Debt Bonds                                  |  |                                    |  
|                                                  |  |                                     |  
|Total Government Securities in pesos              |  | 3,112,312                           |  
|                                                  |  |                                     |  
|In Foreign Currency:                              |  |                                     |  
|Investment Accounts                               |  |                                     |  
|Argentine Bonds                                   |  | 74,588                              |  
|Argentine External Bills (VEY4D)                  |  |                                    |  
|Other Debt Bonds                                  |  |                                    |  
|Holding for Trading or Financial Transactions     |  |                                     |  
|Argentine Bonds                                   |  | 151,682                             |  
|Medium Term Treasury Bonds (BONTE)                |  |                                    |  
|United States Treasury Notes                      |  |                                    |  
|Other Debt Bonds                                  |  | 10,203                              |  
|Other                                             |  |                                     |  
|Argentine Bonds (9%)                              |  |                                    |  
|                                                  |  |                                     |  
|Total Government Securities in foreign currency   |  | 236,473                             |  
|                                                  |  |                                     |  
|Total Government Securities                       |  | 3,348,785                           |  
|                                                  |  |                                     |  
|Investments in Listed Private Securities          |  |                                     |  
|Shares                                            |  | 28,284                              |  
|Corporate BondsListed                            |  | 87,541                              |  
|Mutual Funds                                      |  | 18,925                              |  
|Certificates of Participation in Financial Trusts |  | 21,099                              |  
|                                                  |  |                                     |  
|Total Private Securities                          |  | 155,849                             |  
|                                                  |  |                                     |  
|Subtotal Government and Private Securities        |  | 3,504,634                           |  
|Allowances                                        |  | (323                                | )
|                                                  |  |                                     |  
|Total Government and Private Securities           |  | 3,504,311                           |  
|                                                  |  |                                     |  
|Corporate BondsUnlisted                          |  | 78,228                              |  
|                                                  |  |                                     |  

47

---



The following table analyzes the remaining maturities of our investment portfolio as of December 31, 2005 in accordance with issuance terms.

|                                                     |  | Maturing                                       
|---------------------------------------------------- |  | -----------------------------------------------
|                                                     |  |                                                
|                                                     |  | Within 1 year                                  
|                                                     |  |                                                
|                                                     |  | Book value                                     
|                                                     |  |                                                
|                                                     |  | (in thousands of pesos, except
    percentages)
|Government Securities                                |  |                                                
|In Pesos:                                            |  |                                                
|Investment Accounts                                  |  |                                                
|Argentine Bonds(*)                                   |  | 2,580                                          
|Holding for Trading on Financial Transactions        |  |                                                
|Debt Consolidation Bonds-Social Security             |  |                                                
|(BOCON)(*)                                           |  | 10,342                                         
|Argentine Bonds(*)                                   |  | 20,716                                         
|Other Debt Bonds                                     |  | 58                                             
|Instruments issued by the Argentine Central Banks    |  |                                                
|Argentine Central Bank Bills (LEBAC)(*)              |  | 993,113                                        
|Argentine Central Bank Notes (NOBAC)(*)              |  | 36,215                                         
|Unlisted Government Securities                       |  |                                                
|Tax credit certificates due in 2003/2006             |  | 6                                              
|                                                     |  |                                                
|Total Government securities in pesos                 |  | 1,063,030                                      
|                                                     |  |                                                
|In Foreign Currency:                                 |  |                                                
|Investment Accounts                                  |  |                                                
|Argentine Bond(*)                                    |  | 22,960                                         
|Holding for Trading on Financial Transactions        |  |                                                
|Argentine Bonds (BODEN 2012)(*)                      |  | 7,033                                          
|Argentine Bonds (BODEN 2013)(*)                      |  | 83                                             
|Argentine Bonds (BODEN 2015)(*)                      |  | 5,629                                          
|Argentine Bonds (Others)                             |  |                                               
|Argentine Bonds (Discounts)(*)                       |  | 1,673                                          
|Other Debt Bonds                                     |  | 3,739                                          
|                                                     |  |                                                
|Total Government securities in foreign               |  |                                                
|currency                                             |  | 41,117                                         
|                                                     |  |                                                
|Total Government securities                          |  | 1,104,147                                      
|                                                     |  |                                                
|Certificates of Participation on Financial Trust     |  | 3,256                                          
|                                                     |  |                                                
|Corporate BondsListed                               |  | 26,948                                         
|                                                     |  |                                                
|Corporate Bonds Unlisted                            |  | 3,191                                          
|                                                     |  |                                                
|Weighted average yield (for the securities indicated |  |                                                
|with * )                                             |  | 5.76                                           

48

---



The following table analyzes our loan portfolio by types of loan at December 31, 2005, 2004 and 2003. Loans are stated before deduction of the allowance for loan losses.

|                                                    |  | Fiscal Years ended December
    31, |  
|--------------------------------------------------- |  | ----------------------------------- | -
|                                                    |  |                                     |  
|                                                    |  | 2005                                |  
|                                                    |  |                                     |  
|                                                    |  | (in thousands of pesos)             |  
|Principal                                           |  |                                     |  
|Advances(1)                                         |  | 733,514                             |  
|Notes discounted and purchased(2)                   |  | 560,863                             |  
|Secured with mortgages                              |  | 394,678                             |  
|Consumer loans(3)                                   |  | 962,281                             |  
|Financial loans(4)                                  |  | 142,307                             |  
|Loans to governmental sector(5)                     |  | 4,623,626                           |  
|Other loans                                         |  | 1,364,291                           |  
|Less: Unaccrued interest and unused collections(6)  |  | (154,763                            | )
|Less: Difference arising from purchase of portfolio |  | (89                                 | )
|Plus: Interest and exchange differences receivable  |  | 39,653                              |  
|Less: Allowance for loan losses                     |  | (184,885                            | )
|                                                    |  |                                     |  
|Total                                               |  | 8,481,476                           |  
|                                                    |  |                                     |  

|   
|---
|(1)
|(2)
|(3)
|(4)
|(5)
|(6)

Secured Loans

|                     |  | Fiscal Years ended December
    31,
|-------------------- |  | -----------------------------------
|                     |  |                                    
|                     |  | 2005                               
|                     |  |                                    
|                     |  | (in thousands of pesos)            
|Liquid guarantees    |  | 4,722,686                          
|Preferred guarantees |  | 483,234                            
|                     |  |                                    
|Total                |  | 5,205,920                          
|                     |  |                                    

Credit Policy

The credit policy of the Bank aims to maintain adequate controls on and consistent monitoring of credit risk.

Risk is conceived in a global sense. Our Risk Department is responsible for credit risk, market risk and operational risk.

Risk Management reports to an Assistant Executive Director, the Accounting and Risk Management Director, and is composed of five main areas: Admission and Follow-up, Credit Recoveries,
Operational Risk, Market Risk and Global and Strategic Risk Management.

Risk Management represents us as a member of the Risk Commission in the A.B.A., the Argentine Banking Association.

49

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During 2005, banks continued working on asset quality to reach normalized standards, which led to an improved profitability level and strengthen their asset and liability structure. In this
sense, BBVA Banco Francés strongly reduced the outstanding non-performing financing loans; from Ps.117 million at December 31, 2004 to Ps.95 million by the end of 2005. Similarly, the conservative provisioning policy implemented during the
previous fiscal years, which resulted in a stock of allowance for financing losses of Ps.134 million at December 31, 2004 with a 114.31% coverage ratio, allowed us to register during the 2005 fiscal year Ps.6 million, in spite of an increasing
growth trend in business. We ended fiscal year 2005 with a stock of Ps.140 million for provisions, and a 146.90% coverage ratio. This had a positive impact on our profitability.

Institutional, political and economical stability led to more flexible risk policies for the future. Liquidity improvements coupled with the stabilization of the rate of exchange, provided the
necessary basis to increase our activities as credit providers. We issued credit cards, granted short and middle term loans and personal and mortgage loans in the retail segment, while we financed working capital mainly to exporters, middle market
and corporations that produce for local and external demand.

The Admission and Follow-Up Department worked together with other areas of the Bank in the last restructuring of defaulted debts, a process which, albeit complex and slow, helped to normalize
the corporate portfolio.

The Credit Recoveries Department achieved a high rate of recovery of the charged-off portfolio. During fiscal year 2005, we recovered Ps.57 million, ranking BBVA Banco Francés as one of
the best banks in Argentina, in terms of recovery level, according to information published by the Central Bank.

The Operational Risk Department continued with the implementation risk management tools in compliance with its medium-term plan, reaching all their goals.

In the fiscal year 2005, the Market Risk unit increased its responsibility to include liquidity and structural risk matters.

Risk Management, following its medium term strategy, continued working on internal processes to reach the advanced model standards of the new Basle Accord (BIS II). In this sense, during 2005,
we created a new team exclusively dedicated to this strategic project. We moved towards the development and implementation of methodologies aimed at achieving the concept of risk related to profitability, within a more ambitious plan for 2006 and
2007 that involves its implementation by segments, products and customers.

50

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The table below analyzes our loan portfolio according to the borrowers main economic activity as of December 31, 2005, 2004 and 2003. Where appropriate, personal loans are allocated to
the economic activity of the borrower. Loans are stated before deduction of the allowance for loan losses.

|                                              |  | Fiscal year ended December 31,                 
|--------------------------------------------- |  | -----------------------------------------------
|                                              |  |                                                
|                                              |  | 2005                                           
|                                              |  |                                                
|                                              |  | LoanPortfolio                                  
|                                              |  |                                                
|                                              |  | (in thousands of pesos, except
    percentages)
|Agricultural and Livestock                    |  | 238,549                                        
|Beverage                                      |  | 136,097                                        
|Chemicals                                     |  |                                               
|Construction                                  |  | 79,900                                         
|Consumer                                      |  | 1,336,441                                      
|Electrical Machinery                          |  | 29,667                                         
|Electricity, Oil, Water and Sanitary Services |  |                                               
|Financial Sector                              |  | 142,307                                        
|Foodstuff                                     |  | 175,622                                        
|Furniture and Accessories                     |  |                                               
|Government Services                           |  | 4,623,626                                      
|Industrial Metals                             |  | 70,012                                         
|Leather and Fur Product                       |  | 52,580                                         
|Machinery and Tools                           |  |                                               
|Mining Products                               |  | 402,258                                        
|Oil and Carbon                                |  | 351,029                                        
|Others                                        |  | 509,333                                        
|Other Manufacturing                           |  | 76,672                                         
|Paper Products                                |  |                                               
|Printers, Publishers and Related Industries   |  | 3,527                                          
|Rubber Products                               |  | 42,366                                         
|Retail Trade                                  |  | 198,933                                        
|Services                                      |  | 256                                            
|Shoes, Apparel and Other Textile Products     |  | 7,660                                          
|Textile                                       |  | 13,336                                         
|Tobacco                                       |  | 11,927                                         
|Transportation Material                       |  | 77,613                                         
|Wholesale Trade                               |  | 78,267                                         
|Wood Products and Cork                        |  | 8,472                                          
|                                              |  |                                                
|Total                                         |  | 8,666,450                                      
|                                              |  |                                                

51

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The following table analyzes our loan portfolio as of December 31, 2005 by type and by the time remaining to maturity. Loans are stated before deduction of the allowance for loan losses. We
expect most loans to be repaid at maturity in cash or through refinancing at market terms.

|                                                  |  |                                                 |   |                | Maturing 
|------------------------------------------------- |  | ----------------------------------------------- | - | -------------- | ---------
|                                                  |  |                                                 |   |                |          
|                                                  |  | Amount atDecember 31,2005                       |   | Within3 months |          
|                                                  |  |                                                 |   |                |          
|                                                  |  | (in thousands of pesos, except
    percentages) |  
|To the non-financial public sector                |  | 4,623,626                                       |   |                | 90,601   
|To the financial sector                           |  | 142,307                                         |   |                | 46,159   
|To the non-financial private sector and residents |  |                                                 |   |                |          
|abroad                                            |  | 3,900,517                                       |   |                | 2,068,970
|Overdraft                                         |  | 738,636                                         |   |                | 641,421  
|With privileged guarantees                        |  | 459,044                                         |   |                | 25,924   
|Credit cards                                      |  | 546,906                                         |   |                | 546,906  
|Other                                             |  | 2,155,931                                       |   |                | 854,719  
|                                                  |  |                                                 |   |                |          
|Total                                             |  | 8,666,450                                       |   |                | 2,205,730
|                                                  |  |                                                 |   |                |          
|Percentage of total loan portfolio                |  | 100.00                                          | % |                | 25.45    
|                                                  |  |                                                 |   |                |          
|Foreign Country Outstanding Positions             |  |                                                 |   |                |          

The following table sets forth, as of December 31, 2005, 2004 and 2003, the aggregate amount of our cross-border outstanding exceeding 1% of total assets at each date. Cross-border outstanding
are defined as loans, interest-bearing deposits in other banks, and other monetary assets held by borrowers outside of Argentina (in the case of Banco Francés) and the Cayman Islands (in the case of Banco Francés (Cayman) Ltd.).
Cross-border outstanding of Banco Francés and Banco Francés (Cayman) Ltd are denominated exclusively in dollars, converted into pesos in the chart below.

|                                                                       |  | Fiscal Year Ended December 31,
|---------------------------------------------------------------------- |  | ------------------------------
|                                                                       |  |                               
|                                                                       |  | 2005                          
|                                                                       |  |                               
|                                                                       |  | (in thousands of pesos)       
|Outstanding of Banco Francés (Cayman) Ltd. to American borrowers       |  |                              
|Outstanding of Banco Francés (Cayman) Ltd. to Argentine borrowers      |  |                              
|                                                                       |  |                               
|Total                                                                  |  |                              
|                                                                       |  |                               
|                                                                       |  |                               
|Interest Rate Sensitivity of Outstanding Loans as
of December 31, 2005 |  |                               

The following table analyzes, by currency of denomination, the interest rate sensitivity of our loan portfolio as of December 31, 2005. Loans are stated before deduction of the allowance for
loan losses.

|                                   | Fiscal Year EndedDecember
31, 2005
|---------------------------------- | ----------------------------------
|                                   |                                   
|                                   | (in thousands of pesos)           
|Variable Rate                      |                                   
|Pesos  including adjustable loans | 4,759,779                         
|Foreign Currency                   | 136,046                           
|                                   |                                   
|                                   | 4,895,825                         
|                                   |                                   
|Fixed Rate                         |                                   
|Pesos                              | 3,160,891                         
|Foreign Currency                   | 516,262                           
|                                   |                                   
|                                   | 3,677,153                         
|                                   |                                   
|Non-performing(1)                  |                                   
|Pesos                              | 86,844                            
|Foreign Currency                   | 6,628                             
|                                   |                                   
|                                   | 93,472                            
|                                   |                                   
|Total                              | 8,666,450                         
|                                   |                                   

|   
|---
|(1)

52

---



The following table sets forth a breakdown of our fixed and variable rate loans which have a maturity of one year or more at December 31, 2005.

|                                                         |  | Interest Sensitivity in Outstanding Loans Maturing In More Than One Year
|-------------------------------------------------------- |  | ------------------------------------------------------------------------
|                                                         |  |                                                                         
|                                                         |  | Fixed Rate                                                              
|                                                         |  |                                                                         
|                                                         |  | (in thousands of pesos)                                                 
|To the non-financial public sector                       |  |                                                                        
|To the financial sector                                  |  | 10,974                                                                  
|To the non-financial private sector and residents abroad |  | 755,287                                                                 
|                                                         |  |                                                                         
|Total                                                    |  | 766,261                                                                 
|                                                         |  |                                                                         

Banco Francés classifies its borrowers in accordance with the regulations of the Central Bank, its primary bank regulator, and not in the manner established by the Securities and
Exchange Commission. As a result, Banco Francés does not keep records classifying loans as non-accrual, past due, restructured and potential problem loans, as those terms are defined by the
SEC.

The Central Bank established requirements, with respect to the classification of borrowers and the provisions for loan losses. The following is a summary of the Central Banks loan
classification requirements up to the date of this annual report.

The loan classification system is a bifurcated system, which requires the application of one set of criteria to classify loans in a banks consumer portfolio, and another set
of criteria to classify loans in a banks commercial portfolio.

The principal criterion applied to loans in the consumer portfolio is delinquency aging, irrespective of the fact that, prior to the granting of financing, debtors payment capacity should be
analyzed, evaluating:

- The allocation of their periodic income in relation to the totality of credit commitments assumed, or
- Through the use of the credit scoring method.

The principal criterion applied to loans in the commercial portfolio is the borrowers ability to pay, as measured by such borrowers future cash flow. We can opt to apply the
consumer loan classification criteria to commercial loans of up to Ps.500,000 (Ps.200,000 until April, 2005).

Under the regulations, consumer borrowers are classified as follows:

|1. | Normal if all payments on its loans are current or less than 31 days overdue and, in checking account overdrafts, less than 61 days overdue;                                           
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                          
|2. | Inadequate Servicing if payments with respect to principal, interest or otherwise, on any of its loans, are overdue for more than 31 and up to 90 days;                                
|   |                                                                                                                                                                                          
|3. | Deficient Servicing if payments on any of its loans are overdue for more than 90 and up to 180 days;                                                                                   
|   |                                                                                                                                                                                          
|4. | Difficult Recovery if payments on any of its loans are overdue for more than 180 days and up to one year or if it is subject to judicial proceedings for default on any of those loans;
|   |                                                                                                                                                                                          
|5. | Irrecoverable if payments on any of its loans are overdue for more than one year, if the borrower is in bankruptcy or liquidation proceedings or if it is insolvent; and               

53

---



|6. | Irrecoverable for Technical Decision if such borrower is:
|-- | -----------------------------------------------------------
|  
|   | (a)                                                        
|  
|   |                                                            
|   |                                                            
|   |                                                            
|   |                                                            
|  
|   | (b)                                                        
|  
|   |                                                            
|   |                                                            
|  
|   |                                                            
|   |                                                            
|   |                                                            
|   |                                                            
|   |                                                            
|   |                                                            
|   |                                                            
|  
|   |                                                            

Commercial borrowers
are classified as follows:

1.Normal if
there is no doubt that they can meet all of their financial obligations.

2.(a)Special Tracking-Under Observation if they are able to meet all of their financial obligations but are sensitive to changes that could compromise that ability absent timely
corrective measures.

2.(b)Special Tracking-Under Negotiation or with Refinancing Agreements if they are unable to comply with their obligations as agreed and formally state, at least 60 days before the
date on which the payment of their obligations is due, their intention to refinance such debts.

54

---



3. Problem if they have problems in meeting their ordinary financial obligations.

4. High Risk of Insolvency if they are highly unlikely to meet their financial obligations.

5. Irrecoverable if it is clear, at the time of the classification, that they will not meet their financial obligations to the classifying bank.

6. Irrecoverable for Technical Decision if such borrower meets the same criteria as described above for consumer borrowers.

In classifying a commercial borrower, banks must take into account other factors depending upon the classification category, such as the quality of the borrowers management, the
borrowers operating history, its present and projected financial situation, the adequacy of its financial reporting, the general risks associated with the market in which the borrower operates, the borrowers relative position within such
market, its payment history and ability to service debt.

In the case of legal proceedings, whether these proceedings are initiated by us or at the instance of the borrower, commercial borrowers must be classified according to pre-determined
circumstances, independently from the classification under which they would fall.

Under this classification system, all loans to a given borrower are grouped under the highest classification assigned to that borrower by the classifying bank. The classification of a given
borrower must not differ by more than one higher category from a lower classification given to that borrower by at least two other banks whose aggregate loans outstanding to that borrower represent 40% or more of the total loans outstanding to that
borrower in the Argentine financial system at the time of the classification.

Under the Central Bank regulation, banks must establish the following loan loss provisions based on the amount owed on the loan (including accrued but unpaid interest). As the table suggests,
the presence of preferred guarantees reduces the level of required provisions.

| |                                                                |  | Loan Loss Provision
          Required              | 
| | -------------------------------------------------------------- |  | --------------------------------------------------- | 
| |                                                                |  |                                                     | 
| |                                                                |  | With
           Preferred A 
          Guarantees | 
| |                                                                |  |                                                     | 
| | Normal                                                         |  | 1%                                                  | 
| | Inadequate Servicing / Special tracking - under observation(2) |  | 1%                                                  | 
| | Special tracking - under negotiation or with refinancing       |  |                                                     | 
| | agreements(2)                                                  |  | 1%                                                  | 
| | Deficient Servicing / Problem                                  |  | 1%                                                  | 
| | Difficult Recovery / High Risk of Insolvency                   |  | 1%                                                  | 
| | Irrecoverable                                                  |  | 1%                                                  | 
| | Irrecoverable for Technical Decision                           |  | 1%                                                  | 
| | Additional Loans(3)                                            |  | 1%                                                  | 

| |    
| | ---
| | (1)
| | (2)
| | (3)

| |  | Irrecoverable                              | 10 | %
| |  | ------------------------------------------ | -- | -
| |  | Difficult Recovery/High Risk of Insolvency | 20 | %
| |  | Deficient Servicing/Problem                | 30 | %
| |  | Inadequate Servicing/Potential Risk        | 40 | %

55

---



Furthermore, banks are required to establish provisions equal to 100% of any interest accrued on loans to borrowers classified as problem or lower or deficient servicing
 or lower. The Bank chooses to interrupt interest accrual accounting as permitted by the regulation.

The Central Bank regulations set requirements for the review by banks of their classification of borrowers. The classification given to borrowers whose outstanding loans represent at any given
time more than 5% of the lending banks risk weighted capital must be reviewed at least on a quarterly basis. The classification given to borrowers whose outstanding loans represent at any time between 1.00% and 5.00% of the lending banks
risk weighted capital, or are for an amount greater than Ps.1.0 million, must be reviewed at least every six months. The classification of all other types of borrowers must be reviewed at least once a year. In addition, banks must review the
classification given to a borrower in any of the following situations:

- Any time the Central Bank modifies the definition of its borrower classifications;
- Any time another bank downgrades a borrower whose loan standings are greater than 10% of the total loans outstanding in the Argentine financial system;
- Any time a credit rating agency downgrades by more than one category the rating assigned to bonds issued by such borrower; and
- If the Central Bank requires it as a result of an inspection.
- In case of discrepancy by more than one level between the rating given by the financial entity and those granted by at least another two financial entities or trusts in categories below that
assigned by it, and whose credits as a whole represent at least 20% and are below 40% of the total amount informed by all creditors, as per the latest information available at the Debtors Department of the financial system.

We are therefore fully compliant with the Central Bank requirements relating to borrower declassifications. We also fully complied with the provisioning requirements regarding all our normal
loans; that is, we had established the full 1.0% provision for normal loans, as well as the 100% provision required for loans with preferred guarantees being twenty-five months in arrears and classified as Difficult Recovery, High
Risk of Insolvency and Irrecoverable. In addition, we believe that we have adequate provisions to cover any known losses and any losses inherent in the loan portfolio. See Note 3.5.5. to the Consolidated Financial Statements.

The Bank stops accruing interest on a loan as soon as any scheduled payment is 90 days overdue, or earlier if the customer is classified as Problem, Deficient
Servicing, High Risk of Insolvency, Difficult Recovery, Irrecoverable or Irrecoverable for Technical Decision. In the case of installment loans, which include mortgage loans, 15 days after the
second consecutive installment is overdue, the loan is assigned to the Problem Loans Department and we cease to accrue interest. The Past Due Collections Department commences follow-up collection actions 5 days after the loan
is overdue. In the case of an overdraft, the account is assigned to the Problem Loans Department after 60 days past due, and in the case of a credit card loan, after the second minimum payment is missed.

56

---



The following table
    presents our loan portfolio, before the deduction for the allowance for loan
    losses, using the classification system of the Central Bank in effect at
    the end of each fiscal year:

|                                                       |  | Fiscal Years Ended
          December 31,             | 
|------------------------------------------------------ |  | ----------------------------------------------------- | 
|                                                       |  |                                                       | 
|                                                       |  | 2005                                                  | 
|                                                       |  |                                                       | 
|                                                       |  | (in thousands
          of pesos, except percentages) | 
|Loan Portfolio                                         |  |                                                       | 
|Categories                                             |  |                                                       | 
|Normal                                                 |  | 8,489,941                                             | 
|Inadequate servicing
        and Potential Risk        |  | 83,037                                                | 
|Deficient servicing and
        with Problem           |  | 11,829                                                | 
|Difficult recovery and
        high risk of insolvency |  | 68,160                                                | 
|Irrecoverable                                          |  | 13,362                                                | 
|Irrecoverable for Technical
        decision           |  | 121                                                   | 
|                                                       |  |                                                       | 
|Total                                                  |  | 8,666,450                                             | 
|                                                       |  |                                                       | 

- 5% reduction in the percentage of cancellation determined for the different categories (1 to 5), in order to reclassify a debtor to a higher rating.
- Private or Judicial Arrangements: 20% cancellation is required (previously 30%) for a debtor to be moved to Special tracking  under observation situation.
- Modification in the conditions for preferred A guarantees  Credit Securities (checks / promissory notes/invoices).
- Extension to 18 months of the term for considering mortgage guarantees (in force until June 30, 2004).
- Flexibility of percentages for the granting of additional credit.

In addition to this, Communication A 4467, extended until December 31, 2005 the effect of the following temporary provisions of the regulation on Classification of Debtors:

- It extended until June 30, 2006 the temporary provisions of Communication A 4060 which permits the reclassification of debtors restructured on the basis of their repayment
capacity as being in normal situation, with the agreement of the Board of Directors.
- It incorporated point 2.2.7 of the Allowances Exhibit, by which the situation of a debtor who has made a Refinancing with Capital Reduction is determined by difference between the allowances
net of debt and the amount of the referred reduction.

According to these points those agreements (of whatever kind) made between the debtor and the financial institution between June 30, 2002 and December 31, 2004, may be reclassified to
Normal with the approval of the financial institutions Board of Directors, provided that it can be demonstrated that the debtor has repayment capacity based on the projected cash flows under the new loan conditions, the company is
shown to be viable, and other Normal situation conditions.

For debts exceeding Ps.5 billion in the financial system, the Central Bank must be informed about the parameters considered for re-categorization, and an opinion of the external auditor of the
bank must be obtained.

It is also possible
to waive conditions considered for a change of category, depending on the category.

In the case of a refinancing with a rebate, the provision to be made should be equal to the difference between the amount of the previous provision and the rebate granted.

57

---



Thefollowingtablepresentsourconsumerandcommercialloanportfolioas ofDecember31, 2005, 2004, 2003, 2002 and 2001 under theclassificationsystem of the Central Bank, before thedeductionof theallowancefor loan losses:

|                                                  |  | Fiscal Years
          EndedDecember31,                  | 
|------------------------------------------------- |  | -------------------------------------------------------- | 
|                                                  |  |                                                          | 
|                                                  |  | 2005                                                     | 
|                                                  |  |                                                          | 
|                                                  |  | Total                                                    | 
|                                                  |  |                                                          | 
|                                                  |  | (in thousands
          of pesos, except percentages)(1) | 
|Normal (Consumer)                                 |  | 1,442,324                                                | 
|Normal (Commercial)                               |  | 7,047,617                                                | 
|                                                  |  |                                                          | 
|                                                  |  | 8,489,941                                                | 
|                                                  |  |                                                          | 
|Inadequate servicing (Consumer)                   |  | 8,518                                                    | 
|Special tracking (Commercial)                     |  | 74,519                                                   | 
|                                                  |  |                                                          | 
|                                                  |  | 83,037                                                   | 
|                                                  |  |                                                          | 
|Deficient servicing (Consumer)                    |  | 5,040                                                    | 
|Problem (Commercial)                              |  | 6,789                                                    | 
|                                                  |  |                                                          | 
|                                                  |  | 11,829                                                   | 
|                                                  |  |                                                          | 
|Difficult recovery (Consumer)                     |  | 6,395                                                    | 
|High risk of insolvency (Commercial)              |  | 61,765                                                   | 
|                                                  |  |                                                          | 
|                                                  |  | 68,160                                                   | 
|                                                  |  |                                                          | 
|Irrecoverable (Consumer)                          |  | 8,007                                                    | 
|Irrecoverable (Commercial)                        |  | 5,355                                                    | 
|                                                  |  |                                                          | 
|                                                  |  | 13,362                                                   | 
|                                                  |  |                                                          | 
|Irrecoverable for technical decision (Consumer)   |  | 121                                                      | 
|Irrecoverable for technical decision (Commercial) |  |                                                         | 
|                                                  |  |                                                          | 
|                                                  |  | 121                                                      | 
|                                                  |  |                                                          | 
|Total consumer loans                              |  | 1,470,405                                                | 
|Total commercial loans                            |  | 7,196,045                                                | 
|                                                  |  |                                                          | 
|Total                                             |  | 8,666,450                                                | 
|                                                  |  |                                                          | 

|   
|---
|(1)

58

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Applying the Central Banks loan classification criteria described above, the following table analyzes at each of the dates indicated below our gross non-performing and restructured loan
portfolio, and further breaks down the total into loans with preferred guarantees and those which are unsecured:

| |                           |  | Fiscal Years Ended
          December 31, | 
| | ------------------------- |  | ----------------------------------------- | 
| |                           |  |                                           | 
| |                           |  | 2005                                      | 
| |                           |  |                                           | 
| |                           |  | (in thousands of pesos)                   | 
| | Non-performing loans(1)   |  | 93,472                                    | 
| |                           |  |                                           | 
| | Total                     |  | 93,472                                    | 
| |                           |  |                                           | 
| | With preferred guarantees |  | 7,008                                     | 
| | Unsecured                 |  | 86,464                                    | 
| |                           |  |                                           | 
| | Total                     |  | 93,472                                    | 
| |                           |  |                                           | 

| |    
| | ---
| | (1)

59

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The table below sets forth
non-performingloans
byeconomicactivity
as of each of the  datesindicated:

|                                                  |  | Fiscal
          Years EndedDecember31,                           
|------------------------------------------------- |  | ------------------------------------------------------------------
|                                                  |  |                                                                   
|                                                  |  | 2005                                                              
|                                                  |  |                                                                   
|                                                  |  | Total                                                             
|                                                  |  |                                                                   
|                                                  |  | (in
                    thousands of pesos, except percentages)(1)
|Agricultural and Livestock                        |  | 20                                                                
|Beverage                                          |  | 1                                                                 
|Chemicals                                         |  |                                                                  
|Construction                                      |  | 1,778                                                             
|Consumer                                          |  | 14,423                                                            
|Electrical Machinery                              |  |                                                                  
|Electricity, Oil, Water and 
   Sanitary Services |  |                                                                  
|Financial Sector                                  |  |                                                                  
|Foodstuff                                         |  | 1                                                                 
|Furniture and Accessories                         |  |                                                                  
|Government Services                               |  |                                                                  
|Industrial Metals                                 |  |                                                                  
|Leather and Fur Products                          |  |                                                                  
|Machinery and Tools                               |  |                                                                  
|Mining Products                                   |  |                                                                  
|Oil and Carbon                                    |  | 221                                                               
|Others                                            |  | 61,268                                                            
|Other Manufacturing                               |  |                                                                  
|Paper Products                                    |  |                                                                  
|Printer, Publishers and 
   Related Industries    |  |                                                                  
|Rubber Products                                   |  |                                                                  
|Retail Trade                                      |  | 13,142                                                            
|Services                                          |  |                                                                  
|Shoes, Apparel and 
   Other Textile Products     |  |                                                                  
|Textile                                           |  |                                                                  
|Transportation Material                           |  | 1                                                                 
|Wholesale Trade                                   |  | 2,614                                                             
|Wood Products and Cork                            |  | 3                                                                 
|                                                  |  |                                                                   
|Total                                             |  | 93,472                                                            
|                                                  |  |                                                                   

|   
|---
|(1)

As ofDecember31, 2005, themajorityof our loanportfolio,and non-performingandrestructuredloanportfolio,consistedof loans toArgentineborrowers.At that date,approximatelyPs.27.7 million or 0.32% of our total loanportfolio,consistedof loans to foreignborrowers.

Gross interest income that would have beenrecordedon non-performingloans during the fiscal years endedDecember31, 2005, 2004, 2003, 2002 and 2001amountedto Ps.57.8million,Ps.59.4million,Ps.75.2million,Ps.99.5
million and Ps.157.4million,respectively.

60

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The table below sets forth the activity in the allowance for loan losses for the fiscal years ended December 31, 2005, 2004, 2003, 2002 and 2001. See Note 16.6. to the Consolidated Financial
Statements. In conformity with Central Bank requirements, we charge off non-performing loans when we believe that recovery is unlikely and in any event no later than seven months after a loan has been classified as irrecoverable without
preferred guarantees. We continue to try to collect all amounts past due, even if they have been charged off,
if we believe that the likelihood of collecting such amounts justifies the commitment of resources to do so.

|                                     |  | Fiscal Years Ended December
          31,                  
|------------------------------------ |  | -----------------------------------------------------------
|                                     |  |                                                            
|                                     |  | 2005                                                       
|                                     |  |                                                            
|                                     |  | (in thousands
                of pesos, except percentages)
|Balance at the beginning of the year |  | 202,693                                                    
|Provisions for loan losses           |  | 114,220                                                    
|Charge-offs(1)                       |  | (132,028                                                   
|Advances                             |  | (18,136                                                    
|Consumer                             |  | (39,081                                                    
|Notes discounted and purchased       |  | (17,418                                                    
|Other                                |  | (57,393                                                    
|                                     |  |                                                            
|Balance at the end of year           |  | 184,885                                                    
|                                     |  |                                                            
|Net charge-off / average loans       |  | 1.49                                                       

|   
|---
|(1)
|   

The following table allocates the allowance for loan losses and sets forth the percentage distribution by each category of loans in the total loan portfolio (principals only) for each of the
fiscal years ended December 31, 2005, 2004, 2003, 2002 and 2001.

|                       |  | Fiscal
          Years Ended December 31,   | 
|---------------------- |  | ------------------------------------------- | 
|                       |  |                                             | 
|                       |  | 2005                                        | 
|                       |  |                                             | 
|                       |  | Total                                       | 
|                       |  |                                             | 
|                       |  | (in thousands of pesos, except percentages) | 
|Advances               |  | 11,550                                      | 
|Notes discounted and   |  |                                             | 
|purchased              |  | 7,393                                       | 
|Secured with mortgages |  | 7,082                                       | 
|Chattel mortgage       |  | 760                                         | 
|Consumers loans        |  | 14,664                                      | 
|Financial Loans        |  | 1,691                                       | 
|Other loans to         |  |                                             | 
|governmental sector    |  | 49,324                                      | 
|Other                  |  | 92,421                                      | 
|                       |  |                                             | 
|Total                  |  | 184,885                                     | 
|                       |  |                                             | 

61

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The following table sets out the composition of each category of deposits that exceeded 10% of average total deposits in each of the fiscal years ended December 31, 2005, 2004, and
2003.

|                                      |  | Fiscal Year ended
          December 31, |   
|------------------------------------- |  | ---------------------------------------- | --
|                                      |  |                                          |   
|                                      |  | 2005                                     |   
|                                      |  |                                          |   
|                                      |  | (in thousands of pesos)                  |   
|Deposits in Domestic Bank ́s Offices   |  |                                          |   
|Non-interest-bearing Demand Deposits  |  |                                          |   
|Average                               |  |                                          |   
|Pesos                                 |  | 1,636,017                                |   
|Dollars                               |  | 13,007                                   |   
|                                      |  |                                          |   
|Total                                 |  | 1,649,024                                |   
|                                      |  |                                          |   
|Saving Accounts                       |  |                                          |   
|Average                               |  |                                          |   
|Pesos                                 |  | 2,189,515                                |   
|Dollars                               |  | 583,270                                  |   
|                                      |  |                                          |   
|Total                                 |  | 2,772,785                                |   
|                                      |  |                                          |   
|Average real rate                     |  |                                          |   
|Pesos                                 |  | (9.35                                    | )%
|Dollars                               |  | (7.76                                    | )%
|                                      |  |                                          |   
|Total                                 |  | (9.01                                    | )%
|                                      |  |                                          |   
|Time Deposits                         |  |                                          |   
|Average                               |  |                                          |   
|Pesos                                 |  | 4,852,674                                |   
|Dollars                               |  | 379,025                                  |   
|                                      |  |                                          |   
|Total                                 |  | 5,231,699                                |   
|                                      |  |                                          |   
|Average real rate                     |  |                                          |   
|Pesos                                 |  | (3.38                                    | )%
|Dollars                               |  | (6.79                                    | )%
|                                      |  |                                          |   
|Total                                 |  | (3.63                                    | )%
|                                      |  |                                          |   
|Deposits in Foreign Bank ́s Offices(1) |  |                                          |   
|Savings Accounts                      |  |                                          |   
|Average                               |  |                                          |   
|Pesos                                 |  |                                         |   
|Dollars                               |  |                                         |   
|                                      |  |                                          |   
|Total                                 |  |                                         |   
|                                      |  |                                          |   
|Average real rate                     |  |                                          |   
|Pesos                                 |  |                                         |   
|Dollars                               |  |                                         |   
|                                      |  |                                          |   
|Total                                 |  |                                         |   
|                                      |  |                                          |   
|Time Deposits                         |  |                                          |   
|Average                               |  |                                          |   
|Pesos                                 |  |                                         |   
|Dollars                               |  |                                         |   
|                                      |  |                                          |   
|Total                                 |  |                                         |   
|                                      |  |                                          |   
|Average real rate                     |  |                                          |   
|Pesos                                 |  |                                         |   
|Dollars                               |  |                                         |   
|                                      |  |                                          |   
|Total                                 |  |                                         |   
|                                      |  |                                          |   

|   
|---
|(1)

62

---



The following table sets forth information regarding the maturity of our deposits at December 31, 2005.

|                    |  |                         |  |                 |  | Maturing,                    |  |                               |  |                 | 
|------------------- |  | ----------------------- |  | --------------- |  | ---------------------------- |  | ----------------------------- |  | --------------- | 
|                    |  |                         |  |                 |  |                              |  |                               |  |                 | 
|                    |  | Total                   |  | Within
3
months |  | After 3 but
within 
6 months |  | After 6 but 
within 12
months |  | After 12 months | 
|                    |  |                         |  |                 |  |                              |  |                               |  |                 | 
|                    |  | (in thousands of pesos) | 
|Checking            |  | 1,886,905               |  | 1,886,905       |  |                             |  |                              |  |                | 
|Savings             |  | 3,000,508               |  | 3,000,508       |  |                             |  |                              |  |                | 
|Time deposits       |  | 5,034,949               |  | 3,574,046       |  | 784,288                      |  | 443,101                       |  | 233,514         | 
|Investment accounts |  | 212,013                 |  | 64,134          |  | 12,181                       |  | 20,269                        |  | 115,429         | 
|Other               |  | 478,711                 |  | 473,814         |  | 259                          |  | 4,624                         |  | 14              | 
|                    |  |                         |  |                 |  |                              |  |                               |  |                 | 
|Total               |  | 10,613,086              |  | 8,999,407       |  | 796,728                      |  | 467,994                       |  | 348,957         | 
|                    |  |                         |  |                 |  |                              |  |                               |  |                 | 

We are including in Other Deposits the CEDROS, as established by Decree No. 905/02 and Communication A 3656 of the Central Bank.

The following table sets forth information regarding the maturity of our time deposits and investment accounts in denominations of Ps.100,000 or more at December 31, 2005.

|                 |  |                                             |  |                           |  | Maturing,                                        |  |                                                   |  |                 | 
|---------------- |  | ------------------------------------------- |  | ------------------------- |  | ------------------------------------------------ |  | ------------------------------------------------- |  | --------------- | 
|                 |  |                                             |  |                           |  |                                                  |  |                                                   |  |                 | 
|                 |  | Total                                       |  | Within
          3 months |  | After 3 but
          within 
          6 months |  | After 6 but 
          within 12
          months |  | After 12 months | 
|                 |  |                                             |  |                           |  |                                                  |  |                                                   |  |                 | 
|                 |  | (in
                    thousands of pesos) | 
|Domestic offices |  | 3,259,081                                   |  | 2,048,643                 |  | 567,189                                          |  | 306,982                                           |  | 336,267         | 
|                 |  |                                             |  |                           |  |                                                  |  |                                                   |  |                 | 
|Total            |  | 3,259,081                                   |  | 2,048,643                 |  | 567,189                                          |  | 306,982                                           |  | 336,267         | 
|                 |  |                                             |  |                           |  |                                                  |  |                                                   |  |                 | 

Short-Term Borrowings

Our short-term borrowings totaled approximately Ps.0.9 billion, Ps.1.3 billion and Ps.2.3 billion for the fiscal years ended December 31, 2005, 2004 and 2003, respectively. The table below
shows those amounts at the end of each fiscal year.

|                                    |  | At December 31,                             | 
|----------------------------------- |  | ------------------------------------------- | 
|                                    |  |                                             | 
|                                    |  | 2005                                        | 
|                                    |  |                                             | 
|                                    |  | Amount                                      | 
|                                    |  |                                             | 
|                                    |  | (in thousands of pesos, except percentages) | 
|Total amount outstanding at the end |  |                                             | 
|of the reported period              |  | 867,039                                     | 
|Average during year                 |  | 1,224,225                                   | 
|Maximum month-end balance           |  | 2,049,672                                   | 

63

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THE ARGENTINE BANKING SYSTEM AND ITS REGULATORY FRAMEWORK

On December 31, 2005, Argentinas banking system consisted of 71 commercial banks, including 13 government-owned or government-related banks and 58 privately owned banks. The principal
regulators of financial institutions in Argentina are the Central Bank, theSuperintendencia de Entidades Financieras y Cambiarias(the Superintendency of Financial
institutions and Exchanges, referred to as the Superintendency) and, in the case of financial institutions that publicly offer their own securities in Argentina or otherwise engage in the offering or trading of third parties
 securities in Argentina, the CNV.

On December 31, 2005, the largest privately owned locally based commercial banks, in terms of total assets, were the following: Banco de Galicia y Buenos Aires S.A., Banco Francés, Banco
Río de la Plata S.A., Bank Boston N.A., and Banco Macro Bansud S.A. Some of these banks, including Banco Francés, have one or more significant foreign investors. According to information published by the Central Bank, at December 31,
2005, private financial institutions accounted for approximately 54.46% of deposits and approximately 67.76% of gross loans in the Argentine financial system. In addition, the ten largest private financial institutions accounted for 39.40% of all
deposits and 51.81% of all loans in the Argentine financial system. The largest foreign banks at such date were Bank Boston N.A. and HSBC Bank. Foreign banks compete under the same regulatory conditions as Argentine banks.

The principal state owned banks are: Banco Nación, Banco de la Provincia de Buenos Aires and Banco Ciudad de Buenos Aires. As of December 31, 2005, based on the available data of the
Central Bank, such entities accounted for approximately 39.24% of deposits and approximately 25.60% of gross loans in the Argentine banking system.

Under the provisions of the Argentine financial institutions Law No. 21,526 (the Financial Institutions Law), government owned or government-related banks and private banks have
comparable rights and obligations except that the former have the sole right and obligation to handle public revenues and promote regional development. Government-owned banks are required to meet the credit needs of public sector entities. Moreover,
the by-laws of some government-owned banks, which include federal, provincial and locally owned banks, require that the principalities which own them guarantee their commitments.

The Financial Institutions Law regulates banking activities in Argentina and places the supervision and control of the Argentine banking system in the hands of the Central Bank, an autonomous
institution. The Financial Institutions Law provides the Central Bank with broad access to the accounting systems, books, correspondence, documents and other papers of banking institutions. The Central Bank regulates the provision of credit and
supervises the liquidity and the general operation of the Argentine financial markets. The Central Bank enforces the Financial Institutions Law and authorizes banks to operate in Argentina. This law distinguishes between public and private financial
institutions. It was amended in February 1994 to eliminate the previous distinctions between locally owned and foreign owned private financial institutions. The Central Bank does not have the authority to supervise the liquidation of financial
institutions.

Moreover, the Central Bank establishes technical ratios to limit the levels of indebtedness, liquidity, maximum credit that may be granted per customer and foreign exchange assets
and liabilities positions, among others. The Central Bank carries out formal inspections from time to time of all banking institutions to monitor their compliance with legal and regulatory requirements. If a bank does not comply with the technical
ratios, it must explain such noncompliance to the Central Bank. There are specific regulations governing reinstatement plans and other measures arising from the failure of these plans. Furthermore, the Central Bank has the power to impose sanctions
for noncompliance, which vary from a strong reprimand to revocation of banking licenses.

The Central Bank requires banks to submit information to it on a daily, monthly, quarterly, semiannual and annual basis. These reports contain, among other important information, balance sheets
and income statements, information relating to reserve funds, use of deposits and indications on portfolio quality, including details on principal debtors and any loan-loss provisions established. The reports are designed to allow the Central Bank
to monitor the banks business practices. If the Central Banks rules are breached, various sanctions may be imposed depending on the gravity of the violation, ranging from calling attention to the infraction to the imposition of fines or
even the revocation of a banks operating license. Moreover, noncompliance with certain rules may result in the obligatory presentation to the Central Bank of specific capital adequacy or regularization plans. These plans must be approved by
the Central Bank for a bank to maintain its license.

64

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Additionally, the Central Bank can make on-site inspections in order to confirm the accuracy of information it receives from banks. Since September 1994, the Central Bank has supervised banks
on a consolidated basis.

During 1997, the Central Bank organized a supervision area of internal and external auditors of financial institutions that evaluate performance comprehensively in internal audit areas as well
as firms and professionals working as external audit of financial institutions. SeeInformation on the CompanyThe Argentine Banking System and its Regulatory FrameworkBASIC Systembelow.

On January 23, 2002 the Congress amended the charter of the Central Bank, eliminating certain restrictions on the Central Banks ability to provide financial assistance to financial
institutions with liquidity constraints. On February 4, 2002, by virtue of Decree No. 214/02 the Central Bank was also allowed until December 2003 to grant financial assistance to financial institutions whose solvency had been affected. Before these
measures, the Central Bank had limitations on its ability to make loans or otherwise extend financial assistance to banks with financial difficulties. Primarily, such assistance could not be granted, other than in exceptional circumstances, for more
than 30 days or if it would affect the Central Banks foreign currency reserves.

On September 5, 2003, Law No. 25,780 was enacted, which introduced amendments to the Financial Institutions Law Corporate and the Central Bank charter. Among the most significant of such
modifications we may mention the following:

- Except by express provision to the contrary established by-law, the Central Bank will not be affected by any regulations of a general character which may have been or shall have been enacted
with reference to Public Administration bodies and which may introduce limitations to the authority or powers of the Central Bank as set forth in its own Charter.
- The Central Bank is empowered to make temporary advances to the Government up to an amount equivalent to 12% of the monetary base, which for this purpose includes amounts constituted by the
monetary circulation plus the sight deposits of the financial institutions with the Central Bank, in current account or in special accounts. It may also grant advances up to an amount
not exceeding 10% of the cash resources obtained by the Government in the past twelve months. At no time may the amount granted as temporary advances, excluding those exclusively allocated to the payment of
obligations with the multilateral credit institutions, exceed 12% of the monetary base. All advances so granted must be reimbursed within the next twelve months; should any of these
advances remain unpaid after its due date, it will not be possible to use these powers again until all owed amounts shall have been reimbursed.
- The provisions of Decree No. 1131/01 are abrogated, and the validity of Articles 44, 46 paragraph (c), 47 and 48 of the Central Bank Charter, regarding the powers and authority of the
Superintendency of Financial and Foreign Exchange Entities, is reestablished in terms of the text approved as Article 1 of Law No. 24,144.
- A temporary regulation was introduced, applicable until December 2005, authorizing the Central Bank to: (i) provide assistance to financial institutions with liquidity and/or solvency
problems, including those undergoing restructuring by resolution of the Central Bank in terms of Article 35 bis of the Financial Institutions Law; and (ii) authorize the integration of the reserve requirements for financial institutions with financial assets other than cash, in the form of sight deposits with the Central Bank or in foreign currency accounts as per Art. 28 of the
Central Bank Charter.
- Decree No 1599/05, as amended by Law 23,928: Reserves exceeding 100% of the monetary base may be allocated to the payment of obligations assumed with international financial
entities.

According to Communication A 2227 dated July 15, 1994 and its amendments and correlative provisions, since 1994 the Argentine financial entities are subject to supervision in
consolidated form by the Central Bank (irrespective of the observance on an individual basis of the regulations applicable thereto). In other words, the financial statements and other information regarding them must reflect the transactions of their
head office as well as those of their branches in the country and abroad, and those of any significant local and foreign subsidiaries. Consequently, the requirements as to liquidity, solvency, minimum capital, risk concentration, and provisions for
loan losses, among others, must be calculated on a consolidated basis.

From the above-mentioned communication it is clear that the financial institutions must submit certain information to the Central Bank, including the following:

65

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- Financial statements and other quarterly and annual
reports reflecting in consolidated form the transactions of the financial entity,
its local and foreign branches, and its local and foreign significant subsidiaries (as
defined below); and
- Financial statements and other quarterly and annual reports reflecting in consolidated form the transactions of the financial entity, its local and foreign branches, its local and foreign
subsidiaries (as defined below), or entities or companies in the country and abroad where the financial entity has possession or control over more than 12.5% of the shares entitled to vote, in those cases determined by the Superintendency of Financial and Foreign Exchange Institutions, and those companies not subject to consolidated supervision which the financial entity may have
  chosen to include with the prior approval of the Superintendency of Financial and Foreign Exchange Institutions.

| |  |                                                                                                                                  
| |  | ---------------------------------------------------------------------------------------------------------------------------------
| |  | A subsidiary of a local financial entity is any local or foreign financial entity or company in any of the following positions:
|
| |  | (1)                                                                                                                              
|
| |  | (2)                                                                                                                              
|
| |  | (3)                                                                                                                              

The possession or control by the financial entity is considered indirect if exercised through another legal person, its controlling shareholders or directors appointed by such controlling
shareholders or persons linked to them, in control of more than 50% measured as a whole of the total votes of any instrument with voting rights in another entity or company. Also considered indirect is any other form of control or
interest where, in the opinion of the Superintendency of Financial and Foreign Exchange Institutions, and even if the shareholders interest does not exceed 50%, a situation of control, and therefore the subsidiary character of an entity or
company is configured or can be inferred from the evidence collected.

| |  | A significant subsidiary is any subsidiary:
| |  | ---------------------------------------------
|
| |  | (1)                                          
|
| |  | (2)                                          
|

The Central Bank requires that on an annual basis banks allocate a certain percentage of their net income, set by the Central Bank, to a legal reserve, which is currently set at 20%. This
reserve can only be used during periods in which a bank has incurred losses and has exhausted all unappropriated retained earnings and other reserves on profit. Banks may not pay dividends if the legal reserve has been impaired. However, as of April 24, 2006 the Central Bank has established by Communication A 4526 that whenever the Legal Reserve is used to absorb losses, profits could be distributed if the balance prior to absorption were greater than 20% of the corporate capital
plus capital adjustment, once this last amount is achieved.

The minimum cash system determines what portion of their deposits or obligations the entities must keep available, that is to say, not as part of their lending capacity. The minimum cash
requirement is calculated on the monthly average of daily balances for comprised obligations as recorded at the close of each calendar month, and must be observed separately for each currency of denomination of the comprised obligations. The minimum
cash must be made effective in any of the instruments indicated below:

|(i)  | Cash in the country;                                                                                                                                                         
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    
|(ii) | Current accounts in Pesos, special guarantee accounts and accounts in connection with the attention of pension benefits, of the financial entities with the Central Bank; and
|    

66

---



|(iii) | Minimum cash accounts of the financial entities
        with the Central Bank, denominated in U.S. dollars or other foreign currencies.
|----- | ---------------------------------------------------------------------------------------------------------------------------------------

The balances maintained on accounts opened with the Central Bank as eligible for minimum cash integration are remunerated up to those amounts corresponding to legal requirements, that is to
say, no remuneration applies for any excess reserves. Commencing on  April 2006 and according to Communication A 4509 of the Central Bank, the accounts mentioned above will only be remunerated up to the amounts set forth for term transactions.
Therefore, no interest will be acknowledged for the payment of the pertinent sight deposits and obligations.

By Communication A 4147 of May 28, 2005 and in effect as of June 1, 2004, the Central Bank set forth the application of different requirements for deposits in pesos as opposed to
foreign currencies. In addition, the requirements applicable to deposits in pesos were reduced and as of August 2004 an increase in requirements for deposits in foreign currency took effect.

The following table discloses the minimum cash requirements with respect to each type of account in force since December 2003:

67

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|Type of Account                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  | From
Dec-2003 |   | From
Jun-2004 |     | From
Aug-2004 |  | From
Jan-2005 |   | From
Jun-2005 |     | From
Jul-2005 |  | From
Aug-2005 |   | From
Dec-2005 |     | From
Feb-2006 |  | From
Apr-2006
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------- | - | ------------- | --- | ------------- |  | ------------- | - | ------------- | --- | ------------- |  | ------------- | - | ------------- | --- | ------------- |  | -------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |               |   |               |     |               |  |               |   |               |     |               |  |               |   |               |     |               |  |              
|Mutual Funds sight deposits (made accordingly CNV rules)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | 80            | % |               | 80  | %             |  | 100           | % |               | 100 | %             |  | 100           | % |               | 100 | %             |  | —            
|Current accounts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | 20            | % |               | 18  | %             |  | 18            | % |               | 16  | %             |  | 16            | % |               | 16  | %             |  | 16           
|Other demand deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  |               |   |               |     |               |  |               |   |               |     |               |  |               |   |               |     |               |  |              
|In pesos                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | 20            | % |               | 18  | %             |  | 18            | % |               | 16  | %             |  | 16            | % |               | 16  | %             |  | 16           
|In foreign currency                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 20            | % |               | 20  | %             |  | 30            | % |               | 30  | %             |  | 30            | % |               | 30  | %             |  | 30           
|Savings accounts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  |               |   |               |     |               |  |               |   |               |     |               |  |               |   |               |     |               |  |              
|In pesos                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | 20            | % |               | 18  | %             |  | 18            | % |               | 16  | %             |  | 16            | % |               | 16  | %             |  | 16           
|In foreign currency                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 20            | % |               | 20  | %             |  | 30            | % |               | 30  | %             |  | 30            | % |               | 30  | %             |  | 30           
|Current accounts of financial institutions(1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 100           | % |               | 100 | %             |  | 100           | % |               | 100 | %             |  | 100           | % |               | 100 | %             |  | 100          
|Unused balances from current-account advances effected                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | 20            | % |               | 18  | %             |  | 18            | % |               | 16  | %             |  | 16            | % |               | 16  | %             |  | 16           
|Fixed-term deposits (including CEDROS  and others with CER clauses), bonds for
 acceptancesincluding liabilities for the sale or assignment of credits to subjects other than
 financial institutions, reverse repurchases, bonds and stock-exchange reverse swaps, investments at
 constant term, with advanced cancellation or renewal option with the exception of fixed-term
 deposits in US dollars payable in pesos and of sight and fixed-term deposits made under court order
 with funds allocated in cases under court jurisdiction, and their immobilized balances by residual
 term(3): |  |               |   |               |     |               |  |               |   |               |     |               |  |               |   |               |     |               |  |              
|In pesos                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |               |   |               |     |               |  |               |   |               |     |               |  |               |   |               |     |               |  |              
|Up to 29 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 18            | % |               | 18  | %             |  | 18            | % |               | 16  | %             |  | 16            | % |               | 16  | %             |  | 16           
|From 30 to 59 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 14            | % |               | 14  | %             |  | 14            | % |               | 13  | %             |  | 13            | % |               | 13  | %             |  | 13           
|From 60 to 89 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 10            | % |               | 10  | %             |  | 10            | % |               | 9   | %             |  | 9             | % |               | 9   | %             |  | 9            
|From 90 to 179 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 5             | % |               | 5   | %             |  | 5             | % |               | 4   | %             |  | 4             | % |               | 4   | %             |  | 4            
|From 180 to 365 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | 3             | % |               | 3   | %             |  | 3             | % |               | 2   | %             |  | 2             | % |               | 2   | %             |  | 2            
|More than 365 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 0             | % |               | 0   | %             |  | 0             | % |               | 0   | %             |  | 0             | % |               | 0   | %             |  | 0            
|In foreign currency                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |               |   |               |     |               |  |               |   |               |     |               |  |               |   |               |     |               |  |              
|Up to 29 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 18            | % |               | 18  | %             |  | 35            | % |               | 35  | %             |  | 35            | % |               | 35  | %             |  | 35           
|From 30 to 59 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 14            | % |               | 14  | %             |  | 28            | % |               | 28  | %             |  | 28            | % |               | 28  | %             |  | 28           
|From 60 to 89 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 10            | % |               | 10  | %             |  | 20            | % |               | 20  | %             |  | 20            | % |               | 20  | %             |  | 20           
|From 90 to 179 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 5             | % |               | 5   | %             |  | 10            | % |               | 10  | %             |  | 10            | % |               | 10  | %             |  | 10           
|From 180 to 365 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | 3             | % |               | 3   | %             |  | 6             | % |               | 6   | %             |  | 6             | % |               | 6   | %             |  | 6            
|More than 365 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 0             | % |               | 0   | %             |  | 0             | % |               | 0   | %             |  | 0             | % |               | 0   | %             |  | 0            
|Bonds for foreign financial lines                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |  | 0             | % |               | 0   | %             |  | 0             | % |               | 0   | %             |  | 0             | % |               | 0   | %             |  | 0            
|Debt securities (including corporate bonds)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |               |   |               |     |               |  |               |   |               |     |               |  |               |   |               |     |               |  |              
|a) Debt issued as of January 1, 2002, including
                         those from restructured bonds, as per their residual term:                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  |               |   |               |     |               |  |               |   |               |     |               |  |               |   |               |     |               |  |              
|In pesos                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  |               |   |               |     |               |  |               |   |               |     |               |  |               |   |               |     |               |  |              
|Up to 29 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 18            | % |               | 18  | %             |  | 18            | % |               | 16  | %             |  | 16            | % |               | 16  | %             |  | 16           
|From 30 to 59                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | 14            | % |               | 14  | %             |  | 14            | % |               | 13  | %             |  | 13            | % |               | 13  | %             |  | 13           
|From 60 to 89 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 10            | % |               | 10  | %             |  | 10            | % |               | 9   | %             |  | 9             | % |               | 9   | %             |  | 9            
|From 90 to 179 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | 5             | % |               | 5   | %             |  | 5             | % |               | 4   | %             |  | 4             | % |               | 4   | %             |  | 4            
|From 180 to 365 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | 3             | % |               | 3   | %             |  | 3             | % |               | 2   | %             |  | 2             | % |               | 2   | %             |  | 2            
|More than 365 days                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | 0             | % |               | 0   | %             |  | 0             | % |               | 0   | %             |  | 0             | % |               | 0   | %             |  | 0            

68

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|Type of Account                                                                                                                                                                                  |  | From
      Dec-2003 |   | From
      Jun-2004 |     | From
      Aug-2004 |  | From
      Jan-2005 |     | From
      Jun-2005 |     | From
      Jul-2005 |  | From
      Aug-2005 |     | From
      Dec-2005 |     | From
      Feb-2006 |  | From
      Apr-2006
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------------- | - | ------------------- | --- | ------------------- |  | ------------------- | --- | ------------------- | --- | ------------------- |  | ------------------- | --- | ------------------- | --- | ------------------- |  | -------------------
|                                                                                                                                                                                                 |  |                     |   |                     |     |                     |  |                     |     |                     |     |                     |  |                     |     |                     |     |                     |  |                    
|In foreign currency                                                                                                                                                                              |  |                     |   |                     |     |                     |  |                     |     |                     |     |                     |  |                     |     |                     |     |                     |  |                    
|Up to 29 days                                                                                                                                                                                    |  | 18                  | % |                     | 18  | %                   |  | 35                  | %   |                     | 35  | %                   |  | 35                  | %   |                     | 35  | %                   |  | 35                 
|From 30 to 59                                                                                                                                                                                    |  | 14                  | % |                     | 14  | %                   |  | 28                  | %   |                     | 28  | %                   |  | 28                  | %   |                     | 28  | %                   |  | 28                 
|From 60 to 89 days                                                                                                                                                                               |  | 10                  | % |                     | 10  | %                   |  | 20                  | %   |                     | 20  | %                   |  | 20                  | %   |                     | 20  | %                   |  | 20                 
|From 90 to 179 days                                                                                                                                                                              |  | 5                   | % |                     | 5   | %                   |  | 10                  | %   |                     | 10  | %                   |  | 10                  | %   |                     | 10  | %                   |  | 10                 
|From 180 to 365 days                                                                                                                                                                             |  | 3                   | % |                     | 3   | %                   |  | 6                   | %   |                     | 6   | %                   |  | 6                   | %   |                     | 6   | %                   |  | 6                  
|More than 365 days                                                                                                                                                                               |  | 0                   | % |                     | 0   | %                   |  | 0                   | %   |                     | 0   | %                   |  | 0                   | %   |                     | 0   | %                   |  | 0                  
|b) Others                                                                                                                                                                                        |  | 0                   | % |                     | 0   | %                   |  | 0                   | %   |                     | 0   | %                   |  | 0                   | %   |                     | 0   | %                   |  | 0                  
|Fixed-term deposits in US dollars, payable in pesos                                                                                                                                              |  | 0                   | % |                     | —   | (2)                 |  | —                   | (2) |                     | —   | (2)                 |  | —                   | (2) |                     | —   | (2)                 |  | —                  
|Bonds with the Trust Fund for Assistance to Financial and Insurance Institutions                                                                                                                 |  | 0                   | % |                     | 0   | %                   |  | 0                   | %   |                     | 0   | %                   |  | 0                   | %   |                     | 0   | %                   |  | 0                  
|Sight and term deposits made by judicial order with funds originated in legal actions currently under course and their immobilized balances                                                      |  |                     |   |                     |     |                     |  |                     |     |                     |     |                     |  |                     |     |                     |     |                     |  |                    
|In pesos                                                                                                                                                                                         |  | 10                  | % |                     | 10  | %                   |  | 10                  | %   |                     | 10  | %                   |  | 10                  | %   |                     | 8   | %                   |  | 8                  
|In foreign currency                                                                                                                                                                              |  | 10                  | % |                     | 10  | %                   |  | 15                  | %   |                     | 15  | %                   |  | 15                  | %   |                     | 15  | %                   |  | 15                 
|Special accounts in US dollars for the deposit of guarantees required in futures and options
transactions at self-regulated markets subject to the control of the National Securities Commission |  |                     |   |                     |     |                     |  |                     |     |                     |     |                     |  |                     |     |                     |     |                     |  |                    
|                                                                                                                                                                                                 |  | 100                 | % |                     | 100 | %                   |  | 100                 | %   |                     | 100 | %                   |  | 100                 | %   |                     | 100 | %                   |  | 100                
|Special at-sight accounts in foreign currency                                                                                                                                                    |  | 100                 | % |                     | 100 | %                   |  | 100                 | %   |                     | 100 | %                   |  | 100                 | %   |                     | 100 | %                   |  | 100                
|Mutual Funds deposits (except mutual funds sight deposits made accordingly CNV rules)                                                                                                            |  |                     |   |                     |     |                     |  |                     |     |                     |     |                     |  |                     |     |                     |     |                     |  |                    
|In pesos                                                                                                                                                                                         |  |                     |   |                     |     |                     |  | 25                  | %   |                     | 25  | %                   |  | 25                  | %   |                     | 25  | %                   |  | 25                 
|In foreign currency                                                                                                                                                                              |  |                     |   |                     |     |                     |  | 40                  | %   |                     | 40  | %                   |  | 40                  | %   |                     | 40  | %                   |  | 40                 
|Special deposits related to funds revenues from abroad  Decree No. 616/05                                                                                                                       |  |                     |   |                     |     |                     |  |                     |     |                     |     |                     |  | 100                 | %   |                     | 100 | %                   |  | 100                
|Deposits and other demand obligations in pesos, whose return exceeds 50% BADLAR rate of private financial institutions average(5)                                                               |  |                     |   |                     |     |                     |  |                     |     |                     |     |                     |  |                     |     |                     |     |                     |  |                    

|   
|---
|(1)
|(2)
|(3)
|(4)
|(5)

69

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In addition to the above mentioned requirements, the following requirements must be observed:

- 100% reserve for any defect in the application of resources in foreign currency for the month in respect to which the calculation of
the minimum cash requirement is made. SeeInformation on the CompanyThe Argentine Banking System and its
Regulatory FrameworkLending Capacity Provided by Deposits in Foreign Currency.
- 100% reserve for any defect in the application of resources deriving from sight bonds in pesos for the month in respect of which the
calculation of the minimum cash requirement is made (effective as October 2003). SeeInformation on the CompanyThe Argentine Banking System and its Regulatory FrameworkMinimum Application of Resources Deriving from Sight and Term Obligations in
Pesos.

Minimum Application of Resources Deriving from Sight and Term Obligations in Pesos

Through Communication A 3598, the Central Bank created a system for the application of resources from sight bonds in pesos whose observance was optional
from March 2002 to May 2002 and mandatory after such date.

By Communication A 3824 the Central Bank incorporated certain obligations in pesos among the items included in the system.

Any defect in the application of resources under this system must be computed for an amount equivalent in order to calculate the minimum cash requirement in pesos
for the same period.

These resources must be used for the following purposes:

- Credits acquired, participation certificates or debt securities issued by financial trusts and amounts otherwise contributed for any
of the above destinations in transactions closed or to be closed as of November 26, 1998, on occasion of the restructuring of within the framework of the Argentine Law.
- Central Bank drafts in pesos adjustable by the reference stabilization coefficient, and acquired either in bidding transactions or
through secondary negotiation (until April 30, 2003).

These rules were in force until October 31, 2003 and have no effect as of November 1, 2003 as per Communication A 4032 issued by the Central Bank on
October 10 of the same year.

Lending Capacity Provided by Deposits in Foreign Currency

According to Communication A 3528 and complementary communications of the Central Bank, the lending capacity provided by deposits denominated in foreign
currency must be applied in the denomination of the currency of the deposits. This includes those deposits denominated in dollars and payable in pesos and applies to the following purposes:

| | (1) | Prefinancing or financing of exports, carried out directly or through agents, consignees or other proxies acting for the account and order of the owner of the goods. This comprises those
operations for the purpose of financing working capital and/or the acquisition of objects related to the production of goods to be exported, provided the flow of income in foreign currency deriving from such exports is sufficient to settle such
transactions.                                                                                                                                                                                       
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (2) | Financing transactions granted to goods, producers or processors, provided they have firm sale contracts for the goods to be produced for an exporter, with prices fixed in a foreign currency and
involving fungible goods with a regular and customary quotation in foreign currency which is widely known and easily accessed by the public in local or international markets.                                                                                                                                                                                                                                                                   
|
| | (3) | Financing transactions for producers of goods to be exported, either in the same condition or as part of other goods, by third-party purchasers, provided they have total pledges or guarantees in
foreign currency from such third parties.                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | (4) | Financing of investment projects, working capital and/or the acquisition of any kind of goods, including temporary importation of commodities, which may increase or be related to the production
of goods for exportation. Even though income from exporter companies does not totally derive from sales abroad, financing may only be allocated if the income flow deriving from exportation is sufficient. It comprises those transactions where
financing is granted via the Banks participation in syndicated loans, be they with local or foreign entities (in force as from 23 September 2005 as per Central Bank Communication A 4423).

70

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| | (5)  | Financing to clients from the commercial portfolio and of a commercial nature who receive treatment for their consumption or housing credits under the provisions of the Debtors
 Classification regulationsdestined for the importation of capital goods (BK according to the Common Nomenclator for the MERCOSUR attached as Annex I to Decree 690-02 and other complementary provisions) which will result in an
increase in the production of goods destined for domestic consumption. In order to grant such financing, the financial entities must verify that their clients have sufficient paying capacity considering at least two scenarios which contemplate
significant exchange rate variations within a term of up to one year and which, in either case, exceed the latest estimate available resulting from the Market Expectations Survey published by this institution (in force since 9 December
2005 under Central Bank Communication A 4453).
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (6)  | Debt securities or certificates of participation in financial trusts -including other collection rights specifically acknowledged in the trust agreement to be constituted within the framework
IDB Loan No 1192/OC-AR- whose assets under management are loans originated by financial entities under the terms described in points (1) through (3) above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | (7)  | Debt securities or certificates of participation in financial trusts, issued in foreign currency and with public offer authorized by the CNV, whose assets under management are documents
guaranteed by mutual guarantee companies or by provincial funds created for the same purpose, and admitted by the Central Bank, acquired by the trustee for the purpose of financing transactions under the terms and conditions described in points (1)
through (3) above.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| | (8)  | Financing transactions for purposes other than those mentioned in the preceding points, included in the credit program to which the IDB loan makes reference as mentioned in the fourth point
above, without exceeding 10% of the lending capacity.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | (9)  | Interfinancing loans (any interfinancing loans granted with such resources must be identified).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | (10) | Central Bank bills in U.S. dollars acquired by bidding or secondary negotiation (such application must be as a minimum equivalent to the amount of deposits in U.S. dollars payable in pesos) ceased to be effective on July 29, 2005 according to Communication "A" 4395 of the Banco Central.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

The lending capacity will result from the sum of all deposits in foreign currency plus all inter-financial loans received originated in the lending capacity for this
type of deposit, after deduction of the minimum reserve requirements applicable to deposits.

Any application defects must be subject to an equivalent increase in the minimum cash requirement, unless they correspond to the minimum application contemplated in
(10) above.

Those defects contemplated in (10) above must be subject to a charge equivalent to twice the annual interest rate on maturity resulting from the offers of bills in
pesos made by the Central Bank.

Effective as of May 15, 2004 and in terms of Communication A 4140, the Central Bank canceled the possibility of taking fixed-term deposits in U.S.
dollars payable in pesos as mentioned in the first paragraph, providing that the provisions contemplated for this type of deposits will remain valid until expiration of those in existence. As of December 31, 2004, the Bank does not maintain any deposits of this
type.

Reporting Requirements

On September 26, 1995, the Central Bank issued Communication A 2374, the latest restated text of Communication A 2879 and amendments. It
complements the regulations designed to limit the liquidity risk that financial institutions in Argentina assume. Under this regulation, beginning in April 1996, banks have to draw up monthly reports on cash flow, detailing the following:

- Contractual cash flow of assets and liabilities,
- Current cash flow to renew assets and liabilities,
- Cash flow designed to prevent illiquidity of the bank, and
- Cash flow designed to anticipate illiquidity in the financial system, both with and without compliance with minimum requirements.

71

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Financial institutions also have to adopt management and control policies to assure reasonable levels of liquidity to effectively manage the different potential
scenarios which may affect deposits and other financial obligations. These policies must establish procedures to evaluate and sufficiently anticipate the liquidity of the institutions in the context of the market so as to revise projections, adopt
measures to eliminate liquidity problems and obtain funds on market terms sufficient to maintain a prudent level of assets over the long term. These policies must also address:

- The concentration of assets and liabilities in particular clients;
- The general economic situation, probable trends and the impact on available credit; and
- The ability to obtain funds through the sale of public debt instruments and/or liquid assets.

Furthermore, Communication A 2374 requires financial institutions to establish a daily tracking of its liquidity and of the market, calling
for the participation of and coordination with the highest level management of the institution. Additionally, financial institutions must appoint one member of the board of directors to be informed at least weekly of the changes in the liquidity
condition of the institutions and the market which may require new strategies to protect the liquidity of the institution.

Communication A 3465 of the Central Bank dated February 7, 2002 suspended the implementation of this scheme from December 2001.

Limitations on Types of Business

Argentine commercial banks may conduct all activities and operations that are not specifically prohibited by law or by regulations of the Central Bank, banks are
permitted, among other things, to:

- Make loans in pesos and foreign currency,
- Receive deposits in pesos and foreign currency,
- Issue guarantees,
- Underwrite, place and broker equity and debt securities in the over-the-counter market, subject to the prior approval of the CNV,
- Conduct transactions in foreign currency,
- Act as fiduciary, and
- Issue credit cards.

According to the Financial Institutions Law, banks in Argentina are prohibited from investing in commercial, industrial or agricultural entities, or other entities
without the express authorization of the Central Bank. The Central Bank may then impose conditions and limits to guarantee the safety and soundness of the financial institutions.

These limitations include:

- The prohibition of a bank from pledging its shares,
- Restriction on incurring any liens upon its properties without prior approval from the Central Bank, and
- Limitations on transactions with directors or officers, including any company or person related to such directors or officers, on
terms more favorable than those normally provided to clients. SeeInformation on the CompanyThe Argentine Banking System and its Regulatory FrameworkLending and Investment LimitsRelated Personsbelow in this section.

Notwithstanding the foregoing, banks may own shares in other financial institutions with prior approval of the Central Bank and in public service companies if
necessary to obtain those services.

72

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Capital Adequacy Requirements

Basle Accord

In July 1988, the Basle Committee on Banking Regulations and Supervisory Practices (the Basle Committee), which includes the supervisory authorities of
twelve major industrial countries, adopted an international framework (the Basle Accord) for capital measurement and capital standards of banking institutions. The Basle Accord established a risk asset ratio as the principal measure of
capital adequacy. The framework provides:

| |  | Definitions for Tier I (core) capital (Tier I Capital) and Tier II (supplemental) capital (Tier II Capital),                                            
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | A system for weighing assets and off-balance sheet items according to credit risk (this weighted total referred to as the Basle Risk Weighted Assets), and
|
| |  | As of the end of 1992, a requirement that banks engaged in international operations maintain                                                                
|
| |  | (1)                                                                                                                                                         
| |  | (2)                                                                                                                                                         

These requirements, subject to certain transition rules which effectively reduce the amount of capital required in the first two years, went into effect at the end
of 1990. If the Basle Accord had been applied to us at December 31, 2005, our Total Capital would have been approximately 4.37 times the minimum required.

Central Bank Rules

Under the Financial Institutions Law, Argentine financial institutions must comply at all times with the minimum capital requirements described by the Central Bank.
In July 1991, the Central Bank amended its minimum capital adequacy rules to follow those recommended by the Basle Committee more closely. However, the Central Banks capital adequacy rules remain stricter than the Basle Committees
recommendations. Under rules issued by the Central Bank in July 1993 and its amendments, a commercial bank must maintain its Minimum Capital above a certain level.

Minimum Capital is equal to the sum of:

| |  | Basic Net Worth, which includes:                                                                                                                                                                                                                                                                                                            
| |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | (1)                                                                                                                                                                                                                                                                                                                                           
|
| |  | (2)                                                                                                                                                                                                                                                                                                                                           
|
| |  | (3)                                                                                                                                                                                                                                                                                                                                           
|
| |  | (4)                                                                                                                                                                                                                                                                                                                                           
|
| |  | (5)                                                                                                                                                                                                                                                                                                                                           
|
| |  | Minus:                                                                                                                                                                                                                                                                                                                                        
|
| |  | Balances favorable to the entity as registered in the assets, corresponding to the minimum presumed income tax for such portion as exceeds 10% of the Basic net equity without computing this item,
or 10% of the Bank ́s Computable Net Worth for the preceding period, whichever is smaller (Communication A 4296 dated February 11, 2005);
|
| |  | Plus:                                                                                                                                                                                                                                                                                                                                         
|
| |  | Complementary Net Worth, which includes 50% of loan loss provisions for loans to borrowers classified as Normal under Central Bank rules, certain subordinated debt and
certain unaudited net income, minus unaudited losses and certain items such as permanent investments in other financial institutions and intangible assets.       

73

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Minimum Capital must be, at least, the greater of:

- Minimum basic capital, and
- Minimum capital required for credit risk, which includes the minimum capital requirement for market risk, plus the minimum capital
requirement for interest rate risk.

The entities in operation as of October 31, 1995 must maintain as of January 1, 1999 a basic minimum capital of Ps.5 million if at December 31, 1998 they were
subject to basic requirements lower than Ps.5 million, or about Ps.8.9 million for the rest of the entities. As of January 1, 2003 the basic minimum capital is fixed at Ps.15 million for all commercial banks (excepting wholesale banks subject to a
basic minimum capital of Ps.10 million). Effective as of July 1, 2005, changes were made to the minimum capital requirements applicable to financial entities. Differential requirements were established for banks and other financial entities, mainly
based on the area where their head offices are located, in order to benefit those areas with smaller banking coverage according to Central Bank criteria, which now enjoy less stringent requirements as regards minimum basic capital. However, those
banks in operation as at June 30, 2005 will maintain their differentiated minimum capital if it does not exceed Ps.15 million. On the other hand, the above-mentioned differences in force with respect to wholesale banks have disappeared, all banking
institutions now being subject to the same minimum capital requirements. Those banks which act as custodians and/or registration agents of securities representing the investments of the retirement and pension funds and/or as registration agents for
registered mortgage letters must certify a minimum capital equal to or above the greater of Ps.50 million or the equivalent of 5% of the securities under custody (in the case of mortgage letters, considering the net value of any amortizations
effected).

By Communication A 3959 dated May 30, 2003 and other complementary communications, the Central Bank modified the regulations for calculating minimum
capital requirements for credit, interest rate and market risk. These modifications became fully effective as of January 2004. There follows a description of such regulations as are applicable as of the date of this report.

The minimum capital requirement for credit risk is the sum of:

| | (a) | 10% of the value of our fixed or illiquid assets; and                                                                                                                               
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) | 8% of the value of certain categories of financial or liquid assets, net of certain allowances and reserves, multiplied by a coefficient based on the perceived risk of such assets.
|
| | (c) | 8% of certain assets of the non-financial public sector as accounted for in investment accounts or under special valuation criteria determined by the Central Bank.                 

The sum of (a), (b) and (c) shall then be multiplied by a second coefficient ranging from 0.970 to 1.15 based on the rating that the Superintendency grants to the
bank based on the its net worth, asset quality, management, profitability and liquidity. To determine a banks risk-weighted assets, the Central Bank has assigned to each category of liquid asset a risk value based on the type of asset,
borrower, collateral or guarantee, if any. For example, consider the risk values assigned to the following assets:

- Cash, gold, public securities subject to minimum capital requirements for market risk, and debt instruments issued by the Central Bank
were assigned a 0% risk value;
- Correspondents accounts and other accounts at sight with banks of the country and abroad rated as investment grade and bonds issued by governments of member countries of the Organization of Economic Cooperation and Development (OECD), which are internationally rated AA
 or higher, were assigned a 20% risk value;
- Debt instruments issued by Argentine provinces, municipalities or other public sector agencies, which are not expressly guaranteed by
the national government were assigned a 100% risk value;
- Loans to the non-financial private sector with preferred guarantees in cash, gold or bonds on fixed-term deposit certificates issued
by the creditor entity itself and with automatic reimbursements for export transactions corresponding to multilateral and bilateral foreign trade agreements were assigned a 0% risk
value;
- Loans to the non-financial private sector with preferred guarantees granted by mutual guarantee companies registered with the Central
Bank, export credit insurance policies and documentary credits in use were assigned a 50% risk value;

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- Purchase money, home mortgage loans and automobile-backed loans were assigned a 50% risk value, provided they do not exceed 75% of
their appraisal value;
- The amount of a loan exceeding 75% of their appraisal value and most unsecured loans and debt instruments as well as holdings of
listed stock were assigned a 100% risk value; and
- Loans to the non-financial public sector not guaranteed by the national government were assigned a 100% risk value.

On July 25, 2003, the Central Bank introduced Communication A 3986, effective as of January 2004, which provided for the application of a correction
coefficient (ALFA 1), for the purpose of temporarily reducing the minimum capital requirement for credit risk with respect to assets in investment accounts and financing transactions granted to the non-financial public sector up to May 31, 2003, for
instruments received by the financial entities on account of the compensation implemented under articles 28 and 29 of Decree No. 905/02, for instruments issued by the Trust Fund for Provincial Development under Decree No. 1579/02, even if their
reception or incorporation takes place alter the established date, and for Discount Bonds and the corresponding GDP-related negotiable securities issued under the conditions of Annexes IV and V, respectively, of Decree No. 1735/04,
received in exchange for assets on record as May 31, 2003 as a consequence of the sovereign debt restructurings. Therefore, the application of this coefficient excludes those financing and refinancing transactions -including express or tacit
renewals or time extensions- to the national non-financial public sector granted as of June 1, 2003. Such coefficient was fixed in the following values:

Period
 
 ALFA1January / December 2004
 
 0.05January / December 2005
 
 0.15January / December 2006
 
 0.30January / December 2007
 
 0.50January / December 2008
 
 0.75From January 2009
 
 1.00


Finally, any excesses incurred for noncompliance with other technical regulations must be added to the credit risk requirement calculated as indicated in the
preceding paragraphs.

Minimum Capital Requirement for Market Risk:under Communication A 2435, dated May
16, 1996, as amended by Communication A 2461, dated August 30, 1996, the Central Bank implemented, effective from September 1, 1996, additional minimum capital requirements in relation to market risk associated with positions held by
financial institutions in local assets, foreign assets, foreign currency and gold, including derivatives bought or sold on such positions.

Local Assets include:

- Debt securities issued by the National Government, except for those held in investment accounts, and quotas in common investment funds
that invest in those securities; provided that, such securities and/or holdings are usually listed on a national securities exchange; and
- Shares of capital stock of Argentine companies included in the Argentine stock market index (or Merval Index) and quotas
in common investment funds that invest in those shares.

Foreign Assets are defined to include:

- Debt securities (i.e., positions held in debt securities issued by foreign companies, sovereign securities issued by foreign governments and quotas in common investment funds; provided that, such securities and/or holdings are usually listed on a national securities exchange); and
- Shares (i.e., positions held in shares of capital stock of foreign companies, quotas in common investment funds; provided that, such
securities, holdings and/or indexes are usually listed on a national securities exchange). If any of the assets mentioned in this clause are listed in different stock markets in diverse
foreign currencies, the listing price and foreign currency of the most representative stock market (in terms of the volume of transactions in the relevant asset) will be taken into consideration for purposes of these new capital requirements.

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The positions under consideration must be separated according to the currency of issue of each instrument, regardless of the issuers residence. In the cases of
assets expressed in foreign currency, the entity must consider the risk for two positions: that which corresponds to the assets and the position in foreign currency, the relevant capital requirement being determined on the basis of the latter. The
value of all positions will be expressed in pesos by using the reference exchange rate published by the Central Bank for the U.S. dollar, after application of the swap rate corresponding to the other currencies.

Foreign currency includes the net positions for each foreign currency, considering the totality of assets and liabilities in such currencies, and the
gold position. Those positions in foreign currency which, individually considered at the close of each day of transactions, are below the equivalent of Ps.300,000 may be excluded. This exclusion will not apply if the computable foreign currencies
considered as a whole at the close of each day exceeds Ps.1,500,000. Purchase or sale of contracts that give the right to buy or sell local assets and foreign assets, are taken into consideration in calculating minimum capital requirements. The
swaps and other derivatives on assets not affected by these regulations will be excluded from the portfolios that are subject to risk value calculation, provided such transactions are for the purpose of covering financial intermediation
risks.

The market risk-related capital requirements are determined by using specific risk methodologies and based on the financial institutions daily net positions in
any of the above-mentioned assets. These requirements follow, in general, standards established by the Basle Committee and the European Union.

Minimum Capital Requirement for Rate Risk:under Communication A 2793, dated October
27, 1998, the Central Bank has implemented certain modifications, to be made effective by March 1999, to the methodology financial institutions use to calculate minimum capital requirements. This regulation requires that additional items be
considered for purposes of determining minimum capital requirements, including risks associated with fluctuations in interest rates, credit quality and certain types of market risk. Communication A 3959 dated May 30, 2003 and effective
as of January 2004 included the calculation of risk for those transactions adjustable by CER and CVS (see Note 15.3. to the Consolidated Financial Statements). However, the following items are excluded from this Regulation:

- Securities and derivative instruments that are already subject to minimum capital requirements;
- Holdings in foreign currency not subject to minimum capital for market risk as they are below the minimum applicable limits;
- Bankers acceptances;
- Assets affected, covered by derivatives agreements made with foreign banks with international risk rate A or above, granted by international rating agencies accepted by the Central Bank; and
- Subordinated debt that is included in the calculation of Complementary Net Worth, and other assets deductible from minimum capital
integration;

Effective as of January 2004 according to the terms of Communication A 3986 dated July 25, 2003, the Central Bank determines the application of an
ALFA2 coefficient in order to temporarily reduce the requirement for interest rate risk. For these purposes, the following values are fixed:

Period
 
 ALFA2January / December 2004
 
 0.20January / December 2005
 
 0.40January / December 2006
 
 0.70From December 2007
 
 1.00


According to the Central Bank regulations on Minimum Capitals, the financial entities must adjust to such regulations on an individual and consolidated basis.

Although the Bank fully complied on a consolidated basis with the ratios for minimum capital and spreading of credit risk, it fell short from meeting those ratios on
the basis of the Banks individual financial statements. This shortfall did not constitute a violation of Central Bank requirements through December 31, 2003. On January 21, 2004 the Bank filed the reformulation of the Regularization and
Reorganization Plan, which would enable the Bank to fully meet the mentioned technical ratio. On March 18, 2004, the Central Bank deemed the reformulation of the plan to have been effected, which plan included the sale of Banco Francés
(Cayman) Ltd. to

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BBVA. As a consequence of such sale, consummated on March 18, 2004, the Banks ́ Computable Net Worth has been substantially increased on an individual level, thus enabling the Bank to meet
the minimum capital requirements set by the Central Bank both on an individual and consolidated basis since April 2004. The Shareholders Meeting of April 22, 2004, authorized a capital increase (see Note 1.2.1. to the Consolidated Financial
Statements). The subscription and payment for shares issued in connection with this capital increase were completed in November 2004, thus increasing the capital reserves beyond the level of compliance attained in April 2004 (see Note 15.5. to the
Consolidated Financial Statements).

If a financial institution does not comply with all these minimum capital requirements, it must submit a regulatory and redress plan to the Central Bank, which may
impose various penalties, including:

- Temporary limitation on the amount of deposits a bank may accept,
- Institutional restrictions as per expansion capacity and dividends distribution in cash,
- Revocation of the license of a bank to conduct foreign exchange transactions, and in some extreme cases;
- Revocation of the license of a bank to operate.

The following table presents, at December 31, 2005, both the calculation of our ratio of capital to risk-weighted assets computed under the Basle Accord and our
capital under the minimum capital rules of the Central Bank. In addition, see Note 16.14 to the Consolidated Financial Statements.

|                                                  |  | At December 31, 2005                       |  
|------------------------------------------------- |  | ------------------------------------------ | -
|                                                  |  |                                            |  
|                                                  |  | (in millions of Pesos,
except percentages) |  
|                                                  |  |                                            |  
|Basle Accord                                      |  |                                            |  
|Total Capital                                     |  | 1,698.7                                    |  
|Risk-weighted asset                               |  | 4,861.2                                    |  
|Ratio of total capital to risk-weighted assets(1) |  | 34.9                                       | %
|Required capital                                  |  | 388.9                                      |  
|Excess capital                                    |  | 1,309.8                                    |  
|                                                 
|Central Bank ́s Rules(2)                           |  |                                            |  
|Total Capital                                     |  | 1,889.9                                    |  
|Risk and Fixed weighted assets                    |  | 11,375.7                                   |  
|Ratio of total capital to risk-weighted assets(3) |  | 16.6                                       | %
|Required capital(4)                               |  | 868.5                                      |  
|Excess capital                                    |  | 1,021.4                                    |  

|   
|---
|(1)
|(2)
|(3)
|(4)

System Governing the Holding of Securities in Investment Accounts

By Communication A 2793, dated March 1, 1999, the Central Bank abolished the previous system of holdings in investment accounts available and for sale.

As a result of this change, the Central Bank established in paragraph 7 of Communication A 2859 the canceling of the balance of the account entitled
Unrealized Valuation Differences in Government Bonds Available for Sale as of February 28, 1999, which was charged against unappropriated earnings. This reclassification did not result in any change in our net worth as of that date.

The new system included in the Attachment to Communication A 2793 permits placing in investment accounts government and private debt
instruments which must comply with minimum capital requirements due to market risk (published on a monthly basis by the Central Bank).

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Holdings were recorded at their cost value and increased in accordance with their internal rate of return and the time elapsed since the beginning of the holding
period.

The positive differences between accounting value and market value increased by 20% at the end of each month constitute an item deductible from the minimum paid-in
capital.

As of March 1, 2000 and according to Communication A 3039 of the Central Bank, the holdings in investment accounts are recorded at cost value increased
by the interest resulting from the current coupon. The book value of the holdings on the last day of each month will be reduced by an amount resulting from the positive difference between the book value for the position of each security as of that
date and its market value increased by 20% (this treatment was suspended as of April 2001 until December 2001 as set forth by Communications A 3269 and A 3303 of the Central Bank). As a compensation, the obligation to deduct
from the computable net worth the difference between the book value of the securities and their market value increased by 20% was eliminated.

As of June 1, 2001, according to Communication A 3083 of the Central Bank, the criteria for the accounting registration of the holdings in investment
account was modified. Such holdings are registered at cost value exponentially increased up to each service due date according to its internal return rate and the time elapsed since their incorporation to such accounts.

In the case of holdings incorporated to investment accounts prior to June 1, 2001, the basis to be considered will be the value registered at May 31, 2001, resulting
from the use of the valuation procedures admitted so far and the internal return rate resulting as of May 31, 2001 for such securities. With respect to the treatment of valuation differences, the criteria set forth by Communication A
 3039 of the Central Bank is maintained.

By Communication A 3857 the Central Bank restricts the application of these provisions to those securities incorporated up to December 31, 2002, except
for those received by the financial institutions as part of the compensation implemented by articles 28 and 29 of Decree No. 905/02.

By Communication A 3785 the Central Bank added a new chapter to the regulations, applicable only to those bonds received under the compensation mechanism
implemented by the National Government in order to reimburse the entities for certain negative equity effects generated by the conversion into pesos at different exchange rates of those credits and obligations denominated in foreign currency, as
well as by the negative net position deriving from such conversion (Articles 28 and 29, Decree No. 905/02). Such bonds may be registered by the entities at their technical value.

By Communication A 4114 dated March 12, 2004, the Central Bank included in the above-mentioned chapter those bonds to be received by the financial
institutions as compensation for the transformation of loans adjustable by CER into loans adjustable by CVS (Chapter II of Law No. 25,796 and Annex II to Decree No. 117/04).

For so long as this procedure is in force the entities may only distribute cash dividends for such amount as the profits exceed the difference between the
above-mentioned accounting value for registration purposes and the quotation of the bonds after all legal and statutory appropriations have been made.

According to Communication A 4084 dated January 30, 2004, those securities in respect of which the Central Bank ceases to publish daily volatility
reports as they do not comply with the liquidity requirements for such purpose, must be excluded from this regulatory framework and considered as Without Quotation. Those securities excluded for this reason may not be reincorporated to
the system in the future.

CAMEL Quality Rating System

Under Law No. 24,144 the Central Bank established the CAMEL quality rating system which is based on weighting consistent and comparable criteria,
creditworthiness, compliance with the Financial Institutions Law, its administrative order and the general operating solvency of the entity. Each letter of the CAMEL system corresponds to the following areas of the operations of each bank that is
being rated: C represents capital, A represents assets, M represents management, E represents earnings and L represents liquidity. Each factor is evaluated and rated on a scale from 1 to 5,
1 being the highest rating an institution can receive. By combining the individual factors that are under evaluation, a combined index can be obtained which represents the final rating for the entity. The rating a bank receives from the CAMEL system
can be used by the Central Bank in making decisions such as determining the levels of minimum capital or the amount of contributions a bank is required to contribute to the insurance guarantee system. According to the letter presented by the Central
Bank on November 30, 2000, we were granted a quality rating of 1. Since then no new ratings have been published by the Central Bank.

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BASIC System

The Central Bank established a control system known as BASIC which requires that all financial institutions comply with a set of procedures affecting
their transactions. The system allows public access to a higher level of information and security as regards its placements in the Argentine banking system. Each letter in the name of the BASIC system identifies one of the following procedures:

B (Bonds). By decision of the Central Bank ́s board, banks were expected to issue bonds and other securities or obtain placements from international
top-rated banks for an equivalent of 2% of their deposits in pesos and foreign currency. The placement of such bonds would make it possible for depositors to know the perception of the market on the equity situation of each financial entity. The
Central Bank required that all financial institutions in Argentina should once a year perform at least one of the following actions:

- A debt issue in a country which must be a member of the OECD and at the same time have an AAA rating in respect of its
sovereign debt;
- An issue of capital stock approved by the relevant local authorities and according to which the shares could be freely traded either
in such local market or in the market of a member nation of the OECD with an AAA rating in respect of its sovereign debt;
- A debt issue to an Argentine financial entity which complies with the alternative procedure described in (a) above; or
- A transaction with a foreign bank with a minimum credit rating of A, by which the Argentine entity would receive deposits
or take loans from such foreign bank. The purpose of such requirement was to have the Argentine financial institutions exposed to scrutiny and analysis by third parties considered by the
Central Bank to be rating demanding in matters that have to do with credit analysis and quality control. The need to respond to the expectations of such third parties at the same time created for the Central Bank an additional source of quality control over the Argentine banking system. While this requirement remained in force the Bank complied with it at all times.

The requirement was abrogated by Communication A 3498 of the Central Bank, dated March 1, 2002.

A (Audit). The Central Bank requires a number of auditing procedures which include:

- The creation of a registry of auditors;
- The implementation of strict accounting procedures to be observed by auditors;
- The payment of a guarantee of compliance by such auditors so as to induce them to fully comply with the procedures; and
- The creation of a Central Bank division in charge of verifying the observance of the established regulations by the external auditors.

The purpose of this requirement is to ensure accurate representations by the financial institutions to both the Superintendency and to the public. It involves
verifying the figures presented by the entity as well as an in-depth investigation into whether such figures appropriately reflect the activities of the bank in question.

S (Supervision). The supervision by the monetary authorities is not replaced but is naturally complemented and reinforced by the information from market
sources and continues to be a basic element for controlling the financial system. In Argentina, as in most of the world, what is in use is a combination of remote analysis and inspections in the bank itself. The Argentine supervision system
specifically applies an internationally recommended classification system, known as the above-mentioned CAMEL system. In summary, this requirement implies that the Central Bank reserves the right to regularly inspect all financial institutions.

I (Information). This is a fundamental element in banking supervision and also as regards the control exercised by the market. It is clear that no
effective supervision is possible without relevant, reliable and timely information. No discipline can be imposed by the market on the banks and no control will be effective on the supervision if there is no access to such information. This is why
the Central Bank requires that the financial institutions disclose certain statistical information on a daily, weekly, monthly and quarterly basis.

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C (Calificación (Spanish for Rating)). The rating agencies play a quite significant role in banking supervision. The rating work pays attention to
the available guarantees and informs the less-specialized investors about the risk involved in the different securities. The investors information universe is thus expanded and this increases the efficiency of the information process. It would
be economically inefficient for the smaller investors to conduct their own collection and analysis of information for each alternative present in the marketplace. This is the reason that justifies the existence of the rating agencies which naturally
appear in the marketplace to fulfill such role. The Central Bank established a system that requires that a credit evaluation be regularly performed by internationally recognized rating agencies.

Foreign Currency Position

As at the date of this Prospectus, the maximum limit for the general foreign exchange position that must be maintained on a daily basis by the financial institutions
is the greater of :

- 15% of the equivalent in dollars of their Bank ́s Computable Net Worth (Responsabilidad Patrimonial Computable or RPC), as registered at the close of the month that is two months prior to the relevant month plus the amount that results from multiplying 5% of the total amount
transacted with clients in the purchase and sale of foreign currencies in the month that is two months prior to the relevant month, and 2% of the total deposits at sight and at term
locally constituted and payable in foreign bank notes (excluding deposits under custody), as registered at the close of the calendar month that is two months prior to the relevant month.
- And a minimum equivalent to US$1,500,000 (for the banks), these minimum limits may be increased according to the number of
establishments devoted to foreign exchange transactions and by operations with holdings in foreign currencies other than the dollar or the Euro and other permitted transactions. Banco
Francés maintains the limit indicated in the point above mentioned.

The maximum limit is reduced by 50% if the financial entity has a debt on record for rediscounts and/or advances with the Central Bank for an amount exceeding 50% of
the latest RPC recorded by the entity, excluding from the calculation of the indebtedness those transactions which the entity chose to refinance in terms of Communication A 3941 of the Central Bank.

To this effect, the Central Bank defined the general foreign-exchange position as the sum of the following items:

- Gold and foreign currency resources available in the country;
- Gold and foreign currency resources available abroad;
- Foreign public and private securities;
- Cash or future foreign-exchange purchases pending settlement;
- Cash or future public and private security purchases pending settlement;
- Cash or future foreign-exchange sales pending settlement;
- Cash or future public and private security sales pending settlement; and
- Foreign-exchange holdings in the form of deposits and investments at any term in banks from abroad and all kinds of liquid investments
abroad.

The general foreign exchange position does not include foreign assets of third parties under custody, balances with correspondents of third parties pending
settlement, purchases and sales of foreign currencies or securities at a term and direct investments abroad.

In addition to the limit described above, all funds from foreign currency deposits and received financial loans granted with funds from foreign currency deposits
must be applied mainly to the financing of foreign trade transactions, any defects of application being subject to an equivalent increase in the minimum cash requirements. SeeInformation on the CompanyThe Argentine Banking System and its Regulatory FrameworkLending Capacity Provided by Deposits in Foreign Currency.

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Effective May 1, 2003 in terms of Communication A 3889 of the Central Bank, the global net position in foreign currency may not exceed the following
limits:

| |  | Negative global net position (liabilities exceeding assets), 30% of the Computable Net Worth.
| |  | ---------------------------------------------------------------------------------------------
|
| |  | Positive global net position (assets exceeding liabilities), the least of the following:     
|
| |  | (1)                                                                                          
| |  | (2)                                                                                          

Own liquid resources means Computable Net Worth minus the immobilized assets and related persons assistance.

The global net position in foreign currency will include all assets and liabilities from financial intermediation in foreign currency and securities in foreign
currency (deriving from cash and term transactions) including those contracts for derivatives linked to these concepts, those items which must be included in the General Foreign Exchange Position, all deposits in such currency in accounts opened
with the Central Bank, as well as the gold position, the fixed-term deposits in U.S. dollars payable in pesos and any Central Bank bills in U.S. dollars.

In addition to the above and irrespective of the observance of the limit set forth above, the net global position, considering the balances of accounts at sight and
other related assets and liabilities whichever the nature or character of the transaction- (be they assets negotiated on a customary basis or by significant volumes in institutionalized markets) realized or expiring within the following 180
days, may not exceed the percentage applied over the computable equity responsibility of the month prior to that duly indicated by the Central Bank. In order to determine the above position, only the securities registered on the accounts at market
value will be considered, irrespective of the calculation in the position of the services whose expiration falls within 180 days (Communication A 4135 of May 5, 2004).

By Communication A 4350 dated May 12, 2005, the Central Bank suspended as of May 1, 2005 the limits for the global positive net position and the
additional short-term limit (transactions due within 180 days), as mentioned above.

Any excess above the limits will be subject to a charge amounting to the greatest of twice the annual rate at due date for Central Bank drafts in dollars or twice
the LIBOR rate at thirty days for transactions in such currency.

For financial information regarding our net foreign currency exposure, see Note 25. to the Consolidated Financial Statements.

Fixed assets and other items

The Central Bank determines that the fixed assets and other items maintained by the financial entities must not exceed 100% of the entitys RPC.

Such fixed assets and other items include the following:

- Shares of local companies.
- Various credits (including the net balance favorable to Entity corresponding to the Minimum Presumed Income Tax. Undeductible of Basic
Net Worth).
- Property for own use.
- Various property items.
- Organization and development expenses.
- Goodwill.
- Financing transactions for related clients.

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Excluded from the above concepts are those assets deductible for calculating the entitys RPC and assets affected as guarantee for certain operations mainly
related to swaps and derivatives, as well as the financing transactions with certain related companies provided the participation in the company exceeds 50% of the corporate capital and 50% of the votes.

The calculation of such assets will be effected according to the balances at the close of each month, net of depreciations, accumulated amortizations and bad debt
risk allowances (except for 50% of the allowance on the portfolio in normal situation). It will also be possible to deduct certain liabilities related to the assets being calculated. In the case of financing transactions with related clients, the
calculation will be based on the balance at the close of each month or the largest assistance provided to each client during the period in question.

Any excesses in this relationship generate an equivalent increase of the minimum capitals. Furthermore, any entity incurring noncompliance violations in three
consecutive or four non-consecutive months within a period of twelve consecutive months must submit a regularization and normalization program.

Lending and Investment Limits

Lending and Investment Limits (except for the public sector)

Central Bank rules limit the amount of credit, including guarantees, that a commercial bank may extend to, and the amount of equity that it may invest in, any entity
at any time. These limits are based on the Banks Computable Net Worth on the last day of the immediately preceding month.

According to Central Bank rules, a commercial bank may not extend credit to a single non-related client and its affiliates, or invest in that clients equity,
in an amount in excess of 15% of the banks Computable Net Worth. However, we may extend additional credit to that client up to 25% of the Banks Computable Net Worth if that additional credit is secured with certain senior preferred
liquid assets, including public or private debt securities. Total loans or other extensions of credit that a commercial bank may grant to any particular borrower and its affiliates are also limited based on the borrowers net worth. Total loans
or other extensions of credit to any particular borrower and its affiliates may not exceed, in general, 100% of such borrowers net worth, but such limit may be increased to 300% of the borrowers net worth if such amount does not exceed
2.5% of the Banks Computable Net Worth.

Effective October 1, 1995, the Central Bank requires that extensions of credit in any form in excess of 2.5% of a Banks Computable Net Worth must be approved
by the relevant branch manager, regional manager, relevant first line administrative officer of the credit area, general manager and credit committee, if any, of the bank, as well as by its board of directors, administration council or similar
corporate body.

In addition, an equity investment of a commercial bank in another company that does not provide services that are complementary to the services provided by a
commercial bank may not exceed 12.5% of the stockholders equity of such company. Temporarily until December 31, 2003, the entities may receive up to 20% as protection for their credits.

Related Persons

The Central Bank limits the amount a bank can lend to, and the amount of equity it may invest in, a Related Person. A Related Person is defined to
include:

- Any individual or entity controlling a bank, controlled by a bank or affiliated with a bank, as defined by the Central Bank;
- Any entity that both controls the bank and has common directors to the extent such directors, voting together, will constitute a
simple majority of the boards of directors of the bank and such entity; or
- In certain exceptional cases, any individual or entity whom the Central Bank has determined to be in a position to adversely affect
the financial condition of the bank.

Control is defined as:

- Holding or controlling, directly or indirectly, 25% of the voting stock of the controlled person;
- Having held 50% or more of the voting stock of the controlled person at the time of the last election of that entitys board of directors;

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- Any type of equity holding which creates the ability to vote or direct the vote so as to prevail on any issue considered at the controlled persons general shareholders meeting or meeting of the board of directors, or
- When a person is determined by the Board of Directors of the Central Bank to be exercising any influence, directly or indirectly, on
the management or policies of the bank.

Under Communication A 3129 dated June 30, 2000, applied from July 1, 2000, the Central Bank established that the total amount of the operations of a
company or related person may not exceed the following percentages of their computable equity as of the last day of the month prior to that to which they apply :

| |  | Local financial institutions whose transactions are subject to consolidation by lender or borrower in terms of regulations on consolidated supervision and which are rated CAMEL 1 or
2:                                                                                   
| |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | (1)                                                                                                                                                                                                                                                                        
| |  | (2)                                                                                                                                                                                                                                                                        
|
| |  | Local financial institution not included in the above definition: 10%.                                                                                                                                                                                                     
|
| |  | Local companies consolidated by the financial entity in terms of the consolidated supervision regulations issued by the Central Bank and whose only object is one of the activities defined as
complementary services of the financial activity that are mentioned below:
|
| |  | (1)                                                                                                                                                                                                                                                                        
| |  | (2)                                                                                                                                                                                                                                                                        
| |  | (3)                                                                                                                                                                                                                                                                        
| |  | (4)                                                                                                                                                                                                                                                                        
|
| |  |                                                                                                                                                                                                                                                                            
| |  |                                                                                                                                                                                                                                                                            
|
| |  | All other domestic companies not complying with the provisions mentioned in the preceding point: 10%.                                                                                                                                                                      
|
| |  | Foreign financial institutions rated as Investment Grade: 10%; all others, 5% for non-guaranteed operations and up to 10% for guaranteed operations, without exceeding 10% as a
whole.                                                                                   
|
| |  | All other transactions: 5% without guarantee and up to 10% with guarantees, without exceeding 10% as a whole.                                                                                                                                                              

General Limit: the total amount of the operations of all companies or persons related to the financial institutions referred under the second, fourth, fifth and
sixth points above, may not in any case exceed 20% of the companys Computable Net Worth as of the last day of the preceding month.

As of November 13, 1998, pursuant to Communication A 2800 of the Central Bank, as supplemented, all lending to or investing in Related Persons is
prohibited for any financial institution having a CAMEL rating of 4 or 5 (Communication A 2829 of the Central Bank) except in the following situations and under the following limitations:

- Foreign financial institutions which are subsidiaries of the domestic institution subject to oversight on a consolidated basis (Communication A 2829 of the Central Bank),
- Foreign banks controlling domestic financial institutions or their branches or subsidiaries abroad (Communication A 2829 of the Central Bank),
- When the Related Person is a company that has been fully consolidated by the bank and is exclusively involved in certain activities
that are complementary to financial intermediation, the foregoing traditional restrictions with regard to investments and loans apply; and

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- When the Related Person is a company expressly referred to as an exempted entity under Article 28 of Law No. 21,726 and only in
respect of equity investments, the bank is limited to lending to such Related Person and only in accordance with the previous traditional restrictions.

In addition, with respect to Related Persons who are natural persons, the total amount of loans to those Related Persons cannot exceed Ps.50,000, which must be used
exclusively for personal or family purposes. Failure to properly observe these requirements can result in an increase of the minimum capital requirements for credit risk in an amount equal to 100% of the daily excess amounts over the requirements
beginning on the month when the excess amounts are not corrected and continuing while the excess amounts remain. In the case of information registered out of term, this increase will be applied beginning on the month when the information is
registered and for as long as the default exists. Moreover, once the default has been corrected, the increase will be applied for a number of months equal to the period during which the Central Bank was not informed. For repeated defaults the
increase can reach up to 130% of the excess amount.

At December 31, 2005 the aggregate of computable loans, other extensions of credit and equity investments by Banco Francés on a consolidated basis to Related
Persons amounted to Ps.131.6 million, or 6.98% of Banco Francés Computable Net Worth.

Non-financial Public Sector:

By Communication A 3911 dated March 28, 2003 and effective as of April 2003, the Central Bank set forth new limits for those transactions carried out
with the non-financial public sector.

The non-financial public sector includes inter alia:

- National Government;
- Provincial Governments;
- City of Buenos Aires;
- Municipal Governments; and
- Central administration, ministries, departments and their decentralized and autonomous entities and other official bodies.

Communication "A" 4527 dated  April 25, 2006 determines that the Central Bank may apply to public sector companies governed by Law 20,705 the general treatment
foreseen for the non-financial private sector in connection with all effects of the rules applicable on the subject, provided they comply with the following requirements:

- In order to develop their activities, they should not require resources from the state budget be it the  national, municipal, provincial or belonging to the Autonomous City of Buenos Aires- for such concepts as transfers, capital contributions  excepting those corresponding to their
incorporation  or reimbursable financial assistance- destined for covering expenses and/or investments made in the course of their normal and customary businesses, with the only
exception of those which may have been contemplated in the 2001 and 2003 budgets.
- Technical and professional independence of their managerial bodies for implementing corporate policies.
- To trade their goods and/or services at market prices.
- To possess fixed assets; the use of which in the activity is not subject to any condition from their shareholders.
- No distribution of dividends among their shareholders.

Compliance with all the above conditions must have been verified uninterruptedly during at least the ten years immediately preceding the date of the granting of
financial assistance.

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All financing granted to the above entities may not exceed the following limits with respect to the entitys equity liability as at the last day of the
preceding month:

- Transactions of the national public sector: 50%, this limit include loans granted to governments from other jurisdictions guaranteed
by their participation in the federal tax collection system.
- Total of transactions granted to each provincial jurisdiction and the city of Buenos Aires (excluding those comprised in the previous
paragraph which must be guaranteed by the collection of local taxes or by pledge or implemented under leasing agreements: 10%. This limit includes financing operations granted to municipal
governments in the respective jurisdiction and guaranteed by their participation in the collection of provincial taxes.
- Total of transactions with each municipal jurisdiction, which must be guaranteed by the collection of local taxes or by pledge, or
implemented under leasing agreements: 3%. Total financing granted to the above-mentioned jurisdictions (excluding those mentioned in the previous paragraph) : 15%.
- Total of transactions comprised in the first three points above: 75%.

On the other hand, the Central Bank determined that any excesses to the above relations and to the limit mentioned in the last paragraph of this point, exclusively
originated in the application of the new limits and conditions for computing financing transactions, will not be considered as non-compliances, provided that such excesses result from transactions existing prior to March 31, 2003, or are determined
or increased by the receipt of compensation bonds or promissory notes as per Articles 28 and 29 of Decree No. 905/02, or of those eventually received by application of other specific provisions after that date, and deriving from Law No. 25,561 of
Public Emergency and Foreign Exchange Reform (including bonds issued in terms of Decree No. 1735/04 which may be received within the framework of the Argentine debt restructuring, in exchange for eligible securities pre-existing as at March 31,
2003), as well as those received within the framework of the Mortgage Refinancing System established by Law No. 25,798. Those excesses registered in the case of new transactions will also not be considered as non-compliances, provided that they
originate exclusively in the granting of financing to the non-financial public sector with funds originated in amortization services or partial or total payments of the aforementioned debt. These funds must be applicable within 180 calendar days
following the due date. In the case of a primary subscription of National Government debt securities, point 2 of Communication A 4343 authorizes the reinvestment of the funds to be collected for amortizations or partial or total
payments, with an anticipation of up to 180 calendar days to their due date.

In addition, by point 1 of Communication A 4455 and effective as of  December 1, 2005, a margin has been admitted for those entities exceeding the
observance of the limits (due to the above-mentioned preexisting operations) to carry out purchase and sale of, or financial transactions with, national public securities responsible for applying minimum capital requirements for market risk that is to
say, with such volatility as informed by the Central Bank-, provided it does not exceed the equivalent to 15% of the RPC. Such limit will be constituted with the allocation, as from the date referred to above, of any of the following: i) the
realization of non-financial public sector assets in the portfolio which are computable for determining such limits, ii) the allocation at market value of national public securities holdings, and iii) funds received for amortization services
corresponding to the public sector assets involved.

However, no financing will be granted in those cases where the ratio of transactions comprised with respect to the Bank ́s Computable Net Worth determined as of
March 31, 2003 is exceeded owing to reductions in this last parameter and until such relationship is reestablished.

Apart from the above-mentioned limits, the guarantee provided to all effects by the collection of taxes (either federal or local) and/or by the collection of
royalties by provincial or municipal jurisdictions may not exceed 40% of the total of such income at the time of evaluating the granting of new financing, and considering the new financing about to be granted. This requirement does not apply for
transactions guaranteed by pledge or leasing agreements.

Effective July 1, 1993, the amount of non-exempted credit to and equity stakes in a single client, whether related to us or not, of a given bank which individually
exceeds 10% of that banks Computable Net Worth may not exceed, in the aggregate, three or five times the banks Computable Net Worth, excluding loans in domestic financial institutions and including equity stakes in domestic financial
institutions. This last limit does not consider those guaranteed loans received in exchange for national public debt securities implemented through guaranteed loans (Communication A 3366). Also excluded until December 31, 2005 will be
the compensation bonds or promissory notes received according to the provisions of Articles 28 and 29 of Decree No. 905/02 as amended (point 3 of Communication A 4093, as amended by point 7 of Communication A 4467).

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Loan Loss Allowance

The Central Bank has established specific loan loss allowance requirements for loans to borrowers in the Risk of insolvency, Legal proceeding
 and Bankruptcy or liquidation categories under the old Central Bank loan classification system in effect prior to June 30, 1994, and loans to borrowers classified as Inadequate Servicing, Potential Risk or
Special Tracking (as of October 2001), Problem, Deficient Servicing, High Risk of Insolvency, Difficult Recovery, Irrecoverable and Irrecoverable for Technical
Decision under the new Central Bank loan classification system effective on June 30, 1994. In addition, effective in 1993, the Central Bank established a mandatory general allowance requirement for all performing loans. See
Information on the CompanySelected Statistical InformationAllowance for Loan Losses and Loan Loss Experience.

Priority of Deposits

Law No. 24,485 in force since April 18, 1995, as amended by Law No. 25,089, provides that in the event of judicial liquidation or bankruptcy of the Bank, all
depositors, irrespective of the type, amount or currency of their deposits, will have general and absolute preferential rights with respect to all other creditors (such as Holders), except for certain labor credits and credits secured with pledge or
mortgage, or such credits granted under Article 17, subparagraphs (b), (c) and (f) of the Central Banks Charter (including rediscounts granted by financial institutions due to temporary lack of liquidity, advance payments made to financial
institutions with security interest, assignment of security interest, pledge or special allocation of certain assets) and credits granted by the Bank Liquidity Fund (Fondo de Liquidez Bancaria) secured by pledge or mortgage, to be paid with 100% of
the funds deriving from the liquidation of the Banks assets. Moreover, the holders of any type of deposit have a special priority right over all other creditors of the bank, except certain employee creditors, to be paid out of (i) any funds of
the bank that may be in the possession of the Central Bank as Minimum Cash Reserve, (ii) any other funds of the bank existing as of the date on which the bank ́s license is revoked, or (iii) any proceeds resulting from the mandatory transfer of
certain assets of the financial institution to another as determined by the Central Bank pursuant Section 35 of the Argentine Financial Institutions Law, according to the following order of priority: (a) deposits of up to Ps.50,000 per person
(including all amounts such person deposited in one financial entity), or its equivalent in foreign currency, (b) all deposits of an amount higher than Ps.50,000 , or its equivalent in foreign currency, and (c) all other deposits on a pro rata
basis.

Furthermore, pursuant to section 53 of Law No. 21,526 as amended, credits of the Central Bank shall have priority over other credits, except for credits secured by
pledge or mortgage, certain labor credits and depositors, credits granted under Article 17, subparagraphs (b), (c) and (f) of the Central Banks Charter (including rediscounts granted by financial institutions due to temporary lack of
liquidity, advance payments made to financial institutions with security interest, assignment of security interest, pledge or special allocation of certain assets) and credits granted by the Bank Liquidity Fund (Fondo de Liquidez Bancaria) secured
by pledge or mortgage.

Capital Markets

Under the Financial Institutions Law, banks may underwrite and place both equity and debt securities. There are currently no statutory limitations on the size of a
banks underwriting commitments. However, a banks underwriting commitment would be treated as an extension of credit subject to the limitations discussed under Lending and Investment Limits.

Commercial banks are authorized to trade public and private debt securities in the Argentine over-the-counter market if they are members of the MAE and authorized to
act as over-the-counter brokers (agentes de mercado abierto). The MAE is a self-regulatory institution that has been authorized by the CNV. In our capacity as an over-the-counter broker, we are subject to the supervision of the MAE as a
self-regulatory institution, and of the CNV as primary regulator, and accordingly, must comply with certain reporting requirements.

Since 1990, the Buenos Aires Stock Market (Mercado de Valores de Buenos AiresMERVAL) has authorized brokerage firms or houses organized as sole
purpose corporations to operate as securities brokers on the Buenos Aires Stock Exchange. Commercial banks may freely own a Securities Brokerage Company, there are no current restrictions on ownership, and most of the principal commercial banks
operating in Argentina have already established their own Securities Brokerage Company. All brokers, individuals or firms, are required to own at least one share of stock in the MERVAL to be admitted as a securities broker on the Buenos Aires Stock
Exchange.

An agreement between the Buenos Aires Stock Exchange and representatives of the MAE dealers provides that trading in shares and other equity securities will be
conducted exclusively on the Buenos Aires Stock Exchange and that all debt securities listed on the Buenos Aires Stock Exchange may also be traded on the MAE. Trading in Argentine government securities, which are not covered by the agreement, is
conducted mainly on the MAE. The agreement does not extend to other Argentine exchanges.

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Commercial banks may operate as both managers and and custodians of Argentine mutual funds; provided, however, that a bank may not act simultaneously as manager and
custodian for the same fund.

We have been registered as an over-the-counter broker since 1989. In 1991, we established Francés Valores Sociedad de BolsaS.A.

Financial Institutions with Economic Difficulties

Under the Financial Institutions Law, if a financial institution:

- Evidences a cash reserve deficiency,
- Has not satisfied certain technical standards,
- Has not maintained minimum net worth standards, or
- Is deemed by the Central Bank to have impaired solvency or liquidity,

Such financial entity must submit a regularization and normalization plan under such terms and conditions as may be established by the Central Bank within a term
that may not exceed thirty days. This notwithstanding, the Central Bank may appoint overseers with veto powers and/or demand the creation of guarantees and restrict or prohibit the distribution of remittances or profits. The lack of submission, the
rejection or any noncompliance with the regularization or normalization plans entitle the Central Bank to revoke the authorization to operate as a financial entity and to apply sanctions. Stet if the plan is accepted, the Central Bank may grant a
temporary exemption with respect to the observance of the technical regulations and excuse or postpone the payment of fines (if any).

Likewise, and prior to the revocation of the authorization to operate as a financial entity, the Central Bank may authorize the restructuring of the entity for the
protection of its depositors, by applying any of the following decisions or a combination thereof in a sequential, gradual or direct manner: reduction, increase and assignment of the corporate capital, exclusion of assets and liabilities and their
transfer to other financial institutions, judicial intervention, responsibility and transfer of excluded assets or liabilities.

Dissolution and liquidation of financial institutions

As provided in the Argentine Financial Institutions Law, the Central Bank must be notified of any decision adopted by a financial institutions legal or
corporate authorities concerning its dissolution. The Central Bank, in turn, must then notify such decision to a competent court, which should determine who will liquidate the entity between the corporate authorities or an independent liquidator
appointed for the purpose. The courts decision will be based on whether or not there is sufficient assurance that the corporate authorities are capable of carrying out such liquidation properly.

Pursuant to the Argentine Financial Institutions Law, the Central Bank no longer acts as liquidator of financial institutions. However, if a restructuring plan has
failed or is not deemed feasible, or violations of local laws and regulations have been incurred, or significant changes have occurred in the institutions condition since the original authorization was granted, then the Central Bank may revoke
a banks license to operate as a financial institution. In this event, the law allows for judicial or extra judicial liquidation. During the liquidation process and once the license to operate as a financial institution has been revoked, a
court of competent jurisdiction may adjudge the former financial institution in bankruptcy or a petition in bankruptcy may be filed by any creditor of the bank after a period of 60 calendar days has elapsed since the license was revoked.

Money laundering

The concept of money laundering is generally used to denote transactions intended to introduce criminal proceeds into the institutional system and thus to transform
profits from illegal activities into assets of a seemingly legitimate origin.

On April 13, 2000, the Argentine congress passed Law No. 25,246, which defines money laundering as a type of crime. In addition, the law creates the so-called
Financial Information Unit, establishing an administrative criminal system, and supersedes several sections of the Argentine criminal code.

Money laundering is defined as a crime under the criminal code, which states that a crime will be committed whenever a person converts, transfers, manages, sells,
encumbers, or otherwise uses money or any other assets stemming from a crime in which that

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person has not participated, with the possible result that the original or substituted assets may appear to be of a legitimate origin, provided the value of the assets exceeds Ps.50,000 whether
such amount results from one or more transactions.

The main purpose of Law No. 25,246 is to prevent money laundering. In line with internationally accepted practice, it does not attribute responsibility for
controlling these criminal transactions only to government agencies, but also assigns certain duties to diverse private sector entities such as banks, stockbrokers, brokerage houses and insurance companies. These duties consist basically in
information capturing functions. The Central Bank regulation requires banks to take certain minimum precautions to prevent money laundering.

Each institution must appoint a senior management officer as the person responsible for money laundering prevention in charge of centralizing any information the
Central Bank may require on its own initiative or at the request of any competent authority. In addition, this officer or other person reporting to the general manager, the board of directors, or equivalent authority, will be responsible for the
implementation, tracking, and control of internal procedures to ensure compliance with the regulations.

In addition, financial institutions are required to report to the Superintendence any transaction that appears suspicious or unusual, or lacks economic or legal
justification, or is unnecessarily complex, whether performed on isolated occasions or repeatedly. In July 2001, the Central Bank released a list of non cooperative jurisdictions so that financial institutions would pay special attention
to transactions to and from those areas. Some of those jurisdictions include: Egypt, Guatemala, Cook Islands, Indonesia, Hungary, Lebanon, Marshall Islands and the Philippines.

We comply with all applicable money laundering regulations as provided for by the Central Bank and the Financial Information Unit; in particular with Resolution No.
2 of the Financial Information Unit, dated October 25, 2002, which regulates Section 21 paragraphs a) and b) of Law No. 25,246 that provides for the gathering of information regarding suspicious operations and its reporting to the authorities.

Deposit Guarantee Insurance System

Law No. 24,485, published on April 18, 1995 and Decree No. 540/95 of the same date provided for the organization of a Bank Deposit Guarantee Insurance System. This
system is limited, mandatory, and for valuable consideration, designed to provide coverage for risks inherent in bank deposits, as a subsidiary and supplementary protection to that offered by the system of bank deposit privileges and protection
created by the Financial Institutions Law.

That Law provided for the organization of the company Seguros de Depósitos Sociedad Anónima to manage the Deposit Guarantee Fund, whose
shareholders, as amended by Decree No. 1292/96, will be the Central Bank, with one share, as a minimum, and the trust made up of the financial institutions in such proportion as may be determined by the Central Bank for each one, based on their
contributions to the Deposit Guarantee Fund.

This guarantee system does not include:

- Deposits made by other financial institutions, including certificates of deposit acquired by secondary trading;
- Deposits made by persons directly or indirectly related to the financial institution;
- Deposits acquired by means of offering incentives, including deposits under the El Libretón program;
- Certificates of deposit of securities, acceptances or guarantees;
- Those deposits made after July 1, 1995 and to September 17, 1998, at a rate exceeding by two percentage points per annum or more than
paid by the Banco Nación for similar terms and, after such date, at a rate exceeding by two percentage points per annum the rolling average for the last five banking days of the
deposit rates found by the survey performed by the Central Bank; and
- Certificates of deposit transferable whose ownership has been acquired by way of endorsement.

In August 1995, Seguros de Depósitos Sociedad Anónima was organized. We hold a 12.5657% equity interest in the company.

By Communication A 2337 of May 19, 1995, the Central Bank notified the financial institutions of the approval of the regulations on the application of
the guarantee system as of April 18, 1995.

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Decree No. 1127/98 dated September 24, 1998, increased the amount covered by the deposit guarantee system to Ps.30,000, irrespective of the term. In the case of
transactions in the name of two or more persons, the guarantee will be prorated among the respective holders. The total guarantee amount by persons may not exceed Ps.30,000, regardless of the number of accounts and/or deposits.

The deposits for amounts over Ps.30,000 are also included in the guarantee system up to the Ps.30,000 limit. The Central Bank may decide at any time to amend the
guarantee system cover amount based on continued consolidation of the Argentine financial system or any other indicators.

The Argentine insurance system was financed with monthly contributions by all financial institutions operating in Argentina, ranging from 0.03% to 0.06% of average
peso and foreign currency deposits held by such financial institutions.

According to Communication A 3064 of the Central Bank, applicable to contributions from January 2000, financial institutions may choose to make a
contribution to the Deposit Guarantee Fund equivalent to 50% of the amount mentioned in the preceding paragraph, and arrange a loan with Seguros de Depósitos Sociedad Anónima to provide for the remaining 50%.

Such loans are for a maximum term of 36 months, for each monthly loan, due on the twelfth day of the month in question. The balances owed for Deposit Guarantee Fund
accrue an interest equivalent to the yield obtained from the placement to the Deposit Guarantee Fund resources in instruments that are similar to those chosen for the investment of foreign currency reserves of the Central Bank.

Under Communication A 3153 dated August 24, 2000, the Central Bank decided to cancel, effective September 2000, the obligation to lend to SEDESA 50% of
the monthly contributions, and reduced these contributions to a rate ranging from 0.015% to 0.03% of the monthly average of deposits in pesos and foreign currency held at each entity.

As of December 2004 the contribution to the deposit guarantee fund made by the financial entities has had the following evolution:

- A 3358 of November 9, 2001 of the Central Bank, contributions percentage increased to 0.03% effective as of the contribution due December 2001.
- A 4206 of September 14, 2004 of the Central Bank, contributions percentage decreased to 0.02% effective as of the contribution due September 2004.
- A 4271 of December 30, 2004 of the Central Bank, contributions percentage decreased to 0.015% effective as of the contribution due January 2005.

During 2002, Decree No. 214/02 of the Executive, in its Article 16, made changes to the provisions of Decree No. 540/95 as amended, which allowed SEDESA to issue
nominative non-endorsable securities to be offered to depositors as payment of the deposit guarantee whenever it did not have sufficient funds to that effect. Such securities, whose conditions would be established for general purposes by the Central
Bank, must be accepted by the financial entities in order to constitute deposits.

Credit Cards Law No. 25,065

Law No. 25,065, enacted in 1999, governs different aspects of the credit, purchase and debit card system. In its main aspects, this law: (i) creates an obligation to
sign a contract between the bank and the holder of the credit card before the card is issued, (ii) fixes a maximum limit to financial interest charged on balances, which may not exceed by more than 25% the rate applied to personal loan transactions,
(iii) sets a maximum 3% fee to be charged by the banks to commercial establishments, and is not entitled to charged commercial establishments in the same line of business with different rates and (iv) prohibits providing information to financial
background databases regarding particulars of credit card holders in delinquent payment situations.

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ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Considerations on Politics and Economy in Argentina

The Argentine economy has experienced significant volatility in recent decades characterized by periods of low or negative growth and high and variable levels of
inflation. Although inflation was tempered and the economy experienced growth during most of the period from 1991 to the middle of 1998, in the third quarter of 1998 the economy entered into a long-lasting recession. In addition, the government
experienced an increasing fiscal deficit which rose from approximately US$4.2 billion in 1998 to US$8.8 billion in 2001. By December of 2001, Argentinas sovereign debt had increased to approximately US$143.9 billion, an increase of
more than 84% from the end of 1994, primarily due to the inability of the Government to reduce public spending and increase tax collections. In the last quarter of 2001, Argentinas economic conditions deteriorated significantly, precipitating
a political and economic crisis.

In the context of marked uncertainty following political and regulatory changes, in the first quarter of 2002 the economy recorded its largest reversal in the last
20 years (-16.3%
on a year-over-year basis). The main declines were recorded by consumption and domestic investment, as a result of shrinking incomes following the devaluation and subsequent pesification, combined with the absence of a stable legal
framework. In the following quarters, GDP showed a slight improvement in seasonally adjusted terms, driven by exporting and import substitution sectors, which benefited from the depreciation of the peso. Even so, output was down 10.9% for the year,
because of the predominance of the fall in activity in service sectors that represent over 60% of the GDP.

The year 2003 started with strong political uncertainties, which decreased with the newly elected administration. President Kirchner, who won the elections with only
22% of the votes, thereafter consolidated his political power through provincial elections and reinforced his positive image. Moreover, the exchange and price stability allowed for a significant recovery of consumer confidence that translated into
higher consumption levels in the second semester. The growing economic activity, GDP increased by 8.8 % in 2003, was also driven by fixed gross investment, mainly in the construction industry, which rose by 38 %. Local demand recovery, however, did
not result in a larger pressure on prices as on average the economic figures are still below full use of resources. Showing strong differences between goods and services, consumer prices increased only 3.7% in 2003.

A favorable evolution in the Argentine economy was recorded during year 2004. In this respect, the following indicators are worth mentioning: i) an increase in the
Treasury primary surplus which exceeded the targets agreed on in the short-term agreement with the International Monetary Fund; ii) a decrease and stabilization in the foreign exchange parity as a result of substantial trade surplus; iii) an
increase of 9% in the Gross Domestic Product during the year 2004; iv) stabilization of wholesale and retail inflation rates; v) a more steady financial context with an increase in the financial system deposits; and vi) a marked increase in the
prices of publicly traded Government securities.

Moreover, unemployment levels also showed considerable improvements reaching 12.1% during the fourth quarter of 2004, over 2 percentage points below the same rate of
the same period of the previous year.

Exports from Argentina also benefited from the high prices of commodities, especially the soy sector during the first semester. While export prices rose 9.4% during
the year, the amounts exported only grew 6.6% mainly due to the fall in volumes of primary products exported as result of the weather conditions that impacted on the soy harvest. Exports of industrial products rose by almost 24% during the year, led
by automobile, chemical and plastic products. However, the trade surplus (of 12,105 million dollars) fell in comparison to the previous year due to the strong increase in imports that expanded 62 % once again led by capital goods purchases.

The key economic event during 2005 was the restructuring of the public debt in default since 2001 launched by the Government in February pursuant to which the
Argentine government offered its creditors three types of bonds (par, discount & quasi-par) in exchange for the Argentine sovereign debt they held, as well as bonds in lieu of past due interest on such sovereign debt. The exchange offer
encompassed 81,836 million dollars in securities held by residents and non residents, and achieved an acceptance rate of 76.15%. The new bonds issued after the exchange amounted to 35,261 million dollars, among which 44% were denominated in pesos.

For the third consecutive year, the economy grew by 9.2% . With an economy growing at high rates, inflationary pressures started to appear during the first quarter
of the year. Regulated prices (mainly public utilities ́ tariffs) had a moderating impact on inflation in spite of which, the year ended with a 12.3% increase in prices.

Greater optimism following the successful debt restructuring resulted in the return of positive capital flows to Argentina which added to the dollar surplus stemming
from the trade balance. Increased export dynamics, mainly in manufactured industrial goods,

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was reflected in a 14.2% accrued growth of volumes exported in 2005. Thus, the trade surplus for the year closed at 11,418 million dollars, only 5.7 % below 2004s, despite the 23.6 % growth
of imports.

In this environment of abundant foreign exchange supply and with the public sector as the main buyer of dollars with the purpose of honoring debt commitments with
multilateral organizations, the exchange rate closed 2005 at 3.03 pesos per dollar, slightly above December 2004 levels.

During 2005 the Government was able to sustain fiscal solvency and the primary result of the non financial public sector reached 19,661 million pesos, more than 13%
above previous years surplus.

In general, improvements in collection were the result of an increased inflation, economic activity growth and reduction of tax evasion. As of the second half of the
year primary expenses started to grow at a rate stronger than that of revenues and this performance continued during the first quarter of 2006.

The year 2005 was characterized by the higher interest payments and debt amortizations, of approximately 12,000 million dollars, that the government had to
face due to different reasons, including the completion of the debt restructuring process and the lack of agreement with the IMF during the year. By mid-December, the government decided to pay off, completely and in advance, its 9,500 million dollar
debt with the IMF making use of accrued international reserves at the Central Bank. This transaction was carried out at the beginning of January 2006, replacing those reserves at the Central Bank by a dollar-denominated government security with
similar yield.

Effects of Recent Events on Banco Francés

Substantially all of our operations, property and customers are located in Argentina. Consequently, following the 2002 crisis and the package of government measures
described elsewhere in this annual report, our financial condition and results of operations were deeply affected. During 2002 our business activities contracted compared to historical levels since December 2001, and a liquidity needs led to a
suspension of most of new loans. Our structural strengths, our reaction capacity and our adjustment to the new economic environment were the pillars of our performance in 2002. We responded to the deepening of the crisis by prioritizing liquidity,
substituting foreign currency funds with domestic currency funds and satisfying the growing demand for transactional business, while adjusting the operating structure to the new business profile.

Following a four-year recession period, the economy began to recover in 2003 and deposits flowed back into the system. This positive trend continued during 2004 both
in terms of economic activity and fiscal solvency, with stable prices and exchange rates, while in the financial system peso and dollar deposits continued to grow and loans to the private sector accelerated their recovery. Similarly the economy
showed a solid performance during 2005, with a robust 9% GDP growth. The successful conclusion of the sovereign debt restructuring process by the beginning of the year led to a capital inflow, which in turn, combined with a positive trade balance,
allowed to maintain the national governments fiscal surplus, while the monetary policy implemented by the Central Bank focused on increasing international reserves. Deposits also have recovered, spurred by the strong performance of private
sector deposits, and private sector loans outperformed with cumulative expansion of over 30%.

In 2005, we concentrated our efforts on implementing the following measures:

- Increase private sector loans with a conservative risk assessment strategy;
- Reduce our public sector exposure in order to comply with regulations that limit public sector holdings to 40% of total assets;
- Further develop the transactional business as a source of fee income;
- Improve our assets and liabilities structure (including the payment of the loans granted by the Central Bank during the liquidity
crisis) given the increase in public sector assets market value; and
- Engage in discussions with the Government on the solution of pending issues, such as: 1) compensation of losses related to the payment
of judicial injunctions; and 2) reduction of structural mismatches between our assets and liabilities accounts (term and rate).

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Critical Accounting Policies

Our Consolidated Financial Statements are prepared in accordance with the rules prescribed by the Central Bank, which differ in certain respects from generally
accepted accounting principles in Argentina, as described in Notes 3. and 4. to the Consolidated Financial Statements. These rules require Banco Francés and its subsidiaries to make some estimates and assumptions. Some of these estimates
require difficult, subjective or complex judgments about matters that are inherently uncertain, and as a result, actual results could differ from those estimates. Due to the estimation process involved, the following summarized accounting policies
and their applications are considered to be critical to understanding the business operations, financial condition and results of operations of Banco Francés and its subsidiaries.

Allowance for Commercial Loan Losses

Banco Francés provides for estimated possible losses on loans and the related accrued interest generally through the establishment of an allowance for loan
losses. The allowance for commercial loan losses charged to expense is determined by management based on a periodic analysis of updated financial information provided by the debtor at the request of Banco Francés. The basic assessment
criterion is the future debt payment capacity or the collateral granted to Banco Francés on the basis of the estimated cash flow. Banco Francés also takes into account other circumstances such as timely compliance with obligations,
qualified and honest management, whether the company is engaged in economic activities with acceptable prospects and the competitiveness of the debtor within its industry.

On the basis of these conditions, the customer is placed in any of the six categories established by the Central Bank that have been assigned minimum fixed allowance
requirements. Based on its analysis, Banco Francés books additional allowances for certain debtors, which does not require recategorizing the debtor under the rules of the Central Bank. The use of different estimates or assumptions could
result in different allowances for commercial loan losses.

Contingent Liabilities

We are subject to proceedings, lawsuits and other claims related to labor, commercial, civil and other matters. We make determinations of the amount of reserves
required, if any, for these contingencies after a careful analysis of each individual issue. The required reserves may change in the future due to new developments in each matter or changes in the settlement strategy.

The Bank is a defendant in several actions in which the petitioner claims the government measures taken with respect to their deposits during the economic crisis was
a violation of constitutional law. Several judges in these actions have issued injunctions against Banco Francés ordering: 1) the reimbursement of deposits in amounts larger than those provided for under current legislation or 2) the release
of rescheduled deposits or 3) inapplicability of the "emergency framework" legislation passed by the National Congress and the measures issued by the Federal Executive or the Central Bank. Because no city, state, or supreme court has ruled on the
matter as of the date of filing of this report, the final outcome of these legal actions is unknown.

At December 31, 2005, as described in Note 15.2. to the Consolidated Financial Statements, the Bank records as an intangible asset the difference in nominal terms
between the deposit at the free market exchange rate at the moment of each payment compared to the book value of 1.40 pesos per dollar plus CER to that date. This asset is being amortized in 60 monthly installments from April 2003. As of December
31, 2005, Banco Francés keeps registered under this concept Ps.1,119.4 million less accumulated amortization of Ps.554.0 million under Intangible Assets. Moreover, Banco Francés has stated in a note to the Financial Statements that the
amortization described above is charged solely to comply with the regulations of the Central Bank and that it should not be interpreted as an implicit waiver of possible compensation or recovery of the exchange rate differences resulting from the
compliance with court orders granted in actions seeking the protection of civil rights or other legal actions derived from the mandatory conversion of bank deposits into pesos.

Fair Value

We prepare our financial statements in accordance with the rules of the Central Bank related thereto, which differ from U.S. GAAP in valuing financial instruments.
U.S. GAAP require financial instruments to be valued at fair value. We estimated the fair value as the amount at which a financial instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or
liquidation, and such value was best evidenced by a quoted market price, if one existed. In cases where quoted market prices were not available, fair value estimation was based on the quoted market price of a financial instrument with similar
characteristics, the present value of expected future cash flows, or other valuation techniques, all of which were significantly affected by the assumptions used (see Note 17.16. to Consolidated Financial Statements).

92

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Although we used our best judgment in estimating the fair value of these financial instruments, there are inherent weaknesses in any estimation technique. As a
result, the fair value may not be indicative of the net realizable or liquidation value. Moreover, minor changes in the assumptions used could have a significant impact on the resulting estimated fair values.

For a detailed description of the applicable accounting principles, please see Note 3. to the Consolidated Financial Statements.

Differences between Central Bank Rules and Generally Accepted Accounting Principles Effective in the City of Buenos Aires

The most significant valuation differences between the rules prescribed by the Central Bank and the professional accounting standards effective in Buenos Aires City
are detailed below (see Note 4. to the Consolidated Financial Statements).

| |  | Restatement of the financial statements to recognize the changes in the purchasing power of the currency                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  | The Consolidated Financial Statements recognize the effects of changes in the purchasing power of the currency up to February 28, 2003 following the restatement method established by Technical
Pronouncement No. 6 of the F.A.C.P.C.E. (amended by TP No. 19). In accordance with Decree No. 664/03 of the National Executive Branch, Communication A 3921 of the Central Bank and Resolution No. 441 of the C.N.V., application of that
method was discontinued by the Bank and, therefore, it the Bank did not recognize the effects of changes in the purchasing power of the currency arising after March 1, 2003.                                 
|
| |  | Professional accounting standards effective in Buenos Aires City established the discontinuance of the restatement into homogenous currency as of October 1, 2003 on the understanding that the
country had a stable monetary context. The change in the Wholesale Price Index between March 1, 2003 and September 30, 2003 was 2.14% (negative). Had the accounting information been restated in accordance with professional accounting standards,
effective in the City of Buenos Aires, the effect on the net loss for each fiscal year and total stockholders' equity would not have been significant considering the financial statements as a whole.
|
| |  | Valuation Criteria                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| |  | (1)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | (2)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | (3)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            

93

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| |  |     | Organization and
        Development Expenses corresponding to differences resulting from
        compliance with the court measures generated by the repayment of deposits
        in the financial system within the framework of Law No. 25,561, Decree
        No. 214/02 and complementary regulations, as established by Communication
  A 3916 of the Central Bank. In accordance with current professional
  accounting standards, effective in the City of Buenos Aires, those amounts
  should be recognized based on the best possible estimate of amounts receivable,
  considering  the circumstances mentioned in that note.                                                                                                              
| |  | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  | (4) | Tax Effects                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| |  |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| |  |     | As it is indicated in Note 5.1. to the Consolidated Financial Statements., the Bank has received various communications from the Central Bank pursuant to which that Central Bank indicates that
the capitalization of items arising from the application of the deferred tax method is not allowed. In accordance with current professional accounting standards, effective in the City of Buenos Aires, a deferred tax asset should be recognized to the
extent the reversal of temporary differences generates a future decrease in the tax effectively determined. As a result, the provisions set up by the Bank in this respect, for Ps.360,000 thousand and Ps.118,000 thousand as of December 31, 2005 and
2004, respectively, should be recovered.

In all other material respects, Central Bank rules are consistent with generally accepted accounting principles in Buenos Aires City.

Differences Between Other Regulatory Bodies and Accepted Accounting Principles Effective in the City of Buenos Aires

In 2005, Consolidar Cía de Seguros de Retiro S.A. included the balance from the technical commitments incurred with the insured in the Other Liabilities
caption. The Other Subsidiaries ́ Liabilities caption includes Ps.29,819 corresponding to the regularizing account called Unaccrued Secured Loans Valuation Difference which, as established by the Superintendency of Insurance, will
be settled through subsequent accrual of the regularizing accounts of secured loans. In accordance with the current professional accounting standards, effective in the City of Buenos Aires, such amount should have been recorded as a loss for the
year ended December 31, 2003.

Operating Results

Changes to Argentine law have had a significant impact on our operations. The conversion of certain of our dollar-denominated assets and liabilities into
peso-denominated assets and liabilities and the devaluation of the peso, took place during fiscal year 2002 and therefore are reflected in our Financial Statements for the fiscal year ended December 31, 2002. Furthermore, the changes in Argentine
law and their impact on our operations are expected to render any comparison of financial statements of ours for periods ended after December 31, 2001 with those for periods ended on or prior to December 31, 2001 meaningless.

The Bank presents its financial statements in equivalent purchasing power, following the restatement method established by FACPCE Technical Resolution No. 6
(modified by Technical Resolution No. 19), using an adjustment rate derived from the internal WPI published by the INDEC.

According to the above mentioned method, the accounting measurements were restated according to the purchasing power changes of August 31, 1995. As of that date,
based on the prevailing economic stability conditions and according with CNV General Resolution No. 272 and Central Bank Communication A 2365, the accounting measures were not restated through December 31, 2001. In light of CNV General
Resolution No. 415 and Central Bank Communication A 3702, the method was reinstated effective as of January 1, 2002, considering the previous accounting measures restated as of December 31, 2001.

By means of Communication A 3921 of the Central Bank and CNV General Resolution No. 441/03 in compliance with Decree No. 664/03 of the Executive Branch
the application of the restatement method on financial statements in equivalent purchasing power has been suspended as of March 1, 2003. Accordingly, Banco Francés applied the mentioned restatement only until February 28, 2003.

The following discussion is based upon information contained in the Consolidated Financial Statements and should be read in conjunction with them. The Consolidated
Financial Statements have been prepared in accordance with the rules of the Central Bank related thereto (Argentine Banking GAAP), which differ in certain respects from Argentine GAAP and U.S. GAAP. The principal differences between Argentine
Banking GAAP and U.S. GAAP are discussed in Note 17 to the Consolidated Financial Statements as they relate to us, together with a reconciliation to U.S. GAAP of our net income and total stockholders equity. For a more detailed description of
the accounting principles and considerations used in preparing the following discussion, seePresentation
of Financial

94

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Information. Additionaly the information set below for the
fiscal years ended December 2004 and 2003 has been modified from its original
version to apply the adjustments to prior years income (loss). As fully
explained in Note 3.5.18. to the Consolidated Financial Statements.

Within the framework of the Regularization and Reorganization Plan filed by the Bank with the Central Bank, and Resolution No. 52/04 of the Superintendency of
Financial and Exchange Institutions, dated March 17, 2004, on March 18, 2004, the Bank sold to BBVA S.A. its 100% interest in Banco Francés (Cayman) Ltd. Accordingly, the Financial Statements for the fiscal years ended up to December 31, 2003
include the consolidation of Banco Francés (Cayman) Ltd. For more information see Notes 1.5. and 15.5. to the Consolidated Financial Statements.

Results of Operations for the Fiscal Years Ended December 31, 2005, 2004 and 2003.

Overview

Our net income for fiscal year ended December 31, 2005 was Ps.117.2 million. This income was mainly due to a 50.07% increase in Gross Intermediation Margin, a 23.29%
increase in Service Charge Income, a 4.98% decrease in Other Expenses and a 75,73% decrease in Income Tax. This income was partially offset by a 120.43% increase in Provisions for Loan Losses, a 41.83% increase in Service Charge Expense, a 14.12%
increase in Operating Expenses, a 33.66% decrease in Other Income and a 32.94% increase in loss on Minority Interest in Subsidiaries.

Our net loss for fiscal year ended December 31, 2004, was Ps.54.0 million. This loss was mainly due to a 10.56% increase in Service Charge Expense, a 38.93% decrease
in Other Income, a 3.28% increase in Other Expense and a 366.33% increase in loss on Minority Interest in Subsidiaries. The loss was partially offset by a 305.06% increase in Gross Intermediation Margin, a 32.91% decrease in Provisions for Loan
Losses, a 27.77% increase in Service Charge Income, a 4.44% decrease in Operating Expenses, a 59.26% decrease in Income Tax and the elimination of monetary loss.

Financial Income

Our Financial Income increased 43.24% to Ps.1,654.2 million for the fiscal year ended December 31, 2005 from Ps.1,154.8 million for the fiscal year ended December
31, 2004 which in turn decreased 5,86% from Ps.1,226.7 million for the fiscal year ended December 31, 2003. The components of our Financial Income are reflected in the following table.

|                                                            |  | Fiscal Year Ended December 31,
|----------------------------------------------------------- |  | ------------------------------
|                                                            |  |                               
|                                                            |  | 2005                          
|                                                            |  |                               
|                                                            |  | (in thousands of pesos)       
|Interest on cash and due from banks                         |  | 25,364                        
|Interest on loans to the financial sector                   |  | 21,245                        
|Interest on overdraft                                       |  | 41,346                        
|Interest on loans with privileged guarantees                |  | 45,109                        
|Interest on credit card loans                               |  | 24,095                        
|Interest on other loans                                     |  | 498,423                       
|Net income from government and private securities           |  | 209,438                       
|Interest from other receivables from financial transactions |  | 10,374                        
|Indexation by benchmark stabilization coefficient (CER)     |  | 663,743                       
|Listed-price differences                                    |  | -                             
|Other                                                       |  | 115,015                       
|                                                            |  |                               
|Total                                                       |  | 1,654,152                     
|                                                            |  |                               

|   
|---
|(1)

The
    increase in Financial Income during fiscal year ended December 31, 2005,
    was mainly due to an increase in CER, Net income on Government and Private
    Securities, Interest on Other Loans, Interest on Overdraft, Interest on Loans
    to the Financial Sector, Interest on Cash and Due from Banks and Interest
    on Credit Card Loans. These increases were partially offset by decreases
    in Interest on Loans with Privileged Guarantees and Other Financial Income.
    This variation reflected the increase in average volume and average nominal
interest rate on interest earning assets.

95

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The decrease in Financial Income during the fiscal year ended December 31, 2004, was mainly due to a decrease in listed-price differences, Interests on Other Loans,
Interest on Overdraft, Interest on Credit Card Loans, Interest on Loans with Privileged Guarantees and Interest on Loans to the Financial Sector. These decreases were partially offset by increases in CER, Interest on Cash and Due from Banks, Net
Income from Government and Private Securities and increases in Other Income. This variation reflected the decrease in average volume on interest earning assets partially offset by increases in average nominal rates on interest earning assets
(increase in average real rates).

The following table sets forth the changes in financial income due to increases/decreases in volume and increases/decreases in nominal rates of average
interest-earning assets. Such financial income excludes exchange differences and premiums or forward sales of foreign exchange.

|                                                                                            |  | December 31 2005
vs.
December 31 2004
Increase (Decrease) |  |  | December 31 2004
vs.
December 31 2003
Increase (Decrease) |  
|------------------------------------------------------------------------------------------- |  | --------------------------------------------------------- |  |  | --------------------------------------------------------- | -
|                                                                                            |  |                                                           |  |  |                                                           |  
|                                                                                            |  | (in thousands of pesos)                                   |  |  | (in thousands of pesos)                                   |  
|Financial Income due to changes in the volume of interest-earning assets                    |  | 253,128                                                   |  |  | (159,235                                                  | )
|Financial Income due to changes in average nominal rates of interest-earning assets         |  | 202,735                                                   |  |  | 305,015                                                   |  
|Financial Income due to changes in the volume and average nominal rates of interest-earning |  |                                                           |  |  |                                                           |  
|assets                                                                                      |  | 47,966                                                    |  |  | (49,380                                                   | )
|                                                                                            |  |                                                           |  |  |                                                           |  
|Net Change                                                                                  |  | 503,829                                                   |  |  | 96,400                                                    |  
|                                                                                            |  |                                                           |  |  |                                                           |  

Financial Expenses increased 32.85% to Ps.608.9 million in the fiscal year ended December 31, 2005 from Ps.458.4 million in the fiscal year ended December 31, 2004,
which in turn was decrease of 56.55% from Ps.1,054.8 million in the fiscal year ended December 31, 2003. The components of our Financial Expenses are reflected in the following table.

|                                                            |  | Fiscal Year Ended December 31,
|----------------------------------------------------------- |  | ------------------------------
|                                                            |  |                               
|                                                            |  | 2005                          
|                                                            |  |                               
|                                                            |  | (in thousands of pesos)       
|Interest on checking accounts                               |  | 23,782                        
|Interest on savings deposits                                |  | 3,675                         
|Interest on time deposit(2)                                 |  | 152,660                       
|Interest from other liabilities from financial transactions |  | 28,001                        
|Indexation by benchmark stabilization coefficient (CER)     |  | 306,815                       
|Listed-price differences                                    |  | 525                           
|Other                                                       |  | 93,491                        
|                                                            |  |                               
|Total                                                       |  | 608,949                       
|                                                            |  |                               

|   
|---
|(1)
|(2)

Taxes on Financial Income and Contributions to the Bank Deposit Guarantee Insurance System, included in Financial ExpenseOther, amounted to Ps.32.2 million as
of December 31,2005, Ps.43.1 million as of December 31, 2004 and Ps.33.9 million as of December 31, 2003.

Contributions to the Bank Deposit Guarantee Insurance System decreased during fiscal year 2005 due to the decrease in the rate of contribution from 0.03% - 0.02%
during fircal year ended December 31, 2004 to 0.015% in the fiscal year ended December 31, 2005.

Contributions to the Bank Deposit Guarantee Insurance System increased during fiscal year 2004 due to increases in volume of savings and demand deposits.

The
    following table sets forth the changes in Financial Expenses due to the increases/decreases
    in volume and decreases/increases of nominal rates of average interest-bearing
    liabilities. Such Financial Expense excludes exchange rate variations and
    premiums on forward purchases of foreign exchange, contributions to Bank
    Deposit Guarantee Insurance System, mandatory contributions and taxes on
interest income.

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|                                                                                          |  | December 31, 2005
vs
December 31, 2004
Increase (Decrease) |  |  | December 31, 2004
vs
December 31, 2003
Increase (Decrease) |  
|----------------------------------------------------------------------------------------- |  | ---------------------------------------------------------- |  |  | ---------------------------------------------------------- | -
|                                                                                          |  |                                                            |  |  |                                                            |  
|                                                                                          |  | (in thousands of pesos)                                    |  |  | (in thousands of pesos)                                    |  
|Financial Expense due to changes in the volume of interest-bearing liabilities            |  | 5,283                                                      |  |  | (75,800                                                    | )
|Financial Expense due to changes in average nominal rates of interest-bearing liabilities |  | 154,165                                                    |  |  | (260,052                                                   | )
|Financial Expense due to changes in the volume and average nominal rates of interest-     |  |                                                            |  |  |                                                            |  
|bearing liabilities                                                                       |  | 1,867                                                      |  |  | 27,513                                                     |  
|                                                                                          |  |                                                            |  |  |                                                            |  
|Net Change                                                                                |  | 161,315                                                    |  |  | (308,339                                                   | )
|                                                                                          |  |                                                            |  |  |                                                            |  

Our average interest-bearing liabilities decreased 10.5% from Ps.11.4 billion in fiscal 2003 to Ps.10.2 billion in the fiscal year ended December 31, 2004. This
decrease was mainly attributable to a decrease in volume of time deposits, loans from the Central Bank, other financial institutions, corporate bonds and Other liabilities, partially offset by an increase in volume of saving deposits. Average
dollar-denominated time deposits decreased 57.03% from Ps.454.1 million in the fiscal year ended December 31, 2003 to Ps.195.1 million in the fiscal year ended December 31, 2004. Average peso-denominated time deposits decreased 12.96% to Ps.3,972.5
million in the fiscal year ended December 31, 2004, from Ps.4,563.8 million in the fiscal year ended December 31, 2003. Average dollar-denominated and peso-denominated saving deposits increased 32.92% and 181.09% from Ps.273.8 million and Ps.733.3
million in the fiscal year ended December 31, 2003, to Ps.364.0 million and Ps.2,061.2 million in the fiscal year ended December 31, 2004, respectively. Average corporate bonds issued decreased 14.0% from Ps.482.8 million in the fiscal year ended
December 31, 2003 to Ps.415.2 million in the fiscal year ended December 31, 2004. Borrowings from the Central Bank decreased 10.18% from Ps.2,170.6 million in the fiscal year ended December 31, 2003 to Ps.1,949.6 million in the fiscal year ended
December 31, 2004 mainly due to the payments made during the fiscal year.

Gross Intermediation Margin

Our Gross Intermediation Margin (defined as Financial Income less Financial Expenses) of Ps.1,045.2 million in the fiscal year ended December 31, 2005, represented a
50.07% increase over Gross Intermediation Margin of Ps.696.5 million in the fiscal year ended December 31, 2004, which in turn represented a 305.06% increase over Gross Intermediation Margin of Ps.171.9 million in the fiscal year ended December 31,
2003.

97

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The following table sets forth the changes in Gross Intermediation Margin:

|                                                                                        |  | December 31, 2005
vs.
December 31, 2004
Increase (Decrease) |  | December 31, 2004
vs.
December 31, 2003
Increase (Decrease) |  
|--------------------------------------------------------------------------------------- |  | ----------------------------------------------------------- |  | ----------------------------------------------------------- | -
|                                                                                        |  |                                                             |  |                                                             |  
|                                                                                        |  | (in thousands of pesos)                                     |  | (in thousands of pesos)                                     |  
|Gross Intermediation Margin due to changes in the volume of interest-earning assets and |  |                                                             |  |                                                             |  
|interest-bearing liabilities                                                            |  | 247,845                                                     |  | (83,435                                                     | )
|Gross Intermediation Margin due to changes in average nominal rates of interest-earning |  |                                                             |  |                                                             |  
|assets and interest-bearing liabilities                                                 |  | 48,570                                                      |  | 565,067                                                     |  
|Gross Intermediation Margin due to changes in the volume and average nominal rates of   |  |                                                             |  |                                                             |  
|interest-earning assets and interest-bearing liabilities                                |  | 46,099                                                      |  | (76,893                                                     | )
|                                                                                        |  |                                                             |  |                                                             |  
|Net Change                                                                              |  | 342,514                                                     |  | 404,739                                                     |  
|                                                                                        |  |                                                             |  |                                                             |  

The increase in the Gross Intermediation Margin in the fiscal year ended December 31, 2005 was principally due to an increase in the yield spread (nominal basis)
from 5.03% in the fiscal year ended December 31, 2004 to 5.22% in the fiscal year ended December 31, 2005, and to the increases in volume and average nominal rates of interest-earning assets partially offset by increases in volume and nominal rates
of interest-bearing liabilities.

The increase in the Gross Intermediation Margin in the fiscal year ended December 31, 2004 was principally due to an increase in the yield spread (nominal basis)
from 0.87% in the fiscal year ended December 31, 2003 to 5.03% in the fiscal year ended December 31, 2004, and to the decreases in volume and average nominal rates of interest-bearing liabilities and increase in average nominal rates of
interest-earning assets partially offset by decrease in volume of interest-earning assets.

SeeInformation on the CompanySelected Statistical InformationAverage Balance
Sheets, Interest Earned on Interest-Earning Assets and Interest Paid on Interest-Bearing Liabilities,  Interest-Earning Assets: Net Interest Margin and Spread.

Provision for Loan Losses

Loan loss provisions totaled Ps.114.6 million in the fiscal year ended December 31, 2005, a 120.43% increase over Ps.52.0 million in the fiscal year ended December
31, 2004, which in turn represents a 32.91% decrease over the Ps.77.5 million in the fiscal year ended December 31, 2003. The increase in fiscal 2005 was mainly due to direct charge offs derived from the sale of Public Sector Loans done during the
year. The decrease in fiscal 2004 was mainly due to the improvement of the economic situation in some economic sectors, which allowed for a better recovery of the loans portfolio and due to the sale of nonperforming loans in connection to the Banco
Francés (Cayman) Ltd. transaction.

Our non-performing loan portfolio amounted to Ps.93.5 million at December 31, 2005, a 11.10% decrease over Ps.105.1 million at December 31, 2004, which in turn
represented a 82.07% decrease over the Ps.586.2 million at December 31, 2003.

The non-performing loan portfolio ratio decreased from 6.66% at December 31, 2003 to 1.11% as of December 31, 2004 and decreased to 1.08% as of December 31, 2005.

Our management believes that our allowance for loan losses is adequate to cover any known losses and any losses inherent in its loan portfolio. For a discussion of
our policy with respect to the establishment of our allowance for loan losses seeInformation on the CompanySelected Statistical InformationAllowance for Loan Losses
and Loan Loss Experience.

98

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Service Charge Income

Service Charge Income was Ps.721.2 million for fiscal year ended December 31, 2005, Ps.584.9 million for fiscal year ended December 31, 2004 and Ps.457.8 million for
fiscal 2003. The fiscal year 2005 amount represented a 23.29% increase from the amount earned in fiscal 2004. The fiscal 2004 amount represented a 27.77% increase from the amount earned in 2003. The following table provides a breakdown of our
Service Charge Income by category.

|                                          |  | Fiscal Year Ended December 31,
|----------------------------------------- |  | ------------------------------
|                                          |  |                               
|                                          |  | 2005                          
|                                          |  |                               
|                                          |  | (in thousands of pesos)       
|Service charges on deposit accounts       |  | 141,885                       
|Credit card operations                    |  | 75,913                        
|Other fees related to foreign trade       |  | 33,051                        
|Credit-related fees                       |  | 14,391                        
|Fund management fees                      |  | 317,633                       
|Capital markets and securities activities |  | 9,496                         
|Rental of safety deposit boxes            |  | 11,419                        
|Fees related to guarantees                |  | 1,791                         
|Insurance agency                          |  | 20,409                        
|Other                                     |  | 95,179                        
|                                          |  |                               
|Total                                     |  | 721,167                       
|                                          |  |                               

Service charges on deposit accounts are comprised principally of maintenance fees on checking and savings accounts and transaction fees on current accounts. These
fees increased 19.32% from Ps.114.0 million in the fiscal year ended December 31, 2003 to Ps.136.1 million in the fiscal year ended December 31, 2004 which in turn increased 4.26% to Ps.141.9 million in the fiscal year ended December 31, 2005. The
increase in fiscal 2005 was mainly due to increases in the volume and number of transactions of such accounts. The increase in fiscal 2004 was mainly due to an increase in activity. At December 31, 2005, we had 1,285,428 of such accounts compared to
1,211,006 such accounts at December 31, 2004 and compared to the 1,271,479 such accounts at December 31, 2003.

Income from credit card operations, which consists of customer fees, retailer transaction fees, merchant processing fees and penalty charges, increased 34.77% from
Ps.55.3 million in the fiscal year ended December 31, 2003 to Ps.74.5 million in the fiscal year ended December 31, 2004, and in turn increased 1.84% to Ps.75.9 million in fiscal 2005. The increase in the fiscal year 2005 was mainly due to increases
in activity, in the use of credit cards and in the volume of credit cards issued. The increase in the fiscal year 2004 was mainly due to the recovery of the Argentine economic situation during the fiscal year. At December 31, 2005, the total number
of credit cards we issued amounted to 672,558 compared to 558,864 at December 31, 2004 and to 507,687, at December 31, 2003.

Fees related to foreign trade increased 2.03% from Ps.23.7 million in the fiscal year ended December 31, 2003, to Ps.24.2 million in the fiscal year ended December
31, 2004, and in turn increased 36.49% to Ps.33.1 million in the fiscal year ended December 31, 2005. The increase in fiscal 2005 was mainly due to increases in volume of foreign trade and to the increase in the exchange rate. The increase in the
fiscal year 2004 was mainly because of increases in volume of foreign trade (imports) which we attribute to the stability of the rate of exchange during the fiscal year.

Credit related fees increased 81.23% from Ps.4.2 million in the fiscal year ended December 31, 2003 to Ps.7.7 million in the fiscal year ended December 31,
2004, which in turn increased 87.68% to Ps.14.4 million in the fiscal year ended December 31, 2005. These increases were mainly due to the increase in granting of new loans due to the improvement in the economic situation of Argentina.

Fees related to fund management increased 33.27% from Ps.193.2 million in the fiscal year ended December 31, 2003 to Ps.257.5 in the fiscal year ended December 31,
2004, as a result of an increase in fund management and pension fund management activities. Similarly these fees increased 23.34% to Ps.317.6 million in the fiscal year ended December 31, 2005, as a result of an increase in fund management and
pension fund management activities. Funds under management grew 19.0% to Ps.12.5 billion in the fiscal year 2005 from Ps 10.5 billion in the fiscal year 2004, which in turn increased 17.5% from Ps.9.5 billion in fiscal 2003.

We placed special emphasis on creating funds under the concept of managing an investment portfolio diversified among the various kinds of financial assets, both
local and foreign (shares, bonds and certificates of deposit). These fees increased during fiscal years 2004 and 2005 mainly due to the recovery of the economic environment in Argentina.

99

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Income from capital markets and securities activities principally represents fees from underwriting and placement of corporate bonds, commercial paper and equity
securities. It also reflects fees for our corporate advisory business, but excludes gains from trading Government Securities. Trading gains are included in Financial Income under Income from Government and Private Securities.
Finally, income from capital markets and securities activities also includes brokerage commissions earned by Francés Valores, Banco Francés securities brokerage subsidiary, but does not include similar income earned by Banco
Francés itself, which is recorded as Financial Income under Income from Government and Private Securities.

Income from capital markets and securities activities decreased 17.03% from Ps.10.6 million in the fiscal year ended December 31, 2003, to Ps.8.8 million in the
fiscal year ended December 31, 2004, mainly due to a decrease in activity related to private debt restructuring, and increased 7.93% to Ps.9.5 million in the fiscal year ended December 31, 2005 mainly due to increase in activity in placement of
bonds of private sector enterprises.

Rental of safety deposit boxes increased 45.87% from Ps.6.3 million in the fiscal year ended December 31, 2003 to Ps.9.2 million in the fiscal year ended December
31, 2004, and further increased 23.98% to 11.4 million in the fiscal year ended December 31, 2005. These increases were mainly due to the increase in activity due to the improvement of the economic situation in Argentina.

Fees related to Insurance Agency increased 72.51% from Ps.10.5 million in the fiscal year ended December 31, 2003 to Ps.18.1 million in the fiscal year ended
December 31, 2004 and increased 12.75% to Ps.20.4 million in the fiscal year ended December 31, 2005. These increases were mainly due to the increase in consumer economic activity.

Fees related to guarantees increased 40.49% from Ps.1.8 million in the fiscal year ended December 31, 2003 to Ps.2.5 million in the fiscal year ended December 31,
2004 and in turn decreased 29.68% to Ps.1.8 million in the fiscal year ended December 31, 2005. The increase in fiscal 2004 was mainly due to increase in activity. The decrease in fiscal 2005 was mainly due to a decrease in activity.

Other service charge income increased 21.63% from Ps.38.0 million in the fiscal year ended December 31, 2003 to Ps.46.2 million in fiscal 2004. This service charge
income increased 105.88% to Ps.95.2 million in the fiscal year ended December 31, 2005.

Service Charge Expenses

Service Charge Expenses, which consist of fees that we paid principally to other financial institutions, and taxes on service charge income increased 10.56% from
Ps.49.6 million in the fiscal year ended December 31, 2003 to Ps.54.8 million in the fiscal year ended December 31, 2004, mainly as a result of the increase in commissions paid and due to the increase in Service Charge Income. These expenses
increased 41.83% to Ps.77.8 million in the fiscal year ended December 31, 2005 mainly as a result of the increase in Service Charge Income.

Operating Expenses

Our operating expenses increased 14.12% to Ps.775.8 million in the fiscal year ended December 31, 2005 from Ps.679.8 million in the fiscal year ended December 31,
2004, which in turn decreased 4.44% from Ps.711.4 million in the fiscal year ended December 31, 2003.

Operating expenses increased in the fiscal year 2005 mainly because of: (i) a 20.66% increase in personnel expenses, (ii) a 22.19% increase in taxes, (iii) a 34.10%
increase in credit card advertising and issuance expenses, (iv) a 45.72% increase in advertising and promotion, (v) a 10.57% increase in maintenance and repairs, (vi) a 19.40% increase in staff welfare, (vii) a 13.82% increase in rentals, (viii) a
18.03% increase in business travel and development, (ix) a 5.68% increase in utilities, (x) a 6.12% increase in fees and external administrative services and (xi) a 15.41% increase in other operating expenses. Such increases were partially offset by:
(i) a 15.78% decrease in depreciation of Bank premises and equipment, (ii) a 38.29% decrease in courier transportation and (iii) a 26.30% decrease in amortization of organization and development expenses.

Operating expenses decreased in the fiscal year 2004 mainly because of: (i) a 63.59% decrease in amortization of organization and development expenses, (ii) a 10.80%
decrease in utilities (iii) a 33.13% decrease in depreciation of bank premises and equipment, (iv) a 9.8% decrease in fees and external administrative services and (v) a 0.92% decrease in courrier transportation. Such decreases were partially offset
by: (i) a 10.17% increase in personnel expenses, (ii) a 209.34% increase credit card advertising and issuance expense, (iii) a 45.51% increase in advertising and promotion, (iv) a 20.19% increase in taxes and (v) a 4.08% increase in other expenses.

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The components of our Operating Expenses are reflected in the following table:

|                                                              |  | Fiscal Year Ended December 31,
|------------------------------------------------------------- |  | ------------------------------
|                                                              |  |                               
|                                                              |  | 2005                          
|                                                              |  |                               
|                                                              |  | (in thousands of pesos)       
|Personnel expenses                                            |  | 372,128                       
|Fees and external administrative services                     |  | 10,852                        
|Taxes                                                         |  | 37,818                        
|Utilities                                                     |  | 20,989                        
|Depreciation of Bank property and equipment                   |  | 29,248                        
|Credit card advertising and issuance expense                  |  | 16,302                        
|Courier transportation                                        |  | 7,213                         
|Advertising and promotion (excluding credit card advertising) |  | 34,146                        
|Maintenance and repairs                                       |  | 26,157                        
|Business travel and development                               |  | 12,961                        
|Staff welfare                                                 |  | 25,565                        
|Amortization of organization and development expenses         |  | 28,082                        
|Rentals                                                       |  | 38,968                        
|Other                                                         |  | 115,406                       
|                                                              |  |                               
|Total                                                         |  | 775,835                       
|                                                              |  |                               

|   
|---
|(1)

The largest component of Operating Expenses in each of these years was personnel expenses, which increased 20.66% during fiscal year 2005 and 10.17% during fiscal
year 2004 principally as a result of increases in salaries (which include payroll, termination payments and bonuses).

The number of our full-time employees decreased from 3,753 in the fiscal year ended December 31, 2003 to 3,541 in the fiscal year ended December 31, 2004 and
increased to 3,618 in the fiscal year ended December 31, 2005 (not including 1,907; 1,884 and 1,908 employees from non-banking subsidiaries, at December 31, 2005, 2004 and 2003, respectively). The decrease in total personnel from fiscal year 2003 to
fiscal year 2004 was principally due to the reduction in the number of bank personnel because of cost-cutting efforts. The increase in fiscal 2005 was mainly due to the recovery of our business activity.

During fiscal 2005 we opened 3 branch offices while during fiscal year 2004, we closed 8 branch offices (including four branch offices of Credilogros) and during
fiscal year 2003, we closed 10 branch offices.

Fees and external administrative services increased 6.12% to Ps.10.9 million in the fiscal year ended December 31, 2005 from Ps.10.2 million in the fiscal year ended
December 31, 2004, which in turn decreased 9.8% from Ps.11.3 million in the fiscal year ended December 31, 2003. The decrease in the fiscal year ended December 31, 2004 was mainly due to a decrease in hiring external administrative resources. The
increase in fiscal 2005 was mainly due to increases in the costs of services and in hiring external resources.

Taxes other than income tax increased 22.19% to Ps.37.8 million in the fiscal year ended December 31, 2005 from Ps.30.9 million in the fiscal year ended December 31,
2004, which in turn increased 20.19% from Ps.25.7 million in the fiscal year ended December 31, 2003. The increases in fiscals 2005 and 2004 were mainly due to increase in activity.

Depreciation of property and equipment decreased 15.78% to Ps.29.2 million in the fiscal year ended December 31, 2005, from Ps.34.7 million in the fiscal year ended
December 31, 2004, which in turn decreased 33.13% from Ps.51.9 million in the fiscal year ended December 31, 2003. The decreases in fiscal 2005 and 2004 were mainly due to reductions in additions to the Bank ́s properties and equipment.

Credit card advertising and issuance expense increased 34.09% to Ps.16.3 million in the fiscal year ended December 31, 2005 from Ps.12.2 million in the fiscal year
ended December 31, 2004, which in turn increased 209.34% from Ps.3.9 million in the fiscal year ended December 31, 2003. The increases in fiscals 2005 and 2004 were mainly a result of an increases in the use of credit cards due to the improving
economic situation of Argentina, and the relaunching of all credit products by the Financial System.

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Advertising and promotion fees increased 45.71% to Ps.34.1 million in the fiscal year ended December 31, 2005, from Ps.23.4 million in the fiscal year ended December
31, 2004, which in turn increased 45.51% from Ps.16.1 million in the fiscal year ended December 31, 2003. The increases in fiscal 2005 and 2004 were mainly due to an increase of advertising expenses related to products relaunched during those fiscal
years.

Utility costs increased 5.68% to Ps.21.0 million in the fiscal year ended December 31, 2005, from Ps.19.9 million in the fiscal year ended December 31, 2004, which
in turn decreased 10.79% from Ps.22.3 million in fiscal 2003. The increase in the fiscal year 2005 was mainly due to a higher activity level. The decrease in the fiscal year ended December 31, 2004 was mainly due to the different plans adopted in
order to reduce administrative expenses, the negotiation of contracts with suppliers at corporate level, the closing of branches and improvements in efficiency derived from new processing systems.

Amortization of organization and development expenses decreased 26.30% to Ps.28.1 million in the fiscal year ended December 31, 2005, from Ps.38.1 million in the
fiscal year ended December 31, 2004, which in turn decreased 63.59% from Ps.104.7 million in the fiscal year ended December 31, 2003. The decreases in fiscals 2005 and 2004 were mainly due to reductions in additions during those fiscal
years.

Rental expenses increased 13.82% to Ps.39.0 million in the fiscal year ended December 31, 2005, from Ps.34.2 million in the fiscal year ended December 31, 2004,
which in turn increased 2.54% from Ps.33.4 million in the fiscal year ended December 31, 2003. The increases in the fiscal years 2005 and 2004 were mainly due to higher rental costs. At December 31, 2005 our branch network consisted of 230
branches, of which 114 were located in properties we own and 116 were located in properties we lease. At December 31, 2004 our branch network consisted of 227 branches, of which 114 were located in properties we own and 113 were located in
properties we lease.

Other operating expenses increased 15.40% to Ps.115.4 million in the fiscal year ended December 31, 2005 from Ps.100.0 million in the fiscal year ended December 31,
2004, which in turn increased 4.07% from Ps.96.1 million in the fiscal year ended December 31, 2003. The increases in fiscal 2005 and 2004 were mainly due to increases in costs and to the increase in activity.

Other Income

Other Income decreased 33.66% to Ps.483.9 million in the fiscal year ended December 31, 2005 from Ps.729.3 million in the fiscal year ended December 31, 2004, which
in turn decreased 38.93% from Ps.1,194.3 million in the fiscal year ended December 31, 2003. The decrease in fiscal 2005 was mainly due to a 72.10% decrease in recoveries of charged off loans and reversal of allowances, an 85.67% decrease in income
from long-term investments and a 37.24% decrease in income from disposal of assets, partially offset by increases in rentals, punitive interest and interest on other assets. The decrease in fiscal 2004 was mainly due to a 65.59% decrease in
recoveries of charged-off loans and reversal of allowances, and decreases in punitive interest and interest on other assets, partially offset by increases in income from long-term investments, rentals and income from disposal of fixed assets.

Other Expenses

Other Expenses decreased 4.98% to Ps.1,128.9 million in the fiscal year ended December 31, 2005 from Ps.1,188.1 million in the fiscal year ended December 31, 2004,
which in turn increased 3.28% from Ps.1,150.4 million in the fiscal year ended December 31, 2003.

The decrease in the fiscal year ended December 31, 2005 was mainly due to a 26.51% decrease in Other Expenses (from Ps.608.6 million in the fiscal year ended
December 31, 2004 to Ps.447.2 million in the fiscal year ended December 31, 2005), partially offset by a 8.13% increase in depreciation on differences paid on constitutional protection actions (from Ps.203.4 million in the fiscal year ended December
31, 2004 to Ps.220.0 million in the fiscal year ended December 31, 2005) and a 20.31% increase in provision for other receivables and other allowances (from Ps.351.5 million in the fiscal year ended December 31, 2004 to Ps.422.9 million in the
fiscal year ended December 31, 2005).

The increase in the fiscal year 2004 was mainly due to: (i) a 53.65% increase in depreciation on differences paid on constitutional protection actions (from Ps.132.4
million in the fiscal year ended December 31, 2003 to Ps.203.4 million in the fiscal year ended December 31, 2004) and (ii) a 61.99% increase in Other Expensesother (from Ps.375.7 million in the fiscal year ended December 31, 2003 to Ps.608.6
million in the fiscal year ended December 31, 2004). These increases were partially offset by: (i) a 42.58% decrease in provision for other receivables and other allowances (from Ps.612.2 million in the fiscal year ended December 31, 2003 to
Ps.351.5 million in the fiscal year ended December 31, 2004) and (ii) a 31.82% decrease in amortization in goodwill (from Ps.9.9 million in the fiscal year ended December 31, 2003 to Ps.6.8 million in the fiscal year ended December 31, 2004).

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Income Tax

Income Tax expense was Ps.18.7 million in the fiscal year ended December 31, 2005, a 75.73% decrease from Ps.77.1 million of the fiscal year ended December 31, 2004,
which in turn represents a 59.26% decrease over the Ps.189.2 million posted in the fiscal year ended December 31, 2003. The decreases in the fiscal years 2005 and 2004 were mainly due to the temporary differences originated in each fiscal year
according to the deferred tax method of accounting.

The following table illustrates, for each of the last three fiscal years, our income before income tax, the income tax expense that would have been payable at the
statutory rate, various adjustments, and our actual income tax expense.

|                                                     |  | Fiscal Year Ended
December 31,             
|---------------------------------------------------- |  | -------------------------------------------
|                                                     |  |                                            
|                                                     |  | 2005                                       
|                                                     |  |                                            
|                                                     |  | (in thousands of pesos, except percentages)
|Net Income before income tax and minority interest   |  | 153,067                                    
|Statutory tax rate                                   |  | 35                                         
|Income tax (at statutory rate)                       |  | 53,573                                     
|Deferred tax                                         |  | (84,700                                    
|Inflation adjustment not deductible                  |  |                                           
|Tax-exempt income                                    |  | (54,363                                    
|Unrealized valuation difference                      |  |                                            
|Loss on capital contribution in kind to subsidiaries |  |                                            
|Allowances on deferred tax assets                    |  | 84,700                                     
|Other                                                |  | (12,815                                    
|                                                     |  |                                            
|Income tax (gain) / loss                             |  | (13,605                                    
|(Allowances)                                         |  |                                           
|                                                     |  |                                            
|Income tax (gain) / loss, net                        |  | (13,605                                    
|Actual income tax                                    |  | 13,605                                     
|Deferred income tax(1)                               |  |                                           

|   
|---
|(1)
|(2)

Our effective income tax rates differ significantly from the statutory income tax rate applicable to us. The difference between the statutory rate and the effective
rate is principally due to the following factors. First, the income from local subsidiaries is tax exempt, and depreciation of goodwill is not tax deductible. Second, effective tax rate is affected by the different treatment of loan loss provisions
for financial and tax reporting purposes. Additionally, the allowance made on public loans is not tax deductible. Finally, Government Securities are generally marked-to-market for tax reporting purposes, with unrealized gains and losses included in
taxable income, even if such securities are carried on a cost-plus-yield basis for financial reporting purposes. See Note 17.1. to the Consolidated Financial Statements.

Minority interest in subsidiaries

Loss on minority interest was Ps.17.1 million in the fiscal year ended December 31, 2005; Ps.12.9 million in the fiscal year ended December 31, 2004 and Ps.4.8
million (income) in the fiscal year ended December 31, 2003. These changes were mainly due to the changes in net income of Consolidar Group (through which we hold a 53.89% interest in Consolidar AFJP S.A., a 65.96% in Consolidar
Compañía de Seguros de Vida S.A. and a 66.67% interest in Consolidar Seguros de Retiro S.A.) and the changes in net income of Credilogros Compañía Financiera S.A. (in which we have a 69.52% interest) and PSA
Compañía Financiera S.A. (in which we hold a 50% interest).

Monetary loss

Monetary loss reflects the effect derived from inflation (since January 1, 2002 up to February 2003) for maintaining monetary assets and liabilities. See Note 3.2.
to the Consolidated Financial Statements.

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Financial Condition

Total Assets

At December 31, 2005 we had total assets of Ps.15,983.7 million, which represented a 0.36% decrease from the Ps.16,041.7 million as of December 31, 2004.

The decrease was mainly due to the following: an 8.49% decrease in Loans net of allowances (from Ps.9,268.7 million at December 31, 2004 to Ps.8,481.5 million at
December 31, 2005) mainly due to the sale of Public Sector loans during the present fiscal year; a 14.74% decrease in Other Receivables from Financial Transactions (from Ps.975.2 million at December 31, 2004 to Ps.831.5 million at December 31,
2005), mainly due to the decrease of spot and forward sales of government securities; a 22.98% decrease in Intangible Assets (from Ps.850.8 million at December 31, 2004 to Ps.655.3 million at December 31, 2005), mainly due to the amortization of
differences on constitutional protection actions paid; a 33.81% decrease in Other Assets (from Ps.95.5 million at December 31, 2004 to Ps.63.2 million at December 31, 2005), a 3.31% decrease in Cash and due from Banks (from Ps.1,666.6 million in the
fiscal year ended December 31, 2004 to Ps.1,611.5 million in the fiscal year ended December 31, 2005), a 1.47% decrease in Bank Premises and Equipment (from Ps.381.4 million at December 31, 2004 to Ps.375.8 million at December 31, 2005) and a 21.85%
decrease in Suspense items (from Ps.1,2 million al December 321, 2004 to Ps.0.9 million al December 31, 2005).

These decreases were partially offset by: a 41.48% increase in Government and private securities (from Ps.2,476.9 million at December 31, 2004 to Ps.3,504.3 million
at December 31, 2005), mainly due to the increase in Instruments issued by the Argentine Central Bank, a 122.22% increase in Assets Subject to Financial Lease (from Ps.58.6 million at December 31, 2004 to Ps.130.2 million at December 31, 2005), a
6.06% increase in Investments in Other Companies (from Ps.47.4 million at December 31, 2004 to Ps.50.3 million at December 31, 2005), a 27.9% increase in Other Receivables (from Ps.186.8 million at December 31, 2004 to Ps.239.0 million at December
31, 2005) and a 24.47% increase in Other Subsidiaries Assets (from Ps.32.3 million at December 31, 2004 to Ps.40.3 million at December 31, 2005).

Total Liabilities and Stockholders Equity

At December 31, 2005, we had total liabilities and minority interests in subsidiaries of Ps.14,182.2 million, representing a 1.22% decrease from the Ps.14,357.3
million at December 31, 2004.

The decrease was mainly due to the following: a 61.98% decrease in Other Liabilities from Financial Transactions (from Ps.3,274.4 million at December 31, 2004 to
Ps.1,244.8 million at December 31, 2005) mainly due to the anticipated payment of the advances owed to the Argentine Central Bank, a 100% decrease in Subordinated Corporate Bonds (from Ps.60.3 million at December 31, 2004 to Ps.0 million at December
31, 2005), a 93.2% decrease in Suspense Items (from Ps.33.8 million at December 31, 2004 to Ps.2.3 million at December 31, 2005), and a 0.94% decrease in Allowances (from Ps.265.7 million at December 31, 2004 to Ps.263.2 million at December 31,
2005). These decreases were partially offset by: an 18% increase in Deposits (from Ps.8,993.8 million at December 31, 2004 to Ps.10,613.1 million at December 31, 2005), mainly due to the increase in certificates of deposits and savings accounts, a
14.47% increase in Other Subsidiary Liabilities (from Ps.1,413.4 million at December 31, 2004 to Ps.1,617.9 million at December 31, 2005), a 74.93% increase in Other liabilities (from Ps.144.0 million at December 31, 2004 to Ps.252.0 million at
December 31, 2005) and an 8.31% increase in Minority Interest in Subsidiaries (from Ps.171.9 million at December 31, 2004 to Ps.189.0 million at December 31, 2005), mainly due to the income in subsidiaries.

Stockholders Equity increased from Ps.1,684.3 million at December 31, 2004 to Ps.1,801.5 million at December 31, 2005. The 6.96% increase reflected the Net
income of the year (Ps.117.2 million).

Liquidity and Capital Resources

Asset and Liability Management

The purpose of asset and liability management is to structure our consolidated balance sheet in light of interest rate, liquidity and foreign exchange risks, as well
as market risk, public sector risk and capital structure. We have an Asset and Liability Committee, which meets weekly, and is composed of the Chief Executive Officer, the Assistant Executive Director, Accounting and Risk Management, the Wholesale
Banking Director, the Retail Banking Director, the Chief Financial Officer and the Treasury Manager. The Asset and Liability Committee establishes specific limits with respect to risk exposure, sets policy with respect to pricing and approves
commercial policies which may have a financial impact on our balance sheet. It is also responsible for the follow-up of monetary aggregates and financial variables, our liquidity position, regulations from the Central Bank and the competitive
environment in assets, liabilities and interest rates.

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Liquidity

Our asset and liability management policy attempts to ensure that sufficient liquidity is available to meet our funding requirements. As a measure of our liquidity,
we had a ratio of liquid assets to total deposits of 44.11%, 33.07% and 30.26% at December 31, 2005, 2004 and 2003, respectively. Liquid assets include cash, debt from banks and government and corporate securities (excluding holdings in investment
accounts and unlisted government securities).

Our primary source of funds is our deposit base, which primarily consists of peso and dollar denominated deposits in current accounts, savings accounts and time
deposits from individuals and corporations, which deposits at December 31, 2005 totaled Ps.10,613.1 million. Approximately 12% of our deposits at such date were dollar denominated.

Under a medium-term note program, that expired in December 2005, we issued the first series of subordinated corporate bonds, on March 31, 1998, in the amount of
US$150 million, at an annual floating interest rate of LIBOR plus 3.3 points, maturing on March 31, 2005. As of December 31, 2002 we capitalized US$130 million of the above mentioned subordinated debt. As of December 31, 2004 the outstanding
capital of this debt amounted to US$20 million, which was paid on March 31, 2005 upon maturity.

On April 27, 2000, the general ordinary and extraordinary shareholders meeting approved the increase of the aggregate outstanding maximum amount of the corporate
bonds to be issued under the Medium-Term Note Program to US$1,000 million. The shareholders meeting also approved the creation of a short-term program to be issued in various series and classes for a total outstanding amount of up to US$300
million (or its equivalent in other currency) for five years. Under this program we can issue corporate bonds (not convertible into shares) maturing in one year or less with or without third party guarantees according to the dispositions of the
Board of Directors.

On
October 31, 2000, we issued corporate bonds in the amount of US$150 million
face value, at a price equal to 100% of the face value, with an annual interest
 rate of LIBOR plus 145 basis points, payable on a semi-annual basis maturing
on October 31, 2002, to be amortized upon maturity. On October 2002 we agreed
to refinance these corporate bonds through the issue of a new series of bonds.
Such  refinancing included the interest payment and a 5% payment of the capital
as of October 31, 2002, the payment of a 5.26% of the capital of the new bond
at 180 days of the issuance and the balance in one year. In November 2003 we
agreed upon the  refinancing of these bonds through the issue of a new series
of bonds. Such refinancing included the interest payment and a 10% payment of
the capital as of November 26, 2003, and the remaining in semi-annual installments
with final maturity on  October 31, 2008. As of December 31, 2005 the principal
outstanding of this debt amounts to US$94.5 million. Section 36 of Law No.
23,576, states that in order for the issuance of notes to be subject to fiscal
benefits, said notes must be sold  by public offering procedures, and their proceeds
must be invested: (i) in physical assets situated in Argentina; (ii) in working
capital in Argentina; (iii) for the refinancing of debt; or (iv) for the payment
of irrevocable contributions in  affiliate companies of the issuer, if their
proceeds are exclusively invested as described in (i) and (ii).

The shareholders meeting held on July 15, 2003, approved the creation of a new medium-term note program, for five years, for the issuance and re-issuance of simple
notes (Obligaciones Negociables), non-convertible into shares with common guarantee or such guarantees determined by the Board of Directors and subordinated notes without guarantee, convertible or non-convertible into shares, for a total outstanding
amount of up to US$300 million according to the provisions of the Central Banks Communications A 2970 and A 3558 as amended under Law No. 23,576 as amended by Law No. 23,962.

On December 22, 2003 we paid a Ps.60 million seven-year loan plus CER (originally US$60 million) granted by the Fiduciary Fund for Assistance to Financial and
Insurance Institutions to Banco de Crédito Argentino, on December 20, 1996, for the financing of the acquisition of certain assets and liabilities.

On January 10, 2003, the Federal Executive published Decree No. 53/03 which amended Decree No. 410/02. Decree No. 410/02 had the effect of not converting certain
foreign currency obligations of public and private sector companies into pesos. The Decree governed obligations to the National Government as a result of i) subsidiary or other loans and guarantees originally financed by multilateral credit entities
or ii) arising from liabilities owed by the National Treasury and refinanced with external creditors. The decision taken by the Managing Committee of the Trust Fund for Reconstruction of Companies at the meeting held on May 28, 2003 stated that 50%
of the aforementioned financing was to be converted into pesos while the difference would be remain in its original currency.

On December 29, 2004, we paid the last installment of subordinated corporate bonds issued by Corpbanca, which we thereby acquired. This debt was originally stated in
U.S. dollars for an amount of US$30 million and was converted into pesos at the exchange rate Ps.1 per U.S. dollar, and indexed by applying CER in accordance with the regulations established by the Government in February, 2002.

105

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The
Bank has filed a subsidiary appeal for reversal before a higher administrative
authority applying for a change in the aforementioned criterion and has reiterated
 its position at the time of each interest and principal payment. Upon the appeal ́s
 dismissal, the claims were filed with the hierarchical superior officer on March
 16, 2004. On May 17, 2004 the grounds for the appeal before the higher  administrative
 authority were expanded. On February 7, 2005, the Bank was notified of Resolution
 No. 25 dated January 17, 2005, executed by the Argentine Minister of Economy
 and Production, which dismissed the Hierarchical Remedy sought. On May 16,
 2005, an administrative action under section 100 (Decree No. 1759/72, 1991 revision)
 was filed against Resolution No. 25 issued by the Ministry of Economy and Production,
 which dismissed the Hierarchical Appeal filed by the Bank. At present, the
 case is pending determination by the Federal Executive. This notwithstanding,
 in May 2005 a liability of US$23,176 thousand was recorded under Other Liabilities
 from Financial Transactions, this being the dollar amount owed estimated by
 the Bank  in the filing mentioned above. This effect should be compensated under
 the terms of the compensation mechanism for financial institutions mentioned
 in Note 15.1. to the Consolidated Financial Statements which was also recorded
 for 114,922 thousand pesos in the  line Other receivables not covered by debtor
 classification regulations under Other receivables from financial transactions
 and 72,429 thousand pesos for the corresponding liability to be paid to B.C.R.A.
 At any event, the final determination of this issue would not imply additional
 losses for the Bank.

Dividends and other payments from our Argentine non-banking subsidiaries also provide an additional potential source of liquidity, even though relatively
insignificant in amount. Each Argentine non-banking subsidiary is required to allocate 5% of its annual net income to a legal reserve until such reserve equals 20% of the subsidiarys capital stock. This reserve cannot be used to pay us
dividends.

The measures taken by the Government at the beginning of 2002, including the repeal of the Convertibility Law, the pesification of all assets and
liabilities in the formal economy and the default by the Government on its debt, led to a massive withdrawal of deposits and a breakdown in the chain of payments. We had to face a persistent drain of deposits, lawsuits brought by depositors to get
back their deposits in cash and in their original currency, and the maturing of our foreign currency liabilities. As of December 31, 2005, we have repaid a total of approximately US$105.1 million and Ps.2,114.3 million in connection with
lawsuits brought by depositors.

Capital Resources

At the regular and special stockholders meeting held on August 7, 2002, the stockholders approved the Banks capital increase in the amount of up to 1,250,000
nominal value for the subscription of common, book-entry shares, entitled to one vote per share. Those shares might be paid up in cash and/or with subordinated corporate bonds in foreign currency issued by the Bank, maturing on March 31, 2005,
and/or with loans granted by BBVA to the Bank. The Bank management, at its meeting of December 5, 2002, decided to: approve the assets to be contributed, as follows: (i) cash, (ii) subordinated corporate bonds issued by the Bank, maturing March 31,
2005, and (iii) the loan granted by BBVA on April 19, 2002, in the amount of US$79.3 million; establish the value of subordinated corporate bonds to capitalize in US$58.10 per US$100 nominal value, based on valuation reports made by
independent third parties; and establish the amount of shares to be listed as 209,631,892.

On December 31, 2002, in accordance with the issuance conditions of the new shares, 158,361,439 new shares in the exercise of preemptive rights and 135,101 new
shares in the exercise of the option to buy additional shares that were not purchased by other shareholders in exercise of their preemptive rights, were subscribed and integrated. The Banks capital stock amounts to Ps.368,128,432 as of
December 31, 2002 and 2003.

At the regular and special meetings held on April 22, 2004, the stockholders approved the Bank's capital increase in the amount of up to 385,000 nominal value for
the subscription of common, book-entry shares, entitled to one vote per share. The stockholders delegated to the Board of Directors the power to establish the remaining conditions.

On June 11, 2004, the Bank filed an application for public offering of shares to be sold through subscription (Chapter VI Rules of the National Securities
Commission, General Resolution No. 368/01) with the Buenos Aires Stock Exchange and the National Securities Commission.

The public offering of 103,232,874 ordinary shares of Ps.1.00 par value each, entitled to one vote per share and with equal rights than the remaining shares of the
Bank, according to what was established by the Board of Directors Meeting held on June 10, 2004, and the Meeting of Sub-Delegates appointed by the Board of Directors Meeting of October 5, 2004, was authorized by Resolution No. 14,917 of the National
Securities Commission on October 4, 2004. The stock-market listing of the referred shares was authorized by the Buenos Aires Stock Exchange on October 7, 2004. It was stated that the preferential subscription period began on October 18, 2004 and
ended on November 17, 2004.

106

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On November 2, 2004, BBVA subscribed to 65,326,744 new shares. The integration of the amount of Ps.230,603,406.32 corresponding to the new shares is carried out by
the capitalization of BBVA by means of a loan amounting to US$77,701,464.68 plus interest up to November 2, 2004 inclusive, of US$21,288.07.

On November 19, 2004 the subscription procedure came to an end. An aggregate of 103,232,874 new shares was issued for a paid-in amount of Ps.364,412,045.22, which
resulted in an additional paid-in capital of Ps.261,179,171.12.

Interest Rate Sensitivity

A key component of our asset and liability policy is the management of interest rate sensitivity. Interest rate sensitivity is the exposure and the measure of
sensitivity to interest rate variations. The interest rate sensitivity measures the impact on the gross intermediation margin in response to a change in market interest rates. For any given period, the pricing structure is matched when an equal
amount of assets and liabilities reprice. Any mismatch of interest-earning assets and interest-bearing liabilities is known as a gap position and is shown in the following tables. A negative gap denotes liability sensitivity and normally means that
a decline in interest rates would have a positive effect on net interest income while an increase in interest rates would have a negative effect on interest income.

Our interest rate sensitivity strategy takes into account not only the rates of return and their underlying degree of risk, but also liquidity requirements,
including minimum regulatory cash reserves, mandatory liquidity ratios, withdrawal and maturity of deposits and additional demands for funds. Our gap limits are established and subsequently monitored by the Asset and Liability Management Committee.

The following table shows the interest rate sensitivity of our interest-earning assets and interest-bearing liabilities. Variations in interest rate sensitivity may
also arise within the repricing periods presented.

It is important to highlight that given the devaluation of the peso and the following conversion into pesos of assets and liabilities in foreign currency, the
Government measures introduced an important interest rate gap in our Net Financial Income. While a significant part of the Banks risk assets, mainly Public sector loans and bonds, accrue CER adjustment plus an annual interest rate, most
liabilities accrue interest at a fixed rate, except for certain discount loans granted to Banco Francés by the Central Bank, the remaining portfolio of rescheduled deposits, known as CEDROS, and the new CER adjusted deposits. Rescheduled
deposits  Ps.459 million as of December 31, 2004  were converted into pesos at a Ps.1.4 per dollar and are subject to CER adjustment plus a 2% annual interest rate; new CER CDs  Ps.1,202 million by 2004 year-end  are subject
to CER adjustment plus a 0.49% interest rate. On the asset side, certain mortgages, personal and pledge loans accrued CVS instead of CER adjustment, plus an annual interest rate until April 2004, when they began to accrue a fixed interest rate (with
no adjustment)  in accordance with Law No. 25,713, Decree No. 117/04. Fixed rate assets and liabilities with a maturity of no more than three months and total adjusted assets and liabilities, are included in the following chart, in the 0-3
months interval, given that CER adjustment changes on a monthly basis. The chart shows our exposure to a positive interest rate gap, but it is important to bear in mind that CER behavior may differ from that of the interest rate. In this sense, the
aforementioned adjusted CER deposits help to reduce the long CER adjusted position.

|                                            |  | Remaining Maturity or Earliest Repricing Intervals at December 31, 2005
|------------------------------------------- |  | -----------------------------------------------------------------------
|                                            |  |                                                                        
|                                            |  | 0-3 months                                                             
|                                            |  |                                                                        
|                                            |  | (in thousands of pesos, except percentages)                            
|Interest-earning assets                     |  |                                                                        
|Interest earning deposits in banks          |  | 1,033,277                                                              
|Government securities                       |  | 3,069,417                                                              
|Corporate bonds                             |  | 84,416                                                                 
|Loans(1)                                    |  | 6,897,495                                                              
|                                            |  |                                                                        
|Total                                       |  | 11,084,605                                                             
|                                            |  |                                                                        
|Interest-bearing liabilities                |  |                                                                        
|Deposits                                    |  | 8,240,329                                                              
|Corporate bonds                             |  | -                                                                      
|Due to other banks                          |  | 766,265                                                                
|                                            |  |                                                                        
|Total                                       |  | 9,006,594                                                              
|                                            |  |                                                                        
|Asset/liability gap                         |  | 2,078,011                                                              
|Cumulative sensitivity gap                  |  | 2,078,011                                                              
|Cumulative sensitivity gap as a             |  |                                                                        
|percentage of total interest-earning assets |  | 15.72                                                                  

|   
|---
|(1)

107

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The following table shows the interest rate sensitivity of our peso-denominated interest-earning assets and interest-bearing liabilities.

|                                            |  | Remaining Maturity or Earliest Repricing Intervals at December 31, 2005
|------------------------------------------- |  | -----------------------------------------------------------------------
|                                            |  |                                                                        
|                                            |  | 0-3 months                                                             
|                                            |  |                                                                        
|                                            |  | (in thousands of pesos, except percentages)                            
|Interest-earning assets:                    |  |                                                                        
|Interest earning deposits in banks          |  | 357,493                                                                
|Government securities                       |  | 2,930,167                                                              
|Corporate bonds                             |  | 22,025                                                                 
|Loans(1)                                    |  | 6,394,074                                                              
|                                            |  |                                                                        
|Total                                       |  | 9,703,759                                                              
|                                            |  |                                                                        
|Interest-bearing liabilities:               |  |                                                                        
|Deposits                                    |  | 7,161,322                                                              
|Corporate bonds                             |  | -                                                                      
|Due to other banks                          |  | 289,944                                                                
|                                            |  |                                                                        
|Total                                       |  | 7,451,266                                                              
|                                            |  |                                                                        
|Asset/liability gap                         |  | 2,252,493                                                              
|Cumulative sensitivity gap                  |  | 2,252,493                                                              
|Cumulative sensitivity gap as a             |  |                                                                        
|percentage of total interest-earning assets |  | 19.46                                                                  

|   
|---
|(1)

The following table shows the interest rate sensitivity of our foreign currency denominated interest-earning assets and interest-bearing liabilities. Variations in
interest rate sensitivity may also arise within the repricing periods presented.

|                                            |  | Remaining Maturity or Earliest Reprising Intervals at December 31, 2005
|------------------------------------------- |  | -----------------------------------------------------------------------
|                                            |  |                                                                        
|                                            |  | 0-3 months                                                             
|                                            |  |                                                                        
|                                            |  | (in thousands of pesos, except percentages)                            
|Interest-earning assets:                    |  |                                                                        
|Interest earning deposits in banks          |  | 675,784                                                                
|Government securities                       |  | 139,250                                                                
|Corporate bonds                             |  | 62,391                                                                 
|Loans(1)                                    |  | 503,421                                                                
|                                            |  |                                                                        
|Total                                       |  | 1,380,846                                                              
|                                            |  |                                                                        
|Interest-bearing liabilities:               |  |                                                                        
|Deposits                                    |  | 1,079,007                                                              
|Corporate bonds                             |  | -                                                                      
|Due to other banks                          |  | 476,321                                                                
|                                            |  |                                                                        
|Total                                       |  | 1,555,328                                                              
|                                            |  |                                                                        
|Asset/liability gap                         |  | (174,482                                                               
|Cumulative sensitivity gap                  |  | (174,482                                                               
|Cumulative sensitivity gap as a             |  |                                                                        
|percentage of total interest-earning assets |  | (10.61                                                                 

|   
|---
|(1)

Exchange Rate Sensitivity

As of December 31, 2005, our total foreign exchange-denominated asset position was Ps.2,323.3 million and our total foreign exchange-denominated liability position
was Ps.1,605.7 million, resulting in a net asset currency position of Ps.717.6 million, which is 44.34% of stockholders equity.

For a description of the changes in the exchange rates since December 2005, seeInformation on
the CompanyRecent Political and Economic Developments in Argentinaand Note 16.13. to the Consolidated Financial Statements. For a description of foreign exchange risk, seeQuantitative and Qualitative Disclosures About Market RiskForeign Exchange Risk.

108

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Capital Requirements

As of December 31, 2005 we had a consolidated excess capital of Ps.983.8 million pursuant to the Central Bank ́s rules. At such date, Basic Net
Worth and Complementary Net Worth, subject to applicable deductions, amounted to Ps.1,890.8 million under the Argentine risk-based capital guidelines (which are based on the Basle Committee). As of December 31, 2004, our excess
capital amounted to Ps.1,189.8 million, with a Basic Net Worth and Complementary Net Worth, subject to applicable deductions, of Ps.1,656.4 million.

As of December 31, 2005, we complied with the Central Banks capital requirements on a consolidated basis and our capital resources were sufficient for our
capital requirements. See a description of the minimum capital requirements currently in effect inInformation on the CompanyThe Argentine Banking System and its Regulatory Framework.

As of December 31, 2005 and 2004, our stockholders equity was Ps.1,801.6 million and Ps.1,684.3 million, respectively. At such dates, our ratio of average
stockholders equity/average total assets was 10.88% and 10.06%, respectively. SeeInformation on the CompanySelect Statistical InformationReturn on Equity and
Assets.

In our opinion, our capital resources are sufficient for the Banks present requirements also on an individual and a consolidatedbasis.

We are not aware of any legal or economic restrictions on the ability of our subsidiaries to transfer funds to Banco Francés in the form of cash dividends,
loans, advances - subject to the regulations of each industry- or by other means. However, there can be no assurance that in the future such restrictions will not be adopted or that, if adopted, they will not negatively affect our liquidity.

As of December 31, 2005, the Bank had no material commitments for capital expenditures.

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The following table sets forth, for the dates indicated, the calculation of our excess capital under the Central Bank ́s rules and certain capital and liquidity ratios.

|                                                                           |  | At December 31,                                                 
|-------------------------------------------------------------------------- |  | ----------------------------------------------------------------
|                                                                           |  |                                                                 
|                                                                           |  | 2005(5)                                                         
|                                                                           |  |                                                                 
|                                                                           |  | (in thousands of
          pesos, except ratios and percentages)
|Calculation of Excess Capital(1)                                           |  |                                                                 
|Allocated to assets at risk                                                |  | 331,836                                                         
|Allocated to Bank premises and equipment, intangible assets and equity     |  |                                                                 
|investment assets                                                          |  | 132,125                                                         
|Market risk                                                                |  | 38,079                                                          
|Interest rate risk                                                         |  | 97,950                                                          
|Incremental minimum capital requirements originated in excesses in         |  |                                                                 
|other regulations                                                          |  | 197,645                                                         
|Public sector and securities in investment account                         |  | 70,877                                                          
|                                                                           |  |                                                                 
|Required minimum capital under Central Bank rules                          |  | 868,512                                                         
|                                                                           |  |                                                                 
|Basic net worth                                                            |  | 1,684,343                                                       
|Complementary net worth                                                    |  | 122,207                                                         
|Deductions                                                                 |  | (105,617                                                        
|Minority interest                                                          |  | 188,960                                                         
|                                                                           |  |                                                                 
|Total Capital under Central Bank rules                                     |  | 1,889,893                                                       
|                                                                           |  |                                                                 
|Excess capital                                                             |  | 1,021,381                                                       
|Selected Capital and Liquidity Ratios                                      |  |                                                                 
|Average stockholders equity as a percentage of average total assets(1)(2) |  | 10.88                                                           
|Total Liabilities as a multiple of total stockholders equity              |  | 7.77                                                            
|Cash and due from banks as a percentage of total deposits                  |  | 15.18                                                           
|Liquid assets as a percentage of total deposits(1)(3)                      |  | 48.20                                                           
|Loans as a percentage of total assets                                      |  | 53.06                                                           

|   
|---
|(1)
|(2)
|(3)
|(4)
|(5)

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The following table represents our contractual obligations and commercial commitments as of December 31, 2005:

|                                   |  | Payments due by Period
(in thousands of Pesos)
|---------------------------------- |  | ----------------------------------------------
|                                   |  |                                               
|                                   |  | Total                                         
|                                   |  |                                               
|Contractual obligations            |  |                                               
|Long-term debt                     |  | 1,134,115                                     
|Capital lease obligations          |  | -                                             
|Operating leases                   |  | 37,934                                        
|Unconditional purchase obligations |  | -                                             
|Other long-term obligations        |  | -                                             
|                                   |  |                                               
|Total                              |  | 1,172,049                                     
|                                   |  |                                               
|Commercial Commitments             |  |                                               
|Lines of credit                    |  | 3,827                                         
|Standby letters of credit          |  | 80,571                                        
|Guarantees                         |  | 171,084                                       
|Standby repurchase obligations     |  | 110,680                                       
|                                   |  |                                               
|Total                              |  | 366,162                                       
|                                   |  |                                               
|Off-Balance Sheet Arrangements     |  |                                               

We enter into various transactions involving off-balance sheet financial instruments (see Note 16.19 to the Consolidated Financial Statements). We use these instruments to meet the risk
management, trading and financing needs of clients or for our proprietary trading and asset and liability management purposes. These instruments are subject to varying degrees of credit and market risk. We monitor credit risk and market risk
associated with on- and off-balance sheet financial instruments on an aggregate basis.

We use the same credit policies in determining whether to enter or extend call and put option contracts, commitments, conditional obligations and guarantees as we do for granting loans. Our
management believes that the outstanding off-balance sheet items do not represent an unusual credit risk.

The market risk of derivatives arises from the potential for changes in value due to fluctuations in market prices. We reduce our exposure to market risk, if necessary, by entering into
offsetting transactions in accordance with the hedging global policy defined by BBVA for its subsidiaries. The credit risk of derivatives arises from the potential of a counterparty to default on its contractual obligations. The effect of such a
default varies as the market value of derivative contracts changes. Credit exposure exists at a particular point in time when a derivative has a positive market value. We attempt to limit our credit risk by dealing with creditworthy counterparties
and obtaining collateral where appropriate. Our activities related to hedging and derivatives transactions in 2005 are explained in Note 16.19. to the Consolidated Financial Statements.

Commitments to extend credit are agreements to lend to a customer at a future date, subject to compliance with contractual terms. Commitments generally have fixed expiration dates or other
termination clauses and may require the payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent actual future cash requirements for the Bank. The Bank
evaluates each customers creditworthiness on a case-by-case basis. Foreign trade acceptances represent Bank customers liabilities on outstanding drafts or bills of exchange that have been accepted by the Bank and the Banks
liability to remit payment upon the presentation of the accepted drafts or bills of exchange. The credit risk involved in foreign trade acceptances and guarantees granted is essentially the same as that involved in extending loan facilities to
customers.

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We act as trustee in several financial trusts established for various purposes. We are in no case personally liable for the liabilities assumed in the performance of the trust obligations. Any
liabilities resulting from the trust are satisfied with and up to the full amount of the trust assets or their proceeds. See Note 10. to the Consolidated Financial Statements.

In addition, we act as trustee in 63 non financial trusts. We are in no case personally liable for the liabilities assumed in the performance of the contract obligations. Any liabilities are
satisfied with and up to the full amount of the trust assets and their proceeds. The non-financial trusts at issue were set up to secure the receivables of several creditors (beneficiaries) and the trustee was entrusted with the management, care,
preservation and custody of the trust assets. The trust assets represent about Ps.4,068 million and consist mainly of cash, creditors ́ rights, real estate and shares. See Note 10. to the Consolidated Financial Statements.

We prepare our financial statements in accordance with the rules of the Central Bank related thereto, which differ from U.S. GAAP in certain respects, as discussed in Note 17 to the
Consolidated Financial Statements. The differences and the most significant effects on our net income and Stockholders Equity over the fiscal years ended December 31, 2005, 2004 and 2003 are described below.

Under U.S. SFAS No. 109, deferred tax assets or liabilities are recorded for temporary differences between the financial reporting basis and the tax basis of assets and liabilities at statutory
tax rates expected to be in effect when such amounts will be realized. Deferred tax assets are recognized if it is more likely than not that such assets will be realized. As explained in Note 5.1. to the Consolidated Financial Statements, we applied
this method to determine the charge for income tax. The adjustments required in order to reconcile assets and liabilities with U.S. GAAP, as detailed in the following paragraph, are shown without considering their effect on income tax. This effect
would have caused our net income to increase by Ps.19.3 million, Ps.513.7 million and Ps.392.5 million for the fiscal years ended December 31, 2005, 2004 and 2003 respectively. In addition, stockholders equity would have increased by Ps.536.6
million and Ps.483.6 million as of December 31, 2005 and 2004, respectively.

In addition, as mentioned in Note 5.2. to the Consolidated Financial Statements, the Bank, as requested by the Central Bank, did not record an asset for the credit for tax on minimum presumed
income. As of December 31, 2003, a valuation allowance was provided to reserve the amount recorded, in view of the deteriorating economic situation in Argentina. Several events arose after the closing of the year ended December 31, 2004 that
improved the forecast of the Argentine economy and the development of future operations in the Bank. Given that the Bank estimates that it shall have taxable income against which these tax credits shall be offset, the valuation allowance should be
reversed in accordance with U.S. GAAP. Had U.S. GAAP been applied, and as a result of the adjustment to earnings of prior years booked by the Bank under Central Bank ́s rules, the Bank ́s assets would be increased by Ps.1.0 million as of
December 31, 2004 and decrease by Ps.61.6 as of December 31, 2003. On the other hand, the Bank ́s net income would be decreased by Ps.1.0 million and Ps.66.5 million as of December 31, 2005 and 2003, respectively and would be increased by
Ps.62.6 million for the year ended December 31, 2004.

Under Argentine Banking GAAP, loan origination and issuance credit cards fees are recognized when collected. Under U.S. SFAS No. 91, these fees are recognized over the life of the related
loan as an adjustment to yield. The effect of applying SFAS No. 91 would have been to decrease our net income by Ps.2.3 million and Ps.9.7 million for the fiscal years ended December 31, 2005 and 2004 and to increase it by Ps.19.3 million in the
fiscal year ended December 31, 2003. Since the effect of U.S. GAAP treatment would have been to decrease the principal balance of outstanding loans, application of SFAS No. 91 to our financial statements would have reduced Stockholders Equity
by Ps.23.1 million, Ps.20.8 million and Ps.11.1 million for the fiscal years ended December 31, 2005, 2004 and 2003, respectively.

Under Argentine Banking GAAP, certain software development expenses are amortized over the estimated useful life of the software, for up to a maximum of 60 months. Under Argentine Banking GAAP,
the Consolidar Group capitalized expenses incurred in connection with the launching of certain activities. The Pension Fund Manager Superintendency (the agency overseeing Consolidar AFJP) authorized the capitalization of disbursements made through
September 25, 1994, for salaries, advertising, software, agents commissions, fees, brochures, forms, printing and leases and rentals. Under U.S. SFAS No. 2, these expenses are to be charged off to income when incurred. If U.S. GAAP
had been applied, our assets would have decreased by Ps.16.9 million, Ps.16.4 million and Ps.18.9 million for the fiscal years ended December 31, 2005, 2004 and 2003, respectively. Our net income would have decreased by Ps.0.5 million for the fiscal
year ended December 31, 2005 and would be increased by Ps.2.4 million and Ps.40.1 million for the fiscal years ended December 31, 2004 and 2003, respectively.

112

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Under Argentine Banking GAAP, Government securities that we decided to classify as investment accounts (including those used for forward purchases under repurchase agreements) were carried at a
cost adjusted for the accrual at fiscal year-end of interest based on the internal rate of return from the time elapsed from acquisition date. According to U.S. GAAP, these securities should be considered as available for sale and carried at fair
value (market value if available) with unrealized gains and losses reported as a net amount, net of income tax within the stockholders equity accounts. However, SFAS No. 115 requires that if the decline in fair value is judged to be other than
temporary, the cost of the security shall be written down to fair value, and the amount of the write down shall be included in earnings. Had U.S. GAAP been applied, our assets would have decreased by Ps.173.0 million, Ps.460.1 million and Ps.821.4
million for the fiscal years ended December 31, 2005, 2004 and 2003, respectively. Our net income would have increased by Ps.383.3 million and Ps.167.3 million for the fiscal years ended December 31, 2005 and 2004, respectively and would be
decreased by Ps.378.5 million for the fiscal year ended December 31, 2003.

Under Argentine Banking GAAP, we carry our unlisted Government and private securities denominated in pesos at cost and our unlisted Government and private securities denominated in foreign
currencies at par plus accrued income translated at the closing exchange rate on the day of valuation. Under U.S. GAAP for trading securities, a fair valuation methodology should be used to value securities for accounting purposes. Had U.S. GAAP
been applied, our assets would be increased by Ps.4.5 million for the fiscal years ended December 31, 2005 and would be decreased by Ps.7.9 million and Ps.372.2 million for the fiscal years ended December 31, 2004 and 2003, respectively. On the
other hand, the income for the year ended December 31, 2005, 2004 and 2003 would be increased by Ps.12.4, Ps.364.3 and Ps.542.7, respectively.

Under Argentine Banking GAAP, the allowance for loans has been calculated based on the Banks estimated loan loss risk in light of debtor compliance and the collaterals supporting the
respective transactions, as provided by Communication A 2950 and supplemented by the Central Bank. SFAS No. 114, as amended by SFAS No. 118, requires a creditor to measure impairment of a loan based on the present value of expected
future cash flows discounted at the loans effective interest rate, or at the loans observable market price or the fair value of the collateral if the loan is collateral dependent. This statement is applicable to all loans (including
those restructured in a troubled debt restructuring involving a modification of terms), except large groups of smaller-balance homogenous loans that are collectively evaluated for impairment. Had U.S. GAAP been applied, the Banks assets would
be increased by Ps.49.6 million and Ps.37.6 million at December 31, 2005 and 2004, respectively and would be decreased by Ps.10.8 million at December 31, 2003. On the other hand, the income for the years ended December 31, 2005 and 2004 would be
increased by Ps.12.0 million and Ps.48.4 million, respectively and would be decreased by Ps.10.8 million for the fiscal year ended December 31, 2003.

Under Argentine Banking GAAP, BBVA Banco Francés and its subsidiaries swapped Federal State Securities, bonds, treasury bills and unsecured loans at face value for secured loans. The
initial value of the certificates matched that of the prior book value as of the date of the swap. According to U.S. GAAP, a non-temporary impairment affects the swapped obligations and therefore requires that, in the event that such obligations
have been classified as held to maturity, a loss be recorded for the difference between the book value of the obligation swapped and its quotation at the date of the swap, as such quotation is considered the best measure for recognizing
the above mentioned impairment. The effects of adjustments required to state the amounts swapped in accordance with U.S. GAAP would be to decrease assets by Ps.909.5 million, Ps.1,821.8 million and Ps.2,005.5 million at December 31, 2005, 2004 and
2003 respectively. On the other hand, income would be increased by Ps.912.3 million and Ps.183.7 million for the fiscal years ended December 31, 2005 and 2004, respectively and would be decreased by Ps.289.0 million for the year ended December 31,
2003.

As a result of Public Emergency and Exchange System Reform Law and the public debt default, an impairment affects the credit facilities given to non-financial provincial governmental sector and
other government agencies. Therefore according to U.S. GAAP, a loss must be recorded for the difference between their accounting value and the expected value of their future cash flows. The effects of adjustments required to state these amounts in
accordance with U.S. GAAP would decrease assets by Ps.149.0 million, Ps.175.3 million and Ps.328.6 million at December 31, 2005, 2004 and 2003, respectively. On the other hand, income for the years ended December 31, 2005, 2004 and 2003 would be
increased by Ps.26.3, Ps.153.3 million and Ps.381.1 million, respectively.

On April 26, 2004, the Bank swapped Secured Bonds due in 2018 to conclude the Swap I of deposits for Government Bonds. This swap generated, in accordance with U.S. GAAP, gains on
extinguishments of deposit-related liabilities for the fiscal year ended December 31, 2003 by Ps.104,3 million, thus generating an increase of the Banks assets by that amount as of December 31, 2003 and a decrease in the income for the fiscal
year ended December 31, 2004.

In August, 2004, the Bank swapped Secured Bonds due in 2018 in the framework of Swap II of Deposits for Government Bonds. This swap generated, in accordance with U.S. GAAP, gains on
extinguishments of deposit-related liabilities in the income for the year ended December, 31 2004 by Ps.108.0 million.

Pursuant to Argentine
Banking GAAP, at December 31, 2003 the Bank recorded as assets: a) the difference
between the paid amounts for constitutional protection actions and the deposit
amounts registered in accordance with the existing regulations.

113




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The Government has not indicated that it will compensate
the Bank for the difference between the amounts paid for constitutional protection actions and the deposit amounts registered in accordance with the existing regulations; b) the difference generated by the application of the CVS coefficient instead of the CER, on the understanding that the
Government would compensate the Bank for the loss caused by those situations. The National Congress has enacted a law contemplating that compensation. On January 23, 2004, the Federal Executive ruled the abovementioned law through Decree No. 117/04.
The Central Bank regulated the compensation through Communication A 4114. As described in Note 15.3. to the Consolidated Financial Statements, on June 2004 the Bank wrote off the relevant asset and recorded an adjustment to earnings of
prior years. This adjustment has not had impact under U.S. GAAP because these assets were not recognized under those policies; and c) in the fiscal year 2003, the Bank registered a loss because Credilogros decided to abandon the claim, after several
adverse instances, about recorded as an asset the compensation generated by the negative position in foreign currency as of December 31, 2001. SFAS No. 5 Accounting for Contingencies requires that contingencies that might result in gains
should not be reflected in the accounts since to do so might be to recognize revenue prior to its realization. Had U.S. GAAP been applied, our assets would have decreased by Ps.586.5 million, Ps.739.3 million and Ps.811.6 million at December 31,
2005, 2004 and 2003, respectively. On the other hand, net income would have increased by Ps.152.8 million and Ps.72.3 million at December 31, 2005 and 2004, respectively and would be decreased by Ps.409.8 million at December 31, 2003.

Under Argentine Banking GAAP the Bank accounted for its investment in the Buenos Aires Stock Exchange at market value. Under U.S. GAAP, such investments would have been valued at cost or at a
lesser amount where there is a non-temporary impairment in value. Additionally, the companies that are under 20% were valued by the equity method in accordance with Central Bank rules. Under U.S. GAAP, those investments, that are non-marketable
securities, would have been valued at cost. Had U.S. GAAP been applied, the Banks assets would be decreased by Ps.18.8 million, Ps.12.8 million and Ps.8.6 million at December 31, 2005, 2004 and 2003, respectively. On the other hand, the income
for the years ended December 31, 2005, 2004 and 2003 would be decreased by Ps.5.9 million, Ps.4.3 million and Ps.3.5 million, respectively.

Pursuant to Argentine Banking GAAP, we generally record the cost of vacation payments earned by employees when paid, U.S. GAAP requires that this expense be recorded on an accrual basis as the
vacations are earned. If U.S. GAAP had been applied, our liabilities would have increased by Ps.44.8 million, Ps.36.1 million and Ps.33.6 million for the fiscal years ended December 31, 2005, 2004 and 2003, respectively. Net income would have
decreased by Ps.8.8 million, Ps.2.5 million and Ps.1.5 million for the fiscal years ended December 31, 2005, 2004 and 2003, respectively.

Pursuant to Argentine Banking GAAP, we do not give accounting recognition to checks drawn against the Bank or other banks or other items to be collected, until such time as the related item
clears or is accepted. Such items are recorded by the Bank in memorandum accounts. U.S. banks, however, account for such items through balance sheet clearing accounts at the time the items are presented. Had U.S. GAAP been applied, the Banks
assets and liabilities would be increased by approximately Ps.768.7 million and Ps.740.8 million at December 31, 2005 and 2004, respectively.

Under Argentine Banking GAAP, the Bank recognizes for forward and unsettled spot transactions as a receivable and a payable at the time of the agreement, which reflect the amount of cash,
currency or securities to be exchanged at the closing date. The receivable or payable representing the receipt or delivery of securities or currency is stated at the quoted market value of such securities or currency. Under U.S. GAAP, in general
entities would not recognize a receivable or payable but would recognize the differences arising from changes in the market price of securities or currency to be received or delivered if the transaction did not qualify as a hedge. Had U.S. GAAP been
applied, the Banks assets and liabilities would be decreased by approximately Ps.84.5 million and Ps.53.3 million at December 31, 2005 and 2004, respectively.

Under Argentine Banking GAAP, foreign trade acceptances are not recorded on the balance sheet by the Bank. In accordance with Regulation S-X, acceptances and related customer liabilities should
be recorded on the balance sheet. The effect of the adjustment required to state balance sheets in accordance with Regulation S-X would be to increase assets (due from customers on acceptances) and increase liabilities (bank acceptances outstanding)
by Ps.80.6 million and Ps.109.7 million at December 31, 2005 and 2004, respectively.

At December 31, 2005 and 2004, the subsidiary Consolidar AFJP, manages a retirement and pension plan for an amount of 12.8 and 10.5 billion pesos, respectively. During the period ended December
31, 2005, the Bank has performed a review and recalculation for its pension and retirement obligations activities, as well as the amounts considered to recover for any future compensation, consequently, the Bank has reconsidered the amounts
previously recorded under US GAAP for such obligations. As a result of such review, the shareholders equity and consolidated net income in accordance with accounting principles generally accepted in the United States of America have been
restated for the year ended December 31, 2004 and 2003. Therefore, the stockholders equity
for the periods ended December 31, 2004 and 2003 have been reduced in Ps.172.9
million and Ps.124.7 million, respectively, and net income has been reduced in
Ps.48.3 million and Ps.124.7 million, respectively. Additionally, for the period
ended December 31, 2005

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On May 4, 1998, our shareholders approved the reversal of the shares issuance premium related to the capital increase paid on December 19, 1997 and relating to the business goodwill from the
acquisition of 71.754% of the capital stock of Banco de Crédito Argentino. Under Argentine Banking GAAP, we recognize the issuance premium under Issuance premiums and capitalize the related amount under Intangible assets. The
effect of adjustments required to state such amounts in accordance with U.S. GAAP would be to increase assets by Ps.254.9 million for fiscal years ended December 31, 2005, 2004 and 2003.

On May 13, 1999, BBVA acquired Corp Banca S.A. and Atuel Fideicomisos S.A. and on September, 13, 1999, BBVA sold its interests in both companies to BF. For the difference between the definitive
price of the transaction and the incorporation value of both companies, the Bank recognized a goodwill and amortized it in proportion to the months of estimated useful life (120-month period). Under U.S. GAAP, we would be required to account for the
acquisition of the mentioned companies at BBVAs book balance. Had U.S. GAAP been applied, the Banks assets would be increased by Ps.29.2 million, Ps.22.6 million and Ps.16.0 million at December 31, 2005, 2004 and 2003, respectively.
Additionally, the income would be increased by Ps.6.6 million for the fiscal years ended December 31, 2005, 2004 and 2003.

SFAS 142 requires, effective January 1, 2002, that goodwill no longer be amortized, but is subject to an impairment test annually or more frequently if events or changes in circumstances
indicate that the asset may be impaired. Accordingly, we have recognized an impairment loss. Had U.S. GAAP been applied, our assets would be decreased by Ps.309.6 million for the fiscal years ended December 31, 2005, 2004 and 2003. On the other
hand, the income for the year ended December 31, 2003 would be increased by Ps.3,3 million.

As a result of the sale of Banco Francés (Cayman) Ltd. during the year ended December 31, 2004, as described in Note 1.5., the income for the year then ended would be decreased by
Ps.200.0 million.

In the fiscal year ended December 31, 2004 we sold our interest in Banco Francés (Cayman) Ltd. In consequence, the comprehensive income at December 31, 2003 was charged to income in the
fiscal year ended December 31, 2004. Had U.S. GAAP been applied, our income for the fiscal year ended December 31, 2004 and 2003 would be increased by Ps.143.4 million and Ps.159.7 million, respectively.

Consolidar Cía. de Seguros de Retiro S.A. and Consolidar Cía. de Seguros de Vida S.A. maintain reserves accounted in Other Liabilities from Subsidiaries valued in accordance with
de accounting standards established by the Superintendence of Pension Fund Administrators and the National Superintendence of Insurance (see Notes 3.5.21. and 6.). Had U.S. GAAP been applied, liabilities would be decreased by Ps.10.1 million for the
year ended December 31, 2005 and would be increased by Ps.36.8 million and Ps.41.4 million at December 31, 2004 and 2003, respectively. On the other hand, income for the year ended December 31, 2005 and 2004 would be increased by Ps.46.9 million and
Ps.4.6 million, respectively and decreased by Ps.41.4 million for the fiscal year ended December 31, 2003.

Calculated in accordance with U.S. GAAP, our net income (net loss) for the fiscal years ended December 31, 2005, 2004 and 2003 would have been Ps.1,634.6 million, Ps.1,407.5 million and
Ps.(26.4) million, respectively. Under Argentine Banking GAAP, our net income (net loss) was Ps.117.2 million, Ps.(54.0) million and Ps.(350.3) million, for the same respective periods.

The international rating agencies downgraded our ratings in 2001 and 2002, following the crisis and the sovereign ceiling. Standard & Poors rated our counterparty credit risk rating
SD (selective default) and our senior debt rating CC and Moodys Investors Service rated our financial strength credit rating E and our senior debt rating Ca.

As of June 15, 2002, we asked the international rating agencies to temporarily suspend the ratings of Banco Francés. We made this decision within cost reduction measures and because we
believed that our ratings would not improve in the medium term in light of the deep crisis in Argentina and in the financial system.

As of June 1, 2005, with the completion of the sovereign debt restructuring, Standard & Poor upgraded the new sovereign debt to B-. Accordingly Standard & Poors rated our local
counterparty credit risk rating A+, our senior debt rating as A+.

115

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We incur research and development expenses in connection with technology information systems. SeeInformation on the Company-Business
Overview-Information Technology. We hold no material patents and do not license to others any of our intellectual property. We plan infrastructure development (processing, telecommunications, Internet,
information security) based upon present and projected future demand of such services. We acquire the necessary technology, including equipment, from third parties.

In light of strong economic activity and fiscal solvency, coupled with stable exchange rate and inflation under control, the financial system will continue to be focused, during 2006, on
further expanding the private sector lending activity while reinforcing the transactional business. Solid credit growth was mainly biased towards short and medium-term loans in the corporate market and personal loans and credit cards in the consumer
segment and represents a clear trend for the years to come, However, no assurance can be given that credit demand will remain strong and that this trend will continue. For a description of recent changes in our business strategy seeInformation on the Company-Business Overview.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

Directors and Senior Management

Directors

The Bank is managed by a Board of Directors (the Board) consisting of a minimum of three and a maximum of nine directors, all of whom are elected by the shareholders for a period of
three years and are eligible for re-election. Although the terms of our current directors are staggered, this is not required by our bylaws. Our bylaws also contemplate the election of alternate directors. The Board regularly meets at least once per
month.

At present, the Board consists of five regular and two alternate directors. The table below indicates the names of the members of our Board, their present position in the company, their
business background and the date of expiration of the period for which they were elected.

The General Regular and Special Shareholders Meeting held on April 27, 2006 elected one regular director, re-elected two regular directors and two alternate directors, all for a period of three
years. After the relevant distribution of positions, the Board was constituted as follows: Mr. Jorge Carlos Bledel as Chairman, Mr. José Carlos Plá Royo as Vice-Chairman, and Messrs. Marcelo Gustavo Canestri, Javier DOrnellas and
Oscar Miguel Castro as Regular Directors. Messrs. Martín Ezequiel Zarich and Carlos Horacio Peguet were also elected as alternate members of the Board.

116

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|Name         |  | Current
Term Ends |  | Position as ofDecember 31,2004 |  | Date of Birth |  | Present principal occupations outside Banco Francésand
business experience
|------------ |  | ----------------- |  | ------------------------------ |  | ------------- |  | --------------------------------------------------------------------------
|             |  |                   |  |                                |  |               |  |                                                                           
|Jorge Carlos |  | December          |  | Chairman                       |  | 04/19/1954    |  | Present principal occupations:                                            
|Bledel       |  | 2008              |  |                                |  |               |  | Director, Rombo Compañía Financiera S.A. (Rombo Compañía                 
|             |  |                   |  |                                |  |               |  | Financiera); Director, Credilogros Compañía Financiera S.A.              
|(*)          |  |                   |  |                                |  |               |  | (Credilogros); Vice Chairman, Francés Valores Sociedad de Bolsa S.A.    
|             |  |                   |  |                                |  |               |  | (Francés Valores); Chairman, Inversora Otar S.A. (Inversora Otar );   
|             |  |                   |  |                                |  |               |  | Chairman, Consolidar AFJP S.A. (Consolidar AFJP); Chairman,             
|             |  |                   |  |                                |  |               |  | Consolidar ART S.A. (Consolidar ART); Chairman, Consolidar              
|             |  |                   |  |                                |  |               |  | Compañía de Seguros de Vida S.A. (Consolidar Seguros de Vida);          
|             |  |                   |  |                                |  |               |  | Chairman, Consolidar Compañía de Seguros de Retiro S.A. (Consolidar      
|             |  |                   |  |                                |  |               |  | Seguros de Retiro); Chairman, Consolidar Seguros S.A. (Consolidar       
|             |  |                   |  |                                |  |               |  | Seguros) and Chairman, Consolidar Salud S.A. (Consolidar Salud).       
|             |  |                   |  |                                |  |               |  |                                                                           
|             |  |                   |  |                                |  |               |  | Business experience:Credit
Manager, Banco del Interior y Buenos Aires;    
|             |  |                   |  |                                |  |               |  | Business Manager, Corporación Metropolitana de Finanzas; Financial        
|             |  |                   |  |                                |  |               |  | Manager, Banco Francés; Wholesale Banking Director, Banco Francés         
|             |  |                   |  |                                |  |               |  | and Retail Banking Director, Banco Francés.                               
|             |  |                   |  |                                |  |               |  |                                                                           
|             |  |                   |  |                                |  |               |  | Mr. Bledel joined the staff of Banco Francés
in 1986 and was first elected
|             |  |                   |  |                                |  |               |  | to the Board in March 2003.                                               
|            
|Juan Ignacio |  | December          |  | Vice-chairman                  |  | 04/01/1944    |  | Present principal occupations:                                            
|Giménez      |  | 2005              |  |                                |  |               |  | Vice-Chairman, Inversora Otar.                                            
|Echeverría   |  |                   |  |                                |  |               |  |                                                                           
|             |  |                   |  |                                |  |               |  | Business experience:Director J. Justo S.A. and Stein Baltogar.            
|(**)         |  |                   |  |                                |  |               |  |                                                                           
|             |  |                   |  |                                |  |               |  | Mr. Jiménez Echeverría was first elected to the Board in December 1996.   
|            
|Marcelo      |  | December          |  | Director                       |  | 04/23/1953    |  | Present principal occupations:                                            
|Gustavo      |  | 2006              |  |                                |  |               |  | Director, Francés Valores; Alternate Director, Consolidar AFJP; Alternate 
|Canestri     |  |                   |  |                                |  |               |  | Director, Consolidar Seguros de Vida; Alternate Director, Consolidar      
|             |  |                   |  |                                |  |               |  | Seguros de Retiro; Alternate Director, Consolidar ART; Regular Director,  
|(*)          |  |                   |  |                                |  |               |  | Inversora Otar; Chairman, Credilogros and Alternate Director, BBVA        
|             |  |                   |  |                                |  |               |  | Consolidar Seguros S.A. (BBVA Seguros).                                 
|             |  |                   |  |                                |  |               |  |                                                                           
|             |  |                   |  |                                |  |               |  | Business experience:Corporate
Assistant Manager, Banco Francés;           
|             |  |                   |  |                                |  |               |  | Wholesale Banking Assistant Manager, Banco Francés; Asset                 
|             |  |                   |  |                                |  |               |  | Management Director, Banco Francés and Financial Director, Banco          
|             |  |                   |  |                                |  |               |  | Francés.                                                                  
|             |  |                   |  |                                |  |               |  |                                                                           
|             |  |                   |  |                                |  |               |  | Mr. Canestri joined the Bank in 1973 was first elected
to the Board in    
|             |  |                   |  |                                |  |               |  | September 2001.                                                           
|            
|Javier José  |  | December          |  | Director                       |  | 06/07/1940    |  | Present principal occupations:                                            
|DOrnellas   |  | 2006              |  |                                |  |               |  | Chairman, Rentar S.A.; Chairman, VASA S.A.; Chairman, MASISA              
|             |  |                   |  |                                |  |               |  | Argentina S.A.; Director, HSBC S.A. de Inversiones; Chairman, Vidriería   
|(***)        |  |                   |  |                                |  |               |  | Argentina S.A., Chairman, Vidrios Lirquén S.A. and Vice-Chairman,         
|             |  |                   |  |                                |  |               |  | Santa Lucía Cristal SACIF.                                                
|             |  |                   |  |                                |  |               |  |                                                                           
|             |  |                   |  |                                |  |               |  | Business experience:Director,
HSBC Roberts S.A. de Inversiones.           
|             |  |                   |  |                                |  |               |  | Mr. DOrnellas was elected as Director in 1998.                           

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|Name         |  | Current
Term Ends |  | Position as ofDecember 31,2004 |  | Date of Birth |  | Present principal occupations outside Banco Francésand
business experience
|------------ |  | ----------------- |  | ------------------------------ |  | ------------- |  | --------------------------------------------------------------------------
|             |  |                   |  |                                |  |               |  |                                                                           
|Oscar Miguel |  | December          |  | Director                       |  | 12/04/1945    |  | Present principal occupations:                                            
|Castro       |  | 2008              |  |                                |  |               |  | Statutory auditor (síndico), Origenes Retiro, Internacional Vida, Origenes
|             |  |                   |  |                                |  |               |  | A.F.J.P., Transportadora Gas del Sur (Alternate).                         
|(***)        |  |                   |  |                                |  |               |  |                                                                           
|             |  |                   |  |                                |  |               |  | Business experience:Statutory auditor: Santander Sociedad de Bolsa,       
|             |  |                   |  |                                |  |               |  | Banco Supervielle, Banco Rio, Banco Societe Generale S.A., Axa            
|             |  |                   |  |                                |  |               |  | Inversora, BBVA Banco Francés. Alternate statutory auditor: Banco         
|             |  |                   |  |                                |  |               |  | Comafi, BNP Asset Management. Financial Executive Team member:            
|             |  |                   |  |                                |  |               |  | Arthur Andersen Worldwide. Partner in charge of Financial Markets         
|             |  |                   |  |                                |  |               |  | division: Arthur Andersen Latinamerica. Partner: Pistrelli Diaz y Asoc.   
|             |  |                   |  |                                |  |               |  | (Arthur Andersen).                                                        
|             |  |                   |  |                                |  |               |  |                                                                           
|             |  |                   |  |                                |  |               |  | Mr. Castro was elected as director in 2003.                               

|     
|-----
|(*)  
|(**) 
|(***)

The Regular and Special Shareholder Meeting held on April 27, 2006 appointed Mr. José Carlos Plá Royo as director for a period of three years. According to the provisions of
General Resolution No. 368, as amended by General Resolution No. 400 of de CNV, Mr. José Carlos Royo Plá does not qualify as independent director, as he is a former employee of BBVA.

The Regular and Special
Shareholder Meeting held on April 27, 2006 re-elected Messrs. Jorge Carlos Bledel,
and Oscar Miguel Castro as directors for a period of three years. The Regular
and  Special Shareholders Meeting held on April 30, 2003 appointed the following
persons as alternate directors for a period of three years: Messrs. Martín
Ezequiel Zarich (Background: Director of Banking Development in the Americas
for BBVA;  Retail Banking Director; Financial Director; Banco Francés
Merger Director; Planning Director for Banco de Crédito; Manager, Management
Control, for Banco de Crédito; Economist for Banco de Crédito;
he joined Banco  Crédito in 1987); and Carlos Horacio Peguet (Background:
Vice Chairman and General Manager, Consolidar AFJP; Vice Chairman, Consolidar
ART; Vice Chairman Consolidar Salud; Vice Chairman, Consolidar Seguros de Retiro;
Vice Chairman, Consolidar  Seguros de Vida; Vice Chairman Consolidar Seguros;
Vice Chairman, Consolidar Salud; Chairman, Clínica y Maternidad Santa
Isabel S.A.; Chairman, Clínica Bazterrica S.A.; Vice Chairman, Assurex
S.A.; he joined the Consolidar Group in  1994); none of them qualify as independent
directors under the independence criteria established by General Resolution No.
400 of the CNV.

The Regular and Special
Shareholder Meeting held on April 22, 2004 re-elected Messrs. Javier DOrnellas
and Marcelo Gustavo Canestri as directors for a period of three years.

The Regular and Special
Shareholder Meeting held on April 27, 2006 re-elected Messrs. Martín Ezequiel
Zarich and Carlos Horacio Peguet as alternate directors for a period of three
years.

Until the date of this annual report, the Central Bank has not issued the corresponding authorization to the appointment of the above-mentioned director José Carlos Plá Royo.

118

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The table below indicates the names of the members of the management committee who are our main executives, their present positions and the year of their appointment for the position, as well
as their business background. All main executives are appointed for an indefinite period.

|              |  |                 |  |                  |  |               |  |                                                                          
|------------- |  | --------------- |  | ---------------- |  | ------------- |  | -------------------------------------------------------------------------
|Name          |  | First
Appointed |  | Current Position |  | Date of Birth |  | Background and Work Experience                                           
|              |  |                 |  |                  |  |               |  |                                                                          
|Jorge Carlos  |  | 2001            |  | Executive        |  | 04/19/1954    |  | Director, Rombo Compañía Financiera; Director, Credilogros; Vice         
|Bledel        |  |                 |  | Chairman         |  |               |  | Chairman, Francés Valores; Chairman, Inversora Otar; Chairman,           
|              |  |                 |  |                  |  |               |  | Consolidar AFJP; Chairman, Consolidar ART; Chairman, Consolidar          
|              |  |                 |  |                  |  |               |  | Seguros de Vida; Chairman, Consolidar Seguros de Retiro; Chairman,       
|              |  |                 |  |                  |  |               |  | Consolidar Seguros and Chairman, Consolidar Salud.                       
|              |  |                 |  |                  |  |               |  | Mr. Bledel joined Banco Francés in 1986.                                 
|             
|José Carlos   |  | 2003            |  | Assistant        |  | 03/15/1959    |  | General Assistant Director and Financial Director of Banco del Comercio  
|López Álvarez |  |                 |  | Executive        |  |               |  | (Spain) and Vice-president, Risk Management Director and Financial       
|              |  |                 |  | Director,        |  |               |  | Director of BBVA Brasil.                                                 
|              |  |                 |  | Accounting and   |  |               |  | Mr. López Alvarez joined the Bank in 2003.                               
|              |  |                 |  | Risk             |  |               |  |                                                                          
|              |  |                 |  | Management       |  |               |  |                                                                          
|              |  |                 |  | Director         |  |               |  |                                                                          
|             
|Tomás Deane   |  | 2003            |  | Director, Local  |  | 03/29/1967    |  | Mr. Deane joined the Bank in 1990, in the area of Financial Funds        
|              |  |                 |  | Wholesale        |  |               |  | Management.                                                              
|              |  |                 |  | Banking          |  |               |  |                                                                          
|             
|Oscar Hugo    |  | 2002            |  | Director, Retail |  | 03/27/1951    |  | Director, Credilogros Compañía Financiera S.A.; Director, Rombo          
|Fantacone     |  |                 |  | Banking          |  |               |  | Compañía Financiera; Regular Director, Banelco S.A.; Regular Director    
|              |  |                 |  |                  |  |               |  | Visa Argentina S.A.                                                      
|              |  |                 |  |                  |  |               |  |                                                                          
|              |  |                 |  |                  |  |               |  | Mr. Fantacone joined Banco Francés in 1982, as Special Credits Manager.  
|              |  |                 |  |                  |  |               |  |                                                                          
|              |  |                 |  |                  |  |               |  | He also was Client Services Manager and was promoted to Regional         
|.             |  |                 |  |                  |  |               |  | Director in 1997                                                         
|             
|Marcelo       |  | 2001            |  | Financial        |  | 04/23/1953    |  | Director, Francés Valores; Alternate Director, Consolidar AFJP; Alternate
|Gustavo       |  |                 |  | Director         |  |               |  | Director, Consolidar Seguros de Vida; Alternate Director, Consolidar     
|Canestri      |  |                 |  |                  |  |               |  | Seguros de Retiro; Alternate Director, Consolidar ART; Alternate         
|              |  |                 |  |                  |  |               |  | Director, BBVA Consolidar Seguros S.A.; Regular Director, Inversora      
|              |  |                 |  |                  |  |               |  | Otar S.A.; Chairman, Credilogros Compañía Financiera S.A. and Alternate  
|              |  |                 |  |                  |  |               |  | Director, BBVA Consolidar Seguros S.A.                                   
|              |  |                 |  |                  |  |               |  |                                                                          
|              |  |                 |  |                  |  |               |  | Mr. Canestri joined the Bank in 1973.                                    
|             
|Gabriel       |  | 2002            |  | Media Director   |  | 08/14/1958    |  | Organization Manager, Banco Francés.                                     
|Milstein      |  |                 |  |                  |  |               |  | Mr. Milstein joined the Bank in 1995.                                    
|             
|Carlos E.     |  | 1998            |  | Director,        |  | 08/10/1957    |  | Director, Atuel Fideicomisos S.A.; Chairman, Promoción y Servicios       
|Montoto       |  |                 |  | Human            |  |               |  | Financieros S.A.                                                         
|              |  |                 |  | Resources and    |  |               |  |                                                                          
|              |  |                 |  | Quality          |  |               |  | Mr. Montoto joined Banco Francés in 1975.                                

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|                                                       |  |                |  |                  |  |               |  |                                                                     
|------------------------------------------------------ |  | -------------- |  | ---------------- |  | ------------- |  | --------------------------------------------------------------------
|Name                                                   |  | FirstAppointed |  | Current Position |  | Date of Birth |  | Background and Work Experience                                      
|                                                       |  |                |  |                  |  |               |  |                                                                     
|Daniel M                                               |  | 2001           |  | Director, Global |  | 05/17/1962    |  | Manager Recovery of Corporate Credits, Banco de Crédito, Manager;   
|González                                               |  |                |  | Wholesale        |  |               |  | Credit Recovery, Banco de Crédito; Manager Wholesale Banking, Banco 
|                                                       |  |                |  | Banking          |  |               |  | de Crédito; Individual Risks Manager, Banco Francés and Director    
|(*)                                                    |  |                |  |                  |  |               |  | Corporate Banking, Banco Francés.                                   
|                                                       |  |                |  |                  |  |               |  |                                                                     
|                                                       |  |                |  |                  |  |               |  | Mr. González joined the former Banco de Crédito
in 1988.            
|                                                      
|Juan Eugenio                                           |  | 2005           |  | Director, Risk   |  | 06/20/1956    |  | Mr. Rogero González joined the BBVA in 1973, his background and work
|Rogero                                                 |  |                |  | Management       |  |               |  | experience includes: Branch Corporate Banking Director of Bilbao    
|González                                               |  |                |  |                  |  |               |  | BBVA; Risk and Corporate Director, BBVA Puerto Rico; Insurance      
|                                                       |  |                |  |                  |  |               |  | Development Director, BBVA America and Global Corporate Risk        
|                                                       |  |                |  |                  |  |               |  | Control Director, BBVA.                                             
|                                                       |  |                |  |                  |  |               |  |                                                                     
|                                                       |  |                |  |                  |  |               |  | Mr. Rogero González joined the Bank in 2005.                        
|                                                      
|(*) Mr. Daniel Marcelo González, died on July 8, 2005. |  |               

The service contracts of the directors and the executive officers do not provide for benefits upon termination of employment. Expect for mentioned inDirectors, Senior Management and Employees-Compensation of Directors and Officers.

The following table indicates the composition of the Supervisory Committee of Banco Francés until December 31, 2005:

|          |  |                               |  | Expiration of term
|--------- |  | ----------------------------- |  | ------------------
|          |  |                               |  |                   
|Regular   |  | Mario Rafael Biscardi         |  | December 31, 2005 
|          |  | Carlos Roberto Chiesa         |  | December 31, 2005 
|          |  | Alejandro Mosquera            |  | December 31, 2005 
|          |  |                               |  |                   
|Alternate |  | Osvaldo Pablo Alejandro Jofré |  | December 31, 2005 
|          |  | Julieta Paula Pariso          |  | December 31, 2005 
|          |  | Paola Lorena Rolotti          |  | December 31, 2005 

As of December 31, 2005, both the regular and alternate members of the Banks Supervisory Committee, in their capacity as public accountants, have represented to the Bank that: (a) they
perform or are prepared to perform the function of statutory auditors with the professional independence required by Technical Resolution No. 15 of the Argentine Federation of Professional Councils in Economic Sciences, and (b) they are members of
Biscardi & Asociados.

The General Ordinary and Special Shareholders Meeting of Banco Francés held on April 27, 2006, appointed the following members of the Supervisory Committee:

|          |  |                               |  | Expiration of term
|--------- |  | ----------------------------- |  | ------------------
|          |  |                               |  |                   
|Regular   |  | Mario Rafael Biscardi         |  | December 31, 2006 
|          |  | Carlos Roberto Chiesa         |  | December 31, 2006 
|          |  | Alejandro Mosquera            |  | December 31, 2006 
|          |  |                               |  |                   
|Alternate |  | Osvaldo Pablo Alejandro Jofré |  | December 31, 2006 
|          |  | Julieta Paula Pariso          |  | December 31, 2006 
|          |  | Paola Lorena Rolotti          |  | December 31, 2006 

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Mario Rafael Biscardi: Attorney, a partner of the firm Biscardi & Asociados, he is a member of the Supervisory Committee of, inter alia, Banco Société Générale S.A., Banco Banex S.A., Banco
Itaú Buen Ayre S.A., GMAC Cia. Financiera S.A., General American Compañía de Seguros de Vida S.A., Renault Argentina S.A., Sociedad Comercial del Plata S.A., P&G Holding S.R.L and Inta S.A.

Carlos Roberto Chiesa: Attorney, a partner of the firm Biscardi & Asociados, he is a member of the Supervisory Committee of, inter alia, Banco Société Générale S.A., Banco Banex S.A., Banco
Itaú Buen Ayre S.A., GMAC Cia. Financiera S.A., General American Compañía de Seguros de Vida S.A. and Hidroeléctrica Cerros Colorados S.A.

Alejandro Mosquera: Attorney, a partner of the firm Biscardi & Asociados, he is a member of the Supervisory Committee of, inter alia, Banco Société Générale S.A., Banco Banex S.A., Banco
Itaú Buen Ayre S.A., GMAC Cia. Financiera S.A., General American Compañía de Seguros de Vida S.A., Renault Argentina S.A., Sociedad Comercial del Plata S.A., P&G Holding S.R.L, and Inta S.A.

Osvaldo Pablo Alejandro Jofré : Attorney, a member of the firm Biscardi & Asociados, he is a member of the Supervisory Committee of Banco Société Générale S.A., Banco Banex S.A., Banco
Itaú Buen Ayre S.A., GMAC Cia. Financiera S.A., General American Compañía de Seguros de Vida S.A., Duke Energy International Southern Cone S.R.L., Sofital SAFeII and Santista Textil S.A.

Julieta Paula Pariso: Attorney, a member of the firm Biscardi & Asociados, she is a member of the Supervisory Committee of Banco Société Générale S.A., Banco Banex S.A., Banco Itaú
 Buen Ayre S.A., General American Compañía de Seguros de Vida S.A., Duke Energy International Southern Cone S.R.L., Sofital SAFeII, GMAC Cia. Financiera S.A. and Hidroeléctrica Cerros Colorados S.A.

Paola Lorena Rolotti: Attorney, a member of the firm Biscardi & Asociados, she is a member of the Supervisory Committee of Banco Société Générale S.A., Banco Banex S.A., Banco Itaú
 Buen Ayre S.A., General American Compañía de Seguros de Vida S.A., Duke Energy International Southern Cone S.R.L., Sofital SAFeII, Santista Textil S.A. and Hidroeléctrica Cerros Colorados S.A.

Both the regular and alternate members of the Banks Supervisory Committee, in their capacity as attorneys, have represented to the Bank that: (i) they are members of Biscardi &
 Asociados S.R.L. Law Firm and qualify as independent according to General Resolution No. 368 (New Text 2001), as amended by General Resolution No. 400 of the CNV; and (ii) have filed all the information required by the mentioned
dispositions of the CNV, regarding their professional relations with the Bank.

There are no agreements between the Bank and its directors, members of the Supervisory Committee or main executives, as a consequence of which the directors, members of the Supervisory
Committee or main executives might have interests in opposition to those of the Bank, according to the provisions of Article 272 of LC.

All legal advice is provided to the Bank by its own Legal Affairs Department.

External Auditors

As of October 1, 2002, Deloitte & Co. S.R.L. acts as the Banks external auditor. The Regular and Special Shareholders Meetings held on August 7, 2002, April 30, 2003 and April 22,
2004, April 28, 2005 and April 27, 2006 approved such appointment.

According to the provisions of General Resolution No. 368 of the CNV (New Text 2001) the auditor of the financial statements for (i) the fiscal years ended December 31, 2001 was Mr. Mario A.
Bittar, National Public Accountant (University of Buenos Aires), who is registered with the Professional Council of Economic Sciences of the City of Buenos Aires, Volume 184, Page 238, (ii) the fiscal year ended December 31, 2002 was Mr. Carlos
Alberto Haehnel, National Public Accountant registered with the Professional Council of Economic Sciences of the City of Buenos Aires, Volume 60, Page 89; and (iii) the auditor of the financial statements for the fiscal years ended December 31,
2003, 2004 and 2005 was Mr. Carlos Bernardo Srulevich, National Public Accountant (University of Buenos Aires), who is registered with the Professional Council of Economic Sciences of the City of Buenos Aires, Volume 139, Page 192.

The firm Deloitte & Co. S.R.L. has its domicile at Florida 234, 5th floor (C1005AAF), City of Buenos Aires, Argentina and is registered with the Professional Council in Economic Sciences of
the City of Buenos Aires, under Volume 1, Page 3.

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Banco Francés established the Audit Committee (I) as described in the Minutes of the Board of Directors No. 4,878 to comply with the provisions set out by the Central Bank in its
Communication A 2525, as supplemented, dated April 1997.

- Jorge Carlos Bledel
- Oscar Hugo Fantacone
- Oscar Miguel Castro
- Javier DOrnellas
- Eduardo Zerega

The Audit Committee (I) meets once a month. In each of these meetings, the Internal Audit Director presents the projects undertaken by the Internal Audit Department. The minutes of the meeting
are then drawn up detailing the issues discussed as well as those items requiring further discussion. The minutes are transcribed into an internal control book which is sent to the Board of Directors for their information.

- Supervise the appropriate implementation of the internal control systems defined in the institution through a regular evaluation;
- Provide assistance to improve the effectiveness of the internal controls;
- Inquire about external audit planning and comment as necessary on the nature, scope, and time for the performance of the audit proceedings;
- Revise and approve the annual work program of the institutions internal audit area (Internal Audit Planning Memorandum or Annual Planning) to be carried out
under these rules, as well as the level of compliance with such program;
- Revise the reports issued by the internal auditors pursuant to the provisions set forth in these rules;
- Consider the observations made by the external and the internal auditors regarding the internal control weaknesses found during the performance of their duties, as well as the corrective
measures implemented by the general management to minimize or cure such weaknesses;
- Review the results obtained by the Supervisory Committee of the Bank during the performance of its duties, as informed in the applicable reports;
- Maintain a permanent communication with the officers of the Superintendency of Financial and Exchange Institutions in charge of the control of the Bank, so as to learn about their concerns,
and the problems identified during the inspections conducted in the Bank, and control the actions adopted to solve such problems;
- Keep informed of the annual financial statements and the financial statements for the respective three-month periods as well as the external auditors report issued with respect to the
former, and any other applicable accounting information; and
- Regularly control compliance with the independence rules applicable to external auditors.

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Audit Committee (II) (as per Decree No. 677/01 and General Resolution No. 400/02 which complies with NYSE Listing Standards)

Banco Francés has an Audit Committee (II) created by resolution of the Board of Directors dated on May 21, 2004. General Ordinary and Special Shareholders Meeting held on April 27, 2006,
appointed José Carlos Plá Royo in replacement of Juan Ignacio Giménez Echeverría in order to comply with NYSE Section 303A.07(b), which states that as from July 1, 2005 all members of the Audit Committee are required to
be independent.

With the appointment of José Carlos Plá Royo, the Audit Committee (II) consists of three members of the Board, most of them are independent directors in terms of Decree No. 677/01
and Resolution No.400/02, are elected for three years and may be re-elected. Its present composition, according Board of Directors resolution held on April 27, 2006 will be constituted as follows:

| | Members: | José Carlos Plá Royo
| | -------- | --------------------
| |          | Oscar Miguel Castro 
| |          | Javier DOrnellas   

- To render an opinion on the Boards proposal to appoint the external auditors to be retained by the company, and ensure their independence.
- To supervise the operation of internal control and administrative accounting systems, as well as ensure the reliability of the latter and of all financial information or other significant
facts submitted to the CNV and the self-regulated bodies in compliance with the applicable information regulations.
- To supervise the application of policies as regards the information about the companys risk management.
- To furnish the market with comprehensive information in respect of operations which may involve conflicts of interest with members of the corporate bodies or controlling
shareholders.
- To render an opinion on the reasonableness of proposals concerning fees and share option plans for the companys directors and managers as submitted by the administration
body.
- To render an opinion on the observance of legal requirements and the reasonableness of the conditions for the issuance of shares or securities convertible into shares in the event of a
capital increase, with exclusion or limitation of preference rights.
- To verify the observance of the applicable standards of behavior.
- To issue a duly grounded opinion with regard to operations with related parties in those cases contemplated by the Decree.
- To issue a duly grounded opinion and forward it to the self-regulated entities as determined by the CNV whenever there is a conflict of interests or the possibility of such a conflict in the
company.
- To prepare annually an action plan to be submitted to the Board and the Supervisory Committee.
- To examine the plans prepared by the external and internal auditors, evaluate their performance and issue an opinion on the matter on occasion of the presentation and publication of the
annual financial statements.

All directors, members of the Supervisory Committee, managers and external auditors must, at the request of the Audit Committee, attend its sessions and cooperate with it, facilitating its
access to such information as may be available to them. In order to ensure a more appropriate exercise of the powers and duties contemplated herein, the committee may request the advice of lawyers and other independent professionals and retain their
services for the account of the company within the budget allocated for such purposes by the shareholders meeting. The Audit Committee shall have access to such information and documentation as it may deem necessary in order to comply with its
obligations.

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The aggregate amount of compensation paid by Banco Francés and its subsidiaries during the fiscal year ended December 31, 2005, to all directors and officers for services in all
capacities, including salaries and bonuses, was Ps.14.2 million. This amount also includes compensation accrued during 2004 and paid in 2005. Compensation in the amount of Ps.7.5 million accrued during 2005 and was fully paid in 2006 before the date
of this annual report. During the fiscal year ended December 31, 2005, Banco Francés was required to set aside Ps.4.1 million to provide defined contribution pension plans (see Note 16.16. to our Consolidated Financial Statements).

The Bank has the following special committees (i) Management, (ii) Media, (iii) Risks and (iv) Disclosure, among others.

The Management Committee is comprised of: (i) Jorge Carlos Bledel, (ii) Marcelo Gustavo Canestri, , ( iii) Carlos Eduardo Montoto, (iv) Oscar Hugo Fantacone, (v) Gabriel Milstein, (vi)
Tomás Deane, (vii) José Carlos López Álvarez and Juan Eugenio Rogero González.

The duties of the Management Committee are: (i) to set the business and investment strategies, general risk policies and human resources policies, together with the General Manager of the
Company, (ii) grant delegation powers to the officers, (iii) analyze and approve the annual general budget, (iv) monitor its evolution and determine the corrective measures pursuant to internal and market variables, and (v) create business synergies
with the rest of the groups companies.

The Media Committee has as duties the institutional treatment of policies, objectives and the planning of the information system area and is comprised of: (i) Gabriel Milstein, (ii) Oscar Hugo
Fantacone, (iii) Marcelo Gustavo Canestri, (iv) Daniel Marcelo González, (v) Eduardo Zerega, (vi) Jorge Carlos Bledel and (vii) Guillermo de la Plaza.

The Risk Committee is comprised of: (i) Chairman and Chief Executive Officer, Jorge Bledel; (ii) Vice Chairman, José Carlos López Alvarez; (iii) Risk Management Director, Juan
Eugenio Rogero González; and (iv) Corporate Risk Manager, Gerardo Fiandrino.

|(1) | Approve ratings for amounts (regularly adjusted) and those which were delegated as being Special Risks (Multiple Risk Ratings or Risks related to the media, political parties, trade unions or related to Banco Francés
or its officers);                                          
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                     
|(2) | If it is a rating proposal for an amount exceeding the limit mentioned, it shall first be approved by the Operations Technical Committee (OTC) and send it to the Credit Risk Central Unit (UCRC) for its
approval;                                                               
|    |                                                                                                                                                                                                                                                                                     
|(3) | If the UCRC ́s decision coincides with the decision taken by the OTC, the committee shall register such resolution in the applicable record of the OTC, shall further inform the applicable area for the rating to be
included and shall send a copy to the applicable business area;
|    |                                                                                                                                                                                                                                                                                     
|(4) | If the UCRC decision differs from the decision made by the OTC, a new rating shall have to be effected and informed to a new OTC; and                                                                                                                                               
|    |                                                                                                                                                                                                                                                                                     
|(5) | Decide proposed refinancing for amounts (regularly adjusted) and as to any relief or fine pursuant to the rules in force.                                                                                                                                                           
|    |                                                                                                                                                                                                                                                                                     
|(6) | The OTCs decisions shall be adopted upon the
consent of the committee; in the event the decision were not unanimous, such
decision shall fall within the discretion of the Committees Chairman.                                                                                   

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The Disclosure Committee is comprised of: (i) Assistant Director to the Executive Director, José Carlos López Álvarez, (ii) Director, Financial Area (Chairman), Marcelo
Gustavo Canestri , (iii) Director, Legal Advisory, Evelina Leoní Sarrailh, (iv) Auditing Director, Eduardo Zerega, (v) Accounting Manager, Claudia Gonzalez, (vi) Planning and MIS Manager, Enrique Bartolomé; (vii) Independent Director,
Oscar Miguel Castro; and (viii) Investor Relations (Secretary), Adriana Arbelbide.

The General Functions of the Disclosure Committee are to make sure that all information supplied to the Banks shareholders, the markets where its shares are listed and the regulatory
bodies of such markets is true and complete, adequately represents its financial situation and the results of its operations, and is communicated in compliance with the terms and other requirements of the applicable regulations and with general
market operation and good corporate governance principles. It must therefore ensure the existence and maintenance by the Bank of procedures and controls regarding the preparation and content of all information included in the Financial Statements as
well as of any accounting or financial information which must be registered with the CNV and other regulatory bodies and agents of the stock exchanges where the shares of Banco Francés are listed.

•Terrorism Assets and Money Laundering Prevention Committee

The Terrorism Assets and Money Laundering Prevention Committee is comprised of: The Regulatory Compliance Direction Director (Coordinator), the Regulatory Compliance Directions officer
(Vice-coordinator) in charge of Assets Laundering, the BBVA  Banco Francés S.A.s Director (Vocal member) Responsible for Anti-laundering activities, a Regular Director (Vocal member) of the Board of BBVA  Banco
Francés S.A. the Chief Financial Trading (Vocal member), the Regulatory Compliance Directions officer (Vice-coordinator) responsible for Related Companies, the Legal Services Directions Director (Vice-coordinator), the Auditing
Directions Director (Vice-coordinator), a Representative (Secretary) of the Legal Services Direction, the Media Directions Director (Vocal member), the Direction of Human Resources and Qualitys Director (Vocal member), the
Commercial Banking Directions Director (Vocal member)., the Financial Companies Area Manager of the Commercial Banking Direction (Vocal member),
Consolidars Internal Control and Regulatory Compliance Manager (Vocal member), the President of Francés Valores Sociedad de Bolsa S.A. (Vocal member), and the President of Francés Administradora de Inversiones S.A. (Vocal
member).

In order to comply with its control and prevention purposes, the Terrorism Assets and Money Laundering Prevention Committee assumes the following responsibilities:

|–                                                      | To deal with all matters related
    to the prevention of terrorism assets laundering and financing.                                                                                                                                                                                            
|------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                       |                                                                                                                                                                                                                                                                                                 
|–                                                      | To define operational policies
    and continuously monitor their degree of advancement.                                                                                                                                                                                                        
|                                                       |                                                                                                                                                                                                                                                                                                 
|–                                                      | To provide support for the terrorism
        assets laundering and financing Sub-Committee in order to make decisions
        on reporting to the competent authorities
        about any transactions which may appear unusual or suspicious, or dismissing such
    action as may be required.
|                                                       |                                                                                                                                                                                                                                                                                                 
|–                                                      | To assign duties to the different
    areas involved.                                                                                                                                                                                                                                           
|                                                       |                                                                                                                                                                                                                                                                                                 
|Each Vocal member assumes the following
    functions:
|                                                       |                                                                                                                                                                                                                                                                                                 
|–                                                      | To render his or her area of activity
        more sensitive as to the importance of preventing terrorism assets laundering
    and financing.                                                                                                                                                  
|                                                       |                                                                                                                                                                                                                                                                                                 
|–                                                      | To detect any relevant situation
    which may occur in his or her area in this connection.                                                                                                                                                                                                     
|                                                       |                                                                                                                                                                                                                                                                                                 
|–                                                      | To analyze any new product or service
    and evaluate potential asset laundering risks.                                                                                                                                                                                                        
|                                                       |                                                                                                                                                                                                                                                                                                 
|–                                                      | To assume the necessary commitments
        in his or her area in order to implement prevention systems in coordination
        with the officer responsible for Asset
    Laundering Prevention.                                                                                               

The Terrorism Asset Laundering and Financing Committee
    has delegated some of its powers in order to optimize the treatment of reports
    received. To this effect a Prevention Subcommittee has been created with
    powers to receive, analyze and report any unusual or suspicious operations
    according to the procedure determined by the Banks internal regulations.

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The committee meets every three months, or extraordinarily whenever the coordinator should deem it convenient due to the existence of relevant matters to be discussed.

Not fewer than five business days in advance of the meeting the Regulatory Compliance Director will discuss with the secretary those subjects to be treated at the quarterly meeting, and the
Secretary will submit the agenda to the members of the Committee.

- Terrorism Assets Laundering and Financing Committee

Participants

The Regulatory Compliance Director (Coordinator), the Regulatory Compliance Directions officer responsible for Asset Laundering (vice-coordinator), the Head of the Legal Services
  Direction (vice-coordinator), the Head of the Auditing Direction (vice-coordinator)

The Regulatory Compliance Director in his capacity as Coordinator is empowered to summon the involved reporting area even if it is not a member of the Subcommittee in order to clarify or
provide such information as may be necessary for the resolution of the case.

Its mission is to analyze the information received about suspicious operations, agree upon actions to further examine them as required in each particular case and decide on such basis as to
whether the operation will be reported to the BCRA or not.

- Corporate Integrity Management Committee

Participants

The Committee members acquire such condition as a result of their position and will cease to be such members as soon as they cease in their functions as heads of the relevant areas.

Director Legal Advisory.
     Director Regulatory Compliance
     Director Human Resources
     Director Internal Auditing

The Committee members may appoint any executive in their area to replace them in case of absence or impossibility to attend any of its meetings.

Secretary

The Committee will appoint a Secretary pertaining to the Legal Services Area to attend the meetings without a vote and perform the following functions:

|– | Convene the Committee.                                                                                       
|- | -------------------------------------------------------------------------------------------------------------
|  |                                                                                                              
|– | Prepare the agenda for the Committee meetings
    based on the proposals received from the different members.

Functions

To authorize exemptions from compliance with concrete provisions of the Code. In all cases such exemptions will be of an exceptional character and for a justified reason which will not result
in any risks for the Corporate Integrity of BBVA Banco Francés and companies of the group in Argentina.

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To promote the adoption of such measures as are required in order to resolve about any ethically questionable behaviors which may be brought to the knowledge of any of the members, either as a
consequence of their functions in their areas or due to the reception of communications of the type mentioned in paragraph 6.28. of the Code of Behavior.

With respect to those circumstances from which might derive significant risks for BBVA Banco Francés Banco Francés and companies of the group in Argentina, to bring the case to
the attention of the relevant:

|(1) | Board of Directors or Auditing and Regulatory Compliance Commission as the case may be.                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                          
|(2) | Management Committee.                                                                                                                    
|    |                                                                                                                                          
|(3) | Officer responsible for the preparation of financial statements, in order to ensure that such statements will reflect any relevant facts.

To resolve on any situations where the interests of BBVA Banco Francés and companies of the group in Argentina may appear to be in opposition to those of their clients.

To prepare and distribute interpretation notes on such aspects of the Code as may so require in order to ensure their application in practice.

To propose changes to the content of the Code in order to adjust it to the evolution of the activities and businesses of BBVA Banco Francés and companies of the group in Argentina, to
their operational environment and to the best practices of the financial industry.

The Committee will meet with such frequency as may be required for the performance of its functions.

- Discipline Committee

Participants

Human Resources: Director Human Resources, II Labor
  Relations and III Labor Relations Management.

Auditing: Auditing Director, III of the relevant Auditing area (Companies or Individuals) as the case may be and III Special Audits.

Retail Banking: Director Retail Banking and the relevant Territorial Director.

If the representation of the area involved is not included in the points above, it will correspond to its highest level or to the one delegated by it.

It is BBVA Banco Francés corporate body in charge of examining labor disciplinary files.

|(1) | Fraud, violation of Bank regulations, negligence in their compliance.                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                             
|(2) | Disloyalty in the tasks requested.                                                                                          
|    |                                                                                                                             
|(3) | Confidence abuse; theft or robbery of property belonging to the Bank, fellows, clients or any person in the Banks premises.
|    |                                                                                                                             
|(4) | Powers abuse.                                                                                                               

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A meeting is held once a month and only if necessary in case the matters to be considered require an urgent and immediate decision.

| | Computing Security Committee      
| | ----------------------------------
| |                                   
| | Participants                      
| |                                   
| | Media Director                    
| |                                   
| | II
Computing Planning and Security
| |                                   
| | II
Design and Development         
| |                                   
| | II
Organization                   
| |                                   
| | II
Computing Technology           
| |                                   
| | III
Computing Security            
| |                                   
| | Presidency                        
| |                                   
| | Media Director                    
| |                                   
| | Functions                         

The purpose is to ensure confidentiality, integrity and accuracy of information, and continuity of transaction, in any form or manner it may appear, thus protecting it against any unauthorized
use, disclosure, deliberate or accidental modification or interruption, focused on the business development in an adequate security and control encounter. To approve human resources polices.

Regular meetings

On a monthly basis.

Significant Differences between Banco Francéss Corporate Governance Practices and U.S. Companies Practices under NYSE Listing Standards

Banco Francéss corporate governance practices are governed by the applicable Argentine law (particularly, the Business Companies Law, Decree No. 677/01 and the Standards of the
CNV), as well as by its bylaws. Banco Francés has securities that are registered with the SEC and are listed on the NYSE, and is therefore subject to corporate governance requirements applicable to NYSE-listed non-U.S. companies.

NYSE-listed non-U.S. companies may, in general, follow their home country corporate governance practices in lieu of most of the new NYSE corporate governance requirements codified in Section
303A of the NYSEs Listed Company Manual. However, NYSE-listed non-U.S. companies must comply with NYSE Sections 303A.06, 303A.11 and 303A.12(b) and (c).

NYSE Section 303A.11 requires that non-U.S. companies disclose any significant ways in which their corporate governance practices differ from U.S. companies under NYSE listing standards. In
accordance with NYSE Section 303A.11, we describe below the relevant differences between Banco Francéss corporate governance practices and NYSE standards for listed companies.

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Under NYSE Section 303A.01, a NYSE-listed company must have a majority of independent directors on its board of directors.

Under Argentine law, the board is not required to consist of a majority of independent directors. Notwithstanding, when directors are appointed, each shareholder that nominates a director is
required to report at the meeting whether or not such director is independent. As of May 28, 2004, Argentine companies are required to have at least two independent directors to appoint to the Audit Committee. Since October 29, 1998, Banco
Francés has two independent directors out of its five members of the Board of Directors.

NYSE Section 303A.02 establishes general standards to evaluate directors independence (no director qualifies as independent unless the board of directors affirmatively
determines that the director has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company)), and emphasizes that the concern is independence
from management. The board is also required, on a case by case basis, to express an opinion with regard to the independence or lack of independence, of each individual director.

To qualify as an independent or non-independent director, CNV standards (General Resolution No. 400) are substantially similar to NYSE standards. CNV standards provide
that independence is required with respect to the Bank, and to its controlling shareholders or to shareholders with material holdings (35% or more), and that, for any person to be appointed as an independent director, such person must not perform
executive functions within the Bank. Close relatives of any persons who would not qualify as independent directors would also not be considered independent.

Under NYSE Section 303A.03, non-management directors must meet at regularly scheduled executive meetings not attended by management. Neither Argentine law nor Banco Francéss bylaws
require that any such meetings be held.

Under NYSE Section 303A.04, listed companies shall have a nominating/corporate governance committee comprised entirely of independent directors. Neither Argentine law nor Banco
Francéss bylaws require the formation of a nominating/corporate governance committee. The right to nominate directors is vested in the shareholders and the nomination is made at the shareholders meeting. Pursuant to
CNV Standards, the person who nominates a director shall report at the shareholders meeting whether or not the nominee is an independent person, based on criteria established by CNV (which are substantially similar to NYSE
standards).

Under NYSE Section 303A.05(a), listed companies had to have a Compensation Committee comprised entirely of independent directors. Under NYSE Section 303A.05(b), the
Compensation Committee shall have a written charter establishing certain minimum responsibilities as set forth in NYSE Section 303A.05(b)(i). Banco Francés does not have a compensation committee because neither Argentine law nor
Banco Francéss bylaws require the formation of a compensation committee.

Under NYSE Section 303A.06, listed companies must have an audit committee that complies with SEC requirements. Foreign private issuers shall have this audit committee in place prior
to July 31, 2005. Decree No. 677/01 and CNV ́s standards require Banco Francés to have its audit committee in place on or prior to May 28, 2004. The Audit Committee (II) of Banco Francés currently complies with the standards of
Decree No. 677/01 and CNV.

Under NYSE Section 303A.07(a), the audit committee shall consist of at least three members. All of its members shall be financially literate or must acquire such financial knowledge within a
reasonable period and at least one of its members shall have experience in accounting or financial administration. Argentine law also requires the Audit Committee to be comprised of at least three members. Pursuant to CNV ́s standards, audit
committee members are required to be conversant in business, financial, or accounting issues. CNV ́s rules provide for the training of its members to carry out their duties and Banco Francés engages in this training.

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Under NYSE Section 303A.07(a), if a member of the audit committee is simultaneously a member of the audit committee of more than three public companies, and the listed company does not limit
the number of audit committees on which its members may serve, then, in each case the board shall determine whether the simultaneous service would prevent such member from effectively serving on the listed companys audit committee, and shall
report its decision in the annual proxy statement of the company or in the companys annual report filed with the SEC. No such provision regarding an audit committee members simultaneous membership on public companies exists under
Argentine law or Banco Francéss bylaws.

Under NYSE Section 303A.07(b), all members of the audit committee are required to be independent. In accordance with Decree No. 677/01, a majority of the members of Audit Committee
(II) are independent.

Under NYSE Section 303A.07(c), the audit committee shall have a charter establishing the duties and responsibilities of its members, including, at a minimum, some of the duties and
responsibilities required by Rule 10A-3 of the Securities Exchange Act of 1934 (the Exchange Act) and as set forth in NYSE Section 303A.7(c) of the NYSE Manual. The functions and responsibilities of the audit committee in Argentina,
established by Decree No. 677/01 and CNV ́s standards, are essentially the same as provided for under Rule 10A-3 of the Exchange Act.

NYSE Sections 303A.07(c)(iii)(B) and (C) establish audit committee objectives: (i) to discuss the annual audited financial statements and the quarterly financial statements of the company with
management and the independent auditor, including the information disclosed under the heading Managements Discussion and Analysis of Financial Conditions and Results of Operations; (ii) to discuss the companys press releases
relating to its earnings, as well as the financial information and guidelines relating to its earnings that are supplied to equity researchers and rating agencies. No such provision is contained in the Argentine law or Banco Francéss
bylaws. However, CNV standards establish similar functions for the audit committee, namely, to verify the reliability of athe administrative-accounting system, and of all financial data, or of any significant data submitted to CNV and to
self-regulated exchanges, in compliance with the applicable reporting regime.

NYSE Section 303A.07(c)(iii)(B) provides that the audit committee shall establish clear policies for hiring external auditors employees. No such provision regarding hiring external
auditors employees is contained in Argentine law or Banco Francéss bylaws.

NYSE Section 303A.07(d) provides that each company must have an internal audit function in order to provide to the management and to the audit committee permanent assessments on the
companys risk management processes and internal control system. No such provision regarding an internal audit function is required by Argentine law or Banco Francéss bylaws. However, Banco Francés has an Audit Committee
according to Central Bank ́s rules, which provides to the management permanent assessments about management and operating processes, and risks of the company.

NYSE Section 303A.09 provides that companies must adopt and disclose corporate governance guidelines, including several issues for which such reporting is mandatory, and include such
information on the companys website, which should also include the charters of the Audit Committee, the Nominating Committee and the Compensation Committee.

Decree No. 677/01 required additional information that companies must include in their annual reports, including information relating to the decision-making organization (corporate governance),
the companys internal controls system, norms for director and manager compensation, stock-options, and any other compensation system applicable to Board members and managers. Decree No. 677/01 does not address the remaining issues included in
NYSE Section 303A.09. However, all relevant information sent by the Bank to the CNV is forwarded to the CNV through the CNVs Financial Reporting Highway and may be viewed on the CNV ́s website.

Under NYSE Section 303A.09, the board of directors must make a self-assessment of its performance at least once a year to determine if it or its committees function effectively and report
thereon. Under Argentine law, the boards performance is evaluated at the annual shareholders meeting.

Code of Ethics

NYSE Section 303A.10
    provides for the adoption of a Code of Business Conduct and Ethics and sets
    out the topics that such code must contain. Banco Francéss Board
    approved in December 18, 2003 a Code of Conduct of BBVA Banco Francés
    and its group of companies in Argentina, which applies to all management
    and employees, with no exceptions, the English translation of

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which is available to the public on Banco Francéss
  website. See Code of Ethics. Banco Francés believes that
its Code of Conduct complies with the NYSE requirements.

*Certifications by
    the CEO*

NYSE Section 303A.12 (a) provides that the CEO shall on a yearly basis certify to NYSE that he/she knows of no violation by the company of NYSE Sections relating to corporate governance. No
such certification is required by Argentine law or by Banco Francéss bylaws.

Under NYSE Section 303A.12 (b), the CEO shall notify the NYSE in writing whenever any executive officer of the company becomes aware of any substantial non-fulfillment of any applicable
provision under NYSE Section 303A.

No such provision regarding notification of non-fulfillment of NYSE Section 303A is contained in Argentine law or Banco Francéss bylaws, but Banco Francéss CEO will
comply with the notice provisions as set forth under NYSE Section 303A.12(b).

The following table shows the breakdown of our full-time payroll employees as of December 31, 2005, 2004 and 2003:

|                     |  | As of December 31,
|-------------------- |  | ------------------
|                     |  |                   
|                     |  | 2005(1)           
|                     |  |                   
|Main office          |  | 1,218             
|Branches             |  | 2,400             
|Foreign Subsidiaries |  | -                 
|                     |  |                   
|Total                |  | 3,618             
|                     |  |                   

|   
|---
|(3)

Our employees are represented by a national bank union with optional membership. As of December 31, 2005, 320 employees were unionized. The union negotiates a collective bargaining agreement to
establish minimum salaries for all of its members. We have not experienced any conflicts with the union for over 20 years and we consider relations with our employees to be satisfactory.

We have a personnel Training and Development Department, which is in charge of the training of all of the Banks employees. This includes in-house training courses and seminars in all the
areas: Operations, Technology and Business (Branches, Corporate Banking). We provide bonuses to individual employees throughout the bank on a discretionary basis, taking into consideration individual merit and overall profit levels. We do not have a
formal profit-sharing plan.

As of May 31, 2006, Gabriel Milstein (Media Director), Marcelo Canestri (Financial Director), Oscar Fantacone (Retail Banking Director) and Carlos Montoto (Human Resources and Quality
Director), owned shares in Banco Francés, which represented less than 1% of the capital stock of the Bank.

None of our directors, members of the Supervising Committee or our remaining senior executives own shares or options on shares of Banco Francés.

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ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

The following table sets forth certain information regarding the beneficial ownership of our ordinary shares as of December 31, 2005, by each person who, to our knowledge, owns beneficially
more than 5% of our ordinary shares. These persons do not have different voting rights.

|                                   |  | Ordinary Shares Beneficially Owned At December 31,
2005
|---------------------------------- |  | -------------------------------------------------------
|                                   |  |                                                        
|Beneficial Owner                   |  | Number                                                 
|                                   |  |                                                        
|Banco Bilbao Vizcaya Argentaria(1) |  | 215,195,798                                            
|Bilbao Vizcaya America BV(2)       |  | 96,796,099                                             
|Inversora Otar S.A.(3)             |  | 44,301,125                                             
|The Bank of New York(4)            |  | 39,245,315                                             

|(1) | Number of shares and percent of class owned directly and indirectly by BBVA except for shares held through Bilbao Vizcaya América BV.
|--- | -------------------------------------------------------------------------------------------------------------------------------------
|(2) | Banco Bilbao Vizcaya América BV is controlled by BBVA.                                                                               
|(3) | Inversora Otar S.A. is controlled indirectly by BBVA.                                                                                
|(4) | As holder agent of ADR.                                                                                                              

On December 31, 2002, Banco Francés carried out a capital increase, in the domestic market. Accordingly the capital stock of Banco Francés increased from 209,631,892 shares to
368,128,432 shares and BBVA increased its equity interest in the Bank from 68.2% to 79.53% .

Banco Francés carried out a new capital increase in 2004. The subscription period for the exercise of the preemptive and accretion rights regarding the issuance of 103,232,874 ordinary
shares of Ps.1 nominal value and one vote per share, entitled to dividends on the same conditions as the shares of the company outstanding ended on November 17, 2004.
The offer was carried out by the capitalization of certain eligible assets and cash, and took place in Argentina. Accordingly the capital stock of Banco Francés increased from 368,128,432 shares to 471,361,306 shares. As a result of the
capitalization BBVA (the main shareholder of Banco Francés) owns, directly and indirectly, 75.59% of Banco Francés capital stock.

Banco Francés is a corporation registered under Argentine law whose shareholders restrict their liability to the shares they have subscribed and paid-in under the Business Companies Law.
Therefore, and in terms of Law No. 25,738, no shareholder of the Bank, whether foreign or local, is liable beyond such paid-in shares for obligations deriving from transactions made by the Bank.

Except as described above, we are unaware of any arrangements the operation of which may, at a subsequent date, result in a change of control of Banco Francés.

As of December 31, 2005, according to our records and the records of the Depositary, 28 holders of ordinary shares and 38 registered holders of ADSs have an address in the United States,
representing, in the aggregate, 8.94% of our issued and outstanding ordinary shares.

The following table presents the loans granted, guarantees given and extensions of credit granted (unused portions) to related parties for the fiscal years ended December 31, 2005 and 2004.
Related parties include controlled companies, controlling shareholders and entities under common control, key management and directors and associated entities.

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|                                                          |  | Fiscal Year ended December
    31, 2005 |  | Fiscal Year ended
    December 31, 2004
|--------------------------------------------------------- |  | --------------------------------------- |  | ---------------------------------------
|                                                          |  |                                         |  |                                        
|Related Party                                             |  | LargestOutstandingAmount(1)(2)          |  | Interest
Rates                         
|                                                          |  |                                         |  |                                        
|Controlled, Controlling and under common control
Entities |  |                                         |  |                                        
|BBVA and subsidiaries                                     |  | 238,295                                 |  |                                       
|                                                          |  |                                         |  |                                        
|BBVA Uruguay and subsidiary                               |  |                                        |  |                                       
|Banco Francés Cayman Ltd. and Subsidiary(3)               |  |                                        |  |                                       
|Credilogros Cía. Financiera S.A.                          |  | 77,635                                  |  | 4.81                                   
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|Francés Valores Sociedad de Bolsa S.A.                    |  | 28,016                                  |  | 45.00                                  
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|Francés Administradora de Inversión                       |  | 836                                     |  |                                       
|                                                          |  |                                         |  |                                        
|Consolidar AFJP S.A.                                      |  | 34,000                                  |  | 45.00                                  
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|Consolidar Seguros de Vida S.A.                           |  | 9,973                                   |  | 45.00                                  
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|Consolidar Seguros de Retiro S.A.                         |  | 13,147                                  |  | 45.00                                  
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|Consolidar ART S.A.                                       |  | 4,753                                   |  | 45.00                                  
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|Consolidar Comercializadora S.A.                          |  | 1,253                                   |  | 45.00                                  
|PSA Finance                                               |  | 49,346                                  |  | 9.02                                   
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|Consolidar Seguros S.A.                                   |  | 5,529                                   |  | 45.00                                  
|                                                          |  |                                         |  |                                        
|                                                          |  |                                         |  |                                        
|Assurex S.A.                                              |  | 303                                     |  |                                       
|                                                          |  |                                         |  |                                        
|Inversora Otar                                            |  |                                        |  |                                       
|Atuel Fideicomisos S.A.                                   |  | 16,292                                  |  |                                       

|(1) | Largest amount during the period indicated.                                                                                                                
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|(2) | In thousands of pesos.                                                                                                                                     
|(3) | On March 18, 2004, the Bank sold to BBVA S.A. its 100% interest in Banco Francés (Cayman) Limited (see Note 1.5. to our Consolidated Financial Statements).

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|                                   |  | Fiscal Year
          ended December 31, 2005 |  | Fiscal
          Year ended December 31, 2004
|---------------------------------- |  | --------------------------------------------- |  | ---------------------------------------------
|                                   |  |                                               |  |                                              
|Related Party                      |  | LargestOutstandingAmount(1)(2)                |  | Interest
    Rates                           
|                                   |  |                                               |  |                                              
|                                   |  |                                               |  |                                              
|Associated Entities                |  |                                               |  |                                              
|Consolidar Salud S.A.              |  | 297                                           |  | 45.00                                        
|                                   |  |                                               |  |                                              
|Clínica Baxterrica                 |  | 293                                           |  | 45.00                                        
|Renault Credit Int. Suc. Argentina |  |                                              |  |                                             
|Rombo Cia Financiera S.A.          |  | 84,638                                        |  | 8.71                                         
|                                   |  |                                               |  |                                              
|                                   |  |                                               |  |                                              
|Key Management Personnel(3)        |  | 883                                           |  | 28.00                                        
|                                   |  |                                               |  |                                              
|                                   |  |                                               |  |                                              
|                                   |  |                                               |  |                                              
|                                   |  |                                               |  |                                              

|(1) | Largest amount during the period indicated.                                                              
|--- | ---------------------------------------------------------------------------------------------------------
|(2) | In thousands of pesos.                                                                                   
|(3) | Includes directors, senior managers, members of the audit committee and managers with relevant authority.

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|Assistance received from BBVA: to Banco Francés |  |                 |  |                             
|----------------------------------------------- |  | --------------- |  | ----------------------------
|Date                                            |  | Description     |  | Original principal
amount(1)
|                                                |  |                 |  |                             
|March, 1998                                     |  | Corporate Bonds |  | 130,000                     
|April, 2002                                     |  | Loan            |  | 79,316                      
|April, 2002                                     |  | Loan            |  | 80,000                      
|July, 2002                                      |  | REPO            |  | 102,100                     
|March, 2004                                     |  | Loan            |  | 77,701                      
|October, 2000                                   |  | FRN             |  | 20,000                      
|May, 2004                                       |  | Loan            |  | 64,000                      
|                                                |  |                 |  |                             
|October, 2002                                   |  | Loan            |  | 1,000                       
|April, 2003                                     |  | Loan            |  | 1,000                       
|November, 2003                                  |  | Loan            |  | 1,800                       
|October, 2004                                   |  | Loan            |  | 900                         
|February, 2005                                  |  | Loan            |  | 900                         
|May, 2005                                       |  | Loan            |  | 900                         
|November, 2005                                  |  | Loan            |  | 900                         
|                                                |  |                 |  |                             
|                                                |  |                 |  |                             
|(1)In
    thousands of US$                      |  |                 |  |                             

ITEM 8. FINANCIAL INFORMATIONFinancial Statements

SeeItem 18. Financial Statements.

Legal Proceedings

We are involved in collection proceedings initiated in the normal course of business and in the proceedings mentioned in Note 36 to the Consolidated Financial Statements, none of which, if
determined adversely to us, would have a material adverse effect on us or our operations.

The measures taken by the Government at the beginning of 2002, including the repeal of the Convertibility Law, the pesification of all assets and liabilities in the formal economy
and the default by the Government on its debt, led to a massive withdrawal of deposits and a breakdown in the chain of payments. We have faced many lawsuits brought by depositors to recover their deposits in cash and in their original currency
interest on their foreign currency deposits. As of May 31, 2005, we had repaid a total of approximately Ps.2,050 million and US$104.9 million in deposits in connection with lawsuits brought by depositors, and during 2005 BBVA Banco Francés
has paid Ps.123.1million (comprised by Ps.79.1 million of deposits and Ps.44 million of negative exchange difference) regarding lawsuits brought against the Bank (amparos).

We do not have a defined policy of dividend distributions. However, according Communication A 4152 of the Central Bank from June 2, 2004, such distribution must have the prior
authorization of the Central Bank and is subject to the following conditions:

- The entity must not be under any regularization or restructuring plans for the protection of credit and bank deposits (Articles 34 and 34 bis of the Financial Entities Law).
- The entity shall not have received financial assistance from the Central Bank.
- The entity must not be affected in its liquidity and solvency as a result of the distribution of profits.

For a description of the cash dividends that we have paid on our ordinary shares and ADSs for the years 2000 to 2005, seeKey Information-Cash
Dividends.

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We were one of the first companies listed on the BCBA. Since 1993 our shares have also been listed on the New York Stock Exchange and, since December, 1999 on the Madrid Stock Exchange. Before
November 1993, there was no public market for our ordinary shares or ADSs outside of Argentina. The ordinary shares are currently traded on the Buenos Aires Stock Exchange under the symbol FRAN and the ADSs are currently traded on the
New York Stock Exchange under the symbol BFR. We cannot give assurance that a public market in the United States for the ADSs will continue to exist.

The table below shows the quarterly high and low closing prices of the ordinary shares in pesos on BCBA for the periods indicated. Prices have been adjusted to reflect all stock dividends paid
through the date of this annual report.

|                                    |  | Pesos Per
Ordinary Share(1)
|----------------------------------- |  | ---------------------------
|                                    |  |                            
|                                    |  | High                       
|                                    |  |                            
|2006                                |  |                            
|June 2006 (through June 15, 2006)   |  | 7.37                       
|May 2005                            |  | 8.80                       
|April 2006                          |  | 8.80                       
|March 2006                          |  | 8.50                       
|February 2006                       |  | 7.76                       
|January 2006                        |  | 7.93                       
|Fiscal year ended December 31, 2005 |  | 8.13                       
|Fourth quarter                      |  | 8.13                       
|Third quarter                       |  | 7.80                       
|Second quarter                      |  | 6.87                       
|First quarter                       |  | 7.40                       
|Fiscal year ended December 31, 2004 |  | 9.95                       
|Fourth quarter                      |  | 7.03                       
|Third quarter                       |  | 6.53                       
|Second quarter                      |  | 8.45                       
|First quarter                       |  | 9.95                       
|Fiscal year ended December 31, 2003 |  | 9.40                       
|Fiscal year ended December 31, 2002 |  | 4.49                       
|Fiscal year ended December 31, 2001 |  | 10.45                      

|   
|---
|(1)

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The ordinary shares trade on the New York Stock Exchange in the form of ADSs issued by The Bank of New York, as depositary. Each ADS represents three ordinary shares. The table below shows the
quarterly high and low closing prices of the ADSs in dollars on the New York Stock Exchange for the periods indicated.

|                                    |  | US$ Per ADS
|----------------------------------- |  | -----------
|                                    |  |            
|                                    |  | High       
|                                    |  |            
|2006                                |  |            
|June 2006 (through June 15, 2006)   |  | 71/4       
|May 2006                            |  | 843/50     
|April 2006                          |  | 846/63     
|March 2006                          |  | 83/13      
|February 2006                       |  | 733/50     
|January 2006                        |  | 724/25     
|Fiscal year ended December 31, 2005 |  | 81/4       
|Fourth quarter                      |  | 81/4       
|Third quarter                       |  | 87/50      
|Second quarter                      |  | 71/5       
|First quarter                       |  | 764/81     
|Fiscal year ended December 31, 2004 |  | 103/20     
|Fourth quarter                      |  | 79/53      
|Third quarter                       |  | 649/71     
|Second quarter                      |  | 99/53      
|First quarter                       |  | 103/20     
|Fiscal year ended December 31, 2003 |  | 92/5       
|Fiscal year ended December 31, 2002 |  | 721/64     
|Fiscal year ended December 31, 2001 |  | 3131/64    

There are nine exchanges in Argentina, of which five have affiliated stock markets and, accordingly, are authorized to quote publicly offered securities: Buenos Aires, Rosario, Córdoba,
Mendoza and Santa Fe. The oldest and largest of these exchanges is the BCBA, which was founded in 1854. Usually, the overwhelming majority of all Argentine equity trades take place on the BCBA. As of December 31, 2005 the shares of 104 Argentine
companies, excluding mutual funds, were listed on the BCBA. As of December 31, 2005, the 10 most actively traded stocks represented 87.71% of the total volume of equity traded on the exchange (SINAC plus Floor). All publicly
offered securities may be traded on authorized securities exchanges and, except for equity securities, in the Argentine over-the-counter market or MAE. SeeInformation on the CompanyThe Argentine
Banking System and its Regulatory FrameworkCapital Markets.

The MERVAL, which is affiliated with the BCBA, is the largest stock market in Argentina. The MERVAL is a corporation which regulates its members (all of whom are stockholders of the
corporation) and transactions conducted on that market. Only stockholders of the MERVAL are allowed to effect transactions either as principal or as agent in that stock market. In 1990, brokerage houses, including bank subsidiaries, were allowed to
enter as full members of the market. Trading in the MERVAL is conducted through three different trading systems:

- the Floor;
- the SINAC; and
- the Continuous.

The operations at the traditional auction system (Floor) start from 11:00 A.M. and end at 5:00 P.M. each business day. Also available is an electronic auction system called
SINAC where each broker inputs both its buys and sells while the system matches the operations. Since July 1998, both auction systems (the Floor and SINAC) are considered to be a single market. Additionally, the
Buenos Aires Stock Markets trades are made through an electronic Continuous Market System (the Continuous) that operates from 11:00 A.M. to 5:00 P.M. each business day. The Continuous is a system that registers and makes public
trades that were privately arranged by registered brokers and brokerage companies on behalf of their clients. Such trades are reported on the Mercado Abierto,
an electronic reporting system similar to, but different from, the Continuous
Market System. To control price volatility, the BCBA operates a system which
suspends dealing in shares and bonds of a particular issuer for 30 minutes or
less when changes

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in the price of such shares exceed or fall more
    than 10% of the preceding days closing share price. From then on, the
    BCBA suspends trading for a few minutes when prices rise or fall an additional
5% or more in the same day.

As of December 31, 2005, the market capitalization of the 104 companies listed on the BCBA was approximately US$254.56 billion.

The following table summarizes certain historical information about the Buenos Aires Stock Exchange.

|                                    |  | Year ended December 31, |  
|----------------------------------- |  | ----------------------- | -
|                                    |  |                         |  
|                                    |  | 2005                    |  
|                                    |  |                         |  
|Market capitalization (US$ billion) |  | 254.5                   |  
|Number of companies listed          |  | 104                     |  
|Rate of return in dollars(1)        |  | 10.60                   | %
|Market/book ratio(2)                |  | 2.02                    |  

|(1) | Based on the Merval Index                                            
|--- | ---------------------------------------------------------------------
|(2) | Estimated                                                            
|    | Source: BCBA and Instituto Argentino de Mercados de Capitales (IAMC).

Market Regulation

Both the CNV and BCBA oversee the regulation of the Argentine capital markets. The CNV is responsible for authorizing public offerings of securities and supervising stockbrokers, including
those which are subsidiaries of banking institutions. Generally, Argentine securities markets are regulated by Law No. 17,811, which created the CNV and which regulates securities exchanges, stockbrokers, market operations and the public offering of
securities.

Under Law No. 17,811, public trading of securities on exchanges must be made with stock markets organized as stock corporations, which must be affiliated with a stock exchange.

Each stock market has the operating responsibility for all transactions performed by stockbrokers and has disciplinary power over them. Each stock market guarantees the proper settlement or
clearance of transactions entered into by stockbrokers. The effect of such a guarantee is to provide brokers assurances that transactions will be consummated in a timely manner.

The CNV has passed a set of resolutions establishing a system of self-regulatory entities, under which each self-regulatory entity (which currently includes each exchange and the MAE) is
responsible for developing and implementing regulations governing its respective securities market, subject to the approval and oversight of the CNV. Internal rules of each exchange for its affiliated stock market establish conditions for listing
securities, admitting brokers, conducting trades and controlling the truthfulness of any information which is required to be reported.

In recent years, changes to the legal framework have been introduced permitting the issuance and trading of new financial products in the Argentine capital markets, including commercial paper,
new types of corporate bonds and futures and options. On November 1991, brokerage fees were deregulated and transfer taxes and stamp taxes on publicly offered securities were eliminated.

In compliance with the provisions of Law No. 20,643, most debt and equity securities traded on the exchanges and on the MAE must, unless otherwise instructed by the stockholders, be deposited
by the stockbrokers or over-the-counter dealers in the Caja de Valores, which is a corporation owned by the BCBA, the MERVAL and certain provincial exchanges. The Caja de Valores provides central depository facilities for securities and acts as a
transfer and paying agent. In September 2000, the Caja de Valores started Argenclear S.A. (Argenclear), a clearing house owned by the most important private and public banks of Argentina, MERVAL and BCBA. Argenclear provides services to
the brokers for the settlement of public bond trades registered in the MAE. It also handles settlement of securities transactions carried out by the BCBA and operates the computerized Exchange Information System.

On May 17, 2001, by means of General Resolution No. 368 the CNV approved a new restated text for a number of regulations in force in order to unify, harmonize and simplify the different
requirements established by them. The new text incorporates the changes implemented by all general resolutions issued after General Resolution No. 290. On May 28, 2001, the Official Bulletin published the text of Decree No. 677/01 which created a
regulatory framework to ensure Public Offer Transparency.

In order to offer securities to the public in Argentina, an issuer must meet certain requirements of the CNV, regarding assets, operating history, management and other matters, and only
securities for which an application for a public offering has been approved by the CNV may be listed on the BCBA. This approval does not imply any kind of certification or assurance related to the merits or the quality of the securities, or the
solvency of the issuer. Issuers of listed securities are required to file with the CNV and the BCBA quarterly financial statements and audited annual financial statements, as well as various other periodic reports.

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Although participation by foreign investors in BCBA has historically been low, it has increased since 1991 as a consequence of the economic reform programs implemented by the Government and the
liberalization of restrictions to the access by foreign investors to securities in the Argentine securities market. Currently, an important amount of floating capital and public bonds is held by foreign investors.

ITEM 10. ADDITIONAL INFORMATION

Memorandum and Articles of Association

The following summarizes certain material provisions of our bylaws and Argentine law, the main bodies of regulation governing Banco Francés. This summary is qualified in its entirety by
reference to the Business Companies Law, the Financial Institution Law and our bylaws. Copies of our bylaws have been filed as exhibits to our 2003 annual report on Form 20-F.

At our Ordinary and Extraordinary Stockholders Meeting held on April 28, 2005, our stockholders voted to amend section 11 of the Bylaws in order to comply with Resolution No. 20/04 of the
Companies Supervisory Department (Inspección General de Justicia), and its amendments. This amendment will require each of our Directors to (i) pledge an amount of at least Ps.10,000 as a guarantee of the Directors performance and (ii)
maintain a special domicile within the Argentine Republic. This amendment has been filed with the Public Registry of Commerce, which has been approved as of the filing of this annual report, on December 12, 2005, under Number 16.335, Book 30.

Banco Francés is registered with the Public Registry of Commerce of the Argentina (Registro Público de Comercio) under company number 1,065, Page 359, Book 5, Volume A
 of Local Corporate Bylaws. Section 3 of our bylaws provides that the object of Banco Francés is to engage in the commercial banking business, including financial brokerage, whether in Argentina or abroad. To this end, Banco Francés is
authorized to perform the following activities:

- Accept term and demand deposits;
- Grant short-term bullet and other amortizable loans;
- Discount, purchase and sell bills of exchange, promissory notes, pledges, checks, drafts and other negotiable instruments;
- Grant guarantees, bonds or other forms of collateral; accept bills of exchange, drafts and other orders of payment, transfer funds and issue and accept letters of credit;
- Grant advances on credits from property sales, acquire the same and undertake the risks resulting therefrom, take steps to collect them and offer technical and administrative
assistance;
- Invest in Government securities;
- Make temporary investments in liquid assets;
- Invest in new stock or securities issues, in pursuance of such regulations as may be set forth to that purpose;
- Accept securities in custody and provide other services related to the banking business;
- Manage, on account of third parties, the purchase and sale of securities, and act as paying agents in relation to dividends, redemption and interest; engage in brokerage activities in the
over-the-counter securities market;
- Perform foreign exchange transactions;
- Comply with agencies related to its operations;
- Receive deposits of participation in mortgage loans
and in special accounts;

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- Issue mortgage obligations;
- Grant loans for the acquisition, construction, enlargement, repair, improvement and maintenance of urban or rural real estate, and for the substitution of mortgages taken out for that same
  purpose;
- Receive loans from abroad and act as intermediary in local or foreign currency-denominated loans;
- Issue private bonds, and
- Carry out such lending, borrowing and service-related operations as are not forbidden under the Financial Institutions Law.

Under Section 18 of our by-laws, the Board of Directors receives an annual fee established by the shareholders. This fee is subject to the restrictions of Section 261 of the Business Companies
Law, which provides that the aggregate compensation of the directors may not exceed 25% of the income of the company, or 5% of the income if no dividends were distributed to the shareholders.

Under Section 272 of the Business Companies Law, a director may not vote in respect of any proposal in which he, or any person connected to him, has an interest contrary to the interests of
Banco Francés.

Directors need not hold shares in Banco Francés or any of our subsidiaries to qualify and be appointed as directors of Banco Francés.

As of the date of the filing of this annual report, our capital is formed by a single class of shares, all of which are ordinary shares and have the same voting and economic rights.
Shareholders participate in the distribution of dividends pro rata the paid-in capital. Furthermore, shareholders are entitled to participate in the distribution resulting from the liquidation of Banco Francés in proportion to the paid-in
capital.

Shareholders are entitled to vote cumulatively one-third of the vacancies of the board of directors. The board may not be reelected in alternative intervals if it impairs or prevents the
exercise by shareholders of their cumulative voting rights.

Shareholders may no longer claim the payment of dividends from Banco Francés once three years have elapsed from the date on which the relevant dividend was made available to such shareholder.

Our bylaws do not contain any provisions related to sinking funds or potential liability of shareholders of Banco Francés to make additional contributions.

According Communication A 4152, from June 2, 2004 states that financial entities can distribute utilities, with the corresponding authorization from the Central Bank, who must
verify the following regarding such financial entity:

- It is not under the dispositions of Section 34 Reformulation and Reorganization Procedure and Section 35 bis Restructuring of financial entity in defense of credit and bank
deposits of the Financial Entities Law;
- It does not register financial assistance from the Central Bank; and
- It does not affect the liquidity and solvency as a consequence of the utilities distribution.

All general meetings other than annual general meetings are called regular or special meetings. Regular and special shareholders meetings are to be convened by the Board of Directors of
the Bank or by the Supervisory Committee in such instances as set forth by law, or whenever they may deem it necessary, or upon requisition of shareholders representing at least 5% of our stock capital, as provided by Section 236 of the Business
Companies Law.



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Shareholders meetings
  are called by publication for five days, at least 20 and not more than 45 days
  before the date of the meeting, in the Official Gazette and in one of the most
  widely circulated newspapers in Argentina. The notice must include the nature,
  the date, time and place of the meeting, the agenda, and any special requirements
in our bylaws for the shareholders to attend.

In case of adjournment of a regular shareholders meeting, the meeting on second call may be held on the same date, at least one hour after the time set for the meeting on first call, in
compliance with Section 237 of the Business Companies Law. In case of adjournment of a special shareholders meeting, the meeting on second call must be held within the following thirty days, and the publication must appear for three days at
least eight days before the date set for that meeting.

In order to attend and vote at any shareholders meeting, shareholders must deposit with us their shares or a share certificate or a statement of account representing book-entry shares, as
the case may be, issued by us, a securities depository or any other authorized institution, to be recorded in the record book of attendance, at least three business days before the date of the meeting.

Holders of registered or book-entry shares, the record of which we keep, are only required to notify us to register their names in the record book of attendance, at least three business days
before the date of the meeting. We must provide such shareholders with certificates authorizing them to attend the meeting.

Shareholders may be present at meetings by power-of-attorney or proxy. In the latter case, the principals signature shall be certified by a court, notary public or bank. Directors,
statutory auditors, managers or any other of our employees may not act as agents for these purposes.

A quorum must be present at any regular shareholders meetings on first call upon the attendance of shareholders representing the majority of voting stock. On second call, there is a
quorum with the attendance of any number of shares present. A quorum is present at any special shareholders meeting on first call upon the attendance of shareholders representing 60% of the voting stock. Shareholders representing 30% of our
voting stock shall constitute a quorum at a special shareholders meeting on second call. In any case, resolutions require the absolute majority of the voting stock present.

There are no restrictions imposed by Argentine law or our bylaws or other organizational documents regarding the rights of nonresidents or foreign persons to hold or vote our ordinary shares or
ADSs of the Bank.

There are no provisions in our articles of incorporation or bylaws that would have the effect of delaying, deferring or preventing a change of control of Banco Francés and that would
operate only with respect to a merger, acquisition, corporate restructuring involving Banco Francés or any of its subsidiaries.

Ownership Disclosure

There are no provisions in our bylaws governing the ownership threshold above which shareholder ownership must be disclosed.

Our bylaws do not establish conditions for the changes in the capital of Banco Francés more stringent than those conditions imposed by the Business Companies Law.

No material agreements outside the ordinary course of business have been entered into during the last two years.

On January 7, 2002, Congress approved the Public Emergency Law that introduced dramatic changes to the countrys
economic model and amended the currency board that pegged the peso at parity
with the dollar which had been in effect since April 1, 1991 pursuant to the
Convertibility Law. The new law empowers the Executive Branch to implement, among
other things, additional monetary, financial and exchange measures to overcome
the economic crisis in the medium term, including the power to establish a system
to determine the exchange rate applicable to the peso. The Central Bank, among
other restrictive measures, restricted the transfer of U.S. dollars abroad without
its prior approval. In 2003 and 2004, the government substantially eased these
restrictions.

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Moreover, on devaluing the peso in early 2002, the Government has implemented a dual exchange rate whereby export and certain import transactions would be governed by a fixed,
official exchange rate of Ps.1.40 to US$1.00, while all other transactions would be governed by a free exchange rate to be set freely by the exchange market, with occasional intervention by the Central Bank. Following an extended bank
holiday, the exchange market reopened on January 11, 2002, with transactions between Ps.1.60 and Ps.1.70 to US$1.00 (bid price) by market close on that date.

As a general rule, transfer of funds abroad required prior Central Bank approval. However, this general principle was eased by numerous exceptions introduced since December 2002. Currently, in
order to purchase and/or transfer foreign currency abroad, the transaction should be specifically admitted among the list of items (authorizing the purchase and/or transfer of foreign currency) that is published by the Central Bank.
Certain items are, however, still subject to restrictions.

Under the Central Banks exchange regulations, proceeds of new financing must be transferred into Argentina and converted into pesos in the local exchange market within 30 days as from the
relevant disbursement.

Repayment of principal of, and interest on, foreign indebtedness, was initially subject to Central Banks prior authorization. Currently, due to the recent changes introduced by the
Central Bank, local companies (with the exception of financial institutions), following certain requirements, may:

- Pay abroad interest on foreign debt at maturity or 15 days in advance, without prior Central Bank authorization. However, in case the proceeds of the loan were disbursed abroad, payment of
interest would be restricted to the difference between: (i) the total interest accrued under the relevant debt until the date of payment, minus (ii) the interest obtained by the local borrower abroad on the loan proceeds between the date of disbursement and the date of effective transfer and exchange for pesos of the proceeds of the relevant loan.
- Repay principal of foreign debt at maturity (or 90 days in advance, to the extent that the amounts so prepaid were brought into the local market and exchanged for pesos, and repayment takes
place at least 180 days therefrom) without prior Central Bank authorization. Communication A 4177 (as amended) also allows prepayment of principal with an anticipation of more than 90 days, but subject to the following conditions:

|(1) | If prepayment of principal is not made in the context of a debt restructuring process, then the amount prepaid should not exceed the present value of such amount, calculated according to the formula provided by the Central
Bank, unless the prepayment is coupled with the transfer and exchange for pesos of a new loan with a present value equal to the prepaid amounts.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                                                                                                                                                                                                                                                
|(2) | If the prepayment is made within the context of a debt restructuring process, then the new terms and conditions of the debt after the restructuring, including the amount prepaid, shall not result in an increase of the
present value of the whole debt (according to the formula of the Central Bank).                                                                      

Regulations regarding Imports and Exports

The Central Bank established under Communication A 3473, as amended, an obligation to transfer from abroad to Argentina the foreign currency obtained from the collection of exports
and to settle the foreign currency in the single free exchange market. This is a general obligation applicable to all export transactions, except certain specific cases such as oil exports. In addition, all collections by exporters must be collected
between 60 and 360 calendar days from the date of the export, depending on the product being exported, for the exporter to negotiate the foreign currency in the domestic exchange market.

In respect to imports, advanced payments of any goods are allowed, upon condition that the clearance of the imported goods (nationalization) is credited within 360 days.

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Purchase of Foreign Currency

A.Local individuals and companies

Local individuals and companies are now authorized to buy up to certain amounts of foreign currency for purposes of (i) real estate investments outside of Argentina; (ii) loans granted to
persons not domiciled in Argentina; (iii) direct investments outside of Argentina of persons domiciled in Argentina; (iv) portfolio investments outside of Argentina, among others.

- US$2,000,000 per month; or
- The aggregate equivalent amount in pesos paid by such individual or company to the Argentine tax authority (Administración Federal de Ingresos Públicos) on the immediately
preceding month in connection with export duties, plus three times the amount paid in connection with the tax on bank credits and debits.

In addition, pursuant to Communication A 3998 (as amended), individuals and companies can, up to June 30, 2005, purchase and transfer abroad up to US$40,000,000, per month and per
person (not cumulative), under the item portfolio investments outside of Argentina if certain conditions are fulfilled.

Moreover, pursuant to Communication A 3661 (as amended), prior authorization from the Central Bank is required by nonresidents for the purchase of foreign exchange for any amount
above the equivalent of US$5,000 per month.

Notwithstanding the above, Communication A 4129 (as amended) states that no authorization from the Central Bank will be required with regard to the repatriation of direct and
portfolio investments of non-residents, in the following cases:

- Transfers abroad of an aggregate equivalent of up to US$2,000,000 per month arising out of:

|(1) | Foreign indebtedness of residents related to Argentine imports of goods and services;                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                               
|(2) | Recoveries under local bankruptcy proceedings to the extent the foreign creditor was admitted as such by the bankruptcy court;
|    |                                                                                                                               
|(3) | Proceeds of sales of direct investments in local non-financial companies; and                                                 
|    |                                                                                                                               
|(4) | Proceeds of final winding up of direct investment in local non-financial companies.                                           

- Transfers abroad of an aggregate equivalent of up to US$500,000 per month arising out of:

|(1) | Proceeds of sales of other portfolio investments and their revenues, such as investments in shares of local companies, investment funds and local trusts;
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                                                          
|(2) | Purchases of loans granted to residents by local banks;                                                                                                  
|    |                                                                                                                                                          
|(3) | Acquisition of invoices and promissory notes for local commercial transactions, investment in local bonds denominated in pesos; and                      
|    |                                                                                                                                                          
|(4) | The acquisition of other local credits.                                                                                                                  

Transfer of Corporate Bonds

According to Communication A 3859 (as amended), Argentine companies may freely transfer corporate profits and dividends corresponding to audited financial statements (i.e., no prior
Central Bank approval is needed). Moreover, transfers abroad in order to pay reinsurance premiums will be subject only to the issuance of a statement by the Argentine Superintendency of Insurance (the regulatory authority on insurance matters)
detailing the amount to be transferred.

Pursuant to Decree No. 285/03 and Communication A 3972 (as amended), as of June 30, 2003, all purchases and sales of foreign currency, as well as transfers to and from the local
market, should be registered with the Central Bank.

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In
addition, the proceeds of new credit facilities (including loans, issuance of
bonds, credit facilities, repos, etc.) should be brought into the local market
and exchanged into pesos, and such debt cannot be repaid abroad prior to 365
days from the date of the relevant disbursement. Moreover, in these cases
a deposit corresponding to the 30% of the amount in question, must be maintained
for a term of 365 days. As a general rule, credit facilities related to foreign
trade is  exempted from this time limit (subject to certain requirements).

On March 4, 2005 the Argentine Central Bank issued Communication A 4305 that regulates the reporting system of direct investments and real estate investments carried out by
non-residents in Argentina and by Argentine residents abroad, which had been implemented through Communication A 4237 dated November 10, 2004.

Non-Argentine residents are compelled to comply with the reporting regime if the value of their investments in Argentina reaches or surpasses the equivalent of US$500,000  measured in
terms of the net worth of the company in which they participate or fiscal value of the real estate owned. If the investments do not reach such amount, the compliance with such regime is optional.

According to Communication A 4237, companies in which non-Argentine residents participate in and administrators of real estate pertaining to non-Argentine residents are those
obliged to comply with the reporting regime.

Argentine investors are compelled to comply with the reporting regime if the value of their investments abroad reaches or surpasses the equivalent of US$1,000,000  measured in terms of
net worth of the company in which they participate or the fiscal value of the real estate they own.

If the value of those investments abroad do not exceed the equivalent of US$5,000,000, the declaration could be carried out annually instead of semiannually. If the investments do not reach the
equivalent of US$1,000,000, the compliance with such regime is optional.

The first declarations will correspond to the semester ended on December 31, 2004, and will have to be filed within 90 calendar days as of such date.

Communication A 4049, dated November 11, 2003 and Communication A 4285 (as amended) dated January 17, 2005, relaxed restrictions on foreign currency transactions by
abrogating the requirement of prior approval of the Central Bank for the execution of certain future and forward operations and for the access to the foreign exchange market for their cancellation. These operations include agreements for the
coverage of foreign currencies and interest rates, commodity prices, and the execution of external transactions in the form of Repos.

Communication A 4086 (as amended), dated February 3, 2004 also relaxed restrictions on the access to the foreign exchange market, by allowing investment funds to carry out their
operations under general regulations.

The following is a summary of certain Argentine and United States federal tax consequences of the acquisition, ownership and disposition of our ADSs or ordinary shares by a United States
holder. This summary is not a complete analysis or listing of all possible tax considerations that may be relevant to a holder of our ADSs or ordinary shares.

Argentine Taxes

General

The following is a summary of certain Argentine tax matters that may be relevant with respect to the acquisition, ownership and disposition of ADSs or ordinary shares. Investors in and
prospective purchasers of ADSs or ordinary shares should consult their own tax advisers as to the United States, Argentine or other tax consequences of the acquisition, ownership and disposition of ADSs or ordinary shares. Such summary is based upon
the tax laws of Argentina, and regulations thereunder, in effect as of the date of this annual report and is subject to any subsequent change in Argentine laws and regulations which may come into effect after such date.

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Pursuant to Law No. 25,063, as enacted into law on December 30, 1998, dividend payments on the ordinary shares (and ADSs), whether in the form of cash, stock, or other types of consideration,
are subject to Argentine withholding taxes at the rate of 35% to the extent the aggregate amount distributed exceeds the sum of: (i) our accumulated taxable earnings and (ii) certain tax-exempt income (such as dividend payments from other
corporations).

In accordance with a resolution adopted by the Ordinary and Extraordinary Shareholders' Meeting held on April 27, 2006, it was resolved that as of June 2, 2006 the Bank will proceed with the payment of cash dividends.

Such dividend distributions will be subject to a 35% income tax withholding on the portion of the dividends exceeding profits determined on the basis of the application of the general regulations of the Income Tax Law. The Bank informed that it will previously inquire with the AFIP (Argentine Public Revenue Administration  the Argentine Tax Authority) in respect to the applicability of such withholding.

Until the pertinent reply is received from AFIP, the Bank will retain any amounts withheld in an interest bearing account. Any reply received from the AFIP will be duly informed through the Daily Bulletin of the Buenos Aires Stock Exchange. If pertinent, all shareholders will be duly informed of any amounts withheld plus any interest at their disposal at the Caja de Valores S.A.

To the extent the ADSs or ordinary shares are listed on a local or foreign stock exchange market, capital gains derived by nonresident individuals or foreign companies from the sale, exchange
or other disposition of ADSs or ordinary shares are not currently subject to income tax.

In the event that capital gains should become subject to income tax in the future, such taxation would be the responsibility of the beneficial owners of ADSs and not the responsibility of
Euroclear or Cedel, as the case may be.

Neither the sale, exchange or other disposition of ADSs or ordinary shares nor the payment of dividends thereunder is subject to VAT.

The sale or transfer of ADSs or ordinary shares is not subject to transfer tax.

Personal Property Tax


According to Law No. 23,966, as amended, and Decrees No. 127/96 and 812/96, all individuals and undivided estates are subject in Argentina to a personal property tax on all assets held at
December 31 of each fiscal year (the Personal Property Tax). In the case of individuals and undivided estates domiciled or located in Argentina, an exemption is available to taxpayers whose assets included in the tax base for purposes of
the Personal Property Tax do not exceed Ps.102,300. Corporations and other legal entities domiciled or located in Argentina are not subject to the Personal Property Tax. Individuals and undivided estates domiciled or located in a foreign country are
subject to the Personal Property Tax only with respect to assets located in Argentina.

Pursuant to Law No. 25,585, published in the Official Gazette on May 15, 2002, the Personal Property Tax on shares of the capital stock of corporations, such as ADSs (held in book-entry form or
evidenced by ADRs) and shares of common stock, or equity interests in other entities organized under the Business Companies Law No. 19,550, as amended, and whose holders are individuals or undivided estates domiciled in Argentina or in a foreign
country, or corporations or any other entities located in a foreign country, shall be assessed and paid by the corresponding Argentine issuer of the shares or equity interests, such as Banco Francés.

The tax rate to be applied is 0.50% and the taxable base is the value of the shareholders equity arising from the last balance sheet of the company at December 31. The minimum exempted
amount of Ps.102,300 is not applicable. The tax so paid is considered a definitive payment.

Pursuant to Law No. 25,585, it is presumed  without the right to rebut such presumption  that shares of stock corporations, such as ADSs (held in book-entry form or evidenced by ADRs)
and shares of common stock, and equity interests in entities governed by the Business Companies Law No. 19,550, as amended, whose holders are corporations or any other entities, companies, permanent

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establishments and trusts, domiciled,
    settled or located in a foreign country, belong indirectly to individuals
    or undivided estates domiciled in a foreign country.

The
    companies responsible for the tax payment, such as Banco Francés,
    are entitled to obtain refunds of the amounts paid, and may retain or foreclose
    on the property included in the tax base for purposes of the Personal Property
    Tax that originated the payment.

On
    May, 2005 and 2006, Banco Francés paid Ps.3,021,317 and 3,254,699
    respectively, on account of its shareholders in connection with the Personal
    Property Tax due with respect to assets held as of December 31, 2004 and
    2005, respectively. As of June 15, 2006, only Ps.1,692,683 and Ps.3,143,008,
respectively has been refunded to us.

Other Taxes

There are no Argentine inheritance, succession or gift taxes applicable to the ownership, transfer or disposition of ADSs or ordinary shares. There are no Argentine stamp, issue, registration
or similar taxes or duties payable by holders of ADSs or ordinary shares. Such holdings are also not affected by the tax applied on bank-account debits and credits and other transactions.

No Argentine tax is imposed on the deposit or withdrawal of ordinary shares in exchange for ADSs.

There is currently no income tax treaty or convention in effect between Argentina and the United States.

The following summary describes the material U.S. federal income tax consequences of the acquisition, ownership and disposition of ADSs or ordinary shares, but it does not purport to be a
comprehensive description of all of the tax considerations that may be relevant to a particular persons decision to acquire such securities. The summary applies only to U.S. Holders (as described below) that hold ADSs or ordinary shares as
capital assets for U.S. federal income tax purposes and does not address special classes of holders, such as:

- Certain financial institutions;
- Insurance companies;
- Dealers and traders in securities or foreign currencies;
- Holders holding ADSs or ordinary shares as part of a hedge, straddle or conversion transaction;
- Holders whose functional currency for U.S. federal income tax purposes is not the U.S. dollar;
- Holders liable for alternative minimum tax;
- Tax exempt organizations;
- Partnerships or other entities classified as partnerships for U.S. federal income tax purposes;
- Holders that own or are deemed to own 10% or more of our voting shares; or
- Persons who acquired our ADSs or ordinary shares pursuant to the exercise of any employee stock option or otherwise as compensation.

The summary is based upon tax laws of the United States including the Internal Revenue Code of 1986, as amended to the date hereof (the Code),
administrative pronouncements, judicial decisions and final, temporary and proposed
Treasury regulations, changes to any of which may affect the tax consequences
described herein possibly with retroactive effect. In addition, the summary assumes
that each obligation provided for in or otherwise contemplated by the Deposit
Agreement or any other related document will be performed in accordance with
its terms. Prospective purchasers of the ADSs or ordinary shares are urged to
consult their own tax

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As used herein, a U.S. Holder is a beneficial owner of ADSs or ordinary shares that is, for United States federal income tax purposes:

- A citizen or resident of the United States;
- A corporation, or other entity taxable as a corporation, created or organized in or under the laws of the United States or of any political subdivision thereof; or
- An estate or trust the income of which is subject to United States federal income taxation regardless of its source.

In general, U.S. Holders of ADSs will be treated as the holders of the underlying ordinary shares represented by those ADSs for U.S. federal income tax purposes. Accordingly, no gain or loss
will be recognized if a U.S. Holder exchanges ADSs for the underlying ordinary shares represented by those ADSs.

The U.S. Treasury has expressed concerns that parties to whom ADSs are pre-released may be taking actions that are inconsistent with the claiming of foreign tax credits for U.S. Holders of
ADSs. Such actions would also be inconsistent with claiming the 15% rate applicable to dividends received by certain non-corporate U.S. Holders. Accordingly, the analysis of the creditability of Argentine taxes and the availability of the 15% rate
for dividends received by certain non-corporate U.S. Holders described below could be affected by actions taken by parties to whom ADSs are pre-released.

To the extent paid out of our current or accumulated earnings and profits (as determined in accordance with United States federal income tax principles), distributions, including any Argentine
withholding tax, made with respect to ADSs or ordinary shares (other than certain pro rata distributions of our capital stock or rights to subscribe for ordinary shares of our capital stock) will be includible in the income of a U.S. Holder as
foreign source ordinary dividend income. Such dividends will not be eligible for the dividends received deduction generally allowed to corporations under the Code. Subject to applicable limitations and the discussion above regarding
concerns expressed by the U.S. Treasury, dividends paid to non-corporate U.S. Holders in taxable years beginning before January 1, 2011, will be taxable at a maximum rate of 15% if the dividends are qualified dividends. Dividends paid on
ADSs will be treated as qualified dividends if (i) the ADSs are readily tradable on an established securities market in the United States and (ii) we were not, in the year prior to the year in which the dividend was paid, and are not, in the year in
which the dividend is paid, a passive foreign investment company, or PFIC, for U.S. federal income tax purposes. The ADSs are listed on the New York Stock Exchange, and will qualify as readily tradable on an established securities market
in the United States so long as they are so listed. We believe that we will not be considered a PFIC for U.S. federal income tax purposes with respect to our 2005 taxable year, as discussed below. The amount of the distribution will equal the U.S.
dollar value of the Argentine pesos received, calculated by reference to the exchange rate in effect on the date such distribution is received (which, for U.S. Holders of ADSs, will be the date such distribution is received by the Depositary),
whether or not the Depositary or U.S. Holder in fact converts any Argentine pesos received into U.S. dollars at that time. Any gains or losses resulting from the conversion of Argentine pesos into U.S. dollars will be treated as ordinary income or
loss, as the case may be, of the U.S. Holder and will be U.S. source.

Subject to applicable limitations that may vary depending upon a U.S. Holders circumstances and subject to the discussion above regarding concerns expressed by the U.S. Treasury, a U.S.
Holder will be entitled to a credit against its U.S. federal income tax liability for any Argentine taxes withheld from dividends on ADSs or ordinary shares. The limitation on foreign taxes eligible for credit is calculated separately with respect
to specific classes of income. Amounts paid on account of the Argentine Personal Property Tax, if any, will not be eligible for credit against the U.S. Holders U.S. federal income tax liability. U.S. Holders are urged to consult their own tax
advisors to determine whether they are subject to any special rules that limit their ability to make effective use of foreign tax credits. Instead of claiming a credit, a U.S. Holder may, at its election, deduct such otherwise creditable Argentine
taxes in computing its taxable income, subject to generally applicable limitations under U.S. law.

Subject to the discussion of the PFIC rules below, gain or loss realized by a U.S. Holder on the sale or exchange of ADSs or ordinary shares will be subject to United States federal income tax
as capital gain or loss in an amount equal to the difference between the U.S. Holders tax basis in the ADSs or ordinary shares and the amount realized on the disposition. Such capital gain or loss will be long term capital gain or loss if the
U.S. Holder held the ADSs or ordinary shares for more than one year. Gain or loss, if any, will be U.S. source for foreign tax credit purposes. The deductibility of capital losses is subject to limitations. Long-term capital gain of a non-corporate
U.S. Holder is generally taxed at a preferential rate.

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We believe that we are not a PFIC for U.S. federal income tax purposes for the taxable year 2005. However, since our PFIC status depends upon the composition of our income and assets and the
market value of our assets (including, among others, less than 25 percent owned equity investments) from time to time, and based upon certain proposed Treasury regulations that are not yet in effect but are generally proposed to become effective for
taxable years after December 31, 1994, there can be no assurance that we will not be considered a PFIC for any taxable year. If we are treated as a PFIC for any taxable year, gain recognized by a U.S. Holder on a sale or other disposition of ADSs or
ordinary shares would be allocated ratably over the U.S. Holders holding period for the ADSs or ordinary shares. The amounts allocated to the taxable year of the sale or other exchange and to any year before we became a PFIC would be taxed as
ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, and an interest charge would be imposed on the amount allocated to such taxable
year. Further, any distribution in respect of ADSs or ordinary shares in excess of 125 percent of the average of the annual distributions on ADSs or ordinary shares received by the U.S. Holder during the preceding three years or the U.S.
Holders holding period, whichever if shorter, would be subject to taxation as described above. Certain elections may be available (including a mark-to-market election) to United States persons that may mitigate the adverse consequences
resulting from PFIC status.

In addition, if we were to be treated as a PFIC in a taxable year in which we pay a dividend or the prior taxable year, the 15% dividend rate discussed above with respect to dividends paid to
non-corporate holders would not apply.

Payment of dividends and sales proceeds that are made within the United States or through certain U.S.-related financial intermediaries generally are subject to information reporting and to
backup withholding unless (i) you are a corporation or other exempt recipient or (ii) in the case of backup withholding, you provide a correct taxpayer identification number and certify that you are not subject to backup withholding. The amount of
any backup withholding from a payment to a U.S. Holder will be allowed as a credit against the U.S. Holders U.S. federal income tax liability and may entitle the U.S. Holder to a refund, provided that the required information is furnished to
the Internal Revenue Service.

This annual report and the exhibits thereto and any periodic reports or other information filed pursuant to the Exchange Act may be inspected without charge and copied at prescribed rates at
the SECs public reference room located at 450 Fifth Street, NW, Washington, D.C. 25049. In addition, the SEC maintains a website that contains information filed electronically with the SEC, which can be accessed over the internet at
http://www.sec.gov. The documents concerning Banco Francés which are referred to in this annual report may also be inspected at our office at Reconquista 199, C1003ABB Buenos Aires, Republic of Argentina.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk is the uncertainty to which future earnings and financial position are exposed as a result of adverse changes in the financial markets in which we operate. This risk is a
consequence of our lending, trading and investments businesses and mainly consists of interest rate risk, foreign exchange risk and equity prices risk.

The estimation of potential losses that could arise from reasonably likely adverse changes in market conditions is the key element of managing market risk. The main tool we use to make this
estimation on our trading and investments activities is a value at risk methodology (VAR).

VAR is an estimate (made with a given confidence interval) of the maximum potential loss in the fair or market value of a certain instrument or portfolio likely to occur over a specified time
period, or time horizon, if that portfolio were held unchanged for that time period. This methodology is based on statistical methods that take into account many variables that may cause a change in the value of Banco
Francéss portfolios, including interest rates, foreign exchange rates, securities prices, volatility of all this, and any correlation among the foregoing.

Additionally, the Bank has an independent area of market risk management called Market Risk Department that manages the control of all market activities that may be involved in the
calculation of VAR. This area interacts in a daily basis with all the different areas of the Bank that are related with the trading activities of Banco Francés and with the market risk management area in Spain.

We are also involved in a continuous process of improvement of our systems, in order to update them to the latest methodological advances in market risk measurement and control.

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Our VAR estimations provide us with a consistent and uniform measure of market risk in our trading portfolios.

VAR uses historical movements in these variables to estimate reasonably likely potential losses in trading activities assuming normal market conditions and market liquidity. The historical
observation involves building a distribution of hypothetical daily changes in trading portfolio value. These hypothetical changes are based on daily-observed percentage changes in key market indexes or other market factors to which the portfolio may
be sensitive.

Our VAR analysis is updated daily by recalculating the historic volatility and correlation that serve as the basis for this analysis. In the case of our VAR analysis, the period for estimating
risk factors is about one year and we assume a one-day holding period and adverse market movements of 2.3264 standard deviations as the standard for risk measurement and comparison. This range approximates a 99% one-tailed confidence interval. For a
given portfolio, this implies that changes in market value are statistically likely to deviate adversely from VAR estimates approximately 1% of the time or one day out of 100 days. The volatility and correlation used in the calculation process are
obtained by the technique known as exponential smooth, which confers a higher relative weight to the last historical data considered within the one-year series.

The area of Market Risk Management uses VAR as a corporate tool to estimate and limit market risks related to all of our trading activities. Global VAR limits for trading activities at our
dealing room are set by the agreement between the Market Risk Area, the Trading Area and the Permanent Executive Commission at BBVA Group headquarters in Spain. Two types of limits are used to seek to control market risk arising from our trading
activities: limits based on VAR and stop-loss limits for the principal portfolios. Limits on particular portfolios and products are established within each business.

The VAR model incorporates several variables that could impact the fair value of our trading portfolio, as well as the correlation between these variables. It takes into account linear and
non-linear exposures to price and interest rate risk and linear exposure to implied volatility risks.

We estimate VAR for each of our trading portfolios and all trading portfolios combined. The following table shows the VAR for Banco Francés combined trading activities for last
year.

|        |  | 2005 |  | 2004 | 
|------- |  | ---- |  | ---- | 
|        |  |      |  |      | 
|Average |  | 0.81 |  | 0.37 | 
|Minimum |  | 0.22 |  | 0.02 | 
|Maximum |  | 2.57 |  | 2.01 | 
|Dec.31  |  | 0.98 |  | 0.58 | 

Daily Trading VAR  Categories(in million pesos)

|Interest Risk Var |  | 2005 |  | 2004 | 
|----------------- |  | ---- |  | ---- | 
|                  |  |      |  |      | 
|Average           |  | 0.76 |  | 0.28 | 
|Minimum           |  | 0.12 |  | 0.01 | 
|Maximum           |  | 2.57 |  | 2.00 | 
|Dec.31            |  | 0.97 |  | 0.28 | 
|Currency Risk Var |  | 2005 |  | 2004 | 
|                  |  |      |  |      | 
|Average           |  | 0.20 |  | 0.14 | 
|Minimum           |  | 0.04 |  | 0.01 | 
|Maximum           |  | 0.96 |  | 0.50 | 
|Dec.31            |  | 0.10 |  | 0.49 | 

Interest rate risk is mainly explained by the allocation of excess liquidity.

Our exposure to Foreign Exchange Risk is minimal and is primarily a result of Foreign Trade Business.

149

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The following graph shows the movements in Banco Francés VAR for their trading activities during 2005:



The graph above indicates the evolution of the risk exposure, measured with VAR, during the year 2005. Because of market conditions, and internal restrictions from the Central Bank, Banco
Francés, was not allowed to purchase local bonds, which might have derived a bigger amount of VAR exposure.

This restriction made the risk assumed during the year 2005, a very small one, giving the average VAR amount a risk exposure of 800 thousand pesos with a minimum of 200 thousand pesos and a
maximum of 2,57 million pesos.

The evolution that fixed rate bonds denominated in local currency (Central Banks Bills) had in the portfolio of the Bank accounts for almost all the variability in VAR risk exposure
during 2005. This evolution depended mostly on the liquidity possibilities that the Bank had during the period involved. The portfolio of the Bank during the year was almost entirely comprised of fixed rate bonds (Central Banks
Bills).

Non-Trading Risk

None.

Interest Rate Risk

The discussion that follows relates to interest risk in 2005 and bears no relation to our current or future interest rate risk.

Interest rate sensitivity is the relationship between market interest rates and net portfolio value on the one hand and net interest income on the other, due to the repricing of assets and
liabilities. Our interest rate sensitivity analysis measures the sensitivity of the net portfolio value and net interest income to parallel changes in interest rates and to changes in the yield curve.

For the purpose of calculating net present value, when the rate of interest is fixed, future cash flows of financial assets and liabilities are calculated on a contractual basis. When the
interest rate is variable, cash flows are included that have a maturity during the repricing interval. Such amounts are added to the remaining balance of the asset or the liability at the end of the interval.

Net interest income is calculated as the difference between interest income earned on interest-earning assets and interest expense from interest-bearing liabilities for each month of the fiscal
year immediately following the fiscal year ended December 31, 2005.

In general, the usefulness of this calculation is limited to its assumption of a permanent increase or decrease in interest rates and that all of such rates change at the same rate.
Accordingly, actual results could differ materially from those projected.

150

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For any given period, the pricing structure is matched when an equal amount of assets and liabilities reprice. Any mismatch of interest-earning assets and interest-bearing liabilities is known
as a gap. A positive gap denotes asset sensitivity and normally means that an increase in interest rates would have a negative effect on net portfolio value and a positive effect on interest income, while a decline in interest rates would have a
positive effect on net portfolio value and a negative effect on net interest income.

Changes in interest rates affect our profitability as a result of timing differences on the repricing of the assets and liabilities. One measure of the effect of a change in interest rates is
to measure the change in net portfolio value (defined as the net present value of interest-earning assets and interest-bearing liabilities) and the effect on net interest income from a given change in interest rates. In the table below, interest
rates are assumed to change immediately, while the consistency and levels of interest-earning assets and interest-bearing liabilities, including the effects of derivative financial instruments, remain constant. The table measures the net portfolio
value and net interest income under various interest rate scenarios and the percentage changes from amounts generated under a stable interest rate environment.

The following chart include adjusted assets and liabilities in the 0-3 months interval assuming 10.16% annual adjustment. In order to measure the effect of a change in interest rates in net
portfolio value and net interest income we are assuming the same change in interest rate as in the adjustment rate. However as this may not be the case we are including another column showing the impact of a variation in the adjustment rate with no
variation in interest rate.

|At December 31,
    2005                       |  
|---------------------------------------------- | -
|                                               |  
|Change in Base
Interest Rates
(Basis points)   |  
|                                               |  
|(in millions of pesos, except
    percentages) |  
|100                                            |  
|50                                             |  
|0                                              |  
|(50                                            | )
|(100                                           | )

Based on our position at December 31, 2005, and assuming a hypothetical, immediate 50 basis points increase in interests rates affecting all interest rate sensitive assets and liabilities as of
January 1, 2006, net portfolio value would be reduced by Ps.21.5 million and net interest income over 2006 would be increased by approximately Ps.10.6 million.

Accordingly, on considering a 50 b.p. increase in the adjustment rate Net interest income increases Ps.18.5 million.

As of December 31, 2005, as part of our asset and liability management, we aimed to minimize the impact on results of foreign exchange rate fluctuations by maintaining excess balances of assets
over liabilities denominated in dollars.

|                                           |  |                                                                   |  |                                                                  
|------------------------------------------ |  | ----------------------------------------------------------------- |  | -----------------------------------------------------------------
|Peso Against All other Currencies          |  | Effect on Net Income based on ourposition
as of December 31, 2005 |  | Effect on Net Income based on ourposition
as of December 31, 2004
|                                           |  |                                                                   |  |                                                                  
|(in millions of pesos, except percentages)
|5%                                         |  | (4)                                                               |  | (36)                                                             
|(5)%                                       |  | 4                                                                 |  | 36                                                               

For a description of the changes in the exchange rates since December 2005, seeInformation on the CompanyRecent Political and Economic
Developments in Argentinaand Note 37.23. to the Consolidated Financial Statements.

Equity and Commodity Price Risk

Equity and commodity risk are the risks associated with adverse movements in the value of equity securities and commodities or related indexes. We do not have any material exposure to either of
them.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

151

---



- PART II -

ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

None.

ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS

None.

ITEM 15. CONTROLS AND PROCEDURES

- Evaluation of disclosure controls and procedures. As of December 31, 2005, the Bank, under the supervision and with the participation of the Banks management, including the Chief
Executive Officer and the Chief Financial Officer, performed an evaluation of the effectiveness of the Banks disclosure controls and procedures. The Banks management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which by their nature can provide only reasonable assurance regarding management's control objectives. Based on
this evaluation, the Banks Chief Executive Officer and Chief Financial Officer concluded that the Banks disclosure controls and procedures are effective at the reasonable
assurance level for gathering, analyzing and disclosing the information the Bank is required to disclose in the reports it files under the Securities Exchange Act of 1934, within the time periods specified in the
SECs rules and forms.
- Changes in internal controls over financial reporting. There has been no change in the Banks internal control over financial reporting that occurred during the period covered by this
annual report that has materially affected, or is reasonably likely to materially affect, the Banks internal control over financial reporting.

The Banks Board of Directors has appointed Mr. Oscar Miguel Castro to serve on its audit committees (I and II). The Banks Board of Directors has concluded that Mr. Castro is a
financial expert based on his extensive audit experience, having been a partner of an international accounting firm until 2001. Mr. Castro qualifies as an independent director according to the independence criteria established by General Resolution
No. 368 (New Text 2001), as amended by General Resolution No. 400 of the CNV.

The standards of ethical conduct that Banco Francés expects from its employees are found within the Code of Conduct of BBVA Banco Francés and its group of companies in
Argentina, or the Code of Conduct, approved by the Board of Directors on December 18, 2003.

The Code of Conduct is applicable to all our management and employees, including the Executive Chairman, the Financial Director and other senior financial officers of the Bank. All officers and
employees are accountable for adhering to the Code of Conduct. Suspected violations of the Code of Conduct may be reported in accordance with procedures designed to address the reported situation and to protect the reporting employee. The failure to
comply with criteria and rules of the Code of Conduct may result in disciplinary action in accordance with applicable Argentine employment laws.

The Code of Conduct is accessible via Banco Francéss corporate website at:

http://www.bancofrances.com.ar/html/institucional/informacion_banco/codigo_etica/inst_info_codigoetica.htm(the information found at this website is not incorporated by reference into
this report).

A copy of our Code of Conduct is also available on request, free of charge, by writing or telephoning us at:

> BBVA Banco Francés S.A.Attention: Investor Relations DepartmentReconquista 40C1003ABB Buenos AiresRepublic of ArgentinaTelephone number: (54 11) 4341 5036e-mail address:marbelbide@bancofrances.com.ar

152

---



During fiscal year 2005, there have been no amendments to any provisions of the Code of Conduct that apply to our executive officers.

No waivers from any provisions of the Code of Conduct were expressly or implicitly granted to the Executive Chairman, the Financial Director and any other senior financial officer of the Bank
in the fiscal year 2005.

ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES

Following is a summary of the fees to our independent external auditors for the years ended December 31, 2005 and 2004:

| |                    |  | 2005 ActualFees        |  | 2004 ActualFees | 
| | ------------------ |  | ---------------------- |  | --------------- | 
| |                    |  |                        |  |                 | 
| |                    |  | (in millions of pesos) | 
| | Audit fees         |  | 2.06                   |  | 1.79            | 
| | Audit-related fees |  |                       |  |                | 
| | Tax fees           |  | 0.13                   |  | 0.16            | 
| | All other fees     |  |                       |  |                | 
| |                    |  |                        |  |                 | 
| | Total fees         |  | 2.19                   |  | 1.95            | 
| |                    |  |                        |  |                 | 

Audit feesare fees for professional services performed by Deloitte & Co. S.R.L. for the audit and limited review of the Banks annual and quarterly financial statements and
services that are normally provided in connection with statutory and regulatory filings.

Audit-related feesconsist of fees for assurance and related services performed by Deloitte & Co. S.R.L. that are reasonably related to the performance of the audit or review of
the Bank's financial statements and are not reported as Audit fees.

Tax feesconsist of tax compliance, tax advice and tax planning services and assistance and advice related to tax audits and appeals.

The Audit Committee has approved policies and procedures for pre-approving all non-audit work performed by Deloitte & Co. S.R.L. after January 1, 2005. Specifically, the policies and
procedures prohibit Deloitte & Co. S.R.L. from performing any services for the Bank or its subsidiaries without the prior approval of the Audit Committee. All of the services provided by Deloitte & Co. S.R.L. in 2005 were approved by the
Audit Committee pursuant to these approval policies. The Audit Committee meets once a month. In each of these meetings, the Internal Audit Director presents the projects undertaken by the Internal Audit Department. The minutes of the meeting are
then drawn up detailing the issues discussed as well as those items requiring further discussion. The minutes are transcribed into an internal control book which is sent to the board of directors for their information. SeeDirectors, senior management and employees-Audit Committee(I).

ITEM 16D. EXEMPTIONS FROM LISTING REQUIREMENTS FOR AUDIT COMMITTEES

ITEM 16E. PURCHASES OF EQUITY SECURITIES BY ONE ISSUER AND AFFILIATED PERSONS

153

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- PART III -

ITEM 17. FINANCIAL STATEMENTS

We have responded to Item 18 in lieu of this item.

ITEM 18. FINANCIAL STATEMENTS

Reference is made to Item 19 for a list of the financial statements filed as a part of this annual report.

ITEM 19. EXHIBITS

| | • | Index to Consolidated Financial Statements:                                                              |     
| | - | -------------------------------------------------------------------------------------------------------- | ----
| |   |                                                                                                          | Page
| |   | Report of Independent Registered Public Accounting Firm                                                  | F-2 
| |   | Consolidated Balance Sheets as of December 31, 2005 and 2004                                             | F-4 
| |   | Consolidated Statements of Operations for the fiscal years ended December 31, 2005, 2004 and 2003        | F-8 
| |   | Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2005, 2004 and 2003        | F-10
| |   | Consolidated Statements of Changes in Stockholders Equity for the fiscal years ended December 31, 2005, | F-12
| |   | 2004 and 2003                                                                                            |     
| |   | Notes to the Consolidated Financial Statements                                                           | F-13
| |   | Legal Actions  Constitutional Protection Actions (Exhibit I)                                            | F-78
| |   |                                                                                                          |     
| | • | Index to Exhibits:                                                                                       |     

|              |                                                                                          
|------------- | -----------------------------------------------------------------------------------------
|ExhibitNumber | Description                                                                              
|1.1           | Amended and Restated By-Laws (Estatutos) of BBVA Banco Francés                           
|              |                                                                                          
|1.2           | English translation of the Amended and Restated By-Laws (Estatutos) of BBVA Banco Francés
|              |                                                                                          
|8.1           | Subsidiaries of the Company                                                              
|              |                                                                                          
|12.1          | Section 302 Certification of Chief Executive Officer                                     
|              |                                                                                          
|12.2          | Section 302 Certification of Chief Financial Officer                                     
|              |                                                                                          
|13.1          | Section 906 Certification                                                                

We will furnish to the Securities and Exchange Commission, upon request, copies of any unfiled instruments that define the rights of holders of long-term debt of Banco Francés.

154

---



SIGNATURES


The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its
behalf.

| | BBVA BANCO FRANCÉS
    S.A.
| | ---------------------------
| |                            
| | By:                        
| |                            
| |                            
| |                            

155

---



|                                          
|------------------------------------------
|BBVA BANCO FRANCÉS S.A. AND SUBSIDIARIES  
|INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

|                                                                                                                       |  | Page
|---------------------------------------------------------------------------------------------------------------------- |  | ----
|Report of Independent Registered Public Accounting Firm                                                                |  | F-2 
|                                                                                                                       |  |     
|Consolidated Balance Sheets as of December 31, 2005 and 2004                                                           |  | F-4 
|                                                                                                                       |  |     
|Consolidated Statements of Operations for the fiscal years ended December 31, 2005, 2004 and 2003                      |  | F-8 
|                                                                                                                       |  |     
|Consolidated Statements of Cash Flows for the fiscal years ended December 31, 2005, 2004 and 2003                      |  | F-10
|                                                                                                                       |  |     
|Consolidated Statements of Changes in Stockholders Equity for the fiscal years ended December 31, 2005, 2004 and 2003 |  | F-12
|                                                                                                                       |  |     
|Notes to the Consolidated Financial Statements                                                                         |  | F-13
|                                                                                                                       |  |     
|Legal Actions  Constitutional Protection Actions (Exhibit I)                                                          |  | F-78

F-1

---



|REPORT OF INDEPENDENT REGISTERED
|--------------------------------
|PUBLIC ACCOUNTING FIRM          

|To the President and Board of Directors of
|------------------------------------------
|BBVA BANCO FRANCÉS S.A.                   
|Reconquista 199                           
|Buenos Aires, Argentina                   

|1. | We have audited the accompanying consolidated balance sheets of BBVA BANCO FRANCÉS S.A. (the Bank) and subsidiaries (entities organized under Argentine Legislation, except Banco Francés (Cayman)
Limited, incorporated under the laws of Cayman Islands) as of December 31, 2005 and 2004, and the related consolidated statements of operations, changes in stockholders equity and cash flows for each of the three years in the period ended
December 31, 2005 (all expressed in thousands of Argentine Pesos). These financial statements are the responsibility of the Banks management. Our responsibility is to express an opinion on these financial statements based on our
audits.                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|2. | We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material misstatement. The Bank is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of
internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Banks internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates
made by Banks management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|3. | As mentioned in note 4, the accompanying consolidated financial statements have been prepared in accordance with the accounting standards established by the Argentine Central Bank (the BCRA) applicable to
consolidated financial statements, which differ in certain respects from, and constitute a comprehensive basis of accounting other than, Argentine generally accepted accounting principles applicable to business enterprises in general.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|4. | In our opinion, the consolidated financial statements referred to in paragraph 1 present fairly, in all material respects, the financial position of BBVA BANCO FRANCÉS S.A. and subsidiaries as of December 31, 2005 and
2004 and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005, in conformity with the rules established by the BCRA applicable to consolidated financial statements.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-2

---



|5. | As discussed in Note 3.5.18. to the consolidated financial statements, in 2005 the Company, as established by BCRA, changed its method of accounting for certain assets and liabilities and, retroactively, restated the 2004 and
2003 consolidated financial statements for the change.                                                                                                                                                                                                                                                                                                                     
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|6. | Accounting rules established by the BCRA vary in certain significant respects from accounting principles generally accepted in the United States of America (U.S. GAAP). Information relating to the nature and effect of such
differences is presented in Note 17 to the consolidated financial statements. As discussed in Note 17.15. to the consolidated financial statements, the stockholders equity and consolidated net income (loss) in accordance with accounting
principles generally accepted in the United States of America for the years ended December 31, 2004 and 2003 have been restated.

Buenos Aires, February 10, 2006 (June 26, 2006 as to Notes 16, 17 and 18 to the consolidated financial statements)

| | DELOITTE & Co. S.R.L.   | 
| | ----------------------- | 
| |                         | 
| |                         | 
| | /s/ Carlos B. Srulevich | 
| |                         | 
| | CARLOS B. SRULEVICH     | 
| | Partner                 | 
| |                         | 
| |                         | 
| |                         | 

Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, its member firms, and their respective subsidiaries and affiliates. As a Swiss Verein (association), neither Deloitte Touche Tohmatsu nor any of
its member firms has any liability for each others acts or omissions. Each of the member firms is a separate and independent legal entity operating under the names "Deloitte," "Deloitte & Touche," "Deloitte Touche Tohmatsu," or other
related names. Services are provided by the member firms or their subsidiaries or affiliates and not by the Deloitte Touche Tohmatsu Verein.

F-3

---



|BBVA BANCO FRANCÉS S.A. AND SUBSIDIARIES
|----------------------------------------
|CONSOLIDATED BALANCE SHEETS             
|As of December 31, 2005 and 2004        
|Stated in thousands of Pesos            

|                                                                     |  | December 31, | 
|-------------------------------------------------------------------- |  | ------------ | 
|                                                                     |  |              | 
|                                                                     |  | 2005         | 
|                                                                     |  |              | 
|ASSETS                                                               |  |              | 
|CASH AND DUE FROM BANKS                                              |  | 1,611,506    | 
|                                                                     |  |              | 
|Cash                                                                 |  | 483,377      | 
|Due from banks and correspondents                                    |  | 1,128,129    | 
|GOVERNMENT AND PRIVATE SECURITIES                                    |  | 3,504,311    | 
|                                                                     |  |              | 
|Holdings in investment accounts                                      |  | 435,104      | 
|Holdings for trading or financial transactions                       |  | 664,837      | 
|Unlisted Government Securities                                       |  | 6            | 
|Instruments issued by the Argentine Central Bank                     |  | 2,248,838    | 
|Investments in listed private securities                             |  | 155,849      | 
|Less: Allowances                                                     |  | 323          | 
|LOANS                                                                |  | 8,481,476    | 
|                                                                     |  |              | 
|To government sector                                                 |  | 4,623,626    | 
|To financial sector                                                  |  | 142,307      | 
|To non-financial private sector and residents abroad:                |  | 3,900,517    | 
|                                                                     |  |              | 
|Overdraft                                                            |  | 733,514      | 
|Discounted instruments                                               |  | 560,863      | 
|Real estate mortgage                                                 |  | 394,678      | 
|Collateral Loans                                                     |  | 60,714       | 
|Consumer                                                             |  | 355,649      | 
|Credit cards                                                         |  | 545,918      | 
|Other                                                                |  | 1,364,291    | 
|Interest and listed-price differences accrued and pending collection |  | 39,653       | 
|Less: Unused collections                                             |  | 152,186      | 
|Less: Interest documented together with main obligation              |  | 2,577        | 
|Less: Difference arising from purchase of portfolio                  |  | 89           | 
|Less: Allowances                                                     |  | 184,885      | 
|Carried forward                                                      |  | 13,597,293   | 
|                                                                     |  |              | 

|   
|---
|(1)

The accompanying Notes 1 to 18 and Exhibit I are an integral part of these Consolidated Financial Statements.

F-4

---



|BBVA BANCO FRANCÉS S.A. AND SUBSIDIARIES
|----------------------------------------
|CONSOLIDATED BALANCE SHEETS(Continued) 
|As of December 31, 2005 and 2004        
|Stated in thousands of Pesos            

|                                                                                         |  | December 31, | 
|---------------------------------------------------------------------------------------- |  | ------------ | 
|                                                                                         |  |              | 
|                                                                                         |  | 2005         | 
|                                                                                         |  |              | 
|Brought forward                                                                          |  | 13,597,293   | 
|                                                                                         |  |              | 
|OTHER RECEIVABLES FROM FINANCIAL TRANSACTIONS                                            |  | 831,450      | 
|                                                                                         |  |              | 
|Argentine Central Bank                                                                   |  | 286,206      | 
|Amounts receivable for spot and forward sales to be settled                              |  | 158,120      | 
|Instruments to be received for spot and forward purchases to be settled                  |  | 35,730       | 
|Unlisted corporate bonds                                                                 |  | 78,228       | 
|Non-deliverable forward transactions balances to be settled                              |  | 281          | 
|Other receivables not covered by debtor classification regulations                       |  | 130,321      | 
|Other receivables covered by debtor classification regulations                           |  | 21,538       | 
|Interest accrued and pending collection not covered by debtor classification regulations |  | 121,104      | 
|Interest accrued and pending collection covered by debtor classification regulations     |  | 3,020        | 
|Less: Allowances                                                                         |  | 3,098        | 
|ASSETS SUBJECT TO FINANCIAL LEASING                                                      |  | 130,165      | 
|                                                                                         |  |              | 
|Assets subject to financial leasing                                                      |  | 131,650      | 
|Less: Allowances                                                                         |  | 1,485        | 
|INVESTMENTS IN OTHER COMPANIES                                                           |  | 50,297       | 
|                                                                                         |  |              | 
|In financial institutions                                                                |  | 12,859       | 
|Other                                                                                    |  | 49,377       | 
|Less: Allowances                                                                         |  | 11,939       | 
|OTHER RECEIVABLES                                                                        |  | 238,961      | 
|                                                                                         |  |              | 
|Receivables from sale of property assets                                                 |  | 2,257        | 
|Tax on minimum presumed income  Tax Credit                                              |  | 90,094       | 
|Other                                                                                    |  | 535,708      | 
|Interest accrued and pending collection on receivables from sale of property assets      |  | 41           | 
|Other accrued interest receivable                                                        |  | 10           | 
|Less: Allowances                                                                         |  | 389,149      | 
|PREMISES AND EQUIPMENT                                                                   |  | 375,797      | 
|                                                                                         |  |              | 
|OTHER ASSETS                                                                             |  | 63,246       | 
|                                                                                         |  |              | 
|INTANGIBLE ASSETS                                                                        |  | 655,336      | 
|                                                                                         |  |              | 
|Goodwill                                                                                 |  | 25,459       | 
|Organization and development expenses                                                    |  | 629,877      | 
|SUSPENSE ITEMS                                                                           |  | 948          | 
|                                                                                         |  |              | 
|SUBSIDIARIES OTHER ASSETS                                                               |  | 40,255       | 
|                                                                                         |  |              | 
|TOTAL ASSETS                                                                             |  | 15,983,748   | 
|                                                                                         |  |              | 

|   
|---
|(1)

The accompanying Notes 1 to 18 and Exhibit I are an integral part of these Consolidated Financial Statements.

F-5

---



|BBVA BANCO FRANCÉS S.A. AND SUBSIDIARIES
|----------------------------------------
|CONSOLIDATED BALANCE SHEETS(Continued) 
|As of December 31, 2005 and 2004        
|Stated in thousands of Pesos            

|                                                                     |  | December 31, | 
|-------------------------------------------------------------------- |  | ------------ | 
|                                                                     |  |              | 
|                                                                     |  | 2005         | 
|                                                                     |  |              | 
|LIABILITIES                                                          |  |              | 
|DEPOSITS                                                             |  | 10,613,086   | 
|                                                                     |  |              | 
|Governmental sector                                                  |  | 102,848      | 
|Financial sector                                                     |  | 27,695       | 
|Non financial private sector and residents abroad:                   |  | 10,482,543   | 
|                                                                     |  |              | 
|Checking accounts                                                    |  | 1,841,450    | 
|Savings deposits                                                     |  | 3,000,466    | 
|Time deposits                                                        |  | 4,855,393    | 
|Investments accounts                                                 |  | 210,575      | 
|Other                                                                |  | 477,880      | 
|Interest and listedprice differences accrued payable                |  | 96,779       | 
|OTHER LIABILITIES FROM FINANCIAL TRANSACTIONS                        |  | 1,244,795    | 
|                                                                     |  |              | 
|Argentine Central BankOther                                         |  | 100,745      | 
|Banks and International Institutions                                 |  | 224,311      | 
|Nonsubordinated corporate bonds                                     |  | 286,486      | 
|Amounts payable for spot and forward purchases to be settled         |  | 26,165       | 
|Instruments to be delivered for spot and forward sales to be settled |  | 165,727      | 
|Non-deliverable forward transactions balances to be settled          |  | 150          | 
|Financing received from Argentine financial institutions             |  | 74,927       | 
|Other                                                                |  | 359,875      | 
|Interest and listedprice differences accrued payable                |  | 6,409        | 
|OTHER LIABILITIES                                                    |  | 251,979      | 
|                                                                     |  |              | 
|Fees payable                                                         |  | 156          | 
|Other                                                                |  | 251,823      | 
|ALLOWANCES                                                           |  | 263,191      | 
|                                                                     |  |              | 
|SUBORDINATED CORPORATE BONDS                                         |  | -            | 
|                                                                     |  |              | 
|SUSPENSE ITEMS                                                       |  | 2,299        | 
|                                                                     |  |              | 
|SUBSIDIARIES OTHER LIABILITIES                                      |  | 1,617,891    | 
|                                                                     |  |              | 
|TOTAL LIABILITIES                                                    |  | 13,993,241   | 
|                                                                     |  |              | 
|MINORITY INTEREST IN SUBSIDIARIES                                    |  | 188,960      | 
|                                                                     |  |              | 
|STOCKHOLDERS EQUITY                                                 |  | 1,801,547    | 
|                                                                     |  |              | 
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                           |  | 15,983,748   | 
|                                                                     |  |              | 

|   
|---
|(1)

The accompanying Notes 1 to 18 and Exhibit I are an integral part of these Consolidated Financial Statements.

F-6

---



|BBVA BANCO FRANCÉS S.A. AND SUBSIDIARIES
|----------------------------------------
|CONSOLIDATED BALANCE SHEETS(Continued) 
|As of December 31, 2005 and 2004        
|Stated in thousands of Pesos            

|                                                                                   |  | December 31, | 
|---------------------------------------------------------------------------------- |  | ------------ | 
|                                                                                   |  |              | 
|                                                                                   |  | 2005         | 
|                                                                                   |  |              | 
|DEBIT ACCOUNTS                                                                     |  |              | 
|Contingent                                                                         |  | 3,360,940    | 
|                                                                                   |  |              | 
|Guaranties received                                                                |  | 3,035,165    | 
|Contra contingent
 debit accounts                                                  |  | 325,775      | 
|Control                                                                            |  | 24,379,460   | 
|                                                                                   |  |              | 
|Receivables classified as non recoverable                                          |  | 393,234      | 
|Other                                                                              |  | 23,666,953   | 
|Contra control debit accounts                                                      |  | 319,273      | 
|Derivatives                                                                        |  | 140,143      | 
|                                                                                   |  |              | 
|Notional amount of non-deliverable forward transactions                          |  | 46,982       | 
|Contra debit derivatives accounts                                                  |  | 93,161       | 
|For trustee activities                                                             |  | 29,896       | 
|                                                                                   |  |              | 
|Funds in trust                                                                     |  | 29,896       | 
|                                                                                   |  |              | 
|TOTAL                                                                              |  | 27,910,439   | 
|                                                                                   |  |              | 
|CREDIT ACCOUNTS                                                                    |  |              | 
|Contingent                                                                         |  | 3,360,940    | 
|                                                                                   |  |              | 
|Credit lines granted (unused portion) covered by debtor classification regulations |  | 3,827        | 
|Guaranties provided to the Argentine Central Bank                                  |  | 70,293       | 
|Other guaranties given covered by debtor classification regulations                |  | 171,022      | 
|Other guarantees given non covered by debtor classification regulations            |  | 62           | 
|Other covered by debtor classification regulations                                 |  | 80,571       | 
|Contra contingent credit accounts                                                  |  | 3,035,165    | 
|Control                                                                            |  | 24,379,460   | 
|                                                                                   |  |              | 
|Items to be credited                                                               |  | 134,517      | 
|Other                                                                              |  | 184,756      | 
|Contra control credit accounts                                                     |  | 24,060,187   | 
|Derivatives                                                                        |  | 140,143      | 
|                                                                                   |  |              | 
|Notional amount of non-deliverable forward transactions                          |  | 93,161       | 
|Contra debit derivatives accounts                                                  |  | 46,982       | 
|For trustee activities                                                             |  | 29,896       | 
|                                                                                   |  |              | 
|Contra credit accounts for trustee activities                                      |  | 29,896       | 
|                                                                                   |  |              | 
|TOTAL                                                                              |  | 27,910,439   | 
|                                                                                   |  |              | 

|   
|---
|(1)

The accompanying Notes 1 to 18 and Exhibit I are an integral part of these Consolidated Financial Statements.

F-7

---



|BBVA BANCO FRANCÉS S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|CONSOLIDATED STATEMENTS OF OPERATIONS                      
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

|                                                          |  | Fiscal year ended December 31, | 
|--------------------------------------------------------- |  | ------------------------------ | 
|                                                          |  |                                | 
|                                                          |  | 2005                           | 
|                                                          |  |                                | 
|FINANCIAL INCOME                                          |  | 1,654,152                      | 
|                                                          |  |                                | 
|Interest
 cash and due from banks                         |  | 25,364                         | 
|Interest
 on loans to the financial sector                |  | 21,245                         | 
|Interest
 on overdraft                                    |  | 41,346                         | 
|Interest
 on discounted instruments                       |  | 22,989                         | 
|Interest
 on real estate mortgage                         |  | 41,487                         | 
|Interest
 on collateral loans                             |  | 3,622                          | 
|Interest
 on credit card loans                            |  | 24,095                         | 
|Interest on other loans                                   |  | 151,583                        | 
|Interest on other receivables from financial transactions |  | 10,374                         | 
|Income from secured loansDecree No. 1387/01              |  | 323,851                        | 
|Net income from government and private securities         |  | 209,438                        | 
|Indexation by benchmark stabilization coefficient (CER)   |  | 663,743                        | 
|Indexation by salaries variation index (CVS)              |  | -                              | 
|Other                                                     |  | 115,015                        | 
|FINANCIAL EXPENSES                                        |  | 608,949                        | 
|                                                          |  |                                | 
|Interest on checking accounts                             |  | 23,782                         | 
|Interest on savings deposits                              |  | 3,675                          | 
|Interest on time deposit                                  |  | 151,034                        | 
|Interest on financing to the financial sector             |  | 1,325                          | 
|Interest on other liabilities from financial transactions |  | 28,001                         | 
|Other interest                                            |  | 61,665                         | 
|Indexation by CER                                         |  | 306,815                        | 
|Other                                                     |  | 32,652                         | 
|GROSS INTERMEDIATION MARGINGAIN                          |  | 1,045,203                      | 
|                                                          |  |                                | 
|ALLOWANCES FOR DOUBTFUL LOANS                             |  | 114,628                        | 
|                                                          |  |                                | 
|SERVICE CHARGE INCOME                                     |  | 721,167                        | 
|                                                          |  |                                | 
|Related to lending transactions                           |  | 84,055                         | 
|Related to liability transactions                         |  | 195,470                        | 
|Other commissions                                         |  | 334,254                        | 
|Other                                                     |  | 107,388                        | 
|Carried forward                                           |  | 1,651,742                      | 
|                                                          |  |                                | 

|   
|---
|(1)

The accompanying Notes 1 to 18 and Exhibit I are an integral part of these Consolidated Financial Statements.

F-8

---



|BBVA BANCO FRANCÉS S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|CONSOLIDATED STATEMENTS OF OPERATIONS  (Continued)        
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

|                                                                      |  | Fiscal year ended
          December 31, |  
|--------------------------------------------------------------------- |  | ---------------------------------------- | -
|                                                                      |  |                                          |  
|                                                                      |  | 2005                                     |  
|                                                                      |  |                                          |  
|Brought forward                                                       |  | 1,651,742                                |  
|                                                                      |  |                                          |  
|SERVICE CHARGE EXPENSES                                               |  | 77,764                                   |  
|                                                                      |  |                                          |  
|Commissions                                                           |  | 52,821                                   |  
|Other                                                                 |  | 24,943                                   |  
|MONETARY GAIN ON FINANCIAL INTERMEDIATION                             |  | -                                        |  
|                                                                      |  |                                          |  
|OPERATING EXPENSES                                                    |  | 775,835                                  |  
|                                                                      |  |                                          |  
|Payroll expenses                                                      |  | 423,013                                  |  
|Fees to Bank Directors and Statutory Auditors                         |  | 329                                      |  
|Other professional fees                                               |  | 27,149                                   |  
|Advertising and publicity                                             |  | 39,757                                   |  
|Taxes                                                                 |  | 37,818                                   |  
|Other operating expenses                                              |  | 172,414                                  |  
|Other                                                                 |  | 75,355                                   |  
|MONETARY LOSS ON OPERATING EXPENSES                                   |  | -                                        |  
|                                                                      |  |                                          |  
|NET GAIN / (LOSS) FROM FINANCIAL TRANSACTIONS                         |  | 798,143                                  |  
|                                                                      |  |                                          |  
|NET (LOSS) / GAIN ON MINORITY INTEREST IN SUBSIDIARIES                |  | (17,151                                  | )
|OTHER INCOME                                                          |  | 483,851                                  |  
|                                                                      |  |                                          |  
|Income from long-term investments                                     |  | 2,870                                    |  
|Punitive interests                                                    |  | 2,868                                    |  
|Loans recovered and reversals of allowances                           |  | 87,857                                   |  
|Other                                                                 |  | 390,256                                  |  
|OTHER EXPENSES                                                        |  | 1,128,927                                |  
|                                                                      |  |                                          |  
|Punitive interests and charges paid to Argentine Central Bank         |  | 67                                       |  
|Charge for uncollectibility of other receivables and other allowances |  | 422,924                                  |  
|Amortization of difference arising from judicial resolutions          |  | 219,961                                  |  
|Other                                                                 |  | 485,975                                  |  
|MONETARY LOSS ON OTHER OPERATIONS                                     |  | -                                        |  
|NET GAIN / (LOSS) BEFORE INCOME TAX AND TAX ON                        |  |                                          |  
|MINIMUM PRESUME INCOME                                                |  | 135,916                                  |  
|                                                                      |  |                                          |  
|INCOME TAX AND TAX ON MINIMUM PRESUME INCOME                          |  | 18,712                                   |  
|NET INCOME / (LOSS) FOR THE FISCAL YEAR                               |  | 117,204                                  |  
|                                                                      |  |                                          |  
|NET INCOME / (LOSS) PER ORDINARY SHARE(2)                             |  | 0,25                                     |  

|   
|---
|(1)
|   
|(2)

The accompanying Notes 1 to 18 and Exhibit I are an integral part of these Consolidated Financial Statements.

F-9

---



|BBVA BANCO FRANCÉS S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOWS                      
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

|                                                                      |  | Fiscal year ended
          December 31, |  
|--------------------------------------------------------------------- |  | ---------------------------------------- | -
|                                                                      |  |                                          |  
|                                                                      |  | 2005                                     |  
|                                                                      |  |                                          |  
|Cash provided by / (used in) operating activities                     |  |                                          |  
|Financial income collected                                            |  | 1,545,426                                |  
|Service charge income collected                                       |  | 720,291                                  |  
|Other sources of funds                                                |  | 214,596                                  |  
|Less:                                                                 |  |                                          |  
|Financial expenses paid                                               |  | 807,599                                  |  
|Operating expenses paid                                               |  | 676,039                                  |  
|Other expenses paid                                                   |  | 528,799                                  |  
|                                                                      |  |                                          |  
|Net cash provided by / (used in) operating activities                 |  | 467,876                                  |  
|                                                                      |  |                                          |  
|Less:                                                                 |  |                                          |  
|Cash used in / (provided by) investing activities                     |  |                                          |  
|Increase / (Decrease) in government and private securities            |  | 431,297                                  |  
|(Decrease) / Increase in loans                                        |  | (81,130                                  | )
|(Decrease) in other receivables from financial transactions           |  | (27,678                                  | )
|(Decrease) in investments in other companies                          |  | (113                                     | )
|Increase in premises and equipment, other fixed assets and intangible |  |                                          |  
|assets                                                                |  | 60,758                                   |  
|Increase in other assets                                              |  | 163,472                                  |  
|                                                                      |  |                                          |  
|Net cash used in / (provided by) investing activities                 |  | 546,606                                  |  
|                                                                      |  |                                          |  
|Plus:                                                                 |  |                                          |  
|Cash provided by / (used in) financing activities                     |  |                                          |  
|Increase in deposits                                                  |  | 1,758,934                                |  
|(Decrease) in other liabilities from financial transactions           |  | (1,718,058                               | )
|(Decrease) / Increase in other liabilities                            |  | (16,788                                  | )
|(Decrease) / Increase in minority interest in subsidiaries            |  | (469                                     | )
|Cash capital contributions                                            |  | -                                        |  
|                                                                      |  |                                          |  
|Net cash provided by financing activities                             |  | 23,619                                   |  
|                                                                      |  |                                          |  
|Monetary (loss) generated on cash and due from bank                   |  | -                                        |  
|                                                                      |  |                                          |  
|(Decrease) / Increase in cash and cash equivalents                    |  | (55,111                                  | )
|                                                                      |  |                                          |  
|Cash and cash equivalents at the beginning of the fiscal year         |  | 1,666,617                                |  
|(Decrease) / Increase in cash and cash equivalents                    |  | (55,111                                  | )
|                                                                      |  |                                          |  
|Cash and cash equivalents at the end of the fiscal year               |  | 1,611,506                                |  
|                                                                      |  |                                          |  

The accompanying Notes 1 to 18 and Exhibit I are an integral part of these Consolidated Financial Statements.

F-10

---



|BBVA BANCO FRANCÉS S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|CONSOLIDATED STATEMENTS OF CASH FLOWS  (Continued)        
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

SUPPLEMENTAL INFORMATION OF NONCASH INVESTING AND FINANCING ACTIVITIES

At December 31, 2005, 2004 and 2003 the Bank entered
into forward, unsettled spot and repurchase contracts to buy or sell foreign
currencies, listed Government and other securities at future dates, exchanging
non-cash assets  or liabilities for other noncash assets or liabilities (see
Note 16.7.).

On January 14, 2005, the restructuring process started for a substantial part of Argentinas sovereign debt, in default ever since late 2001. The swap period came to an end on February 25, 2005. In June 2005, the
National Government consummated the delivery of the exchanged government securities. U.S. dollar-denominated Discount Bonds (VN 26,083,453) and peso denominated Discount Bonds (VN 146,817,752 ) were received by the Bank.

On November 2, 2004 Banco Bilbao Vizcaya Argentaria S.A. (BBVA) subscribed 65.326.744 new shares. The integration of the amount of 230.603.406,32 corresponding to the new shares is carried out by the
capitalization of BBVA by means of a loan amounting to US$77.701.464,68 plus interests up to November 2, 2004 inclusive, for US$21.288,07.

During March, 2004, the Bank sold to BBVA S.A. its 100%-interest in Banco Francés (Cayman) Limited. This operation consisted in:

|a) | Swap of Federal Government Secured loans in pesos held by Banco Francés (Cayman) Limited for private sector loans denominated in US dollars belonging to BBVA Banco Francés S.A. at market value.                                                                               
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                                                                 
|b) | Swap of financial loans granted to BBVA Banco Francés S.A. by BBVA S.A. and Banco Francés (Cayman) Limited for equal halves.                                                                                                                                                    
|   |                                                                                                                                                                                                                                                                                 
|c) | Finally Banco Francés (Cayman) Limited sold Federal Government Secured loans to BBVA S.A. at market value for the latter to pay for the purchase of the participation to BBVA Banco Francés S.A. through the
transfer of those loans. The sale price amounted to US$238,462,142.

In addition, in June 2004 a number of private loans denominated in U.S. dollars were repurchased through the delivery of Argentine Government Bonds BODEN 2012 in exchange for those loans at market rates, resulting from the
compensation mechanism for financial institutions in consequence of the negative patrimonial effects generated by the conversion into pesos at different exchange rates of loans and private debts in foreign currency, as well as the negative foreign
currency net position after the conversion into pesos and released by the BCRA, with a negative result of 78,374, which was charged against allowances set up under liabilities.

Also, on February 4, 2004, the Bank acquired 5% of the capital stock of Francés Administradora de Inversiones S.A. from Banco Francés (Cayman) Limited amounting to 580, through the delivery of Argentine
Government Bonds BODEN 2012.

At December 31, 2003, the Bank swapped provincial public debt into Secured Bond due in 2018. The face value of the loans and securities swapped amounted to 1,010,210.

SUPPLEMENTAL INFORMATION OF CERTAIN CASH MOVEMENTS

At December 31, 2005, 2004 and 2003, taxes paid amounted to 118,500, 139,563 and 87,695, respectively. At such dates, interest-paid amounted to 807,152, 453,415 and 1,035,468, respectively.

The accompanying Notes 1 to 18 and Exhibit I are an integral part of these Consolidated Financial Statements.

F-11

---



|BBVA BANCO FRANCÉS S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS        
|EQUITY                                                     
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

|                                        |  |                    |  |  | Non-capitalized
    contributions |   |  |                                           |   |  | Retained earnings |  |  |        |   |  |                                           |   |  |                             |  
|--------------------------------------- |  | ------------------ |  |  | --------------------------------- | - |  | ----------------------------------------- | - |  | ----------------- |  |  | ------ | - |  | ----------------------------------------- | - |  | --------------------------- | -
|                                        |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|Movements                               |  | Capital
  Stock(1) |  |  | Issuance
  premiums(1)            |   |  | Adjustments tostockholders
    equity(1) |   |  | Legal             |  |  | Other  |   |  | Unrealized
      valuation
    difference |   |  | Unappropriated
    earnings |  
|                                        |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|                                        |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|Balances at December 31, 2002(2)        |  | 368,128            |  |  | 934,211                           |   |  | 769,904                                   |   |  | 428,698           |  |  | 1,802  |   |  | 430,282                                   |   |  | (1,008,720                  | )
|                                        |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|Net loss for the fiscal year(2)         |  |                   |  |  |                                  |   |  |                                          |   |  |                  |  |  |       |   |  |                                          |   |  | (350,328                    | )
|                                        |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|Balances at December 31, 2003(2)        |  | 368,128            |  |  | 934,211                           |   |  | 769,904                                   |   |  | 428,698           |  |  | 1,802  |   |  | 430,282                                   |   |  | (1,359,048                  | )
|                                        |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|Decisions of Stockholders Meeting of   |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|April 22, 2004:                         |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|- Capital increase for the subscription |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|of shares                               |  | 103,233            |  |  | 261,179                           |   |  |                                          |   |  |                  |  |  |       |   |  |                                          |   |  |                            |  
|Absorption approved by BCRA             |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|Resolution No. 52/04                    |  |                   |  |  |                                  |   |  |                                          |   |  |                  |  |  |       |   |  | (200,000                                  | ) |  |                            |  
|Net loss for the fiscal year(2)         |  |                   |  |  |                                  |   |  |                                          |   |  |                  |  |  |       |   |  |                                          |   |  | (54,046                     | )
|                                        |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|Balances at December 31, 2004(2)        |  | 471,361            |  |  | 1,195,390                         |   |  | 769,904                                   |   |  | 428,698           |  |  | 1,802  |   |  | 230,282                                   |   |  | (1,413,094                  | )
|                                        |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|Cumulative losses absorption approved   |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|by Stockholders Meeting held on        |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|April 28, 2005 (Communication           |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|A 4294 as supplemented of the BCRA)   |  |                   |  |  | (1,020,258                        | ) |  | (456,925                                  | ) |  |                  |  |  | (1,802 | ) |  |                                          |   |  | 1,478,985                   |  
|Net income for the fiscal year          |  |                   |  |  |                                  |   |  |                                          |   |  |                  |  |  |       |   |  |                                          |   |  | 117,204                     |  
|                                        |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  
|Balances at December 31, 2005           |  | 471,361            |  |  | 175,132                           |   |  | 312,979                                   |   |  | 428,698           |  |  |       |   |  | 230,282                                   |   |  | 183,095                     |  
|                                        |  |                    |  |  |                                   |   |  |                                           |   |  |                   |  |  |        |   |  |                                           |   |  |                             |  

|   
|---
|(1)
|(2)

The accompanying Notes 1 to 18 and Exhibit I are an integral part of these Consolidated Financial Statements.

F-12

---



|BBVA BANCO FRANCES S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                 
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

NOTE 1CORPORATE SITUATION AND BANKS ACTIVITIES

1.1. Corporate situation

BBVA Banco Francés S.A. (BF or the Bank) has its main place of business in Buenos Aires, Argentina and operates a 230-branch network.

As from December, 1996, BF is part of Banco Bilbao Vizcaya Argentaria S.A. (BBVA) global strategy, which controls the Bank, direct and indirectly, with 75.59% -corporate stock as of December 31, 2005.

Part of BFs corporate stock is publicly traded and is registered with the Buenos Aires Stock Exchange, New York Stock Exchange and Madrid Stock Exchange.

1.2. Stockholders Equity

1.2.1. Capital stock

Changes in the Banks capital stock during the last 5 fiscal years are as follows:

|                                       | Total  
|-------------------------------------- | -------
|                                       |        
|Capital Stock as of December 31, 1999: | 209,631
|                                       |        

|Date of                                                |  |                                                          |  |                      |  |                         | 
|------------------------------------------------------ |  | -------------------------------------------------------- |  | -------------------- |  | ----------------------- | 
|                                                       |  |                                                          |  |                      |  |                         | 
|Stockholders
    Meeting deciding on
    the issuance |  | Registration with the
   Public Registry of
    Commerce |  | Form of
   placement |  | Amount
  (in thousands) | 
|                                                       |  |                                                          |  |                      |  |                         | 
|                                                       |  |                                                          |  |                      |  |                         | 
|08-07-2002                                             |  | 02-06-2003                                               |  | (1)                  |  | 158,497                 | 
|                                                       |  |                                                          |  |                      |  |                         | 
|04-22-2004                                             |  | 01-25-2005                                               |  | (1)                  |  | 103,233                 | 
|                                                       |  |                                                          |  |                      |  |                         | 

|(1) | Through public subscription of shares.                                                                                  
|--- | ------------------------------------------------------------------------------------------------------------------------
|    |                                                                                                                         
|(2) | The amount of Capital Stock is fully paid in and authorized for public offering by Comisión Nacional de Valores (CNV).

1.2.2. Authorized and issued shares

The capital stock of the Bank consists of 471,361,306 Ordinary Shares, par value 1.00 each, all of which are issued and available to stockholders. At July 1, 1992, there were 58,099,410 Ordinary Shares, par value 1.00 each.
Following a stock distribution and a share subscription in September 1993, the total number of authorized and issued Ordinary Shares, par value 1.00 each, increased by 34,859,700 Ordinary Shares and by 18,539,914 Ordinary Shares, respectively.
Furthermore, following stock distributions in September 1995 and October 1996, the total number of authorized and issued Ordinary Shares, par value 1.00 each, increased by 16,724,854 and 19,233,582 Ordinary Shares, respectively. At March 1998, the
total number of authorized and issued Ordinary Shares, par value 1.00 each, increased by 25,000,000 and 14,174,432, respectively, as a result of the issuance of common stock originated by share subscription and by the exchange share rate by merger
with Banco de Crédito Argentino (BCA), for a total of 186,631,892 Ordinary Shares, par value 1.00 each. In April 1999, the total number of authorized and issued Ordinary Shares, par value 1.00 each, increased by 23.000.000 as a result of the
issuance of common stock by a share subscription. In August 2002, the total number of authorized and issued Ordinary Shares, par value 1.00 each, increased by 158,496,540 as a result of the issuance of common stock by a share subscription. Finally,
the total number of authorized and issued ordinary shares, par value 1.00 each, increased by 103,232,874 as a result of the issuance of common stock above mentioned.

F-13

---



|BBVA BANCO FRANCES S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)     
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

1.2.3. Adjustments to stockholders equity

The Adjustments to stockholders equity caption in the consolidated statement of changes in stockholders equity represents:

|a) | The balance of the surplus of the 1,981 technical valuation of properties of the Bank, which is available to absorb losses on the disposal or devaluation of such properties restated as mentioned in Note 3.2.                        
|-- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   |                                                                                                                                                                                                                                        
|b) | The inflation adjustment related to capital stock at the beginning of each year, restated as mentioned in Note 3.2. Capital stock maintains its nominal (par) value at each balance sheet date.                                        
|   |                                                                                                                                                                                                                                        
|c) | The inflation adjustment related to the increase in capital stock restated as mentioned in Note 3.2. This adjustment represents the effect of inflation from the date on which the capital stock was increased to the end of each
year.

The composition of Adjustments to stockholders equity is as follows:

|                                                          |  | December 31, 2005 |   |  | December 31, 2004
|--------------------------------------------------------- |  | ----------------- | - |  | -----------------
|                                                          |  |                   |   |  |                  
|Adjustment to equity fund appraisal revaluation           |  | 41,285            |   |  | 41,285           
|Adjustments to Capital Stock (Included Issuance Premiums) |  | 728,619           |   |  | 728,619          
|Cumulative losses absorption                              |  | (456,925          | ) |  | -                
|                                                          |  |                   |   |  |                  
|Total                                                     |  | 312,979           |   |  | 769,904          
|                                                          |  |                   |   |  |                  

|1.2.4. Issuance Premiums                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|As of August 2002 due to the issuance of 158,496,540 shares subscription in (value 1 per share), at 3.59 each, the Bank received 590,996 over the nominal value of the shares that has been recorded under the Issuance
Premiums account. Finally, due to the issuance of 103,232,874 shares subscription in April 2004 (value 1 per share) at 3.53 each, the Bank received 261,179 over the nominal value of the shares that has been recorded under the Issuance
Premiums account.                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|1.3. Responsibility
of stockholders                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|BBVA Banco Francés S.A. is a corporation established under the laws of the Argentine Republic, and the responsibility of its stockholders is limited to the value of the paid in shares, in accordance with Law No.
19,550. As a result, in compliance with Law No. 25,738, it is hereby informed that neither the foreign capital majority stockholders nor the local or foreign stockholders will respond, in excess of the mentioned paid-in stockholding, for the
liabilities arising out of the transactions performed by the financial institution.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|1.4. Sale
of Credilogros Cía. Financiera S.A.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|On May 20, 1999, the Argentine Central Bank (BCRA) approved the creation of the company Credilogros Compañía Financiera S.A. (CL), which was registered with the Inspección General de
Justicia (the governmental regulatory agency of corporations) on June 24, 1999. On August 10, 1999, at the Company request, the BCRA authorized its starting up in business as a finance company as from August 2, 1999, by Communication
B 6568.                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|As of December 31, 2004, the capital stock of CL amounts to 57,100, and its stockholding structure is as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         

| | BF:                  | 69.5271 | 
| | -------------------- | ------- | 
| | BBVA:                | 29.9475 | 
| | Inversora Otar S.A.: | 0.5254% | 

On March 9, 2005, BF, Inversora Otar S.A. and BBVA sold their aggregate shareholdings in Credilogros Cía.
Financiera S.A. to Banco de Servicios y Transacciones S.A. and Grupo de Servicios
y Transacciones S.A. The amount
of the transaction was US$16,900,000, based on
the Financial Statements as of December 31, 2004. Upon entering into the sale
agreement, an advance payment was made for 20% of the price.

F-14

---



|BBVA BANCO FRANCES S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)     
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

The sale agreement
  as entered into shall be considered duly executed after the approval required
  from regulatory authorities which is still pending as of the date of issuance
  of these Financial Statements.

Until the transfer is consummated, Credilogros Cía. Financiera will continue to be managed by BBVA Banco Francés S.A. and the conduct of its business with customers will remain unchanged.

1.5. Sale of Banco Francés (Cayman) Limited

On March 18, 2004, the Bank sold to BBVA its 100%-interest in Banco Francés (Cayman) Limited.

The sale price amounted to US$238,462,142, and it was collected through Federal Government secured loans previously purchased by BBVA from Banco Francés (Cayman) Limited. BF has recorded such secured loans in
conformity with Communication A 3911 and supplementary regulations. The negative result of the transaction was 210,978 (see Note 4.3. ).

NOTE 2EQUITY INVESTMENTS

2.1. In controlled majority-owned subsidiaries

The following summarizes the investment in and related information of controlled majority-owned subsidiaries which are consolidated.

|                                           |  |                       |  | Shares |  | Percentage participation
|------------------------------------------ |  | --------------------- |  | ------ |  | ------------------------
|                                           |  |                       |  |        |  |                         
|                                           |  | Principal Activity    |  | Type   |  | Quantity                
|                                           |  |                       |  |        |  |                         
|                                           |  |                       |  |        |  | December 31,            
|                                           |  |                       |  |        |  |                         
|Companies                                  |  |                       |  |        |  | 2005                    
|                                           |  |                       |  |        |  |                         
|Francés Valores Sociedad de Bolsa S.A      |  | Stockholder           |  | Common |  | 12,137                  
|Atuel Fideicomisos S.A.                    |  | Trust manager         |  | Common |  | 13,099,869              
|Consolidar A.F.J.P. S.A.                   |  | Pensions fund manager |  | Common |  | 75,842,839              
|Consolidar Cía. de Seguros de Vida S.A.    |  | Insurance company     |  | Common |  | 7,383,921               
|Consolidar Cía. de Seguros de Retiro S.A.  |  | Insurance company     |  | Common |  | 25,033,832              
|PSA Finance Argentina Cía. Financiera S.A. |  | Financial institution |  | Common |  | 9,000                   
|Credilogros Cía. Financiera S.A.           |  | Financial institution |  | Common |  | 39,700,000              

2.2. Non-controlling equity investments

The following are all positions that the Bank holds in financial and non-financial institutions wherever such a position represented an ownership in excess of 2% of the invested companies capital stock as of December
31, 2005.

|Investment                     |  | Country   |  | % of Shares
    Owned |  | Principal Activity                                  |  | Investment in Other
      Subsidiaries
    (in thousands of pesos)
|------------------------------ |  | --------- |  | --------------------- |  | --------------------------------------------------- |  | ------------------------------------------------------------------
|                               |  |           |  |                       |  |                                                     |  |                                                                   
|Rombo Compañía Financiera S.A. |  | Argentina |  | 40.00%                |  | Financial institution                               |  | 12,096.1                                                          
|Consolidar ART S.A.            |  | Argentina |  | 12.50%                |  | Workers compensation                                |  | 18,986.5                                                          
|BBVA Consolidar Seguros S.A.   |  | Argentina |  | 12.22%                |  | Insurance                                           |  | 5,338.1                                                           
|Coelsa S.A.                    |  | Argentina |  | 10.00%                |  | Clearing house                                      |  | 110.5                                                             
|Interbanking S.A.              |  | Argentina |  | 9.09%                 |  | Information services for financial markets          |  | 1,048.4                                                           
|Argencontrol S.A.              |  | Argentina |  | 7.71%                 |  | Agent Mandatary                                     |  | 54.0                                                              
|Sedesa S.A.                    |  | Argentina |  | 8.12%                 |  | Deposit Guarantee Fund                              |  | 123.4                                                             
|Banelco S.A.                   |  | Argentina |  | 11.43%                |  | Nationwide ATM network & credit card administrating |  | 5,534.6                                                           
|Visa Argentina S.A.            |  | Argentina |  | 5.00%                 |  | Credit card issuer                                  |  | 1,160.0                                                           

F-15

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES
TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended
December 31, 2005, 2004 and 2003
Stated in thousands of Pesos

NOTE 3SIGNIFICANT ACCOUNTING POLICIES

3.1. Basis of presentation

In accordance with the procedures set forth in BCRAs regulations and Technical Pronouncement No. 21 of the Argentine Federation of Professional Councils in Economic Sciences (FACPCE), BF has consolidated - line by line
-its balance sheets as of December 31, 2005, 2004 and 2003, as per the following detail:

| | As of December 31, 2005:
|- | ------------------------
|  |                         
|  | a)                      
|  |                         
|  | b)                      
|  |                         

| | As
        of December 31, 2004:
|- | --------------------------------
|  |                                 
|  | a)                              
|  |                                 
|  | b)                              
|  |                                 

| | As
        of December 31, 2003:
|- | --------------------------------
|  |                                 
|  | a)                              
|  |                                 
|  | b)                              

The results of Consolidar Administradora de Fondos de Jubilaciones y Pensiones S.A., Consolidar Cía. de Seguros de Vida S.A. and its subsidiary, and Consolidar Cía. de Seguros de Retiro S.A. and its subsidiary,
have been adjusted in order to homogenize the periods of companies consolidating on the basis of a twelve-month period ended on December 31, 2005, 2004 and 2003.

Interests in subsidiaries are listed in Note 2.

3.2. Restatement of the Financial Statements in equivalent purchasing power

The Financial Statements have been taken from the Bank's books of accounts in conformity with the standards of the BCRA.

These Financial Statements recognize
    the effects of changes in the currency purchasing power through February
    28, 2003, following the restatement method established by FACPCE Technical
    Pronouncement No. 6 (modified by Technical Pronouncement No. 19), using adjustment
    rates derived from the internal Wholesale Price Index published by the National
Institute of Statistics and Census (I.N.D.E.C.).

F-16

---



|BBVA BANCO FRANCES S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)     
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

Accordingly to the above mentioned
    method, the accounting figures were restated by the purchasing power changes
    through August 31, 1995. As from that date, based in the prevailing economic
    stability conditions and accordingly with CNV General Resolution No. 272
    and BCRA Communication A 2365, the accounting figures were not restated through December 31, 2001. In view of CNV General Resolution No. 415 and BCRA Communication A 3702,
    the method was reinstated effective as from January 1, 2002, considering
    the previous accounting figures restated as of December 31, 2001.

By Communication A 3921 of the BCRA and General Resolution No. 441 of the CNV, in compliance with Decree No. 664/03 of the Federal Executive Power, application of the restatement method on Financial Statements in
equivalent purchasing power has been suspended as from March 1, 2003.  Accordingly, BF applied the mentioned restatement until February 28, 2003.

3.3. Comparative information

The Financial Statements as of December 31, 2005 include comparative information with Financial Statements for the fiscal years ended December 31, 2004 and December 31, 2003.

Additionally, the Consolidated Financial Statements and notes for fiscal year ended December 31, 2004 and 2003 have been modified due to adjustments to prior years income/(loss) (see Notes 3.5.18. )

3.4. Foreign subsidiary Financial Statements

The Financial Statements of the foreign subsidiary has been prepared based on similar methods to those applied by BF for preparing its own Financial Statements, in connection with assets and liabilities valuation, income
measurement and restatement procedure as explained in Notes 3.2. and 3.5. The Banco Francés (Cayman) Ltd. Financial Statements do not require any adjustment for inflation since they are stated in US dollars.

The assets and liabilities of Banco Francés
(Cayman) Ltd. and its subsidiary, as of December 31, 2003, originally stated
in US dollars, were converted into Argentine pesos based on the method described
in Note 3.5.1.  The assigned capital and irrevocable contributions were calculated
at the pesos amount paid in by the Bank. Unappropriated earnings were determined
by the difference between assets, liabilities and assigned capital, converted
into pesos as previously  indicated. Then the income (loss) for the years was
determined by the difference between unappropriated earnings at beginning and
year end.

3.5. Valuation methods

The main valuation methods used in the preparation of the Financial Statements have been as follows:

3.5.1. Foreign currency assets and liabilities

As of December 31, 2005 and 2004, such amounts were converted at the benchmark exchange rate of the BCRA as of the closing date of transactions on the last business day of the fiscal years. The exchange differences were
charged to income (loss) for each fiscal year.

3.5.2. Government and private securities

Government securities:

- Federal Government Bonds in US Dollars
    LIBOR 2012  Compensation:

As of December 31, 2005 they were
            valued based on the quotation prevailing at the end of the fiscal year
            plus outstanding coupons.

The outstanding compensation amounting
              to 114,922 (resulting from the redenomination into US dollars of the
              liabilities with the Financial and Insurance Institutions Assistance
              Trust Fund detailed in Note 12) was valued

F-17

---



|BBVA BANCO FRANCES S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)     
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

pursuant to the same criterion and
    was recorded under Other receivables from financial transactions, in the
line Other receivables not covered by debtor classification regulations.

As of December 31, 2004, the Bank booked the compensation received, pursuant to the provisions of BCRA Communication A 3785 at face value as of such date, plus interest accrued pursuant to the conditions of their
issuance, converted into Argentine pesos under the method described in Note 3.5.1.

- Bonds received under the Argentine
    sovereign debt restructuring process:

| | Discount Bonds
        and GDP-linked Securities in U.S. dollars: they were valued based on
        current listed prices as of December
    31, 2005.                                                                                                                                                                               
|- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  |                                                                                                                                                                                                                                                                                                                                      
| | Discount Bonds
        in pesos: they were recorded at the book value of the instruments delivered
        for swap less payments received during
        2004 and the first half of 2005, without exceeding the nominal cash
        flow amount until maturity applicable
    under the terms and conditions of the bonds received.

- As of December 31, 2004, Argentine Republic External Bills in U.S. dollars Survey + 4.95% 2001-2004, and Treasury Bills Series 90 were valued at the lower of book value as of
December 31, 2003, or the value obtained after applying to face values at that date the percentage calculated under the present value method in respect of Secured Bonds 2018, in
accordance with Communication A 4084 of the BCRA. The difference with face value was recognized against the balancing account under Loans as established by Communication A 3911.
- Holdings for trading or financial transactions: they were valued based on current listed prices for each security as of December 31, 2005 and 2004. Differences in listed prices were
credited/charged to income for fiscal years then ended.
- Unlisted government securities: these bonds were valued at the lower of present or face value (including adjustment and accrued interest), as established by Communication A 3911 as
amended of the BCRA.

Investments in listed private securities:

Equity and debt instruments: they were valued based on current listed prices as of December 31, 2005 and 2004. Differences in listed prices were charged to income for fiscal years then ended.

3.5.3. Government loans

Federal Government secured loans  Decree No. 1387/01:

As of December 31, 2005 and 2004, these loans were valued at the lower of present or face value (including adjustment and accrued interest), as established by Communication A 3911 of the BCRA.

The present value as of December 31, 2005 was calculated by discounting the cash flows as per the relevant contracts at an annual rate of 4%, in accordance with the provisions of the abovementioned Communication for December,
2005.

The face value was calculated in accordance with the swap values established by the Ministry of Economy at November 6, 2001 plus interest accrued through the end of the period, converted into pesos at the rate of 1.40 per
dollar plus Benchmark Stabilization Coefficient (CER).

The net effect of differences between
    the value determined for each loan (the lower of present or face value) and
    their theoretical value was charged to the balancing account under Loans
established by Communication A 3911.

In accordance with the abovementioned
    Communication, the theoretical value was calculated based on the book value
    at February 28, 2003, net of the balancing account derived from the swap
    set forth by Decree No. 1387/01 and restated by the CER through the end of
    the fiscal year.

F-18

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES
TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
For the fiscal years ended
December 31, 2005, 2004 and 2003
Stated in thousands of Pesos

Consolidar A.F.J.P. S.A., Consolidar
    Cía. de Seguros de Retiro S.A. and Consolidar Cía. de Seguros
    de Vida S.A.: loans secured by the National Government - Decree No. 1387/01
    held by these subsidiaries were valued in accordance with the regulations
    of the Superintendence of Pension Fund Administrators and the National Superintendence
    of Insurance.

Provincial Governments loans and other Government loans

As of December 31, 2005 and 2004, these loans were valued at the lower of present or face value (including adjustment and accrued interest), as established by Communication A 3911 of the BCRA.

The present value as of December 31, 2005 was calculated by discounting the estimated cash flows at the annual rate of 4%, in accordance with the provisions of the abovementioned Communication for December, 2005.

As the present value determined was lower than the technical value (which agrees with the theoretical value), this difference was recognized against the balancing account under Loans established by Communication A
 3911.

In accordance with the abovementioned Communication, the theoretical value was calculated based on the book value at February 28, 2003 restated by the CER through the end of the each fiscal year.

This item includes 812,165 and 742,930 as of December 31, 2005 and 2004, respectively, corresponding to Provincial Developments Trust Fund Corporate Bonds, which are in the final phase of the restructuring process with the
National Government. No substantially adverse effects on the Banks equity forecast in this respect.

3.5.4. Benchmark stabilization coefficient (CER) and the Salary Variation Coefficient (CVS) accrual

As of December 31, 2005 and 2004, certain receivables and payables have been adjusted to the CER as follows:

- Federal Government Guaranteed Loans had been adjusted under Resolution No. 50/02 of the Ministry of Economy, which resolved that the CER effective 10 (ten) days prior to the maturity date of the
related service will be considered for yield and repayments of the loans.
- Loans to private sector and receivables from sale of assets (subject to conversion into pesos): they have been adjusted under Communication A 3507 of the BCRA and supplementary
regulations, which resolved that the payments through September 30, 2002, were made under the original terms of each transaction and were booked as prepayments, where as from February 3,
2002, the principal was adjusted to the CER prevailing on December 31, 2005 and the end of the previous fiscal year, deducting the prepayments mentioned above as from the payment date,
except those subject to the provisions of Decrees No. 762/02 and 1242/02, which excluded the application of that coefficient from some mortgage, pledge, personal and other lines of credit.
- Federal Government Secured Bonds and Provincial Development Trust Fund Corporate Bonds: had been adjusted under Resolution No. 539/02 of the Ministry of Economy, which resolved that the CER
effective 5 (five) days prior to the maturity date of the related service will be considered for yield and repayments of the bonds.
- Deposits and other assets and liabilities (subject to conversion into pesos): have been adjusted considering the CER prevailing as of December 31, 2005 and 2004.

In November 2003, the Bank accrued
    the C.V.S. (Salary Variation Coefficient) accumulated through that date for
    accounting purposes and has applied this coefficient on balances until its
repeal in May 2004.

F-19

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES
TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
For the fiscal years ended
December 31, 2005, 2004 and 2003
Stated in thousands of Pesos

3.5.5. Allowance for doubtful loans and contingent commitments

For loans, other receivables from financial transactions, assets subject to financing lease, receivables from sale of property assets and contingent commitments: these allowance has been calculated based on the Banks
estimated loan loss risk in light of debtor compliance and the collaterals supporting the respective transactions, as provided by Communication A 2950 and supplemented of the BCRA.

3.5.6. Interest income recognition

Interest has been accrued according to a compound interest formula in the fiscal years in which it was generated, except interest on transactions in foreign currency, those whose maturity does not exceed 92 days, and
adjustable assets and liabilities which were apportioned on a linear basis.

The Bank suspends the accrual of interest generally when the related loan is non-performing and the collection of interest and principal is in doubt. Accrued interest remains on the Banks books and is considered a part
of the loan balance when determining the allowances for loan losses. Interest is then recognized on a cash basis after reducing the balance of accrued interest, if applicable.

3.5.7. Unlisted Corporate Bonds

They were valued at acquisition cost plus income accrued but not received as of December 31, 2005 and 2004.

3.5.8. Instruments to be received and delivered for spot and forward transactions to be settled

The Bank enters into forward contracts to buy or sell foreign currencies, listed Government securities and other securities at future dates. Both a receivable and a payable are recognized at the time of the agreement, which
reflects the amounts of cash, currency or listed securities to be exchanged at the closing date. The difference between the receivable and payable at the original transaction date (premiums) is deferred and amortized over the contracts
life.

The Bank purchases and sells foreign currencies, listed Government and other securities on behalf of its customers which settle another day. An asset or liability is reflected for the amount due from or to the customer and a
corresponding asset or liability is reflected for the currency or listed securities to be exchanged.

The Banks receivables or payables representing the future receipt or delivery of currencies or securities are adjusted to reflect the current market price of such currencies or securities. The amount of such market
price differences is recorded in income for the fiscal year.

Forward sales and purchases of securities associated with repurchase agreements were valued as follows:

- In foreign currency: as of December 31, 2005 and 2004, they were valued according to the benchmark exchange rate of the BCRA for each currency determined on the last business day of each fiscal
year.
- Holdings in investment accounts and for trading transactions: according to the method described in Note 3.5.2.

3.5.9. Amounts receivable and payable
      for spot and forward transactions pending settlement

They were valued based on the prices
    agreed upon for each transaction, plus related premiums accrued as of December
    31, 2005 and 2004.

3.5.10. Assets subject to financing
      leasing

As of December 31, 2005 and 2004,
    they have been valued at the present value of unaccrued installments calculated
    as per the conditions agreed upon in the respective contracts, applying the
    imputed interest rate thereto.

F-20

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

3.5.11. Investments in other companies

They have been valued according to the following methods:

- VISA Argentina S.A., Banelco S.A., Consolidar A.R.T. S.A., Rombo Cía. Financiera S.A., BBVA Consolidar Seguros
    S.A. and Interbanking S.A.: as of December 31, 2005 and 2004 were valued by the equity method at the end of each years.
- Other: as of December 31, 2005 and 2004 were valued at acquisition cost, without exceeding their recoverable
    value.

The Bank recorded an adjustment to earnings of prior years of 115 (loss) due to adjustments of certain investments in other companies. This adjustment affected the items Investments in Other
Companies of the balance sheet as of December 31, 2004 by 115 (decrease) and Other Income of the income statement as that date by 90 (decrease), whereas an adjustment by 25 (decrease) affected income for the year ended December 31, 2003.

3.5.12. Premises and equipment and Other assets

They have been valued at
acquisition cost plus increases from prior-year appraisal revaluations, restated
as explained in Note 3.2., less related accumulated depreciation calculated in
 proportion to the months of estimated useful life of items concerned.

3.5.13. Intangible assets

They have been valued at
acquisition cost restated as explained in Note 3.2., less related accumulated
depreciation calculated in proportion to the months of estimated useful life
of the items  concerned.

Amortization of goodwill and organization and development expenses is calculated using the straight-line method over the length of their estimated recovery period (120 month-period for
goodwill).

The intangible assets of the subsidiary Consolidar Administradora de Jubilaciones y Pensiones S.A. were amortized in accordance with standards of the A.F.J.P. ́s Superintendency.

The Bank recorded an adjustment to earnings of prior years of 18,167 (loss) due to a change in the accounting criteria applied to certain projects. Said adjustment affected the item Intangible
Assets of the balance sheet as of December 31, 2004 by 18,167 (decrease) and the item Operating Expenses  Other Operating Expenses of the statement of income as of that date by 12,119 (decrease) whereas as of December 31, 2003 it affected
balance sheet accounts by 30,286 (decrease).

3.5.14. Employee termination pay

The Bank expenses employee termination pay as disbursed.

3.5.15.
Other liabilities

They include
    the debit balances non arising out of transactions relating to the supply
    and demand of financial resources, plus the adjustments and interest payable
    accrued as of December 31, 2005 and 2004.

The Bank
    recorded an adjustment to earnings of prior years for 8,040 (loss) to reflect
    expenses of software maintenance and transport of values corresponding to
    the fiscal year ended December 31, 2004. This adjustment affected the item
    Other Liabilities from the balance sheet as of December 31, 2004 in 8,040
    (increase), the item Administrative Expenses  Other Operating Expenses
    of the statement of income in 7,390 (increase) and the item Operating Expenses  Other
    in 650 (increase).

F-21

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

3.5.16.
      Allowance for other contingencies

It includes the estimated amounts to meet contingencies of probable occurrence that, if occurred, would give rise to a loss for the Bank.

3.5.17. Stockholders equity accounts

They are restated as explained in Note 3.2. , except for the "Capital Stock" and Non-capitalized contributions accounts which have been kept at original value. The adjustment
resulting from the restatement is included in the "Adjustment to Stockholders ́ Equity " account.

The Stockholders Meeting held on April 28, 2005 decided to absorb accumulated losses as detailed in the Consolidated Financial Statements of Changes in Stockholders' Equity.

3.5.18. Adjustments to prior years income

Following we present a summary of the adjustments, under BCRA rules, to prior years income which affect the fiscal years 2005, 2004 and 2003:

|Items                          |  | Adjustments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|------------------------------ |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Investments in other companies |  | The Bank recorded an adjustment to earnings of prior years of 115 (loss) due to adjustments of certain investments in other companies. This adjustment affected the items Investments in Other Companies of the balance sheet as of December 31, 2004
by 115 (decrease) and Other Income of the income statement as that date by 90 (decrease), whereas an adjustment by 25 (decrease) affected income for the year ended December 31, 2003.                                                           
|                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Intangible assets              |  | The Bank recorded an adjustment to earnings of prior years of 18,167 (loss) due to a change in the accounting criteria applied to certain projects. Said adjustment affected the item Intangible Assets of the Balance Sheet as of December 31, 2004 by
18,167 (decrease) and the item Operating Expenses  Other Operating Expenses of the statement of income as of that date by 12,119 (decrease) whereas as of December 31, 2003 it affected balance sheet accounts by 30,286 (decrease).          
|                               |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Other liabilities              |  | The Bank recorded an adjustment to earnings of prior years for 8,040 (loss) to reflect expenses of software maintenance and transport of values corresponding to the fiscal year ended December 31, 2004. This adjustment affected the item Other
Liabilities from the balance sheet as of December 31, 2004 in 8,040 (increase), the item Administrative Expenses  Other Operating Expenses of the statement of income in 7,390 (increase) and the item Operating Expenses - Other in 650
(increase).

F-22

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

|Items                                    |  | Adjustments                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|---------------------------------------- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Tax on minimum presumed income (TOMPI) |  | Up to December 31, 2003, the Bank recorded under Other Receivables - Tax Advance account, a credit for the TOMPI, as long as this tax exceeded income tax. On March 8, 2004, the BCRA requested the reversal of the amounts recorded as assets for TOMPI for the years 2001/2002 with charge to income or prior years
 adjustments, as appropriate, based on a regulatory interpretation of the BCRA. In addition, on February 11, 2005, the BCRA issued Communication A 4295 whereby it allowed, under certain guidelines, to record TOMPI credit balances.
Therefore, on December 31, 2005, the Entity recorded this asset for 118,494 (90,094 in the items Other Receivables - Tax on minimum presumed income and 28,400 in Other Receivables  Other) and included an adjustment to earnings of prior years
for a total amount of 92,631 (gain). In the balance sheet as of December 31, 2004, presented for comparative purposes, such adjustment affected the item Other receivables by 92,631 (increase) and in the statement of income as of that date affected
the items Income Tax and Tax on Minimum Presumed Income and Other Income by 26,406 (decrease), whereas an adjustment of 65,631 affected the book value at the beginning of fiscal year 2004.
|                                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|Portfolio variation coefficient          |  | On June 30, 2004, in compliance with the provisions under Communication A4114 of the B.C.R.A. and Resolution 302/04 of the Ministry of Economy and Production, the Bank proceeded to write off the asset representing the nominal difference
  generated by the application of CVS instead of CER and booked an adjustment of earnings of prior years for 141,064 (loss). In the Financial Statements as of December 31, 2003, presented for comparative purposes, such adjustment affected the other
  receivables account (decrease) for 141,064, other income (decrease) for 105,792 and other expense (decrease) for 61,728. Under no circumstances does such de-registration mean a waiver of compensation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     

3.5.19. Statements of Operations Accounts

- As of December 31, 2005 and 2004, accounts accruing monetary transactions (Financial Income (Expense), Service Charge Income
(Expense), Provision for Loan Losses, Operating Expenses, etc.) were computed on the basis of their monthly amounts. As of December 31, 2003 accounts accruing monetary transactions
(Financial Income (Expense), Service Charge Income (Expense), Provision for Loan Losses, Operating Expenses, etc.) were restated by applying the adjustments coefficients to the historical amounts accrued on a monthly basis, up to February 28, 2003.
- Accounts reflecting the effect on income resulting from the sale, write-off, or use of non-monetary assets were computed based on the
value of such assets, as mentioned in Note 3.2.
- Income from investments in subsidiaries was computed based on such companies income adjusted as explained in Note
3.2.

3.5.20.
      Consolidated statements of cash flows

For purposes
    of reporting cash flows, cash and cash equivalents include amounts set forth
    under Cash and due from banks. The Consolidated Statement of
    Cash Flows was prepared using the measurement methods prescribed by the BCRA,
    but in accordance with the SEC ́s presentation requirements.

F-23

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

3.5.21.
      Other assets and other liabilities from subsidiaries (Consolidar Group)

They have been valued in accordance with the accounting standards established by the National Superintendence of Insurance and National Superintendence of Pension Funds Managers.

3.5.22. Use of estimates

The preparation of the Financial Statements in accordance with the standards set forth by the BCRA requires the Banks Board of Directors to use assumptions and estimates that affect certain
assets such as allowances for doubtful loan and certain liabilities such as provisions for other contingencies as well as the income/loss generated during the periods being reported. Final income/loss may differ from such estimates.

NOTE 4DIFFERENCIES BETWEEN BCRA ACCOUNTING STANDARDS AND GENERALLY ACCEPTED ACCOUNTING PRINCIPLES EFFECTIVE IN BUENOS AIRES CITY - ARGENTINA

By Resolution CD No. 93/05 the Professional Council in Economic Sciences of Buenos Aires City (C.P.C.E.C.A.B.A.) adopted, with certain clarifications, Technical Pronouncements No. 16, 17, 18, 19,
20 and 21 of the F.A.C.P.C.E. incorporating certain changes to the professional accounting valuation and disclosure standards.  Furthermore, by General Resolution No. 459/04, the National Securities Commission (C.N.V.) adopted, with certain
amendments, those Technical Pronouncements based on the resolutions of the C.P.C.E.C.A.B.A., which are mandatory applicable as from the years commenced on January 1, 2003, except for Technical Pronouncement No. 21, effective on April 1, 2004, with
early application permitted.

The Bank has prepared these Financial Statements by applying the regulations of the BCRA, which do not contemplate some of the valuation criteria incorporated to the accounting principles
generally accepted in Buenos Aires City.

The main differences between the regulations of the BCRA and the accounting principles generally accepted in Buenos Aires City are detailed below.

4.1. Restatement of the Financial Statements to recognize the changes in the currency purchasing power

These Financial Statements recognize the effects of changes in the currency purchasing power through February 28, 2003 following the restatement method established by Technical Pronouncement No.
6 of the F.A.C.P.C.E. (amended by TP No. 19). In accordance with Decree No. 664/03 of the National Executive Power, Communication A 3921 of the BCRA and Resolution No. 441 of the C.N.V., the application of that method was discontinued by
the Bank and, therefore, it did not recognize the effects of changes in the currency purchasing power arising after March 1, 2003.

In addition, CD No. 190/03 issued by the C.P.C.E.C.A.B.A. established the discontinuance of the restatement into homogenous currency as from October 1, 2003 on the understanding that the country
showed a stable monetary context. The change in the Wholesale Prices Index between March 1, 2003 and September 30, 2003 was 2.14%(negative).
    Had the accounting information been restated in accordance with professional
    accounting standards, the effect on the results for each fiscal year and
    total stockholders' equity would not have been significant considering the
Financial Statements as a whole.

4.2.
      Valuation criteria

|a) | Federal
          Government Secured Loans                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | During
        the year ended on December 31, 2001, as a consequence of the provisions
        of Decree No. 1387/01, on November 6, 2001 the Bank and its subsidiaries
        exchanged federal government securities, bonds, treasury bills and/or
        unsecured loans with the Federal Government for a face value of US$3,291,795
        thousands for federal secured loans. At December 31, 2005 and 2004, those
        loans are recorded under Loans  to the Government Sector amounting
        to 3,809,264 and 6,181,489, respectively, in accordance with the criterion
        described in Note 3.5.3.

F-24

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

In accordance with Resolution CD No. 290/01 of the C.P.C.E.C.A.B.A., at December 31, 2005 and 2004, these assets should have been valued considering the respective quotation values of the swapped
  bonds at November 6, 2001, delivered in exchange. However, the recoverable values of these assets as of December 31, 2005 exceed their book values.

|b) | Government Securities and Other Credit Assistance to the Public Sector                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | As of December 31, 2005 and 2004, the Bank and its subsidiaries keeps other assets with the Public Sector amounting to 1,172,681 and 1,867,810 respectively, in accordance with the criterion
described in Notes 3.5.2., 3.5.3. and 3.5.8. In accordance with accounting principles generally accepted in Buenos Aires City, these assets are to be valued at current value and would imply a decrease in stockholders equity in approximately
265,000 and 518,000 as of December 31, 2005 and 2004.                                                                                                                                                                                                                                                                                                                                                                                                                               
|  
|c) | Effects caused by court measures related to deposits (constitutional protection actions)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|  
|   | As mentioned in Note 15.2., as of December 31, 2005 and 2004, the Bank recorded assets amounting to 565,352 and 739,289 (whose original values had been 1,119,388 and 1,075,116), respectively,
under Intangible Assets  Organization and Development Expenses account corresponding to differences resulting from compliance with the court measures generated by the repayment of deposits in the financial system within the
framework of Law No. 25,561, Decree No. 214/02 and complementary regulations, as established by Communication A 3916 of the BCRA. In accordance with professional accounting standards currently in force, the amounts detailed above should
have been covered by an allowance up to the concurrence of the balance that represents the best possible estimate of the amounts to be recovered, an amount that may not be objectively determined as of the date of issuance of these
statements.
|  
|d) | Tax effects                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|  
|   | As already indicated in Note 5.1., the Bank has received various communications from the BCRA pursuant to which that BCRA indicates that the capitalization of items arising from the application
of the deferred tax method is not allowed. In accordance with current professional accounting standards, a deferred tax asset should be recognized to the extent the reversal of temporary differences generates a future decrease in the tax effectively
determined. As a result, the allowances set up by the Bank in this respect, for 360,000 and 118,000 as of December 31, 2005 and 2004, respectively, should be reversed.                                                                                                                                                                                                                                                                                                 

4.3.
Disclosure aspects

Unrealized
      valuation difference

During
    the fiscal year 2004, the Bank has absorbed 200,000 of the negative results
    appeared from the sale operation of the subsidiary of Banco Francés
    (Cayman) Limited and charged to the account Unrealized Valuation Difference of
    the stockholders ́ equity, according to what was authorized in the Resolution
    No. 52/04 of the Superintendent of Financial and Exchange Institutions.

According
    to accounting principles generally accepted in Buenos Aires City, such amount
    should have been charged to income (loss) for the fiscal year finished on
    December 31, 2004, while the remaining balance of the mentioned account should
    be recorded into unappropriated earnings account of the stockholders ́ equity.

4.4.
      Other differences with respect to generally accepted accounting principles
      effective in Buenos Aires City, Consolidar Cía. de Seguros de Retiro
      S.A.

The Company
    included the balance from the technical commitments incurred with the insured
    in the Other Subsidiaries Liabilities caption. The abovementioned caption
    includes 29,819 and 58,458 for the fiscal years ended at December 31, 2005
    and December, 31 2004, respectively, corresponding to the regularizing account
    called Unaccrued secured loans valuation difference which, as
    established by the National Superintendence of Insurance, will be settled

F-25

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

through subsequent
  accrual of the regularizing accounts of secured loans. In accordance with current
  professional accounting standards, such amount should have been recorded as
  a loss for the  year ended December 31, 2003.

NOTE 5TAX MATTERS

5.1. Income tax

The Bank determined the charge for income tax by applying the effective 35% rate to taxable income estimated for each fiscal year considering the effect of temporary differences between
accounting and taxable income. The Bank considered as temporary differences those that have a definitive reversal date in subsequent years. As of December 31, 2005 and 2004, the Bank has estimated the existence of a net operating loss in the income
tax.

On June 19, 2003, the Bank received a note from the BCRA indicating that the capitalization of items arising from the application of the deferred tax method is not allowed.

On June 26, 2003, the Banks Board of Directors, based on the opinion of its legal counsel, have responded the above mentioned note, indicating that in their opinion the rules of the BCRA
did not prohibit the application of the deferred tax method generated by the recognition of temporary differences between the accounting and tax result. Subsequently, Resolution No. 118/03 of the Superintendent of Financial and Exchange Institutions
received on October 7, 2003 confirmed the terms of the note dated June 19, 2003. Consequently, as from that date the Bank has set up an allowance for the net balance between the deferred tax assets and liabilities.

5.2. Tax on minimum presumed income

Tax on minimum presumed income (TOMPI) was established by Law No. 25,063 in the year ended December 31, 1998, for a ten-year term. This tax is supplementary to income tax: while the latter is
levied on the taxable income for the year, TOMPI is a minimum levy determined by applying the current 1% rate on the potential income of certain productive assets. Therefore, the Banks tax obligation for each year will coincide with the
highest of these taxes. The above Law provides that institutions governed by Financial Institutions Law must consider as a tax base 20% of their taxable assets, after deducting non-computable ones. However, if TOMPI exceeds income tax in a given
year, the excess thereof may be computed as a payment on account of any income tax in excess of TOMPI that may occur in any of the following ten years.

In every year that net operating losses are offset, the tax benefit (the benefit of the effective rate on the net operating loss used) will be realized to the extent that income tax (net of the
offsetting) equals or exceeds tax on minimum presumed income, but will reduced by any excess of the latter over former.

Up to December
    31, 2003, the Bank recorded under Other Receivables  Tax Advance account,
a prepaid tax for the TOMPI, as long as this tax exceeded income tax.

On March
    8, 2004, the BCRA requested the reversal of the amounts recorded as assets
    (prepaid tax) for TOMPI for the years 2001/2002 with charge to income or
    prior years adjustments, as appropriate, based on a regulatory interpretation
    of the BCRA.

In addition,
    on February 11, 2005, the BCRA issued Communication A 4295 whereby
    it allowed, under certain guidelines, to record TOMPI receivable balances.

Therefore,
    on December 31, 2005, the Entity recorded this asset for 118,494 (90,094
    in the items Other Receivables  Tax on minimum presumed income and
    28,400 in Other Receivables  Other) and included an adjustment to prior
    years earnings for a total amount of 92,631 (gain). In the balance sheet
    as of December 31, 2004, presented for comparative purposes, such adjustment
    affected the item Other receivables by 92,631 (increase) and in the statement
    of operations for the year then ended affected the items Income Tax and Tax
    on Minimum Presumed Income and Other Income by 26,406 (decrease), whereas
    an adjustment of 65,631 affected the book value at the beginning of fiscal
    year 2004.

F-26

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

5.3. Other tax issues

The AFIP (Argentine Public Revenue Administration) inspected open tax periods and the Bank received ex-officio assessments, which were appealed before the Argentine Administrative Tax Court. Such
Court, to the issuance date of these Financial Statements, gave an opinion on the ex-officio assessment made in 1992 and 1993, partially admitting the claim of tax authorities. On June 18, 2002 the Bank decided to appeal the ruling of 1992 with the
Court of Appeals, where it is being treated at present.

Furthermore, on July 18, 2003 a remedy for the review and appeal against the 1993 judgment was filed, and is currently pending.

The Argentine Administrative Tax Court has also issued an opinion in respect of the appeals filed against the ex-officio assessments concerning the tax on minimum presumed income for year 1999
and the income tax for years 1994, 1995 and 1998, fully upholding the claims filed and reversing the appealed resolutions. However, on April 8, 2005 the Argentine Administrative Tax Court conceded the appeal to Argentine Public Revenue
Administration.

The Board of Directors and tax and legal counsel estimate that the Bank made a reasonable interpretation of effective regulations regarding the observed periods.

NOTE 6SUBSIDIARIES ́ OTHER ASSETS AND SUBSIDIARIES ́ OTHER LIABILITIES

Detailed below are the balances of those accounts:

Subsidiaries Other Assets

|                                                            |  | 2005      |   | 2004
|----------------------------------------------------------- |  | --------- | - | ----
|                                                            |  |           |   |     
|                                                           
|Premium receivables from insurance companies                |  | 23,461    |   |     
|Complementary Capital  Insurance Company                   |  | 13,226    |   |     
|Others related to insurance business                        |  | 3,568     |   |     
|                                                            |  |           |   |     
|Total                                                       |  | 40,255    |   |     
|                                                            |  |           |   |     
|                                                           
|Subsidiaries Other Liabilities                             |  |           |   |     
|                                                            |  | 2005      |   | 2004
|                                                            |  |           |   |     
|                                                           
|Insurance companies, claims in adjustment process           |  | 128,339   |   |     
|Fluctuation fund  Consolidar Cía de Seguros de Retiro S.A. |  | 79,887    |   |     
|Insurance companies, mathematical reserve                   |  | 1,367,010 |   |     
|Insurance companies, reinsurer ́s reserve                    |  | (244      | ) |     
|Difference arising from secured loans accrued valuation     |  | (29,819   | ) |     
|Benefit pending of integration  Resolution No. 29,796      |  | (2,203    | ) |     
|Others related to insurance business                        |  | 74,921    |   |     
|                                                            |  |           |   |     
|Total                                                       |  | 1,617,891 |   |     
|                                                            |  |           |   |     

F-27

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

NOTE 7RESTRICTED ASSETS

As of December 31, 2005, there were Banks assets, which are restricted as follows:

|a) | The Government and Private Securities account includes 24,435 in Federal Government bonds in US dollars LIBOR 2012 which have been frozen until final confirmation by the Argentine Minister of
Economy and Production of the compensation amount (see Note 15.1.).                                                                                                                                                                                   
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|b) | The Government and Private Securities account includes 69,068 in Secured Bonds due 2018 allocated to the guarantee required to act as custodian of investment securities related to pension
funds.                                                                                                                                                                                                                                                    
|  
|c) | Out of the Bank's loan portfolio, 1,213 are allocated to the guarantee securing payables to the BCRA.                                                                                                                                                                                                                                                                                                                                                 
|  
|d) | Francés Valores Sociedad de Bolsa S.A. (stockbroking company) holds two shares of Mercado de Valores de Buenos Aires S.A, booked in the amount of 4,840. These shares have been pledged in
favor of CHUBB Argentina de Seguros S.A. in security of the contract this insurance company executed with Mercado de Valores de Buenos Aires S.A. to cover the latters guaranteeing any noncompliance of stock broking companies with
their obligations.

NOTE 8CONTINGENCIES

Export tax rebates

In January 1993, former Banco de Crédito Argentino (ex BCA) found out that a group of companies presumably related among them had used fake documentation to collect export tax
rebates, under current legislation through certain of its branches.

Immediately upon becoming aware of such events, the ex-BCA reported this situation to the Federal Police Banking Division pressing criminal charges before the Federal Criminal Court No. 2,
Clerks Office No. 5 of the City of Buenos Aires.

The BCRA has made certain observations to the procedure followed by the ex-BCA in paying tax rebates. The ex-BCA has based its reply to the BCRA on the fact that the aforesaid payments had been
made complying strictly with current regulations for the aforesaid transactions.

On October
    14, 1994, the General Director for Legal Affairs of the Ministry of Economy
    and Public Works and Utilities (MEOSP) ordered the ex-BCA to reimburse the
    amount which may be applicable to tax rebate payments which, in his opinion,
were considered inapplicable.

On October
    26, 1994, the ex-BCA filed a notice with the MEOSP by which it fully and
    emphatically rejected the aforesaid order for containing untrue, erroneous
    and legally unfounded representations since the ex-BCA acted in strict compliance
    with current regulations when carrying out each and every transaction related
    to the payment of export tax rebates.

On December
    17, 1996, the ex-BCA was notified of the lawsuit filed by the Federal State
    in the action styled MEOSP, Federal State vs. BCA in regard of Request
    for Opinion, at the Federal Administrative Court of Original Jurisdiction,
    Clerks Office No. 1 of the City of Buenos Aires.

The lawsuit
    has been filed in November 1995 even when it was first notified by the Federal
    State on the aforesaid date.

In February,
    1997, the ex-BCA put forth a defense to stop the progress of the lawsuit
    filed by the Federal Government suspending the term until the complaint is
    answered. In that filing the Banks Legal Counsel alleged that the ex-BCA
    acted in compliance with the standards in force, and after a background analysis,
    it became abundantly clear that it was the responsibility of the government
    agencies that had not met the express control standards under their exclusive
    charge.

F-28

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

The abovementioned
    exception was dismissed in December 1997 by the judge hearing the case, therefore,
    in February 1998, the Bank decided to file an appeal with the Court of Appeals.

The Court of Appeals ruled in favor of the Bank's appeal, that is to say, it upheld the Bank's defense based on a legal defect and its request that the Banco de la Nación Argentina, the
Customs Service and the BCRA be summoned as parties to the suit. Both such requests were rejected by the Court of original jurisdiction and have now deserved a favorable ruling from the appellate court.

At present, the proceedings are awaiting that the Federal State amends the vices of its action, hence once this has been complied with, notifications will be resumed. Irrespective of the above,
it has been agreed to suspend the legal proceedings with a view to a possible out-of-court transactions formulated by sellers, since this out-of-court settlement was dropped by sellers, the abovementioned legal proceedings were resumed.  Despite the
suspension of terms, the parties agreed to a pre-trial stage for the production of evidence. The court has ordered the Federal Government to resolve the defects in the claim. The National Government has just reduced its claim
significantly.

In any event, the eventual contingency resulting from such situation will be assumed by the sellers of the ex-BCA under the terms of the shares sales contracts.

NOTE 9BANK DEPOSIT GUARANTEE INSURANCE SYSTEM

The Bank is included in the Deposit Guarantee System established by Law 24,485, Regulatory Decrees No. 540/95, 1292/96 and 1127/98 and Communication A 2337 and BCRA's complementary
regulations.

Such law provided for the creation of the Company Seguros de Depósitos Sociedad Anónima (SEDESA) for purposes of managing the Deposit Guarantee Fund (DGF), whose shareholders, in
accordance with the changes introduced by Decree No. 1292/96, shall be the BCRA with one share as a minimum and the trustees of the trust created by the financial institutions in the proportion to be determined for each by the BCRA according to
their contributions to the DGF.

That Company was incorporated in August 1995 and the Bank has a 13.7597% interest in its capital stock.

The Deposit
    Guarantee System, which is limited, compulsory and onerous, has been created
    for purposes of covering the bank deposit risks subsidiarily and complementarily
    to the deposit protection and privilege system established by the Financial
Institutions Law.

The guarantee
    shall cover the repayment of principal disbursed plus interest accrued through
    the date of revoking of the authorization to operate or through the date
    of suspension of the institution through application of Section 49 of the
    BCRA's Charter provided that the latter had been adopted earlier than the
    former without exceeding the amount of pesos thirty thousand. Regarding operations
    in the name of two or more people, the guarantee shall be prorated between
    the holders. In no event shall the total guarantee per person exceed the
    abovementioned amount, whatever the number of accounts and/or deposits.

NOTE
      10TRUST ACTIVITIES

10.1.
      Financial Trusts

On January
    5, 2001, the BCRAs Board of Directors issued Resolution No. 19/01,
    providing for the exclusion of Mercobank S.A.s (a bank organized under
    Argentine legislation) senior liabilities under the terms of Section 35 bis
    of the Financial Institutions Law, the authorization to transfer the excluded
    assets to BF as trustee of the Diagonal Trust, and the authorization to transfer
    the excluded liabilities to beneficiary banks. Also, on the mentioned date,
    the agreement to set up the Diagonal Trust was subscribed by Mercobank S.A.
    as settle and BF as trustee in relation to the exclusion of assets as provided
    in the resolution abovementioned. BF entrusted Atuel Fideicomisos S.A. the
    management of collections and the realization of the corpus

F-29

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

assets. As of
    December 31, 2005, total estimated corpusassets
    of Diagonal Trust and Inmobal Nutrer Trust amount to 5,728 and 4,699 respectively,
    and they are recorded in memorandum debit accounts For trustee activities  Funds received in
trust.

Atuel Fideicomisos S.A., within the framework of its activities, is acting as trustee for the following trusts, and will not respond with its personal property in the execution of the trust, to
be satisfied with the underlying assets.

- Corp Banca Trust: created by contract dated May 13, 1997, signed between Atuel Fideicomisos S.A. as trustee, Corp Banca S.A. (later
BBVA Banco Francés S.A.) as trustor and beneficiary, Banco Central de la República Argentina and Seguro de Depósitos S.A. (the beneficiaries).The proceeds of the collection and/or the realization of the assets that constitute this Trust, resulting from Trustors
performance, will be applied to the obligations engaged and/or assumed by Corp Banca S.A. (later BBVA Banco Francés S.A.) as beneficiaries of this trust, under the terms and
conditions detailed in the respective contract.
- Banco Francés Trust: created by contract dated May 12, 2000, signed between Atuel Fideicomisos S.A. as trustee, and BBVA Banco
Francés S.A. as trustor and beneficiary. As from January 1, 2002, by assignment made by BBVA Banco Francés S.A., the beneficiary of the certificate of interest is Banco
Bilbao Vizcaya Argentaria S.A. (BBVA).

Atuel Fideicomisos S.A. acts as liquidator and collection manager of the assets under trust, and is accountable to the beneficiary for all monthly amounts obtained as a consequence of the
above-mentioned liquidation and collection.

In addition, Atuel Fideicomisos
S.A. participates as the administration and collection manager of Diagonal Trust
which was created by contract dated January 5, 2001, signed between Mercobank
S.A.  as trustor, BBVA Banco Francés S.A. as trustee and BBVA Banco Francés
S.A. and other financing entities and Seguro de Depósitos S.A. as beneficiaries.

10.2. Non-Financial Trusts

BF acts as trustee in 63
and 53 non-financial trusts for the fiscal years ended at December 31, 2005 and
December 31, 2004, respectively, and in no case being personally liable for the
liabilities assumed in the performance of the contract obligations; such liabilities
will be satisfied with and up to the full amount of the corpus assets and the
proceeds therefrom. The non-financial trusts concerned were set up to secure
the receivables of several creditors (beneficiaries) and the trustee was entrusted
the management, care, preservation and custody of the corpus assets until (i)
the requirements to show the noncompliance with the obligations by the debtor
(settler) vis-à-vis the beneficiaries are met, moment at which such assets
will be sold and the proceeds therefrom will be distributed (net of expenses)
among all beneficiaries, the remainder (if any) being delivered to the settler,
or (ii) all contract terms and conditions are complied with, in which case all
the corpus assets will be returned to the settler or to whom it may indicate.
The trust assets represent about 4,068 million and 4,135 million as of December
31, 2005 and 2004, respectively, consist of cash, creditors' rights, real estate
and shares.

NOTE
      11CORPORATE BONDS

The Ordinary
    Stockholders Meeting of former-Banco Francés del Río
    de la Plata (former-BFRP) held on September 30, 1994, authorized the creation
    of a five-year program for issuance and reissuance of corporate bonds, nonconvertible
    into shares, for an amount of up to US$500,000,000.

On April
    27, 1999, the Ordinary and Extraordinary Stockholders Meeting decided
    to extend the term of the abovementioned program for five years and authorized
    the issuance of corporate bonds convertible into share of commons stock in
    the amount of up to US$200,000,000 either under the Banks program
    or otherwise.

On April
    27, 2000, the Ordinary and Extraordinary Stockholders Meeting approved
    to increase the outstanding amount under the abovementioned program for up
    to US$1,000,000,000. The increase was authorized by CNVs Certificate
    No. 268 of July 18, 2000.

F-30

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

In addition,
    the abovementioned Stockholders Meeting approved the creation of a program for the issuance of non-subordinated short-term corporate notes to be issued under several classes
  and series up to a total amount outstanding at any given time of US$300,000,000; the term of the program is five years, during which corporate notes nonconvertible into shares and unsecured or guaranteed by third parties may be issued for a term
  of up to one year in accordance with the conditions stipulated by the Board of Directors.

On July 15, 2003, an Extraordinary Stockholders Meeting approved the setting up of a Program for the issuance and re-issuance of ordinary non-convertible Negotiable Obligations with
ordinary guarantee, or such guarantees as may be decided by the Board of Directors, and unsecured Subordinated Negotiable Obligations, convertible or not into shares. During the life of the Program, which will be 5 (five) years, it shall be possible
to issue and re-issue any number of series and/or classes of Negotiable Obligations as long as at all times the maximum amount in circulation after adding together all series and/or classes outstanding under the Program pending redemption does not
exceed at any time US$300,000,000.

The following chart reflects corporate bonds in force as of December 31, 2005:

|Global program
amount |  | Date of
issuance |  | Features         |  | Face
value |  | Currency |  | Price of
issue |  | Nominal
annual
rate |  | Payment of
interest |  | Book balance
   (in thousands) |  | Capital
expiration
Date
|--------------------- |  | ---------------- |  | ---------------- |  | ---------- |  | -------- |  | -------------- |  | ------------------- |  | ------------------- |  | ------------------------------ |  | -----------------------
|                      |  |                  |  |                  |  |            |  |          |  |                |  |                     |  |                     |  |                                |  |                        
|US$ 1,000,000,000     |  | 11/26/2003       |  | Non-subordinated |  | 94,503,150 |  | US$      |  | 100            |  | (1)                 |  | Semiannual          |  | 288,871                        |  | 10/31/2008 (2)         

|   
|---
|(1)
|(2)

According to the provisions of the Corporate Bond Law and to the rules of the BCRA, the proceeds from the issuance of corporate bonds are allocated to (i) granting mortgage loans to purchase and
repair housing and personal loans in Argentina; (ii) granting corporate loans in Argentina earmarked for contributions to working capital; investment in physical assets located in Argentina or refinancing liabilities, or (iii) contributing to
working capital, investing in physical assets located in Argentina or refinancing liabilities.

NOTE
      12FUNDING OF THE FINANCIAL AND INSURANCE INSTITUTIONS ASSISTANCE
TRUST FUND (FFAEFS)

12.1.On
    November 22, 1996, the ex-BCA requested the Board of the FFAEFS for a US$60,000,000
    loan to finance the purchase of certain assets and liabilities to be excluded
    from ex - Banco Caseros S.A. Such request was granted and the respective
    agreement was signed on December 18, 1996.

By means
    of such agreement, the Bank undertook to repay the loan seven years after
    disbursement by the FFAEFS on December 20, 1996. On December 22, 2003, the
    Bank cancelled such financing, after its conversion into Argentine pesos
    at the exchange rate of 1 Argentine peso to each dollar and its adjustment
    by CER.

12.2.On
    December 22, 1997, Corp Banca (CB) executed with the FFAEFS a loan for consumption
    agreement in the amount of US$30,000,000, to be reimbursed in five annual,
    equal and consecutive installments starting as from the disbursement date.
    The first one would be paid three years after such date.

As per
    this agreement, CB issued subordinate corporate bonds with the authorization
    for public offering by the CNV and the authorization to trade on the BCBA
    in the terms and conditions established in the loan for consumption agreement
    and under Communication A 2264 of the BCRA for the amount equivalent
    to that effectively loaned under the loan for consumption agreement referred
    to above. By Resolution No. 12,384 of August 28, 1998, the CNV authorized
    the issuance of common, subordinate corporate bonds nonconvertible into shares
    for a face value of US$30,000,000 at an annual nominal rate equal to
    LIBOR plus an annual nominal rate of 4% for the first period and, thereafter,
    LIBOR plus an annual nominal rate of 3% with a minimum of 8,07% per annum,
    due December 29, 2004.

On December
    29, 2004, the Bank cancelled the last installment of this corporate bonds,
    after its conversion into Argentine pesos at the exchange rate of 1 Argentine
    peso to each US dollar and its adjustment by CER.

F-31

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

Due to these agreements, the BF may not distribute cash dividends in amounts exceeding 50% of liquid and realized income related to each balance sheet normally prepared.

On January 10, 2003, the Federal Executive published Decree No. 53/03 which amended section 1 subsection j) of Decree No. 410/02, excluding from the conversion into pesos provided for by section
1 of Decree No. 214/02 the obligation of Public and Private Sector Companies to pay any amount of money in foreign currency owed to the National Government as a result of subsidiary or other loans and guarantees originally financed by
Multilateral Credit Institutions or arising from liabilities owed by the National Treasury and refinanced with external creditors.

The decision taken by the Managing Committee of the Trust Fund for Reconstruction of Companies at the meeting held on May 28, 2003  stating that only 50% of the aforementioned financing was to be
converted into pesos while the difference was to be maintained in its original currency was notified by note dated June 9, 2003.

The Bank has filed a subsidiary appeal for reversal before a higher administrative authority applying for a change in the aforementioned criterion and has reiterated its position on occasion of
each interest and principal payment. Upon the appeal for reversal being dismissed, the claims were filed with the hierarchical superior officer on March 16, 2004. On May 17, 2004 the grounds for the appeal before the higher administrative authority
were enlarged.

On February 7, 2005, the Bank was notified of Resolution No. 25 dated January 17, 2005 executed by the Argentine Minister of Economy and Production, which dismisses the Hierarchical Remedy
filed.

On May 16, 2005, an administrative
action under section 100 (Decree No. 1759/72, 1991 revision) was filed against
Resolution No. 25 issued by the Ministry of Economy and Production, which  dismissed
the Hierarchical Appeal filed by the Bank. At present, the case is pending determination
by the Federal Executive. Notwithstanding, in May 2005 a liability of 23,176
thousand dollars was recorded under Other Liabilities from Financial  Transactions,
this being the dollar amount owed estimated by the Bank in the filing mentioned
above. This effect should be compensated under the terms of the compensation
mechanism for financial institutions mentioned in Note 15.1., which was also
 recorded for 114,922 in the line Other receivables not covered by debtor classification
regulations under Other receivables from financial transactions (Note 3.5.2.)
and 72,429 for the corresponding liability to be paid to B.C.R.A. At any event,
 the final determination of this issue would not imply additional losses for
the Bank.

NOTE
13COMPLIANCE WITH CNV REQUIREMENTS

13.1.
      Compliance with the requirements to act as agent in the over-the-counter
      market

As of
    December 31, 2005, the Banks Stockholders Equity exceeds the
    minimum requested to act as agent in the over-the-counter market, according
    to Resolution No. 368/01 of the CNV.

13.2.
      Mutual Funds custodian

As of
    December 31, 2005 and 2004, in its capacity of custodian of FBA Acciones
    Globales, FBA Total, FBA Renta, FBA Renta
    Pesos, FBA Renta Dólares, FBA Bonos, FBA
    Calificado, FBA Ahorro Dólares, FBA Ahorro
    Pesos, FBA Renta Fija, FBA Renta Premium, FBA
    Renta Corto Plazo, FBA Europa, FBA Horizonte, "FBA
    Internacional and FBA EEUU, managed by the subsidiary Francés
    Administradora de Inversiones S.A. Gerente de Fondos Comunes de Inversión,
    the Bank holds certificates of deposits, shares, corporate bonds, government
    securities, tax credit certificates and investments financial trust certificates
    in safekeeping in the amount of 777,933 and 423,568 respectively, all of
    which making up the Funds portfolio and booked in memorandum accounts Debit-Control
    - Other.

F-32

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

NOTE
      14RESTRICTIONS ON EARNINGS DISTRIBUTIONS

|a) | As stated in Note 12, the Bank may not distribute as dividends in cash an amount exceeding 50% of liquid and realized income related to each one of the Financial Statements regularly
prepared.
|-- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|b) | Under BCRA Communication A 4152, the distribution of earnings must be previously approved by the BCRA.                                                                                        
|  
|c) | Under BCRA Communication A 4295, in order to determine the balances to be distributed, the assets booked as Minimum presumed income tax are to be deducted from unappropriated
earnings.      
|  
|d) | As stated in the Offering Memorandum of the Bank's outstanding corporate bonds, the Bank may pay dividends or other distributions only with ordinary shares.                                    

NOTE 15ECONOMIC FRAMEWORK AND EVOLUTION OF THE BANK

On January 14, 2005, the
restructuring process started for a substantial part of Argentinas sovereign
debt, in default ever since late 2001 (for an approximate amount of US$80
billion).  The process included a significant reduction in the principal owed
as well as reduction in interest rates and extension of payment terms. For this
purpose, the National Government offered three types of bonds in exchange for
the defaulted  securities, whose characteristics were established pursuant to
Decree No. 1735/04. Additionally, the Government has announced that it does not
plan to make payments on debt not submitted to the restructuring process. The
proposal presented  contemplated the issuance of bonds with significant waiting
periods both for the amortization of principal and interest. This will allow
the Government to schedule maturities stepwise and to have financial relief,
as it will thus be able to  adequately honor payments of the debt recently restructured
and to continue to honor the payments already committed in the framework of the
debt restructured during 2002 (primarily the Secured Loans issued by the National
Government) as it has been  doing so far. The swap period came to an end on February
25, 2005. The level of acceptance received by the exchange offer was significant.
On March 18, 2005, the National Government announced the outcome of the exchange,
the degree of acceptance of  which amounted to 76.15%. And this implies that
the Argentine Republic has left the default behind.

In June
    2005, the National Government consummated the delivery of the exchanged government
    securities. U.S. dollar-denominated Discount Bonds and peso-denominated Discount
Bonds were received, and interest amounts were also paid as scheduled.

Additionally,
    in mid-December, 2005 the Government decided to pay off, in full and prior
    to maturity, its indebtedness to the IMF, applying to such payment the international
    reserves accumulated in the B.C.R.A.

At the
    close of fiscal 2005, BBVA Banco Francés posted income for 117,204,
    with stockholders equity amounting 1,801,547 and a ROE (average return
    on equity) of 7%. Hand in hand with robust economic growth, reflected in
    a 9% increase in GDP, the Bank successfully implemented a business strategy
    aimed at reconstructing the volume of intermediation in the private sector,
    in turn reflected in 69.4% growth in the aggregate of loans to the private
    sector and 19.4% in total deposits. In line with this objective, the Bank
    kept focused on its core business, consolidating its leading position in
    the market in terms of deposits, growing in terms of total loans to the private
    sector and posting quality levels in its portfolio that are even better than
    those seen prior to the crisis. Additionally, the Bank maintained its strengths
    in transactional businesses carrying out at the same time major improvements
    in the structure of its assets and liabilities, including a decrease in Government
    assets and total settlement of the re-discounts due to illiquidity granted
    by the Central Bank of Argentina during the 2002 crisis (with rate costs
    plus CER adjustment). The substantial increase in profitability achieved
    during 2005 provides a sound basis for the challenge faced by the Bank for
    the future consisting in the expansion of recurring income, which represents
    the Bank's main objective.

Consolidation
    in the financial margin, based on higher variation in the CER coefficient
    plus a growing volume of intermediation with its customers, in conjunction
    with high efficiency levels led to sustained growth in the Bank's operating
    income. Such growth in operating income was achieved after offsetting the
    loss derived from the sale ofGovernment
    assets with the charge resulting from the amortization due to payment of
    the actions for the protection of constitutional rights (amparo)
    for this fiscal year.

F-33

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

In the light of the favorable evolution seen in recent years, the Board of Directors of the Bank is optimistic in relation to future operations, specially if the Federal Government were to take
measures to solve the deep imbalance caused by compliance with the constitutional protection actions (judicial injunctions) and to complete the process of compensation to the financial system.

15.1. Asymmetrical conversion into pesos (pesification)

The Bank received several notes from the BCRA in which it observed certain items and recording criteria that gave rise to the compensation being requested. BF answered those letters expressing
that it had made a reasonable interpretation of current regulations and requesting the BCRA to review the criteria observed.

Subsequently, Resolutions No. 24/04 and 179/04 issued by the Superintendent of Financial and Exchange Institutions, partially accepted the defense presented by the Bank. BF filed two Hierarchical
Remedy with the Superintendence of Financial and Exchange Institutions, requesting the revocation of the abovementioned resolutions in respect of rejected items.

The total effect of the above differences on the compensation amounts to 280,000, approximately. It should be noted that as of December 31, 2004 the Bank has written off assets subject to
objections that were not recognized in connection with the BCRAs request. This does not imply a waiver of the actions mentioned above.

In addition, as mentioned in Note 12, in May 2005 the compensation to be received in Boden 2012 for US$39,078,010 face value was recorded under Other receivables not covered by debtor
classification  Other receivables from financial transactions.

15.2.
Legal actions  Constitutional protection actions

The measures
    adopted by the Federal Executive Power with respect to the situation of public
    emergency in political, economic, financial and foreign exchange matters
    triggered a number of legal actions brought by individuals and companies
    against the Federal Government, the BCRA and financial institutions, based
    on considering that some of those measures were contrary to their constitutional
    rights.

In the
    particular case of foreign-exchange deposits, the first instance courts of
    began to massively order by precautionary measures the partial or total reimbursement
    of such deposits, either in foreign currency or at the free-exchange rate
    at the time of reimbursement, until a final pronouncement is made as to the
    constitutional validity of the conversion into pesos of foreign-currency
    deposits, as set forth by legal regulations of the Federal Executive.

Up to
    the date of these Financial Statements, the Supreme Court has issued a number
    of judgments related to this issue which resolve the subject only in a partial
    and non-definitive manner, as more fully detailed in Exhibit I to these Consolidated
    Financial Statements.

On the
    other hand, in view of the equity loss caused by these measures to the detriment
    of the financial system, and in particular of BF, such loss has been brought
    to the knowledge of the Ministry of Economy and the BCRA, with reserve of
    rights. To this date, the authorities have not ruled a possible compensation
    for the financial system on this matter.

The Bank,
    in conformity with BCRA regulations, has recognized the differences resulting
    from the complience of the above-mentioned judicial pronouncements with respect
    to the provisions of the regulations in force. The above-mentioned assets,
    calculated according to the nominal difference between the free-exchange
    rate of the deposit at the time of payment as against the accounting value
    (the nominal value of the foreign-exchange deposit converted into pesos at
    the rate of 1.40 pesos per dollar plus CER adjustment to that date), are
    being amortized in 60 monthly installments as from April 2003 or as from
    the date of payment, whichever is later.

As of December
    31, 2005 and 2004, BF recorded 565,352 and 739,289, respectively, (after
    deduction of accumulated amortization for 554,036 and 335,827 as of December
    31, 2005 and 2004, respectively) under Intangible Assets, Organization and
    Development Expenses account.

F-34

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

The Bank, however, notifies that such amortization is solely calculated to comply with the regulations of the BCRA and that by no means does it imply a waiver to possible compensation or recovery
of the exchange difference resulting from compliance with court orders corresponding to petitions for protection of civil rights or other court action derived from the mandatory conversion of bank deposits into pesos.

In the opinion of the Banks Board of Directors and its legal advisors there exists compensation or recovery probabilities for such equity loss.

15.3. Portfolio variation coefficient

Pursuant to Law No. 25,796 and Decree No. 117/04, the Federal Government established that financial institutions were to be compensated for the damages sustained as a result of the application to
certain bank loans of indexation by salary variation coefficient (CVS) instead of indexation by benchmark stabilization coefficient (CER). The Argentine Central Bank (B.C.R.A.) regulated such procedure through Communication A 4114,
whereas the Ministry of Economy and Production, pursuant to Resolution 302/04 clarified the calculation methodology to be used. However, given that the provisions mentioned give rise to doubts as regards implementation and effective compensation, on
May 6, 2004, the ABA (Asociación de Bancos de la Argentina) filed with the Ministry of Economy with copy to the Argentine Central Bank, a request for compensation for the difference between
the CER and CVS coefficients applicable to loans according to the provisions of Law No. 25,713, DecreeNo.762/02. Said request
was rejected by the Ministry of Economy on July 21, 2004.

As the Bank applied the CVS coefficient to certain loans subject to pesification,
on May 18, 2004, it filed with the B.C.R.A., with copy to the Ministry of Economy,
its adhesion to the system of compensation for the difference in coefficients
already mentioned, subject to the calculation methodology that in the opinion
of the Bank was best suited to the spirit of current rules and regulations, a
copy of which was attached to the adhesion filing. Said filing was ratified in
a letter dated October 4, 2004.

On June
    30, 2004, in compliance with the provisions under Communication A 4114
    of the B.C.R.A. and Resolution 302/04 of the Ministry of Economy and Production,
    the Bank proceeded to write off the asset representing the nominal difference
    generated by the application of CVS instead of CER and booked an adjustment
    of earnings of prior years for 141,064 (loss). In the Financial Statements
    as of December 31, 2003, presented for comparative purposes, such adjustment
    affected the other receivables account (decrease) for 141,064, other income
    (decrease) for 105,792 and other expense (decrease) for 61,728. Under no
    circumstances does such de-registration mean a waiver of compensation.

15.4.
      BCRA advances and rediscounts

For the
    purpose of covering the decrease in deposits, the Bank obtained, during the
    period March through July 2002, advances from the BCRA at the end of the
    previous fiscal year amounted to (principal, CER and interests) 1,855,115,
    and are included under Other liabilities from financial transactions  BCRA
    Other. In guarantee of such assistance, the Bank executed a first-degree
    collateral agreement whereby it encumbered in favor of the BCRA a portion
    of the Banks credit rights under the Guaranteed Loan Agreement executed
    on December 7, 2001, pursuant to Federal Executive Decree No. 1387/01 as
    supplemented and amended.

On September
    2, 2005, the Bank cancelled in advance the aggregate balance of rediscounts
    for liquidity purposes granted by the BCRA, then amounting to 1,827,911.
    Consequently, the national secured loans pledged as a security for that assistance
    were released and are available as of the date hereof.

F-35

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

15.5. Regularization and Reorganization Plan

Due to the systemic crisis occurred at the end of 2001, the Banks Board of Directors decided to implement a plan to strengthen the Banks stockholders ́ equity and liquidity.
Similarly, the BCRA in exercise of its powers requested that the Bank formally submit the above-mentioned plan before that body. The plan was presented on May 31, 2002.

As from July 2002, BF has regularized its liquidity position, fulfilling in this way with the technical regulations required, under this concept, by the BCRA.

By Resolution No. 354/2003 dated September 4, 2003, the BCRA requested the Banks reformulation of the regularization and reorganization plan to consider issues such as the adoption of
measures to increase the Banks adjusted stockholders equity and conforming of technical ratios to those required by Communication A 3959 and complementary regulations related to Minimum Capital Requirements in force as from
January 1, 2004. After its joint analysis with the technical divisions of the Bank and the BCRA of the alternatives under treatment, on January 21, 2004, the Bank filed a formal reformulation of the regularization and reorganization plan with the
control authority, thus complying with the requirements established by the mentioned Resolution.

During March 2004, the Bank carried out the actions covered in the plan, included the sale of the subsidiary Banco Francés (Cayman) Limited to BBVA. Therefore, as from April 2004 the Bank
has met the Minimum Capital requirements and other technical ratios established by the BCRA, even without giving effect to the capital increase made in November 2004.

In addition, the Stockholders Meeting dated April 22, 2004 ordered a capital increase that was fully subscribed and paid in during the month of November 2004.

During June, 2004, as committed in the plan, the repurchase of loans and the sale of Boden 2012 was carried out.

On February
    25, 2005, the Superintendent of Financial and Exchange Institutions gave
    notice of Resolution No. 46/05 dated February 23, 2005, which regarded the
regularization and reorganization plan presented by the Bank as duly fulfilled.

As of
    December 31, 2005, the Banks Minimum Capital position, measured on
    an individual basis, was as follows:

Capital
          Requirement (*)
      
      816,370Computable
          Capital
      
      1,714,660Excess
          over Capital Requirement
      
      898,290


|   
|---
|(*)

F-36

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

NOTE 16OTHER REQUIERED DISCLOSURES IN ACCORDANCE WITH THE SEC ́S REQUIREMENTS

16.1. Transactions with related parties

The balances as of December 31, 2005 and 2004, for transactions performed with parents, subsidiaries and affiliates are as follows:

|                             |  | Balance Sheet |  | Memorandum Accounts (1)
|---------------------------- |  | ------------- |  | -----------------------
|                             |  |               |  |                        
|                             |  | Assets        |  | Liabilities            
|                             |  |               |  |                        
|Company                      |  | 2005          |  | 2004                   
|                             |  |               |  |                        
|                            
|BBVA S.A.                    |  | 6,237         |  | -                      
|Consolidar A.R.T. S.A.       |  | 180           |  | 30                     
|BBVA Consolidar Seguros S.A. |  | 188           |  | 4                      
|Rombo Cía. Financiera S.A.   |  | 72,323        |  | 22,934                 
|Inversora Otar S.A.          |  | -             |  | -                      
|Consolidar Salud S.A.        |  | -             |  | 18                     

|   
|---
|(1)

The net
    income as of December 31, 2005, 2004 and 2003, for transactions performed
with parents, subsidiaries and affiliates are as follows:

|         |  | Net
          Income (2)
|-------- |  | ------------------------
|         |  |                         
|         |  | 2005                    
|         |  |                         
|Income   |  | 22,659                  
|Expenses |  | (3,871                  
|         |  |                         
|         |  | 18,788                  
|         |  |                         

|   
|---
|(2)

16.2.
      Minimum cash balances and restricted deposit

In accordance
    with BCRA and foreign central banks regulations, the Bank is required
    to maintain daily average minimum cash balances for each month in cash, in
    its account with the BCRA, and in accounts with foreign correspondent banks.
    The required daily averages calculated for the month ending on each balance
    sheet date are as follows:

|                                           |  | December
          31,
|------------------------------------------ |  | ----------------------
|                                           |  |                       
|                                           |  | 2005                  
|                                           |  |                       
|Peso
        and Foreign Currency Balances |  | 1,449,832             

16.3. Interest-bearing
      deposits with other banks

|a) | Included
        in Cash and Due from Banks there are: (1) interest-bearing
        deposits with the BCRA totaling 919,932 and 1,177,698 as of December
        31, 2005 and 2004 respectively; (2) interest-bearing deposits in foreign
        banks totaling 5,742 and 31,190 as of December 31, 2005 and 2004, respectively
        and (3) interest-bearing deposits in local banks totaling 2,513 and 927
        as of December 31, 2005 and 2004, respectively.
|-- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|b) | Included
        in Loans there are: (1) overnight foreign bank interest-bearing
        deposits totaling 9,839 as of December 31, 2005. As of December 31, 2004
        the Entity did not register amounts for this kind of operation.                                                                                                                                                                                                                               
|  
|c) | Included
        in Other Receivables from Financial Transactions there are
        other interest-bearing deposits with the BCRA totaling 107,198 and 146,825
        as of December 31, 2005 and 2004, respectively.                                                                                                                                                                                                                                                  

F-37

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

16.4. Government and private securities

Government and private securities held by the Bank at December 31, 2005 and 2004 are as follows:

|                                                   |  | December 31,
|-------------------------------------------------- |  | ------------
|                                                   |  |             
|Holdings in investment accounts                    |  | 2005        
|                                                   |  |             
|Argentine Republic External Bills (VEY4D)          |  | -           
|Argentine Bonds                                    |  | 435,104     
|Argentine Treasury bills                           |  | -           
|Other                                              |  | -           
|                                                   |  |             
|Total                                              |  | 435,104     
|                                                   |  |             
|                                                  
|Holdings for trading or financial transactions     |  |             
|Treasury Bills                                     |  | -           
|Middle Term Treasury Bonds (BONTE 2002)            |  | -           
|Argentine Bonds                                    |  | 608,319     
|Debt Consolidation Bonds - Social Security (BOCON) |  | 45,238      
|Other                                              |  | 11,280      
|                                                   |  |             
|Total                                              |  | 664,837     
|                                                   |  |             
|                                                  
|Unlisted Government securities                     |  |             
|Secured Bonds (BOGAR 2018)                         |  | -           
|Tax credit certificates                            |  | 6           
|Other                                              |  | -           
|                                                   |  |             
|Total                                              |  | 6           
|                                                   |  |             

|Instruments
            issued by the Argentine Central Bank |  |           |  |        
|------------------------------------------------------------ |  | --------- |  | -------
|Argentine
        Central Bank Bills (LEBAC)                 |  | 1,160,312 |  | 958,979
|Argentine
        Central Bank Notes (NOBAC)                 |  | 1,088,526 |  | 40,584 
|                                                             |  |           |  |        
|Total                                                        |  | 2,248,838 |  | 999,563
|                                                             |  |           |  |        
|                                                            
|                                                            
|Investment
            in listed private securities          |  |           |  |        
|Shares                                                       |  | 28,284    |  | 40,965 
|Negotiable
        Obligations                               |  | 87,541    |  | 93,102 
|Mutual
        Funds                                         |  | 18,925    |  | 45,145 
|Certificates
        of participation in financial trusts    |  | 21,099    |  | -      
|                                                             |  |           |  |        
|Total                                                        |  | 155,849   |  | 179,212
|                                                             |  |           |  |        

Securities holdings in investment accounts

The book value and market value of holdings in investment accounts (including those used for forward purchases under repurchase agreements) at December 31, 2005 and 2004, were as
follows:

F-38

---



|                                          |  | December 31,
|----------------------------------------- |  | ------------
|                                          |  |             
|                                          |  |             
|                                          |  | 2005        
|                                          |  |             
|                                          |  | Book value  
|                                          |  |             
|Argentine Republic External Bills (VEY4D) |  |            
|Argentine Bonds                           |  | 435,104     
|Argentine Treasury Bills                  |  |            
|Other Debt Bonds                          |  |            
|                                          |  |             
|Total                                     |  | 435,104     
|                                          |  |             

The book value and the market value of holdings in investment accounts (including those used for forward purchases under repurchase agreements) at December 31, 2005, by contractual maturity were
as follows:

|                                       |  | December 31,
|-------------------------------------- |  | ------------
|                                       |  |             
|                                       |  | Book value  
|                                       |  |             
|Past due                               |  | 30,438      
|Due in one year or less                |  | 60,897      
|Due after one year through five years  |  | 67,269      
|Due after five years through ten years |  | 276,500     
|                                       |  |             
|Total                                  |  | 435,104     
|                                       |  |             

As of December 31, 2005 and 2004, the Bank did not hold government securities classified as held to maturity under US GAAP. The government securities classified as holding in
investment account under BCRA rules were classified either available for sale or trading under U.S. GAAP (see Notes 17.5.1. and 17.5.2. ).

16.5. Loans

A description of certain categories of loans on the accompanying consolidated balance sheets is as follows:

To government sector: loans to public sector, excluding public financial entities.

To the financial sector: loans to local financial institutions.

To the non financial private sector and residents abroad: loans given to the private sector (excluding local financial institutions) and residents abroad from Argentina.

Overdraft: basically short-term loans to companies and overdraft lines of credit.

Discounted instruments: includes promissory notes, discounted documents and instruments acquired under factoring agreements.

Consumer: loans granted to individuals to acquired consumer goods.

Collateral loans (real state mortgage and security agreements): loans secured by privileged guarantees.

Credit cards: consists mainly of credit card loans.

F-39

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

Under BCRA rules, the Bank must disclose the type of collateral pledged on loans to non-financial private sector and residents abroad. The classification of the loan portfolio in this regard is
as follows:

|                                                    |  | December 31,
|--------------------------------------------------- |  | ------------
|                                                    |  |             
|                                                    |  | 2005        
|                                                    |  |             
|Government sector                                   |  | 4,623,626   
|Financial sector                                    |  | 142,307     
|Non-financial private sector and residents abroad   |  | 3,900,517   
|                                                    |  |             
|Commercial portfolio                               |  |             
|With self-liquidating preferred guarantees          |  | 92,092      
|With other preferred guarantees                     |  | 44,036      
|Without preferred guarantees                        |  | 2,293,984   
|Consumer portfolio                                 |  |             
|With self-liquidating preferred guarantees          |  | 6,968       
|With other preferred guarantees                     |  | 439,198     
|Without preferred guarantees                        |  | 1,024,239   
|                                                   
|Less: Difference arising from purchase of portfolio |  | (89         
|Less: Allowances for loan losses                    |  | (184,885    
|                                                    |  |             
|Total                                               |  | 8,481,476   
|                                                    |  |             

Commercial loan: encompasses all financing facilities, other than those not reaching an amount equivalent to 500 with or without preferred guarantees.

Consumer loan: encompasses all financing facilities related to consumption (whether personal, professional or family consumption, loans for purchasing of consumer goods and financing credit
cards) or housing loans (for buying, building or refurbishing) and financing (credits and guarantees) of a commercial nature up to an amount equivalent to 500 with or without preferred guarantees.

Self - liquidating preferred consist mainly of cash guarantees, gold guarantees, warrants over primary products and other forms of collateral of self-liquidation.

Other preferred guarantees consist, in general, of real estate mortgages and other forms of collateral pledged to secure the loan amount. The entire principal amount of loan is
included under the heading preferred guarantees regardless of the current market value of the collateral.

Without preferred guarantees consist, in general, of unsecured third-party guarantees.

F-40

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

The Bank also tracks its loan portfolio by industry segment. At December 31, 2005, the following industry segments represented the loan concentrations:

Industry Segment
      
      Percentage of
        Total LoansGovernmental Services
      
      53.35
      %Consumer
      
      15.42
      %Other
      
      7.23
      %Mining Products
      
      4.64
      %Oil and Carbon
      
      4.05
      %Agricultural Livestock
      
      2.75
      %Retail Trade
      
      2.30
      %Food Stuff
      
      2.03
      %Financial Sector
      
      1.64
      %Beverage
      
      1.57
      %Construction
      
      0.92
      %Transportation Material
      
      0.90
      %Wholesale Trade
      
      0.90
      %Other Manufacturing
      
      0.88
      %Industrial Metals
      
      0.81
      %Leather and Fur Product
      
      0.61
      %Total
      
      100.00
      %


Substantially most of Banks operations, property and customers are located in Argentina. Therefore, the performance of Banks loan portfolio, financial condition and the results of its
operations depend primarily on the macroeconomic and political conditions prevailing in Argentina.

The Bank has significant exposure to the Argentine Federal Government and Provinces in form of secured loans and other debt obligations. Federal and provincial debt represents a significant
portion of Banks total risk assets. During 2002, most dollar Public Sector debt with the Financial System was converted into pesos at a rate of 1.4 pesos per dollar, while most dollar Private Sector debt was converted into pesos at a rate of 1
peso per dollar, thus increasing the relative share of Public Sector exposure in the Banks assets.

During 2005, certain related-parties of the Bank were loan customers of the Bank. As defined under BCRA rules, related-parties include the associated companies in which the Bank has
some sort of important influence (as stated by said rules) and related persons such as any director or member of the Statutory Auditor Committee of the Bank within the previous three years, senior management of the Bank, members of the immediate
families of any such persons, and companies with which they are associated. The historical activity in principal amounts of loans to related-parties during the fiscal year ended December 31, 2005, is as follows:

|                                            |  | 2005  
|------------------------------------------- |  | ------
|                                            |  |       
|Balance at the beginning of the fiscal year |  | 30,730
|New Loans                                   |  | 58,411
|Repayments                                  |  | (5,488
|                                            |  |       
|Balance at the end of the fiscal year       |  | 83,653
|                                            |  |       

Total loans outstanding to these related parties at December 31, 2005 and 2004 including accrued interest, amounted to 85,604 and 31,358, respectively. Such loans are made in the ordinary course
of business at normal credit terms, including interest rate and collateral requirements, and, in the opinion of management, do not represent more than normal credit risk.

At December 31, 2005 and 2004, approximately 27,690 and 5,587 or 0.32% and 0.06% of the Banks portfolio, respectively, consisted of loans to foreign borrowers.

Certain loan customers
of the Bank are under court order or have entered into agreements with the Bank
to satisfy their debt on basis different from the original loan terms. The Bank
eliminates  any differences between the principal and
accrued interest due under
the original loan and the new loan amount through a charge to the allowance for
loan losses at the time of the restructuring.

F-41

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

At December 31, 2005 and 2004, non-performing loans amounted to 93,472 and 105,136, respectively; Past due loans included in the abovementioned amounts reach to 52,874 and 86,933 at December 31,
2005 and 2004, respectively.

16.6. Allowance for loan losses

The activity in the allowance for loan losses for the fiscal years presented is as follows:

|                                            |  | Year ended
December 31, 2005 |   | Year ended
December 31, 2004 |          | Year ended
December 31, 2003
|------------------------------------------- |  | ---------------------------- | - | ---------------------------- | -------- | ----------------------------
|                                            |  |                              |   |                              |          |                             
|Balance at the beginning of the fiscal year |  | 202,693                      |   |                              | 459,573  |                             
|Provision for loan losses                   |  | 114,220                      |   |                              | 62,509   |                             
|Write-offs                                  |  | (132,028                     | ) |                              | (319,389 | )                           
|Monetary gain generated on allowances       |  | -                            |   |                              | -        |                             
|                                            |  |                              |   |                              |          |                             
|Balance at the end of the fiscal year       |  | 184,885                      |   |                              | 202,693  |                             
|                                            |  |                              |   |                              |          |                             

16.7. Other receivables from financial transactions

The composition of other banking receivables by type of guarantee is as follows:

|                             |  | December 31,
|---------------------------- |  | ------------
|                             |  |             
|Description                  |  | 2005        
|                             |  |             
|With preferred guarantees    |  | 286,185     
|Without preferred guarantees |  | 548,363     
|Allowances                   |  | (3,098      
|                             |  |             
|                             |  | 831,450     
|                             |  |             

The Bank enters into spot, forward, repurchase agreements and reverse repurchase agreements, to buy or sell foreign currency (principally U.S. dollars) and Government securities. The Bank
recognizes the cash, currency or security amount to be exchanged in the future as a receivable and payable, at the initial transaction date.

F-42

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

The assets and corresponding liabilities related to such transactions are as follows:

|                                                                             |  | December 31,
|---------------------------------------------------------------------------- |  | ------------
|                                                                             |  |             
|Description                                                                  |  | 2005        
|                                                                             |  |             
|                                                                            
|Forward Purchases and Sales                                                  |  |             
|Notional amount of non-deliverable forward purchases                       |  | 46,982      
|Contra debit derivatives accounts                                            |  | 46,982      
|Notional amount of non-deliverable forward sales                           |  | 93,161      
|Contra debit derivatives accounts                                            |  | 93,161      
|Non-deliverable forward transactions balances pending settlement-Receivables |  | 281         
|Non-deliverable forward transactions balances pending settlement-Liability   |  | 150         
|Forward sales of government securities                                       |  |             
|Forward sales of government securities(1)                                    |  | 2           
|Forward sales of securities                                                  |  |             
|Debtors under forward sales of securities                                    |  | 6           
|                                                                            
|                                                                            
|Repurchase and reverse repurchase agreements with government securities      |  |             
|Debtors under reverse repurchase agreements                                  |  | 99,762      
|Forward sales under reverse repurchase agreements                            |  | 110,680     

|   
|---
|(1)

|                                                               |  |              |  |       
|-------------------------------------------------------------- |  | ------------ |  | ------
|                                                               |  | December 31,
|                                                               |  |             
|Description                                                    |  | 2005         |  | 2004  
|                                                               |  |              |  |       
|                                                              
|Spot transactions with settlement another day                  |  |              |  |       
|Unsettled spot securities purchases                            |  | 16,960       |  | 10,841
|Creditors under unsettled spot securities purchases            |  | 18,169       |  | 11,270
|Debtors under unsettled spot securities sales                  |  | 38,006       |  | 4,483 
|Unsettled spot securities sales                                |  | 9,311        |  | 3,831 
|Unsettled spot foreign exchange purchases                      |  |             |  | 8,320 
|Creditors under unsettled spot foreign exchange purchases      |  | 3,025        |  | 5,941 
|Debtors under unsettled spot foreign exchange sales            |  | 1,286        |  | 213   
|Unsettled spot foreign exchange sales                          |  | 3,169        |  | 2,877 
|Unsettled spot Government securities purchases                 |  | 18,770       |  | 15,031
|Creditors under unsettled spot Government securities purchases |  | 4,971        |  | 14,681
|Debtors under unsettled spot Government securities sales       |  | 19,060       |  | 16,748
|Unsettled spot Government securities sales                     |  | 42,565       |  | 17,269

F-43

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

16.8. Premises and equipment and other assets

16.8.1. Premises and equipment

The major categories of the Banks premises and equipment, and accumulated depreciation related thereto, are presented in the following table:

|                         |  | Estimated
    useful
    life (years) |  |      | December 31,
|------------------------ |  | ------------------------------------- |  | ---- | ------------
|                         |  |                                       |  |     
|Description              |  |                                       |  | 2005 |             
|                         |  |                                       |  |      |             
|Land and buildings       |  | 50                                    |  |      | 448,338     
|Furniture and facilities |  | 10                                    |  |      | 81,441      
|Machinery and equipment  |  | 5                                     |  |      | 64,742      
|Vehicles                 |  | 5                                     |  |      | 3,921       
|Accumulated depreciation |  |                                       |  |      | (222,645    
|                         |  |                                       |  |      |             
|Total                    |  |                                       |  |      | 375,797     
|                         |  |                                       |  |      |             

Depreciation expense was 29,207 and 34,727, at December 31, 2005 and 2004, respectively.

16.8.2. Other assets

Other assets consisted of the following at December 31, 2005 and 2004:

|                                                      |  | Estimated
useful
life (years) |      | December 31,
|----------------------------------------------------- |  | ----------------------------- | ---- | ------------
|                                                      |  |                               |     
|Description                                           |  |                               | 2005 |             
|                                                      |  |                               |      |             
|Rent assets                                           |  | 50                            |      | 9,230       
|Works of art                                          |  |                              |      | 983         
|Assets acquired for secure loans                      |  | 50                            |      |            
|Stationery and office supplies                        |  |                              |      | 1,610       
|Land and buildings not affected by banking activities |  | 50                            |      | 50,398      
|Vehicles to deliver for leasing                       |  |                               |      | 1,025       
|                                                      |  |                               |      |             
|Total                                                 |  |                               |      | 63,246      
|                                                      |  |                               |      |             

Depreciation expense was 1,344 and 2,100, at December 31, 2005 and 2004, respectively.

16.9. Intangible assets

Goodwill

The breakdown of goodwill account as of December 31, 2005 and 2004, is as follows:

|                                                                              |  | December 31,
|----------------------------------------------------------------------------- |  | ------------
|                                                                              |  |             
|Description                                                                   |  | 2005        
|                                                                              |  |             
|Goodwill for the purchase of Corp Banca S.A., net of accumulated amortization |  |             
|of 40,835 at December 31, 2005                                                |  | 25,459      

Depreciation expense on goodwill was 6,629 and 6,768 (included 138 for the purchase of FADISA by Atuel Fideicomisos S.A.) at December 31, 2005 and 2004, respectively.

F-44

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

Organization and development expenses

The breakdown of organization and development account as of December 31, 2005 and 2004, is as follows:

|                                                             |  | Estimated
    useful
    life (years) |      | December 31,
|------------------------------------------------------------ |  | ------------------------------------- | ---- | ------------
|                                                             |  |                                       |     
|Description                                                  |  |                                       | 2005 |             
|                                                             |  |                                       |      |             
|Start-up expenses of Consolidar AFJP                         |  | 11                                    |      | 29,687      
|Organization and development non  deductible expenses(1)    |  | 5                                     |      | 565,352     
|Computer software acquisition expenses and computer programs |  |                                       |      |             
|development expenses                                         |  | 5                                     |      | 6,087       
|Other intangible assets                                      |  | 5                                     |      | 28,751      
|                                                             |  |                                       |      |             
|Total                                                        |  |                                       |      | 629,877     
|                                                             |  |                                       |      |             

|   
|---
|(1)
|(2)

The variations in 2005 in intangible asset accounts were as follows:

|                             |  | 2005   
|---------------------------- |  | -------
|                             |  |        
|Balance at January 1, 2005   |  | 818,726
|Additions                   |  | 63,789 
|Decreases                   |  | 4,551  
|Period amortization         |  | 248,087
|                             |  |        
|Balance at December 31, 2005 |  | 629,877
|                             |  |        

16.10. Allowances

Allowances deducted from assets or included in liabilities are as follows:

|                                                     |  | December 31,
|---------------------------------------------------- |  | ------------
|                                                     |  |             
|Description                                          |  | 2005        
|                                                     |  |             
|Deducted from assets                                 |  |             
|For government and private securities(1)             |  | 323         
|For other receivables from financial transactions(2) |  | 3,098       
|For assets subject to financial leasing(2)           |  | 1,485       
|For investments in other companies(3)                |  | 11,939      
|For other receivables(4)                             |  | 389,149     
|                                                     |  |             
|Total                                                |  | 405,994     
|                                                     |  |             
|Liabilities                                          |  |             
|Other loss contingencies(5)                          |  | 262,426     
|Contingent commitments(6)                            |  | 765         
|                                                     |  |             
|Total                                                |  | 263,191     
|                                                     |  |             

|   
|---
|(1)
|(2)
|(3)
|(4)
|(5)
|(6)

F-45

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
For
the fiscal years ended December 31, 2005, 2004 and 2003
Stated in thousands of
Pesos

16.11. Other liabilities from financial transactions  Argentine Central Bank

The Bank borrows funds under various credit facilities obtained from the Argentine Central Bank for specific purposes, as follows:

|                       |  | December 31,
|---------------------- |  | ------------
|                       |  |             
|Description            |  | 2005        
|                       |  |             
|Short-term liabilities |  | 22,143      
|Long-term liabilities  |  | 78,602      
|                       |  |             
|Total                  |  | 100,745     
|                       |  |             

At December 31, 2005 and 2004, accrued interests and other differences included on the above liabilities amounted to 45,735 and 139,440 respectively. During fiscal year 2005, interest rate for this liability was 2% per
annum.

Maturities of the long-term liabilities in the table above for each of the following fiscal years are as follows:

|Fiscal Year  |  |       
|------------ |  | ------
|2007         |  | 13,100
|2008         |  | 13,100
|2009         |  | 13,100
|2010         |  | 13,100
|2011         |  | 13,101
|As from 2011 |  | 13,101
|             |  |       
|Total        |  | 78,602
|             |  |       

16.12. Other liabilities from financial transactions  Banks and international institutions and financing received from financial institutions

The Bank borrows funds under different credit arrangements from local and foreign banks and international lending agencies, as follows:

|                                                   |  | December 31,
|-------------------------------------------------- |  | ------------
|                                                   |  |             
|Description                                        |  | 2005        
|                                                   |  |             
|Short-term liabilities                             |  |             
|Other lines of credit from local and foreign banks |  | 249,626     
|                                                   |  |             
|Total short-term liabilities                       |  | 249,626     
|                                                   |  |             
|Long-term liabilities                              |  |             
|Other lines of credit from local and foreign banks |  | 53,636      
|                                                   |  |             
|Total long-term liabilities                        |  | 53,636      
|                                                   |  |             
|Total                                              |  | 303,262     
|                                                   |  |             

Accrued interests included on the above liabilities are 4,024 and 1,765, at December 31, 2005 and 2004 respectively, and are included in the Interest and listed-price differences accrued payable account in the
accompanying consolidated balance sheets. Interest rates for long-term liabilities vary from 5.04% to 5.52% per annum.

F-46

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
For
the fiscal years ended December 31, 2005, 2004 and 2003
Stated in thousands of
Pesos

Maturities of the long-term liabilities in the table above for each of the following fiscal years are as follows:

|Fiscal Year |  |       
|----------- |  | ------
|2007        |  | 18,923
|2008        |  | 23,798
|2009        |  | 5,459 
|2010        |  | 5,456 
|            |  |       
|Total       |  | 53,636
|            |  |       

The funds mentioned under the caption Long-term liabilities: Other lines of credit from local and foreign banks are applied mainly to loans to companies involved in foreign trade transactions.

The balances of assets and liabilities denominated in foreign currency are as follows:

|                                              |  | December 31,
|--------------------------------------------- |  | ------------
|                                              |  |             
|Description                                   |  | 2005        
|                                              |  |             
|Assets                                        |  |             
|Cash and due from Banks                       |  | 1,027,697   
|Government and private securities             |  | 265,080     
|Loans                                         |  | 641,172     
|Other receivables from financial transactions |  | 226,298     
|Assets subject to financial leasing           |  | 78          
|Investments in other companies                |  | 809         
|Other receivables                             |  | 13,569      
|Suspense items                                |  | 97          
|                                              |  |             
|Total                                         |  | 2,174,800   
|                                              |  |             
|Liabilities                                   |  |             
|Deposits                                      |  | 1,285,196   
|Other liabilities from financial transactions |  | 802,090     
|Other liabilities                             |  | 6,355       
|Subordinated Corporate Bonds                  |  | -           
|Suspense items                                |  | 6           
|Other liabilities                             |  | 8,717       
|                                              |  |             
|Total                                         |  | 2,102,364   
|                                              |  |             

16.14.
Minimum capital requirements

Under BCRA regulations, the Bank is required to maintain individual and consolidated minimum levels of equity capital (minimum capital). At December 31, 2005 and 2004 the consolidated minimum capital is based
upon risk-weighted assets and also considers interest rate risk and market risk. The required consolidated minimum capital and the consolidated Banks capital calculated under the BCRA regulations, are as follows:

|                  |  | RequiredMinimumCapital |  | ComputableCapital |  | Excess of actual
Minimum Capital
over Required
Minimum Capital(1)
|----------------- |  | ---------------------- |  | ----------------- |  | -----------------------------------------------------------------
|                  |  |                        |  |                   |  |                                                                  
|December 31, 2005 |  | 868,512                |  | 1,889,893         |  | 1,021,381                                                        
|December 31, 2004 |  | 466,595                |  | 1,656,396         |  | 1,189,801                                                        

|(1) | The Bank must maintain a surplus of minimum paid-in
capitals amounting to at least Ps.38,440, Ps.40,392 and Ps.37,969 as at December
31, 2005, 2004 and 2003, respectively, equivalent to 0.25% of the amount of values
under  custody for securities representing investments from pension funds, as
well as in connection with its function as registrar of mortgage-backed bonds,
invested in national public securities and other destinations authorized by the
BCRA and guaranteed  in favor of the said Entity.
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

F-47

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
For
the fiscal years ended December 31, 2005, 2004 and 2003
Stated in thousands of
Pesos

|16.15.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Earnings per share                       
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | -----------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                          
|Earnings per share for the fiscal years ended December 31, 2005, 2004 and 2003, were computed by dividing net income by the weighted-average number of Ordinary Shares outstanding during each fiscal year.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                          
|16.16.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Employee benefit plans                   
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                          
|The Bank does not maintain pension plans for its
  employees; nevertheless, since 2005 the Banco Francés Group gives to
  certain executives, with role at corporate level, the possibility to access
  into defined  contribution pension plan that it is subject to SFAS No. 87 and
  132 (revised 2003). This pension plan consists in a percentage calculated over
  determinate recompensing concepts. During the fiscal years ended December 31,
  2005 the Bank has been  accruing initial contributions as hedge for prior years
  by 3,430 and 669 for the 2005. These expenses are included in Other Expense 
   Charge for uncollectibility of other receivable and other allowances and Administrative
  Expenses   Personal Expenses, respectively, in the Consolidated Financial
  Statements as of December 31, 2005.
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                          
|In addition, the Bank is obligated to pay employer contributions to the National Pension Plan System, determined on the basis of total monthly payroll. These expenses aggregated 31,294, 28,841 and 24,784 for the fiscal
years ended December 31, 2005, 2004 and 2003, respectively, and are included in the Operating ExpensesPayroll expenses account in the Consolidated Statements of Income.                                                                                                                                                                                                                                                                                                                                                                                                                                    
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                          
|16.17.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     | Business segment consolidated information
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                          
|FAS No. 131 requires that a public business enterprise report financial and descriptive information about its reportable operating segments. Operating segments are components of an enterprise about which separate financial
information is available that is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Generally, financial information is required to be reported on the basis that it is used
internally for evaluating segment performance and deciding how to allocate resources to segments.                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                          
|The Bank is mainly concentrated on the financial sector, especially through its activities related to banking/financial, pension fund manager and insurance.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |                                          
|The following information shows total assets, financial income, service charge income and other income, total income, financial expenses, provision for loan losses, operating expenses, other expenses, total expenses, loss
on minority interest in subsidiaries and total net income for each of the business segment identified by the Banks management.                                                                                                                                                                                                                                                                                                                                                                                                                                                                             

F-48

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
For
the fiscal years ended December 31, 2005, 2004 and 2003
Stated in thousands of
Pesos

|                          |  | As of December
    31, 2005
|------------------------- |  | ---------------------------
|                          |  |                            
|                          |  | Banking Financial          
|                          |  |                            
|                          |  | BBVA Banco
Francés S.A.(3) 
|                          |  |                            
|Total assets              |  | 13,839,847                 
|                          |  |                            
|Financial income          |  | 1,412,036                  
|Service charge income     |  |                            
|and other income          |  | 757,620                    
|Total income(1)           |  | 2,169,656                  
|                          |  |                            
|Financial expenses        |  | (617,332                   
|Allowances for doubtful   |  |                            
|loans                     |  | (109,265                   
|Operating expenses        |  | (564,742                   
|Other expenses            |  | (791,684                   
|Total expenses(2)         |  | (2,083,023                 
|                          |  |                            
|Loss on minority interest |  |                            
|in subsidiaries           |  | (1                         
|                          |  |                            
|Total net income          |  | 86,632                     
|                          |  |                            

|   
|---
|(1)
|(2)
|(3)

|                          |  | As of December
          31, 2004
|------------------------- |  | ---------------------------------
|                          |  |                                  
|                          |  | Banking
          Financial      
|                          |  |                                  
|                          |  | BBVA Banco
    Francés S.A.(3)   
|                          |  |                                  
|Total assets(3)           |  | 14,275,608                       
|                          |  |                                  
|Financial income          |  | 951,586                          
|Service charge income     |  |                                  
|and other income (3)      |  | 675,257                          
|Total income(1)           |  | 1,626,843                        
|                          |  |                                  
|Financial expenses        |  | (461,014                         
|Allowances for doubtful   |  |                                  
|loans                     |  | (49,464                          
|Operating expenses(3)     |  | (474,568                         
|Other expenses(3)         |  | (719,669                         
|Total expenses(2)         |  | (1,704,715                       
|                          |  |                                  
|Gain / (loss) on minority |  |                                  
|interest in subsidiaries  |  |                                  
|(3)                       |  | (7                               
|                          |  |                                  
|Total net income / (loss) |  | (77,879                          
|                          |  |                                  

|   
|---
|(1)
|(2)
|(3)
|(4)

F-49

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
For
the fiscal years ended December 31, 2005, 2004 and 2003
Stated in thousands of
Pesos

|                          |  | As of December 31, 2003        
|------------------------- |  | -------------------------------
|                          |  |                                
|                          |  | Banking Financial              
|                          |  |                                
|                          |  | BBVA Banco
    Francés S.A. (4)
|                          |  |                                
|                          |  |                                
|Total assets(3)           |  | 12,248,072                     
|                         
|Financial income          |  | 1,163,181                      
|Service charge income     |  |                                
|and other income (3)      |  | 1,094,203                      
|Total income(1)           |  | 2,257,384                      
|                         
|Financial expenses        |  | (1,181,831                     
|Allowances for doubtful   |  |                                
|loans                     |  | (73,203                        
|Operating expenses        |  | (539,465                       
|Other expenses(3)         |  | (972,796                       
|Total expenses(2)         |  | (2,767,295                     
|                         
|Gain / (loss) on minority |  |                                
|interest in subsidiaries  |  |                                
|(3)                       |  | -                              
|                          |  |                                
|Net monetary income /     |  |                                
|(loss)                    |  | 1,548                          
|                          |  |                                
|Total net income / (loss) |  | (508,363                       
|                         

|   
|---
|(1)
|(2)
|(3)
|(4)

The Banks reportable segments are strategic business units that offer different products and services. They are managed separately because each segment appeals to different markets and, accordingly, requires different
  technology and marketing strategies.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Bank evaluates performance based on profit or loss from operations before income taxes not
  including nonrecurring gains or losses.

The Bank does not have a single external private
  customer from whom it derives 10 percent or more of its revenues and operates
  in one geographical area. Nevertheless, as it is mentioned in Note 16.5., the
  Bank has  significant exposure to the Argentine Federal Government and Provinces
  in form of secured loans and other debt obligations. For the years ended December
  31, 2005, 2004 and 2003, the Bank recorded, under BCRA rules, income from secured
  loans (Decree  No. 1387/01), including CER accrual of 805,273, 508,612 and
  441,162, respectively. In addition, for the years ended December 31, 2005,
  2004 and 2003, the Bank recorded net income from government securities of 176,156,
  162,386 and 179,667,  respectively.

Substantially most of Banks operations, property and customers are located in Argentina.

F-50

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
For
the fiscal years ended December 31, 2005, 2004 and 2003
Stated in thousands of
Pesos

The presentation of Financial Statements according to Central Bank rules differs significantly from the format required by the US. Securities and Exchange Commission under Rules 9-03 and 9-04 of Regulation S-X
      (Article 9). The following Financial Statements have been restated into constant Pesos as explained in Note 3.2. The restatement was made using the adjustment factor arising from the WPI. These Financial Statements were prepared using
  the measurement methods prescribed by the BCRA, but in accordance with the presentation requirements of the US SEC. The income statements presented below discloses the categories required by Article 9:

|                                                  |  | Year ended December 31,
|------------------------------------------------- |  | -----------------------
|                                                  |  |                        
|                                                  |  | 2005                   
|                                                  |  |                        
|Consolidated Income Statements                    |  |                        
|Interest and fees on loans                        |  | 1,254,007              
|Dividends on investment securities                |  | -                      
|Interest on investment securities                 |  | 3,586                  
|Trading account interest                          |  | 243,751                
|                                                  |  |                        
|Total interest income                             |  | 1,501,344              
|                                                  |  |                        
|Interest on deposits                              |  | 365,106                
|Interest on short-tern borrowings                 |  | 210,300                
|Interest on long-term debt                        |  | 891                    
|                                                  |  |                        
|Total interest expense                            |  | 576,297                
|                                                  |  |                        
|Net interest income                               |  | 925,047                
|                                                  |  |                        
|Provision for loan losses                         |  | 114,628                
|                                                  |  |                        
|Net interest gain after provision for loan losses |  | 810,419                
|                                                  |  |                        
|Service charges on deposit accounts               |  | 143,933                
|Credit card service charges and fees              |  | 102,050                
|Fees on securities activities                     |  | 15,598                 
|Other commissions                                 |  | 539,462                
|Income from investment in equity securities       |  | 2,870                  
|Foreign currency gains net                        |  | 72,407                 
|Minority interest in subsidiariesgain            |  | -                      
|Other                                             |  | 480,349                
|                                                  |  |                        
|Total other income                                |  | 1,356,669              
|                                                  |  |                        

F-51

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
For
the fiscal years ended December 31, 2005, 2004 and 2003
Stated in thousands of
Pesos

|                                                                               |  | Year ended December 31, | 
|------------------------------------------------------------------------------ |  | ----------------------- | 
|                                                                               |  |                        
|                                                                               |  | 2005                    | 
|                                                                               |  |                         | 
|Consolidated Expenses Statements                                               |  |                         | 
|Commissions                                                                    |  | 52,821                  | 
|Personnel expenses                                                             |  | 397,693                 | 
|Fees and external administrative services                                      |  | 39,837                  | 
|Depreciation of bank premises and equipment and other fixed assets             |  | 30,592                  | 
|Business travel and development                                                |  | 12,961                  | 
|Utilities                                                                      |  | 21,440                  | 
|Advertising and promotion                                                      |  | 39,757                  | 
|Contributions and taxes                                                        |  | 92,564                  | 
|Maintenance and repairs                                                        |  | 26,157                  | 
|Amortization of Goodwill                                                       |  | 6,629                   | 
|Provision for loss contingencies                                               |  | 422,924                 | 
|Deferred income tax                                                            |  | -                       | 
|Foreign currency loss net                                                      |  | -                       | 
|Loss on disposal of fixed and other assets                                     |  | 26,402                  | 
|Minority interest in subsidiariesloss                                         |  | 17,151                  | 
|Loss from effect of inflation on banking assets and liabilities                |  | -                       | 
|Other                                                                          |  | 844,244                 | 
|                                                                               |  |                         | 
|Total other expenses                                                           |  | 2,031,172               | 
|                                                                               |  |                         | 
|Income before income tax and tax on minimum presume income expenses            |  | 135,916                 | 
|                                                                               |  |                         | 
|Income tax and tax on minimum presume income expenses (see Note 5.1. and 5.2.) |  | 18,712                  | 
|                                                                               |  |                         | 
|Net gain / (loss)                                                              |  | 117,204                 | 
|                                                                               |  |                         | 
|Net gain / (loss) per Ordinary Share                                           |  | 0.25                    | 

|   
|---
|(1)

Certain categories of income and expense maintained by the Bank have been presented in the above Article 9 statement of income in a manner which warrants further discussion:

- Foreign currency gain (loss), net: this item relates primarily to the differences in exchange rates on the Banks investments, loans and deposits denominated in foreign currency. The Bank does not
      maintain foreign currency gains or losses in separate categories of assets and liabilities, respectively, and, therefore, since such gains or losses cannot be separately identified by type of activity, Foreign currency gains, net, is
  presented as a component of Non-interest income.

Central Bank rules also required certain classifications of assets and liabilities which are different from those required by Article 9. The following balance sheets depicts the Banks consolidated balance sheets at
  December 31, 2005 and 2004 as if the Bank followed the balance sheets disclosure requirements under Article 9:

F-52

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
For
the fiscal years ended December 31, 2005, 2004 and 2003
Stated in thousands of
Pesos

|                                                                                  |  | December
          31,
|--------------------------------------------------------------------------------- |  | ----------------------
|                                                                                  |  |                       
|                                                                                  |  | 2005                  
|                                                                                  |  |                       
|ASSETS                                                                            |  |                       
|Cash and due from banks                                                           |  | 683,267               
|Interest bearing deposits
        in other banks                                  |  | 1,035,385             
|Unsettled spot purchases                                                          |  | 35,730                
|Debtors under forward
        sales and under reverse repurchase agreements       |  | 99,768                
|Debtors under unsettled
        spot sales                                        |  | 58,352                
|Trading account assets                                                            |  | 3,069,207             
|Investments securities                                                            |  | 485,401               
|Loans                                                                             |  | 8,666,361             
|Allowance
        for loan losses                                                 |  | (184,885              
|Premises and equipment                                                            |  | 375,797               
|Intangible assets                                                                 |  | 655,336               
|Other assets                                                                      |  | 1,004,029             
|                                                                                  |  |                       
|Total
        assets                                                              |  | 15,983,748            
|                                                                                  |  |                       
|LIABILITIES AND STOCKHOLDERS EQUITY                                              |  |                       
|Interest bearing deposits                                                         |  | 8,616,985             
|Non interest bearing
        deposits                                             |  | 1,996,101             
|Creditors under forward
        purchases and under reverse repurchase agreements |  | 150                   
|Creditors under unsettled
        spot purchases                                  |  | 26,165                
|Forward sales and under
        repurchase agreements                             |  | 110,682               
|Unsettled spot sales                                                              |  | 55,045                
|Other short-term borrowings                                                       |  | 674,997               
|Other liabilities                                                                 |  | 1,872,169             
|Long-term debt                                                                    |  | 377,756               
|Commitments and contingent
        liabilities                                    |  | 263,191               
|Minority Interest in
        subsidiaries                                         |  | 188,960               
|Common Stock                                                                      |  | 471,361               
|Non-capitalized contributions                                                     |  | 175,132               
|Other stockholders equity                                                        |  | 1,155,054             
|                                                                                  |  |                       
|Total
        liabilities and stockholders equity                                |  | 15,983,748            
|                                                                                  |  |                       

|   
|---
|(1)

16.19.
Off-Balance sheet financial instrument

The Bank enters into various transactions involving off-balance-sheet financial instruments. These instruments could be used to meet the risk management, trading and financing needs of clients or for the Banks
      proprietary trading and asset and liability management purposes, and could be subject to varying degrees of credit and market risk. Credit risk and market risk associated with on- and off-balance-sheet financial instruments are monitored on an
  aggregate basis.

The Bank uses the same credit policies in determining whether to enter or extend call and put option contracts, commitments, conditional obligations and guarantees as it does for granting loans. In the opinion of
  management, the Banks outstanding off-balance-sheet items do not represent unusual credit risk.

a) Derivatives

In the normal course of its business, the Bank enters into a variety transactions principally in the foreign exchange and stock markets. The majority of the counterparties in the derivative transactions are banks and other
  financial institutions.

F-53

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
For
the fiscal years ended December 31, 2005, 2004 and 2003
Stated in thousands of
Pesos

- Options: they confer the right on the buyer, but no obligation, to receive or pay a specific quantity of an asset or financial instrument for specified price at or before a specified date.
Options may be exchange traded or Over the Counter (OTC) agreements. The Bank principally buys and sells interest options on an index. As December 31, 2004, 2003 and 2002 the bank
does not have outstanding options.
- Futures and Forwards: they are agreements to deliver or take delivery of a specified rate, price or index applied against the underlying asset or financial instrument, at a specific date.
Futures are exchange traded at standardized amounts of the underlying asset or financial instrument. Forward contracts are OTC agreements and are principally dealt in by the Bank in
securities/foreign exchange as forward agreements.

Pursuant to BCRA regulations, future and forward transactions must be recorded under Other Receivables from Financial Transactions and Other Liabilities from Financial Transactions in the
accompanying consolidated balance sheets and they have been valued as mentioned in Note 3.5.9.

The notional contractual amount of these instruments represents the volume of outstanding transactions and does not represent the potential gain or loss associated with the market or credit risk of such transactions. The
market risk of derivatives arises from the potential for changes in value due to fluctuations in market prices. The Bank reduces its exposure to market risk, if necessary, by entering into offsetting transactions in accordance with the global policy
of hedging defined by BBVA for its subsidiaries. The credit risk of derivatives arises from the potential of a counterparty to default on its contractual obligations. The effect of such a default varies as the market value of derivative contracts
changes. Credit exposure exists at a particular point in time when a derivative has a positive market value. The Bank attempts to limit its credit risk by dealing with creditworthy counterparties and obtaining collateral where appropriate. At
December 31, 2004 and 2003, the Bank entered into forward contracts for trading and hedging purposes. The notional amount of outstanding forward contracts as of the mentioned dates, are included in Note 16.7. The following table shows at December
31, 2004 and 2003 the notional value forward transactions divided between hedging and trading (all transactions are due in one year or less):

|                                          |  | December 31, 2005 |  | December 31, 2004
|----------------------------------------- |  | ----------------- |  | -----------------
|                                          |  |                   |  |                  
|                                          |  | Hedging           |  | Trading          
|                                          |  |                   |  |                  
|Forward sales and purchases of foreign    |  |                   |  |                  
|exchange                                  |  | 138,041           |  |                 
|Forward sales and purchases of government |  |                   |  |                  
|and private securities                    |  |                  |  | 2                
|Other forward sales and purchases         |  |                  |  | 2,102            
|                                          |  |                   |  |                  
|b) Credit-related financial instruments   |  |                   |  |                  

The Banks exposure to credit loss in the event of non-performance by counterparties to commitments to extend credit, guarantees granted and foreign trade acceptances is represented by the contractual notional amount
of those investments.

|A summary of credit exposure related to these items is shown below (*): |  |              |  |        
|----------------------------------------------------------------------- |  | ------------ |  | -------
|                                                                        |  |             
|                                                                        |  | December 31,
|                                                                        |  |             
|                                                                        |  | 2005         |  | 2004   
|                                                                        |  |              |  |        
|Credit lines granted (unused portion) cover by debtor classification    |  | 3,827        |  | 272,854
|Foreign trade acceptances and standby letters of credit                 |  | 80,571       |  | 109,704
|Guarantees granted                                                      |  | 171,084      |  | 219,798



---

F-54

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
For
the fiscal years ended December 31, 2005, 2004 and 2003
Stated in thousands of
Pesos

Commitments to extend credit are agreements to lend to a customer at a future date, subject to compliance with contractual terms. Commitments generally have fixed expiration dates or other termination clauses and may
require the payment of a fee. Since many of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent actual future cash requirements for the Bank. The Bank evaluates each
customers creditworthiness on a case-by-case basis.

Foreign trade acceptances represent Bank customers ́ liabilities on outstanding drafts or bills of exchange that have been accepted by the Bank and the Banks liability to remit payment upon the presentation of
the accepted drafts or bills of exchange.

The credit risk involved in foreign trade acceptances and guarantees granted is essentially the same as that involved in extending loan facilities to customers. In order to grant guarantees to its customers, the Bank may
require counter guarantees. Such financial instruments are classified, by type of guarantee, as follows:

|                                    |  | December 31,
|----------------------------------- |  | ------------
|                                    |  |             
|                                    |  | 2005        
|                                    |  |             
|Self-liquidating counter guarantees |  | 13,112      
|Preferred counter guarantees        |  | 74          

The Bank accounts for checks against it and other banks, as well as other items in process of collection, such as notes, bills and miscellaneous items, in memorandum accounts until such time as the related item clears or is
accepted. In the opinion of management, no significant risk of loss exists on these clearing transactions. The amounts of clearing items in process are as follows:

|                                          |  | December 31,
|----------------------------------------- |  | ------------
|                                          |  |             
|                                          |  | 2005        
|                                          |  |             
|Checks drawn on the Bank pending clearing |  | 105,251     
|Checks drawn against other Banks          |  | 134,517     
|Drafts and notes for collection           |  | 528,885     
|                                          |  |             
|c) Trust activities                       |  |             
|                                          |  |             
|See Note 10.                              |  |             

16.20.
Pension Fund Management

Consolidar AFJP S.A. manages a pension fund that as of December 31, 2005 and 2004 amounted to 12.8 billion and 10.5 billion, respectively.

NOTE 17SUMMARY OF SIGNIFICANT DIFFERENCES BETWEEN THE ARGENTINE CENTRAL BANK RULES AND UNITED STATES GENERALLY ACCEPTED ACCOUNTING PRINCIPLES

The following is a description of the significant differences between BCRA rules followed in the preparation of the Banks Financial Statements and those applicable in the United States under generally accepted
accounting principles (US GAAP). References below to SFAS are to United States Statements of Financial Accounting Standards. Pursuant to the BCRA ́s rules, the Banks Financial Statements recognize the effects of
inflation until August 31, 1995 and since January 1, 2002 to February 28, 2003, as mentioned in Note 3.2. As allowed by the U.S. Securities and Exchange Commission under item 18 of Form 20-F, the effect of inflation accounting under BCRA rules has
not been reversed in the reconciliation to US. GAAP.

F-55

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
For
the fiscal years ended December 31, 2005, 2004 and 2003
Stated in thousands of
Pesos

As explained in Note 5.1. the Bank determined the charge for income tax applying the effective rate to taxable income estimated for each year considering the effect of temporary differences between book and taxable income.
The criteria is in accordance with US GAAP, based on SFAS No. 109, Accounting for Income Taxes.

Under SFAS No. 109, deferred tax assets or liabilities are recorded for temporary differences between the financial and tax basis of assets and liabilities. A valuation allowance is provided for the deferred tax assets to
the extent that it is more likely than not that they will not be realized.

The following table accounts for the difference between the actual tax provision and the amounts obtained by applying the statutory income tax rate in Argentina to income before income tax in accordance with US.
GAAP:

|                                                          |  | Year ended December 31,
|--------------------------------------------------------- |  | -----------------------
|                                                          |  |                        
|Description                                               |  | 2005                   
|                                                          |  |                        
|Statutory income tax rate                                 |  | 35.00                  
|Income tax (benefit) provision computed at statutory rate |  | 623,328                
|Tax exempt income                                         |  | (494,422               
|Nondeductible items                                       |  | 84,700                 
|Other, net                                                |  | (30,890                
|                                                          |  |                        
|Income tax computed in accordance with U.S. GAAP          |  | 182,716                
|                                                          |  |                        
|Initial adjustments to net deferred tax assets            |  | (77,258                
|                                                          |  |                        
|Income tax computed in accordance with BCRA rules         |  | (242,000               
|                                                          |  |                        
|Adjustments to reconcile income tax (benefit) to US GAAP  |  | 347,458                
|                                                          |  |                        
|(Recover) Charge of allowances on deferred tax assets     |  | (366,801               
|                                                          |  |                        

The tax exempt income adjustment noted above principally
relates to gains generated by equity investment, which were not subject to income
tax (19,758, 61,848 and 64,700 for the year ended December 31, 2005, 2004 and
2003,  respectively), to the exemption established during the public debt swap
transaction mentioned in Note 1.3., by which the income generated by the Guaranteed
Loans received were exempt in the income tax (105,825, 162,104 and 30,955 for
the years  ended December 31, 2005, 2004 and 2003 respectively), the write-off
of the relevant asset generated by the application of the CVS index instead CER
mentioned in Note 15.3. (49,371 for the year ended December 31, 2004) and other
net  effects.

- The effect of the conversion into pesos and the adjustment through the CER, over the difference between book value under US GAAP and face value of Federal Government loans carried by the
Bank and domestic subsidiaries which were not deductible from income tax (233,323 and 190,967 for the years ended December 31, 2004 and 2003 respectively). For the fiscal year ended
December 31, 2005, this effect results in a tax exempt income of 251,375.
- The effects of the inflation, which were not deductible from income taxes (22,635 for the year ended December 31, 2003).
- The allowances booked under BCRA rules (84,700 for
the fiscal years ended December 31, 2005).

Other includes other net effects, and tax exempt income and non-deductible items arising from Consolidated Subsidiaries.

F-56

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BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

SFAS No. 109 requires that an allowance for deferred
tax assets is needed when, based on the weight of available evidence, it is more
likely than not that some portion of the deferred tax assets will not be realized.
The valuation allowance should be sufficient to reduce the deferred tax assets
to the amount that is more likely than not to be realized.

As of December 31, 2002, as a result of the deteriorating economic and financial situation in Argentina, a valuation allowance was recorded to reserve for the Banks net deferred tax assets
  because management believed that it was more likely than not that these assets would not be recovered and the Bank provided a valuation allowance over its net deferred tax assets position. This situation continued and accordingly, the Bank provided
  a valuation allowance of 1,681,832 in order to fully reserve for its net deferred tax assets as of December 31, 2003.

As of December 31, 2005 and 2004, a favorable evolution in the Argentine economy has been recorded. Accordingly, the Bank has assessed all available evidence to determine the amount of valuation
allowance needed, including financial and tax projections. As a result, based on the weight of that evidence, the Bank provided a valuation allowance of 805,873 and 1,172,674 as of December 31, 2005 and 2004, respectively.

Deferred tax assets (liabilities) are summarized as follows:

|                                                                         |  | December 31,
|------------------------------------------------------------------------ |  | ------------
|                                                                         |  |             
|Description                                                              |  | 2005        
|                                                                         |  |             
|Deferred tax assets:                                                     |  |             
|Government and private securities valuation                              |  |            
|Loans                                                                    |  | 219,506     
|Loan origination and issuance credit cards fees                         |  | 9,241       
|Property, equipment and miscellaneous assets                             |  | 5,962       
|Intangible assets                                                        |  |            
|Investment in other companies                                            |  |            
|Other liabilities                                                        |  | 29,589      
|Allowance for loss contingencies                                         |  | 614,194     
|Pension and retirement obligations activities                           |  | 72,549      
|Foreign exchange difference                                              |  |            
|Net operating loss                                                       |  | 766,673     
|Other                                                                    |  | 575         
|                                                                         |  |             
|                                                                         |  | 1,718,289   
|                                                                         |  |             
|Deferred tax liabilities:                                                |  |             
|Government and private securities valuation                              |  | (14,135     
|Foreign exchange difference                                              |  | (1,087      
|Property, equipment and miscellaneous assets                             |  |            
|Intangible assets                                                        |  | (599        
|Other                                                                    |  |            
|                                                                         |  |             
|                                                                         |  | (15,821     
|                                                                         |  |             
|Net deferred tax asset under US GAAP                                     |  | 1,702,468   
|                                                                         |  |             
|Net deferred tax asset in accordance with BCRA rules                     |  | 360,000     
|                                                                         |  |             
|Adjustment to reconcile net deferred tax assets / liabilities to US GAAP |  | 1,342,468   
|                                                                         |  |             
|Allowances on deferred tax assets in accordance with BCRA rules          |  | (360,000    
|                                                                         |  |             
|Adjustment to reconcile Allowances on deferred tax assets to US GAAP     |  | (805,873    
|                                                                         |  |             

The nature of deferred tax asset or liability of the most significant components are described as follows:

- Government and private securities: as mentioned in Note 17.5. all unlisted government and private securities
    and those with non-representative valuation, were adjusted at fair value, thus causing a increase/decrease in their accounting value, which does not comply with the conditions required for them to be tax-deductible in the years ended December 31,
    2005, 2004 and 2003.

F-57

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BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

- Loans:
    as regards deduction of uncollectible accounts, effective Argentine tax rules
    require the existence of certain uncollectibility indicators defined in the
    Income Tax Law (i.e.: to begin court proceedings or bankruptcy adjudication),
    whereas under accounting criteria uncollectibility charges are recorded on
    the basis of assessing the debtors payment capacity. This differing
    principally relates to the accounting registration of the impairment that
    took place in the loans to the provincial governmental sector and to other
    public sector agencies (see Note 17.4.4.), which, as mentioned above, does
    not comply with the indicators required to be tax-deductible, and the difference
    between book value under US GAAP and the face value of Federal Government
    loans received for the sale of Banco Francés (Cayman) Limited (see
    Note 15.5.).
- Property, Equipment and miscellaneous assets: under tax criteria, PP&E depreciation is determined on values
        equivalent to the acquisition cost of the respective PP&E items and by the full-year-of-addition depreciation method. Under accounting criteria, depreciation is determined on values equivalent to the acquisition cost restated as explained in
        Note 3.2. and on the basis of the months of useful life elapsed from addition date through valuation date.
- Intangible assets: under tax criteria, the amortization of these assets is determined by the
      full-year-of-addition method, whereas accounting criteria contemplate the calculation of amortization on the basis of the months of useful life elapsed from addition through valuation date.
- Investments in other companies: the accounting value of participations in controlled companies is determined by
      applying the equity method. In terms of the Income Tax Law, the results generated by the above-mentioned companies will only be subject to the tax when dividends are collected.
- Other liabilities: deferred assets/liabilities result from differences in the accounting and tax criteria used
      to assess expense accruals such as accrual for dismissals calculation.
- Allowance for loss contingencies: as regards deduction of loss contingencies, effective Argentine tax rules
      require the existence of certain indicators defined in the Income Tax Law (i.e. final judgment), whereas under accounting criteria, loss contingencies charges are recorded on the basis of the estimated amounts necessary to meet contingencies of
      probable occurrence.
- Foreign exchange difference: In fiscal years ended December 31, 2005, 2004 and 2003, on valuing the assets in
      foreign currency, the bank converted such an amounts at the benchmark exchange rate of the BCRA. The income tax law requires Banco Nación buying exchange rate. On fiscal year ended December 31, 2001, the effect generated by the foreign
      exchange difference resulting from the Argentine peso devaluation booked in the year ended December 31, 2001, according with US GAAP, may be deducted from taxes in the next five fiscal years as from the fiscal year commenced on January 1,
    2002.

As of December 31, 2005, the Bank (on individual basis) carries accumulated tax loss carry forwards of 766,673 that will mature as follows:

Amount2006
      
      37,3142007
      
      482,4792008
      
      210,8142009
      
      36,066


The adjustments required in order to reconcile assets and liabilities with the US GAAP, as detailed in the following notes, are shown without considering their effect on the income tax. The
effect of reflecting such adjustments on the Banks net assets causes them to increase by 536,595 and 483,575 as of December 31, 2005 and 2004, respectively. In addition, income would be increased by 19,343, 513,684 and 392,456 as of December
31, 2005, 2004 and 2003, respectively.

F-58

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BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

Tax on minimum presumed income

As mentioned in Note 5.2. as of December 31, 2005, the Bank has recorded an asset for the credit for tax on minimum presumed income.

As of December 31, 2003, a valuation allowance was provided to reserve the amount recorded, in view of the deteriorating economic situation in Argentina and the cumulative tax loss for the
preceding years in the Bank. As previously mentioned, several events arose after the closing of the year ended December 31, 2004 that improved the forecast of the Argentine economy and the development of future operations in the bank. Given that the
Bank estimates that it shall have taxable income against which these tax credits shall be offset, the valuation allowance should be reversed in accordance with US GAAP.

Had US GAAP been applied, and as a result of the adjustment to prior years earnings booked by the Bank under BCRA ́s rules, the Banks assets would be increased by 1,003 as of
December 31, 2004 and would be decreased by 61,639 as of December 31, 2003. On the other hand, the Bank ́s net income would be decreased by 1,003 and 66,457 for the years ended December 31, 2005 and 2003 respectively, and would be increased by
62,642 for the year ended December 31, 2004.

As of December 31, 2005, the Bank (on individual basis) carries accumulated tax on minimum presumed income credits for 118,494 that will mature as follows:

Amount2011
      
      17,1152012
      
      24,5192013
      
      23,9972014
      
      24,4632015
      
      28,400


17.2. Loan origination and issuance credit cards fees

The Bank recognizes fees on credit card products, consumer loans and acceptances when collected and charges direct origination costs when incurred. In accordance with US. GAAP under SFAS No. 91,
loan origination fees and certain direct loan origination costs should be recognized over the life of the related loan as an adjustment of yield.

The effects of adjustments
required to state such amounts in accordance with U.S. GAAP would be decreased
assets by 23,051, 20,781 and 11,083 at December 31, 2005, 2004 and 2003, respectively.
On  the other hand, income for the year ended December 31, 2005 and 2004 would
be decreased by 2,270 and 9,698 and for the year ended December 31, 2003 would
be increased by 19,282.

17.3. Intangible assets

The Bank amortizes software development expenses (included in organization and development expenses) over their estimated useful life, up to a maximum of 60 months. US. GAAP, in accordance to the
Statement of Position 98-1, requires that part of such expenses be written off to income when incurred, depending on their characteristics.

Pension Fund Manager Superintendency
regulations, the agency overseeing Consolidar AFJP S.A., authorized the capitalization
of disbursements made through September 25, 1994, for salaries,
advertising, software, agents commissions, fees, brochures, forms printing
and leases and rentals, as the most significant items. Consolidar AFJP
S.A., capitalized expenses incurred in connection with the launch of new activities.
Under US GAAP, the above-mentioned expenses are to be considered as expenses
for the fiscal year in which they are incurred.

The effects
    of adjustments required to state such amounts in accordance with US. GAAP
    would be decreased assets by 16,890, 16,418 and 18,861 at December 31, 2005,
    2004 and 2003, respectively. In addition income would be decreased by 472
    at December 31, 2005 and increased by 2,443 and 40,087 at December 31, 2004
    and 2003, respectively.

F-59

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BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

17.4. Loan loss reserve

The Bank provides for losses
on loans generally through specific allocations on a loan-by-loan basis, once
the loan becomes classified in a category which indicates that collectibility
may be  impaired, and also through mandatory general provisions on performing
loans, which serves to cover inherent loan losses for which specific provisions
have not been made (see Note 3.5.5.).

U.S GAAP requires that an allowance for loan losses be maintained to cover estimated losses inherent in the loan portfolio. Under this concept, the specific allowances identified for individual
loans or pools of loans are supplemented by an amount provided for inherent loan losses estimated to have been incurred but which are not identified based on individual loan reviews. The amount of inherent loss for loans not specifically provided is
estimated based upon evaluation of historical write-off experience, mix of loans and other factors.

The Banks accounting for its loan loss reserve differs in some respects with practices of U.S.-based banks, as discussed below in Notes 17.4.1, 17.4.2, 17.4.3 and 17.4.4.

The following table discloses the amounts required by SFAS No. 114, as of December 31, 2005, 2004 and 2003:

|                                                                                    |  | Fiscal year ended December 31,
|----------------------------------------------------------------------------------- |  | ------------------------------
|                                                                                    |  |                               
|                                                                                    |  | 2005                          
|                                                                                    |  |                               
|Total amount of loans considered as impaired                                       |  | 990,854                       
|Amount of loans considered as impaired for
 which there is a related allowance for  |  |                               
|credit losses                                                                       |  | 990,854                       
|Amount of loans considered as impaired for
 which there is no related allowance for |  |                               
|credit losses                                                                       |  | -                             
|Reserves allocated to impaired loans                                               |  | 297,667                       
|Average balance of impaired loans during the fiscal year                           |  | 1,033,864                     

Under US GAAP, the activity in the allowance for loan losses for the fiscal years presented is as follows:

|                                            |  | Year ended
December 31, 2005 |   | Year ended
December 31, 2004 |          | Year ended
December 31, 2003
|------------------------------------------- |  | ---------------------------- | - | ---------------------------- | -------- | ----------------------------
|                                            |  |                              |   |                              |          |                             
|Balance at the beginning of the fiscal year |  | 340,402                      |   |                              | 799,011  |                             
|Provision for loan losses                   |  | 102,251                      |   |                              | 24,908   |                             
|Charge-offs                                 |  | (158,326                     | ) |                              | (483,517 | )                           
|Monetary gain generated on allowances       |  | -                            |   |                              | -        |                             
|                                            |  |                              |   |                              |          |                             
|Balance at the end of the fiscal year       |  | 284,327                      |   |                              | 340,402  |                             
|                                            |  |                              |   |                              |          |                             

17.4.1. Interest recognitionnon accrual loans

The method applied to recognize income on loans is described in Note 3.5.6.

Additionally, the Bank suspends the accrual of interest generally when the related loan is non-performing and the collection of interest and principal is in doubt. Accrued interest remains on the
Banks books and is considered a part of the loan balance. It allowances in its whole when the Bank determining the reserve for credit losses. U.S. GAAP requires that such accrued interest be charged off to income.

The Bank recognizes interest
income on a cash basis for non-accrual loans. U.S. GAAP requires that if the
collectibility of the principal of the nonaccrual loan is in doubt, cash payments
should be applied to reduce the

F-60

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BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

principal
    to the extent necessary to remove such doubt. Management believes that the
    effect of this difference in interest recognition is not material to the
Banks consolidated income statements taken as a whole.

17.4.2.
      Impaired loansNon-Financial Private Sector and residents abroad

Effective July 1, 1995, the Bank adopted SFAS No. 114, Accounting by Creditors for Impairment of a Loan and SFAS No. 118, Accounting by Creditors for Impairment of a
LoanIncome Recognition and Disclosures for computing U.S. GAAP adjustments. SFAS No. 114, as amended by SFAS No. 118, requires a creditor to measure impairment of a loan based on the present value of expected future cash flows discounted
at the loans effective interest rate, or at the loans observable market price or the fair value of the collateral if the loan is collateral dependent. This Statement is applicable to all loans (including those restructured in a troubled
debt restructuring involving a modification of terms), except large groups of smaller-balance homogenous loans that are collectively evaluated for impairment. The Bank considers commercial loans over 500 for individual impairment evaluations. Loans
are considered impaired when, based on managements evaluation, a borrower will not be able to fulfill its obligation under the original terms of the loan. SFAS No. 118 amends the income recognition provisions that had been included in SFAS No.
114.

Had US GAAP been applied, the Banks assets would be increased by 49,569 and 37,601 at December 31, 2005 and 2004 respectively and decreased by 10,830 at December 31, 2003. On the other
hand, the income would be increased by 11,968 and 48,431 at December 31, 2005 and 2004, respectively, and decreased by 10,830 at December 31, 2003.

17.4.3. Federal Government Secured Loans

During the fiscal year ended December 31, 2001, and pursuant to Decrees No. 1387/01 and 1646/01, the Bank and its subsidiaries swapped a portion of their holdings in federal government securities
and/or loans to the federal government sector outstanding as of November 6, 2001, for a nominal value of US$3,291,795 thousands, for Guaranteed Loans amounting to US$3,360,403 thousands.

As provided for in BCRA Communication A 3366 and A 3385, the initial value of the certificates matched that of the prior book value as of the date of the swap.

As of December 31, 2001, the above-mentioned debt swap is subject to the provisions of SFAS No. 115, Accounting for certain investments in debt securities. According to SFAS No. 115 a
non-temporary impairment affects the swapped obligations and therefore requires that, in the event of such obligations having been classified as held to maturity, a loss be recorded for the difference between the book value of the
obligation so swapped and its quotation at the date of the swap, as such quotation is understood to be the best measure for recognizing the above-mentioned impairment. Once this impairment is recognized in the accounting, the new book value of the
obligations to be swapped will constitute the initial value of the new loans received. As from such date, the Bank considered the mentioned value plus the related CER adjustment accrued.

As of December 31, 2005, 2004 and 2003 the values calculated as mentioned in the above paragraph were converted into pesos. The income for the years ended December 31, 2004 and 2003 reflects
mainly the interest accretion, allowances recovery recorded under BCRA rules (loss), and the effect of the incorporation of new secured loans (loss). The income for the year ended December 31, 2005 reflects mainly the revenues produced for the sale
of an important part of the stock of these assets effected during the year then ended at market values significantly higher to those recorded in accordance with US GAAP, and by the interest accretion of the loans in stock.

The effects of adjustments
required to state such amounts in accordance with US GAAP would be decreased
assets by 909,500, 1,821,800 and 2,005,492 at December 31, 2005, 2004 and 2003
respectively. On the other hand, the income for the year ended December
31, 2005 and 2004 would be increased by 912,300 and 183,692 and the income for
the years ended December 31, 2003 would be decreased by 288,999. Additionally,
see Note 17.18.

F-61

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

17.4.4.
      LoansNon-Financial Provincial Governmental Sector and other governmental sector agencies

As a result of Public Emergency and Exchange System Reform Law and the public debt default, meeting such obligations is based on scant Argentine Treasury resources and the persistent fiscal
deficit of the Federal, Provincial and Municipal Governments, which inevitably led to a significant public indebtedness. Therefore, the Ministry of Economy was empowered to take the actions and deal with the formalities needed to reschedule the
Federal Governments debt.

Thus, on February 27, 2002, the Federal and Provincial Governments signed an agreement on the financial relationship and basis of a federal tax revenue sharing system which, among other issues,
established that the Provincial Governments may request from Federal Government to renegotiate provincial public debts; such debts could thus be reprogrammed under the guidelines to which the federal governmental debt is subject.

The originally conditions of these assets were modified too under the terms of the pesification system.

On December 26, 2002, the
Economy Ministry accepted the offers of conversion of the Provincial Public Debt
into Guaranteed Bonds, implemented in loans and that represented in Government
 Securities. During the second six-month period of 2003, the Bank received the
mentioned securities in swap, i.e. Secured Bonds due in 2018. (see Note 17.5.1.).

As fully explained in Note
3.5.3., on December 31, 2005, the process of swap of Provincial Development Trust
Fund Corporate Bonds is in the final phase of the restructuring process for which
the  Bank will receive BOGAR 2020.

Considering the issues mentioned above, an impairment does affect such credit facilities and a loss must therefore be recorded according to US GAAP for the difference between their accounting
value and the expected value of their future cash flows.

The effects of adjustments
required to state these amounts in accordance with US GAAP would be decreased
assets by 149,012, 175,310 and 328,608 at December 31, 2005, 2004 and 2003, respectively.
 On the other hand, income for the years ended December 31, 2005, 2004 and 2003
would be increased by 26,298, 153,298 and 381,056  effect of recovering
of allowances for loans losses of 375,837 and a monetary gain from these allowances
by 5,219  (inflation effect)  , respectively. It should be noted that the
increase in the income for the year ended December 31, 2003 is originated in
the above  mentioned swap (see additionally Note 17.5.2, decreased in the
income for the same  year).

17.5. Government and private securities valuation

17.5.1. Government securitiesAvailable for sale

At December 31, 2003 the Bank swapped provincial public debt into Secured Bond due in 2018. The face value of the loans and securities swapped amounted to 1,010,210. At December 31, 2005, as a
result of the Governments debt restructuring, the Bank received for the defaulted portfolio Dollar denominated Discount bonds amounted to US$26,083, and Peso denominated Discount bonds amounted to Ps.146,818.

According to US GAAP, the Bank decided to classify Government Securities as available for sale and carried at fair value (market value if available), with unrealized gains and losses reported as
a net amount, net of income tax, within the stockholders equity accounts.
However, SFAS No. 115 requires that if the decline in fair value is judged to
be other than temporary, the cost of the security shall be written down to fair
value, and the amount of the write down shall be included in earnings. This valuation
criteria differ from BCRA rules, as described in Note 3.5.2.

Had US
    GAAP been applied, the Banks assets would be decreased 173,002, 460,087
    and 821,375 at December 31, 2005, 2004 and 2003, respectively.

On the
    other hand, the income for the year ended December 31, 2005 and 2004 would
    be increased by 383,305 and 167,307 and the income for the year ended December
    31, 2003 would be decreased by 378,462, respectively.

Additionally,
    see Note 17.18.

The amortized
    cost and fair value of Government Securities available for sale as of December
    31, 2005 are as follows:

F-62

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

|                      |  | Amortized Cost |  | Gross Unrealized Loss |  | Fair Value |  | Number of Positions
|--------------------- |  | -------------- |  | --------------------- |  | ---------- |  | -------------------
|Government Securities |  | 330,316        |  | (10,194)              |  | 320,122    |  | 3                  

17.5.2. Government and private securitiesTrading Account

Under US GAAP, the Bank
classified as trading securities, its holdings booked in investment accounts
under BCRA rules, basically BODEN 2012 and other securities. The Bank carries
these Government  and private securities in accordance with BCRA (see Note 3.5.2.).
Under U.S. GAAP for trading securities, a fair valuation methodology should be
used to value the securities for accounting purposes.

Had US GAAP been applied, the Banks assets would be increased by 4,525 at December 31, 2005 and decreased by 7,922 and 372,245 at December 31, 2004 and 2003, respectively. On the other hand, the
income for the year ended December 31, 2005, 2004 and 2003 would be increased by 12,447, 364,323 and 542,743, respectively.

17.6. Gain contingencies

I) Constitutional protection actions

At December 31, 2003, as
described in Note 15.2., the Bank recorded an asset for the difference in nominal
terms between the deposit at the free market exchange rate at the moment of each
 payment compared to the book value of 1.40 pesos per dollar plus CER to that
date. This asset is being amortized in 60 monthly installments as from April
2003.

SFAS No. 5 Accounting
for Contingencies requires that contingencies that might result in gains
are not reflected in the accounts since to do so might be to recognize revenue
prior to  its realization. Had U.S. GAAP been applied, the Banks assets
would be decreased by 586,534, 739,289 and 811,557 at December 31, 2005, 2004
and 2003, respectively. On the other hand the income for the year ended December
31, 2005 and 2004  would be increased by 152,755 and 72,268, respectively, and
for the year ended December 31, 2003 would be decreased by 416,444.

At December 31, 2003 the
Bank recorded as an asset the difference generated by the CVS coefficient application
instead of the CER. As described in Note 15.3., on June 2004 the Bank wrote off
the  relevant asset and recorded an adjustment to earnings of prior year. This
adjustment has not had impact under U.S. GAAP because this asset was not recognized
under those policies.

II) Credilogros Compañía Financiera S.A.

At December 31, 2002 the subsidiary Credilogros Compañía
Financiera S.A. presented different notes to the BCRA and to the Ministry of
Economy requesting the compensation mechanism for financial institutions in consequence
of the negative patrimonial effects generated by the conversion into pesos at
different exchange rates of loans and private debts in foreign currency, as well
as the negative foreign currency net position after the conversion into pesos
as of December 31, 2001, calculated on the basis of certain interpretation which
were different from the existing regulations. In consequence, the Entity has
activated the amounts that would arise from the eventual compensation.

On 31
    December 2003 and because of several adverse instances on the claim referred
    to above, the Entity resolved to desist thereon and booked the claimed amount
    as a result of the fiscal year (loss).

Had U.S.
    GAAP been applied, the Banks income for the year ended December 31,
    2003 would be increased by 6,613.

F-63

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

17.7. Investment in other companies

At December 31, 2005, 2004 and 2003, the Bank accounted for the investment in the Buenos Aires Stock Exchange at the market value at that date. Under U.S. GAAP, such investments would have been
valued at cost or at a lesser amount where there is an-other-than-temporary impairment in value. Had U.S. GAAP been applied, the Banks assets would be decreased by 1,796 at December 31, 2005 and increased by 558 and 1,458 at December 31, 2004
and 2003, respectively.

In addition, there are a number of companies which are under 20% and they were valued by the equity method in accordance with Central Bank rules. Under US GAAP, such investments, which are
non-marketable securities, would have been valued at cost. Had US GAAP been applied, the Banks assets would be decreased by 16,970, 13,400 and 10,029 at December 31, 2005, 2004 and 2003, respectively.

On the other hand, the income for the years ended December 31, 2005, 2004 and 2003 would be decreased by 5,924, 4,271 and 3,473, respectively, due to the effect of the differences mentioned in
the preceding paragraphs.

17.8. Foreign currency translation

U.S. GAAP foreign currency translation requirements are covered by SFAS No. 52. A determination of the foreign entitys functional currency, which is the currency of the primary economic
environment in which it operates, must be made. Depending on the functional currency of the foreign entity, translations of Financial Statements are performed using a combination of current, average and historical exchange rates.

The functional currency of Banco Francés (Cayman) Ltd. is the US$. Under U.S. GAAP its Financial Statements should be translated into Pesos at the current rate for assets and
liabilities and at the average exchange rate for its results of operations.

The Bank, under Central
Bank rules, has translated the assets, liabilities and results amounts of Banco
Francés (Cayman) Ltd. at the applicable fiscal year-end exchange rate
(see Note 3.4)  . Had U.S. GAAP been applied, the Banks income for fiscal
year ended December 31, 2003 would be increased by 159,677. The comprehensive
income for that year would be decreased for such amounts.

In the fiscal year ended
December 31, 2004, this subsidiary was sold. In consequence, the comprehensive
income at December 31, 2003 was charged to income in the fiscal year ended December
31,  2004 by 143,371. Under U.S. GAAP, the effect of the sale was not material
to the Bank ́s Consolidated Income Statement.

17.9. Vacation expense

The cost of vacations earned by employees is generally recorded by the Bank when paid. U.S. GAAP requires that this expense be recorded on an accrual basis as the vacations are earned.

Had U.S.
    GAAP been applied, the Banks liabilities would be increased by 44,829,
    36,073 and 33,586 at December 31, 2005, 2004 and 2003, respectively. In addition,
    the income for the years ended December 31, 2005, 2004 and 2003 would be
decreased by 8,756, 2,487 and 1,512, respectively.

17.10.
      Items in process of collection

The Bank
    does not give accounting recognition to checks drawn against the Bank or
    other Banks or other items to be collected, until such time as the related
    item clears or is accepted. Such items are recorded by the Bank in Memorandum
    accounts. U.S. banks, however, account for such items through balance sheet
    clearing accounts at the time the items are presented.

Had U.S.
    GAAP been applied, the Banks assets and liabilities would be increased
    by approximately 768,653 and 740,826 at December 31, 2005 and 2004, respectively.

F-64

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

The same
    effect would be displayed in the Balance Sheet disclosure requirements in
    accordance with Regulation S-X (see Note 16.18. ).

17.11. Forward and unsettled spot transactions

The Bank enters into forward and unsettled spot contracts for trading purposes.

The Bank accounts for such forward and unsettled spot contracts on a basis different from that required under U.S. GAAP.

For such forward and unsettled spot transactions, the Bank recognizes both a receivable and a payable at the time of the agreement, which reflect the amount of cash, currency or securities to be
exchanged at the closing date. The receivable or payable representing the receipt or delivery of securities or currency is stated at the quoted market value of such securities or currency. In the United States, accounting for forward foreign
exchange contracts and futures contracts are governed by SFAS No. 133, Accounting for Derivated Instruments and Hedging Activities(see Note 17.22) . Under this standard, in general entities would not recognize a receivable or payable but
would recognize the differences arising from changes in the market price of securities or currency to be received or delivered if the transaction did not qualify as a hedge.

Had U.S. GAAP been applied, the Banks assets and liabilities would be decreased by approximately 84,523 and 53,347 at December 31, 2005 and 2004, respectively.

The same effect would be displayed in the Balance Sheet disclosure requirements in accordance with Regulation S-X (see Note 16.18. ).

17.12. Technical Valuation  Inflation adjustments

A technical revaluation (inflation adjustments) of the Banks properties was made in 1981 to eliminate relative price distortions generated by the hyper inflation then prevailing in
Argentina. This revaluation was recorded in the Adjustments to stockholders ́ equity caption. Under BCRA rules, when an asset which had been revalued is sold at a loss, the loss is recorded directly to Adjustments to
stockholders ́ equity to the extent of the original revaluation. Under U.S. GAAP, the technical valuation (inflation adjustments) is considered to be a permanent addition to equity and, accordingly, any loss on the sale of an asset which
was revalued would be reflected in net income. There has been no sale of revalued assets during the fiscal years ended December 31, 2005, 2004 and 2003. Consequently, the balance related to the previously mentioned revaluation included in the
Adjustments to Stockholders Equity caption has not been modified.

17.13.
Acceptances

Foreign
    trade acceptances are not recorded on the balance sheet by the Bank. In accordance
    with Regulation S-X, acceptances and related customer liabilities should
    be recorded on the balance sheet. The adjustment required to state the Bank ́s
    balance sheets in accordance with Regulation S-X would be to increase assets
    (due from customers on acceptances) and increase liabilities (bank acceptances
    outstanding) by 80,571 and 109,704 at December 31, 2005 and 2004, respectively.

The same
    effect would be displayed in the Balance Sheet disclosure requirements in
    accordance with Regulation S-X (see Note 16.18.).

F-65

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

17.14.
      Variableincome investments

Consolidar Group has variable-income investments. Under BCRA rules, these investments were valued at their face value plus the respective agreed-upon yield accrued through the fiscal year-end
and, where applicable, translated at the exchange rate effective as of that date.

US GAAP require that fair value for such investments be determined by means of mathematical models such as Black-Scholes.

In the opinion of Banks management, the effect of such adjustment is not material at December 31, 2005, 2004 and 2003.

17.15. Pension and retirement obligations activities

As indicted in Note 16.20. , at December 31, 2005 and 2004, the subsidiary Consolidar AFJP S.A. manages a retirement and pension plan for an amount of 12.8 and 10.5 billion pesos,
respectively.

During  the period ended December 31, 2005, the Bank performed a review and recalculation for its pension and retirement obligations activities, as well as the amounts considered to recover
for any future compensation, consequently, the Bank reconsidered the amounts previously recorded under US GAAP for such obligations.

As a result of such review, the stockholders equity and consolidated net income in accordance with accounting principles generally accepted in the United States of America have been
restated for the year ended December 31, 2004 and 2003. Therefore, the stockholders equity for the periods ended December 31, 2004 and 2003 has been reduced in 172,930 and 124,670, respectively, and net income has been reduced in 48,260 and
124,670, respectively.

Additionally, for the period ended December 31, 2005 if U.S. GAAP had been applied, the stockholders equity would be decreased by 209,039 and net income would have been reduced by
36,109.

17.16. Fair Value of Financial Instruments

In December 1991, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 107, Disclosures about Fair Value of Financial Instruments
 (SFAS No. 107). This pronouncement became effective for fiscal years ended after December 15, 1992 and requires disclosure of fair value information about financial instruments, whether or not recognized on the balance sheet, for which it is
practicable to estimate fair value.

SFAS No. 107 defines a financial instrument as cash, evidence of an ownership in an entity, or a contract that both conveys or imposes on an entity the contractual right or obligation to either
receive or deliver cash or another financial

instrument. Fair value
    is defined as the amount at which a financial instrument could be exchanged
    in a current transaction between willing parties, other than in a forced
    sale or liquidation, and is best evidenced by a quoted market price, if one
    exists.

In cases
    where quoted market prices are not available, fair value estimation are based
    on the quoted market price of a financial instrument with similar characteristics,
    the present value of expected future cash flow, or other valuation techniques,
    all of which are significantly affected by the assumptions used. Although
    management uses its best judgment in estimating the fair value of these financial
    instruments, there are inherent weaknesses in any estimation technique. As
    a result, the fair value may not be indicative of the net realizable or liquidation
    value. Furthermore, minor changes in the assumptions used could have a significant
    impact on the resulting estimated fair values.

In addition,
    disclosure of fair values is not required for non-financial assets and liabilities
    such as property and equipment, sundry assets and intangible assets and anticipated
    future business. As a result, the following fair values do not reflect the
    underlying value of the Bank.

F-66

---



|BBVA BANCO FRANCES S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)     
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

A significant portion of the Banks assets and liabilities are in short-term financial instruments, with a remaining maturity of under one year, and/or with variable rates. These short-term and variable-rate financial
  instruments are considered to have a fair value equivalent to their carrying value at the balance sheet date.

For financial instruments with remaining maturity over one year and with fixed-rates, and therefore not included above, the following methods and assumptions were used to estimate their fair value:

- ListedInvestment accounts: fair value for these securities is based upon quoted market prices (if available) at December 31, 2005 and 2004.
- Unlisted government securities: fair value for these securities was taken to be equal to the present value of future cash flows discounted at the average year-end market interest rates for
securities of similar interest rate, credit risk and maturity.

Fair value is estimated by discounting future cash flows using the current rates at which loans would be made to borrowers with similar credit ratings and for the same remaining maturities, considering the contractual terms
in effect as of December 31, 2005 and 2004.

- Forward purchases of Government securities under repurchase agreements with holdings in investment accounts: fair value for these receivables were based upon quoted market prices (if
available) at December 31, 2005 and 2004 of the securities to be received after the fiscal year-end.
- Unlisted corporate bonds: fair value for these securities was taken to be equal to the present value of future cash flows discounted at the average year-end market interest rates for
securities of similar interest rate, credit risk and maturity.

As a significant portion of the Banks deposits as of December 31, 2005 and 2004 (almost 99% considering the contractual terms in effect as of such date) have a remaining maturity of under one year, they were
considered to have a fair value equivalent to their carrying value at the balance sheet date.

Advances requested
from the BCRA

As from December 31, 2004 fair value is estimated
    by discounting future cash flows of the Federal Government Guaranteed LoansDecree
    No. 1387/01, given in guarantee to the BCRA.

As of December 31, 2005 and 2004, non-subordinated
    and subordinated corporate bonds have a remaining maturity of under one year
    and/or with variable rates, they were considered to have a fair value equivalent
    to their carrying value at the balance sheet date.

Commitments to extend credit, standby letter of
    credit, guarantees granted and foreign trade acceptances (see Note 16.19.).

F-67

---



|BBVA BANCO FRANCES S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)     
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

It is estimated that the differential, if any, between the fee charged, which is equivalent to the carrying amount, by the Bank for these transactions and the average December 31, 2005 and 2004 market fee would not give
  rise to a material variance from the carrying amount.

The following is a summary of carrying amounts and estimated fair values of financial instruments at December 31, 2005 and 2004:

|                                              |  | December 31,    | 
|--------------------------------------------- |  | --------------- | 
|                                              |  |                 | 
|                                              |  | 2005            | 
|                                              |  |                 | 
|                                              |  | Carrying
Amount | 
|                                              |  |                 | 
|Financial assets                              |  |                 | 
|Cash and due from banks                       |  | 1,611,506       | 
|Government and private securities(1)          |  | 3,504,311       | 
|Loans(2)                                      |  | 8,481,476       | 
|Other receivables from financial transactions |  | 831,450         | 
|Assets subject to financial leasing           |  | 130,165         | 
|Investments in other companies                |  | 50,297          | 
|                                              |  |                 | 
|                                              |  | 14,609,205      | 
|                                              |  |                 | 
|Financial liabilities                         |  |                 | 
|Deposits                                      |  | 10,613,086      | 
|Other liabilities from financial transactions |  | 1,244,795       | 
|Subordinated Corporate Bonds                  |  | -               | 
|                                              |  |                 | 
|                                              |  | 11,857,881      | 
|                                              |  |                 | 

|   
|---
|(1)
|(2)
|(3)

17.17. Goodwill

- On May 4, 1998, the General and Special Stockholders
Meeting approved (to be effective on April 30, 1998) the reversal
of the shares issuance premium in the amount of 428,661 related  to the capital
increase with nominal value 25,000 thousand
paid in on December 19, 1997, and bearing up to 428,661 of the Business Goodwill
from the acquisition of 71.754% of the
capital stock of Banco de Crédito Argentino S.A. The mentioned reversal
is not allowed in accordance with US. GAAP.
Under U.S. GAAP, the Bank should recognize the issuance premium under Issuance premiums and capitalize the related amount
under Intangible Assets.

> The effect of adjustments required to state such
>       amounts in accordance with US GAAP would be increased assets by 254,882
>       at December 31, 2005, 2004 and 2003.

- On May 13, 1999, BBVA (majority owner of BF)
      acquired CB and Atuel Fideicomisos S.A. and on September, 13,
      1999, BBVA sold its interests in both companies to BF. For the difference
      between the definitive price of the transaction
      and the incorporation value of both companies, the Bank recognized a goodwill
      and amortized it in proportion to the
      months of estimated useful life (120 month-period). Under US GAAP, the
      Bank would be required to account for
      the acquisition of the mentioned companies at BBVAs book balance.
      Had US GAAP been applied, the Banks
      assets would be increased by 29,236, 22,607 and 15,977 thousand at December
      31, 2005, 2004 and 2003, respectively.
      Additionally, the income would be increased by 6,629, 6,630 and 6,628 for
      the years ended December 31, 2005, 2004
      and 2003.
- SFAS No. 142 requires, effective January 1,
      2002, that goodwill are no longer amortized, but is subject to impairment
      test annually or more frequently if events or changes in circumstances
      indicate that the asset may be impaired.
      In 2001 the Bank had recognized an impairment loss and wrote off the entire
      balance of the US GAAP goodwill. Had US
      GAAP been applied, the Banks assets would be decreased by 309,577
      as of December 31,

F-68

---



|BBVA BANCO FRANCES S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)     
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

> 2005, 2004 and 2003 respectively. On the other hand, the income for the year ended December 31, 2003 would be increased by 3,297.

17.18. Transfers and servicing of financial Assets and Extinguishment of Liabilities

In June 1996, the FASB issued Statement No. 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, which is effective for all transfers and servicing of financial assets and
extinguishments of liabilities occurring after December 31, 1996, as amended by SFAS No. 127 Deferral of the Effective Date of Certain Provisions of SFAS No. 125. SFAS No. 125 as subsequently amended by SFAS No. 140, establishes a
criteria for determining whether a transfer of financial assets in exchange for cash or other consideration should be accounted for as a sale or as a pledge of collateral in a secured borrowing. This statement also establishes accounting
requirements for pledged collateral.

On April 26, 2004, the Bank swapped Secured Bonds due in 2018 to conclude the Swap I of deposits for Government Bonds. This swap generated, in accordance with US GAAP, gains on extinguishments of deposits liabilities for
the fiscal year ended December 31, 2003 of 104,337, thus generating an increasing of the Banks assets by that amount as of December 31, 2003 and a decreasing in the income for the fiscal year ended December 31, 2004.

In August 2004, the Bank swapped Secured Bonds due in 2018 in the framework of Swap II of Deposits for Government Bonds. This swap generated, in accordance with US GAAP, gains on extinguishments of deposit liabilities in
the income for the year ended December, 31 2004 for 107,955.

17.19. Earnings Per Share

In February 1997, the FASB issued Statement No. 128, Earnings Per Share, which is effective for interim financial information and annual Financial Statements with periods ending after December 15, 1997. SFAS No.
128 supersedes APB 15 and its interpretations. It applies to companies with publicly traded common stock or potential common stock and establishes a new methodology for reporting earnings per share (EPS). It requires that entities with simple
capital structures present basic per share amounts for income for continuing operations and net income on the face of the income statement. All other entities subject to SFAS No. 128 must present basic and diluted per-share amounts for income from
continuing operations and net income on the face of the income statement, regardless of the magnitude of their difference.

The adoption of this accounting disclosure is shown in Note 17.25.

17.20. Reporting on Comprenhensive Income (loss)

SFAS No. 130 Reporting on Comprenhensive
    Income requires entities to report a measure of all changes in equity
    of an enterprise that result from transactions and other economic events
    of the period other than transactions with owners (comprehensive income).
    Comprehensive income (loss) is the total of net income (loss) and all other
    non-owner changes in equity. This statement, which is effective for fiscal
    years beginning after December 15, 1997, requires that comprehensive income
    (loss) be reported in a financial statement that is displayed with the same
    prominence as other Financial Statements with an aggregate amount of comprehensive
    income (loss) reported in that same financial statement. The adoption of
    this accounting disclosure is shown in Notes 17.26. and 17.27.

17.21. Employers disclosures about pensions
      and other postretirement benefits

SFAS No. 132 Employers Disclosures about
    Pensions and Other Postretirement Benefits. This Statement, which is
    effective for fiscal years beginning after December 15, 1997, revises employers
    disclosures about pension and other postretirement benefit plans. It does
    not change the measurement or recognition of those plans. It standardizes
    the disclosure requirements for pensions and other postretirement benefits
    to the extent practicable, requires additional information on changes in
    the benefit obligations and fair values of plan assets that will facilitate
    financial analysis, and eliminates certain disclosures that are no longer
    as useful as they were when SFAS No. 87 Employers Accounting for Pensions,
    No. 88 Employers Accounting for settlements and Curtalilments of Defined
    Benefit

F-69

---



|BBVA BANCO FRANCES S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)     
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

Pension Plans and for Termination
    Benefits and No. 106 Employers  Accounting for Postretirement
    Benefits Other Than Pensions, were issued. The Statement suggests combined
    formats for presentation of  pension and other postretirement benefit disclosures.
    The Banco Francés
  Group gives to certain executives, with role at corporate level, the possibility
  to access into defined contribution pension plan.This adjustment has not had impact
  under U.S. GAAP. (see Note 16.16.).

17.22. Accounting for Derivative Instruments and Hedging Activities

In June 1998, the U.S. Financial Accounting Standards Board issued SFAS No. 133 Accounting for Derivative Instruments and Hedging Activities. This statement as subsequently amended by SFAS No. 137, 138 and 149
is required to be adopted for reporting under U.S. generally accepted accounting principles for all fiscal years beginning after June 15, 2000.

SFAS No. 133 establishes accounting and reporting standards for derivative instruments, including certain derivative instruments embedded in other contracts (collectively referred to as derivatives) and for hedging
activities. It requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position and measure those instruments at fair value. If certain conditions are met, a derivative may be specifically
designated as (a) a hedge of the exposure to changes in the fair value of a recognized asset or liability or an unrecognized firm commitment, (b) a hedge of the exposure to variable cash flows of a forecasted transaction, or (c) a hedge of the
foreign currency exposure of a net investment in a foreign operation, an unrecognized firm commitment, an available for sale security, or a foreign currency denominated forecasted transaction.

Among other provisions, SFAS No. 133 requires that for a transaction to qualify for special hedge accounting treatment the transaction must meet specific test of effectiveness and all hedge ineffectiveness is required to be
reported currently in computation of net income. SFAS No. 133 further requires the identification of assets, liabilities or anticipated transactions being hedged and periodic revaluation of such hedged positions to reflect the changes in market
value of risk being hedged. SFAS No. 133 further expands the definition of derivatives to include certain contacts or provisions commonly embedded in contracts or financial instruments and requires that such derivatives be reported at fair
value.

In Note 16.19., it is explained in detail the derivate
instruments used by the Bank and the valuation methods of these instruments were
explained in Note 3.5.8. Management believes that the effect of the application
of  this accounting requirement does not have a material impact on the Bank consolidated
financial condition or results of operations.

17.23. Foreign exchange difference

As a result of the sale of Banco Francés
    (Cayman) Ltd. during the year ended December 31, 2004, as described in Note
    1.5., 200,000 of the negative result of the transaction was absorbed and
    charged to the account Unrealized valuation difference under
    stockholders equity.

17.24. Technical Commitments

Consolidar Cía. de Seguros de Retiro S.A.
    and Consolidar Cía. de Seguros de Vida S.A. maintain reserves accounted
    in Other Liabilities from Subsidiaries valued in accordance with de accounting
    standards established by the Superintendence of Pension Fund Administrators
    and the National Superintendence of Insurance (see Notes 3.5.21. and 6.).

The effects of adjustments required to state such
    amounts in accordance with U.S. GAAP would be decreased liabilities by 10,114
    at December 31, 2005 and would be increased liabilities by 36,783 and 41,357
    at December 31, 2004 and 2003, respectively. On the other hand, income for
    the years ended December 31, 2005 and 2004 would be increased by 46,897 and
    4,574, respectively and would be decreased by 41,357 at December 31, 2003.

F-70

---



|BBVA BANCO FRANCES S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)     
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

17.25. Set forth below are the significant adjustments
      to consolidated net income and consolidated stockholders equity which
      would be required if U.S. GAAP had been applied instead of Central Bank
      rules:

|                                                                           |  |        |  |  | Consolidated Net
          Income
      Years ended December 31, |   |  |          
|-------------------------------------------------------------------------- |  | ------ |  |  | ---------------------------------------------------------------- | - |  | ---------
|                                                                           |  |        |  |  |                                                                  |   |  |          
|                                                                           |  | Ref.   |  |  | 2005                                                             |   |  | 2004     
|                                                                           |  |        |  |  |                                                                  |   |  |          
|Net income as stated                                                       |  |        |  |  | 117,204                                                          |   |  | (54,046  
|Deferred taxes                                                             |  | 17.1   |  |  | (347,458                                                         | ) |  | 4,526    
|Allowances on deferred tax assets                                          |  | 17.1   |  |  | 366,801                                                          |   |  | 509,158  
|Tax on minimum presumed income                                             |  | 17.1   |  |  | (1,003                                                           | ) |  | 62,642   
|Loan origination and issuance credit cards fees                           |  | 17.2   |  |  | (2,270                                                           | ) |  | (9,698   
|Intangible assets                                                          |  | 17.3   |  |  | (472                                                             | ) |  | 2,443    
|Non Financial Private Sector and residents abroad loans                    |  | 17.4.2 |  |  | 11,968                                                           |   |  | 48,431   
|Federal Government secured loans                                           |  | 17.4.3 |  |  | 912,300                                                          |   |  | 183,692  
|Provincial Government loans                                                |  | 17.4.4 |  |  | 26,298                                                           |   |  | 153,298  
|Government securities                                                      |  | 17.5   |  |  | 395,752                                                          |   |  | 531,630  
|Gain contingencies                                                         |  | 17.6   |  |  | 152,755                                                          |   |  | 72,268   
|Investment in other companies                                              |  | 17.7   |  |  | (5,924                                                           | ) |  | (4,271   
|Foreign currency translation to reporting                                  |  |        |  |  |                                                                  |   |  |          
|currency (Argentine Peso)                                                  |  | 17.8   |  |  |                                                                 |   |  | 143,371  
|Vacation expense                                                           |  | 17.9   |  |  | (8,756                                                           | ) |  | (2,487   
|Pension and retirement obligations activities                             |  | 17.15  |  |  | (36,109                                                          | ) |  | (48,260  
|Goodwill Amortization                                                      |  | 17.17  |  |  | 6,629                                                            |   |  | 6,630    
|Impairment on goodwill                                                     |  | 17.17  |  |  |                                                                 |   |  |         
|Gain on extinguishment of liabilities                                      |  | 17.18  |  |  |                                                                 |   |  | 3,618    
|Unrealized valuation difference                                            |  | 17.23  |  |  |                                                                 |   |  | (200,000 
|Technical Commitments                                                      |  | 17.24  |  |  | 46,897                                                           |   |  | 4,574    
|                                                                           |  |        |  |  |                                                                  |   |  |          
|Approximated net income / (loss) in accordance with U.S. GAAP              |  |        |  |  | 1,634,612                                                        |   |  | 1,407,519
|                                                                           |  |        |  |  |                                                                  |   |  |          
|Approximated net income / (loss) per share in accordance with U.S. GAAP(1) |  |        |  |  | 3.47                                                             |   |  | 3.65     
|Weighted average number of shares Outstanding (in thousands)               |  |        |  |  | 471,361                                                          |   |  | 385,334  
|                                                                           |  |        |  |  |                                                                  |   |  |          

|   
|---
|(1)
|(2)
|(3)
|   

|                                                                    |  |        |  |  | Consolidated Stockholders Equity
      Years ended December 31, |   |     
|------------------------------------------------------------------- |  | ------ |  |  | ---------------------------------------------------------------- | - | ----
|                                                                    |  |        |  |  |                                                                  |   |     
|                                                                    |  | Ref.   |  |  | 2005                                                             |   | 2004
|                                                                    |  |        |  |  |                                                                  |   |     
|Stockholders equity
        as stated                              |  |        |  |  | 1,801,547                                                        |   |     
|Deferred
        taxes                                              |  | 17.1   |  |  | 1,342,468                                                        |   |     
|Allowances
        on deferred tax assets                           |  | 17.1   |  |  | (805,873                                                         | ) |     
|Tax
        on minimum presumed income                              |  | 17.1   |  |  |                                                                 |   |     
|Loan
        origination and issuance credit cards fees            |  | 17.2   |  |  | (23,051                                                          | ) |     
|Intangible
        assets                                           |  | 17.3   |  |  | (16,890                                                          | ) |     
|Non
        Financial Private Sector and residents abroad loans     |  | 17.4.2 |  |  | 49,569                                                           |   |     
|Federal
        Government secured loans                            |  | 17.4.3 |  |  | (909,500                                                         | ) |     
|Provincial
        Government loans                                 |  | 17.4.4 |  |  | (149,012                                                         | ) |     
|Government
        securities                                       |  | 17.5   |  |  | (168,477                                                         | ) |     
|Gain
        contingencies                                          |  | 17.6   |  |  | (586,534                                                         | ) |     
|Investment
        in other companies                               |  | 17.7   |  |  | (18,766                                                          | ) |     
|Vacation
        expense                                            |  | 17.9   |  |  | (44,829                                                          | ) |     
|Pension
        and retirement obligations activities              |  | 17.15  |  |  | (209,039                                                         | ) |     
|Goodwill                                                            |  | 17.17  |  |  | (25,459                                                          | ) |     
|Gain
        on extinguishment of liabilities                       |  | 17.18  |  |  |                                                                 |   |     
|Technical
        Commitments                                       |  | 17.24  |  |  | 10,114                                                           |   |     
|                                                                    |  |        |  |  |                                                                  |   |     
|Approximated consolidated
        Stockholders (deficit) equity in |  |        |  |  |                                                                  |   |     
|accordance
        with U.S. GAAP                                   |  |        |  |  | 246,268                                                          |   |     
|                                                                    |  |        |  |  |                                                                  |   |     

|   
|---
|(1)
|(2)



F-71

---



|BBVA BANCO FRANCES S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)     
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

|
|

Had US GAAP been
applied, the amounts of the assets and liabilities would be as follows:

|            |  | For the fiscal
          years ended December 31, | 
|----------- |  | ------------------------------------------------- | 
|            |  |                                                   | 
|            |  | 2005                                              | 
|            |  |                                                   | 
|Assets      |  | 15,421,682                                        | 
|Liabilities |  | 15,175,414                                        | 

|   
|---
|(1)
|(2)
|   

| |  |  |  |  |  |  |  | 
| |  |  |  |  |  |  |  | 
| |  |  |  |  |  |  |  | 

|                                                                     |  | Consolidated Net
          Income 
      Year ended December 31, |   | 
|-------------------------------------------------------------------- |  | ---------------------------------------------------------------- | - | 
|                                                                     |  |                                                                  |   | 
|                                                                     |  | 2005                                                             |   | 
|                                                                     |  |                                                                  |   | 
|Financial income                                                     |  | 2,113,219                                                        |   | 
|Financial expenses                                                   |  | (608,949                                                         | ) | 
|Allowances for doubtful
        loans                                |  | (102,659                                                         | ) | 
|Service charge income                                                |  | 721,510                                                          |   | 
|Service charge expenses                                              |  | (77,764                                                          | ) | 
|Operating expenses                                                   |  | (781,067                                                         | ) | 
|Net Monetary loss                                                    |  | -                                                                |   | 
|Other income                                                         |  | 1,187,397                                                        |   | 
|Other expenses                                                       |  | (670,751                                                         | ) | 
|                                                                     |  |                                                                  |   | 
|Income before income
        tax                                     |  | 1,780,936                                                        |   | 
|Income tax                                                           |  | (124,170                                                         | ) | 
|                                                                     |  |                                                                  |   | 
|Net income                                                           |  | 1,656,766                                                        |   | 
|                                                                     |  |                                                                  |   | 
|Gain / (loss) on minority
        interest in subsidiaries           |  | (22,154                                                          | ) | 
|                                                                     |  |                                                                  |   | 
|Total consolidated income                                            |  | 1,634,612                                                        |   | 
|                                                                     |  |                                                                  |   | 
|                                                                     |  |                                                                  |   | 
|Comprehensive income                                                 |  |                                                                  |   | 
|Net income / (loss) in
        accordance with US GAAP               |  | 1,634,612                                                        |   | 
|                                                                     |  |                                                                  |   | 
|Other comprehensive income
        / (loss), net of tax(1) (3)       |  | (62,543                                                          | ) | 
|                                                                     |  |                                                                  |   | 
|Comprehensive net income
        / (loss) in accordance with US GAAP |  | 1,572,069                                                        |   | 
|                                                                     |  |                                                                  |   | 

|   
|---
|(1)
|(2)
|(3)



F-72

---



|BBVA BANCO FRANCES S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)     
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

17.27. Set forth below are the related tax effects allocated to each component of other comprehensive income (loss) and the accumulated other comprehensive income (loss) balances, as of December 31, 2005, 2004 and
  2003:

Tax effects on Other Comprehensive Income/(Loss)

|                                                                |  | Year ended
        December
                     31, 2005 |   |  | Year ended
        December
                     31, 2004 |  |  | Year ended
December 31, 2003 |  
|--------------------------------------------------------------- |  | --------------------------------------------------------- | - |  | --------------------------------------------------------- |  |  | ---------------------------- | -
|                                                                |  |                                                           |   |  |                                                           |  |  |                              |  
|                                                                |  | Before
Tax Amount                                         |   |  | Tax
(Expense)
or Benefit                                  |  |  | Net of Tax
Amount            |  
|                                                                |  |                                                           |   |  |                                                           |  |  |                              |  
|Foreign currency translation
Adjustments                        |  |                                                          |   |  |                                                          |  |  |                             |  
|Unrealized gains/(losses)
                  on Securities:      |  | (96,220                                                   | ) |  | 33,677                                                    |  |  | (62,543                      | )
|                                                                |  |                                                           |   |  |                                                           |  |  |                              |  
|Other comprehensive income
                       gain / (loss) |  | (96,220                                                   | ) |  | 33,677                                                    |  |  | (62,543                      | )
|                                                                |  |                                                           |   |  |                                                           |  |  |                              |  

Accumulated other comprehensive income / (loss) balances

|                           |  | Year ended 
               December
          31, 2005 |  |  | Year ended 
               December
          31, 2004                                     |   |  | Year ended 
               December
          31, 2003  |  
|-------------------------- |  | ------------------------------------------------------ |  |  | ------------------------------------------------------------------------------------------ | - |  | ------------------------------------------------------- | -
|                           |  |                                                        |  |  |                                                                                            |   |  |                                                         |  
|                           |  | Foreign
          Currency
          Items             |  |  | Unrealized
               Gains/
               (losses)
          on
          securities |   |  | Accumulated
Other
Comprehensive
          Income (loss) |  
|                           |  |                                                        |  |  |                                                                                            |   |  |                                                         |  
|Beginning balance          |  |                                                       |  |  | 55,917                                                                                     |   |  | 55,917                                                  |  
|Current-fiscal year change |  |                                                       |  |  | (62,543                                                                                    | ) |  | (62,543                                                 | )
|                           |  |                                                        |  |  |                                                                                            |   |  |                                                         |  
|Ending balance             |  |                                                       |  |  | (6,626                                                                                     | ) |  | (6,626                                                  | )
|                           |  |                                                        |  |  |                                                                                            |   |  |                                                         |  

F-73

---



|BBVA BANCO FRANCES S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)     
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               
|                                                           

For purposes of the accompanying statement of cash flows the Bank considers cash and due from banks to be cash and cash equivalents.

The following supplemental cash flow information separately presents the effect of inflation from operating, investing and financing activities and the effect of exchange rate changes on cash.

|                                                               |  | December 31,
2005 |   |  | December 31,
2004 |  |  | December 31,
2003 |  
|-------------------------------------------------------------- |  | ----------------- | - |  | ----------------- |  |  | ----------------- | -
|                                                               |  |                   |   |  |                   |  |  |                   |  
|Cash and cash equivalents at the end of the fiscal year        |  | 1,611,506         |   |  | 1,666,617         |  |  | 1,639,154         |  
|Cash and cash equivalents at beginning of the fiscal year      |  | 1,666,617         |   |  | 1,639,154         |  |  | 1,050,636         |  
|                                                               |  |                   |   |  |                   |  |  |                   |  
|Subtotal                                                       |  | (55,111           | ) |  | 27,463            |  |  | 588,518           |  
|Reversal of inflation restatement of cash and cash equivalents |  | -                 |   |  | -                 |  |  | 7,726             |  
|                                                               |  |                   |   |  |                   |  |  |                   |  
|(Decrease) / increase in cash and cash equivalents             |  | (55,111           | ) |  | 27,463            |  |  | 596,244           |  
|                                                               |  |                   |   |  |                   |  |  |                   |  
|CAUSES OF CHANGES IN CASH AND CASH EQUIVALENTS                 |  |                   |   |  |                   |  |  |                   |  
|Cash provide by / (used in) operating activities               |  | 467,876           |   |  | 723,645           |  |  | (942,695          | )
|Cash used in / (provided by) investing activities              |  | 534,780           |   |  | 824,038           |  |  | (412,928          | )
|Cash provided by financing activities                          |  | 23,619            |   |  | 136,218           |  |  | 1,091,709         |  
|Effect of exchange rate changes on cash                        |  | 11,826            |   |  | 8,362             |  |  | (34,302           | )
|                                                               |  |                   |   |  |                   |  |  |                   |  
|(Decrease) / increase in cash and cash equivalents             |  | (55,111           | ) |  | 27,463            |  |  | 596,244           |  
|                                                               |  |                   |   |  |                   |  |  |                   |  

Set forth below is the reconciliation of net income to net cash flow from operating activities, as required by SFAS No. 95 Statement of Cash Flows:

|                                                                           |  | Year ended December 31, |   |  | 
|-------------------------------------------------------------------------- |  | ----------------------- | - |  | 
|                                                                           |  |                         |   |  | 
|                                                                           |  | 2005                    |   |  | 
|                                                                           |  |                         |   |  | 
|Net gain / (loss) for the fiscal year                                      |  | 117,204                 |   |  | 
|Adjustments to reconcile net income to net cash from
operating activities: |  |                         |   |  | 
|Amortization and depreciation                                              |  | 312,298                 |   |  | 
|Provision for loan losses and special reserves, net of reversals           |  | 513,160                 |   |  | 
|Net income from government and private securities                          |  | (209,438                | ) |  | 
|Foreign exchange differences                                               |  | (72,942                 | ) |  | 
|Minority interests in subsidiaries                                         |  | 17,151                  |   |  | 
|Deferred taxes                                                             |  | 50,917                  |   |  | 
|Equity (loss) of unconsolidated subsidiaries                               |  | (2,870                  | ) |  | 
|Monetary loss generated on cash and due from banks                         |  | -                       |   |  | 
|Net (increase) / decrease in interest receivable and payable and other     |  |                         |   |  | 
|accrued income and expenses                                                |  | (257,604                | ) |  | 
|                                                                           |  |                         |   |  | 
|Net cash provided by / (used in) operating activities                      |  | 467,876                 |   |  | 
|                                                                           |  |                         |   |  | 

|   
|---
|(1)
|   

F-74

---



|BBVA BANCO FRANCES S.A. AND SUBSIDIARIES                   
|-----------------------------------------------------------
|NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)     
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

17.29. New accounting pronouncements (U.S. GAAP)

> a) Accounting Changes and Error Corrections
>      In May, 2005, the FASB issued Statement No. 154 Accounting
>                     Changes and Error Corrections (a replacement of APB Opinion No.
>                     20 and FASB Statement No. 3).
>      This statement applies to all voluntary changes
>                     in accounting principle. It also applies to changes required by an
>                     accounting pronouncement in the unusual instance that the pronouncement
>                     does not include specific transition provisions. Opinion No. 20 previously
>                     required that most voluntary changes in accounting principle be recognized
>                     by including in net income of the period of the change the cumulative
>                     effect of changing to the new accounting principle.
>      This statement requires retrospective application
>                     to prior periods Financial Statements of changes in accounting principle,
>                     unless it is impracticable to determine either the period-specific
>                     effects or the cumulative effect of the change. This statement is the
>                     result of a broader effort by the FASB to improve the comparability
>                     of cross-border financial reporting by working with the IASB.
>      b) Accounting for Certain Hybrid Financial Instruments
>      In February, 2006, the FASB issued Statement No.
>                     155 Accounting for Certain Hybrid Financial Instruments (amends
>                     FASB Statements No. 133, Accounting for Derivative Instruments
>                     and Hedging Activities, and No. 140, Accounting for Transfers
>                     and Servicing of Financial Assets and Extinguishments of Liabilities).
>      This Statement resolves issues addressed in Statement
>                     133 Implementation Issue No. D1, Application of Statement 133
>                     to Beneficial Interests in Securitized Financial Assets.
>      This Statement:
>      Permits fair value remeasurement for any
>                          hybrid financial instrument that contains an embedded derivative
>                          that otherwise would require
>                          bifurcation.
>           Clarifies which interest-only strips and
>                          principal-only strips are not subject to the requirements of Statement
>                          No. 133.
>           Establishes a requirement to evaluate interests
>                          in securitized financial assets to identify interests that are freestanding
>                          derivatives or that are hybrid financial instruments that contain
>                          an embedded derivative requiring bifurcation.
>           Clarifies that concentrations of credit risk
>                          in the form of subordination are not embedded derivatives.
>           Amends Statement No. 140 to eliminate the
>                          prohibition on a qualifying special-purpose entity from holding
>                          a derivative financial instrument
>                          that pertains to a beneficial interest other than another derivative
>                          financial instrument.The Company does not expect that the adoption of
>                the above mentioned new accounting pronouncement will have a material
>                impact on the Consolidated Financial Statements.

F-75

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

c) Accounting for Servicing of Financial Assets

In March, 2006, the FASB issued Statement No. 156 Accounting for Servicing of Financial Assets (amends FASB Statement No. 140, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities), with respect to the accounting for separately recognized servicing assets and servicing liabilities.

This Statement:

|• | Requires an entity to recognize a servicing asset or servicing liability each time it undertakes an obligation to
 service a financial asset by entering into a servicing contract in any of the following situations:                                                                                                                                                                                                                                                                                                             
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| 
|  | -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| 
|  | -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| 
|  | -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| 
|• | Requires all separately recognized servicing assets and servicing liabilities to be initially measured at fair value, if
 practicable.                                                                                                                                                                                                                                                                                                                                                                                             
| 
|• | Permits an entity to choose either of the following subsequent measurement methods for each class of separately
 recognized servicing assets and servicing liabilities:                                                                                                                                                                                                                                                                                                                                                            
| 
|  | -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| 
|  | -                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|• | At its initial adoption, permits a one-time reclassification of available-for-sale securities to trading securities by
 entities with recognized servicing rights, without calling into question the treatment of other available-for-sale
 securities under Statement 115, provided that the available-for-sale securities are identified in some manner as
 offsetting the entitys exposure to changes in fair value of servicing assets or servicing liabilities that a servicer
 elects to subsequently measure at fair value.
| 
|• | Requires separate presentation of servicing assets and servicing liabilities subsequently measured at fair value in
 the statement of financial position and additional disclosures for all separately recognized servicing assets and
 servicing liabilities.                                                                                                                                                                                                                                                                     

The Company does not expect that the adoption of the above mentioned new accounting pronouncement will have a material impact on the Consolidated Financial Statements.

F-76

---



BBVA BANCO FRANCES S.A. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued) 
For the fiscal years ended December 31, 2005, 2004 and 2003 
Stated in thousands of Pesos

NOTE 18SUBSEQUENT EVENTS

|a) | On March 10, 2006 the Board of Directors resolved to propose to the shareholders the distribution of dividends in cash for a total amount of 27,000 to be distributed in proportion to the nominal
holding of each shareholder equivalent to $0.05728 per share.                                     
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|  
|   | On April 27, 2006 at the Banks General Annual and Special Shareholders Meeting, it was announced that such distribution is subject to the following two conditions:                                                                                                                                
|  
|   | •                                                                                                                                                                                                                                                                                                    
|  
|   | •                                                                                                                                                                                                                                                                                                    
|  
|   | On April 27, 2006 the Argentine Central Bank issued an authorization to this Bank for the payment of dividends in cash.                                                                                                                                                                              
|  
|   | On May 5, 2006, the Meeting of Bondholders of the Corporate Bonds Program Series 15 issued on November 26, 2003, held on second call, resolved to grant this Bank exemption from the prohibition to
distribute dividends in cash, which had been included in the terms and conditions of such Series.
|  
|   | On June 2, 2006, the payment of dividends in cash was effected.                                                                                                                                                                                                                                      
|  
|b) | As of May 31, 2006 the restructuration process of the Provincial Development Trust Fund has successfully ended and the Bank swapped this debt receiving Secured Bonds due 2020.                                                                                                                      

F-77

---



|Exhibit I                                                  
|-----------------------------------------------------------
|BBVA BANCO FRANCÉS S.A. AND SUBSIDIARIES                   
|LEGAL ACTIONS  CONSTITUTIONAL PROTECTION ACTIONS          
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

The measures adopted by the Federal Executive with respect to the political, economic, financial and foreign exchange emergency triggered a number of legal actions to be filed by individuals and
companies, in the form of constitutional protection actions (judicial injunctions resulting in the immediate release of frozen deposits), against the Federal Government, the BCRA and Financial Institutions as the petitioners consider that the Law on
Public Emergency and its supplementary provisions are unconstitutional. Based, mainly in the Kiper against Federal Government and Others case, dictated by the Supreme Court, the courts massively started to dictate through constitutional
protection actions, the partial reimbursement of bank deposits in US dollars or Argentine pesos at the floating exchange rate.

On March 11, 2002, the Argentine Association of Government-owned and Private Banks and the Argentine Bank Association filed a per saltum appeal with the Argentine Supreme Court under
section 195 bis of the Argentine Code of Civil and Commercial Procedure (according to the modification introduced by Law No. 25,561). The appeal was filed for the benefit of government-owned and private banks that are members of such associations
and was based on the Argentine institutional and systematic crisis and on the need to comply with effective regulations to achieve an ordered and gradual solution for the restrictions affecting the financial system and guaranteeing a plurality of
interest.

The Supreme Court of Justice (CSJN) has handed down the following decisions in relation to the claims filed as a result of the emergency situation above described:

- On March
            5,2003, on the action for the protection of constitutional rights
            brought against the Federal  Government by the Province of San Luis,
            the Banco de la Nación Argentina and the BCRA declaring to
            be unconstitutional, ordering the return of the amounts deposited
            in either US dollars or the equivalent in pesos at the free market
            rate of  exchange.
- On July 13, 2004, in the case Cabrera, Gerónimo Rafael v. Argentine Executive Branch on action for
    the protection of constitutional rights (amparo), in which it rejected the claim of a depositor on the grounds that the latter had exercised his rights within the framework of the emergency laws, and collected a portion of his deposit in
    pesos, without reserving the right to claim the difference in U.S. dollars at the exchange rate prevailing in the open market.
- On September 14, 2004, the CSJN also pronounced in the case entitled CAMPBELL, María Enriqueta
    Vda. De Tufiño y otro c/ P.E.N. - Banco de Salta S.A. Grupo Macro s/ AMPARO- Medida cautelar, rejecting the claim of a depositor which was filed before the Court of original Jurisdiction and the Court of appeal, declaring the
    unconstitutionality of the emergency rule questioned regarding the pesification of the deposit funds in foreign currency.
- On October 26, 2004, was pronounced in the case entitled BUSTOS, ALBERTO ROQUE Y OTROS c/ P.E.N. Y OTROS
    s/ AMPARO, revoking the sentence in which mentioned the action on the protection of constitutional rights (amparo), declaring that such action is not adequate for such claim and declares the constitutionality of the rule by which the argentine
    economy was pesificated due to the economic, financial and exchange emergency situation through which the country is going through, confirmed by Congress Law. The revocation of the sentence of the Original Jurisdiction do not state how the Judge of
    this jurisdiction will resolve the fulfillment of the Court and for such reason proceed to the refund of the amount already paid due to the legal demands ordered by a Grade Judge.

On February 3, 2004, the ABA, which groups all national banks of foreign-capital, filed with the Ministry of Economy a request for compensation of the exchange gain/loss resulting from compliance
with judicial injunctions related to constitutional protection actions commenced by holders of deposits denominated in US Dollars prior to the alteration of the convertibility regime. The Bank has consented to such filing.

As of the date hereof, BBVA Banco Francés S.A. continues to be subject to precautionary measures or execution of judgments rendered by first or second instance courts as well as to
decisions that adhered to the Supreme Court rulings as concerns the constitutionality of pesification, the own acts theory, etc. (which are, in terms of volume and impact, substantially lower than in prior years). The Bank estimates that it
shall not receive new claims implying a significant adverse effect on its balance sheets. In the defense of its shareholders and clients interests, BBVA Banco Francés S.A. has articulated such judicial defenses as deemed by it to
be conducive to the preservation of its equity.

F-78

---



|Exhibit I (cont.)                                          
|-----------------------------------------------------------
|BBVA BANCO FRANCÉS S.A. AND SUBSIDIARIES                   
|LEGAL ACTIONS  CONSTITUTIONAL PROTECTION ACTIONS          
|For the fiscal years ended December 31, 2005, 2004 and 2003
|Stated in thousands of Pesos                               

Owing to the equity loss that the fulfillment of the precautionary measures ordered by different courts in constitutional protection actions imply for the financial system and, in particular, for
BF, the Bank has let this loss be known to the Ministry Economy and the BCRA expressing a reservation of legal rights.

To date the authorities have not ruled on possible compensation for the financial system in relation to these matters.

Furthermore, by means of Communication A 3916 dated April 3, 2003 the BCRA resolved to allow the capitalization of the differences arising from compliance with court orders in cases
challenging regulations in force in accordance with Law 25,561, DecreeNo.214/02 and complementary regulations in relation to
deposits within the financial system. This asset (calculated according to the difference in nominal terms between the deposit at the free market exchange rate at the moment of each payment compared to the book value of 1.40 pesos per dollar plus CER
to that date) is being amortized in 60 monthly installments as from April 2003.

As of December 31, 2005 and 2004, BF records 565,352 and 739,289, respectively (after deducting the accumulated amortization for 554,036 and 335,827 as of December 31, 2005 and 2004,
respectively), in the Intangible Assets item, Organization and Development Expenses account.

The Bank, however, notifies that such amortization is solely calculated to comply with the regulations of the BCRA and that by no means does it imply a waiver to possible compensation or recovery
of the exchange difference resulting from compliance with court orders corresponding to petitions for protection of civil rights or other court action derived from the mandatory conversion of bank deposits into pesos.

In the opinion of the Banks Board of Directors and its legal advisors there exists compensation or recovery probabilities for such equity loss.

F-79

---



|Exhibit
      Number | Description                                                                                                   
|-------------------- | --------------------------------------------------------------------------------------------------------------
|                     |                                                                                                               
|1.1                  | Amended
        and Restated By-Laws (Estatutos) of BBVA Banco Francés S.A.                                   
|                    
|1.2                  | English
        translation of the Amended and Restated By-Laws (Estatutos) of BBVA Banco
        Francés S.A.
|                    
|8.1                  | Subsidiaries
        of the Company                                                                           
|                    
|12.1                 | Section
        302 Certification of Chief Executive Officer                                                  
|                    
|12.2                 | Section
        302 Certification of Chief Financial Officer                                                  
|                    
|13.1                 | Section
        906 Certification                                                                             
|