SecProbe.io

CORRESP
1
filename1.htm

      March 12,
2008

      Re:         BBVA
Banco Francés S.A.

      Form
20-F for the fiscal year ended December 31, 2006

      Filed
May 16, 2007

      File
No. 001-12568

      Mr. Edwin
Adames

      United
States Securities and Exchange Commission

      Division
of Corporation Finance

      450 Fifth
Street, N.W.

      Washington,
D.C. 20549-0408

      Dear Mr.
Adames:

      Thank you
for your letter dated February 27, 2008, setting forth comments from staff of
the Division of Corporation Finance (the “Staff”) of the United States
Securities and Exchange Commission (the “Commission”) on the annual report on
Form 20-F for the year ended December 31, 2006 (the “2006 Form 20-F”) of BBVA
Banco Francés S.A. (“Banco Francés”, also referred to in this letter as the
“company”, the “Bank” and “we”), which was filed with the Commission on May 16,
2007.

      We
appreciate your understanding in allowing us the time necessary to prepare our
responses, which we set forth in Annex A hereto. To facilitate the Staff’s
review, we have reproduced the captions and numbered comments from the Staff’s
comment letter in boldface text.

      In
providing these responses, and in response to the Staff’s request, we hereby
acknowledge that:

                §

                BBVA
      Banco Francés S.A. is responsible for the adequacy and accuracy of the
      disclosure in its filings;

                §

                Staff
      comments or changes to disclosure in response to Staff comments in the
      filings reviewed by the Staff do not foreclose the Commission from taking
      any action with respect to the filing;
and

                §

                BBVA
      Banco Francés S.A. may not assert Staff comments as a defense in any
      proceeding initiated by the Commission or any person under the federal
      securities laws of the United
States.

      We would
like to express our appreciation for your attention in these matters, and we are
available to discuss any of our responses with you at your convenience. In that
regard, please do not hesitate to contact Martín Ezequiel Zarich in Buenos Aires
at 011-54-4341-5083 or fax: 011-54-4341-5085; or our counsel, Michael J.
Willisch of Davis Polk & Wardwell, at 011-34-91-702-2741 or fax:
011-44-207-710-4884.

              Very
      truly yours,

                /s/
      Martín Ezequiel Zarich

                BBVA
      Banco Francés S.A.

            A-1

            Annex A.1
(cont.)

      Note 17.1. Income Taxes,
page F-51

                1.

                We
      refer to the proposed disclosure to be included in future filings
      described in your response to Comment 1 regarding the reclassification of
      the Initial adjustments to net deferred tax assets to the Other, net line
      item. Please revise the proposed disclosure to include the
      following:

                ·

                A
      comparison of how the Initial adjustment to net deferred tax assets are
      accounted for under the Argentine GAAP banking rules and how they differ
      with respect to the accounting and disclosures requirements of paragraphs
      27 and 45.g. of SFAS 109.

                ·

                A
      statement, similar to your response to the second bullet point of Comment
      1, that (1) under US GAAP the Company fully provisioned in 2004 and 2005
      the net operating losses that are part of the net deferred tax asset; and
      (2) the effect of this  provisioning of the reconciliation of
      Argentine BCRA banking GAAP to US GAAP for fiscal years 2004 to
      2006.

      For the
purpose of clarifying the disclosures in our Annual Report on Form 20-F for the
fiscal year ended on December 31, 2007 (the “2007 Form 20-F”) and  in
other future financial statement filings made with the SEC that contain U.S.
GAAP reconciliations (the 2007 Form 20-F, together with such other filings,
collectively, the “Future Filings”), we propose to the Staff consideration of
the following changes (we have underlined the wording that we have added and
struck through irrelevant information) to the table included on page F-51 in
order to clarify this line item, as follows:

            -1-

      Annex A.1 (cont.)

                  Description

                    2006 (1)

                  Income
      before income tax in accordance with US GAAP

                  1,468,544

                  Statutory
      income tax rate

                  35.00%

                  Income
      tax provision computed at statutory rate

                  513,990

                  Tax
      exempt income

                  (14,257)

                  Non-deductible
      items

                  —

                  Other,
      net

                  Initial
      adjustments to net deferred tax assets

                    (11,391)

                    (104,431)

                  Income
      tax computed in accordance with U.S. GAAP

                    487,822

                    383,391

                  Initial adjustments
      to net deferred tax assets

                    (104,431)

                  Income
      tax computed in accordance with BCRA’s rules (2)

                    23,000

                  Adjustments
      to reconcile income tax (benefit) to U.S. GAAP

                  360,391

                  (Recover)
      of allowances on deferred tax assets

                  (325,939)

                  (1)
      In
      thousands of Ps.

                  (2)
      BCRA:
      Banco Central de la República Argentina, the Argentine financial system
      regulator.

      We will
also incorporate the following additional information at the botton of the table
included on page F-51, between second paragraph (non deductible items) and third
paragraph (other):

      “Initial
adjustments to net deferred tax assets” are originated in changes that occurred
in the tax legislation for the fiscal year ended December 31, 2006.

      As
explained in Note 5.1, under Argentine BCRA banking GAAP the capitalization of
the net operating losses is not allowed. Consecuently, these adjustments have
not impact under such rules.

      Under
US GAAP, the net operating losses that are part of the net deferred tax assets
are entirely provisioned in the years 2004 and 2005. As the initial adjustment
affects net operating losses that are entirely provisioned, its impact in equity
as well as in the income/loss is neutral.

        Under
US GAAP the Bank has considered that in terms of paragraph 27 and 45.g. of SFAS
109, “Accounting for Income Taxes”, these adjustments correspond to changes in
the tax legislation occurred in the fiscal year where the Initial adjustment to
net deferred tax assets is disclosed. These adjustments affect the initial
balances of net operating losses considered in determining income tax under
local accounting standards, and therefore are disclosed under Initial
adjustments to net deferred tax assets.

                  ·

                  A
      statement in the paragraph that describes the composition of the Other,
      net line item that the Initial adjustment to net deferred tax assets for
      2006 is 90% of the Other, net line item as
  revised.

      For the
purpose of clarifing the disclosures in our Annual Report on Form 20-F for the
fiscal year ended December 31, 2007, we will segregate the line “Initial
adjusments to net deferred tax assets” in the proposed changes to the table
included on page F-51 (see our response to the previous bullet point).

                2.

                We
      refer to your response to the second bullet point on Comment 2 regarding
      the differences between Income tax computed in accordance with BCRA rules
      as used in the income tax reconciliation in Note 17.1 and the Income tax
      and tax on minimun presume income (loss) line item in the Consolidated
      Statement of Operations on page F-9. In future filings please include in
      Note 17.1. the following:

                  ·

                  A
      discussion of the Company´s authoritative basis for using Income tax
      computed in accordance with BCRA rules in the reconciliation of Argentine
      GAAP income tax to US GAAP income tax instead of the Income tax and tax on
      minimun presume income (loss) in the Consolitaded Statement of Operations
      on page 9, prepared under Argentine
GAAP.

                  ·

                  A
      summary of the basic differences between Income tax computed in accordance
      with BCRA rules and Income tax and tax on minimun presume income
      (loss).

                  ·

                  A
      description of the specific line items in the Argentine GAAP Consolidated
      Statement of Operation on page F-9 where the income tax expense or income
      computed in accordance with BCRA rules is included considering the
      following:

                  o

                  These
      BCRA income tax amounts are the Argentine GAAP income tax totals for years
      2004 and 2006 that the Company used in the reconciliation of Argentine
      GAAP income tax to US GAAP income tax on page F-51;
  and

                  o

                  These
      BCRA income tax amounts are not the same as the Income tax and tax on
      minimun presume income (loss) line item in the Argentine GAAP Consolidated
      Statement of Operation on page F-9. Refer to (1) the 2006 BCRA income tax
      expense of 23,000 millon pesos used in the reconciliation on page F-51
      included in Other Expenses of the Argentine GAAP Statement of Operarions
      on page F-9 as stated in the breadown is in Note 6.m, Other Expense,
      Others, page F-30; and to (2) the 2005 BCRA income tax expense reversal of
      242,000 millon pesos include in the reconciliation on page F-51 included
      in Other Income in the Argentine GAAP Statement of Operations on page F-9
      as described in the breakdown in Note 6.1, Breakdown of Main Items and
      Accounts, Other Income, on page
F-30.

      We
acknowledge your comment and in future filings we will incorporate the following
additional information at the bottom of the table included in page F-51, after
the paragraph “other, net”:

        As
mentioned in Note 5.2 to the Consolidated Financial Statements, tax on minimum
presumed income (TOMPI) is a complementary tax to the income tax. The Bank’s tax
obligation for each year will coincide with the highest of  two taxes,
the BCRA income tax and TOMPI . However, if TOMPI exceeds the 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.
Since TOMPI is calculated on different basis than income tax (under tax
legislation is based on  taxable assets and it is not based in income
for fiscal years and has no relation with income), it is not included in the
line “Income tax computed in accordance with BCRA rules”.

      “Income
tax computed in accordance with BCRA rules” corresponds to the Argentine GAAP
income tax determined as per the deferred tax method.  Under BCRA
rules, income/(losses) related to deferred tax method must be classified in the
“Other Income
/ Expenses” line items.  Therefore, the deferred income tax amounting
to 23,000  for 2006 was classified in the “Other Expenses”
line item of the Consolidated Statement of Operations. For the year 2005 it
amounted to 242,000 and was classified in the “Other Income” line item of the
Consolidated Statement of Operations (see Note 6 with the breakdown of Other
Income and Other Expense accounts in accordance with BCRA rules).

          -2-

        Annex A.1
(cont.)

      These
“BCRA income tax amounts” are not the same as the “income tax and tax on minimum
presumed income (loss)” – TOMPI – line item in the Argentine GAAP Consolidated
Statement of Operations on Page F-9.   Under BCRA rules, this
account should include the current income tax and TOMPI, while income (losses)
related to deferred tax method must be classified in the “Other Income /
Expenses” line item.  In the years 2007, 2006 and 2005 “income tax and
TOMPI” account includes only TOMPI for XX, 71,680 and 18,712,
respectively.

      The
amounts related to the Income Tax computed in accordance with BCRA rules and Tax
on minimun presumed income (TOMPI) are disclosed below:

                  2007 (1)

                  2006 (1)

                  2005 (1)

                Tax
      on minimun presumed income (Income tax and TOMPI line item –
      F-9)

                XX

                71,680

                18,712

                Income
      tax computed in accordance with BCRA rules (Other Income/Expenses line
      item)

                XX

                23,000

                (242,000)

                Total
      – Income tax plus Tax on minimun presumed income

                  XX

                  94,680

                  (223,288)

                  (1)

                  In
      thousands of Ps.

                3.

                We
      refer to your response to the fifth bullet point of Comment 4 in which you
      state, although the note refers to both federal government securities and
      loans, the 2001 swap included only holders of securities and did not
      include loans. Please revise this note in future filings to revise the
      reference to loans in the swap or state there were no troubled debt
      restructuring under SFAS 15 regarding the swap in 2001 since they only
      included only securities.

      We
acknoledge your comment and in future filings we will modify the first paragraph
of note 17.4.3. as follows:

      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 face
value of US$3,291,795 thousands, for Guaranteed Loans amounting to US$3,360,403
thousands.

                4.

                We
      refer to your response to bullet point six of Comment 4. In future filings
      please include in this note the following information, similar to that
      provide in your supplemental
response:

                  ·

                  An
      explanation of the reason why the market value of the securities under
      Argentine BCRA accounting rules for these transaction is significantly
      higher than under US GAAP taking into consideration the other than
      temporary impairment charges recognized for these securities under SFAS
      115 prior to the swap transactions in
2001.

                  ·

                  A
      quantitative presentation, similar to the table provided in your response,
      that shows how the Federal Government Secured Loans reconciliation
      adjustment to Stockholders´equity as stated in the Argentine to US GAAP
      reconciliation in Note 17.24 was determined considering
      the difference between the fair value of the securities swap under
      Argentine and US GAAP for each fiscal
  year.

            -3-

            Annex A.1
(cont.)

                  ·

                  A
      description and quantitative disclosure of the effects that sales made
      each year of the guaranteed loan porfolio acquired in 2001 have had as
      part of the Federal Government Secured Loans reconcilition adjustment to
      Net income/(loss) as stated in Note 17.24 in the Argentine to US GAAP
      reconciliation, considering as stated in your response, these sales under
      US GAAP are important since they release a portion of the valuation
      adjustment previously made in
2001.

      The market
value of the securities is the same for BCRA rules and US GAAP. The difference
is due to the accounting