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- **Q3 Results**: Net loss of ARS 87.7 billion due to restructuring, but 9M ROE at 6.9% (excluding one-time costs). NPLs rose to 5.8%, driven by retail credit stress.
- **2025 Outlook**: Full-year ROE expected at 4% (6% excluding restructuring). 2026 target: 11-12% ROE, with Q4 2026 run rate at 15%.
- **Margin Recovery**: November margins returned to Q2 levels, with further improvement in 2026. NPLs to peak at 7% in March 2026, then decline to 4.3-4.5%.
- **Growth Drivers**: 25% YoY loan growth in 2026, focused on commercial lending and short-duration consumer loans. Deposit growth projected at 20%.
- **Capital Strength**: Tier 1 ratio at 22.1%, with no immediate funding constraints despite LDR near 100%.
- **Long-Term Vision**: Targeting 15-20% ROE by 2027 through loan-to-GDP expansion and cost efficiency improvements.

**【Management Opening Remarks】**
- **Economic Overview**: Argentina's economy grew 5% YoY in September 2025, with a primary surplus of 0.5% of GDP. Inflation reached 24.8% year-to-date, with monthly rates stabilizing at 2.1-2.3% in Q3.
- **Financial Market Trends**: Peso-denominated deposits grew 53% YoY, while dollar-denominated deposits rose 38.9%. Loan growth was strong (105.4% YoY for peso loans), but NPLs increased to 5.8% due to retail credit stress.
- **Company Performance**: Q3 net loss of ARS 87.7 billion included ARS 105.3 billion in restructuring expenses. ROE was -4.7% for the quarter, but 6.9% for the year excluding one-time costs.
- **Challenges**: High interest rates (48.7% on short-term peso deposits) and regulatory changes impacted margins. NPL provisions rose 26%, and restructuring costs drove headcount reduction by 2,000 YoY.

**【CFO Financial Commentary】**
- **Profit Outlook**: Full-year 2025 ROE expected at 4% (6% excluding restructuring). 2026 ROE target: 11-12%, with Q4 2026 run rate at 15%.
- **Margin Recovery**: November margins returned to Q2 levels, with further improvement expected in 2026 despite potential rate cuts.
- **Asset Quality**: NPLs expected to peak at 7% in March 2026, then decline to 4.3-4.5% by year-end. Coverage ratio to stabilize around 110%.
- **Cost Efficiency**: Restructuring reduced annualized costs by ARS 160 billion. 2026 loan growth projected at 25% YoY, with deposits growing 20%.
- **Capital Management**: Tier 1 ratio at 22.1% (down 160bps QoQ) but stable due to OCI reserve normalization. No immediate need for external funding despite LDR near 100%.

**【Q&A Highlights】**
- **Loan Growth Strategy**: Focus on commercial lending (oil, gas, mining) and short-duration consumer loans. Dollar lending growth constrained by liquidity limits.
- **Macro Assumptions**: 2026 GDP growth 3.7%, inflation 18%, exchange rate ARS 16.10/USD. Deposit growth to outpace lending in 2026.
- **Risk Appetite**: Comfortable with capital above 13.5%, targeting 15%+ ROE by 2027 through loan-to-GDP expansion (10%+ current, +2% YoY growth).
- **Market Participation**: Exploring debt issuance for large projects, but prioritizing deposit growth for cost efficiency.


Grupo Financiero Galicia S.A. (GGAL) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

GGAL

GGAL fundamentals

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