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GRUPO FINANCIERO GALICIA
Investor Presentation
December 2018
Agenda
1 / The Argentine Economy
2 / The Argentina Financial System
4 / Banco Galicia
5 / Naranja
6 / Sudamericana Holding
7 / Galicia Administradora de Fondos
3 / Grupo Financiero Galicia
3
-5,9%
10,1%
6,0%
-1,0%
2,4%
-2,5%
2,7%
-1,8%
2,9%
-2,3%-1,5%
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* 2019*
(*)Survey of Market Expectations (REM August, BCRA) Source: INDEC and BCRA
Real Gross Domestic Product
YoY % Var.
GDP quarterly evolution
Industrial Production quarterly evolution
2,8%
-3,6%
2,1%
-0,9%
0,3%
-2,5%
-3,7%
-04%
03%
-07%
04%
01%
-07%
1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18 3Q18
Source: INDEC
Source: FIEL
2,4%
0,0%
-1,3%
0,1%
1,9%
0,7%
-4,0%
00%
04%
-04%
04%
-04%
1Q15 3Q15 1Q16 3Q16 1Q17 3Q17 1Q18
q/q % chg. (sa) y/y % chg. (r.h.s.)
Economic Activity
364,76
192,84
100
200
300
400
2001 2003 2005 2007 2009 2011 2013 2015 2017
Agricultural Commodity Prices
Dec’01=100.
As of December, 2018.
4
Real Exchange Rate
Index Nov-18= 36,46 AR$/USD
21,03
61,42
25,19
72,73
23,27
42,37
36,46
12
17
22
27
32
37
42
47
52
57
62
67
72
77
No
v-0
1
Ap
r-03
Sep
-04
Feb
-06
Jul-
07
Dec
-08
May
-10
Oct
-11
Mar
-13
Au
g-1
4
Jan
-16
Jun
-17
No
v-1
8
Multilateral RER Bilateral RER (AR$/USD)
Source: BCRA
International Environment
-2,7
0,0
-5,1
-3,2
-8
-4
0
4
2007 2009 2011 2013 2015 2017 2019E
As
a %
of
GD
P
Primary Fiscal Balance as a % of GDP
Overall Fiscal Balance as a % of GDP
Fiscal Performance (Federal Government only)
Primary Fiscal Deficit – Annual Target
as % of GDP
5,54,6
3,8
2,7
0
-1
2015 2016 2017 2018 2019 2020
Source: Ministry of Finance
0
1
2
3
4
5
6
0
5.000
10.000
15.000
20.000
25.000
30.000
2007 2009 2011 2013 2015 2017
Monetary FinancingUse ofinternationalreserves
ArgentineCentral Bankprofits
ArgentineCentral Bankadvances
Total ArgentineCentral Bankfinancing (as %of GDP) - r.h.s.
5Source: BCRA and own estimates
Source: Ministry of Finance
Mil
lio
ns
of
USD
As a %
of G
DP
Fiscal Performance
0
7
14
21
28
2018 2019 2020 2021 2022 2023 2024 2025 2026
Projected annual debt payments(*)
Foreign currency Pesos
Bil
lio
ns
of
US$
(*) Net of Central Bank advances, treasury bills and non-transferable bills held by Central Bank.
29%
15% 16%24%
35%
18,6%
18,7%30,1%
27,7%
32,2%55%
39%
57%
77%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 II-18
Private Holders IFIs Public Sector Debt Total Gross Debt
Argentina: Public Sector Gross Debt
As a % of GDP
Sovereign Debt
Debt by Currency
USD63%
Pesos19%
Euros7%
Pesos CER indexed
6%Other
5%
As of June, 2018.
7
67,2
64,8
0
25
50
75
100
2003 2006 2009 2012 2015 2018E
Bil
lio
ns
of
US$
Exports Imports
Foreign Trade
-5,6
2,4
-15
0
15
30
2004 2006 2008 2010 2012 2014 2016 2018E
Bil
lio
ns
of
US$
Trade Balance
-5,1%
-2,5%
-6%
-4%
-2%
0%
2%
4%
6%
2003 2005 2007 2009 2011 2013 2015 2017 2019E
As
% o
f G
DP
Current Account
Capital Account
Current and Capital Accounts
Accrual Basis, as % of GDP
Source: INDEC and own estimates
External Sector Performance
8
Monetary AggregatesReal YoY change
-5,7%
-15,2%
-25,0%-30%
-20%
-10%
0%
10%
20%
30%
Feb-15 Nov-15 Aug-16 May-17 Feb-18 Nov-18
ARS Private Deposits
ARS Credit to the Private Sector
M2 (private)
Central Bank Interest Rate PolicyANR (%)
59,00
61,20
24
32
40
48
56
64
72
80
Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18
Call 1d Monetary Policy Interes Rate
International ReservesUSD billion
47
24
45
62
51
Jun-12 May-13 Apr-14 Mar-15 Feb-16 Jan-17 Dec-17 Nov-18
Monetary Performance
9
CPI Inflation
Greater Buenos Aires
Inflation
y/y % chg.
Source: FIEL and own estimates
Source: INDEC
2,9%
2,2%
2,5%
48,0%
46,2%
Jan-17 Apr-17 Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18
m/m % chg. y/y % chg. (r.h.s.)
Market Expectations – Central Bank Survey
Annual Inflation
Source: BCRA, INDEC and own estimates
31,8
40,3
44,847,5
20,6
27,0 27,5
15,0
19,0 19,2
0
5
10
15
20
25
30
35
40
45
50
Jul-17 Oct-17 Jan-18 Apr-18 Jul-18 Oct-18
2018 2019 202021%
24%26%
41%
27%
39%
25%
47%
25%
00%
10%
20%
30%
40%
50%
Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 2018E 2019E
Inflation
Agenda
1 / The Argentine Economy
2 / The Argentina Financial System
4 / Banco Galicia
5 / Naranja
6 / Sudamericana Holding
7 / Galicia Administradora de Fondos
3 / Grupo Financiero Galicia
22
16
0
5
10
15
20
25
2010 2012 2014 2016 2018
Deposits from the Private Sector Loans to the Private Sector
11
Source: Central Bank of each country.
0
20
40
60
80
100
Chile Brazil Colombia Peru Mexico Argentina
52 56
24 34 29
18
78 67
44 34
23 15
Deposits to GDP
Loans to GDP
Financial Depth
as a % of GDP
as a % of GDP
But Still Low Financial Depth
12
29,1%
63,0%
23,2%
40,4%
32,2%
10,2%
Nov-17 Feb-18 May-18 Aug-18 Nov-18
Total (ARS + USD)
ARS
USD (in USD)
Deposit Growth
Y-O-Y Monthly % Change
Private-Sector Loans
Y-O-Y Monthly % Change
51,0%
42,0%
45,2%
25,7%
64,2%
6,6%
Nov-17 Feb-18 May-18 Aug-18 Nov-18
Total (ARS + USD)
ARS
USD (in USD)
Private – Sector Loans and Deposit Growth
13
Private Deposits Mix
% Total deposits
Breakdown of Deposits by Currency and Type
64%
36%
0%
20%
40%
60%
80%
100%
Nov-13 Sep-14 Jul-15 May-16 Mar-17 Jan-18 Nov-18
Deposits in ARS
Deposits in USD
Deposits in ARS Mix
% Deposits in ARS
46%
54%
40%
45%
50%
55%
Nov-13 Nov-14 Nov-15 Nov-16 Nov-17 Nov-18
Current and Saving Accounts Time Deposits
14
Cost of Liabilities
Private Badlar and Private Poll
Interest Rates Spread
Yield on Assets vs Cost of Liabilities
(weighted by operated amounts)
22,6
63,9
41,3
0
8
16
24
32
40
48
56
64
72
Oct-16 Apr-17 Oct-17 Apr-18 Oct-18
Spread
Weighted Yield on Assets
Weighted Cost of Liabilities
50,4
47,8
22
26
30
34
38
42
46
50
54
58
Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18
Private Badlar
Private poll (30 d.) of time deposits
68,9
62,5
20
25
30
35
40
45
50
55
60
65
70
75
80
85
Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18
Companies: overdraft in checking accounts
Individuals: Personal loans
Yield on Assets
Increase in Interest Rates
Number
Market Share
Private-Sector
Deposits (%)
Banking Institutions 61
Government-Owned Banks 13 33.8
Private-Sector Banks 48 66.2
- Domestic Banks 32 32.1
- Foreign Banks 16 34.2
August 2018
15
Composition of the Banking System
16
25,3
25,7
29,532,7 32,4
29,6
23,4
33,0
2011 2012 2013 sep-182014 2015 2016 2017
R.O.E.
55,6
58,7
54,852,6
54,057,6
61,1
55,7
ago-1820132011 20152012 20172014 2016
Efficiency
2,7
2,9
3,44,1 4,1
3,6
2,7
3,8
20142011 2012 2013 2015 2016 2017 sep-18
R.O.A.
1,2
1,5 1,5
1,81,5
1,7 1,7
2,2
2013 201620152011 2012 2014 sep-182017
NPLs
Profitability and Asset Quality
Strengths
» High liquidity (with increased allocation to Central Bank paper).
» Peso-based intermediation with high proportion of transactional deposits.
» Adequate capitalization levels.
Opportunities
» Low level of financial depth.
» Increase in concentration.
» Potential demand for mortgage loans.
Challenges
» Lack of long-term funding.
» Reach a greater customer base - Bancarization.
» Increased competition from new fintech players.
» Sustain profitability.
Threats» Lead time to correct fiscal, monetary and external imbalances.
» Brazilian economy as a limitation to growth.
17
Current Situation of the Financial System
Agenda
1 / The Argentine Economy
2 / The Argentina Financial System
4 / Banco Galicia
5 / Naranja
6 / Sudamericana Holding
7 / Galicia Administradora de Fondos
3 / Grupo Financiero Galicia
EBA HOLDING
55.1% Votes
100%87.5%
12.5%
19.7% Shares
83%
Insurance 100%
19
Mutual Funds
95%
5%
Collection
Processing
Organizational Structure
Results for the 3Q18. In millions of pesos. Variation (%) 3Q17.
(2)
Variation3Q17
3.405
4.212
524
78
Other resultsBanco deGalicia S.A.U.
Tarjetas Regionales S.A.
Galicia Administradora de Fondos S.A.
166
Sudamericana Holding S.A.
39
Net Income
78% 84%
-30%
98%
(1) 83% since January 1, 2018 (77% from the split-merger agreement with Banco Galicia and 6% from the acquisition of a minority interest).
(2) Includes results from our interest in Galicia Warrants S.A. (87.5%), and Net Investment S.A. (87.5%), and in Galicia Valores S.A. (1%).
Grupo Financiero Galicia - Results from Equity Investments
(1)
N/A
EFFICIENCY
ROA
ROE
Business Summary – Grupo Financiero Galicia
34.63%+770 bp y/y
As of September 30, 2018.
3.72%+30 bp y/y
21
FINANCIAL MARGIN14.54%
+235 bp y/y
47.85%-846 bp y/y
Agenda
1 / The Argentine Economy
2 / The Argentina Financial System
4 / Banco Galicia
5 / Naranja
6 / Sudamericana Holding
7 / Galicia Administradora de Fondos
3 / Grupo Financiero Galicia
DEPOSITS
EQUITY
ASSETS
NET LOANS
ROE(3Q annualized)
Business Summary – Banco Galicia
Ps. 469.6 bn.
Ps. 246.3 bn.
35.6%
BRANCHES 319
EMPLOYEES 6,457
CLIENTS
As of September 30, 2018.Exchange rate (Ps. per US$) = 40.90
11.5 US$ bn.
6.0 US$ bn.
Ps. 320.4 bn.7.8 US$ bn.
Ps. 39.8 bn.1 US$ bn. 4.0 million
23
15,5%
10,3%
10,3%
8,9%
7,4%
7,1%
4,0%
3,5%
3,4%
3,1%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18%
Nación
Santander
Galicia
Provincia
Macro
BBVA
HSBC
Ciudad
ICBC
Patagonia
Market share of
loans to the private-sector (1)
Market share of
private-sector deposits
(1) Includes securitized loans and leasing. Source: Argentine Central Bank.(P) Goverment owned Banks.
As of July 31, 2018.
16,7%
12,6%
10,5%
9,4%
7,9%
6,6%
4,3%
4,3%
3,3%
3,0%
0% 2% 4% 6% 8% 10% 12% 14% 16% 18% 20%
Nación
Santander
Galicia
Provincia
BBVA
Macro
HSBC
Credicoop
ICBC
Ciudad
(P)
(P)
(P)
(P)
TOP 10 = 79% TOP 10 = 73%
Galicia Galicia
24
(P)
(P)
One of the Largest Banks
0
200
400
600
800
Santander Macro Galicia BBVA HSBC
Branches (number)
(1) Includes securitized loans and leasing.
Source: Argentine Central Bank (except for Naranja).
As of July 31, 2018.
0
5
10
15
Santander Galicia Macro BBVA HSBC
Market Share ofLoans to the Private Sector (%) (1)
+ Naranja
0
5
10
15
Santander Galicia BBVA Macro HSBC
Market Share ofPrivate-Sector Deposits (%)
25
+ Naranja
0
5.000
10.000
15.000
20.000
Santander Galicia BBVA Macro HSBC
Credit Cards Managed (in thousands)
+ Naranja
Peer Comparison
26%
50%
10%
14%
Low Income
Medium Income
Prof. and Self-employed
High Income
19%
1%
80%
Agribusiness Corporations SMEsAs of September 30, 2018.
26
Corporate Banking
Total: 108,352
Consumer Banking
Total: 3,902,404
Broad and Growing Customer Base
As of September 30, 2018.
Large Corporations
29%
Middle-Market
Companies20%
Agribusiness12%
Individuals 35%
Financial Sector
4%
Gross Loans: Ps. 252 billion
27
Loan Portfolio by Maturity
Loans in foreign currency: 38.6%.
Breakdown of Loans to the Private Sector
27%
30%
9%
23%
6% 5%
<1-6 months
<1 month >5 years1-3 years6-12 months
3-5yearsB
illi
on
so
f P
s.
Galicia
Deposits75%
Bonds3%
Subordinated Bonds
2%
Other(*)20%
Total Funding: Ps. 429.9 billions
(*) Includes among other: repos, financial institutions, collections on account of third parties, debt with merchants.
US$ -denominated deposits: 47.9%.As of September 30, 2018.
28
Time Deposits34%
Checking accounts
21% Saving accounts
45%
Deposits Breakdown by Type:Ps. 320.4 billions
Funding Sources
3,07%
2,37%
7,17%
103,03%
40%
60%
80%
100%
120%
140%
160%
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
2015 2016 2017 2018
Lo
an lo
ss reserves /
NP
Ls
NP
Ls
/ T
ota
l lo
ans
to t
he
pri
vat
e se
cto
r
NPLs / Total loans to the private sector Bank NPL ratio
Naranja NPL ratio (until Sep'17 with CFA) Loan loss reserves / NPLs
As of September 30, 2018.29
Asset Quality
11,4%
9,5%
12,5%
10,3%
14,1%
13,4%
14,0%
8,0%
10,0%
12,0%
14,0%
16,0%
mar-15 mar-16 mar-17 mar-18
As of September 30, 2018.
To
tal
Cap
ital
Rat
io (
%)
Minimum Requirement Ps.29.1 bn
Regulatory Capital Ps. 48.8 bn
Excess Capital Ps. 19.7 bn / 68%
30
Excess Regulatory Capital and Total Capital Ratio
31
14,1%
10,9%
13,5%
10,4%
13,8%
1Q 171Q 16 3Q 16 3Q 17 1Q 18 3Q 18
Net Interest Margin - NIM Efficiency
R.O.E. R.O.A.
58,7%64,8%
53,27
41,2%
31,4%
22,3%
35,6%36,0%
30,2%
36,14
34,6%
Grupo Financiero GaliciaBanco Galicia
3,3%
2,8%
3,83
2,4%
3,3%
Until Dec’17 consolidated with Naranja and CFA
As of September 30, 2018.
Strong Profitability
1Q 171Q 16 3Q 16 3Q 17 1Q 18 3Q 18
1Q 171Q 16 3Q 16 3Q 17 1Q 18 3Q 18 1Q 171Q 16 3Q 16 3Q 17 1Q 18 3Q 18
Variation3Q 2017
3Q 2018
32
Consolidated Income Statement – 3Q 2018
8.180
3.405
3.824
Net change for loan losses
Administrative Expenses
(1.639)
(4.792)
(592)(1.576)
Net financal income
Net Income from Services
Net Other Income/Losses
Income tax Net Income
104%64%
266%
37% 34%78%
Agenda
1 / The Argentine Economy
2 / The Argentina Financial System
4 / Banco Galicia
5 / Naranja
6 / Sudamericana Holding
7 / Galicia Administradora de Fondos
3 / Grupo Financiero Galicia
NET INCOME
EQUITY
ASSETS
LOANS
ROE(3m annualized)
Business Summary – Naranja
Ps. 2,155 millions+9% y/y
Ps. 10.1 bn.+32% y/y
Ps. 46.2 bn.+44% y/y
Ps. 43.6 bn.+41% y/y
25.4%
BRANCHES188 branches
49 offices
EMPLOYEES 3,502
CLIENTS 4.9 million
ACCOUNTS 3.5 millions activeaccounts
CARDS ISSUED 9.3 millions
MERCHANTS280,000
affiliated merchants
TRANSACTIONS+181 million
anual transactions
As of September 30, 2018.
34
» Consumer finance to medium and low income segments.
» Merchant acquirer and payment processing services provider to proprietary credit cards.
» Largest credit card issuer in Argentina with over:
» 3.5 million active accounts and 9.3 million cards issued.
» 188 branches and 49 offices across the country.
» 15.0%1 market share in purchase volume (billed + installments) nationwide.
» Second largest merchant acquirer with over 280,000 affiliated merchants.
» Third largest independent payment processor with more than 181 million annual transactions.
In millions of Ps.9M 2017 9M 2018
Assets 32,028 46,222
Loans 30,844 43,615
Net Worth 7,679 10,146
Net Income 1,999 2,155
ROE 38.8% 30.9%
1 Estimated.As of September 30, 2018.
Naranja
35
Agenda
1 / The Argentine Economy
2 / The Argentina Financial System
4 / Banco Galicia
5 / Naranja
6 / Sudamericana Holding
7 / Galicia Administradora de Fondos
3 / Grupo Financiero Galicia
12.5% 87.5%
Sudamericana Holding
Turnover: $3.511MM
AUM: $1.038MMEquity: $761MM
Profit: $456 MM
Turnover: $0,1MM
AUM: $205MM
Equity: $42,6 MM
Profit: $4,2 MM
Turnover: $60MM
AUM: $23MM
Equity: $20 MM
Profit: $20 MM
Founded in 1996 and originally aimed at
individuals' insurance that is currently
broadening its strategy to cover corporate
insurance.
Retirement insurance company. It
manages voluntary retirement and pension
plans.
Insurance broker of the corporate segment,
which offers coverage in those lines not
marketed by Galicia Seguros.
Sudamericana Holding - Corporate Structure
37
Positioning
Jul17-Mar18
General Data
Homeowners Insurance Ranked 1st 9.4% Market Share
Theft Ranked 1st 19.6% Market Share
Personal Accidents Ranked 3rd 10.0% Market Share
Group Life Ranked 12th 2.2% Market Share
Miscellaneous Risks Ranked 6th 5.4% Market Share
Annual Turnover: AR$ 3.5 billion (FY2018)
Policies in force: 3 million (credit-related insurance) and 4.4
million (voluntary insurance).
Sudamericana Holding – General Data
38
Main Business Partners
Business Partners' Branches
Telemarketing
Specialized Insurance
Stands
ATMs
Specialized Salesforce
Internet
• Over 550 branches of our affiliated companies (Banco Galicia and Naranja).
• Near 120 branches of retail chains.
• +160 telemarketers at our own call center.
• 290 telemarketers at an external call center.
•Near 65 stands at our business partners' branches.
• Insurance sale through Banco Galicia's ATM network.
• Account officers for corporate businesses.
• Specialized Insurance Officers in banking branches.
• Open market sale through different web pages.
• Homebanking
Sudamericana Holding – Distribution Channels
39
Credit related life insurance.
Group and Individual Life Insurance.
Burial
PA Multirisk: air, public transport, pedestrian
PA Financial: credit card activator
PA Self-Employed and Account Holders
Damages to Building and Contents, Theft and Civil Liability
Additional Charges for Glasses, Electronic Equipment, Household Civil Liability, Pets, etc.
Emergency Services: electrician, plumber, locksmith
Theft in ATMs
Handbag Insurance, Theft of Cell Phones and other technological portable devices.
Theft of bicycle
Extended Warranty for Home Appliances
Purchase Protection
Unemployment
Comprehensive Business
Surety
Next Launch: Engineering Risks
Life Insurance
Personal Accidents
Homeowners Insurance
Theft
Miscellaneous Risks
Corporate Insurance
Sudamericana Holding – Main Products
40
1.457 2.009 2.947 3.329 3.571
14,5% 13,3%22,2%
16,0% 14,7%
-
500
1.000
1.500
2.000
2.500
3.000
3.500
4.000
2014 2015 2016 2017 2018
Turnover Net Margin
Turnover per Fiscal Year (in Millions of AR$)
86,0 84,4 74,6 83,9 86,0
38%
47%
13%Combined Ratio GS (%)
7%
Sudamericana Holding – Turnover and profits evolution
41
Agenda
1 / The Argentine Economy
2 / The Argentina Financial System
4 / Banco Galicia
5 / Naranja
6 / Sudamericana Holding
7 / Galicia Administradora de Fondos
3 / Grupo Financiero Galicia
Galicia Administradora de Fondos
• Galicia Administradora de Fondos, established in 1958, is a pioneer in the mutual fund business.
• The company manages FIMA mutual funds, designed to meet the needs of various client segments (institutional investors, companies and individuals).
• As for September 2018, had a market share of 10.3%.
FUNDS
NET INCOME
AUM
12AR$ and US$
Ps. 376 millions
Ps. 57.5 bn.-21% y/y
65,207
22EMPLOYEES
CLIENTS
As of September 30, 2018.
Net Income
Assets Under Management
(*) In millions pesos
Galicia Administradora de Fondos
119
139
81
3Q17 4Q17 3Q18
+17% -41%
37.329
91.609
58.115
4Q16 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18
Our Family of Funds
Secure Balanced Dynamic
Investor Profile
Investment horizon/ Risk
Galicia Administradora de Fondos
Short Term Medium Term Long Term
Fun
d Y
ield