Grupo Financiero Galicia (GGAL) Q1 2025 earnings summary

Executive summary

• Net income for Q1 2025 was ARS 146 billion (Ps.145,978 million), down 63% year-over-year, with ROE at 8.88% and ROA at 1.68%.

• Profitability metrics declined sharply due to a challenging macroeconomic environment in Argentina, but the group maintained a diversified business model across banking, insurance, digital finance, asset management, and securities.

• Results were mainly driven by profits from Naranja X (ARS 64.5 billion), Banco Galicia, Galicia Asset Management/Fondos Fima, and Galicia Seguros.

• Efficiency ratio increased to 50.5% in Q1 2025, up over 1,500 basis points year-over-year.

• Capital ratio stood at 24.4%, with 12,145 employees and 501 branches.

Financial highlights

• Net income fell 63% year-over-year; Banco Galicia's net income dropped 90% due to an 84% lower operating result.

• Net interest income decreased 66% year-over-year, mainly from lower bond portfolio yields and reduced interest on government securities.

• Net fee income rose 43% year-over-year, driven by higher credit card and deposit fees.

• Provisions for loan losses increased 193% due to loan book growth and higher delinquency.

• Deposits reached ARS 19.2 trillion, up 83% year-over-year, with strong growth in dollar savings and peso time deposits.

Outlook and guidance

• ROE guidance for 2025 revised down to 12%-13% (real terms), from previous 15%, reflecting transition year and integration costs.

• Loan growth guidance maintained at 50% in real terms; deposit growth expected at 30%-40%.

• ROE targeted to rise to 17% in 2026 and 20% in 2027 as integration synergies are realized.

• NPLs expected to stabilize or decrease by year-end after a temporary spike.

• The Central Bank authorized the merger of Banco Galicia and Galicia Más, to be completed within 180 days of May 22, 2025.