Grupo Financiero Galicia (GGAL) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 reached Ps.408,985 million, up 90% year-over-year, with ROE at 42.5% and ROA at 9.7%.

• Six-month net income totaled Ps.711,882 million, a 138% increase over 6M 2023, with ROE at 37.56%.

• Results driven by strong contributions from banking, fintech, asset management, and insurance segments.

• Banco Galicia maintained a leading market position, with 11.5% share in private-sector loans and 9.8% in deposits as of May 2024.

• Naranja X and Galicia Seguros delivered robust growth, with Naranja X's net income up 11,606% y/y and Galicia Seguros' annual turnover at AR$91.4bn.

Financial highlights

• Net interest income for Q2 was Ps.1,011,498 million, up 46% year-over-year; net fee income declined 6% to Ps.118,660 million.

• Banco Galicia's net loans were AR$4,611bn (-13% y/y), deposits AR$8,339bn (-24% y/y), and assets AR$14,425bn (-8% y/y) as of June 2024.

• Naranja X's 2Q24 ROE reached 61.2% (+6,063 bp y/y), with deposits up 137% y/y and net loans up 16% y/y.

• Galicia Seguros reported 3.4 million policies in force and leading market share in homeowners insurance (13.2%).

• FIMA mutual funds managed AR$5.37tn in assets, with net income of AR$12bn in 2Q24.

Outlook and guidance

• Market expects annual inflation to remain high in 2024, with Central Bank survey projecting 127.4% for the year.

• Argentina's GDP contracted 2.6% y/y in 1Q24, with industrial production down 3.1% in 2Q24.

• Fiscal deficit and sovereign debt levels remain elevated, with public sector gross debt at 104% of GDP as of Q1 2024.

• Market share in private sector loans rose to 11.89% (+12 bp YoY); deposit market share increased to 10.49% (+57 bp YoY).

• Capital ratio at 28.76%, up 512 bp year-over-year, with excess capital of Ps.1,963,292 million.