Grupo Financiero Galicia (GGAL) Q2 2025 earnings summary

Executive summary

• Achieved successful merger with Galicia Más (former HSBC Argentina), integrating banking, asset management, and insurance units, resulting in a 2.5% market share gain in loans and deposits.

• Net income for Q2 2025 was ARS 173 billion, down 70% year-over-year, with a 1.9% ROAA and 9.5% ROAE.

• Major profit contributions came from Banco Galicia (ARS 97.8bn), Naranja X (ARS 32.1bn), Fondos Fima (ARS 27bn), and Galicia Seguros (ARS 12.7bn).

• Maintained healthy liquidity, solvency, and profitability metrics despite a volatile macroeconomic and political environment.

• Economic activity in Argentina showed modest growth in 1Q25, with GDP up 0.8% QoQ and 3.5% YoY, but inflation remains extremely high at 211.4% YoY in July 2025.

Financial highlights

• Net income fell 70% year-over-year, mainly due to a 67% lower operating result and a 36% drop in net interest income.

• Net fee income rose 30% year-over-year, driven by a 51% increase in credit card fees and 28% in deposit fees.

• Loan loss provisions surged 192% year-over-year, reflecting higher risk in personal loans and credit cards.

• Deposits grew 72% year-over-year to ARS 19,942bn, and net loans rose 124% to ARS 14,412bn as of June 30, 2025.

• Net exposure to the public sector fell to 19% of total assets from 42% a year ago.

Outlook and guidance

• ROE guidance for 2025 is 9%-11%, excluding potential one-time restructuring costs from the ongoing voluntary redundancy program.

• Loan growth expected to be 30%-40% and deposit growth 30%-35% for 2025, revised down from earlier projections due to market volatility.

• Margin compression anticipated in Q3 due to rapid interest rate increases, with stabilization expected post-elections.

• NPLs expected to stabilize by end of Q3, with total NPL ratio projected near 5% by year-end.

• The group continues to focus on digital transformation, customer experience, and sustainable growth.