Grupo Financiero Galicia (GGAL) Q3 2024 earnings summary

Executive summary

• Net income for Q3 2024 reached 168.375 billion Pesos, up 1% year-over-year, with ROE at 15.26% and efficiency ratio at 48.75%.

• Nine-month net income was 966.616 billion Pesos, a 92% increase year-over-year, with ROE at 29.94%.

• Results were driven by strong contributions from Naranja X, Fondos Fima, and Galicia Asset Management, offset by a loss in Galicia Seguros.

• Argentina's economy contracted 3.8% year-over-year in August, with a 3.1% contraction year-to-date, but a primary fiscal surplus of 0.5% of GDP in Q3 2024.

• Inflation decelerated sharply, with National CPI at 101.6% for the first nine months, and monthly inflation dropping from 25.5% in December 2023 to 3.5% in September 2024.

Financial highlights

• Net interest income for Q3 was 546.943 million Pesos, down 37% year-over-year, and net fee income decreased 9% to 142.405 million Pesos.

• Net result from financial instruments rose 47% to 166.072 million Pesos, driven by government securities and derivatives.

• Loan loss provisions increased 77% year-over-year to 109.332 million Pesos.

• Deposits grew 14% year-over-year to 13.193 trillion Pesos, with a shift toward foreign currency savings accounts.

• Return on average assets was 3.14% annualized; return on average equity was 15.26%.

Outlook and guidance

• Loan growth for 2024 is expected to reach 50-55% in real terms, higher than previously forecast.

• GDP contraction for 2024 is now expected to be 3.4%, with a 5% recovery forecast for 2025.

• Inflation for 2025 is forecast at 37%, with interest rates expected to continue declining.

• ROE for 2024 is expected between 25-30%, and for 2025, between 15-18% excluding HSBC acquisition effects.

• Capital ratio remains strong at 26.40%, with excess capital of 2.239 trillion Pesos.