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 was achieved in Q3 2024.

• Acquisition of HSBC Argentina approved and capital increase implemented.

Financial highlights

• Net interest income for Q3 was 546.943 million pesos, down 37% year-over-year, mainly due to lower interest on government securities and loans.

• Net fee income decreased 9% year-over-year to 142.405 million pesos, mainly from lower product bundle fees.

• 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, reflecting loan portfolio growth.

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

Outlook and guidance

• Real loan growth for 2024 is expected to reach 50-55%, revised upward from previous guidance.

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

• Inflation for 2025 is forecast at 37%, with further declines anticipated.

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

• Regulatory changes may impact minimum cash requirements and deposit structure.