Grupo Financiero Galicia (GGAL) Q3 2025 earnings summary

Executive summary

• The Argentine economy grew 5% year-over-year in September, but industrial production was negative at -2.0% YoY in 3Q25, and inflation remains extremely high at 211.4% YoY in October 2025, though market expectations see a decline to 94.8% in 2026.

• Fiscal deficit narrowed to -0.6% of GDP in 2025, with a primary surplus of 0.5% of GDP in Q3 and reduced central bank financing.

• Grupo Financiero Galicia reported a net loss of ARS 87.7 billion in Q3, mainly due to extraordinary restructuring expenses from the HSBC Argentina merger, with net income for 9M25 at ARS 259.2 billion, down 80% year-over-year.

• Sovereign debt remains elevated at 76% of GDP as of Q2 2025, with significant upcoming foreign currency payments.

Financial highlights

• Net operating income fell 23% sequentially, with net interest income down 10% and net results from financial instruments down 89%.

• Loan loss provisions increased 26% quarter-over-quarter and surged 208% year-over-year to ARS 443.4 billion.

• Net fee income grew 9% and profits from FX and gold increased 12%.

• Average interest-earning assets rose 8% from the previous quarter, with a 5% increase in peso loans and 27% in dollar loans.

• Efficiency ratio was 65.5%, up 1,730 bps year-over-year.

Outlook and guidance

• Margins improved in November and are expected to remain strong through December.

• Full-year 2025 ROE is projected at 4% reported, or 6% excluding non-recurring integration costs; 2026 ROE guidance is 11-12%, with a run-rate of 15% by Q4 2026 and a long-term target of 15-20%.

• NPLs expected to peak at 6-7% in March 2026, then improve.

• Lending growth forecasted at 25% and deposit growth at 20% in real terms for 2026.

• Regulatory changes in reserve requirements and interest rates are expected to affect funding costs and margins.