Grupo Financiero Galicia (GGAL) Q4 2024 earnings summary

Executive summary

• Net income for 2024 reached ARS 1.6 trillion, up 121% year-over-year, with ROE at 33.98% and efficiency at 46.91%, driven by Banco Galicia, Naranja X, and the HSBC Argentina acquisition, partially offset by a loss at Galicia Seguros.

• Fourth quarter net income was ARS 574 billion, a 203% increase from the prior year, with Banco Galicia contributing ARS 527 billion, including a significant gain from the HSBC Argentina acquisition.

• The acquisition of HSBC Argentina closed in December, consolidating the group's position as Argentina's largest private sector financial group and resulting in a net gain of ARS 485 billion after adjustments.

• Grupo Galicia reported a FY24 ROE of 34.0% (+1,659bp YoY) and ROA at 7.0% (+359bp YoY), with Naranja X posting net income of ARS 228 billion (+662% YoY) and ROE of 33.1%.

• The Argentine economy faced high inflation and monetary tightening, with net international reserves at -USD 6.2bn as of Feb 2025.

Financial highlights

• Banco Galicia's net income for Q4 was ARS 527 billion, up 311% year-over-year, mainly due to a one-time ARS 575 billion gain from the HSBC acquisition.

• Net interest income for 2024 was ARS 5.14 trillion, up 26% year-over-year; net fee income rose 10% year-over-year, and net results from financial instruments increased 53%.

• Total assets at year-end were ARS 32.7 trillion, up 46% year-over-year; deposits reached ARS 18.6 trillion, up 50%.

• Naranja X's assets grew 73% YoY, net loans 75% YoY, and deposits 217% YoY.

• FIMA mutual funds managed ARS 7.6 trillion in assets, with net income of ARS 68.3 billion in 4Q24.

Outlook and guidance

• Loan growth expected to reach 50% year-over-year in 2025, with deposits growing around 35%.

• ROE for 2025 forecasted at 15% in real terms, down from 34% in 2024 due to absence of extraordinary items and merger-related expenses; target ROE for 2026 and beyond is 15-20%.

• No capital increase anticipated through 2027 under current projections.

• Dividend payments planned for May 2025, subject to Central Bank approval, with amounts similar in dollars to the prior year; 2024 dividend proposal totals up to ARS 488 billion.

• Corporate reorganization planned to streamline operations and improve efficiency, including mergers and spin-offs.