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SECURITIES AND EXCHANGE COMMISSION
o | Registration Statement pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934 |
þ | Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Shell Company Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
(Translation of Registrant’s name into English)
(Jurisdiction of incorporation or organization)
Tte. Gral. Juan D. Perón 456
C1038 AAJ-Buenos Aires, Argentina
(Address of principal executive offices)
Tel: 54 11 4 343 7528 / Fax: 54 11 4 331 9183, prichards@gfgsa.com
Perón 456, 2° Piso C1038AAJ Buenos Aires ARGENTINA
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Class B Ordinary Shares, Ps. 1.00 par value, each ten shares of which are represented by an American Depositary Share
None
None
Class A Ordinary Shares, Ps. 1.00 par value | 281,221,650 | |||
Class B Ordinary Shares, Ps. 1.00 par value | 960,185,367 |
Large accelerated filero | Accelerated filerþ | Non-accelerated filero |
U.S. GAAPo | International Financial Reporting Standards As issued by the International Accounting Standards Boardo | Otherþ |
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Exhibit 13.2 |
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• | Grupo Financiero Galicia S.A.; |
• | Banco de Galicia y Buenos Aires S.A., our largest subsidiary, its wholly-owned subsidiary Banco Galicia Uruguay S.A., (“Galicia Uruguay”), Galicia Uruguay’s subsidiaries and other subsidiaries and affiliated companies required to be consolidated under Argentine Banking GAAP (collectively “Banco Galicia” or the “Bank” except where otherwise noted); |
• | Tarjetas Regionales S.A., a wholly owned subsidiary of the Bank, and its operating subsidiaries; |
• | Sudamericana Holding S.A., and its subsidiaries; |
• | Galicia Warrants S.A.; |
• | Net Investment S.A., and its subsidiaries; |
• | Galval Agente de Valores S.A.; and |
• | GV Mandataria de Valores S.A. (“GV Mandataria”). |
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• | changes in general political, legal, social or other conditions in Argentina; |
• | changes in capital markets in general that may affect policies or attitudes toward lending to Argentina or Argentine companies, including expected or unexpected turbulence or volatility in domestic or international financial markets such as the ongoing global economic slowdown; |
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• | changes in regional, national and international business and economic conditions, including inflation; |
• | changes in government regulation, including tax regulations and changes in or failures to comply with banking or other regulations; |
• | increased competition in the banking, financial services, credit card services, insurance, asset management and related industries; |
• | changes in interest rates which may, among other things, adversely affect margins; |
• | a loss of market share by any of our main businesses; |
• | a change in the credit cycle and increased borrowers defaults; |
• | our inability to sustain or improve our performance; |
• | our inability to obtain additional debt or equity financing on attractive conditions or at all, which may limit our ability to fund existing operations and to finance new activities; |
• | technological changes, changes in consumer spending and saving habits, our inability to implement new technologies, and |
• | other factors discussed under Item 3. “Key Information-Risk Factors” in this annual report. |
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Fiscal Year Ended December 31, | ||||||||||||||||||||||||
2008 | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
(in millions of US Dollars, | ||||||||||||||||||||||||
except as noted)(1) | ||||||||||||||||||||||||
Unaudited | (in millions of Pesos, except as noted)(1) | |||||||||||||||||||||||
Consolidated Income Statement in Accordance with Argentine Banking GAAP | ||||||||||||||||||||||||
Financial Income | 741.0 | 2,559.3 | 1,997.9 | 2,229.8 | 2,398.6 | 1,391.6 | ||||||||||||||||||
Financial Expenses | 411.4 | 1,421.0 | 1,246.7 | 1,851.6 | 1,845.9 | 1,167.4 | ||||||||||||||||||
Net Financial Income(2) | 329.6 | 1,138.3 | 751.2 | 378.2 | 552.7 | 224.2 | ||||||||||||||||||
Provision for Losses on Loans and Other Receivables | 114.5 | 395.4 | 255.5 | 110.9 | 76.7 | 190.2 | ||||||||||||||||||
Income / (Loss) before Taxes | 72.6 | 250.8 | 117.5 | 75.3 | 126.5 | (66.1 | ) | |||||||||||||||||
Income Tax | (21.4 | ) | (74.0 | ) | (71.5 | ) | (94.2 | ) | (19.3 | ) | (43.8 | ) | ||||||||||||
Net Income / (Loss) | 51.2 | 176.8 | 46.0 | (18.9 | ) | 107.2 | (109.9 | ) | ||||||||||||||||
Earnings / (Loss) per Share (in Pesos) | 0.041 | 0.142 | 0.037 | (0.015 | ) | 0.086 | (0.093 | ) | ||||||||||||||||
Cash Dividends per Share (in Pesos) | — | — | — | — | — | — | ||||||||||||||||||
Stock Dividends per Share (in Pesos) | — | — | — | — | — | — | ||||||||||||||||||
Book Value per Share (in Pesos) | 0.431 | 1.487 | 1.333 | 1.296 | 1.310 | 1.224 |
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Fiscal Year Ended December 31, | ||||||||||||||||||||||||
2008 | 2008 | 2007 | 2006 | 2005 | 2004 | |||||||||||||||||||
(in millions of US Dollars, | ||||||||||||||||||||||||
except as noted)(1) | ||||||||||||||||||||||||
Unaudited | (in millions of Pesos, except as noted)(1) | |||||||||||||||||||||||
Amounts in Accordance with U.S. GAAP | ||||||||||||||||||||||||
Net Income / (Loss) | (339.1 | ) | (1,171.0 | ) | 592.9 | 3,524.9 | 731.0 | (1.1 | ) | |||||||||||||||
Basic and Diluted Earnings / (Losses) per Share (in Pesos) | (0.273 | ) | (0.943 | ) | 0.478 | 2.841 | 0.589 | (0.001 | ) | |||||||||||||||
Book Value / (Deficit) per Share (in Pesos) | (0.176 | ) | (0.608 | ) | 0.192 | 0.117 | (1.714 | ) | (2.574 | ) | ||||||||||||||
Financial Income | 347.9 | 1,201.7 | 2,433.2 | 5,456.4 | 2,958.7 | 1,448.7 | ||||||||||||||||||
Financial Expenses | (402.8 | ) | (1,391.3 | ) | 1,160.1 | 1,863.6 | 1,845.9 | 1,167.4 | ||||||||||||||||
Net Financial Income / (Loss) | (54.9 | ) | (189.6 | ) | 1,273.1 | 3,592.8 | 1,112.8 | 281.3 | ||||||||||||||||
Provision for Losses on Loans and Other Receivables | (130.3 | ) | (450.1 | ) | 203.4 | 160.3 | 113.5 | 210.0 | ||||||||||||||||
Income Tax | 14.7 | 50.9 | (92.5 | ) | (277.1 | ) | 19.3 | 35.4 | ||||||||||||||||
Consolidated Balance Sheet in Accordance with Argentine Banking GAAP | ||||||||||||||||||||||||
Cash and Due from Banks | 985.9 | 3,405.1 | 2,960.0 | 2,294.8 | 1,041.2 | 988.7 | ||||||||||||||||||
Government Securities, Net | 443.5 | 1,531.8 | 1,693.0 | 3,188.3 | 5,967.4 | 5,518.0 | ||||||||||||||||||
Loans, Net | 3,409.3 | 11,774.6 | 11,601.0 | 10,525.0 | 10,557.6 | 8,439.8 | ||||||||||||||||||
Total Assets | 7,162.1 | 24,735.8 | 22,828.7 | 23,615.4 | 25,638.1 | 23,652.2 | ||||||||||||||||||
Deposits | 4,069.9 | 14,056.1 | 13,165.6 | 10,779.4 | 8,421.7 | 6,756.9 | ||||||||||||||||||
Other Funds(3) | 2,557.8 | 8,834.0 | 8,008.6 | 11,227.5 | 15,589.6 | 15,375.8 | ||||||||||||||||||
Total Shareholders’ Equity | 534.4 | 1,845.7 | 1,654.5 | 1,608.5 | 1,626.8 | 1,519.5 | ||||||||||||||||||
Average Total Assets(4) | 6,779.0 | 23,412.5 | 21,332.4 | 24,614.5 | 24,238.1 | 22,725.9 | ||||||||||||||||||
Percentage of Period-end Balance Sheet Items Denominated in Dollars: | ||||||||||||||||||||||||
Loans, Net of Allowances | 16.97 | 16.97 | 15.13 | 16.66 | 9.84 | 10.42 | ||||||||||||||||||
Total Assets | 28.85 | 28.85 | 27.60 | 28.94 | 26.55 | 32.92 | ||||||||||||||||||
Deposits | 16.98 | 16.98 | 15.53 | 14.13 | 15.55 | 20.89 | ||||||||||||||||||
Total Liabilities | 32.47 | 32.47 | 32.84 | 30.41 | 25.81 | 29.56 | ||||||||||||||||||
Amounts in Accordance with U.S. GAAP | ||||||||||||||||||||||||
Trading Securities | 286.5 | 989.6 | 476.2 | 208.2 | 790.0 | 564.7 | ||||||||||||||||||
Available-for-Sale Securities | 593.6 | 2,050.0 | 3,717.3 | 5,214.6 | 5,350.3 | 3,923.1 | ||||||||||||||||||
Total Assets | 7,284.9 | 25,159.7 | 24,429.1 | 24,107.0 | 19,949.3 | 17,007.3 | ||||||||||||||||||
Total Liabilities | 7,503.3 | 25,914.1 | 24,191.0 | 23,961.2 | 22,077.6 | 20,203.0 | ||||||||||||||||||
Shareholders’ Equity (Deficit) | (218.4 | ) | (754.4 | ) | 238.1 | 145.8 | (2,128.3 | ) | (3,195.7 | ) |
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Fiscal Year Ended December 31, | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
(in millions of Pesos, except as noted)(1) | ||||||||||||||||||||
Selected Ratios in Accordance with Argentine Banking GAAP | ||||||||||||||||||||
Profitability and Efficiency | ||||||||||||||||||||
Net Yield on Interest Earning Assets(5) | 5.72 | % | 4.13 | % | 1.21 | % | 2.38 | % | 1.02 | % | ||||||||||
Financial Margin(6) | 5.72 | 4.12 | 1.74 | 2.53 | 1.08 | |||||||||||||||
Return on Average Assets(7) | 0.91 | 0.37 | 0.0004 | 0.59 | (0.42 | ) | ||||||||||||||
Return on Average Shareholders’ Equity(8) | 10.13 | 2.86 | (1.15 | ) | 6.83 | (7.32 | ) | |||||||||||||
Net Income from Services as a Percentage of OperatingIncome(9) | 51.07 | 54.86 | 63.99 | 48.65 | 66.06 | |||||||||||||||
Efficiency ratio(10) | 76.57 | 77.29 | 92.80 | 72.56 | 94.46 | |||||||||||||||
Capital | ||||||||||||||||||||
Shareholders’ Equity as a Percentage of Total Assets | 7.46 | % | 7.25 | % | 6.81 | % | 6.35 | % | 6.42 | % | ||||||||||
Total Liabilities as a Multiple of Shareholders’ Equity | 12.40 | x | 12.80 | x | 13.68 | x | 14.76 | x | 14.56 | x | ||||||||||
Total Capital Ratio | 13.92 | % | 15.54 | % | 15.03 | % | 20.78 | % | 25.11 | % | ||||||||||
Liquidity | ||||||||||||||||||||
Cash and Due from Banks as a Percentage of Total Deposits | 24.23 | % | 22.48 | % | 21.29 | % | 12.36 | % | 14.63 | % | ||||||||||
Loans, Net as a Percentage of Total Assets | 47.60 | 50.82 | 44.57 | 41.18 | 35.68 | |||||||||||||||
Credit Quality | ||||||||||||||||||||
Past Due Loans(11) as a Percentage of Total Loans | 2.87 | % | 2.77 | % | 2.38 | % | 2.34 | % | 4.97 | % | ||||||||||
Non-Accrual Loans(12) as a Percentage of Total Loans | 3.49 | 3.14 | 2.58 | 3.50 | 7.74 | |||||||||||||||
Allowance for Loan Losses as a Percentage of Non-accrual Loans(12) | 123.11 | 114.05 | 117.16 | 111.90 | 90.51 | |||||||||||||||
Net Charge-Offs(13) as a Percentage of Average Loans | 1.83 | 0.65 | 1.42 | 1.49 | 3.77 | |||||||||||||||
Ratios in Accordance with U.S. GAAP | ||||||||||||||||||||
Capital | ||||||||||||||||||||
Shareholders’ Equity (deficit) as a Percentage of Total Assets | (3.00) | % | 0.97 | % | 0.60 | % | (10.67) | % | (18.79) | % | ||||||||||
Total Liabilities as a Multiple of Total Shareholders’ Equity | (34.35) | x | 101.61 | x | 164.33 | x | (10.37) | x | (6.32) | x | ||||||||||
Liquidity | ||||||||||||||||||||
Loans, Net as a Percentage of Total Assets | 49.59 | % | 49.36 | % | 40.10 | % | 50.15 | % | 43.91 | % | ||||||||||
Credit Quality | ||||||||||||||||||||
Allowance for Loan Losses as a Percentage of Non-Accrual Loans | 141.34 | 132.13 | 168.58 | 139.49 | 84.75 | |||||||||||||||
Inflation and Exchange Rate | ||||||||||||||||||||
Wholesale Inflation(14) | 8.82 | % | 14.56 | % | 7.14 | % | 10.69 | % | 7.87 | % | ||||||||||
Consumer Inflation(15) | 7.24 | 8.47 | 9.84 | 12.33 | 6.10 | |||||||||||||||
Exchange Rate Variation(16) (%) | 9.61 | 2.66 | 1.25 | 1.94 | 1.39 | |||||||||||||||
CER(17) | 7.97 | 8.50 | 10.08 | 11.75 | 5.48 | |||||||||||||||
CVS(18) | — | — | — | — | 5.32 |
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(1) | The exchange rate used to convert the December 31, 2008 amounts into US Dollars was Ps. 3.4537 per US$1.00. All amounts are stated in millions of Pesos, except inflation and exchange rates, percentages, ratios, multiples and per-share data. | |
(2) | Net financial income primarily represents income from interest on loans and other receivables resulting from financial brokerage plus net income from government and corporate debt securities, including gains and losses, minus interest on deposits and other liabilities from financial intermediation and monetary loss from financial brokerage. It also includes the CER adjustment. | |
(3) | Includes primarily liabilities with other banks and international entities. Until December 31, 2006, debt with the Argentine Central Bank was also included. | |
(4) | The average balances of assets, including the related interest that is due are calculated on a daily basis for Banco Galicia and for Galicia Uruguay, as well as for Tarjetas Regionales S.A consolidated with its operating subsidiaries, and on a monthly basis for Grupo Financiero Galicia and its non-banking subsidiaries. | |
(5) | Net interest earned divided by interest-earning assets. For a description of net interest earned, see Item 4. “Information on the Company-Selected Statistical Information-Interest-Earning Assets-Net Yield on Interest-Earning Assets”. | |
(6) | Financial margin represents net financial income divided by average interest-earning assets. | |
(7) | Net income excluding minority interest as a percentage of average total assets. | |
(8) | Net income as a percentage of average shareholders’ equity. | |
(9) | Operating income is defined as net financial income plus net income from services. | |
(10) | Administrative expenses as a percentage of operating income as defined above. | |
(11) | Past-due loans are defined as the aggregate principal amount of a loan plus any accrued interest that is due and payable for which either the principal or any interest payment is 91 days or more past due. | |
(12) | Non-Accrual loans are defined as those loans in the categories of: (a) Consumer portfolio: “Medium Risk,” “High Risk,” “Uncollectible,” and “Uncollectible Due to Technical Reasons;” and (b) Commercial portfolio: “With problems,” “High Risk of Insolvency,” “Uncollectible,” and “Uncollectible Due to Technical Reasons”. | |
(13) | Charge-offs plus direct charge-offs minus bad debts recovered. | |
(14) | As measured by the annual change in the end-of-period Wholesale Price Index (“WPI”), published by INDEC. | |
(15) | As measured by the annual change in the end-of-period Consumer Price Index (“CPI”), published by INDEC. | |
(16) | Annual change in the end-of-period exchange rate expressed in Pesos per US Dollar. | |
(17) | The “CER” is the “Coeficiente de Estabilización de Referencia,” an adjustment coefficient based on changes in the Consumer Price Index, which became effective February 3, 2002. | |
(18) | The “CVS” is the “Coeficiente de Variación Salarial,” an adjustment coefficient based on the variation of salaries, which was effective between October 1, 2002 and March 31, 2004. The percentage disclosed for fiscal year 2004 corresponds to the variation between January 1, 2004 and March 31, 2004. |
Exchange Rate(1) | ||||||||||||||||
High | Low | Average(2) (3) | Period-End | |||||||||||||
(in Pesos per US Dollar) | ||||||||||||||||
2004 | 3.0718 | 2.8037 | 2.9415 | (3) | 2.9738 | |||||||||||
2005 | 3.0523 | 2.8592 | 2.9233 | (3) | 3.0315 | |||||||||||
2006 | 3.1072 | 3.0305 | 3.0740 | (3) | 3.0695 | |||||||||||
2007 | 3.1797 | 3.0553 | 3.1154 | (3) | 3.1510 | |||||||||||
2008 | 3.4537 | 3.0128 | 3.1623 | (3) | 3.4537 | |||||||||||
December 2008 | 3.4537 | 3.3763 | 3.4226 | 3.4537 | ||||||||||||
January 2009 | 3.4875 | 3.4497 | 3.4640 | 3.4875 | ||||||||||||
February 2009 | 3.5595 | 3.4860 | 3.5115 | 3.5595 | ||||||||||||
March 2009 | 3.7167 | 3.5905 | 3.6540 | 3.7135 | ||||||||||||
April 2009 | 3.7208 | 3.6738 | 3.6934 | 3.7198 | ||||||||||||
May 2009 | 3.7465 | 3.6928 | 3.7245 | 3.7465 |
(1) | Using closing reference exchange rates as published by the Argentine Central Bank. | |
(2) | Monthly average of daily closing quotations, unless otherwise noted. | |
(3) | Based on monthly averages. |
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• | Galicia Uruguay, incorporated in Uruguay and currently not an operating financial institution; |
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• | Galval Agente de Valores S.A. or “Galval”, incorporated in Uruguay; |
• | Galicia Pension Fund Ltd. and Galicia (Cayman) Ltd. or “Galicia Cayman”, incorporated in the Cayman Islands; |
• | Tarjeta Naranja Dominicana S.A., incorporated in the Dominican Republic. |
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• | US$648.5 million of long-term Dollar-denominated debt instruments, of which US$464.8 million were Dollar-denominated negotiable obligations due 2014 (referred to as the “Step Up Notes Due 2014” or the “2014 Notes”) issued under an indenture. |
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• | US$399.8 million of medium-term Dollar-denominated debt instruments, of which US$352.8 million were Dollar-denominated negotiable obligations due 2010 (referred to as the “Floating Rate Notes Due 2010” or the “2010 Notes”) issued under an indenture. |
• | US$230.0 million of subordinated Dollar-denominated debt instruments, of which US$218.2 million were Dollar-denominated negotiable obligations due 2019 (referred to as the “Subordinated Notes Due 2019” or the “2019 Notes”) issued under an indenture. |
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• | SMEs: annual sales between Ps. 1 million and Ps. 150 million. Service of this sector is also divided in subcategories. |
• | Large companies: annual sales above Ps. 150 million. |
• | Agribusinesses: all agribusinesses and those individuals with activity in the agriculture and livestock sectors with annual revenues above Ps. 200,000 (individuals below Ps. 200,000 are served by the Retail Banking division). |
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Geographical Area | Number of Branches | |||
City of Buenos Aires | 76 | |||
Greater Buenos Aires | 60 | |||
Rest of the Province of Buenos Aires | 31 | |||
Santa Fe | 15 | |||
Córdoba | 14 | |||
Mendoza | 9 | |||
Entre Ríos and Chubut | 4 each | |||
Río Negro | 3 | |||
Corrientes, La Pampa, Misiones, San Luis, Tierra del Fuego and Tucumán | 2 each | |||
Catamarca, Chaco, Formosa, Jujuy, La Rioja, Neuquén, Salta, Santa Cruz, Santiago del Estero and San Juan | 1 each | |||
Total | 238 | |||
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March 2009 | ||||
Branches(number) | ||||
Bank Branches | 238 | |||
Regional Credit Card Cos. Branches | 152 | |||
Business Centers and In-House Facilities | 15 | |||
Private-Banking Centers | 12 | |||
Electronic Banking Terminals(number) | ||||
ATMs | 641 | |||
Self-Service Terminals | 758 | |||
Electronic Banking Transactions(thousands per month) | ||||
ATMs + Self-Service Terminals | 7,724 | |||
Phone-Banking | 457 | |||
e-banking | 12,693 |
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Square | ||||||||
Meters | ||||||||
Property | Address | (approx.) | Main Uses | |||||
Grupo Financiero Galicia | ||||||||
- Owned | -Tte. Gral. Juan D. Perón 456, 2nd floor, Buenos Aires, Argentina | 191 | Administrative activities | |||||
-Maipú 241, Buenos Aires, Argentina (1) | 1,616 | Administrative activities | ||||||
Banco de Galicia y Buenos Aires S.A. | ||||||||
- Owned | -Tte. Gral. Juan D. Perón 407, Buenos Aires, Argentina | 17,300 | Administrative activities | |||||
-Tte. Gral. Juan D. Perón 430, Buenos Aires, Argentina | 42,000 | Administrative activities | ||||||
-Florida 361, Buenos Aires, Argentina | 7,340 | Administrative activities | ||||||
- Rented | -San Martín 178/200, Buenos Aires, Argentina | 3,600 | Administrative activities | |||||
Banco Galicia Uruguay S.A. | ||||||||
- Owned | -Dr. Americo Ricaldoni 2468, Montevideo, Uruguay | 400 | Administrative activities | |||||
-Punta del Este, Uruguay | Former Branch | |||||||
- Rented | -Montevideo, Uruguay | 580 | Storage | |||||
Tarjeta Naranja S.A. | ||||||||
- Owned | -Sucre 152, 154 and 541, Córdoba, Argentina | 6,300 | Administrative activities | |||||
-Humberto Primo, Córdoba, Argentina: 7 properties | 4,900 | Administrative activities | ||||||
-Ruta Nacional 36, km. 8, Córdoba, Argentina | 49,200 | Storage | ||||||
-San Jerónimo 2348 and 2350, Santa Fe, Argentina | 1,475 | Administrative activities | ||||||
Río Grande, Tierra del Fuego, Argentina | 300 | Commercial activities | ||||||
- Rented | -Sucre 145/151, La Rioja 359, 364 and 375, Córdoba, Argentina | 4,450 | Administrative activities, printing centre and storage | |||||
Tarjetas Cuyanas S.A. | ||||||||
- Rented | -Belgrano 1415, Mendoza, Argentina | 1,740 | Administrative activities | |||||
-Belgrano 1462, Mendoza, Argentina | 1,156 | Administrative activities | ||||||
-Vicente Zapata 145, Mendoza, Argentina | 280 | Printing centre | ||||||
-Olascoaga 348, San José, Mendoza, Argentina | 580 | Storage | ||||||
Tarjetas del Mar S.A. | ||||||||
- Rented | -Luro 3001, Mar del Plata, Buenos Aires, Argentina | 240 | Administrative Activities | |||||
-Luro 2943, Mar del Plata, Buenos Aires, Argentina | 765 | Administrative Activities | ||||||
Galicia Seguros S.A. | ||||||||
- Owned | -Maipú 241, Buenos Aires, Argentina | 1,643 | Administrative activities | |||||
Net Investment S.A. | ||||||||
- Rented | -25 de Mayo 702, 3rd floor, Buenos Aires, Argentina | 290 | Administrative activities | |||||
Galicia Warrants S.A. | ||||||||
- Owned | -Tte. Gral. Juan D. Perón 456, 6th floor, Buenos Aires, Argentina | 118 | Administrative activities | |||||
-Ruta Nacional 18, Km. 209, San Salvador, Entre Ríos, Argentina | 47,917 | Storage | ||||||
- Leased | -Alsina 3450, San Miguel de Tucumán, Tucumán, Argentina | 12,800 | Storage | |||||
- Rented | -Lavalle 3272, San Miguel de Tucumán, Tucumán, Argentina | 3,200 | Storage | |||||
-Alto Verde, Chicligasta, Tucumán, Argentina | 2,000 | Storage | ||||||
-Pasaje 1° de Mayo Esquina 25 de Mayo, Barrio el Corte Alderete, Tucumán, Argentina | 2,000 | Storage | ||||||
-San Martín 891 PB, San Miguel de Tucumán, Tucumán, Argentina | 64 | Administrative activities | ||||||
Galval Agente de Valores S.A. | ||||||||
- Rented | -Zona Franca, Montevideo, Uruguay | 120 | Administrative activities | |||||
GV Mandataria de Valores S.A. | ||||||||
- Rented | -25 de Mayo 432, 3rd floor, Buenos Aires, Argentina (2) | 336 | Administrative activities | |||||
(1) | We lease six units to the Bank equivalent to 1,159.5 square meters, for Ps. 34,784.1 per month and two units to Galicia Seguros S.A. equivalent to 413.6 square meters, for Ps. 12,408.3 per month. We hold a 45.4 square meters unit vacant for storage. | |
(2) | Banco Galicia leases a property to GV Mandataria, for US$4,500 per month during the first year, US$4,635 during the second year and US$4,775 during the third year. |
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• | Banco Galicia: 238 branches located in Argentina, 137 of which were owned and 101 of which were rented by Banco Galicia, located in all of Argentina’s 23 provinces. |
• | Tarjeta Naranja S.A.: 114 sales points located in 21 of the 23 Argentine provinces, 113 of which were rented by the company. |
• | Tarjetas Cuyanas S.A.: 28 sales points located in the provinces of Mendoza, San Juan, San Luis, Santiago del Estero, La Pampa, La Rioja, Catamarca, Neuquén, Rio Negro, Salta, Jujuy and Tucumán. All of them were rented. |
• | Tarjetas del Mar S.A.: 8 sales points located in the Province of Buenos Aires, all of which were rented. |
• | Ps. 103.4 million in fixed assets (real estate, machinery and equipment, vehicles, furniture and fittings); |
• | Ps. 44 million in construction in progress; and |
• | Ps. 132.5 million in organizational and IT system development expenses. |
• | Ps. 80.5 million in fixed assets (real estate, machinery and equipment, vehicles, furniture and fittings); |
• | Ps. 44.7 million in construction in progress; and |
• | Ps. 83.5 million in organizational and IT system development expenses. |
• | Ps. 41.7 million in fixed assets (real estate, machinery and equipment, vehicles, furniture and fittings); |
• | Ps. 46.7 million in construction in progress; and |
• | Ps. 48.1 million in organizational and IT system development expenses. |
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(In millions of Pesos) | ||||
Construction of the New Corporate Tower (construction, furniture, equipment, phones, etc.) | Ps. | 14.5 | ||
Fixed Assets | 94.3 | |||
Organizational and IT System Development | 90.8 | |||
In Subsidiaries | 8.0 | |||
Total | Ps. | 207.6 | ||
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Fiscal Year Ended December 31, 2008 (*) | ||||||||||||||||||||||||||||||||||||
Pesos | Dollars | Total | ||||||||||||||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||||||||||||||
Average | Accrued | Yield/ | Average | Accrued | Yield/ | Average | Accrued | Yield/ | ||||||||||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||||||||||||
(in millions of Pesos, except rates) | ||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Government Securities | 1,161.4 | 72.2 | 6.22 | 2,480.8 | 76.3 | 3.08 | 3,642.2 | 148.5 | 4.08 | |||||||||||||||||||||||||||
Loans | ||||||||||||||||||||||||||||||||||||
Private Sector | 8,848.1 | 1,756.6 | 19.85 | 1,964.4 | 132.6 | 6.75 | 10,812.5 | 1,889.2 | 17.47 | |||||||||||||||||||||||||||
Public Sector | 1,264.8 | 165.7 | 13.10 | — | — | — | 1,264.8 | 165.7 | 13.10 | |||||||||||||||||||||||||||
Total Loans | 10,112.9 | 1,922.3 | 19.01 | 1,964.4 | 132.6 | 6.75 | 12,077.3 | 2,054.9 | 17.01 | |||||||||||||||||||||||||||
Other | 2,908.1 | 197.0 | 6.77 | 1,264.9 | 15.2 | 1.20 | 4,173.0 | 212.2 | 5.09 | |||||||||||||||||||||||||||
Total Interest-Earning Assets | 14,182.4 | 2,191.5 | 15.45 | 5,710.1 | 224.1 | 3.92 | 19,892.5 | 2,415.6 | 12.14 | |||||||||||||||||||||||||||
Cash and Gold | 599.2 | — | — | 287.9 | — | — | 887.1 | — | — | |||||||||||||||||||||||||||
Equity in Other Companies | 708.4 | — | — | 63.8 | — | — | 772.2 | — | — | |||||||||||||||||||||||||||
Other Assets | 2,211.6 | — | — | 218.2 | — | — | 2,429.8 | — | — | |||||||||||||||||||||||||||
Allowances | (479.1 | ) | — | — | (90.0 | ) | — | — | (569.1 | ) | — | — | ||||||||||||||||||||||||
Total Assets | 17,222.5 | — | — | 6,190.0 | — | — | 23,412.5 | — | — | |||||||||||||||||||||||||||
Liabilities and Equity | ||||||||||||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||||||||||||
Current Accounts | 697.7 | 21.6 | 3.10 | 250.4 | — | — | 948.1 | 21.6 | 2.28 | |||||||||||||||||||||||||||
Savings Accounts | 1,849.3 | 4.7 | 0.25 | 738.4 | — | — | 2,587.7 | 4.7 | 0.18 | |||||||||||||||||||||||||||
Time Deposits | 5,797.6 | 749.9 | 12.93 | 971.8 | 17.8 | 1.83 | 6,769.4 | 767.7 | 11.34 | |||||||||||||||||||||||||||
Total Interest-Bearing Deposits | 8,344.6 | 776.2 | 9.30 | 1,960.6 | 17.8 | 0.91 | 10,305.2 | 794.0 | 7.70 | |||||||||||||||||||||||||||
Argentine Central Bank | — | — | — | 0.4 | — | — | 0.4 | — | — | |||||||||||||||||||||||||||
Other Financial Entities | 297.7 | 53.8 | 18.07 | 797.5 | 39.3 | 4.93 | 1,095.2 | 93.1 | 8.50 | |||||||||||||||||||||||||||
Debt Securities | 487.3 | 70.5 | 14.47 | 2,312.5 | 209.6 | 9.06 | 2,799.8 | 280.1 | 10.00 | |||||||||||||||||||||||||||
Other | 224.9 | 21.6 | 9.60 | 1,269.0 | 88.9 | 7.01 | 1,493.9 | 110.5 | 7.40 | |||||||||||||||||||||||||||
Total Interest-Bearing Liabilities | 9,354.5 | 922.1 | 9.86 | 6,340.0 | 355.6 | 5.61 | 15,694.5 | 1,277.7 | 8.14 | |||||||||||||||||||||||||||
Demand Deposits | 2,873.6 | — | — | 12.4 | — | — | 2,886.0 | — | — | |||||||||||||||||||||||||||
Other Liabilities | 2,313.1 | — | — | 559.5 | — | — | 2,872.6 | — | — | |||||||||||||||||||||||||||
Minority Interests | 214.4 | — | — | — | — | — | 214.4 | — | — | |||||||||||||||||||||||||||
Shareholders’ Equity | 1,745.0 | — | — | — | — | — | 1,745.0 | — | — | |||||||||||||||||||||||||||
Total Liabilities and Equity | 16,500.6 | — | — | 6,911.9 | — | — | 23,412.5 | — | — | |||||||||||||||||||||||||||
Spread and Net Yield | ||||||||||||||||||||||||||||||||||||
Interest Rate Spread | 5.59 | (1.69 | ) | 4.00 | ||||||||||||||||||||||||||||||||
Cost of Funds Supporting Interest-Earning Assets | 6.50 | 6.23 | 6.42 | |||||||||||||||||||||||||||||||||
Net Yield on Interest-Earning Assets | 8.95 | (2.30 | ) | 5.72 |
(*) | Rates include the CER adjustment. |
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Fiscal Year Ended December 31, 2007 (*) | ||||||||||||||||||||||||||||||||||||
Pesos | Dollars | Total | ||||||||||||||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||||||||||||||
Average | Accrued | Yield/ | Average | Accrued | Yield/ | Average | Accrued | Yield/ | ||||||||||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | ||||||||||||||||||||||||||||
(in millions of Pesos, except rates) | ||||||||||||||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||||||||||||
Government Securities | 1,209.1 | 16.9 | 1.40 | 3,069.7 | 129.4 | 4.22 | 4,278.8 | 146.3 | 3.42 | |||||||||||||||||||||||||||
Loans | ||||||||||||||||||||||||||||||||||||
Private Sector | 7,178.8 | 1,163.5 | 16.21 | 1,665.0 | 107.1 | 6.43 | 8,843.8 | 1,270.6 | 14.37 | |||||||||||||||||||||||||||
Public Sector | 1,685.1 | 221.2 | 13.13 | — | — | — | 1,685.1 | 221.2 | 13.13 | |||||||||||||||||||||||||||
Total Loans | 8,863.9 | 1,384.7 | 15.62 | 1,665.0 | 107.1 | 6.43 | 10,528.9 | 1,491.8 | 14.17 | |||||||||||||||||||||||||||
Other(1) | 2,378.1 | 155.2 | 6.53 | 1,040.1 | 29.8 | 2.87 | 3,418.2 | 185.0 | 5.41 | |||||||||||||||||||||||||||
Total Interest-Earning Assets | 12,451.1 | 1,556.8 | 12.50 | 5,774.8 | 266.3 | 4.61 | 18,225.9 | 1,823.1 | 10.00 | |||||||||||||||||||||||||||
Cash and Gold | 484.6 | — | — | 201.6 | — | — | 686.2 | — | — | |||||||||||||||||||||||||||
Equity in Other Companies | 661.0 | — | — | 65.2 | — | — | 726.2 | — | — | |||||||||||||||||||||||||||
Other Assets | 2,010.4 | — | — | 126.8 | — | — | 2,137.2 | — | — | |||||||||||||||||||||||||||
Allowances | (335.9 | ) | — | — | (107.2 | ) | — | — | (443.1 | ) | — | — | ||||||||||||||||||||||||
Total Assets | 15,271.2 | — | — | 6,061.2 | — | — | 21,332.4 | — | — | |||||||||||||||||||||||||||
Liabilities and Equity | ||||||||||||||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||||||||||||||
Current Accounts | 531.0 | 16.4 | 3.09 | 147.4 | — | — | 678.4 | 16.4 | 2.42 | |||||||||||||||||||||||||||
Savings Accounts | 1,647.2 | 5.1 | 0.31 | 605.7 | — | — | 2,252.9 | 5.1 | 0.23 | |||||||||||||||||||||||||||
Time Deposits | 5,705.6 | 547.0 | 9.59 | 900.6 | 15.4 | 1.71 | 6,606.2 | 562.4 | 8.51 | |||||||||||||||||||||||||||
Total Interest-Bearing Deposits | 7,883.8 | 568.5 | 7.21 | 1,653.7 | 15.4 | 0.93 | 9,537.5 | 583.9 | 6.12 | |||||||||||||||||||||||||||
Argentine Central Bank | 261.3 | 68.8 | 26.33 | 0.2 | — | — | 261.5 | 68.8 | 26.31 | |||||||||||||||||||||||||||
Other Financial Entities | 186.4 | 27.2 | 14.59 | 352.8 | 16.9 | 4.79 | 539.2 | 44.1 | 8.18 | |||||||||||||||||||||||||||
Debt Securities | 530.0 | 77.7 | 14.66 | 2,830.1 | 213.3 | 7.54 | 3,360.1 | 291.0 | 8.66 | |||||||||||||||||||||||||||
Other | 149.7 | 16.5 | 11.02 | 1,010.8 | 66.9 | 6.62 | 1,160.5 | 83.4 | 7.19 | |||||||||||||||||||||||||||
Total Interest-Bearing Liabilities | 9,011.2 | 758.7 | 8.42 | 5,847.6 | 312.5 | 5.34 | 14,858.8 | 1,071.2 | 7.21 | |||||||||||||||||||||||||||
Demand Deposits | 2,287.6 | — | — | 19.9 | — | — | 2,307.5 | — | — | |||||||||||||||||||||||||||
Other Liabilities | 1,872.7 | — | — | 513.8 | — | — | 2,386.5 | — | — | |||||||||||||||||||||||||||
Minority Interests | 172.9 | — | — | — | — | — | 172.9 | — | — | |||||||||||||||||||||||||||
Shareholders’ Equity | 1,606.7 | — | — | — | — | — | 1,606.7 | — | — | |||||||||||||||||||||||||||
Total Liabilities and Equity | 14,951.1 | — | — | 6,381.3 | — | — | 21,332.4 | — | — | |||||||||||||||||||||||||||
Spread and Net Yield | ||||||||||||||||||||||||||||||||||||
Interest Rate Spread | 4.08 | (0.73 | ) | 2.79 | ||||||||||||||||||||||||||||||||
Cost of Funds Supporting Interest-Earning Assets | 6.09 | 5.41 | 5.88 | |||||||||||||||||||||||||||||||||
Net Yield on Interest-Earning Assets | 6.41 | (0.80 | ) | 4.13 |
(*) | Rates include the CER adjustment. | |
(1) | Includes, among other amounts, the amounts corresponding to the Compensatory Bond and the Hedge Bond to be received. |
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Fiscal Year Ended December 31, 2006 (*) | |||||||||||||||||||||||||||||||||||||
Pesos | Dollars | Total | |||||||||||||||||||||||||||||||||||
Average | Average | Average | |||||||||||||||||||||||||||||||||||
Average | Accrued | Yield/ | �� | Average | Accrued | Yield/ | Average | Accrued | Yield/ | ||||||||||||||||||||||||||||
Balance | Interest | Rate | Balance | Interest | Rate | Balance | Interest | Rate | |||||||||||||||||||||||||||||
(in millions of Pesos, except rates) | |||||||||||||||||||||||||||||||||||||
Assets | |||||||||||||||||||||||||||||||||||||
Government Securities | 3,501.5 | 252.5 | 7.21 | 1,174.3 | 60.0 | 5.11 | 4,675.8 | 312.5 | 6.68 | ||||||||||||||||||||||||||||
Loans | |||||||||||||||||||||||||||||||||||||
Private Sector | 5,148.2 | 754.0 | 14.65 | 1,333.3 | 75.1 | 5.63 | 6,481.5 | 829.1 | 12.79 | ||||||||||||||||||||||||||||
Public Sector | 4,369.5 | 496.3 | 11.36 | — | — | — | 4,369.5 | 496.3 | 11.36 | ||||||||||||||||||||||||||||
Total Loans | 9,517.7 | 1,250.3 | 13.14 | 1,333.3 | 75.1 | 5.63 | 10,851.0 | 1,325.4 | 12.21 | ||||||||||||||||||||||||||||
Other(1) | 1,778.4 | 125.5 | 7.06 | 4,447.4 | 158.8 | 3.57 | 6,225.8 | 284.3 | 4.57 | ||||||||||||||||||||||||||||
Total Interest-Earning Assets | 14,797.6 | 1,628.3 | 11.00 | 6,955.0 | 293.9 | 4.23 | 21,752.6 | 1,922.2 | 8.84 | ||||||||||||||||||||||||||||
Cash and Gold | 432.7 | — | — | 210.0 | — | — | 642.7 | — | — | ||||||||||||||||||||||||||||
Equity in Other Companies | 561.1 | — | — | 44.2 | — | — | 605.3 | — | — | ||||||||||||||||||||||||||||
Other Assets | 1,970.2 | — | — | 80.8 | — | — | 2,051.0 | — | — | ||||||||||||||||||||||||||||
Allowances | (348.8 | ) | — | — | (88.3 | ) | — | — | (437.1 | ) | — | — | |||||||||||||||||||||||||
Total Assets | 17,412.8 | — | — | 7,201.7 | — | — | 24,614.5 | — | — | ||||||||||||||||||||||||||||
Liabilities and Equity | |||||||||||||||||||||||||||||||||||||
Deposits | |||||||||||||||||||||||||||||||||||||
Current Accounts | 536.8 | 21.0 | 3.91 | 122.0 | — | — | 658.8 | 21.0 | 3.19 | ||||||||||||||||||||||||||||
Savings Accounts | 1,283.0 | 4.4 | 0.34 | 506.3 | — | — | 1,789.3 | 4.4 | 0.25 | ||||||||||||||||||||||||||||
Time Deposits | 4,556.3 | 405.8 | 8.91 | 741.6 | 9.6 | 1.29 | 5,297.9 | 415.4 | 7.84 | ||||||||||||||||||||||||||||
Total Interest-Bearing Deposits | 6,376.1 | 431.2 | 6.76 | 1,369.9 | 9.6 | 0.70 | 7,746.0 | 440.8 | 5.69 | ||||||||||||||||||||||||||||
Argentine Central Bank | 6,083.0 | 769.5 | 12.65 | 0.1 | — | — | 6,083.1 | 769.5 | 12.65 | ||||||||||||||||||||||||||||
Other Financial Entities | 265.9 | 35.1 | 13.20 | 172.9 | 11.3 | 6.54 | 438.8 | 46.4 | 10.57 | ||||||||||||||||||||||||||||
Debt Securities | 170.7 | 24.4 | 14.29 | 3,261.7 | 270.5 | 8.29 | 3,432.4 | 294.9 | 8.59 | ||||||||||||||||||||||||||||
Other | 108.8 | 12.2 | 11.21 | 1,084.9 | 96.2 | 8.87 | 1,193.7 | 108.4 | 9.08 | ||||||||||||||||||||||||||||
Total Interest-Bearing Liabilities | 13,004.5 | 1,272.4 | 9.78 | 5,889.5 | 387.6 | 6.58 | 18,894.0 | 1,660.0 | 8.79 | ||||||||||||||||||||||||||||
Demand Deposits | 1,735.8 | — | — | 20.6 | — | — | 1,756.4 | — | — | ||||||||||||||||||||||||||||
Other Liabilities | 1,651.9 | — | — | 518.8 | — | — | 2,170.7 | — | — | ||||||||||||||||||||||||||||
Minority Interests | 144.1 | — | — | — | — | — | 144.1 | — | — | ||||||||||||||||||||||||||||
Shareholders’ Equity | 1,649.3 | — | — | — | — | — | 1,649.3 | — | — | ||||||||||||||||||||||||||||
Total Liabilities and Equity | 18,185.6 | — | — | 6,428.9 | — | — | 24,614.5 | — | — | ||||||||||||||||||||||||||||
Spread and Net Yield | |||||||||||||||||||||||||||||||||||||
Interest Rate Spread | 1.22 | (2.35 | ) | 0.05 | |||||||||||||||||||||||||||||||||
Cost of Funds Supporting Interest-Earning Assets | 8.60 | 5.57 | 7.63 | ||||||||||||||||||||||||||||||||||
Net Yield on Interest-Earning Assets | 2.41 | (1.35 | ) | 1.21 |
(*) | Rates include the CER adjustment. | |
(1) | Includes, among other amounts, the amounts corresponding to the Compensatory Bond and the Hedge Bond to be received. |
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Fiscal Year 2008/ Fiscal Year 2007, | Fiscal Year 2007/ Fiscal Year 2006, | |||||||||||||||||||||||
Increase (Decrease) due to changes in | Increase (Decrease) due to changes in | |||||||||||||||||||||||
Volume | Rate | Net Change | Volume | Rate | Net Change | |||||||||||||||||||
(in millions of Pesos) | ||||||||||||||||||||||||
Interest Earning Assets | ||||||||||||||||||||||||
Government Securities | ||||||||||||||||||||||||
Pesos | (0.6 | ) | 55.9 | 55.3 | (105.6 | ) | (130.0 | ) | (235.6 | ) | ||||||||||||||
Dollars | (22.0 | ) | (31.1 | ) | (53.1 | ) | 77.8 | (8.4 | ) | 69.4 | ||||||||||||||
Total | (22.6 | ) | 24.8 | 2.2 | (27.8 | ) | (138.4 | ) | (166.2 | ) | ||||||||||||||
Loans | ||||||||||||||||||||||||
Private Sector | ||||||||||||||||||||||||
Pesos | 301.5 | 291.6 | 593.1 | 322.3 | 87.2 | 409.5 | ||||||||||||||||||
Dollars | 20.0 | 5.5 | 25.5 | 20.4 | 11.6 | 32.0 | ||||||||||||||||||
Total | 321.5 | 297.1 | 618.6 | 342.7 | 98.8 | 441.5 | ||||||||||||||||||
Public Sector | ||||||||||||||||||||||||
Pesos | (55.1 | ) | (0.4 | ) | (55.5 | ) | (368.5 | ) | 93.4 | (275.1 | ) | |||||||||||||
Dollars | — | — | — | — | — | — | ||||||||||||||||||
Total | (55.1 | ) | (0.4 | ) | (55.5 | ) | (368.5 | ) | 93.4 | (275.1 | ) | |||||||||||||
Other | ||||||||||||||||||||||||
Pesos | 35.7 | 6.1 | 41.8 | 38.2 | (8.5 | ) | 29.7 | |||||||||||||||||
Dollars | 8.7 | (23.3 | ) | (14.6 | ) | (102.6 | ) | (26.4 | ) | (129.0 | ) | |||||||||||||
Total | 44.4 | (17.2 | ) | 27.2 | (64.4 | ) | (34.9 | ) | (99.3 | ) | ||||||||||||||
Total Interest-Earning Assets | ||||||||||||||||||||||||
Pesos | 281.5 | 353.2 | 634.7 | (113.6 | ) | 42.1 | (71.5 | ) | ||||||||||||||||
Dollars | 6.7 | (48.9 | ) | (42.2 | ) | (4.4 | ) | (23.2 | ) | (27.6 | ) | |||||||||||||
Total | 288.2 | 304.3 | 592.5 | (118.0 | ) | 18.9 | (99.1 | ) | ||||||||||||||||
Interest Bearing Liabilities | ||||||||||||||||||||||||
Demand Account | ||||||||||||||||||||||||
Pesos | 5.2 | — | 5.2 | (0.2 | ) | (4.4 | ) | (4.6 | ) | |||||||||||||||
Dollars | — | — | — | — | — | — | ||||||||||||||||||
Total | 5.2 | — | 5.2 | (0.2 | ) | (4.4 | ) | (4.6 | ) | |||||||||||||||
Savings Account | ||||||||||||||||||||||||
Pesos | 0.9 | (1.3 | ) | (0.4 | ) | 1.1 | (0.4 | ) | 0.7 | |||||||||||||||
Dollars | — | — | — | — | — | — | ||||||||||||||||||
Total | 0.9 | (1.3 | ) | (0.4 | ) | 1.1 | (0.4 | ) | 0.7 | |||||||||||||||
Time Deposits | ||||||||||||||||||||||||
Pesos | 9.0 | 193.9 | 202.9 | 108.4 | 32.8 | 141.2 | ||||||||||||||||||
Dollars | 1.3 | 1.1 | 2.4 | 2.3 | 3.5 | 5.8 | ||||||||||||||||||
Total | 10.3 | 195.0 | 205.3 | 110.7 | 36.3 | 147.0 | ||||||||||||||||||
With the Argentine Central Bank | ||||||||||||||||||||||||
Pesos | (34.4 | ) | (34.4 | ) | (68.8 | ) | (1,110.3 | ) | 409.6 | (700.7 | ) | |||||||||||||
Dollars | — | — | — | — | — | — | ||||||||||||||||||
Total | (34.4 | ) | (34.4 | ) | (68.8 | ) | (1,110.3 | ) | 409.6 | (700.7 | ) | |||||||||||||
With Other Financial Entities | ||||||||||||||||||||||||
Pesos | 19.0 | 7.6 | 26.6 | (12.2 | ) | 4.3 | (7.9 | ) | ||||||||||||||||
Dollars | 21.9 | 0.5 | 22.4 | 7.5 | (1.9 | ) | 5.6 | |||||||||||||||||
Total | 40.9 | 8.1 | 49.0 | (4.7 | ) | 2.4 | (2.3 | ) | ||||||||||||||||
Negotiable Obligations | ||||||||||||||||||||||||
Pesos | (6.2 | ) | (1.0 | ) | (7.2 | ) | 52.7 | 0.6 | 53.3 | |||||||||||||||
Dollars | (42.8 | ) | 39.1 | (3.7 | ) | (33.8 | ) | (23.4 | ) | (57.2 | ) | |||||||||||||
Total | (49.0 | ) | 38.1 | (10.9 | ) | 18.9 | (22.8 | ) | (3.9 | ) | ||||||||||||||
Other liabilities | ||||||||||||||||||||||||
Pesos | 6.9 | (1.8 | ) | 5.1 | 4.5 | (0.2 | ) | 4.3 | ||||||||||||||||
Dollars | 17.9 | 4.1 | 22.0 | (6.2 | ) | (23.1 | ) | (29.3 | ) | |||||||||||||||
Total | 24.8 | 2.3 | 27.1 | (1.7 | ) | (23.3 | ) | (25.0 | ) | |||||||||||||||
Total Interest Bearing Liabilities | ||||||||||||||||||||||||
Pesos | 0.4 | 163.0 | 163.4 | (956.0 | ) | 442.3 | (513.7 | ) | ||||||||||||||||
Dollars | (1.7 | ) | 44.8 | 43.1 | (30.2 | ) | (44.9 | ) | (75.1 | ) | ||||||||||||||
Total | (1.3 | ) | 207.8 | 206.5 | (986.2 | ) | 397.4 | (588.8 | ) |
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Fiscal Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions of Pesos, except percentages) | ||||||||||||
Total Average Interest-Earning Assets | ||||||||||||
Pesos | 14,182.4 | 12,451.1 | 14,797.6 | |||||||||
Dollars | 5,710.1 | 5,774.8 | 6,955.0 | |||||||||
Total | 19,892.5 | 18,225.9 | 21,752.6 | |||||||||
Net Interest Earned(1) | ||||||||||||
Pesos | 1,269.4 | 798.1 | 355.9 | |||||||||
Dollars | (131.5 | ) | (46.2 | ) | (93.7 | ) | ||||||
Total | 1,137.9 | 751.9 | 262.2 | |||||||||
Net Yield on Interest-Earning Assets(2) (%) | ||||||||||||
Pesos | 8.95 | 6.41 | 2.41 | |||||||||
Dollars | (2.30 | ) | (0.80 | ) | (1.35 | ) | ||||||
Weighted-Average Yield | 5.72 | 4.13 | 1.21 | |||||||||
Interest Spread, Nominal Basis(3)(%) | ||||||||||||
Pesos | 5.59 | 4.08 | 1.22 | |||||||||
Dollars | (1.69 | ) | (0.73 | ) | (2.35 | ) | ||||||
Weighted-Average Yield | 4.00 | 2.79 | 0.05 | |||||||||
Credit Related Fees Included in Net Interest Earned | ||||||||||||
Pesos | 69.9 | 43.5 | 26.4 | |||||||||
Dollars | — | — | — | |||||||||
Total | 69.9 | 43.5 | 26.4 | |||||||||
(1) | Net interest earned corresponds to the net financial income (“Financial Income” minus “Financial Expenses,” as set forth in the Income Statement),plus (i) financial fees included in “Income from Services — In Relation to Lending Transactions” in the Income Statement,(ii) contributions to the Deposits Insurance Fund included in the item with the same denomination that is part of the “Financial Expenses” caption in the Income Statement, and (iii) contributions and taxes on financial income included in the Income Statement under “Financial Expenses — Others”;minus (i) net income from corporate securities, included under “Financial Income/Expenses — Interest Income and Gains/Losses from Holdings of Government and Corporate Securities,” in the Income Statement,(ii) differences in quotation of gold and foreign currency included in the item with the same denomination that is part of the Financial Expenses/Income caption in the Income Statement, and (iii) the premiums and adjustments on forward transactions in foreign currency, included in the item “Financial Income-Others” in the Income Statement. Net interest earned also includes income from government securities used as security margins in repurchase transactions. This income/loss is included in “Miscellaneous Income/Loss — Others” in the Income Statement. Net income from government securities includes both interest and gains/losses due to the variation of market quotations. | |
(2) | Net interest earned, divided by average interest-earning assets. | |
(3) | Interest spread, nominal basis is the difference between the average nominal interest rate on interest-earning assets and the average nominal interest rate on interest-bearing deposits. |
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Fiscal Year Ended December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions of Pesos) | ||||||||||||
Government Securities | ||||||||||||
Pesos | ||||||||||||
Investment | 22.8 | 17.1 | — | |||||||||
Issued by Argentine Central Bank — Lebac and Nobac | 22.8 | 17.1 | — | |||||||||
Trading | 233.7 | 38.9 | 0.1 | |||||||||
Bonar | — | 36.7 | — | |||||||||
Bogar Bonds | 1.6 | 2.1 | — | |||||||||
Others | 232.1 | 0.1 | 0.1 | |||||||||
Issued by Argentine Central Bank | 550.2 | 331.6 | 119.5 | |||||||||
Lebac Unquoted | — | 11.0 | — | |||||||||
Lebac Quoted | — | 103.3 | 17.7 | |||||||||
Nobac Unquoted | 520.2 | 8.3 | 101.8 | |||||||||
Nobac Quoted | 30.0 | 209.0 | — | |||||||||
Without Quotation | 69.8 | 1.9 | 433.5 | |||||||||
Bogar | — | — | 428.6 | |||||||||
Discount Bonds in Pesos | 69.8 | 1.9 | 4.9 | |||||||||
Total Government Securities in Pesos | 876.5 | 389.5 | 553.1 | |||||||||
Dollars | ||||||||||||
Investment | 527.4 | 1,303.4 | 2,608.8 | |||||||||
Boden 2012 Bonds | 525.9 | 1,303.4 | 2,608.8 | |||||||||
Boden 2013 Bonds | 1.5 | — | — | |||||||||
Trading | 127.9 | 0.1 | 26.4 | |||||||||
Boden 2012 Bonds | — | 0.1 | 26.3 | |||||||||
Boden 2013-2015 Bonds | 127.5 | — | — | |||||||||
Others | 0.4 | — | 0.1 | |||||||||
Total Government Securities in Dollars | 655.3 | 1,303.5 | 2,635.2 | |||||||||
Total Government Securities | 1,531.8 | 1,693.0 | 3,188.3 | |||||||||
Corporate Securities | 0.1 | 1.0 | 0.3 | |||||||||
Corporate Equity Securities (Quoted) in Pesos | 0.1 | 1.0 | — | |||||||||
Corporate Equity Securities (Quoted) in Dollars | — | — | 0.3 | |||||||||
Total Government and Corporate Securities | 1,531.9 | 1,694.0 | 3,188.6 | |||||||||
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As of December 31, 2008 | ||||||||||||||||||||||||
Spot | Spot | |||||||||||||||||||||||
Forward | Forward | purchases | sales | Net | ||||||||||||||||||||
Holdings | Purchases | Sales | to be settled | to be settled | Position | |||||||||||||||||||
(in millions of Pesos) | ||||||||||||||||||||||||
Government Securities | ||||||||||||||||||||||||
Held for Investment Purposes | ||||||||||||||||||||||||
Pesos | 22.8 | — | — | — | — | 22.8 | ||||||||||||||||||
Dollar | 525.9 | 1,824.9 | — | — | — | 2,350.8 | ||||||||||||||||||
Held for Trading Purposes | ||||||||||||||||||||||||
Pesos | 233.7 | — | 232.1 | — | — | 1.6 | ||||||||||||||||||
Dollar | 129.4 | — | 127.5 | — | — | 1.9 | ||||||||||||||||||
Securities without Quotation | ||||||||||||||||||||||||
Pesos | 69.8 | 597.1 | — | — | — | 666.9 | ||||||||||||||||||
Instruments issued by the Argentine Central Bank | ||||||||||||||||||||||||
Pesos | 550.2 | — | — | — | — | 550.2 | ||||||||||||||||||
Other | — | 51.1 | — | — | — | 51.1 | ||||||||||||||||||
Total Government Securities | 1,531.8 | 2,473.1 | 359.6 | — | — | 3,645.3 | ||||||||||||||||||
Corporate Equity Securities (Quoted) | 0.1 | — | — | — | — | 0.1 | ||||||||||||||||||
Total Government and Corporate Securities | 1,531.9 | 2,473.1 | 359.6 | — | — | 3,645.4 | ||||||||||||||||||
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• | The market value of our position in Boden 2012 Bonds was Ps. 1,253.4 million. This total comprises both our holdings recorded as government securities held for investment and our forward purchases in connection with repurchase agreements. | ||
• | The market value of our position in Discount Bonds in Pesos and GDP-Linked Negotiable Securities was Ps. 196.5 million. | ||
• | Our holdings of Lebac and Nobac and Bonar Bonds were marked-to-market. |
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January | February | March | April | May | June | July | August | September | October | November | December | |||||||||||||||||||||||||||||||||||||
2003 | 3.00 | 3.00 | 3.00 | 3.00 | 3.00 | 3.00 | 3.00 | 3.00 | 3.00 | 3.00 | ||||||||||||||||||||||||||||||||||||||
2004 | 3.25 | 3.25 | 3.25 | 3.25 | 3.25 | 3.25 | 3.29 | 3.33 | 3.37 | 3.41 | 3.46 | 3.50 | ||||||||||||||||||||||||||||||||||||
2005 | 3.54 | 3.58 | 3.62 | 3.66 | 3.71 | 3.75 | 3.79 | 3.83 | 3.87 | 3.91 | 3.96 | 4.00 | ||||||||||||||||||||||||||||||||||||
2006 | 4.08 | 4.15 | 4.23 | 4.31 | 4.39 | 4.47 | 4.56 | 4.64 | 4.73 | 4.82 | 4.91 | 5.00 | ||||||||||||||||||||||||||||||||||||
2007 | 5% + 0.04xTMC | 5% + 0.08xTMC | 5% + 0.13xTMC | 5% + 0.17xTMC | 5% + 0.21xTMC | 5% + 0.25xTMC | 5% + 0.29xTMC | 5% + 0.33xTMC | 5% + 0.38xTMC | 5% + 0.42xTMC | 5% + 0.46xTMC | 5% + 0.50xTMC | ||||||||||||||||||||||||||||||||||||
2008 | 5% + 0.58xTMC | 5% + 0.66xTMC | 5% + 0.75xTMC | 5% + 0.83xTMC | 5% + 0.92xTMC | TM (as from June 2008) |
Where: | ||
TM = | average market rate informed by the Argentine Central Bank based on the internal rates of return of government securities with similar “modified duration”. | |
TMC = | average market rate corrected = TM — 5%. |
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Maturity Yield | ||||||||||||||||||||||||||||||||||||
Maturing after 1 | Maturing after 5 | |||||||||||||||||||||||||||||||||||
Maturing | year but within | years but within | Maturing | |||||||||||||||||||||||||||||||||
Total | within 1 year | 5 years | 10 years | after 10 years | ||||||||||||||||||||||||||||||||
Book | Book | Book | Book | Book | ||||||||||||||||||||||||||||||||
Value | Value | Yield(1) | Value | Yield(1) | Value | Yield(1) | Value | Yield(1) | ||||||||||||||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||||||||||||||||||
Government Securities | ||||||||||||||||||||||||||||||||||||
Held for Trading and Brokerage Purposes (carried at market value) | ||||||||||||||||||||||||||||||||||||
Pesos | 233.7 | 33.2 | 69.5 | % | 166.5 | 69.5 | % | 33.9 | 69.2 | % | — | — | ||||||||||||||||||||||||
Dollars | 129.5 | 16.6 | 41.1 | % | 64.6 | 42.1 | % | 48.3 | 37.4 | % | — | — | ||||||||||||||||||||||||
Held for Investment (carried at amortized cost) | ||||||||||||||||||||||||||||||||||||
Pesos | 22.7 | 0.4 | 51.1 | % | 10.1 | 43.9 | % | 3.1 | 51.1 | % | 9.3 | 18.4 | % | |||||||||||||||||||||||
Dollars | 525.9 | 131.5 | 41.5 | % | 394.4 | 41.5 | % | — | — | — | — | |||||||||||||||||||||||||
Instruments Issued by the Argentine Central Bank | ||||||||||||||||||||||||||||||||||||
Pesos | 30.0 | — | — | 30.0 | 22.0 | % | — | — | — | — | ||||||||||||||||||||||||||
Securities Without Quotation | ||||||||||||||||||||||||||||||||||||
Pesos | 590.0 | 520.2 | — | — | — | — | — | 69.8 | 19.0 | % | ||||||||||||||||||||||||||
Total Government Securities | 1,531.8 | 701.9 | 12.1 | % | 665.6 | 47.7 | % | 85.3 | 50.5 | % | 79.1 | 18.9 | % | |||||||||||||||||||||||
Corporate Debt Securities | 0.1 | — | — | 0.1 | 8.0 | % | — | — | — | — | ||||||||||||||||||||||||||
Total Portfolio | 1,531.9 | 701.9 | 12.1 | % | 665.7 | 47.7 | % | 85.3 | 50.5 | % | 79.1 | 18.9 | % | |||||||||||||||||||||||
(1) | Effective yield based on December 31, 2008 quoted market values. |
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As of December 31, | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
(in millions of Pesos) | ||||||||||||||||||||
Principal and Interest | ||||||||||||||||||||
Non-Financial Public Sector | 1,319.6 | 1,210.5 | 2,690.6 | 5,187.5 | 4,513.7 | |||||||||||||||
Local Financial Sector | 148.1 | 110.0 | 311.6 | 128.2 | 150.5 | |||||||||||||||
Non-Financial Private Sector and Residents Abroad(1) | ||||||||||||||||||||
Advances | 594.4 | 792.1 | 346.3 | 223.6 | 199.8 | |||||||||||||||
Promissory Notes | 2,116.3 | 2,911.2 | 2,143.7 | 1,836.9 | 1,099.2 | |||||||||||||||
Mortgage Loans | 1,026.8 | 945.1 | 688.0 | 503.4 | 623.9 | |||||||||||||||
Pledge Loans | 81.0 | 94.5 | 67.1 | 121.1 | 92.9 | |||||||||||||||
Personal Loans | 1,217.6 | 977.9 | 563.2 | 258.0 | 58.2 | |||||||||||||||
Credit Card Loans | 4,378.4 | 3,630.1 | 2,458.6 | 1,732.1 | 1,105.4 | |||||||||||||||
Placements in Banks Abroad | 334.5 | 158.0 | 608.0 | 212.9 | 379.2 | |||||||||||||||
Other Loans | 883.3 | 1,010.8 | 794.8 | 599.8 | 393.9 | |||||||||||||||
Accrued Interest, Adjustment and Quotation Differences Receivable | 185.8 | 177.0 | 155.0 | 146.8 | 414.4 | |||||||||||||||
Documented Interest | (38.5 | ) | (42.5 | ) | (23.3 | ) | (12.3 | ) | (3.7 | ) | ||||||||||
Total Non-Financial Private-Sector and Residents Abroad | 10,779.6 | 10,654.2 | 7,801.4 | 5,622.3 | 4,363.2 | |||||||||||||||
Total Gross Loans | 12,247.3 | 11,974.7 | 10,803.6 | 10,938.0 | 9,027.4 | |||||||||||||||
Allowance for Loan Losses | (526.8 | ) | (428.6 | ) | (327.0 | ) | (427.9 | ) | (632.6 | ) | ||||||||||
Total Loans | 11,720.5 | 11,546.1 | 10,476.6 | 10,510.1 | 8,394.8 | |||||||||||||||
Loans with Guarantees | ||||||||||||||||||||
With Preferred Guarantees(2) | 1,332.8 | 1,289.8 | 1,076.2 | 838.5 | 1,190.0 | |||||||||||||||
Other Guarantees | 2,971.1 | 3,180.2 | 4,103.6 | 6,317.3 | 5,235.8 | |||||||||||||||
Total Loans with Guarantees | 4,303.9 | 4,470.0 | 5,179.8 | 7,155.8 | 6,425.8 | |||||||||||||||
(1) | Categories of loans include: |
• | Advances: short-term obligations drawn on by customers through overdrafts. | ||
• | Promissory Notes: endorsed promissory notes, negotiable obligations and other promises to pay signed by one borrower or group of borrowers and factored loans. | ||
• | Mortgage Loans: loans granted to purchase or improve real estate and collateralized by such real estate and commercial loans secured by a real estate mortgage. | ||
• | Pledge Loans: loans secured by collateral (such as cars or machinery) other than real estate, where such collateral is an integral part of the loan documents. | ||
• | Personal Loans: loans to individuals. | ||
• | Credit-Card Loans: loans granted through credit cards to credit card holders. | ||
• | Placements in Banks Abroad: short-term loans to banks abroad. | ||
• | Other loans: loans not included in other categories. | ||
• | Documented interest: discount on notes and bills. |
(2) | Preferred guarantees include mortgages on real estate property or pledges on movable property, such as cars or machinery, where the Bank has priority, endorsements of the Federal Office of the Secretary of Finance, pledges of Government securities, or gold or cash as collateral. |
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�� | ||||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
Amount | % of Total | Amount | % of Total | Amount | % of Total | |||||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||||||
Corporate | 1,148.6 | 9.38 | 1,870.0 | 15.62 | 1,534.7 | 14.21 | ||||||||||||||||||
Middle-Market Companies | 3,716.8 | 30.35 | 3,993.8 | 33.35 | 2,521.9 | 23.34 | ||||||||||||||||||
- Agribusiness | 1,461.4 | 11.93 | 1,341.9 | 11.21 | 902.1 | 8.35 | ||||||||||||||||||
- SMEs | 2,255.4 | 18.42 | 2,651.9 | 22.14 | 1,619.8 | 14.99 | ||||||||||||||||||
Commercial Loans | 4,865.4 | 39.73 | 5,863.8 | 48.97 | 4,056.6 | 37.55 | ||||||||||||||||||
Individuals | 5,578.3 | 45.55 | 4,631.4 | 38.68 | 3,131.0 | 28.98 | ||||||||||||||||||
- Bank | 3,232.0 | 26.39 | 2,603.1 | 21.74 | 1,720.2 | 15.92 | ||||||||||||||||||
- Regional Credit Card Companies | 2,346.3 | 19.16 | 2,028.3 | 16.94 | 1,410.8 | 13.06 | ||||||||||||||||||
Financial Sector(1) | 484.0 | 3.95 | 269.0 | 2.25 | 925.4 | 8.57 | ||||||||||||||||||
Non-Financial Public Sector | 1,319.6 | 10.77 | 1,210.5 | 10.10 | 2,690.6 | 24.90 | ||||||||||||||||||
Other Loans | — | — | — | — | — | — | ||||||||||||||||||
Total(2) | 12,247.3 | 100.00 | 11,974.7 | 100.00 | 10,803.6 | 100.00 | ||||||||||||||||||
(1) | Includes local and international financial sector. Financial Sector loans are primarily composed of interbank loans (call money loans), overnight deposits at international money center banks and loans to provincial banks. | |
(2) | Before the allowance for loan losses. |
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As of December 31, | ||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
% of | % of | % of | ||||||||||||||||||||||
Amount | Total | Amount | Total | Amount | Total | |||||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||||||
Financial Sector(1) | 484.0 | 3.95 | 269.0 | 2.25 | 925.4 | 8.57 | ||||||||||||||||||
Services | ||||||||||||||||||||||||
Non-Financial Public Sector | 1,319.6 | 10.77 | 1,210.5 | 10.10 | 2,690.6 | 24.90 | ||||||||||||||||||
Communications, Transportation Health and Others | 838.3 | 6.84 | 936.7 | 7.82 | 517.2 | 4.79 | ||||||||||||||||||
Electricity, Gas, Water Supply and Sewage Services | 30.7 | 0.25 | 198.2 | 1.66 | 234.8 | 2.17 | ||||||||||||||||||
Other Financial Services | 44.5 | 0.37 | 11.7 | 0.10 | 35.7 | 0.33 | ||||||||||||||||||
Total | 2,233.1 | 18.23 | 2,357.1 | 19.68 | 3,478.3 | 32.19 | ||||||||||||||||||
Primary Products | ||||||||||||||||||||||||
Agriculture and Livestock | 1,274.5 | 10.41 | 1,217.8 | 10.17 | 971.8 | 9.00 | ||||||||||||||||||
Fishing, Forestry and Mining | 60.9 | 0.49 | 49.8 | 0.42 | 29.8 | 0.28 | ||||||||||||||||||
Total | 1,335.4 | 10.90 | 1,267.6 | 10.59 | 1,001.6 | 9.28 | ||||||||||||||||||
Consumer | 5,294.9 | 43.23 | 4,402.4 | 36.76 | 2,988.0 | 27.65 | ||||||||||||||||||
Retail Trade | 537.2 | 4.39 | 721.0 | 6.02 | 524.1 | 4.85 | ||||||||||||||||||
Wholesale Trade | 647.0 | 5.28 | 854.3 | 7.13 | 333.7 | 3.09 | ||||||||||||||||||
Construction | 82.2 | 0.67 | 268.1 | 2.24 | 309.7 | 2.87 | ||||||||||||||||||
Manufacturing | ||||||||||||||||||||||||
Foodstuffs | 533.6 | 4.36 | 561.4 | 4.69 | 406.1 | 3.76 | ||||||||||||||||||
Transportation Materials | 81.5 | 0.67 | 69.3 | 0.58 | 100.2 | 0.93 | ||||||||||||||||||
Chemicals and Oil | 293.2 | 2.39 | 339.6 | 2.84 | 177.4 | 1.64 | ||||||||||||||||||
Manufacturing Industries | 682.6 | 5.57 | 836.1 | 6.98 | 545.7 | 5.05 | ||||||||||||||||||
Total | 1,590.9 | 12.99 | 1,806.4 | 15.09 | 1,229.4 | 11.38 | ||||||||||||||||||
Other Loans | 42.6 | 0.36 | 28.8 | 0.24 | 13.4 | 0.12 | ||||||||||||||||||
Total(2) | 12,247.3 | 100.00 | 11,974.7 | 100.00 | 10,803.6 | 100.00 | ||||||||||||||||||
(1) | Includes local and international financial sectors. | |
(2) | Before the allowance for loan losses. |
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After 1 | After 6 | After 3 | ||||||||||||||||||||||||||
Month but | Months but | After 1 Year | Years but | Total at | ||||||||||||||||||||||||
Within 1 | within 6 | within 12 | but within 3 | within 5 | After 5 | December | ||||||||||||||||||||||
Month | Months | Months | Years | Years | Years | 31, 2008 | ||||||||||||||||||||||
(in millions of Pesos) | ||||||||||||||||||||||||||||
Non-Financial Public Sector(1) | 1.8 | 1,313.5 | 0.5 | 2.0 | 1.8 | — | 1,319.6 | |||||||||||||||||||||
Financial Sector(1) | 148.1 | — | — | — | — | — | 148.1 | |||||||||||||||||||||
Private Sector and Residents Abroad | 6,992.9 | 1,355.6 | 532.4 | 1,089.2 | 505.0 | 304.5 | 10,779.6 | |||||||||||||||||||||
- Advances | 367.3 | 222.0 | 4.4 | 0.6 | — | — | 594.3 | |||||||||||||||||||||
- Promissory Notes | 810.8 | 704.0 | 175.8 | 308.4 | 83.4 | 33.9 | 2,116.3 | |||||||||||||||||||||
- Mortgage Loans | 26.5 | 89.4 | 108.9 | 314.9 | 218.1 | 269.0 | 1,026.8 | |||||||||||||||||||||
- Pledge Loans | 5.4 | 15.5 | 17.6 | 34.9 | 6.0 | 1.6 | 81.0 | |||||||||||||||||||||
- Personal Loans | 71.0 | 296.7 | 222.1 | 430.4 | 197.4 | — | 1,217.6 | |||||||||||||||||||||
- Credit-Card Loans | 4,378.4 | — | — | — | — | — | 4,378.4 | |||||||||||||||||||||
- Other Loans | 1,186.3 | 28.0 | 3.6 | — | 0.1 | — | 1,218.0 | |||||||||||||||||||||
- Accrued Interest and Quotation Differences Receivable(1) | 185.8 | — | — | — | — | — | 185.8 | |||||||||||||||||||||
- (Documented Interest) | (38.5 | ) | — | — | — | — | — | (38.5 | ) | |||||||||||||||||||
- (Unallocated Collections) | (0.1 | ) | — | — | — | — | — | (0.1 | ) | |||||||||||||||||||
Allowance for Loan Losses(2) | (526.8 | ) | (526.8 | ) | ||||||||||||||||||||||||
Total Loans, Net | 6,616.0 | 2,669.1 | 532.9 | 1,091.2 | 506.8 | 304.5 | 11,720.5 | |||||||||||||||||||||
(1) | Interest and the CER adjustment were assigned to the first month. | |
(2) | Allowances were assigned to the first month as were past due loans and loans in judicial proceedings. |
In millions of Pesos | As a % of Total Loans | |||||||
Variable Rate(1)(2) | ||||||||
Pesos | 6,530.0 | 57.41 | ||||||
Dollars | 383.0 | 3.37 | ||||||
Total | 6,913.0 | 60.78 | ||||||
Fixed Rate(2)(3) | ||||||||
Pesos | 2,844.1 | 25.00 | ||||||
Dollars | 1,617.2 | 14.22 | ||||||
Total | 4,461.3 | 39.22 | ||||||
Past Due Loans | ||||||||
Pesos | 452.1 | 3.97 | ||||||
Dollars | 15.3 | 0.13 | ||||||
Total | 467.4 | 4.10 | ||||||
(1) | Includes overdraft loans. | |
(2) | Includes past due loans and excludes interest receivable, differences in quotations and the CER adjustment. | |
(3) | Includes short-term and long-term loans whose rates are determined at the beginning of the loans’ life. |
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Qualitative analysis | Assessment of the quality of the corporate borrower performed by the officer to which the account has been assigned on the basis of personal knowledge. | |
Economic and financial risk | Quantitative analysis of the borrower’s financial statements. | |
Economic sector risk | Measurement of the general risk of the sector in which the borrower operates (based on statistical information gathered from internal and external sources). | |
Environmental risk | Environmental impact assessment (required for all investment projects exceeding Ps. 15 million). |
• | Up to Ps. 6.0 million: credit granting proposals are presented by business officers and approved by officers of the Corporate Credit Department in accordance with pre established credit authority levels. | ||
• | Over Ps. 6.0 million and up to Ps. 10.0 million: credit granting proposals are presented by the manager of the business department to which the account belongs and approved by the manager of the Credit Division. | ||
• | Over Ps. 10.0 million: credit granting operations must be approved by the Board of Directors Committee. The participation of the managers of the business departments depends on the account under approval. |
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• | the reduction in the required loan amortization necessary to improve the customer’s classification; and | ||
• | the possibility to provide customers with new financial assistance and classify as normal customers classified in a non-performing status in the financial system, thereby restricting this financing assistance to pre-established percentages based on the worst situation a customer registers in the financial system. |
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• | to achieve this better quality status, the client must comply with the rest of the requirements for the new category; | ||
• | in case of having refinanced and non-refinanced obligations, the resulting classification shall be the lowest resulting from the individual analysis of each transaction; | ||
• | if a client with a refinanced loan received or had received additional financial assistance, it will remain within the category for 180 days after the refinancing or the granting of additional credit, whichever is more recent; | ||
• | debtors with arrears of over 31 days must be classified within the category resulting from adding the number of arrear days corresponding to the first refinanced debt unpaid installment and those of the minimum arrears set forth for the category in which the debtor is classified at the time default is recorded. |
Loan Classification | Description | |
1. Normal Situation | The debtor is widely able to meet its financial obligations, demonstrating a significant cash flow, a liquid financial situation, an adequate financial structure, a timely payment record, competent management, available information in a timely, accurate manner and satisfactory internal controls. The debtor is in the upper 50% of a sector of activity that is operating properly and presents good prospects. | |
2. With Special Follow-up | The cash flow analysis reflects that the debt may be repaid even though it is possible that the client’s future payment ability may deteriorate without a proper follow-up. | |
This category is divided into two subcategories: | ||
(2.a). Under Observation; | ||
(2.b). Under Negotiation or Agreements to Refinance. | ||
3. With Problems | The cash flow analysis evidences problems to repay the debt, and therefore, should these problems not be solved, there may be some losses. |
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Loan Classification | Description | |
4. High Risk of Insolvency | The cash flow analysis evidences that repayment of the full debt is highly unlikely. | |
5. Uncollectible | The amounts in this category are deemed total losses. Even though these assets may be recovered under certain future circumstances, inability to make payments is evident at the date of analysis. Includes loans to insolvent or bankrupt borrowers. | |
6. Uncollectible due to Technical Reasons | Includes borrowers indicated by the Argentine Central Bank to be in non-performing status with financial institutions that have been liquidated or are being liquidated, or whose authorization to operate has been revoked. It also includes loans to foreign banks and other institutions that are not: | |
(i) classified as “normal”, | ||
(ii) subject to the supervision of the Argentine Central Bank or other similar authority of the country of origin, and | ||
(iii) classified as “investment grade” by any of the rating agencies admitted to the Argentine Central Bank pursuant to Communiqué “A” 2729. |
Loan Classification | Description | |
1. Normal Situation | Loans with timely repayment or arrears not exceeding 31 days, both with respect to principal and interest. In addition, a client classified under category 2, having been refinanced may be recategorized within this category, as long as he amortizes one principal installment (whether monthly or bimonthly) or repays 10% of principal. | |
2. Low Risk | Occasional late payments, with a payment in arrears of more than 32 days and up to 90 days. A client classified under category 3 having been refinanced may be recategorized within this category, as long as he amortizes two principal installments (whether monthly or bimonthly) or repays 10% of principal. | |
3. Medium Risk | Some inability to make payments, with arrears of more than 91 days and up to 180 days. A client classified under category 4 having been refinanced may be recategorized within this category, as long as he amortizes three principal installments (whether monthly or bimonthly) or repays 15% of principal. | |
4. High Risk | Judicial proceedings seeking collection have been initiated or arrears of more than 180 days and up to one year. A client classified under category 5 having been refinanced may be recategorized within this category, as long as he amortizes three principal installments (whether monthly or bimonthly) or repays 20% of principal. | |
5. Uncollectible | Loans to insolvent or bankrupt borrowers, or subject to judicial proceedings, with little or no possibility of collection, or with arrears in excess of one year. | |
6. Uncollectible due to Technical Reasons | Loans to borrowers who fall within the conditions described above under “Commercial Portfolio-Uncollectible due to Technical Reasons”. |
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Category | Secured | Unsecured | ||||||
1. Normal Situation | 1.0 | % | 1.0 | % | ||||
2. (a) “Under Observation” and “Low Risk” | 3.0 | % | 5.0 | % | ||||
2. (b) “Under Negotiation or Agreements to Refinance” | 6.0 | % | 12.0 | % | ||||
3. “With Problems” and “Medium Risk” | 12.0 | % | 25.0 | % | ||||
4. “High Risk of Insolvency” and “High Risk” | 25.0 | % | 50.0 | % | ||||
5. “Uncollectible” | 50.0 | % | 100.0 | % | ||||
6. “Uncollectible Due to Technical Reasons” | 100.0 | % | 100.0 | % |
As of December 31, 2008 | ||||||||||||||||||||||||
Amounts Not Yet Due | Amounts Past Due | Total Loans | ||||||||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||||||
Amounts | % | Amounts | % | Amounts | % | |||||||||||||||||||
Loan Portfolio Classification | ||||||||||||||||||||||||
1. Normal and Normal Performance | 11,430.6 | 96.09 | — | — | 11,430.6 | 93.33 | ||||||||||||||||||
2. With Special Follow-up — Under observation and Low Risk | 388.8 | 3.27 | — | — | 388.8 | 3.18 | ||||||||||||||||||
3. With Problems and Medium Risk | 54.1 | 0.46 | 103.1 | 29.29 | 157.2 | 1.28 | ||||||||||||||||||
4. High Risk of Insolvency and High Risk | 21.8 | 0.18 | 185.4 | 52.67 | 207.2 | 1.69 | ||||||||||||||||||
5. Uncollectible | — | — | 62.0 | 17.61 | 62.0 | 0.51 | ||||||||||||||||||
6. Uncollectible Due to Technical Reasons | — | — | 1.5 | 0.43 | 1.5 | 0.01 | ||||||||||||||||||
Total | 11,895.3 | 100.00 | 352.0 | 100.00 | 12,247.3 | 100.00 | ||||||||||||||||||
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As of December 31, 2007 | ||||||||||||||||||||||||
Amounts Not Yet Due | Amounts Past Due | Total Loans | ||||||||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||||||
Amounts | % | Amounts | % | Amounts | % | |||||||||||||||||||
Loan Portfolio Classification | ||||||||||||||||||||||||
1. Normal and Normal Performance | 11,242.7 | 96.57 | — | — | 11,242.7 | 93.89 | ||||||||||||||||||
2. With Special Follow-up — Under observation and Low Risk | 356.2 | 3.06 | — | — | 356.2 | 2.97 | ||||||||||||||||||
3. With Problems and Medium Risk | 31.7 | 0.27 | 56.0 | 16.87 | 87.7 | 0.73 | ||||||||||||||||||
4. High Risk of Insolvency and High Risk | 12.1 | 0.10 | 221.0 | 66.57 | 233.1 | 1.95 | ||||||||||||||||||
5. Uncollectible | — | — | 48.1 | 14.49 | 48.1 | 0.40 | ||||||||||||||||||
6. Uncollectible Due to Technical Reasons | — | — | 6.9 | 2.07 | 6.9 | 0.06 | ||||||||||||||||||
Total | 11,642.7 | 100.00 | 332.0 | 100.00 | 11,974.7 | 100.00 | ||||||||||||||||||
As of December 31, 2006 | ||||||||||||||||||||||||
Amounts Not Yet Due | Amounts Past Due | Total Loans | ||||||||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||||||
Amounts | % | Amounts | % | Amounts | % | |||||||||||||||||||
Loan Portfolio Classification | ||||||||||||||||||||||||
1. Normal and Normal Performance | 10,149.9 | 96.24 | — | — | 10,149.9 | 93.94 | ||||||||||||||||||
2. With Special Follow-up — Under observation and Low Risk | 374.6 | 3.54 | — | — | 374.6 | 3.47 | ||||||||||||||||||
3. With Problems and Medium Risk | 12.2 | 0.12 | 30.0 | 11.69 | 42.2 | 0.39 | ||||||||||||||||||
4. High Risk of Insolvency and High Risk | 10.2 | 0.10 | 192.7 | 75.07 | 202.9 | 1.88 | ||||||||||||||||||
5. Uncollectible | — | — | 28.8 | 11.22 | 28.8 | 0.27 | ||||||||||||||||||
6. Uncollectible Due to Technical Reasons | — | — | 5.2 | 2.02 | 5.2 | 0.05 | ||||||||||||||||||
Total | 10,546.9 | 100.00 | 256.7 | 100.00 | 10,803.6 | 100.00 | ||||||||||||||||||
As of December 31, 2005 | ||||||||||||||||||||||||
Amounts Not Yet Due | Amounts Past Due | Total Loans | ||||||||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||||||
Amounts | % | Amounts | % | Amounts | % | |||||||||||||||||||
Loan Portfolio Classification | ||||||||||||||||||||||||
1. Normal and Normal Performance | 10,171.2 | 95.22 | — | — | 10,171.2 | 92.99 | ||||||||||||||||||
2. With Special Follow-up — Under observation and Low Risk | 384.4 | 3.60 | — | — | 384.4 | 3.51 | ||||||||||||||||||
3. With Problems and Medium Risk | 120.4 | 1.13 | 206.9 | 80.82 | 327.3 | 2.99 | ||||||||||||||||||
4. High Risk of Insolvency and High Risk | 6.0 | 0.05 | 23.0 | 8.98 | 29.0 | 0.27 | ||||||||||||||||||
5. Uncollectible | — | — | 22.8 | 8.91 | 22.8 | 0.21 | ||||||||||||||||||
6. Uncollectible Due to Technical Reasons | — | — | 3.3 | 1.29 | 3.3 | 0.03 | ||||||||||||||||||
Total | 10,682.0 | 100.00 | 256.0 | 100.00 | 10,938.0 | 100.00 | ||||||||||||||||||
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As of December 31, 2004 | ||||||||||||||||||||||||
Amounts Not Yet Due | Amounts Past Due | Total Loans | ||||||||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||||||
Amounts | % | Amounts | % | Amounts | % | |||||||||||||||||||
Loan Portfolio Classification | ||||||||||||||||||||||||
1. Normal and Normal Performance | 7,766.0 | 90.53 | — | — | 7,766.0 | 86.02 | ||||||||||||||||||
2. With Special Follow-up — Under observation and Low Risk | 562.5 | 6.56 | — | — | 562.5 | 6.23 | ||||||||||||||||||
3. With Problems and Medium Risk | 197.1 | 2.30 | 251.7 | 56.06 | 448.8 | 4.97 | ||||||||||||||||||
4. High Risk of Insolvency and High Risk | 52.8 | 0.61 | 105.8 | 23.56 | 158.6 | 1.76 | ||||||||||||||||||
5. Uncollectible | — | — | 85.5 | 19.04 | 85.5 | 0.95 | ||||||||||||||||||
6. Uncollectible Due to Technical Reasons | — | — | 6.0 | 1.34 | 6.0 | 0.07 | ||||||||||||||||||
Total | 8,578.4 | 100.00 | 449.0 | 100.00 | 9,027.4 | 100.00 | ||||||||||||||||||
As of December 31, | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
(in millions of Pesos, except ratios) | ||||||||||||||||||||
Total Loans(1) | 12,247.3 | 11,974.7 | 10,803.6 | 10,938.0 | 9,027.4 | |||||||||||||||
Non-Accrual Loans(2) | ||||||||||||||||||||
With Preferred Guarantees | 42.0 | 43.5 | 40.2 | 58.4 | 383.7 | |||||||||||||||
With Other Guarantees | 10.3 | 5.0 | 5.1 | 6.5 | 67.4 | |||||||||||||||
Without Guarantees | 375.6 | 327.3 | 233.8 | 317.5 | 247.8 | |||||||||||||||
Total Non-Accrual Loans(2) | 427.9 | 375.8 | 279.1 | 382.4 | 698.9 | |||||||||||||||
Past Due Loan Portfolio | ||||||||||||||||||||
Non-Financial Public Sector | — | — | — | — | — | |||||||||||||||
Local Financial Sector | — | — | — | — | — | |||||||||||||||
Non-Financial Private Sector and Residents Abroad | ||||||||||||||||||||
Advances | 25.9 | 23.0 | 20.9 | 14.1 | 29.9 | |||||||||||||||
Promissory Notes | 24.5 | 134.5 | 135.2 | 191.6 | 253.1 | |||||||||||||||
Mortgage Loans | 24.9 | 30.0 | 28.4 | 14.6 | 115.1 | |||||||||||||||
Pledge Loans | 1.1 | 0.8 | 0.3 | 0.5 | 4.2 | |||||||||||||||
Personal Loans | 45.7 | 17.6 | 4.1 | 0.8 | 4.2 | |||||||||||||||
Credit-Card Loans | 215.0 | 115.4 | 62.7 | 33.4 | 24.9 | |||||||||||||||
Placements with Correspondent Banks | — | — | — | — | — | |||||||||||||||
Other Loans | 14.9 | 10.7 | 5.1 | 1.0 | 17.6 | |||||||||||||||
Total Past Due Loans | 352.0 | 332.0 | 256.7 | 256.0 | 449.0 | |||||||||||||||
Past Due Loans | ||||||||||||||||||||
With Preferred Guarantees | 26.0 | 30.8 | 28.9 | 16.1 | 308.0 | |||||||||||||||
With Other Guarantees | 9.0 | 4.2 | 4.3 | 4.9 | 11.4 | |||||||||||||||
Without Guarantees | 317.0 | 297.0 | 223.5 | 235.0 | 129.6 | |||||||||||||||
Total Past Due Loans | 352.0 | 332.0 | 256.7 | 256.0 | 449.0 | |||||||||||||||
Allowance for Loan Losses | 526.8 | 428.6 | 327.0 | 427.9 | 632.6 | |||||||||||||||
Ratios (%) | ||||||||||||||||||||
As a % of Total Loans: | ||||||||||||||||||||
- Total Past Due Loans | 2.87 | 2.77 | 2.38 | 2.34 | 4.97 | |||||||||||||||
- Past Due Loans with Preferred Guarantees | 0.21 | 0.26 | 0.27 | 0.15 | 3.40 |
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As of December 31, | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
(in millions of Pesos, except ratios) | ||||||||||||||||||||
- Past Due Loans with Other Guarantees | 0.07 | 0.03 | 0.04 | 0.04 | 0.13 | |||||||||||||||
- Past Due Unsecured Amounts | 2.59 | 2.48 | 2.07 | 2.15 | 1.44 | |||||||||||||||
- Non-Accrual Loans(2) | 3.49 | 3.14 | 2.58 | 3.50 | 7.74 | |||||||||||||||
- Non-Accrual Loans(2) (Excluding Interbank Loans) | 3.60 | 3.18 | 2.79 | 3.57 | 8.10 | |||||||||||||||
Non-Accrual Loans(2) as a Percentage of Loans to the Private Sector | 3.95 | 3.53 | 3.49 | 6.77 | 15.92 | |||||||||||||||
Allowance for Loan Losses as a % of: | ||||||||||||||||||||
- Total Loans | 4.30 | 3.58 | 3.03 | 3.91 | 7.01 | |||||||||||||||
- Total Loans Excluding Interbank Loans | 4.44 | 3.63 | 3.27 | 4.00 | 7.33 | |||||||||||||||
- Total Non-Accrual Loans(2) | 123.11 | 114.05 | 117.16 | 111.90 | 90.51 | |||||||||||||||
Non-Accrual Loans with Guarantees as a Percentage of Non-Accrual Loans(2) | 12.22 | 12.91 | 16.23 | 16.97 | 64.54 | |||||||||||||||
Non-Accrual Loans as a Percentage of Total Past Due Loans | 121.56 | 113.20 | 108.73 | 149.38 | 155.66 | |||||||||||||||
(1) | Before the allowance for loan losses. | |
(2) | Non-Accrual loans are defined as those loans in the categories of: (a) Consumer portfolio: “Medium Risk,” “High Risk,” “Uncollectible,” and “Uncollectible Due to Technical Reasons;” and (b) Commercial portfolio: “With problems,” “High Risk of Insolvency,” “Uncollectible,” and “Uncollectible Due to Technical Reasons”. |
As of December 31, | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
(in millions of Pesos) | ||||||||||||||||||||
Interest Income that Would Have Been Recorded on Non-Accrual Loans on which the Accrual of Interest was Discontinued | 35.4 | 35.9 | 23.7 | 45.9 | 32.5 | |||||||||||||||
Recoveries of Interest on Loans Classified as Non-Accrual on which the Accrual of Interest had been Discontinued(1) | 1.8 | 1.8 | 1.2 | 2.3 | 1.6 | |||||||||||||||
(1) | Recorded under “Miscellaneous Income”. |
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Fiscal Year Ended | ||||||||||||||||||||
December 31, | ||||||||||||||||||||
2008 | 2007 | 2006 | 2005 | 2004 | ||||||||||||||||
(in millions of Pesos, except ratios) | ||||||||||||||||||||
Total Loans, Average(1) | 12,077.3 | 10,528.9 | 10,851.0 | 9,746.9 | 11,137.9 | |||||||||||||||
Allowance for Loan Losses at Beginning of Period(2) | 428.6 | 327.0 | 427.9 | 632.6 | 1,177.3 | |||||||||||||||
Changes in the Allowance for Loan Losses During the Period(2) | ||||||||||||||||||||
Provisions Charged to Income | 384.6 | 248.4 | 105.3 | 61.1 | 179.3 | |||||||||||||||
Prior Allowances Reversed | (6.5 | ) | (21.5 | ) | (32.5 | ) | (96.2 | ) | (210.3 | ) | ||||||||||
Charge-Offs (A) | (289.2 | ) | (125.4 | ) | (200.8 | ) | (174.5 | ) | (521.3 | ) | ||||||||||
Inflation and Foreign Exchange Effect and Other Adjustments | 9.3 | 0.1 | 27.1 | 4.9 | 7.6 | |||||||||||||||
Allowance for Loan Losses at End of Period | 526.8 | 428.6 | 327.0 | 427.9 | 632.6 | |||||||||||||||
Charge to the Income Statement during the Period | ||||||||||||||||||||
Provisions Charged to Income(2) | 384.6 | 248.4 | 105.3 | 61.1 | 179.3 | |||||||||||||||
Direct Charge-Offs, Net of Recoveries (B) | (68.4 | ) | (57.2 | ) | (46.4 | ) | (28.9 | ) | (101.6 | ) | ||||||||||
Recoveries of Provisions | (6.5 | ) | (21.5 | ) | (32.5 | ) | (96.2 | ) | (210.3 | ) | ||||||||||
Net Charge (Benefit) to the Income Statement | 309.7 | 169.7 | 26.4 | (64.0 | ) | (132.6 | ) | |||||||||||||
Ratios (%) | ||||||||||||||||||||
Charge-Offs (A+B) to Average Loans(3) | 1.83 | 0.65 | 1.42 | 1.49 | 3.77 | |||||||||||||||
Net Charge to the Income Statement to Average Loans(3) | 2.56 | 1.61 | 0.24 | (0.66 | ) | (1.19 | ) |
(1) | Before the allowance for loan losses. | |
(2) | Includes quotation differences for Galicia Uruguay and Cayman Branch. | |
(3) | Charge-offs plus direct charge-offs minus bad debts recovered. |
As of December 31, | ||||||||||||||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||
Loan | Loan | Loan | ||||||||||||||||||||||||||||||||||
% of | Category | % of | Category | % of | Category | |||||||||||||||||||||||||||||||
Amount | Loans | % | Amount | Loans | % | Amount | Loans | % | ||||||||||||||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||||||||||||||||||
Non-Financial Public Sector | — | — | 10.77 | — | — | 10.11 | — | — | 24.90 | |||||||||||||||||||||||||||
Local Financial Sector | — | — | 1.21 | — | — | 0.92 | — | — | 2.88 | |||||||||||||||||||||||||||
Non-Financial Private Sector and Residents Abroad | ||||||||||||||||||||||||||||||||||||
Advances | 14.5 | 0.12 | 4.85 | 16.2 | 0.13 | 6.61 | 16.3 | 0.15 | 3.21 | |||||||||||||||||||||||||||
Promissory Notes | 34.9 | 0.28 | 17.28 | 119.8 | 1.00 | 24.31 | 151.1 | 1.40 | 19.84 | |||||||||||||||||||||||||||
Mortgage Loans | 21.9 | 0.18 | 8.38 | 26.5 | 0.22 | 7.89 | 25.0 | 0.23 | 6.37 | |||||||||||||||||||||||||||
Pledge Loans | 0.5 | — | 0.66 | 0.3 | — | 0.79 | 0.4 | — | 0.62 | |||||||||||||||||||||||||||
Personal Loans | 37.8 | 0.31 | 9.94 | 14.0 | 0.12 | 8.17 | 3.7 | 0.03 | 5.21 |
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As of December 31, | ||||||||||||||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||||||||||||||
Loan | Loan | Loan | ||||||||||||||||||||||||||||||||||
% of | Category | % of | Category | % of | Category | |||||||||||||||||||||||||||||||
Amount | Loans | % | Amount | Loans | % | Amount | Loans | % | ||||||||||||||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||||||||||||||||||
Credit-Card Loans | 111.4 | 0.91 | 35.75 | 56.0 | 0.47 | 30.31 | 28.5 | 0.26 | 22.76 | |||||||||||||||||||||||||||
Placements in Correspondent Banks | — | — | 2.73 | — | — | 1.32 | — | — | 5.63 | |||||||||||||||||||||||||||
Other | 7.4 | 0.06 | 8.43 | 7.9 | 0.07 | 9.57 | 1.0 | 0.01 | 8.58 | |||||||||||||||||||||||||||
Unallocated(1) | 298.4 | 2.44 | — | 187.9 | 1.57 | — | 101.0 | 0.95 | — | |||||||||||||||||||||||||||
Total | 526.8 | 4.30 | 100.00 | 428.6 | 3.58 | 100.00 | 327.0 | 3.03 | 100.00 | |||||||||||||||||||||||||||
As of December 31, | ||||||||||||||||||||||||
2005 | 2004 | |||||||||||||||||||||||
Loan | Loan | |||||||||||||||||||||||
% of | Category | % of | Category | |||||||||||||||||||||
Amount | Loans | % | Amount | Loans | % | |||||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||||||
Non-Financial Public Sector | — | — | 47.43 | — | — | 50.00 | ||||||||||||||||||
Local Financial Sector | — | — | 1.17 | — | — | 1.67 | ||||||||||||||||||
Non-Financial Private Sector and Residents Abroad | ||||||||||||||||||||||||
Advances | 12.3 | 0.11 | 2.04 | 22.7 | 0.25 | 2.21 | ||||||||||||||||||
Promissory Notes | 186.4 | 1.70 | 16.79 | 270.9 | 3.00 | 12.18 | ||||||||||||||||||
Mortgage Loans | 21.6 | 0.20 | 4.60 | 97.6 | 1.08 | 6.91 | ||||||||||||||||||
Pledge Loans | 0.5 | — | 1.11 | 3.5 | 0.04 | 1.03 | ||||||||||||||||||
Personal Loans | 0.9 | 0.01 | 2.36 | 4.0 | 0.04 | 0.64 | ||||||||||||||||||
Credit-Card Loans | 14.0 | 0.13 | 15.84 | 10.8 | 0.12 | 12.24 | ||||||||||||||||||
Placements in Correspondent Banks | — | — | 1.95 | — | — | 4.20 | ||||||||||||||||||
Other | 17.1 | 0.16 | 6.71 | 32.1 | 0.36 | 8.92 | ||||||||||||||||||
Unallocated(1) | 175.1 | 1.60 | — | 191.0 | 2.12 | — | ||||||||||||||||||
Total | 427.9 | 3.91 | 100.00 | 632.6 | 7.01 | 100.00 | ||||||||||||||||||
(1) | The unallocated reserve consists of the allowances established on the portfolio classified in the “normal situation” category and includes additional reserves in excess of Argentine Central Bank minimum requirements. |
Fiscal Year Ended | ||||||||||||
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions of Pesos) | ||||||||||||
Charge-offs by Type | ||||||||||||
Advances | 17.3 | 6.1 | 2.1 | |||||||||
Promissory Notes | 92.3 | 35.1 | 155.2 | |||||||||
Mortgage Loans | 7.9 | 5.4 | 6.4 | |||||||||
Pledge Loans | 0.1 | 0.2 | 0.2 | |||||||||
Personal Loans | 27.5 | 6.6 | 1.5 | |||||||||
Credit-Card Loans | ||||||||||||
Banco Galicia | 31.6 | 9.2 | 3.0 | |||||||||
Regional Credit-Card Companies | 107.7 | 60.6 | 31.9 | |||||||||
Other Loans | 4.8 | 2.2 | 0.5 | |||||||||
Total | 289.2 | 125.4 | 200.8 | |||||||||
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Fiscal Year Ended | ||||||||||||
December 31, | ||||||||||||
Country | 2008 | 2007 | 2006 | |||||||||
(in millions of Pesos) | ||||||||||||
United Kingdom | ||||||||||||
Demand Deposits | 6.0 | 2.0 | 0.7 | |||||||||
Forward Purchases of Boden 2012 Bonds | 829.0 | 1,244.8 | 355.1 | |||||||||
Forward Purchases of Discount Bonds in Pesos | 603.2 | 600.6 | 723.9 | |||||||||
Total | 1,438.2 | 1,847.4 | 1,079.7 | |||||||||
United States | ||||||||||||
Demand Deposits | 353.4 | 532.1 | 234.0 | |||||||||
Overnight Placements | 317.3 | 159.3 | 608.1 | |||||||||
Other | 0.7 | — | — | |||||||||
Total | 671.4 | 691.4 | 842.1 | |||||||||
Germany | ||||||||||||
Demand Deposits | 3.0 | 0.9 | — | |||||||||
Forward Purchases of Boden 2012 Bonds | 1,087.9 | 240.8 | — | |||||||||
Forward Purchases of Discount Bonds in Pesos | — | 105.9 | — | |||||||||
Total | 1,090.9 | 347.6 | — | |||||||||
• | Ps. 1,438.2 million (5.8% of our total assets) with United Kingdom financial institutions, of which Ps. 829.0 million represent three forward purchases of Boden 2012 Bonds and Ps. 603.2 million represent two forward purchases of Discount Bonds in Pesos, both in connection with repurchase transactions with such financial institutions, and Ps. 6.0 million correspond to demand deposits with such institutions; all are one-year term transactions and bear market floating interest rates based on Libor plus a fixed spread. | ||
• | Ps. 671.4 million (2.7% of our total assets) representing liquid placements with United States financial institutions, of which Ps. 353.4 million correspond to demand deposits and Ps. 317.3 million represent overnight placements. |
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• | Ps. 1,090.9 million (4.4% of our total assets) with a German financial institution, of which Ps. 1,087.9 million represent three forward purchases of Boden 2012 Bonds in connection with repurchase transactions with the applicable financial institution, and Ps. 3.0 million correspond to demand deposits with such institution; two repurchase transactions are for a two-year term and one is for a one-year term; all bear market floating interest rates based on Libor plus a fixed spread. |
As of December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions of Pesos) | ||||||||||||
Current Accounts and Other Demand Deposits | 3,105.4 | 2,675.4 | 2,011.4 | |||||||||
Savings Accounts | 4,035.0 | 3,380.1 | 2,589.5 | |||||||||
Time Deposits | 6,548.0 | 6,704.8 | 5,831.5 | |||||||||
Other Deposits (1) | 263.2 | 291.6 | 215.6 | |||||||||
Plus: Accrued Interest, Quotation Differences and CER Adjustment | 104.5 | 113.7 | 131.4 | |||||||||
Total Deposits | 14,056.1 | 13,165.6 | 10,779.4 | |||||||||
(1) | Includes among other, deposits originated by Decree No. 616/05, Reprogrammed Deposits under judicial proceedings and other demand deposits. |
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Peso-Denominated | Dollar-Denominated | Total | ||||||||||||||||||||||
% of | % of | % of | ||||||||||||||||||||||
Amount | Total | Amount | Total | Amount | Total | |||||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||||||
Current Accounts and Demand Deposits | Ps. | 3,105.4 | 26.9 | % | — | — | % | Ps. | 3,105.4 | 22.3 | % | |||||||||||||
Savings Accounts | 2,815.6 | 24.3 | Ps. | 1,219.4 | 51.1 | 4,035.0 | 28.9 | |||||||||||||||||
Time Deposits | 5,513.2 | 47.7 | 1,034.9 | 43.4 | 6,548.1 | 46.9 | ||||||||||||||||||
Maturing Within 30 Days | 1,414.1 | 12.2 | 279.2 | 11.7 | 1,693.3 | 12.1 | ||||||||||||||||||
Maturing After 31 Days but Within 59 Days | 1,930.3 | 16.7 | 238.7 | 10.0 | 2,169.0 | 15.6 | ||||||||||||||||||
Maturing After 60 Days but Within 89 Days | 671.7 | 5.8 | 116.7 | 4.9 | 788.4 | 5.7 | ||||||||||||||||||
Maturing After 90 Days but Within 179 Days | 539.1 | 4.7 | 224.1 | 9.4 | 763.2 | 5.5 | ||||||||||||||||||
Maturing After 180 Days but Within 365 Days | 877.2 | 7.6 | 129.0 | 5.4 | 1,006.2 | 7.2 | ||||||||||||||||||
Maturing After 365 Days | 80.8 | 0.7 | 47.2 | 2.0 | 128.0 | 0.8 | ||||||||||||||||||
Other Deposits | 131.0 | 1.1 | 132.2 | 5.5 | 263.2 | 1.9 | ||||||||||||||||||
Maturing Within 30 Days | 122.8 | 1.1 | 91.7 | 3.8 | 214.5 | 1.5 | ||||||||||||||||||
Maturing After 31 Days but Within 59 Days | — | — | — | — | — | — | ||||||||||||||||||
Maturing After 60 Days but Within 89 Days | — | — | — | — | — | — | ||||||||||||||||||
Maturing After 90 Days but Within 179 Days | — | — | — | — | — | — | ||||||||||||||||||
Maturing After 180 Days but Within 365 Days | — | — | — | — | — | — | ||||||||||||||||||
Maturing After 365 Days | 8.2 | — | 40.5 | 1.7 | 48.7 | 0.4 | ||||||||||||||||||
Total Deposits(1) | Ps. | 11,565.2 | 100.0 | % | Ps. | 2,386.5 | 100.0 | % | Ps. | 13,951.7 | 100.0 | % | ||||||||||||
(1) | Only principal. Excludes the CER adjustment |
Domestic Offices | Foreign Offices | |||||||
(in millions of Pesos) | ||||||||
Time Deposits | ||||||||
Within 30 Days | 961.6 | — | ||||||
After 31 Days but Within 59 Days | 1,533.1 | — | ||||||
After 60 Days but Within 89 Days | 450.9 | — | ||||||
After 90 Days but Within 179 Days | 415.9 | — | ||||||
After 180 Days but Within 365 Days | 736.5 | — | ||||||
After 365 Days | 177.9 | 12.5 | ||||||
Total Time Deposits | 4,275.9 | 12.5 | ||||||
Other Deposits | — | — | ||||||
Total Deposits(1) | 4,275.9 | 12.5 | ||||||
(1) | Only principal. Excludes the CER adjustment. |
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Fiscal Year Ended | ||||||||||||
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions of Pesos, except percentages) | ||||||||||||
Net Income / (Loss) | 176.8 | 46.0 | (18.9 | ) | ||||||||
Average Total Assets | 23,412.5 | 21,332.4 | 24,614.5 | |||||||||
Average Shareholders’ Equity | 1,745.0 | 1,606.7 | 1,649.3 | |||||||||
Shareholders’ Equity at End of the Period | 1,845.7 | 1,654.5 | 1,608.5 | |||||||||
Net Income / (Loss) as a Percentage of: | ||||||||||||
Average Total Assets | 0.91 | 0.37 | — | |||||||||
Average Shareholders’ Equity | 10.13 | 2.86 | (1.15 | ) | ||||||||
Declared Cash Dividends | — | — | — | |||||||||
Dividend Payout Ratio | — | — | — | |||||||||
Average Shareholders’ Equity as a Percentage of Average Total Assets | 7.45 | 7.53 | 6.70 | |||||||||
Shareholders’ Equity at the End of the Period as a Percentage of Average Total Assets | 7.88 | 7.76 | 6.53 |
As of December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions of Pesos) | ||||||||||||
Short-Term Borrowings | ||||||||||||
Argentine Central Bank | 1.7 | 0.7 | 0.4 | |||||||||
Other Banks and International Entities | ||||||||||||
Credit Lines from Domestic Banks | 43.6 | 33.2 | 134.5 | |||||||||
Credit Lines from Foreign Banks | 354.6 | 258.0 | 45.4 | |||||||||
Repurchases with Domestic Banks | 34.7 | — | 522.9 | |||||||||
Negotiable Obligations | 108.9 | 36.3 | 65.1 | |||||||||
Total | 543.5 | 328.2 | 768.3 | |||||||||
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• | the weighted-average interest rate at year-end, | ||
• | the maximum balance recorded at the monthly closing dates of the periods, | ||
• | the average balances for each period, and | ||
• | the weighted-average interest rate for the periods. |
As of December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions of Pesos, except percentages) | ||||||||||||
Argentine Central Bank | ||||||||||||
Weighted-average Interest Rate at End of Period | — | — | — | |||||||||
Maximum Balance Recorded at the Monthly Closing Dates | Ps. | 1.7 | Ps. | 0.9 | Ps. | 0.9 | ||||||
Average Balances for Each Period | Ps. | 1.1 | Ps. | 0.6 | Ps. | 0.5 | ||||||
Weighted-average Interest Rate for the Period | — | — | — | |||||||||
Credit Lines from Domestic Banks | ||||||||||||
Weighted-average Interest Rate at End of Period | 24.7 | % | 14.2 | % | 9.1 | % | ||||||
Maximum Balance Recorded at the Monthly Closing Dates | Ps. | 261.5 | Ps. | 92.6 | Ps. | 378.7 | ||||||
Average Balances for Each Period | Ps. | 72.9 | Ps. | 57.5 | Ps. | 142.0 | ||||||
Weighted-average Interest Rate for the Period | 13.7 | % | 9.5 | % | 8.0 | % | ||||||
Credit Lines from Foreign Banks | ||||||||||||
Weighted-average Interest Rate at End of Period | 5.4 | % | 5.6 | % | 6.1 | % | ||||||
Maximum Balance Recorded at the Monthly Closing Dates | Ps. | 457.4 | Ps. | 258.0 | Ps. | 45.4 | ||||||
Average Balances for Each Period | Ps. | 373.6 | Ps. | 106.7 | Ps. | 9.7 | ||||||
Weighted-average Interest Rate for the Period | 4.5 | % | 5.8 | % | 6.1 | % | ||||||
Repurchases with Domestic Banks | ||||||||||||
Weighted-average Interest Rate at End of Period | 10.5 | % | — | % | 9.3 | % | ||||||
Maximum Balance Recorded at the Monthly Closing Dates | Ps. | 400.6 | Ps. | 317.4 | Ps. | 525.9 | ||||||
Average Balances for Each Period | Ps. | 132.8 | Ps. | 138.3 | Ps. | 101.6 | ||||||
Weighted-average Interest Rate for the Period | 10.5 | % | 8.9 | % | 7.6 | % | ||||||
Repurchases with Foreign Banks | ||||||||||||
Weighted-average Interest Rate at End of Period | — | — | — | % | ||||||||
Maximum Balance Recorded at the Monthly Closing Dates | — | — | Ps. | 223.5 | ||||||||
Average Balances for Each Period | — | — | Ps. | 145.7 | ||||||||
Weighted-average Interest Rate for the Period | — | — | % | 8.3 | % | |||||||
Negotiable Obligations | ||||||||||||
Weighted-average Interest Rate at End of Period | 12.1 | % | 8.2 | % | 9.9 | % | ||||||
Maximum Balance Recorded at the Monthly Closing Dates | Ps. | 108.9 | Ps. | 65.7 | Ps. | 65.1 | ||||||
Average Balances for Each Period | Ps. | 49.8 | Ps. | 50.8 | Ps. | 49.6 | ||||||
Weighted-average Interest Rate for the Period | 9.9 | % | 9.3 | % | 7.5 | % |
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January 1st/ December 31st | Alfa 1 | Alfa 2 | ||||||
2004 | 0.05 | 0.20 | ||||||
2005 | 0.15 | 0.40 | ||||||
2006 | 0.30 | 0.70 | ||||||
2007 | 0.50 | 1.00 | ||||||
2008 | 0.75 | — | ||||||
2009 | 1.00 | — |
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As of December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions of Pesos, except percentages) | ||||||||||||
Shareholders’ Equity | 1,954.7 | 1,759.4 | 1,263.0 | |||||||||
Argentine Central Bank Minimum Capital Requirements(1) | ||||||||||||
Allocated to Financial Assets | 1,014.1 | 845.3 | 597.1 | |||||||||
Allocated to Fixed Assets, Intangible and Unquoted Equity Investments | 169.5 | 153.2 | 143.5 | |||||||||
Allocated to Market Risk | 5.4 | 20.4 | 12.3 | |||||||||
Allocated to Interest-Rate Risk | 50.7 | 52.4 | 61.6 | |||||||||
Lending to the Non-Financial Public Sector | 324.8 | 231.5 | 269.8 | |||||||||
Total (A) | 1,564.5 | 1,302.8 | 1,084.3 | |||||||||
Computable Regulatory Capital Calculated Under Argentine Banking GAAP | ||||||||||||
Core Capital | 1,789.1 | 1,756.4 | 1,395.0 | |||||||||
Supplemental Capital | 994.7 | 757.1 | 608.4 | |||||||||
Deductions | ||||||||||||
Investments in Financial Entities | (1.7 | ) | (1.5 | ) | (1.5 | ) | ||||||
Organization Expenses | (191.3 | ) | (100.6 | ) | (64.2 | ) | ||||||
Goodwill Recorded from June 30, 1997 | (28.5 | ) | (47.6 | ) | (66.8 | ) | ||||||
Real Estate Properties for Banco Galicia’s Own Use and Miscellaneous, for which No Title Deed has been Made | (6.3 | ) | (2.8 | ) | (5.2 | ) | ||||||
Other | (17.0 | ) | (7.0 | ) | (6.1 | ) | ||||||
Total | (244.8 | ) | (159.5 | ) | (143.8 | ) | ||||||
Additional Capital — Market Variation | 13.3 | 3.1 | 2.0 | |||||||||
Total (B) | 2,552.3 | �� | 2,357.1 | 1,861.6 | ||||||||
Excess Capital | ||||||||||||
Excess Over Required Capital (B)-(A) | 987.8 | 1,054.3 | 777.3 | |||||||||
Excess Over Required Capital as a % of Required Capital | 63.14 | 80.93 | 71.69 | |||||||||
Total Capital Ratio | 13.92 | 15.54 | 15.03 | |||||||||
(1) | In accordance with Argentine Central Bank rules applicable at each date. |
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(a) | By line of insurance: this method establishes a fixed amount by line of insurance. For life insurance companies, it is Ps. 4 million, increasing to Ps. 5 million for companies that offer pension-linked life insurance. For providers of retirement insurance that do not offer pension-linked annuities, the requirement is Ps. 3 million (increasing to Ps. 5 million for companies that offer pension-linked annuities). For companies that offer property insurance that includes damage coverage (excluding those related to vehicles) the requirement is Ps. 1.5 million (increasing to Ps. 8 million for companies that offer all P&C products). | |
(b) | By premiums and additional fees: to use this method, the company must calculate the sum of the premiums written and additional fees earned in the last 12 months. Based on the total, the company must calculate 16%. Finally, it must adjust the total by the ratio of net paid claims to gross paid claims for the last 36 months. This ratio must be at least 50%. | |
(c) | By claims: to use this method, the company must calculate the sum of gross claims paid during the 36 months prior to the end of the period under analysis. To that amount, it must add the difference between the balance of unpaid claims as of the end of the period under analysis and the balance of unpaid claims as of the 36th month prior to the end of the period under analysis. The resulting figure must be divided by three. Then the company must calculate 23%. The resulting figure must be adjusted by the ratio of net paid claims to gross paid claims for the last 36 months. This ratio must be at least 50%. | |
(d) | For life insurance companies that offer policies with an investment component, the figures obtained in b) and c) must be increased by an amount equal to 4% of the technical reserves adjusted by the ratio of net technical reserves to gross technical reserves (at least 85%), plus 0.3% of at-risk capital adjusted by the ratio of retained at-risk capital to total at-risk capital (at least 50%). |
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(a) | Foreign exchange flows into and from the local foreign exchange market and all resident new debt transactions that may imply future foreign exchange payments to nonresidents must be registered with the Argentine Central Bank. | ||
(b) | All new debt of the private sector with non-residents must be for a minimum term of 365 days, except for international trade financing and primary issuances of debt securities, if such securities’ public offering and listing on self-regulated markets in Argentina has been duly authorized. | ||
(c) | All inflows of foreign exchange resulting from such indebtedness, with the exceptions mentioned in the previous item and those regulated by the Argentine Central Bank which are detailed below, and all inflows of foreign exchange by non-residents, excluding direct foreign investments and certain portfolio investments (subscriptions of primary issuances of debt and equity securities, which public offering and listing in self-regulated markets in Argentina has been duly authorized, and government securities acquired in the secondary market), must be for a term of at least 365 days and will be subject to a 30% deposit requirement. | ||
(d) | Such deposit requirement will be held in a local financial institution as an unremunerated Dollar-denominated time deposit maturing in at least 365 days; such funds will not be available as a guarantee for any kind of debt and, upon the deposit maturity date, such funds will become available within the country and, therefore, will be subject to the applicable restrictions on foreign exchange transfers abroad. | ||
(e) | The 30% deposit is not required for, among other things, inflows of foreign currency: |
(i) | resulting from loans granted to residents by local financial institutions in foreign currency; | ||
(ii) | resulting from capital contributions to local institutions, when the contributor owns, previously or as a result of such contributions, 10% or more of the company’s capital or votes, subject to compliance with certain requirements; | ||
(iii) | resulting from sales of interests in local entities to direct investors; | ||
(iv) | to be applied to real estate acquisitions; |
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(v) | resulting from an indebtedness with multilateral and bilateral credit agencies and with official credit agencies; | ||
(vi) | resulting from other foreign indebtedness of the local non-financial private sector, with an average life of no less than two years, the proceeds of which will be applied to the acquisition of non-financial investments (as defined by the Argentine Central Bank); | ||
(vii) | resulting from other foreign indebtedness where the proceeds will be applied to the settlement of foreign debt principal amortization or long term investments in foreign assets; | ||
(viii) | that will be utilized within 10 business days from their liquidation in the local foreign exchange market for purposes listed as “current transactions within the international accounts” by the International Monetary Fund, among others, within such purposes are the payment by non-Argentine residents of certain local taxes; or | ||
(ix) | resulting from the sale of foreign assets of residents in order to subscribe to primary issuances of public debt issued by the Government; and |
(f) | The proceeds of sales of foreign assets brought into the country by residents (“capital repatriation”) will be subject to the 30% deposit requirement noted in (c) above, which will apply to any amounts exceeding US$ 2.0 million per month if certain other operative requirements are met. |
(a) | With no limit in the case of: (i) proceeds from the principal amortization of government securities; (ii) recoveries from local bankruptcies; (iii) proceeds from the sale of direct investments in the non-financial private sector in Argentina or the final disposition of such investments if they were made with foreign currency that entered the local foreign exchange market no less than 365 days before; and (iv) certain other specific cases. | ||
(b) | With a US$ 500,000 monthly limit in the case of the aggregate proceeds of the sale of portfolio investments made with foreign currency that entered the local foreign exchange market no less than 365 days before. | ||
(c) | With a US$ 5,000 monthly limit in cases not contemplated above, unless authorization from the Argentine Central Bank is obtained. |
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• | the losses caused by the mandatory conversion into Pesos of certain liabilities at the Ps. 1.4 per US$ 1.0 exchange rate, which exchange rate was greater than the Ps. 1.0 per US$ 1.0 exchange rate established for the conversion into Pesos of certain Dollar-denominated assets. This was to be achieved through the delivery of a Peso-denominated compensatory bond issued by the Government. | ||
• | the currency mismatch left on financial institutions’ balance sheets after the compulsory pesification of certain of their assets and liabilities after the conversion of the Peso-denominated compensatory bond into a Dollar-denominated compensatory bond. This would be achieved by the purchase by financial institutions of a Dollar-denominated hedge bond. For such purpose, the Government established the issuance of a Dollar-denominated bond bearing Libor and maturing in 2012 (Boden 2012 Bonds). |
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• | B (“Bonos” or Bonds). On an annual basis, all financial institutions in Argentina were required to engage in certain debt issuing transactions in order to expose them to scrutiny and analysis by third parties with high standards. This requirement was eliminated by the Argentine Central Bank effective March 1, 2002. | ||
• | A (“Auditoría” or Audit). The Argentine Central Bank requires a set of external audit procedures that include: (a) the creation of a registry of auditors; (b) the implementation of strict accounting procedures to be complied with by external auditors; (c) the payment of a performance guarantee by those auditors to induce their compliance with the procedures, and (d) the creation of a department within the Argentine Central Bank liable for verifying that the procedures are followed. The purpose of this requirement is to assure accurate disclosure by the financial institutions to both the Superintendency and the public. | ||
• | S (“Supervisión” or Supervision). The Argentine Central Bank has the right to inspect financial institutions from time to time. | ||
• | I (“Información” or Information). Financial institutions are required to file on a monthly basis certain daily, weekly, monthly and quarterly statistical information. | ||
• | C (“Calificación” or Rating). The Argentine Central Bank established a system that required the periodic credit evaluation of financial entities by internationally recognized rating agencies, which was suspended by Communiqué “A” 3601 in May 2002. |
• | equity shares without quotation, excluding (a) stock of companies which provide services complementary to the services offered by the bank, and (b) certain stock participations which are necessary in order to obtain the rendering of public services, if any, |
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• | listed stock and participations in mutual funds which are not included in order to determine the capital requirements related to market risk; and | ||
• | listed stock that does not have a “largely publicly available” market price (when daily quotes of relevant transactions are available, which quotes would not be significantly affected by the disposition of the bank’s holdings of such stock) |
i) | the core capital, which includes permanent capital, non-equity contributions, net worth adjustments, surplus reserves, audited retained earnings (of closed fiscal years) and, effective October 1, 2006, long-term debt instruments, as long as such instruments fulfill certain requirements (maturity of more than 30 years, accrual of recognized return per year not exceeding issuer financial entity’s profits, with unpaid services not being cumulative, so that they cannot be deferred and accumulated to be paid after its maturity date) and do not exceed certain core capital percentages, equal to 30% until December 31, 2008, subject to a schedule that converges with the 15% international standard on January 1, 2013; plus | ||
ii) | the supplemental capital, which may not exceed the core capital, consisting of 50% of unaudited profits and 100% of unaudited losses, and 100% of audited profits or losses for the current fiscal year, 50% of the reserves on the loan portfolio classified as “normal” (general reserves), subordinated debt not exceeding 50% of core capital and with a maturity of at least 5 years, and, effective October 1, 2006, debt instruments which fulfill the requirements to be considered as core capital but exceed the above-mentioned limits, debt instruments with a remaining maturity of less than 10 years and those for which unpaid services are cumulative. In this case, the limit is 50% of the core capital; minus | ||
iii) | the following deductions: (a) demand deposits with banks abroad not rated as investment grade; (b) securities deposited with custodians that were not authorized by the Argentine Central Bank; (c) sovereign bonds issued by a foreign government with a rating lower than that assigned to Argentine sovereign bonds; (d) share holdings in other financial institutions; (e) unregistered real estate; (f) goodwill; (g) organizational and development expenses; and (h) provisioning deficiencies as determined by the Superintendency. |
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• | Demand deposits: |
• | Peso-denominated current accounts and savings accounts: 19%. | ||
• | Dollar-denominated savings accounts: 20%. |
• | Time deposits, including those adjusted by CER (by remaining maturity): |
• | Peso-denominated: up to 29 days: 14%; from 30 to 59 days: 11%; from 60 to 89 days: 7%; from 90 to 179 days: 2%; from 180 to 365 days: 0%. | ||
• | Dollar-denominated: up to 29 days: 20%; from 30 to 59 days: 15%; from 60 to 89 days: 10%; from 90 to 179 days: 5%; from 180 to 365 days: 2%; and more than 365 days: 0%. |
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Without Collateral | With Collateral | |||||||
Non-related Customers (*) | 15 | % | 25 | % | ||||
Domestic Financial Institutions (**) | 25 | % | 25 | % | ||||
Foreign Financial Institutions (Investment Grade) | 25 | % | 25 | % | ||||
Foreign Financial Institutions (Other) | 5 | % | 5 | % | ||||
Reciprocal Guarantee Entities Authorized by the Argentine Central Bank (***) | — | 25 | % | |||||
Public Sector (****): | ||||||||
i) National | 50 | % | 50 | % | ||||
ii) City of Buenos Aires and Provinces (Each) | 10 | % | 10 | % | ||||
iii) Municipalities (Each) | 3 | % | 3 | % |
(*) | For the purpose of these limits, business groups shall be considered as a one client. | |
(**) | For second floor financial institutions, the limit is 100%. | |
(***) | Law 24,467: associations of companies authorized by the Argentine Central Bank to guarantee loans. In case one of the companies fails to pay, the other takes responsibility. | |
(****) | Excess over the new limits set in March 2003 will not be computed if arising from loans granted before March 2003, if determined or increased by the receipt of bonds or promissory notes as compensation for the asymmetric pesification, or if arising from the rolling over of preexisting loans. |
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Limit based on a Bank’s RPC | Limit based on Customers’ Net Worth | |||||||
Companies with Non-complementary Activities | 12.5 | % (**) | ||||||
Companies with Complementary Activities | 100 | % | ||||||
Total Shares | 50 | % | ||||||
Shares Without Quotation (*) | 15 | % |
(*) | Includes shares that do not quote frequently and therefore are not subject capital requirements to cover market risk. | |
(**) | Shares or equity interests can be accepted for the payment of credits, up to 20% of the firm’s capital, without exceeding 20% of the votes. They must be sold within one year so as to reach the regulatory limit. |
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• | deposits of individuals or entities up to Ps. 50,000 or the equivalent thereof in foreign currency, with only one person per deposit being able to use this preference. For the determination of this preference, all deposits of the same person registered by the entity shall be computed; | ||
• | deposits in excess of Ps. 50,000 or the equivalent thereof in foreign currency, referred to above; | ||
• | liabilities originated on commercial credit lines granted to the financial entity, which are directly related with international trade. |
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• | places the supervision of credit and debit card companies in the hands of the Argentine Central Bank for financial matters and of the National Undersecretary of Industry and Trade for business and commercial matters; | ||
• | sets a 3% cap on the rate a credit card company can charge merchants with which it has entered into card acceptance agreements for processing customer card holders’ transactions with such merchants, calculated as a percentage of the customers’ purchases; | ||
• | establishes that credit card companies must provide the Argentine Central Bank with the information on their loan portfolio that such entity requires, and | ||
• | sets a cap on the interest rate a credit card company can charge a card holder, which cannot exceed by more than 25% the average interest rate charged by the issuer on personal loans and, for non-bank issuers, it cannot exceed by more than 25% the financial system’s average interest rate on personal loans published by the Argentine Central Bank. |
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i) | Any person who converts, transfers, administers, sells, encumbers or uses money or any other asset derived from any crime in which he was not involved, with the possible result of giving those original or secondary assets the appearance of having a legal origin and as long as their value is greater than Ps. 50,000, whether through a single act or through a series of related events, will be imprisoned for two to ten years and will be fined an amount that will be between two and ten times the amount of the transaction. | ||
ii) | Any person that was not involved in a crime committed by another person but that (a) helps a person to elude or escape from an investigation by the relevant authority; (b) hides, alters or destroys any trail, evidence or object related to the crime or helps the perpetrator of the crime or any participant to hide them, alter them or make them disappear; (c) acquires, receives or hides money or objects arising from a crime; (d) does not report a crime or does not identify a perpetrator of or participant in a crime that is known to him when obligated to do so in order to promote the criminal prosecution of a crime of such nature; (e) secures or helps the perpetrator of or participant in a crime to secure the product or profit of a crime, will be imprisoned for six months to three years. |
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• | Expand the volume of our business with the private sector; | ||
• | Progressively strengthen our balance sheet by consistently reducing the Bank’s high exposure to the public sector, as well as those liabilities incurred by the Bank as a consequence of the 2001-2002 crisis, and | ||
• | Capitalize the Bank. |
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For the 12-month period ended December 31, | ||||||||||||
(in percentages) | 2008 | 2007 | 2006 | |||||||||
Price Indices(1) | ||||||||||||
WPI | 8.82 | 14.56 | 7.14 | |||||||||
CPI | 7.24 | 8.47 | 9.84 | |||||||||
Adjustment Indices | ||||||||||||
CER | 7.97 | 8.50 | 10.08 |
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As of December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(In millions of Pesos) | ||||||||||||
Assets | ||||||||||||
In Pesos, Unadjusted | 15,165.1 | 14,177.0 | 12,510.4 | |||||||||
In Pesos, Adjusted by the CER | 2,439.2 | 2,350.7 | 4,271.5 | |||||||||
In Foreign Currency(1) | 7,131.5 | 6,301.0 | 6,833.5 | |||||||||
Total Assets | 24,735.8 | 22,828.7 | 23,615.4 | |||||||||
Liabilities and Shareholders’ Equity | ||||||||||||
In Pesos, Unadjusted, Including Shareholders’ Equity | 17,262.1 | 15,597.3 | 13,096.4 | |||||||||
In Pesos, Adjusted by the CER | 50.3 | 277.3 | 3,826.2 | |||||||||
In Foreign Currency(1) | 7,423.4 | 6,954.1 | 6,692.8 | |||||||||
Total Liabilities and Shareholders’ Equity | 24,735.8 | 22,828.7 | 23,615.4 | |||||||||
(1) | If adjusted to reflect forward sales and purchases of foreign exchange made by the Bank and recorded off-balance sheet, assets amounted to Ps. 10,495.4 million and liabilities Ps. 10,228.3 million. |
Fiscal Year Ended | Change | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2008 | 2007 | 2006 | 2008/2007 | 2007/2006 | ||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||
Consolidated Income Statement | ||||||||||||||||||||
Financial Income | 2,559.3 | 1,997.9 | 2,229.8 | 561.4 | (231.9 | ) | ||||||||||||||
Financial Expenses | 1,421.0 | 1,246.7 | 1,851.6 | 174.3 | (604.9 | ) | ||||||||||||||
Net financial Income | 1,138.3 | 751.2 | 378.2 | 387.1 | 373.0 | |||||||||||||||
Provision for Losses on Loans and Other Receivables | 395.4 | 255.5 | 110.9 | 139.9 | 144.6 | |||||||||||||||
Net income from Services | 1,187.9 | 913.1 | 672.0 | 274.8 | 241.1 | |||||||||||||||
Administrative Expenses | 1,781.1 | 1,286.3 | 974.6 | 494.8 | 311.7 | |||||||||||||||
Minority Interest | (35.8 | ) | (32.1 | ) | (19.0 | ) | (3.7 | ) | (13.1 | ) | ||||||||||
Income / (Loss) from Equity Investments | 56.8 | 2.0 | (14.4 | ) | 54.8 | 16.4 | ||||||||||||||
Miscellaneous Income / (Loss), Net | 80.1 | 25.1 | 144.0 | 55.0 | (118.9 | ) | ||||||||||||||
Income Tax | (74.0 | ) | (71.5 | ) | (94.2 | ) | (2.5 | ) | 22.7 | |||||||||||
Net income / (Loss) | 176.8 | 46.0 | (18.9 | ) | 130.8 | 64.9 | ||||||||||||||
Return on Average Assets(1) | 0.91 | 0.37 | 0.0004 | 0.54 | 0.3696 | |||||||||||||||
Return on Average Shareholders’ Equity | 10.13 | 2.86 | (1.15 | ) | 7.27 | 4.01 |
(1) | For the calculation of the return on average assets, profits or losses corresponding to minority interests are excluded from net income. |
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• | a 30.1% increase in net income from services, from Ps. 913.1 million to Ps. 1,187.9 million, | ||
• | a 28.1% increase in financial income, from Ps. 1,997.9 million to Ps. 2,559.3 million, | ||
• | a Ps. 55.0 million increase in miscellaneous net income, from Ps. 25.1 million to Ps. 80.1 million, and | ||
• | a Ps. 54.8 million increase in income from equity investments, from Ps. 2.0 million to Ps. 56.8 million. |
• | a 38.5% increase in administrative expenses, which increased from Ps. 1,286.3 million to Ps. 1,781.1 million, | ||
• | a 14.0% increase in financial expenses, from Ps. 1,246.7 million to Ps. 1,421.0 million, and | ||
• | a Ps. 139.9 million increase in provisions for losses on loans, from Ps. 255.5 million to Ps. 395.4 million. |
• | a 32.7% reduction in financial expenses, from Ps. 1,851.6 million to Ps. 1,246.7 million, | ||
• | a 35.9% increase in net income from services, from Ps. 672.0 million to Ps. 913.1 million, and | ||
• | a Ps. 22.7 million decrease in income tax charges, 24.1% lower than the Ps. 94.2 million corresponding to the previous fiscal year. |
• | a 32% increase in administrative expenses, which increased from Ps. 974.6 million to Ps. 1,286.3 million, | ||
• | a 10.4% reduction in financial income, from Ps. 2,229.8 million to Ps. 1,997.9 million, | ||
• | a Ps. 144.6 million increase in provisions for losses on loans, from Ps. 110.9 million to Ps. 255.5 million, and | ||
• | a Ps. 118.9 million reduction in miscellaneous net income, from Ps. 144.0 million to Ps. 25.1 million. |
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Fiscal Year Ended | ||||||||||||
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions of Pesos) | ||||||||||||
Income on Loans and Other Receivables Resulting from Financial Brokerage and Premiums Earned on Reverse Repurchases | 1,930.3 | 1,413.2 | 1,149.1 | |||||||||
Income from Government and Corporate Securities, Net | 238.1 | 241.3 | 235.3 | |||||||||
CER Adjustment | 123.9 | 205.1 | 736.0 | |||||||||
Other(1) | 267.0 | 138.3 | 109.4 | |||||||||
Total | 2,559.3 | 1,997.9 | 2,229.8 | |||||||||
(1) | Reflects income from financial leases, net, and differences in the quotation of gold and foreign currency as well as premiums on forward sales of foreign exchange. |
As of December 31, | ||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
Average | Average | Average | ||||||||||||||||||||||
Balance | Rate | Balance | Rate | Balance | Rate | |||||||||||||||||||
(in millions of Pesos, except rates) | ||||||||||||||||||||||||
Interest-Earning Assets | 19,892.5 | 12.14 | 18,225.9 | 10.00 | 21,752.6 | 8.84 | ||||||||||||||||||
Government Securities | 3,642.2 | 4.08 | 4,278.8 | 3.42 | 4,675.8 | 6.68 | ||||||||||||||||||
Loans | 12,077.3 | 17.01 | 10,528.9 | 14.17 | 10,851.0 | 12.21 | ||||||||||||||||||
Other(1) | 4,173.0 | 5.09 | 3,418.2 | 5.41 | 6,225.8 | 4.57 | ||||||||||||||||||
Interest-Bearing Liabilities | 15,694.5 | 8.14 | 14,858.8 | 7.21 | 18,894.0 | 8.79 | ||||||||||||||||||
Current Accounts | 948.1 | 2.28 | 678.4 | 2.42 | 658.8 | 3.19 | ||||||||||||||||||
Savings Accounts | 2,587.7 | 0.18 | 2,252.9 | 0.23 | 1,789.3 | 0.25 | ||||||||||||||||||
Time Deposits(2) | 6,769.4 | 11.34 | 6,606.2 | 8.51 | 5,297.9 | 7.84 | ||||||||||||||||||
Argentine Central Bank(3) | 0.4 | — | 261.5 | 26.31 | 6,083.1 | 12.65 | ||||||||||||||||||
Debt Securities | 2,799.8 | 10.00 | 3,360.1 | 8.66 | 3,432.4 | 8.59 | ||||||||||||||||||
Other Interest-bearing Liabilities | 2,589.1 | 7.86 | 1,699.7 | 7.50 | 1,632.5 | 9.48 | ||||||||||||||||||
Spread and Net Yield | ||||||||||||||||||||||||
Interest Spread, Nominal Basis(4) | 4.00 | 2.79 | 0.05 | |||||||||||||||||||||
Net Yield on Interest-earning Assets(5) | 5.72 | 4.13 | 1.21 | |||||||||||||||||||||
Financial Margin(6) | 5.72 | 4.12 | 1.74 | |||||||||||||||||||||
(1) | Includes amounts corresponding to the Compensatory Bond and the Hedge Bond. | |
(2) | Includes restructured deposits certificates and restructured deposits with amparo claims. | |
(3) | Includes the financial assistance from the Argentine Central Bank and the advance from the Argentine Central Bank for the subscription of the Hedge Bond. | |
(4) | Reflects the difference between the average nominal interest rate on interest-earning assets and the average nominal interest rate on interest-bearing liabilities. Interest rates include the CER adjustment. | |
(5) | Net interest earned divided by average interest-earning assets. Interest rates include the CER adjustment. | |
(6) | Represents net financial income, divided by average interest-earning assets. |
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Fiscal Year Ended | ||||||||||||
December 31, | ||||||||||||
(in percentages) | 2008 | 2007 | 2006 | |||||||||
Total Deposits | 5.93 | 6.32 | 6.18 | |||||||||
Private-Sector Deposits | ||||||||||||
Total | 7.61 | 8.23 | 8.43 | |||||||||
Deposits in Current and Savings Accounts and Non-Restructured Time Deposits | 7.87 | 8.55 | 8.78 | |||||||||
Total Loans | 6.16 | 7.41 | 8.13 | |||||||||
Private-Sector Loans | 6.12 | 7.75 | 7.22 | |||||||||
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Fiscal Year Ended | ||||||||||||
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions of Pesos) | ||||||||||||
Interest on Deposits | 786.1 | 547.3 | 346.1 | |||||||||
Negotiable Obligations | 288.8 | 335.2 | 294.9 | |||||||||
Contributions and Taxes | 135.9 | 86.4 | 68.6 | |||||||||
CER Adjustment | 9.2 | 67.0 | 697.7 | |||||||||
Other(1) | 201.0 | 210.8 | 444.3 | |||||||||
Total | 1,421.0 | 1,246.7 | 1,851.6 | |||||||||
(1) | Includes accrued interest on liabilities resulting from financial brokerage with banks and international entities and premiums payable on repurchases. |
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Fiscal Year Ended | % Change | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2008 | 2007 | 2006 | 2008/2007 | 2007/2006 | ||||||||||||||||
(in millions of Pesos) | (in percentages) | |||||||||||||||||||
Income From | ||||||||||||||||||||
Credit Cards | 952.6 | 669.5 | 473.6 | 42.3 | 41.4 | |||||||||||||||
Deposits Accounts | 201.7 | 160.5 | 125.7 | 25.7 | 27.7 | |||||||||||||||
Financial Fees | 42.0 | 28.8 | 19.4 | 45.8 | 48.5 | |||||||||||||||
Credit-related Fees | 95.7 | 79.1 | 53.4 | 21.0 | 48.1 | |||||||||||||||
Check Collection | 33.9 | 27.3 | 18.3 | 24.2 | 49.2 | |||||||||||||||
Collection Services (Taxes and Utility Bills) | 19.5 | 14.1 | 11.2 | 38.3 | 25.9 | |||||||||||||||
International Trade | 46.1 | 39.5 | 31.9 | 16.7 | 23.8 | |||||||||||||||
Insurance | 65.5 | 60.8 | 45.0 | 7.7 | 35.1 | |||||||||||||||
Other (1) | 115.1 | 91.1 | 74.6 | 26.3 | 22.1 | |||||||||||||||
Total Income | 1,572.1 | 1,170.7 | 853.1 | 34.3 | 37.2 | |||||||||||||||
Total Expenses | 384.2 | 257.6 | 181.1 | 49.1 | 42.2 | |||||||||||||||
Net Income from Services | 1,187.9 | 913.1 | 672.0 | 30.1 | 35.9 | |||||||||||||||
(1) | Includes, among others, fees from investment banking activities, asset management, safe deposit boxes and cash management. |
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% Change | ||||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
Credit Cards | 2008 | 2007 | 2006 | 2008/2007 | 2007/2006 | |||||||||||||||
(number of credit cards, except otherwise noted) | (percentages) | |||||||||||||||||||
Visa | 936,267 | 855,708 | 721,105 | 9.41 | 18.67 | |||||||||||||||
“Gold” | 203,464 | 172,830 | 124,287 | 17.72 | 39.06 | |||||||||||||||
International | 470,709 | 433,000 | 387,485 | 8.71 | 11.75 | |||||||||||||||
Domestic | 227,785 | 229,174 | 198,409 | (0.61 | ) | 15.51 | ||||||||||||||
“Business” | 20,976 | 15,962 | 10,877 | 31.41 | 46.75 | |||||||||||||||
“Corporate” | 960 | 295 | 47 | 225.42 | 527.66 | |||||||||||||||
“Platinum” | 12,373 | 4,447 | — | 178.23 | — | |||||||||||||||
Galicia Rural | 6,215 | 5,841 | 5,049 | 6.40 | 15.69 | |||||||||||||||
American Express | 241,145 | 195,360 | 131,660 | 23.44 | 48.38 | |||||||||||||||
“Gold” | 99,970 | 79,829 | 56,563 | 25.23 | 41.13 | |||||||||||||||
International | 133,644 | 115,531 | 75,097 | 15.68 | 53.84 | |||||||||||||||
Platinum | 7,531 | — | — | — | — | |||||||||||||||
MasterCard | 54,916 | 50,577 | 41,271 | 8.58 | 22.55 | |||||||||||||||
“Gold” | 16,790 | 13,203 | 10,437 | 27.17 | 26.50 | |||||||||||||||
MasterCard | 36,531 | 35,684 | 29,765 | 2.37 | 19.89 | |||||||||||||||
Argencard | 1,595 | 1,690 | 1,069 | (5.62 | ) | 58.09 | ||||||||||||||
Regional Credit-Card Companies | 4,742,816 | 4,283,770 | 3,383,483 | 10.72 | 26.61 | |||||||||||||||
Local Brands | 2,864,709 | 2,479,788 | 2,192,098 | 15.52 | 13.12 | |||||||||||||||
Visa | 1,628,185 | 1,599,046 | 1,068,702 | 1.82 | 49.63 | |||||||||||||||
MasterCard | 217,090 | 182,237 | 122,683 | 19.13 | 48.54 | |||||||||||||||
American Express | 32,832 | 22,699 | — | 44.64 | — | |||||||||||||||
Total | 5,981,359 | 5,391,256 | 4,282,568 | 10.95 | 25.89 | |||||||||||||||
Total Amount of Purchases (in millions of Pesos) | Ps. | 14,949 | Ps. | 11,566 | Ps. | 8,305 | 29.24 | 39.27 | ||||||||||||
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Fiscal Year Ended | % Change | |||||||||||||||||||
December 31, | December 31, | |||||||||||||||||||
2008 | 2007 | 2006 | 2008/2007 | 2007/2006 | ||||||||||||||||
(in millions of Pesos) | (in percentages) | |||||||||||||||||||
Salaries and Social Security Contributions | 805.2 | 540.6 | 415.4 | 48.9 | 30.1 | |||||||||||||||
Property-related Expenses | 113.2 | 89.9 | 65.1 | 25.9 | 38.1 | |||||||||||||||
Personnel Services | 90.8 | 75.7 | 46.6 | 19.9 | 62.4 | |||||||||||||||
Advertising and Publicity | 146.5 | 113.8 | 84.5 | 28.7 | 34.7 | |||||||||||||||
Amount Accrued in Relation to Directors’ and Syndics’ Compensation | 8.2 | 6.4 | 6.0 | 28.1 | 6.7 | |||||||||||||||
Electricity and Communications | 72.7 | 57.2 | 41.1 | 27.1 | 39.2 | |||||||||||||||
Taxes | 104.0 | 70.4 | 50.5 | 47.7 | 39.4 | |||||||||||||||
Other | 440.5 | 332.3 | 265.4 | 32.6 | 25.2 | |||||||||||||||
Total | 1,781.1 | 1,286.3 | 974.6 | 38.5 | 32.0 | |||||||||||||||
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December 31, 2008 | December 31, 2007 | December 31, 2006 | ||||||||||
(in millions of Pesos) | ||||||||||||
Argentine Banking GAAP | 526.8 | 428.6 | 327.0 | |||||||||
U.S. GAAP | ||||||||||||
SFAS 114 | ||||||||||||
Allowance for Loan Losses | 134.5 | 246.3 | 291.9 | |||||||||
Effect of BG Trust Securitization - - Treated as a Secured Borrowing for U.S. GAAP Purposes | (40.9 | ) | (64.9 | ) | (89.7 | ) | ||||||
SFAS 5 | 452.9 | 240.9 | 170.6 | |||||||||
U.S. GAAP Shareholders’ Equity Adjustment | (19.7 | ) | 6.3 | (45.8 | ) | |||||||
• | “With Problems” | ||
• | “High Risk of Insolvency” | ||
• | “Uncollectible” |
December 31, 2008 | December 31, 2007 | December 31, 2006 | ||||||||||
(in millions of Pesos) | ||||||||||||
Loan Loss Reserve Under U.S. GAAP – SFAS 114 Analysis | 134.5 | 246.3 | 291.9 |
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December 31, 2008 | December 31, 2007 | December 31, 2006 | ||||||||||
(in millions of Pesos) | ||||||||||||
Loan Loss Reserve Under U.S. GAAP – SFAS 5 Analysis | 452.9 | 240.9 | 170.6 | |||||||||
• | Loan loss reserves as a percentage of non-accrual loans, | ||
• | Loan loss reserves as a percentage of total amounts past due, and | ||
• | Loan loss reserves as a percentage of past-due unsecured amounts. |
December 31, 2008 | December 31, 2007 | December 31, 2006 | ||||||||||
Loan Loss Reserves as a Percentage of Non-accrual Loans | 141.34 | % | 132.13 | % | 168.58 | % | ||||||
Loan Loss Reserves as a Percentage of Total Amounts Past Due | 171.81 | % | 149.57 | % | 183.29 | % | ||||||
Loan Loss Reserves as a Percentage of Past-due Unsecured Amounts | 190.78 | % | 167.19 | % | 210.51 | % |
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• | determine whether the entity meets the criteria to qualify as a VIE and; |
• | determine whether Grupo Financiero Galicia is the primary beneficiary of the VIE. |
• | the design of the entity, including the nature of its risks and the purpose for which the entity was created, to determine the variability that the entity was designed to create and distribute to its interest holders; |
• | the nature of the involvement with the entity; |
• | whether control of the entity may be achieved through arrangements that do not involve voting equity; |
• | whether there is sufficient equity investment at risk to finance the activities of the entity and; |
• | whether parties other than the equity holders have the obligation to absorb expected losses or the right to received residual returns. |
• | whether the variable interest absorbs the majority of the VIE’s expected losses; |
• | whether the variable interest receives the majority of the VIE’s expected returns and; |
• | whether Grupo Financiero Galicia has the ability to make decisions that significantly affect the VIE’s results and activities. |
(In millions of Pesos) | December 31, 2008 | |||
Cash and due from banks | Ps. | 33.4 | ||
Loans (net of allowances) | 939.9 | |||
Other assets | 21.2 | |||
Total Assets | 994.5 | |||
Debt Securities | 722.0 | |||
Certificates of Participation | 247.7 | |||
Other liabilities | 24.8 | |||
Total Liabilities | 994.5 | |||
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Net Income (Loss) | Shareholders’ Equity (Deficit) | |||||||||||||||
Argentine Banking | Argentine Banking | |||||||||||||||
GAAP | U.S. GAAP | GAAP | U.S. GAAP | |||||||||||||
(in millions of Pesos) | ||||||||||||||||
Fiscal Year 2008 | 176.8 | (1,171.0 | ) | 1,845.7 | (754.4 | ) | ||||||||||
Fiscal Year 2007 | 46.0 | 592.9 | 1,654.5 | 238.1 | ||||||||||||
Fiscal Year 2006 | (18.9 | ) | 3,524.9 | 1,608.5 | 145.8 |
• | Since 2005, given that the Compensatory Bond was received in full in that year, the corresponding Boden 2012 Bonds are reflected at market value, with changes in values being recognized under other comprehensive income, the effect of which varies significantly in 2006 and 2007. As of December 31, 2008, Grupo Financiero Galicia had recorded an other-than-temporary impairment for U.S. GAAP purposes, which resulted in a significant decrease in its net income for fiscal year 2008 under U.S. GAAP. |
• | The Hedge Bond and the liability with the Argentine Central Bank for its purchase were not recognized under U.S. GAAP in 2005, while they were recognized in 2006. With the delivery to the Bank of 90.8% of the Hedge Bond in 2006, as the Bank acquired control of 90.8% of the asset that previously was not recognized as such, the adjustment made in the prior year (to reflect that the asset, recognized under Argentine Banking GAAP, was not recognized under U.S. GAAP) was reversed in the same proportion which generated a significant increase in our net income for fiscal year 2006 under U.S. GAAP. |
• | Discount Bonds in Pesos are reflected at market values, with changes from market values at the time of exchange being recognized as other comprehensive income. As of December 31, 2008, Grupo Financiero Galicia had recorded an other-than-temporary impairment for U.S. GAAP purposes, which resulted in a significant decrease in its net income for fiscal year 2008 under U.S. GAAP. |
• | The Bank’s foreign debt restructuring completed in 2004 was accounted as a troubled debt restructuring. Therefore the carrying value of such debt is higher under U.S. GAAP and no gain was recognized at the time of the restructuring. |
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• | Certain of our securitization transactions are considered sales under U.S. GAAP, with the valuation of retained interests reflecting fair values, with changes in unrealized gains and losses charged to equity through other comprehensive income. As of December 31, 2008, Grupo Financiero Galicia had recorded an other-than-temporary impairment of the certificates of participation in Galtrust I, in Nues Trust and in Almafuerte Special Fund, based on a variety of factors, mostly including the period of time and extent to which the market value had been lower than the cost and the weakening of the global and local markets. The fair value of these retained interests in the trusts is determined based upon an estimate of cash flows to be collected by Grupo Financiero Galicia as the holder of the retained interests, discounted at an estimated market rate and will constitute the new cost basis of these securities. |
• | Banking: our banking business segment represents Banco de Galicia y Buenos Aires S.A. consolidated line by line with Galicia Uruguay and its subsidiaries and the results of other small banking-related subsidiaries. |
• | Regional Credit Cards: our regional credit cards business segment represents the accounts of Tarjetas Regionales S.A. consolidated with its subsidiaries. |
• | Insurance: our insurance business segment represents the accounts of Sudamericana and its subsidiaries. |
• | Other Grupo Businesses: this segment includes the results of Net Investment, Galicia Warrants, GV Mandataria and Galval. |
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As of December 31, | ||||||||||||
In millions of Pesos, except percentages | 2008 | 2007 | 2006 | |||||||||
Net Financial Income | 847.3 | 516.2 | 66.0 | |||||||||
Net Income from Services | 655.0 | 520.4 | 377.3 | |||||||||
Net Operating Revenue | 1,502.3 | 1,036.6 | 443.3 | |||||||||
Provisions for Loan Losses | 214.9 | 159.2 | 57.6 | |||||||||
Administrative Expenses | 1,166.5 | 875.1 | 681.4 | |||||||||
Net Operating Income | 120.9 | 2.3 | (295.7 | ) | ||||||||
Income from Equity Investments | ||||||||||||
Tarjetas Regionales SA | 76.4 | 88.2 | 70.9 | |||||||||
Sudamericana | 2.9 | 1.9 | 1.1 | |||||||||
Others | 58.1 | 3.5 | (14.8 | ) | ||||||||
Income from Equity Investments | 137.4 | 93.6 | 57.2 | |||||||||
Other Income (Loss) | (63.0 | ) | (65.5 | ) | 112.3 | |||||||
Pre-tax Income | 195.3 | 30.4 | (126.2 | ) | ||||||||
Net Income | 195.3 | 30.4 | (126.2 | ) | ||||||||
Net Income as a % of Grupo Financiero Galicia’s Net Income | 110 | % | 66 | % | 667 | % | ||||||
Average Loans | 8,707.5 | 7,140.6 | 5,332.3 | |||||||||
Average Deposits | 13,199.0 | 11,857.0 | 9,506.0 |
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As of December 31, | ||||||||||||
In millions of Pesos, except percentages | 2008 | 2007 | 2006 | |||||||||
Net Financial Income | 296.2 | 203.2 | 157.5 | |||||||||
Net Income from Services | 571.8 | 409.0 | 289.8 | |||||||||
Net Operating Revenue | 868.0 | 612.2 | 447.3 | |||||||||
Provisions for Loan Losses | 180.4 | 96.3 | 53.2 | |||||||||
Administrative Expenses | 554.5 | 369.5 | 263.9 | |||||||||
Net Operating Income | 133.1 | 146.4 | 130.2 | |||||||||
Other Income (Loss) | 45.2 | 41.3 | 20.7 | |||||||||
Minority Interests | (20.6 | ) | (27.5 | ) | (24.1 | ) | ||||||
Pre-tax Income | 157.7 | 160.2 | 126.8 | |||||||||
Income Tax Provision | 81.3 | 72.1 | 55.9 | |||||||||
Net Income | 76.4 | 88.1 | 70.9 | |||||||||
Net Income as a % of Grupo Financiero Galicia’s Net Income | 43 | % | 192 | % | (375 | )% | ||||||
Average Loans | 2,105.0 | 1,703.1 | 1,149.3 | |||||||||
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As of September 30, | ||||||||||||
In millions of Pesos, except percentages | 2008 | 2007 | 2006 | |||||||||
Net Financial Income | 20.2 | 16.6 | 17.0 | |||||||||
Net Operating Revenue | 20.2 | 16.6 | 17.0 | |||||||||
Administrative Expenses | 30.0 | 16.1 | 11.2 | |||||||||
Net Operating Income | (9.8 | ) | 0.5 | 5.8 | ||||||||
Other Income (Loss) | 43.5 | 22.0 | 6.9 | |||||||||
Pre-tax Income | 33.7 | 22.5 | 12.7 | |||||||||
Income Tax Provision | 11.1 | 7.9 | 3.7 | |||||||||
Net Income | 22.6 | 14.6 | 9.0 | |||||||||
Net Income as a % of Grupo Financiero Galicia’s Net Income | 12.8 | % | 32 | % | (48 | )% | ||||||
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As of December 31, | ||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
Amounts | % | Amounts | % | Amounts | % | |||||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||||||
Cash and Due from Banks | 3,405.1 | 13.8 | 2,960.0 | 13.0 | 2,294.8 | 9.7 | ||||||||||||||||||
Government and Corporate Securities | 1,531.9 | 6.2 | 1,694.0 | 7.4 | 3,188.6 | 13.5 | ||||||||||||||||||
Loans to the Non Financial Public Sector | 11,774.6 | 47.6 | 11,601.0 | 50.8 | 10,525.0 | 44.6 | ||||||||||||||||||
Hedge Bond to be Acquired | — | — | — | — | 401.3 | 1.7 | ||||||||||||||||||
Other Receivables — Argentine Central Bank | — | — | — | — | 1,733.3 | 7.3 | ||||||||||||||||||
Other Assets | 8,024.2 | 32.4 | 6,573.7 | 28.8 | 5,472.4 | 23.2 | ||||||||||||||||||
Total | 24,735.8 | 100.0 | 22,828.7 | 100.0 | 23,615.4 | 100.0 | ||||||||||||||||||
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• | Ps. 1,824.9 million of forward purchases of Boden 2012 Bonds in connection with repurchase agreements (including the corresponding security margins recorded as “Miscellaneous Receivables” in the balance sheet). |
• | Ps. 1,164.9 million recorded under “Bank Premises and Equipment”, “Miscellaneous Assets” and “Intangible Assets”, excluding from the latter the deferred losses fromamparoclaims. |
• | Ps. 634.0 million corresponding to our holdings of debt securities and participation certificates issued by the Galtrust I Financial Trust, resulting from the securitization of loans to the provincial public sector in late 2000. |
• | Ps. 597.1 million of forward purchases of Discount Bonds in Pesos in connection with repurchase agreements (including the corresponding security margins recorded as “Miscellaneous Receivables” in the balance sheet). |
• | Ps. 445.2 million corresponding to “Assets under Financial Leases”. |
• | Ps. 408.9 million corresponding to holdings of the participation certificate in, and debt securities of, the special fund (referred to as “Special Fund Former Almafuerte Bank”) jointly formed by the Bank with other private-sector banks in order to facilitate the recovery of the assets of former Almafuerte Bank. |
• | Ps. 365.3 million corresponding to participation certificates in, and debt securities of, different financial trusts, created by the Bank or by third parties. |
• | Ps. 316.9 million recorded as an intangible asset, which reflect deferred losses in connection withamparoclaims due to the difference between the amount paid to depositors (the deposit’s original contractual amount, collected by depositors in US Dollars or at the free market exchange rate) as a consequence of court orders, and the amount established by the pesification rules (conversion at the Ps. 1.40 per US Dollar exchange rate, plus CER adjustment and interest), net of the accumulated amortization, plus the amount of deferred amortization. |
• | Ps. 283.5 million corresponding to the minimum presumed income tax recorded under “Miscellaneous Receivables”. |
• | Ps. 258.4 million corresponding to balances deposited at the Argentine Central Bank as guarantees in favor of clearing houses. |
• | Ps. 57.3 million corresponding to equity investments. |
• | Ps. 46.6 million corresponding to debt securities, mostly of the Bank (Ps. 39.8 million) and the rest corresponding to securities issued by other companies. |
As of December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions of Pesos) | ||||||||||||
Net Position in Government Securities | 3,345.3 | 3,877.8 | 4,832.7 | |||||||||
Trading and Investment Accounts | 627.6 | 435.8 | 164.3 | |||||||||
Boden 2012 Bonds | 2,350.8 | 2,744.3 | 3,582.9 | |||||||||
Bogar Bonds | — | — | 366.5 | |||||||||
Discount Bonds in Pesos and GDP-Linked Negotiable Securities | 666.9 | 697.7 | 719.0 | |||||||||
Loans | 1,481.5 | 1,372.9 | 2,846.7 | |||||||||
Financial Sector | 107.9 | 107.4 | 107.4 | |||||||||
Secured Loans and Others | 1,373.6 | 1,265.5 | 2,739.3 | |||||||||
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As of December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions of Pesos) | ||||||||||||
Other Receivables Resulting from Financial Brokerage | 927.5 | 870.1 | 1,218.6 | |||||||||
Boden 2012 Bonds (Hedge Bond) | — | — | 401.3 | |||||||||
Trusts’ Certificates of Participation and Securities | 927.5 | 870.1 | 817.3 | |||||||||
Total Assets(1) | 6,054.3 | 6,120.8 | 8,898.0 | |||||||||
Liabilities with the Argentine Central Bank | — | — | 3,026.0 | |||||||||
Net Exposure | 6,054.3 | 6,120.8 | 5,872.0 | |||||||||
(1) | Does not include deposits with the Argentine Central Bank, which constitute one of the items by which the Bank complies with the Argentine Central Bank’s minimum cash requirements. |
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December 31, | ||||||||||||||||||||||||
2008 | 2007 | 2006 | ||||||||||||||||||||||
Amounts | % | Amounts | % | Amounts | % | |||||||||||||||||||
(in millions of Pesos, except percentages) | ||||||||||||||||||||||||
Deposits | 14,056.1 | 56.8 | 13,165.6 | 57.8 | 10,779.4 | 45.6 | ||||||||||||||||||
Current Accounts and Other Demand Deposits | 3,105.4 | 12.6 | 2,675.4 | 11.7 | 2,011.4 | 8.5 | ||||||||||||||||||
Savings Accounts | 4,035.0 | 16.3 | 3,380.1 | 14.8 | 2,589.5 | 11.0 | ||||||||||||||||||
Time Deposits | 6,548.0 | 26.5 | 6,708.8 | 29.5 | 5,831.5 | 24.6 | ||||||||||||||||||
Other Deposits | 263.2 | 1.1 | 291.6 | 1.3 | 215.6 | 0.9 | ||||||||||||||||||
Accrued Interest, Quotation Differences and CER Adjustment | 104.5 | 0.4 | 113.7 | 0.5 | 131.4 | 0.6 | ||||||||||||||||||
Debt with Financial Institutions(1) | 2,172.9 | 8.8 | 2,307.8 | 10.1 | 5,217.2 | 22.1 | ||||||||||||||||||
Argentine Central Bank | ||||||||||||||||||||||||
Financial Assistance | — | — | — | — | 2,688.7 | 11.4 | ||||||||||||||||||
Advance for the Acquisition of the Hedge Bond | — | — | — | — | 336.8 | 1.4 | ||||||||||||||||||
Domestic Financial Institutions | 248.6 | 1.0 | 318.5 | 1.4 | 287.7 | 1.2 | ||||||||||||||||||
International Banks and Credit Agencies | 941.5 | 3.8 | 733.3 | 3.2 | 870.5 | 3.7 | ||||||||||||||||||
Repurchases | 982.8 | 4.0 | 1,256.0 | 5.5 | 1,033.5 | 4.4 | ||||||||||||||||||
Negotiable Obligations (Unsubordinated and Subordinated)(1) | 2,932.5 | 11.9 | 3,105.6 | 13.6 | 3,676.0 | 15.6 | ||||||||||||||||||
Other obligations | 3,728.6 | 15.0 | 2,595.2 | 11.3 | 2,334.3 | 9.9 | ||||||||||||||||||
Shareholders’ Equity | 1,845.7 | 7.5 | 1,654.5 | 7.2 | 1,608.5 | 6.8 | ||||||||||||||||||
Total Funding | 24,735.8 | 100.0 | 22,828.7 | 100.0 | 23,615.4 | 100.0 | ||||||||||||||||||
(1) | Includes accrued interest, quotation differences, and CER adjustment where applicable. |
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• | Ps. 353.7 million and Ps. 934.0 million of 2010 Notes and 2014 Notes, respectively, and Ps. 987.0 million of 2019 Notes, all of them issued in 2004 and corresponding to new debt of the Bank resulting from the foreign debt restructuring completed in May of said year. |
• | Ps. 55.7 million of negotiable obligations issued by Galicia Uruguay to refinance its deposits, which securities were issued either in connection with the original restructuring or with the exchange offers subsequently made by Galicia Uruguay to its customers. |
• | Ps. 62.5 million and Ps. 69.1 million of Class VII and Class VIII Negotiable Obligations, respectively, maturing in 2009, issued by Tarjeta Naranja S.A. |
• | Ps. 39.8 million of Series XIX Negotiable Obligations, maturing in 2009, issued by Tarjetas Cuyanas S.A. |
• | Ps. 5.8 million of past due foreign debt included in the Bank’s 2004 debt restructuring, the holders of which did not participate in such restructuring. |
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Standard & | Evaluadora | |||||||
Poor’s | Fitch Argentina | Latinoamericana | Moody’s | |||||
LOCAL RATINGS | ||||||||
Grupo Financiero Galicia S.A. | ||||||||
Rating of Shares | 1 | |||||||
Short-/Medium Term Debt (1) | A+ | |||||||
Banco de Galicia y Buenos Aires S.A. | ||||||||
Counterparty Rating | raA | |||||||
Medium-/Long-Term Debt(2) (3) | raA | A+ | Aa3.ar | |||||
Subordinated Debt(2) (4) | raA- | A | Aa3.ar | |||||
Deposits (Long Term / Short Term) | raA / raA-1 | |||||||
Deposits (Local Currency / Foreign Currency) | Aa2.ar / Ba1.ar | |||||||
Tarjeta Naranja S.A. | ||||||||
Medium-/Long-Term Debt(2) (5) | AA-(arg) | |||||||
Short-Term Debt(2) (6) | AA-(arg) | |||||||
Tarjetas Cuyanas S.A. | ||||||||
Long-Term Debt(2) (7) | A(arg) | |||||||
Short-Term Debt(2) (8) | A(arg) | |||||||
INTERNATIONAL RATINGS | ||||||||
Tarjeta Naranja S.A. | ||||||||
Medium-/Long-Term Debt(2) (9) | B- | |||||||
Tarjetas Cuyanas S.A. | ||||||||
Long-Term Debt(2) (7) | B- | |||||||
Short-Term Debt(2) (8) | B- |
(1) | Negotiable Obligations Due in 2010 and 2011, issued on June 4, 2009. | |
(2) | See “-Contractual Obligations”. | |
(3) | Negotiable Obligations Due in 2010 and Negotiable Obligations Due in 2014. | |
(4) | Subordinated Negotiable Obligations Due in 2019. | |
(5) | Classes IV and VII Negotiable Obligations. | |
(6) | Class VIII Negotiable Obligations. | |
(7) | Series XVIII Negotiable Obligations. | |
(8) | Series XIX Negotiable Obligations. | |
(9) | Class IV Negotiable Obligations. |
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Annual | Less than 1 | 1 to 3 | 3 to 5 | Over 5 | ||||||||||||||||||||
Maturity | Interest Rate | Total | Year | Years | Years | Years | ||||||||||||||||||
Banco Galicia | ||||||||||||||||||||||||
Deposits | ||||||||||||||||||||||||
Time Deposits (including Other Deposits) (Pesos/US$) | Various | Various | 6,698.3 | 6,651.1 | 47.2 | — | — | |||||||||||||||||
Bonds | ||||||||||||||||||||||||
2010 Notes (US$)(1) (2) (3) | 2010 | Libor + 350 b.p. | Ps. | 365.9 | Ps. | 248.0 | Ps. | 117.9 | — | — | ||||||||||||||
2014 Notes (US$)(1) (2) (4) | 2014 | 7.00% | 966.9 | 32.9 | 442.4 | Ps. | 442.4 | Ps. | 49.2 | |||||||||||||||
2019 Notes (US$)(1) (5) | 2019 | 11.00% | 987.0 | — | — | — | 987.0 | |||||||||||||||||
9% Notes Due 2003 (US$)(6) | 2003 | 9.00% | 9.5 | 9.5 | — | — | — | |||||||||||||||||
Loans | ||||||||||||||||||||||||
Floating Rate Loans Due 2010 (US$) (1) (2) (3) | 2010 | Libor + 350 b.p. | 5.7 | 3.9 | 1.8 | — | — | |||||||||||||||||
Floating Rate Loans Due 2014 (US$)(1) (2) (4) | 2014 | Libor + 85 b.p. | 87.9 | 1.8 | 40.8 | 40.8 | 4.5 | |||||||||||||||||
Floating Rate Loans Due 2019 (US$)(1) (7) | 2019 | Libor + 578 b.p. | 6.5 | — | — | — | 6.5 | |||||||||||||||||
IBD Financial Loans (US$) | Various | Various | 1.4 | 0.1 | 1.3 | — | — | |||||||||||||||||
IFC Financial Loans (US$) | Various | Libor + 350 b.p. | 267.9 | 54.7 | 102.0 | 89.4 | 21.8 | |||||||||||||||||
Other Financial Loans (US$)(8) | Various | Various | 365.2 | 358.5 | 6.7 | — | — | |||||||||||||||||
Merrill Lynch Intl. Financial Loan (US$)(9) | 2009 | 7.8% | 220.4 | 220.4 | — | — | — | |||||||||||||||||
BID Financial Loans (Pesos) | Various | Various | 87.0 | 15.8 | 30.2 | 20.6 | 20.4 | |||||||||||||||||
Fontar Financial Loans (Pesos) | Various | Various | 61.0 | 11.1 | 24.5 | 17.1 | 8.3 | |||||||||||||||||
BICE Loans (CER Adjusted Pesos) | Various | CER+4.0% | 3.0 | 3.0 | — | — | — | |||||||||||||||||
BICE Loans (US$)(10) | Various | Libor + 550 b.p. | 3.5 | 3.5 | — | — | — | |||||||||||||||||
Repurchases (US$)(11) | Various | Various | 982.8 | 692.0 | 290.8 | — | — | |||||||||||||||||
Galicia Uruguay | ||||||||||||||||||||||||
Negotiable Obligations (US$)(12) | Various | Various | 54.5 | 9.0 | 45.5 | — | — | |||||||||||||||||
Tarjetas Regionales S.A. | ||||||||||||||||||||||||
Financial Loans with Local Banks (Pesos) | Various | Various | 242.9 | 93.3 | 136.2 | 13.4 | — | |||||||||||||||||
Negotiable Obligations (Pesos/US$) | Various | Various | 549.7 | 316.8 | 222.9 | 10.0 | — | |||||||||||||||||
Total | Ps. | 11,967.0 | Ps. | 8,725.4 | Ps. | 1,510.2 | Ps. | 633.7 | Ps. | 1,097.7 | ||||||||||||||
(1) | Issued in 2004 as part of the restructuring of the foreign debt of the Bank’s Head Office and its Cayman Branch. | |
(2) | Interest payable in cash, semiannually, on January 1 and July 1 of each year, beginning on July 1, 2004. | |
(3) | Floating Rate Notes Due 2010: Principal amortizes semiannually, on January 1 and July 1 of each year, beginning on July 1, 2006, in eight equal installments of 12.5% of principal at issuance or incurrence, until maturity on January 1, 2010, when the remaining 12.5% is due. | |
(4) | Step-Up Rate Notes Due 2014: Principal amortizes semiannually, on January 1 and July 1 of each year, beginning on January 1, 2010, in eight equal installments of 11.11% of principal at issuance or incurrence, until maturity, when the remaining 4.86% is due (during 2007, the Bank made a cancellation in advance which was applied to the last installment, which modified the original cash flow). The rate increased 1% on January 1 of each year, until it reached 7% on January 1, 2008. | |
(5) | Subordinated Notes Due 2019: Interest paid in cash: 6% per annum from January 1, 2004 until (but not including) January 1, 2014, payable semiannually, on January 1 and July 1 of each year, beginning on July 1, 2004. Unless the notes are previously redeemed, the annual interest rate will increase to 11% per annum from that date until (but not including) January 1, 2019. Interest paid in additional subordinated negotiable obligations due 2019: 5% per annum from January 1, 2004, to be paid on January 1, 2014 and January 1, 2019. Principal amortizes in full on January 1, 2019, unless the notes are previously redeemed at par plus accrued but unpaid interest, in whole or in part, at the Bank’s option, at any time after the 2010 Notes and the 2014 Notes have been repaid in full and, otherwise, in accordance with the terms of the agreements governing such notes. | |
(6) | The balance represents debt not tendered by its holders to the exchange offered by the Bank to restructure its foreign debt, which was completed in May 2004. |
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(7) | Interest payable in cash: Libor+78 b.p., per annum from January 1, 2004, until (but not including) January 1, 2014, payable semiannually, on January 1 and July 1 of each year, beginning on July 1, 2004. Unless the loans are previously redeemed, the annual interest rate will increase to Libor+578 b.p. per annum from that date until (but not including) January 1, 2019. Also pays interest in additional subordinated loans, due 2019: 5% per annum from January 1, 2004, to be paid on January 1, 2014 and January 1, 2019. Principal amortizes in full on January 1, 2019 unless the loans are previously redeemed at part plus accrued interest and additional amounts, if any, in whole or in part at the Bank’s option, in accordance with the terms of the agreements governing such loans. | |
(8) | Borrowings to finance international trade operations to Bank customers. | |
(9) | Borrowing from Grupo Financiero Galicia to fund part of the subscription of the Bank’s shares issued as part of its August 2007 capital increase. The principal of the loan amounts to US$80 million. Interest accrues at a fixed rate of 7.75% per annum in the first year and in the second year it accrues at the 3-month Libor+350 b.p. Principal will be amortized as follows: US$18 million are due in July 2008 and the remaining principal amount is due in July 2009. | |
(10) | Corresponds to US$10.0 million of principal at incurrence accruing Libor+550 b.p., with interest payable semiannually, in May and November of each year, and. principal amortizing in 9 semiannual installments, beginning in May 2005 and ending in May 2009. | |
(11) | Includes premiums. | |
(12) | Issued in 2002 as part of the restructuring of Galicia Uruguay’s deposits. Includes: |
• | 2% Negotiable Obligations Due 2011: principal amortizes in 9 equal annual installments in September of each year, beginning in September 2003, the first 2 installments are of 15% of principal, and the remaining 7 are of 10% of principal. Interest is payable annually in September of each year, beginning in September 2003 and accrues at a fixed rate of 2% per annum. | ||
• | Floating Rate Negotiable Obligations Due 2011: principal amortizes in 3 annual installments in December of each year, beginning in December 2009, the first 2 installments are of 30% of principal, and the remaining one is 40% of principal. Interest is payable semiannually in June and December of each year, beginning in December 2003, and accrues at Libor+300 b.p., and has a 7% cap. |
(In millions of Pesos) | ||||
2009 | 44.81 | |||
2010 | 49.44 | |||
2011 | 52.77 | |||
2012 | 56.13 | |||
2013 | 58.60 | |||
2014 and After | 60.25 | |||
Total | 322.00 | |||
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December 31, 2008 | ||||
(in millions of Pesos) | ||||
Commitments to Extend Credit | 1,003.4 | |||
Standby Letters of Credit | 157.1 | |||
Guarantees Granted | 208.9 | |||
Acceptances | 69.5 |
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December 31, 2008 | ||||
(in millions of Pesos) | ||||
Preferred Counter Guarantees | 34.7 | |||
Other Counter Guarantees | 43.3 |
December 31, 2008 | ||||
(in millions of Pesos) | ||||
Checks Drawn on the Bank | 439.8 | |||
Checks Drawn on Other Banks | 369.5 | |||
Bills and Other Items for Collection | 1,322.1 |
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• | Level 1: inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | ||
• | Level 2: inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. | ||
Inputs include the following: |
(a) | Quoted prices for similar assets or liabilities in active markets; | ||
(b) | Quoted prices for identical or similar assets or liabilities in non-active markets; | ||
(c) | Pricing models whose inputs are observable for substantially the full term of the asset or liability; and | ||
(d) | Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means. |
• | Level 3: inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
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December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions of Pesos) | ||||||||||||
Funds (1) at the Beginning of the Fiscal Year | Ps. | 3,766.2 | Ps. | 4,988.2 | Ps. | 2,046.8 | ||||||
Funds Provided (Used) by Operating Activities | 888.6 | 2,449.8 | 3,548.1 | |||||||||
- Funds Provided by the Sale Of or Proceeds From Government Securities | 839.2 | 1,589.5 | 1,267.5 | |||||||||
- CER Adjustment | (113.2 | ) | 485.6 | 891.9 | ||||||||
- Other | 162.6 | 374.7 | 1,388.7 | |||||||||
Funds Provided (Used) by Investing Activities | 1,057.1 | (1,715.7 | ) | 689.3 | ||||||||
- Net Increase/Decrease in Loans | 1,501.3 | (1,410.8 | ) | 894.1 | ||||||||
Loans to the Private Sector | 1,444.6 | (2,027.8 | ) | (27.3 | ) | |||||||
Loans to the Public Sector | 56.7 | 617.0 | 921.4 | |||||||||
- Other | (444.2 | ) | (304.9 | ) | (204.9 | ) | ||||||
Funds Provided (Used) by Financing Activities | (1,065.6 | ) | (2,003.9 | ) | (1,302.4 | ) | ||||||
- Net Increase in Deposits | (57.0 | ) | 1,752.5 | 1,894.3 | ||||||||
- Funds Provided/Used by Repurchases | (376.6 | ) | 229.9 | 934.4 | ||||||||
- Funds Raised by the Regional Credit Card Companies | 269.5 | 174.9 | 418.0 | |||||||||
- Payments on Long-term Debt | (743.5 | ) | (1,770.3 | ) | (656.5 | ) | ||||||
- Payments on Long-term Debt by Galicia Uruguay | 0.0 | (53.2 | ) | (30.5 | ) | |||||||
- Payments on Debt with the Argentine Central Bank | 1.0 | (2,713.0 | ) | (4,034.7 | ) | |||||||
- Other | (159.0 | ) | 375.3 | 172.6 | ||||||||
- Effect of Exchange Rate on Cash and Cash Equivalents | 149.2 | 47.9 | 6.4 | |||||||||
Funds at the End of the Fiscal Year | Ps. | 4,795.4 | Ps. | 3,766.2 | Ps. | 4,988.2 | ||||||
(1) | Cash and cash equivalents. |
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(i) | a Ps. 474.0 million net decrease in long term credit facilities, mainly corresponding to: (a) payments of interest on restructured debt for US$ 49 million, (b) the payment of two amortization installments on debt due 2010 for US$ 68.4 million, (c) the prepayment of the Bank’s 2014 Notes for US$ 30.2 million, (d) a reduction of US$ 24.6 million of Banco Galicia Uruguay’s restructured debt structured as negotiable obligations, (e) an increase of Ps. 153.6 million of IFC loans and (f) a Ps. 80.5 million net decrease in funds obtained by the regional credit card companies through the issuance of negotiable obligations; |
(ii) | a Ps. 376.6 million net decrease in repurchase transactions; |
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(iii) | a Ps. 156.6 million net decrease in short-term borrowings, mainly due to: (a) the decrease in borrowings from local and foreign banks, for Ps. 81.0 million and (b) the payment of US$ 24.0 million as part of a US$ 80 million loan granted to us in last year; and | ||
(iv) | a Ps. 57.0 million decrease in deposits, corresponding to: (a) a decrease of Ps. 908.4 million in time deposits and (b) an increase of Ps. 868.1 million in demand deposits. |
(i) | a Ps. 1,823.5 million decrease in long-term liabilities, mainly corresponding to: (a) payments of interest on restructured debt for Ps. 280.0 million, (b) principal amortization of the 2007 Notes for Ps. 121.6 million, (c) payments by the regional credit card companies on negotiable obligations for Ps. 151.0 million, (d) repurchases of loans due 2010 and 2014 for Ps. 593.3 million, (e) payment of two amortization installments on debt due 2010 for Ps. 277.9 million, (f) prepayment of 2010 Notes for Ps. 155.9 million and of 2014 Notes for Ps. 119.1 million, (g) prepayment of 2014 Notes triggered by the cash subscription for the Bank’s capital increase under our restructured foreign debt agreements, for Ps. 71.5 million, and (i) settlement by Galicia Uruguay of restructured debt, for Ps. 53.2 million, and | ||
(ii) | a Ps. 2,332.5 million decrease of short-term borrowings, mainly due to the full repayment of financial assistance from the Argentine Central Bank, for Ps. 2,713.0 million, partially offset by an increase in borrowings from local banks, for Ps. 102.9 million. |
(i) | a Ps. 687.0 million decrease in long-term liabilities, mainly due to: (a) payments of interest on restructured debt for Ps. 326.2 million, (b) principal amortization on 2007 Notes for Ps. 118.5 million, (c) payments by the regional credit card companies on negotiable obligations for Ps. 178.9 million, and (d) settlement by Galicia Uruguay of restructured debt, for Ps. 30.5 million, and | ||
(ii) | a Ps. 3,856.8 million decrease in short-term borrowings due to payments on short-term borrowings, mainly financial assistance from the Argentine Central Bank, for Ps. 2,665.0 million (including both scheduled payments and amounts settled in advance), and on the advance from such entity for the acquisition of the Hedge Bond, for Ps. 1,369.7 million, net of increased borrowings (short-term call loans) from local banks for Ps. 75.5 million and increased financing from the IFC, for Ps. 64.0 million. |
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As of December 31, 2008(1) | ||||||||||||||||||||
Less than one Year | 1 – 5 Years | 5 – 10 Years | Over 10 Years | Total | ||||||||||||||||
(in millions of Pesos, except ratios) | ||||||||||||||||||||
Assets | ||||||||||||||||||||
Cash and Due from Banks | 1,368.4 | — | — | — | 1,368.4 | |||||||||||||||
Argentine Central Bank — Escrow Accounts | 2,294.6 | — | — | — | 2,294.6 | |||||||||||||||
Overnight Placements | 334.5 | — | — | — | 334.5 | |||||||||||||||
Loans — Public Sector | 1,378.9 | 3.8 | — | — | 1,382.7 | |||||||||||||||
Loans — Private Sector | 7,984.7 | 1,530.7 | 286.9 | 22.1 | 9,824.4 | |||||||||||||||
Government Securities | 1,463.6 | 1,544.9 | — | — | 3,008.5 | |||||||||||||||
Negotiable Obligations and Corporate Securities | 1.0 | 37.2 | 6.8 | 0.4 | 45.4 | |||||||||||||||
Financial Trusts | 265.4 | 339.2 | 630.9 | 0.3 | 1,235.8 | |||||||||||||||
Special Fund Former Almafuerte Bank | 230.5 | 154.9 | — | — | 385.4 | |||||||||||||||
Assets under Financial Lease | 161.1 | 259.4 | 65.7 | 6.5 | 492.7 | |||||||||||||||
Other — Argentine Central Bank | 359.4 | — | — | — | 359.4 | |||||||||||||||
Total Assets | 15,842.1 | 3,870.1 | 990.3 | 29.3 | 20,731.8 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Savings Accounts | 4,056.6 | — | — | — | 4,056.6 | |||||||||||||||
Demand Deposits | 3,312.3 | — | — | — | 3,312.3 | |||||||||||||||
Time Deposits | 6,587.6 | 47.2 | 0.1 | 0.1 | 6,635.0 | |||||||||||||||
Negotiable Obligations | 552.3 | 1,284.0 | 989.3 | — | 2,825.6 | |||||||||||||||
International Banks and Credit Agencies | 412.1 | 282.9 | 76.7 | — | 771.7 | |||||||||||||||
Domestic Banks | 123.6 | 242.0 | 28.7 | — | 394.3 | |||||||||||||||
Other Liabilities(1) | 2,392.9 | 290.8 | — | — | 2,683.7 | |||||||||||||||
Total Liabilities | 17,437.4 | 2,146.9 | 1,094.8 | 0.1 | 20,679.2 | |||||||||||||||
Asset / Liability Gap | (1,595.3 | ) | 1,723.2 | (104.5 | ) | 29.2 | 52.6 | |||||||||||||
Cumulative Gap | (1,595.3 | ) | 127.9 | 23.4 | 52.6 | 52.6 | ||||||||||||||
Ratio of Cumulative Gap to Cumulative Liabilities | (9.2 | )% | 0.7 | % | 0.1 | % | 0.3 | % | ||||||||||||
Ratio of Cumulative Gap to Total Liabilities | (7.7 | )% | 0.6 | % | 0.1 | % | 0.3 | % |
Principal plus CER adjustment. Does not include interest. | ||
(1) | Includes, mainly, debt with retailers due to credit card operations, liabilities in connection with repurchase transactions, debt with domestic credit agencies and collections for third parties. The “Less than One Year” bucket also includes Ps. 5.8 million corresponding to the Bank’s foreign debt not tendered by its holders in the exchange offered to restructure such foreign debt, which was completed in May 2004. |
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As of December 31, 2008 | ||||
(in millions of Pesos) | ||||
Legal Requirement | Ps. | 3,207.3 | ||
Excess Liquidity | 1,497.9 | |||
Total Liquidity (1) | Ps. | 4,705.2 | ||
(1) | Excludes cash and due from banks of consolidated companies. |
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As of December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
(in millions of Pesos, except ratios, multiples and percentages) | ||||||||||||
Shareholders’ Equity | Ps. | 1,845.7 | Ps. | 1,654.5 | Ps. | 1,608.5 | ||||||
Shareholders’ Equity as a Percentage of Total Assets | 7.46 | % | 7.25 | % | 6.81 | % | ||||||
Total Liabilities as a Multiple of Total Shareholders’ Equity | 12.40 | x | 12.80 | x | 13.68 | x | ||||||
Tangible Shareholders’ Equity(1) as a Percentage of Total Assets | 5.17 | % | 5.28 | % | 4.68 | % |
(1) | Tangible shareholders’ equity represents shareholders’ equity minus intangible assets. |
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Principal | Member | Current | ||||||||
Name | Position | Date of Birth | Occupation | Since | Term Ends | |||||
Antonio R. Garcés | Chairman of the Board and Chief Executive Officer | May 30, 1942 | Banker | April 2002 | December 2010 | |||||
Federico Braun | Vice Chairman | February 4, 1948 | Businessman | September 1999 | December 2010 | |||||
Abel Ayerza | Director | May 27, 1939 | Businessman | September 1999 | December 2011 | |||||
Eduardo Escasany | Director | June 30, 1950 | Businessman | April 2005 | December 2009 | |||||
Enrique Martin | Director | October 19, 1945 | Businessman | April 2006 | December 2011 | |||||
Luis O. Oddone | Director | May 11, 1938 | Businessman | April 2005 | December 2009 | |||||
Pedro A. Richards | Director | November 14, 1952 | Businessman | April 2005 | December 2009 | |||||
Silvestre Vila Moret | Director | April 26, 1971 | Businessman | June 2002 | December 2010 | |||||
Eduardo J. Zimmermann | Director | January 3, 1931 | Businessman | April 2000 | December 2011 | |||||
Pablo Gutierrez | Alternate Director | December 9, 1959 | Banker | April 2003 | December 2011 | |||||
María Ofelia Hordeñana de Escasany | Alternate Director | December 30, 1920 | Businesswoman | April 2000 | December 2010 | |||||
Sergio Grinenco | Alternate Director | May 26, 1948 | Banker | April 2003 | December 2011 | |||||
Alejandro Rojas Lagarde | Alternate Director | July 17, 1937 | Lawyer | April 2000 | December 2010 | |||||
Luis S. Monsegur | Alternate Director | August 15, 1936 | Accountant | April 2000 | December 2010 |
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Principal | Current | |||||
Name | Position | Occupation | Term Ends | |||
Norberto Corizzo | Syndic | Accountant | December 2009 | |||
Luis A. Díaz | Syndic | Accountant | December 2009 | |||
Adolfo Melián | Syndic | Lawyer | December 2009 | |||
Miguel Armando | Alternate Syndic | Lawyer | December 2009 | |||
Fernando Noetinger | Alternate Syndic | Lawyer | December 2009 | |||
Horacio Tedín | Alternate Syndic | Lawyer | December 2009 |
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Date of | Principal | Member | Current | |||||||
Name | Position | Birth | Occupation | Since | Term Ends | |||||
Antonio R. Garcés | Chairman of the Board | May 30, 1942 | Banker | September 2001 | December 2011 | |||||
Sergio Grinenco | Vice Chairman and Chief Financial Officer | May 26, 1948 | Banker | April 2003 | December 2011 | |||||
Enrique M. Garda Olaciregui | Secretary Director | April 29, 1946 | Banker | April 2003 | December 2010 | |||||
Daniel A. Llambías | Director | February 8, 1947 | Banker | September 2001 | December 2009 | |||||
Luis M. Ribaya | Director | July 17, 1952 | Banker | September 2001 | December 2010 | |||||
Guillermo J. Pando | Director | October 23, 1948 | Banker | April 2003 | December 2010 | |||||
Pablo Gutierrez | Director | December 9, 1959 | Banker | April 2005 | December 2011 | |||||
Eduardo O. Del Piano(1) | Director | May 12, 1938 | Accountant | April 2004 | December 2009 | |||||
Pablo M. Garat(1) | Director | January 12, 1953 | Lawyer | April 2004 | December 2009 | |||||
Enrique García Pinto | Alternate Director | August 10, 1948 | — | April 2009 | December 2011 | |||||
Raúl Héctor Seoane | Alternate Director | July 18, 1953 | Banker | April 2005 | December 2011 | |||||
Juan C. Fossatti(2) | Alternate Director | September 11, 1955 | Lawyer | June 2002 | December 2011 | |||||
Osvaldo H. Canova(2) | Alternate Director | December 8, 1934 | Accountant | April 2004 | December 2009 | |||||
Julio P. Naveyra(2) | Alternate Director | March 24, 1941 | Accountant | April 2004 | December 2009 |
(1) | In accordance with the rules of the CNV, and pursuant to the classifications adopted by the CNV, Messrs. Eduardo O. Del Piano and Pablo M. Garat are independent and were reelected at the ordinary shareholders’ meeting held on April 26, 2007. The Board of Directors’ meeting held on April 27, 2007 reelected them as members of the Audit Committee. Messrs. Del Piano and Garat are also independent directors in accordance with the Nasdaq rules. | |
(2) | In accordance with the rules of the CNV, and pursuant to the classifications adopted by the CNV, Mr. Fossatti, Mr. Canova and Mr. Naveyra are independent alternate directors. They would replace the independent directors in case of vacancy. They are also independent directors in accordance with the Nasdaq rules. |
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Division | Manager | |
Wholesale Banking | To be appointed | |
Retail Banking | Daniel A. Llambías (in charge) | |
Treasury | To be appointed | |
Distribution | Juan Sarquís | |
Credit | Juan Carlos L’Afflitto | |
Corporative Services | Miguel Angel Peña |
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Year of | Principal | Current | ||||||||
Name | Appointment | Position | Occupation | Term Ends | ||||||
Adolfo H. Melián | 2008 | Syndic | Lawyer | December 31, 2009 | ||||||
Norberto D. Corizzo | 2008 | Syndic | Accountant | December 31, 2009 | ||||||
Luis A. Díaz | 2009 | Syndic | Accountant | December 31, 2009 | ||||||
Fernando Noetinger | 2008 | Alternate Syndic | Lawyer | December 31, 2009 | ||||||
Miguel N. Armando | 2008 | Alternate Syndic | Lawyer | December 31, 2009 | ||||||
Ricardo A. Bertoglio | 2008 | Alternate Syndic | Accountant | December 31, 2009 |
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• | total compensation, including salaries, variable compensation and other related concepts for the directors that are also employees and for executive and supervision functions they perform, and |
• | compensation for the independent directors. |
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As of December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Grupo Financiero Galicia S.A. | 9 | 10 | 8 | |||||||||
Banco de Galicia y Buenos Aires S.A. | 5,324 | 5,164 | 4,676 | |||||||||
Branches | 2,888 | 2,604 | 2,414 | |||||||||
Head Office | 2,436 | 2,560 | 2,262 | |||||||||
Galicia Uruguay | 10 | 13 | 13 | |||||||||
Regional Credit-Card Companies | 3,898 | 3,769 | 3,174 | |||||||||
Sudamericana Consolidated | 105 | 96 | 91 | |||||||||
Other Subsidiaries | 62 | 51 | 46 | |||||||||
Total | 9,408 | 9,103 | 8,008 | |||||||||
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(i) | Rule 4350 (b) (1) (A) — Distribution of Annual and Interim Reports. In lieu of the requirements of Rule 4350 (b) (1) (A), we follow Argentine law, which requires that companies make public a Spanish language annual report, including annual audited consolidated financial statements, by filing such annual report with the CNV and the BASE, within 70 calendar days of the end of the company’s fiscal year. Interim reports must be filed with the CNV and the BASE within 42 calendar days of the end of each fiscal quarter. The BASE publishes the annual reports and interim reports in the BASE bulletin and makes the bulletin available for inspection at its offices. In addition, our shareholders can receive copies of our annual reports and any interim reports upon such shareholders’ request. English language translations of our annual reports and interim reports are furnished to the SEC. We also post the English language translation of our annual reports and quarterly press releases on our website. Furthermore, under the terms of the Second Amended and Restated Deposit Agreement, dated as of June 22, 2000, among us, The Bank of New York, as depositary, and owners of ADSs issued thereunder, we are required to furnish The Bank of New York with, among other things, English language translations of our annual reports and each of our quarterly press releases. Annual reports and quarterly press releases are available for inspection by ADR holders at the offices of The Bank of New York located at, 101 Barclay Street, 22nd Floor, New York, New York. Finally, Argentine law requires that 20 calendar days before the date of a shareholders’ meeting, the board of directors must provide to the shareholders, at the company’s executive office or through electronic means, all information relevant to the shareholders’ meeting, including copies of any documents to be considered by the shareholders (which includes the annual report), as well as proposals of the company’s board of directors. |
(ii) | �� | Rule 4350 (c) (1) — Majority of Independent Directors. In lieu of the requirements of Rule 4350 (c) (1), we follow Argentine law, which does not require that a majority of the board of directors be comprised of independent directors. Argentine law instead requires that public companies in Argentina such as us must have a sufficient number of independent directors to be able to form an audit committee of at least three members, the majority of which must be independent pursuant to the criteria established by the CNV. In addition, because we are a “controlled company” as defined in Rule 4350 (c) (5), we are relying on the exemption provided thereby for purposes of complying with Rule 4350 (c) (1). |
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(iii) | Rule 4350 (c) (2) — Executive Sessions of the Board of Directors. In lieu of the requirements of Rule 4350 (c) (2), we follow Argentine law which does not require independent directors to hold regularly scheduled meetings at which only such independent directors are present (i.e., executive sessions). Our Board of Directors as a whole is responsible for monitoring our affairs. In addition, under Argentine law, the board of directors may approve the delegation of specific responsibilities to designated directors or non-director managers of the company. Also, it is mandatory for public companies to form a supervisory committee (composed ofsyndics), which is responsible for monitoring the legality of the company’s actions under Argentine law and the conformity thereof with its by-laws. Finally, our audit committee has regularly scheduled meetings and, as such, such meetings will serve a substantially similar purpose as executive sessions. |
(iv) | Rule 4350 (c) (3) — Compensation of Officers. In lieu of the requirements of Rule 4350 (c) (3), we follow Argentine law, which does not require companies to form a compensation committee comprised solely of independent directors. It also is not required in Argentine law that the compensation of the chief executive officer and all other executive officers be determined by either a majority of the independent directors or a compensation committee comprised solely of independent directors. Under Argentine law, the board of directors is the corporate body responsible for determining the compensation of the chief executive officer and all other executive officers, so long as they are not directors. In addition, under Argentine law, the audit committee shall give its opinion about the reasonableness of management’s proposals on fees and option plans for directors or managers of the company. Finally, because we are a “controlled company” as defined in Rule 4350 (c) (5), we are relying on the exemption provided thereby for purposes of complying with Rule 4350 (c) (3). |
(v) | Rule 4350(c)(4) — Nomination of Directors. In lieu of the requirements of Rule 4350 (c) (4), we follow Argentine law which requires that directors be nominated directly by the shareholders at the shareholders’ meeting and that they be selected and recommended by the shareholders themselves. Under Argentine law, it is the responsibility of the ordinary shareholders’ meeting to appoint and remove directors and to set their compensation. In addition, because we are a “controlled company” as defined in Rule 4350 (c) (5), we are relying on the exemption provided thereby for purposes of complying with Rule 4350 (c) (4). |
(vi) | Rule 4350 (d) (1) — Audit Committee Charter. In lieu of the requirements of Rule 4350 (d) (1), we follow Argentine law, which requires that audit committees have a charter but does not require that companies certify as to the adoption of the charter nor does it require an annual review and assessment thereof. Argentine law instead requires that companies prepare a proposed plan or course of action with respect to those matters, which are the responsibility of the company’s audit committee. Such plan or course of action could, at the discretion of our audit committee, include a review and assessment of the audit committee charter. |
(vii) | Rule 4350 (d) (2) — Audit Committee Composition. Argentine law does not require, and it is equally not customary business practice in Argentina, that companies have an audit committee comprised solely of independent directors. Argentine law instead requires that companies establish an audit committee with at least three members comprised of a majority of independent directors as defined by Argentine law. Nonetheless, although not required by Argentine law, we have a three member audit committee comprised of entirely independent directors, as independence is defined in Rule 10 (A)-3 (b) (1), one of which the Board of Directors has determined to be an audit committee financial expert. In addition, we have a supervisory committee (“comisión fiscalizadora”) composed of three syndics, which are in charge of monitoring the legality, under Argentine law, of the actions of our board of directors and the conformity of such actions with our by-laws. |
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(viii) | Rule 4350 (f) — Quorum. In lieu of the requirements of Rule 4350 (f), we follow Argentine law and our bylaws, which distinguish between ordinary meetings and extraordinary meetings and require, in connection with ordinary meetings, that a quorum consist of a majority of stock entitled to vote. If no quorum is present at the first meeting, a second meeting may be called at which the shareholders present, whatever their number, constitute a quorum and resolutions may be adopted by an absolute majority of the votes present. Argentine law and our bylaws require, in connection with extraordinary meetings, that a quorum consist of 60% of the stock entitled to vote. However, if such quorum is not present at the first meeting, our bylaws provide that a second meeting may be called which may be held with the number of shareholders present. In both ordinary and extraordinary meetings, decisions are adopted by an absolute majority of votes present at the meeting, except for certain fundamental matters (such as mergers and spin-offs (when we are not the surviving entity and the surviving entity is not listed on any stock exchange), anticipated liquidation, a change in our domicile to outside of Argentina, total or partial recapitalization of our statutory capital following a loss, any transformation in our corporate legal form or a substantial change in our corporate purpose) which require an approval by vote of the majority of all the stock entitled to vote (all stock being entitled to only one vote). |
(ix) | Rule 4350 (g) — Solicitation of Proxies. In lieu of the requirements of Rule 4350 (g), we follow Argentine law which requires that notices of shareholders’ meetings be published, for five consecutive days, in the Official Gazette and in a widely circulated newspaper in Argentina no earlier than 45 calendar days prior to the meeting and at least 20 calendar days prior to such meeting. In order to attend a meeting and be listed on the meeting registry, shareholders are required to submit evidence of their book-entry share account held at Caja de Valores S.A. (“Caja de Valores”) up to three business days prior to the scheduled meeting date. If entitled to attend the meeting, a shareholder may be represented by proxy (properly executed and delivered with a certified signature) granted to any other person, with the exception of a director, syndic, member of the surveillance committee (“consejo de vigilancia”), manager or employee of the issuer, which are prohibited by Argentine law from acting as proxies. In addition, our ADR holders receive, prior to the shareholders’ meeting, a notice listing the matters on the agenda, a copy of the annual report and a voting card. |
(x) | Rule 4350 (h) — Conflicts of Interest. In lieu of the requirements of Rule 4350 (h), we follow Argentine law which requires that related party transactions be approved by the audit committee when the transaction exceeds one percent (1%) of the corporation’s net worth, measured pursuant to the last audited balance sheet, so long as the relevant transaction exceeds the equivalent of three hundred thousand Argentine Pesos (Ps. 300,000). Directors can contract with the corporation only on terms consistent with prevailing market terms. If the contract is not in accordance with prevailing market terms, such transaction must be pre-approved by the board of directors (excluding the interested director). In addition, under Argentine law, a shareholder is required to abstain from voting on a business transaction in which its interests may be in conflict with the interests of the company. In the event such shareholder votes on such business transaction and such business transaction would not have been approved without such shareholder’s vote, such shareholder may be liable to the company for damages and the resolution may be declared void. |
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Name | Class A Shares | % of Class A Shares | % of Total Votes | |||||||
EBA Holding S.A. | 281,221,650 class A shares | 100 | 59.4 |
Name | Class B Shares | % of Class B Shares | % of Total Votes | |||||||||
The Bank of New York (1) | 320,454,370 class B shares | 33.4 | 13.5 | |||||||||
ANSES(2) | 253,609,737 class B shares | 26.4 | 10.7 | |||||||||
EBA Holding Shareholders (3) | 113,939,764 class B shares | 11.9 | 4.8 | |||||||||
Banco Santander(4) | 82,741,540 class B shares | 8.6 | 3.5 |
(1) | Pursuant to the requirements of Argentine law, all class B shares represented by ADSs are owned of record by The Bank of New York, as Depositary. The address for the Bank of New York is 101 Barclay Street, 22nd Floor, New York 10286, and the country of organization is the United States. Includes the holdings of Banco Santander Central Hispano. | |
(2) | ANSES’ holding is obtained through information supplied by Caja de Valores and information gathered from the ANSES. Said holding includes 64,204,420 shares in ADS. | |
(3) | No member holds more than 2.0% of the capital stock. Said holding includes 12,876,220 shares in the form of ADS. | |
(4) | Information is based on a Schedule 13 G filed by Banco Santander dated February 16, 2001. However, we have confirmed the amount with information provided by third party companies. The address for Banco Santander is Plaza de Canalejas 28014, Madrid, Spain, and the country of organization is the Kingdom of Spain. The holding is in ADRs. |
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Name | Shares | % of Shares | % of Total Votes | |||||||||
The Bank of New York | 320,454,370 class B shares | 25.8 | 13.5 | |||||||||
EBA Holding S.A. | 281,221,650 class A shares | 22.7 | 59.4 | |||||||||
ANSES | 253,609,737 class B shares | 20.4 | 10.7 | |||||||||
EBA Holding Shareholders | 113,939,764 class B shares | 9.2 | 4.8 | |||||||||
Banco Santander | 82,741,540 class B shares | 6.7 | 3.5 |
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Outstanding amount | ||||||||||||||||||
Entity | Granted in | Rate | Original Amount | December 31, 2008 | April 30, 2009 | |||||||||||||
% | (in millions of Pesos) | |||||||||||||||||
Net Investment S.A. | Nov/Dec 2008 | 0.0 | Ps. | 0.20 | Ps. | 0.20 | Ps. | 0.20 | ||||||||||
GV Mandataria de Valores S.A. | Nov/Dec 2008 | 0.0 | Ps. | 0.57 | Ps. | 0.57 | Ps. | 0.57 |
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April 30, 2009 | December 31, 2008 | December 31, 2007 | December 31, 2006 | |||||||||||||
In millions of Pesos, except as noted | ||||||||||||||||
Aggregate Total Financial Exposure | Ps. | 52.8 | Ps. | 74.9 | Ps. | 40.8 | Ps. | 19.3 | ||||||||
Number of Recipient Related Parties | 218 | 221 | 207 | 205 | ||||||||||||
Individuals | 170 | 174 | 168 | 163 | ||||||||||||
Companies | 48 | 47 | 39 | 42 | ||||||||||||
Average Total Financial Exposure | Ps. | 0.2 | Ps. | 0.3 | Ps. | 0.2 | Ps. | 0.1 | ||||||||
Single Largest Exposure | Ps. | 8.8 | Ps. | 30.5 | Ps. | 11.6 | Ps. | 3.6 |
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In millions of Pesos | ||||
To Legal Reserve | 39.0 | |||
To Next Fiscal Year | 160.0 |
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Average Daily Volume | ||||||||||||
High | Low | (in thousands of Class B shares) | ||||||||||
Calendar Year | ||||||||||||
2004(1) | 2.61 | 1.42 | 5,571.5 | |||||||||
2005 | 2.81 | 2.06 | 4,784.6 | |||||||||
2006 | 2.86 | 1.72 | 2,045.3 | |||||||||
2007 | 3.37 | 2.23 | 1,924.8 | |||||||||
2008 | 2.36 | 0.57 | 3,549.4 | |||||||||
Two Most Recent Fiscal Years | ||||||||||||
2007 | ||||||||||||
First Quarter | 3.37 | 2.69 | 2,762.6 | |||||||||
Second Quarter | 3.34 | 2.98 | 1,622.9 | |||||||||
Third Quarter | 3.11 | 2.25 | 2,000.7 | |||||||||
Fourth Quarter | 2.63 | 2.23 | 1,259.6 | |||||||||
2008 | ||||||||||||
First Quarter | 2.36 | 1.94 | 1,290.8 | |||||||||
Second Quarter | 2.26 | 1.57 | 1,465.5 | |||||||||
Third Quarter | 1.63 | 1.12 | 1,642.9 | |||||||||
Fourth Quarter | 1.56 | 0.57 | 3,549.4 | |||||||||
2009 | ||||||||||||
First Quarter | 0.88 | 0.61 | 1,497.9 | |||||||||
Second Quarter (through May 31, 2009) | 1.17 | 0.70 | 3,029.7 | |||||||||
Most Recent Six Months | ||||||||||||
December 2008 | 0.86 | 0.63 | 3,129.7 | |||||||||
January 2009 | 0.88 | 0.69 | 1,637.3 | |||||||||
February 2009 | 0.75 | 0.66 | 1,159.2 | |||||||||
March 2009 | 0.70 | 0.61 | 1,681.0 | |||||||||
April 2009 | 0.79 | 0.70 | 2,085.2 | |||||||||
May 2009 | 1.17 | 0.75 | 3,974.1 |
(1) | On April 28, 2004, our class B shares began trading ex-coupon, which coupon related to the right to subscribe for the preferred shares as part of the preemptive rights offering. The value of each class B share was reduced by the value of the coupon of Ps. 0.101 per class B share. |
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Average Daily Volume | ||||||||||||
High | Low | (in thousands of preferred shares) | ||||||||||
Calendar Year | ||||||||||||
2004(from May 13, 2004) | Ps. | 2.48 | Ps. | 1.29 | 490.0 | |||||||
2005(through May 11, 2005) | 2.72 | 2.03 | 183.4 | |||||||||
Most Recent Fiscal Year | ||||||||||||
2004 | ||||||||||||
Second Quarter (from May 13, 2004) | 1.59 | 1.29 | 345.6 | |||||||||
Third Quarter | 1.87 | 1.33 | 681.4 | |||||||||
Fourth Quarter | 2.48 | 1.88 | 376.1 | |||||||||
2005 | ||||||||||||
First Quarter | 2.72 | 2.10 | 230.9 | |||||||||
Second Quarter (through May 11, 2005) | 2.34 | 2.03 | 81.8 | |||||||||
Most Recent Six Months | ||||||||||||
December 2004 | 2.48 | 1.99 | 275.2 | |||||||||
January 2005 | 2.44 | 2.26 | 146.0 | |||||||||
February 2005 | 2.69 | 2.37 | 184.3 | |||||||||
March 2005 | 2.72 | 2.10 | 360.3 | |||||||||
April 2005 | 2.25 | 2.03 | 100.4 | |||||||||
May 2005 (through May 11, 2005) | 2.34 | 2.15 | 32.9 |
Average Daily Volume | ||||||||||||
High | Low | (in thousands of ADRs) | ||||||||||
Calendar Year | ||||||||||||
2004 | 8.85 | 4.65 | 324.2 | |||||||||
2005 | 9.62 | 6.87 | 347.3 | |||||||||
2006 | 9.56 | 5.61 | 190.2 | |||||||||
2007 | 11.12 | 6.98 | 273.1 | |||||||||
2008 | 7.6 | 1.45 | 251.6 | |||||||||
Two Most Recent Fiscal Years | ||||||||||||
2007 | ||||||||||||
First Quarter | 11.12 | 8.69 | 289.3 | |||||||||
Second Quarter | 11.00 | 9.59 | 239.0 | |||||||||
Third Quarter | 10.00 | 7.15 | 335.7 | |||||||||
Fourth Quarter | 8.25 | 6.98 | 229.4 | |||||||||
2008 | ||||||||||||
First Quarter | 7.60 | 6.14 | 259.3 | |||||||||
Second Quarter | 7.07 | 4.92 | 235.2 | |||||||||
Third Quarter | 5.30 | 3.63 | 222.2 | |||||||||
Fourth Quarter | 5.00 | 1.45 | 290.1 | |||||||||
2009 | ||||||||||||
First Quarter | 2.42 | 1.56 | 100.9 | |||||||||
Second Quarter (through May 31, 2009) | 3.10 | 1.80 | 216.9 | |||||||||
Most Recent Six Months | ||||||||||||
December 2008 | 2.33 | 1.69 | 160.8 | |||||||||
January 2009 | 2.42 | 1.77 | 135.9 | |||||||||
February 2009 | 2.12 | 1.78 | 105.0 | |||||||||
March 2009 | 1.82 | 1.56 | 65.4 | |||||||||
April 2009 | 2.06 | 1.80 | 171.9 | |||||||||
May 2009 | 3.10 | 1.90 | 264.0 |
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Average Daily Trading Volume | ||||||||||||
High | Low | (in thousand Class B shares) | ||||||||||
Calendar Year | ||||||||||||
2004 | 5.10 | 3.30 | 1.22 | |||||||||
2005 | 4.30 | 3.60 | 1.96 | |||||||||
2006 | 4.50 | 3.04 | 1.56 | |||||||||
2007 | 6.46 | 4.25 | 2.74 | |||||||||
2008 | 4.45 | 2.15 | 3.30 | |||||||||
Two Most Recent Fiscal Years | ||||||||||||
2007 | ||||||||||||
First Quarter | 6.46 | 4.25 | 5.94 | |||||||||
Second Quarter | 5.80 | 4.99 | 2.40 | |||||||||
Third Quarter | 5.05 | 4.45 | 1.43 | |||||||||
Fourth Quarter | 4.70 | 4.30 | 1.10 | |||||||||
2008 | ||||||||||||
First Quarter | 4.45 | 4.08 | 1.87 | |||||||||
Second Quarter | 4.45 | 3.65 | 4.59 | |||||||||
Third Quarter | 3.85 | 3.69 | 0.88 | |||||||||
Fourth Quarter | 3.85 | 2.40 | 4.19 | |||||||||
2009 | ||||||||||||
First Quarter | 2.38 | 2.17 | 2.14 | |||||||||
Second Quarter (through May 31, 2009) | 2.30 | 2.15 | 7.40 | |||||||||
Most Recent Six Months | ||||||||||||
December 2008 | 2.56 | 2.40 | 4.19 | |||||||||
January 2009 | 2.38 | 2.30 | 2.06 | |||||||||
February 2009 | 2.30 | 2.27 | 2.13 | |||||||||
March 2009 | 2.27 | 2.17 | 2.23 | |||||||||
April 2009 | 2.20 | 2.17 | 15.02 | |||||||||
May 2009 | 2.30 | 2.15 | 5.10 |
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As of December 31, 2009 | ||||||||||||
Shares | Number of Shares | % of Capital Stock | % of Voting Rights | |||||||||
Class A Shares | 281,221,650 | 22.65 | 59.42 | |||||||||
Class B Shares | 960,185,367 | 77.35 | 40.58 | |||||||||
Total | 1,241,407,017 | 100.00 | 100.00 | |||||||||
• | a merger or spin-off in which we are not the surviving corporation, unless the acquirer’s shares are authorized to be publicly offered or listed on any stock exchange; |
• | a transformation in our legal corporate form; |
• | a fundamental change in our corporate purpose; |
• | a change of our domicile to outside Argentina; |
• | a voluntary termination of our public offering or listing authorization; |
• | our continuation following a delisting or a mandatory cancellation of our public offering or listing authorization; |
• | a total or partial recapitalization of our statutory capital following a loss; or |
• | the appointment of syndics. |
• | EBA Holding sells 100% of its class A shares; |
• | EBA Holding sells a portion of our class A shares to a third person who, when aggregating all our class A shares with our class B shares owned by such person, if any, obtains 50% plus one vote of our total votes; or |
• | the current shareholders of EBA Holding sell shares of EBA Holding that will allow the buyer to exercise more than 50% of the voting power of EBA Holding at any general shareholders’ meeting of EBA Holding shareholders, except for transfers to other current shareholders of EBA Holding or to their heirs or their legal successors or to entities owned by any of them. |
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• | approval of the financial statements and general performance of the management for the preceding fiscal year; |
• | appointment and remuneration of directors and members of the supervisory committee; |
• | allocation of profits; and |
• | any other matter the board of directors decides to submit to the shareholders’ meeting concerning the company’s business administration. Matters which may be discussed at these or other ordinary meetings include resolutions regarding the responsibility of directors and members of the supervisory committee, as well as capital increases and the issuance of negotiable obligations. |
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• | a merger or spin-off in which we are not the surviving corporation, unless the acquirer’s shares are authorized to be publicly offered or listed on any stock exchange, |
• | a transformation in our legal corporate form, |
• | a fundamental change in our corporate purpose, |
• | a change of our domicile to outside Argentina, |
• | a voluntary termination of our public offering or listing authorization, |
• | our continuation following a delisting or a mandatory cancellation of our public offering or listing authorization, or |
• | a total or partial recapitalization of our statutory capital following a loss, |
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Net Portfolio | Net Financial Income (1) | |||||||||||||||
(In millions of Pesos, except percentages) | As of December 31, 2008 | As of December 31, 2007 | ||||||||||||||
Change in Interest Rates in b.p. | Variation | % Change in the NFI | Variation | % Change in the NFI | ||||||||||||
200 | (48.0 | ) | (4.59 | )% | (57.6 | ) | (7.55 | )% | ||||||||
150 | (36.0 | ) | (3.44 | )% | (43.2 | ) | (5.66 | )% | ||||||||
100 | (23.9 | ) | (2.29 | )% | (28.8 | ) | (3.77 | )% | ||||||||
50 | (12.0 | ) | (1.15 | )% | (14.4 | ) | (1.89 | )% | ||||||||
Static | — | — | — | — | ||||||||||||
(50) | 13.9 | 1.33 | % | 9.8 | 1.28 | % | ||||||||||
(100) | 23.7 | 2.27 | % | 19.6 | 2.57 | % | ||||||||||
(150) | 35.4 | 3.39 | % | 26.1 | 3.42 | % | ||||||||||
(200) | 47.2 | 4.52 | % | 30.0 | 3.93 | % |
Net Trading Portfolio | Net Financial Income(1) | |||||||||||||||
(In millions of Pesos, except percentages) | As of December 31, 2008 | As of December 31, 2007 | ||||||||||||||
Change in Interest Rates in b.p. | Variation | % Change in the NFI | Variation | % Change in the NFI | ||||||||||||
200 | 11.0 | 1.05 | % | 6.7 | 0.88 | % | ||||||||||
150 | 8.3 | 0.79 | % | 5.0 | 0.66 | % | ||||||||||
100 | 5.5 | 0.53 | % | 3.4 | 0.45 | % | ||||||||||
50 | 2.8 | 0.27 | % | 1.7 | 0.22 | % | ||||||||||
Static | — | — | — | — | ||||||||||||
(50) | (2.7 | ) | (0.26 | )% | (1.6 | ) | (0.21 | )% | ||||||||
(100) | (5.5 | ) | (0.53 | )% | (3.3 | ) | (0.43 | )% | ||||||||
(150) | (8.2 | ) | (0.78 | )% | (4.9 | ) | (0.64 | )% | ||||||||
(200) | (11.0 | ) | (1.05 | )% | (6.6 | ) | (0.86 | )% |
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Net Non Trading Portfolio | Net Financial Income(1) | |||||||||||||||
(In millions of Pesos, except percentages) | As of December 31, 2008 | As of December 31, 2007 | ||||||||||||||
Change in Interest Rates in b.p. | Variation | % Change in the NFI | Variation | % Change in the NFI | ||||||||||||
200 | (59.0 | ) | (5.65 | )% | (64.3 | ) | (8.43 | )% | ||||||||
150 | (44.3 | ) | (4.24 | )% | (48.2 | ) | (6.32 | )% | ||||||||
100 | (29.4 | ) | (2.81 | )% | (32.2 | ) | (4.22 | )% | ||||||||
50 | (14.8 | ) | (1.41 | )% | (16.1 | ) | (2.11 | )% | ||||||||
Static | — | — | — | — | ||||||||||||
(50) | 16.6 | 1.59 | % | 11.4 | 1.49 | % | ||||||||||
(100) | 29.2 | 2.79 | % | 22.9 | 3.00 | % | ||||||||||
(150) | 43.6 | 4.18 | % | 31.0 | 4.06 | % | ||||||||||
(200) | 58.2 | 5.57 | % | 36.6 | 4.80 | % |
(1) | Net interest of the first year. |
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Net Portfolio | Net Fair Value | |||||||||||||||
(In millions of Pesos, except percentages) | As of December 31, 2008 | As of December 31, 2007 | ||||||||||||||
Change in Interest Rates in b.p. | Variation | % Change in the RPC | Variation | % Change in the RPC | ||||||||||||
200 | (4.6 | ) | (0.18 | )% | (47.8 | ) | (2.02 | )% | ||||||||
150 | (3.6 | ) | (0.14 | )% | (36.2 | ) | (1.53 | )% | ||||||||
100 | (2.7 | ) | (0.11 | )% | (24.5 | ) | (1.03 | )% | ||||||||
50 | (1.2 | ) | (0.05 | )% | (12.4 | ) | (0.52 | )% | ||||||||
Static | ||||||||||||||||
(50) | 1.3 | 0.05 | % | 12.8 | 0.54 | % | ||||||||||
(100) | 2.6 | 0.10 | % | 26.1 | 1.10 | % | ||||||||||
(150) | 4.0 | 0.15 | % | 39.3 | 1.66 | % | ||||||||||
(200) | 5.3 | 0.21 | % | 53.3 | 2.25 | % |
Net Trading Portfolio | Net Fair Value | |||||||||||||||
(In millions of Pesos, except percentages) | As of December 31, 2008 | As of December 31, 2007 | ||||||||||||||
Change in Interest Rates in b.p. | Variation | % Change in the RPC | Variation | % Change in the RPC | ||||||||||||
200 | (0.7 | ) | (0.03 | )% | (3.8 | ) | (0.16 | )% | ||||||||
150 | (0.5 | ) | (0.02 | )% | (2.8 | ) | (0.12 | )% | ||||||||
100 | (0.3 | ) | (0.01 | )% | (1.9 | ) | (0.08 | )% | ||||||||
50 | (0.2 | ) | (0.01 | )% | (0.9 | ) | (0.04 | )% | ||||||||
Static | ||||||||||||||||
(50) | 0.2 | 0.01 | % | 1.0 | 0.04 | % | ||||||||||
(100) | 0.4 | 0.02 | % | 1.9 | 0.08 | % | ||||||||||
(150) | 0.5 | 0.02 | % | 2.9 | 0.12 | % | ||||||||||
(200) | 0.7 | 0.03 | % | 3.8 | 0.16 | % |
Net Non Trading Portfolio | Net Fair Value | |||||||||||||||
(In millions of Pesos, except percentages) | As of December 31, 2008 | As of December 31, 2007 | ||||||||||||||
Change in Interest Rates in b.p. | Variation | % Change in the RPC | Variation | % Change in the RPC | ||||||||||||
200 | (3.9 | ) | (0.15 | )% | (44.0 | ) | (1.86 | )% | ||||||||
150 | (3.1 | ) | (0.12 | )% | (33.4 | ) | (1.41 | )% | ||||||||
100 | (2.4 | ) | (0.10 | )% | (22.6 | ) | (0.95 | )% | ||||||||
50 | (1.0 | ) | (0.04 | )% | (11.5 | ) | (0.49 | )% | ||||||||
Static | ||||||||||||||||
(50) | 1.1 | 0.04 | % | 11.8 | 0.50 | % | ||||||||||
(100) | 2.2 | 0.09 | % | 24.2 | 1.02 | % | ||||||||||
(150) | 3.5 | 0.14 | % | 36.4 | 1.54 | % | ||||||||||
(200) | 4.6 | 0.18 | % | 49.5 | 2.09 | % |
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Value of Foreign Currency Net Position as of | ||||||||||||
December 31, 2008 | ||||||||||||
Percentage Change in the Value of the Peso Relative to the Dollar(1) | Amount | Absolute Variation | % Change | |||||||||
(In millions of Pesos, except percentages) | ||||||||||||
40% | 318.6 | 91.0 | 40.0 | |||||||||
30% | 295.9 | 68.3 | 30.0 | |||||||||
20% | 273.1 | 45.5 | 20.0 | |||||||||
10% | 250.4 | 22.8 | 10.0 | |||||||||
Static | 227.6 | — | — | |||||||||
(10)% | 204.8 | (22.8 | ) | (10.0 | ) | |||||||
(20)% | 182.1 | (45.5 | ) | (20.0 | ) | |||||||
(30)% | 159.3 | (68.3 | ) | (30.0 | ) | |||||||
(40)% | 136.6 | (91.0 | ) | (40.0 | ) |
(1) | Devaluation / (Revaluation). | |
(2) | Adjusted to reflect forward purchases and sales of foreign currency without delivery of the underlying asset, registered in memorandum accounts. In addition, as of December 31, 2008, the fair value of the Bank’s foreign currency derivatives amounted to Ps. 43.2 million. |
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Value of Foreign Currency Net Position as of | ||||||||||||
December 31, 2007 | ||||||||||||
Percentage Change in the Value of the Peso Relative to the Dollar(1) | Amount | Absolute Variation | % Change | |||||||||
(In millions of Pesos, except percentages) | ||||||||||||
40% | 453.9 | 129.7 | 40.0 | |||||||||
30% | 421.5 | 97.3 | 30.0 | |||||||||
20% | 389.0 | 64.8 | 20.0 | |||||||||
10% | 356.6 | 32.4 | 10.0 | |||||||||
Static | 324.2 | (2) | — | — | ||||||||
(10)% | 291.8 | (32.4 | ) | (10.0 | ) | |||||||
(20)% | 259.4 | (64.8 | ) | (20.0 | ) | |||||||
(30)% | 226.9 | (97.3 | ) | (30.0 | ) | |||||||
(40)% | 194.5 | (129.7 | ) | (40.0 | ) |
(1) | Devaluation / (Revaluation). | |
(2) | Adjusted to reflect forward purchases and sales of foreign currency without delivery of the underlying asset, registered in memorandum accounts. In addition, as of December 31, 2007, the fair value of the Bank’s foreign currency derivatives amounted to Ps. 7.7 million. |
Value of Foreign Currency Net Position as of | ||||||||||||
December 31, 2006 | ||||||||||||
Percentage Change in the Value of the Peso Relative to the Dollar(1) | Amount | Absolute Variation | % Change | |||||||||
(In millions of Pesos, except percentages) | ||||||||||||
40% | 101.5 | 29.0 | 40.0 | |||||||||
30% | 94.3 | 21.8 | 30.1 | |||||||||
20% | 87.0 | 14.5 | 20.0 | |||||||||
10% | 79.8 | 7.3 | 10.1 | |||||||||
Static | 72.5 | (2) | — | — | ||||||||
(10)% | 65.3 | (7.2 | ) | (9.9 | ) | |||||||
(20)% | 58.0 | (14.5 | ) | (20.0 | ) | |||||||
(30)% | 50.8 | (21.7 | ) | (29.9 | ) | |||||||
(40)% | 43.5 | (29.0 | ) | (40.0 | ) |
(1) | Devaluation / (Revaluation). | |
(2) | Adjusted to reflect forward purchases and sales of foreign currency without delivery of the underlying asset, registered in memorandum accounts. In addition, as of December 31, 2006, the fair value of the Bank’s foreign currency derivatives amounted to Ps. 2.6 million. |
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As of December 31, 2008 | ||||||||||||
Assets | Liabilities | Gap | ||||||||||
(In millions of Pesos) | ||||||||||||
Financial Assets and Liabilities | 20,999.7 | 21,209.6 | (209.9 | ) | ||||||||
Pesos — Adjusted by CER | 2,367.6 | 50.3 | 2,317.3 | |||||||||
Pesos — Unadjusted | 11,531.4 | 13,896.4 | (2,365.0 | ) | ||||||||
Foreign Currency(1) | 7,100.7 | 7,262.9 | (162.2 | ) | ||||||||
Other Assets and Liabilities | 3,440.1 | 1,275.5 | 2,164.6 | |||||||||
Total Gap | 24,439.8 | 22,485.1 | 1,954.7 | |||||||||
Adjusted for Forward Transactions Recorded in Memo Accounts | ||||||||||||
Financial Assets and Liabilities | 20,999.7 | 21,209.6 | (209.9 | ) | ||||||||
Pesos — Adjusted by the CER | 2,367.6 | 50.3 | 2,317.3 | |||||||||
Pesos — Unadjusted, Including Shareholders’ Equity(2) | 8,336.7 | 11,091.5 | (2,754.8 | ) | ||||||||
Foreign Currency(1)(2) | 10,295.4 | 10,067.8 | 227.6 | |||||||||
Other Assets and Liabilities | 3,440.1 | 1,275.5 | 2,164.6 | |||||||||
Total Adjusted Gap | 24,439.8 | 22,485.1 | 1,954.7 | |||||||||
(1) | In Pesos, at an exchange rate of Ps. 3.4537 per US$ 1.0. | |
(2) | Adjusted for forward sales and purchases of foreign exchange made by the Bank and recorded off-balance sheet. |
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(i) | A 95% “degree of confidence”. |
(ii) | VaR estimates are made for holding periods of one day and “n” days, where “n” is defined as the number of days necessary to liquidate the position in each security. |
(iii) | In the case of new issuances, the available trading days are taken into consideration, with a maximum; if there are not enough trading days or if there are no quotations, the volatility of bonds from domestic issuers with similar risk and characteristics is used. |
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2008 | 2007 | |||||||
(In thousands of Pesos) | ||||||||
Audit Fees | 6,756 | 4,788 | ||||||
Audit Related Fees | 1,428 | 1,819 | ||||||
Tax Fees | 685 | 280 | ||||||
All Other Fees | 656 | 434 | ||||||
Total | 9,525 | 7,321 | ||||||
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Report of the Independent Registered Public Accounting Firm as of and for the fiscal years ended December 31, 2008, 2007 and 2006. | ||||
Consolidated Balance Sheets as of December 31, 2008 and 2007. | ||||
Consolidated Statements of Income for the years ended December 31, 2008, 2007 and 2006. | ||||
Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006. | ||||
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2008, 2007 and 2006. | ||||
Notes to the Consolidated Financial Statements. |
Exhibit | Description | |||
1.1 | Unofficial English language translation of the Bylaws (estatutos sociales). **** | |||
2.1 | Form of Deposit Agreement between The Bank of New York and the registrant, including the form of American Depositary Receipt.* | |||
2.2 | Indenture, dated as of May 18, 2004, among the Bank, The Bank of New York and Banco Rio de la Plata S.A.** | |||
2.3 | Indenture, dated as of June 4, 2009, among Grupo Financiero Galicia, The Bank of New York Mellon, Banco de Valores S.A. and The Bank of New York (Luxembourg) S.A. | |||
4.1 | English translation of form of Financial Trust Contract, dated April 16, 2002, among the Bank, Banco Provincia de Buenos Aires and BAPRO Mandatos y Negocios S.A.*** | |||
4.2 | Form of Restructured Loan Facility (as evidenced by the Note Purchase Agreement, dated as of April 27, 2004, among Banco de Galicia y Buenos Aires S.A., Barclays Bank PLC, the holders party thereto and Deutsche Bank Trust Company Americas).** | |||
4.3 | Form of First Amendment and Waiver to Restructured Loan Facility (as evidenced by the First Amendment and Waiver to the Note Purchase Agreement, dated as of December 20, 2004, among Banco de Galicia y Buenos Aires S.A., the holders party thereto and Deutsche Bank Trust Company Americas). **** |
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Exhibit | Description | |||
4.4 | Form of Second Amendment to Restructured Loan Facility (as evidenced by the Second Amendment to the Note Purchase Agreement, dated as of August 25, 2006, among Banco de Galicia y Buenos Aires S.A., the holders party thereto and Deutsche Bank Trust Company Americas).***** | |||
4.5 | Form of Third Amendment to Restructured Loan Facility (as evidenced by the Third Amendment to the Note Purchase Agreement, dated as of December 28, 2007, among Banco de Galicia y Buenos Aires S.A., the holders party thereto and Deutsche Bank Trust Company Americas).****** | |||
4.6 | Loan Agreement, dated as of July 24, 2007, between Grupo Financiero Galicia S.A. and Merrill Lynch International.****** | |||
8.1 | For a list of our subsidiaries as of the end of the fiscal year covered by this annual report, please see Item 4. “Information on the Company-Organizational Structure.” | |||
11.1 | Code of Ethics. | |||
11.2 | Code of Corporate Governance Good Practices. | |||
12.1 | Certification of the principal executive officer required under Rule 13a-14(a) or Rule 15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||
12.2 | Certification of the principal financial officer required under Rule 13a-14(a) or Rule 15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||
13.1 | Certification of the principal executive officer required pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||
13.2 | Certification of the principal financial officer required pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
* | Incorporated by reference from our Registration Statement on Form F-4 (333-11960). | |
** | Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2003. | |
*** | Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2002. | |
**** | Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2004. | |
***** | Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2006. | |
****** | Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2007. |
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GRUPO FINANCIERO GALICIA S.A. | ||||||||
By: | /s/ Antonio Garcés | |||||||
Name: | Antonio Garcés | |||||||
Title: | Chairman of the Board and Chief Executive Officer |
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Santiago J. Mignone
Partner
February 12, 2009, except for notes 27, 31, 34 and 35 as to which the date is June 29, 2009.
F-3
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December 31, | ||||||||
2008 | 2007 | |||||||
ASSETS | ||||||||
A. Cash and due from banks | ||||||||
Cash | 986,687 | 743,185 | ||||||
Financial institutions and correspondents | 2,418,446 | 2,216,828 | ||||||
Argentine Central Bank | 2,036,164 | 1,648,864 | ||||||
Other local financial institutions | 16,228 | 26,425 | ||||||
Foreign | 366,054 | 541,539 | ||||||
Ps. | 3,405,133 | Ps. | 2,960,013 | |||||
B. Government and corporate securities | ||||||||
Holdings of investment account securities | 548,692 | 1,303,437 | ||||||
Holdings of trading securities | 235,614 | 38,991 | ||||||
Government securities from repo transactions with the Argentine Central Bank | 127,532 | — | ||||||
Government securities without quotation | 69,772 | 1,872 | ||||||
Securities issued by the Argentine Central Bank | 550,204 | 348,757 | ||||||
Investments in quoted corporate securities | 56 | 973 | ||||||
Ps. | 1,531,870 | Ps. | 1,694,030 | |||||
C. Loans | ||||||||
To the non-financial public sector | 1,373,642 | 1,265,466 | ||||||
To the financial sector | 148,115 | 110,028 | ||||||
Interbank loans — (call money loans granted) | 40,200 | 2,906 | ||||||
Other loans to domestic financial institutions | 65,662 | 64,895 | ||||||
Accrued interest, adjustments and exchange rate differences receivable | 42,253 | 42,227 | ||||||
To the non-financial private sector and residents abroad | 10,779,630 | 10,654,142 | ||||||
Overdrafts | 594,365 | 792,148 | ||||||
Promissory notes | 2,116,303 | 2,911,170 | ||||||
Mortgage loans | 1,026,754 | 945,088 | ||||||
Pledge loans | 80,991 | 94,520 | ||||||
Personal loans | 1,217,645 | 977,976 | ||||||
Credit card loans | 4,378,366 | 3,630,133 | ||||||
Other | 1,217,984 | 1,168,684 | ||||||
Accrued Interest, adjustments and quotation differences receivable | 185,762 | 177,027 | ||||||
Documented interest | (38,468 | ) | (42,462 | ) | ||||
Unallocated collections | (72 | ) | (142 | ) | ||||
Allowances | (526,801 | ) | (428,607 | ) | ||||
Ps. | 11,774,586 | Ps. | 11,601,029 | |||||
D. Other receivables resulting from financial brokerage | ||||||||
Argentine Central Bank | 627,212 | 192,911 | ||||||
Amounts receivable for spot and forward sales to be settled | 4,031 | 31,090 | ||||||
Securities receivable under spot and forward purchases to be settled | 1,314,589 | 1,517,600 | ||||||
Negotiable obligations without quotation | 4,951 | 20,868 | ||||||
Balances from forward transactions without delivery of underlying asset to be settled | 10,445 | 1,087 | ||||||
Other | 2,174,794 | 1,852,584 | ||||||
Allowances | (12,252 | ) | (19,170 | ) | ||||
Ps. | 4,123,770 | Ps. | 3,596,970 |
F-4
Table of Contents
As of December 31, 2008 and 2007
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||
2008 | 2007 | |||||||
ASSETS (Continued) | ||||||||
E. Assets under financial leases | ||||||||
Assets under financial leases | 449,936 | 359,552 | ||||||
Allowances | (4,699 | ) | (3,768 | ) | ||||
Ps. | 445,237 | Ps. | 355,784 | |||||
F. Equity investments | ||||||||
In financial institutions | 1,712 | 3,138 | ||||||
Other | 50,018 | 82,009 | ||||||
Allowances | (3,211 | ) | (41,357 | ) | ||||
Ps. | 48,519 | Ps. | 43,790 | |||||
G. Miscellaneous receivables | ||||||||
Receivables for assets sold | 18,031 | 15,980 | ||||||
Tax on minimum presumed income — Tax credit | 284,421 | 258,515 | ||||||
Other | 1,623,860 | 1,056,970 | ||||||
Accrued interest on receivables for assets sold | 108 | 98 | ||||||
Other accrued interest and adjustments receivable | 86 | 79 | ||||||
Allowances | (81,298 | ) | (85,588 | ) | ||||
Ps. | 1,845,208 | Ps. | 1,246,054 | |||||
H. Bank premises and equipment | Ps. | 871,269 | Ps. | 743,132 | ||||
I. Miscellaneous assets | Ps. | 78,623 | Ps. | 112,575 | ||||
J. Intangible assets | ||||||||
Goodwill | 37,804 | 58,266 | ||||||
Organization and development expenses | 529,175 | 390,052 | ||||||
Ps. | 566,979 | Ps. | 448,318 | |||||
K. Unallocated items | 5,744 | 9,161 | ||||||
L. Other Assets | 38,852 | 17,882 | ||||||
Total Assets | Ps. | 24,735,790 | Ps. | 22,828,738 | ||||
F-5
Table of Contents
As of December 31, 2008 and 2007
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||
2008 | 2007 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
M. Deposits | ||||||||
Non-financial public sector | Ps. | 1,290,958 | Ps. | 193,911 | ||||
Financial sector | 169,302 | 167,206 | ||||||
Non-financial private sector and residents abroad | 12,595,874 | 12,804,504 | ||||||
Current accounts | 3,002,003 | 2,629,925 | ||||||
Saving accounts | 3,843,596 | 3,228,954 | ||||||
Time deposits | 5,411,178 | 6,543,910 | ||||||
Investment accounts | 206 | 199 | ||||||
Other | 261,927 | 291,103 | ||||||
Accrued interest and quotation differences payable | 76,964 | 110,413 | ||||||
Ps. | 14,056,134 | Ps. | 13,165,621 | |||||
N. Other liabilities resulting from financial brokerage | ||||||||
Argentine Central Bank | 1,682 | 698 | ||||||
Other | 1,682 | 698 | ||||||
Banks and international entities | 941,483 | 717,316 | ||||||
Unsubordinated negotiable obligations | 1,886,138 | 2,190,231 | ||||||
Amounts payable for spot and forward purchases to be settled | 1,014,120 | 1,273,308 | ||||||
Securities to be delivered under spot and forward sales to be settled | 363,640 | 30,734 | ||||||
Loans from domestic financial institutions | 248,550 | 213,039 | ||||||
-Interbank loans (call money loans received) | — | 12,501 | ||||||
-Other loans from domestic financial institutions | 245,630 | 199,191 | ||||||
-Accrued interest payable | 2,920 | 1,347 | ||||||
Balances from forward transactions without delivery of underlying asset to be settled | 1,270 | — | ||||||
Other | 2,207,308 | 1,855,825 | ||||||
Accrued interest and quotation differences payable | 75,261 | 81,803 | ||||||
Ps. | 6,739,452 | Ps. | 6,362,954 | |||||
O. Miscellaneous liabilities | ||||||||
Dividends payable | 16,147 | 40 | ||||||
Directors’ and Syndics’ fees | 4,946 | 4,343 | ||||||
Other | 457,627 | 320,200 | ||||||
Ps. | 478,720 | Ps. | 324,583 | |||||
P. Provisions | 257,333 | 170,083 | ||||||
Q. Subordinated negotiable obligations | 986,969 | 855,258 | ||||||
R. Unallocated items | 12,627 | 6,347 | ||||||
S. Other Liabilities | 112,606 | 71,800 | ||||||
T. Minority interests | 246,204 | 217,587 | ||||||
Total Liabilities | Ps. | 22,890,045 | Ps. | 21,174,233 | ||||
SHAREHOLDERS’ EQUITY | 1,845,745 | 1,654,505 | ||||||
Total Liabilities and Shareholders’ Equity | Ps. | 24,735,790 | Ps. | 22,828,738 | ||||
F-6
Table of Contents
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
A. Financial income | ||||||||||||
Interest on cash and due from banks | Ps. | 8,765 | Ps. | 14,895 | Ps. | 874 | ||||||
Interest on loans granted to the financial sector | 3,896 | 3,345 | 2,869 | |||||||||
Interest on overdrafts | 182,804 | 111,299 | 69,670 | |||||||||
Interest on promissory notes | 440,490 | 294,154 | 200,564 | |||||||||
Interest on mortgage loans | 126,543 | 98,364 | 69,967 | |||||||||
Interest on pledge loans | 14,998 | 12,408 | 12,146 | |||||||||
Interest on credit card loans | 656,477 | 431,790 | 281,116 | |||||||||
Interest on other loans | 317,501 | 202,771 | 105,813 | |||||||||
Interest on other receivables resulting from financial brokerage | 33,994 | 36,231 | 171,878 | |||||||||
Net income from government and corporate securities | 238,098 | 241,303 | 235,272 | |||||||||
Net income from secured loans — Decree No. 1387/01 | 59,851 | 79,709 | 194,777 | |||||||||
Consumer price index adjustment (CER) | 123,948 | 205,145 | 736,029 | |||||||||
Exchange rate differences on gold and foreign currency | 77,898 | 87,957 | 76,154 | |||||||||
Other | 274,088 | 178,515 | 72,694 | |||||||||
Ps. | 2,559,351 | Ps. | 1,997,886 | Ps. | 2,229,823 | |||||||
B. Financial expenses | ||||||||||||
Interest on current account deposits | 21,641 | 16,377 | 21,043 | |||||||||
Interest on savings account deposits | 3,446 | 4,540 | 4,105 | |||||||||
Interest on time deposits | 757,699 | 521,096 | 313,036 | |||||||||
Interest on interbank loans received (call money loans) | 5,696 | 3,918 | 3,517 | |||||||||
Interest on financing from the financial sector | 774 | 1,946 | 3,462 | |||||||||
Interest on other liabilities resulting from financial brokerage | 297,026 | 313,586 | 317,459 | |||||||||
Interest on subordinated obligations | 101,424 | 94,660 | 76,480 | |||||||||
Other interest | 3,313 | 45,848 | 186,578 | |||||||||
Consumer price index adjustment | 9,249 | 66,984 | 697,694 | |||||||||
Contributions made to Deposit Insurance Fund | 23,555 | 20,378 | 15,771 | |||||||||
Other | 197,196 | 157,367 | 212,454 | |||||||||
Ps. | 1,421,019 | Ps. | 1,246,700 | Ps. | 1,851,599 | |||||||
C. Gross brokerage margin | 1,138,332 | 751,186 | 378,224 | |||||||||
Loan loss provisions | 395,389 | 255,502 | 110,869 | |||||||||
D. Income from services | ||||||||||||
In relation to lending transactions | 379,752 | 334,730 | 247,501 | |||||||||
In relation to borrowing transactions | 370,181 | 293,308 | 220,543 | |||||||||
Other commissions | 22,415 | 18,731 | 17,056 | |||||||||
Other | 799,800 | 523,931 | 367,993 | |||||||||
Ps. | 1,572,148 | Ps. | 1,170,700 | Ps. | 853,093 | |||||||
E. Expenses for services | ||||||||||||
Commissions | 164,780 | 117,708 | 80,801 | |||||||||
Other | 219,500 | 139,896 | 100,291 | |||||||||
Ps. | 384,280 | Ps. | 257,604 | Ps. | 181,092 |
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Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
F. Administrative expenses | ||||||||||||
Personnel expenses | 966,213 | 670,587 | 506,632 | |||||||||
Directors’ and syndics’ fees | 8,153 | 6,415 | 5,989 | |||||||||
Other fees | 56,938 | 42,939 | 36,148 | |||||||||
Advertising and publicity | 146,496 | 113,809 | 84,507 | |||||||||
Taxes | 103,998 | 70,393 | 50,469 | |||||||||
Depreciation of bank premises and equipment | 61,910 | 49,952 | 37,095 | |||||||||
Amortization of organization expenses | 37,950 | 35,640 | 34,904 | |||||||||
Other operating expenses | 249,219 | 190,616 | 145,017 | |||||||||
Other | 150,201 | 105,973 | 73,803 | |||||||||
Ps. | 1,781,078 | Ps. | 1,286,324 | Ps. | 974,564 | |||||||
Net Income / (Loss) from financial brokerage | Ps. | 149,733 | Ps. | 122,456 | Ps. | (35,208 | ) | |||||
G. Minority interests result | Ps. | (35,812 | ) | Ps. | (32,119 | ) | Ps. | (19,016 | ) | |||
H. Miscellaneous income | ||||||||||||
Net lncome from equity investments | 56,764 | 1,957 | — | |||||||||
Default interests | 4,429 | 1,988 | 1,062 | |||||||||
Loans recovered and allowances reversed | 103,992 | 95,969 | 142,885 | |||||||||
Other | 333,646 | 173,581 | 151,176 | |||||||||
Consumer price index adjustment (CER) | 28 | 8 | 105 | |||||||||
Ps. | 498,859 | Ps. | 273,503 | Ps. | 295,228 | |||||||
I. Miscellaneous losses | ||||||||||||
Net loss on long-term investments | — | — | 14,362 | |||||||||
Default interests and charges in favor of the Argentine Central Bank | 17 | 15 | 571 | |||||||||
Loan loss provisions for miscellaneous receivables and other provisions | 161,703 | 48,151 | 62,424 | |||||||||
Amortization of differences arising from court resolutions | 39,545 | 108,667 | — | |||||||||
Depreciation and losses from miscellaneous assets | 1,405 | 627 | 923 | |||||||||
Amortization of goodwill | 20,462 | 19,687 | 20,478 | |||||||||
Other | 138,784 | 69,155 | 66,922 | |||||||||
Consumer price index adjustment | 31 | 35 | — | |||||||||
Ps. | 361,947 | Ps. | 246,337 | Ps. | 165,680 | |||||||
Net Income before tax | 250,833 | 117,503 | 75,324 | |||||||||
J. Income tax | Ps. | 74,014 | Ps. | 71,466 | Ps. | 94,238 | ||||||
Net Income / (Loss) for the fiscal year | Ps. | 176,819 | Ps. | 46,037 | Ps. | (18,914 | ) | |||||
Net Income / (Loss) per common share (basic and assuming full dilution) | 0.142 | 0.037 | (0.015 | ) |
F-8
Table of Contents
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Cash Flow from operating activities: | ||||||||||||
Net Income / (Loss) for the year | Ps. | 176,819 | Ps. | 46,037 | Ps. | (18,914 | ) | |||||
Adjustments to reconcile net income to net cash from Operating activities: | ||||||||||||
Depreciation of bank premises and equipment and Miscellaneous assets | 63,309 | 50,570 | 37,550 | |||||||||
Amortization of intangible assets | 97,957 | 163,994 | 55,382 | |||||||||
Increase in allowances for loan and other losses, net of reversals | 335,658 | 269,201 | 80,863 | |||||||||
Equity loss / (gain) of unconsolidated subsidiaries | (56,764 | ) | (1,957 | ) | 14,362 | |||||||
Gain on sale of premises and equipment | (695 | ) | (1,472 | ) | (1,261 | ) | ||||||
Consumer price index adjustment (CER/CVS) | (113,226 | ) | 485,628 | 891,866 | ||||||||
Unrealized foreign exchange (loss) / gain | (229,426 | ) | 37,057 | (5,914 | ) | |||||||
Decrease in government securities | 839,152 | 1,589,476 | 1,267,505 | |||||||||
Decrease / (Increase) in other assets | (122,938 | ) | (27,441 | ) | 1,064,407 | |||||||
Increase / (Decrease) in other liabilities | (101,284 | ) | (161,327 | ) | 162,287 | |||||||
Net cash provided by operating activities | Ps. | 888,562 | Ps. | 2,449,766 | Ps. | 3,548,133 | ||||||
Cash Flow from investing activities: | ||||||||||||
(Increase) / Decrease in loans, net | 1,501,309 | (1,410,830 | ) | 894,129 | ||||||||
Sales of investments in other companies | 10,421 | — | 13,774 | |||||||||
Increase in equity investments in other companies | (5,063 | ) | (1,698 | ) | — | |||||||
Increase in deposits at the Argentine Central Bank | (76,838 | ) | (45,941 | ) | (36,169 | ) | ||||||
Additions to bank premises and equipment, miscellaneous, and intangible assets | (403,085 | ) | (287,620 | ) | (196,313 | ) | ||||||
Proceeds from sales of premises and equipment | 30,337 | 30,381 | 13,838 | |||||||||
Net cash (used in) / provided by investing activities | Ps. | 1,057,081 | Ps. | (1,715,708 | ) | Ps. | 689,259 | |||||
Cash Flow from financing activities: | ||||||||||||
Capital Increase in subsidiaries from minority shareholders | — | 299 | — | |||||||||
Cash dividends paid in minority interests | (1,404 | ) | (5,517 | ) | (5,280 | ) | ||||||
Increase / (Decrease) in deposits, net | (57,029 | ) | 1,752,527 | 1,894,251 | ||||||||
Borrowings under credit facilities — long-term | 269,498 | 369,668 | 418,018 | |||||||||
Payments on credit facilities — long-term | (743,476 | ) | (1,823,464 | ) | (687,024 | ) | ||||||
Decrease in short-term borrowings, net | (156,579 | ) | (2,527,284 | ) | (3,856,813 | ) | ||||||
Increase / (Decrease) in repurchase agreements | (376,645 | ) | 229,886 | 934,408 | ||||||||
Net cash used in financing activities | Ps. | (1,065,635 | ) | Ps. | (2,003,885 | ) | Ps. | (1,302,440 | ) |
F-9
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Increase / (Decrease) in cash and cash equivalents, net | Ps. | 880,008 | Ps. | (1,269,827 | ) | Ps. | 2,934,952 | |||||
Cash and cash equivalents at the beginning of the year | 3,766,207 | 4,988,198 | 2,046,836 | |||||||||
Effect of exchange rate changes on cash and cash equivalents | 149,168 | 47,836 | 6,410 | |||||||||
Cash and cash equivalents at the end of the year | Ps. | 4,795,383 | Ps. | 3,766,207 | Ps. | 4,988,198 | ||||||
Supplemental disclosures relative to cash flows: | ||||||||||||
Interest paid | Ps. | 1,227,389 | Ps. | 951,134 | Ps. | 734,756 | ||||||
Income tax paid | Ps. | 64,914 | Ps. | 32,996 | Ps. | 20,074 | ||||||
Minimum Presumed Income Tax (*) | Ps. | 19,767 | Ps. | 31,353 | Ps. | 30,031 | ||||||
Non-Cash Investing and financing activities — Trust Interest | Ps. | 159,376 | Ps. | 98,121 | Ps. | 99,573 |
(*) | The MPIT is calculated based on assets and can be credited against future income tax. |
F-10
Table of Contents
Inflation | (Accumulated | |||||||||||||||||||||||||||||||
adjustments to | deficit) / | Total | ||||||||||||||||||||||||||||||
Capital | Paid in | Capital Stock and | Treasury | Profit reserves | Retained | Shareholders’ | ||||||||||||||||||||||||||
Stock | Capital | Paid in Capital | Stock | Legal | Other | earnings | Equity | |||||||||||||||||||||||||
Balance at December 31, 2005 | Ps. | 1,241,407 | — | Ps. | 278,131 | — | Ps. | — | Ps. | — | Ps. | 107,238 | Ps. | 1,626,776 | ||||||||||||||||||
Distribution of retained earnings by the shareholders’ meeting on April 27,2006 | ||||||||||||||||||||||||||||||||
Legal Reserve | — | — | — | — | 34,855 | — | (34,855 | ) | — | |||||||||||||||||||||||
Discretionary Reserve | — | — | — | — | — | 72,383 | (72,383 | ) | — | |||||||||||||||||||||||
Purchase of treasury stock | (1,614 | ) | — | (362 | ) | 1,976 | — | — | — | — | ||||||||||||||||||||||
Sales of treasury stock | 1,614 | 606 | 362 | (1,976 | ) | — | — | — | 606 | |||||||||||||||||||||||
Net loss for the year | — | — | — | — | — | — | (18,914 | ) | (18,914 | ) | ||||||||||||||||||||||
Balance at December 31, 2006 | Ps. | 1,241,407 | Ps. | 606 | Ps. | 278,131 | — | Ps. | 34,855 | Ps. | 72,383 | Ps. | (18,914 | ) | Ps. | 1,608,468 | ||||||||||||||||
Absorption approved by the shareholders’ meeting on April 26.2007 | — | — | — | — | — | (18,914 | ) | 18,914 | — | |||||||||||||||||||||||
Net Income for the year | — | — | — | — | — | — | 46,037 | 46,037 | ||||||||||||||||||||||||
Balance at December 31, 2007 | Ps. | 1,241,407 | Ps. | 606 | Ps. | 278,131 | — | Ps. | 34,855 | Ps. | 53,469 | Ps. | 46,037 | Ps. | 1,654,505 | |||||||||||||||||
Distribution of retained earnings by the shareholders’ meeting on April 29,2008 | ||||||||||||||||||||||||||||||||
Legal Reserve | — | — | — | — | 2,302 | (2,302 | ) | — | ||||||||||||||||||||||||
Discretionary Reserve | — | — | — | — | — | 43,735 | (43,735 | ) | — | |||||||||||||||||||||||
Valuation Differences | — | 14,421 | — | 14,421 | ||||||||||||||||||||||||||||
Net Income for the year | — | — | — | — | — | 176,819 | 176,819 | |||||||||||||||||||||||||
Balance at December 31, 2008 | Ps. | 1,241,407 | Ps. | 606 | Ps. | 278,131 | — | Ps. | 37,157 | Ps. | 111,625 | 176,819 | 1,845,745 | |||||||||||||||||||
F-11
Table of Contents
Issuing Company | December 31, 2008 | December 31, 2007 | ||||||
Grupo Financiero Galicia S.A. | ||||||||
Net Investment S.A. | 99.33 | % | 99.33 | % | ||||
Galicia Warrants S.A. | 99.33 | % | 99.33 | % | ||||
Sudamericana Holding S.A. | 99.33 | % | 99.33 | % | ||||
Galval Agente de Valores S.A. | 100.00 | % | 100.00 | % | ||||
GV Mandataria de Valores S.A. | 100.00 | % | — | |||||
Banco de Galicia y Buenos Aires S.A. | 94.66 | % | 94.66 | % | ||||
Banco Galicia Uruguay S.A. | 94.66 | % | 94.66 | % | ||||
Tarjetas Regionales S.A. | 94.66 | % | 94.66 | % | ||||
Galicia Administradora de Fondos S.A. Sociedad Gerente de Fondos Comunes de Inversión | 94.66 | % | 94.66 | % | ||||
Galicia (Cayman) Ltd. | 94.66 | % | 94.66 | % | ||||
Galicia Pension Fund S.A. | 94.66 | % | 94.66 | % | ||||
Tarjetas del Mar S.A. | 94.65 | % | 94.65 | % | ||||
Galicia Valores S.A. Sociedad de Bolsa | 94.65 | % | 94.65 | % | ||||
Galicia Factoring y Leasing S.A. | 94.64 | % | 94.64 | % | ||||
Tarjeta Naranja S.A. | 75.73 | % | 75.73 | % | ||||
Cobranzas Regionales S.A. | 73.40 | % | 73.40 | % | ||||
Tarjetas Cuyanas S.A. | 56.80 | % | 56.80 | % | ||||
Tarjeta Naranja Dominicana S.A. | 37.86 | % | 37.86 | % |
F-12
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-13
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-14
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-15
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
• | Ownership of a portion of a related company’s capital granting the voting power necessary to influence the approval of such company’s financial statements and profits distribution. |
• | Representation in the related company’s board of directors or corporate governance body. |
• | Participation in the definition of the related company’s policies. |
• | Existence of significant transactions between the company holding the interest and the related company (for example, when the former is the latter’s only supplier or by far its most important client). |
• | Interchange of senior officers among companies. |
• | Technical dependence of one of the companies on the other. |
F-16
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-17
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-18
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||
2008 | 2007 | |||||||
Peso balances | Ps. | 1,713,396 | Ps. | 1,573,904 | ||||
Foreign currency balances | 1,328,983 | 868,529 |
December 31, | ||||||||
2008 | 2007 | |||||||
Funds and securities pledged under various arrangements | Ps. | 1,992,080 | Ps. | 1,218,993 | ||||
Shares on equity investments (*) | 5,250 | 5,250 | ||||||
Deposits in the Argentine Central Bank, restricted under Argentine Central Bank regulations | 3,055 | 1,937 | ||||||
Loans pledged and real property granted as collateral-Banco Galicia Uruguay S.A. (**) | 65,468 | 120,639 | ||||||
Loans granted as collateral(***) | 157,693 | — | ||||||
Total | Ps. | 2,223,546 | Ps. | 1,346,819 | ||||
(*) | Shares over which transferability is subject to prior approval of the National or Provincial authorities, as applicable, under the terms of certain concession contracts signed. | |
(**) | Under a fixed pledged agreement signed on July 24, 2003 and registered with the Registry of Property — Movable Property — Pledges Division of Montevideo — Uruguay, on August 5, 2003, Galicia Uruguay S.A.’s credit rights against all of its debtors have been pledged in favor of the holders of transferable time deposit certificates and/or negotiable obligations issued in compliance with the debt restructuring plan approved. | |
(***) | As of December 31, 2008, the Bank has recorded Ps.266,686 as collateral for credit lines granted by the IFC, and the related transactions have been allocated to the resources provided by the IFC. As collateral for the requested funds, the Bank used secured loans for a face value of US$ 51,000, equivalent to a cash amount of Ps.157,693, through the Argentine Central Bank, to the Subsecretaría de la Micro, Pequeña y Mediana Empresa y Desarrollo Provincial destined to the financing of the Global Credit Program for Small and Medium Companies. As of December 31, 2008, balance of secured loans was Ps.87,222. |
F-19
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||
2008 | 2007 | |||||||
Government Securities | ||||||||
For trading purposes: | ||||||||
Government Bonds | Ps. | 362,716 | Ps. | 38,991 | ||||
Other | 430 | — | ||||||
Total trading securities | Ps. | 363,146 | Ps. | 38,991 | ||||
In investment accounts | ||||||||
Government Bonds (Boden 2012 Bonds) | 542,876 | 1,303,437 | ||||||
Securities issued by the Argentine Central Bank | 5,816 | — | ||||||
Total securities in investment accounts | Ps. | 548,692 | Ps. | 1,303,437 | ||||
Securities issued by the Argentine Central Bank | ||||||||
Securities with quotation | 29,965 | 312,383 | ||||||
Securities without quotation | 520,239 | 36,374 | ||||||
Total Securities issued by the Argentine Central Bank | Ps. | 550,204 | Ps. | 348,757 | ||||
Without quotation | ||||||||
Government Bonds | 69,772 | 1,872 | ||||||
Total Without quotation securities | 69,772 | 1,872 | ||||||
Total government securities | Ps. | 1,531,814 | Ps. | 1,693,057 | ||||
Corporate Securities | ||||||||
Shares | — | 5 | ||||||
Marketable Negotiable obligations | 56 | — | ||||||
Mortgage Bonds | — | 968 | ||||||
Total corporate securities | Ps. | 56 | Ps. | 973 | ||||
Total government and corporate securities | Ps. | 1,531,870 | Ps. | 1,694,030 | ||||
F-20
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||
2008 | 2007 | |||||||
Non-financial public sector | Ps. | 1,373,642 | Ps. | 1,265,466 | ||||
Financial sector (Argentine) | 148,115 | 110,028 | ||||||
Non-financial private sector and residents abroad | 10,779,630 | 10,654,142 | ||||||
- With preferred guarantees | 1,332,798 | 1,289,818 | ||||||
- With other guarantees | 1,546,237 | 1,864,482 | ||||||
- Unsecured | 7,900,595 | 7,499,842 | ||||||
Subtotal | 12,301,387 | 12,029,636 | ||||||
Allowance for loan losses (See Note 7) | (526,801 | ) | (428,607 | ) | ||||
Total | Ps. | 11,774,586 | Ps. | 11,601,029 | ||||
F-21
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||
2008 | 2007 | |||||||
Financial Sector | 3.95 | % | 2.25 | % | ||||
Services | 18.23 | % | 19.68 | % | ||||
Primary Products | 10.90 | % | 10.59 | % | ||||
Consumer | 43.23 | % | 36.76 | % | ||||
Retail Trade | 4.39 | % | 6.02 | % | ||||
Wholesale Trade | 5.28 | % | 7.13 | % | ||||
Construction | 0.67 | % | 2.24 | % | ||||
Manufacturing | 12.99 | % | 15.09 | % |
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Balance at beginning of year | Ps. | 428,607 | Ps. | 327,042 | Ps. | 427,911 | ||||||
Provision charged to income | 384,606 | 248,415 | 105,312 | |||||||||
Recoveries | (6,510 | ) | (21,556 | ) | (32,492 | ) | ||||||
Foreign exchange effect and other adjustments | 9,289 | 131 | 27,113 | |||||||||
Loans charged off | (289,191 | ) | (125,425 | ) | (200,802 | ) | ||||||
Balance at end of year | Ps. | 526,801 | Ps. | 428,607 | Ps. | 327,042 | ||||||
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Provisions charged to income | Ps. | 384,606 | Ps. | 248,415 | Ps. | 105,312 | ||||||
Direct charge-offs | 7,307 | 4,334 | 3,338 | |||||||||
Other receivable losses | 2,545 | 1,413 | 788 | |||||||||
Financial leases | 931 | 1,340 | 1,431 | |||||||||
Ps. | 395,389 | Ps. | 255,502 | Ps. | 110,869 | |||||||
December 31, | ||||||||
2008 | 2007 | |||||||
Preferred guarantees, including deposits with The Argentine Central Bank | Ps. | 338,189 | Ps. | 234,939 | ||||
Other guarantees | 1,588 | 76 | ||||||
Unsecured | 3,796,245 | 3,381,125 | ||||||
Less: Allowance for doubtful accounts | (12,252 | ) | (19,170 | ) | ||||
Ps. | 4,123,770 | Ps. | 3,596,970 | |||||
F-22
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||
2008 | 2007 | |||||||
Mutual funds | Ps. | 39,443 | Ps. | 59,256 | ||||
Galtrust I | 633,996 | 600,909 | ||||||
Other financial trust participation certificates | 971,064 | 828,318 | ||||||
Accrued commissions | 19,015 | 15,836 | ||||||
Others | 511,276 | 348,265 | ||||||
Ps. | 2,174,794 | Ps. | 1,852,584 | |||||
December 31, | ||||||||
2008 | 2007 | |||||||
In Financial Institutions, complementary and authorized activities | ||||||||
Banelco S.A. | Ps. | 8,453 | Ps. | 7,852 | ||||
Visa Argentina S.A. | 2,576 | 951 | ||||||
Mercado de Valores de Buenos Aires S.A. | 8,142 | 8,141 | ||||||
Banco Latinoamericano de Exportaciones S.A. | 1,712 | 1,562 | ||||||
Others | 861 | 2,429 | ||||||
Total equity investments in Financial Institutions, complementary and authorized activities | Ps. | 21,744 | Ps. | 20,935 | ||||
In Non-financial Institutions | ||||||||
Aguas Argentinas S.A (*) | Ps. | — | Ps. | 23,370 | ||||
Electrigal S.A. | 5,455 | 5,455 | ||||||
Aguas Provinciales de Santa Fe S.A (*) | — | 10,771 | ||||||
A.E.C. S.A. | 14,244 | 10,656 | ||||||
Aguas Cordobesas S.A. | 8,911 | 8,911 | ||||||
Other | 1,376 | 5,049 | ||||||
Total equity investments in non-financial institutions | Ps. | 29,986 | Ps. | 64,212 | ||||
Allowances | Ps. | (3,211 | ) | Ps. | (41,357 | ) | ||
Total Equity investments | Ps. | 48,519 | Ps. | 43,790 | ||||
(*) | In September 2008, the Group sold its equity investments in these companies. (See note 3) |
December 31, | ||||||||
2008 | 2007 | |||||||
Land and buildings | Ps. | 890,660 | Ps. | 782,787 | ||||
Furniture and fittings | 182,205 | 165,470 | ||||||
Machinery and equipment | 305,187 | 280,044 | ||||||
Vehicles | 1,243 | 1,202 | ||||||
Others | 6,202 | 7,052 | ||||||
Accumulated depreciation | (514,228 | ) | (493,423 | ) | ||||
Ps. | 871,269 | Ps. | 743,132 | |||||
F-23
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||
2008 | 2007 | |||||||
Goodwill, net of accumulated amortization of Ps.164,790 and Ps.144,328 , respectively | Ps. | 37,804 | Ps. | 58,266 | ||||
Organization and development expenses, net of accumulated amortization of Ps.163,157 and Ps.170,610 respectively | 212,301 | 113,028 | ||||||
Legal actions related to the payment of deposits (“amparo claims”), net of accumulated amortization of Ps.469,382 and Ps.429,836 , respectively (see Note 2.10) | 316,874 | 277,024 | ||||||
Ps. | 566,979 | Ps. | 448,318 | |||||
December 31, | ||||||||
2008 | 2007 | |||||||
Banking | 37,139 | 47,932 | ||||||
Regional Credit Card companies | 665 | 10,334 | ||||||
Ps. | 37,804 | Ps. | 58,266 | |||||
December 31, | ||||||||
2008 | 2007 | |||||||
Construction in progress | Ps. | 24,857 | Ps. | 53,331 | ||||
Deposits on fixed asset purchases | 20,955 | 22,285 | ||||||
Stationery and supplies | 9,607 | 6,249 | ||||||
Real estate held for sale | 7,326 | 7,571 | ||||||
Others | 15,878 | 23,139 | ||||||
Ps. | 78,623 | Ps. | 112,575 | |||||
F-24
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||
2008 | 2007 | |||||||
Allowances against asset accounts: | ||||||||
Other receivables resulting from financial brokerage, for collection risk (a) | 12,252 | 19,170 | ||||||
Assets under financial leases (a) | 4,699 | 3,768 | ||||||
Equity investments in other companies (b) | 3,211 | 41,357 | ||||||
Miscellaneous receivables, for collection risk (a) | 81,298 | 85,588 | ||||||
Reserves for contingencies: | ||||||||
For severance payments (c) | 3,212 | 2,477 | ||||||
Litigations (d) | 32,125 | 28,694 | ||||||
Other contingencies | 189,936 | 114,448 | ||||||
Sundry liabilities arising from credit card activities (e) | 31,849 | 24,110 | ||||||
Other commitments (f) | 211 | 354 | ||||||
Total reserves for contingencies | Ps. | 257,333 | Ps. | 170,083 | ||||
(a) | Based upon an assessment of debtors’ performance, the economic and financial situation and the guarantees collateralizing their respective transactions. | |
(b) | Includes the estimated losses due to the excess of the cost plus dividend method over the equity method in non-majority owned equity investments. | |
(c) | Estimated amounts payable under labor lawsuits filed against the Bank by former employees. | |
(d) | Litigation arising from different types of claims from customers (e.g., claims for thefts from safe deposit boxes, the cashing of checks that have been fraudulently altered, discrepancies in deposits and payments services that the Bank renders, etc). | |
(e) | Reserves for rewards to be given under a credit-card reward program, for a guarantee of credit-cards receivable and for the estimated liability for the insurance of the payment of credit-cards balance in the event of the death of the credit-card holders. | |
At the date of these consolidated financial statements, the Argentine Revenue Service (AFIP), the Revenue Board of the Province of Córdoba and the Municipalities of the cities of Mendoza and San Luis are in the process of conducting audits, with respect to claims made by such agencies, regarding taxes applicable to Credit Cards issuing companies. The amount claimed for such reason, adjusted as of December 31, 2008, totals Ps.31,659, approximately. | ||
Based on the opinions of their tax advisors, the companies believe that the abovementioned claims are both legally and technically groundless. | ||
However, since the final outcome of these measures cannot be foreseen, provisions have been set up to cover such contingencies. Therefore, both companies are taking the corresponding administrative and legal steps in order to solve such issues. | ||
(f) | Represents contingent commitments in connection with customers classified in categories other than the “normal” categories under Argentine Banking GAAP. | |
At the date of these consolidated financial statements, there are several review and assessment processes ongoing, at different progress stages, initiated by the provincial and Autonomous City of Buenos Aires’ Tax Authorities related to the turnover tax, mainly corresponding to fiscal year 2002, and basically in connection with the Compensatory Bond set forth by the National Government in order to compensate financial institutions for the losses resulting from the asymmetric pesification of loans and deposits. | ||
The Bank has been expressing its disagreement regarding these adjustments at the corresponding administrative and/or legal proceedings. These proceedings and their possible effects are constantly being monitored by the management division. Even though the foregoing has not been finally resolved yet, the Bank considers it has complied with its tax liabilities in full pursuant to current regulations, since it is not possible to foresee the final outcome, the Bank has established provisions deemed suitable according to each process’s status. |
F-25
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
13. | Other Liabilities Resulting from Financial Brokerage- Banks and International Entities, and Loans from Domestic Financial Institutions |
December 31, | ||||||||
2008 | 2007 | |||||||
Description | ||||||||
Bank and International Entities | ||||||||
Contractual long-term Liabilities | ||||||||
Floating Rate Bank Loans 2010 | Ps. | 5,507 | Ps. | 8,318 | ||||
Floating Rate Bank Loans 2014 | 86,078 | 78,266 | ||||||
Floating Rate Bank Loans 2019 | 6,239 | 5,276 | ||||||
Internacional Finance Corp. (I.F.C.) | 267,067 | 113,444 | ||||||
Loan Merrill Lynch | 214,086 | 251,920 | ||||||
Other lines from foreign banks | 7,943 | 2,096 | ||||||
Total long-term liabilities | Ps. | 586,920 | Ps. | 459,320 | ||||
Contractual short-term liabilities: | ||||||||
Other lines from foreign banks | 354,563 | 257,996 | ||||||
Total short-term liabilities | Ps. | 354,563 | Ps. | 257,996 | ||||
Total Banks and International Entities | Ps. | 941,483 | Ps. | 717,316 | ||||
Domestic and Financial Institutions | ||||||||
Contractual long-term liabilities: | ||||||||
BICE (Banco de Inversión y Comercio Exterior) | 5,056 | 15,805 | ||||||
Other lines from domestic banks | 199,873 | 164,007 | ||||||
Total long-term liabilities | Ps. | 204,929 | Ps. | 179,812 | ||||
Contractual short-term liabilities: | ||||||||
Other lines from credit from domestic banks | 43,621 | 33,227 | ||||||
Total short-term liabilities | Ps. | 43,621 | Ps. | 33,227 | ||||
Total Domestic and Financial Institutions | Ps. | 248,550 | Ps. | 213,039 | ||||
TOTAL | Ps. | 1,190,033 | Ps. | 930,355 | ||||
F-26
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
Contractual long-term Liabilities | ||||
2009 | 301,745 | |||
2010 | 175,138 | |||
2011 | 113,658 | |||
2012 | 82,440 | |||
2013 | 73,317 | |||
Thereafter | 45,551 | |||
Ps. | 791,849 | |||
Annual | ||||||||||||||||
Interest | December 31, | |||||||||||||||
Negotiable Obligations (1) | Maturity | Rate | 2008 | 2007 | ||||||||||||
Contractual Long-term liabilities: | ||||||||||||||||
9% Notes Due 2003(*) (Semi-annual interest, principal payable at maturity) | 2003 | 9.00 | % | 5,813 | 12,106 | |||||||||||
Banco Galicia — Note 2010 - Libor +350 BP (Semi-annual interest) | 2010 | 6.65 | % | 353,755 | 536,594 | |||||||||||
Banco Galicia Uruguay S.A. Unsubordinated (restructured deposits) (Annual interest, principal payable every year) | Various | Various | 54,305 | 114,957 | ||||||||||||
Banco Galicia — Note 2014 (Semi — annual interest) | 2014 | 7.00 | % | 933,106 | 944,404 | |||||||||||
Banco Galicia — Subordinated Note 2019 (Semi-annual interest, principal payable at maturity) | 2019 | 11.00 | % | 986,969 | 855,258 | |||||||||||
Tarjeta Naranja Class II (Interest fixed, semi-annual interest- principal payable every six months) | 2008 | 17.00 | % | — | 40,075 | |||||||||||
Tarjeta Naranja Class IV (Interest fixed, semi-annual interest- principal payable every six months) | 2011 | 15.50 | % | 229,821 | 307,900 | |||||||||||
Tarjeta Cuyanas S.A. Serie XVIII (Interest fixed, semi-annual interest- principal payable every six months) | 2012 | 12.00 | % | 139,128 | 197,855 | |||||||||||
Tarjeta Naranja Class VII (Fixed Interest, principal payable at maturity) | 2009 | 10,50 | % | 61,355 | — | |||||||||||
Total long-term liabilities | Ps. | 2,764,252 | Ps. | 3,009,149 | ||||||||||||
Contractual Short-term liabilities: | ||||||||||||||||
Tarjeta Naranja Class VIII (Fixed Interest, principal payable at maturity) | 2009 | 11,00 | % | 69,058 | — | |||||||||||
Tarjetas Cuyanas S. XIX (Fixed Interest, principal payable at maturity) | 2009 | 14,00 | % | 39,797 | — | |||||||||||
Tarjeta Naranja Class V (Fixed Interest, principal payable at maturity) | 2008 | 8.25 | % | — | 36,340 | |||||||||||
Total short-term liabilities | 108,855 | 36,340 | ||||||||||||||
Ps. | 2,873,107 | Ps. | 3,045,489 | |||||||||||||
(1) | Only principal, except for Subordinated Obligations which include accrued interest for Ps.51,765. |
F-27
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
Past due (*) | 5,813 | |||
2009 | 442,274 | |||
2010 | 464,329 | |||
2011 | 364,233 | |||
2012 | 231,142 | |||
2013 | 221,205 | |||
Thereafter | 1,035,256 | |||
Total | Ps. | 2,764,252 | ||
(*) | Corresponds to past due debt not yet restructured. |
December 31, | ||||||||
2008 | 2007 | |||||||
Assets: | ||||||||
Cash and due from banks | Ps. | 1,806,827 | Ps. | 1,481,130 | ||||
Government and corporate securities | 672,354 | 1,303,518 | ||||||
Loans | 1,998,358 | 1,755,230 | ||||||
Other receivables resulting from financial brokerage | 1,630,433 | 1,170,778 | ||||||
Assets under financial leases | 23,541 | — | ||||||
Equity investments in other companies | 1,762 | 3,186 | ||||||
Miscellaneous receivables | 995,257 | 570,780 | ||||||
Bank premises and equipment | 4,990 | 10,928 | ||||||
Miscellaneous assets | 297 | 41 | ||||||
Intangible assets | 601 | 974 | ||||||
Unallocated items | 2,791 | 4,166 | ||||||
Other assets | 129 | 252 | ||||||
Total | Ps. | 7,137,340 | Ps. | 6,300,983 | ||||
Liabilities: | ||||||||
Deposits | Ps. | 2,386,180 | Ps. | 2,044,743 | ||||
Other liabilities resulting from financial brokerage | 4,031,939 | 4,035,208 | ||||||
Miscellaneous liabilities | 14,746 | 16,381 | ||||||
Subordinated Negotiable Obligations | 986,969 | 855,258 | ||||||
Provisions | 8,244 | 1,182 | ||||||
Unallocated items | 3,519 | 1,205 | ||||||
Other Liabilities | 85 | 83 | ||||||
Total | Ps. | 7,431,682 | Ps. | 6,954,060 | ||||
F-28
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Financial Income | ||||||||||||
Interest on other receivables resulting from financial brokerage: | ||||||||||||
Interest on purchased certificates of deposits | 6,033 | 5,374 | 3,667 | |||||||||
Compensatory Bond | — | 3,699 | 150,737 | |||||||||
Additional interest on current accounts and special accounts with the Argentine Central Bank | 12,241 | 19,621 | 14,811 | |||||||||
Advance payment-Leasing | 12,332 | 5,708 | 1,512 | |||||||||
Other | 3,388 | 1,829 | 1,151 | |||||||||
Ps. | 33,994 | Ps. | 36,231 | Ps. | 171,878 | |||||||
Other | ||||||||||||
Premiums on forward purchases of Government securities under repos | 7,013 | 2,863 | 3,548 | |||||||||
Interest on pre-export and export financing | 69,238 | 57,447 | 34,669 | |||||||||
Result from other credits by financial brokerage | 11,076 | 71,667 | — | |||||||||
Leasing | 80,036 | 46,534 | 33,268 | |||||||||
Net position of valuation public sector loans | 9,157 | — | — | |||||||||
Net position of forward transactions in pesos | 95,433 | — | — | |||||||||
Other | 2,135 | 4 | 1,209 | |||||||||
Ps. | 274,088 | Ps. | 178,515 | Ps. | 72,694 | |||||||
Financial Expenses | ||||||||||||
Interest on other liabilities resulting from financial brokerage: | ||||||||||||
Interest on negotiable obligations | 187,320 | 240,569 | 225,903 | |||||||||
Interest on other liabilities resulting from financial brokerage from other banks and international entities | 109,706 | 73,017 | 91,556 | |||||||||
Ps. | 297,026 | Ps. | 313,586 | Ps. | 317,459 | |||||||
Other interest | ||||||||||||
Interest on Argentine Central Bank loans | — | 5,782 | 109,459 | |||||||||
CER adjustment on Argentine Central Bank advances | — | 34,766 | 69,156 | |||||||||
Other | 3,313 | 5,300 | 7,963 | |||||||||
Ps. | 3,313 | Ps. | 45,848 | Ps. | 186,578 | |||||||
F-29
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Other | ||||||||||||
Premiums on repo transactions | 84,823 | 68,727 | 34,586 | |||||||||
Contributions and taxes on financial income | 112,373 | 66,028 | 52,865 | |||||||||
Net position of valuation public sector loans | — | 6,440 | 122,261 | |||||||||
Net position of forward transactions in pesos | — | 16,172 | 1,868 | |||||||||
Other | — | — | 874 | |||||||||
Ps. | 197,196 | Ps. | 157,367 | Ps. | 212,454 | |||||||
Income from services | ||||||||||||
Other | ||||||||||||
Commissions on credit cards | 652,040 | 410,543 | 279,598 | |||||||||
Safety rental | 18,003 | 13,213 | 10,007 | |||||||||
Insurance premiums | 58,901 | 49,032 | 39,980 | |||||||||
Other | 70,856 | 51,143 | 38,408 | |||||||||
Ps. | 799,800 | Ps. | 523,931 | Ps. | 367,993 | |||||||
Expenses for services | ||||||||||||
Other | ||||||||||||
Gross revenue taxes | 74,339 | 52,504 | 36,671 | |||||||||
Linked with credit cards | 130,813 | 77,555 | 58,342 | |||||||||
Other | 14,348 | 9,837 | 5,278 | |||||||||
Ps. | 219,500 | Ps. | 139,896 | Ps. | 100,291 | |||||||
Administrative expenses | ||||||||||||
Other operating expenses | ||||||||||||
Rentals | 51,292 | 39,963 | 28,032 | |||||||||
Electricity and communications | 72,712 | 57,205 | 41,104 | |||||||||
Maintenance and repair expenses | 43,841 | 34,780 | 31,979 | |||||||||
Security Services | 42,255 | 31,752 | 23,490 | |||||||||
Other operating expenses | 39,119 | 26,916 | 20,412 | |||||||||
Ps. | 249,219 | Ps. | 190,616 | Ps. | 145,017 | |||||||
Miscellaneous income | ||||||||||||
Other | ||||||||||||
Interest on miscellaneous receivables | 39,382 | 19,875 | 58,143 | |||||||||
Premiums and commissions from insurance business | 276,019 | 115,567 | 59,984 | |||||||||
Other | 18,245 | 38,139 | 33,049 | |||||||||
Ps. | 333,646 | Ps. | 173,581 | Ps. | 151,176 | |||||||
Miscellaneous losses | ||||||||||||
Other | ||||||||||||
Claims | 1,821 | 1,191 | 1,288 | |||||||||
Commissions and expenses on insurance business | 119,045 | 52,019 | 53,074 | |||||||||
Other | 17,918 | 15,945 | 12,560 | |||||||||
Ps. | 138,784 | Ps. | 69,155 | Ps. | 66,922 | |||||||
F-30
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
• | The positive difference between the book value and the market value of public sector assets and/or debt instruments issued by the Argentine Central Bank not valued at market price: Ps.(2,520,934). | ||
• | The amount of the assets representing losses from lawsuits related to deposits: Ps. (316,874). |
F-31
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
Computable Capital as a % | ||||||||||||
Minimum Capital. | Computable Capital. | of Minimum Capital. | ||||||||||
December 31, 2008 | Ps. | 1,564,542 | Ps. | 2,552,269 | 163,13 | |||||||
December 31, 2007 | Ps. | 1,302,827 | Ps. | 2,357,135 | 180,92 |
F-32
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-33
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Interest income: | ||||||||||||
Interest and fees on loans (*) | Ps. | 2,099,393 | Ps. | 1,505,134 | Ps. | 1,337,273 | ||||||
Interest and dividends on investment securities: | ||||||||||||
Tax-exempt | 76,912 | 99,880 | 54,380 | |||||||||
Interest on interest bearing deposits with other banks | 8,765 | 14,895 | 874 | |||||||||
Interest on other receivables from financial brokerage | 163,420 | 158,767 | 272,635 | |||||||||
Government securities and other trading gains (loss), net | 71,515 | 46,396 | 258,098 | |||||||||
Total interest income | 2,420,005 | 1,825,072 | 1,923,260 | |||||||||
Interest expense | ||||||||||||
Interest on deposits | 794,037 | 583,873 | 440,784 | |||||||||
Interest on securities sold under agreements to repurchase | 84,823 | 68,736 | 34,586 | |||||||||
Interest on short-term liabilities from financial intermediation | 82,667 | 58,926 | 60,032 | |||||||||
Interest on long-term liabilities from financial intermediation (*) | 316,141 | 359,602 | 1,124,644 | |||||||||
Total interest expense | 1,277,668 | 1,071,137 | 1,660,046 | |||||||||
Net interest income | 1,142,337 | 753,935 | 263,214 | |||||||||
Provision for loan losses, Net of reversals | 313,188 | 172,470 | 28,628 | |||||||||
Net interest income /(expense) after provision for loan losses | 829,149 | 581,465 | 234,586 | |||||||||
(*) | Includes CER/CVS adjustments. |
F-34
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Non-interest income: | ||||||||||||
Service charges on deposit accounts | Ps. | 201,653 | Ps. | 160,534 | Ps. | 125,687 | ||||||
Credit-card service charges and fees | 548,629 | 434,358 | 316,324 | |||||||||
Other commissions | 897,715 | 610,984 | 435,109 | |||||||||
Income from equity in other companies | 56,764 | 1,957 | — | |||||||||
Premiums and commissions on insurance business | 276,019 | 115,567 | 59,984 | |||||||||
Gain on sale of other investment | — | — | 93,575 | |||||||||
Other | 139,949 | 121,428 | 219,047 | |||||||||
Total non-interest income | Ps. | 2,120,729 | Ps. | 1,444,828 | Ps. | 1,249,726 | ||||||
Non-interest expense: | ||||||||||||
Commissions | 309,808 | 204,867 | 144,240 | |||||||||
Salaries and social security charges | 805,197 | 540,643 | 415,406 | |||||||||
Fees and external administrative services | 161,192 | 125,502 | 102,799 | |||||||||
Depreciation of bank premises and equipment | 61,910 | 49,952 | 37,095 | |||||||||
Personnel services | 90,791 | 75,650 | 46,622 | |||||||||
Rentals | 51,292 | 39,963 | 28,032 | |||||||||
Electricity and communications | 72,712 | 57,205 | 41,104 | |||||||||
Advertising and publicity | 146,496 | 113,809 | 84,507 | |||||||||
Taxes | 324,475 | 214,006 | 158,352 | |||||||||
Amortization of organization and development expenses | 37,950 | 35,640 | 34,904 | |||||||||
Loss from equity in other companies | — | — | 14,362 | |||||||||
Maintenance and repair expenses | 43,841 | 34,780 | 31,979 | |||||||||
Minority interest | 35,812 | 32,119 | 19,016 | |||||||||
Commissions and expenses on insurance business | 119,045 | 52,019 | 53,072 | |||||||||
Amortization of “Amparo claims” | 39,545 | 108,667 | — | |||||||||
Other Provisions and reserves | 161,703 | 48,151 | 62,424 | |||||||||
Other | 237,276 | 175,817 | 135,074 | |||||||||
Total non-interest expense | Ps. | 2,699,045 | Ps. | 1,908,790 | Ps. | 1,408,988 | ||||||
Income before tax expense | 250,833 | 117,503 | 75,324 | |||||||||
Income tax expense | (74,014 | ) | (71,466 | ) | (94,238 | ) | ||||||
Net (loss) / income | Ps. | 176,819 | Ps. | 46,037 | Ps | (18,914 | ) | |||||
F-35
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||
2008 | 2007 | |||||||
Assets: | ||||||||
Cash and due from banks | Ps. | 3,440,912 | Ps. | 3,008,009 | ||||
Interest-bearing deposits in other banks | 317,278 | 159,252 | ||||||
Federal funds sold and securities purchased under resale agreements or similar agreements | 416,914 | 2,906 | ||||||
Trading account assets | 989,565 | 476,195 | ||||||
Available for sale securities | 4,325,448 | 4,743,676 | ||||||
Loans | 12,951,627 | 12,444,276 | ||||||
Allowances for loan losses | (539,475 | ) | (437,917 | ) | ||||
Miscellaneous receivables | 998,331 | 768,641 | ||||||
Fixed assets | 871,269 | 743,132 | ||||||
Intangible Assets | 566,979 | 448,318 | ||||||
Other assets | 1,282,416 | 1,043,401 | ||||||
Total assets | Ps. | 25,621,264 | Ps. | 23,399,889 | ||||
Liabilities and Shareholders’ Equity: | ||||||||
Deposits | Ps. | 13,953,478 | Ps. | 13,070,023 | ||||
Short-term borrowing | 507,039 | 327,563 | ||||||
Other liabilities | 368,278 | 744,896 | ||||||
Amounts payable for spot and forward purchases to be settled | 1,014,120 | 1,273,308 | ||||||
Other liabilities resulting from financial brokerage | 3,394,246 | 1,969,060 | ||||||
Long-term debt | 3,556,101 | 3,648,281 | ||||||
Miscellaneous Liabilities | 478,720 | 324,583 | ||||||
Contingent liabilities | 257,333 | 170,083 | ||||||
Minority interest in Consolidated Subsidiaries | 246,204 | 217,587 | ||||||
Common stock | 1,241,407 | 1,241,407 | ||||||
Other shareholders’ equity | 604,338 | 413,098 | ||||||
Total liabilities and shareholders’ equity | Ps. | 25,621,264 | Ps. | 23,399,889 | ||||
December 31, 2008 | December 31, 2007 | |||||||||||||||||||||||
Unrealized | Unrealized | |||||||||||||||||||||||
Carrying value | Gains/(Losses) | Market value | Carrying value | Gains/(Losses) | Market value | |||||||||||||||||||
Boden 2012 Bonds - Compensatory Bond and Hedge Bond | 2,350,815 | — | 1,253,440 | 2,744,256 | (47,694 | ) | 2,437,796 | |||||||||||||||||
GalTrust I | 633,996 | — | 67,881 | 600,909 | (97,166 | ) | 295,325 | |||||||||||||||||
Discount Bonds | 641,804 | — | 161,531 | 671,492 | 34,020 | 312,087 | ||||||||||||||||||
Other assets | 698,833 | 20,241 | 567,174 | 727,019 | (32,981 | ) | 672,132 | |||||||||||||||||
TOTAL | Ps. | 4,325,448 | Ps. | 20,241 | Ps. | 2,050,026 | Ps. | 4,743,676 | Ps | (143,821 | ) | Ps. | 3,717,340 | |||||||||||
F-36
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, 2008 | ||||||||||||||||||||
Maturing after | Maturing after | |||||||||||||||||||
Maturing within | 1 year but within | 5 years but within | Maturing after | |||||||||||||||||
Carrying Value | 1 year | 5 years | 10 years | 10 years | ||||||||||||||||
Boden 2012 Bonds – Compensatory Bond and Hedge Bond | Ps. | 2,350,815 | Ps. | 587,704 | Ps. | 1,763,111 | Ps. | — | Ps. | — | ||||||||||
GalTrust I | 633,996 | — | 32,560 | 601,436 | — | |||||||||||||||
Discount Bonds | 641,804 | — | — | — | 641,804 | |||||||||||||||
Participation Certificates | 461,714 | 306,849 | 154,865 | — | — | |||||||||||||||
Debt Securities | 88,234 | 64,912 | 6,600 | 16,722 | — | |||||||||||||||
Other assets | 148,885 | 148,885 | — | — | — | |||||||||||||||
TOTAL | Ps. | 4,325,448 | Ps. | 1,108,350 | Ps. | 1,957,136 | Ps. | 618,158 | Ps. | 641,804 | ||||||||||
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Total revenues:(*) | ||||||||||||
Republic of Argentina | Ps. | 4,582,947 | Ps. | 3,376,524 | Ps. | 3,315,964 | ||||||
Republic of Uruguay | 47,411 | 65,565 | 82,194 | |||||||||
Net income (loss), net of monetary effects allocable to each country: | ||||||||||||
Republic of Argentina | 166,368 | 28,214 | (64,399 | ) | ||||||||
Republic of Uruguay | 10,451 | 17,823 | 45,485 | |||||||||
Total assets: | ||||||||||||
Republic of Argentina | 24,349,404 | 22,335,675 | 23,075,194 | |||||||||
Republic of Uruguay | 386,386 | 493,063 | 540,244 | |||||||||
Fixed assets | ||||||||||||
Republic of Argentina | 866,179 | 732,109 | 479,184 | |||||||||
Republic of Uruguay | 5,090 | 11,023 | 11,106 | |||||||||
Miscellaneous assets | ||||||||||||
Republic of Argentina | 78,326 | 112,534 | 271,067 | |||||||||
Republic of Uruguay | 297 | 41 | 40 | |||||||||
Goodwill | ||||||||||||
Republic of Argentina | 37,804 | 58,266 | 65,165 | |||||||||
Other intangible assets | ||||||||||||
Republic of Argentina | 528,115 | 389,078 | 436,724 | |||||||||
Republic of Uruguay | 1,060 | 974 | 907 | |||||||||
Geographical segment assets as a percentage of total assets | ||||||||||||
Republic of Argentina | 98,44 | % | 97,84 | % | 97,71 | % | ||||||
Republic of Uruguay | 1,56 | % | 2,16 | % | 2,29 | % |
(*) | The caption Revenues include financial income, income from services and miscellaneous income. |
F-37
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||
2008 | 2007 | |||||||
Commitments to extend credit | Ps. | 1,003,449 | Ps. | 827,851 | ||||
Standby letters of credit | 157,056 | 144,215 | ||||||
Guarantees granted | 208,851 | 139,692 | ||||||
Acceptances | 69,500 | 56,251 |
December 31, | ||||||||
2008 | 2007 | |||||||
Preferred counter-guarantees | Ps. | 34,748 | Ps. | 24,840 | ||||
Other counter-guarantees | 43,253 | 26,546 |
F-38
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||
2008 | 2007 | |||||||
Checks drawn on the Bank | Ps. | 439,809 | Ps. | 297,143 | ||||
Checks drawn on the other Bank | 369,531 | 360,481 | ||||||
Bills and other items for collection | 1,322,145 | 1,640,885 |
Notional | Net Book | Net Book | ||||||||||||||||||
Average | Amount as | Value as of | Value as of | |||||||||||||||||
Weighted | of | December 31, | December 31, | |||||||||||||||||
Maturity | December 31, | 2008 Asset / | 2007 Asset / | |||||||||||||||||
Type ofContract | Underlying | Term | 2008 | (Liability) | (Liability) - | |||||||||||||||
FUTURES (a) | ||||||||||||||||||||
- Purchases | Foreign currency | 5 months | 230,332 | — | 1,087 | (*) | ||||||||||||||
- Sales | Foreign currency | 3 months | 116,240 | (297 | )(*) | — | ||||||||||||||
FORWARDS — CLIENTS (b) | ||||||||||||||||||||
- Sales | Foreign currency | 7 months | 91,624 | (23,556 | )(*) | — | ||||||||||||||
- Purchases | Foreign currency | 3 months | 300 | 65 | (*) | — | ||||||||||||||
FORWARD FOREIGN CURRENCY HEDGE CONTRACT (c) | ||||||||||||||||||||
- Purchases | Foreign currency | 7 months | 49,000 | 15,827 | — | |||||||||||||||
OPTIONS (d) | ||||||||||||||||||||
- Put option written Boden 2012 coupon | National government securities | 25 months | 36,508 | — | — | |||||||||||||||
- Put option written Boden 2013 coupon | National government securities | 38 months | 108,142 | — | — |
(*) | As of December 31, 2008 and 2007, the amounts correspond to sales as well as purchases. | |
(a) | These transactions are made through recognized exchange markets, such as Mercado Abierto Electrónico (MAE) and Mercado a Término de Rosario (ROFEX). |
F-39
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
The general settlement method for these transactions does not require delivery of the traded underlying asset. Rather, settlement is carried on a daily basis for the difference, if any, between the closing price of the underlying asset and the closing price or value of the underlying asset corresponding to the previous day, the difference in price being charged to income. | ||
The Group records under “Other Receivables from Financial Brokerage” and / or “Other Liabilities Resulting from Financial Brokerage”, as the case may be, the difference between the agreed foreign currency exchange rate and such exchange rate at the end of the year according with the future prices published by the recognized exchange markets mentioned above. | ||
These transactions only include futures purchase and sale of U.S. dollars. | ||
(b) | These transactions have been conducted directly with customers pursuant to the above-mentioned conditions. The Group records under “Other Receivables from Financial Brokerage” and / or “Other Liabilities Resulting from Financial Brokerage”, as the case may be, the difference between the agreed foreign currency exchange rate and such exchange rate at the end of the year according with the future prices published by Rofex. | |
(c) | On October 14, 2008, the Group entered into a forward foreign currency hedge contract, aimed to hedge the risk associated with the exchange rate exposure of financial debt designated in U.S. Dollars. | |
Since the Group’s purpose when entering into this contract was to reduce its exposure to US Dollar fluctuations and denominate its future commitments in Pesos, and the main terms of the contract (amount and due date) are similar to those of the financial debt, the derivative has been designated as a cash flow hedge. Changes in the fair value of this derivative have been charged to shareholders’ equity, under “Valuation difference from hedging derivatives”, and shall be recorded as results when the covered item affects such results. | ||
(d) | As established by Decree 1836/02 and Argentine Central Bank regulations, in connection with the second exchange offered by the government to exchange restructured deposits for government bonds, the Bank granted an option to sell coupons to the holders of restructured deposits certificates who had opted to receive Boden 2013 Bonds and Boden 2012 Bonds in exchange for their certificates. | |
The exercise price will be equal to that resulting from converting to pesos the face value of each coupon in U.S. dollars at a rate of Ps.1.40 per U.S. dollar adjusted by applying the CER, which arises from comparing the index at February 3, 2002 to that corresponding to the due date of the coupon. That value shall in no case exceed the principal and interest amounts in pesos resulting from applying the face value of the coupon in U.S. dollars at the buying exchange rate quoted by Banco de la Nación Argentina (Banco Nación) on the payment date of that coupon. | ||
As of December 31, 2008 and 2007, the options bought and sold were recorded at their exercise price in memorandum accounts. The premiums collected and/or paid have been accrued on a straight-line basis over the life of the contract. |
F-40
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
2008 | 2007 | |||||||||||||||
Book Value | Fair Value | Book Value | Fair Value | |||||||||||||
Derivative activities: (see Note 26) | ||||||||||||||||
Assets | Ps. | 15,892 | Ps. | 15,892 | Ps. | 1,087 | Ps. | 1,087 | ||||||||
Liabilities | 23,853 | 67,073 | — | 7,697 | ||||||||||||
Non derivative activities: | ||||||||||||||||
Assets: | ||||||||||||||||
Cash and due from banks (1) | Ps. | 3,405,133 | Ps. | 3,405,133 | Ps. | 2,960,013 | Ps. | 2,960,013 | ||||||||
Government securities (2) | ||||||||||||||||
Trading | 913,350 | 913,350 | 387,748 | 387,739 | ||||||||||||
Without quotation | 69,772 | 20,559 | 1,872 | 1,872 | ||||||||||||
Investment | 548,692 | 303,196 | 1,303,437 | 1,157,954 | ||||||||||||
Loans (3) | 11,774,586 | 11,211,857 | 11,601,029 | 11,486,918 | ||||||||||||
Others (4) | 5,416,276 | 3,501,411 | 4,269,838 | 3,433,156 | ||||||||||||
Liabilities: | ||||||||||||||||
Deposits (5) | Ps. | 14,056,134 | Ps. | 13,979,359 | Ps. | 13,165,621 | Ps. | 13,132,756 | ||||||||
Other liabilities resulting from financial Intermediation: | ||||||||||||||||
Banks and international entities and Loans from Domestic Financial Institutions (6) and Negotiable obligations (7) | 4,140,741 | 2,419,854 | 4,054,516 | 3,780,254 | ||||||||||||
Others (8) | 3,561,827 | 3,502,958 | 3,163,696 | 3,132,170 |
(1) | Cash and due from banks:By definition, cash and due from banks are short-term and do not possess credit loss risk. The carrying values as of December 31, 2008 and 2007 are a reasonable estimate of fair value. | |
(2) | Government securities:Government securities held for trading purposes are carried at fair value. Holdings of investment account securities correspond to the Compensatory Bond and the Hedge Bond received (Boden 2012 Bonds) related to the compensation to financial institutions, which fair value corresponds to the Boden 2012 Bonds’ quoted market value. Under Argentine Banking GAAP, securities without quotation include Discount Bonds. Such bonds had quoted market values and therefore the fair value of them where determined using the mentioned quoted market values. |
F-41
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
(3) | Loans:The fair values of loans are estimated for groups of similar characteristics, including type of loan, credit quality incorporating the credit risk factor. For floating- or adjustable-rate loans, which mature or are repriced within a short period of time, the carrying values are considered to be a reasonable estimate of fair values. For fixed-rate loans, market prices are not generally available and the fair values are estimated by and remaining maturity. In discounting the estimated future cash flows based on the contracted maturity of the loans. The discount rates are based on the current market rates corresponding to the applicable maturity. Where quoted market prices or estimated fair values are available, primarily for loans to refinancing countries, loans held for dispositions or sales and certain other foreign loans, the fair values are based on such market prices and estimated fair values, including secondary market prices. For nonperforming loans, the fair values are generally determined on an individual basis by discounting the estimated future cash flows and may be based on the appraisal value of underlying collateral as appropriate. | |
In order to determine the fair value of Secured Loans, the portfolio was considered at amortized cost, which is the fair value at the date of exchange (December 2001). | ||
(4) | Others:Includes other receivables from financial brokerage and equity investments in other companies. A majority of the items included under “Other Receivables from Financial Brokerage” purchases of government securities held for investment purposes is the quoted market value of the underlying government securities, mostly Boden 2012 and Discount Bonds. Also included under this caption are financial trusts certificates of participation, that their fair value is estimated using valuation techniques to convert the future amounts to a single present amount discounted. The measurement is based on the value indicated by current market expectation about those future amounts. The estimated of the cash flows is based on the future cash flows from the securitized assets, considering the prepayments, historical loan performance, etc. Equity investments in companies where significant influence is exercised are not within the scope of SFAS No. 107. Equity investments in other companies are carried at market value less costs to sell. | |
(5) | Deposits:The fair value of deposit liabilities on demand and savings account deposits is similar to its book value. The fair value of time deposits was calculated by discounting contractual cash flows using current market rates for instruments with similar maturities. | |
(6) | Banks and international entities and loans from domestic financial institutions:Includes credit lines borrowed under different credit arrangements from local and foreign banks and entities. Most of them were restructured as of May 2004. As of December 2008 and December 2007, when no quoted market prices were available, the estimated fair value has been calculated by discounting the contractual cash flows of these liabilities at estimated market rates. | |
(7) | Negotiable obligations:As of December 31, 2008 and December 31, 2007, the fair value of the negotiable obligations was determined based on quoted market prices and when no quoted market prices were available, the estimated fair value has been calculated by discounting the contractual cash flows of these liabilities at estimated market rates. | |
(8) | Others:Includes other liabilities resulting from financial brokerage. Their fair value was estimated at the expected future cash discounted at the estimated rates at year-end. |
F-42
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-43
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-44
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-45
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
a) Financial trusts with Banco de Galicia y Buenos Aires S.A. as trustee outstanding at fiscal year-end: |
Estimated | Book value of securities held | |||||||||||||||||||||||||||
Creation | maturity | Portfolio | in own portfolio | |||||||||||||||||||||||||
Name | Date | date | Trustee | Trust assets | transferred | 12.31.08 | 12.31.07 | |||||||||||||||||||||
Galtrust I | 10.13.00 | 10.10.15 | First Trust of New York N.A. | Loans to provincial governments (Bogar) | US$ | 490,224 | (*) | Ps. | 633,996 | Ps. | 600,909 | |||||||||||||||||
Galtrust II | 12.17.01 | 12.10.10 | First Trust of New York N.A. | Mortgage loans | US$ | 61,191 | — | Ps. | 8,146 | |||||||||||||||||||
Galtrust V | 12.17.01 | 01.10.16 | First Trust of New York N.A. | Mortgage loans | US$ | 57,573 | — | Ps. | 16,854 | |||||||||||||||||||
Galicia | 04.16.02 | 05.06.32 | Bapro mandatos y negocios | Secured loans | Ps. | 108,000 | Ps. | 73,447 | Ps. | 65,347 | ||||||||||||||||||
Créditos Inmobiliarios Galicia I | 08.17.05 | 03.15.15 | Deutsche Bank S.A. | Mortgage loans | Ps. | 91,000 | Ps. | 21,291 | Ps. | 20,313 | ||||||||||||||||||
Créditos Inmobiliarios Galicia II | 10.12.05 | 12.15.25 | Deutsche Bank S.A. | Mortgage loans | Ps. | 150,000 | Ps. | 49,892 | Ps. | 47,493 | ||||||||||||||||||
Galicia Prendas Comerciales | 07.03.06 | 02.15.11 | Deutsche Bank S.A. | Pledge loans | Ps. | 86,623 | Ps. | 6,593 | Ps. | 12,780 | ||||||||||||||||||
Galicia Personales III | 05.16.06 | 03.15.11 | Deutsche Bank S.A. | Personal loans | Ps. | 100,000 | — | Ps. | 15,909 | |||||||||||||||||||
Galicia Personales IV | 01.17.07 | 10.15.11 | Deutsche Bank S.A. | Personal loans | Ps. | 100,000 | Ps. | 13,737 | Ps. | 13,824 | ||||||||||||||||||
Galicia Personales V | 04.13.07 | 01.15.12 | Deutsche Bank S.A. | Personal loans | Ps. | 150,000 | Ps. | 25,168 | Ps. | 19,939 | ||||||||||||||||||
Galicia Personales VI | 09.28.07 | 06.15.12 | Deutsche Bank S.A. | Personal loans | Ps. | 108,081 | Ps. | 17,670 | Ps. | 15,257 | ||||||||||||||||||
Galicia Personales VII | 02.21.08 | 11.15.12 | Deutsche Bank S.A. | Personal loans | Ps. | 150,000 | Ps. | 25,010 | — | |||||||||||||||||||
Galicia Personales VIII | 07.04.08 | 04.15.13 | Deutsche Bank S.A. | Personal loans | Ps. | 187,500 | Ps. | 39,956 | — | |||||||||||||||||||
Galicia Leasing I | 09.22.06 | 05.15.11 | Deutsche Bank S.A. | Assets under financial leases | Ps. | 150,000 | Ps. | 24,168 | Ps. | 23,015 |
(*) | The remaining US$ 9,776 was transferred in cash. |
F-46
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
Estimated | Book value of securities | |||||||||||||||||||||||||||
Creation | maturity | Portfolio | held in own portfolio | |||||||||||||||||||||||||
Name | date | date | Trustee | Trust assets | transferred | 12.31.08 | 12.31.07 | |||||||||||||||||||||
Tarjeta Naranja Trust I | 11.07.05 | 05.20.08 | Equity Trust Company (Argentina) S.A. | Certain credit rights against cardholders | Ps. | 94,500 | — | Ps. | 21,195 | |||||||||||||||||||
Tarjeta Naranja Trust III | 08.15.06 | 09.20.08 | Equity Trust Company (Argentina) S.A. | Certain credit rights against cardholders | Ps. | 139,342 | — | Ps. | 26,844 | |||||||||||||||||||
Tarjeta Naranja Trust IV | 08.14.07 | �� | 07.20.08 | Equity Trust Company (Argentina) S.A. | Certain credit rights against cardholders | Ps. | 76,052 | — | Ps. | 8,694 | ||||||||||||||||||
Tarjeta Naranja Trust V | 10.09.07 | 11.20.09 | Equity Trust Company (Argentina) S.A. | Certain credit rights against cardholders | Ps. | 115,306 | Ps. | 21,391 | Ps. | 17,828 | ||||||||||||||||||
Tarjeta Naranja Trust Vl | 12.11.07 | 01.23.10 | Equity Trust Company (Argentina) S.A. | Certain credit rights against cardholders | Ps. | 150,003 | Ps. | 24,983 | Ps. | 22,436 | ||||||||||||||||||
Tarjeta Naranja Trust Vll | 02.19.08 | 07.23.10 | Equity Trust Company (Argentina) S.A. | Certain credit rights against cardholders | Ps. | 142,913 | Ps. | 25,316 | — | |||||||||||||||||||
Tarjeta Naranja Trust Vlll | 08.05.08 | 09.20.10 | Equity Trust Company (Argentina) S.A. | Certain credit rights against cardholders | Ps. | 138,742 | Ps. | 46,235 | — |
F-47
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
Estimated | Book value of securities held | |||||||||||||||||||||||||||
Creation | maturity | Portfolio | in own portfolio | |||||||||||||||||||||||||
Name | date | date | Trustee | Trust assets | transferred | 12.31.08 | 12.31.07 | |||||||||||||||||||||
Tarjetas Cuyanas Trust IV | 11.01.06 | 11.15.08 | Equity Trust Company (Argentina) S.A. | Certain credit rights against cardholders | Ps. | 68,120 | — | Ps. | 17,911 | |||||||||||||||||||
Tarjetas Cuyanas Trust V | 02.04.08 | 03.15.10 | Equity Trust Company (Argentina) S.A. | Certain credit rights against cardholders | Ps. | 61,700 | Ps. | 14,733 | — | |||||||||||||||||||
Tarjetas Cuyanas Trust VI | 07.07.08 | 02.23.10 | Equity Trust Company (Argentina) S.A. | Certain credit rights against cardholders | Ps. | 89,000 | Ps. | 21,023 | — |
Estimated | Book value of securities held | |||||||||||||||||||||||||||
Creation | maturity | Portfolio | in own portfolio | |||||||||||||||||||||||||
Name | date | date | Trustee | Trust assets | transferred | 12.31.08 | 12.31.07 | |||||||||||||||||||||
Tarjetas del Mar Serie III | 11.09.07 | 07.31.08 | Banco de Galicia y Buenos Aires S.A. | Certain credit rights against cardholders | Ps. | 14,217 | — | Ps. | 2,692 | |||||||||||||||||||
Tarjetas del Mar Serie IV | 07.28.08 | 05.31.09 | Equity Trust Company (Argentina) S.A. | Certain credit rights against cardholders | Ps. | 26,800 | Ps. | 5,186 | — |
e) | Trust Activities |
• | Trust contracts for purposes of guaranteeing compliance with obligations: |
F-48
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
Balances of | Maturity Date | |||||||||||
Date of Contract | Trustor | Trust Funds | (1) | |||||||||
Ps. | ||||||||||||
12.29.05 | Tecsan – Benito Roggio | 2 | 04.28.11 | |||||||||
04.10.07 | Sullair | 2 | 12.31.10 | |||||||||
10.25.07 | Argensun | 4 | 01.31.09 | |||||||||
02.12.08 | Sinteplast | 148 | 01.28.13 | |||||||||
Total | 156 |
(1) | These amounts shall be released monthly until settlement date of trustor obligations or maturity date, whichever occurs first. |
• | Financial trust contracts: |
Date of Contract | Trustor | Balances of Trust Funds | Maturity Date | |||||||||||||
Ps. | US$ | |||||||||||||||
03.10.05 | Grobo I | 714 | — | 06.30.09 | (3) | |||||||||||
07.13.05 | Rumbo Norte I | 4,277 | 32 | 07.13.11 | (3) | |||||||||||
10.12.05 | Hydro I | 24,960 | — | 09.05.17 | (2) | |||||||||||
08.10.06 | Faid 2006/07 | 179 | — | 02.28.09 | (3) | |||||||||||
12.05.06 | Faid 2011 | 49,805 | — | 02.28.12 | (3) | |||||||||||
12.06.06 | Gas I | 392,050 | — | 06.30.11 | (3) | |||||||||||
03.02.07 | Agro Nitralco | 2,876 | — | 03.31.09 | (3) | |||||||||||
03.29.07 | Saturno V | 90 | — | 02.28.09 | (3) | |||||||||||
05.11.07 | Radio Sapienza V | 12 | — | 02.28.09 | (3) | |||||||||||
06.08.07 | Saturno VI | 870 | — | 06.30.09 | (3) | |||||||||||
09.05.07 | Saturno VII | 3,493 | — | 09.30.09 | (3) | |||||||||||
11.22.07 | Radio Sapienza VI | 5,737 | — | 01.12.11 | (3) | |||||||||||
03.19.08 | Saturno VIII | 5,931 | — | 03.31.09 | (3) | |||||||||||
06.19.08 | Saturno IX | 1,120 | — | 03.31.09 | (3) | |||||||||||
05.06.08 | Agro Nitralco II | 17,426 | — | 08.14.09 | (3) | |||||||||||
Totals | 509,540 | 32 |
(2) | These amounts shall be released monthly until redemption of debt securities. | |
(3) | Estimated date, since maturity date shall occur at the time of the distribution of all of trust assets. |
F-49
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-50
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
Regional | Other Grupo | Consolidated | ||||||||||||||||||||||
In Pesos Thousands | Banking | Credit Cards | Insurance | Businesses | Adjustments | Total | ||||||||||||||||||
Year ended December 31, 2008 | ||||||||||||||||||||||||
Net Financial Income | 847,282 | 296,156 | 20,156 | (80 | ) | (25,182 | ) | 1,138,332 | ||||||||||||||||
Net Income from Services | 654,952 | 571,829 | — | 12,897 | (51,810 | ) | 1,187,868 | |||||||||||||||||
Net Operating Revenue | 1,502,234 | 867,985 | 20,156 | 12,817 | (76,992 | ) | 2,326,200 | |||||||||||||||||
Provisions for Loan Losses | 214,948 | 180,441 | — | — | — | 395,389 | ||||||||||||||||||
Administrative Expenses | 1,166,476 | 554,451 | 29,963 | 13,463 | 16,725 | 1,781,078 | ||||||||||||||||||
Net Operating Income | 120,810 | 133,093 | (9,807 | ) | (646 | ) | (93,717 | ) | 149,733 | |||||||||||||||
Income from Equity Investment | ||||||||||||||||||||||||
Tarjetas Regionales SA | 76,436 | — | — | — | (76,436 | ) | — | |||||||||||||||||
Sudamericana | 2,866 | — | — | — | (2,866 | ) | — | |||||||||||||||||
Others | 58,164 | — | — | — | (1,400 | ) | 56,764 | |||||||||||||||||
Other Income (Loss) | (63,014 | ) | 45,242 | 43,506 | 2,104 | 52,310 | 80,148 | |||||||||||||||||
Minority Interests | — | (20,646 | ) | — | — | (15,166 | ) | (35,812 | ) | |||||||||||||||
Pre-tax Income | 195,262 | 157,689 | 33,699 | 1,458 | (137,275 | ) | 250,833 | |||||||||||||||||
Income tax provision | — | 81,253 | 11,140 | 1,328 | (19,707 | ) | 74,014 | |||||||||||||||||
Net Income | 195,262 | 76,436 | 22,559 | 130 | (117,568 | ) | 176,819 | |||||||||||||||||
Net Income as a % of Grupo Financiero Galicia’s Net Income | 110.43 | % | 43.23 | % | 12.76 | % | 0.07 | % | ||||||||||||||||
Average: | ||||||||||||||||||||||||
Loans | 8,707,477 | 2,104,993 | — | — | — | 10,812,470 | ||||||||||||||||||
Deposits | 13,199,000 | — | — | — | (7,712 | ) | 13,191,288 | |||||||||||||||||
End of Period: | ||||||||||||||||||||||||
Assets | 24,439,812 | 2,763,843 | 227,719 | 22,552 | (2,718,136 | ) | 24,735,790 | |||||||||||||||||
Equity | 1,954,666 | 453,728 | 77,065 | 8,641 | (648,355 | ) | 1,845,745 |
F-51
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
Regional | Other Grupo | Consolidated | ||||||||||||||||||||||
In Pesos Thousands | Banking | Credit Cards | Insurance | Businesses | Adjustments | Total | ||||||||||||||||||
Year ended December 31, 2007 | ||||||||||||||||||||||||
Net Financial Income | 516,158 | 203,187 | 16,640 | 559 | 14,642 | 751,186 | ||||||||||||||||||
Net Income from Services | 520,471 | 409,019 | — | 8,468 | (24,862 | ) | 913,096 | |||||||||||||||||
Net Operating Revenue | 1,036,629 | 612,206 | 16,640 | 9,027 | (10,220 | ) | 1,664,282 | |||||||||||||||||
Provisions for Loan Losses | 159,197 | 96,305 | — | — | — | 255,502 | ||||||||||||||||||
Administrative Expenses | 875,085 | 369,476 | 16,147 | 9,147 | 16,469 | 1,286,324 | ||||||||||||||||||
Net Operating Income | 2,347 | 146,425 | 493 | (120 | ) | (26,689 | ) | 122,456 | ||||||||||||||||
Income from Equity Investment | ||||||||||||||||||||||||
Tarjetas Regionales SA | 88,154 | — | — | — | (88,154 | ) | — | |||||||||||||||||
Sudamericana | 1,910 | — | — | — | (1,910 | ) | — | |||||||||||||||||
Others | 3,476 | — | — | (31 | ) | (1,488 | ) | 1,957 | ||||||||||||||||
Other Income (Loss) | (65,465 | ) | 41,343 | 21,983 | 2,198 | 25,150 | 25,209 | |||||||||||||||||
Minority Interests | — | (27,510 | ) | — | — | (4,609 | ) | (32,119 | ) | |||||||||||||||
Pre-tax Income | 30,422 | 160,258 | 22,476 | 2,047 | (97,700 | ) | 117,503 | |||||||||||||||||
Income tax provision | — | 72,104 | 7,846 | 819 | (9,303 | ) | 71,466 | |||||||||||||||||
Net Income | 30,422 | 88,154 | 14,630 | 1,228 | (88,397 | ) | 46,037 | |||||||||||||||||
Net Income as a % of Grupo Financiero Galicia’s Net Income | 66.1 | % | 191.5 | % | 31.8 | % | 2.7 | % | — | — | ||||||||||||||
Average: | ||||||||||||||||||||||||
Loans | 7,140,643 | 1,703,145 | — | — | — | 8,843,788 | ||||||||||||||||||
Deposits | 11,857,001 | — | — | — | (12,059 | ) | 11,844,942 | |||||||||||||||||
End of Period: | ||||||||||||||||||||||||
Assets | 20,682,613 | 2,397,126 | 155,427 | 12,449 | (418,877 | ) | 22,828,738 | |||||||||||||||||
Equity | 1,759,396 | 377,294 | 64,506 | 9,406 | (556,097 | ) | 1,654,505 |
F-52
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
Regional | Other Grupo | Consolidated | ||||||||||||||||||||||
In Pesos thousand | Galicia Bank | Credit Cards | Insurance | Businesses | Adjustments | Total | ||||||||||||||||||
Year ended December 31, 2006 | ||||||||||||||||||||||||
Net Financial Income | 66,044 | 157,474 | 17,049 | 472 | 137,185 | 378,224 | ||||||||||||||||||
Net Income from Services | 377,346 | 289,798 | — | 7,870 | (3,013 | ) | 672,001 | |||||||||||||||||
Net Operating Revenue | 443,390 | 447,272 | 17,049 | 8,342 | 134,172 | 1,050,225 | ||||||||||||||||||
Provisions for Loan Losses | 57,628 | 53,239 | — | 1 | 1 | 110,869 | ||||||||||||||||||
Administrative Expenses | 681,438 | 263,789 | 11,234 | 7,340 | 10,763 | 974,564 | ||||||||||||||||||
Net Operating Income | (295,676 | ) | 130,244 | 5,815 | 1,001 | 123,408 | (35,208 | ) | ||||||||||||||||
Income from Equity Investment | ||||||||||||||||||||||||
Tarjetas Regionales SA | 70,897 | — | — | — | (70,897 | ) | — | |||||||||||||||||
Sudamericana | 1,126 | — | — | — | (1,126 | ) | — | |||||||||||||||||
Others | (14,821 | ) | — | — | (163 | ) | 622 | (14,362 | ) | |||||||||||||||
Other Income (Loss) | 112,263 | 20,666 | 6,910 | 954 | 3,117 | 143,910 | ||||||||||||||||||
Minority Interests | — | (24,124 | ) | (3 | ) | — | 5,111 | (19,016 | ) | |||||||||||||||
Pre-tax Income | (126,211 | ) | 126,786 | 12,722 | 1,792 | 60,235 | 75,324 | |||||||||||||||||
Income tax provision | — | 55,889 | 3,697 | 864 | 33,788 | 94,238 | ||||||||||||||||||
Net Income | (126,211 | ) | 70,897 | 9,025 | 928 | 26,447 | (18,914 | ) | ||||||||||||||||
Net Income as a % of Grupo Financiero Galicia’s Net Income | 667.3 | % | (374.8 | %) | (47.7 | %) | (4,9 | %) | — | — | ||||||||||||||
Averages: | ||||||||||||||||||||||||
Loans | 5,332,256 | 1,149,257 | — | — | — | 6,481,513 | ||||||||||||||||||
Deposits | 9,505,994 | — | — | — | (3,528 | ) | 9,502,466 | |||||||||||||||||
End of Period: | ||||||||||||||||||||||||
Assets | 22,105,651 | 1,820,887 | 121,908 | 12,000 | (426,271 | ) | 23,634,175 | |||||||||||||||||
Equity | 1,263,008 | 289,141 | 48,061 | 8,980 | (722 | ) | 1,608,468 |
F-53
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
33. | Differences between the Argentine Central Bank’s regulations and Argentine GAAP in the Autonomous City of Buenos Aires. |
F-54
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-55
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
35. | Summary of Significant Differences between Argentine Central Bank Rules and United States Accounting Principles. |
F-56
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, 2008 | ||||||||||||
SFAS 109 | ||||||||||||
applied to | SFAS 109 applied | |||||||||||
Argentine GAAP | to U.S. GAAP | |||||||||||
balances | adjustments | SFAS 109 | ||||||||||
Deferred tax assets | ||||||||||||
Allowance for loan losses — private sector | 138,917 | 16,973 | 155,890 | |||||||||
Allowance for loan losses — public sector | 12,101 | — | 12,101 | |||||||||
Amortization of Intangible assets | 70,654 | — | 70,654 | |||||||||
Compensation related to the payment of deposits | — | 110,906 | 110,906 | |||||||||
Impairment of fixed assets and foreclosed assets | — | 20,575 | 20,575 | |||||||||
Provision for contingencies | 87,065 | — | 87,065 | |||||||||
Debt restructuring | — | 59,984 | 59,984 | |||||||||
Others | 54,768 | 46,175 | 100,943 | |||||||||
Loss carry forward | 799,138 | — | 799,138 | |||||||||
Total gross deferred tax assets | Ps. | 1,162,643 | Ps. | 254,613 | Ps. | 1,417,256 | ||||||
Deferred tax liabilities: | ||||||||||||
Compensatory and Hedge bond, Provincial public debt and Discount Bond | Ps. | 563,288 | Ps. | (548,711 | ) | Ps. | 14,577 | |||||
Others | 128,307 | — | 128,307 | |||||||||
Total gross deferred tax liabilities | Ps. | 691,595 | Ps. | (548,711 | ) | Ps. | 142,884 | |||||
Net deferred income tax asset before valuation allowance | Ps. | 471,048 | Ps. | 803,324 | Ps. | 1,274,372 | ||||||
Valuation allowance | (799,138 | ) | — | (799,138 | ) | |||||||
Net deferred income tax (liabilities) / assets | Ps. | (328,090 | ) | Ps. | 803,324 | Ps. | 475,234 | |||||
December 31, 2007 | ||||||||||||
SFAS 109 | ||||||||||||
applied to | SFAS 109 applied | |||||||||||
Argentine GAAP | to U.S. GAAP | |||||||||||
balances | adjustments | SFAS 109 | ||||||||||
Deferred tax assets | ||||||||||||
Allowance for loan losses — private sector | 91,306 | (2,189 | ) | 89,117 | ||||||||
Allowance for loan losses — public sector | 15,306 | — | 15,306 | |||||||||
Amortization of Intangible assets | 85,564 | — | 85,564 | |||||||||
Compensation related to the payment of deposits | — | 96,958 | 96,958 | |||||||||
Impairment of fixed assets and foreclosed assets | — | 21,063 | 21,063 | |||||||||
Provision for contingencies | 55,358 | — | 55,358 | |||||||||
Debt restructuring | — | 70,396 | 70,396 | |||||||||
Others | 37,296 | 28,465 | 65,761 | |||||||||
Loss carry forward | 553,796 | — | 553,796 | |||||||||
Total gross deferred tax assets | Ps. | 838,626 | Ps. | 214,693 | Ps. | 1,053,319 | ||||||
Deferred tax liabilities: | ||||||||||||
Provincial public debt / Discount Bond | Ps. | 232,862 | Ps. | (218,570 | ) | Ps. | 14,292 | |||||
Others | 134,933 | — | 134,933 | |||||||||
Total gross deferred tax liabilities | Ps. | 367,795 | Ps. | (218,570 | ) | Ps. | 149,225 | |||||
Net deferred income tax asset before valuation allowance | Ps. | 470,831 | Ps. | 433,263 | Ps. | 904,094 | ||||||
Valuation allowance | (553,796 | ) | — | (553,796 | ) | |||||||
Net deferred income tax (liabilities) / assets | Ps. | (82,965 | ) | Ps. | 433,263 | Ps. | 350,298 | |||||
F-57
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Statutory income tax rate | 35 | % | 35 | % | 35 | % | ||||||
Tax provision computed by applying the statutory rate to the income before taxation calculated in accordance with U .S. GAAP | Ps. | (427,665 | ) | Ps. | 239,896 | Ps. | 1,136,729 | |||||
Tax exempt income | 92,791 | (162,249 | ) | (752,120 | ) | |||||||
Valuation allowance | 283,952 | 14,875 | (661,725 | ) | ||||||||
Actual tax provision under U.S. GAAP | Ps. | (50,922 | ) | Ps. | 92,522 | Ps. | (277,116 | ) | ||||
Jurisdiction | Tax year | |||
Argentina | 2004 - 2008 | |||
Uruguay | 2004 - 2008 |
F-58
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-59
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-60
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Total impaired loans | Ps. | 286,489 | Ps. | 399,528 | Ps. | 460,615 | ||||||
Average impaired loans during the year | 179,969 | 398,419 | 586,410 | |||||||||
Total impaired loans with no allowance under U.S. GAAP | 10,603 | 7,132 | 10,262 | |||||||||
Cash payments received for interest on impaired loans, Recognized as income | 831 | 473 | 342 | |||||||||
Allowance for impaired loans under SFAS 114 | 134,527 | 246,293 | 291,882 |
F-61
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-62
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-63
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-64
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-65
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | December 31, | December 31, | ||||||||||
Discount real rate for: | 2008 | 2007 | 2006 | |||||||||
Galtrust I Participation Certificates | 40 | % | 9 | % | 5 | % |
F-66
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
• | determine whether the entity meets the criteria to qualify as a VIE and; | ||
• | determine whether the Group is the primary beneficiary of the VIE. |
• | the design of the entity, including the nature of its risks and the purpose for which the entity was created, to determine the variability that the entity was designed to create and distribute to its interest holders; | ||
• | the nature of the involvement with the entity; | ||
• | whether control of the entity may be achieved through arrangements that do not involve voting equity; | ||
• | whether there is sufficient equity investment at risk to finance the activities of the entity and; | ||
• | whether parties other than the equity holders have the obligation to absorb expected losses or the right to received residual returns. |
• | whether the variable interest absorbs the majority of the VIE’s expected losses; | ||
• | whether the variable interest receives the majority of the VIE’s expected returns and; | ||
• | whether the Group has the ability to make decisions that significantly affect the VIE’s results and activities. |
F-67
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||
2008 | ||||
Cash and due from banks | Ps. | 33,372 | ||
Loans (net of allowances) | 939,955 | |||
Other assets | 21,157 | |||
Total Assets | Ps. | 994,484 | ||
Debt Securities | Ps. | 721,993 | ||
Certificates of Participation | 247,651 | |||
Other liabilities | 24,840 | |||
Total Liabilities | Ps. | 994,484 | ||
F-68
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
• | The continuing involvement in these trusts is related to the acting as servicer of the Group securitized assets and the retained interest hold by the Group through certificates of participation; | ||
• | There were no restrictions on assets reported by an entity in its statement of financial position related to a transferred financial asset. |
F-69
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-70
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-71
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
2008 | ||||||||||||
Estimated | U.S. GAAP | |||||||||||
Maximum | Proceeds | Carrying | ||||||||||
Potential | From collateral | Amount - | ||||||||||
Payments (*) | Recourse | Liability | ||||||||||
Financial guarantees | 72,008 | 5,362 | 292 | |||||||||
Ps. | 72,008 | Ps. | 5,362 | Ps. | 292 | |||||||
2007 | ||||||||||||
Estimated | U.S. GAAP | |||||||||||
Maximum | Proceeds | Carrying | ||||||||||
Potential | From collateral | Amount - | ||||||||||
Payments (*) | Recourse | Liability | ||||||||||
Financial guarantees | 47,667 | 2,133 | 88 | |||||||||
Ps. | 47,667 | Ps. | 2,133 | Ps. | 88 | |||||||
(*) | The maximum potential payments represent a “worse-case scenario’’, and do not necessarily reflect expected results. Estimated proceeds from collateral and recourse represent the anticipated value of assets that could be liquidated or received from other parties to offset the Company’s payments under guarantees. |
F-72
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-73
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
• | Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. | ||
• | Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability. | ||
Level 2 — inputs include the following: |
a) | Quoted prices for similar assets or liabilities in active markets; | ||
b) | Quoted prices for identical or similar assets or liabilities in non-active markets; | ||
c) | Pricing models whose inputs are observable for substantially the full term of the asset or liability; and | ||
d) | Pricing models whose inputs are derived principally from or corroborated by observable market data through correlation or other means. |
• | Level 3 — inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
F-74
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-75
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-76
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
Internal | Internal | |||||||||||||||
models with | models with | |||||||||||||||
Quoted | significant | significant | ||||||||||||||
market prices | observable | unobservable | ||||||||||||||
Total | in active | market | market | |||||||||||||
carrying | markets | parameters | parameters | |||||||||||||
Balances as of December 31, 2008 | value | (Level 1) | (Level 2) | (Level 3) | ||||||||||||
ASSETS | ||||||||||||||||
a) Government securities and other investments | ||||||||||||||||
Trading Securities | Ps. | 363,146 | Ps. | 363,146 | Ps. | — | Ps. | — | ||||||||
Compensatory and Hedge Bond Received | 280,410 | 280,410 | — | — | ||||||||||||
Discount Bonds & GDP Linked Negotiable Sec. | 51,871 | 51,871 | — | — | ||||||||||||
Securities issued by the Argentine Central Bank | 550,204 | 550,204 | — | — | ||||||||||||
Equity Securities | 56 | 56 | — | — | ||||||||||||
Other Investments | 301,486 | — | — | 301,486 | ||||||||||||
b) Securities receivable under repurchase agreements | ||||||||||||||||
Compensatory and Hedge Bond Received | 973,030 | 973,030 | — | — | ||||||||||||
Discount Bonds | 144,631 | 144,631 | — | — | ||||||||||||
c) Transfers of financial assets | ||||||||||||||||
Debt Securities and Certificates of Participation | 58,177 | — | — | 58,177 | ||||||||||||
Certificate of Participation Galtrust I | 67,881 | — | — | 67,881 | ||||||||||||
d) Derivatives instruments | 15,892 | — | 15,892 | — | ||||||||||||
TOTAL ASSETS AT FAIR VALUE | 2,806,784 | 2,363,348 | 15,892 | 427,544 | ||||||||||||
LIABILITIES | ||||||||||||||||
e) Derivatives instruments | (67,073 | ) | (297 | ) | (66,776 | ) | — | |||||||||
TOTAL LIABILITIES AT FAIR VALUE | (67,073 | ) | (297 | ) | (66,776 | ) | — |
Total Fair Value | ||||
Balances as of December 31, 2008 | Measurements | |||
Available for sale securities | Ps. | |||
Fair value, December 31, 2007 | 737,649 | |||
Total gains or losses (realized/unrealized) | (247,634 | ) | ||
Included in earnings | (259,762 | ) | ||
Included in other comprehensive income | 12,128 | |||
Purchases, issuances and settlements | (62,471 | ) | ||
Transfers in to/ out of level 3 | — | |||
Fair value, December 31, 2008 | 427,544 |
F-77
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
Total Fair Value | ||||
Balances as of December 31, 2008 | Measurements | |||
Available for sale securities | Ps. | |||
Classification of gains and losses (realized/unrealized) included in earnings for 2008: | ||||
Financial Income | (259,762 | ) | ||
Total | (259,762 | ) |
F-78
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-79
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
• | intends to sell the security; | ||
• | is more likely than not to be required to sell the security before recovering its cost; or | ||
• | does not expect to recover the security’s entire amortized cost basis (even if the entity does not intend to sell) — that is, a ‘credit loss’. |
• | the estimated amount relating to the credit loss, and | ||
• | all other changes in fair value. |
F-80
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
• | Eliminates the scope exception for qualifying special-purpose entities | ||
• | Eliminates the quantitative model for determining which party should consolidate and replaces it with a qualitative model focusing on decision-making for an entity’s significant economic activities | ||
• | Requires a company to continually reassess whether it should consolidate an entity subject to FIN 46(R) | ||
• | Requires an assessment of whether an entity is subject to the standard due to a troubled debt restructuring | ||
• | Requires extensive new disclosures |
F-81
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Net income (loss) as stated | Ps. | 176,819 | Ps. | 46,037 | Ps. | (18,914 | ) | |||||
Loan origination fees and costs (Note 35 b.) | 10,300 | (38,629 | ) | (9,855 | ) | |||||||
Intangible assets: | ||||||||||||
Goodwill amortization and impairment (Note 35 c.) | (77,605 | ) | 19,687 | 19,838 | ||||||||
Other intangible assets (Note 35 c.) | (24,593 | ) | 3,965 | (14,888 | ) | |||||||
Compensation related to the payment of deposits (Note 35 g.) | (39,850 | ) | 90,197 | (19,444 | ) | |||||||
Equity investments in other companies — Impairment (Note 35 k.) | (3,882 | ) | (8,381 | ) | 45,442 | |||||||
Loss on exchange of National Public Debt (Note 35 d.(ii)) | 48,228 | 196,743 | 591,227 | |||||||||
Provincial Public Debt (Note 35 d.(iii)) | — | 198,099 | 1,790,197 | |||||||||
Loan impairment — Private sector (Note 35 d.(iv)) | (54,748 | ) | 52,056 | (49,393 | ) | |||||||
Transfers of financial assets (Note 35 h.) | (376,975 | ) | 8,814 | (22,607 | ) | |||||||
Government Securities and other investments: | ||||||||||||
Compensatory Bond received and Hedge Bond (Note 35 e.(i)) | (838,609 | ) | 63,973 | 751,648 | ||||||||
GDP — Linked Negotiable Securities (Note 35 e.(ii)) | (31,479 | ) | (23,683 | ) | 54,940 | |||||||
Impairment of other available for sale securities (Note 35 e.(ii) (iii)) | (197,564 | ) | 36,151 | 21,096 | ||||||||
Real estate properties asset amortization (Note 35 j.) | 1,395 | 1,395 | 1,395 | |||||||||
Recognition for the fair value of obligations assumed under Financial guarantees issued (Note 35 l.) | (35,727 | ) | (5,773 | ) | 11,047 | |||||||
Troubled Debt restructuring (Note 35 n.) | 29,749 | 86,558 | 28,039 | |||||||||
Deferred Income tax (Note 35 a.) | 124,936 | (21,056 | ) | 371,354 | ||||||||
Minimum Presumed Income Tax (Note 35 a.) | (25,906 | ) | (39,631 | ) | (47,895 | ) | ||||||
Minority interest (Note 35 m.) | 144,533 | (73,627 | ) | 21,686 | ||||||||
Net income (loss) in accordance with U.S. GAAP | (1,170,978 | ) | 592,895 | 3,524,913 | ||||||||
Average number of shares outstanding (in thousands) (Note 21) | 1,241,407 | 1,241,407 | 1,240,932 | |||||||||
Basic net income (loss) per share in accordance with U.S. GAAP (Note 21) | (0.943 | ) | 0.478 | 2.841 | ||||||||
Diluted net income (loss) per share in accordance with U.S. GAAP (Note 21) | (0.943 | ) | 0.478 | 2.841 | ||||||||
F-82
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||
2008 | 2007 | |||||||
Shareholders’ equity as stated | Ps. | 1,845,745 | Ps. | 1,654,505 | ||||
Loan origination fees and costs (Note 35 b.) | (40,236 | ) | (50,536 | ) | ||||
Intangible assets: | ||||||||
Goodwill amortization and impairment (Note 35 c.) | 13,749 | 91,354 | ||||||
Other intangible assets (Note 35 c.) | (46,806 | ) | (22,213 | ) | ||||
Compensation related to the payment of deposits (Note 35 g) | (316,874 | ) | (277,024 | ) | ||||
Equity investments in other companies — Impairment (Note 35 k.) | (26,817 | ) | (22,935 | ) | ||||
Loans -non Financial Public Sector — Secured loans (Note 35 d.(ii)) | (32,495 | ) | (80,723 | ) | ||||
Loan impairment — Private sector (Note 35 d.(iv)) | (48,495 | ) | 6,253 | |||||
Government securities and other investments: | ||||||||
Compensatory and Hedge Bond received (Note 35 e.(i)) | (1,097,375 | ) | (306,460 | ) | ||||
Discount Bonds (Note 35 e.(ii)) | (480,273 | ) | (359,405 | ) | ||||
GDP — Linked Negotiable Securities (Note 35 e.(ii)) | 9,901 | 41,380 | ||||||
Other Investments (Note 35 e (iii)) | (110,716 | ) | (43,307 | ) | ||||
Financial assets transferred (Note 35 h.) | (587,058 | ) | (317,164 | ) | ||||
Minority interest (Note 35 m.) | 246,204 | 101,671 | ||||||
Impairment of real estate properties and foreclosed assets (Note 35 j.) | (67,155 | ) | (67,155 | ) | ||||
Real Estate properties amortization (Note 35 j.) | 8,370 | 6,975 | ||||||
Minimum Presumed Income Tax (Note 35 a.) | (284,421 | ) | (258,515 | ) | ||||
Deferred Income tax (Note 35 a.) | 475,234 | 350,298 | ||||||
Recognition for the fair value of obligations assumed under financial guarantees issued (Note 35 l.) | (43,512 | ) | (7,785 | ) | ||||
Foreign debt restructuring (Note 35 n.) | (171,383 | ) | (201,132 | ) | ||||
Consolidated shareholders’ equity (deficit) in accordance with U.S. GAAP | Ps. | (754,413 | ) | Ps. | 238,082 | |||
F-83
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
Adjustments to | Other | Total | ||||||||||||||||||||||||||||||
Capital | Paid | Shareholders’ | Profit Reserves | Comprehensive | Retained | Shareholders’ | ||||||||||||||||||||||||||
Stock | in Capital | Equity | Legal | Other | Income (loss) | Earnings | Equity | |||||||||||||||||||||||||
Balance at December 31, 2005 | Ps. | 1,241,407 | Ps. | — | Ps. | 294,254 | Ps. | — | Ps. | — | Ps. | 1,608,250 | Ps. | (5,272,172 | ) | Ps. | (2,128,261 | ) | ||||||||||||||
Distribution of retained earnings by the shareholders’ meeting on April 27,2006 | ||||||||||||||||||||||||||||||||
Legal Reserve | — | — | — | 34,855 | — | — | (34,855 | ) | — | |||||||||||||||||||||||
Discretionary Reserve | — | — | — | — | 72,383 | — | (72,383 | ) | — | |||||||||||||||||||||||
Unrealized gain of available-for-sale securities, net of tax and minority interest | — | — | — | — | — | (1,251,449 | ) | — | (1,251,449 | ) | ||||||||||||||||||||||
Sale of Treasury Stock | — | 606 | — | — | — | — | — | 606 | ||||||||||||||||||||||||
Net income for the year under U.S. GAAP | — | — | — | — | — | — | 3,524,913 | 3,524,913 | ||||||||||||||||||||||||
Balance at December 31, 2006 | Ps. | 1,241,407 | Ps. | 606 | Ps. | 294,254 | Ps. | 34,855 | Ps. | 72,383 | Ps. | 356,801 | Ps. | (1,854,497 | ) | Ps. | 145,809 | |||||||||||||||
Distribution of retained earnings: | ||||||||||||||||||||||||||||||||
Absorption approved by the shareholders’ meeting on April 26,2007 | ||||||||||||||||||||||||||||||||
Discretionary Reserve | — | — | — | — | (18,914 | ) | — | 18,914 | — | |||||||||||||||||||||||
Unrealized gain of available-for-sale securities, net of tax and minority interest | — | — | — | — | — | (500,622 | ) | — | (500,622 | ) | ||||||||||||||||||||||
Net income for the year under U.S. GAAP | — | — | — | — | — | — | 592,895 | 592,895 | ||||||||||||||||||||||||
Balance at December 31, 2007 | Ps. | 1,241,407 | Ps. | 606 | Ps. | 294,254 | Ps. | 34,855 | Ps. | 53,469 | Ps. | (143,821 | ) | Ps. | (1,242,688 | ) | Ps. | 238,082 | ||||||||||||||
Distribution of retained earnings: | ||||||||||||||||||||||||||||||||
Absorption approved by the shareholders’ meeting on April 29,2008 | ||||||||||||||||||||||||||||||||
Legal Reserve | — | — | — | 2,302 | — | — | (2,302 | ) | — | |||||||||||||||||||||||
Discretionary Reserve | — | — | — | — | 43,735 | — | (43,735 | ) | — | |||||||||||||||||||||||
Valuation Differences | — | — | — | — | 14,421 | — | — | 14,421 | ||||||||||||||||||||||||
Unrealized gain of available-for-sale securities, net of tax and minority interest | — | — | — | — | — | 164,062 | — | 164,062 | ||||||||||||||||||||||||
Net income for the year under U.S. GAAP | — | — | — | — | — | — | (1,170,978 | ) | (1,170,978 | ) | ||||||||||||||||||||||
Balance at December 31, 2008 | Ps. | 1,241,407 | 606 | 294,254 | 37,157 | 111,625 | 20,241 | (2,459,703 | ) | (754,413 | ) | |||||||||||||||||||||
F-84
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Income Statement | ||||||||||||
Financial Income | Ps. | 1,201,697 | Ps. | 2,433,198 | Ps. | 5,456,352 | ||||||
Financial Expenditures | 1,391,270 | 1,160,142 | 1,863,588 | |||||||||
Net Financial Income | (189,573 | ) | 1,273,056 | 3,592,764 | ||||||||
Provision for Loan Losses | 450,137 | 203,446 | 160,262 | |||||||||
Income from Services | 1,538,380 | 1,153,619 | 837,340 | |||||||||
Expenditures from Services | 383,654 | 257,242 | 180,408 | |||||||||
Administrative Expenses | 1,799,579 | 1,258,089 | 982,843 | |||||||||
Net Income / (Loss) from Financial Brokerage | (1,284,563 | ) | 707,898 | 3,106,591 | ||||||||
Minority Interests | 108,721 | (105,746 | ) | 2,670 | ||||||||
Miscellaneous Income | 494,977 | 271,546 | 326,308 | |||||||||
Miscellaneous Losses | (541,035 | ) | 188,281 | 187,772 | ||||||||
Net Income / (Loss) before Income tax | (1,221,900 | ) | 685,417 | 3,247,797 | ||||||||
Income Tax | (50,922 | ) | 92,522 | (277,116 | ) | |||||||
Net income (loss) under U.S. GAAP | (1,170,978 | ) | 592,895 | 3,524,913 | ||||||||
Other comprehensive income (loss): | ||||||||||||
Unrealized gains (losses) on securities | 164,062 | (500,622 | ) | (1,251,449 | ) | |||||||
Other comprehensive income (loss) | 164,062 | (500,622 | ) | (1,251,449 | ) | |||||||
Comprehensive income (Loss) | Ps. | (1,006,916 | ) | Ps. | 92,273 | Ps. | 2,273,464 | |||||
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
Boden 2012 Bonds — Compensatory Bond | — | (47,694 | ) | 89,441 | ||||||||
Bogar Bonds | — | — | 168,908 | |||||||||
GalTrust I | — | (97,166 | ) | (7,443 | ) | |||||||
Discount Bonds | — | 34,020 | 125,251 | |||||||||
Other | 20,241 | (32,981 | ) | (19,356 | ) | |||||||
Accumulated other comprehensive income/ (loss) | Ps. | 20,241 | Ps. | (143,821 | ) | Ps. | 356,801 |
F-85
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, 2008 | December 31, 2007 | |||||||||||||||
Argentine | Argentine | |||||||||||||||
Banking | Banking | |||||||||||||||
GAAP | U.S. GAAP | GAAP | U.S. GAAP | |||||||||||||
Argentine national government loans | Ps. | 1,481,563 | Ps. | 1,449,068 | Ps. | 1,372,854 | Ps. | 1,306,743 | ||||||||
Other Argentine public-sector receivables | 297,467 | 186,751 | 272,966 | 215,047 | ||||||||||||
Galtrust I (securitization of Provincial Loans) | 630,002 | 63,887 | 597,123 | 291,539 | ||||||||||||
Compensatory bond received | 2,350,815 | 1,253,440 | 2,744,256 | 2,437,796 | ||||||||||||
Other (1) | 1,294,448 | 824,076 | 1,133,572 | 815,547 | ||||||||||||
Total | Ps. | 6,054,295 | Ps. | 3,777,222 | Ps. | 6,120,771 | Ps. | 5,066,672 | ||||||||
(1) | Includes bonds and other national government bonds. |
F-86
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
F-87
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||
2008 | 2007 | |||||||
ASSETS | ||||||||
A. Cash and due from Banks | ||||||||
Cash | Ps. | 10 | Ps. | 11 | ||||
Financial institutions and correspondents | 207 | 10,689 | ||||||
Ps. | 217 | Ps. | 10,700 | |||||
B. Government and corporate securities | ||||||||
Holdings of trading securities | 191 | — | ||||||
Ps. | 191 | Ps. | — | |||||
C. Loans | ||||||||
To the financial sector | 47,264 | 43,511 | ||||||
Ps. | 47,264 | Ps. | 43,511 | |||||
D. Other receivables resulting from financial brokerage | ||||||||
Negotiable obligations without quotation | 711 | 2,591 | ||||||
Balances from forward transactions without delivery of underlying asset to be settled | 15,827 | — | ||||||
Other receivables not included in the debtor classification Regulations | 147 | 3,212 | ||||||
Other receivables included in the debtor classification Regulations | 26,850 | 12,465 | ||||||
Accrued interest receivable included in the debtor Classification regulations | 161 | 47 | ||||||
Ps. | 43,696 | Ps. | 18,315 | |||||
F. Equity investments | ||||||||
In financial institutions | 1,898,232 | 1,700,152 | ||||||
Other | 63,899 | 56,336 | ||||||
Ps. | 1,962,131 | Ps. | 1,756,488 | |||||
G. Miscellaneous receivables | ||||||||
Tax on minimum presumed income — Tax credit | 869 | — | ||||||
Other | 6,178 | 76,848 | ||||||
Ps. | 7,047 | Ps. | 76,848 | |||||
H. Bank premises and equipment | 3,044 | 3,134 | ||||||
J. Intangible assets | ||||||||
Goodwill | 10,976 | 12,255 | ||||||
Organization and development expenses | 33 | 18 | ||||||
Ps. | 11,009 | Ps. | 12,273 | |||||
Total Assets | Ps. | 2,074,599 | Ps. | 1,921,269 | ||||
December 31, | ||||||||
2008 | 2007 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
N. Other liabilities resulting from financial brokerage Banks and international entities | Ps. | 214,086 | Ps. | 251,920 | ||||
Accrued interest and quotation differences payable | 6,250 | 8,569 | ||||||
220,336 | 260,489 | |||||||
O. Miscellaneous liabilities | ||||||||
Directors’ and Syndics’ fees | Ps. | 60 | Ps. | 132 | ||||
Other | 8,458 | 6,143 | ||||||
8,518 | 6,275 | |||||||
Total Liabilities | Ps. | 228,854 | Ps. | 266,764 | ||||
SHAREHOLDERS’ EQUITY | Ps. | 1,845,745 | Ps. | 1,654,505 | ||||
Total Liabilities and Shareholders’ Equity | Ps. | 2,074,599 | Ps. | 1,921,269 | ||||
F-88
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
A. Financial income | ||||||||||||
Interest on loans granted to the financial sector | 97 | 694 | 54 | |||||||||
Interest on other loans | — | 670 | — | |||||||||
Interest on other receivables resulting from financial brokerage | 314 | 388 | 665 | |||||||||
Net income from government and corporate securities | 126 | 5,817 | 114,641 | |||||||||
Other | — | 897 | 3,100 | |||||||||
Ps. | 537 | Ps. | 8,466 | Ps. | 118,460 | |||||||
B. Financial expenses | ||||||||||||
Interest on other liabilities resulting from financial brokerage | Ps. | 17,062 | Ps. | 8,565 | Ps. | — | ||||||
Exchange rate differences on gold and foreign currency | 11,258 | — | — | |||||||||
Other | 280 | 302 | 53 | |||||||||
Ps. | 28,600 | Ps. | 8,867 | Ps. | 53 | |||||||
C. Gross brokerage margin | (28,063 | ) | (401 | ) | 118,407 | |||||||
F. Administrative expenses | ||||||||||||
Personnel expenses | 3,492 | 2,953 | 2,149 | |||||||||
Directors’ and syndics’ fees | 1,013 | 933 | 702 | |||||||||
Other fees | 3,182 | 3,522 | 2,033 | |||||||||
Taxes | 1,208 | 2,150 | 704 | |||||||||
Other operating expenses | 521 | 529 | 613 | |||||||||
Other | 5,080 | 4,665 | 4,265 | |||||||||
Ps. | 14,496 | Ps. | 14,752 | Ps. | 10,466 | |||||||
Net Income / (Loss) from financial brokerage | Ps. | (42,559 | ) | Ps. | (15,153 | ) | Ps. | 107,941 | ||||
H. Miscellaneous income | ||||||||||||
Net income on long-term investments | 219,688 | 65,840 | — | |||||||||
Loans recovered and allowances reversed | — | — | 640 | |||||||||
Other | 1,557 | 609 | 1,111 | |||||||||
Ps. | 221,245 | Ps. | 66,449 | Ps. | 1,751 | |||||||
I. Miscellaneous losses | ||||||||||||
Net loss on long-term investments (1) | — | — | 81,238 | |||||||||
Other | 3,952 | 2,111 | 1,723 | |||||||||
Ps. | 3,952 | Ps. | 2,111 | Ps. | 82,961 | |||||||
Net Income / (Loss) before tax | 174,734 | 49,185 | 26,731 | |||||||||
J. Income tax | Ps. | (2,085 | ) | Ps. | 3,148 | Ps. | 45,645 | |||||
Net income / (Loss) for the fiscal year | Ps. | 176,819 | Ps. | 46,037 | Ps. | (18,914 | ) | |||||
(1) | Includes the foreign currency position compensation. |
F-89
Table of Contents
For the fiscal years ended December 31, 2008, 2007 and 2006
(Expressed in thousands of Argentine pesos)
December 31, | ||||||||||||
2008 | 2007 | 2006 | ||||||||||
CHANGES IN CASH | ||||||||||||
Cash at the beginning of the period | Ps. | 26,407 | Ps. | 15,727 | Ps. | 9,573 | ||||||
Increase / (decrease) in cash | 1,155 | 10,680 | 6,154 | |||||||||
Cash at end of period | 27,562 | 26,407 | 15,727 | |||||||||
Cash provided by (used in) operating activities | ||||||||||||
Less: | (15,349 | ) | (25,404 | ) | (31,884 | ) | ||||||
Operating expenses paid | ||||||||||||
Plus: | ||||||||||||
Other operating income received | 5,294 | 20,694 | 22,347 | |||||||||
Cash provided by (used in) operating activities | Ps. | (10,055 | ) | Ps. | (4,710 | ) | Ps. | (9,537 | ) | |||
Other sources of cash | ||||||||||||
Loan received | — | 250,960 | — | |||||||||
Dividends | 12,163 | 9,450 | 613 | |||||||||
Increase in short-term investment | 1,676 | 5,062 | 14,581 | |||||||||
Collection of deposit as per Decree 616/2005 | 72,360 | — | — | |||||||||
Other sources of cash | 1,806 | 718 | 546 | |||||||||
Other sources of cash | Ps. | 88,005 | Ps. | 266,190 | Ps. | 15,740 | ||||||
Other uses of cash | ||||||||||||
Payment of loans received | (76,760 | ) | — | — | ||||||||
Increase in fixed assets | (24 | ) | (213 | ) | (42 | ) | ||||||
Increase in long-term investments | (11 | ) | (175,299 | ) | (7 | ) | ||||||
Deposit as per Decree 616/2005 | — | (75,288 | ) | — | ||||||||
Total other uses of cash | Ps. | (76,795 | ) | Ps. | (250,800 | ) | Ps. | (49 | ) | |||
Increase / (decrease) in cash | Ps. | 1,155 | Ps. | 10,680 | Ps. | 6,154 | ||||||
F-90
Table of Contents
Exhibit | Description | |||
1.1 | Unofficial English language translation of the Bylaws (estatutos sociales). **** | |||
2.1 | Form of Deposit Agreement between The Bank of New York and the registrant, including the form of American Depositary Receipt.* | |||
2.2 | Indenture, dated as of May 18, 2004, among the Bank, The Bank of New York and Banco Rio de la Plata S.A.** | |||
2.3 | Indenture, dated as of June 4, 2009, among Grupo Financiero Galicia, The Bank of New York Mellon, Banco de Valores S.A. and The Bank of New York (Luxembourg) S.A. | |||
4.1 | English translation of form of Financial Trust Contract, dated April 16, 2002, among the Bank, Banco Provincia de Buenos Aires and BAPRO Mandatos y Negocios S.A.*** | |||
4.2 | Form of Restructured Loan Facility (as evidenced by the Note Purchase Agreement, dated as of April 27, 2004, among Banco de Galicia y Buenos Aires S.A., Barclays Bank PLC, the holders party thereto and Deutsche Bank Trust Company Americas).** | |||
4.3 | Form of First Amendment and Waiver to Restructured Loan Facility (as evidenced by the First Amendment and Waiver to the Note Purchase Agreement, dated as of December 20, 2004, among Banco de Galicia y Buenos Aires S.A., the holders party thereto and Deutsche Bank Trust Company Americas). **** | |||
4.4 | Form of Second Amendment to Restructured Loan Facility (as evidenced by the Second Amendment to the Note Purchase Agreement, dated as of August 25, 2006, among Banco de Galicia y Buenos Aires S.A., the holders party thereto and Deutsche Bank Trust Company Americas).***** | |||
4.5 | Form of Third Amendment to Restructured Loan Facility (as evidenced by the Third Amendment to the Note Purchase Agreement, dated as of December 28, 2007, among Banco de Galicia y Buenos Aires S.A., the holders party thereto and Deutsche Bank Trust Company Americas).****** | |||
4.6 | Loan Agreement, dated as of July 24, 2007, between Grupo Financiero Galicia S.A. and Merrill Lynch International.****** | |||
8.1 | For a list of our subsidiaries as of the end of the fiscal year covered by this annual report, please see Item 4. “Information on the Company-Organizational Structure.” | |||
11.1 | Code of Ethics. | |||
11.2 | Code of Corporate Governance Good Practices. | |||
12.1 | Certification of the principal executive officer required under Rule 13a-14(a) or Rule 15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||
12.2 | Certification of the principal financial officer required under Rule 13a-14(a) or Rule 15d-14(a), pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||
13.1 | Certification of the principal executive officer required pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||
13.2 | Certification of the principal financial officer required pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
* | Incorporated by reference from our Registration Statement on Form F-4 (333-11960). | |
** | Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2003. | |
*** | Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2002. | |
**** | Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2004. | |
***** | Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2006. | |
****** | Incorporated by reference from our Annual Report on Form 20-F for the year ended December 31, 2007. |