Exhibit 99.1
FOR IMMEDIATE RELEASE
For more information contact:
José Luis Ronsini
CFO – Grupo Financiero Galicia S.A.
Telephone: (5411) 4343-7528
Pablo Firvida
Institutional Relations Manager
Tel.:(54-11) 6329-4881
inversores@gfgsa.com
www.gfgsa.com
GRUPO FINANCIERO GALICIA S.A. REPORTS FINANCIAL RESULTS FOR THE
QUARTER AND THE FISCAL YEAR THAT ENDED ON DECEMBER 31, 2017
Buenos Aires, Argentina, February 8, 2018 - Grupo Financiero Galicia S.A. (“Grupo Financiero Galicia”; Buenos Aires Stock Exchange: GGAL /NASDAQ: GGAL) today announced its financial results for the quarter and the fiscal year that ended on December 31, 2017.
HIGHLIGHTS
➣ | Net income for the fiscal year that ended on December 31, 2017 amounted to Ps. 8,329 million, a 38.4% increase from the Ps.6,018 million profit recorded in the 2016 fiscal year. Net income per share amounted to Ps.5.84, compared to Ps.4.63 per share for the 2016 fiscal year. |
➣ | The results of the 2017 fiscal year were mainly attributable to the income derived from Grupo Financiero Galicia’s interest in Banco de Galicia y Buenos Aires S.A. (“Banco Galicia” or the “Bank”), for Ps.6,915 million (+35.7%), in Sudamericana Holding S.A., for Ps.415 million(-34.4%), and in Galicia Administradora de Fondos S.A., for Ps.428 million (+128.9%), which was also increased by financial results of Ps.689 million and partially offset by administrative expenses of Ps.92 million. |
➣ | Net income for the quarter that ended on December 31, 2017 (or “the quarter”) amounted to Ps.2,676 million, a 51.0% increase from the Ps.1,772 million profit recorded in the fourth quarter of the 2016 fiscal year. The profit per share for the quarter amounted to Ps.1.88, compared to Ps.1.36 per share for the same quarter of the 2016 fiscal year. |
➣ | The results of the quarter were mainly attributable to the income derived from Grupo Financiero Galicia’s interest in Banco Galicia, for Ps.1,754 million (+13.0%), in Sudamericana Holding S.A., for Ps.138 million (+40.8%), and in Galicia Administradora de Fondos S.A., for Ps.132 million (+100.0%), which was also increased by financial results for Ps.700 million and partially offset by administrative expenses for Ps.16 million and by the income tax for Ps.16. |
➣ | As of December 31, 2017, Grupo Financiero Galicia and its subsidiaries had a staff of 11,649 employees, a network of 657 branches and other points of contact with clients, and managed 4.6 million deposit accounts and 13.5 million credit cards. |
CONFERENCE CALL
On Friday, February 9, 2018, at 11:00 A.M. Eastern Standard Time (1:00 P.M. Buenos Aires Time), Grupo Financiero Galicia will host a conference call to review these results. Thecall-in number is: +1323-794-2093 - Conference ID: 7506959.
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GRUPO FINANCIERO GALICIA S.A.
RESULTS FOR THE FISCAL YEAR THAT ENDED ON DECEMBER 31, 2017
In millions of pesos, except percentages | ||||||||||||
Table I Result by Business | FY2017 | FY2016 | Variation (%) (*) | |||||||||
Income from Equity Investments in: | ||||||||||||
Banco de Galicia y Buenos Aires S.A. | 6,915 | 5,094 | 35.7 | |||||||||
Sudamericana Holding S.A. | 415 | 633 | (34.4) | |||||||||
Galicia Administradora de Fondos S.A. | 428 | 187 | 128.9 | |||||||||
Other companies(1) | 28 | 38 | (26.3) | |||||||||
Deferred tax adjustment(2) | (41) | 217 | (118.9) | |||||||||
Administrative Expenses | (92) | (62) | 48.4 | |||||||||
Financial Results | 689 | (88) | 883.0 | |||||||||
Other income and expenses | 3 | (1) | 400.0 | |||||||||
Income Tax | (16) | - | - | |||||||||
Net Income | 8,329 | 6,018 | 38.4 |
(*) Calculated using figures in millions, with decimals.
(1) Includes the results from our interests in Compañía Financiera Argentina S.A. (3%), Galicia Warrants S.A. (87.5%) and Net Investment S.A. (in liquidation) (87.5%), and beginning in May 2017 in Galicia Valores S.A. (1%).
(2) Income tax charge determined by Banco Galicia’s subsidiaries in accordance with the deferred tax method.
Net income for the fiscal year that ended on December 31, 2017 amounted to Ps.8,329 million, 38.4% higher than the profit recorded for the 2016 fiscal year.
This result was mainly due to profits from Grupo Financiero Galicia’s interest in Banco Galicia, for Ps.6,915 million, in Sudamericana Holding, for Ps.415 million, and in Galicia Administradora de Fondos, for Ps.428 million, and from financial results for Ps.689 million.
RESULTS FOR THE QUARTER
In millions of pesos, except percentages | ||||||||||||||||||||
Table II | FY2017 | FY2016 | Variation (%)(*) | |||||||||||||||||
Net Income by Business | 4th Q | 3rd Q | 4th Q | 4Q17 vs 3Q17 | 4Q17 vs 4Q16 | |||||||||||||||
Income from Equity Investments in: | ||||||||||||||||||||
Banco de Galicia y Buenos Aires S.A. | 1,754 | 2,017 | 1,552 | (13.0) | 13.0 | |||||||||||||||
Sudamericana Holding S.A. | 138 | 83 | 98 | 66.3 | 40.8 | |||||||||||||||
Galicia Administradora de Fondos S.A. | 132 | 113 | 66 | 16.8 | 100.0 | |||||||||||||||
Other companies(1) | 4 | 19 | 9 | (78.9) | (55.6) | |||||||||||||||
Deferred tax adjustment(2) | (29) | (5) | 70 | 480.0 | (141.4) | |||||||||||||||
Administrative Expenses | (16) | (19) | (13) | (15.8) | 23.1 | |||||||||||||||
Financial Results | 700 | 10 | (13) | 6.900.0 | - | |||||||||||||||
Other income and expenses | 9 | (1) | 3 | - | 200.0 | |||||||||||||||
Income Tax | (16) | - | - | - | - | |||||||||||||||
Net Income | 2,676 | 2,217 | 1,772 | 20.7 | 51.0 |
(*) Calculated using values in millions with decimals.
(1) Includes results from our interests in Compañía Financiera Argentina S.A. (3%), Galicia Warrants S.A. (87.5%) and Net Investment S.A. (in liquidation) (87.5%), and beginning on May 2017 in Galicia Valores S.A. (1%).
(2) Income tax charge determined by Banco Galicia’s subsidiaries in accordance with the deferred tax method.
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In pesos, except stated otherwise and percentages | ||||||||||||||||
Table III | FY2017 | FY2016 | Twelve Months Ended | |||||||||||||
Principal Indicators | 4th Q | 4th Q | 12/31/17 | 12/31/16 | ||||||||||||
Earnings per Share | ||||||||||||||||
Average Shares Outstanding (in thousands) | 1,426,765 | 1,300,265 | 1,426,765 | 1,300,265 | ||||||||||||
Earnings per Share(1)(2) | 1.88 | 1.36 | 5.84 | 4.63 | ||||||||||||
Book Value per Share(1) | 27.54 | 15.65 | 27.54 | 15.65 | ||||||||||||
Closing Price | ||||||||||||||||
Shares - Buenos Aires Stock Exchange | 123.70 | 42.70 | ||||||||||||||
ADS - Nasdaq (in dollars) | 65.85 | 26.92 | ||||||||||||||
Price/Book Value | 4.49 | 2.73 | ||||||||||||||
Average Daily Volume (amounts in thousands) | ||||||||||||||||
Buenos Aires Stock Exchange | 644 | 517 | 593 | 495 | ||||||||||||
Nasdaq(3) | 4,927 | 3,059 | 4,549 | 3,027 | ||||||||||||
Profitability (%) | ||||||||||||||||
Return on Average Assets(4) | 4.01 | 3.59 | 3.52 | 3.48 | ||||||||||||
Return on Average Shareholders’ Equity (4) | 28.39 | 36.45 | 30.91 | 35.03 |
(1) 10 ordinary shares = 1 ADS.
(2) Earnings for the period divided by the shares outstanding at the end of the period.
(3) Expressed in equivalent shares.
(4) Annualized.
In the fourth quarter of the 2017 fiscal year, Grupo Financiero Galicia recorded a Ps.2,676 million profit, which represented a 4.01% annualized return on average assets and a 28.39% return on average shareholder’s equity.
This result was mainly due to profits from its interest in Banco Galicia, for Ps.1,754 million, which represented 65.5% of Grupo Financiero Galicia’s net income.
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Grupo Financiero Galicia S.A. – Selected Financial Information – Consolidated Data | In millions of pesos | |||||||||||||||||||
FY2017 | FY2016 | |||||||||||||||||||
4th Q | 3rd Q | 2ndQ | 1st Q | 4th Q | ||||||||||||||||
Consolidated Balance Sheet | ||||||||||||||||||||
Cash and due from Banks | 56,659 | 36,152 | 33,334 | 50,221 | 61,166 | |||||||||||||||
Government and Corporate Securities | 38,771 | 32,221 | 29,717 | 25,590 | 13,701 | |||||||||||||||
Net Loans | 197,335 | 173,744 | 159,873 | 146,443 | 137,452 | |||||||||||||||
Other Receivables Resulting from Financial Brokerage | 33,359 | 18,412 | 17,486 | 20,773 | 18,178 | |||||||||||||||
Equity Investments in other Companies | 29 | 28 | 45 | 54 | 53 | |||||||||||||||
Bank Premises and Equipment, Miscellaneous and Intangible Assets | 8,670 | 7,866 | 7,485 | 7,098 | 6,678 | |||||||||||||||
Other Assets | 6,190 | 5,979 | 5,233 | 5,849 | 5,023 | |||||||||||||||
Total Assets | 341,013 | 274,402 | 253,173 | 256,028 | 242,251 | |||||||||||||||
Deposits | 203,451 | 164,415 | 158,152 | 158,652 | 151,688 | |||||||||||||||
Other Liabilities Resulting from Financial Brokerage | 81,343 | 59,226 | 57,654 | 62,480 | 57,794 | |||||||||||||||
Subordinated Notes | 4,828 | 4,360 | 4,261 | 3,865 | 4,065 | |||||||||||||||
Other Liabilities | 10,156 | 9,440 | 7,972 | 7,520 | 6,889 | |||||||||||||||
Minority Interest | 1,935 | 1,766 | 1,585 | 1,558 | 1,462 | |||||||||||||||
Total Liabilities | 301,713 | 239,207 | 229,624 | 234,075 | 221,898 | |||||||||||||||
Shareholders’ Equity | 39,300 | 35,195 | 23,549 | 21,953 | 20,353 | |||||||||||||||
Consolidated Income Statement | ||||||||||||||||||||
Financial Income | 13,218 | 11,289 | 10,725 | 9,988 | 9,502 | |||||||||||||||
Financial Expenses | (5,652) | (4,799) | (4,777) | (5,117) | (4,515) | |||||||||||||||
Gross Brokerage Margin | 7,566 | 6,490 | 5,948 | 4,871 | 4,987 | |||||||||||||||
Provisions for Loan Losses | (1,468) | (1,131) | (1,449) | (1,157) | (1,311) | |||||||||||||||
Income from Services, Net | 3,876 | 3,544 | 3,594 | 3,461 | 3,169 | |||||||||||||||
Income from Insurance Activities | 606 | 471 | 515 | 525 | 615 | |||||||||||||||
Administrative Expenses | (6,439) | (5,686) | (5,735) | (5,131) | (5,054) | |||||||||||||||
Minority Interest | (169) | (181) | (95) | (181) | (133) | |||||||||||||||
Income from Equity Investments | 10 | 42 | 163 | 6 | 2 | |||||||||||||||
Net Other Income | 142 | 110 | (12) | 178 | 474 | |||||||||||||||
Income Tax | (1,448) | (1,442) | (1,094) | (971) | (977) | |||||||||||||||
Net Income | 2,676 | 2,217 | 1,835 | 1,601 | 1,772 |
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Grupo Financiero Galicia S.A. – Additional Information | ||||||||||||||||||||
FY2017 | FY2016 | |||||||||||||||||||
4th Q | 3rd Q | 2ndQ | 1st Q | 4th Q | ||||||||||||||||
Physical Data (Number of) | ||||||||||||||||||||
Employees | 11,649 | 11,767 | 11,771 | 11,828 | 11,956 | |||||||||||||||
Banco Galicia | 6,214 | 6,160 | 6,023 | 5,939 | 5,799 | |||||||||||||||
Regional Credit-Card Companies | 3,896 | 4,073 | 4,211 | 4,316 | 4,571 | |||||||||||||||
Compañía Financiera Argentina | 1,117 | 1,111 | 1,107 | 1,153 | 1,164 | |||||||||||||||
Sudamericana Holding | 375 | 378 | 383 | 375 | 374 | |||||||||||||||
Galicia Administradora de Fondos | 19 | 16 | 18 | 16 | 16 | |||||||||||||||
Other companies | 28 | 29 | 29 | 29 | 32 | |||||||||||||||
Branches | 574 | 555 | 550 | 549 | 542 | |||||||||||||||
Bank Branches | 306 | 285 | 279 | 279 | 279 | |||||||||||||||
Regional Credit-Card Companies | 205 | 207 | 208 | 207 | 206 | |||||||||||||||
Compañía Financiera Argentina | 63 | 63 | 63 | 63 | 57 | |||||||||||||||
Other Points of Sale | 83 | 82 | 85 | 85 | 120 | |||||||||||||||
Regional Credit-Card Companies | 52 | 51 | 54 | 54 | 83 | |||||||||||||||
Compañía Financiera Argentina | 31 | 31 | 31 | 31 | 37 | |||||||||||||||
Deposit Accounts(in thousands) | 4,560 | 4,421 | 4,284 | 4,149 | 4,018 | |||||||||||||||
Credit Cards(in thousands) | 13,455 | 13,534 | 13,564 | 13,703 | 14,310 | |||||||||||||||
Banco Galicia | 4,086 | 3,982 | 3,889 | 3,797 | 3,675 | |||||||||||||||
Regional Credit-Card Companies | 9,148 | 9,336 | 9,483 | 9,729 | 10,459 | |||||||||||||||
Compañía Financiera Argentina | 221 | 216 | 192 | 177 | 176 | |||||||||||||||
Inflation and Exchange Rates | ||||||||||||||||||||
Retail Price Index (%) | 6.14 | 5.33 | 5.39 | 6.26 | 5.26 | |||||||||||||||
Wholesale Price Index (I.P.I.M.) (%) | 4.67 | 5.59 | 3.33 | 4.15 | 2.52 | |||||||||||||||
C.E.R. Coefficient (%) | 5.00 | 4.29 | 7.02 | 4.64 | 4.49 | |||||||||||||||
Exchange Rate (Pesos per U$S)(1) | 18.7742 | 17.3183 | 16.5985 | 15.3818 | 15.8502 | |||||||||||||||
Rates | ||||||||||||||||||||
Badlar (quarterly averages) (2) | 22.48 | 20.77 | 19.58 | 19.76 | 21.07 | |||||||||||||||
Credit Line for Investment Projects (established by regulations) (3) | 17.00 | 17.00 | 17.00 | 17.00 | 17.00 |
(1) Reference foreign currency exchange rate in accordance to Communiqué “A” 3500 from the Argentine Central Bank, as of the last working day of the quarter.
(2) Private banks’30-day time deposits rate for amounts over Ps.1 million.
(3) From October 1 until October 31, 2016, the rate was 22%.
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BANCO DE GALICIA Y BUENOS AIRES S.A.
HIGHLIGHTS
➣ | Net income for the fourth quarter amounted to Ps.1,754 million, accumulating a Ps.6,915 million profit for the 2017 fiscal year, compared to a Ps.5,094 million profit for the 2016 fiscal year. |
➣ | The growth in results for the 2017 fiscal year when compared to the 2016 fiscal year was mainly due to the 39.7% growth in operating income(1) as a consequence of the higher volume of intermediation with the private sector, partially offset by 47.3% higher provisions for loan losses and 30.5% higher administrative expenses due to the higher level of activity and to the evolution of operating costs. |
➣ | The credit exposure to the private sector reached Ps.224,249 million, up 42.5% during the last twelve months, and deposits reached Ps.203,578 million, up 33.9% during the same period. As of December 31, 2017, the Bank’s estimated market share of loans to the private sector was 10.11% while its estimated market share of deposits from the private sector was 10.29%. |
➣ | Thenon-accrual loan portfolio represented 3.36% of total loans to the private sector, recording an increase of 5 basis points (“bp”) from the 3.31% recorded at the end of the same quarter of the 2016 fiscal year, while its coverage with allowances for loan losses reached 97.34%, 2.72 percentage points (“pp”) lower than a year before. Accounting for the sale of Compañía Financiera Argentina S.A., the coverage ofnon-accrual loans with allowances reached 103.84%. |
➣ | In the framework of the Credit Line for Production Financing and Financial Inclusion, as of December 31, 2017, the Bank granted the mandatory amount established by regulations in force. As of the end of the quarter, the outstanding amount of those loans reached Ps.8,308 million. |
➣ | As of the end of the quarter, shareholders’ equity amounted to Ps.35,821 million, and the computable capital was Ps.29,530 million, representing a Ps.6,920 million (or 30.6%) excess over the capital requirement, and reaching a regulatory capital ratio of 10.69%. According to regulations in force, capital contributions made in kind can be computed only after being approved by the Argentine Central Bank, approval that was granted in January 2018. If this capital contribution had been taken into account as of the end of the 2017 fiscal year, the regulatory capital ratio would have reached 14.32%. |
INFORMATION DISCLOSURE
The data shown in the tables below and the consolidated financial statements correspond to Banco Galicia, consolidated with the subsidiaries under its direct or indirect control, except where otherwise noted.
The Bank’s consolidated financial statements and the figures included in the different tables of this report correspond to Banco Galicia, Tarjetas Regionales S.A. and its subsidiaries,(2) Tarjetas del Mar S.A.,(3) Galicia Valores S.A., Compañía Financiera Argentina S.A.(4) and Cobranzas y Servicios S.A.(4)
(1)Net financial income plus net income from services.
(2)Since January 1, 2018, Tarjetas Regionales S.A. and its subsidiaries will be consolidated with Grupo Financiero Galicia. See Recent Developments.
(3)On March 31, 2017, Tarjetas del Mar S.A. was no longer consolidated with Banco Galicia, due to its sale.
(4) On February 2, the sale of Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A. was completed.
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RESULTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017
In millions of pesos, except percentages | ||||||||||||
Table IV Evolution of Consolidated Results | FY2017 | FY2016 | Variation (%) | |||||||||
Net Financial Income | 23,762 | 16,066 | 47.9 | |||||||||
Net Income from Services | 14,815 | 11,543 | 28.3 | |||||||||
Provisions for Loan Losses | (5,205) | (3,533) | 47.3 | |||||||||
Administrative Expenses | (22,149) | (16,974) | 30.5 | |||||||||
Operating Income | 11,223 | 7,102 | 58.0 | |||||||||
Net Other Income / (Loss)(*) | 131 | 1,113 | (88.2) | |||||||||
Income Tax | (4,439) | (3,121) | 42.2 | |||||||||
Net Income | 6,915 | 5,094 | 35.7 |
(*) Includes income from equity investments and minority interest results.
Net income for the 2017 fiscal year amounted to Ps.6,915 million, 35.7% higher than the Ps. 5,094 million profit recorded for the 2016 fiscal year.
This result represented a 3.02% return on average assets and a 30.25% return on average shareholder’s equity, compared to 2.97% and 31.42%, respectively, recorded in the 2016 fiscal year.
The higher net income was mainly due to a Ps.10,968 million increase in the operating income, partially offset by increases of Ps.5,175 million in administrative expenses, Ps.1,672 in provisions for loan losses and Ps.1,318 million in income tax.
The operating income for the 2017 fiscal year totaled Ps.38,577 million, up 39.7% from the Ps.27,609 million recorded in the prior year. This positive development was due to both a Ps.7,696 million (47.9%) higher net financial income and a Ps.3,272 million (28.3%) higher net income from services.
The improvement in the net financial income was due to the increase in the volume of activity with the private sector and a higher financial margin in the fiscal year.
Net income from services amounted to Ps.14,815 million, up 28.3% from the prior fiscal year as a consequence of higher fees, mainly in those related to regional credit cards (26.8%), deposit accounts (41.4%) and credit (82.9%).
Provisions for loan losses amounted to Ps.5,205 million, Ps.1,672 million or 47.3% higher than those recorded in the 2016 fiscal year, due to the evolution of credits in arrears of the consumer portfolio and to higher regulatory provisions on the normal portfolio as a consequence of the increase in the credit portfolio.
Administrative expenses totaled Ps.22,149 million, 30.5% higher than those recorded in the previous fiscal year. Personnel expenses amounted to Ps.12,077 million, growing 29.0%, mainly as a consequence of the salary increase agreement with the unions, a provision related to certain compensations and tonon-recurring human resources expenses. The remaining administrative expenses increased to Ps.10,072 million, Ps.2,457 million (32.3%) higher than those recorded in the 2016 fiscal year, as a consequence of the increase in expenses related to services provided to the Bank.
The income tax charge was Ps.4,439 million, Ps.1,318 million higher than in the 2016 fiscal year.
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RESULTS FOR THE QUARTER
In millions of pesos, except percentages | ||||||||||||||||||||
Table V Evolution of Consolidated Results | FY2017 | FY2016 | Variation (%) | |||||||||||||||||
4th Q | 3rd Q | 4th Q | 4Q17 vs 3Q17 | 4Q17 vs 4Q16 | ||||||||||||||||
Net Financial Income | 6,737 | 6,365 | 4,897 | 5.8 | 37.6 | |||||||||||||||
Net Income from Services | 3,942 | 3,592 | 3,413 | 9.7 | 15.5 | |||||||||||||||
Provisions for Loan Losses | (1,468) | (1,131) | (1,311) | 29.8 | 12.0 | |||||||||||||||
Administrative Expenses | (6,197) | (5,487) | (4,860) | 12.9 | 27.5 | |||||||||||||||
Operating Income | 3,014 | 3,339 | 2,139 | (9.7) | 40.9 | |||||||||||||||
Net Other Income / (Loss)(*) | (23) | (20) | 375 | 15.0 | (106.1) | |||||||||||||||
Income Tax | (1,237) | (1,302) | (962) | (5.0) | 28.6 | |||||||||||||||
Net Income | 1,754 | 2,017 | 1,552 | (13.0) | 13.0 |
(*) Includes income from equity investments and minority interest results.
Percentages | ||||||||||||||||
Table VI | FY2017 | FY2016 | Twelve Months Ended | |||||||||||||
Profitability and Efficiency | 4th Q | 4th Q | 12/31/17 | 12/31/16 | ||||||||||||
Return on Average Assets(*) | 2.83 | 3.17 | 3.02 | 2.97 | ||||||||||||
Return on Average Shareholders’ Equity(*) | 25.98 | 34.22 | 30.25 | 31.42 | ||||||||||||
Financial Margin(*) (1) | 13.05 | 13.23 | 12.97 | 11.95 | ||||||||||||
Net Income from Services as a % of Operating Income(2) | 36.91 | 41.07 | 38.40 | 41.81 | ||||||||||||
Net Income from Services as a % of Administrative Expenses | 63.61 | 70.23 | 66.89 | 68.00 | ||||||||||||
Administrative Expenses as a % of Operating Income (2) | 58.03 | 58.48 | 57.42 | 61.48 |
(*) Annualized.
(1) Financial Margin: Financial Income minus Financial Expenses, divided by Average Interest-earning Assets.
(2) Operating Income: Net Financial Income plus Net Income from Services.
In the fourth quarter of the 2017 fiscal year, the Bank recorded a Ps.1,754 million profit, Ps.202 million (13.0%) higher than the Ps.1,552 million profit recorded for the same quarter of the previous year.
The variation in net income was a consequence of the Ps.2,369 million increase in operating income, which was mainly offset by increases of Ps.1,337 million in administrative expenses, Ps.157 million in provisions for loan losses and Ps.275 million in income tax.
The operating income for the fourth quarter of the 2017 fiscal year totaled Ps.10,679 million, up 28.5% from the Ps.8,310 million recorded in the same quarter of the prior year. This positive development was due to both a higher net financial income (up Ps.1,840 million or 37.6%) and a higher net income from services (up Ps.529 million or 15.5%).
The net financial income for the quarter included a Ps.443 million gain from foreign-currency quotation differences, compared to a Ps.295 million profit in the fourth quarter of the previous fiscal year.
The quarter’s net financial income before foreign-currency quotation differences amounted to Ps.6,294 million, which represented a Ps.1,692 million (36.8%) increase as compared to the Ps.4,602 million of income recorded in the same quarter of the 2016 fiscal year, as a consequence of the increase in the portfolio of loans to the private sector together with a higher spread.
9 |
Average balances in millions of pesos. Yields and rates in annualized nominal % | ||||||||||||||||||||||||||||||||||||||||
Table VII Average Balances, Yield and Rates(*) | FY2017 | FY2016 | ||||||||||||||||||||||||||||||||||||||
4th Q | 3rd Q | 2ndQ | 1st Q | 4th Q | ||||||||||||||||||||||||||||||||||||
Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | |||||||||||||||||||||||||||||||
Interest-Earning Assets | 206,440 | 22.35 | 190,544 | 21.78 | 174,010 | 22.85 | 162,016 | 22.86 | 148,022 | 24.04 | ||||||||||||||||||||||||||||||
Government Securities | 20,329 | 21.67 | 20,297 | 23.08 | 19,417 | 22.33 | 16,386 | 20.14 | 18,164 | 20.52 | ||||||||||||||||||||||||||||||
Loans | 181,391 | 22.32 | 165,388 | 21.52 | 150,387 | 22.85 | 139,593 | 23.08 | 127,732 | 24.48 | ||||||||||||||||||||||||||||||
Financial Trusts Securities | 146 | 21.52 | 260 | 13.28 | 368 | 18.29 | 452 | 23.88 | 532 | 22.82 | ||||||||||||||||||||||||||||||
Other Interest-Earning Assets | 4,574 | 26.37 | 4,599 | 25.87 | 3,838 | 25.93 | 5,585 | 25.14 | 1,594 | 29.35 | ||||||||||||||||||||||||||||||
Interest-Bearing Liabilities | 159,611 | 11.51 | 150,042 | 10.70 | 137,869 | 10.96 | 128,575 | 12.03 | 109,386 | 13.58 | ||||||||||||||||||||||||||||||
Current Accounts | 3,205 | 0.01 | 5,257 | 0.01 | 1,756 | 0.10 | 1,244 | - | - | - | ||||||||||||||||||||||||||||||
Saving Accounts | 65,494 | 0.10 | 61,630 | 0.08 | 51,760 | 0.08 | 42,086 | 0.10 | 34,496 | 0.09 | ||||||||||||||||||||||||||||||
Time Deposits | 61,674 | 20.12 | 56,403 | 19.23 | 58,521 | 17.66 | 59,341 | 18.38 | 52,338 | 20.68 | ||||||||||||||||||||||||||||||
Debt Securities | 19,674 | 22.89 | 19,617 | 21.00 | 19,283 | 19.38 | 17,131 | 16.42 | 16,761 | 16.87 | ||||||||||||||||||||||||||||||
Other Interest-Bearing Liabilities | 9,564 | 14.53 | 7,135 | 14.46 | 6,549 | 15.22 | 8,773 | 19.50 | 5,791 | 20.35 |
(*) Does not include foreign-currency quotation differences. Annual nominal interest rates were calculated using a360-day denominator.
The average interest-earning assets grew Ps.58,418 million (39.5%) as compared to the fourth quarter of the previous fiscal year, primarily as a consequence of the Ps.53,659 million increase in the average portfolio of loans to the private sector (42.0%). Interest-bearing liabilities increased Ps.50,225 million (45.9%) during the same period, primarily due to a Ps.30,998 million increase in the average balances of saving deposits (89.9%), which was mainly due to the Tax Amnesty Law.
The average yield on interest-earning assets for the fourth quarter of the 2017 fiscal year was 22.35%, representing a 169 bp decrease compared to the same quarter of the prior year, mainly due to decreases of 216 bp in the interest rate on loans partially offset by a 115 bp increase in the interest rate on government securities. Likewise, the average cost of interest-bearing liabilities was 11.51%, representing a 207 bp decrease compared to the fourth quarter of the prior year primarily due to a 56 bp the decrease in the average interest rate on time deposits.
In millions of pesos | ||||||||||||||||||||
Table VIII | FY2017 | FY2016 | ||||||||||||||||||
Income from Services, Net | 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||||||
National Cards | 1,410 | 1,279 | 1,197 | 1,370 | 1,337 | |||||||||||||||
Regional Credit Cards | 2,188 | 1,910 | 1,958 | 1,808 | 1,838 | |||||||||||||||
CFA | 121 | 115 | 108 | 105 | 103 | |||||||||||||||
Deposit Accounts | 996 | 932 | 919 | 804 | 706 | |||||||||||||||
Insurance | 128 | 133 | 141 | 155 | 153 | |||||||||||||||
Financial Fees | 53 | 51 | 45 | 39 | 37 | |||||||||||||||
Credit-Related Fees | 174 | 190 | 199 | 121 | 145 | |||||||||||||||
Foreign Trade | 140 | 130 | 108 | 106 | 92 | |||||||||||||||
Collections | 138 | 129 | 123 | 113 | 101 | |||||||||||||||
Utility-Bills Collection Services | 135 | 120 | 90 | 82 | 75 | |||||||||||||||
Mutual Funds | 39 | 33 | 30 | 26 | 22 | |||||||||||||||
Other | 367 | 302 | 276 | 262 | 253 | |||||||||||||||
Total Income | 5,889 | 5,324 | 5,194 | 4,991 | 4,862 | |||||||||||||||
Total Expenditures | (1,947) | (1,732) | (1,521) | (1,383) | (1,449) | |||||||||||||||
Income from Services, Net | 3,942 | 3,592 | 3,673 | 3,608 | 3,413 |
10 |
Net income from services amounted to Ps.3,942 million, up 15.5% from the Ps.3,413 million recorded in the fourth quarter of the previous fiscal year. The increases in fees which stood out were those related to regional credit cards (19.0%) and deposit accounts (41.1%).
Provisions for loan losses for the fourth quarter of the 2017 fiscal year amounted to Ps.1,468 million, Ps.157 million higher than those recorded in the same quarter of the prior year, due to the evolution of credits in arrears of the consumer portfolio and to higher regulatory provisions on the portfolio in normal situation as a consequence of the increase in the volume of credit.
Administrative expenses for the quarter totaled Ps.6,197 million, up 27.5% from the same quarter of the previous year. Personnel expenses amounted to Ps.3,385 million, growing 25.7%, mainly as a consequence of salary increase agreements with the unions, a provision related to certain compensations and tonon-recurring human resources expenses. The remaining administrative expenses amounted to Ps.2,812 million, which represented a Ps.644 million (29.7%) increase as compared to the Ps.2,168 million from the fourth quarter of fiscal year 2016, mainly due to increases in maintenance, security services, cash transportation, electricity and communications, and taxes, due to the increase in the level of activity and of expenses related to services provided to the Bank.
The net other loss for the period amounted to Ps.23 million, decreasing Ps.398 million as compared to the same quarter of the previous fiscal year, mainly due to the sale of a property owned by the Bank recorded in the fourth quarter of 2016.
The income tax charge was Ps.1,237 million, Ps.275 million higher than in the fourth quarter of the 2016 fiscal year.
LEVEL OF ACTIVITY
In millions of pesos | ||||||||||||||||||||
Table IX | FY2017 | FY2016 | ||||||||||||||||||
Exposure to the Private Sector | 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||||||
Loans | 204,000 | 179,715 | 165,886 | 151,604 | 142,158 | |||||||||||||||
Financial Leases | 1,700 | 1,467 | 1,230 | 987 | 972 | |||||||||||||||
Corporate Securities | 1,088 | 1,305 | 757 | 658 | 1,220 | |||||||||||||||
Other Financing (*) | 17,461 | 16,093 | 14,261 | 12,489 | 13,045 | |||||||||||||||
Total Credit | 224,249 | 198,580 | 182,134 | 165,738 | 157,395 |
(*) Includes certain accounts under the balance sheet heading Other Receivables from Financial Brokerage, Guarantees Granted and Unused Balances of Loans Granted.
As of December 31, 2017, the Bank’s total exposure to the private sector reached Ps.224,249 million, representing an increase of 42.5% from a year before and of 12.9% during the quarter.
Total loans include Ps.34,691 million corresponding to the regional credit card companies, which registered a 20.0% increase during the last twelve months and a 12.5% increase during the quarter.(*) They also include Ps.7,649 million from CFA, which increased 44.8% during year and 9.5% during the quarter.
(*) For comparative purposes loans granted by Tarjetas del Mar S.A. were not considered.
11 |
Percentages | ||||||||||||||||||||
Table X | FY2017 | FY2016 | ||||||||||||||||||
Market Share (*) | 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||||||
Total Loans | 9.93 | 9.91 | 10.15 | 10.17 | 9.79 | |||||||||||||||
Loans to the Private Sector | 10.11 | 9.80 | 10.39 | 10.32 | 10.12 |
(*) Banco Galicia and CFA, within the Argentine financial system, according to the daily information on loans published by the Argentine Central Bank. Loans include only principal. The regional credit-card companies’ data is not included.
The Bank’s market share of loans to the private sector as of December 31, 2017, without considering those granted by the regional credit card companies, was 10.11%, compared to a 9.80% from September 30, 2017, and to 10.12% from December 31, 2016.
In millions of pesos | ||||||||||||||||||||
Table XI | FY2017 | FY2016 | ||||||||||||||||||
Loans by Type of Borrower | 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||||||
Large Corporations | 39,232 | 31,470 | 32,456 | 24,641 | 22,434 | |||||||||||||||
SMEs | 50,199 | 42,308 | 39,140 | 37,128 | 34,411 | |||||||||||||||
Individuals | 110,308 | 96,662 | 90,247 | 84,773 | 81,978 | |||||||||||||||
Financial Sector | 4,261 | 9,275 | 4,043 | 5,062 | 3,335 | |||||||||||||||
Total Loans | 204,000 | 179,715 | 165,886 | 151,604 | 142,158 | |||||||||||||||
Allowances | 6,670 | 5,982 | 5,962 | 5,166 | 4,707 | |||||||||||||||
Total Loans, Net | 197,330 | 173,733 | 159,924 | 146,438 | 137,451 |
In millions of pesos | ||||||||||||||||||||
Table XII | FY2017 | FY2016 | ||||||||||||||||||
Loans by Sector of Activity | 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||||||
Financial Sector | 4,261 | 9,275 | 4,043 | 5,062 | 3,335 | |||||||||||||||
Services | 14,259 | 10,559 | 10,416 | 7,884 | 8,593 | |||||||||||||||
Agriculture and Livestock | 18,612 | 15,255 | 14,442 | 13,536 | 11,921 | |||||||||||||||
Consumer | 110,373 | 96,696 | 90,291 | 84,557 | 82,730 | |||||||||||||||
Retail and Wholesale Trade | 19,951 | 17,078 | 16,265 | 13,437 | 13,140 | |||||||||||||||
Construction | 2,436 | 2,041 | 1,878 | 1,375 | 1,177 | |||||||||||||||
Manufacturing | 30,263 | 24,709 | 24,098 | 22,678 | 19,452 | |||||||||||||||
Other | 3,845 | 4,102 | 4,453 | 3,075 | 1,810 | |||||||||||||||
Total Loans | 204,000 | 179,715 | 165,886 | 151,604 | 142,158 | |||||||||||||||
Allowances | 6,670 | 5,982 | 5,962 | 5,166 | 4,707 | |||||||||||||||
Total Loans, Net | 197,330 | 173,733 | 159,924 | 146,438 | 137,451 |
During the year, loans to the private sector registered growth mainly in those granted to large corporations (74.9%), to SMEs (45.9%) and to individuals (34.6%). By sector of activity, higher growth was recorded in the consumer sector (33.4%), the manufacturing sector (55.6%), agricultural and livestock sector (56.1%) and the retail and wholesale trade sector (51.8%).
12 |
In millions of pesos | ||||||||||||||||||||
Table XIII | FY2017 | FY2016 | ||||||||||||||||||
Exposure to the Argentine Public Sector (*) | 4th Q | 3rd Q | 2ndQ | 1st Q | 4th Q | |||||||||||||||
Government Securities’ Net Position | 26,593 | 23,007 | 22,111 | 19,539 | 15,320 | |||||||||||||||
Lebac | 17,284 | 16,538 | 14,539 | 13,174 | 10,241 | �� | ||||||||||||||
Other | 9,309 | 6,469 | 7,572 | 6,365 | 5,079 | |||||||||||||||
Other Receivables Resulting from Financial Brokerage | 435 | 485 | 665 | 653 | 833 | |||||||||||||||
Trust Certificates of Participation and Securities | 103 | 218 | 330 | 428 | 515 | |||||||||||||||
Other | 332 | 267 | 335 | 225 | 318 | |||||||||||||||
Total Exposure | 27,028 | 23,492 | 22,776 | 20,192 | 16,153 |
(*) Excludes 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 requirement.
As of December 31, 2017, the Bank’s exposure to the public sector amounted to Ps.27,028 million, representing a 67.3% increase during the last twelve months due to a higher holding of Lebac. Excluding debt securities issued by the Argentine Central Bank, said exposure reached Ps.9,744 million (2.9% of total assets), while as of December 31, 2016, it amounted to Ps.5,912 million (2.5% of total assets).
In millions of pesos | ||||||||||||||||||||
Table XIV | FY2017 | FY2016 | ||||||||||||||||||
Deposits (*) | 4th Q | 3rd Q | 2ndQ | 1st Q | 4th Q | |||||||||||||||
In Pesos | 133,158 | 110,966 | 110,552 | 109,702 | 100,980 | |||||||||||||||
Current Accounts | 33,203 | 29,239 | 29,327 | 27,461 | 28,136 | |||||||||||||||
Saving Accounts | 42,223 | 28,758 | 30,514 | 22,791 | 26,639 | |||||||||||||||
Time Deposits | 55,354 | 50,886 | 48,748 | 56,975 | 43,781 | |||||||||||||||
Other | 2,378 | 2,083 | 1,963 | 2,475 | 2,424 | |||||||||||||||
In Foreign Currency | 70,420 | 53,552 | 48,071 | 49,173 | 51,067 | |||||||||||||||
Total Deposits | 203,578 | 164,518 | 158,623 | 158,875 | 152,047 |
(*) Includes deposits in Banco Galicia and CFA, net of eliminations between said companies. Deposits from the remaining subsidiaries were not eliminated.
As of December 31, 2017, the Bank’s deposits amounted to Ps.203,578 million, representing a 33.9% increase during the last twelve months, as a consequence of the 31.9% increase in peso-denominated deposits and of the 37.9% increase in dollar-denominated deposits, mainly due to the Tax Amnesty Law. During the quarter, deposits recorded an increase of 23.7% (with a growth of 20.0% for peso-denominated deposits and an increase of 31.5% for dollar-denominated deposits), mainly due to a higher balance of peso-denominated saving accounts, which increased Ps.13,465 million (46.8%).
Percentages | ||||||||||||||||||||
Table XV | FY2017 | FY2016 | ||||||||||||||||||
Market Share (*) | 4th Q | 3rd Q | 2nd Q | 1st Q | 4th Q | |||||||||||||||
Total Deposits | 8.32 | 7.56 | 7.69 | 7.68 | 7.94 | |||||||||||||||
Private Sector Deposits | 10.29 | 9.48 | 9.50 | 10.21 | 9.96 |
(*) Banco Galicia and CFA, within the Argentine financial system, according to the daily information on deposits published by the Argentine Central Bank. Deposits and Loans include only principal.
As of December 31, 2017, the Bank’s estimated market share of private sector deposits in the Argentine financial system was 10.29%, compared to 9.48% for the prior quarter and to 9.96% from a year before.
13 |
In millions of pesos | ||||||||||||||||||||
Table XVI | FY2017 | FY2016 | ||||||||||||||||||
Other Financial Liabilities | 4th Q | 3rd Q | 2ndQ | 1st Q | 4th Q | |||||||||||||||
Domestic Financial Institutions and Credit Entities | 3,031 | 3,402 | 3,265 | 4,818 | 4,095 | |||||||||||||||
Foreign Financial Institutions and Credit Entities | 5,031 | 3,593 | 2,729 | 2,195 | 2,213 | |||||||||||||||
Notes(*) | 20,711 | 19,678 | 19,327 | 18,025 | 17,339 | |||||||||||||||
Obligations in Connection with Spot Transactions Pending Settlement and Repurchase Agreement Transactions | 21,463 | 8,143 | 9,087 | 13,727 | 8,555 | |||||||||||||||
Obligations in Connection with Debts with Merchants due to Credit-Card Activities | 26,565 | 20,430 | 18,681 | 18,623 | 20,813 | |||||||||||||||
Other | 9,819 | 9,156 | 8,993 | 9,063 | 9,432 | |||||||||||||||
Total | 86,620 | 64,402 | 62,082 | 66,451 | 62,447 |
(*) Includes subordinated notes.
As of December 31, 2017, other financial liabilities amounted to Ps.86,620 million, Ps.24,173 million or 38.7% higher than the Ps.62,447 million recorded a year before. This growth was mainly due to the increase of: (i) obligations in connection with spot transactions pending settlement and repurchase agreement transactions, for Ps.12,908 million; (ii) financing from merchants in connection with credit card activities, for Ps.5,752 million; and (iii) of notes, for Ps.3,372, related mainly to transactions of Tarjeta Naranja and CFA, partially offset by the amortizations made during the last twelve months.
As of December 31, 2017, the Bank had 4.6 million deposit accounts, which represent an increase of approximately 542,000 accounts as compared with the same date of the previous year. Likewise, the number of credit cards reached 13.5 million, 855,000 less than those managed a year before, mainly due to the sale of Tarjetas del Mar S.A., which managed 435,000 credit cards as of the end of December 2016.
ASSET QUALITY
In millions of pesos, except percentages | ||||||||||||||||||||
Table XVII | FY2017 | FY2016 | ||||||||||||||||||
Loan Portfolio Quality | 4th Q | 3rd Q | 2ndQ | 1st Q | 4th Q | |||||||||||||||
Non-Accrual Loans (*) | 6,852 | 5,870 | 5,961 | 5,160 | 4,704 | |||||||||||||||
With Preferred Guarantees | 194 | 118 | 106 | 93 | 96 | |||||||||||||||
With Other Guarantees | 207 | 137 | 106 | 99 | 88 | |||||||||||||||
Without Guarantees | 6,451 | 5,615 | 5,749 | 4,968 | 4,520 | |||||||||||||||
Allowance for Loan Losses | 6,670 | 5,982 | 5,962 | 5,166 | 4,707 | |||||||||||||||
Non-Accrual Loans to Private-Sector Loans (%) | 3.36 | 3.27 | 3.59 | 3.40 | 3.31 | |||||||||||||||
Allowance for Loan Losses to Private-Sector Loans (%) | 3.27 | 3.33 | 3.59 | 3.41 | 3.31 | |||||||||||||||
Allowance for Loan Losses toNon-Accrual Loans (%) | 97.34 | 101.91 | 100.02 | 100.12 | 100.06 | |||||||||||||||
Non-Accrual Loans with Guarantees toNon-Accrual Loans (%) | 5.85 | 4.34 | 3.56 | 3.72 | 3.91 |
(*) Thenon-accrual portfolio includes loans classified under the following categories of the Argentine Central Bank classification: With Problems and Medium Risk, High Risk of Insolvency and High Risk, Uncollectible and Uncollectible due to Technical Reasons.
The Bank’snon-accrual loan portfolio amounted to Ps.6,852 million as of December 31, 2017, representing 3.36% of total loans to the private-sector, increasing 5 bps from the 3.31% ratio of a year before.
The coverage of thenon-accrual loan portfolio with allowances for loan losses reached 97.34% as of December 31, 2017, compared to 100.06% from a year before. However, excluding CFA, the coverage as of the end of the quarter was 103.84%.
14 |
In terms of total credit (defined as loans, certain accounts included in “Other Receivables Resulting from Financial Brokerage” representing credit transactions, assets under financial leases, guarantees granted and unused balances of loans granted), the Bank’snon-accrual portfolio represented 3.08% of total credit to the private-sector, and its coverage with allowances for loan losses reached 98.05%, compared to 3.01% and 101.16% of a year before, respectively.
On an individual basis Banco Galicia’snon-accrual loan portfolio amounted to Ps.3,390 million as of December 31, 2017, increasing 81.6% during the last twelve months, representing 2.09% of total loans to the private-sector, compared to the 1.74% ratio recorded a year before, recording a 35 bp increase. The coverage with allowances for loan losses reached 106.02%, compared to 117.14% a year before.
In millions of pesos | ||||||||||||||||||||
Table XVIII | FY2017 | FY2016 | ||||||||||||||||||
Consolidated Analysis of Loan Loss Experience | 4th Q | 3rd Q | 2ndQ | 1st Q | 4th Q | |||||||||||||||
Allowance for Loan Losses at the Beginning of the Quarter | 5,982 | 5,962 | 5,166 | 4,707 | 4,265 | |||||||||||||||
Changes in the Allowance for Loan Losses | ||||||||||||||||||||
Provisions Charged to Income | 1,364 | 1,011 | 1,354 | 1,082 | 1,249 | |||||||||||||||
Provisions Reversed | - | - | - | - | (54) | |||||||||||||||
Charge Offs | (676) | (991) | (558) | (623) | (753) | |||||||||||||||
Allowance for Loan Losses at Quarter End | 6,670 | 5,982 | 5,962 | 5,166 | 4,707 | |||||||||||||||
Charge to the Income Statement | ||||||||||||||||||||
Provisions Charged to Income | (1,364) | (1,011) | (1,354) | (1,082) | (1,249) | |||||||||||||||
Direct Charge Offs | (91) | (108) | (81) | (69) | (50) | |||||||||||||||
Bad Debts Recovered | 99 | 131 | 97 | 88 | 143 | |||||||||||||||
Provisions Reversed (*) | - | - | - | - | 54 | |||||||||||||||
Net Charge to the Income Statement | (1,356) | (988) | (1,338) | (1,063) | (1,102) |
(*) Recorded under “Net Other Income/(Loss).”
During the quarter, Ps.676 million were charged off against the allowance for loan losses and direct charges to the income statement for Ps.91 million were made.
In millions of pesos, except ratios | ||||||||||||||||||||
Table XIX | FY2017 | FY2016 | ||||||||||||||||||
Consolidated Regulatory Capital | 4th Q | 3rd Q | 2ndQ | 1st Q | 4th Q | |||||||||||||||
Minimum Capital Required (A) | 22,610 | 20,086 | 17,684 | 16,441 | 15,258 | |||||||||||||||
Allocated to Credit Risk | 17,263 | 15,222 | 13,440 | 12,407 | 11,511 | |||||||||||||||
Allocated to Market Risk | 1,126 | 884 | 558 | 624 | 556 | |||||||||||||||
Allocated to Operational Risk | 4,221 | 3,980 | 3,686 | 3,410 | 3,191 | |||||||||||||||
Computable Capital (B): | 29,530 | 27,439 | 25,477 | 23,454 | 22,010 | |||||||||||||||
Tier I | 22,582 | 21,074 | 19,384 | 17,932 | 16,471 | |||||||||||||||
Tier II | 6,948 | 6,365 | 6,093 | 5,522 | 5,539 | |||||||||||||||
Excess over Required Capital (B)—(A) | 6,920 | 7,353 | 7,793 | 7,013 | 6,752 | |||||||||||||||
Regulatory Ratio (%) | 10.69 | 11.20 | 11.80 | 11.68 | 11.82 |
As of December 31, 2017, the Bank’s consolidated computable capital was Ps.6,920 million (30.6%) higher than the Ps.22,610 million capital requirement. As of December 31, 2016, this excess amounted to Ps.6,752 million (44.3%).
The minimum capital requirement increased Ps.7,352 million as compared to December 31, 2016, mainly as a result of the higher requirements of: (i) Ps.5,752 million due to the growth of the private-sector loan portfolio; and (ii) Ps.1,030 million on operational risk.
15 |
Computable capital increased Ps.7,520 million as compared to December 31, 2016, mainly as a consequence of a higher Tier I capital, for Ps.6,111 million, due to the higher net income, partially offset by higher deductions, resulting from organization and development expenses. Tier II capital recorded a Ps.1,409 million increase, mainly due to: (i) 100% of the subordinated notes issued on July 19, 2016, for U$S 250 million which proceeds were used to cancel in advance the subordinated notes due in 2019, of which 24% was considered as computable capital; and (ii) the higher balance of the provision for loan losses on the credit portfolio in normal situation.
According to regulations in force, capital contributions made in kind can be computed only after being approved by the Argentine Central Bank, approval that was granted in January 2018. If this capital contribution had been taken into account as of the end of fiscal year 2017, the regulatory capital ratio would have reached 14.32%.
Percentages | ||||||||||||||||||||
Table XX | FY2017 | FY2016 | ||||||||||||||||||
Liquidity (unconsolidated) | 4th Q | 3rd Q | 2ndQ | 1st Q | 4th Q | |||||||||||||||
Liquid Assets (*) as a percentage of Transactional Deposits | 66.52 | 57.27 | 57.89 | 80.03 | 71.79 | |||||||||||||||
Liquid Assets (*) as a percentage of Total Deposits | 44.26 | 36.07 | 36.99 | 47.48 | 47.18 |
(*) Liquid assets include cash and due from banks (including deposits with the Argentine Central Bank and the special escrow accounts with the monetary authority), holdings of Lebac (Argentine Central Bank’s bills), net call money interbank loans, short-term placements with correspondent banks and reverse repurchase agreement transactions with the local market.
As of December 31, 2017, the Bank’s liquid assets represented 66.52% of the Bank’s transactional deposits and 44.26% of its total deposits, as compared to 71.79% and 47.18%, respectively, as of December 31, 2016.
16 |
BANCO DE GALICIA Y BUENOS AIRES S.A.
SELECTED FINANCIAL INFORMATION - CONSOLIDATED DATA (*)
In millions of pesos | ||||||||||||||||||||
FY2017 | FY2016 | |||||||||||||||||||
4th Q | 3rd Q | 2ndQ | 1st Q | 4th Q | ||||||||||||||||
Cash and Due from Banks | 56,651 | 36,144 | 33,318 | 50,205 | 61,132 | |||||||||||||||
Government and Corporate Securities | 36,411 | 22,264 | 28,654 | 24,423 | 12,548 | |||||||||||||||
Net Loans | 197,330 | 173,733 | 159,924 | 146,438 | 137,451 | |||||||||||||||
Other Receivables Resulting from Financial Brokerage | 32,441 | 17,925 | 17,136 | 20,669 | 18,470 | |||||||||||||||
Equity Investments in Other Companies | 180 | 155 | 198 | 187 | 181 | |||||||||||||||
Bank Premises and Equipment, Miscellaneous and Intangible Assets | 8,563 | 7,749 | 7,363 | 6,976 | 6,571 | |||||||||||||||
Other Assets | 4,808 | 4,455 | 3,802 | 4,402 | 3,705 | |||||||||||||||
Total Assets | 336,384 | 262,425 | 250,395 | 253,300 | 240,058 | |||||||||||||||
Deposits | 203,504 | 164,449 | 158,212 | 158,685 | 151,727 | |||||||||||||||
Other Liabilities Resulting from Financial Brokerage | 81,792 | 60,042 | 57,821 | 62,586 | 58,382 | |||||||||||||||
Subordinated Notes | 4,828 | 4,360 | 4,261 | 3,865 | 4,065 | |||||||||||||||
Other | 8,594 | 7,841 | 6,570 | 6,328 | 5,628 | |||||||||||||||
Minority Interests | 1,845 | 1,666 | 1,481 | 1,450 | 1,350 | |||||||||||||||
Total Liabilities | 300,563 | 238,358 | 228,345 | 232,914 | 221,152 | |||||||||||||||
Shareholders’ Equity | 35,821 | 24,067 | 22,050 | 20,386 | 18,906 | |||||||||||||||
Foreign-Currency Assets and Liabilities | ||||||||||||||||||||
Assets | 88,937 | 66,046 | 59,184 | 63,491 | 66,729 | |||||||||||||||
Liabilities | 87,120 | 66,661 | 59,505 | 65,978 | 68,544 | |||||||||||||||
Net Forward Purchases/(Sales) of Foreign Currency (1) | (2,541) | (2,378) | 932 | 2,744 | 4,097 |
(*) Banco de Galicia y Buenos Aires S.A. consolidated with subsidiary companies (Section 33 - Law No. 19,550).
(1) Recordedoff-balance sheet.
17 |
BANCO DE GALICIA Y BUENOS AIRES S.A.:
SELECTED FINANCIAL INFORMATION - CONSOLIDATED DATA (*)
In millions of pesos | ||||||||||||||||||||
FY2017 | FY2016 | |||||||||||||||||||
4th Q | 3rd Q | 2ndQ | 1st Q | 4th Q | ||||||||||||||||
Financial Income | 12,401 | 11,162 | 10,624 | 9,901 | 9,391 | |||||||||||||||
Interest on Loans to the Financial Sector | 191 | 168 | 139 | 109 | 101 | |||||||||||||||
Interest on Overdrafts | 809 | 654 | 638 | 655 | 803 | |||||||||||||||
Interest on Promissory Notes | 1,626 | 1,440 | 1,263 | 1,229 | 1,223 | |||||||||||||||
Interest on Mortgage Loans | 112 | 96 | 80 | 82 | 97 | |||||||||||||||
Interest on Pledge Loans | 42 | 34 | 27 | 22 | 22 | |||||||||||||||
Interest on Credit-Card Loans | 4,438 | 4,061 | 4,235 | 4,001 | 3,861 | |||||||||||||||
Interest on Financial Leases | 91 | 80 | 71 | 68 | 70 | |||||||||||||||
Interest on Other Loans | 2,537 | 2,264 | 2,073 | 1,863 | 1,629 | |||||||||||||||
Net Income from Government and Corporate Securities | 1,347 | 1,374 | 1,293 | 999 | 1,147 | |||||||||||||||
Interest on Other Receivables Resulting from Financial Brokerage | 19 | 18 | 13 | 10 | 13 | |||||||||||||||
Net Income from Secured Loans - Decree No.1387/01 | - | - | - | 2 | - | |||||||||||||||
CER Adjustment | 140 | 59 | 38 | 10 | 6 | |||||||||||||||
Other | 430 | 408 | 296 | 379 | 118 | |||||||||||||||
Quotation Differences on Gold and Foreign Currency | 619 | 506 | 458 | 472 | 301 | |||||||||||||||
Financial Expenses | (5,664) | (4,797) | (4,764) | (5,101) | (4,494) | |||||||||||||||
Interest on Saving Accounts Deposits | - | (1) | - | - | - | |||||||||||||||
Interest on Checking Accounts Deposits | (1) | (2) | (1) | (2) | (2) | |||||||||||||||
Interest on Time Deposits | (2,914) | (2,447) | (2,518) | (2,694) | (2,689) | |||||||||||||||
Interest on Subordinated Obligations | (94) | (92) | (84) | (80) | (82) | |||||||||||||||
Other Interest | (183) | (262) | (62) | (36) | (15) | |||||||||||||||
Interest on Interbank Loans Received (Call Money Loans) | (20) | (11) | (7) | (14) | (6) | |||||||||||||||
Interest on Other Financing from Financial Entities | (171) | (155) | (132) | (121) | (69) | |||||||||||||||
Net Losses from Options | - | - | - | (1) | (5) | |||||||||||||||
Interest on Other Liabilities Resulting from Financial Brokerage | (1,093) | (998) | (961) | (813) | (801) | |||||||||||||||
Contributions to the Deposit Insurance Fund | (73) | (70) | (70) | (65) | (51) | |||||||||||||||
CER Adjustment | (20) | (13) | (13) | (4) | (4) | |||||||||||||||
Other | (1,095) | (746) | (916) | (1,271) | (770) | |||||||||||||||
Gross Financial Margin | 6,737 | 6,365 | 5,860 | 4,800 | 4,897 | |||||||||||||||
Provisions for Loan Losses | (1,468) | (1,131) | (1,449) | (1,157) | (1,311) | |||||||||||||||
Income from Services, Net | 3,942 | 3,592 | 3,673 | 3,608 | 3,413 | |||||||||||||||
Administrative Expenses | (6,197) | (5,487) | (5,533) | (4,932) | (4,860) | |||||||||||||||
Personnel Expenses | (3,385) | (2,944) | (2,991) | (2,757) | (2,692) | |||||||||||||||
Directors’ and Syndics’ Fees (**) | 4 | (15) | (17) | (19) | (10) | |||||||||||||||
Other Fees | (186) | (190) | (153) | (111) | (161) | |||||||||||||||
Advertising and Publicity | (251) | (219) | (231) | (156) | (183) | |||||||||||||||
Taxes | (605) | (567) | (549) | (490) | (454) | |||||||||||||||
Depreciation of Premises and Equipment | (153) | (121) | (106) | (91) | (85) | |||||||||||||||
Amortization of Organization Expenses | (164) | (161) | (163) | (164) | (181) | |||||||||||||||
Other Operating Expenses | (800) | (734) | (726) | (634) | (563) | |||||||||||||||
Other | (657) | (536) | (597) | (510) | (531) | |||||||||||||||
Minority Interest Results | (179) | (186) | (119) | (156) | (115) | |||||||||||||||
Income from Equity Investments | 35 | 61 | 183 | 23 | 19 | |||||||||||||||
Net Other Income / (Loss) | 121 | 105 | 62 | 181 | 471 | |||||||||||||||
Income Tax | (1,237) | (1,302) | (1,013) | (887) | (962) | |||||||||||||||
Net Income / (Loss) | 1,754 | 2,017 | 1,664 | 1,480 | 1,552 |
(*) Banco de Galicia y Buenos Aires S.A., consolidated with subsidiary companies (Section 33 – Law No. 19,550).
(**) In the fourth quarter a recovery of fees was recorded due to the merger of Tarjeta Naranja S.A. and Cards Cuyanas S.A.
18 |
BANCO DE GALICIA Y BUENOS AIRES S.A.:
SELECTED FINANCIAL INFORMATION - CONSOLIDATED DATA (*)
In millions of pesos | ||||||||
FY2017 | FY2016 | |||||||
FINANCIAL INCOME | 44,088 | 36,211 | ||||||
Interest on Loans to the Financial Sector | 607 | 338 | ||||||
Interest on Overdrafts | 2,756 | 3,089 | ||||||
Interest on Promissory Notes | 5,558 | 5,321 | ||||||
Interest on Mortgage Loans | 370 | 474 | ||||||
Interest on Pledge Loans | 125 | 88 | ||||||
Interest on Credit-Card Loans | 16,735 | 14,178 | ||||||
Interest on Financial Leases | 310 | 290 | ||||||
Interest on Other Loans | 8,737 | 5,289 | ||||||
Net Income from Government and Corporate Securities | 5,013 | 5,502 | ||||||
Interest on Other Receivables Resulting from Financial Brokerage | 60 | 51 | ||||||
Net Income from Secured Loans - Decree No.1387/01 | 2 | - | ||||||
CER Adjustment | 247 | 6 | ||||||
Other | 1,513 | 588 | ||||||
Quotation Differences on Gold and Foreign Currency | 2,055 | 997 | ||||||
FINANCIAL EXPENSES | (20,326) | (20,145) | ||||||
Interest on Checking-Accounts Deposits | (1) | - | ||||||
Interest on Savings-Accounts Deposits | (6) | (5) | ||||||
Interest on Time Deposits | (10,573) | (13,072) | ||||||
Interest on Subordinated Obligations | (350) | (533) | ||||||
Other Interest | (543) | (58) | ||||||
Interest on Interbank Loans Received (Call Money Loans) | (52) | (36) | ||||||
Interest on Other Financing from Financial Entities | (579) | (187) | ||||||
Interest on Other Liabilities Resulting from Financial Brokerage | (1) | (29) | ||||||
Net Income from Options | (3,865) | (2,956) | ||||||
Contributions to the Deposit Insurance Fund | (278) | (314) | ||||||
CER Adjustment | (50) | (7) | ||||||
Other | (4,028) | (2,948) | ||||||
GROSS FINANCIAL MARGIN | 23,762 | 16,066 | ||||||
PROVISIONS FOR LOAN LOSSES | (5,205) | (3,533) | ||||||
INCOME FROM SERVICES, NET | 14,815 | 11,543 | ||||||
ADMINISTRATIVE EXPENSES | (22,149) | (16,974) | ||||||
Personnel Expenses | (12,077) | (9,359) | ||||||
Directors’ and Syndics’ Fees | (47) | (53) | ||||||
Other Fees | (640) | (472) | ||||||
Advertising and Publicity | (857) | (742) | ||||||
Taxes | (2,211) | (1,620) | ||||||
Depreciation of Premises and Equipment | (471) | (286) | ||||||
Amortization of Organization Expenses | (652) | (738) | ||||||
Other Operating Expenses | (2,894) | (2,066) | ||||||
Other | (2,300) | (1,638) | ||||||
MINORITY INTEREST RESULTS | (640) | (350) | ||||||
INCOME FROM EQUITY INVESTMENTS | 302 | 180 | ||||||
NET OTHER INCOME / (LOSS) | 469 | 1,283 | ||||||
INCOME TAX | (4,439) | (3,121) | ||||||
NET INCOME / (LOSS) | 6,915 | 5,094 |
(*) Banco de Galicia y Buenos Aires S.A., consolidated with subsidiary companies (Section 33 – Law No. 19,550).
19 |
CONSUMER FINANCE BUSINESS – ADDITIONAL INFORMATION
TARJETAS REGIONALES S.A.
The data shown in the following tables correspond to Tarjetas Regionales S.A. consolidated with its subsidiaries (Tarjeta Naranja S.A.,(*) Tarjetas Cuyanas S.A., Procesadora Regional S.A. and Cobranzas Regionales S.A.). Figures are stated according to Argentine Central Bank accounting standards.
RESULTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017
In millions of pesos, except percentages | ||||||||||||
Table XXI Evolution of Consolidated Results | FY2017 | FY2016 | Variation (%) | |||||||||
Net Financial Income | 5,917 | 3,916 | 51.1 | |||||||||
Net Income from Services | 6,745 | 5,034 | 34.0 | |||||||||
Provisions for Loan Losses | (2,018) | (1,546) | 30.5 | |||||||||
Administrative Expenses | (6,939) | (5,450) | 27.3 | |||||||||
Operating Income | 3,705 | 1,954 | 89.6 | |||||||||
Net Other Income / (Loss)(*) | 680 | 568 | 19.7 | |||||||||
Income Tax | (1,640) | (1,095) | 49.8 | |||||||||
Net Income | 2,745 | 1,427 | 92.4 |
(*) Includes income from equity investments and minority interest results.
RESULTS FOR THE QUARTER
In millions of pesos, except percentages | ||||||||||||||||||||
Table XXII | FY2017 | FY2016 | Variation (%) | |||||||||||||||||
Selected Information | 4th Q | 3rd Q | 4th Q | 4Q17 vs 3Q17 | 4Q17 vs 4Q16 | |||||||||||||||
Total Assets | 36,459 | 32,039 | 30,847 | 13.8 | 18.2 | |||||||||||||||
Cash and Due from Banks | 537 | 416 | 461 | 29.1 | 16.5 | |||||||||||||||
Loans | 32,311 | 28,547 | 26,914 | 13.2 | 20.1 | |||||||||||||||
Total Liabilities | 28,603 | 24,956 | 25,347 | 14.6 | 12.8 | |||||||||||||||
Notes | 9,122 | 9,027 | 7,157 | 1.1 | 27.5 | |||||||||||||||
Financial Entities | 332 | 403 | 2,379 | (17.6) | (86.0) | |||||||||||||||
Merchants | 16,047 | 12,853 | 13,307 | 24.9 | 20.6 | |||||||||||||||
Shareholders’ Equity | 7,856 | 7,083 | 5,500 | 10.9 | 42.8 | |||||||||||||||
Net Income | 773 | 794 | 456 | (2.6) | 69.5 | |||||||||||||||
Net Financial Income | 1,656 | 1,481 | 1,233 | 11.8 | 34.3 | |||||||||||||||
Net Income from Services | 1,883 | 1,636 | 1,516 | 15.1 | 24.2 | |||||||||||||||
Provisions for Loan Losses | (493) | (441) | (551) | 11.8 | (10.5) | |||||||||||||||
Administrative Expenses | (1,907) | (1,682) | (1,560) | 13.4 | 22.2 | |||||||||||||||
Loan Portfolio Quality | Variation (b.p.) | |||||||||||||||||||
Non-Accrual Loans to Total Loans (%) | 6.81 | 7.07 | 7.08 | (26) | (27) | |||||||||||||||
Allowance for Loan Losses to Total Loans (%) | 6.86 | 7.45 | 6.89 | (59) | (3) | |||||||||||||||
Allowance for Loan Losses toNon-Accrual Loans (%) | 100.80 | 105.37 | 97.41 | (457) | 339 |
(*) Beginning on October 1, 2017, Tarjeta Naranja S.A. absorbed the assets and liabilities of Tarjetas Cuyanas S.A., due to the merger of both companies.
20 |
Percentages | ||||||||||||||||
Table XXIII | FY2017 | FY2016 | Twelve Months Ended | |||||||||||||
Profitability and Efficiency | 4th Q | 4th Q | 12/31/17 | 12/31/16 | ||||||||||||
Return on Average Assets(*) | 9.17 | 6.59 | 8.79 | 5.81 | ||||||||||||
Return on Average Shareholders’ Equity(*) | 42.84 | 34.54 | 42.70 | 29.45 | ||||||||||||
Financial Margin(*) (1) | 20.70 | 17.92 | 19.36 | 16.22 | ||||||||||||
Net Income from Services as a % of Operating Income(2) | 53.21 | 55.15 | 53.27 | 56.25 | ||||||||||||
Net Income from Services as a % of Administrative Expenses | 98.74 | 97.18 | 97.20 | 92.37 | ||||||||||||
Administrative Expenses as a % of Operating Income (2) | 53.89 | 56.75 | 54.80 | 60.89 |
(*) Annualized.
(1) Financial Margin: Financial Income minus Financial Expenses, divided by Average Interest-earning Assets.
(2) Operating Income: Net Financial Income plus Net Income from Services.
21 |
COMPAÑÍA FINANCIERA ARGENTINA S.A.
RESULTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2017
In millions of pesos, except percentages | ||||||||||||
Table XXIV Evolution of Consolidated Results | FY2017 | FY2016 | Variation (%) | |||||||||
Net Financial Income | 2,142 | 1,453 | 47.4 | |||||||||
Net Income from Services | 284 | 244 | 16.4 | |||||||||
Provisions for Loan Losses | (602) | (346) | 74.0 | |||||||||
Administrative Expenses | (1,504) | (1,171) | 28.4 | |||||||||
Operating Income | 320 | 180 | 77.8 | |||||||||
Net Other Income / (Loss)(*) | 110 | 293 | (62.5) | |||||||||
Income Tax | (156) | (130) | 20.0 | |||||||||
Net Income | 274 | 343 | (20.1) |
(*) Includes income from equity investments.
RESULTS FOR THE QUARTER
In millions of pesos, except percentages | ||||||||||||||||||||
Table XXV | FY2017 | FY2016 | Variation (%) | |||||||||||||||||
Selected Information | 4th Q | 3rd Q | 4th Q | 4Q17 vs 3Q17 | 4Q17 vs 4Q16 | |||||||||||||||
Total Assets | 8,527 | 7,610 | 5,894 | 12.0 | 44.7 | |||||||||||||||
Cash and Due from Banks | 328 | 347 | 395 | (5.5) | (17.0) | |||||||||||||||
Loans | 6,952 | 6,377 | 4,916 | 9.0 | 41.4 | |||||||||||||||
Total Liabilities | 7,287 | 6,422 | 4,678 | 13.5 | 55.8 | |||||||||||||||
Deposits | 2,701 | 2,194 | 1,413 | 23.1 | 91.2 | |||||||||||||||
Notes | 2,407 | 1,938 | 1,207 | 24.2 | 99.4 | |||||||||||||||
Financial Entities | 1,357 | 1,140 | 1,251 | 19.0 | 8.5 | |||||||||||||||
Shareholders’ Equity | 1,240 | 1,188 | 1,216 | 4.4 | 2.0 | |||||||||||||||
Net Income | 52 | 91 | 112 | (42.9) | (53.6) | |||||||||||||||
Net Financial Income | 561 | 551 | 447 | 1.8 | 25.5 | |||||||||||||||
Net Income from Services | 78 | 71 | 65 | 9.9 | 20.0 | |||||||||||||||
Provisions for Loan Losses | (181) | (135) | (123) | 34.1 | 47.2 | |||||||||||||||
Administrative Expenses | (411) | (390) | (346) | 5.4 | 18.8 | |||||||||||||||
Loan Portfolio Quality | Variation (b.p.) | |||||||||||||||||||
Non-Accrual Loans to Total Loans (%) | 14.38 | 13.92 | 11.80 | 46 | 258 | |||||||||||||||
Allowance for Loan Losses to Total Loans (%) | 9.11 | 8.69 | 6.91 | 42 | 220 | |||||||||||||||
Allowance for Loan Losses toNon-Accrual Loans (%) | 63.36 | 62.45 | 58.59 | 91 | 477 |
Percentages | ||||||||||||||||
Table XXVI | FY2017 | FY2016 | Twelve Months Ended | |||||||||||||
Profitability and Efficiency | 4th Q | 4th Q | 12/31/17 | 12/31/16 | ||||||||||||
Return on Average Assets(*) | 2.52 | 8.13 | 3.86 | 7.50 | ||||||||||||
Return on Average Shareholders’ Equity(*) | 16.26 | 37.49 | 22.53 | 29.19 | ||||||||||||
Financial Margin(*) (1) | 29.21 | 36.06 | 32.75 | 34.24 | ||||||||||||
Net Income from Services as a % of Operating Income(2) | 12.21 | 12.70 | 11.71 | 14.38 | ||||||||||||
Net Income from Services as a % of Administrative Expenses | 18.98 | 18.79 | 18.88 | 20.84 | ||||||||||||
Administrative Expenses as a % of Operating Income (2) | 64.32 | 67.58 | 62.00 | 69.00 |
(*) Annualized.
(1) Financial Margin: Financial Income minus Financial Expenses, divided by Average Interest-earning Assets.
(2) Operating Income: Net Financial Income plus Net Income from Services.
22 |
SUDAMERICANA HOLDING S.A.
INFORMATION DISCLOSURE
The data shown in the tables of this report and the consolidated financial statements correspond to Sudamericana Holding S.A. consolidated with the subsidiaries under its direct or indirect control (Galicia Seguros S.A., Galicia Retiro Compañía de Seguros S.A. and Galicia Broker Asesores de Seguros S.A.).
RESULTS FOR THE TWELVE MONTHS THAT ENDED ON DECEMBER 31, 2017
In millions of pesos, except percentages | ||||||||||||
Table XXVII | Twelve months ended: | Variation (%) | ||||||||||
Selected Information | 12/31/17 | 12/31/16 | ||||||||||
Assets | 2,317 | 2,217 | 4.5 | |||||||||
Premiums Receivable | 661 | 512 | 29.1 | |||||||||
Reinsurance Recoverables | 3 | 3 | - | |||||||||
Liabilities | 1,329 | 1,198 | 10.9 | |||||||||
Debt with Insureds | 261 | 214 | 22.0 | |||||||||
Debt with Reinsurers | 17 | (1) | - | |||||||||
Debt with Agents and Brokers | 153 | 147 | 4.1 | |||||||||
Insurance Contract Liabilities | 401 | 303 | 32.3 | |||||||||
Shareholders’ Equity | 988 | 1,019 | (3.0) | |||||||||
Net Income | 471 | 710 | (33.7) | |||||||||
Earned Premiums | 3,202 | 3,319 | (3.5) | |||||||||
Incurred Claims | (380) | (461) | (17.6) | |||||||||
Net Investment Income | 326 | 316 | 3.0 | |||||||||
Commissions and Other | (1,175) | (786) | 49.5 | |||||||||
Operating Expenses | (1,172) | (983) | 19.2 | |||||||||
Annualized Sales | 1,662 | 1,059 | 56.9 |
RESULTS FOR THE QUARTER THAT ENDED ON DECEMBER 31, 2017
In millions of pesos, except percentages | ||||||||||||||||||||
Table XXVIII | Quarters ended: | Variation (%) | ||||||||||||||||||
Selected Information | 12/31/17 | 09/30/17 | 12/31/16 | Quarter | Annual | |||||||||||||||
Assets | 2.317 | 2.265 | 2.217 | 2.3 | 4.5 | |||||||||||||||
Premiums Receivable | 661 | 580 | 512 | 14.0 | 29.1 | |||||||||||||||
Reinsurance Recoverables | 3 | 4 | 3 | (25.0) | - | |||||||||||||||
Liabilities | 1.329 | 1.419 | 1.198 | (6.3) | 10.9 | |||||||||||||||
Debt with Insureds | 261 | 248 | 214 | 5.2 | 22.0 | |||||||||||||||
Debt with Reinsurers | 17 | 8 | (1) | 112.5 | - | |||||||||||||||
Debt with Agents and Brokers | 153 | 137 | 147 | 11.7 | 4.1 | |||||||||||||||
Insurance Contract Liabilities | 401 | 383 | 303 | 4.7 | 32.3 | |||||||||||||||
Shareholders’ Equity | 988 | 846 | 1.019 | 16.8 | (3.0) | |||||||||||||||
Net Income | 157 | 95 | 112 | 66.3 | 40.8 | |||||||||||||||
Earned Premiums | 874 | 791 | 823 | 10.5 | 6.2 | |||||||||||||||
Incurred Claims | (86) | (91) | (138) | (5.5) | (37.7) | |||||||||||||||
Net Investment Income | 84 | 92 | 72 | (8.7) | 16.7 | |||||||||||||||
Commissions and Other | (318) | (317) | (236) | 0.3 | 34.7 | |||||||||||||||
Operating Expenses | (317) | (291) | (276) | 8.9 | 14.9 | |||||||||||||||
Annualized Sales | 465 | 452 | 311 | 2.9 | 49.5 |
23 |
Percentages | ||||||||||||||||
Table XXIX | Quarters ended: | Twelve Months Ended: | ||||||||||||||
Profitability | 12/31/17 | 12/31/16 | 12/31/17 | 12/31/16 | ||||||||||||
Return on Average Assets(*) | 24,82 | 20,23 | 20,78 | 38,05 | ||||||||||||
Return on Average Shareholders’ Equity(*) | 60,24 | 45,31 | 42,97 | 78,70 |
(*) Annualized.
24 |
GALICIA ADMINISTRADORA DE FONDOS S.A.
RESULTS FOR THE FISCAL YEAR THAT ENDED ON DECEMBER 31, 2017
In millions of pesos, except percentages | ||||||||||||
Table XXX Selected Information | FY2017 | FY2016 | Variation (%) | |||||||||
Shareholders’ Equity | 460 | 207 | 122.2 | |||||||||
Net Income | 450 | 197 | 128.4 | |||||||||
Fees and Commissions | 724 | 331 | 118.7 | |||||||||
Administrative Expenses | (62) | (47) | 31.9 | |||||||||
Commercial Expenses | (44) | (20) | 120.0 |
RESULTS FOR THE QUARTER
In millions of pesos, except percentages | ||||||||||||||||||||
Table XXXI | FY2017 | FY2016 | Variation (%) | |||||||||||||||||
Selected Information | 4th Q | 3rd Q | 4th Q | 4Q17 vs 3Q17 | 4Q17 vs 4Q16 | |||||||||||||||
Shareholders’ Equity | 460 | 321 | 207 | 43.3 | 122.2 | |||||||||||||||
Net Income | 138 | 119 | 69 | 16.0 | 100.0 | |||||||||||||||
Fees and Commissions | 219 | 186 | 122 | 17.7 | 79.5 | |||||||||||||||
Administrative Expenses | (22) | (12) | (19) | 83.3 | 15.8 | |||||||||||||||
Commercial Expenses | (16) | (11) | (8) | 45.5 | 100.0 |
In millions of pesos, except percentages | ||||||||||||||||
Table XXXII: | Assets Under Management as of: | Variation | ||||||||||||||
Mutual Funds | 4th Q17 | 4th Q16 | Ps. | % | ||||||||||||
Fima Premium | 7,540 | 7,130 | 410 | 5.8 | ||||||||||||
Fima Ahorro Pesos | 20,918 | 15,955 | 4,963 | 31.1 | ||||||||||||
Fima Ahorro Plus | 21,143 | 10,195 | 10,948 | 107.4 | ||||||||||||
Fima Capital Plus | 384 | 562 | (178) | (31.7) | ||||||||||||
Fima Renta en Pesos | 545 | 239 | 306 | 128.0 | ||||||||||||
Fima Renta Plus | 458 | 247 | 211 | 85.4 | ||||||||||||
Fima Abierto Pymes | 238 | 187 | 51 | 27.3 | ||||||||||||
Fima Acciones | 323 | 118 | 205 | 173.7 | ||||||||||||
Fima PB Acciones | 973 | 305 | 668 | 219.0 | ||||||||||||
Fima Mix I | 6 | 152 | (146) | (96.1) | ||||||||||||
Fima Renta Dólares I | 17,114 | 2,237 | 14,877 | 665.0 | ||||||||||||
Fima Renta Dólares II | 5,354 | 2 | 5,352 | 267,600.0 | ||||||||||||
Total Assets Under Management | 74,996 | 37,329 | 37,667 | 100.9 |
25 |
RECENT DEVELOPMENTS
SPLITOF TARJETAS REGIONALES
At the Extraordinary Shareholders’ Meetings of Grupo Financiero Galicia and Banco Galicia held on December 14, 2017, the shareholders approved a corporate reorganization process consisting of the split off of the Bank’s 77% interest in Tarjetas Regionales S.A. and its incorporation into the equity of Grupo Financiero Galicia, effective January 1, 2018. On January 23, 2018, the definitive split-merger agreement was signed, and its registration in the Public Registry of Commerce is currently pending. The capital reduction of Banco Galicia resulting from the reorganization has no impact on Grupo Financiero Galicia.
ACQUISITIONOFA MINORITY INTERESTIN TARJETAS REGIONALES
During August 2017, Grupo Financiero Galicia accepted irrevocable offers made by minority shareholders for the sale of a 6% interest in Targetas Regionales S.A. for US$ 49 million. The transfer was made effective on January 5, 2018.
CAPITAL CONTRIBUTIONOF GRUPO FINANCIERO GALICIA
On December 27, 2017, Grupo Financiero Galicia in its capacity as sole shareholder and holder of 100% of the capital of Banco Galicia, integrated the capital contribution of Ps.10,000 million through LEBACs. The Argentine Central Bank, through its Resolution No.35 dated January 11, 2018, approved the capital contribution, allowing this contribution to be considered as computable capital.
SALEOF CFAAND COBRANZASY SERVICIOS
On February 2, 2018, the sale of Compañía Financiera Argentina S.A. and Cobranzas y Servicios S.A. was completed. The total amount of the transaction reached Ps.1,064 million.
IFRS REGULATIONS
Beginning with the financial statements corresponding to the first quarter of the 2017 fiscal year, the adjustments corresponding to the application of IFRS are reported as a note to the balance sheet. IFRS will be fully applied from the 2018 fiscal year. As of December 31, 2017, the adjustment to Banco Galicia’s net worth as a result of the application of these standards amounts to Ps.3,144 million, reaching an adjusted net worth of Ps.38,971 million. For Grupo Financiero Galicia, the adjustment amounts to Ps.1,964 million and the adjusted balance amounts to Ps.41,264 million. These figures are subject to change and may only be considered definitive when preparing the annual financial statements for the year in which IFRS are applied for the first time.
DISTRIBUTION NETWORK
During the quarter, the Bank increased its distribution network with the opening of 19 new branches: 3 in the City of Buenos Aires, 8 in the province of Buenos Aires, 1 in Corrientes, 1 in Neuquén, 2 in Chaco, 2 in Córdoba, 1 in Mendoza and 1 in San Juan.
This report is a summary analysis of Grupo Financiero Galicia’s financial condition and results of operations as of and for the periods indicated. For a correct interpretation, this report must be read in conjunction with Grupo Financiero Galicia’s financial statements, as well as with all other material periodically filed with the National Securities Commission (www.cnv.gob.ar), the Buenos Aires Stock Exchange (www.bolsar.com), the Cordoba Stock Exchange (www.bolsacba.com.ar) and the Nasdaq (www.nasdaq.com). In addition, the Argentine Central Bank(www.bcra.gob.ar) may publish information related to Banco Galicia as of a date subsequent to the last date for which the Bank has published information.
Readers of this report must note that this is a translation made from an original version written and expressed in Spanish. Therefore, any matters of interpretation should be referred to the original version in Spanish.
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