Exhibit 99.1
GRUPO FINANCIERO GALICIA S.A. REPORTS FINANCIAL RESULTS FOR
THE FIRST QUARTER THAT ENDED ON MARCH 31, 2018
Buenos Aires, Argentina, May 24, 2018 – Grupo Financiero Galicia S.A. (BYMA: GGAL /NASDAQ: GGAL) announced its financial results for the first quarter that ended on March 31, 2018 (“the quarter”).
HIGHLIGHTS
➣ | As from the current fiscal year, the results of Grupo Financiero Galicia S.A. (“Grupo Financiero Galicia” or “GFG”) and its subsidiaries are reported in accordance with the International Financial Reporting Standards (“IFRS”) as established by the Argentine Central Bank. Therefore, the financial statements and this report are presented in accordance with said standards. For a better comparison, figures for 2017 are also presented in accordance with IFRS. |
➣ | Net income for the quarter that ended on March 31, 2018, amounted to Ps.2,985 million, 109% higher than the Ps.1,431 million profit recorded in the first quarter of the 2017 fiscal year. The profit per share for the quarter amounted to Ps.2.10, compared to Ps.1.10 per share for the same quarter of the 2017 fiscal year. |
➣ | The results of the quarter were mainly attributable to the income derived from Grupo Financiero Galicia’s interest in Banco de Galicia y Buenos Aires S.A. (“Banco Galicia”), for Ps.1,956 million, in Tarjetas Regionales S.A., for Ps.699 million, in Galicia Administradora de Fondos S.A., for Ps.159 million, and in Sudamericana Holding S.A., for Ps.146 million, increased by a net operating income of Ps.71 million and partially offset by administrative expenses of Ps.29 million. |
➣ | Grupo Financiero Galicia and Banco Galicia made a split-merger agreement consisting of a split of part of Banco Galicia’s equity, composed of its 77% interest in Tarjetas Regionales S.A., that was merged into the equity of Grupo Financiero Galicia, effective as of January 1, 2018. In addition, the purchase of a 6% interest in Targetas Regionales S.A. was made effective as of January 5, 2018, as a consequence of which Grupo Financiero Galicia reached an 83% interest in said company. |
➣ | At the Shareholders’ Meeting held on April 24, 2018, the shareholders approved the payment of a cash dividend in the amount of Ps.1,200 million, equivalent to Ps.0.84 per share, which was made on May 9, 2018. |
Conference Call:
May 29, 2018, 11:00 A.M. Eastern Time (12:00 P.M. Buenos Aires Time)
Call-in number: +1323-701-0219
Conference ID: 5580098
For more information contact:
José Luis Ronsini - CFO
Pablo Firvida - IRO
Tel.: (5411) 6329-4881
inversores@gfgsa.com
www.gfgsa.com
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CONSOLIDATED INFORMATION
Consolidated Financial Statement | 2018 | 2017 | Variation (%) | |||||||||||||||||
(In millions of pesos, except otherwise noted) | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Financial Information | ||||||||||||||||||||
Assets | 327,621 | 324,294 | 246,121 | 1 | 33 | |||||||||||||||
Net loans and other financing | 210,427 | 194,538 | 143,634 | 8 | 47 | |||||||||||||||
Deposits | 198,364 | 200,723 | 156,694 | (1) | 27 | |||||||||||||||
Shareholders’ equity attributable to the controlling company | 44,678 | 41,188 | 26,148 | 8 | 71 | |||||||||||||||
Shares outstanding(in thousands of shares) (1) | 1,426,765 | 1,426,765 | 1,300,265 | - | 10 | |||||||||||||||
Book value per share(in pesos) | 31.31 | 28.87 | 20.11 | 8 | 76 | |||||||||||||||
Profitability | ||||||||||||||||||||
Net income attributable to Grupo Financiero Galicia | 2,985 | 2,840 | 1,431 | 5 | 109 | |||||||||||||||
Net income per share(in pesos) | 2.10 | 1.99 | 1.10 | 6 | 91 |
(1) 10 ordinary shares = 1 ADS.
Selected Ratios | 2018 | 2017 | Variation (bp) | |||||||||||||||||
(Percentages) | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Return (1) on average assets (2) | 3.66 | 3.82 | 2.34 | (16) | 132 | |||||||||||||||
Return (1) on average shareholders´ equity (2) | 27.33 | 28.42 | 24.72 | (109) | 261 | |||||||||||||||
Efficiency (3) | 54.27 | 54.92 | 59.42 | (65) | (515) | |||||||||||||||
Total capital ratio (4) | 14.57 | 10.69 | 11.68 | 388 | 289 | |||||||||||||||
Non-performing loans / loans to the private sector | 3.21 | 2.84 | 2.96 | 37 | 25 | |||||||||||||||
Provisions / loans to the private sector | 3.38 | 3.05 | 3.26 | 33 | 12 | |||||||||||||||
Provisions /non-performing loans | 105.26 | 107.43 | 110.34 | (217) | (508) |
(1) Net comprehensive income attributable to the controlling company.
(2) Annualized.
(3) Net interest income plus net fee income plus net result from financial instruments plus quotation differences plus certain items included in other operating income, divided by personnel expenses plus administrative expenses plus depreciation and devaluations of assets.
(4) Banco Galicia on an individual basis.
2 |
Market Indicators | 2018 | 2017 | Variation (%) | |||||||||||||||||
(In millions of pesos, except otherwise noted and percentages) | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Market price | ||||||||||||||||||||
Shares – BYMA | 131.30 | 123.70 | 58.90 | 123 | ||||||||||||||||
ADS – NASDAQ (in US$) | 65.76 | 65.85 | 37.86 | - | 74 | |||||||||||||||
Price BYMA / book value | 4.19 | 4.28 | 3.31 | (2) | 27 | |||||||||||||||
Average daily volume(in thousands of shares) | ||||||||||||||||||||
BYMA | 495 | 644 | 682 | (23) | (27) | |||||||||||||||
NASDAQ (1) | 3,922 | 4,927 | 4,620 | (20) | (15) | |||||||||||||||
Market share (%) | �� | Variation (pb) | ||||||||||||||||||
Banco Galicia | ||||||||||||||||||||
Loans to the private sector | 9.54 | 9.65 | 9.80 | (11) | (26) | |||||||||||||||
Deposits from the private sector | 9.67 | 10.20 | 10.09 | (53) | (42) | |||||||||||||||
Galicia Administradora de Fondos S.A. | 13.30 | 12.50 | 12.70 | 80 | 60 | |||||||||||||||
Galicia Seguros S.A. (2) | 10.80 | 11.56 | 10.66 | (76) | 14 |
(1) Expressed in equivalent shares: 10 ordinary shares = 1 ADS.
(2) Considering the main property insurance products: homeowners insurance, theft insurance and miscellaneous risks insurance.
3 |
GRUPO FINANCIERO GALICIA
RESULTS FOR THE QUARTER
Income Statement | 2018 | 2017 | Variation (%) | |||||||||||||||||
(In millions of pesos, except percentages) | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Results from Equity Investments | 2,970 | 2,154 | 1,472 | 38 | 102 | |||||||||||||||
Banco de Galicia y Buenos Aires S.A. | 1,956 | 1,902 | 1,296 | 3 | 50 | |||||||||||||||
Tarjetas Regionales S.A.(1) | 699 | - | - | - | - | |||||||||||||||
Galicia Administradora de Fondos S.A. | 159 | 132 | 85 | 20 | 87 | |||||||||||||||
Sudamericana Holding S.A. | 146 | 119 | 95 | 23 | 54 | |||||||||||||||
Other subsidiaries(2) | 10 | 1 | (4) | 900 | (350) | |||||||||||||||
Net operating income | 71 | 708 | (8) | (90) | (988) | |||||||||||||||
Administrative expenses | (29) | (16) | (36) | 81 | (19) | |||||||||||||||
Other operating income and expenses(3) | 1 | 1 | - | - | 100 | |||||||||||||||
Income tax | (14) | (16) | - | (13) | 100 | |||||||||||||||
Other comprehensive income | (14) | 9 | 3 | (256) | (567) | |||||||||||||||
Net income attributable to Grupo Financiero Galicia | 2,985 | 2,840 | 1,431 | 5 | 109 |
(1) 83% since January 1, 2018 (77% from the split-merger agreement with Banco Galicia and 6% from the acquisition of a minority interest).
(2) Includes the result from the interest in Galicia Warrants S.A. (87.5%) and Galicia Valores S.A. (1%).
(3) Result of the sale of Compañía Financiera Argentina S.A.
In the first quarter of the 2018 fiscal year, Grupo Financiero Galicia recorded a Ps.2,985 million profit, which represented a 3.66% annualized return on average assets and a 27.33% return on average shareholder’s equity.
This result was mainly due to profits from Grupo Financiero Galicia’s interest in Banco Galicia, for Ps.1,956 million, in Tarjetas Regionales S.A., for Ps.699 million, in Galicia Administradora de Fondos S.A., for Ps.159 million, and in Sudamericana Holding S.A., for Ps.146 million.
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SELECTED FINANCIAL INFORMATION - CONSOLIDATED
Balance Sheet | 2018 | 2017 | Variation (%) | |||||||||||||||||
(In millions of pesos) | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 46,441 | 58,945 | 49,888 | (21) | (7) | |||||||||||||||
Debt securities | 31,373 | 28,978 | 21,358 | 8 | 47 | |||||||||||||||
Net loans and other financing | 210,427 | 194,538 | 143,633 | 8 | 46 | |||||||||||||||
Other financial assets | 23,758 | 26,158 | 16,226 | (9) | 46 | |||||||||||||||
Equity investments in subsidiaries, associates and joint businesses | 22 | 21 | 203 | 5 | (89) | |||||||||||||||
Property, bank premises, equipment and intangible assets | 10,978 | 10,705 | 9,703 | 3 | 13 | |||||||||||||||
Other assets | 4,394 | 3,765 | 4,135 | 17 | 6 | |||||||||||||||
Assets available for sale (1) | 228 | 1,184 | 974 | (81) | (76) | |||||||||||||||
Total assets | 327,621 | 324,294 | 246,120 | 1 | 33 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits | 198,364 | 200,723 | 156,694 | (1) | 27 | |||||||||||||||
Financing from financial entities | 11,292 | 7,869 | 7,043 | 43 | 60 | |||||||||||||||
Other financial liabilities | 38,963 | 40,986 | 29,442 | (5) | 32 | |||||||||||||||
Notes | 14,373 | 13,739 | 13,298 | 5 | 8 | |||||||||||||||
Subordinated notes | 5,079 | 4,828 | 3,864 | 5 | 31 | |||||||||||||||
Other liabilities | 13,299 | 13,026 | 9,631 | 2 | 38 | |||||||||||||||
Total liabilities | 281,370 | 281,171 | 219,972 | - | 28 | |||||||||||||||
Shareholders’ equity attributable to Grupo Financiero Galicia | 44,678 | 41,188 | 24,587 | 8 | 81 | |||||||||||||||
Shareholders’ equity attributable to third parties | 1,573 | 1,935 | 1,561 | (19) | 8 | |||||||||||||||
Shareholders’ equity | 46,251 | 43,123 | 26,148 | 7 | 88 |
(1) Includes the interest in Compañía Financiera Argentina S.A. and in Cobranzas y Servicios S.A. until the 4Q2017, and the interest in Prisma Medios de Pago S.A. since the 3Q2017.
5 |
Income Statement | 2018 | 2017 | Variation (%) | |||||||||||||||||
(In millions of pesos) | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Interest income | 11,067 | 10,004 | 7,970 | 11 | 39 | |||||||||||||||
Interest related expenses | (4,889) | (4,272) | (3,707) | 14 | 32 | |||||||||||||||
Net interest income | 6,178 | 5,732 | 4,263 | 8 | 45 | |||||||||||||||
Fee income | 2,074 | 2,110 | 1,697 | (2) | 22 | |||||||||||||||
Fee related expenses | (561) | (678) | (549) | (17) | 2 | |||||||||||||||
Net fee income | 1,513 | 1,432 | 1,148 | 6 | 32 | |||||||||||||||
Net results from financial instruments | 1,849 | 658 | 678 | 181 | 173 | |||||||||||||||
Gold and foreign currency quotation differences | 774 | 1,419 | 460 | (45) | 68 | |||||||||||||||
Other operating income | 4,106 | 4,005 | 3,245 | 3 | 27 | |||||||||||||||
Underwriting income from insurance business | 642 | 592 | 524 | 8 | 23 | |||||||||||||||
Loan loss provisions | (1,622) | (1,282) | (1,041) | 27 | 56 | |||||||||||||||
Net operating income | 13,440 | 12,556 | 9,277 | 7 | 45 | |||||||||||||||
Personnel expenses | (3,095) | (2,997) | (2,472) | 3 | 25 | |||||||||||||||
Administrative expenses | (2,925) | (2,772) | (2,095) | 6 | 40 | |||||||||||||||
Depreciations and devaluations of assets | (257) | (287) | (234) | (10) | 10 | |||||||||||||||
Other operating expenses | (2,702) | (2,485) | (1,744) | 9 | 55 | |||||||||||||||
Operating income | 4,461 | 4,015 | 2,732 | 11 | 63 | |||||||||||||||
Results from associates and joint businesses | 1 | 33 | 25 | (97) | (96) | |||||||||||||||
Results from discontinued activities (1) | 51 | (185) | (185) | (128) | (128) | |||||||||||||||
Income tax | (1,371) | (863) | (984) | 59 | 39 | |||||||||||||||
Net income | 3,142 | 3,000 | 1,588 | 5 | 98 | |||||||||||||||
Other comprehensive income | (14) | 9 | 3 | (256) | (567) | |||||||||||||||
Comprehensive income | 3,129 | 3,009 | 1,591 | 4 | 97 | |||||||||||||||
Comprehensive income attributable to third parties | (144) | (169) | (160) | (15) | (10) | |||||||||||||||
Comprehensive income attributable to Grupo Financiero Galicia | 2,985 | 2,840 | 1,431 | 5 | 109 |
(1) Net of income tax.
6 |
Additional Information | 2018 | 2017 | ||||||||||||||||||
(Physical Data (Number of)) | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Employees | 10,581 | 10,532 | 10,656 | 10,664 | 10,675 | |||||||||||||||
Banco Galicia | 6,393 | 6,214 | 6,160 | 6,023 | 5,939 | |||||||||||||||
Tarjetas Regionales | 3,760 | 3,896 | 4,073 | 4,211 | 4,316 | |||||||||||||||
Galicia Administradora de Fondos | 19 | 19 | 16 | 18 | 16 | |||||||||||||||
Sudamericana Holding | 381 | 375 | 378 | 383 | 375 | |||||||||||||||
Other companies | 28 | 28 | 29 | 29 | 29 | |||||||||||||||
Branches and other points of sales | 564 | 563 | 543 | 541 | 540 | |||||||||||||||
Banco Galicia | 308 | 306 | 285 | 279 | 279 | |||||||||||||||
Tarjetas Regionales | 256 | 257 | 258 | 262 | 261 | |||||||||||||||
Deposit Accounts(in thousands) | 4,348 | 4,249 | 4,114 | 3,983 | 3,859 | |||||||||||||||
Credit Cards(in thousands) | 13,391 | 13,234 | 13,318 | 13,372 | 13,525 | |||||||||||||||
Banco Galicia | 4,222 | 4,086 | 3,982 | 3,889 | 3,796 | |||||||||||||||
Tarjetas Regionales | 9,169 | 9,148 | 9,336 | 9,483 | 9,729 | |||||||||||||||
Galicia Administradora de Fondos’ assets under management | 91,609 | 67,771 | 74,996 | 64,042 | 56,882 | |||||||||||||||
Inflation, exchange rate and interest rates | ||||||||||||||||||||
Consumer price index (IPC) (%) | 6.66 | 6.14 | 5.33 | 5.39 | 6.26 | |||||||||||||||
Wholesale price index (IPIM) (%) | 11.70 | 4.67 | 5.59 | 3.33 | 4.15 | |||||||||||||||
Acquisition value unit (UVA) (%) | 22.61 | 21.15 | 20.16 | 19.33 | 18.04 | |||||||||||||||
Exchange rate (Ps./US$)(1) | 20.14 | 18.77 | 17.32 | 16.60 | 15.38 | |||||||||||||||
Badlar (quarterly averages) (2) | �� | 22.89 | 22.48 | 20.77 | 19.58 | 19.76 |
(1) References foreign currency exchange rate in accordance with 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.
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BANCO GALICIA
HIGHLIGHTS
➣ | Total comprehensive income for the first quarter amounted to Ps.1,953 million, Ps.654 million (50%) higher than in the same quarter of the 2017 fiscal year. |
➣ | The credit exposure to the private sector reached Ps.195,522 million, up 50% during the last twelve months, and deposits reached Ps.198,479 million, up 27% during the same period. As of March 31, 2018, Banco Galicia’s estimated market share of loans to the private sector was 9.54% while its estimated market share of deposits from the private sector was 9.67%. |
➣ | Thenon-accrual loan portfolio represented 2.41% of total loans to the private sector, recording an increase of 66 basis points (“bp”) from the 1.75% recorded at the end of the same quarter of the 2017 fiscal year, while its coverage with allowances for loan losses reached 103.53%. |
➣ | As of the end of the quarter, shareholders’ equity amounted to Ps.25,668 million (up Ps.9,227 million or 56%), and the computable capital was Ps.45,497 million (up Ps.22,043 million or 94%). The excess over the capital requirement amounted to Ps.19,829 million or 77%, and the total capital ratio was 14.57%. |
INFORMATION DISCLOSURE
The data shown in this report and the consolidated financial statements correspond to Banco Galicia consolidated, except where otherwise noted.
For comparison purposes, figures for the 2017 fiscal year corresponding to Banco Galicia’s interest in Tarjetas Regionales S.A.(1) (“Tarjetas Regionales”), Compañía Financiera Argentina S.A. (“CFA”)(2)and Cobranzas y Servicios S.A. (“CyS”) (2) are presented in the line of results from associates and joint businesses.
(1) Beginning in January 1, 2018, the financial statements of Tarjetas Regionales are consolidated line by line with Grupo Financiero Galicia.
(2)On February 2, 2018, the sale of Companñía Financiera Argentina and CyS was completed.
8 |
RESULTS FOR THE QUARTER
Income Statement | 2018 | 2017 | Variation (%) | |||||||||||||||||
(In millions of pesos) | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Net interest income | 4,155 | 3,581 | 2,720 | 16 | 53 | |||||||||||||||
Net fee income | 1,082 | 980 | 635 | 10 | 70 | |||||||||||||||
Net results from financial instruments | 1,656 | 999 | 680 | 66 | 143 | |||||||||||||||
Gold and foreign currency quotation differences | 744 | 644 | 454 | 15 | 64 | |||||||||||||||
Other operating income | 2,326 | 2,280 | 2,021 | 2 | 15 | |||||||||||||||
Loan loss provisions | (963) | (794) | (531) | 21 | 81 | |||||||||||||||
Net operating income | 9,000 | 7,690 | 5,979 | 17 | 51 | |||||||||||||||
Personnel expenses | (2,123) | (2,010) | (1,669) | 6 | 27 | |||||||||||||||
Administrative expenses | (1,767) | (1,683) | (1,233) | 5 | 43 | |||||||||||||||
Depreciations and devaluations of assets | (186) | (227) | (180) | (18) | 3 | |||||||||||||||
Other operating expenses | (2,219) | (2,110) | (1,472) | 5 | 51 | |||||||||||||||
Operating income | 2,705 | 1,660 | 1,425 | 63 | 90 | |||||||||||||||
Results from associates and joint businesses | 31 | 586 | 572 | (95) | (95) | |||||||||||||||
Results before taxes from activities that continue | 2,736 | 2,246 | 1,997 | 22 | 37 | |||||||||||||||
Income tax on activities that continue | (831) | (321) | (516) | 159 | 61 | |||||||||||||||
Results from activities that continue | 1,905 | 1,925 | 1,481 | (1) | 29 | |||||||||||||||
Results from discontinued activities (1) | 72 | - | - | 100 | 100 | |||||||||||||||
Income tax on discontinued activities | (21) | - | (185) | 100 | (89) | |||||||||||||||
Net income | 1,956 | 1,925 | 1,296 | 2 | 51 | |||||||||||||||
Other comprehensive income | (3) | 5 | 3 | (160) | (200) | |||||||||||||||
Total comprehensive income | 1,953 | 1,930 | 1,299 | 1 | 50 | |||||||||||||||
Profitability and Efficiency | 2018 | 2017 | Variation (bp) | |||||||||||||||||
(Percentages) | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Return (1) on average assets | 2.80 | 3.03 | 2.40 | (23) | 40 | |||||||||||||||
Return (1) on average shareholders´ equity | 22.82 | 19.79 | 21.68 | 303 | 114 | |||||||||||||||
Financial margin (1) (2) | 12.42 | 11.24 | 10.97 | 118 | 145 | |||||||||||||||
Efficiency ratio (3) | 52.47 | 60.23 | 61.88 | (776) | (941) |
(1) Annualized.
(2) Net interest income plus net result from financial instruments plus quotation differences plus certain items included in other operating income, divided by average interest-earning assets.
(3) Net interest income plus net fee income plus net result from financial instruments plus quotation differences plus certain items included in other operating income, divided by personnel expenses plus administrative expenses plus depreciation and devaluations of assets.
In the first quarter of fiscal year 2018, Banco Galicia recorded a Ps.1,953 million profit, Ps.654 million (50%) higher than the Ps.1,299 million profit for the same quarter of the previous year.
The higher net income was a consequence of a 53% increase in net interest income and a 70% increase in net fee income, which resulted in a 51% higher net operating income, partially offset by increases in administrative expenses and personnel expenses (34%).
The net operating income for the first quarter of the 2018 fiscal year totaled Ps.9,000 million, up Ps.3,021 from the Ps.5,979 million recorded in the same quarter of the prior year. In this positive development it is worth noting the 143% increase of net results of financial instruments.
9 |
Net Interest Income | 2018 | 2017 | Variation(bp) | |||||||||||||||||
In millions of pesos, except percentages | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Interest income | 8,398 | 7,286 | 5,857 | 15 | 43 | |||||||||||||||
Loans and other financing | 8,287 | 6,834 | 5,558 | 21 | 49 | |||||||||||||||
Other interest-earning assets | 111 | 452 | 299 | (75) | (63) | |||||||||||||||
Interest expenses | (4,243) | (3,705) | (3,137) | 15 | 35 | |||||||||||||||
Time deposits and term investments | (3,404) | (2,890) | (2,665) | 18 | 28 | |||||||||||||||
Other interest-bearing liabilities | (839) | (815) | (472) | 3 | 78 | |||||||||||||||
Net interest income | 4,155 | 3,581 | 2,720 | 16 | 53 |
Net interest income for the quarter amounted to Ps.4,155 million, with a Ps.1,435 million increase compared to the Ps.2,720 million profit from the same quarter of 2017.
Yields and Rates (1) Average balances: in millions of pesos Yields and rates: annualized nominal % | 2018 | 2017 | ||||||||||||||||||||||||||||||||||||||
1Q | 4Q | 3Q | 2Q | 1Q | ||||||||||||||||||||||||||||||||||||
Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | |||||||||||||||||||||||||||||||
Interest-earning assets | 190,940 | 21.31 | 168,968 | 20.02 | 155,416 | 19.24 | 140,145 | 20.32 | 129,395 | 20.68 | ||||||||||||||||||||||||||||||
Government securities | 24,859 | 26.66 | 19,755 | 23.57 | 20,263 | 23.18 | 19,803 | 22.13 | 16,842 | 20.96 | ||||||||||||||||||||||||||||||
Loans (2) | 163,234 | 20.45 | 144,446 | 19.37 | 130,330 | 18.58 | 116,298 | 19.97 | 106,737 | 20.41 | ||||||||||||||||||||||||||||||
Other interest-earning assets | 2,847 | 23.96 | 4,767 | 25.01 | 4,823 | 26.03 | 4,044 | 21.64 | 5,816 | 24.94 | ||||||||||||||||||||||||||||||
Interest-bearing liabilities | 172,437 | 9.85 | 145,053 | 10.22 | 135,822 | 9.41 | 123,739 | 9.58 | 117,641 | 10.68 | ||||||||||||||||||||||||||||||
Current accounts | 4,392 | 0.00 | 3,205 | 0.01 | 5,257 | 0.01 | 1,756 | 0.11 | 1,244 | 0.00 | ||||||||||||||||||||||||||||||
Saving accounts | 77,065 | 0.16 | 64,726 | 0.10 | 60,938 | 0.08 | 51,193 | 0.08 | 41,575 | 0.10 | ||||||||||||||||||||||||||||||
Time deposits | 72,017 | 19.99 | 60,134 | 20.24 | 55,132 | 19.27 | 57,491 | 17.57 | 58,358 | 18.28 | ||||||||||||||||||||||||||||||
Debt securities | 9,365 | 16.21 | 8,701 | 17.06 | 8,627 | 16.14 | 8,843 | 14.16 | 11,979 | 11.26 | ||||||||||||||||||||||||||||||
Other interest-bearing liabilities | 9,598 | 9.84 | 8,287 | 13.39 | 5,868 | 12.15 | 4,456 | 10.36 | 4,485 | 11.26 |
(1) Does not include foreign-currency quotation differences. Annual nominal interest rates were calculated using a360-day denominator.
(2) Does not include other financing.
The average interest-earning assets grew Ps.61,545 million (48%) as compared to the first quarter of the previous fiscal year, primarily as a consequence of the Ps.56,497 million (53%) increase in the average balance of loans to the private sector and of Ps.8,017 million (48%) in the average portfolio of government securities. Interest-bearing liabilities increased Ps.54.796 million (47%) during the same period, primarily due to a Ps.35,490 million (85%) increase in the average balances of saving accounts and a Ps.13,659 million (23%) increase in time deposits.
The average yield on interest-earning assets for the first quarter of fiscal year 2018 was 21.31%, with a 63 bp increase compared to the same quarter of the prior year, mainly due to an increase of 570 bp in the interest rate on government securities. Likewise, the average cost of interest-bearing liabilities was 9.85%, with an 83 bp decrease compared to the first quarter of the prior year due to the 142 bp decrease in the average interest rate on other interest-bearing liabilities and a better mix of deposits.
10 |
Net Fee Income | 2018 | 2017 | ||||||||||||||||||
In millions of pesos | 1Q | 4Q | 3Q | �� | 2Q | 1Q | ||||||||||||||
Credit cards | 221 | 192 | 191 | 238 | 178 | |||||||||||||||
Deposit accounts | 509 | 500 | 471 | 448 | 412 | |||||||||||||||
Insurance | 16 | 25 | 18 | 29 | 31 | |||||||||||||||
Financial fees | 58 | 53 | 51 | 45 | 39 | |||||||||||||||
Credit-related fees | 10 | 31 | 24 | 21 | 22 | |||||||||||||||
Foreign trade | 144 | 140 | 130 | 108 | 106 | |||||||||||||||
Collections | 121 | 138 | 129 | 123 | 113 | |||||||||||||||
Utility-bills collection services | 137 | 135 | 120 | 90 | 82 | |||||||||||||||
Mutual funds | 42 | 39 | 33 | 30 | 26 | |||||||||||||||
Other | 268 | 266 | 243 | 312 | 116 | |||||||||||||||
Total fee income | 1,526 | 1,519 | 1,410 | 1,444 | 1,125 | |||||||||||||||
Total expenditures | (444) | (539) | (397) | (537) | (490) | |||||||||||||||
Net fee income | 1,082 | 980 | 1,013 | 907 | 635 |
Net fee income amounted to Ps.1,082 million, up 70% from the Ps.635 million recorded in the first quarter of the previous fiscal year. The increases of fees which stood out were those related to deposit accounts (Ps.97 million or 24%) and to utility bills collections (Ps.55 million or 67%).
Results from gold and foreign currency quotation differences for the quarter amounted to Ps.744 million, 64% higher than the Ps.454 million profit recorded in the same quarter of 2017.
Provisions for loan losses for the first quarter of fiscal year 2018 amounted to Ps.963 million, Ps.432 million (81%) 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.
Personnel expenses amounted to Ps.2,123 million, increasing 27% from the same quarter of 2017, mainly due to salary increase agreements with unions. Administrative expenses for the quarter totaled Ps.1,767 million, up 43% in the same period, as a consequence of the increase in the level of activity and of expenses related to services provided to Banco Galicia.
Other operating expenses reached Ps.2,219 million, increasing Ps.747 million (52%) from the Ps.1,472 million recorded in the first quarter of 2017.
Results from discontinued activities for the quarter include a Ps.72 million profit from the sale of CFA and CyS, which, net of income tax for Ps.21 million, reached Ps.51 million.
The income tax charge was Ps.831 million, Ps.315 million (61%) higher than in the first quarter of fiscal year 2017.
11 |
LEVEL OF ACTIVITY
Exposure to the Private Sector | 2018 | 2017 | ||||||||||||||||||
In millions of pesos | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Loans and other financing | 175,382 | 161,682 | 140,842 | 128,783 | 115,772 | |||||||||||||||
Loans(1) | 170,781 | 157,402 | 137,468 | 125,312 | 113,165 | |||||||||||||||
Financial leases | 1,918 | 1,873 | 1,654 | 1,421 | 1,187 | |||||||||||||||
Other | 2,683 | 2,407 | 1,720 | 2,050 | 1,420 | |||||||||||||||
Corporate securities | 3,171 | 2,244 | 1,079 | 1,686 | 1,201 | |||||||||||||||
Other financing(2) | 16,969 | 15,927 | 14,556 | 12,904 | 13,183 | |||||||||||||||
Total credit | 195,522 | 179,853 | 156,477 | 143,373 | 130,156 | |||||||||||||||
(1) Loans in foreign currency as of March 31, 2018, amounted to Ps.46,073 million. (2) Includes certainoff-balance accounts related to guarantees granted. |
|
As of March 31, 2018, the total exposure to the private sector reached Ps.195,522 million, with an increase of 50% from a year before and of 9% during the quarter.
Market Share (1) | 2018 | 2017 | ||||||||||||||||||
Percentages | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Total loans | 9.49 | 9.53 | 9.46 | 9.70 | 9.73 | |||||||||||||||
Loans to the private sector | 9.54 | 9.65 | 9.31 | 9.88 | 9.80 | |||||||||||||||
(1) According to the daily information on loans published by the Argentine Central Bank. Only principal as of the last day of each quarter. |
Banco Galicia’s market share of loans to the private sector as of March 31, 2018, was 9.54%, decreasing 26 bp from March 31, 2017.
Break down of loans and other financing | 2018 | 2017 | ||||||||||||||||||
In millions of pesos | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Financial entities | 4,596 | 4,702 | 4,445 | 3,978 | 3,500 | |||||||||||||||
Non-financial private sector and residents abroad | 175,382 | 161,682 | 140,842 | 128,783 | 115,772 | |||||||||||||||
Loans | 170,781 | 157,402 | 137,468 | 125,312 | 113,165 | |||||||||||||||
Overdrafts | 11,826 | 11,298 | 8,047 | 8,191 | 8,568 | |||||||||||||||
Promissory notes | 34,144 | 35,533 | 30,004 | 27,165 | 26,384 | |||||||||||||||
Mortgage loans | 8,106 | 5,713 | 3,919 | 2,476 | 1,972 | |||||||||||||||
Pledge loans | 1,123 | 1,079 | 890 | 641 | 509 | |||||||||||||||
Personal loans | 21,054 | 18,354 | 16,087 | 13,902 | 11,892 | |||||||||||||||
Credit-card loans | 56,609 | 53,853 | 46,433 | 45,129 | 44,183 | |||||||||||||||
Other | 35,996 | 30,437 | 31,273 | 27,094 | 18,914 | |||||||||||||||
Accrued interest, adjustments and quotation differences receivable | 2,868 | 2,059 | 1,483 | 1,294 | 1,347 | |||||||||||||||
Documented interest | (945) | (924) | (668) | (580) | (604) | |||||||||||||||
Financial leases | 1,918 | 1,873 | 1,654 | 1,421 | 1,187 | |||||||||||||||
Other financing | 2,683 | 2,407 | 1,720 | 2,050 | 1,420 | |||||||||||||||
Total loans and other financing | 179,978 | 166,384 | 145,287 | 132,761 | 119,272 | |||||||||||||||
Allowances | (4,454) | (3,698) | (3,171) | (2,997) | (2,539) | |||||||||||||||
Loans | (4,365) | (3,594) | (3,077) | (2,909) | (2,463) | |||||||||||||||
Financial leases | (22) | (22) | (19) | (18) | (15) | |||||||||||||||
Other financing | (67) | (82) | (75) | (70) | (61) | |||||||||||||||
Net loans and other financing | 175,524 | 162,686 | 142,116 | 129,764 | 116,733 |
As of March 31, 2018, the loan portfolio before provisions amounted to Ps.170,781 million, growing 51% from March 31, 2017.
12 |
Loans by Type of Borrower | 2018 | 2017 | Variation (%) | |||||||||||||||||||||
In millions of pesos | 1Q | 4Q | 3Q | 2Q | 1Q | 1Q18/1Q17 | ||||||||||||||||||
Large corporations | 40,906 | 39,232 | 31,470 | 32,456 | 24,641 | 66 | ||||||||||||||||||
SMEs | 52,354 | 49,421 | 41,553 | 38,772 | 36,582 | 43 | ||||||||||||||||||
Individuals | 75,537 | 68,008 | 58,870 | 53,396 | 49,285 | 53 | ||||||||||||||||||
Financial sector | 6,052 | 4,990 | 9,613 | 4,596 | 5,771 | 5 | ||||||||||||||||||
Other | 808 | 807 | 730 | 366 | 662 | 22 | ||||||||||||||||||
IFRS adjustment(1) | (511) | (1,462) | (1,691) | (1,365) | (1,313) | (61) | ||||||||||||||||||
Total loans | 175,146 | 160,996 | 140,545 | 128,221 | 115,628 | 51 | ||||||||||||||||||
Allowances | (4,365) | (3,594) | (3,077) | (2,909) | (2,463) | 77 | ||||||||||||||||||
Net total loans | 170,781 | 157,402 | 137,468 | 125,312 | 113,165 | 51 |
(1) According to Argentine Central Bank regulations, loan adjustments due to IFRS are exposed in one line.
Loans by Sector of Activity | 2018 | 2017 | Variation (%) | |||||||||||||||||||||
In millions of pesos | 1Q | 4Q | 3Q | 2Q | 1Q | 1Q18/1Q17 | ||||||||||||||||||
Financial sector | 6,052 | 4,990 | 9,613 | 4,596 | 5,772 | 5 | ||||||||||||||||||
Services | 11,040 | 14,259 | 10,557 | 10,420 | 7,987 | 38 | ||||||||||||||||||
Agriculture and livestock | 26,275 | 22,369 | 19,341 | 18,517 | 16,540 | 59 | ||||||||||||||||||
Consumer | 75,597 | 68,076 | 58,902 | 53,438 | 49,127 | 54 | ||||||||||||||||||
Retail and wholesale trade | 20,680 | 19,939 | 17,063 | 16,245 | 13,430 | 54 | ||||||||||||||||||
Construction | 2,569 | 2,435 | 2,040 | 1,878 | 1,375 | 87 | ||||||||||||||||||
Manufacturing | 33,349 | 30,261 | 24,710 | 24,097 | 22,677 | 47 | ||||||||||||||||||
Other | 95 | 129 | 10 | 395 | 33 | 188 | ||||||||||||||||||
IFRS adjustment(1) | (511) | (1,462) | (1,691) | (1,365) | (1,313) | (61) | ||||||||||||||||||
Total loans | 175,146 | 160,996 | 140,545 | 128,221 | 115,628 | 51 | ||||||||||||||||||
Allowances | (4,365) | (3,594) | (3,077) | (2,909) | (2,463) | 77 | ||||||||||||||||||
Net total loans | 170,781 | 157,402 | 137,468 | 125,312 | 113,165 | 51 |
(1) According to Argentine Central Bank regulations, loan adjustments due to IFRS are exposed in one line.
During the year, loans to the private sector registered growth, mainly those granted to individuals (Ps.26,252 million or 53%), to large corporations (Ps.16,265 million or 66%) and to SMEs (Ps.15,772 million or 43%). By sector of activity, the higher growth was recorded in the consumer sector (Ps.26,470 million or 54%), the manufacturing industry (Ps.10,672 million or 47%) and in the agricultural and livestock sector (Ps.9,735 million or 59%).
Exposure to the Argentine Public Sector (1) | 2018 | 2017 | ||||||||||||||||||
In millions of pesos | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Government securities’ net position | 29,270 | 26,267 | 23,009 | 22,301 | 19,943 | |||||||||||||||
Lebac - Leliq | 18,138 | 16,690 | 16,509 | 14,446 | 13,156 | |||||||||||||||
Other – Includes IFRS adjustment | 11,132 | 9,577 | 6,500 | 7,855 | 6,787 | |||||||||||||||
Other receivables resulting from financial brokerage | 49 | 369 | 305 | 374 | 264 | |||||||||||||||
Trust certificates of participation and securities | 36 | 37 | 38 | 39 | 39 | |||||||||||||||
Other | 13 | 332 | 267 | 335 | 225 | |||||||||||||||
Total exposure | 29,319 | 26,636 | 23,314 | 22,675 | 20,207 |
(1) Excludes deposits with the Argentine Central Bank, which constitute one of the items by which Banco Galicia complies with minimum cash requirements.
As of March 31, 2018, Banco Galicia’s exposure to the public sector amounted to Ps.29,319 million, recording a 45% increase during the last twelve months, due to a Ps.4,982 million (38%) increase in the portfolio of debt securities issued by the Argentine Central Bank (Lebac and Leliq) and of Ps.4,345 million (64%) in other government securities. Excluding Lebac and Leliq said exposure reached Ps.11,181 million (3.94% of total assets), while as of March 31, 2017, it amounted to Ps.7,051 million (3.22% of total assets).
13 |
Deposits | 2018 | 2017 | ||||||||||||||||||
In millions of pesos | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
In pesos | 125,416 | 130,421 | 108,731 | 108,613 | 107,724 | |||||||||||||||
Current accounts | 31,127 | 33,167 | 29,198 | 29,288 | 27,423 | |||||||||||||||
Saving accounts | 32,054 | 41,405 | 28,003 | 29,767 | 22,149 | |||||||||||||||
Time deposits | 59,664 | 53,535 | 49,492 | 47,653 | 55,724 | |||||||||||||||
Other | 2,571 | 2,314 | 2,038 | 1,905 | 2,428 | |||||||||||||||
In foreign currency | 73,063 | 70,414 | 53,548 | 48,063 | 49,127 | |||||||||||||||
Total deposits | 198,479 | 200,835 | 162,279 | 156,676 | 156,851 |
As of March 31, 2018, Banco Galicia’s deposits amounted to Ps.198,479 million, representing a 27% increase during the last twelve months, as a consequence of the increase of peso-denominated saving accounts and of dollar-denominated deposits.
At the end of the quarter, there were more than 4.3 million deposit accounts, 13% more than a year before.
Market Share (1) | 2018 | 2017 | ||||||||||||||||||
Percentages | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Total deposits | 7.31 | 8.23 | 7.48 | 7.61 | 7.59 | |||||||||||||||
Private sector deposits | 9.67 | 10.20 | 9.37 | 9.40 | 10.09 |
(1) According to the daily information on loans published by the Argentine Central Bank. Balances are as of the last day of each quarter.
As of March 31, 2018, Banco Galicia’s estimated market share of private sector deposits in the Argentine financial system was 9.67%, recording a 42 bp decrease from a year before.
Other Financial Liabilities | 2018 | 2017 | ||||||||||||||||||
In millions of pesos | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Financial entities | 10,193 | 7,729 | 6,625 | 4,842 | 4,386 | |||||||||||||||
Other financial liabilities | 22,338 | 24,741 | 16,965 | 14,295 | 16,941 | |||||||||||||||
Notes | 4,475 | 4,489 | 4,395 | 4,412 | 7,134 | |||||||||||||||
Subordinated notes | 5,079 | 4,828 | 4,360 | 4,261 | 3,865 | |||||||||||||||
Total financial liabilities | 42,085 | 41,787 | 32,345 | 27,810 | 32,326 |
Other financial liabilities at the end of the first quarter of 2018 amounted to Ps.42,085 million, Ps.9,759 million (30%) higher than the Ps.32,326 million recorded a year before. This growth was mainly due to the increase of financing from financial entities (Ps.5,807 million or 132%) and of other financial liabilities (Ps.5,397 million or 32%).
ASSET QUALITY
Loan Portfolio Quality | 2018 | 2017 | ||||||||||||||||||
In millions of pesos, except percentages | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Non-accrual loans (1) | 4,216 | 3,200 | 2,547 | 2,420 | 2,014 | |||||||||||||||
With preferred guarantees | 208 | 194 | 118 | 106 | 93 | |||||||||||||||
With other guarantees | 341 | 207 | 137 | 106 | 99 | |||||||||||||||
Without guarantees | 3,667 | 2,799 | 2,292 | 2,208 | 1,822 | |||||||||||||||
Allowance for loan losses | 4,365 | 3,594 | 3,077 | 2,909 | 2,463 | |||||||||||||||
Non-accrual loans to private-sector loans (%) | 2.41 | 1.99 | 1.81 | 1.89 | 1.75 | |||||||||||||||
Allowance for loan losses to private-sector loans (%) | 2.49 | 2.23 | 2.19 | 2.27 | 2.14 | |||||||||||||||
Allowance for loan losses tonon-accrual loans (%) | 103.53 | 112.31 | 120.81 | 120.21 | 122.29 | |||||||||||||||
Non-accrual loans with guarantees tonon-accrual loans (%) | 13.02 | 12.53 | 10.01 | 8.75 | 9.56 |
(1) 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.
14 |
Banco Galicia’snon-accrual loan portfolio amounted to Ps.4,216 million as of March 31, 2018, representing 2.41% of total loans to the private-sector, increasing 66 bp from the 1.75% ratio of a year before.
The coverage of thenon-accrual loan portfolio with allowances for loan losses reached 103.53% as of the end of the quarter, compared to 122.29% from a year before.
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—Banco Galicia’snon-accrual portfolio represented 2.46% of total credit to the private sector, and its coverage with allowances for loan losses reached 105.80%, compared to 1.93% and 106.53% of a year before, respectively.
Consolidated Analysis of Loan Loss Experience | 2018 | 2017 | ||||||||||||||||||
In millions of pesos | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Allowance for loan losses at the beginning of the quarter | 3,594 | 3,077 | 2,909 | 2,463 | 2,187 | |||||||||||||||
Changes in the allowance for loan losses | ||||||||||||||||||||
Provisions charged to income | 884 | 743 | 487 | 654 | 492 | |||||||||||||||
Provisions reversed | - | - | - | - | - | |||||||||||||||
Charge offs | (113) | (226) | (319) | (208) | (216) | |||||||||||||||
Allowance for loan losses at the end of the quarter | 4,365 | 3,594 | 3,077 | 2,909 | 2,463 | |||||||||||||||
Charge to the income statement | ||||||||||||||||||||
Provisions charged to income | (884) | (743) | (487) | (656) | (492) | |||||||||||||||
Direct charge offs | (91) | (45) | (60) | (42) | (36) | |||||||||||||||
Bad debts recovered | 20 | 33 | 23 | 30 | 45 | |||||||||||||||
Provisions reversed (*) | - | - | - | - | - | |||||||||||||||
Net charge to the income statement | (955) | (755) | (524) | (668) | (483) |
(*) Recorded under “Net Other Income / (Loss)”.
During the quarter, Ps.113 million were charged off against the allowance for loan losses and direct charges to the income statement for Ps.91 million were made.
CAPITALIZATION AND LIQUIDITY
Consolidated Regulatory Capital | 2018 | 2017 | ||||||||||||||||||
In millions of pesos, except ratios | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Minimum capital required (A) | 25,668 | 22,610 | 20,086 | 17,684 | 16,441 | |||||||||||||||
Allocated to credit risk | 19,781 | 17,263 | 15,222 | 13,440 | 12,407 | |||||||||||||||
Allocated to market risk | 1,535 | 1,126 | 884 | 558 | 624 | |||||||||||||||
Allocated to operational risk | 4,352 | 4,221 | 3,980 | 3,686 | 3,410 | |||||||||||||||
Computable capital (B) | 45,497 | 29,530 | 27,439 | 25,477 | 23,454 | |||||||||||||||
Tier I | 38,049 | 22,582 | 21,074 | 19,384 | 17,932 | |||||||||||||||
Tier II | 7,448 | 6,948 | 6,365 | 6,093 | 5,522 | |||||||||||||||
Excess over required capital (B)—(A) | 19,829 | 6,920 | 7,353 | 7,793 | 7,013 | |||||||||||||||
Total capital ratio (%) | 14.57 | 10.69 | 11.20 | 11.80 | 11.68 |
As of March 31, 2018, Banco Galicia’s consolidated computable capital was Ps.19,829 million (77% excess over requirement) higher than the Ps.25,688 million capital requirement. As of March 31, 2017, this excess amounted to Ps.7,013 million (43%).
15 |
The minimum capital requirement increased Ps.9,227 million as compared to March 31, 2017, mainly due to the growth of the private-sector loan portfolio, and computable capital increased Ps.22,043 million in the same period, primarily as a consequence of Banco Galicia’s capitalization and of the application of IFRS. The total capital ratio was 14.57%, increasing 289 bp during the last twelve months.
Liquidity | 2018 | 2017 | ||||||||||||||||||
Percentages | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Liquid assets (*) as a percentage of transactional deposits | 63.73 | 69.72 | 59.15 | 58.35 | 84.11 | |||||||||||||||
Liquid assets (*) as a percentage of total deposits | 38.99 | 46.38 | 37.25 | 37.28 | 49.89 |
(*) Liquid assets include cash and amounts 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 March 31, 2018, Banco Galicia’s liquid assets represented 63.73% of Banco Galicia’s transactional deposits and 38.99% of its total deposits, as compared to 84.11% and 49.89%, respectively, as of March 31, 2017.
16 |
SELECTED FINANCIAL INFORMATION
Balance Sheet | 2018 | 2017 | Variation (%) | |||||||||||||||||
(In millions of pesos) | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 45,844 | 58,461 | 49,540 | (22) | (7) | |||||||||||||||
Debt securities | 29,463 | 26,602 | 20,366 | 11 | 45 | |||||||||||||||
Net loans and other financing | 175,524 | 162,686 | 116,733 | 8 | 50 | |||||||||||||||
Other financial assets | 20,322 | 22,636 | 14,861 | (10) | 37 | |||||||||||||||
Equity investments in subsidiaries, associates and joint businesses | 204 | 6,675 | 5,452 | (97) | (96) | |||||||||||||||
Property, bank premises, equipment and intangible assets | 9,792 | 9,573 | 8,672 | 2 | 13 | |||||||||||||||
Other assets | 2,511 | 1,985 | 2,212 | 27 | 14 | |||||||||||||||
Assets available for sale (1) | 228 | 1,155 | 1,105 | (80) | (79) | |||||||||||||||
Total assets | 283,888 | 289,773 | 218,941 | (2) | 30 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits | 198,479 | 200,835 | 156,851 | (1) | 27 | |||||||||||||||
Financing from financial entities | 10,193 | 7,729 | 4,386 | 32 | 132 | |||||||||||||||
Other financial liabilities | 22,338 | 24,741 | 16,941 | (10) | 32 | |||||||||||||||
Notes | 4,475 | 4,489 | 7,134 | - | (37) | |||||||||||||||
Subordinated notes | 5,079 | 4,828 | 3,865 | 5 | 31 | |||||||||||||||
Other liabilities | 8,923 | 8,200 | 6,414 | 9 | 39 | |||||||||||||||
Total liabilities | 249,487 | 250,822 | 195,591 | (1) | 28 | |||||||||||||||
Shareholders’ equity | 34,401 | 38,951 | 23,350 | (12) | 47 | |||||||||||||||
Foreign-currency assets and liabilities | ||||||||||||||||||||
Assets | 89,809 | 85,948 | 62,004 | 4 | 45 | |||||||||||||||
Liabilities | 92,414 | 84,720 | 64,682 | 9 | 43 | |||||||||||||||
Net forward purchases/(sales) of foreign currency (2) | 2,052 | (3,074) | 2,507 | 167 | (18) |
(1) Includes the interest in CFA and in CyS until the 4Q2017, and the interest in Prisma Medios de Pago S.A. since the 3Q2017.
(2) Recordedoff-balance sheet.
Income Statement | 2018 | 2017 | ||||||||||||||||||
(In millions of pesos) | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Interest income | 8,398 | 7,286 | 6,454 | 6,199 | 5,857 | |||||||||||||||
Interest related expenses | (4,243) | (3,705) | (3,188) | (2,961) | (3,137) | |||||||||||||||
Net interest income | 4,155 | 3,581 | 3,266 | 3238 | 2,720 | |||||||||||||||
Fee income | 1,526 | 1,519 | 1,410 | 1,444 | 1,125 | |||||||||||||||
Fee related expenses | (444) | (539) | (397) | (537) | (490) | |||||||||||||||
Net fee income | 1,082 | 980 | 1,013 | 907 | 635 | |||||||||||||||
Net results from financial instruments | 1,656 | 999 | 1,435 | 1,011 | 680 | |||||||||||||||
Gold and foreign currency quotation differences | 744 | 644 | 515 | 471 | 454 | |||||||||||||||
Other operating income | 2,326 | 2,280 | 1,971 | 1,888 | 2,021 | |||||||||||||||
Loan loss provisions | (963) | (794) | (555) | (705) | (531) | |||||||||||||||
Net operating income | 9,000 | 7,690 | 7,645 | 6,810 | 5,979 | |||||||||||||||
Personnel expenses | (2,123) | (2,010) | (1,726) | (1,701) | (1,669) | |||||||||||||||
Administrative expenses | (1,767) | (1,683) | (1,500) | (1,465) | (1,233) | |||||||||||||||
Depreciations and devaluations of assets | (186) | (227) | (203) | (181) | (180) | |||||||||||||||
Other operating expenses | (2,219) | (2,110) | (1,980) | (1,648) | (1,472) | |||||||||||||||
Operating income | 2,705 | 1,660 | 2,236 | 1,815 | 1,425 | |||||||||||||||
Results from associates and joint businesses | 31 | 586 | 669 | 609 | 572 | |||||||||||||||
Results from discontinued activities | 51 | - | - | - | - | |||||||||||||||
Income tax | (831) | (321) | (995) | (367) | (701) | |||||||||||||||
Net income | 1,956 | 1,925 | 1,910 | 2,057 | 1,296 | |||||||||||||||
Other comprehensive income | (3) | 5 | (97) | (192) | 3 | |||||||||||||||
Comprehensive income | 1,953 | 1,930 | 1,813 | 1,865 | 1,299 |
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TARJETAS REGIONALES
HIGHLIGHTS
➣ | On March 15, 2018, the Comisión Nacional de Valores approved the merger of Tarjeta Naranja S.A. (absorbing company) and Tarjetas Cuyanas S.A. (absorbed company). |
INFORMATION DISCLOSURE
The data shown in the following tables correspond to Tarjetas Regionales consolidated line by line with its subsidiaries.
RESULTS FOR THE QUARTER
Income Statement | 2018 | 2017 | Variation (%) | |||||||||||||||||
(In millions of pesos) | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Net interest income | 1,929 | 1,672 | 1,425 | 15 | 35 | |||||||||||||||
Net fee income | 401 | 477 | 439 | (16) | (9) | |||||||||||||||
Net results from financial instruments | 107 | 131 | 53 | (18) | 102 | |||||||||||||||
Gold and foreign currency quotation differences | 4 | (5) | 6 | (180) | (33) | |||||||||||||||
Other operating income | 1,814 | 1,839 | 1,467 | (1) | 24 | |||||||||||||||
Loan loss provisions | (659) | (493) | (509) | 34 | 29 | |||||||||||||||
Net operating income | 3,596 | 3,621 | 2,881 | (1) | 25 | |||||||||||||||
Personnel expensens | (848) | (869) | (692) | (2) | 23 | |||||||||||||||
Administrative expenses | (1,048) | (985) | (780) | 6 | 34 | |||||||||||||||
Depreciations and devaluations of assets | (60) | (54) | (48) | 11 | 25 | |||||||||||||||
Other operating expenses | (437) | (421) | (306) | 4 | 43 | |||||||||||||||
Operating income | 1,203 | 1,292 | 1,055 | (7) | 14 | |||||||||||||||
Income tax | (361) | (556) | (363) | (35) | (1) | |||||||||||||||
Net income | 842 | 736 | 692 | 14 | 22 | |||||||||||||||
Profitability and Efficiency | 2018 | 2017 | Variation (bp) | |||||||||||||||||
(Percentages) | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Return (1) on average assets | 9.48 | 8.79 | 9.14 | 69 | 34 | |||||||||||||||
Return (1) on average shareholders´ equity | 37.51 | 42.70 | 46.16 | (519) | (865) | |||||||||||||||
Financial margin (1) (2) | 19.23 | 19.36 | 18.83 | (13) | 40 | |||||||||||||||
Efficiency ratio (3) | 53.06 | 54.80 | 51.89 | (174) | 117 |
(1) Annualized.
(2) Net interest income plus net result from financial instruments plus quotation differences plus certain items included in other operating income, divided by average interest-earning assets.
(3) Net interest income plus net fee income plus net result from financial instruments plus quotation differences plus certain items included in other operating income, divided by personnel expenses plus administrative expenses plus depreciation and devaluations of assets.
In the first quarter of the 2018 fiscal year, Tarjetas Regionales recorded a Ps.842 million profit, up 22% in the last twelve months. This profit represented a 9.48% annualized return on average assets and a 37.51% return on average shareholder’s equity, compared to 9.14% and 46.16%, respectively, from the first quarter of 2017.
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Net operating income amounted to Ps.3,596 million, increasing 25% from the first quarter of 2017, with net interest growing 35% and other operating income growing 24%.
Provisions for loan losses for the quarter amounted to Ps.659 million, 81% higher than the Ps.509 million recorded in the same quarter of the prior year.
ASSET QUALITY
Loan Portfolio Quality | 2018 | 2017 | ||||||||||||||||||
Percentages | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Non-accrual loans to total loans | 6.86 | 6.81 | 7.07 | 8.20 | 7.69 | |||||||||||||||
Allowance for loan losses to total loans | 7.41 | 6.86 | 7.45 | 8.21 | 7.67 | |||||||||||||||
Allowance for loan losses tonon-accrual loans (%) | 108.01 | 100.80 | 105.37 | 100.16 | 99.69 |
(1) 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.
SELECTED FINANCIAL INFORMATION
Balance Sheet | 2018 | 2017 | ||||||||||||||||||
(In millions of pesos) | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 662 | 534 | 414 | 638 | 453 | |||||||||||||||
Debt securities | 233 | 251 | 17 | 18 | 52 | |||||||||||||||
Net loans and other financing | 35,538 | 32,364 | 28,370 | 27,884 | 26,991 | |||||||||||||||
Other financial assets | 2,064 | 2,140 | 1,838 | 1,149 | 1,055 | |||||||||||||||
Equity investments in subsidiaries, associates and joint businesses | - | 53 | - | - | - | |||||||||||||||
Property, bank premises, equipment and intangible assets | 971 | 905 | 852 | 839 | 829 | |||||||||||||||
Othernon-financial assets | 797 | 781 | 947 | 922 | 944 | |||||||||||||||
Total assets | 40,265 | 37,028 | 32,438 | 31,450 | 30,324 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Financing from financial entities | 1,284 | 332 | 403 | 907 | 2,757 | |||||||||||||||
Other financial liabilities | 16,973 | 16,533 | 12,957 | 12,259 | 12,537 | |||||||||||||||
Notes | 10,066 | 9,481 | 9,358 | 9,543 | 6,275 | |||||||||||||||
Othernon-financial liabilities | 2,685 | 2,265 | 2,040 | 1,849 | 1,980 | |||||||||||||||
Total liabilities | 31,008 | 28,611 | 24,758 | 24,558 | 23,549 | |||||||||||||||
Shareholders’ equity | 9,257 | 8,417 | 7,680 | 6,892 | 6,775 |
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GALICIA ADMINISTRADORA DE FONDOS
RESULTS FOR THE QUARTER
Income Statement | 2018 | 2017 | Variation (%) | |||||||||||||||||
(In millions of pesos) | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Net fee income | 9 | - | 10 | 100 | (10) | |||||||||||||||
Net results from financial instruments | 25 | 34 | - | (26) | 100 | |||||||||||||||
Other operating income | 246 | 218 | 149 | 13 | 65 | |||||||||||||||
Net operating income | 280 | 252 | 159 | 11 | 76 | |||||||||||||||
Personnel expenses | (14) | (13) | (10) | 8 | 40 | |||||||||||||||
Administrative expenses | (13) | (11) | (4) | 18 | 225 | |||||||||||||||
Other operating expenses | (13) | (13) | (8) | - | 63 | |||||||||||||||
Operating income | 240 | 215 | 137 | 12 | 75 | |||||||||||||||
Income tax | (72) | (76) | (48) | (5) | 50 | |||||||||||||||
Net income | 168 | 139 | 89 | 21 | 89 |
ASSETS UNDER MANAGEMENT
Mutual Fund | Assets Under Management as of: | Variation | ||||||||||||||
In millions of pesos, except percentages | 1Q18 | 1Q17 | Ps. | % | ||||||||||||
Fima Premium | 10,690 | 7,182 | 3,508 | 49 | ||||||||||||
Fima Ahorro Pesos | 25,998 | 17,335 | 8,663 | 50 | ||||||||||||
Fima Ahorro Plus | 25,542 | 23,004 | 2,538 | 11 | ||||||||||||
Fima Capital Plus | 709 | 551 | 158 | 29 | ||||||||||||
Fima Renta en Pesos | 771 | 457 | 314 | 69 | ||||||||||||
Fima Renta Plus | 585 | 474 | 111 | 23 | ||||||||||||
Fima Abierto Pymes | 273 | 207 | 66 | 32 | ||||||||||||
Fima Acciones | 630 | 177 | 453 | 256 | ||||||||||||
Fima PB Acciones | 1,729 | 527 | 1,202 | 228 | ||||||||||||
Fima Mix I | 572 | 121 | 451 | 373 | ||||||||||||
Fima Renta Dólares I | 17,439 | 5,765 | 11,674 | 203 | ||||||||||||
Fima Renta Dólares II | 6,671 | 1,082 | 5,589 | 517 | ||||||||||||
Total Assets Under Management | 91,609 | 56,882 | 34,727 | 61 |
SELECTED FINANCIAL INFORMATION
Balance Sheet | 2018 | 2017 | ||||||||||||||||||
(In millions of pesos) | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 2 | 12 | 1 | 2 | 1 | |||||||||||||||
Debt securities | 22 | - | - | - | 3 | |||||||||||||||
Other financial assets | 391 | 634 | 447 | 290 | 156 | |||||||||||||||
Othernon-financial assets | 119 | 90 | 61 | 32 | 1 | |||||||||||||||
Total assets | 534 | 736 | 509 | 324 | 161 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Othernon-financial liabilities | 344 | 276 | 188 | 122 | 62 | |||||||||||||||
Total liabilities | 344 | 276 | 188 | 122 | 62 | |||||||||||||||
Shareholders’ equity | 190 | 460 | 321 | 202 | 99 |
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SUDAMERICANA HOLDING
INFORMATION DISCLOSURE
The data shown in the tables of this report and the consolidated financial statements correspond to Sudamericana Holding S.A. consolidated line by line with the subsidiaries under its control.
RESULTS FOR THE QUARTER
Income Statement | 2018 | 2017 | Variation (%) | |||||||||||||||||
(In millions of pesos) | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Earned premium | 894 | 878 | 757 | 2 | 18 | |||||||||||||||
Incurred claims | (91) | (85) | (93) | 7 | (2) | |||||||||||||||
Withdrawals | - | (1) | (1) | (100) | (100) | |||||||||||||||
Life annuities | (2) | (1) | (1) | 100 | 100 | |||||||||||||||
Acquisition and General Expenses | (415) | (413) | (349) | 1 | 19 | |||||||||||||||
Other Income and Expenses | (16) | (71) | (37) | (77) | (57) | |||||||||||||||
Underwriting income | 370 | 307 | 236 | 21 | 57 | |||||||||||||||
Interest income | 76 | 91 | 62 | (16) | 23 | |||||||||||||||
Net results from financial instruments | 19 | (18) | - | 206 | 100 | |||||||||||||||
Depreciations and devaluations of assets | 1 | - | (1) | 100 | 200 | |||||||||||||||
Other operating expenses | 3 | (43) | (18) | 107 | 117 | |||||||||||||||
Net operating income | 469 | 337 | 279 | 39 | 68 | |||||||||||||||
Personnel expenses | (99) | (94) | (69) | 5 | 43 | |||||||||||||||
Administrative expenses | (64) | (78) | (67) | (18) | (4) | |||||||||||||||
Depreciations and devaluations of assets | (11) | (8) | (5) | 38 | 120 | |||||||||||||||
Other operating expenses | (30) | 55 | 28 | (155) | (207) | |||||||||||||||
Operating income | 265 | 212 | 166 | 25 | 60 | |||||||||||||||
Income tax | (98) | (75) | (58) | 31 | 69 | |||||||||||||||
Net income | 167 | 137 | 109 | 22 | 53 | |||||||||||||||
Other comprehensive income | (13) | 16 | (1) | (181) | 1,200 | |||||||||||||||
Comprehensive income | 154 | 153 | 108 | 1 | 43 |
Profitability | 2018 | 2017 | Variation (pb) | |||||||||||||||||
Percentages | 1Q | 4Q | 1Q | 1Q18 vs 4Q17 | 1Q18 vs 1Q17 | |||||||||||||||
Return (1) on average assets | 24.50 | 24.10 | 18.80 | 40 | 570 | |||||||||||||||
Return (1) on average shareholders’ equity | 53.40 | 54.70 | 36.70 | (130) | 1,670 | |||||||||||||||
Efficiency ratio | 71.60 | 70.80 | 71.20 | 80 | 40 |
(1) Annualized.
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SELECTED FINANCIAL INFORMATION
Balance Sheet | 2018 | 2017 | ||||||||||||||||||
(In millions of pesos) | 1Q | 4Q | 3Q | 2Q | 1Q | |||||||||||||||
Assets | 39 | 23 | 28 | 35 | 149 | |||||||||||||||
Cash and due from banks | 689 | 791 | 790 | 1,113 | 1,242 | |||||||||||||||
Debt securities | 1,509 | 1,271 | 999 | 1,031 | 673 | |||||||||||||||
Other financial assets | 212 | 200 | 197 | 189 | 186 | |||||||||||||||
Property, bank premises, equipment and intangible assets | 169 | 87 | 303 | 219 | 169 | |||||||||||||||
Othernon-financial assets | 2,618 | 2,372 | 2,317 | 2,587 | 2,419 | |||||||||||||||
Total assets | ||||||||||||||||||||
Liabilities | 3 | 3 | 10 | 5 | 135 | |||||||||||||||
Financial entities | 1,415 | 1,324 | 1,405 | 1,285 | 1,107 | |||||||||||||||
Othernon-financial liabilities | 1,418 | 1,327 | 1,415 | 1,290 | 1,242 | |||||||||||||||
Total liabilities | 1,200 | 1,045 | 902 | 1,297 | 1,177 | |||||||||||||||
Shareholders’ equity | 39 | 23 | 28 | 35 | 149 |
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RECENT DEVELOPMENTS
BANCO GALICIA
BANCO FINANSUR
On March 9, 2018 the Argentine Central Bank approved to the transfer of certain assets and liabilities of Banco Finansur S.A. to Banco Galicia, within the framework of Law N° 21,526 (Law of Financial Entities), article 35 bis, Section II (Restructuring of an entity in defense of bank deposits and credit).
NOTES
On April 24, 2018, Banco Galicia issued its Class V Series I Notes for Ps.4,209 million, with a maturity of 24 months and a fix rate of 25.98%, and Series II, for Ps.2,033 million, with a maturity of 36 months and a floating rate of Badlar + 3.5%.
SALEOF COMPAÑÍA FINANCIERA ARGENTINAAND COBRANZASY SERVICIOS
On March 26, 2018, the sale of CFA and CyS was completed, for a total amount of Ps.1,047 million.
GREEN BOND
On March 21, 2018, Banco Galicia approved the issuance of a “Green Bond” note for up to US$100 million, which is considered to be an ideal tool to promote sustainable development. The entire amount will be subscribed by the IFC.
DISTRIBURION NETWORK
During the quarter, Banco Galicia increased its distribution network with the opening of two new branches in the cities of Bahía Blanca (province of Buenos Aires) and Viedma (province of Río Negro).
REGULATORY CHANGES
NET POSITIONIN FOREIGN CURRENCY
Beginning on May 7, 2018, the Argentine Central Bank established that the net global position shall be measured on a daily basis, setting a new limit on the long net position in foreign currency, equivalent to 10% (previously 30%) of the computable regulatory capital or of its own liquid resources, whichever is the lesser. On May 14, it established that said amount should be calculated with the daily balances revalued using the exchange rate corresponding to the last day of the previous month.
MINIMUMCASHREQUIREMENTS
The Argentine Central Bank established that for the period of May to July 2018, compliance with the minimum cash requirement will be made quarterly. For the month of May, compliance with the minimum daily requirement was eliminated.
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 Argentine 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 Banco Galicia 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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