Exhibit 99.1
GRUPO FINANCIERO GALICIA S.A. REPORTS FINANCIAL RESULTS FOR
THE FOURTH QUARTER THAT ENDED ON DECEMBER 31, 2018
Buenos Aires, Argentina, March 7, 2019 – Grupo Financiero Galicia S.A. (BYMA / NASDAQ: GGAL) announced its financial results for the fourth quarter that ended on December 31, 2018 (the “Quarter”).
HIGHLIGHTS
Ø | For the 2018 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. For a comparative purposes, figures for 2017 are also presented in accordance with IFRS. In addition, balances of certain items from previous quarters have been reclassified. |
Ø | Net income attributable to GFG for the 2018 fiscal year amounted to Ps.14,427 million, 67% higher than the Ps.8,631 million recorded in the prior fiscal year. The profit per share amounted to Ps.10.11, as compared to Ps.6.05 per share recorded for the 2017 fiscal year. |
Ø | The results of the 2018 fiscal year were mainly attributable to the income derived from GFG’s interests held in Banco de Galicia y Buenos Aires S.A.U. (“Banco Galicia” or “the Bank”), for Ps.11,536 million, Tarjetas Regionales S.A., for Ps.1,768 million, Sudamericana Holding S.A., for Ps.571 million, and Galicia Administradora de Fondos S.A. (“GAF”), for Ps.402 million, which were also increased by a net operating income of Ps.286 million, and partially offset by administrative expenses of Ps.117 million. |
Ø | Net income attributable to Grupo Financiero Galicia for the Quarter amounted to Ps.4,428 million, 55% higher than the Ps.2,851 million recorded in the same quarter of the prior fiscal year. The profit per share for the Quarter amounted to Ps.3.10, compared to Ps.2.00 per share for the same quarter of the 2017 fiscal year. |
Ø | The results of the Quarter were mainly attributable to the income derived from GFG’s interest in Banco Galicia, for Ps.4,208 million, in Sudamericana Holding S.A., for Ps.140 million, and in GAF, for Ps.44 million, which were partially offset by a Ps.22 million loss relating to Tarjetas Regionales S.A. |
Ø | The Bank’s market share of loans to the private sector was 10.52% and its market share for deposits from the private sector was 11.08%, increasing 87 bp and 88 bp, respectively, as compared to December 31, 2017. |
Conference Call:
March 8, 2019, 11:00 am Eastern Time (1:00 pm Buenos Aires Time)
Call-in number: +1323-994-2082
Conference ID: 8637758
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 | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Financial Information | ||||||||||||||||||||
Assets | 565,234 | 517,801 | 327,295 | 9 | 73 | |||||||||||||||
Net loans and other financing | 286,953 | 293,940 | 192,802 | (2 | ) | 49 | ||||||||||||||
Deposits | 360,097 | 320,052 | 200,729 | 13 | 79 | |||||||||||||||
Shareholders’ equity attributable to GFG | 54,878 | 50,439 | 41,221 | 9 | 33 | |||||||||||||||
Shares outstanding(in thousands of shares) (1) | 1,426,765 | 1,426,765 | 1,426,765 | - | - | |||||||||||||||
Book value per share(in pesos) | 38.46 | 35.35 | 28.89 | 311 bp | 957 bp | |||||||||||||||
Net income attributable to GFG | 4,428 | 4,212 | 2,851 | 5 | 55 | |||||||||||||||
Net income per share(in pesos) | 3.10 | 2.95 | 2.00 | 15 bp | 110 bp |
(1) 10 ordinary shares = 1 ADS.
Selected Ratios | 2018 | 2017 | Variation (bp) | Fiscal Year | ||||||||||||||||||||||||
Percentages, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | 2018 | 2017 | |||||||||||||||||||||
Return (1) on average assets (2) | 3.24 | 3.55 | 3.91 | (31 | ) | (67 | ) | 3.37 | 3.49 | |||||||||||||||||||
Return (1) on average shareholders’ equity (2) | 33.43 | 34.63 | 29.03 | (120 | ) | 440 | 30.53 | 30.19 | ||||||||||||||||||||
Financial Margin (2) (3) | 14.66 | 14.54 | 12.41 | 12 | 225 | 13.68 | 12.05 | |||||||||||||||||||||
Efficiency ratio (4) | 51.75 | 47.85 | 53.56 | 390 | (181 | ) | 52.07 | 57.25 | ||||||||||||||||||||
Total capital ratio (5) | 15.11 | 14.30 | 10.69 | 81 | 442 | - | - | |||||||||||||||||||||
Non-performing loans / Private-sector loans | 3.51 | 3.07 | 2.86 | 44 | 65 | - | - | |||||||||||||||||||||
Allowance for loan losses / Private-sector loans | 3.88 | 3.13 | 3.06 | 75 | 82 | - | - | |||||||||||||||||||||
Allowance for loan losses /Non-accrual loans | 110.59 | 101.80 | 107.08 | 879 | 351 | - | - | |||||||||||||||||||||
Cost of risk (2) | 4.74 | 4.15 | 2.74 | 59 | 200 | 3.89 | 2.74 |
(1) Net income attributable to GFG.
(2) Annualized.
(3) Net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income and expenses, divided by the average balance of interest-earning assets.
(4) Personnel expenses plus administrative expenses plus depreciation and devaluations of assets, divided by net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income.
(5) Banco Galicia consolidated with Tarjetas Regionales S.A..
Market Indicators | 2018 | 2017 | Variation | |||||||||||||||||
In pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Market price | (bp | ) | ||||||||||||||||||
Shares – BYMA | 103.30 | 105.65 | 123.70 | (235 | ) | (2,040 | ) | |||||||||||||
ADS – NASDAQ (in US$) | 27.57 | 25.43 | 65.85 | 214 | (3,828 | ) | ||||||||||||||
Price BYMA / book value | 2.69 | 2.99 | 4.28 | (30 | ) | (159 | ) | |||||||||||||
Average daily volume(in thousands of shares) | (%) | |||||||||||||||||||
BYMA | 1,238 | 1,587 | 644 | (22 | ) | 92 | ||||||||||||||
NASDAQ (1) | 9,164 | 14,035 | 4,927 | (35 | ) | 86 | ||||||||||||||
Market share (%) | (bp) | |||||||||||||||||||
Banco Galicia | ||||||||||||||||||||
Loans to the private sector | 10.52 | 10.58 | 9.65 | (6 | ) | 87 | ||||||||||||||
Deposits from the private sector | 11.08 | 11.04 | 10.20 | 4 | 88 | |||||||||||||||
Galicia Administradora de Fondos S.A. | 10.08 | 10.17 | 12.50 | (9 | ) | (242 | ) |
(1) Expressed in equivalent shares: 10 ordinary shares = 1 ADS.
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GRUPO FINANCIERO GALICIA
RESULTSFORTHE FISCAL YEAR
Income Statement | 2018 | 2017 | Variation (%) | |||||||||
In millions of pesos, except otherwise noted | ||||||||||||
Results from Equity Investments | 14,316 | 8,039 | 78 | |||||||||
Banco de Galicia y Buenos Aires S.A.U. | 11,536 | 7,178 | 61 | |||||||||
Tarjetas Regionales S.A.(1) | 1,768 | - | N/A | |||||||||
Galicia Administradora de Fondos S.A. | 402 | 428 | (6) | |||||||||
Sudamericana Holding S.A. | 571 | 409 | 40 | |||||||||
Other subsidiaries(2) | 39 | 24 | 63 | |||||||||
Net operating income | 286 | 699 | (59) | |||||||||
Administrative expenses | (117) | (94) | 24 | |||||||||
Other operating income and expenses | (4) | 3 | (233) | |||||||||
Income tax | (54) | (16) | 238 | |||||||||
Net income attributable to GFG | 14,427 | 8,631 | 67 | |||||||||
Other comprehensive income | (75) | (267) | (72) | |||||||||
Comprehensive income attributable to GFG | 14,352 | 8,364 | 72 |
(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%).
Net income attributable to GFG for the 2018 fiscal year amounted to Ps.14,427 million, which represented a 3.37% annualized return on average assets and a 30.53% return on average shareholder’s equity.
The results described above are mainly attributable to profits from GFG’s interests in Banco Galicia, for Ps.11,536 million, Tarjetas Regionales S.A., for Ps.1,768 million, Sudamericana Holding S.A., for Ps.571 million, and GAF, for Ps.402 million. In the 2017 fiscal year, results from equity investments in Banco Galicia also included the interest in Tarjetas Regionales S.A.
RESULTSFORTHE QUARTER
Income Statement | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Results from Equity Investments | 4,368 | 4,190 | 2,169 | 4 | 101 | |||||||||||||||
Banco de Galicia y Buenos Aires S.A.U. | 4,208 | 3,404 | 1,913 | 24 | 120 | |||||||||||||||
Tarjetas Regionales S.A.(1) | (22) | 524 | - | (104) | N/A | |||||||||||||||
Galicia Administradora de Fondos S.A. | 44 | 78 | 132 | (44) | (67) | |||||||||||||||
Sudamericana Holding S.A. | 140 | 166 | 125 | (16) | 12 | |||||||||||||||
Other subsidiaries(2) | (2) | 18 | (1) | (111) | 100 | |||||||||||||||
Net operating income | 105 | 57 | 712 | 84 | (85) | |||||||||||||||
Administrative expenses | (15) | (24) | (17) | (38) | (12) | |||||||||||||||
Other operating income and expenses | (5) | (1) | 3 | 400 | (267) | |||||||||||||||
Income tax | (25) | (10) | (16) | 150 | 56 | |||||||||||||||
Net income attributable to GFG | 4,428 | 4,212 | 2,851 | 5 | 55 | |||||||||||||||
Other comprehensive income | 4 | (81) | 9 | (105) | (56) | |||||||||||||||
Comprehensive income attributable to GFG | 4,432 | 4,131 | 2,860 | 7 | 55 |
(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%).
Net income attributable to GFG for the Quarter amounted to Ps.4,428 million, which represented a 3.24% annualized return on average assets and a 33.43% return on average shareholders’ equity.
3 |
This result was mainly due to profits from GFG’s interests in Banco Galicia, for Ps.4,208 million, Sudamericana Holding S.A., for Ps.140 million, and GAF, for Ps.44 million, which were partially offset by a Ps.22 million loss recorded relating to Tarjetas Regionales S.A. In the fourth quarter of the 2017 fiscal year, results from equity investments in Banco Galicia included its interest in Tarjetas Regionales S.A.
SELECTED FINANCIAL INFORMATION - CONSOLIDATED
Balance Sheet | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 143,309 | 116,815 | 58,955 | 23 | 143 | |||||||||||||||
Debt securities | 75,989 | 22,563 | 28,953 | 237 | 162 | |||||||||||||||
Net loans and other financing | 286,953 | 293,940 | 192,802 | (2) | 49 | |||||||||||||||
Other financial assets | 38,312 | 65,817 | 26,338 | (42) | 45 | |||||||||||||||
Property, bank premises, equipment | 10,885 | 10,522 | 9,790 | 3 | 11 | |||||||||||||||
Intangible assets | 3,744 | 1,112 | 906 | 237 | 313 | |||||||||||||||
Other assets | 5,638 | 6,788 | 3,666 | (17) | 54 | |||||||||||||||
Assets available for sale (1) | 404 | 244 | 5,885 | 66 | (93) | |||||||||||||||
Total assets | 565,234 | 517,801 | 327,295 | 9 | 73 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits | 360,097 | 320,052 | 200,729 | 13 | 79 | |||||||||||||||
Financing from financial entities | 19,446 | 26,457 | 7,869 | (26) | 147 | |||||||||||||||
Other financial liabilities | 69,165 | 64,966 | 39,193 | 6 | 76 | |||||||||||||||
Notes | 29,984 | 26,794 | 13,735 | 12 | 118 | |||||||||||||||
Subordinated notes | 9,768 | 10,357 | 4,828 | (6) | 102 | |||||||||||||||
Other liabilities | 20,175 | 17,011 | 17,785 | 19 | 13 | |||||||||||||||
Total liabilities | 508,635 | 465,637 | 284,139 | 9 | 79 | |||||||||||||||
Shareholders’ equity attributable to third parties | 1,721 | 1,725 | 1,935 | - | (11) | |||||||||||||||
Shareholders’ equity attributable to GFG | 54,878 | 50,439 | 41,221 | 9 | 33 | |||||||||||||||
Shareholders’ equity | 56,599 | 52,164 | 43,156 | 9 | 31 |
(1) Includes the interest in Compañía Financiera Argentina and in Cobranzas y Servicios until the fourth quarter of 2017, and the interest in Prisma Medios de Pago since the third quarter of 2017.
4 |
Income Statement | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Net interest income | 6,667 | 7,745 | 5,681 | (14) | 17 | |||||||||||||||
Interest income | 22,760 | 18,591 | 9,995 | 22 | 128 | |||||||||||||||
Interest related expenses | (16,093) | (10,846) | (4,314) | 48 | 273 | |||||||||||||||
Net fee income | 5,246 | 4,775 | 4,938 | 10 | 6 | |||||||||||||||
Fee income | 6,038 | 5,590 | 5,521 | 8 | 9 | |||||||||||||||
Fee related expenses | (792) | (815) | (583) | (3) | 36 | |||||||||||||||
Net results from financial instruments | 6,239 | 5,192 | 1,484 | 20 | 320 | |||||||||||||||
Gold and foreign currency quotation differences | 1,619 | (54) | 648 | 3,098 | 150 | |||||||||||||||
Other operating income | 2,181 | 1,926 | 337 | 13 | 547 | |||||||||||||||
Underwriting income from insurance business | 507 | 626 | 405 | (19) | 25 | |||||||||||||||
Loan loss provisions | (3,489) | (2,827) | (1,287) | 23 | 171 | |||||||||||||||
Net operating income | 18,970 | 17,383 | 12,206 | 9 | 55 | |||||||||||||||
Personnel expenses | (4,291) | (3,390) | (2,993) | 27 | 43 | |||||||||||||||
Administrative expenses | (4,345) | (3,783) | (2,761) | 15 | 57 | |||||||||||||||
Depreciations and devaluations of assets | (353) | (297) | (8) | 19 | 4,313 | |||||||||||||||
Other operating expenses | (3,619) | (3,610) | (2,449) | - | 48 | |||||||||||||||
Operating income | 6,362 | 6,303 | 3,995 | 1 | 59 | |||||||||||||||
Results from associates and joint businesses | - | - | 16 | - | (100) | |||||||||||||||
Income tax | (1,939) | (1,983) | (990) | (2) | 96 | |||||||||||||||
Net income | 4,423 | 4,320 | 3,021 | 2 | 46 | |||||||||||||||
Net income attributable to third parties | (5) | 108 | 170 | (105) | (103) | |||||||||||||||
Net income attributable to GFG | 4,428 | 4,212 | 2,851 | 5 | 55 | |||||||||||||||
Other comprehensive income (1) | 4 | (81) | 9 | 105 | (56) | |||||||||||||||
Total comprehensive income | 4,427 | 4,239 | 3,030 | 4 | 46 | |||||||||||||||
Comprehensive income attributable to third parties | (5) | 108 | 170 | (105) | (103) | |||||||||||||||
Comprehensive income attributable to GFG | 4,432 | 4,131 | 2,860 | 7 | 55 |
(1) Net of income tax.
Additional Information | 2018 | 2017 | ||||||||||||||||||
(Number of, except otherwise noted) | 4Q | 3Q | 2Q | 1Q | 4Q | |||||||||||||||
Employees | 10,209 | 10,455 | 10,574 | 10,581 | 10,532 | |||||||||||||||
Banco Galicia | 6,294 | 6,457 | 6,478 | 6,393 | 6,214 | |||||||||||||||
Tarjetas Regionales | 3,488 | 3,564 | 3,657 | 3,760 | 3,896 | |||||||||||||||
Galicia Administradora de Fondos | 22 | 21 | 19 | 19 | 19 | |||||||||||||||
Sudamericana Holding | 381 | 386 | 391 | 381 | 375 | |||||||||||||||
Other companies | 24 | 27 | 29 | 28 | 28 | |||||||||||||||
Branches and other points of sales | 560 | 556 | 558 | 564 | 563 | |||||||||||||||
Banco Galicia | 325 | 319 | 309 | 308 | 306 | |||||||||||||||
Tarjetas Regionales | 238 | 237 | 249 | 256 | 257 | |||||||||||||||
Deposit Accounts at Banco Galicia (in thousands) | 4,760 | 4,637 | 4,505 | 4,348 | 4,249 | |||||||||||||||
Credit Cards (in thousands) | 13,916 | 14,286 | 14,205 | 13,391 | 13,234 | |||||||||||||||
Banco Galicia | 5,098 | 5,029 | 4,953 | 4,222 | 4,086 | |||||||||||||||
Tarjetas Regionales | 8,818 | 9,257 | 9,252 | 9,169 | 9,148 | |||||||||||||||
GAF assets under management (millions of pesos) | 64,404 | 58,115 | 72,922 | 91,609 | 67,771 | |||||||||||||||
Inflation, exchange rate and interest rates | ||||||||||||||||||||
Consumer price index (IPC) (%) | 11.50 | 14.10 | 8.80 | 6.70 | 6.14 | |||||||||||||||
Wholesale price index (IPIM) (%) | 4.50 | 27.50 | 16.60 | 11.80 | 4.67 | |||||||||||||||
Acquisition value unit (UVA) | 31.06 | 26.73 | 24.31 | 22.61 | 21.15 | |||||||||||||||
Exchange rate (Ps./US$) (1) | 37.81 | 40.90 | 28.86 | 20.14 | 18.77 | |||||||||||||||
Badlar (quarterly averages) (2) | 50.21 | 37.08 | 27.31 | 22.86 | 22.48 |
(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.
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BANCO GALICIA
HIGHLIGHTS
Ø | Net income attributable to Banco Galicia for the 2018 fiscal year amounted to Ps.11,536 million, Ps.4,358 million (61%) higher than the figure accounted for in the 2017 fiscal year, mainly due to an increase in net operating income (69%). |
Ø | Net income for the Quarter amounted to Ps.4,208 million, Ps.2,295 million (120%) higher than the figure accounted for in the same quarter of the 2017 fiscal year, mainly due to an increase in net operating income (103%). Excluding the results from thesplit-up of Tarjetas Regionales S.A. (effective as of January 1, 2018), net income increased 224%. |
Ø | The credit exposure to the private sector reached Ps.287,891 million, up 58% from the Ps. 182,655 million recorded in the fourth quarter of the 2017 fiscal year, and deposits reached Ps.361,302 million, up 80% from Ps.200,835 million. As of December 31, 2018, the Bank’s estimated market share of loans to the private sector was 10.52%, while its estimated market share of deposits from the private sector was 11.08%. |
Ø | Thenon-accrual loan portfolio represented 2.88% of total loans to the private sector, recording an increase of 88 basis points (“bp”) from the 2.00% recorded at the end of the same quarter of the 2017 fiscal year. |
Ø | As of the end of the Quarter, the minimum capital requirement amounted to Ps.27,163 million (up Ps.8,968 million or 49%), and the computable capital was Ps.49,329 million (up Ps.26,525 million or 116%). The excess over the capital requirement amounted to Ps.22,166 million, and the total capital ratio was 15.14%. |
INFORMATION DISCLOSURE
The data shown in this report and the consolidated financial statements correspond to Banco de Galicia y Buenos Aires S.A.U., as consolidated, except where otherwise noted.
For comparison purposes, figures for the 2017 fiscal year corresponding to the Bank’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. In addition, balances of certain items were adjusted or reclassified.
(1) Beginning in January 1, 2018, the financial statements of Tarjetas Regionales were consolidated line by line with Grupo Financiero Galicia.
(2) On February 2, 2018, the sale of each of Companñĺa Financiera Argentina and Cobranzas y Servicios was completed.
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RESULTSFORTHE FISCAL YEAR
Income Statement | 2018 | 2017 | Variation (%) | |||||||||
In millions of pesos, except otherwise noted | ||||||||||||
Net interest income | 19,247 | 12,806 | 50 | |||||||||
Net fee income | 10,248 | 7,588 | 35 | |||||||||
Net results from financial instruments | 14,018 | 4,193 | 234 | |||||||||
Gold and foreign currency quotation differences | 3,100 | 2,087 | 49 | |||||||||
Other operating income | 5,896 | 3,190 | 85 | |||||||||
Loan loss provisions | (6,511) | (2,587) | 152 | |||||||||
Net operating income | 45,998 | 27,277 | 69 | |||||||||
Personnel expenses | (9,498) | (7,103) | 34 | |||||||||
Administrative expenses | (8,618) | (5,824) | 48 | |||||||||
Depreciations and devaluations of assets | (837) | (552) | 52 | |||||||||
Other operating expenses | (10,646) | (6,611) | 61 | |||||||||
Operating income | 16,399 | 7,187 | 128 | |||||||||
Results from associates and joint businesses | 110 | 2,374 | (95) | |||||||||
Income tax | (5,023) | (2,198) | 129 | |||||||||
Results from discontinued activities (1) (2) | 51 | (185) | (128) | |||||||||
Net income | 11,537 | 7,178 | 61 | |||||||||
Net income attributable to third parties | 1 | - | N/A | |||||||||
Net income attributable to Banco Galicia | 11,536 | 7,178 | 61 | |||||||||
Other comprehensive income (1) | (65) | (281) | (77) | |||||||||
Total comprehensive income | 11,472 | 6,897 | 66 | |||||||||
(1) Net of income tax. | ||||||||||||
| ||||||||||||
Profitability and Efficiency | 2018 | 2017 | Variation (bp) | |||||||||
Percentages, except otherwise noted | ||||||||||||
Return (1) on average assets | 3.17 | 3.06 | 11 | |||||||||
Return (1) on average shareholders´ equity | 30.86 | 26.07 | 479 | |||||||||
Financial margin (1) (2) | 12.93 | 10.43 | 250 | |||||||||
Efficiency ratio (3) | 40.35 | 52.98 | (1,263) |
(1) Annualized.
(2) Net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus certain items included in other operating income, divided by average interest-earning assets.
(3) Personnel expenses plus administrative expenses plus depreciation and devaluations of assets, divided by net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income.
In fiscal year 2018 net income attributable to Banco Galicia amounted to Ps.11,536 million, Ps.4,358 million (61%) higher than the Ps.7,178 million profit for the same quarter of the previous fiscal year, which represented a 3.17% annualized return on average assets and a 30.86% return on average shareholders’ equity.
7 |
RESULTSFORTHE QUARTER
Income Statement | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Net interest income | 4,623 | 5,770 | 3,577 | (20) | 29 | |||||||||||||||
Net fee income | 2,978 | 2,691 | 1,976 | 11 | 51 | |||||||||||||||
Net results from financial instruments | 6,026 | 4,843 | 989 | 24 | 509 | |||||||||||||||
Gold and foreign currency quotation differences | 1,678 | (83) | 645 | 2,122 | 160 | |||||||||||||||
Other operating income | 1,707 | 1,602 | 944 | 7 | 81 | |||||||||||||||
Loan loss provisions | (2,055) | (2,032) | (795) | 1 | 158 | |||||||||||||||
Net operating income | 14,957 | 12,791 | 7,336 | 17 | 104 | |||||||||||||||
Personnel expenses | (2,916) | (2,324) | (2,007) | 25 | 45 | |||||||||||||||
Administrative expenses | (2,522) | (2,248) | (1,669) | 12 | 51 | |||||||||||||||
Other operating expenses | (3,489) | (3,259) | (2,033) | 7 | 72 | |||||||||||||||
Operating income | 6,030 | 4,960 | 1,627 | 22 | 271 | |||||||||||||||
Results from associates and joint businesses | 24 | 30 | 606 | (20) | (96) | |||||||||||||||
Income tax | (1,846) | (1,585) | (320) | 16 | 477 | |||||||||||||||
Net income | 4,208 | 3,405 | 1,913 | 24 | 120 | |||||||||||||||
Net income attributable to third parties | - | 1 | - | (100) | - | |||||||||||||||
Net income attributable to Banco Galicia | 4,208 | 3,404 | 1,913 | 24 | 120 | |||||||||||||||
Other comprehensive income (1) | 3 | (82) | 4 | 104 | (25) | |||||||||||||||
Total comprehensive income | 4,211 | 3,323 | 1,917 | 27 | 120 | |||||||||||||||
(1) Net of income tax. | ||||||||||||||||||||
| ||||||||||||||||||||
Profitability and Efficiency | 2018 | 2017 | Variation (bp) | |||||||||||||||||
Percentages, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Return (1) on average assets | 3.68 | 3.36 | 2.84 | 32 | 84 | |||||||||||||||
Return (1) on average shareholders´ equity | 39.99 | 35.60 | 21.94 | 439 | 1,805 | |||||||||||||||
Financial margin (1) (2) | 14.71 | 14.00 | 9.96 | 71 | 475 | |||||||||||||||
Efficiency ratio (3) | 42.97 | 41.21 | 52.24 | 176 | (927) |
(1) Annualized.
(2) Net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus certain items included in other operating income, divided by average interest-earning assets.
(3) Personnel expenses plus administrative expenses plus depreciation and devaluations of assets, divided by net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income.
In the fourth quarter of the 2018 fiscal year a Ps.4,208 million net income attributable to Banco Galicia was recorded, Ps.2,295 million (120%) higher than the Ps.1,913 million for the same quarter of the previous fiscal year, which resulted from a higher net operating income (104%) due to the growth in the net income from financial instruments (509%).
8 |
Net Interest Income | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Interest income | 18,840 | 15,265 | 7,282 | 23 | 159 | |||||||||||||||
Private sector securities | 34 | 41 | (1) | (17) | 3,500 | |||||||||||||||
Public sector securities(1) | 576 | 469 | (58) | 23 | 1,093 | |||||||||||||||
Loans and other financing | 18,183 | 14,384 | 7,092 | 26 | 156 | |||||||||||||||
Financial sector | 621 | 624 | 220 | - | 182 | |||||||||||||||
Non-financial private sector | 17,562 | 13,760 | 6,872 | 28 | 156 | |||||||||||||||
Overdrafts | 3,052 | 2,985 | 809 | 2 | 277 | |||||||||||||||
Promissory notes | 3,193 | 2,845 | 1,664 | 12 | 92 | |||||||||||||||
Mortgage loans | 2,568 | 1,350 | 239 | 90 | 974 | |||||||||||||||
Pledge loans | 71 | 109 | 43 | (35) | 65 | |||||||||||||||
Personal loans | 2,119 | 1,973 | 1,452 | 7 | 46 | |||||||||||||||
Credit-card loans | 5,269 | 3,562 | 2,285 | 48 | 131 | |||||||||||||||
Financial leases | 171 | 127 | 91 | 35 | 88 | |||||||||||||||
Other | 1,119 | 809 | 289 | 38 | 287 | |||||||||||||||
Other interest-earning assets | 47 | 371 | 180 | (87) | (74) | |||||||||||||||
Interest expenses | (14,217) | (9,495) | (3,705) | 50 | 284 | |||||||||||||||
Deposits from thenon-financial private sector | (12,309) | (7,821) | (3,058) | 57 | 303 | |||||||||||||||
Saving accounts | (1) | (1) | (1) | - | - | |||||||||||||||
Time deposits and term investments | (10,626) | (6,652) | (2,889) | 60 | 268 | |||||||||||||||
Other | (1,682) | (1,168) | (168) | 44 | 901 | |||||||||||||||
Financing from financial institutions | (356) | (270) | (137) | 32 | 160 | |||||||||||||||
Repurchase agreement transactions | (22) | (40) | (94) | (45) | 77 | |||||||||||||||
Other interest-bearing liabilities | (195) | (242) | (47) | (19) | 315 | |||||||||||||||
Notes | (1,335) | (1,122) | (369) | 19 | 262 | |||||||||||||||
Net interest income | 4,623 | 5,770 | 3,577 | (20) | 29 |
(1) Corresponds to interest on Bote 2020.
Net interest income for the Quarter amounted to Ps.4,623 million, representing a Ps.1,046 million (29%) increase as compared to the Ps.3,577 million profit from the same quarter of the 2017 fiscal year. This increase was primarily a consequence of a Ps.11,091 million (156%) increase in interest on loans and other financing.
Yields and Rates (1) | 2018 | 2017 | Variation (% / bp) | |||||||||||||||||||||||||||||||||||||
Average balances: in millions of pesos | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||||||||||||||||||||||
Yields and rates: annualized nominal % | Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | Av. B. | Int. | ||||||||||||||||||||||||||||||
Interest-earning assets | 287,490 | 35.47 | 263,420 | 27.85 | 180,915 | 18.72 | 9 | 762 | 59 | 1,675 | ||||||||||||||||||||||||||||||
In pesos | 194,081 | 49.70 | 180,451 | 37.94 | 137,287 | 23.54 | 8 | 1,176 | 41 | 2,616 | ||||||||||||||||||||||||||||||
Government securities | 49,073 | 57.71 | 28,941 | 42.78 | 17,245 | 23.33 | 70 | 1,493 | 185 | 3,438 | ||||||||||||||||||||||||||||||
Loans | 141,109 | 46.74 | 144,153 | 36.54 | 114,293 | 23.34 | (1) | 1,020 | 23 | 2,340 | ||||||||||||||||||||||||||||||
Other interest-earning assets | 3,899 | 56.21 | 7,357 | 46.21 | 5,749 | 27.97 | (47) | 1,000 | (32) | 2,824 | ||||||||||||||||||||||||||||||
In foreign currency | 93,409 | 5.90 | 82,969 | 5.93 | 43,628 | 3.55 | 13 | (3) | 114 | 235 | ||||||||||||||||||||||||||||||
Government securities | 2,627 | (1.07) | 3,522 | 13.86 | 5,302 | 3.85 | (25) | (1,493) | (50) | (492) | ||||||||||||||||||||||||||||||
Loans | 88,812 | 6.07 | 78,101 | 5.49 | 37,802 | 3.22 | 14 | 58 | 135 | 285 | ||||||||||||||||||||||||||||||
Other interest-earning assets | 1,970 | 7.51 | 1,346 | 10.40 | 524 | 24.43 | 46 | (289) | 276 | (1,692) | ||||||||||||||||||||||||||||||
Interest-bearing liabilities | 296,389 | 19.22 | 262,623 | 14.43 | 156,551 | 9.46 | 13 | 479 | 89 | 976 | ||||||||||||||||||||||||||||||
In pesos | 144,635 | 38.03 | 129,511 | 27.47 | 96,364 | 14.72 | 12 | 1,056 | 50 | 2,331 | ||||||||||||||||||||||||||||||
Saving accounts | 27,358 | 1.46 | 27,515 | 0.81 | 28,499 | 0.21 | (1) | 65 | (4) | 125 | ||||||||||||||||||||||||||||||
Time deposits | 103,448 | 47.02 | 88,122 | 34.86 | 56,362 | 21.41 | 17 | 1,216 | 84 | 2,561 | ||||||||||||||||||||||||||||||
Debt securities | 10,503 | 42.31 | 10,380 | 33.14 | 4,350 | 25.38 | 1 | 917 | 141 | 1,693 | ||||||||||||||||||||||||||||||
Other interest-bearing liabilities | 3,326 | 45.82 | 3,494 | 34.23 | 7,153 | 13.25 | (5) | 1,159 | (54) | 3,257 | ||||||||||||||||||||||||||||||
In foreign currency | 151,754 | 1.29 | 133,112 | 1.73 | 60,187 | 1.06 | 14 | (44) | 152 | 23 | ||||||||||||||||||||||||||||||
Saving accounts | 90,227 | - | 78,830 | - | 41,468 | - | 14 | - | 118 | - | ||||||||||||||||||||||||||||||
Time deposits | 33,926 | 0.61 | 26,008 | 1.28 | 9,595 | 1.04 | 30 | (67) | 254 | (43) | ||||||||||||||||||||||||||||||
Debt securities | 12,910 | 7.56 | 11,137 | 8.40 | 4,391 | 8.56 | 16 | (84) | 194 | (100) | ||||||||||||||||||||||||||||||
Other interest-bearing liabilities | 14,691 | 5.25 | 17,137 | 6.07 | 4,733 | 3.38 | (14) | (82) | 210 | 187 |
(1) Does not include foreign currency quotation differences. Annual nominal interest rates were calculated using a360-day denominator.
9 |
The average interest-earning assets for the Quarter amounted to Ps.287,490 million, growing Ps.106,575 million (59%) as compared to the figure recorded for the fourth quarter of the previous fiscal year, primarily as a consequence of the Ps.31,828 million (185%) increase in the average portfolio of peso-denominated government securities and of the Ps.51,010 million (135%) increase in the average balance of loans to the private sector.
Interest-bearing liabilities reached Ps.296,389 million, increasing Ps.139,838 million (89%) during the same period, primarily due to a Ps.48,759 million (118%) increase in the average balances of dollar-denominated saving accounts as a consequence of the evolution of the exchange rate and a Ps.47,086 million (84%) increase in peso-denominated time deposits.
The average yield on interest-earning assets for the fourth quarter of the 2018 fiscal year was 35.47%, with an 1,675 bp increase compared to the same quarter of the prior fiscal year, mainly due to an increase of 3,438 bp in the yield on peso-denominated government securities and of an increase of 2,824 bp in the interest rate on other interest earning assets. Likewise, the average cost of interest-bearing liabilities was 19.22%, with a 976 bp increase as compared to the fourth quarter of the prior fiscal year, mainly due to the 3,257 bp increase in the average interest rate on other interest-bearing liabilities and of 2,561 bp on peso-denominated time deposits.
Net Fee Income | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Credit cards | 1,576 | 1,289 | 1,103 | 22 | 43 | |||||||||||||||
Deposit accounts | 847 | 815 | 500 | 4 | 69 | |||||||||||||||
Insurance | 163 | 153 | 127 | 7 | 28 | |||||||||||||||
Financial fees | 58 | 64 | 52 | (9) | 12 | |||||||||||||||
Credit-related fees | 27 | 34 | 66 | (21) | (59) | |||||||||||||||
Foreign trade | 248 | 230 | 174 | 8 | 43 | |||||||||||||||
Collections | 176 | 161 | 137 | 9 | 28 | |||||||||||||||
Utility-bills collection services | 228 | 199 | 136 | 15 | 68 | |||||||||||||||
Mutual funds | 125 | 127 | 38 | (2) | 229 | |||||||||||||||
Other | 233 | 214 | 182 | 9 | 28 | |||||||||||||||
Total fee income | 3,681 | 3,286 | 2,515 | 12 | (46) | |||||||||||||||
Total expenditures | (703) | (595) | (539) | 18 | 30 | |||||||||||||||
Net fee income | 2,978 | 2,691 | 1,976 | 11 | 51 |
Net fee income for the Quarter amounted to Ps.2,978 million, up 51% from the Ps.1,976 million recorded in the fourth quarter of the previous fiscal year. The increases in fees which stood out were those related to credit-cards (Ps.473 million or 43%) and to deposit accounts (Ps.347 million or 69%).
Net Income from Financial Instruments | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Government securities | 6,482 | 2,684 | 1,061 | 142 | 511 | |||||||||||||||
Private sector securities | 174 | 201 | 107 | (13) | 63 | |||||||||||||||
Derivative financial instruments | (630) | 1,958 | (179) | (132) | 252 | |||||||||||||||
Forward transactions | (546) | 1,974 | (179) | (128) | 205 | |||||||||||||||
Interest-rate swaps | (84) | (16) | - | 425 | - | |||||||||||||||
Net income from financial instruments | 6,026 | 4,843 | 989 | 24 | 509 |
10 |
Net income from financial instruments for the Quarter amounted to Ps.6,026 million, up Ps.5,037 million (509%) from the Ps.989 million recorded in the same quarter of the 2017 fiscal year, as a consequence of the increase in gains from government securities (511%).
Profits from gold and foreign currency quotation differences for the Quarter amounted to Ps.1,678 million, 160% higher than the Ps.645 million profit recorded in the same quarter of the 2017 fiscal year. This result includes a Ps. 1,623 million profit from foreign-currency trading.
Other Operating Income | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Other financial income / (losses) (1) (2) | 73 | 89 | 44 | (18) | 66 | |||||||||||||||
Fees from bundles of products (1) | 642 | 584 | 497 | 10 | 29 | |||||||||||||||
Rental of safe deposit boxes (1) | 120 | 108 | 89 | 11 | 35 | |||||||||||||||
Other fee income (1) | 130 | 124 | 94 | 5 | 38 | |||||||||||||||
Other adjustments and interest on miscellaneous receivables | 412 | 507 | 109 | (19) | 278 | |||||||||||||||
Other | 330 | 190 | 111 | 74 | 197 | |||||||||||||||
Total other operating income | 1.707 | 1.602 | 944 | 7 | 81 |
(1) Item included for calculating the efficiency ratio.
(2) Item included for calculating the financial margin.
Other operating income for the Quarter reached Ps.1,707 million, increasing Ps.763 million (81%) from the Ps.944 million net profit recorded in the fourth quarter of 2017.
Provisions for loan losses for the fourth quarter of the 2018 fiscal year amounted to Ps.2,055 million, Ps.1,260 million (158%) higher than those recorded in the same quarter of the prior year. This was 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.2,916 million for the Quarter, increasing 45% from the same quarter of the 2017 fiscal year, mainly due to salary increase agreements with the union.
Administrative Expenses | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Fees and compensations for services | 168 | 200 | 73 | (16) | 130 | |||||||||||||||
Fees to directors and syndics | 9 | 7 | 5 | 29 | 80 | |||||||||||||||
Publicity, promotion and research expenses | 167 | 128 | 134 | 30 | 25 | |||||||||||||||
Taxes | 492 | 395 | 330 | 25 | 49 | |||||||||||||||
Maintenance | 342 | 275 | 145 | 24 | 136 | |||||||||||||||
Electricity and communications | 185 | 168 | 128 | 10 | 45 | |||||||||||||||
Stationery and office supplies | 30 | 23 | 19 | 30 | 58 | |||||||||||||||
Rentals | 144 | 129 | 74 | 12 | 95 | |||||||||||||||
Hired administrative services | 303 | 284 | 232 | 7 | 31 | |||||||||||||||
Security | 123 | 117 | 106 | 5 | 16 | |||||||||||||||
Insurance | 18 | 13 | 11 | 38 | 64 | |||||||||||||||
Other | 541 | 509 | 412 | 6 | 31 | |||||||||||||||
Total administrative expenses | 2,522 | 2,248 | 1,669 | 12 | 51 |
Administrative expenses for the Quarter totaled Ps.2,522 million, up 51% in the same period, as a consequence of a Ps.197 million (136%) increase in maintenance expenses and of the Ps.162 million (49%) increase in taxes.
11 |
Other Operating Expenses | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Contribution to the Deposit Insurance Fund (1) (2) | 143 | 108 | 72 | 32 | 99 | |||||||||||||||
Other financial expenses (1) (2) | 368 | 122 | 73 | 202 | 404 | |||||||||||||||
Turnover tax (1) | 1,779 | 1,581 | 866 | 13 | 105 | |||||||||||||||
On operating income (2) | 1,228 | 1,094 | 601 | 12 | 104 | |||||||||||||||
On fees | 487 | 430 | 234 | 13 | 108 | |||||||||||||||
On other items | 64 | 57 | 31 | 12 | 106 | |||||||||||||||
Otherfee-related expenditures(2) | 808 | 778 | 560 | 4 | 44 | |||||||||||||||
Other | 391 | 670 | 462 | (42) | (15) | |||||||||||||||
Total other operating expenses | 3,489 | 3,259 | 2,033 | 7 | 72 |
(1) Item included for calculating the efficiency ratio.
(2) Item included for calculating the financial margin.
Other operating expenses reached Ps.3,489 million, increasing Ps.1,456 million (72%) from the Ps.2,033 million recorded in the fourth quarter of the 2017 fiscal year.
The income tax charge was Ps.1,846 million, Ps.1,526 million (477%) higher than in the fourth quarter of the 2017 fiscal year.
SELECTED FINANCIAL INFORMATION
Balance Sheet | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 142,049 | 116,288 | 58,461 | 22 | 143 | |||||||||||||||
Debt securities | 75,974 | 22,019 | 26,602 | 245 | 186 | |||||||||||||||
Net loans and other financing | 243,276 | 253,978 | 160,904 | (4) | 51 | |||||||||||||||
Other financial assets | 33,135 | 62,321 | 22,841 | (47) | 45 | |||||||||||||||
Equity investments in subsidiaries, associates and joint businesses | 203 | 180 | 6,650 | 13 | (97) | |||||||||||||||
Property, bank premises, equipment | 9,869 | 9,567 | 8,973 | 3 | 10 | |||||||||||||||
Intangible assets | 3,260 | 685 | 600 | 376 | 443 | |||||||||||||||
Other assets | 3,068 | 4,307 | 1,820 | (29) | 69 | |||||||||||||||
Assets available for sale (1) | 404 | 244 | 5,716 | 66 | (93) | |||||||||||||||
Total assets | 511,238 | 469,588 | 292,567 | 9 | 75 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Deposits | 361,302 | 320,367 | 200,835 | 13 | 80 | |||||||||||||||
Financing from financial entities | 17,491 | 23,637 | 7,728 | (26) | 126 | |||||||||||||||
Other financial liabilities | 47,483 | 47,481 | 22,948 | - | 107 | |||||||||||||||
Notes | 15,528 | 15,273 | 4,489 | 2 | 246 | |||||||||||||||
Subordinated notes | 9,768 | 10,357 | 4,828 | (6) | 102 | |||||||||||||||
Other liabilities | 15,695 | 12,712 | 12,762 | 23 | 23 | |||||||||||||||
Total liabilities | 467,267 | 429,827 | 253,590 | 9 | 84 | |||||||||||||||
Shareholders’ equity | 43,971 | 39,761 | 38,978 | 11 | 13 | |||||||||||||||
Foreign currency assets and liabilities | ||||||||||||||||||||
Assets | 200,001 | 193,734 | 85,788 | 3 | 133 | |||||||||||||||
Liabilities | 200,421 | 195,557 | 83,745 | 2 | 139 | |||||||||||||||
Net forward purchases/(sales) of foreign currency (2) | 102 | 2,728 | (2,807) | (96) | (104) | |||||||||||||||
Net global position in foreign currency | (318) | 905 | (764) | (135) | (58) |
(1) Includes the interests in Compañía Financiera Argentina S.A. and in Cobranzas y Servicios S.A. until 2017, and the interest in Prisma Medios de Pago S.A. since the fourth quarter of 2017.
(2) Recordedoff-balance sheet.
12 |
LEVELOF ACTIVITY
Financing to the Private Sector(1) | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
In pesos | 170,640 | 174,882 | 137,236 | (2) | 24 | |||||||||||||||
Loans | 131,792 | 140,542 | 116,882 | (6) | 13 | |||||||||||||||
UVA-adjusted loans | 17,438 | 13,332 | 4,060 | 31 | 330 | |||||||||||||||
Financial leases | 1,361 | 1,495 | 1,562 | (9) | (13) | |||||||||||||||
Debt securities | 411 | 492 | 696 | (16) | (41) | |||||||||||||||
Other financing (2) | 19,638 | 19,021 | 14,036 | 3 | 40 | |||||||||||||||
In foreign currency | 117,251 | 124,518 | 45,419 | (6) | 158 | |||||||||||||||
Loans | 93,773 | 98,580 | 39,342 | (5) | 138 | |||||||||||||||
Financial leases | 1,013 | 1,037 | 311 | (2) | 226 | |||||||||||||||
Debt securities | 4,293 | 5,359 | 1,544 | (20) | 178 | |||||||||||||||
Other financing (2) | 18,172 | 19,542 | 4,222 | (7) | 330 | |||||||||||||||
Total financing to the private sector | 287,891 | 299,400 | 182,655 | (4) | 58 |
(1) Includes IFRS adjustment.
(2) Includes certainoff-balance sheet accounts related to guarantees granted.
As of December 31, 2018, total financing to the private sector reached Ps.287,891 million, representing a 58% increase from a year before, mainly as a consequence of the growth of the loan portfolio, both in pesos (23%) and in foreign currency (138%). Dollar-denominated loans increased 18% from the same quarter of the 2017 fiscal year.
Market Share (1) | 2018 | 2017 | Variation (bp) | |||||||||||||||||
Percentages, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Total loans | 10.63 | 10.67 | 9.53 | (4) | 110 | |||||||||||||||
Loans to the private sector | 10.52 | 10.58 | 9.65 | (6) | 87 |
(1) According to the daily information on loans published by the Argentine Central Bank. Only principal as of the last day of each quarter.
The Bank’s market share of loans to the private sector as of December 31, 2018, was 10.52%, increasing 87 bp from December 31, 2017.
13 |
Break down of loans and other financing | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Financial entities | 7,943 | 8,866 | 4,703 | (10) | 69 | |||||||||||||||
Loans | 7,942 | 8,860 | 4,700 | (10) | 69 | |||||||||||||||
Other financing | 1 | 6 | 3 | (83) | (67) | |||||||||||||||
Non-financial private sector and residents abroad | 242,691 | 251,352 | 159,868 | (3) | 52 | |||||||||||||||
Loans | 235,061 | 243,594 | 155,584 | (4) | 51 | |||||||||||||||
Overdrafts | 14,430 | 24,697 | 11,298 | (42) | 28 | |||||||||||||||
Promissory notes | 36,101 | 43,849 | 35,533 | (18) | 2 | |||||||||||||||
Mortgage loans | 11,793 | 11,826 | 5,713 | - | 106 | |||||||||||||||
Pledge loans | 998 | 1,112 | 1,078 | (10) | (7) | |||||||||||||||
Personal loans | 25,312 | 24,792 | 18,333 | 2 | 38 | |||||||||||||||
Credit-card loans | 67,709 | 62,892 | 53,853 | 8 | 26 | |||||||||||||||
Other | 74,735 | 71,509 | 30,433 | 5 | 146 | |||||||||||||||
Accrued interest, adjustments and foreign currency quotation differences receivable | 5,395 | 4,031 | 267 | 34 | 1,921 | |||||||||||||||
Documented interest | (1,412) | (1,114) | (924) | 27 | 53 | |||||||||||||||
Financial leases | 2,374 | 2,532 | 1,873 | (6) | 27 | |||||||||||||||
Other financing | 5,256 | 5,226 | 2,411 | 1 | 118 | |||||||||||||||
Non-financial public sector | 12 | 1 | - | 1,100 | N/A | |||||||||||||||
Total loans and other financing | 250,646 | 260,219 | 164,571 | (4) | 52 | |||||||||||||||
Allowances | (7,370) | (6,241) | (3,667) | 18 | 99 | |||||||||||||||
Loans | (7,263) | (6,157) | (3,594) | 18 | 102 | |||||||||||||||
Financial leases | (29) | (31) | (22) | (6) | 32 | |||||||||||||||
Other financing | (78) | (53) | (51) | 47 | (7) | |||||||||||||||
Net loans and other financing | 243,276 | 253,978 | 160,904 | (4) | 51 |
As of December 31, 2018, net loans and other financing provisions amounted to Ps.243,276 million, growing 51% from December 31, 2017, mainly due to a Ps.13,856 (26%) million increase in credit-card loans and of Ps.6,979 million (38%) in personal loans.
Loans by Type of Borrower | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Large corporations | 91,754 | 103,416 | 39,232 | (11) | 134 | |||||||||||||||
SMEs | 48,462 | 51,066 | 49,421 | (5) | (2) | |||||||||||||||
Individuals | 93,253 | 88,066 | 68,009 | 6 | 37 | |||||||||||||||
Financial sector | 7,942 | 8,860 | 4,700 | (10) | 69 | |||||||||||||||
Residents abroad | 5,248 | 3,830 | 274 | 37 | 1,815 | |||||||||||||||
Other | 554 | 698 | 800 | (21) | (31) | |||||||||||||||
IFRS adjustment | (4,198) | (3,481) | (359) | 21 | 1,069 | |||||||||||||||
Total loans | 243,015 | 252,455 | 162,077 | (4) | 50 | |||||||||||||||
Allowances | (7,263) | (6,157) | (3,595) | 18 | 102 | |||||||||||||||
Net total loans | 235,752 | 246,298 | 158,482 | (4) | 49 |
14 |
Loans by Sector of Activity | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Financial sector | 7,942 | 8,860 | 4,700 | (10) | 69 | |||||||||||||||
Residents abroad | 5,248 | 3,830 | 274 | 37 | 1,815 | |||||||||||||||
Services | 13,771 | 16,311 | 14,259 | (16) | (3) | |||||||||||||||
Agriculture and livestock | 31,852 | 30,573 | 18,606 | 4 | 71 | |||||||||||||||
Consumer | 93,282 | 88,105 | 68,076 | 6 | 37 | |||||||||||||||
Retail and wholesale trade | 20,589 | 23,029 | 19,939 | (11) | 3 | |||||||||||||||
Construction | 3,224 | 3,662 | 2,435 | (12) | 32 | |||||||||||||||
Manufacturing industry | 50,537 | 58,199 | 30,261 | (13) | 67 | |||||||||||||||
Other | 20,768 | 23,367 | 3,886 | (11) | 434 | |||||||||||||||
IFRS adjustment | (4,198) | (3,481) | (359) | 21 | 1,069 | |||||||||||||||
Total loans | 243,015 | 252,455 | 162,077 | (4) | 50 | |||||||||||||||
Allowances | (7,263) | (6,157) | (3,595) | 18 | 102 | |||||||||||||||
Net total loans | 235,752 | 246,298 | 158,482 | (4) | 49 |
When compared to the previous fiscal year, loans to the private sector registered growth, mainly in those granted to large corporations (Ps.52,522 million or 134%) and to individuals (Ps.25,244 million or 37%). By sector of activity, the higher growth was recorded in the consumer sector (Ps.25,206 million or 37%) and in the manufacturing industry (Ps.20,276 million or 67%).
Net Exposure to the Argentine Public Sector (1) | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Government securities’ net position | 84,205 | 29,614 | 26,367 | 184 | 219 | |||||||||||||||
Lebac | - | 1,260 | 15,843 | (100) | (100) | |||||||||||||||
Leliq | 70,157 | 12,923 | - | 443 | N/A | |||||||||||||||
Bote | 8,976 | 9,355 | - | (4) | N/A | |||||||||||||||
Other | 5,072 | 6,076 | 10,524 | (17) | (52) | |||||||||||||||
Other receivables resulting from financial brokerage | 57 | 63 | 39 | (10) | 46 | |||||||||||||||
Loans and other financing | 13 | 7 | 2 | 86 | 550 | |||||||||||||||
Trust certificates of participation and securities | 44 | 56 | 37 | (21) | 19 | |||||||||||||||
Total exposure to the public sector | 84,262 | 29,677 | 26,406 | 184 | 219 |
(1) Excludes deposits with the Argentine Central Bank, which constitute one of the items by which the Bank complies with minimum cash requirements.
As of December 31, 2018, the Bank’s exposure to the public sector amounted to Ps.84,262 million, recording a 219% increase during the last twelve months, due to an increase in the portfolio of government securities, mainly of debt securities issued by the Argentine Central Bank, partially offset by the sale of Lebacs. Excluding Argentine Central Bank paper, net exposure to the public sector reached Ps.14,105 million (3% of total assets), while, as of December 31, 2017, it amounted to Ps.10,563 million (4% of total assets).
15 |
Deposits | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
In pesos | 198,601 | 167,113 | 130,421 | 19 | 52 | |||||||||||||||
Current accounts | 40,069 | 34,347 | 33,210 | 17 | 21 | |||||||||||||||
Saving accounts | 61,129 | 45,870 | 41,362 | 33 | 48 | |||||||||||||||
Time deposits | 90,143 | 80,204 | 52,933 | 12 | 70 | |||||||||||||||
UVA-adjusted time deposits | 1,984 | 2,278 | 603 | (13) | 229 | |||||||||||||||
Other | 1,273 | 1,196 | 886 | 6 | 44 | |||||||||||||||
Interests and adjustments | 4,003 | 3,218 | 1,427 | 24 | 181 | |||||||||||||||
In foreign currency | 162,701 | 153,254 | 70,414 | 6 | 131 | |||||||||||||||
Saving accounts | 137,796 | 125,680 | 59,054 | 10 | 133 | |||||||||||||||
Time deposits | 24,064 | 26,545 | 10,946 | (9) | 120 | |||||||||||||||
Other | 793 | 952 | 398 | (17) | 99 | |||||||||||||||
Interests and adjustments | 48 | 77 | 16 | (38) | 200 | |||||||||||||||
Total deposits | 361,302 | 320,367 | 200,835 | 13 | 80 |
As of December 31, 2018, the Bank’s deposits amounted to Ps.361,302 million, representing an 80% increase during the last twelve months. Peso-denominated deposits increased 52% in the same period, mainly due to a Ps.37,210 million (70%) increase in time deposits and Ps.19,767 million (48%) increase in deposits in saving accounts. Dollar-denominated deposits increased 131% in the last twelve months, as a consequence of the evolution of the exchange rate. Deposits in dollar-denominated saving accounts reached Ps.137,796, increasing 13% measured in dollars (133% measured in pesos) from December 31, 2017.
At the end of the Quarter there were 4.8 million deposit accounts, 12% more than the 4.2 million recorded from a year before.
Market Share (1) | 2018 | 2017 | Variation (bp) | |||||||||||||||||
Percentages, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Total deposits | 8.85 | 8.39 | 8.23 | 46 | 62 | |||||||||||||||
Private sector deposits | 11.08 | 11.04 | 10.20 | 4 | 88 |
(1) According to the daily information on loans published by the Argentine Central Bank. Balances as of the last day of each quarter.
As of December 31, 2018, the Bank’s estimated market share of private sector deposits in the Argentine financial system was 11.08%, recording a 88 bp increase from a year before.
Financial Liabilities | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Financial entities | 17,491 | 23,637 | 7,728 | (26) | 126 | |||||||||||||||
Financing from credit-card purchases | 15,274 | 11,120 | 10,514 | 37 | 45 | |||||||||||||||
Notes | 15,528 | 15,273 | 4,489 | 2 | 246 | |||||||||||||||
Subordinated notes | 9,768 | 10,357 | 4,828 | (6) | 102 | |||||||||||||||
Creditors for purchases of foreign currency | 14,410 | 15,658 | 5,049 | (8) | 185 | |||||||||||||||
Collections on account of third parties | 7,647 | 6,009 | 3,148 | 27 | 143 | |||||||||||||||
Other financial liabilities | 10,152 | 14,694 | 4,237 | (31) | 140 | |||||||||||||||
Total financial liabilities | 90,270 | 96,748 | 39,993 | (7) | 116 |
Financial liabilities at the end of the fourth quarter of the 2018 fiscal year amounted to Ps.90,270 million, Ps.48,483 million (116%) higher than the Ps.39,993 million recorded a year before. This growth was mainly due to the increase in notes (Ps.11,039 million or 246%) and in financing from financial entities (Ps.9,763 million or 126%).
16 |
ASSET QUALITY
Loan Portfolio Quality | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Non-accrual loans (1) | 7,003 | 5,976 | 3,203 | 17 | 119 | |||||||||||||||
With preferred guarantees | 492 | 446 | 194 | 10 | 154 | |||||||||||||||
With other guarantees | 737 | 703 | 206 | 5 | 258 | |||||||||||||||
Without guarantees | 5,774 | 4,827 | 2,803 | 20 | 106 | |||||||||||||||
Allowance for loan losses | 7,263 | 6,157 | 3,594 | 18 | 102 | |||||||||||||||
Relevant ratios (%) | Variation (bp) | |||||||||||||||||||
Non-accrual loans to private-sector loans | 2.88 | 2.37 | 2.00 | 51 | 88 | |||||||||||||||
Allowance for loan losses to private-sector loans | 2.99 | 2.44 | 2.24 | 55 | 75 | |||||||||||||||
Allowance for loan losses tonon-accrual loans | 103.73 | 103.03 | 112.24 | 70 | (851) | |||||||||||||||
Non-accrual loans with guarantees tonon-accrual loans | 17.54 | 19.23 | 12.49 | (169) | 505 | |||||||||||||||
Cost of risk (2) | 3.56 | 3.45 | 2.05 | 11 | 151 |
(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.
(2) Annualized.
The Bank’snon-accrual loan portfolio amounted to Ps.7,003 million as of December 31, 2018, accounting for 2.88% of total loans to the private-sector, increasing 88 bp from the 2.00% ratio of a year before.
The coverage of thenon-accrual loan portfolio with allowances for loan losses reached 103.73% as of the end of the Quarter, compared to 112.24% from a year before.
In terms of total financing (defined as loans, certain other receivable financial asset accounts, guarantees granted and unused balances of loans granted) the Bank’snon-accrual portfolio represented 2.54% of total financing to the private-sector, and its coverage with allowances for loan losses reached 101.82%, compared to 2.08% and 117.46% from a year before, respectively.
Analysis of Loan Loss Experience | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Allowance for loan losses at the beginning of the Quarter | 6,157 | 4,918 | 3,077 | 25 | 100 | |||||||||||||||
Changes in the allowance for loan losses | ||||||||||||||||||||
Provisions charged to income | 1,954 | 1,888 | 743 | 3 | 163 | |||||||||||||||
Charge offs | (848) | (649) | (226) | 31 | 275 | |||||||||||||||
Allowance for loan losses at the end of the Quarter | 7,263 | 6,157 | 3,594 | 18 | 102 | |||||||||||||||
Charge to the income statement | ||||||||||||||||||||
Provisions charged to income (1) | (1,954) | (1,888) | (743) | 3 | 163 | |||||||||||||||
Direct charge offs (1) | (90) | (92) | (46) | (2) | 96 | |||||||||||||||
Bad debts recovered | 43 | 33 | 31 | 30 | 39 | |||||||||||||||
Net charge to the income statement | (2,001) | (1,947) | (758) | 3 | 164 |
(1) Item included for calculating the cost of risk.
During the Quarter, Ps.848 million were charged off against the allowance for loan losses and direct charges to the income statement for Ps.90 million were made. Net charge to the income statement amounted to Ps.2,001 million.
17 |
CAPITALIZATIONAND LIQUIDITY
Regulatory Capital | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Minimum capital required (A) | 27,163 | 29,120 | 18,195 | (7) | 49 | |||||||||||||||
Allocated to credit risk | 22,171 | 24,642 | 14,414 | (10) | 54 | |||||||||||||||
Allocated to market risk | 969 | 943 | 1,126 | 3 | (14) | |||||||||||||||
Allocated to operational risk | 4,023 | 3,535 | 2,655 | 14 | 52 | |||||||||||||||
Computable capital (B) | 49,329 | 48,774 | 22,804 | 1 | 116 | |||||||||||||||
Tier I | 36,584 | 35,322 | 16,221 | 4 | 126 | |||||||||||||||
Tier II | 12,745 | 13,452 | 6,583 | (5) | 94 | |||||||||||||||
Excess over required capital (B) - (A) | 22,166 | 19,654 | 4,609 | 13 | 381 | |||||||||||||||
Risk weighted assets | 325,853 | 348,263 | 221,472 | (6) | 47 | |||||||||||||||
Variation (bp) | ||||||||||||||||||||
Total capital ratio (%) | 15.14 | 14.01 | 10.90 | 113 | 424 | |||||||||||||||
Tier I capital ratio (%) | 11.23 | 10.14 | 7.80 | 109 | 343 |
As of December 31, 2018, the Bank’s computable capital amounted to Ps.49,329 million, Ps.22,166 million (82%) higher than the Ps.27,163 million capital requirement. As of December 31, 2017, this excess amounted to Ps.4,609 million (25%).
The minimum capital requirement increased Ps.8,968 million as compared to December 31, 2017, mainly due to the growth of the private-sector loan portfolio, and computable capital increased Ps.26,525 million in the same period, primarily as consequence of the Ps.10,000 million capitalization and of the application of IFRS. The total capital ratio was 15.14%, increasing 424 bp during the last twelve months.
Liquidity | 2018 | 2017 | Variation (%) | |||||||||||||||||
Percentages, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Cash and due from banks | 142,049 | 116,288 | 58,461 | 22 | 143 | |||||||||||||||
Government securities | 62,388 | 15,897 | 19,771 | 292 | 216 | |||||||||||||||
Call-money | 938 | 1,074 | 935 | (13) | - | |||||||||||||||
Overnight placements in correspondent banks | 6,256 | 4,895 | 491 | 28 | 1,174 | |||||||||||||||
Repurchase agreement transactions | (419) | 14,652 | 8,415 | (103) | (105) | |||||||||||||||
Escrow accounts | 5,188 | 4,459 | 3,610 | 16 | 44 | |||||||||||||||
Total liquid assets | 216,400 | 157,265 | 91,683 | 38 | 136 | |||||||||||||||
Liquidity ratios | Variation (bp) | |||||||||||||||||||
Liquid assets (*) as a percentage of transactional deposits | 90.55 | 76.38 | 68.61 | 1,417 | 2,194 | |||||||||||||||
Liquid assets (*) as a percentage of total deposits | 59.89 | 49.09 | 45.65 | 1,080 | 1,424 |
(*) 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, 2018, the Bank’s liquid assets represented 90,55% of the Bank’s transactional deposits and 59.89% of its total deposits, as compared to 68.61% and 45.65%, respectively, as of December 31, 2017.
18 |
TARJETAS REGIONALES
INFORMATION DISCLOSURE
The data shown in the following tables correspond to Tarjetas Regionales, consolidated line by line with its subsidiaries.
RESULTSFORTHE FISCAL YEAR
Income Statement | 2018 | 2017 | Variation (%) | |||||||||
In millions of pesos, except otherwise noted | ||||||||||||
Net interest income | 7,516 | 6,414 | 17 | |||||||||
Net fee income | 9,136 | 7,599 | 20 | |||||||||
Net results from financial instruments | 696 | (1) | 69,700 | |||||||||
Gold and foreign currency quotation differences | (50) | 9 | (656) | |||||||||
Other operating income | 956 | 759 | 26 | |||||||||
Loan loss provisions | (3,816) | (2,018) | 89 | |||||||||
Net operating income | 14,438 | 12,762 | 13 | |||||||||
Personnel expenses | (3,940) | (3,142) | 25 | |||||||||
Administrative expenses | (5,304) | (3,593) | 48 | |||||||||
Depreciations and devaluations of assets | (286) | (203) | 41 | |||||||||
Other operating expenses (1) | (1,907) | (1,440) | 32 | |||||||||
Operating income | 3,001 | 4,384 | (32) | |||||||||
Income tax | (871) | (1,665) | (48) | |||||||||
Net income | 2,130 | 2,719 | (22) |
(1) In the third quarter of 2018 this includes sales tax for Ps.204 million. Item included for calculating the financial margin.
Profitability and Efficiency | 2018 | 2017 | Variation (bp) | |||||||||
Percentages, except otherwise noted | ||||||||||||
Return(1) on average assets | 4.86 | 8.50 | (364) | |||||||||
Return(1) on average shareholders´ equity | 22.36 | 33.95 | (1,159) | |||||||||
Financial margin (1) (2) | 17.02 | 17.98 | (96) | |||||||||
Efficiency ratio (3) | 61.62 | 54.79 | 683 |
(1) Annualized.
(2) Net interest income plus net result from financial instruments plus foreign currency quotation differences plus certain items included in other operating income and expenses, divided by average interest-earning assets.
(3) Personnel expenses plus administrative expenses plus depreciation and devaluations of assets, divided by net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income.
RESULTSFORTHE QUARTER
Income Statement | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Net interest income | 1,792 | 1,857 | 2,054 | (4) | (13) | |||||||||||||||
Net fee income | 2,511 | 2,342 | 2,141 | 7 | 17 | |||||||||||||||
Net results from financial instruments | 218 | 221 | (252) | (1) | 187 | |||||||||||||||
Gold and foreign currency quotation differences | (50) | (4) | (5) | 1,150 | 900 | |||||||||||||||
Other operating income | 292 | 258 | 173 | 13 | 69 | |||||||||||||||
Loan loss provisions | (1,432) | (797) | (493) | 80 | 190 | |||||||||||||||
Net operating income | 3,331 | 3,877 | 3,618 | (14) | (8) | |||||||||||||||
Personnel expenses | (1,200) | (942) | (869) | 27 | 38 | |||||||||||||||
Administrative expenses | (1,598) | (1,468) | (984) | 9 | 62 | |||||||||||||||
Depreciations and devaluations of assets | (83) | (75) | (54) | 11 | 54 | |||||||||||||||
Other operating expenses | (512) | (495) | (421) | 3 | 22 | |||||||||||||||
Operating income | (62) | 897 | 1,290 | (107) | (105) | |||||||||||||||
Income tax | 36 | (266) | (557) | (114) | (106) | |||||||||||||||
Net income | (26) | 631 | 733 | (104) | (104) |
19 |
Profitability and Efficiency | 2018 | 2017 | Variation (bp) | |||||||||||||||||
Percentages, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Return(1) on average assets | (0.21) | 5.33 | 8.37 | (554) | (858) | |||||||||||||||
Return(1) on average shareholders´ equity | (1.02) | 25.36 | 36.31 | (2,638) | (3,733) | |||||||||||||||
Financial margin (1) (2) | 14.61 | 16.36 | 18.28 | (175) | (367) | |||||||||||||||
Efficiency ratio (3) | 72.42 | 63.02 | 53.96 | 940 | 1,846 |
(1) Annualized.
(2) Net interest income plus net result from financial instruments plus foreign currency quotation differences plus certain items included in other operating income and expenses, divided by average interest-earning assets.
(3) Personnel expenses plus administrative expenses plus depreciation and devaluations of assets, divided by net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income.
In the fourth quarter of the 2018 fiscal year, Tarjetas Regionales recorded a Ps.26 million loss, as compared to the Ps.733 million profit recorded in the same quarter of the 2017 fiscal year. This loss represented a-0.21% (minus 0.21%) annualized return on average assets and a-1.02% (minus 1.02%) return on average shareholder’s equity, as compared to 8.37% and 36.31%, respectively, recorded from the fourth quarter of the 2017 fiscal year.
Net operating income amounted to Ps.3,331 million, decreasing 8% from the fourth quarter of the 2017 fiscal year, mainly due to a 13% lower net interest income.
Provisions for loan losses for the Quarter amounted to Ps.1,432 million, 190% higher than the Ps.493 million recorded in the same quarter of the prior year.
20 |
SELECTED FINANCIAL INFORMATION
Balance Sheet | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 1,365 | 646 | 537 | 111 | 154 | |||||||||||||||
Debt securities | 54 | 749 | 251 | (93) | (78) | |||||||||||||||
Net loans and other financing | 45,313 | 40,516 | 32,364 | 12 | 40 | |||||||||||||||
Other financial assets | 3,628 | 2,047 | 2,174 | 77 | 67 | |||||||||||||||
Property, bank premises, equipment | 835 | 777 | 669 | 7 | 25 | |||||||||||||||
Intangible assets | 423 | 368 | 250 | 15 | 69 | |||||||||||||||
Othernon-financial assets | 1,090 | 1,072 | 772 | 2 | 41 | |||||||||||||||
Total assets | 52,708 | 46,175 | 37,017 | 14 | 42 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Financing from financial entities | 2,131 | 2,999 | 332 | (29) | 542 | |||||||||||||||
Other financial liabilities | 23,244 | 18,770 | 16,533 | 24 | 41 | |||||||||||||||
Notes | 14,979 | 12,096 | 9,482 | 24 | 58 | |||||||||||||||
Othernon-financial liabilities | 2,232 | 2,163 | 2,255 | 3 | (1) | |||||||||||||||
Total liabilities | 42,586 | 36,028 | 28,602 | 18 | 49 | |||||||||||||||
Shareholders’ equity | 10,122 | 10,147 | 8,415 | - | 20 |
ASSET QUALITY
Loan Portfolio Quality | 2018 | 2017 | Variation (%) | |||||||||||||||||
Percentages, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Non-accrual loans (1) | 3,322 | 3,127 | 2,361 | 6 | 41 | |||||||||||||||
Allowances for loan losses | 4,045 | 3,110 | 2,380 | 30 | 70 | |||||||||||||||
Ratios (%) | Variation (bp) | |||||||||||||||||||
Non-accrual loans to loans to the private sector | 6.84 | 7.17 | 6.81 | (33) | 3 | |||||||||||||||
Allowance for loan losses to loans to the private sector | 8.33 | 7.13 | 6.86 | 120 | 142 | |||||||||||||||
Allowance for loan losses tonon-accrual loans | 121.76 | 99.46 | 100.80 | 2,230 | 2,096 | |||||||||||||||
Cost of risk (2) | 12.44 | 8.19 | 6.03 | 425 | 641 |
(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.
(2) Annualized.
Analysis of Loan Loss Experience | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Allowance for loan losses | ||||||||||||||||||||
At the beginning of the Quarter | 3,110 | 2,802 | 2,297 | 11 | 35 | |||||||||||||||
Changes in the allowance for loan losses | ||||||||||||||||||||
Provisions charged to income | 1,350 | 718 | 446 | 88 | 203 | |||||||||||||||
Charge offs (1) | (415) | (410) | (363) | 1 | 14 | |||||||||||||||
Allowance for loan losses at the end of the Quarter | 4,045 | 3,110 | 2,380 | 30 | 70 | |||||||||||||||
Charge to the income statement | ||||||||||||||||||||
Provisions charged to income (2) | (1,350) | (718) | (446) | 88 | 203 | |||||||||||||||
Direct charge offs (2) | (83) | (93) | (46) | (11) | 80 | |||||||||||||||
Bad debts recovered | 59 | 105 | 46 | (44) | 28 | |||||||||||||||
Net charge to the income statement | (1,374) | (706) | (446) | 95 | 208 |
(1) includes Ps.785 million from the sale ofbad- loans in the third quarter of 2018.
(2) Item included for calculating the cost of risk.
21 |
GALICIA ADMINISTRADORADE FONDOS
RESULTSFORTHE FISCAL YEAR
Income Statement | 2018 | 2017 | Variation (%) | |||||||||
In millions of pesos, except otherwise noted | ||||||||||||
Net interest income | 20 | 3 | 567 | |||||||||
Net fee income | (1) | (1) | - | |||||||||
Net results from financial instruments | 153 | 72 | 113 | |||||||||
Gold and foreign currency quotation differences | 6 | - | N/A | |||||||||
Other operating income | 591 | 725 | (18) | |||||||||
Net operating income | 769 | 799 | (4) | |||||||||
Personnel and administrative expenses | (126) | (65) | 94 | |||||||||
Other operating expenses | (39) | (40) | (3) | |||||||||
Operating income | 604 | 694 | (13) | |||||||||
Income tax | (182) | (244) | (25) | |||||||||
Net income | 422 | 450 | (6) |
RESULTSFORTHE QUARTER
Income Statement | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Net interest income | 10 | - | - | N/A | N/A | |||||||||||||||
Net fee income | - | - | (1) | - | 100 | |||||||||||||||
Net results from financial instruments | 3 | 63 | 34 | (95) | (91) | |||||||||||||||
Gold and foreign currency quotation differences | (1) | 6 | - | (117) | N/A | |||||||||||||||
Other operating income | 90 | 92 | 218 | (2) | (59) | |||||||||||||||
Net operating income | 102 | 161 | 251 | (37) | (59) | |||||||||||||||
Personnel and administrative expenses | (29) | (36) | (23) | (19) | 26 | |||||||||||||||
Other operating expenses | (6) | (8) | (13) | (25) | (54) | |||||||||||||||
Operating income | 67 | 117 | 215 | (43) | (69) | |||||||||||||||
Income tax | (21) | (35) | (76) | (40) | (72) | |||||||||||||||
Net income | 46 | 82 | 139 | (44) | (67) |
ASSETS UNDER MANAGEMENT
Mutual Fund | Assets Under Management as of: | Variation | ||||||||||||||||||
In millions of pesos, except otherwise noted | 4Q18 | 3Q18 | 4Q17 | vs 3Q18 | vs 4Q17 | |||||||||||||||
Fima Premium | 29,475 | 29,671 | 10,099 | (1) | 192 | |||||||||||||||
Fima Ahorro Pesos | 9,892 | 7,154 | 20,823 | 38 | (52) | |||||||||||||||
Fima Ahorro Plus | 9,968 | 4,690 | 17,239 | 113 | (42) | |||||||||||||||
Fima Capital Plus | 205 | 242 | 379 | (15) | (46) | |||||||||||||||
Fima Renta en Pesos | 245 | 346 | 526 | (29) | (53) | |||||||||||||||
Fima Renta Plus | 145 | 167 | 370 | (13) | (61) | |||||||||||||||
Fima Abierto Pymes | 313 | 329 | 264 | (5) | 19 | |||||||||||||||
Fima Acciones | 328 | 463 | 413 | (29) | (21) | |||||||||||||||
Fima PB Acciones | 718 | 1,141 | 1,143 | (37) | (37) | |||||||||||||||
Fima Mix I | 7 | 10 | 165 | (30) | (96) | |||||||||||||||
Fima Renta Dólares I | 7,352 | 10,847 | 12,233 | (32) | (40) | |||||||||||||||
Fima Renta Dólares II | 1,564 | 3,055 | 4,117 | (49) | (62) | |||||||||||||||
Fima Renta Acciones Latinoamerica | 13 | - | - | N/A | N/A | |||||||||||||||
Fima Renta Fija Internacional | 179 | - | - | N/A | N/A | |||||||||||||||
Total Assets Under Management | 60,404 | 58,115 | 67,771 | 4 | (11) |
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SELECTED FINANCIAL INFORMATION
Balance Sheet | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 35 | 26 | 12 | 35 | 192 | |||||||||||||||
Other financial assets | 635 | 451 | 634 | 41 | - | |||||||||||||||
Othernon-financial assets | 4 | 124 | 90 | (97) | (96) | |||||||||||||||
Total assets | 674 | 601 | 736 | 12 | (8) | |||||||||||||||
Liabilities | ||||||||||||||||||||
Othernon-financial liabilities | 229 | 203 | 276 | 13 | (17) | |||||||||||||||
Total liabilities | 229 | 203 | 276 | 13 | (17) | |||||||||||||||
Shareholders’ equity | 445 | 398 | 460 | 12 | (3) |
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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.
RESULTSFORTHE FISCAL YEAR
Income Statement | 2018 | 2017 | Variation (%) | |||||||||
In millions of pesos, except otherwise noted | ||||||||||||
Earned premium | 3,784 | 3,206 | 18 | |||||||||
Incurred claims | (478) | (380) | 26 | |||||||||
Withdrawals | (5) | (4) | 25 | |||||||||
Life annuities | (7) | (6) | 17 | |||||||||
Acquisition and general expenses | (2,016) | (1,682) | 20 | |||||||||
Other income and expenses | (44) | (110) | (60) | |||||||||
Underwriting income | 1,234 | 1,024 | 21 | |||||||||
Interest income | 423 | 290 | 46 | |||||||||
Net results from financial instruments | 96 | 29 | 231 | |||||||||
Gold and foreign currency quotation differences | 4 | 1 | 300 | |||||||||
Other operating income | 89 | 8 | 1,013 | |||||||||
Net operating income | 1,846 | 1,352 | 37 | |||||||||
Personnel expenses | (472) | (339) | 39 | |||||||||
Administrative expenses | (340) | (276) | 23 | |||||||||
Depreciations and devaluations of assets | (59) | (24) | 146 | |||||||||
Operating income | 975 | 713 | 37 | |||||||||
Results from associates and joint businesses | - | 2 | (100) | |||||||||
Income tax | (322) | (247) | 30 | |||||||||
Net income | 653 | 468 | 40 | |||||||||
Other comprehensive income | (11) | 15 | (173) | |||||||||
Total comprehensive income | 642 | 483 | 33 |
Profitability | 2018 | 2017 | Variation (pb) | |||||||||
Percentages, except otherwise noted | 4Q | 3Q | 4Q | |||||||||
Return on average assets (1) | 22.99 | 19.39 | 360 | |||||||||
Return on average shareholders’ equity (1) | 54.18 | 42.66 | 1.152 | |||||||||
Efficiency ratio (2) | 53.90 | 54.33 | (43) | |||||||||
Combined ratio (3) | 62.03 | 62.16 | (13) |
(1) Annualized.
(2) Acquisition and general expenses divided by earned premiums plus other income and expenses.
(3) Acquisition and general expenses divided by earned premiums plus incurred claims plus withdrawals plus life annuities plus other income and expenses.
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RESULTSFORTHE QUARTER
Income Statement | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Earned premium | 1,009 | 943 | 837 | 7 | 21 | |||||||||||||||
Incurred claims | (133) | (117) | (76) | 14 | 75 | |||||||||||||||
Withdrawals | (2) | (3) | - | (33) | N/A | |||||||||||||||
Life annuities | (2) | (1) | (2) | 100 | - | |||||||||||||||
Acquisition and general expenses | (725) | (398) | (526) | 82 | 38 | |||||||||||||||
Other income and expenses | 28 | (54) | (52) | (152) | (154) | |||||||||||||||
Underwriting income | 175 | 370 | 181 | (53) | (3) | |||||||||||||||
Interest income | 142 | 100 | 66 | 42 | 115 | |||||||||||||||
Net results from financial instruments | 36 | 29 | 45 | 24 | (20) | |||||||||||||||
Gold and foreign currency quotation differences | (2) | - | 1 | N/A | (300) | |||||||||||||||
Other operating income | 9 | 35 | (22) | (74) | (141) | |||||||||||||||
Net operating income | 360 | 534 | 271 | (33) | 33 | |||||||||||||||
Personnel expenses | (139) | (120) | (94) | 16 | 48 | |||||||||||||||
Administrative expenses | (118) | (77) | (78) | 53 | 51 | |||||||||||||||
Depreciations and devaluations of assets | (20) | (15) | (8) | 33 | 150 | |||||||||||||||
Other operating expenses | 147 | (51) | 122 | (388) | 20 | |||||||||||||||
Operating income | 230 | 271 | 213 | (15) | 8 | |||||||||||||||
Income tax | (70) | (81) | (70) | (100) | - | |||||||||||||||
Net income | 160 | 190 | 143 | (16) | 12 | |||||||||||||||
Other comprehensive income | 1 | 1 | 5 | - | (80) | |||||||||||||||
Total comprehensive income | 161 | 191 | 148 | (16) | 9 |
Profitability | 2018 | 2017 | Variation (pb) | |||||||||||||||||
Percentages, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Return on average assets (1) | 20.50 | 24.77 | 23.31 | (427) | (281) | |||||||||||||||
Return on average shareholders’ equity (1) | 53.12 | 57.50 | 60.10 | (438) | (698) | |||||||||||||||
Efficiency ratio (2) | 69.91 | 44.77 | 67.01 | 2,514 | 290 | |||||||||||||||
Combined ratio (3) | 80.56 | 60.76 | 74.40 | 1,980 | 616 |
(1) Annualized.
(2) Acquisition and general expenses divided by earned premiums plus other income and expenses.
(3) Acquisition and general expenses divided by earned premiums plus incurred claims, withdrawals, life annuities, other income and expenses.
SELECTED FINANCIAL INFORMATION
Balance Sheet | 2018 | 2017 | Variation (%) | |||||||||||||||||
In millions of pesos, except otherwise noted | 4Q | 3Q | 4Q | vs 3Q18 | vs 4Q17 | |||||||||||||||
Assets | ||||||||||||||||||||
Cash and due from banks | 55 | 36 | 23 | 53 | 139 | |||||||||||||||
Debt securities | 83 | 174 | 718 | (52) | (88) | |||||||||||||||
Net loans and other financing | 426 | 293 | 14 | 45 | 2,943 | |||||||||||||||
Other financial assets | 1,226 | 1,045 | 655 | 17 | 87 | |||||||||||||||
Property, bank premises, equipment | 178 | 175 | 144 | 2 | 24 | |||||||||||||||
Intangible assets | 61 | 59 | 56 | 3 | 9 | |||||||||||||||
Othernon-financial assets | 1,105 | 1,065 | 797 | 4 | 39 | |||||||||||||||
Total assets | 3,134 | 2,847 | 2,407 | 10 | 30 | |||||||||||||||
Liabilities | ||||||||||||||||||||
Financial entities | - | - | 4 | - | (100) | |||||||||||||||
Othernon-financial liabilities | 1,881 | 1,755 | 1,353 | 7 | 39 | |||||||||||||||
Total liabilities | 1,881 | 1,755 | 1,357 | 7 | 39 | |||||||||||||||
Shareholders’ equity | 1,253 | 1,092 | 1,050 | 15 | 19 |
25 |
RECENT DEVELOPMENTS
SALEOF PRISMA MEDIOSDE PAGO S.A.
On January 21, 2019, the Bank accepted an offer from Advent International Global Private Equity to purchase Prisma Medios de Pago S.A., pursuant to a divestment commitment entered into by Prisma Medios de Pago S.A. and its shareholders before the National Commission for the Defense of Competition. The total estimated price of the transaction amounted to US$106 million. On February 1, the Bank transferred shares representing 7.7% of Prisma Medios de Pago S.A.’s capital to Advent International Global Private Equity and received US$63 million. The remaining balance will be paid over the course of the next 5 years. Banco Galicia maintains a 7.4% interest in Prisma Medios de Pago S.A.
NOTES
On February 14, 2019, Banco Galicia issued Class VI Notes, for a nominal value of US$82.7 million, with a fixed rate of 4.8% and with a maturity date of 7 months from the applicable issue and settlement date.
DISTRIBUTION NETWORK
During the Quarter, the Bank increased its distribution network via the opening of six new branches, two in the province of Buenos Aires, one in Santa Fe and three in the city of Buenos Aires.
REGULATORY CHANGES
INFLATION ADJUSTMENT
Through its Communquee “A” 6651, the Argentine Central Bank established that the presentation of information restated in homogeneous currency shall be applied for financial periods beginning on or after January 1, 2020, in accordance with Law 27,468. In accordance therewith, the criteria for restating the financial information established in IAS 29 have not been used. Such application would have widespread effects on the financial statements, and as a consequence the reported balances would be significantly affected. As of December 31,2018, GFG’s equity would have amounted to Ps.63,483 million and the result for the fiscal year would have been a Ps.455 million loss, approximately.
This report is a summary analysis of GFG’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 GFG’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 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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