Standard&Poor's Ratings Services' ratings on Banco de sGalicia y Buenos Aires S.A. mainly reflect the relatively high economic and political risks in Argentina. They also incorporate the bank's weak capitalization and operating efficiency. Its strong franchise and good competitive position in the Argentine financial system partially offset these risks. Banco Galicia's relatively low nonperforming loans (NPLs), diversified portfolio mix, and low-cost funding profile also support the ratings. The bank is exposed to the risks inherent to the Argentine economy, in which high inflation has shortened the planning horizon for economic agents in the country. During 2010, Banco Galicia's loans to the private sector increased by a high 56.6%, reaching about Argentine pesos (ARP) 22 billion ($5.6 billion at
