Update: Banco De Galicia Y Buenos Aires S.A.U.

In April 2024, Banco Galicia and its parent, Grupo Financiero Galicia (not rated) agreed to acquire HSBC Bank Argentina S.A. We expect the transaction to be completed in the next nine months, subject to regulatory approvals. We will evaluate the acquisition's impact on Banco Galicia's intrinsic credit quality, especially in terms of business position and capitalization, and on the group's credit fundamentals. We believe the acquisition would reinforce Grupo Galicia and Banco Galicia's sound competitive position. Profitability will also depend on the investment valuation model and changes in the asset mix. Also, we expect credit to pick up in the second half of the year after interest rates and inflation fall. We forecast nominal credit growth above inflation and that

...The sovereign credit ratings on Argentina (###/Stable/C) continue to constrain the long-term rating on Banco Galicia. We rarely rate financial institutions higher than the sovereign where they operate, because we consider it unlikely that these institutions would remain unaffected by developments in domestic economies. We believe Banco Galicia has a solid franchise and good earning capacity, despite Argentina's economic woes. Banco Galicia has good brand recognition and a sound competitive position as one of the largest financial entities in the country, resulting in stable operating revenue and business. In April 2024, Banco Galicia and its parent, Grupo Financiero Galicia (not rated) agreed to acquire HSBC Bank Argentina S.A. We expect the transaction to be completed in the next nine months, subject to regulatory approvals. We will evaluate the acquisition's impact on Banco Galicia's intrinsic credit quality, especially in terms of business...

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