Grupo Financiero Galicia SA Q2 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Ernesto Gabilondo - Bank of America Merrill Lynch - Analyst : Thank you. Hi, good morning, Pablo and team. Congrats for the results. My first question will be on loan growth and asset quality. We notice an important deterioration in Naranja's credit card business. So just wondering how do you see the asset quality for Naranja for this year in terms of NPLs and cost of risk going forward, especially as we are starting to see an expansion of the credit business? My second question is if you can elaborate a little bit more on the ongoing position that the bank executed with the Central Bank related to the port, what were the implications into the P&L and balance sheet? And also, you can talk a little bit about the time line and implications of the repo then proposing the Central Bank, and also what was related to this? Can you remind us how much of your position on securities is linked to inflation and how they have been classified your balance sheet? And my last question is on your ROE guidance for the year, if we could assume a sustainable ROE above 20% in the next year? Thank you.

Question: Ernesto Gabilondo - Bank of America Merrill Lynch - Analyst : Yes, how is the exposure after the puts and how it was before?

Question: Ernesto Gabilondo - Bank of America Merrill Lynch - Analyst : Excellent, Pablo, thank you very much. Just a quick follow-up in terms of the overall securities, can you remind us how is your position on securities linked to inflation and how are you classify them? I don't know Is if they are for home for sale or for home activity?

Question: Ernesto Gabilondo - Bank of America Merrill Lynch - Analyst : Okay, perfect. Thank you very much, Pablo. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 23, 2024 / 4:00PM, GGALm.BA - Q2 2024 Grupo Financiero Galicia SA Earnings Call

Question: Brian Flores - Citibank - Analyst : Hey, Pablo and team, thank you for the opportunity. I wanted to ask, [mid term] growth, where should we see the focus on growth? Should it be across the board? Should it be more on personal loans? If you could elaborate a bit on where are you seeing like the best recoveries in terms of demand? I know generally it begins on the corporate side, but then it filters out to consumer. If you could expand a bit on the dynamics that you are seeing, that would be very good for us. On my second question, I wanted to ask on NIMS. I know this is a very hard question, but I know I am yields are decreasing, but also these are obviously helping you on interest expenses too. So wanted to ask you when should we see NIMS stabilizing? That would be very helpful. Thank you.

Question: Brian Flores - Citibank - Analyst : Probably, if I may just a quick follow-up. Regarding coverage, I think the level that we are seeing, it is a bit low. And as you were saying, you have intention to continue accelerating. So do you think we should see a higher pickup in terms of cost of risk first before normalizing that dimension or do you think you know, I mean, we shouldn't see a big spike in terms of increasing the coverage? And then if I may, just a final one. you mentioned the acquisition of HSBC Argentina. When do you see this like happening officially? Or when do you think we should see or hear news from the central banks' approval? Thank you.

Question: Brian Flores - Citibank - Analyst : Thank you.

Question: Marina Mertens - Latin Securities - Analyst : Hi, good morning, Pablo. So I have a question regarding Naranja X, which has significantly contributed to this quarter's results and ROE. And so how do you plan to leverage on its performance in your overall strategy? And also, which were the main driver of behind this growth in both loans and deposits?

Question: Marina Mertens - Latin Securities - Analyst : Again, thank you.

Question: Carlos Gomez-Lopez - HSBC - Analyst : Hello, Pablo, good morning and congratulations on the results and two questions. The first one, maybe you said this before, but could you give us your economic forecast for '24 and '25, and in particular inflation rate and the exchange rate? Second, could you perhaps in simple terms explain to us how you have managed your bond portfolio differently from your peers? Because we have seen quite significant results in securities for the three large banks and where does that come from? And how should we expect that to evolve in the coming quarters? Thank you.

Question: Carlos Gomez-Lopez - HSBC - Analyst : Before you go on the ForEx, so if there is an adjustment in the exchange rate. So after that adjustment, where do you see the currency evolution? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. AUGUST 23, 2024 / 4:00PM, GGALm.BA - Q2 2024 Grupo Financiero Galicia SA Earnings Call

Question: Carlos Gomez-Lopez - HSBC - Analyst : Thank you. And for the rest of the year with respect to deals again, because there are a lot of CPI linkers with respect to yield, we see inflation declining with it?

Question: Carlos Gomez-Lopez - HSBC - Analyst : Very clear. Thank you so much.