Grupo Financiero Galicia SA Q4 2024 Earnings Call Transcript

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

Question: Brian Flores - Citi Investment Research (US) - Analyst : Thank you, Tim. Good morning for the opportunity to ask questions. I have two questions. The first one is on your projections for ROE of this year. I know conditions have been changing a lot, so I just wanted to hear, how should we think in terms of growth and ROE for this year. And then if I may, a second question on capital. We saw a very strong consumption of Tier 1 ratio from quarter to quarter. So if you could help us, think about how are you going to fund the growth in the coming quarters if, would you raise capital or dollars, for example, now that it can be used on the asset side. Would you be open to make a follow on or are you all, considering that it's going to be all organic funding just because the level of capital seems a bit tighter now to fund growth. So I just wanted to hear your thoughts on both of these? Thank you very much.

Question: Brian Flores - Citi Investment Research (US) - Analyst : Perfect. And just last follow up here. So in terms of dividends, do you think maybe 2025, as you were mentioning, transitioning lower ROE, should we also expect maybe a lower dividend distribution in 2025?

Question: Brian Flores - Citi Investment Research (US) - Analyst : Perfect. Very clear. Thank you.

Question: Carlos Lopez - HSBC - Analyst : Yes, thank you very much. So, two questions. First, this is the dividends, do you need to pay a dividend? I mean, you, I mean you are projecting high growth. Yes, you can pay it from the subsidiaries. You can take some from the bank, but if you are thinking that by 2027, you might already get into the need for capital for growth, why do you need to pay a dividend at this point. My second question refers to inflation adjustments, as we go into a lower inflation phase, when do you think that you could contemplate, what the regulation could contemplate moving out of inflation accounting? What year would that be, would that be announced and what, yeah, would that be effective? Thank you so much.

Question: Carlos Lopez - HSBC - Analyst : And so, if I can inquire there, so that standard is the same amount in dollars, the same amount in (multiple speakers)

Question: Carlos Lopez - HSBC - Analyst : It is a calendar, yes, right? So it will be '25, '26, '27, and then they would design '28 and it might apply already in '28 or already in '29?

Question: Carlos Lopez - HSBC - Analyst : Thank you. And if I can follow up, I don't think you have mentioned what your expectations are for inflation and exchange rate for this year and next? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 28, 2025 / 4:00PM, GGALm.BA - Q4 2024 Grupo Financiero Galicia SA Earnings Call

Question: Carlos Lopez - HSBC - Analyst : Yeah. Thank you so much.

Question: Pedro Offenhenden - Latin Securities S.A. - Analyst : Hi, Paulo. Hi, Gonzalo. Thank you for the call. I have two questions regarding securities. How do you expect the weight of securities to evolve in '25 this year? And if, do you have any projections of how the loan to asset and security to asset ratio could be brought this year?

Question: Pedro Offenhenden - Latin Securities S.A. - Analyst : Thank you, Paulo. And if I can ask on the timing of that, like going back to the 2017 or '18 levels, would be the end of this year, 2026? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 28, 2025 / 4:00PM, GGALm.BA - Q4 2024 Grupo Financiero Galicia SA Earnings Call

Question: Pedro Offenhenden - Latin Securities S.A. - Analyst : Thank you, Pablo. Very good, yeah.

Question: Jorge Mauro - Fundamenta Investments - Analyst : Yes, hello. My question is regarding the provisions at Naranja X When you look at the provision in this quarter, they increased more than 100%, it's 150% [Q&Q] So I'm just trying to understand, what has been driven this and what should we expect going forward?

Question: Jorge Mauro - Fundamenta Investments - Analyst : Okay. So essentially, as you now -- you have a one-off hit because you need to increase provisions. Okay, I got it. On a recurring basis, it should go back to around 9%, 10%.

Question: Jorge Mauro - Fundamenta Investments - Analyst : Okay. Thank you very much.

Question: Brian Flores - Citi Investment Research (US) - Analyst : Thank you for the opportunity to ask another question. Just Pablo, I want to ask you on the right of (inaudible) and also the volatility, that this has driven, right? We saw fourth quarter, sorry, third quarter with over 40% levels of ROE. Now we have around 11%. And particularly (inaudible) were increasing very strongly over the quarter. So if you could just explain if this is some seasonality, some deterioration in, I don't know, the great conditions, anything that you could help us provide sorry, try to help us understand a bit better, would be great. Thank you.

Question: Brian Flores - Citi Investment Research (US) - Analyst : Super helpful. Pablo, if I may, so then how should we think about the structural levels of ROE (inaudible) Do you think it's due to its efficiency, because I know it's very good. It's like something above '25, close to '30, or do you think it's more close to the 20 as the consolidated group?

Question: Brian Flores - Citi Investment Research (US) - Analyst : Perfect, Pablo. Thank you.

Question: Maclovio Pi±a - INCA Investments, LLC - Analyst : Great, thank you. I just have a very quick question. Can you please confirm the actual number of shares you have at the end of the quarter, because I've seen two numbers here. So I just want to make sure I have everything, absolutely correct?

Question: Maclovio Pi±a - INCA Investments, LLC - Analyst : Yes, please.

Question: Maclovio Pi±a - INCA Investments, LLC - Analyst : Okay. Excellent. Great. Thank you very much, Paul. I really appreciate it. Thank you for your time. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 28, 2025 / 4:00PM, GGALm.BA - Q4 2024 Grupo Financiero Galicia SA Earnings Call

Question: Murilo Riccini - Bradesco S.A Corretora - Analyst : Thank you guys. Thank you for the call. I'd like to better understand the dynamics of the ROE. So this, skyrocket of the ROE during the fourth quarter. If you could try to clean up a little bit this number with the one-offs just to better understand the dynamics for the future already heard that you are expecting something around 15% for 2025. So just to confirm this number as well? Thank you.

Question: Murilo Riccini - Bradesco S.A Corretora - Analyst : Very helpful, Pablo. Thank you.