Grupo Financiero Galicia Sa Class B · BCBA:GGAL
Grupo Financiero Galicia Sa Class B — Banco Galicia — Investor Presentation (July 2014)
40 slides from Grupo Financiero Galicia Sa Class B's investor presentation, July 2014
Slide 1: Banco Galicia Investor Presentation July 2014
Banco Galicia Investor Presentation July 2014
Slide 2: Agenda
Agenda » The Argentine Economy »The Argentine Financial System »Banco Galicia »Annex 2
Slide 3: Economic Activity
Economic Activity 12% 600 9.2% 8.8% 9.0% 9.2% 8.9% 9% 8.5% 8.7% 550 8.0% 6.8% 6.6% 6% 500 3.0% 3% 450 1.9% Billons of Ps. GDP % Change 0.9% 0.0% 0% 400 0.4% 2.8% -1.5% -3% 350 -2.8% -4.4% -6% 300 -9% 250 -12% -10.9% 200 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E 2014E Real GDP
Slide 4: International Environment
International Environment Agricultural Commodity Prices Real Exchange Rate 400 3 300 2 1.8 200 1 1.3 100 0 Dec-01 Jun-03 Dec-04 Jun-06 Dec-07 Jun-09 Dec-10 Jun-12 Dec-13 2001 2003 2005 2007 2009 2011 2013 Dec’01=100. Bilateral (Ps./US$) Multilateral As of June 18, 2014. Annual Average. Adjusted by I
Slide 5: Fiscal Performance
Fiscal Performance Fiscal Performance (Federal Government only) 4 25 2 13 Billons of US$ As a % of GDP 0.3 0 0 -2 -13 -1.7% -2.0 -2.2 -2.5% -4 -25 1997 1999 2001 2003 2005 2007 2009 2011 2013E 2014E Overall Fiscal Balance as a % of GDP Overall Fiscal Balance (in millions of US$) Monetary Financing 2
Slide 6: Sovereign Debt
Sovereign Debt Sovereign Debt Projected annual debt payments(*) 200 20 Foreign currency Pesos 150 15 Billions of US$ 100 10 As a % of GDP 45.6 50 5 17.9 0 12.2 0 1997 2000 2003 2006 2009 2012 2013 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Gross public sector debt Public debt net of intra pub
Slide 7: External Sector Performance
External Sector Performance External Sector 10.0% 120 7.5% 100 5.0% 80 As a % of GDP Billons of US$ 2.5% 60 0.8% 0.0% 0.0% 40 0.1% -2.5% -1.0% -1.2% 20 -5.0% 0 1997 1999 2001 2003 2005 2007 2009 2011 2013 2014E Current Accout (accrued basis) Exports Imports Net External Asset Accumulation 5 2.5% 0 0
Slide 8: Monetary Performance
Monetary Performance Central Bank’s FX Market Average Daily Intervention International Reserves (In millions of Dollars)(*) (In billions of Dollars)(*) 160 60 80 45 0 30 -80 15 -160 0 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Jan-04 Jan-06 Jan-08 Jan-10 Jan-12 Jan-14 Stock of Lebac (In billions of P
Slide 9: Inflation
Inflation CPI Other Measures (end of period, annual variation) (12 months trailing variation) 40 45 41 35.8 35 37 35 29.4 30 CCI 27.4 26 25 25 24 % 23 21 % 19 20 18 16 15 15 PBPI 12 10 CPI 10.9 10 6 5 4 0 1 5 IWPI -2 -1 -2 0 -5 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 '97 '98 '
Slide 10: Country Risk Premium
Country Risk Premium 4,500 4,372 From January 1, 2007 2,000 4,000 1,750 1,500 1,250 3,500 1,000 Basis points over U.S. Treasury 750 3,000 500 250 2,500 0 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Embi+ Embi+ Arg 2,000 1,704 1,562 1,500 1,045 991 1,000 925 773 808 686 707 660 461 533 55
Slide 11: Agenda
Agenda » The Argentine Economy »The Argentine Financial System »Banco Galicia »Annex 11
Slide 12: Sustained Growth in Financial Intermediation
Sustained Growth in Financial Intermediation Deposits from the Private Sector (in billlons of Pesos) CAGR: 22.5% 33%(*) 700 28% 600 29% 500 27% 400 30% 20% 300 25% 8% 21% 22% 200 23% 13% 100 0 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 May-14 Loans to the Pri
Slide 13: Private-Sector Loans and Deposit Growth
Private-Sector Loans and Deposit Growth Y-O-Y Monthly % Change Dec'06=100 80 590 70 540 60 490 50 440 40 390 % 30 340 20 290 10 240 0 190 -10 140 -20 90 Dec-03 Jul-05 Feb-07 Sep-08 Apr-10 Nov-11 Jun-13 Dec-06 Jan-08 Feb-09 Mar-10 Apr-11 May-12 Jun-13 Deposits Loans Deposits in Pesos Deposits in Doll
Slide 14: But Still Low Financial Depth
But Still Low Financial Depth In billions of constant Pesos (*) As a % of GDP 680 30 26 580 25 24 22 21 480 20 19 19 18 19 19 19 18 18 18 16 17 17 1715 16 17 16 380 15 13 12 12 13 10 9 10 11 280 10 8 180 5 80 0 Jan-97 Sep-99 May-02 Jan-05 Sep-07 May-10 Jan-13 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09
Slide 15: Increase in Interest Rates
Increase in Interest Rates Nominal Interest Rates (monthly averages) Real Interest Rates (annual averages) (2) 28 18 24 12 20 6 16 % 0 % 12 -6 8 -12 4 0 -18 Dec-04 Mar-06 Jun-07 Sep-08 Dec-09 Mar-11 Jun-12 Sep-13 2000 2002 2004 2006 2008 2010 2012 2014E BADLAR Private Banks (1) (1) Private Banks’ 30
Slide 16: Breakdown of Deposits by Currency and Type
Breakdown of Deposits by Currency and Type By Currency By Type of Deposit (as a % of CA+SA+Time Deposits) (as a % of CA+SA+Time Deposits) 100 100 91% 80 80 60 60 51% 49% 40 40 20 20 9% 0 0 Jun-01 Dec-02 Jun-04 Dec-05 Jun-07 Dec-08 Jun-10 Dec-11 Jun-13 Jun-01 Dec-02 Jun-04 Dec-05 Jun-07 Dec-08 Jun-10
Slide 17: Change in the Composition of the Banking System
Change in the Composition of the Banking System December 2001 February 2014 Market Share Market Share Number Private-Sector Number Private-Sector Deposits (%) Deposits (%) Banking Institutions 86 100 66 100 Government-Owned Banks 13 30 12 35 Private-Sector Banks 73 70 54 65 - Domestic Banks 34 15 34
Slide 18: Improvement in Asset Composition and Loan Portfolio Quality
Improvement in Asset Composition and in Loan Portfolio Quality Exposure to the Public Sector (*) Composition of Loans 60 100% 50 48 45 75% 57 34 74 % 30 50% 23 24 18 19 15 16 13 15 13 11 25% 10 9 9 43 26 0 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Apr-14 2000 Feb-14 (*
Slide 19: Improvement in Profitability
Improvement in Profitability R.O.A. and R.O.E 15 120 10 80 42.5 5 25.3 25.7 29.5 40 19.2 24.4 14.3 11.0 13.4 5.3 7.0 2.8 2.7 2.9 3.4 -0.5 1.6 2.3 0 0 -0.1 -0.3 -2.9 0.9 1.9 1.5 (4.2) -5 -8.9 (22.7) -40 -10 (59.2) -80 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Apr-14 ROA RO
Slide 20: Current Situation of the Financial System
Current Situation of the Financial System Strengths » High liquidity, with some reduction in Peso segment. » Peso-based intermediation with high proportion of transactional deposits. » Improved asset mix – Increase in business with private sector. Opportunities » Low level of financial depth. » Incr
Slide 21: Agenda
Agenda » The Argentine Economy »The Argentine Financial System »Banco Galicia »Annex 21
Slide 22: Simplified Organizational Structure
Simplified Organizational Structure EBA HOLDING 58.0% Votes 21.6% Shares 87.5% 100.0% 12.5% Insurance 77% 97% 3% 95% 100% 100% 95% 5% 5% Collection Processing 22
Slide 23: Banco Galicia in Numbers
Banco Galicia in Numbers March 2014 (Consolidated figures) US$ bn. Ps. bn. (8.01 Ps./US$) Assets 88.6 11.1 Net Loans 55.9 7.0 Deposits 55.1 6.9 Equity 7.5 0.9 Number of Branches Employees Clients (*) Bank 261 5,424 2,850 Reg. Credit-Card Cos. 204 5,563 4,508 (**) CFA 95 1,196 540 Total 560 12,183 7,
Slide 24: One of the Largest Banks
One of the Largest Banks Market share of Market share of (1) private-sector deposits loans to the private-sector Nación (P) 18.1% Nación (P) 14.9% Santander 9.2% Santander 8.9% (P) Provincia 9.1% Galicia(2) Galicia 8.2% Galicia Galicia 8.7% Provincia (P) 7.6% BBVA 7.3% Macro 7.5% Macro 6.6% BBVA 6.7
Slide 25: Peer Comparison
Peer Comparison Market Share of Market Share of Private-Sector Deposits (%) Loans to the Private Sector (%) (1) 12.0 12.0 8.0 8.0 4.0 4.0 - 0.0 Santander Galicia BBVA Macro HSBC Santander Galicia Macro BBVA HSBC +T.Reg.+CFA Credit Cards Managed (in thousands) Branches (number) 12,000 800 9,000 600 6
Slide 26: Competitive Environment
Competitive Environment Market Share of Private-Sector Deposits 10.5 9.5 8.5 7.5 6.5 5.5 4.5 3.5 2.5 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Source: Argentine Central Bank. As of February 28, 2014. 26
Slide 27: Broad and Growing Customer Base
Broad and Growing Customer Base Total: 7.9 million, 41%(1) of Argentina’s economically active population 12.9% CAGR since December’02 Consumer Banking Corporate Banking Total: 2,776,574 Total: 73,469 2% 19% 24% 5% 9% Low Income Agribusiness Medium Income 10% 57% Corporations 74% Prof. and Self-emplo
Slide 28: Breakdown of Loans to the Private Sector
Breakdown of Loans to the Private Sector Agribusiness Agribusiness 20% 14% Individuals (Bank) 28% Individuals 38% Middle-Market Companies 18% Large Corporations Middle-Market 12% Companies Financial Sector Individuals (Regional 25% 1% Financial Sector Credit-Card Large Corporations 1% Individuals (C
Slide 29: Loan Portfolio by Maturity
Loan Portfolio by Maturity 25 38% 36% 20 15 Billions of Ps. 10 14% 10% 5 2% 0.3% 0 <1 month 1-6 months 6-12 months 1-3 years 3-5 years >5 years Maturing within 1 year: 84.0%. US$-denominated loans: 5.4%. Consolidated figures, as of March 31, 2014. 29
Slide 30: Funding Sources (non consolidated)
Funding Sources (non consolidated) Bank: Ps. 67.4 billions Credit Cards: Ps.13.2 billions CFA: Ps.2.4 billions Other(*) Subordinated 13% Financial Financial Bonds Entities Merchants Entities Deposits 3% 32% 42% 23% 58% Bonds 3% Bonds 19% Deposits Bonds 81% 26% (*) Includes among other: repos, financ
Slide 31: Asset Quality
Asset Quality 12% 160% Acquisition of CFA 10% 140% NPLs / Total loans to the private sector 8.8% Loan loss reserves / NPLs 8% 120% 107.3% 6% 100% 3.8% 4% 80% 2.0% 2% 60% 0% 40% Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 NPLs / Total loans to the privat
Slide 32: Excess Regulatory Capital and Total Capital Ratio
Excess Regulatory Capital and Total Capital Ratio 18 Minimum Requirement Ps. 6.3 bn Regulatory Capital Ps. 7.9 bn Excess Capital Ps. 1.6 bn / 24.0% 16 Total Capital Ratio (%) 14 13.4% 12 10 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Banco Galicia conso
Slide 33: Strong Profitability
Strong Profitability Total Assets, Public Sector Exposure and ROA Net Interest Margin - NIM 100 5 16 3.9 80 4 3.4 12 Billions of Ps. 60 2.9 3 % 2.6 88.6 8 15.8 1.9 82.2 40 2 12.1 12.8 62.8 11.7 10.1 0.9 0.8 50.7 4 8.3 20 35.2 1 5.8 24.4 27.5 0 5.4 3.8 1.5 1.7 1.7 2.8 3.2 0 0 Total Assets Exposure to
Slide 34: Agenda
Agenda » The Argentine Economy »The Argentine Financial System »Banco Galicia »Annex 34
Slide 35: Consolidated Income Statement
Consolidated Income Statement 1,346 3,878 640 17% 1,989 3M 2014 35% 2,532 51% 100% 70 545 65% 2% 14% 774 20% Net Financial Net Income Operating Net Charge for Administrative Net Other Income Tax Net Income Income from Services Income Loan Losses Expenses Income/Losses 1,317 1,011 Variation 3M 2013 4
Slide 36: Consolidated Income Statement
Consolidated Income Statement 1,346 3,878 640 17% 1,989 1Q14 35% 2,532 51% 100% 70 545 65% 2% 14% 774 20% Net Financial Net Income Operating Net Charge for Administrative Net Other Income Tax Net Income Income from Services Income Loan Losses Expenses Income/Losses 495 546 Variation 4Q13 213 158 167
Slide 37: Volume Growth & Productivity Improvement
Volume Growth & Productivity Improvement Variation Dec-02 Mar-14 Abs. % ·Employees 6,058 12,205 6,147 101 - Banco Galicia 4,057 5,424 1,367 34 - Regional Credit-Card Cos. 1,904 5,563 3,659 192 - CFA 1,196 - Other Subsidiaries 97 22 (75) (77) ·Distribution Platform Branches - Banco Galicia 229 261 32
Slide 38: Tarjetas Regionales
Tarjetas Regionales » Consumer finance to medium and low income segments. » Merchant acquirer and payment processing services provider to proprietary credit cards. » Largest credit card issuer in Argentina with over: » 3.0 million active accounts and 8.0 million cards issued. » 204 branches and 56 o
Slide 39: CFA | Efectivo Sí
CFA | Efectivo Sí » Consumer finance to medium and low income segments. » Leader in Personal Loans within consumer finance institutions. » More than 20 years in the market with strong brand: » 536,000 current clients (segment C1, C2, C3, D1) – more than 1 million historical clients. » 418,000 loans
Slide 40: Lines of Business
Lines of Business March 2014 (In millions of Ps. except percentages). It does not include accrued interest. Cash loans. 2,210 69% Granted in branches. Payroll loans. 445 14% Government employees, pensioners, military and members of mutuals. Loans for the acquisition of goods. 384 12% Granted through