Banco Galicia Investor Presentation May 2015
Agenda » The Argentine Economy »The Argentine Financial System »Banco Galicia »Annex 2
Economic Activity 12% 900 9,1% 9,2% 8,8% 9,0% 8,4% 9% 8,6% 8,0% 7,9% 800 6% 5,0% 700 3,2% 3,1% 2,9% 3% GDP % Change Billons of Ps. 600 0,9% 0,5% 0,1% 0% -0,2% -0,7% -0,3% 500 -3% -4,4% -4,2% 400 -6% 300 -9% -10,9% -12% 200 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E Real GDP growth Official Figures Private estimates (LatinFocus - Market Consensus) GDP, 1993 constant prices As of March 2015. 3
International Environment Agricultural Commodity Prices Real Exchange Rate 3 400 2 300 1.4 1.1 200 1 100 0 Dic-01 Jun-03 Dic-04 Jun-06 Dic-07 Jun-09 Dic-10 Jun-12 Dic-13 2001 2003 2005 2007 2009 2011 2013 2015 Dec’01=100. Bilateral (Ps./US$) Multilateral As of April 30, 2015. Annual Average. Adjusted by INDEC CPI until 2006, and by private estimates since 2007. As of March 2015. World GDP Growth 12 8 4 % 0 -4 2001 2003 2005 2007 2009 2011 2013 2015E 2016E Developed economies Emerging and developing economies World International Monetary Fund: World Economic Outlook, January 2015. 4
Fiscal Performance Fiscal Performance (Federal Government only) 6 30 4 20 As a % of GDP 2 10 Billons of US$ 0,2 0 0 -2 -10 -1,3 -2,0 -1,9 -2,5 -3,1 -4 -20 -6 -30 1997 1999 2001 2003 2005 2007 2009 2011 2013 2014 2015E Overall Fiscal Balance as a % of GDP Overall Fiscal Balance (in millions of US$) Monetary Financing 30.000 6 25.000 5 Millions of US$ 20.000 4 As a % of GDP 15.000 3 10.000 2 5.000 1 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015E Argentine Central Bank advances Argentine Central Bank profits Use of international reserves Total Argentine Central Bank financing (as % of GDP) - r.h.s. 5
Sovereign Debt Sovereign Debt Projected annual debt payments (*) 250 25 Foreign currency Pesos 200 20 Billions of US$ 150 15 As a % of GDP 100 10 42.8 50 5 18.0 11.7 0 0 1997 2000 2003 2006 2009 2011 2013 2014 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Gross public sector debt (*) Net of Central Bank advances, treasury bills and non-transferable Public debt net of intra public sector holdings bills held by Central Bank. Public debt net of intra public sector holdings and International Financial Institutions Debt stock Debt by Currency Pesos 250 indexed to CER 199 Pesos 5% 200 5% 150 Other USD 4% 60% 100 50 Euros 0 26% 1997 1999 2001 2003 2005 2007 2009 2011 2013 2014 As of June 30, 2014. 6
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% -0,8% -0,9% -2,5% -1,4% 20 -5,0% 0 1997 1999 2001 2003 2005 2007 2009 2011 2013 2014 2015E Current Accout (accrued basis) Exports Imports Net External Asset Accumulation 5 2,5% Billons of US$ 0 0,0% As a % of GDP -5 -2,5% -10 -5,0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015E Source: INDEC 7
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 Ene-04 Ene-06 Ene-08 Ene-10 Ene-12 Ene-14 Ene-04 Ene-06 Ene-08 Ene-10 Ene-12 Ene-14 Stock of Lebac M2 (In billions of Pesos)(*) 280 800 70% Monthly average in billions of Ps. 245 700 60% 210 YOY % chg 600 50% 175 500 40% 140 400 30% 105 300 20% 70 200 10% 35 100 0 0 0% Ene-04 Ene-06 Ene-08 Ene-10 Ene-12 Ene-14 Ene-04 Ene-06 Ene-08 Ene-10 Ene-12 Ene-14 (*) As of March 31, 2015. 8
Inflation CPI Other Measures (end of period, annual variation) (12 months trailing variation) 40 50 41 35 41 40 30 27.9 C C I 30 26 26 25 24 % 23 21 % 18 19 20 20 16 18.0 16.8 12 15 P B P I 10 10 13.2 C P I 6 4 10 10,9 0 1 0 5 -2 -1 -2 I W P I -10 0 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14 '15E CCI: Cost of Construction Index PBPI: Producers Basic Prices Index INDEC CPI until 2006, and private estimates since 2007. CPI: Consumer Prices Index (*) IWPI: Internal Wholesale Prices Index As of December 2014. (*) Published up to Dec’13. New index 2 months 2015: 2.1%. 9
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 Ene-07 Ene-09 Ene-11 Ene-13 Ene-15 Embi+ Embi+ Arg 2.000 1.704 1.562 1.500 1.045 925 991 1.000 808 773 719 707 588 660 550 533 496 499 461 410 500 216 0 (2) 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 (1) Risk Premium (end of period) (1) As measured by the EMBI+ for Argentina except for the period between 2002 and 2004 when it corresponds to the spread over Treasury of the Boden 2012 Bond. (2) As of April 8, 2015. 10
Agenda » The Argentine Economy »The Argentine Financial System »Banco Galicia »Annex 11
Sustained Growth in Financial Intermediation Deposits from the Private Sector (in billlons of Pesos) CAGR: 23.2% 35% 900 32% 800 700 28% 600 29% 500 27% 30% 400 20% 8% 25% 300 21% 22% 13% 23% 200 100 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 Dec-14 Mar-15 Loans to the Private Sector (in billions of Pesos) CAGR: 26.1% 900 800 22% 20% 700 30% 600 500 31% 47% 400 37% 10% 300 22% 43% 40% 25% 38% 200 (12)% 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 Dec-14 Mar-15 CAGR: Dec-02 / March-15. As of March 31, 2015. 12
Private-Sector Loans and Deposit Growth Y-O-Y Monthly % Change Dec'06=100 60 900 50 800 40 700 600 30 % 20 500 10 400 0 300 -10 200 100 -20 Dec-06 Jan-08 Feb-09 Mar-10 Apr-11 May-12 Jun-13 Jul-14 Dic-03 Jun-05 Dic-06 Jun-08 Dic-09 Jun-11 Dic-12 Jun-14 Deposits in Pesos Deposits in Dollars (In US$) Deposits Loans As of March 31, 2015. 13
But Still Low Financial Depth In billions of constant Pesos (*) As a % of GDP 780 35 680 30 26 580 24 25 22 21 19 19 18 19 19 480 20 14 14 15 15 16 16 15 13 14 10 11 10 10 10 11 12 13 14 13 13 380 15 10 8 9 280 10 180 5 80 0 Ene-97 Ene-00 Ene-03 Ene-06 Ene-09 Ene-12 Ene-15 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13 '14E '15E Deposits from the Private Sector Loans to the Private Sector Deposits from the Private Sector Loans to the Private Sector (*) Adjusted by INDEC CPI until 2006, and by private estimates since 2007. In millions of Ps.of March 2015. Financial Depth (as a % of GDP) 100 81 77 80 58 60 42 39 38 35 37 40 19 21 21 15 20 0 Chile Brazil Peru Colombia Mexico Argentina Deposits to GDP Loans to GDP As of March 2015. Central Bank of each country. 14
Increase in Interest Rates Nominal Interest Rates Real Interest Rates (monthly averages) (annual averages) (2) 28 18 24 12 20 6 16 % 0 % 12 -6 8 -12 4 0 -18 2000 2002 2004 2006 2008 2010 2012 2014 2015E Dic-04 Jun-06 Dic-07 Jun-09 Dic-10 Jun-12 Dic-13 BADLAR Private Banks (1) (1) Private Banks’ 30-day time deposits rate, for deposits over Ps. 1 million. (2) Adjusted by INDEC CPI until 2006, and by private estimates since 2007. As of March 31, 2015. 15
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 - Jun-01 Dic-02 Jun-04 Dic-05 Jun-07 Dic-08 Jun-10 Dic-11 Jun-13 Dic-14 Jun-01 Dic-02 Jun-04 Dic-05 Jun-07 Dic-08 Jun-10 Dic-11 Jun-13 Dic-14 Current Accounts + Savings Accounts Time Deposits Pesos CER Adjusted Foreign Currency Deposit data is not shown for the period January-March 2002, because as a result of the devaluation and the pesification measures, figures are not homogeneous for that period. As of March 31, 2015. 16
Change in the Composition of the Banking System December 2001 January 2015 Market Share Market Share Number Private-Sector Number Private-Sector Deposits (%) Deposits (%) Banking Institutions 86 86 100 100 65 65 100 100 Government-Owned Banks 13 30 12 36 Private-Sector Banks 73 70 53 64 - Domestic Banks 34 15 33 31 - Foreign Banks 39 55 20 33 17
Improvement in Asset Composition and in Loan Portfolio Quality Exposure to the Public Sector (*) Composition of Loans 60 100% 50 48 45 75% 55 74 34 % 30 50% 24 23 19 18 16 15 13 11 13 15 25% 45 10 9 9 9 26 0 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Feb'15 2000 Ene-15 INDIVIDUALS COMPANIES (*) Not including Central Bank Paper. Loan Portfolio Quality 20 180 Loan Loss Reserves / NPLs 140 140.6 NPLs / Total Credit 15 150 10 120 5 90 1.8 0 60 As of February 28, 2015. NPLs / Total Credit Loan Loss Reserves / NPLs 18
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