Banco Galicia Investor Presentation May 2017
Agenda » The Argentine Economy »The Argentine Financial System »Banco Galicia »Annex 2
Economic Activity GDP and Income per Cápita Income per Cápita (in constant Ps.) 800 22,000 20,000 700 Billions of Ps. 18,000 600 16,000 14,000 500 12,000 400 10,000 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2017E GDP - 2004 Constant Prices Income per cápita Real GDP Grow owth th 20% 15% 10% GDP % Change 5% 0% -5% -10% -15% 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2017E As of April 30, 2017. 3
International Environment Real Exchange Rate Agricultural Commodity Prices ( Dec’15=100) 250 400 200 300 150 103.08 100 200 96.93 50 100 0 2001 2003 2005 2006 2008 2009 2011 2013 2014 2016 2001 2004 2007 2010 2013 2016 Dec’01=100. Bilateral (Ps./US$) Multilateral As of April 30, 2017. Annual Avg Adjusted by INDEC CPI until 2006, and by private estimates since 2007. As of April 30, 2017. Interest Rates 80 25 70 20 60 % 50 % 15 40 10 30 20 5 10 0 0 Jun-2005 Jul- 2005 2007 2009 2010 2012 2014 2016 2001 2002 2004 UST10y + EMBI+ Latam UST10y + EMBI+ Arg 4
Fiscal Performance Fiscal Performance (Federal Government only) 4 0 As a % of GDP -4.2 -4 -5.6 -8 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017E Primary Fiscal Balance as a % of GDP Overall Fiscal Balance as a % of GDP Monetary Financing 30,000 6 25,000 5 Millions of US$ 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 2015 2016 2017E 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 Projected annual debt payments (*) Sovereign Debt 28 200 Foreign currency Pesos 21 150 Billions of US$ As a % of GDP 14 100 56.9 7 50 20.2 13.1 0 0 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015 (*) Net of Central Bank advances, treasury bills and non-transferable Gross public sector debt bills held by Central Bank. Public debt net of intra public sector holdings (estimated) Public debt net of intra public sector holdings and IFIs (estimated) Debt stock Debt by Currency 300 246 Pesos indexed to CER Pesos 7% 225 19% Pesos Dólar Billions of US$ Linked 150 Other 3% 1% 75 Euros 9% 0 1998 2000 2002 2004 2006 2008 2010 2012 2014 Jun-16 USD Total sovereign debt 61% Source: MECON 6
External Sector Performance Current Account (accrued basis) Foreign Trade 100 6.0% 75 3.0% Billions of US$ As a % of GDP 62 61 50 0.0% 25 -3.0% -2.7% Exports Imports 0 -6.0% 2004 2006 2008 2010 2012 2014 2016 2004 2006 2008 2010 2012 2014 2016 Capital Account (accrued basis) Trade Balance 6.0% 30 3.2% 15 3.0% Billions of US$ As a % of GDP 0 0.0% -15 -3.0% -30 -6.0% -45 2004 2006 2008 2010 2012 2014 2016 2004 2006 2008 2010 2012 2014 2016 2017E TOTAL AL Pri Primary ary pr prod oducts ts Source: INDEC Manuf anufac actu ture res of of agric agricultu ultural ral ori origin gin Ind ndustr trial al manuf anufac actu ture res Fuel and Fu and ene nerg rgy 7
Monetary Performance International Reserves Central Bank interest rate policy (In billions of Dollars) 50 60 40 45 30 30 % 20 15 10 0 0 2004 2006 2008 2010 2012 2014 2016 2012 2013 2014 2015 2016 2017 CB Repo (7 days) Lebacs 35 Call (20d moving avg.) Stock of Lebac M2 (*) (In billions of Pesos) 800 800 1,500 60% Monthly average in billions of Ps. 700 700 1,250 50% 600 600 YOY % chg 1,000 40% 500 500 400 400 750 30% 300 300 500 20% 200 200 250 10% 100 100 0 - 0% 2004 2006 2008 2010 2012 2014 2016 2004 2006 2008 2010 2012 2014 2016 (*) As of April 30, 2017. 8
Inflation CPI - 12 12 Months hs Trailin ling Varia iatio ion Monthly hly % % Chang nge 5.0 60 4.5 4.0 45 3.5 3.0 % % 30 2.5 2.0 1.5 15 1.0 0.5 0 - 2013 2014 2014 2015 2015 2016 2016 2017 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Headline Core CPI CABA (core) REM* Jul (core) REM* Aug (core) Source: City of Buenos Aires. * REM: Survey of market expectations As of March 31, 2017. 9
Agenda » The Argentine Economy »The Argentine Financial System »Banco Galicia »Annex 10
Private-Sector Loans and Deposit Growth Dec'06=100 Y-O-Y Monthly % Change 1,200 60 50 1,000 40 800 30 20 600 10 400 0 -10 200 -20 0 -30 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2006 2008 2010 2012 2014 2016 Deposits in Pesos Deposits in Dollars (In US$) Deposits Loans As of March 31, 2017. 11
But Still Low Financial Depth As a % of GDP 30 25 20 18 15 14 10 5 0 2000 2002 2004 2006 2008 2010 2012 2014 2016 Deposits from the Private Sector Loans to the Private Sector Financial Depth (as a % of GDP) 100 88 80 72 60 52 45 42 43 40 40 32 22 20 22 15 20 0 Chile Brazil Colombia Peru Mexico Argentina Deposits to GDP Loans to GDP As of June 30, 2016. Source: Central Bank of each country. 12
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 80 80 61 72 60 60 40 40 28 39 20 20 0 0 2001 2004 2007 2010 2013 2016 2001 2004 2007 2010 2013 2016 Current Accounts + Savings Accounts Time Deposits Pesos 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 April 30, 2017. 13
Increase in Interest Rates Nominal Interest Rates Real Interest Rates (monthly averages) (annual averages) (2) 32 18 28 12 24 6 20 % 16 0 % 12 -6 8 -12 4 0 -18 2004 2006 2008 2010 2012 2014 2016 2004 2006 2008 2010 2012 2014 2016 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 April 30, 2017. 14
Change in the Composition of the Banking System December 2001 February 2017 Market Share Market Share Number Private-Sector Number Private-Sector Deposits (%) Deposits (%) Banking Institutions 86 86 100 100 63 63 100 100 Government-Owned Banks 13 30 13 34 Private-Sector Banks 73 70 50 66 - Domestic Banks 34 15 33 33 - Foreign Banks 39 55 17 33 15
Improvement in Asset Composition and in Loan Portfolio Quality Exposure to the Public Sector (*) Composition of Loans (As a % of Total Assets) 60 100% 50 50 49 45 75% % 74 50% 30 18 18 51 25% 15 8.2 8.2 26 0% 0 2000 2002 2004 2006 2008 2010 2012 2014 2016Feb-17 2000 Feb'17 INDIVIDUALS COMPANIES (*) Not including Central Bank Paper. Loan Portfolio Quality 20 180 Loan Loss Reserves / NPLs NPLs / Total Credit 136.4 .4 15 150 10 120 5 90 1.8 1.8 0 60 As of February 28, 2017. NPLs / Total Credit Loan Loss Reserves / NPLs 16
Improvement in Profitability R.O.A. and R.O.E 10.0 32.7 32.4 29.6 40 27.7 25.3 25.7 29.5 19.2 24.4 5.0 14.3 11.0 13.4 20 7.0 4.1 4.1 3.6 3.4 3.4 2.8 2.7 2.9 (0.5) 2.3 1.9 0 1.5 1.6 0.9 - (0.3) (0.1) (2.9) (4.2) -20 (22.7) (8.9) (5.0) -40 (59.2) (10.0) -60 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Feb-17 ROA ROE Efficiency 160 80 Efficiency Ratio % 120 60 45.1 Coverage % 80 40 59.9 40 20 0 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Feb-17 Efficiency Ratio Coverage of Administrative Expenses with Income from Services As of February 28, 2017. 17
Current Situation of the Financial System Strengt gths » High liquidity (with increased allocation to Central Bank paper). » Peso-based intermediation with high proportion of transactional deposits. » Adequate capitalization levels. Opport rtunit ities ies » Low level of financial depth. » Increase in concentration. » Potential demand for mortgage loans. Challen lenges » Lack of long-term funding. » Reach a greater customer base - Bancarization. » Increased competition from new fintech players. » Sustain profitability. Threats » Lead time to correct fiscal, monetary and external imbalances. » Brazilian economy as a limitation to growth. 18
Agenda » The Argentine Economy »The Argentine Financial System »Banco Galicia »Annex 19
Simplified Organizational Structure EBA HOLDING 58.0% Votes 21.6% Shares 87.5% 95% 100% 12.5% 5% Insurance Mutual Funds 77% 97% 3% 95% 100% 100% 95% 5% 5% Collection Processing 20
Banco Galicia in Numbers March 2017 (Consolidated figures) US$ bn. Ps. bn. (15.38 Ps./US$) Assets 253.3 16.5 Net Loans 146.4 9.5 Deposits 158.7 10.3 Equity 20.4 1.3 Clients (*) Branches Employees Number of Bank 279 5,939 3,655 Reg. Credit-Card Cos. 207 4,316 4,957 (**) CFA 94 1,156 533 580 580 11,411 9,145 Total (*) In thousands. (**) 63 branches and 31 offices. 21
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