Enhanced Investments - Financial Portal

Published: 2020-11-30 08:56:53 ET

EX-99.1 2 d25625dex991.htm EX-99.1 EX-99.1

Exhibit 99.1

LOGO

GRUPO FINANCIERO GALICIA S.A. REPORTS FINANCIAL RESULTS FOR

THE THIRD QUARTER OF THE 2020 FISCAL YEAR THAT ENDED ON SEPTEMBER 30, 2020

Buenos Aires, Argentina, November 24, 2020 – Grupo Financiero Galicia S.A. (BYMA /NASDAQ: GGAL) announced its financial results for the third quarter of the 2020 fiscal year (the “Quarter”), which ended on September 30, 2020.

Beginning with the fiscal year that started on January 1, 2020, Grupo Financiero Galicia S.A. (“GFG” or “Grupo Financiero Galicia”) has applied the restatement criteria established by IAS 29 “Financial Information in Hyperinflationary Economies”, and the expected credit loss model, in accordance with Communication “A” 6847 of the Argentine Central Bank, which includes item 5.5 “Impairment” of IFRS 9 “Financial Instruments”. For comparative purposes, the information corresponding to the 2019 fiscal year was adjusted in accordance with the abovementioned standards and restated in constant currency, except as otherwise noted.

HIGHLIGHTS

Comprehensive income attributable to Grupo Financiero Galicia for the Quarter reached Ps.4,835 million, 136% higher than the Ps.2,051 million recorded in the same quarter of the 2019 fiscal year. Net income attributable to Grupo Financiero Galicia amounted to Ps.5,450 million, 99% higher than the Ps.2,744 million recorded in the third quarter of the prior fiscal year. Net profit per share for the Quarter amounted to Ps.3.82, as compared to the Ps.1.92 per share recorded for the same quarter of the 2019 fiscal year.

The results of the Quarter were mainly attributable to the income derived from GFG’s interests in Banco de Galicia y Buenos Aires S.A.U. (“Banco Galicia” or the “Bank”), for Ps.4,476 million, Galicia Administradora de Fondos S.A. (“GAF”), for Ps.344 million, Tarjetas Regionales S.A. (“Tarjetas Regionales”), for Ps.295 million, and in Sudamericana Holding S.A. (“Sudamericana Holdings”), for Ps.273 million. These results were increased by a net operating income of Ps.124 million and partially offset by personnel and administrative expenses of Ps.45 million and losses from the net monetary position in the amount of Ps.133 million.

The Bank’s market share of loans to the private sector was 12.72%, increasing 131 basis points (“bp”) as compared to September 30, 2019. Market share for deposits from the private sector was 10.13%, approximately equivalent to the figure that was recorded as of the end of the third quarter of the prior fiscal year.

As of the end of the Quarter, the minimum capital requirement amounted to Ps.49,973 million, increasing Ps.13,068 million (35%), and computable capital was Ps.141,035 million, increasing Ps.67,578 million (92%), in each case as compared to the figures recorded in the third quarter of the 2019 fiscal year. The excess of computable capital over the minimum capital requirement amounted to Ps.91,062 million, and the total capital ratio was 23.09%.

Conference Call:

November 25, 2020, 9:00 am Eastern Time

Call-in number: +1 323-289-6576

Conference ID: 5432410


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For more information, contact:

Bruno Folino - CFO

Pablo Firvida - IRO Tel.: (5411) 6329-4881

inversores@gfgsa.com

www.gfgsa.com


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CONSOLIDATED INFORMATION


Consolidated Financial Statement			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 3Q20		vs 2Q19
Financial Information
Assets		948,631		961,352		927,875		(1)		2
Net loans and other financing		458,793		460,268		463,081		-		(1)
Deposits		614,983		635,449		519,153		(3)		18
Shareholders’ equity attributable to GFG		154,944		151,809		134,494		2		15
Shares outstanding (in thousands of shares) ⁽¹⁾		1,426,765		1,426,765		1,426,765		-		-
Book value per share (in pesos)		108.58		106.38		94.25		220		1,433
Net income attributable to GFG		5,450		6,065		2,744		(10)		99
Net income per share (in pesos)		3.82		4.25		1.92		(43)		190

(1) 10 ordinary shares = 1 ADS.


Selected Ratios			2020		2019				Variation (bp)
Percentages, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Return ⁽¹⁾ on average assets ⁽²⁾		2.30		2.72		1.17		(42)		113
Return ⁽¹⁾ on average shareholders´ equity ⁽²⁾		14.02		16.45		8.10		(243)		592
Financial Margin ^(2) (3)		18.09		20.22		14.16		(213)		393
Efficiency ratio ⁽⁴⁾		49.08		41.94		51.65		714		(257)
Total capital ratio ⁽⁵⁾		23.93		20.04		16.48		389		745
Non-performing loans / Loans to private sector		2.72		3.34		4.93		(62)		(221)
Allowance for loan losses / Loans to private sector		7.33		7.16		6.47		17		86
Allowance for loan losses / Non-accrual loans		269.72		214.66		131.35		5,506		13,837
Non-accrual portfolio with guarantees to non-accrual portfolio		18.90		20.80		12.11		(190)		679
Cost of Risk ⁽⁶⁾		4.83		10.65		7.13		(582)		(230)

(1) Net income attributable to GFG.

(2) Annualized.

(3) Net interest income, plus net result from financial instruments, plus foreign currency quotation differences, plus insurance premiums earned, plus certain items included in other operating income and expenses, divided by the average balance of interest-earning assets.

(4) Personnel expenses, plus administrative expenses, plus depreciation and devaluations of assets, divided by net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income, plus the result from the net monetary position.

(5) Banco Galicia consolidated with Tarjetas Regionales.

(6) Includes provisions for unused balances of overdrafts and credit cards.


Market Indicators			2020		2019		Variation
In pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Market price									(bp)
Shares – BYMA		105.90		103.20		81.55		270		2,435
ADS – NASDAQ (in US$)		7.24		9.70		13.00		(246)		(576)
Price BYMA / book value		0.98		0.97		0.87		1		11
Average daily volume (in thousands of shares)									(%)
BYMA		3,264		3,496		1,907		(7)		71
NASDAQ ⁽¹⁾		14,643		18,404		24,279		(20)		(40)
Market share (%)									(bp)
Banco Galicia
Loans to the private sector		12.72		12.92		11.41		(20)		131
Deposits from the private sector		10.13		10.44		10.13		(31)		-
Galicia Administradora de Fondos S.A.		10.61		11.11		10.66		(50)		(5)

(1) Expressed in equivalent shares: 10 ordinary shares = 1 ADS.


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GRUPO FINANCIERO GALICIA

RESULTS FOR THE QUARTER


Income Statement			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Results from Equity Investments		5,538		6,135		2,720		(10)		104
Banco de Galicia y Buenos Aires S.A.U.		4,476		5,202		2,816		(14)		59
Tarjetas Regionales S.A.		295		20		(207)		1,375		243
Galicia Administradora de Fondos S.A.		344		319		71		8		385
Sudamericana Holding S.A.		273		392		60		(30)		355
Other subsidiaries		150		202		(20)		(26)		850
Net operating income		124		84		190		48		(35)
Administrative expenses		(45)		(70)		(77)		(36)		(42)
Other operating income and expenses		(4)		(1)		(2)		300		100
Results from the net monetary position		(133)		(67)		(59)		99		125
Income tax		(30)		(16)		(28)		88		7
Net income attributable to GFG		5,450		6,065		2,744		(10)		99
Other comprehensive income		(615)		1,966		(693)		(131)		11
Comprehensive income attributable to GFG		4,835		8,031		2,051		(40)		136

Net income attributable to GFG for the Quarter amounted to Ps.5,450 million, which represented a 2.30% annualized return on average assets and a 14.02% return on average shareholders’ equity.

The abovementioned result was mainly attributable to profits realized from GFG’s interests in Banco Galicia, for Ps.4,476 million, GAF, for Ps.344 million, Tarjetas Regionales, for Ps.295 million, and in Sudamericana Holding, for Ps.273 million.

SELECTED FINANCIAL INFORMATION – CONSOLIDATED


Balance Sheet			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Assets
Cash and due from banks		142,896		136,540		151,178		5		(5)
Debt securities		182,384		167,725		78,079		9		134
Net loans and other financing		458,793		460,268		463,081		-		(1)
Other financial assets		98,613		129,884		172,407		(24)		(43)
Equity investments in subsidiaries, associates and joint businesses		45		3		-		1,400		N/A
Property, bank premises, equipment		39,589		39,930		40,740		(1)		(3)
Intangible assets		13,083		13,219		11,049		(1)		18
Other assets		13,178		13,732		11,118		(4)		19
Assets available for sale		50		51		223		(2)		(78)
Total assets		948,631		961,352		927,875		(1)		2
Liabilities
Deposits		614,983		635,449		519,153		(3)		18
Financing from financial entities		9,497		11,844		37,341		(20)		(75)
Other financial liabilities		78,084		72,427		130,870		8		(40)
Notes		17,706		17,049		36,562		4		(52)
Subordinated notes		19,199		19,635		19,940		(2)		(4)
Other liabilities		50,503		49,484		46,157		2		9
Total liabilities		789,972		805,888		790,023		(2)		-
Shareholders’ equity attributable to third parties		3,715		3,655		3,358		2		11
Shareholders’ equity attributable to GFG		154,944		151,809		134,494		2		15
Total shareholder’s equity		158,659		155,464		137,852		2		15


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Income Statement			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Net interest income		13,614		21,185		12,107		(36)		12
Interest income		34,144		37,708		42,179		(9)		(19)
Interest related expenses		(20,530)		(16,523)		(30,072)		24		(32)
Net fee income		8,729		8,021		8,253		9		6
Fee income		10,954		10,064		10,602		9		3
Fee related expenses		(2,225)		(2,043)		(2,349)		9		(5)
Net results from financial instruments		16,520		14,627		19,789		13		(17)
Gold and foreign currency quotation differences		2,375		1,025		2,659		132		(11)
Other operating income		4,686		5,939		4,800		(21)		(2)
Underwriting income from insurance business		1,279		1,282		1,076		-		19
Loan loss provisions		(5,668)		(5,816)		(8,251)		(3)		(31)
Net operating income		41,535		46,263		40,433		(10)		3
Personnel expenses		(7,420)		(6,968)		(7,340)		6		1
Administrative expenses		(7,062)		(7,391)		(6,876)		(4)		3
Depreciations and devaluations of assets		(1,819)		(1,754)		(1,429)		4		27
Other operating expenses		(7,601)		(15,327)		(8,272)		(50)		(8)
Operating income		17,633		14,823		16,516		19		7
Results from the net monetary position		(6,792)		(4,461)		(10,348)		52		(34)
Income tax		(5,330)		(4,293)		(3,466)		24		54
Net income		5,511		6,069		2,702		(9)		104
Net income attributable to third parties		61		4		(42)		1,425		245
Net income attributable to GFG		5,450		6,065		2,744		(10)		99
Other comprehensive income⁽¹⁾		(615)		1,966		(693)		(131)		11
Total comprehensive income		4,896		8,035		2,009		(39)		144
Comprehensive income attributable to third parties		61		4		(42)		1,425		245
Comprehensive income attributable to GFG		4,835		8,031		2,051		(40)		136
(1) Net of income tax.

Additional Information			2020						2019
	3Q		2Q		1Q		4Q		3Q
Employees		9,408		9,516		9,549		9,718		9,824
Banco Galicia		5,842		5,971		6,040		6,118		6,247
Tarjetas Regionales		3,110		3,099		3,075		3,151		3,161
Galicia Administradora de Fondos		25		25		27		27		29
Sudamericana Holding		385		376		376		395		375
Other subsidiaries		46		45		31		27		12
Branches and other points of sales		510		511		517		528		545
Banco Galicia		326		326		326		326		325
Tarjetas Regionales S.A.		184		185		191		202		220
Deposit Accounts at Banco Galicia (in thousands)		6,148		5,812		5,427		5,279		5,140
Credit Cards (in thousands)		13,490		13,472		13,428		13,544		13,852
Banco Galicia		5,009		5,096		5,032		4,986		5,191
Tarjetas Regionales S.A.		8,481		8,376		8,396		8,558		8,661
GAF’ assets under management (millions of pesos)		182,686		165,376		138,774		99,970		94,573
Inflation, exchange rate and interest rates
Consumer price index⁽¹⁾		346.6207		321.9738		305.5515		283.4442		253.7102
Consumer price index⁽¹⁾ (%)		7.65		5.37		7.80		11.72		12.49
Wholesale price index (IPIM) (%)		11.76		2.69		3.62		13.22		15.94
Acquisition value unit (UVA)		58.52		55.06		51.62		47.16		41.26
Exchange rate (Ps./US$)⁽²⁾		76.18		70.46		64.47		59.90		57.56
Badlar (%, quarterly averages)⁽³⁾		29.64		24.42		33.25		48.06		54.67

(1)

Consumer price index published by the Argentine National Institute of Statistics (INDEC)

(2)

Reference exchange rate in accordance to Communiqué “A” 3500 from the Argentine Central Bank as of the last working day of the Quarter.

(3)

Private banks’ 30-day time deposits rate for amounts over Ps.1 million.


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BANCO GALICIA

HIGHLIGHTS

Net income for the Quarter amounted to Ps.4,476 million, Ps.1,660 million (59%) higher than the figure recorded for the same quarter of the 2019 fiscal year mainly due to an Ps.896 million (10%) increase in net interest income and Ps.1,236 million (19%) decrease in loan loss provisions.

Net operating income for the Quarter amounted to Ps.31,460 million, Ps.408 million lower than the Ps.31,868 million recorded in the third quarter of the 2019 fiscal year mainly as a consequence of a decrease in net income from financial instruments, which was partially offset by the growth in net interest income.

The credit exposure to the private sector reached Ps.445,382 million for the Quarter, down 2% from Ps.454,324 million recorded in the third quarter of the 2019 fiscal year, and deposits reached Ps.616,451 million, up 18% from the Ps.522,998 million recorded during the same period. As of September 30, 2020, the Bank’s estimated market share of loans to the private sector was 12.72% while its estimated market share of deposits from the private sector was 10.13%.

The non-accrual loan portfolio represented 2.20% of total financing to the private sector, representing a decrease of 152 bp from the 3.72% recorded at the end of the same quarter of the prior fiscal year, while coverage with allowances for loan losses reached 301.52%.


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RESULTS FOR THE QUARTER


Income Statement			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Net interest income		10,116		17,784		9,220		(43)		10
Net fee income		4,989		5,106		4,199		(2)		19
Net results from financial instruments		15,574		13,896		18,861		12		(17)
Gold and foreign currency quotation differences		2,254		930		2,384		142		(5)
Other operating income		3,676		4,364		3,589		(16)		2
Loan-loss provisions		(5,149)		(4,773)		(6,385)		8		(19)
Net operating income		31,460		37,307		31,868		(16)		(1)
Personnel expenses		(5,346)		(4,963)		(5,383)		8		(1)
Administrative expenses		(4,569)		(5,225)		(4,635)		(13)		(1)
Depreciations and devaluations of assets		(1,336)		(1,302)		(1,030)		3		30
Other operating expenses		(5,982)		(13,473)		(7,083)		(56)		(16)
Operating income		14,227		12,344		13,737		15		4
Results from the net monetary position		(5,232)		(3,406)		(8,010)		54		(35)
Results from associates and joint businesses		33		68		29		(51)		14
Income tax		(4,552)		(3,804)		(2,940)		20		55
Net Income		4,476		5,202		2,816		(14)		59
Other comprehensive income (loss)		(626)		1,930		(641)		(132)		2
Total comprehensive income		3,850		7,132		2,175		(46)		77


Profitability and Efficiency			2020		2019		Variation ( bp)
Percentages, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Return ⁽¹⁾ on average assets		2.00		2.46		1.22		(46)		78
Return ⁽¹⁾ on average shareholders’ equity		13.68		16.77		9.71		(309)		397
Financial margin⁽¹⁾⁽²⁾		16.98		20.26		13.57		(328)		341
Efficiency ratio ⁽³⁾		44.09		36.79		55.95		730		(1,186)

(1)

Annualized.

(2)

Net interest income, plus net result from financial instruments, plus foreign currency quotation differences, plus certain items included in other operating income, divided by average interest-earning assets.

(3)

Personnel expenses plus administrative expenses plus depreciation and devaluations of assets, divided by net interest income plus net fee income plus net result from financial instruments plus foreign currency quotation differences plus insurance premiums earned plus certain items included in other operating income, plus the result from the net monetary position.

During the Quarter, net income attributable to Banco Galicia amounted to Ps.4,476 million, Ps.1,660 million (59%) higher than the Ps.2,816 million recorded for the same quarter of the previous fiscal year. This result was primarily a consequence of a Ps2,778 million (35%) decrease in results from the net monetary position, Ps.1,236 million (19%) lower loan loss provisions, an Ps.896 million (10%) higher net interest income and a Ps.790 million (19%)higher net fee income, offset by a Ps.3,287 million (17%) lower net income from financial instruments.


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Net Interest Income			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Interest income		29,899		33,185		36,246		(10)		(18)
Private sector securities		-		-		36		-		(100)
Public Sector securities ⁽¹⁾		864		1,792		1,255		(52)		(31)
Loans and other financing		27,138		29,576		29,466		(8)		(8)
Financial sector		495		914		988		(46)		(50)
Non-financial private sector		26,643		28,662		28,478		(7)		(6)
Overdrafts		1,903		3,358		4,629		(43)		(59)
Promissory notes		11,049		11,267		6,176		(2)		79
Mortgage notes		2,542		2,950		3,286		(14)		(23)
Pledge loans		316		184		338		72		(7)
Personal loans		3,590		3,795		3,595		(5)		-
Credit-card loans		5,654		5,698		8,121		(1)		(30)
Financial leases		89		92		210		(3)		(58)
Pre-financing and financing of exports		734		964		2,001		(24)		(63)
Other		766		354		122		116		528
Repurchase agreement transactions		1,897		1,817		5,489		4		(65)
Interest expenses		(19,783)		(15,401)		(27,026)		28		(27)
Deposits from the non-financial private sector		(19,118)		(14,091)		(23,883)		36		(20)
Saving accounts		(2,979)		(2,329)		(3,240)		28		(8)
Time deposits and term investments		(14,729)		(11,619)		(20,495)		27		(28)
Other		(1,410)		(143)		(148)		886		853
Financing from financial institutions		(133)		(149)		(516)		(11)		(74)
Repurchase agreement transactions		(10)		(18)		(114)		(44)		(91)
Other interest-bearing liabilities		(350)		(206)		(475)		70		(26)
Notes		(172)		(937)		(2,038)		(82)		(92)
Net interest income		10,116		17,784		9,220		(43)		10

Net interest income for the Quarter amounted to Ps.10,116 million, representing an Ps.896 million (10%) increase as compared to the Ps.9,220 million profit recorded for the same quarter of the 2019 fiscal year.

Interest income for the Quarter reached Ps.29,899 million, down 18% from the Ps.36,246 million recorded in the same quarter of the 2019 fiscal year. This decrease was primarily a consequence of lower interests realized in repurchase agreement transactions, for Ps.3,592 million (65%), on overdrafts, for Ps.2,726 million (59%), and on credit cards, for Ps.2,467 million (30%), and which was offset by higher interests realized on promissory notes, for Ps.4,873 million (79%).

Interest expenses amounted to Ps.19,783 million, down 27% from the same quarter of the 2019 fiscal year mainly due to lower interest realized on time deposits and term investments (for Ps.5,766 million or 28%).


				8


Yield and Rates⁽¹⁾							2020				2019						Variation (%/bp)
Average balances: in millions of pesos			3Q				2Q				3Q				vs 2Q20				vs 3Q19
Yields and rates: annualized nominal %	Av. B.		Int.		Av. B.		Int.		Av. B.		Int.		Av. B.		Int.		Av. B.		Int.
In pesos		551,160		31.32		505,906		33.87		405,617		50.14		9		(255)		36		(1,882)
Government securities		186,432		34.90		137,289		38.90		135,493		55.41		36		(400)		38		(2,051)
Loans		321,033		30.23		318,669		33.49		226,997		46.17		1		(326)		41		(1,594)
Other interest-earning assets		43,695		24.10		49,948		22.52		43,127		54.49		(13)		158		1		(3,039)
In foreign currency		56,319		5.82		81,005		11.41		179,700		2.66		(30)		(559)		(69)		316
Government securities		179		(487.15)		5,877		60.30		17,949		(37.39)		(97)		(54,745)		(99)		(44,976)
Loans		54,429		7.45		73,352		7.47		159,600		7.09		(26)		(2)		(66)		36
Other interest-earning assets		1,711		5.38		1,776		12.39		2,151		7.85		(4)		(701)		(20)		(247)
Interest-earning assets		607,479		28.96		586,911		30.77		585,317		35.56		4		(181)		4		(660)
In pesos		361,961		20.99		340,066		16.57		256,080		38.81		6		442		41		(1,782)
Saving accounts		157,599		9.47		151,589		6.38		78,873		17.07		4		309		100		(760)
Time deposits		200,396		30.12		178,378		24.88		159,527		51.22		12		524		26		(2,110)
Debt securities		1,595		9.03		6,306		27.40		13,443		12.36		(75)		(1,837)		(88)		(333)
Other interest-bearing liabilities		2,371		22.61		3,793		14.97		4,237		60.05		(37)		764		(44)		(3,744)
In foreign currency		156,123		1.54		162,463		2.04		259,509		1.78		(4)		(50)		(40)		(24)
Saving accounts		89,660		-		90,353		-		164,405		0.00		(1)		-		(45)		-
Time deposits		32,666		1.46		32,847		1.55		36,341		0.98		(1)		(9)		(10)		48
Debt securities		25,611		5.89		25,932		7.74		28,952		8.24		(1)		(185)		(12)		(235)
Other interest-bearing liabilities		8,186		5.08		13,331		5.94		29,811		6.29		(39)		(86)		(73)		(121)
Interest-bearing liabilities		518,084		15.13		502,529		11.87		515,589		20.17		3		326		-		(504)

(1) Does not include foreign currency quotation differences. Annual nominal interest rates were calculated using a 360-day denominator

The average interest-earning assets amounted to Ps.607,479 million, increasing Ps.22,162 million (4%) as compared to the figure recorded for the third quarter of the previous fiscal year primarily as a consequence of the Ps.94,036 million (41%) increase in the average peso-denominated loan portfolio and the increase of Ps.50,939 million (38%) in the average portfolio of peso-denominated government securities. The foregoing increases were partially offset by a decrease in the average volume of dollar-denominated loans, for Ps.105,171 million (66%), and in dollar-denominated government securities, for Ps.17,770 million (99%).

Average interest-bearing liabilities reached Ps.518,084 million, increasing Ps.2,495 million during the same period primarily due to an increase in the average balance of peso-denominated time deposits, for Ps.40,869 million (26%), and offset by a decrease in dollar-denominated saving accounts, for Ps.74,745 million (45%).

The average yield on interest-earning assets for the Quarter was 28.96%, representing a 660 bp decrease as compared to the figure recorded for the same quarter of the prior fiscal year mainly due to decreases of 44,976 bp in the average yield on dollar-denominated government securities, 3,039 bp on other interest-earning assets in pesos and of 2,051 bp on peso-denominated government securities. Likewise, the average cost of interest-bearing liabilities was 15.13%, representing a 504 bp decrease as compared to the third quarter of the prior fiscal year that was mainly due to a 3,744 bp decrease in the average interest rate on other interest-bearing liabilities in pesos and a 2,110 bp decrease in the interest rate on peso-denominated time deposits.


				9


Net Fee Income			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Credit cards		2,976		2,838		2,202		5		35
Deposit accounts		1,011		1,122		1,102		(10)		(8)
Insurance		315		310		265		2		19
Financial fees		43		70		86		(39)		(50)
Credit-related fees		159		131		34		21		368
Foreign trade		501		409		546		22		(8)
Collections		407		415		402		(2)		1
Utility-Bills collection services		506		398		537		27		(6)
Mutual Funds		113		213		263		(47)		(57)
Other		469		535		447		(12)		5
Total fee income		6,500		6,441		5,884		1		10
Total expenditures		(1,511)		(1,335)		(1,685)		13		(10)
Net fee income		4,989		5,106		4,199		(2)		19

Net fee income amounted to Ps.4,989 million, up 19% from the Ps.4,199 million recorded in the third quarter of the previous fiscal year. The increase in fees which stood out were those related to credit cards (for Ps.774 million or 35%).


Net Income from Financial Instruments			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Government securities		15,034		13,031		16,141		15		(7)
Argentine Central Bank		13,098		9,662		19,405		36		(33)
Other		1,936		3,369		(3,264)		(43)		159
Private sector securities		140		529		277		(74)		(49)
Derivative financial instruments		400		336		2,442		19		(84)
Forward transactions		399		339		2,474		18		(84)
Interest-rate swaps		1		(3)		(32)		133		103
Results from other financial assets/liabilities		-		-		1		-		(100)
Net income from financial instruments		15,574		13,896		18,861		12		(17)

Net income from financial instruments for the Quarter amounted to Ps.15,574 million, down Ps.3,287 million from the Ps.18,861 million recorded in the same quarter of the 2019 fiscal year primarily as a consequence of a Ps.6,307 million (33%) decrease in results from instruments issued by the Argentine Central Bank (Leliq) (which was due to lower holdings and yields), and of a Ps.2,042 million (84%) decrease from derivative financial instruments, offset by higher results from government securities, for Ps.5,200 million (159%).

During the Quarter, a Ps.2,254 million profit from gold and foreign currency quotation differences was recorded, as compared to a Ps.2,384 million profit recorded from the same quarter of the 2019 fiscal year. This result includes a Ps.1,831 million gain from foreign-currency trading.


Other Operating Income			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Other financial income⁽¹⁾⁽²⁾		363		(588)		1,073		162		(66)
Fees from bundles of products⁽¹⁾		1,375		1,491		1,257		(8)		9
Rental of safe deposit boxes⁽¹⁾		287		299		221		(4)		30
Other fee income⁽¹⁾		175		142		265		23		(34)
Other adjustments and interest on miscellaneous receivables		1,215		1,294		539		(6)		125
Other		261		1,726		234		(85)		12
Total other operating income		3,676		4,364		3,589		(16)		2

(1) Item included for calculating the efficiency ratio.

(2) Item included for calculating the financial margin.


				10

Other operating income for the Quarter reached Ps.3,676 million, increasing Ps.87 million (2%) from the Ps.3,589 million profit recorded in the third quarter of the 2019 fiscal year.

Provisions for loan losses for the Quarter amounted to Ps.5,149 million, Ps.1,236 million (19%) lower than the figure recorded in the same quarter of the prior fiscal year.

Personnel expenses amounted to Ps.5,346 million, decreasing 1% from the figure recorded for the same quarter of the 2019 fiscal year mainly due to a 6% decrease in staff, which was offset by salary increase agreements with the union which were above inflation.


Administrative Expenses			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Fees and compensations for services		437		505		380		(13)		15
Fees to directors and syndics		13		12		13		8		-
Publicity, promotion and research expenses		196		147		303		33		(35)
Taxes		795		1,350		964		(41)		(18)
Maintenance and repairment of goods and IT		1,076		1,198		553		(10)		95
Electricity and communications		372		419		378		(11)		(2)
Stationery and office supplies		33		140		85		(76)		(61)
Hired administrative services		657		729		439		(10)		50
Security		158		158		143		-		10
Insurance		50		52		32		(4)		56
Other		782		515		1,345		52		(42)
Total administrative expenses		4,569		5,225		4,635		(13)		(1)

Administrative expenses for the Quarter totaled Ps.4,569 million, down 1% as compared to the third quarter of the 2019 fiscal year and primarily as a consequence of decreases of Ps.563 million (42%) in other expenses (mainly related to cash transportation), Ps.169 million (18%) in taxes and of Ps.107 million (35%) in publicity promotion and research expenses, all of which were offset by a Ps.523 million (95%) increase in maintenance and repairment of goods and IT.

Depreciation and devaluation of assets amounted to Ps 1,336 million, up 30% from the third quarter of the 2019 fiscal year. This loss includes Ps.190 million from financial leases.


Other Operating Expenses			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Contribution to the Deposit Insurance Fund⁽¹⁾⁽²⁾		259		236		272		10		(5)
Other financial expenses⁽¹⁾⁽²⁾		(5)		176		818		(103)		(101)
Turnover tax		2,995		3,211		3,057		(7)		(2)
On financial income⁽¹⁾⁽²⁾		2,059		2,189		2,215		(6)		(7)
On fees⁽¹⁾		827		903		739		(8)		12
On other items		109		119		103		(8)		6
Other fee-related expenses⁽¹⁾		1,245		1,247		1,561		-		(20)
Other provisions		1,231		7,874		1,052		(84)		17
Claims		94		63		92		49		2
Other		163		666		231		(76)		(29)
Total other operating expenses		5,982		13,473		7,083		(56)		(16)

(1)

Item included for calculating the efficiency ratio.

(2)

Item included for calculating the financial margin.

Other operating expenses reached Ps.5,982 million, decreasing Ps.1,101 million (16%) from the Ps.7,083 million recorded in the third quarter of the 2019 fiscal year. This reduction was primarily a consequence of lower other financial expenses, for Ps.823 million (101%).


				11

The income tax charge for the Quarter was Ps.4,552 million, Ps.1,612 million higher than the figure recorded in the third quarter of the 2019 fiscal year. It is worth noting that, beginning in the second half of 2019, the tax inflation adjustment established by applicable income tax laws began to be applied.

Other comprehensive losses for the Quarter amounted to Ps.626 million, as compared to a Ps.641 million loss recorded in the same period of the 2019 fiscal year.

SELECTED FINANCIAL INFORMATION


Balance Sheet			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Assets
Cash and due from banks		140,810		134,476		149,661		5		(6)
Debt securities		182,083		167,831		78,868		8		131
Net loans and other financing		398,419		408,654		408,227		(3)		(2)
Other financial assets		88,845		122,590		161,922		(28)		(45)
Equity investments in subsidiaries, associates and joint businesses		396		480		439		(18)		(10)
Property, bank premises, equipment		34,824		35,002		35,885		(1)		(3)
Intangible assets		11,445		11,400		9,521		-		20
Other assets		5,566		6,492		4,794		(14)		16
Assets available for sale		51		51		223		-		(77)
Total assets		862,439		886,976		849,540		(3)		2
Liabilities
Deposits		616,451		638,839		522,998		(4)		18
Financing from financial entities		9,388		11,551		36,901		(19)		(75)
Other financial liabilities		37,647		39,062		98,176		(4)		(62)
Notes		9,388		9,454		19,814		(1)		(53)
Subordinated notes		19,199		19,636		19,940		(2)		(4)
Other liabilities		38,784		40,702		37,778		(5)		3
Total liabilities		730,857		759,244		735,607		(4)		(1)
Shareholders’ equity		131,582		127,732		113,933		3		15
Foreign currency assets and liabilities
Assets		189,851		190,231		309,774		-		(39)
Liabilities		192,192		197,507		296,772		(3)		(35)
Net forward purchases/(sales) of foreign currency ⁽¹⁾		(166)		(688)		(1,511)		(76)		(89)
Net global position in foreign currency		(2,507)		(7,964)		11,491		69		(122)

(1)

Recorded off-balance sheet.


				12

LEVEL OF ACTIVITY


Financing to the Private Sector⁽¹⁾			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
In pesos		362,908		365,270		279,794		(1)		30
Loans		323,406		323,914		236,926		-		37
UVA-adjusted loans		27,705		30,108		34,028		(8)		(19)
Financial leases		628		726		1,342		(13)		(53)
Debt securities		3		88		439		(97)		(99)
Other financing⁽²⁾		11,166		10,434		7,059		7		58
In foreign currency		82,474		85,796		174,530		(4)		(53)
Loans		53,943		63,008		142,907		(14)		(62)
Financial leases		1,358		1,560		2,200		(13)		(38)
Debt securities		20		115		2,194		(83)		(99)
Other financing⁽²⁾		27,153		21,113		27,229		29		-
Total financing to the private sector		445,382		451,066		454,324		(1)		(2)

(1)

Includes IFRS adjustment.

(2)

Includes certain off-balance sheet accounts related to guarantees granted.

As of September 30, 2020, total financing to the private sector reached Ps.445,382 million, 2% lower than the figure recorded from the prior fiscal year and primarily as a consequence of an Ps.88,964 million (62%) decrease in dollar-denominated loans, which was offset by an Ps.86,480 million (37%) increase in peso-denominated loans.


Market Share⁽¹⁾			2020		2019		Variation (bp)
Percentages, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Total loans		12.68		12.78		11.49		(10)		119
Loans to the private sector		12.72		12.92		11.41		(20)		131

(1) According to the daily information on loans published by the Argentine Central Bank. Only principal as of the last day of each quarter.

The Bank’s market share of loans to the private sector as of September 30, 2020, was 12.72%, increasing 131 bp from September 30, 2019.


				13


Breakdown of loans and other financing			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Financial entities		11,318		11,206		14,528		1		(22)
Loans		11,318		11,196		14,527		1		(22)
Other financing		-		10		1		(100)		(100)
Non-financial private sector and residents abroad		406,933		414,799		410,205		(2)		(1)
Loans		393,736		405,834		399,334		(3)		(1)
Overdrafts		18,978		29,546		32,401		(36)		(41)
Promissory notes		137,636		140,389		90,297		(2)		52
Mortgage loans		15,832		17,093		20,183		(7)		(22)
Pledge loans		9,965		7,286		4,286		37		133
Personal loans		31,583		32,064		35,468		(2)		(11)
Credit-card loans		122,574		114,991		107,812		7		14
Pre-financing and financing of exports		31,001		38,490		91,377		(19)		(66)
Other Loans		9,651		9,073		3,975		6		143
Accrued interest, adjustments and foreign currency quotation differences receivable		18,357		18,891		15,296		(3)		20
Documented interest		(1,841)		(1,989)		(1,761)		(7)		5
Financial leases		1,986		2,286		3,541		(13)		(44)
Other financing		11,211		6,679		-		68		-
Non-financial public sector		1		-		-		-		-
Total loans and other financing		418,252		426,005		424,733		(2)		(2)
Allowances		(19,833)		(17,351)		(16,506)		14		20
Loans		(19,564)		(17,126)		(16,433)		14		19
Financial leases		(39)		(67)		(49)		(42)		(20)
Other financing		(230)		(158)		(24)		46		858
Net loans and other financing		398,419		408,654		408,227		(3)		(2)

As of September 30, 2020, net loans and other financing after provisions amounted to Ps.398,419 million, decreasing 2% from September 30, 2019 primarily due to a 66% decrease in pre-financing and financing of exports, which was offset by a 52% increase of promissory notes.


Loans by Type of Borrower			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Large corporations		85,653		104,230		127,611		(18)		(33)
Corporations		41,550		44,261		36,110		(6)		15
SMEs		27,682		27,876		20,298		(1)		36
Agribusiness		97,778		89,400		63,665		9		54
Individuals		149,438		146,969		153,323		2		(3)
Financial sector		11,318		11,196		14,527		1		(22)
Residents abroad		1,873		1,523		4,014		23		(53)
Other		737		761		693		(3)		6
IFRS adjustment		(10,974)		(9,186)		(6,380)		19		72
Total loans		405,055		417,030		413,861		(3)		(2)
Allowances		(19,564)		(17,126)		(16,433)		14		19
Net total loans		385,491		399,904		397,428		(4)		(3)


				14


Loans by Sector of Activity			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Financial sector		11,318		11,196		14,527		1		(22)
Residents abroad		1,873		1,523		4,014		23		(53)
Services		43,259		48,198		35,970		(10)		20
Agriculture and livestock		90,885		83,207		55,739		9		63
Consumer		147,261		146,973		153,342		-		(4)
Retail and wholesale trade		34,436		39,657		33,075		(13)		4
Construction		4,793		4,866		5,959		(2)		(20)
Manufacturing industry		54,387		62,813		81,598		(13)		(33)
Other		27,817		27,784		36,017		-		(23)
IFRS adjustment		(10,974)		(9,187)		(6,380)		19		72
Total loans		405,055		417,030		413,861		(3)		(2)
Allowances		(19,564)		(17,126)		(16,433)		14		19
Net total loans		385,491		399,904		397,428		(4)		(3)

In the last twelve months, loans to the private sector increased, primarily in those granted to the agribusiness segment (Ps.34,113 million or 54%) and to SMEs (Ps.7,384 million or 36%). By sector of activity, higher levels of growth were recorded in the agriculture and livestock sector (Ps.35,146 million or 63%) and in services (Ps.7,289 million or 20%), while loans granted to the manufacturing industry decreased Ps.27,211 million (33%).


Net Exposure to the Argentine Public Sector⁽¹⁾			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Government securities net position		209,355		194,180		99,547		8		110
Leliq		148,958		145,341		62,516		2		138
Botes		18,679		17,396		14,971		7		25
Other		41,718		31,443		22,060		33		89
Other receivables resulting from financial brokerage		36,252		71,127		63,705		(49)		(43)
Repurchase agreement transactions - BCRA		36,222		71,088		63,653		(49)		(43)
Loans and other financing		1		10		1		(90)		-
Trust certificates of participation and securities		29		29		51		-		(43)
Total exposure to the public sector		245,607		265,307		163,252		(7)		50

(1) Excludes deposits with the Argentine Central Bank, which constitute one of the items by which the Bank complies with minimum cash requirements.

As of September 30, 2020, the Bank’s exposure to the public sector amounted to Ps.245,607 million, representing a 50% increase during the last twelve months. Excluding exposure to the Argentine Central Bank (with respect to Leliq and repurchase agreement transactions), net exposure to the public sector reached Ps.60,427 million (7% of total assets), while as of September 30, 2019, it amounted to Ps.37,083 million (4% of total assets).


				15


Deposits			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
In pesos		470,212		490,093		309,176		(4)		52
Current accounts		92,915		110,636		76,219		(16)		22
Saving accounts		151,596		170,331		73,361		(11)		107
Time deposits		214,019		190,281		148,452		12		44
UVA-adjusted time deposits		4,204		11,334		751		(63)		460
Other		2,031		2,840		2,711		(28)		(25)
Interests and adjustments		5,447		4,671		7,682		17		(29)
In foreign currency		146,239		148,746		213,822		(2)		(32)
Saving accounts		108,347		114,201		180,438		(5)		(40)
Time deposits		33,766		30,435		31,921		11		6
Other		3,980		3,980		1,414		-		181
Interests and adjustments		146		130		49		12		198
Total deposits		616,451		638,839		522,998		(4)		18

As of September 30, 2020, the Bank’s deposits amounted to Ps.616,451 million, representing an 18% increase during the last twelve months. This was a consequence of the Ps.161,036 million (52%) growth in peso-denominated deposits, with saving accounts up Ps.78,235 million (107%) and time deposits up Ps.65,567 million (44%), and offset by a Ps.72,091 (40%) decrease in dollar-denominated saving accounts.

At the end of the Quarter, there were 6 million deposit accounts, 20% more than the figure recorded for the same period of the prior fiscal year.


Market Share⁽¹⁾			2020		2019		Variation (%)
Percentages, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Total deposits		8.38		8.87		8.42		(49)		(4)
Private sector deposits		10.13		10.44		10.13		(31)		-

(1) According to the daily information on loans published by the Argentine Central Bank. Balances as of the last day of each quarter.

As of September 30, 2020, the Bank’s estimated market share of private sector deposits in the Argentine financial system was 10.13%, approximately equivalent to the figure recorded for the same period of the prior fiscal year.


Financial Liabilities			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Financial entities		9,388		11,551		36,901		(19)		(75)
Financing from credit-card purchases		14,560		16,235		18,393		(10)		(21)
Notes		9,388		9,454		19,814		(1)		(53)
Subordinated notes		19,199		19,636		19,940		(2)		(4)
Creditors from purchases of foreign currency		358		1,395		52,797		(74)		(99)
Collections on account of third parties		12,205		8,354		14,209		46		(14)
Other financial liabilities		10,524		13,078		12,777		(20)		(18)
Total financial liabilities		75,622		79,703		174,831		(5)		(57)

Financial liabilities at the end of the Quarter amounted to Ps.75,622 million, Ps.99,210 million (57%) lower than the Ps.174,831 million recorded for the same period of the prior fiscal year. This decline was mainly due to decreases of Ps.52,439 million (99%) in creditors from purchases of foreign currency, and of Ps.27,513 million (75%) in financial liabilities with financial entities.


				16

ASSET QUALITY


Financing Portfolio Quality			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
	3T		2T		3T		Trimestral		Annual
Non-accrual portfolio⁽¹⁾		9,792		11,444		16,897		(14)		(42)
With preferred guarantees		1,236		2,184		1,637		(43)		(24)
With other guarantees		1,402		1,369		1,470		2		(5)
Without guarantees		7,154		7,891		13,790		(9)		(48)
Total Allowances for loan losses⁽²⁾		29,525		27,467		22,478		7		31
Relevant ratios (%)								Variation ( bp)
Non-accrual portfolio to private sector financing		2.20		2.54		3.72		(34)		(152)
Total allowances for loan losses to private sector financing		6.63		6.09		4.95		54		168
Total allowances for loan losses to non-accrual portfolio		301.52		240.02		133.03		6,150		16,849
Non-accrual portfolio with guarantees to non-accrual portfolio		26.94		31.05		18.39		(411)		855
Cost of Risk⁽³⁾		4.92		10.58		6.51		(566)		(159)

(1) The non-accrual portfolio includes loans classified under the following categories of the Argentine Central Bank classification: With Problems and Medium Risk, High Risk of Insolvency and High Risk and Uncollectible.

(2) Includes allowances on unused balances of credit cards and overdrafts in current accounts.

(3) Includes provisions charged to income on unused balances of credit cards and overdrafts in current accounts. Annualized.

The non-accrual portfolio (which includes certain items of other financial assets and guarantees granted) amounted to Ps.9,792 million as of September 30, 2020, representing 2.20% of private-sector financing and a 152 bp decrease as compared to the 3.72% recorded in the same quarter of the 2019 fiscal year. This decrease was mainly due to the flexibilization of the parameters in respect of the classification of debtors established by the Argentine Central Bank.

Considering the provisions on unused balances of credit cards and overdrafts, the Bank’s coverage of the non-accrual portfolio with total allowances for loan losses reached 301.52%, as compared to 133.03% from the same period of the prior fiscal year.


Loan Portfolio Quality			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
	3T		2T		3T		Trimestral		Annual
Non-accrual loans⁽¹⁾		9,989		11,232		16,427		(11)		(39)
With preferred guarantees		1,203		2,172		1,387		(45)		(13)
With other guarantees		1,373		1,333		1,448		3		(5)
Without guarantees		7,413		7,727		13,592		(4)		(45)
Allowance for loan losses		19,564		17,126		16,433		14		19
Relevant ratios (%)								Variation ( bp)
Non-accrual loans to private-sector loans		2.47		2.69		3.97		(22)		(150)
Allowance for loan losses to private-sector loans		4.83		4.11		3.97		72		86
Allowance for loan losses to non-accrual loans		195.86		152.48		100.04		4,338		9,582
Non-accrual loans with guarantees to non-accrual loans		25.79		31.21		17.26		(542)		853
Cost of risk⁽²⁾		5.57		4.65		11.21		92		(564)

(2) Annualized.

The Bank’s non-accrual loan portfolio amounted to Ps.9,989 million as of September 30, 2020, representing 2.47% of total loans to the private sector, decreasing 150 bp from the 3.97% ratio recorded from the same period of the prior fiscal year. This result was mainly due to the flexibilization of applicable debtor classification regulations.


				17

The coverage of the non-accrual loan portfolio with allowances for loan losses reached 195.86% as of the end of the Quarter, as compared to 100.04% from the same period of the prior fiscal year.


Analysis of Loan Loss Experience			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Allowance for loan losses at the beginning of the Quarter
Changes in the allowance for loan losses		17,126		16,902		13,959		1		23
Provisions charged to income
Provisions charged to income		4,795		4,319		6,294		11		(24)
Charge offs		(685)		(2,995)		(1,718)		(77)		(60)
Other		-		-		(120)		-		(100)
Effect of inflation		(1,672)		(1,100)		(1,982)		52		(16)
Allowance for loan losses at the end of the Quarter		19,564		17,126		16,433		14		19
Charge to the income statement
Provisions charged to income⁽¹⁾		(4,795)		(4,319)		(6,294)		11		(24)
Direct charge offs⁽¹⁾		(188)		(189)		(161)		(1)		17
Bad debts recovered		143		132		97		8		47
Net charge to the income statement		(4,840)		(4,376)		(6,358)		11		(24)

(1) Item included for calculating the cost of risk.

During the Quarter, Ps.685 million were charged off against the allowance for loan losses and direct charges to the income statement in the amount of Ps.188 million were made.

CAPITALIZATION AND LIQUIDITY

The minimum capital requirement and the corresponding integration are presented below. Balances are disclosed in accordance with applicable regulations in force as of each period referenced.


Regulatory Capital			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Minimum capital required (A)		49,973		53,284		36,905		(6)		35
Allocated to credit risk		38,025		42,457		28,809		(10)		32
Allocated to market risk		973		1,054		1,392		(8)		(30)
Allocated to operational risk		10,975		9,773		6,704		12		64
Computable capital (B)		141,035		127,403		73,457		11		92
Tier I		116,222		103,348		54,718		12		112
Tier II		24,813		24,055		18,739		3		32
Excess over required capital (B) (A)		91,062		74,119		36,552		23		149
Risk weighted assets		610,815		650,594		449,140		(6)		36
							Variation (bp)
Total capital ratio (%)		23.09		19.58		16.36		351		673
Tier I capital ratio (%)		19.03		15.89		12.18		314		685

As of September 30, 2020, the Bank’s computable capital amounted to Ps.141,035 million, Ps.91,062 million (182%) higher than the Ps.49,973 million minimum capital requirement. As of September 30, 2019, this excess amounted to Ps.36,552 million (99%).


				18

The minimum capital requirement increased Ps.13,068 million as compared to September 30, 2019, mainly due to the expansion of regulatory requirements on risk weighted assets. Computable capital increased Ps.67,578 million during the same period, primarily as a consequence of a Ps.61,504 million increase in Tier I capital, which was due to an increase resulting from the accounting for shareholders’ equity that resulted from inflation adjustments recorded on non-monetary assets. The Tier II capital increased Ps.6,074 million as a consequence of the effect of the evolution of the foreign exchange rate on subordinated debt. The total capital ratio was 23.09%, increasing 673 bp during the last twelve months.


Liquidity			2020		2019		Variation (%)
Percentages, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Cash and due from banks		140,810		134,476		149,661		5		(6)
Government securities		91,666		115,868		27,649		21		232
Call-money		4,993		1,570		2,302		218		117
Overnight placements in correspondent banks		1,871		1,519		4,000		23		(53)
Net repurchase agreement transactions		36,241		71,105		63,653		(49)		(43)
Escrow accounts		9,412		8,922		9,401		5		-
Other financial assets		83		215		10		(61)		730
Total liquid assets		285,076		333,675		256,676		(15)		11
Liquidity ratios								Variation ( bp)
Liquid assets as a percentage of transactional deposits		80.79		84.44		77.78		(365)		301
Liquid assets as a percentage of total deposits		46.24		52.23		49.08		(599)		(284)

As of September 30, 2020, the Bank’s liquid assets represented 80.79% of the Bank’s transactional deposits and 46.24% of its total deposits, as compared to 77.78% and 49.08%, respectively, as of September 30, 2019.


				19

TARJETAS REGIONALES

INFORMATION DISCLOSURE

The data shown in the following tables correspond to Tarjetas Regionales, consolidated line by line with its subsidiaries.

RESULTS FOR THE QUARTER


Income Statement			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Net interest income		3,274		3,191		2,506		3		31
Net fee income		3,672		3,477		4,284		6		(14)
Net results from financial instruments		446		437		895		2		(50)
Gold and foreign currency quotation differences		13		-		70		-		(81)
Other operating income		741		761		1,127		(3)		(34)
Loan loss provisions		(519)		(1,050)		(1,866)		(51)		(72)
Net operating income		7,627		6,816		7,016		12		9
Personnel expenses		(1,736)		(1,685)		(1,688)		3		3
Administrative expenses		(2,111)		(1,951)		(1,875)		8		13
Depreciations and devaluations of assets		(416)		(388)		(342)		7		22
Other operating expenses		(1,513)		(1,815)		(1,169)		(17)		29
Operating income		1,851		977		1,942		89		(5)
Results from the net monetary position		(1,155)		(815)		(1,919)		42		(40)
Income tax		(341)		(138)		(272)		147		25
Net income		355		24		(249)		1,379		243


Profitability and Efficiency			2020		2019		Variation (bp)
Percentages, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Return⁽¹⁾ on average assets		1.93		0.14		(1.21)		179		314
Return⁽¹⁾ on average shareholders’ equity		6.46		0.45		(4.99)		601		1,145
Financial margin⁽¹⁾⁽²⁾		19.87		18.38		13.04		149		683
Efficiency ratio ⁽³⁾		76.40		71.05		73.29		535		311

(1)

Annualized.

(2)

Net interest income plus net result from financial instruments plus foreign currency quotation differences plus certain items included in other operating income and expenses, divided by average interest-earning assets.

(3)

During the Quarter, Tarjetas Regionales recorded a Ps.355 million net income, Ps.604 million higher than the figure recorded in the same quarter of the 2019 fiscal year. This profit represented a 1.93% annualized return on average assets and a 6.46% return on average shareholders’ equity, as compared to (1.21)% and (4.99)%, respectively, recorded from the third quarter of the 2019 fiscal year.

Net operating income amounted to Ps.7,627 million, increasing 9% from the third quarter of the 2019 fiscal year as a consequence of a higher net interest income (31%) and lower loan loss provisions (72%).


				20

SELECTED FINANCIAL INFORMATION


Balance Sheet			2020		2019		Variation (bp)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Assets
Cash and due from banks		1,438		1,741		4,823		(17)		(70)
Debt securities		522		-		-		-		-
Net loans and other financing		59,432		50,552		54,583		18		9
Other financial assets		4,793		4,886		7,284		(2)		(34)
Property, bank premises, equipment		4,185		4,339		4,234		(4)		(1)
Intangible assets		1,538		1,689		1,361		(9)		13
Other non-financial assets		4,049		3,841		3,530		5		15
Total assets		75,957		67,048		75,815		13		-
Liabilities
Financing from financial entities		517		510		410		1		26
Other financial liabilities		39,122		32,127		33,389		22		17
Notes		8,773		8,047		17,796		9		(51)
Other non-financial liabilities		5,513		4,863		4,465		13		23
Total liabilities		53,925		45,547		56,060		18		(4)
Shareholders’ equity		22,032		21,501		19,755		2		12

ASSET QUALITY


Loan Portfolio Quality			2020		2019		Variation (%)
Percentages, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Non-accrual loans⁽¹⁾		4,166		5,639		8,749		(26)		(52)
Allowances for loan losses		7,272		8,424		10,403		(14)		(30)
Total allowances for loan losses⁽²⁾		8,122		9,203		11,072		(12)		(27)
Ratios (%)								Variation (bp)
Non-accrual loans to loans to the private sector		6.27		9.63		13.47		(336)		(720)
Allowance for loan losses to loans to the private sector		10.94		14.38		16.02		(344)		(508)
Allowance for loan losses to non-accrual loans		174.56		149.39		118.91		2,517		5,565
Cost of risk⁽³⁾		3.29		6.43		15.66		(314)		(1,237)
Total allowance for loan losses⁽²⁾ to loans to the private sector		12.22		15.71		17.05		(349)		(483)
Total allowance for loan losses⁽²⁾ to non-accrual loans		194.96		163.21		126.55		3,175		6,841
Cost of Risk⁽⁴⁾		3.74		8.52		14.40		(478)		(1,066)

(1)

The non-accrual portfolio includes loans classified under the following categories of the Argentine Central Bank classification: With Problems and Medium Risk, High Risk of Insolvency and High Risk and Uncollectible.

(2)

Includes allowances on unused credit card balances.

(3)

Annualized.

(4)

Includes allowances on unused credit card balances. Annualized.

As of September 30, 2020, taking into consideration the provisions for unused credit card balances, the coverage ratio amounted to 194.96%, as compared to the 126.55% figure recorded on the same date of the previous fiscal year.


				21


Analysis of Loan Loss Experience			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Allowances for loan losses
At the beginning of the Quarter		8,424		8,587		10,431		(2)		(19)
Changes in the allowance for loan losses
Provisions charged to income		391		929		1,833		(58)		(79)
Reversals of allowances for loan losses		(518)		(119)		(427)		335		21
Charge offs⁽¹⁾		(453)		(730)		(278)		(38)		63
Effect of inflation		(572)		(243)		(1,156)		135		(51)
Allowance for loan losses at the end of the Quarter		7,272		8,424		10,403		(14)		(30)
Charge to the income statement
Provisions charged to income⁽²⁾		(391)		(929)		(1,833)		(58)		(79)
Direct charge offs⁽²⁾		(128)		(121)		(269)		6		(52)
Bad debt recovered		103		42		58		145		78
Net charge to the income statement		(416)		(1,008)		(2,044)		(59)		(80)

(1)

Item included for calculating the cost of risk.


				22

GALICIA ADMINISTRADORA DE FONDOS

RESULTS FOR THE QUARTER


Income Statement			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Net interest income		1		6		-		(83)		N/A
Net results from financial instruments		42		22		28		91		50
Gold and foreign currency quotation differences		8		8		21		-		(62)
Other operating income		648		544		187		19		247
Net operating income		699		580		236		21		196
Personnel and administrative expenses		(93)		(76)		(55)		22		69
Other operating expenses		(38)		(31)		(14)		23		171
Operating income		568		473		167		20		240
Results from the net monetary position		(47)		(15)		(44)		213		7
Income tax		(177)		(139)		(52)		27		240
Net income		344		319		71		8		385

ASSETS UNDER MANAGEMENT


Mutual Fund	Assets Under Management as of:						Variation (%)
In millions of pesos, except otherwise noted	3Q20		2Q20		3Q19		vs 2Q20		vs 3Q19
Fima Premium		137,649		131,897		77,744		4		77
Fima Ahorro Pesos		9,491		6,769		3,120		40		204
Fima Ahorro Plus		13,925		10,593		3,196		31		336
Fima Capital Plus		11,623		8,342		141		39		8,143
Fima Renta en Pesos		1,577		646		171		144		822
Fima Renta Plus		1,231		772		100		59		1,131
Fima Abierto Pymes		669		675		682		(1)		(2)
Fima Acciones		594		537		402		11		48
Fima PB Acciones		686		698		738		(2)		(7)
Fima Mix I		1,498		511		5		193		29,860
Fima Renta Dolares I		1,737		1,801		2,951		(4)		(41)
Fima Renta Dolares II		494		533		900		(7)		(45)
Fima Renta Acciones Latinoamerica		50		58		223		(14)		(78)
Fima Renta Fija Internacional		1,462		1,544		4,200		(5)		(65)
Total Assets Under Management		182,686		165,376		94,573		10		93


				23

SELECTED FINANCIAL INFORMATION


Balance Sheet			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Assets
Cash and due from banks		283		314		93		(10)		204
Loans and other financing		-		209		-		(100)		N/A
Other financial assets		902		160		380		464		137
Other non-financial assets		2		18		15		(89)		(87)
Total assets		1,187		701		488		69		143
Liabilities
Other non-financial liabilities		321		179		14		79		2,193
Total liabilities		321		179		14		79		2,193
Shareholders’ equity		866		522		474		66		83


				24

SUDAMERICANA HOLDING

INFORMATION DISCLOSURE

The data shown in the tables of this report and the consolidated financial statements correspond to Sudamericana Holding, consolidated line by line with the subsidiaries under its control.

RESULTS FOR THE QUARTER


Income Statement			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Earned premium		1,805		1,752		1,670		3		8
Incurred claims		(254)		(167)		(258)		52		(2)
Withdrawals		(6)		(3)		(9)		100		(33)
Life annuities		(4)		(3)		(3)		33		33
Acquisition and general expenses		(700)		(678)		(865)		3		(19)
Other income and expenses		-		(16)		(2)		(100)		(100)
Underwriting income		841		885		533		(5)		58
Net interest income		140		159		362		(12)		(61)
Net results from financial instruments		(3)		(2)		1		(50)		(400)
Gold and foreign currency quotation differences		(1)		(20)		(5)		95		80
Other operating income		141		113		88		25		60
Net operating income		1,118		1,135		979		(1)		14
Personnel expenses		(247)		(250)		(242)		(1)		2
Administrative expenses		(167)		(130)		(157)		28		6
Depreciations and devaluations of assets		(59)		(58)		(57)		2		4
Operating income		645		697		523		(7)		23
Results from the net monetary position		(181)		(139)		(301)		30		(40)
Income tax		(152)		(110)		(153)		38		(1)
Net income		312		448		69		(30)		352
Other comprehensive income		12		43		(59)		(72)		120
Total comprehensive income		324		491		10		(34)		3,140


Profitability			2020		2019		Variation ( bp)
Percentages, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Return on average assets⁽¹⁾		20.26		30.95		4.27		(1,069)		1,599
Return on average shareholders’ equity⁽¹⁾		38.65		59.57		8.92		(2,092)		2,973
Efficiency ratio ⁽²⁾		71.73		66.66		85.81		507		(1,408)
Combined ratio⁽³⁾		79.50		74.35		95.47		515		(1,597)

(1)

Annualized.

(2)

Acquisition and general expenses, plus personnel expenses, plus administrative expenses, plus depreciations and devaluations of assets, divided by earned premiums, plus incurred claims, plus withdrawals, plus life annuities, plus acquisition and general expenses, plus other income and expenses, plus net interest income, plus net results from financial instruments, plus gold and foreign currency quotation differences, plus some items included in other operating income, plus the net result from the monetary position.

(3)

Acquisition and general expenses, plus personnel expenses, plus administrative expenses, plus depreciations and devaluations of assets, plus incurred claims, plus other income and expenses, divided by earned premiums, plus withdrawals, plus life annuities.


				25

SELECTED FINANCIAL INFORMATION


Balance Sheet			2020		2019		Variation (%)
In millions of pesos, except otherwise noted	3Q		2Q		3Q		vs 2Q20		vs 3Q19
Assets
Cash and due from banks		264		95		103		178		156
Debt securities		-		-		37		-		(100)
Net loans and other financing		500		1,224		419		(59)		19
Other financial assets		2,107		2,320		2,939		(9)		(28)
Property, bank premises, equipment		537		546		571		(2)		(6)
Intangible assets		90		121		167		(26)		(46)
Assets for insurance contracts		1,548		1,469		1,635		5		(5)
Other non-financial assets		710		719		339		(1)		109
Total assets		5,756		6,494		6,210		(11)		(7)
Liabilities
Financial entities		-		-		40		-		(100)
Liabilities for insurance contracts		1,781		1,739		1,829		2		(3)
Other non-financial liabilities		1,675		1,489		1,361		12		23
Total liabilities		3,456		3,228		3,230		7		7
Shareholders’ equity		2,300		3,266		2,980		(30)		(23)


				26

RELEVANT INFORMATION

TARJETAS REGIONALES

At an Extraordinary Shareholders’ Meeting of GFG held on November 10, 2020, the shareholders of GFG approved a preliminary spin off-merger agreement between Grupo Financiero Galicia and certain companies that collectively own 17% of the shares of Tarjetas Regionales.

NOTES

On November 20, 2020, Banco Galicia issued its Class VIII Notes for Ps.1,589 million, having a term of 9 months, at a Badlar rate + 2.5%.

COVID-19

During the Quarter, Grupo Financiero Galicia and its subsidiaries have continued and adapted their operations under the challenging circumstances resulting from the spread of Coronavirus (COVID-19). This pandemic has generated various consequences impacting businesses and economic activities globally. As of mid-March, when the virus began to spread in Argentina, the Argentine National Government implemented a series of measures designed to reduce contagion and provide for preventive and mandatory social isolation or distancing (with variations of such restrictions dependent on the region of the country). As of the date of this report, commercial activities are gradually being normalized in compliance with applicable protocols established by the Argentine government.

Additionally, the Argentine Central Bank and other regulatory agencies have established certain additional regulations with objectives linked to providing assistance to sectors whose activity was affected by the pandemic and to the health care of the community in general.

The final scope of the COVID-19 pandemic and its impact on the global and Argentine economy are still unknown. Although, as of the date of this report, Grupo Financiero Galicia and its subsidiaries have suffered limited impacts on their results due to the pandemic, the impact of a lower level of activity and a higher unemployment could be significant in the future.

The Board of Directors of GFG continues to analyze the situation as it evolves and is prepared to take all measures within its power to guarantee business continuity and to preserve the health and safety of GFG’s employees, customers and other stakeholders.

REGULATORY CHANGES

In connection with the foregoing, the Argentine Central Bank has established certain regulations and protocols, of which the following stand out: (i) attention to customers by prior request of an appointment; (ii) the suspension of the collection of ATM fees; (iii ) the suspension, until December 31, 2020, of dividend distributions; (iv) the extension of credit card maturities; (v) financing of unpaid credit card balances at certain maximum interest rates; (vi) postponement of maturities of unpaid loan balances; (vii) the granting of zero-rate financing to self-employed people; (viii) a credit line for SMEs’ productive investment; (ix) the granting of financing to companies for the payment of salaries; (x) a minimum interest rate on time deposits; (xi) the flexibilization of the parameters in respect of classification of debtors; and (xii) controls on the foreign exchange market.


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Additionally, to promote the granting of financing to sectors affected by the COVID-19 pandemic, the Argentine Central Bank has implemented certain reductions on reserve requirements.

PRODUCTIVE CREDIT LINE FOR SMES

Through Communiqué “A” 7140, the Argentine Central Bank established, effective as of October 16, 2020, a credit line to finance SMEs productive investments. The amount to be granted from October 16, 2020 until March 31, 2021, is equivalent to 7.5% of deposits to the non-financial private sector in pesos, calculated based on the monthly average of daily balances in September of 2020. The proceeds must be used to finance investment projects, working capital and in other special circumstances. The terms and maximum interest rates in connection with such financing were established depending on the ultimate use of the funds. At least 30% of the quota must be allocated to financing investment projects.

This report is a summary analysis of GFG’s financial condition and results of operations as of and for the periods indicated. For a correct interpretation, this report must be read in conjunction with GFG’s financial statements, as well as with all other material periodically filed with the Argentine National Securities Commission (www.cnv.gob.ar), the Buenos Aires Stock Exchange (www.bolsar.com), the Cordoba Stock Exchange (www.bolsacba.com.ar) and the Nasdaq (www.nasdaq.com). In addition, the Argentine Central Bank (www.bcra.gob.ar) may publish information related to Banco Galicia as of a date subsequent to the last date for which the Bank has published information.

Readers of this report must note that this is a translation made from an original version written and expressed in Spanish. Therefore, any matters of interpretation should be referred to the original version in Spanish.


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