Q1 2025 Grupo Financiero Galicia SA Earnings Call

May 28, 2025

Being recorded and a replay will be available at the company's website at G F GSA Dot com.

Operator: and the replay will be available at the company's website at gfgsa.com.

We would like to inform that all attendees will only be listening to conference. During the presentation and then we will start the question and answer section when further instructions will be provided.

Operator: We would like to inform that all attendees will only be listening to the conference during the presentation.

Operator: And then we will start the question and answer section when further instructions will be provided. will be forward-looking. with the meaning of the safe harbor provisions of the U.S. federal securities laws and are subject to risks and uncertainty that could cause actual results. Investors should be aware of events related to the macroeconomic scenario, the financial industry, and other factors that could result to differ materially from those expressed in their respective forward-looking statements.

Some of the statements made during this conference call will be forward looking statements within the meaning of the safe Harbor provisions of the U S. Federal Securities laws and are subject and are subject to risks and uncertainty that could cause actual results to differ materially from those expressed.

Investors should be aware of events related to the macroeconomic scenario the financial industry and other factors that could results to differ materially from those expressed in their respective forward looking statements.

Speaker Change: Now I will turn the conference over to Mr. Gonzalo Fred Mendes, Colorado, CFO and Mr. Pablo <unk> head of Investor Relations you May begin your conference.

Pablo Firvida: Now I will turn the conference.

Pablo Firvida: Gonzalo Fernandez-Covaro, CFO, and Mr. Pablo Firvida, Head of Investor Relations. Thank you, Sofia.

Speaker Change: Thank you Sophie and good morning, and welcome to this conference call and policy to be up together with me is one solid from a Nicola.

Pablo Firvida: Good morning and welcome to this conference call. I'm Pablo Firvida, together with Ms. Gonzalo Fernández-Cobar.

Speaker Change: According to the monthly indicators for economic activity.

Gonzalo Fernandez-Covaro: According to the monthly indicator for economic activity, EMAE, the Argentine economy recorded a 5.6% year-over-year increase during March, while in year-to-date terms, the economic expansion reached 6.1%.

The Argentine economy recorded a five 6% year over year increase during March while the year to date terms the economic expansion reached six 1%.

Speaker Change: During the first quarter of 2025, the primary surplus reached <unk>, 5% of GDP and the overall surplus two 2% of GDP.

Gonzalo Fernandez-Covaro: During the first quarter of 2025, the primary surplus reached 0.5% of GDP and the overall surplus 0.2% of GDP. This implied a slight deterioration compared to the first quarter of 2024 when primary surplus was 0.7% of GDP.

Speaker Change: This implies a slight deterioration compared to the first quarter of 2024, when primary surplus was 0.7% of GDP.

Speaker Change: The national consumer price index accumulated an eight 6% increase during the first quarter of 2025.

Gonzalo Fernandez-Covaro: The National Consumer Price Index accumulated an 8.6% increase during the first quarter of 2025 and an 11.6% rise as of the end of April, reaching a 47.3% annual variation from April, 2025. On the monetary front, the monetary base increased by 0.8 trillion pesos in the first quarter, recording a 145% increase as compared to March 2025. The exchange rate maintained a 2% monthly crawl throughout 2024. And the Argentine Central Bank slowed the pace of adjustment to 1% per month starting February 1st, 2025. The exchange rate averaged $1,069 per dollar in March 2025, a 20.5% devaluation in year-over-year time.

Speaker Change: And an 11, 6% rise as of the end of April reaching a 47, 3% annual variation from April 2024.

Speaker Change: On the monetary front, the monetary base increased by 0.8 trillion pesos in the first quarter recording a 145% increase as compared to March 2024.

Speaker Change: The exchange rate maintain the 2% monthly crawl through throughout 2024, and the Argentine Central Bank slowed the pace of adjustment to 1% per month, starting February one 2025.

Speaker Change: The exchange rate averaged 1069 peso per dollar in March 2025.

Speaker Change: 25% devaluation in Europe over three year terms.

Speaker Change: On April 11th 2025, the Central Bank implemented a foreign exchange regime with the band within which the exchange rate may fluctuate freely.

Gonzalo Fernandez-Covaro: On April 11, 2025, the Central Bank implemented a foreign exchange regime with a ban within which the exchange rate may fluctuate freely. These bans were initially set between 1,000 and 1,400 pesos per dollar and will be adjusted monthly at a rate of minus 1% for the lower bound and plus 1% for the upper bound. The monetary policy rate started 2025 at 22%, but was reduced in late January to 29%, and remained at this level until nowadays. In March 2025, the average rate on peso-denominated private sector time deposits for up to 59 days stood at 29.5%.

Speaker Change: These bonds were initially set between 1000 and 1400 peso per dollar and will be adjusted monthly at a rate of minus 1% for the lower bound and plus 1% for the upper bound.

Speaker Change: The monetary policy rate started 2025 up 22%, but was reduced in late January to 29% and remained at this level until nowadays.

Gonzalo Fernandez-Covaro: The monetary policy rate started 2025 at 22%, but was reduced in late January to 29%, and remained at this level until nowadays. In March 2025, the average rate on peso-denominated private sector time deposits for up to 59 days stood at 29.5%. 55.9 percentage points below the March 2024 average. Private sector deposits in pesos averaged 80.6 trillion pesos in March. increasing by 8.5% during the quarter and 89.9% in the last 12 months. Time deposits in pesos rose 16.5% during the quarter and 125.9% in the year. And peso-denominated transactional deposits increased 0.6% during the quarter and 60% in year-over-year terms. Private sector dollar-denominated deposits amounted to $29.7 billion in March 2025, decreasing 6.6% during the quarter and rising 78.3% in the last 12 months.

Speaker Change: In March 2025, the average rate on peso denominated private sector than deposits for up to 59 days stood at 29, 5%.

Speaker Change: 55, nine percentage points below the March 2024 average.

Gonzalo Fernandez-Covaro: 55.9 percentage points below the March 2024 average. Private sector deposits in pesos averaged 80.6 trillion pesos in March. increasing by 8.5% during the quarter and 89.9% in the last 12 months. Time deposits in pesos rose 16.5% during the quarter and 125.9% in the year. And peso-denominated transactional deposits increased 0.6% during the quarter and 60% in year-over-year terms. Private sector dollar-denominated deposits amounted to $29.7 billion in March 2025, decreasing 6.6% during the quarter and rising 78.3% in the last 12 months. Peso-denominated loans to the private sector averaged 60.8 trillion pesos in March, showing a 20.1% quarterly increase and a 228.1% year-over-year rise.

Speaker Change: Private sector deposits in pesos average 86 trillion pesos in March.

Speaker Change: Increasing by eight 5% during the quarter and 89, 9% in the last 12 months.

Speaker Change: Time deposits in pesos rose 16, 5% during the quarter and 125, 9% in the year and peso denominated transactional deposits increased <unk>, 6% during the quarter and 60% in year over year terms.

Speaker Change: Private sector dollar denominated deposits amounted to $29 $7 billion in March 2025.

Speaker Change: Decreasing six 6% during the quarter and rising 78, 3% in the last 12 months.

Speaker Change: Peso denominated loans to private sector average 68 trillion pesos in March.

Gonzalo Fernandez-Covaro: Peso-denominated loans to the private sector averaged 60.8 trillion pesos in March, showing a 20.1% quarterly increase and a 228.1% year-over-year rise. And private sector dollar-denominated loans amounted to $14.1 billion, increasing 42.1% and 225.8% respectively.

Speaker Change: <unk>, a 21% quarterly increase and a 228, 1% year over year rise.

Speaker Change: Private sector dollar denominated loans amounted to $14 1 billion, increasing 42, 1% and 20.

Gonzalo Fernandez-Covaro: And private sector dollar-denominated loans amounted to $14.1 billion, increasing 42.1% and 225.8% respectively.

Speaker Change: 225, 8% respectively.

Speaker Change: Turning now to repo Financiero Galicia net income for the first quarter amounted to 146 billion pesos, 63% lower from the year ago quarter.

Gonzalo Fernandez-Covaro: Turning now to Grupo Financiero Galicia, net income for the first quarter amounted to 146 billion pesos, 63% lower from the year ago quarter. The result comes from profits from Naranja X for 64 billion pesos, from Banco Galicia for 37 billion pesos, from Galicia Asset Management for 29 billion pesos, and from Galicia Seguros for 11 billion pesos. This profit represented a 1.7% annualized return on average assets and an 8.8% return on average shareholders equity. going to Banco Galicia. The result of the quarter was negatively affected by the reduction in the prices of the trading bond portfolio and the increase in the cost of risk associated with the growth of the loan book and the increase in the NPLs in the retail sector.

Speaker Change: The result comes from profits from <unk> 464 billion pesos from Banco Galicia for 37 billion pesos.

Speaker Change: From <unk> asset management, 429 billion pesos and from Galicia, <unk> orders for 11 billion business.

Speaker Change: This profit represented a one 7% annualized return on average assets.

Speaker Change: Eight 8% return on average shareholders' equity.

Speaker Change: Go into one core Lithia and the result of the quarter was negatively affected by the reduction in the prices of the trading bond portfolio and the increase in the cost of risk associated with the growth of the loan book and the increase in the Npls in the retail segment.

Gonzalo Fernandez-Covaro: going to Banco Galicia. The result of the quarter was negatively affected by the reduction in the prices of the trading bond portfolio and the increase in the cost of risk associated with the growth of the loan book and the increase in the NPLs in the retail sector. The net income for the quarter was 90% lower than in the same quarter of 2024 due to an 84% lower operating result. This was primarily a consequence of a 68% decrease of net operating income as net interest income decreased 66%, mainly because during the first quarter of 2024, the bond portfolio adjusted by inflation had remarkably high yields.

Speaker Change: The net income for the quarter was 90% lower than in the same quarter of 2024.

Gonzalo Fernandez-Covaro: The net income for the quarter was 90% lower than in the same quarter of 2024 due to an 84% lower operating result. This was primarily a consequence of a 68% decrease of net operating income as net interest income decreased 66%, mainly because during the first quarter of 2024, the bond portfolio adjusted by inflation had remarkably high yields. Net results from financial instruments fell 65% due to a reduction in the bond portfolio and results from foreign currency quotation differences decreased 80%. The above-mentioned decreases were partially offset by a 26% growth of net fee income. Average interest earning assets reach 14.9 trillion pesos.

Speaker Change: Due to an 84% lower operating result.

Speaker Change: This was primarily a consequence of the 68% decrease of net operating income.

Speaker Change: Net interest income decreased 66%, mainly because during the first quarter of 2020 for the bond portfolio adjusted by inflation had remarkably high yields.

Speaker Change: Net result from financial instruments fell 65% due to a reduction in the loan portfolio.

Gonzalo Fernandez-Covaro: Net results from financial instruments fell 65% due to a reduction in the bond portfolio and results from foreign currency quotation differences decreased 80%. The above-mentioned decreases were partially offset by a 26% growth of net fee income. Average interest earning assets reach 14.9 trillion pesos. 45% higher than in the same quarter of 2024, primarily due to a 97% increase of the average portfolio of loans in pesos and of 702% of dollar-denominated loans, partially offset by an 88% reduction in the average balance of other interest-earning assets in pesos. In the same period, its yield decreased 95 percentage points, reaching 31.9%.

Speaker Change: Our results from foreign currency quotation differences decreased 80% there.

Speaker Change: The above mentioned decreases were partially offset by a 26% growth of net fee income.

Speaker Change: Average interest, earning assets reached $14 93 billion pesos.

Speaker Change: 45% higher than in the same quarter of 2024.

Gonzalo Fernandez-Covaro: 45% higher than in the same quarter of 2024, primarily due to a 97% increase of the average portfolio of loans in pesos and of 702% of dollar-denominated loans, partially offset by an 88% reduction in the average balance of other interest-earning assets in pesos. In the same period, its yield decreased 95 percentage points, reaching 31.9%. Interest bearing liabilities increased 67 percent from March 2024, amounting to 13.6 trillion pesos, primarily due to the increase of time deposits in pesos and of saving accounts and other deposits in foreign currency. During this period, its cost decreased 41 percentage points to 13.9%.

Speaker Change: Primarily due to a 97% increase of the average portfolio of loans in pesos and 702% of dollar denominated loans, partially offset by an 88% reduction in the average balance of other interest earning assets in pesos.

Speaker Change: In the same period its yield decreased 95 percentage points, reaching 31, 9%.

Speaker Change: Interest bearing liabilities increased 67% from March 2024, amounting to $13 six trillion pesos, primarily due to the increase of term deposits in pesos and of saving accounts and other deposits in foreign currency.

Gonzalo Fernandez-Covaro: Interest bearing liabilities increased 67 percent from March 2024, amounting to 13.6 trillion pesos, primarily due to the increase of time deposits in pesos and of saving accounts and other deposits in foreign currency. During this period, its cost decreased 41 percentage points to 13.9%. Net interest income decreased 66% when compared to the first quarter of 2024. This was the result of a 63% decrease in interest income because of an 80% lower interest on government securities and a 99% lower interest on repo transactions. together with a 58% decrease in interest expense. due to a 46% lower interest rate on time deposits and an 80% interest rate on other deposits.

Speaker Change: During this period, it's cost decreased 41 percentage points to 13, 9%.

Speaker Change: Net interest income decreased 66% when compared to the first quarter of 2024.

Gonzalo Fernandez-Covaro: Net interest income decreased 66% when compared to the first quarter of 2024. This was the result of a 63% decrease in interest income because of an 80% lower interest on government securities and a 99% lower interest on repo transactions. together with a 58% decrease in interest expense. due to a 46% lower interest rate on time deposits and an 80% interest rate on other deposits. Net fee income increased 26% from March 2024 due to a 26% higher income from credit card fees and of 34% from fees on deposit. Net income from financial instruments decreased 65% due to a 67% lower result from government security.

Speaker Change: This was the result of a 63% decrease in interest income because of an 80% lower interest on government securities and in 99% lower interest on repo transactions together with a 58% decrease in interest expenses due to a 46% lower interest rates on <unk>.

Speaker Change: Posits and an 80% interest rate on other deposits.

Speaker Change: Net fee income increased 26% from March 2024, due to a 26% higher income from credit card fees and of 34% from fees on deposits.

Gonzalo Fernandez-Covaro: Net fee income increased 26% from March 2024 due to a 26% higher income from credit card fees and of 34% from fees on deposit. Net income from financial instruments decreased 65% due to a 67% lower result from government security. Gains from FX quotation differences were 80% lower than the year-ago quarter, including the results from foreign currency trading. Other operating income decreased 39% in the quarter while provisions for loan losses increased 193% because of the growth of the financing portfolio and to an increase in delinquency. Personal expenses were 19% lower than a year before. And it is worth to mention that during this quarter, we began to use the provision for restructuring expenses established in the fourth quarter of 2024.

Speaker Change: Net income from financial instruments decreased 65% due to a 67% lower results from government securities.

Speaker Change: Gains from FX quotation differences, where 80% lower than the year ago quarter, including the results from foreign currency trading.

Gonzalo Fernandez-Covaro: Gains from FX quotation differences were 80% lower than the year-ago quarter, including the results from foreign currency trading. Other operating income decreased 39% in the quarter while provisions for loan losses increased 193% because of the growth of the financing portfolio and to an increase in delinquency. Personal expenses were 19% lower than a year before. And it is worth to mention that during this quarter, we began to use the provision for restructuring expenses established in the fourth quarter of 2024.

Speaker Change: Other operating income decreased 39% in the quarter, while provisions for loan losses increased 193% because of the growth of the financing portfolio and to an increase in delinquency.

Speaker Change: Personal expenses were 19% lower than a year before.

Speaker Change: And it is worth to mention that during this quarter, we began to use the provision for restructuring expenses established in the fourth quarter of 2024.

Speaker Change: Administrative expenses increased 25%.

Gonzalo Fernandez-Covaro: Administrative expenses increased 25% due to a 57% increase of higher administrative services and a 20% increase of expenses for maintenance and repairment of goods and IT, and 187% higher publicity, promotions, and research expenses. Other operating expenses decreased 49% due to a 52% lower turnover tax related to financial operations and 97% lower charges for other provisions. Results from the net monetary position decreased 79% year over year following the downward evolution of inflation. The income tax charge was 65% lower than in the year-ago quarter due to lower operating risk. Finally, the other comprehensive income included a $75.1 billion loss.

Speaker Change: Due to a 57% increase of higher administrative services and a 20% increase of expenses for maintenance and repair amount of goods.

Speaker Change: And 187% higher publicity promotions and research expenses.

Speaker Change: Other operating expenses decreased 49% due to a 52% lower turnover tax related to financial operations and 97% lower charges for other provisions.

Speaker Change: Results from the net monetary position decreased 79% year over year following the downward evolution of the inflation.

Speaker Change: The income tax charge was 65% lower than in the year ago quarter due to lower operating results.

Speaker Change: Finally, the other comprehensive income included $75 1 billion loss.

Gonzalo Fernandez-Covaro: Finally, the other comprehensive income included a $75.1 billion loss. mainly due to treasury bills blackout. The bank's financing to the private sector reached 12.6 trillion pesos at the end of the quarter, up 107 percent in the last 12 months, with peso financing increasing 88 percent and dollar-denominated financing growing 177 percent. While by credit line, promissory notes increased 171%, credit card financing, 66%, and personal loans, 221%. Net exposure to the public sector decreased 35% year-over-year, primarily due to the reduction of repo transactions. This exposure represented 19% of total assets as of the end of the quarter, compared to 40% of the year before.

Speaker Change: Mainly due to treasury bills like ups.

Gonzalo Fernandez-Covaro: mainly due to treasury bills blackout. The bank's financing to the private sector reached 12.6 trillion pesos at the end of the quarter, up 107 percent in the last 12 months, with peso financing increasing 88 percent and dollar-denominated financing growing 177 percent. While by credit line, promissory notes increased 171%, credit card financing, 66%, and personal loans, 221%. Net exposure to the public sector decreased 35% year-over-year, primarily due to the reduction of repo transactions. This exposure represented 19% of total assets as of the end of the quarter, compared to 40% of the year before. Deposits reached 15 trillion pesos, 48% higher than a year before, mainly due to 121% increase in saving accounts in dollars and a 69% increase in time deposits in pesos.

Speaker Change: The bank's financing to a private sector reached $12 six trillion pesos at the end of the quarter up one 7% in the last 12 months with peso financing, increasing 88% and <unk>.

Speaker Change: Denominated financing growing 177%.

Speaker Change: Worldwide create line promissory notes increased 171%.

Speaker Change: I'd card financing, 66% and personal loans, 221%.

Speaker Change: Net exposure to public sector decreased 35% year over year.

Speaker Change: Primarily due to the reduction of repo transactions.

Speaker Change: This exposure represented 19% of total assets as of the end of the quarter compared to 40% of the year before.

Speaker Change: Deposits reached 15 trillion pesos, 48% higher than a year before.

Gonzalo Fernandez-Covaro: Deposits reached 15 trillion pesos, 48% higher than a year before, mainly due to 121% increase in saving accounts in dollars and a 69% increase in time deposits in pesos. partially offset by a 16% decrease in other deposits in place. The bank's estimated market share of loans to private sector was 13 percent, 78 basic points higher than at the end of the year-ago quarter, and the market share of deposits from the private sector was 14.2 percent, 400 basic points higher than in the same quarter of 2024. The bank's liquid assets represented 62.4% of transactional deposits and 39.3% of total deposits.

Speaker Change: Mainly due to 121% increase in saving accounts in dollars and 69% increase in time deposits in pesos.

Speaker Change: Partially offset by a 16% decrease in other deposits in pesos.

Gonzalo Fernandez-Covaro: partially offset by a 16% decrease in other deposits in place. The bank's estimated market share of loans to private sector was 13 percent, 78 basic points higher than at the end of the year-ago quarter, and the market share of deposits from the private sector was 14.2 percent, 400 basic points higher than in the same quarter of 2024. The bank's liquid assets represented 62.4% of transactional deposits and 39.3% of total deposits. compared to 104.9% and 65.9% respectively from a year before.

Speaker Change: The bank's estimated market share of loans to private sector was 13% 78 basis points higher than at the end of the year ago quarter and the market share of deposits from the private sector was 14, 2% 400 basis points higher than in the same quarter of 2024.

Speaker Change: The bank's liquid assets represented 62, 4% of transactional deposits and 39, 3% of total deposits compared to 104, 9% and 65, 9% respectively from a year before.

Gonzalo Fernandez-Covaro: compared to 104.9% and 65.9% respectively from a year before. As regards asset quality, the ratio of non-performing loans to total financing ended the quarter at 2.75%, recording a 66 basic points deterioration as compared to the 2.09% of the first quarter of the prior year. At the same time, the coverage with allowances reached 153.3%, up 4.9 percentage points from the 148.4% recorded a year ago. As of the end of March 2025, the bank's total regulatory capital ratio reached 21.1 percent, decreasing 10.7 percentage points from the end of the same quarter of 2024, while the Tier 1 ratio was 20.8 percent, down 12.5 percentage points during the same period.

Speaker Change: As regards asset quality the ratio of nonperforming loans to total financing ended the quarter at 275% recording a 66 66 basis points deterioration as compared to the 279% of the first quarter of the prior year.

Gonzalo Fernandez-Covaro: As regards asset quality, the ratio of non-performing loans to total financing ended the quarter at 2.75%, recording a 66 basic points deterioration as compared to the 2.09% of the first quarter of the prior year. At the same time, the coverage with allowances reached 153.3%, up 4.9 percentage points from the 148.4% recorded a year ago.

Speaker Change: At the same time the coverage with allowances reached 153, 3% up four nine percentage points from the 148, 4% recorded a year ago.

Speaker Change: As of the end of March 2025 demands total regulatory capital ratio reached 21, 1%.

Gonzalo Fernandez-Covaro: As of the end of March 2025, the bank's total regulatory capital ratio reached 21.1%, decreasing 10.7 percentage points from the end of the same quarter of 2024, while the Tier 1 ratio was 20.8%, down 12.5 percentage points during the same period. Consolidated with Galicia mass, the total capital ratio would have been 25.3%.

Speaker Change: Depressing 10, seven percentage points from the end of the same quarter of 2024.

Speaker Change: While the tier one ratio was 28% down 12, five percentage points during the same period.

Speaker Change: Consolidated with the lithium us the total capital ratio would have been 25, 3%.

Gonzalo Fernandez-Covaro: Consolidated with Galicia mass, the total capital ratio would have been 25.3%.

Speaker Change: In summary in a challenging political and macro environment Grupo Financiero, Galicia was able to keep asset quality liquidity solvency and profitability metrics at healthy levels and at the same time continue to move forward with the integration with <unk>, which will be completed.

Gonzalo Fernandez-Covaro: In summary, in a challenging political and macro environment, Grupo Financiero Galicia was able to keep asset quality, liquidity, solvency and profitability metrics at healthy levels, and at the same time continue to move forward with the integration with GaliciaMAS, which would be completed before the end of next June.

Speaker Change: Before the end of next June.

Speaker Change: We are now ready to answer the questions that you may have thank you.

Operator: We are now ready to answer the questions that you may have. Thank you.

Speaker Change: We are going to start the question and answer session.

Speaker Change: And analysts.

Speaker Change: You wish to ask a question. Please click on raise hand, thank you.

Operator: If you wish to ask a question, please click on Raise Hand.

Speaker Change: Question has already been answered you can leave the keel by clicking on fluid handling.

Operator: If your question has already been answered, you can leave the queue by clicking on put Our first question...

Brian Flores: Our first question comes from Brian Flores with Citibank.

Speaker Change: Yes.

Speaker Change: Hi, Pablo Hello, Thank you for the opportunity to ask a question just wanted to the first one if I if I can on the guidance we have seen some of your peers already shifting some of the lines in the guidance.

Unnamed Attendee: Hi, Pablo, Gonzalo, thank you for the opportunity to ask a question.

Unnamed Attendee: I just wanted the first one, if I can, on the guidance. We have seen some of your peers already shifting some of the lines in the guidance and I think you did not mention it in your remarks. I just wanted to know if you're making any changes on any of the lines. And then the second question is on asset quality, because we are seeing some positive iteration. And I know there was some changes on accounting and I know the fourth quarter had perhaps some spikes. But I think now this is more comparable and we are still seeing some pressures on asset quality.

Speaker Change: You did not mention it in your remarks, you just wanted to know.

Speaker Change: If you if you're making any changes or any of the lines.

Unnamed Attendee: I just wanted to know if you're making any changes on any of the lines. And then the second question is on asset quality, because we are seeing some positive iteration. And I know there was some changes on accounting and I know the fourth quarter had perhaps some spikes. But I think now this is more comparable and we are still seeing some pressures on asset quality. So could you elaborate a bit on where is it coming from, this increase in delinquency particularly? And also, we should expect this to normalize or maybe, I don't know, the new range is I know we're coming from a low base, but the new range is a bit higher than what we were initially expecting.

Speaker Change: And then the second question is on asset quality.

Speaker Change: Because we are seeing some positive duration Dino.

Speaker Change: There was some changes on accounting and I know the fourth quarter had perhaps some spikes.

Speaker Change: But I think now this is more comparable and we're still seeing some pressures on asset quality. So could you elaborate a bit on where is it coming from this increase in delinquency, particularly and also if we should expect this to normalize or maybe.

Unnamed Attendee: So could you elaborate a bit on where is it coming from, this increase in delinquency particularly? And also, we should expect this to normalize or maybe, I don't know, the new range is I know we're coming from a low base, but the new range is a bit higher than what we were initially expecting.

Speaker Change: I don't know the in the new range is.

Speaker Change: I know, we're coming from a low base, but our new range is a bit higher than what we were initially expecting thank you.

Speaker Change: Yes.

Unnamed Attendee: Thank you.

Gonzalo Fernandez-Covaro: Thank you. Yes, thank you for the question. I mean, in terms of guidance, we are seeing ROE for the year now between 12 and 13 percent for the group. As we said, This is a transition year for us, and we believe for the entire financial system, where we know we're building our portfolio and, you know, we come from very low levels of lending, so we're in that process of building the portfolio and compensating lower margins with higher volumes. And on top of that, we have, you know, the merge with Galicia Mass, and we expect some expenses on this transition, on the integration from the IT side, but also, you know, from the integration, we expect we may be short on the restructuring provision booked last quarter.

Speaker Change: Thank you for the question I mean in terms of guidance, we are seeing the arrow.

Gonzalo Fernandez-Covaro: Yes, thank you for the question. I mean, in terms of guidance, we are seeing ROE for the year now between 12 and 13 percent for the group. As we said, This is a transition year for us, and we believe for the entire financial system, where we know we're building our portfolio and, you know, we come from very low levels of lending, so we're in that process of building the portfolio and compensating lower margins with higher volumes. And on top of that, we have, you know, the merge with Galicia Mass, and we expect some expenses on this transition, on the integration from the IT side, but also, you know, from the integration, we expect we may be short on the restructuring provision booked last quarter.

Speaker Change: For the year now between 12 and 13% for the group.

Speaker Change: As we said.

Speaker Change: There is a transition year, whereas we believe for the entire financial system and where we knew we are building our portfolio.

Speaker Change: We come from very low levels of lending. So we're in that process of building the portfolio and compensating lower margins with higher volumes.

Speaker Change: On top of that we have.

Speaker Change: The merger with lithium.

Speaker Change: We expect some expenses.

Speaker Change: On the transition on the integration front on the <unk> side, but also in <unk>.

Speaker Change: From the from the integration we expect.

Speaker Change: We may be short on the on the restructuring provision booked last quarter, we may need a bit more.

Speaker Change: So we don't know numbers yet.

Gonzalo Fernandez-Covaro: We may need a bit more, so we don't know numbers yet, but that's what we are seeing with how things are evolving, which is good news, you know, for the future. It may have some more expenses this year, so that's why we are changing also the guidance on our way for the group. Talking about delinquency or entities, I mean, we were coming... The increase in NPS comes from the individual portfolio, not the wholesale. Wholesale is really flat, so I would say this is entire for our consumer lending, let's say. that is the one that grew fastest and started to grow fast.

Speaker Change: That's why we have seen with the with how things.

Speaker Change: Evolving with that good news for the future. It may have some more expenses this year.

Speaker Change: So thats why we are changing also the guidance for the group.

Speaker Change: Talking about delinquency or mpls.

Gonzalo Fernandez-Covaro: Talking about delinquency or entities, I mean, we were coming... The increase in NPS comes from the individual portfolio, not the wholesale. Wholesale is really flat, so I would say this is entire for our consumer lending, let's say. that is the one that grew fastest and started to grow fast. So, we were coming from very low levels. We saw the financial system in Argentina, so increased on NPLs. We are seeing that. We made some changes in origination in the first quarter because I think we are also trying to look what the sweet spot where we want to be.

Speaker Change: You are coming.

Speaker Change: The increase in Npls come from the individuals portfolio and wholesale wholesale is really flat. So I would say this is entire floor for our.

Speaker Change: Consumer lending, let's say.

Speaker Change: That is the one that grew fastest and tablet to grow fast.

Speaker Change: So we were coming from very low levels, we expect.

Gonzalo Fernandez-Covaro: So, we were coming from very low levels. We saw the financial system in Argentina so increase on NPLs. We are seeing that. We made some changes in origination in the first quarter because I think we are also trying to look what the sweet spot where we want to be. After a high growth, it's something unusual for the local system to grow as fast. We made those changes. So, we expect this to stabilize and by the end of the year, the NPLs should be around or a bit less than what we are currently having. We may see still a spike in NPLs in the next couple of months, but then a reduction or stabilization for the end of the year.

Speaker Change: No.

Speaker Change: We saw after the financial system in Argentina, <unk> in Greece.

Speaker Change: On Mpls, we are seeing that.

Speaker Change: We made some changes in origination in the first quarter because I think we are also trying to look what the sweet spot, where we want to be in after a high growth.

Speaker Change: It's something unusual.

Gonzalo Fernandez-Covaro: After a high growth, it's something unusual for the local system to grow as fast. So, we made those changes. So, we expect this to stabilize. And by the end of the year, the NPLs should be around or a bit less than what we are currently having. We may see still a spike in NPLs in the next couple of months, but then a reduction or stabilization for the end of the year. So, we knew that that was something was going to happen when you grow at this pace. Again, we were coming from low levels. We believe that now with the main changes we make, we will be able to stabilize that.

Speaker Change: The <unk> system to grow faster. We are now we made those changes so we expect this to stabilize and <unk>.

Speaker Change: By the end of the year, the npls to be around or a bit less than what we are currently having with macys deal a spike in npls.

Speaker Change: In the next couple of months.

Speaker Change: Then.

Speaker Change: A reduction or stabilization for the end of the year. So we knew that that was something was going to happen when you grow grow.

Gonzalo Fernandez-Covaro: So, we knew that that was something was going to happen when you grow at this pace. Again, we were coming from low levels. We believe that now with the main changes we make, we will be able to stabilize that.

Speaker Change: At this.

Speaker Change: Base.

Speaker Change: Again, we were coming.

Speaker Change: From low levels booted up now with a maintains did we make we will be able to stabilize that.

Speaker Change: And get to a normal let's say.

Speaker Change: Levels.

Speaker Change: Thank you. Thank you one follow up so just to confirm on <unk>.

Gonzalo Fernandez-Covaro: Thank you. Thank you, Gonzalo.

Gonzalo Fernandez-Covaro: Thank you.

Gonzalo Fernandez-Covaro: Thank you, Gonzalo.

Speaker Change: On the ROE range do decreasing a bit from 15 to 12 to 13 and then.

Unnamed Attendee: So just to confirm on their ROE range, you're decreasing a bit from 15 to 12 to 13, and then can you confirm if the long growth of 50% in real terms and deposits between 30 and 40% are reiterated or have any changes? No, the growth rates are we are we are keeping those we think that those are still what going Super clear, thank you. Remember that I just said 12, 13 in real terms, no?

Speaker Change: Can you confirm is the longer over 50% in real terms in deposits between 30, and 40% of our reiterated or have any changes.

Speaker Change: Now the growth rates that we are keeping those where we think that those are what's going to happen here.

Speaker Change: Super clear. Thank you, yes, remember that as you said 213 in real terms no. It's always in our arrow.

Speaker Change: <unk> has already accumulated inflation because in Argentina, we have inflation accounting.

Gonzalo Fernandez-Covaro: So our ROE has already excluded inflation because in Argentina we have inflation accounting. is already included in the panel, as you.

Gonzalo Fernandez-Covaro: So our ROE has already excluded inflation because in Argentina we have inflation accounting. is already included in the panel, as you just heard.

Speaker Change: That's already included in the P&L is a huge asset.

Speaker Change: Our next question comes from.

Operator: Next question. Thank you.

Speaker Change: <unk> with bank of America.

Speaker Change: Thank you hi, good morning, consult Pablo and <unk>, thanks for the opportunity to ask questions.

Unnamed Attendee: Hi, good morning, Gonzalo, Pablo, and Etienne.

Unnamed Attendee: Hi, good morning, Gonzalo, Pablo, and Etienne. Thanks for the opportunity to ask questions. My first one will be a follow-up in asset quality. So, we noticed a high NPL ratio, but at the same time, we also saw cost of risk normalized from last quarter, as it was abnormally high because of an impact on tarjeta. So, just wondering how should we think about the cost of risk evolving in the next quarters and for the full year?

Unnamed Attendee: Thanks for the opportunity to ask questions. My first one will be a follow-up in asset quality. So, we noticed a high NPL ratio, but at the same time, we also saw cost of risk normalized from last quarter, as it was abnormally high because of an impact on tarjeta.

Speaker Change: My first one will be a follow up in asset quality.

Speaker Change: So we notice.

Speaker Change: NPL ratio, but.

Speaker Change: But at the same time, we also saw costa risk normalized from last quarter as it was abnormally high because of an impact on target that.

Speaker Change: So just.

Speaker Change: Just wondering how should we think about the cost of risk evolving in the next quarters.

Unnamed Attendee: So, just wondering how should we think about the cost of risk evolving in the next quarters and for the full year? My second question is on expenses. We saw lower-than-expected expenses because you have started to use the expense-provision build for HSBC in four quarters, but at the same time, you were saying that you should expect some expenses related to IT and the integration costs related to Galicia MAS.

Speaker Change: For the full year.

Speaker Change: My second question is on expenses.

Unnamed Attendee: My second question is on expenses. We saw lower-than-expected expenses because you have started to use the expense-provision build for HSBC in four quarters, but at the same time, you were saying that you should expect some expenses related to IT and the integration costs related to Galicia MAS. So, I just wanted to think how should we expect OPEX growth for the year, and if there's, at some point, room to do some cost synergies.

Speaker Change: We saw lower than expected expenses, because you have started to use the expense provision build for HSBC in fourth quarter.

Speaker Change: But at the same time, you were saying that you should expect some expenses related to IP.

Speaker Change: And the integration.

Speaker Change: Costs related to the lithium mass so Bob.

Speaker Change: Wanted to think how should we expect opex growth for the year.

Unnamed Attendee: So, I just wanted to think how should we expect OPEX growth for the year, and if there's, at some point, room to do some cost synergies.

Speaker Change: And if there is at some point room to do some cost synergies.

Speaker Change: And my last question will be on deposits and we have seen one of your peers remunerating deposits at 32% to attract clients. So I just wanted to know if you are following a similar strategy with your credit card business.

Unnamed Attendee: And my last question will be on deposits. We have seen one of your peers remunerating deposits at 32% to attract clients. So I just wanted to know if you are following a similar strategy with your credit card business. Would it be the same strategy at the bank? So any color on this remuneration on deposits on each of the subsidiaries will be very helpful.

Speaker Change: Would it be the same strategy at the bank.

Speaker Change: So any color on this remuneration on deposits on each of the subsidiaries.

Speaker Change: It will be very helpful.

Joe: Thank you Joe terminated three questions first of risk cost of risk.

Unnamed Attendee: Thank you.

Gonzalo Fernandez-Covaro: Thank you. So to remember the three questions, cost of risk, cost of risk, I mean, cost of risk, cost of risk, as you see, So the group is stable, we have seen a big increase in the bank and a big reduction in Naranja. So, talking about the bank, Galicia Bank I mean. We'll see a spike in the first quarter, as it says. we may see something also to continue the second quarter but then start to go down and we expect a lower number in the in the fourth quarter around 5, 5.5 something like that 5.6 versus the 6.8 that we're having now.

Gonzalo Fernandez-Covaro: So to remember the three questions, cost of risk, cost of risk, I mean, cost of risk, cost of risk, as you see, So the group is stable, we have seen a big increase in the bank and a big reduction in Naranja. So, talking about the bank, Galicia Bank I mean. We'll see a spike in the first quarter, as it says. we may see something also to continue the second quarter but then start to go down and we expect a lower number in the in the fourth quarter around 5, 5.5 something like that 5.6 versus the 6.8 that we're having now.

Speaker Change: I mean cost of risk cost of risk as you see.

Speaker Change: For the group is stable, we have seen a bit increase in the bank and have it reduction in Atlanta.

Speaker Change: So.

Speaker Change: Talking about the bank.

Speaker Change: Lithium manganese.

Speaker Change: Yes.

Speaker Change: We'll see a spike in the first quarter as it says.

Speaker Change: We may see something.

Speaker Change: To continue the second wave, but then start to go down and we expect a lower number in the in the fourth quarter around 555, something like that five 6% versus the $6 eight now we have it now.

Speaker Change: So for the bank, we see a.

Gonzalo Fernandez-Covaro: So for the bank we see Naranja is stable and for the bank we'll see an improvement on the second half of the year. First half we'll still be at this level we may see for the second half. some improvement because of all the actions on irrigation that I mentioned.

Joe: <unk> has a stable and for the bank will see an improvement on the second half of the year first half will still be at this level, we may see for the second half.

Joe: Some improvement because of all of the actions on aviation that I mentioned.

Speaker Change: So again a lot of expenses I think about the second one about the I mean, what you see.

Gonzalo Fernandez-Covaro: Talking about expenses, I think was the second one about the I mean, what you see. You see a reduction in expenses quarter over quarter, not just because we are using the provision, but because last quarter we booked the provision. So last quarter you have a provision that this quarter you don't have. because the provision is paying for voluntary redundancies. So that's the main variation used. But so that's talking about, I think you were talking about the synergies on Galicia Mass or the former HSBC. That's going, that's, I mean, it's a. I think the good news is we are anticipating and having a fast approach on synergies because and we may be able to perform almost 90% of the synergy suspected this year.

Speaker Change: You will see a reduction in expenses quarter over quarter.

Speaker Change: Just because we are using the provision, but because last quarter, we booked a provision. So last quarter you had a provision that is here is that this quarter you don't hide.

Speaker Change: We got the provision is paying for.

Speaker Change: Voluntary redundancies.

Speaker Change: So thats the main the main variation Uzi.

Speaker Change: Acquired are required.

Speaker Change:

Speaker Change: But.

Speaker Change: So talking about I think you are talking about the synergies on the lithium.

Speaker Change: Or the former HSBC.

Speaker Change: That's growing.

Speaker Change: E.

Speaker Change: I think the good news is were anticipating having a fast.

Speaker Change: In our.

Speaker Change: Our approach on synergies.

Speaker Change: Because.

Speaker Change: And we may be able to perform almost 90% of the CNET is expected this year.

Speaker Change: The bonus is difficult to predict on which basically because at some point you have the savings but also.

Gonzalo Fernandez-Covaro: The point is, it's difficult now to predict on which phase, because at some point you have the saving, but also if that happens, we may have a bit of higher restricted expenses, as I mentioned in the prior question. the provision that we booked last quarter may not be enough. So if this trend continues, so if that happens we may have a one-off this year of more restructuring expenses but with the good news that we are getting a sustainable saving for the future. So for the year I would say it's a bit soon to say because it will be a mix of accelerating some synergies and so the good thing of the saving but also the one-off of the restructuring but we expect that I think that the summary is that at the end we may end with a bit higher expenses because of the integration system expenses and restructuring expenses but with a faster approach so we can start next year better than what we thought when we thought about this.

Speaker Change: If that happens we may have a beat.

Speaker Change: Higher restructuring expenses as I mentioned in prior question we.

Speaker Change: The provision that we booked last quarter. It may not be enough. So if this trend continues with that happening. We may have a one off this year of more restructuring expenses, but with the good news that we are getting some.

Speaker Change: Our saving for the future so for the year I would I would say.

Speaker Change: Okay.

Speaker Change: Soon to say because it will be a mix of accelerating some synergies.

Speaker Change: So the good thing of the savings, but also the one off of the of the restructuring, but we expect that Athena did the summary is that.

Speaker Change: At the end, we may and we are bit higher expenses because of the integration system expenses.

Speaker Change: Restructuring expenses, but without with a faster approach. So we can start next year better than what we thought when we when we thought about this plan.

Speaker Change: Anything with anyone remuneration of deposits and commercial deposits I mean as you know.

Gonzalo Fernandez-Covaro: And I think it was another one. Remuneration of deposits. I mean, as you know, NaranjaX is remunerating deposits. It's part of their business model. I mean, they take deposits on the digital wallet and they lend personal loans. In the bank it's different. As you know, our current deposit base, we have our mutual fund, which is called FEMA, you know, the money market deposits that is 24-7, so customers can use that as a remunerating account. We are not seeing any big change in the near future. Of course, we are always analyzing strategic alternatives and see what's best for our customers and for our funding base, but I wouldn't say we are thinking in any major change in the near future.

Speaker Change: <unk> is demonstrating the positive plan of their business.

Speaker Change: <unk> model I mean, they take deposits on the digital wallet in the land personal loans in the bank is different as you know our core deposit base.

Speaker Change: We have our mutual fund, which is called the FEMA money market deposits that is 24, seven so customers can use that.

Speaker Change: As a reminder, <unk> account.

Speaker Change: We have not seen any any big change in the in the near future of course, we are always analyzing strategic alternatives and see what's best for our customers for our funding.

Speaker Change: Base.

Speaker Change: I Wouldnt say, we are making any of our thinking in any major change in the near future.

Speaker Change: This of course, I think as I said, we're always analyzing.

Gonzalo Fernandez-Covaro: So this, of course, can change, as I said, because we're always analyzing the opportunity. But so far, we believe that for the bank, we are not thinking that we're going to apply that.

Speaker Change: Opportunity, but so far we believe that.

Speaker Change: For the bank.

Speaker Change: We are not thinking that we're going to apply that that option.

Speaker Change: Perfect. Thank you very much concern Hello, just a follow up on this last one.

Unnamed Attendee: Perfect.

Unnamed Attendee: Thank you very much, Gonzalo.

Unnamed Attendee: Just to follow up on this last one, can you share with us how much are you remunerating in Aranja X, how much is in the mutual funds of the bank, just to have an idea of how is the difference between them. And additionally, are you seeing competitors being aggressive and at some point potentially changing the strategy of the bank, or do you think it's still too soon to know? I mean, if you're talking about that, I mean, about remunerating accounts, so far, as you said, we just saw one bank doing it, so we haven't seen a real change in the market.

Speaker Change: Can you share with us how much are you Remo narrating in Iraq hierarchies, how much is in the mutual funds of the bank just to have an idea now of how is the difference between them and Additionally are you seeing.

Speaker Change: Competitors being aggressive and at some point.

Speaker Change: <unk>.

Speaker Change: Potentially changing changing the strategy of Europe, or the bank or are you, saying, it's still too soon to know.

Speaker Change: I mean, you are talking about that I mean about emanating accounts so far.

Speaker Change: As you said, we should just saw one bank doing it. So we don't we haven't seen a real change in the market.

Speaker Change: Look at market share I mean.

Speaker Change: The banks.

Gonzalo Fernandez-Covaro: If you look at market share, I mean, banks with higher market share haven't changed their policy so far. We are not seeing any change in general. Of course, there are some players that may do, as you mentioned. So we are not seeing other changes, but that, of course, that may happen.

Speaker Change: With higher market share haven't changed our policy. So far we are not seeing any change in.

Speaker Change: In general of course, there are some players that may do as you mentioned.

Speaker Change: So we're not seeing that the changes that that of course they may happen.

Speaker Change: And in terms of rates.

Speaker Change: Yeah.

Gonzalo Fernandez-Covaro: In terms of rates... Yes, I would like to add some comment there. Today the funding breakdown in pesos for us is 70% with cost, 30% with no cost and it's very atomized and as inflation is going down this threaten is becoming smaller, I would say. It was very important to remunerate transactional accounts or deposits when monthly inflation was much higher than today. In the case of our money market fund, the last yield I saw was around 23.8, 24%. That is what is yielding and you can withdraw it any time, any day, any hour and in the case of Naranca it's in the range of 30%.

Speaker Change: Yes.

Speaker Change: I would like to add some comment there.

Speaker Change: The today.

Speaker Change: The funding breakdown in pesos for us is 70% with cost, 30% with no cost and it's very atomized and as inflation is going down.

Speaker Change: Yes.

Speaker Change: Threaten is becoming smaller I would say it was very important to remunerate transactional.

Speaker Change: Accounts for deposits.

Speaker Change: Monthly replacement was much higher than today in the case of our money money market fund the last year I saw was around 23 point, a 24% that is.

Speaker Change: What is yielding then you can withdraw it.

Speaker Change: Anytime any day any hour.

Speaker Change: And in the case of <unk> is in the range of 30% it has some <unk>.

Speaker Change: Different buckets, you have limits in terms of amount, but on average would be around that number.

Gonzalo Fernandez-Covaro: It has some different buckets and you have limits in terms of amount but on average it would be around that number. Yes, if you leave more money like a time deposit they pay you more but I think it's what Pablo just said. We see the attractiveness of remuneration with inflation going down. It's always valid, but it loses attractiveness for the customer base because of the lower interest rates and the less inflation.

Speaker Change: More of the demand the lack of time deposit they pay you more.

Speaker Change: But I think it's important what <unk> said I mean, we have we see that the attractiveness of the remuneration.

Speaker Change: With inflation going down.

Speaker Change: It's always valued but is it moves.

Speaker Change: Attractiveness for our customer base.

Speaker Change: Because of the lower interest rates on the less inflation and Joan Kissel.

Matt: Hi, Matt.

Matt: No. Thank you very much Hello, Pablo Mhm.

Unnamed Attendee: Thank you very much, Gonzalo and Pablo.

Speaker Change: Our next question comes from Carlos Gomez Lopez with HSBC.

Unnamed Attendee: Our next question comes from Carlos Gomez Lopez. Hello.

Unnamed Attendee: Our next question comes from Carlos Gomez Lopez. Hello. Thank you very much for taking my question.

Speaker Change: Hello, Thank you very much for taking my question.

Speaker Change: I don't think you have mentioned the economic assumptions that you're capable of protecting what you expect in terms of growth.

Unnamed Attendee: Thank you very much for taking my question. I don't think you have mentioned the economic assumptions that you have. We would like to know what you expect in terms of growth, inflation and exchange rate and interest rates by the end of the year and next year. Second, in terms of asset quality, you mentioned that on the corporate portfolio everything has been fine, but we are seeing news of a number of corporates which are starting to not pay at least their debentures, their capital market decisions. Do you think that you will see more such problems as interest rates go down and companies have to change their business models?

Unnamed Attendee: I don't think you have mentioned the economic assumptions that you have. We would like to know what you expect in terms of growth, inflation and exchange rate and interest rates by the end of the year and next year.

Speaker Change: Inflation and exchange rate.

Speaker Change: Interest rates by the end of the year and next year.

Speaker Change: Second in terms of asset quality, you mentioned that on the corporate portfolio. We think has been fine, but we have seen news of a number of corporates, which are starting to not pay at least <unk> debentures that capital markets issuance.

Gonzalo Fernandez-Covaro: Second, in terms of asset quality, you mentioned that on the corporate portfolio everything has been fine, but we are seeing news of a number of corporates which are starting to not pay at least their debentures, their capital market decisions. Do you think that you will see more such problems as interest rates go down and companies have to change their business models? Are you concerned about your cost of risk in the corporate segment? Thank you.

Speaker Change: Do you think that you will see more such problems as interest rates go down and companies have to change their business models are you concerned about Europe.

Speaker Change: Cost of risk in the corporate segment. Thank you.

Gonzalo Fernandez-Covaro: Are you concerned about your cost of risk in the corporate segment?

Speaker Change: Yeah.

Gonzalo Fernandez-Covaro: Thank you. Talking about the second question, first something, and then I'll leave Pablo with the other one. On the wholesale, yeah, I mean, for example, you are talking, I'm sure, about news of the last days about a company that is defaulting their local, their issuance, or the commercial papers, etc. For example, in that exposure, we have a very, very low, less than $6 million unsecured, and then a couple of million secured. So we have a very low exposure on that one. So, I mean, with this change of Argentina, they made this change of business, of country model, I would say, maybe sectors winners and sectors that will lose.

Speaker Change: The second question first starting in the early part of it.

Gonzalo Fernandez-Covaro: Talking about the second question, first something, and then I'll leave Pablo with the other one. On the wholesale, yeah, I mean, for example, you are talking, I'm sure, about news of the last days about a company that is defaulting their local, their issuance, or the commercial papers, etc. For example, in that exposure, we have a very, very low, less than $6 million unsecured, and then a couple of million secured. So we have a very low exposure on that one. So, I mean, with this change of Argentina, they made this change of business, of country model, I would say, maybe sectors winners and sectors that will lose.

Speaker Change: In the on the wholesale Aes <unk>. For example, you are talking about a neutral the last days of the company that is evolving.

Speaker Change: The local their issuance or the commercial papers et cetera, and that is something that exposure with a very very low less than $6 million unsecured and then a couple of millions a year. So we have a low exposure on that one.

Speaker Change: So I mean, we with this.

Speaker Change: Change of Argentina, they made.

Speaker Change: The substantial piece of the country model I would say maybe sectors winners and six of that we lose.

Speaker Change: We really saw further Delaware, our portfolio is well balanced and really of course that if things.

Gonzalo Fernandez-Covaro: We read so far that our portfolio is well balanced and really, of course, that if things doesn't improve as expected in Argentina. Things can go south. But so far, we don't, we are not seeing. concentration in an area. We are an industry that is concerning us, that can affect materially our performance. We can have things here and there, but we are not seeing so far, as I said, a concentration that is concerning us for the reasons you just mentioned.

Speaker Change: And doesn't improve as expecting Athena things can go south but.

Speaker Change: So far we don't we are not seeing that.

Speaker Change: Our concentration in an area.

Speaker Change: We're in an industry that is concerning us.

Speaker Change: Is that kind of affect material year over our pro forma we can have things things here or there, but we are not seeing so far as I said our concentration that can come that is concerning us the original you've just mentioned.

Speaker Change: Yes no.

Carlos: Carlos now regarding the macroeconomic assumptions.

Pablo Firvida: Yes, now, hi Carlos, now regarding the macroeconomic assumptions, these are from our chief economist. There is also a good source that is a central bank in which like 50 economists have their estimates and it's a kind of average, but looking at our chief economist in terms of GDP he's forecasting 5.4% growth this year and 4.5% next year. Inflation for this year, 26%. That is the December-December variation. And for next year, 14%. When we look at The effects. It's a moving target, but the last number he gave us was 1,230 at the end of this year and close to 1,400 next year.

Speaker Change: From our Chief Economist. There is also a good source of that is the central bank in which like 50 economies.

Carlos: Have there.

Carlos: <unk> and its a kind of average, but looking at our chief economist in terms of GDP is forecasting five 4% growth this year and four five next year.

Carlos: Inflation for this year, 26% that is December December variation.

Carlos: For next year, 14%.

Carlos: When we look at.

Carlos:

Pablo Firvida: When we look at The effects. It's a moving target, but the last number he gave us was 1,230 at the end of this year and close to 1,400 next year.

Carlos: The FX.

Carlos: It's a moving target, but the last number he gave us was.

Carlos: 1000.

Carlos: 230.

Carlos: At the end of this year and close to 1400 next year.

Carlos: These are the main assumptions in terms of.

Pablo Firvida: These are the main assumptions. In terms of Interest Rates all or most of the interest rates are going down. a little bit due to this expected reduction in inflation. So, I mean, we're at 32%. I think the policy rate is right now. So, 29. Okay. So, by the end of the year, lower than that. And next year he's forecasting something around 24. Again, it's a moving target, but that was the last number he provided.

Carlos: The interest rates.

Carlos:

Carlos: All or most of the interest rates are going down.

Carlos: A little bit due to this expected reduction in inflation.

Carlos: No.

Carlos: No I mean, we are a 32% in the policy rate is right now so.

Carlos: Okay.

Carlos: So by the end of the year lower than that.

Carlos: Next year is for getting something around 24.

Carlos: Again, it's a moving target, but that was the last number he provided it's important to mention carload level, we have seen because of the high the amount of lending.

Pablo Firvida: It's important to mention, Carlos, that what we are seeing, because of the high demand of lending and long-growing assets and deposits, we are not seeing, really, even though the central bank can reduce the monetary policy rate, we are not seeing that happen, or going together with the lending rate in the market. Because, again, as I said, I mean, demand for loans is high, and so we are not, at that point, and for that reason, we are not seeing that even though rates will continue going down, we are not seeing that lending rate can, mainly in the individuals, but also in SMEs, that that will continue to get that reduction.

Pablo Firvida: It's important to mention, Carlos, that what we are seeing, because of the high demand of lending and long-growing assets and deposits, we are not seeing, really, even though the central bank can reduce the monetary policy rate, we are not seeing that happen, or going together with the lending rate in the market. Because again, as I said, I mean, demand for loans is high and so we are not, at that point and for that reason, we are not seeing that even though rates will continue going down, we are not seeing that lending rate can, mainly in the individuals, but also in SMEs, that that will continue to get that reduction.

Carlos: Loans growing faster than deposits, we are not seeing really even though the central London, reducing monetary policy rate, we have not seen that happen or so that go into whether we the lending rates in the market.

Carlos: Because again as I said I mean.

Carlos: Demand for loans is high.

Carlos: And so we are not at.

Carlos: At that point and for that reason, we are not seeing that even though rate to continue going down we are not seeing the blending reckon mainly in the individuals but also in Smes.

Carlos: We'll continue to add that reduction of cost in megawatt got something done but not at the same proportion because again in the fact in the fourth quarter. We saw margin can be good margin.

Pablo Firvida: Of course, it may go something down, but not at the same proportion, because, again, in fact, in the first quarter, we saw margin, if you exclude margin government bonds, you know, our margin reduction was mainly affected by the government trading portfolio, no? But if you exclude that and do margin in pesos, excluding the government bonds performance, it increased a couple of hundred basis points from prior quarter. Because of the fast growth in lending, the high demand, you know, the lending rates are not going down in the market. Because of Argentina's situation, not necessarily a reduction in monetary policy rate will imply a reduction in the lending or in the whole margin of the bank.

Pablo Firvida: Of course, it may go something down, but not at the same proportion, because again, in the fact in the first quarter, we saw margin, if you exclude margin government bonds, you know, our margin reduction was mainly affected by the government trading portfolio, you know, but if you exclude that and do margin in pesos, excluding the government bonds performance, it increased a couple of hundred basis points from prior quarter. Because of the fast growth in lending, the high demand, you know, the lending rates are not going down in the market. Because of Argentina's situation, not necessarily a reduction in monetary policy rate will imply a reduction in the lending or in the whole margin of the bank.

Carlos: The government bonds.

Carlos: Our margin reduction was mainly affected by the government the trading portfolio.

Carlos: If you exclude that on an undue margin in vessels, excluding the government wants performance. It increase a couple of hundred basis points from prior quarter because of the fast growth in lending the high demand.

Carlos: The lending rates aren't going down in the market to complement that.

Carlos: Because of the Argentina situation not necessarily a reduction in monetary policy rate will imply a reduction in the lending marine the whole marketing of the banks.

Carlos: Very clear thank you.

Carlos: Youre welcome.

Unnamed Attendee: Very clear. Thank you.

Operator: Very clear. Thank you. You're welcome.

Carlos: Our next question comes from Pedro Leduc.

Operator: You're welcome.

Carlos: Got.

Carlos: <unk> BBA.

Unnamed Attendee: Pedro Leduc, Luis Itaubi Thank you very much for the call and taking the question. Pleasure to be here.

Unnamed Attendee: Pedro Leduc, Luis Itaubi Thank you very much for the call and taking the question. Pleasure to be here. First, on Naranja X specifically, very nice ROE close to 30%. If you can talk a little bit more about the business drivers here, it seems like on the NIMS side and provisions, also in the next few quarters, and if this should be still growing higher than the rest of the business. And then last, second question and quick, on the market share that you report there under Galicia MAS, where it fell from high 2% to low 2%. This quarter, I understand there's an adjustment process taking place.

Carlos: Thank you very much for the call and taking the question pleasure to be here.

Carlos: First on the <unk>, specifically very nice Aro EBITDA close to 30%.

Unnamed Attendee: First, on Naranja X specifically, very nice ROE close to 30%. If you can talk a little bit more about the business drivers here, it seems like on the NIMS side and provisions, also in the next few quarters, and if this should be still growing higher than the rest of the business. And then last, second question and quick, on the market share that you report there under Galicia MAS, where it fell from high 2% to low 2%. This quarter, I understand there's an adjustment process taking place. So you can share a little more if this is already the market share that we should see, if there's already more going to the other parts of the group.

Carlos: I can talk a little bit more about above the business drivers here. It seems like on the NIM side and provisions also in the next few quarters and if this should be still growing higher than than the rest of the business.

Carlos: And then last second question quick on the market share that we reported and regardless of mass my cellphone from high to low 2%. This quarter I'm centers, there's an adjustment process taking place. So he can share a lot of or if this is already on the market share. We should see if there is already more volume to the <unk>.

Unnamed Attendee: So you can share a little more if this is already the market share that we should see, if there's already more going to the other parts of the group. So these will be the two questions. Thank you.

Carlos: Other parts of the group to disaggregate the two questions. Thank you.

Gonzalo Fernandez-Covaro: So these will be the two questions. Thank you.

Carlos: Well I'll start with the second one which is the lithium or market share I mean, what is happening. There is we are anticipating customer migrations.

Gonzalo Fernandez-Covaro: I'll start with the second one, which is the Galicia Market Share. I mean, what is happening there is we are anticipating customer migrations in wholesale, for example, meaning, you know, complex customers. We are already asking them to open accounts in Galicia and start to transfer, you know, deposits and their transactionality to Galicia. So it's easier for the integration, not need to migrate complex customers that, for example, have straight finance, structured products, I mean, to get a wholesale, not retail. So in that case, you know, even though you see a market share reduction, part of that is done by the movement or the transition to Galicia in advance to the migration.

Carlos: In wholesale for example.

Carlos: Meaning.

Carlos: Complex customers are already asking them to open accounts in the Lithia and start to transfer you know deposits under the transaction reality.

Carlos: <unk>, it's easier for the integration of non non need to migrate complex customer for example, healthcare REIT Finance director products, Let me join us wholesale not retail.

Carlos: So in that case.

Carlos: We even though you see market share reduction.

Carlos: A part of that is done by by the movement towards the transition to Alicia.

Carlos: In advance to the.

Carlos: To the integration.

Carlos: In clear Lake.

Carlos: Adapt for the Medicare part D. Do you want to answer the origin, Yes, Erika Hi, Pedro.

Gonzalo Fernandez-Covaro: Clear. Thank you.

Gonzalo Fernandez-Covaro: So that's for the market share part, if you want to answer the other one. Yes.

Pablo Firvida: So that's for the market share part, if you want to answer the other one. Yes.

Gonzalo Fernandez-Covaro: On Naranja X, hi, Pedro. You can see an increase in the margin, the financial margin, and an improvement in the cost of risk. Basically, these are the two main drivers, and they have been growing both in number of clients and in loans origination. typically For Naranja, when interest rates go down, their cost of funding improves more than the interest rate they can charge for personal loans and credit card financing, so typically there is a margin expansion. in their case. It's different from the bank. And the cost of risk improved basically because in the fourth quarter, they had changed the model for expected losses.

Pablo Firvida: On Naranja X, hi, Pedro. You can see an increase in the margin, the financial margin, and an improvement in the cost of risk. Basically, these are the two main drivers, and they have been growing both in number of clients and in loans origination. typically For Naranja, when interest rates go down, their cost of funding improves more than the interest rate they can charge for personal loans and credit card financing, so typically there is a margin expansion. in their case. It's different from the bank. And the cost of risk improved basically because in the fourth quarter, they had changed the model for expected losses.

Carlos: You can see an increase in the margin and the financial margin and an improvement in the cost of risk basically these are the two main drivers and they have been growing both in number of clients on in loans origination.

Carlos: Got it.

Carlos: Before in Alaska, when interest rates go down their cost of funding improves.

Carlos: More than.

Carlos: The interest rate they can charge for personal loans and credit card financing noted. So typically there is a margin expansion.

Carlos: In their case is different from the bank.

Carlos: And the cost of risk improved Macy's basically because in the fourth quarter. They have changed the model for expected losses.

Carlos: Basically they have a model that took into account or use variables that were more related with.

Gonzalo Fernandez-Covaro: Basically, they had a model that took into account or used variables that were more related with credit card financing. And as they were growing significantly with personal loans, they had to adapt and change that model. That's why the cost of risk went down from levels of, I don't remember exactly, from 19 to 15 or so. So the profitability of Naranja should be good for the full year. What should happen is that the weight of the bank should be recovering. It's very unusual that Naranja has a higher net income than Banco Galicia. Very clear and complete answers.

Pablo Firvida: Basically, they had a model that took into account or used variables that were more related with credit card financing. And as they were growing significantly with personal loans, they had to adapt and change that model. That's why the cost of risk went down from levels of, I don't remember exactly, from 19 to 15 or so. So the profitability of Naranja should be good for the full year. What should happen is that the weight of the bank should be recovering. It's very unusual that Naranja has a higher net income than Banco Galicia. Very clear and complete answers.

Carlos: Credit card financing and as they were growing significantly with personal loans.

Carlos: Had to adapt and change that model. That's why the cost of risk went down from levels of I don't remember exactly from 19% to 15.

Carlos: So.

Carlos: So the profitability of noncash would be good for the full year, what should happen is that the weight of the bank should be recovering, it's very unusual that and that anchor has.

Carlos: Higher net income that one correlation.

Carlos: Very clear and complete answers. Thank you.

Carlos: Your computer.

Gonzalo Fernandez-Covaro: Thank you both. You're welcome, Pedro.

Operator: Thank you both. You're welcome, Pedro. Please hold while we poll for questions.

Carlos: Please hold while we poll for questions.

Operator: Please hold while we poll for questions.

Carlos: Our next question from.

Speaker Change: Let's start with <unk> Securities.

Carlos: With loan growth consistently outpacing deposit growth.

Unnamed Attendee: Loan Growth Outpatient Depository Moderation in loan growth seems inevitable. How does management envision real loan growth? Well, of course, the first comment I can say is that when you look at the loan to deposit ratio, typically it's very different between pesos and dollars. Big numbers, in pesos 90%, in dollars 50%. We are seeing different growth rates from deposits and loans, but of course the stocks are different, so we must look at the absolute amount. In certain months, there could be more shortage, let's say, of funding, and that is why the bank has been issuing different bonds recently in pesos, in dollars, typically in dollars.

Carlos: Moderation in loan growth seems inevitable.

Carlos: How does management envision real loan growth settling post transaction period say by early <unk> 'twenty six.

Carlos: Well.

Carlos: Of course, if hydro.

Carlos: In the.

Carlos: The first comment I can say is that the when you look at the loan to deposit ratio typically is very different between pesos and dollars.

Carlos: Big numbers in pesos, 90% in dollars 50%.

Carlos: We are seeing.

Carlos: Different growth rates from deposits and loans, but of course, the the stocks are different and also we must look at the absolute amount in.

Carlos: In certain months.

Carlos: There could be more shortage, let's say of funding and that is.

Carlos: Why the bank has been issuing different bonds.

Carlos: Recently.

Carlos: In pesos and dollars typically in dollars, we sold the dollars and we lend pesos and recover the dollars with a forward. So we are looking at different.

Gonzalo Fernandez-Covaro: We sold the and we lent pesos and we covered the dollars with the forward, so we are looking at different ways to have that demand satisfied.

Gonzalo Fernandez-Covaro: We sold the and we lent pesos and we covered the dollars with the forward, so we are looking at different ways to have that demand satisfied. The idea is to keep on growing, and that's why we are keeping the guidance of 50% loan growth this year. Yeah, I mean, just to add to that, I mean, of course, we are going after institutional deposits like commercial paper, but also, you know, trying to focusing a lot in deposits, which is the core funding and the more safe funding. Well, we are seeing, of course, that loans are growing faster than deposits, and that at some point will change because that, not for Galicia, but for the local financial system, will be a constraint in the lending growth.

Carlos: Ways to have that demand satisfied the idea is to keep on growing and that's why we are keeping the guidance of 50% loan growth this year.

Gonzalo Fernandez-Covaro: The idea is to keep on growing, and that's why we are keeping the guidance of 50% loan growth this year. Yeah, I mean, just to add to that, I mean, of course, we are going after institutional deposits like commercial paper, but also, you know, trying to focusing a lot in deposits, which is the core funding and the more safe funding. Well, we are seeing, of course, that loans are growing faster than deposits, and that at some point will change because that, not for Galicia, but for the local financial system, will be a constraint in the lending growth.

Carlos: Yes, I mean, just to add to that.

Carlos: Of course, we are doing.

Carlos: The deposit lag a bit they will also you know trying to.

Carlos: We're seeing a lot in deposit which is the core funding.

Carlos: More safe funding.

Carlos: While we are seeing of course.

Carlos: The loans are growing faster than deposits and that at some point and it will change the boat that now for the lease of our qualifying yoga franchise, you think will be a constraint in the lending growth.

Carlos: We believe that.

Carlos: Even though there is a pile of deposit doesn't go up we believe that we are in a very well positioned to capture more market share in deposits with our size.

Gonzalo Fernandez-Covaro: But we believe that even though the deposit doesn't grow, we believe that we are in a very good position to capture more market share in deposits with our size and our reach to different segments and customers. We believe that we can do a good job there, and if the pie of low deposit doesn't grow, we can get more market share and be able to continue growing our lending. So that's a focus of all the business lines to get more deposits as the raw material to continue growing the lending. And again, we believe that we are in a good position to achieve that and be able to maintain the lending growth as projected.

Carlos: Our our reach to two different segments of customers.

Carlos: We believe that we can do a good job there.

Carlos: I need to buy off low deposit doesn't grow we can gain more market share and be able to continue growing our lending. So that's a focus of the all the business lines to get more deposits.

Carlos: <unk> as a raw material to continue growing lending and again, we havent really we believe that we are in a good position to achieve that and be able to maintain the lending world class as projected.

Carlos: Yeah.

Speaker Change: Next question from Matt.

Gonzalo Fernandez-Covaro: Next question. How do you see net interest margins evolving? Specific repricing strategies or asset plan to help protect margins going © The Bollinger Band, LLC. Was this a seasonal effect or driven by- Do you expect the recent dollar-related measures announced by the government to enhance your I mean, deposits, as I said, deposits are growing, that's something punctual, we are not seeing deposits reduction in general. And if you see in the bank, I think that's group what you are talking about, but I mean, we, we really. What we are seeing is deposits growing lower than loans, but not that we are losing market share in deposits, nothing like that, so we are in the bank, no?

Speaker Change: Scott.

Speaker Change: With inflation decelerating, how do you see net interest margins evolving are there specific repricing strategies or asset mix shift Glen to help protect margins going forward.

Gonzalo Fernandez-Covaro: How do you see net interest margins evolving? Specific repricing strategies or asset plan to help protect margins going Was this a seasonal effect or driven by- Do you expect the recent dollar-related measures announced by the government to enhance your I mean, deposits, as I said, deposits are growing, that's something punctual, we are not seeing deposits reduction in general. And if you see in the bank, I think that's group what you are talking about, but I mean, we, we really. What we are seeing is deposits growing lower than loans, but not that we are losing market share in deposits, nothing like that, so we are in the bank, no?

Carlos: Deposits declined 5% quarter and acquired and in real terms.

Carlos: Was this a seasonal effect or driven by a competitive pressure.

Carlos: What strategies are in place to recover deposit momentum and do you expect the recent dollar related measures announced by the government to enhance your dollar business and support deposit growth.

Carlos: I mean.

Carlos: Deposits as I said deposits.

Carlos: Growing that sounds in punctuality, we have not seen deposits right actually in general.

Carlos: And you can see in the bank.

Carlos: Yeah.

Carlos: I think that group, what you are talking about but I mean, we really.

Carlos: While we continue to see deposits growing lower than that alone, but not that we are losing market share in deposits nothing laid out total who we are in the bank now we have not seen that in our company and that that could be.

Gonzalo Fernandez-Covaro: We are not seeing that happening, that that could be something, again, temporal.

Gonzalo Fernandez-Covaro: We are not seeing that happening, that that could be something, again, temporal. But so we are continuing to focus, as I said before, on our tools and weapons in growing deposits because we want to continue growing lending. Talking about margins, I mean, as I said, what you see here in margin reduction, yes, is an important reduction in government bonds, quarter over quarter. If we go, that it was an important income for banks, of course, but that... March, April, we already start to see an increase or a recuperation on our trading portfolio, and we are a fair more or less of what we lose in the first quarter.

Carlos: Something again.

Carlos: Tampa, but in so we are continuing to focus as I said before or our doors and windows.

Gonzalo Fernandez-Covaro: But so we are continuing to focus, as I said before, on our tools and weapons in growing deposits because we want to continue growing lending. Talking about margins, I mean, as I said, what you see here in margin reduction, yes, is an important reduction in government bonds, quarter over quarter. If we go, that it was an important income for banks, of course, but that... March, April, we already start to see an increase or a recuperation on our trading portfolio, and we are a fair more or less of what we lose in the first quarter. It's already recovered between April and May.

Carlos: And growing deposit because we want to continue growing lending.

Carlos: Talking about margins I mean, we are as.

Carlos: As I said, what you see here and market reaction, yes is an important reduction in lowering government bonds quarter.

Carlos: Quarter over quarter.

Carlos: If we go ex that it wasn't important income for banks of course.

Carlos: Got that.

Carlos: March April we already start to see an increase or a recuperation when our trading portfolio.

Carlos: As there are more or less what we lose in the fourth quarter, it's already recover between between April.

Gonzalo Fernandez-Covaro: It's already recovered between April and May. But if we excluded government bonds investments, I think as I said before, we are seeing our margins in pesos, for example, being flat quarter over quarter. the government lending in pesos. We have seen an increase of 200 basis points between the fourth quarter and third quarter. So we are seeing the high demand in lending, so really The lending rate has not gone down. In fact, in some products, lending rate has gone up in the last month. And it may continue happening if the lending demand continues at this level.

Carlos: On may eight.

Carlos: But if we exclude the golar and bonds investments.

Gonzalo Fernandez-Covaro: But if we excluded government bonds investments, I think as I said before, we are seeing our margins in pesos, for example, being flat quarter over quarter. to exclude government lending in pesos. We are seeing an increase of 200 basis points between fourth quarter and fourth quarter. So we are seeing high demanding lending. So really. The lending rate has not gone down. In fact, in some products, lending rate has gone up in the last month. And it may continue happening if the lending demand continues at this level. Margin, we may see some margin reduction in the government securities side.

Carlos: I think as I said before we have seen our margins in vessels for example, being flat quarter over quarter.

Carlos: And we did.

Carlos: Exclude.

Carlos: The government lending in peso, we are seeing an increase of 200 basis points between fourth quarter and third quarter. So we have seen hide the money lending so really.

Carlos: The lending rate has not gone down in fact in some products lending rate has gone up in the last months and it may continue happening.

Carlos: You know demand in lending demand continues at this level so.

Carlos: Marching we may see some margin reduction in the government securities side.

Gonzalo Fernandez-Covaro: Margin, we may see some margin reduction in the government securities side. That depends, of course, also the volatility of Argentina and the sea of how each of the bonds are trading. But on the lending side, we are seeing a margin stabilization and in some products, some slight increase going forward.

Carlos: That that the pace of core portfolio volatility.

Gonzalo Fernandez-Covaro: That depends, of course, also the volatility of Argentina and the sea of how each of the bonds are trading.

Carlos: Argentina, Andy and the CFO.

Carlos: Each of the bonds are trading but on the lending side.

Carlos: We are seeing a margin stabilization in some products some slight increase going forward.

Gonzalo Fernandez-Covaro: But on the lending side, we are seeing a margin stabilization and in some products, some slight increase going forward.

Speaker Change: Our next question from claiming.

Pablo Firvida: Our next question from Clemente. How do you see ROE evolving this and the following? I mean, for Arroyo, as I said this year, I think we talked about 2012-2013, the guidance, we see that to start to go up again for the future years, I mean, 2026, 2027.

Gonzalo Fernandez-Covaro: Our next question from Clemente. How do you see ROE evolving this and the following? I mean, for Arroyo, as I said this year, I think we talked about 2012-2013, the guidance, we see that to start to go up again for the future years, I mean, 2026, 2027.

Speaker Change: Data with <unk> asset management.

Carlos: How do you see <unk>.

Carlos: Evolving deaths and the following years.

Carlos: You were well capitalized so maybe you are seeing more space there.

Carlos: I mean for our ROI as I said this year I think we talked about 12 or 13 the guidance we.

Carlos: We see that.

Carlos: To start to go up again for the future years, I mean, 'twenty six 'twenty seven.

Carlos: Our our our intention and our target is to continue maybe towards a 20% ROIC stable, 20% ROA, maybe 17 next year on <unk>.

Gonzalo Fernandez-Covaro: Our intention and our target is to continue maybe towards a 20% ROE, stable 20% ROE, maybe 2017 next year and 2020 the following one. That's a trend we want, but we believe that considering our size, we should be trading or operating at a sustainable 20 ROE. That should be, of course, something that will go in stages after we finish the integration this year and start capturing all the value from the HSBC acquisition and finish with all the synergies. That would be the evolution of the ROE that we at least are targeting for the future.

Gonzalo Fernandez-Covaro: Our intention and our target is to continue maybe towards a 20% ROE, stable 20% ROE, maybe 2017 next year and 2020 the following one. That's a trend we want, but we believe that our, considering our size, we should be trading or operating at a sustainable 20% ROE. That should be, of course, something that will go in stages after we finish the integration this year and start capturing all the value from the HSBC acquisition and finish with all the synergies.

Speaker Change: Following one that's a training we won but we believe that our considering our size.

Carlos: It should be trading of operating at a sustainable joining our ROI.

Carlos: That should be of course, something that will go in stages. After we finish the integration this year and start capturing all the.

Carlos: Value from the HSBC acquisition.

Carlos: And families without the synergies that would be my money.

Gonzalo Fernandez-Covaro: That would be the evolution of the ROE that we at least are targeting for the future. Thank you. Over.

Carlos: The evolution of the ROI that we at least have targeting for the future.

Carlos: Thank you.

Carlos: And answer section.

Operator: Thank you. The question Over.

Pablo: We would like to hand, the floor back to Mr. Pablo <unk> Vida for the company's final remarks.

Operator: We would like to hand the floor back.

Operator: We would like to hand the floor back. OK, thank you all for attending this call. If you have any further questions, please do not hesitate to contact. Good morning. Bye bye. Conference is now Thank you for your participation and wish you a

Speaker Change: Okay. Thank you all for attending this call.

Operator: OK, thank you all for attending this call. If you have any further questions, please do not hesitate to contact.

Carlos: If you have any further questions. Please do not hesitate to contact us.

Carlos: Good morning.

Carlos: Bye bye.

Operator: Good morning. Bye bye.

Speaker Change: Grupo Financiero Galicia Conference is now closed we thank you for your participation and wish you a nice day.

Operator: Conference is now Thank you for your participation and wish you a

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