Grupo Financiero Galicia SA (MEX:GGAL N)

Q2 2026 Grupo Financiero Galicia S.A. Earnings Call Transcript

Aug 26, 2026 / 03:00 PM GMT

Release Date Price: MXN708

Transcript

Key Points

Positve

Net income for Q2 2026 reached PHP258 billion, up 12% year-over-year, with a return on average assets of 2.1% and return on average shareholder equity of 11.3%.
Banco Galicia's net income improved 211% sequentially and 21% year-over-year, supported by lower funding costs, stronger performance from government securities and derivatives, and modest net interest margin expansion.
Loan loss provisions declined 8% quarter-over-quarter, reflecting improved delinquency indicators and early signs of stabilization in asset quality.
The bank gained market share in both loans and deposits, with estimated market share of loans to private sector up 69 basis points to 15.1% and deposits up 42 basis points to 14.3%.
The bank maintained strong liquidity and solvency metrics, with a total regulatory capital ratio of 26% and Tier 1 ratio of 25.9%, both increasing 48 basis points from the prior quarter.
Cost efficiency improved, with the bank's efficiency ratio at 38.8% in Q2 2026, and management expects to end the year with costs 11% lower than the prior year due to integration synergies from the HSBC acquisition.
Management expects further reduction in cost of risk to 8.3% for the full year 2026, down from 9.3% currently, and NPL ratio to decline to 6.3% by year-end.
The bank is well-positioned to benefit from potential government initiatives to support mortgage lending, which could drive future loan growth.

Negative

The non-performing loan (NPL) ratio deteriorated to 8.3% in Q2 2026, up 60 basis points from 7.7% in the prior quarter, indicating ongoing asset quality challenges.
Loan growth remained slow, particularly in peso-denominated loans, due to low demand in the commercial credit segment and strict origination policies on the consumer side.
Net interest income decreased 3% quarter-over-quarter, driven by lower interest income from loans and other financing due to lower volumes and declining interest rates.
The bank's net interest margin is expected to face downward pressure as inflation continues to decelerate, with management projecting margins to decline to 16% for the full year.
The cost of risk remains elevated at 9.3% for the bank, though expected to decline, and the stabilization of NPLs is taking longer than initially anticipated.
The bank's ROE for the first half of 2026 was around 7%, below the full-year target of 10%, and management acknowledges that achieving this goal depends on a pickup in lending volumes.
The bank faces ongoing pressure from high Argentine taxes, such as turnover tax and VAT on lending, which could weigh on profitability as margins compress.
Management expects the peso loan portfolio to see only very small real growth, with most loan growth coming from dollar-denominated commercial loans, which carry lower margins.

Refinitiv StreetEvents Event Transcript
E D I T E D V E R S I O N

GGALm.BA - Grupo Financiero Galicia S.A.
Q2 2026 Grupo Financiero Galicia S.A. Earnings Call
Aug 26, 2026 / 03:00PM GMT

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Presentation
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Unidentified_1 [1]
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Good morning, ladies and gentlemen. Welcome to Grupo Financiero Galicia's second quarter 2026 earnings call.

This conference is being recorded 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 in the conference during the presentation, and then we'll start the question-and-answer session when further instructions will be provided.

Some of the statements made during this conference call will be forward-looking statements within the meaning of the safe harbor provisions of the US federal securities laws and are subject to risk and uncertainty that could cause actual results to differ materially from

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