Banco Galicia. Investor Presentation. May 2017

Transcription

1 Banco Galicia Investor Presentation May 217

2 Agenda» The Argentine Economy»The Argentine Financial System»Banco Galicia»Annex 2

3 GDP % Change Billions of Ps. Economic Activity GDP and Income per Cápita E 22, 2, 18, 16, 14, 12, 1, Income per Cápita (in constant Ps.) GDP - 24 Constant Prices Income per cápita 2% Real GDP Growth 15% 1% 5% % -5% -1% -15% E As of April 3,

4 % % International Environment 4 Agricultural Commodity Prices 25 Real Exchange Rate (Dec 15=1) Dec 1=1. As of April 3, Bilateral (Ps./US$) Multilateral Annual Avg Adjusted by INDEC CPI until 26, and by private estimates since 27. As of April 3, UST1y + EMBI+ Latam Interest Rates Jun-25 Jul UST1y + EMBI+ Arg 4

5 Millions of US$ As a % of GDP Fiscal Performance 4 Fiscal Performance (Federal Government only) E Primary Fiscal Balance as a % of GDP Overall Fiscal Balance as a % of GDP 3, 25, Monetary Financing 6 5 2, 15, 1, 5, As a % of GDP E Argentine Central Bank advances Use of international reserves Argentine Central Bank profits Total Argentine Central Bank financing (as % of GDP) - r.h.s. 5

6 Billions of US$ As a % of GDP Billions of US$ Sovereign Debt 2 Sovereign Debt 28 Projected annual debt payments (*) Foreign currency Pesos Gross public sector debt Public debt net of intra public sector holdings (estimated) Public debt net of intra public sector holdings and IFIs (estimated) (*) Net of Central Bank advances, treasury bills and non-transferable bills held by Central Bank Source: MECON Debt stock Jun-16 Total sovereign debt Debt by Currency Other 1% Euros 9% Pesos 19% Pesos indexed to CER 7% Pesos Dólar Linked 3% USD 61% 6

7 As a % of GDP Billions of US$ As a % of GDP Billions of US$ External Sector Performance 6.% Current Account (accrued basis) 1 Foreign Trade 3.%.% % -2.7% 25 Exports Imports -6.% % 3.% Capital Account (accrued basis) 3.2% 3 15 Trade Balance.% -3.% % Source: INDEC E TOTAL Primary products Manufactures of agricultural origin Industrial manufactures Fuel and energy 7

8 Monthly average in billions of Ps. Monetary Performance 6 International Reserves (In billions of Dollars) 5 Central Bank interest rate policy % CB Repo (7 days) Lebacs 35 Call (2d moving avg.) Stock of Lebac (In billions of Pesos) 1,5 1,25 1, 75 M2 (*) 6% 5% 4% 3% YOY % chg % 1% % (*) As of April 3,

9 % % Inflation CPI - 12 Months Trailing Variation Monthly % Change Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Headline Source: City of Buenos Aires. As of March 31, 217. Core CPI CABA (core) REM* Jul (core) REM* Aug (core) * REM: Survey of market expectations 9

10 Agenda» The Argentine Economy»The Argentine Financial System»Banco Galicia»Annex 1

11 Private-Sector Loans and Deposit Growth Y-O-Y Monthly % Change Dec'6=1 6 1,2 5 1, Deposits Loans Deposits in Pesos Deposits in Dollars (In US$) As of March 31,

12 But Still Low Financial Depth 3 As a % of GDP Deposits from the Private Sector Loans to the Private Sector Financial Depth (as a % of GDP) Chile Brazil Colombia Peru Mexico Argentina Deposits to GDP Loans to GDP As of June 3, 216. Source: Central Bank of each country. 12

13 Breakdown of Deposits by Currency and Type 1 By Currency (as a % of CA+SA+Time Deposits) 1 By Type of Deposit (as a % of CA+SA+Time Deposits) Pesos Foreign Currency Current Accounts + Savings Accounts Time Deposits Deposit data is not shown for the period January-March 22, because as a result of the devaluation and the pesification measures, figures are not homogeneous for that period. As of April 3,

14 % % Increase in Interest Rates 32 Nominal Interest Rates (monthly averages) 18 Real Interest Rates (annual averages) (2) (1) Private Banks 3-day time deposits rate, for deposits over Ps. 1 million. (2) Adjusted by INDEC CPI until 26, and by private estimates since 27. As of April 3, 217. BADLAR Private Banks (1) 14

15 Change in the Composition of the Banking System December 21 Market Share Number Private-Sector Deposits (%) February 217 Market Share Number Private-Sector Deposits (%) Banking Institutions Government-Owned Banks Private-Sector Banks Domestic Banks Foreign Banks

16 NPLs / Total Credit % Improvement in Asset Composition and in Loan Portfolio Quality 6 Exposure to the Public Sector (*) (As a % of Total Assets) 1% Composition of Loans % % % Feb-17 % 2 Feb'17 (*) Not including Central Bank Paper. INDIVIDUALS COMPANIES Loan Portfolio Quality Loan Loss Reserves / NPLs As of February 28, 217. NPLs / Total Credit Loan Loss Reserves / NPLs 16

17 Efficiency Ratio % Improvement in Profitability (5.) (.1) (.3) (8.9) (.5) (2.9) (4.2) (22.7) R.O.A. and R.O.E (1.) (59.2) Feb-17-6 ROA ROE 16 Efficiency Coverage % Feb-17 As of February 28, 217. Efficiency Ratio Coverage of Administrative Expenses with Income from Services 17

18 Current Situation of the Financial System Strengths» High liquidity (with increased allocation to Central Bank paper).» Peso-based intermediation with high proportion of transactional deposits.» Adequate capitalization levels. Opportunities» Low level of financial depth.» Increase in concentration.» Potential demand for mortgage loans. Challenges» Lack of long-term funding.» Reach a greater customer base - Bancarization.» Increased competition from new fintech players.» Sustain profitability. Threats» Lead time to correct fiscal, monetary and external imbalances.» Brazilian economy as a limitation to growth. 18

19 Agenda» The Argentine Economy»The Argentine Financial System»Banco Galicia»Annex 19

20 Simplified Organizational Structure EBA HOLDING 58.% Votes 21.6% Shares 87.5% 1% 95% 12.5% 5% Insurance 77% 97% Mutual Funds 3% 95% 1% 1% 95% 5% 5% Collection Processing 2

21 Banco Galicia in Numbers Number of Branches Employees Clients (*) Bank 279 5,939 3,655 Reg. Credit-Card Cos. 27 4,316 4,957 CFA 94 1, Total 58 11,411 9,145 (*) In thousands. (**) 63 branches and 31 offices. March 217 (Consolidated figures) (**) US$ bn. Ps. bn. (15.38 Ps./US$) Assets Net Loans Deposits Equity

22 One of the Largest Banks Market share of Market share of private-sector deposits loans to the private-sector (1) Nación (P) 16.7% Nación (P) 11.3% Santander 11.1% Santander 1.2% Galicia Galicia 1,2% Galicia Galicia (2) 9.7% Provincia (P) 9.% Provincia (P) 8.6% BBVA 7.5% Macro 8.% Macro 6.5% BBVA 6.9% Credicoop 4.9% HSBC 4.1% HSBC 4.1% Ciudad (P) 3.8% ICBC 3.2% ICBC 3.7% Ciudad (P) 3.2% Patagonia 3.6% % 2% 4% 6% 8% 1% 12% 14% 16% 18% 2% (1) Includes securitized loans and leasing. (2) Considering CFA, the Bank s market share of loans to the private-sector would be 9.7%. Source: Argentine Central Bank. (P) Goverment owned Banks. As of February 28, 217. % 2% 4% 6% 8% 1% 12% TOP 1 = 77% TOP 1 = 7 % 22

23 Peer Comparison 15 Market Share of Private-Sector Deposits (%) 15 Market Share of Loans to the Private Sector (%) (1) Santander Galicia BBVA Macro HSBC Santander Galicia Macro BBVA HSBC +T.Reg.+CFA 16, Credit Cards Managed (in thousands) 8 Branches (number) 12, 6 8, 4 4, 2 - Santander Galicia BBVA Macro HSBC +T.Reg.+CFA (1) Includes securitized loans and leasing. Source: Argentine Central Bank (except for the regional credit-card companies). As of February 28, 217. Macro Santander Galicia BBVA HSBC +T.Reg.+CFA 23

24 Competitive Environment 11.5 Market Share of Private-Sector Deposits 1.5 Santander Galicia BBVA 6.5 Macro HSBC Patagonia ICBC Citi Source: Argentine Central Bank. As of February 28,

25 Broad and Growing Customer Base Total: 9.1 million, 47% (1) of Argentina s economically active population 11.2% CAGR since December 2 Consumer Banking Total: 3,557,567 26% 2% Corporate Banking Total: 97,566 1% 79% 1% 49% Low Income 13% Medium Income Prof. and Self-employed High Income In Process of Classification 11% Agribusiness Corporations Small and Middle-Market Business Regional Credit-Card Companies Total: 4,956,614 11% CFA Total: 533,178 5% 29% 32% Low Income Middle Income Middle/High Income 6% Low Income Middle Income Middle/High Income 63% (1) Estimated. As of March 31,

26 Breakdown of Loans to the Private Sector Middle- Market Companies 2% Agribusiness 12% Individuals 43% Middle- Market Companies 15% Agribusiness 9% Individuals (Bank) 33% Large Corporations 16% Large Corporations 21% Financial Sector 4% Financial Sector 3% Individuals (CFA) 4% Individuals (Regional Credit-Card Companies) 2% Bank: Ps billion Consolidated: Ps billion As of March 31,

27 Billions of Ps. Loan Portfolio by Maturity % 4% % 11% 1 <1 month 1-6 months 6-12 months 1-3 years 3-5 years >5 years 3%.4% Maturing within 1 year: 85.7%. US$-denominated loans: 15.7%. Consolidated figures, as of March 31,

28 Billions of Ps. Funding Sources (non consolidated) Bank: Ps billions Credit Cards: Ps.35.3 billions CFA (*) : Ps.4.3 billions Subordinated Bonds 3% Other(*) 17% Deposits 77% Bonds 17% Financial Entities 48% Financial Entities 31% Deposits 44% Bonds 3% (*) Includes among other: repos, financial institutions, collections on account of third parties, debt with merchants. Merchants 35% Bonds 25% Total Deposits Growth (consolidated) Bank Deposits Breakdown by Type CAGR: 34% Checking accounts 19% 1 75 Savings accounts 42% 5 25 Time Deposits 39% As of March 31, US$ -denominated deposits: 33.8%. 28

29 NPLs / Total loans to the private sector Asset Quality 12% Acquisition of CFA 16% 1% 14% 8.52% 8% 6% 1.12% 12% 1% Loan loss reserves / NPLs 4% 8% 3.4% 2% 6% 1.98% % % As of March 31, 217. NPLs / Total loans to the private sector Consumer (T. Reg. + CFA) NPL ratio Bank NPL ratio Loan loss reserves / NPLs 29

30 Total Capital Ratio (%) Excess Regulatory Capital and Total Capital Ratio 16.% Minimum Requirement Ps.16.4 bn Regulatory Capital Ps bn Excess Capital Ps. 7. bn / 42.7 % 14.% Ex CFA 13.2% With IFRS 13.% 12.% 11.7% 1.% 8.% Sep-9 Sep-1 Sep-11 Sep-12 Sep-13 Sep-14 Sep-15 Sep-16 Banco Galicia consolidated. As of March 31,

31 % Millions of Ps. Billions of Ps. % Strong Profitability Total Assets, Public Sector Exposure and ROA Net Interest Margin - NIM Total Assets Exposure to the Non-Financial Public Sector ROA 75 5 Efficency Ratio 7,5 5, Net Income and ROE 6, , , , ,824 1, ,17 1,61 15 % 31 Net Income BGBA ROE GFG Net Income GFG ROE BGBA

32 Agenda» The Argentine Economy»The Argentine Financial System»Banco Galicia»Annex 32

33 Consolidated Income Statement Three months ended 3,68 8,48 1,157 13% 4,932 42% 3M 217 4,8 1% 62% 58% % 11% 1,48 18% Net Financial Income Net Income from Services Operating Income Net Charge for Loan Losses Administrative Expenses Net Other Income/Losses Income Tax Net Income Variation 3M 216 1,211 1,22 2, , % Change

34 Consolidated Income Statement - 1Q of 217 1Q17 4,8 6% 59% 3,68 8,48 1,69 16% 41% 1% 4,932 58% % 12% 1,48 18% Net Financial Income Net Income from Services Operating Income Net Charge for Loan Losses Administrative Expenses Net Other Income/Losses Income Tax Net Income Variation 4Q % Change Variation 1Q16 1,211 1,22 2, , % Change

35 Volume Growth & Productivity Improvement Variation dic-2 mar-17 Abs. % Employees Banco Galicia Regional Credit-Card Cos CFA Other Subsidiaries 97 4 (93) (96) Distribution Platform Branches - Banco Galicia Regional Credit-Card Cos CFA 94 Electronic Banking Transactions (1) (in thousands, per month) Products Deposit Accounts (*) Credit Cards (*) Banco Galicia (*) Regional Credit-Card Cos. (*) (Proprietary brands and others) CFA (*) 177 Debit Cards (*) Client Base (* ) (*) In thousands. 35

36 Tarjetas Regionales» Consumer finance to medium and low income segments.» Merchant acquirer and payment processing services provider to proprietary credit cards.» Largest credit card issuer in Argentina with over:» 3.4 million active accounts and 9.7 million cards issued.» 27 branches and 54 offices across the country.» 13.3% market share in purchase volume (billed + installments) nationwide.» Second largest merchant acquirer with over 25, affiliated merchants.» Largest independent payment processor with more than 167 million annual transactions. In millions of Ps. 3M 216 3M 217 Assets 23,535 3,197 Loans 22,619 29,443 Net Worth 4,825 6,11 Net Income ROE 37.9% 46.8% 36

37 CFA Efectivo Sí» Consumer finance to medium and low income segments.» Leader in Personal Loans within consumer finance institutions.» More than 2 years in the market with strong brand:» 533, current clients (segment C1, C2, C3, D1) more than 1 million historical clients.» 534, loans granted in 216 and 147, during 217.» 141,statements as of March 31, 217 (vs 15, as of March 31, 216).» Loans in pesos, no guarantee, fixed interest rate.» 94 branches (57 Branches and 37 minibranches). In millions of Ps. 3M 216 3M 217 Assets 4,133 6,413 Loans 3,822 6,177 Net Worth 1,354 1,228 Net Income ROE 18.7% 24.2% 37

38 Lines of Business March 217 (In millions of Ps. except percentages). It does not include accrued interest. Cash loans. Granted in branches. Payroll loans. Government employees, pensioners, military and members of mutuals. Loans for the acquisition of goods. Granted through retail merchants associated with CFA. Microfinance. Entrepreneurs and Self-employeed. Issuer of Visa and MasterCard credit cards. Cross-selling to current clients and to open market clients. 2,446 4% 591 1% 327 5%. - 2,813 45% Total 6,177 1% Issuer of debit cards associated with saving accounts and time deposits, for retired people and pensioners. Insurance (casualty, life, burial, purchase). 38

39 Sudamericana Holding - Corporate Structure 12.5% 87.5% Sudamericana Holding Insurance company founded in 1996 and originally aimed at individuals' insurance that is currently broadening its strategy to cover corporate insurance. Turnover: $3,4MM AUM: $963MM Equity: $661MM Retirement insurance company. It manages voluntary retirement and pension plans. Turnover: $.1MM AUM: $137MM Equity: $15.7MM Insurance broker of the corporate segment, which offers coverage in those lines not marketed by Galicia Seguros. Turnover: $39MM AUM: $4.5MM Equity: $11.2MM 39

40 Sudamericana Holding - General Data General Data Annual Turnover: AR$ 3.4 billion (CY216) Policies in force: 3.2 million (credit-related insurance) and 5.4 million (voluntary insurance). Positioning 2Q-FY217 Homeowners Insurance Ranked 1 st 9.9% Market Share Theft Ranked 1 st 18.1% Market Share Personal Accidents Ranked 2 nd 1.5% Market Share Group Life Ranked 5 th 5.3% Market Share Miscellaneous Risks Ranked 8 th 3.1% Market Share Risk Rating FixScr (Affiliate of Fitch Ratings): domestic rating of financial strength AA (arg) Category. Certifications Bureau Veritas Certification: ISO 91:28 Property and life insurance integrated management: Evaluation of policy applications, policy issuance, billing and premium collection, post-sale, inquiry and customer request service, reception and resolution of claims. 4

41 Sudamericana Holding - Distribution Channels Business Partners' Branches Telemarketing Over 5 branches of our affiliated companies (Banco Galicia, Tarjeta Naranja, Tarjeta Nevada and Compañía Financiera Argentina). Near 2 branches of retail chains. +2 telemarketers at our own call center. 18 telemarketers at an external call center. Specialized Insurance Stands ATMs Near 6 stands at our business partners' branches. Insurance sale through Banco Galicia's ATM network. Specialized Salesforce Account officers for corporate businesses. Specialized Insurance Officers in banking branches. Internet Open market sale through different web pages. Main Business Partners 41

42 Sudamericana Holding - Turnover and Profit Evolution Per Fiscal Year (in millions of Ps.) Turnover Profits/Turnover Combined Ratio Galicia Seguros (%) 42% 37% 2. 35% % ,8% 12,4% 13,6% 13,3% 16,4% 93 83, , , , , 2 42