Banco Galicia. Investor Presentation. August 2016

Transcription

1 Banco Galicia Investor Presentation August 216

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 Income per Cápita (in constant Ps.) GDP - 24 Constant Prices Income per cápita 15% GDP Growth 1% 5% % -5% -1% -15% E Real GDP growth Official Figures Private estimates (LatinFocus - Market Consensus) As of July 31,

4 % International Environment 4 Agricultural Commodity Prices 25 Real Exchange Rate (Dec 15=1) ,7 15, Dec 1=1. As of July 31, Bilateral (Ps./US$) Multilateral Annual Average. Adjusted by INDEC CPI until 26, and by private estimates since 27. As of July 31, 216. UST1y + EMBI+ Latam

5 Millions of US$ As a % of GDP Fiscal Performance 4 Fiscal Performance (Federal Government only) -4-4,8-5, E Primary Fiscal Balance as a % of GDP Overall Fiscal Balance as a % of GDP Monetary Financing 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 Sep ,7 17,1 11, Gross public sector debt Public debt net of intra public sector holdings Public debt net of intra public sector holdings and International Financial Institutions (*) Net of Central Bank advances, treasury bills and non-transferable bills held by Central Bank Debt stock 223 Pesos 16% Pesos indexed to CER 4% Debt by Currency Sovereign debt does not include debt with holdouts. As of December 31, 215. Source: MECON Other 3% Euros 18% USD 59% 6

7 Billons of US$ Billions of US$ As a % of GDP Billions of US$ External Sector Performance 6,% Current Account (accrued basis) 1 Foreign Trade 3,% 75,% 5-3,% -2,% 25 Exports Imports -6,% E E 6, Net External Accumulation 2,5% 3 Trade Balance 3, 15, -3, -6,,% -2,5% As a % of GDP , -5,% E 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 16, Central Bank s FX Market Average Daily Intervention (In millions of Dollars)(*) 6 International Reserves (In billions of Dollars) 8, 45-3 (8,) 15 (16,) Stock of Lebac (In billions of Pesos) 1.35 M2 (*) 52,5% ,% 37,5% 3,% 22,5% 15,% 7,5%,% YOY % chg (*) As of July 31,

9 % Inflation CPI - 12 Months Trailing Variation IPC IPCnu Private Estimates 9

10 Basis points over U.S. Treasury Country Risk Premium (1) Risk Premium (end of period) (2) (1) As measured by the EMBI+ for Argentina except for the period between 22 and 24 when it corresponds to the spread over Treasury of the Boden 212 Bond. (2) As of August 2,

11 Agenda» The Argentine Economy»The Argentine Financial System»Banco Galicia»Annex 11

12 Private-Sector Loans and Deposit Growth Y-O-Y Monthly % Change Dec'6= Deposits Loans Deposits in Pesos Deposits in Dollars (In US$) As of June 3,

13 But Still Low Financial Depth In billions of constant Pesos (*) Deposits from the Private Sector (*) Adjusted by INDEC CPI until 26, and by private estimates since 27. In millions of Ps.of October Loans to the Private Sector Financial Depth (as a % of GDP) E Deposits from the Private Sector As a % of GDP Loans to the Private Sector Chile Brazil Colombia Peru Mexico Argentina Deposits to GDP Loans to GDP As of March 31, 216. Source: Central Bank of each country. 13

14 % % Increase in Interest Rates 32 Nominal Interest Rates (monthly averages) 18 Real Interest Rates (annual averages) (2) E (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 July 31, 216. BADLAR Private Banks (1) 14

15 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) 8 84, % 49% 2 15, 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 June 3,

16 Change in the Composition of the Banking System December 21 April 216 Market Share Market Share Number Private-Sector Number Private-Sector Deposits (%) Deposits (%) Banking Institutions Government-Owned Banks Private-Sector Banks Domestic Banks Foreign Banks

17 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 % % ,8 25% May'16 (*) Not including Central Bank Paper. % 2 May-16 INDIVIDUALS COMPANIES Loan Portfolio Quality 145,6 1, Loan Loss Reserves / NPLs As of May 31, 216. NPLs / Total Credit Loan Loss Reserves / NPLs 17

18 Efficiency Ratio % Improvement in Profitability 1, 5, - (5,) (,1) (,3) (8,9) (,5) (2,9) (4,2) (22,7) 7,,9 R.O.A. and R.O.E 32,4 32,3 25,7 29,5 32,7 19,2 24,4 25,3 14,3 11, 13,4 1,9 1,5 1,6 2,3 2,8 2,7 2,9 3,4 4,1 4,1 4, (1,) (59,2) May ROA Efficiency ROE , % 4 49, May-16 As of May 31, 216. Efficiency Ratio Coverage of Administrative Expenses with Income from Services 18

19 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.» Improved asset mix Increase in business with private sector. Opportunities» Low level of financial depth.» Increase in concentration. Challenges» Lack of long-term funding.» Reach a greater customer base - Bancarization.» Increase cross-selling of financial products.» Sustain profitability. Threats» Lead time to correct fiscal, monetary and external imbalances.» Access to convenient international funding.» Brazilian economy as a limitation to growth. 19

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

21 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 21

22 Banco Galicia in Numbers Number of Branches Employees Clients (*) Bank Reg. Credit-Card Cos CFA Total (*) In thousands. (**) 56 branches and 37 offices. June 216 (Consolidated figures) US$ bn. Ps. bn. (14.92 Ps./US$) Assets 198,1 13,3 Net Loans 19,3 7,3 Deposits 118,2 7,9 Equity 16,1 1,1 (**) 22

23 One of the Largest Banks Market share of private-sector deposits Market share of loans to the private-sector (1) Nación (P) 18,5% Nación (P) 11,% Santander 1,3% Río 1,% Provincia (P) 9,3% Galicia Galicia (2) 9,5% Galicia Galicia 9,% Provincia (P) 9,1% BBVA 7,1% Macro 7,7% Macro 6,6% Francés 7,% Credicoop 5,% HSBC 4,4% HSBC 4,3% Ciudad (P) 4,% Ciudad 3,7% Patagonia 3,7% ICBC (P) 3,1% ICBC 3,7% % 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 9.9%. Source: Argentine Central Bank. (P) Goverment owned banks As of May 31, 216. % 2% 4% 6% 8% 1% 12% TOP 1 = 77 % TOP 1 = 7 % 23

24 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) 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 May 31, 216. Macro Santander Galicia BBVA HSBC +T.Reg.+CFA 24

25 Competitive Environment Market Share of Private-Sector Deposits 1,5 Santander 9,5 8,5 Galicia 7,5 6,5 BBVA Macro 5,5 4,5 HSBC 3,5 ICBC Patagonia Citi 2, Source: Argentine Central Bank. As of May 31,

26 Broad and Growing Customer Base 2% Total: 9.2 million, 48% (1) of Argentina s economically active population 12.% CAGR since December 2 2% Consumer Banking Total: 3,475,168 55% 21% Corporate Banking Total: 9,717 1% 12% Low Income Medium Income Prof. and Self-employed High Income In Process of Classification 11% Agribusiness Corporations Small and Middle-Market Business 78% Regional Credit-Card Companies Total: 4,94,188 11% CFA & TDM Total: 675,664 5% 29% 32% Low Income Middle Income Middle/High Income 6% Low Income Middle Income Middle/High Income 63% (1) Estimated. As of June 3,

27 Breakdown of Loans to the Private Sector Agribusiness 13% Individuals 44% Middle- Market Companies 15% Agribusiness 1% Individuals (Bank) 32% Middle- Market Companies 21% Large Corporations 2% Financial Sector 2% Large Corporations 15% Financial Sector 2% Individuals (CFA) 4% Individuals (Regional Credit-Card Companies) 22% Bank: Ps billion Consolidated: Ps billion As of June 3,

28 Billions of Ps. Loan Portfolio by Maturity 6 47% 45 31% % 1% <1 month 1-6 months 6-12 months 1-3 years 3-5 years >5 years 2%.2% Maturing within 1 year: 89.%. US$-denominated loans: 1.6%. Consolidated figures, as of June 3,

29 Billions of Ps. Funding Sources (non consolidated) Subordinated Bonds 2% Bank: Ps billions Other(*) 2% Financial Entities 43% Credit Cards: Ps.28. billions Merchants 38% Financial Entities 16% CFA (*) : Ps.2.7 billions Deposits 28% Bonds 3% Deposits 75% (*) Includes among other: repos, financial institutions, collections on account of third parties, debt with merchants. Bonds 19% Bonds 56% 125 Total Deposits Growth (consolidated) Bank Deposits Breakdown by Type CAGR: 33% Savings accounts 3% Time Deposits 48% As of June 3, 216. (*) Includes information of TDM Checking accounts 22% US$ -denominated deposits: 18.1%. 29

30 NPLs / Total loans to the private sector Asset Quality 12% Acquisition of CFA 16% 1% 14% 8% 6% 7,8% 13,3% 12% 1% Loan loss reserves / NPLs 4% 3,4% 8% 2% 2,% 6% % % As of June 3, 216. NPLs / Total loans to the private sector Consumer (T. Reg. + CFA) NPL ratio Bank NPL ratio Loan loss reserves / NPLs 3

31 Total Capital Ratio (%) Excess Regulatory Capital and Total Capital Ratio 17,5% Minimum Requirement Ps.12. bn Regulatory Capital Ps bn Excess Capital Ps. 4.1 bn / 33.9 % 15,% 14,4% 12,5% 11,% 1,% Regulatory Ratio Total Capital Ratio 7,5% Banco Galicia consolidated. As of June

32 % Millions of Ps. Billions of Ps. % Strong Profitability 24 Total Assets, Public Sector Exposure and ROA 5 2 Net Interest Margin - NIM ,9 2,9 2,6 82,2,9,8 62,8 5, ,4 33,7 5,4 3,8 1,5 1,7 1,7 2,8 3,4 4,7 4,9 3,4 3,6 16, 3,5 16,6 198,1 2, ,8 8,3 1,1 11,7 12,1 12,8 13,4 12,9 11,2 Total Assets Exposure to the Non-Financial Public Sector ROA 1 Efficency Ratio 4. Net Income and ROE ,6 65,1 66,1 63,4 64,2 61,6 56,3 59,7 63, ,5 8,4 2, ,6 37,9 3,9 32,1 33,3 3, % Net Income ROE 32

33 Agenda» The Argentine Economy»The Argentine Financial System»Banco Galicia»Annex 33

34 Consolidated Income Statement Six months ended 6M % % % 1% 6% % 11% % 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 6M % Change

35 Consolidated Income Statement - 2Q of 216 2Q % 9% % 1% 6% % 11% % 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 1Q % Change Variation 2Q % Change

36 Volume Growth & Productivity Improvement Variation dic-2 jun-16 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 93 Electronic Banking Transactions (1) (in thousands, per month) Products Deposit Accounts (*) Credit Cards (*) Banco Galicia (*) Regional Credit-Card Cos. (*) (Proprietary brands and others) CFA (*) 17 Debit Cards (*) Client Base (* ) (*) In thousands. 36

37 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.» 28 branches and 55 offices across the country.» 35% market share in purchase volume in the interior of Argentina (excluding the city and the province of Buenos Aires) and 14% nationwide.» Second largest merchant acquirer with over 25, affiliated merchants.» Largest independent payment processor with more than 151 million annual transactions. In millions of Ps. 6M 215 6M 216 Assets 18,717 24,928 Loans 17,166 24,173 Net Worth 3,454 4,677 Net Income ROE 39.7% 3.2% 37

38 CFA Efectivo Sí & Tarjetas del Mar» 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:» 675, current clients (segment C1, C2, C3, D1) more than 1 million historical clients.» 361, loans granted in 215 and 39, during the 216.» 297,statements as of June3, 216 (vs 256, as of June 3, 215).» Loans in pesos, no guarantee, fixed interest rate.» 129 branches (58 Branches and 71 minibranches). In millions of Ps. 6M 215 6M 216 Assets 4,752 5,677 Loans 4,349 5,678 (*) Net Worth 1,342 1,267 Net Income (*) Includes $327M loan portfolio managed by third parties ROE 13.% 21.9% 38

39 Lines of Business June 216 (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. 1,46 35% 326 8% 284 7%. - 2,25 5% Total 4,4 1% Issuer of debit cards associated with saving accounts and time deposits, for retired people and pensioners. Insurance (casualty, life, burial, purchase). 39

40 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. Retirement insurance company. It manages voluntary retirement and pension plans. Insurance broker of the corporate segment, which offers coverage in those lines not marketed by Galicia Seguros. 4

41 Sudamericana Holding - General Data General Data Annual Turnover: AR$ 2.1 billion (FY215) Policies in force: 3. million (credit-related insurance) and 6. million (voluntary insurance). Positioning FY215 Homeowners Insurance Ranked 1 st 11.3 % Market Share Theft Ranked 1 st 19.1% Market Share Group Life Ranked 4 th 6.% Market Share Personal Accidents Ranked 3 rd 8.7% Market Share Miscellaneous Risks Ranked 9 th 2.3% Market Share Risk Rating Certifications FixScr (Affiliate of Fitch Ratings): domestic rating of financial strength AA (arg) Category. Bureau Veritas Certification: ISO 91:28 certification for the following processes: receipt of claims life, property & casualty insurance claims payment customer service. 41

42 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. 17 telemarketers at an external call center. Specialized Insurance Stands ATMs 3 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 42

43 Sudamericana Holding - Turnover and Profit Evolution Per Fiscal Year (in millions of Ps.) ROE (%) 38% 34% 49% 49% Fiscal Year: July 1st to June 3th 43