Grupo Financiero Galicia (NASDAQ: GGAL ) is at a turning point. The recent acquisition of HSBC Argentina allows it to consolidate its position as the largest private bank in the country, expanding its customer base, its operationalI am an individual investor with over five years of experience in personal investing, holding a PhD in Economics from UCEMA. My investment approach focuses on value companies with solid long-term potential. I share my knowledge with the community by offering analysis to support in ...

Financial Performance - Banco Galicia's Gross Brokerage Margin (GBM) for the first year is limited to a potential loss of 12%, with a negative difference of -3.04% recorded under the "+400/200 bps" scenario compared to the base scenario [1527]. - As of December 31, 2024, Banco Galicia's consolidated GBM showed a variation of 85,363 million Pesos (2.18%) under a 200 bps increase in interest rates [1529]. Risk Management - The Risk Management Division is responsible for identifying and managing various risks, ensuring the board is fully aware of the exposure [1518]. - The Risk Management Committee has executive responsibility for defining and enforcing risk management policies and monitoring compliance [1519]. - The methodology for calculating interest rate risk includes a "critical" scenario derived from statistical simulations of historical interest rate data [1533]. - The maximum tolerable losses for total risk (currency + fixed-income instruments + interest rate derivatives) were set at Ps.64,528 million [1562]. Currency Exposure - Banco Galicia's net asset position in foreign currency was Ps.37,157 million (US$36 million) as of December 31, 2024, after adjustments for forward purchases [1538]. - The impact of a 40% increase in the Peso's value relative to the Dollar would result in a gain of 52,020 million Pesos, while a 40% decrease would lead to a loss of 22,294 million Pesos [1540]. - Banco Galicia has established limits for foreign currency mismatches at 12% and +30% of the bank's computable regulatory capital (RPC) [1537]. - As of December 31, 2024, Grupo Financiero Galicia's foreign currency assets totaled Ps.9,599,309 million, including Ps.5,915,544 million in cash and balances [1548]. - The liabilities in foreign currency amounted to Ps.9,641,583 million, primarily consisting of Ps.7,732,118 million in deposits [1549]. - The net liability position from the consolidated balance sheet was Ps.17,682 million, with a net asset position in foreign currency of Ps.184,271 million, equivalent to US$178.5 million [1550]. - Banco Galicia's net liability position in foreign currency represented -6.3% of its computable regulatory capital (RPC) at fiscal year-end [1551]. - As of December 31, 2024, overseas foreign currency transfer risk exposure was 6.61% of total liabilities, below the 15% limit [1566][1567]. Asset and Liability Management - The total gap in financial assets and liabilities as of December 31, 2024, was 6,063,744 million Pesos, with a significant portion in Pesos adjusted by UVA [1546]. - Non-adjusted Peso-denominated assets were Ps.10,904,639 million, while non-adjusted liabilities were Ps.10,741,917 million, resulting in a net asset position of Ps.2,839,842 million [1552]. - The net asset position adjusted by UVA was Ps.2,811,270 million, primarily from government securities and loans [1553]. - Other assets included property, plant, and equipment valued at Ps.1,358,662 million [1555]. Interest Rate Risk - The net present value of assets and liabilities is calculated monthly, with a limit on interest rate risk exposure not exceeding 15% of consolidated Tier 1 capital; as of December 31, 2024, the "Value at Risk" was -5.70% of Tier 1 capital [1536]. - As of December 31, 2024, overseas foreign currency transfer risk exposure was 6.61% of total liabilities, below the 15% limit [1566][1567]. Support to Public Sector - Banco Galicia provides financial assistance to the non-financial public sector through government securities and direct loans [1569].

Financial Performance - Net income for the year reached Ps. 1,624,744,805, a significant increase of 121.1% compared to Ps. 734,238,287 in 2023[29]. - Basic earnings per share increased to Ps. 1,095.51 in 2024, compared to Ps. 497.89 in 2023, marking a growth of 120.1%[31]. - Total comprehensive income attributable to the parent company's owners was Ps. 1,639,386,979, compared to Ps. 737,597,663 in 2023, reflecting an increase of 122.4%[33]. - Income before Taxes from Continuing Operations increased to $2.21 billion in 2024 from $1.18 billion in 2023, representing an 87% year-over-year growth[41]. - Net operating income for the year was reported at Ps. 7,110,463,722, slightly down from Ps. 7,306,221,802 in 2023[29]. Assets and Liabilities - Total assets increased to Ps. 32,517,979,372 as of December 31, 2024, up from Ps. 22,246,858,046 in 2023, representing a growth of approximately 46%[25]. - Total liabilities increased to Ps. 26,454,235,292 as of December 31, 2024, up from Ps. 17,854,034,339 in 2023, representing a growth of 48.5%[27]. - Loans and other financing rose to Ps. 14,388,091,921 in 2024, up from Ps. 6,708,657,840 in 2023, reflecting an increase of approximately 114%[25]. - Cash and due from banks increased to Ps. 6,744,840,168 in 2024, compared to Ps. 4,346,311,187 in 2023, marking a growth of about 55%[25]. - The company reported a significant increase in financial assets pledged as collateral, rising to Ps. 1,484,416,075 in 2024 from Ps. 939,774,618 in 2023, a growth of approximately 58%[25]. Income and Expenses - Interest income decreased to Ps. 8,244,240,311 in 2024 from Ps. 10,353,121,006 in 2023, reflecting a decline of 20.3%[29]. - Net income from interest rose to Ps. 5,149,812,618, up 36.8% from Ps. 3,762,271,310 in the previous year[29]. - Fee income increased to Ps. 1,271,266,296, up from Ps. 1,190,600,233 in 2023, a growth of 6.8%[29]. - The company reported a loss on net monetary position of Ps. 2,384,891,465, an improvement from a loss of Ps. 3,306,755,066 in 2023[29]. Shareholders' Equity - Total shareholders' equity attributable to the parent company's owners grew to Ps. 6,063,585,599, up from Ps. 4,392,630,487 in 2023, an increase of 38.1%[27]. - As of December 31, 2024, total shareholders' equity reached Ps. 6,063,744,080, up from Ps. 4,392,823,707 at the end of the previous year[35]. - The company distributed cash dividends totaling Ps. 648,652,068 during the fiscal year, impacting retained earnings[35]. - A capital increase of Ps. 680,220,201 was recorded, enhancing the company's financial position[35]. Acquisitions and Investments - The acquisition of GGAL Holdings S.A. was completed with a fair value of net assets acquired amounting to Ps. 1,793,241,094[20]. - The acquisition of HSBC Argentina Holdings S.A. and subsidiaries resulted in a cash payment of $364 million, net of cash acquired[42]. - The business combination resulted in an addition of Ps. 101,505 to the total equity, reflecting strategic growth initiatives[35]. Impairments and Provisions - The expected credit loss allowance was Ps. 709,331,237 thousand as of December 31, 2024, compared to Ps. 290,011,033 in 2023, indicating a significant increase in risk provisioning[15]. - Impairment Charge rose significantly to $862.8 million in 2024, compared to $415.2 million in 2023, indicating a 107% increase[41]. - The Group has recognized an impairment on the value of real estate amounting to Ps. 2,004,137 as of December 31, 2024[133]. - The Group recognized an impairment on real estate valued at Ps. 17,099,191 as of December 31, 2024[146]. Cash Flow and Liquidity - Net Cash Generated by Operating Activities decreased slightly to $3.50 billion in 2024 from $3.63 billion in 2023, a decline of 4%[41]. - Net Cash Generated by Investment Activities turned positive at $865.2 million in 2024, compared to a cash outflow of $178.3 million in 2023[41]. - Total Cash and Cash Equivalents at the end of 2024 stood at $7.41 billion, up from $7.12 billion at the end of 2023, reflecting a 4% increase[41]. - Dividends paid increased to $614.9 million in 2024 from $390.4 million in 2023, marking a 57% rise[41]. Regulatory and Accounting Standards - The Group's financial statements will not be significantly impacted by the amendments to IAS 7 and IFRS 7 regarding Supplier Financing Arrangements, effective January 2024[56]. - The amendments to IAS 21 regarding Lack of Exchangeability are expected to have no significant impact on the Group's financial statements, effective January 2025[57]. - The targeted amendments to IFRS 9 and IFRS 7 are estimated to not significantly affect the Group's financial statements, effective January 2026[58]. - IFRS 18 introduces new presentation and disclosure requirements, with the Group currently assessing its impact, effective January 2027[59]. - The new standard IFRS 19 allows eligible subsidiaries to apply reduced disclosure requirements, with the Group evaluating its effects, effective January 2027[60].

Group 1 - Following the acquisition of HSBC's operations in Argentina, Galicia has become the largest private financial group in Argentina [1] - Galicia closed the previous year with exceptional results, indicating strong financial performance [1] Group 2 - The article highlights the competitive advantage of Galicia in the Argentine financial sector, particularly after the acquisition [1] - The focus on good management and future prospects is emphasized as key factors for Galicia's success [1]

Group 1 - Grupo Financiero Galicia S.A. (NASDAQ: GGAL) has experienced a share price increase of nearly 250% year-to-date [1] - The surge in share price is primarily due to increased investor confidence in Argentina, linked to Javier Milei's economic policies [1] Group 2 - The company is benefiting from a positive market sentiment as the economic reforms appear to be yielding results [1]

Core Viewpoint - Grupo Financiero Galicia (GGAL) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Revisions - The Zacks rating system is based on the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts for the current and following years [2]. - For the fiscal year ending December 2024, Grupo Financiero Galicia is expected to earn $8.17 per share, representing a -6.3% change from the previous year [9]. - Over the past three months, the Zacks Consensus Estimate for Grupo Financiero Galicia has increased by 8.4%, indicating a positive trend in earnings estimates [9]. Impact of Institutional Investors - Changes in a company's future earnings potential, as shown by earnings estimate revisions, are strongly correlated with near-term stock price movements. Institutional investors utilize these estimates to determine the fair value of a company's shares, influencing their buying or selling actions [5]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - The upgrade of Grupo Financiero Galicia to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting a strong potential for price appreciation in the near term [12].

Financial Position - Total assets decreased to Ps. 20,593,625,497 as of December 31, 2023, from Ps. 21,142,164,324 in 2022, representing a decline of approximately 2.6%[27] - Total liabilities decreased from Ps. 17,320,427,795 in 2022 to Ps. 16,527,246,046 in 2023, a reduction of approximately 4.6%[29] - As of December 31, 2023, total shareholders' equity attributable to the parent company's owners was Ps. 4,066,200,588, an increase from Ps. 3,821,736,410 as of December 31, 2022, representing a growth of approximately 6.4%[37] - The total shareholders' equity, including non-controlling interests, reached Ps. 4,066,379,451 as of December 31, 2023[37] Cash and Liquidity - Cash and due from banks increased to Ps. 4,023,323,415 in 2023, up from Ps. 2,809,407,083 in 2022, marking a growth of approximately 43%[27] - The company's cash position improved, with cash alone reaching Ps. 2,228,848,927 in 2023, compared to Ps. 1,083,368,511 in 2022, an increase of approximately 106.6%[27] - Cash dividends distributed amounted to Ps. 438,320,348, reflecting a significant return to shareholders[37] - Cash and cash equivalents at the end of 2023 were Ps. 6,586.3 million, down from Ps. 8,328.4 million at the end of 2022[46] Income and Profitability - Net income for the year increased significantly to Ps. 679,674,788 in 2023, compared to Ps. 304,906,143 in 2022, representing a growth of approximately 122%[31] - Interest income surged to Ps. 9,583,748,697 in 2023, up from Ps. 4,500,238,666 in 2022, marking an increase of about 113%[31] - Net operating income rose to Ps. 6,763,273,963 in 2023, compared to Ps. 4,275,571,978 in 2022, reflecting a growth of approximately 58%[31] - Total comprehensive income for the year reached Ps. 682,779,448 in 2023, compared to Ps. 298,876,602 in 2022, indicating a growth of approximately 128%[35] Credit and Risk Management - The expected credit loss allowance was Ps. 138,300,714 thousand as of December 31, 2023, showing a significant reduction from Ps. 434,141,579 in the previous year[20] - The total expected credit loss allowance was assessed based on macroeconomic scenarios, highlighting the company's proactive approach to risk management[20] - Expected credit loss allowance increased to Ps. 384.4 million in 2023 from Ps. 329.2 million in 2022, reflecting a rise in credit risk[45] Expenses and Costs - Personnel expenses rose to Ps. 708,475,735 in 2023, compared to Ps. 608,224,941 in 2022, reflecting an increase of approximately 16.5%[31] - Loss on Net Monetary Position rose sharply to Ps. 3,061.0 million in 2023 compared to Ps. 1,716.1 million in 2022, indicating increased inflationary pressures[45] Compliance and Reporting - The company maintained effective internal control over financial reporting as of December 31, 2023, according to the independent auditor's opinion[12] - The consolidated financial statements were prepared in accordance with IFRS Accounting Standards, reflecting the company's commitment to transparency and compliance[12] Investments and Financial Instruments - The company reported a significant increase in investments in equity instruments, rising to Ps. 19,427,399 in 2023 from Ps. 14,055,309 in 2022, a growth of approximately 38.5%[27] - The company reported a significant increase in net income from financial instruments measured at fair value through profit or loss, totaling Ps. 552,125,644 in 2023, down from Ps. 2,122,455,994 in 2022[31] Accounting Standards and Policies - The Group has adopted IFRS 17 'Insurance Contracts' effective January 1, 2023, with no material impact on financial statements[66] - The implementation of IAS 29 for hyperinflationary economies has been applied for all years presented, ensuring financial statements are restated in current measurement units[59] - The Group has determined that the application of new accounting standards and amendments will not have a significant impact on its financial statements[67] Shareholder Equity and Dividends - The company’s retained deficit increased slightly from Ps. (1,097,146,058) in 2022 to Ps. (1,115,275,003) in 2023[29] - Other comprehensive income for the year was Ps. 3,109,730, which includes an increase in accumulated profit from financial instruments at fair value through OCI[37] - The Group recognizes dividends as a liability in the consolidated financial statements in the year they are approved by shareholders[190]

Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell even higher, with the expectation that established trends will continue [1] Company Overview: Grupo Financiero Galicia (GGAL) - GGAL currently holds a Momentum Style Score of B, indicating a positive outlook based on price changes and earnings estimate revisions [2] - The company has a Zacks Rank of 1 (Strong Buy), suggesting strong potential for outperformance in the market [3] Performance Metrics - Over the past week, GGAL shares increased by 3.48%, outperforming the Zacks Banks - Foreign industry, which rose by 1.99% [6] - In a longer timeframe, GGAL's shares have surged by 52.58% over the past quarter and 218.51% over the last year, while the S&P 500 only increased by 4.57% and 31.09%, respectively [7] Trading Volume - GGAL's average 20-day trading volume is 1,212,776 shares, which serves as a bullish indicator when combined with rising stock prices [8] Earnings Outlook - In the last two months, one earnings estimate for GGAL has increased, raising the consensus estimate from $4.60 to $7.54 [10] - For the next fiscal year, one estimate has also moved upwards, with no downward revisions noted [10]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling even higher, capitalizing on established price movements [1] - The Zacks Momentum Style Score helps define momentum characteristics, with Grupo Financiero Galicia (GGAL) currently holding a Momentum Style Score of A [2] Group 2: Performance Metrics - GGAL has a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperformance in the market [3] - Over the past week, GGAL shares increased by 12.95%, significantly outperforming the Zacks Banks - Foreign industry, which rose by only 0.57% [5] - In the last quarter, GGAL shares rose by 19.29%, and over the past year, they have surged by 157.13%, while the S&P 500 only increased by 3.12% and 23.92%, respectively [6] Group 3: Trading Volume and Earnings Outlook - GGAL's average 20-day trading volume is 1,237,474 shares, indicating a bullish sign with rising stock prices [7] - In terms of earnings estimates, GGAL's consensus estimate increased from $4.60 to $10.42 over the past 60 days, with one upward revision and no downward revisions for the current fiscal year [9]

Core Viewpoint - Grupo Financiero Galicia (GGAL) has been upgraded to a Zacks Rank 1 (Strong Buy), indicating a positive outlook on its earnings estimates, which is a significant factor influencing stock prices [1][4]. Earnings Estimates and Revisions - The Zacks rating system is based on the Zacks Consensus Estimate, which reflects EPS estimates from sell-side analysts for the current and following years [2]. - The Zacks Consensus Estimate for Grupo Financiero Galicia has increased by 126.5% over the past three months, with expected earnings of $10.42 per share for the fiscal year ending December 2024, representing a year-over-year change of 19.5% [9]. Impact of Earnings on Stock Prices - Changes in a company's future earnings potential, as indicated by earnings estimate revisions, are strongly correlated with near-term stock price movements [5]. - Institutional investors utilize earnings estimates to determine the fair value of a company's shares, leading to buying or selling actions that affect stock prices [5]. Zacks Rating System - The Zacks Rank stock-rating system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [8]. - The upgrade of Grupo Financiero Galicia to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for higher stock prices in the near term [11].