Grupo Financiero Galicia S.A. is one of Argentina’s largest financial services groups, encompassing banking, insurance, asset management, and digital solutions. Its recent financial report indicates a decline in its performance.

For the first quarter of 2025, Grupo Financiero Galicia reported a net income of ARS 146 billion, which is 63% lower than the net income of ARS 397 billion for the same quarter in 2024. The substantial decrease stemmed from various operational challenges faced by its lending divisions. Net income from Banco Galicia alone declined by 90% compared to the first quarter of 2024, culminating in an operating result that dropped by 84%. Net interest income for Banco Galicia also saw a significant drop of 66%, primarily due to comparative figures from a high-yield bond portfolio reported in the prior year.

The company’s average interest-earning assets increased by 45% year-over-year to ARS 14.9 trillion. Meanwhile, nonperforming loans increased, deteriorating to a ratio of 2.75% of total financing, which represents a 66 basis points increase from the prior year’s figure of 2.09%. In response, provisions for loan losses surged by 193%.

Banco Galicia’s total financing to the private sector reached ARS 12.6 trillion at the end of the quarter, showing a significant year-over-year growth of 107%, with peso financing increasing by 88%. The bank’s deposit base increased to ARS 15 trillion, marking a 48% rise from the previous year, largely driven by a 121% increase in dollar-saving accounts.

Guidance for return on equity (ROE) was revised to between 12% and 13% for 2025. This adjustment reflects the anticipated challenges in maintaining profitability amid existing market conditions. Adjusted profit is expected to correlate with anticipated increases in loans by 50% in real terms and deposit growth between 30% and 40%.

The operating environment remains turbulent, marked by inflation and exchange rate fluctuations, with the National Consumer Price Index reflecting an 8.6% rise within the first quarter of 2025 alone. The central bank’s monetary policy rate remains at 29%, despite an adjustment that began in January 2025.

In summary, Grupo Financiero Galicia’s quarterly performance indicates substantial challenges, with declining net income, rising nonperforming loans, and a revised outlook for ROE, all occurring in a complex economic environment marked by inflation and currency volatility.