Financial Data and Key Metrics Changes - Grupo Financiero Galicia reported a net loss of ARS 87.7 billion for the quarter, primarily due to losses from Banco Galicia, NaranjaX, and Galicia Seguros, partially offset by profits from Galicia Asset Management [5] - The net operating income decreased by 23%, with net interest income down by 10% and loan loss provisions up by 26% [7][9] - The return on equity (ROE) for the quarter was -4.7%, while the accumulated annualized figures for the fiscal year reached 4.7% [5][12] Business Line Data and Key Metrics Changes - Banco Galicia's extraordinary expenses amounted to ARS 101.1 billion, negatively impacting financial margins due to high interest rates and increased non-performing loans [6] - Peso-denominated loans to the private sector averaged ARS 79.3 trillion, showing a 105.4% year-over-year increase, while dollar-denominated loans reached $18.3 billion, a 153.4% annual increase [4] - Net interest income decreased by 10% compared to the previous quarter, driven by a 35% increase in interest expenses [8] Market Data and Key Metrics Changes - The Argentine economy recorded a 5% year-over-year increase in economic activity during September, with a primary surplus of 0.5% of GDP [2] - The exchange rate averaged ARS 1,400 per dollar in September 2025, reflecting a 15.6% devaluation compared to June 2025 [3] - Private sector deposits in pesos averaged ARS 94.1 trillion, increasing by 53% year-over-year [4] Company Strategy and Development Direction - The company aims to improve profitability in the fourth quarter and next year, with expectations of an ROE in the low teens range for 2026 [15][16] - The focus will be on maintaining liquidity and solvency metrics while navigating high political effects and monetary volatility [12][13] - The company anticipates a peak in non-performing loans (NPLs) around March next year, with expectations of improvement thereafter [17][38] Management's Comments on Operating Environment and Future Outlook - Management noted that margins were low due to high interest rates but are expected to improve in November and December [15][66] - The company is optimistic about the economic outlook, with anticipated growth in lending and market share [35][36] - Management highlighted the importance of monitoring economic conditions and adjusting strategies accordingly, especially regarding loan origination and asset quality [108] Other Important Information - The restructuring expenses associated with the merger with HSBC Argentina amounted to ARS 105.3 billion [5] - The bank's total regulatory capital ratio decreased to 22.1%, while the tier one ratio was 21.8% [12] - The company expects to maintain a comfortable capital level, with a minimum appetite to operate at 13% to 13.5% [24] Q&A Session Summary Question: Capital ratio and ROE expectations - Analyst inquired about the capital ratio and how it relates to ROE targets, especially in light of expected peaks in NPLs [21] - Management responded that the capital ratio was impacted by bond valuations but is now stabilizing, with a comfortable capital level projected [23][24] Question: Loan origination and maturity - Analyst asked about the current state of loan origination and maturity compared to earlier in the year [22] - Management indicated a slowdown in consumer lending due to portfolio quality but expects to see longer-term commercial lending as the market stabilizes [27][28] Question: Long-term growth expectations - Analyst sought clarity on long-term growth expectations and potential private investments in Argentina [31] - Management projected a 25% growth in lending in real terms, with a focus on commercial lending and consumer lending improvements [35][36] Question: Asset quality and NPLs - Analyst questioned the confidence in the peak of NPLs and the expected cost of risk [32] - Management explained that the peak is anticipated around March, with expected improvements in asset quality driven by better origination practices [38][109] Question: Economic assumptions for inflation and interest rates - Analyst requested economic assumptions regarding inflation and interest rates for the upcoming year [88] - Management provided estimates of 30% inflation for this year and 18% for next year, with GDP growth projected at 4% for this year [89] Question: Integration costs from HSBC acquisition - Analyst inquired about any remaining integration costs from the HSBC acquisition [81] - Management confirmed that most restructuring costs have been booked, with only minor expenses expected in the fourth quarter [82]

Financial Data and Key Indicators Changes - The net loss for the quarter amounted to ARS 87.7 billion, primarily due to losses from Banco Galicia, NaranjaX, and Galicia Seguros, partially offset by profits from Galicia Asset Management [4] - The quarter included extraordinary restructuring expenses associated with the merger with HSBC Argentina amounting to ARS 105.3 billion [4] - Net operating income decreased by 23%, with net interest income down by 10% and loan loss provisions increasing by 26% [6][8] Business Line Data and Key Indicators Changes - Banco Galicia's results included ARS 101.1 billion of extraordinary expenses, negatively affected by increased cost of risk and a decrease in financial margin [5] - Private sector dollar-denominated loans amounted to $18.3 billion, recording a 15.8% quarterly growth and a 153.4% annual increase [3] - Time deposits in pesos rose by 13.1% during the quarter and 76.3% year-over-year [3] Market Data and Key Indicators Changes - The average exchange rate was ARS 1,400 per dollar in September 2025, reflecting a 15.6% devaluation compared to June 2025 [2] - Private sector deposits in pesos averaged ARS 94.1 trillion in September, increasing by 5.6% during the quarter and 53% year-over-year [3] - The estimated market share of loans to the private sector was 14.8%, while the market share of deposits was 16.4% [10] Company Strategy and Development Direction - The company expects an improvement in profitability during the fourth quarter and next year, with a projected ROE of around 4% for 2025 and between 11% and 12% for 2026 [12][13] - The focus will be on improving margins and managing costs, with a significant reduction in headcount due to restructuring [15] - The company anticipates a peak in non-performing loans (NPLs) around March next year, followed by improvement as new, better-quality loans gain weight in the portfolio [15][27] Management's Comments on Operating Environment and Future Outlook - The management noted that the third quarter was marked by high political effects and monetary volatility, negatively affecting margins and asset quality [11] - There is an expectation of a gradual recovery in asset quality, with new origination performing better than older loans [56] - The company is optimistic about the economic environment post-elections, anticipating increased investment and lending opportunities [25][27] Other Important Information - The total regulatory capital ratio reached 22.1%, decreasing 160 basis points from the previous quarter, while the tier one ratio was 21.8% [11] - The company is monitoring liquidity and capital needs closely, with a minimum capital appetite of 13% to 13.5% [19] - The company has seen a significant reduction in dollar purchases from customers post-elections, indicating a stabilization in demand [51] Q&A Session Summary Question: Capital ratio and ROE expectations - The capital ratio was down 120 basis points from the second quarter, with expectations for ROE to improve gradually [16][30] Question: NPL peak and asset quality - The management expects NPLs to peak around March next year, with a range of 6-7% anticipated [27][28] Question: Economic assumptions for inflation and interest rates - The company forecasts GDP growth of 4% for this year and 3.7% for next year, with inflation expected to end this year at 30% and next year at 18% [47][48] Question: Loan-to-deposit ratio and liquidity - The loan-to-deposit ratio is around 99-100%, and the company is comfortable with this level, expecting deposit growth to continue [48] Question: Future funding and market conditions - The company is exploring potential debt in the market but prioritizes deposit growth as a stable funding source [34][35]

Core Insights - The company reported a strong performance in Q3, indicating resilience in its business operations [2] - The net interest income (NII) guidance has been raised to over EUR 3.7 billion for the year, reflecting a 5% growth in new lending [2] - There is notable strength in personal lending and capital markets, particularly in the U.K. [2] Lending and Risk Management - The lending book remains resilient, with a revised cost of risk guidance for the full year at the lower end of the previously advised range of 20 to 30 basis points [3] - The domestic economic environment is supportive, positioning the company for good momentum entering 2026 in terms of activity and pipeline [3]

Core Viewpoint - AFL Group reported strong financial results for the first half of 2025, demonstrating significant growth in earnings and lending activities, supported by effective liquidity management and cost control [2][3][4]. Financial Performance - Consolidated earnings as of 30 June 2025 showed a net banking income of €15.4 million, up 43% from €10.8 million in the same period of 2024 [2][6]. - Gross operating income increased to €6.34 million, doubling from €2.9 million year-on-year [2][6]. - Net income after tax reached €4.66 million, compared to €1.95 million in the first half of 2024 [2][6]. Lending and Capital - Loan production for the half-year rose by 18% to €728 million compared to the first half of 2024 [6]. - Outstanding loans amounted to €9.13 billion, driven by competitive credit offerings to local authorities [4][6]. - Pledged capital increased to €332 million from €328 million at the end of 2024 [2]. Cost Management - The cost/income ratio improved to 66.4%, down from 67.8% at the end of 2024, reflecting effective cost control measures [2][4]. - The cost of risk remains low due to prudent management and the strong creditworthiness of local authorities [5][6]. Liquidity and Capitalization - Liquidity stood at €2.1 billion, sufficient to meet operational needs for 10 months [6][13]. - The CET1 solvency ratio was 56.52%, while the banking leverage ratio was 2.43%, indicating a solid capital structure [13][14]. Market Position and Ratings - AFL's financial structure is recognized as robust by rating agencies, with a long-term rating of A+ from Fitch and AA from Standard & Poor's [10][14]. - The organization has maintained a continuous presence in capital markets, raising €1.3 billion at a tightened margin of 15.7 basis points against the OAT curve [10][11].

Financial Performance Highlights - IFS's quarterly net profit in 2Q25 reached S/ 579.6 million, a 29.9% increase QoQ [207] - IFS achieved a ROE of 20.7% in 2Q25 [34] - Banking sector ROE was 11.1% in 2Q25 [35] - Wealth Management saw a significant ROE increase to 43.9% in 2Q25, approximately 20x YoY [35] - Insurance sector ROE was 58.3% in 2Q25 [35] Business Trends and Growth - System loan book as of June 2025 showed a QoQ increase of 3.1% and a YoY increase of 1.7% [31] - Total commercial loans increased by 4.1% QoQ and 9.8% YoY [202] - Total retail loans increased by 1.1% QoQ and 1.2% YoY [202] - Total deposits increased by 2.7% QoQ and 7.4% YoY, reaching S/ 52,036.0 million [204] Key Ratios and Indicators - IFS's cost-to-income (C/I) ratio was 35.9% in 2Q25 [45] - Banking sector's C/I ratio was 42.3% in 2Q25 [49] - Banking sector's NIM was 5.1% [136] - The cost of risk for the banking sector is at 2.5% [139]