Grupo Financiero Galicia S.A.

Welcome to first quarter 2024 earnings release. My name is Alan. I'll be your coordinator for today's event. Please note this call has been recorded and for the duration, your lines will be on listen only. However, you will have the opportunity to ask questions at the end. This can be done by pressing star one on your telephone keypad. If you require assistance at any time, please press star zero and you'll be connected to an operator. I'll now hand you over to your host, Pablo Ferreira, to begin today's conference. Thank you.

Thank you. Good morning and welcome to this conference call. I will make a concise introduction and then we will take your questions. Some of the statements made during this conference call will be forward-looking statements within the meaning of the safe harbor provisions of the U.S. federal securities laws and are subject to risk and uncertainty that could cause actual results to differ materially from those expressed. According to the monthly indicator for economic activity, the Argentine economy recorded an 8.4% year-over-year contraction during March. In year-to-date terms, the economic downturn reached to 5.3%. During the first quarter, the primary surplus reached 0.6% of GDP and an overall surplus of 0.2%. compared to a 0.4% primary deficit in the first quarter of last year. This result was explained by a 254.6% year-over-year increase of revenues, whereas primary spending rose 144.1%. The National Consumer Price Index accumulated a 51.6% increase during the first quarter and a 287.6% in the last 12 months ended on March 31, 2024. However, monthly inflation has decelerated in recent months from 25.5% in December 2023 to 8.8% in April 2024, trend which is expected to continue. On the monetary front, the monetary base increased by 2.9 trillion pesos in the first quarter of this year, recording a 132.1% increase in year-over-year terms. After taking office, the central bank devalued the exchange rate by 54.2% on December 13th, a 118.3% variation, after which the FX has maintained a 2% monthly crawling peg. The exchange rate averaged 850.3 pesos per dollar in March, a 76.1% devaluation in year over year terms. The overnight repo rate remained the reference monetary policy interest rate after having replaced the LELIC rate in December, 2023. Since then, the monetary authority lowered the policy interest rate five times from 133% to 40%. It is also worth to mention that on March 11th, the central bank eliminated the regulation that established a minimum interest rate on time deposits. In March, 2024, the average rate on peso denominated private sector time deposits for up to 59 days stood at 85.3% 13.9 percentage points above the average for March of last year. Since March rates for time deposits were lowered in line with the reduction of the monetary policy interest rate and currently stands at an average close to 30%. Private sector deposits in pesos average 42.4 trillion pesos in March, increasing 29.6% during the quarter and 137.8% in the last 12 months. Time deposits in pesos rose 42.5% during the quarter and 104.2% year-over-year, while peso-denominated transactional deposits increased 21.2% and 174.8% respectively in the same period. Private sector dollar denominated deposits amounted to $16.7 billion as of the end of March, increasing 14.7% during the quarter and 2% as compared to March 2023. Peso denominated loans to private sector averaged 18.5 trillion pesos in March, increasing 20.4% in the quarter and 144% when compared to the year before. while private sector dollar denominated loans amounted to $4.3 billion, recording a 24.5% expansion during the quarter and a 17.5% rise when compared to March last year. Turning now to the results for the quarter, net income attributable to Grupo Financiero Galicia amounted to 255.5 billion pesos, 263% higher than the year-ago quarter, mainly due to profits from Banco Galicia for 244.3 billion pesos, from Naranja X for 22.6 billion pesos, and from Galicia Asset Management for 11.3 billion pesos, offset by a 16.4 billion pesos loss from Galicia Seguros. This profit represented a 7.1% annualized return on average assets and a 32.4% return on average shareholders' equity. Banco Alicia's net income for the quarter was 319% higher than in the year-ago quarter, mainly due to a 157% increase of the operating income, partially offset by 102% increase of the loss from the net monetary position. Net operating income increased 102% primarily due to a 209% higher net interest income offset by an 18% lower results from financial instruments and of 36% decrease in the results from gold and foreign currency quotation differences. Average interest in assets reached 6.6 trillion pesos, 25% lower than in the same quarter of last year, mainly due to a 61% decrease of the portfolio of government securities and a 33% reduction in the average balance of loans in pesos. In the same period, its yield increased 63 percentage points, reaching 127%. Interest-bearing liabilities decreased 29% from March of last year, amounting to 5.3 trillion pesos, mainly due to a 59% decrease in time deposits in pesos. During this period, its cost increased 9.7 percentage points to 52.2%. Interest income increased 55% due to a 48% growth of interest on government securities, a 338% increase of interest on repurchase agreement transactions, and a 12% increase of interest on loans and other financing. Interest expenses decreased 14% as a consequence of a 33% lower interest on time deposits due to the decrease in its average volume. Net fee income decreased 6% from March last year mainly due to a 25% lower profit from fees on bundles of products and also a 34% decrease on utility bills and collection services, partially offset by a 68% increase of other fees. Net income from financial instruments decreased 18% due to lower results from government securities and to losses from derivative financial instruments. Gains from gold and effects quotation differences was 36% lower from the year-ago quarter, including the results from foreign currency trading. Other operating income increased 43% in the quarter because of a 126% increase in other adjustments and interest on miscellaneous receivables. As regards provision for loan losses, the amount for the quarter was 37% higher than the one recorded in the year-ago quarter, to 47.3 billion pesos. Personal expenses were 3% higher than in the first quarter of 2023 in line with the 5% increase of staff and of salary agreements with the union. Administrative expenses were 10% higher as a consequence of 34% higher taxes and 20% higher expenses for maintenance and repairment of goods and IT. Offset by 51% lower expenses for publicity from promotion and research. Other operating expenses increased 64% mainly due to higher charges for other provisions. The income tax charge was 517% higher than the first quarter of 2023 due to higher operating results. The bank's financing to the private sector reached 3.9 trillion pesos At the end of the quarter, down 20% in the last 12 months, with peso-denominated loans decreasing 29% and dollar-denominated loans growing 37%. Net exposure to the public sector decreased 15% year-over-year because of lower exposure to a central bank, LELIC, LELID, and repurchase agreement transactions. Public sector exposure, excluding central bank exposure, represented 23% of total assets compared to 13% as of the end of the first quarter of last year. Deposits reached 6.5 trillion pesos, 26% lower than a year before, mainly due to a 52% decrease of time deposits in pesos and a 47% decrease of current account in pesos. The bank's estimated market share of loans to the private sector was 12.2%, 52 basic points lower than at the end of a year-ago quarter, and the market share of deposits from the private sector was 10.2%, 38 basic points higher than in the same quarter of 2023. The bank's liquid assets represented 102.5% of transactional deposits and 64.4% of total deposits, compared to 115.9% and 57.9% respectively from a year before. As regards asset quality, the ratio of non-performing loans to total financing ended the quarter at 2.09%, recording a 41 basic points improvement as compared to the 2.50% of the first quarter of the prior year. At the same time, the coverage with allowances reached 148% down 38 percentage points from the 186% recording a year ago. As of the end of March, 2024, the bank's total regulatory capital ratio reached 32.1%, increasing 862 basic points from the end of the same quarter of the prior year. While tier one ratio was 30.9%, up 935 basic points during the same period. In summary, in a particularly challenging and volatile political and macro environment, Grupo Financiero Galicia was able to keep asset quality, liquidity, and solid metrics at healthy levels and to improve the level of profitability despite the significant impact of the high inflation and the steep recession recorded in the quarter. We are now ready to answer the questions that you may have. Thank you.

Thank you. If you'd like to ask a question or make a contribution on today's call, please press star 1 on your telephone keypad. To withdraw your question, please press star 2. You'll be advised when to ask your questions. We'll take our first question from Ernesto Gabilando, Bank of America. Your line is open. Please go ahead.

Thank you. Hi, good morning, Pablo. Thanks for the opportunity. My first question will be on your long-growth expectations. I just wonder what will be the macro assumptions behind long-growth. You can elaborate on how are you seeing GDP growth for this and next year. and also inflation and interest rates. And then my second question will be on your loan-to-deposit ratio. Most of the Argentine banks are starting to resume real loan growth under normalized rates, lower inflation. How would you see the evolution of the loan-to-deposit ratio in the next years? And lastly, I would like to ask you about your ROE expectations. I would like to hear about your thoughts for the second quarter, given that you will start to land, but at the same time, you will have a lot of moving parts. I think my perception is that second quarter will be tough, but then you will have a second half recovering in terms of the ROE. So how would you see the ROE evolution throughout the year? How do you see the ROE for this year and how do you see it sustainable longer term? Thank you.

Okay. Hello, Ernesto. Well, first, long growth, we see, as you mentioned, growing in real terms this year. The trigger was will be when inflation is close to 5% per month, we are going in the right track. According to our estimates, the year will end up with loans growing around 30% in real terms. This has two assumptions on inflation and GDP evolution. close to 140% for the full year, although it's a moving target and it has been coming down. Actually, we are perhaps closer to 135%. The recession we have seen in the first quarter looks like it's getting to a bottom. But nevertheless, the full year will suffer a GDP contraction of roughly 3.8%. That is what our chief economist is forecasting and most of the economists are in the same region. But for next year, we are forecasting a 5% GDP growth and a much lower inflation. How much low depends on many things that I would say between 35 and 40 percent. Definitely still high, but coming from these high levels we have been having in the last years, I would say. Next year, with a much lower inflation and GDP growing, as I mentioned, the loan book should be expanding Perhaps the first loans to react will be the commercial ones and then the individual. Still, it's too early to say how much or what percentage in real terms, but definitely it will be substantial.

Yeah, before moving to the long-deposit ratio, in terms of interest rates, how do you see them for the rest of the year, next year?

Yes. Well, interest rates have been coming down significantly, not only the repo rate, but also that is the reference rate that has an impact on all the rates. One month ago, I remember that the repo rate was at 70%. Today it's at 40. Time deposits, as I mentioned in the first quarter, were at 85% interest rate. Today they are at 30%. So we are seeing interest rates coming down. It will be a function of the evolution of the economy. with this reduction in inflation and interest rates, we see this loan demand picking up quickly. So we will see some type of a margin compression coming from very, very high levels and will be gradual, but we are seeing that the volume will more than offset a compression in margins.

Okay, keep on going. Yes. Yes. The reference rate was around more than 100% last year and today it's already at 40%. Do you think it could be more sustained at this level at least for this year before going a little bit lower?

Yes, could be the case. Also, the central bank has many, I would say, simultaneous objectives. and they said that this reference rate, but also are looking at the effects evolution. So perhaps for this year, it would be difficult to see much more reduction in interest rate, but for next year, it could be the case that interest rates will be going down again. Of course, the central bank, I don't know if to say, of course, that these central banks typically don't allow us to anticipate their moves. They are very efficient in setting new price signals, regulations, but looking at the inflation and the effects we are seeing, it looks like this interest rate level could remain for for this year, or perhaps with small reductions or adjustments. Perfect, perfect. Okay. When we go to the loan-to-deposit ratio, if I'm not wrong, the third quarter ended with 50% loan-to-deposit ratio. It's the difference between pesos and dollars. Of course, in dollars it's much lower. although we have been seeing a pickup in dollar loans, in the demand of dollar loans. So it can grow and we don't have, or I would say the ratios are so low that there is plenty of room to grow. We don't see them getting to the levels we have in 2017 that were close to 90 or 95%. But we will navigate in this transition that we have room to improve that ratio. In terms of ROE expectation, last year Grupo Financiero Alisa had an ROE of 17.4%. This first quarter was very strong with about 32%. It will be hard to replicate the same numbers, so we will see some declining ROE in the following quarters. But in my opinion, it will be in the area of 20% for the full year. Of course, as you also mentioned, Ernesto, there are many moving parts. but we are confident that we will adapt to these price signals I mentioned.

Excellent. So the ROE for the full year around 20% and that you think it could be maintained for the next years at 20%?

Yes, perhaps I'm being a little bit conservative taking into account the first quarter, but Yes, with the information we have today, I would say 20% and perhaps at the same level or even a little bit higher for next year.

Excellent. Thank you very much, Pablo.

You're welcome, Ernesto.

We will take our next question from Brian Flores, Citibank.

Your line is open. Please go ahead.

Hi, Pablo and Tim, thank you for the opportunity. I have two questions. The first one is on strategy. I wanted to ask you, how are you preparing to compete against fintechs, right? You have a very strong consumer franchise. But I think eventually fintechs pressure and they have pressured everyone regarding fees and being very fast in terms of implementing a great offer for consumers. So just one thing to get your views on how are you preparing your franchise going forward? Particularly as we saw this quarter, some pressures on non-interest expenses, which also is a very important item, right? In the end, efficiency gains are a very important part of the equation. So just how are you thinking about this? And then I'll ask my second question. Thank you.

Yes. Hi, Brian. We have been competing with fintechs for many years now. Mercado Pago is the largest fintech or big tech due to that they were born through Mercado Libre. So they got the clients from the e-commerce platform and then they converted these clients into Mercado Pago clients. So they have many clients with their wallet. We have Naranja X, that is I would say the second FinTech in terms of active monthly users. And all the banks are digital. You need scale to become more efficient. That's why in a way we announced the purchase of HSBC. We also have, as you mentioned, a pressure on fees this quarter, but mainly because of the high inflation level in the quarter and the price increases couldn't be reflected or adjusted in the first quarter. So the next quarter you will see an improvement in fee income. So, and if I had to say today, Where banks are making money, I would say that much more with big corporates, medium-sized SMEs, agricultural sector, price banking clients, and not so much the typical massive fintech client. Having said that, we tackle these non-so-profitable businesses with Naranja X, and as I mentioned, we have been competing with them, and I think that both Mercado Pago and Naranja X and perhaps other much smaller companies are a kind of barrier for newcomers. It should be very difficult for, I don't want to mention another company, but any new fintech coming to Argentina from zero, it's almost impossible in my opinion. Very costly. And perhaps it was easier when the interest rate in the world was much lower and it was easy to raise money. Now you have to have profitability much quicker than in the past.

Perfect. Perfect.

Yes, the second question was on the communique that you published very recently on the sanction by CMV. Just wanted to ask you, how did you reach this conclusion? Was it on, is it your estimate, is it based on conversations with the regulator, or is it an internal and with your lawyers, and it could have some upside risk? And when I say upside risk, could it be more than what you are estimating? Just because on the communique, we didn't have much detail. So if you could expand a bit on this, it would be great. Thank you.

Yes, excellent. Well, this... sanction, as you mentioned, actually was an investigation that the CNB, the local SEC, informed us on April 30th that they initiated this investigation. So we, in turn, initiated our internal investigation in order to find out if what the CNB alleged was the case or not. Actually, at that moment, we didn't have a significant 6K because when there is an investigation begins, there is nothing to communicate. Yesterday, as we issued the press release and we advanced with the internal investigation, we said or we communicated formally that we were in this process. We will answer to the CMB on May 29. The number that the CMB is saying that was what we got above what should be the correct number is 23 billion pesos. our preliminary numbers are much lower, but that will be the answer on May 29. But in order to be prudent, we have a provision of 23 billion pesos plus another 23 billion pesos. So actually the provision is 46 billion pesos. It was not something we spoke with the regulator. It was a prudent decision in order to have in our books cover most of all and perhaps more than the final number that the CNB and the central bank will tell us. The thing is not so easy, the number. because executing, well, you know, all the banks that pay a prime have the right to sell to the central bank different bonds. In this case, it was a dual bond and it was not very liquid. And the price that the central bank on an ordinary basis sets is an extrapolation of some dots. And so there are many different analysis in which you can say which is the correct price. And depending on that, the impact is 23 billion pesos or half or whatever, or even nothing if you compare, I don't know, other dual bonds or dollar link or other instruments. So that is what we said as we issued the results. We are saying that we built a provision because of this initial investigation that it's not at all closed. I don't know if it was clear.

No, it was clear. I just think maybe a quick follow-up that would be useful. So you're saying, as you mentioned, it could be less, but also, I mean, is there a probability that it could be more than this, or do you think maybe the limit is on this? returning the $23 billion plus the $23 billion, which maybe the limit is around $50 billion? Or do you think there is a chance to see the regulator sanctions a higher number?

Really, it's difficult to predict. If you analyze these curves, the dots, the extrapolation, the numbers would be much lower, but the It's impossible to predict also the fine. So as I mentioned, as a prudent way, we provisioned this 46 billion pesos. But it's hard really to say if it's enough or it's a lot or if it will be marginal, the effect in the next quarters.

Okay. Just to finalize, and I'm sorry here to ask on this topic maybe a lot of questions, but you say this will be maybe by 29 you're going to present and you're going to answer formally to CMV. By when do you think we could get like a final resolution from CMV?

The CMV doesn't have a deadline. They are not. There is not a process or a procedure that says that, I don't know, in 10 days you have to answer. We hope to get the answer as soon as possible. We would like to close this investigation because definitely we are not happy at all with the situation. So the sooner the better. But it's not in our hands. We will answer. The answer will not be public. Once the situation is closed or settled, it will become public.

Super clear. Thank you.

You're welcome, Brian.

We will take our next question from Carlos Gomez, HSBC. Your line is open. Please go ahead.

Hello. Thank you for taking the question. The first one you show very helpfully. that your government exposure is now 23% of total assets, and it has been increasing. Is there an internal limit that you have set for that exposure? And if we understand correctly, that is not counted. I mean, part of that is not counted. The are not counted as part of your public sector exposure today, right? That would be my first question. The second refers to loan demand. You expect now to grow loans 30%, and we understand that things move very fast in Argentina, but you have a decline of 2% in the first quarter. What are you seeing so far? We are in the middle of the second quarter. What are you seeing so far in other signs of renewed demand in Argentina that gives you hope that you will be able to get to that 30% by the end of the year? Thank you.

Yes. Hi, Carlos. What we see... Well, we make a difference between the government exposure that, as you said, was 23% of total assets, and the central bank exposure, mainly RIPOs today, as the leaks disappeared, and they stood at 17%. So in total, 40%. There are regulatory limits on government exposure, and we also have our internal limits. And this 23% doesn't include the new lay caps that were issued. Basically the new lay caps will be seen in the second quarter. Our objective is to keep this percentage around 25% of total assets. When the loan demand from the private sector Basically, this will be the source of funding. It will be a shift from one of these assets, the government bonds, to lending to the private sector. We are seeing some, I would say, timid or shy loan demand coming from companies. It began with dollars that were seen in the first quarter. And when we speak with the commercial people of corporate banking or SMEs or the agricultural sector, they say that their clients have many projects, but they are waiting for some clarity or some, let's say, more predictable macro variables, mainly lower inflation and a clear path on effects. So in our assumption, we are seeing loan demand rebounding already in the early second half of the, or in the second semester, in the second half of the year.

All right. So you expect, I mean, you still expect that recovery to happen. And to give you another easy question, you mentioned inflation and GDP. What's your forecast for the currency?

For the current year, between 135 and 140% inflation. As I mentioned before, it's a moving target. At the beginning of the year, when we were making our annual budget, most of the economies were thinking 200%, then 180, and it has been coming down. And for next year, it's perhaps early, but the current estimates are around or between 35% and 40%. And also, as I mentioned, still very high, but coming from the very high levels of the previous years, it's a good declining trend.

Yes, thank you. And now my question was about the currency. Where do you expect the peso and the CCL exchange rate to finish? And again, I understand nobody knows.

The blue chip swap, the CCL. Well, right now, in this week mainly, we saw some recovery or increase in the price of the CCL. It's hard to predict because we have the simple, the limitations on effects movement. Our expectation is that the government will release most of these limitations perhaps in September. And at that moment, perhaps we will see some increase in the effects. and the gap between the official effects and the financial dollars should narrow back as it was. The last number I saw was 1,200 pesos for the official exchange rate at the end of the year, but this is even harder to project than the inflation number. So still having all these restrictions and makes the estimates hard. What is important to understand that for banks, we have to be a hedge in dollars. We cannot be long or some, we could be something long in dollars through forward contract. But in general, In general, devaluation doesn't have a direct impact on our balance sheet. Of course, there is an indirect impact on the numbers of our clients. And in general, when there is a devaluation as the private sector is long in dollars in Argentina, there is a kind of a wealth effect, But today, I would say that the main variable to monitor is inflation.

Okay. So for the Forex right now, $1,200 for the official exchange rate? Yes. Thank you so much.

You're welcome, Carlos.

We will take our next question from Alonso Arumbu, BTG. Your line is open. Please go ahead.

Yes. Hi, good morning, and thank you for the call. Pablo, I wanted to ask you about your capital ratios, given the demand you're expecting very strong this year, and I would imagine that in 2025, you would also expect long growth in real terms, probably about 40% as well. How do you see your capital ratios evolving? You have excess capital today. So just if you can give us a color on that and also related to that, what do you think is going to be the policy of the bank? Thank you.

Hi, Alonso. Well, the capital ratio is above 30%, so very high, much higher than what we would like. We announced dividends and we paid dividends. In May, a group of financiers paid two tranches. One was 65 billion pesos. The second one was 142.3 billion pesos. Why the second of 142.3 billion pesos? is because the central bank approved the payments of dividends from the bank to the holding company in three installments. So Grupo Financiero Galicia will receive two additional installments, let's say between 145 and 160, the next installments because they will be adjusted by inflation in June and in July. And then the board of directors of Grupo Financiero Galicia will decide the best moment to pay the other installments to the Grupo Financiero Galicia shareholders. So capital ratio will be reduced with these payments of dividends. We will also have an increase in our capital once we combine Banco Galicia and Grupo Financiero Galicia with HSBC. We have to see what will be the final effect because the price was set in dollars. But at the moment, when we announced the transaction, the price to book we paid was 40%. I assume there will be a capital gain there. And with all the sensitivity analysis we can make, we see enough capital to distribute dividends to absorb HSBC and to grow our loan book this year and next year. And of course, we will be generating results. So really, capital, it's not an issue in the medium term, I would say.

Okay. Thank you, Pablo.

You're welcome, Alonso.

We will take our next question from David Cardo. Your line is open. Please go ahead.

Yes, thank you. Well, congratulations on the results from the quarter. I have a couple of questions. First, on HSBC's acquisition, I understand first that it's not yet consolidated. with the group, but I would like to know, well, if you could give us some color on the rationale behind it, like are there any synergies between both portfolios that you're seeing, I mean, that you're expecting to get, or something of the sort? Second, going back to the admission process, I'm going to go with CNV. Other than the money, other than the financial, the final you may get, are there any other, let's say, trading restrictions that might be imposed on the group?

Hello, David. Well, first, I will begin with the second part. I think that once we – well, first we have to finish with the investigation, no? But let's say we need to pay the money back, the additional gain and the fine, it should be – I don't know what other sanctions could be. perhaps some individuals or finds to individuals that really so far with the information we have today, I would say no other effect. Of course, we are, as I mentioned, we are not happy at all. We take care a lot of our reputation. Internally, it was a very bad surprise, but we need to finish investigations, the answer, and the outcome. With HSBC, we are waiting for two things to get the closing. One is the approval from the central bank, and the other one that we feel or we estimate that will occur in the second semester, perhaps in the fourth quarter. And the other thing we have to achieve or HSBC has to achieve is to be able to disconnect HSBC Argentina with HSBC headquarters. There are some IT software and hardware things that must be disconnected in order to let the Argentine bank to operate as an independent vehicle. Well, the logic or the rationale with the purchase of HSEC was, well, the price was a good one in our opinion. In the price, we didn't put any synergy, but I'm sure there will be some of them. We are getting new clients, it's hard to grow organically. You need a lot of time, so M&A is a good way to gain market share. They have not only good clients, they also have good employees. We are looking also to get more talent. They have certain products and niches like They are very good in COMEX, in foreign trade. They have a good wealth management. We are also getting an insurance company and an asset management company. So it will give us a 3, 3.5% increase in market share. There could be some overlapping of certain branches. We will need to see which ones are owned branches, either by the current HSBC or Galicia. and which are rented perhaps at headquarters could be some overlapping but typically in a normal year in any bank you lose a certain number of people so without doing anything very active we could be getting to a good number of people considering our staff and their staff. There would be synergies, but as I mentioned, they were not priced in. I don't know if I answered you both questions.

Yes, absolutely.

Perfect. Thank you.

You're welcome.

We will take our next question from Marina Mertens, Latin Securities.

Your line is open. Please go ahead.

Hi, Pablo. Good morning. So I have just one question regarding the central bank regulations. So which additional regulations do you expect to be lifted in the coming months, and how do you expect this to impact your business?

Hi, Marina. Well, we are convinced that the central bank will make – will dismantle many regulations that were built in the previous administrations because this central bank believes more in the competition and not so much in the micro-regulation. So the regulation that worried us the most was the minimum interest rate on time deposits that they lifted or they eliminated that minimum interest rate on time deposits in mid-March. So it was a good signal. Then any mandatory lending to SMEs or any cap on interest rates or more flexibility to merge branches is something we are seeing as necessary and they are going to tackle that. One thing that banks in general are fighting for for many years is to level the field with certain fintechs. Some fintechs are not regulated by the central bank, and we keep on saying that if they take deposits, if they grant loans, they must have reserve requirements, capital requirements, They have to provide information to the central bank. They have to know their clients in order to avoid money laundering or this type of thing. So that would be also a good thing, not only eliminating distortive regulations that set caps or floors, but also regulating fintechs. We had some discussions with Mercado Pago regarding the QR, and this has been an issue for many months, even a year, I think. And, well, there is need to have similar rights and obligations. That's, I would say, the main thing. So far, the central bank has been more focused on affects inflation and their balance sheet, and I think it's the best thing they did, no? Now, the second round of measures, in my opinion, will be more regulating or deregulating the financial system, the balance sheet.

Perfect. Thank you.

You're welcome, Marina.

There are no further questions on the line, so I will now hand you back to your host for closing remarks.

Well, okay. Thank you all for attending this call. If you have any further questions, please do not hesitate to contact us. Good morning and have a nice weekend. Bye-bye.

Thank you for joining today's call. You may now disconnect.