Grupo Financiero Galicia S.A.

Good morning, ladies and gentlemen. Welcome to Grupo Financiero Galicia second quarter 2026 earnings call. This conference is being recorded and the replay will be available at the company's website at gfgsa.com. We would like to inform that all attendees will only be listening in the conference during the presentation and then we'll start the question and answer session when further instructions will be provided. 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. Investors should be aware of events related to the macroeconomic scenario, the financial industry and other factors could cause results to differ materially from those expressed in the respective forward-looking statements. Now I will turn the conference over to Mr. Pablo Firvida, Head of Investor Relations. You may begin your conference.

Thank you. Good morning and thank you for joining this conference call. Before reviewing our operating performance, I would like to briefly address the macroeconomic backdrop that shaped the performance of the financial system during the quarter and provide the context for our business trends. According to the Monthly Indicator for Economic Activity, EMAE, the Argentine economy expanded 2.7% year over year in June and recovered 0.8% month over month on a seasonally adjusted basis. Despite this monthly improvement, activity remained 1.1% below December 2025 levels, mainly reflecting the declines recorded in April and May. In the second quarter of 2026, the primary surplus stood at 0.4% of GDP, in line with the level recorded in the second quarter of 2025. On a year-to-date basis, the primary surplus reached 0.8% of GDP. During the first half of the year, total revenues declined 5.7% year-over-year in real terms, while primary spending decreased 2.8% in real terms. The National Consumer Price Index accumulated a 33.5% increase on a year-over-year basis and a 16% increase during the first month of 2026. During the quarter, monthly inflation decelerated from 3.4% in March to 1.9% in June. The monetary base expanded by 4.1 trillion pesos during the second quarter and 8.5 trillion pesos from the end of June 2025, representing a 23% year-over-year growth. In June 2026, the exchange rate averaged 1,450 pesos per dollar, implying an 18.5% year-over-year depreciation. The average rate on 30-day peso-denominated private sector time deposits above 1 billion pesos, Tamar, stood at 22.7%, 10.9 percentage points below the June 2025 average. Turning now to the financial system, private sector peso denominated deposits averaged 117.4 trillion pesos in June, increasing 8.4% during the quarter and 31.8% over the last 12 months. Time deposits grew 8.2% during the quarter and 45.5% year over year, while peso-denominated transactional deposits declined 8.4% during the quarter but increased 17.1% year over year. Private sector dollar denominated deposits amounted to $39.4 billion, increasing 1.9% during the quarter and 29.6% over the last 12 months. Peso denominated loans to private sector averaged 98.7 trillion pesos in June, increasing 6.8% quarter over quarter and 36.4% year over year. Private sector dollar denominated loans amounted to $23.5 billion, recording a 14.6% quarterly growth and a 48.8% annual increase. Overall, the second quarter was characterized by a more stable macroeconomic environment, improving real activity indicators, and continued expansion across key financial system aggregates. Moving on to Grupo Galicia, net income for the second quarter amounted to 258 billion pesos, 12% higher than in the previous year, which represented a 2.1% return on average assets and an 11.3% return on average shareholders' equity. This result was mainly due to profits from Banco Galicia for 158 billion pesos, From Fondo FIMA for 38 billion pesos, from Naranja X for 36 billion pesos, from Galicia Seguros for 23 billion pesos, and from Galicia Securities for 8 billion pesos. Banco Galicia and its income improved by 211% sequentially and 21% compared to the second quarter of 2025. Thank you for watching. Great quality trends also improved, reducing loan loss provisions, while ongoing integration synergies from Galicia Mass, ex-HSBC, drove further efficiency gains. Results additionally benefited from lower inflation-driven monetary losses in a decelerating inflation environment. Average interest in assets reached 30 trillion pesos, 6% higher than in the previous quarter, primarily driven by a 27% higher volume of government securities in pesos and a 37% higher volume of government securities in dollars, together with a 9% growth of dollar-denominated loans, while peso-denominated loans decreased 7% in line with a more selective origination policy and lower demand. In the same period, its yield decreased 190 basic points, reaching 21.1%, 34.8% in peso portfolio and 7.4% in the dollar portfolio, due to lower yields on both local and foreign currency denominated loans. Interest-bearing liabilities decreased 3% from March 2026, amounting to 24 trillion pesos, mainly due to a 10% lower volume of liabilities in dollars, partially offset by an 8% increase in peso-denominated time deposits. During this period, its cost decreased 159 basic points to 10.1%, reflecting the broad-based decline in interest rates that began toward the end of the first quarter of 2026. Net interest income decreased 3% when compared to the prior quarter. Interest income declined 8%, mainly driven by a 17% lower interest income from loans and other financing due to lower volumes and the decline in interest rates during the quarter. This was partially offset by a 20% higher income from government securities, primarily driven by a higher average portfolio and stronger returns from CPI-linked securities. Interest expenses were 16% lower, mainly related to deposits. Net fee income increased by 2% quarter on quarter, mainly due to a 14% decrease of fee expenses. Net income from financial instruments was 275% higher than in the previous quarter. mainly due to lower losses from derivative financial instruments which decreased 85% and 84% rise in results from the derecognition of assets driven by sales of government securities classified at fair value through OCI, 50% higher gains from government securities measured at fair value and a recovery in the results from private sector securities. Results from quotation difference of foreign currency decreased 13% quarter on quarter. This performance was explained by a lower level of transaction activity, given that the previous quarter had registered a higher volume of operations by retail customers. Provision for loan losses declined 8% quarter on quarter, driven by a decrease in loans becoming stage 3, and the associated deterioration of that portfolio, reflecting signs of improvement in the delinquent syndicators observed during the quarter. Personal expenses went up 12% sequentially due to an increase in the provisions for variable payments aligned with improvement in the financial performance, while administrative expenses were flat quarter on quarter. Other operating expenses declined 15% quarter-on-quarter, driven by a 14% lower turnover tax, 13% lower other fee-related expenses, and a 21% decrease in other financial results. The bank's financing to the private sector reached nearly 25 trillion pesos at the end of the quarter, up 4% in the last quarter, with peso financing decreasing 4% and dollar-denominated financing up 19%. Deposits reached 27 trillion pesos, 7% higher than a quarter before, due to a 7% growth of deposits in pesos and a 6% increase in dollar-denominated deposits. The bank's estimated market share of loans to the private sector was 15.1%, 69 basic points higher than at the end of the previous quarter, and the market share of deposits from the private sector was 14.3%, 42 basic points higher than in the first quarter of 2026. The bank's liquid assets represented 93.1% of transactional deposits and 55.2% of total deposits, compared to 95% and 56.6% respectively as of the previous quarter. As regards asset quality, the ratio of non-performing loans to total financing ended the quarter at 8.3%, recording a 60 basic points deterioration as compared to the 7.7% of the first quarter of 2026. The coverage with allowances reached 92.8%, up from 91.4% recorded in the prior quarter. As of the end of June, the bank's total regulatory capital ratio reached 26%, while the Tier 1 ratio was 25.9%, both increasing 48 basic points from the end of the prior quarter. In summary, during the second quarter, profitability improved sequentially, supported by a stronger contribution from financial instruments, lower funding costs, reduced loan loss provisions, and continued efficiency gains from the integration. Business volumes remained resilient, with growth in total financing and deposits, particularly in dollar-denominated loans, while we continued to gain market share in both loans and deposits. At the same time, the non-performing loan ratio increased during the quarter, although coverage levels improved and provisions declined, reflecting early signs of stabilization. Overall, Grupo Galicia maintains strong liquidity and solvency metrics and will remain focused on disciplined growth, preserving capital strength and further improving asset quality and profitability over the coming quarters. Now, Gonzalo Fernández Covaro will make some additional remarks.

Thank you, Pablo. Talking about our financial performance, as Pablo said, we saw a better quarter as interest rates stabilized at lower levels, with margins slightly increasing too, and also better returns from our one portfolio. Our costs of risk continue going down as we expected, and expenses under control, enjoying the results of last year's restructuring. Talking about volume, loan growth continues to be slow due to the low demand in the commercial credit size in pesos, veteran dollars, and strict origination policies on the consumer side. We expect some recovery in the lending volume in the second half. Our projections for loan growth are now around 10 to 15%. Thank you very much. Stabilization and reduction of NPLs will take one more quarter than expected. We are seeing now the peak in the second quarter, so in June now, with a stabilization and reduction going forward. In the bank, we expect a slight decrease of NPLs ratio in the third quarter and reaching around 6.3% at the end of this year on the NPL ratio. We see a cost of risk for the bank around 8.3% for the full year 2026. That's our expectation for the rest of the year. We are now at 9.3%. So we expect that great losses charges will continue going down in the second half as it has been happening in the first two quarters. On the cost side, we are capturing the benefit of the restructuring made last year, as I said, after the HBC acquisition and expect to end the year 11% lower cost than prior year. We already have the same amount of headcount than the one we had before the acquisition of HSBC. And lastly, regarding returns, we see our ROE around 10% for the year. We trust that the lending volume will pick up to achieve this goal. Of course, while the lending growth is low, we also invest in other earning assets like government bonds and good yields. The goal here is to grow earning assets to be able to continue to improve earnings and results. So with that, I think we are open for questions.