United States

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

  

FORM 20-F/A

Amendment No. 1

  

☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended June 30, 2024

 OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

 OR

☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES AND EXCHANGE ACT OF 1934

Date of event requiring this shell company report ___

Commission file number 001-29190

 

CRESUD SOCIEDAD ANONIMA COMERCIAL

INMOBILIARIA FINANCIERA Y AGROPECUARIA

(Exact name of Registrant as specified in its charter)

 

Cresud Inc.

(Translation of Registrant’s name into English)

 

Republic of Argentina

(Jurisdiction of incorporation or organization)

 

Carlos M. Della Paolera 261, 9th Floor (C1001ADA)

City of Buenos Aires, Argentina

(Address of principal executive offices)

 

Matías Iván Gaivironsky

Chief Financial and Administrative Officer

Tel.: +54(11) 4323-7449 - ir@cresud.com.ar

Carlos M. Della Paolera 261, 9th Floor, (C1001ADA),

City of Buenos Aires, Argentina

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

 

 Securities registered or to be registered pursuant to Section 12 (b) of the Act.

 

  

Title of each class		Trading Symbol		Name of each exchange on which registered
American Depositary Shares (ADSs), each representing ten shares of Common Stock		CRESY		Nasdaq National Market of the Nasdaq Stock Market
Common Stock, par value ARS 1.00 per share				Nasdaq National Market of the Nasdaq Stock Market*

  

* Not for trading, but only in connection with the registration of American Depositary Shares, pursuant to the requirements of the Securities and Exchange Commission.

 

Securities registered or to be registered pursuant to Section 12 (g) of the Act: None

 

Securities for which there is a reporting obligation pursuant to Section 15 (d) of the Act: None

 

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the Annual Report: 596,355,320.

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: 

☐ Yes ☒ No

 

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934.

☒ Yes ☐ No

Note: Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:  ☒ Yes  ☐ No

 

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 

☒ Yes  ☐ No

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer” and “emerging growth company” in Rule 12b-2 of the Exchange Act.:

 

Large accelerated filer ☐	Accelerated filer ☒
Non-accelerated filer ☐	Emerging growth company ☐

 

 If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

 

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

 

Indicate by checkmark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant period pursuant to §240.10D-1(b). ☐

 

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

 

U.S. GAAP ☐

International Financial Reporting Standards as issued by the International Accounting Standards Board included in this filing: ☒

Other ☐

 

 If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow:   

Item 17 ☐  Item 18 ☐

 

If this is an Annual Report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

☐ Yes ☒ No

 

 (APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

 

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by the court. Yes ☐ No ☐

 

Please send copies of notices and communications from the Securities and Exchange Commission to:

 

Carolina Zang		Juan M. Naveira
Zang Bergel & Viñes Abogados		Simpson Thacher & Bartlett LLP
Florida 537, 18th Floor C1005AAK City of Buenos Aires Argentina		425 Lexington Avenue New York, NY 10017 United States of America

 

 

EXPLANATORY NOTE

The Company is filing this Amendment No. 1 (this “Amendment”) to its annual report on Form 20-F for the fiscal year ended June 30, 2024, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on October 23, 2024 (the “2024 Form 20-F”). The Company is filing this Amendment to provide separate audited consolidated financial statements and related notes of Banco Hipotecario S.A. as of and for the fiscal years ended December 31, 2024 (the “Financial Statements of Banco Hipotecario”), including the report of independent auditor relating thereto, as required under Rule 3-09 of Regulation S-X under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), which were inadvertently omitted in the 2024 Form 20-F. Banco Hipotecario was a significant subsidiary of the Company under Rule 3-09 of Regulation S-X under the Exchange Act for the Company’s fiscal year ended June 30, 2024.

This Amendment consists solely of the cover page, this explanatory note, the Financial Statements of Banco Hipotecario, and certifications of our chief executive officer and chief financial officer. Other than as expressly set forth herein, this Amendment does not, and does not purport to, amend, update or restate the information in any part of the 2024 Form 20-F or reflect any events that have occurred after the 2024 Form 20-F was filed on October 23, 2024. The filing of this Amendment, and the inclusion of newly executed certifications, should not be understood to mean that any other statements contained in the 2024 Form 20-F are true and complete as of any date subsequent to October 23, 2024.

This Amendment should be read in conjunction with the 2024 Form 20-F and our other filings with the SEC.

PART III

ITEM 19. Exhibits

 

INDEX OF EXHIBITS 

 

Exhibit No.	Description of Exhibit
1.1(20)	Amended and reinstated By-laws “Estatutos” of the registrant, which serve as the registrant’s articles of incorporation and by-laws, and an English translation thereof.
2.6(15)	Warrant Agent Agreement dated as of February 24, 2021, between Cresud S.A.C.I.F. y A. y Representaciones Sociedad Anónima, and Computershare, Inc. and Computershare Trust Company N.A., collectively as warrant agent.
4.1(1)	Consulting Agreement among Cresud S.A.C.I.F. y A. and Dolphin Fund Management S.A. dated October 25, 1994.
4.1.1(12)	(English Summary) Amendment to the Consulting Agreement by and among Cresud and Consultores Asset Management S.A., dated September 8, 2017.
4.2(2)	Agreement for the exchange of Corporate Service between we, IRSA and IRSA CP, dated June 30, 2004.
4.3(4)	English translation of the Amendment to the Agreement for the exchange of Corporate Service among, IRSA and IRSA CP and us, dated August 23, 2007.
4.4(5)	English translation of the Third Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement, dated November 27, 2009.
4.5(6)	Amendment to the Agreement for the exchange of Corporate Service between we, IRSA and IRSA CP, dated March 12, 2010.
4.6(7)	English translation of the Forth Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement, dated July 11, 2011.
4.7(8)	English translation of the Fifth Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement, dated October 15, 2012.
4.8(9)	English translation of the Sixth Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement dated November 12, 2013.
4.9(9)	English translation of the Second Amendment to the Exchange of Operating Services Agreement between the Company, Cresud and IRSA CP dated February 24, 2014.
4.10(10)	English translation of the Seventh Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement dated February 18, 2015.
4.11(11)	English translation of the Eighth Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement dated November 12, 2015.
4.12(12)	English translation of the Ninth Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement dated May 5, 2017
4.13(13)	English translation of the Tenth Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement dated June 29, 2018.
4.14(16)	English translation of the Eleventh Agreement for the Implementation of the Amendment to the Corporate Services Master Agreement dated June 28, 2019.
4.15(17)	English translation of the Twelfth Agreement for the Implementation of the Amendment to the Agreement for the Exchange of Corporate Services between us, IRSA and IRSA CP, dated June 30, 2020.
4.16(18)	English translation of the Thirteenth Agreement for the Implementation of the Amendment to the Agreement for the Exchange of Corporate Services between us, IRSA and IRSA CP, dated June 30, 2021.
4.17(19)	English translation of the Fourteenth Agreement for the Implementation of the Amendment to the Agreement for the Exchange of Corporate Services between IRSA and Cresud, dated July 12, 2022.
4.18(20)	English translation of the Fifteenth Agreement for the Implementation of the Amendment to the Agreement for the Exchange of Corporate Services between IRSA and Cresud, dated July 14, 2023.
4.19(21)	English translation of the Sixteenth Agreement for the Implementation of the Amendment to the Agreement for the Exchange of Corporate Services between IRSA and CRESUD, dated August 20, 2024.
8.1(21)	List of Subsidiaries.
11.1(3)	Code of Ethics.
12.1*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Chief Executive Officer.
12.2*	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 for Chief Financial Officer.
13.1*	Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Chief Executive Officer.
13.2*	Certification pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for Chief Financial Officer.
97(21)	Incentive Compensation Clawback Policy.
99.1(21)	Summary of investment properties by type as of June 30, 2024 (in accordance with Regulation S-X 12-28 (1)).
99.2*	Audited consolidated financial statements of Banco Hipotecario S.A. as of and for the fiscal years ended December 31, 2024 and 2023.

 

* Indicates documents filed herewith.

(1) Incorporated herein by reference to the exhibit to the registrant’s registration statement on Form F-1 (File No. 333-06548) filed with the SEC on March 3, 1997.

(2) Incorporated herein by reference to the report statement on Form 6-K (File No. 333-06548) filed with the SEC on July 1, 2004.

(3) Incorporated herein by reference to the registrant’s report on Form 6-K (File No. 333-06548) filed with the SEC on August 1, 2005.

(4) Incorporated herein by reference to the annual report on Form 20-F (File No. 333-06548) filed with the SEC on December 27, 2007.

(5) Incorporated herein reference to the annual report on Form 20-F (File No. 001-29190) filed with the SEC on December 30, 2009.

(6) Incorporated herein reference to the annual report on Form 20-F (File No. 001-29190) filed with the SEC on December 30, 2010.

(7) Incorporated herein reference to the annual report on Form 20-F (File No. 001-29190) filed with the SEC on December 28, 2011.

(8) Incorporated herein reference to the annual report on Form 20-F (File No. 001-29190) filed with the SEC on October 30, 2012.

(9) Incorporated herein reference to the annual report on Form 20-F (File No. 001-29190) filed with the SEC on October 31, 2014.

(10) Incorporated herein reference to the annual report on Form 20-F (File No. 001-29190) filed with the SEC on November 17, 2015.

(11) Incorporated herein by reference to the annual report on Form 20-F (File No. 001-29190) filed with the SEC on November 1, 2016.

(12) Incorporated herein by reference to the annual report on Form 20-F (File No. 001-29190) filed with the SEC on October 31, 2017.

(13) Incorporated herein by reference to the annual report on Form 20-F (File No. 001-29190) filed with the SEC on October 31, 2018.

(14) Incorporated herein by reference to the annual report on Form 20-F (File No. 001-29190) filed with the SEC on October 31, 2019.

(15) Incorporated by reference to the registrant’s registration statement on Form 8-A filed on June 22, 2021.

(16) Incorporated herein by reference to the Annual Report on Form 20-F (File No. 001-29190) filed with the SEC on October 31, 2019.

(17) Incorporated herein by reference to the Annual Report on Form 20-F (File No. 001-29190) filed with the SEC on November 16, 2020.

(18) Incorporated herein by reference to the Annual Report on Form 20-F (File No. 001-29190) filed with the SEC on November 1, 2021.

(19) Incorporated herein by reference to the Annual Report on Form 20-F (File No. 001-29190) filed with the SEC on October 28, 2022.

(20) Incorporated herein by reference to the Annual Report on Form 20-F (File No. 001-29190) filed with the SEC on October 20, 2023.

(21) Incorporated herein by reference to the Annual Report on Form 20-F (File No. 001-29190) filed with the SEC on October 22, 2024.

 

 

 

SIGNATURES

 

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Amendment No. 1 to the 2024 Form 20-F on its behalf.

 

	Cresud Sociedad Anónima Comercial Inmobiliaria Financiera y Agropecuaria
Date: June 30, 2026	By:	/s/ Matías I. Gaivironsky
		Name: Matías I. Gaivironsky
		Title: Chief Financial and Administrative Officer

  

SECTION 302 CERTIFICATION

I, Alejandro G. Elsztain, certify that:

1. I have reviewed this Amendment No. 1 (the “Amendment”) to the annual report on Form 20-F of Cresud S.A.C.I.F. y A. (the “Company”) for the fiscal year ended June 30, 2024 (as amended by Amendment No. 1, the “2024 Form 20-F”);

2. Based on my knowledge, the Amendment does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the 2024 Form 20-F;

3. Based on my knowledge, the financial statements, and other financial information included in the 2024 Form 20-F, fairly present in all material respects the financial position, results of operations and cash flows of the registrant as of, and for, the periods presented in the 2024 Form 20-F;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the 2024 Form 20-F is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in the 2024 Form 20-F our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by the 2024 Form 20-F based on such evaluation;

d. Disclosed in the 2024 Form 20-F any change in the Company’s internal control over financial reporting that occurred during the period covered by the 2024 Form 20-F that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

	Cresud S.A.C.I.F. y A.
Date: June 30, 2026	By:	/s/ Alejandro G. Elsztain
		Name: Alejandro G. Elsztain
		Title: Chief Executive Officer

 

SECTION 302 CERTIFICATION

I, Matias Gaivironsky, certify that:

1. I have reviewed this Amendment No. 1 (the “Amendment”) to the annual report on Form 20-F of Cresud S.A.C.I.F. y A. (the “Company”) for the fiscal year ended June 30, 2024 (as amended by Amendment No. 1, the “2024 Form 20-F”);

2. Based on my knowledge, the Amendment does not contain any untrue statement of a material fact or omit to state material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by the 2024 Form 20-F;

3. Based on my knowledge, the financial statements, and other financial information included in the 2024 Form 20-F, fairly present in all material respects the financial position, results of operations and cash flows of the registrant as of, and for, the periods presented in the 2024 Form 20-F;

4. The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15(d)-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which the 2024 Form 20-F is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in the 2024 Form 20-F our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by the 2024 Form 20-F based on such evaluation;

d. Disclosed in the 2024 Form 20-F any change in the Company’s internal control over financial reporting that occurred during the period covered by the 2024 Form 20-F that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5. The Company’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

	Cresud S.A.C.I.F. y A.
Date: June 30, 2026	By:	/s/ Matías I. Gaivironsky
		Name: Matías I. Gaivironsky
		Title: Chief Financial and Administrative Officer

 

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO 18 U.S.C.

SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 20-F of Cresud S.A.C.I.F. y A. (the “Company”) for the fiscal year ended June 30, 2024, as filed with the Securities and Exchange Commission on October 23, 2024 (as amended by Amendment No. 1 thereto, the “Report”), Alejandro G. Elsztain, as Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that;

(1) The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities and Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	Cresud S.A.C.I.F. y A.
Date: June 30, 2026	By:	/s/ Alejandro G. Elsztain
		Name: Alejandro G. Elsztain
		Title: Chief Executive Officer

 

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except as to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended.

 

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO 18 U.S.C.

SECTION 1350, AS ADOPTED PURSUANT TO SECTION 906 OF THE

SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report on Form 20-F of Cresud S.A.C.I.F. y A. (the “Company”) for the fiscal year ended June 30, 2024, as filed with the Securities and Exchange Commission on October 23, 2024 (as amended by Amendment No. 1 thereto, the “Report”), Matias Gaivironsky, as Chief Financial and Administrative Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that;

(1) The Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities and Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

	Cresud S.A.C.I.F. y A.
Date: June 30, 2026	By:	/s/ Matías I. Gaivironsky
		Name: Matías I. Gaivironsky
		Title: Chief Financial and Administrative Officer

 

This certification accompanies the Report pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and shall not, except as to the extent required by the Sarbanes-Oxley Act of 2002, be deemed filed by the Company for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended.

 

 

 

 

 

 

 

 

 

Consolidated Financial Statements as of December 31, 2024

  

 

  

 

CONSOLIDATED FINANCIAL STATEMENTS AS OF DECEMBER 31, 2024

 

TABLE OF CONTENTS

 

Cover

Consolidated Statement of Financial Position

Consolidated Statement of Income and Other Comprehensive Income

Consolidated Statement of Changes in Shareholders’ Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

1. General Information and purpose of these consolidated financial statements

2. Economic context

3. Basis of accounting and material accounting policies

4. Use of judgment and estimates

5. Cash and cash equivalents

6. Financial assets at fair value through profit or loss

7. Financial assets at amortized cost

8. Investment in Joint ventures

9. Property and equipment

10. Intangible assets

11. Investment property

12. Other non-financial assets

13. Financial liabilities at fair value through profit or loss

14. Financial liabilities at amortized cost

15. Income tax

16. Other non-financial liabilities

17. Provisions and Contingencies

18. Share capital

19. Reserves

20. Retained earnings

21. Interest income

22. Interest expense

23. Fee and commissions income

24. Fee and commission expense

25. Gains on financial assets and financial liabilities at fair value through profit or loss

26. Foreign currency exchange rate differences

27. Other operating income

28. Employee benefits

29. Administrative expenses

30. Other operating expense 31. Insurance service result

32. Reconciliation of movements of liabilities to cash flows arising from financing activities

33. Operating segments

34. Off-balance sheet accounts

35. Subsidiaries

36. Transactions and balances with related parties

37. Financial risk factors

38. Capital management

39. Deposit guarantee system

40. Subsequent events

  

 

  

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As of December 31, 2024 and 2023

In thousands of Argentine Pesos (Note 3.2)

 

ITEM	NOTES	12/31/2024	12/31/2023
ASSETS
Cash and cash equivalents	5	278,913,103	215,136,516
Financial assets at fair value through profit or loss
Debt securities	6.1	1,203,263,389	313,326,942
Derivative instruments	6.2	139,485	877,133
Financial assets pledged as collateral	6.4	185,244,863	24,089,864
Other financial assets	6.3	5,698,401	20,425,866
Investments in equity instruments	6.5	16,292,587	12,572,550
Financial assets at amortized cost
Loans and other financing arrangements	7.1	686,679,809	310,324,173
Debt securities	7.2	207,401,376	72,360,674
Reverse Repurchase transactions	7.3	15,245,679	2,069,045,156
Financial assets pledged as collateral	7.4	40,567,405	16,218,145
Other financial assets	7.5	49,138,992	55,442,990
Insurance contracts assets		2,329,948	1,857,835
Reinsurance contracts assets		71,766	150,833
Investments in joint ventures	8	61,938,400	69,695,249
Property and equipment	9	84,458,068	87,163,228
Intangible assets	10	6,809,131	4,886,934
Investment property	11	12,772,629	13,546,030
Deferred income tax assets	15.3	1,112,078	493,278
Other non-financial assets	12	7,068,917	8,262,475
TOTAL ASSETS		2,865,146,026	3,295,875,871

 

The accompanying explanatory notes are an integral part of these consolidated financial statements.

 

 

1

 

  

CONSOLIDATED STATEMENT OF FINANCIAL POSITION (CONT.)

As of December 31, 2024 and 2023

In thousands of Argentine Pesos (Note 3.2)

 

ITEM	NOTES	12/31/2024	12/31/2023
LIABILITIES
Financial liabilities at fair value through profit or loss
Short positions in securities	13.1	28,313,132	60,168,188
Derivative instruments	13.2	40,016	-
Financial liabilities at amortized cost
Deposits	14.1	1,758,985,403	2,460,911,116
Other financial liabilities	14.2	159,148,564	107,741,852
Loans from the BCRA (*) and other financial institutions		2,690,568	5,994,442
Repurchase transactions	14.3	155,090,490	-
Debt securities issued	14.4	82,775,976	83,448,243
Insurance contracts liabilities		3,706,879	4,227,346
Reinsurance contracts liabilities		1,769,416	1,565,131
Income tax liabilities
Current	15.2	63,899,830	7,095,801
Deferred	15.2	17,243,525	23,997,330
Other non-financial liabilities	16	91,202,995	66,256,322
Provisions	17	9,755,018	6,528,586
TOTAL LIABILITIES		2,374,621,812	2,827,934,357
EQUITY
Share capital	18	1,500,000	1,500,000
Inflation adjustment to Share capital	18	291,984,498	291,984,498
Reserves	19	106,530,609	41,059,512
Retained earnings	20	71,940,181	121,067,596
Total equity, excluding non-controlling interests		471,955,288	455,611,606
Non-controlling interests		18,568,926	12,329,908
TOTAL EQUITY		490,524,214	467,941,514
TOTAL LIABILITIES AND EQUITY		2,865,146,026	3,295,875,871

 

(*) Argentine Central Bank

 

The accompanying explanatory notes are an integral part of these consolidated financial statements.

 

 

2

  

CONSOLIDATED STATEMENT OF INCOME

AND OTHER COMPREHENSIVE INCOME

For the fiscal years ended December 31, 2024 and 2023

In thousands of Argentine Pesos (Note 3.2)

 

Item	Note	12/31/2024	12/31/2023
Interest income calculated using the effective interest method	21	1,006,766,788	1,353,741,399
Interest expense	22	(968,851,402)	(1,471,080,532)
Insurance Interest income		11,395,837	41,235,823
Net interest income (expense)		49,311,223	(76,103,310)
Fee and commission income	23	50,136,355	64,326,230
Fee and commission expense	24	(2,517,256)	(2,806,744)
Net fee and commission income		47,619,099	61,519,486
Gains on financial assets and liabilities at fair value through profit or loss	25	636,424,796	765,652,048
Gains on financial assets and liabilities at fair value through profit or loss for insurance		10,880,178	28,733,664
Foreign currency exchange differences	26	(17,426,100)	(53,584,579)
Foreign currency exchange differences for insurance		2,282,554	11,063,148
Insurance revenue	31	45,613,067	58,706,395
Insurance service expenses	31	(32,402,915)	(35,738,553)
Revenue		742,301,902	760,248,299
Other operating income	27	32,428,128	44,194,599
Employee benefits	28	(164,835,340)	(151,304,856)
Administrative expenses	29	(52,833,911)	(58,531,483)
Depreciation and impairment of non-financial assets		(8,354,357)	(9,252,713)
Losses on derecognition of financial assets at amortized cost		-	(17,456,242)
Impairment of financial assets	7.6	(31,823,476)	(10,698,834)
Loss on net monetary position		(202,761,248)	(191,519,179)
Loss on net monetary position for insurance		(35,557,203)	(72,648,551)
Other operating expenses	30	(143,803,199)	(163,686,620)
Net income before income tax		134,761,296	129,344,420
Income tax expense	15.1	(54,726,573)	(14,550,271)
NET INCOME FOR THE YEAR		80,034,723	114,794,149
Other comprehensive income		-	-
NET INCOME AND OTHER COMPREHENSIVE INCOME		80,034,723	114,794,149
Net income for the year attributable to:
Holders of ordinary shares of the Bank		74,051,042	112,587,848
Non-controlling interests		5,983,681	2,206,301

 

The accompanying explanatory notes are an integral part of these consolidated financial statements.

 

 

3

 

CONSOLIDATED STATEMENT OF INCOME

AND OTHER COMPREHENSIVE INCOME (CONT.)

For the fiscal years ended December 31, 2024 and 2023

In thousands of Argentine Pesos (Note 3.2)

 

Earnings per Share	12/31/2024	12/31/2023
NUMERATOR
Net income for the year attributable to holders of ordinary shares of the Bank	74,051,042	112,587,848
Net income for the year attributable to holders of ordinary shares of the Bank adjusted to reflect the effect of dilution	74,051,042	112,587,848
DENOMINATOR
Weighted average of outstanding ordinary shares for the fiscal year	1,477,692	1,474,938
Weighted average of outstanding ordinary shares for the fiscal year adjusted to reflect the effects of dilution	1,477,692	1,474,938
BASIC EARNINGS PER SHARE	50.113	76.334
DILUTED EARNINGS PER SHARE	50.113	76.334

 

The accompanying explanatory notes are an integral part of these consolidated financial statements.

 

 

 

	Share capital			Reserves
Changes	Outstanding shares	Treasury shares	Inflation adjustment on Share capital	Legal	Voluntary	Retained earnings	Total equity attributable to holders of ordinary shares of the Bank	Total equity attributable to non-controlling interests	Total equity
Balances as of 12.31.2023	1,476,063	23,937	291,984,498	41,059,512	-	121,067,596	455,611,606	12,329,908	467,941,514
Distribution of unappropriated retained earnings – approved by the Shareholders’ Meeting held on 03/27/2024 (*)
●  Legal Reserve	-	-	-	24,635,692		(24,635,692)	-	-	-
●  Voluntary Reserve	-	-	-	-	40,835,405	(40,835,405)	-	-	-
●  Dividends distribution	-	-	-	-	-	(57,707,360)	(57,707,360)	-	(57,707,360)
Share-based payments under compensation plan (Note 18)	3,275	(3,275)	-	-	-	-	-	-	-
Other changes	-	-	-	-	-	-	-	255,337	255,337
Net income for the year	-	-	-	-	-	74,051,042	74,051,042	5,983,681	80,034,723
Balances as of 12.31.2024	1,479,338	20,662	291,984,498	65,695,204	40,835,405	71,940,181	471,955,288	18,568,926	490,524,214

 

The accompanying explanatory notes are an integral part of these consolidated financial statements.

 

(*) See Note 20.

 

4

  

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (CONT.)

for the fiscal years ended December 31, 2024 and 2023

In thousands of Argentine Pesos (Note 3.2)

	Share Capital
Changes	Outstanding shares	Treasury shares	Inflation adjustment on share Capital	Legal Reserve	Retained earnings	Total equity attributable to holders of ordinary shares of the Bank	Total equity attributable to non-controlling interests	Total equity
Balances as of 12.31.2022	1,473,832	26,168	291,984,498	-	49,539,260	343,023,758	9,352,976	352,376,734
Absorption of unappropriated retained earnings – approved by the Shareholders’ Meeting held on 03/30/2023	-	-	-	41,059,512	(41,059,512)	-	-	-
Share-based payments under compensation plan (Note 18)	2,231	(2,231)	-	-	-	-	-	-
Distribution of subsidiary dividends	-	-	-	-	-	-	770,631	770,631
Net income for the year	-	-	-	-	112,587,848	112,587,848	2,206,301	114,794,149
Balances as of 12.31.2023	1,476,063	23,937	291,984,498	41,059,512	121,067,596	455,611,606	12,329,908	467,941,514

 

The accompanying explanatory notes are an integral part of these consolidated financial statements.

  

5

CONSOLIDATED STATEMENT OF CASH FLOWS

for the fiscal years ended December 31, 2024 and 2023

In thousands of Argentine Pesos (Note 3.2)

ITEM	12/31/2024	12/31/2023
Net income for the year	80,034,723	114,794,149
Adjustments to obtain cash flows from operating activities
Income tax expense	54,726,573	14,550,271
Loss on net monetary position	238,318,451	264,167,730
Depreciation and impairment of assets	8,354,357	9,252,713
Loan loss, net of reversed allowances	28,061,602	9,226,174
Increase in provisions	22,035,637	14,928,837
Net interest expense	(49,311,223)	76,103,310
Net income from measurement of financial instruments at fair value through profit or loss	(646,686,114)	(793,447,621)
Loss from valuation of investment property and property and equipment	8,530,250	17,289,825
(Net increase) / net decrease from operating assets
Debt securities at fair value through profit or loss	(413,884,001)	760,610,964
Derivative instruments	1,324,830	(719,326)
Reverse repurchase transactions	927,176,511	(1,839,194,390)
Loans and other financing arrangements
Non-financial public sector	(2,108)	(253)
Financial sector	(39,195,564)	(8,112,971)
Non-financial private sector and foreign residents	(525,526,629)	(146,345,170)
Debt securities at amortized cost	(174,172,377)	(11,495,290)
Financial assets pledged as collateral	(207,302,286)	(31,072,254)
Investments in equity instruments	(10,519,102)	(9,890,909)
Other assets	(151,586,172)	(194,439,453)
Net increase / (net decrease) from operating liabilities
Deposits
Non-financial public sector	149,814,189	49,296,377
Financial sector	(390)	249
Non-financial private sector and foreign residents	475,607,613	1,745,330,241
Liabilities at fair value through profit or loss	683,087	60,168,188
Derivative instruments	169,183	(1,351,150)
Repurchase transactions	154,784,765	-
Other liabilities	221,969,777	156,846,726
Interest paid	(963,034,559)	(1,445,099,708)
Interest received	1,006,845,016	1,337,919,580
Dividends	65,310	42,675
Income tax paid	(324,630)	(253,795)
Total cash flows generated by operating activities	196,956,719	149,105,719

 

The accompanying explanatory notes are an integral part of these consolidated financial statements.

 

6

 

 

CONSOLIDATED STATEMENT OF CASH FLOWS (CONT.)

for the fiscal years ended December 31, 2024 and 2023

In thousands of Argentine Pesos (Note 3.2)

 

ITEM	12/31/2024	12/31/2023
Cash flows from investing activities
Payments
Purchase of property and equipment, intangible assets and other assets	(6,261,268)	(6,217,171)
Collections
Sale of property and equipment and other assets	1,925,640	79,146
Total cash flows used in investing activities	(4,335,628)	(6,138,025)
Cash flows from financing activities
Payments
Dividends	(55,151,453)	-
Debt securities issued	(28,215,891)	(24,989,317)
Loans to domestic financial institutions	(29,826,665)	(9,488,867)
Other financial liabilities	(8,353,133)	(10,790,177)
Collections
Debt securities issued	65,347,500	-
Loans from domestic financial institutions	21,027,366	7,456,773
Total cash flows used in financing activities	(35,172,276)	(37,811,588)
Effect of exchange rate variations	22,670,693	49,666,505
Effect of loss on net monetary position of cash	(116,342,921)	(127,508,215)
TOTAL VARIATION IN CASH FLOWS
Net increase for the year	63,776,587	27,314,396
Cash at beginning of year	215,136,516	187,822,120
Cash at year end	278,913,103	215,136,516

 

The accompanying explanatory notes are an integral part of these consolidated financial statements.

 

7

 

  

Notes to the consolidated financial statementsas of December 31, 2024 and December 31, 2023

In thousands of Argentine Pesos (Note 3.2)

  

1. GENERAL INFORMATION

 

Banco Hipotecario S.A. (hereinafter, the “Bank” or “the Entity”) is a corporation (“Sociedad anónima”) incorporated under the laws of Argentina. The Bank’s registered office is Reconquista 151 – City of Buenos Aires – Argentina.

 

The Bank is the result of the privatization of the then Banco Hipotecario Nacional (an institution established in 1886), pursuant to Law No. 24855 passed on July 2, 1997 and enacted by the National Executive Branch (PEN) through Decree No. 677 dated July 22, 1997, and regulatory Decree No. 924/97, whereby Banco Hipotecario Nacional was declared "subject to privatization" under the terms of Law No. 23696 and transformed into a corporation. The new entity arising from this transformation does business under the name of "Banco Hipotecario Sociedad Anónima", and as a commercial bank in accordance with Financial Institutions Law No. 21526. The Bank provides retail and corporate banking services. In addition, through its subsidiaries, it provides life and personal accident insurance.

 

These consolidated financial statements include the Bank and its subsidiaries, that is, companies and structured entities controlled by the Bank (collectively, the “Group”).

 

The Bank’s subsidiaries are detailed in Note 34.

 

Part of the Bank's share capital is publicly traded and has been registered with the Buenos Aires Stock Exchange.

 

1.1 Purpose of these consolidated financial statements

 

These consolidated financial statements have been prepared in accordance with IFRS Accounting Standards. They were authorized for issue by the Bank’s board of directors on June 30, 2025.

 

The Bank is a significant not consolidated subsidiary of IRSA Inversiones y Representaciones S.A. (“IRSA”), a Company whose shares are publicly traded on the New York Stock Exchange. Consequently, these consolidated financial statements have been prepared to fulfill IRSA’s reporting requirements of the Securities and Exchange Commission.

 

2. CHANGES IN THE MACROECONOMIC CONTEXT AND FINANCIAL AND CAPITAL SYSTEMS

 

The Group operates in an economic context whose main variables have shown volatility, such as the continued level of the accumulated inflation rate.

 

In particular, and concerning financial assets, the Argentina government took measures regarding the extension of maturities and/or restructuring of government securities.

 

As of the date of these financial statements, the Group maintains public sector debt instruments affected by the measures referred to above.

 

Furthermore, the BCRA has implemented various measures, including:

 

a)	Repurchasing Bills issued by the BCRA (LELIQ) from financial entities;

 

b)	Ceiling rates on credit card financing arrangements and floor rates on time deposits;

 

c)	A financing line for Micro, Small & Medium Entities' (MSME) productive investments that financial institutions are required to hold;

  

d)	Replacement of repurchase transactions by open market operations with National Treasury securities;

 

The events described in this Note affect the Group's operations, as well as the calculation of credit losses and the valuation of public sector debt instruments.

 

The Group’s Management continuously monitors the evolution of the aforementioned circumstances in order to define possible actions to be taken and identify possible impacts on its equity and financial position, which would require disclosure in the financial statements.

 

 

3. BASIS OF ACCOUNTING AND MATERIAL ACCOUNTING POLICIES

 

The consolidated financial statements are prepared on a going concern basis, as management is satisfied that the Group has adequate resources to continue as a going concern for the foreseeable future. In making this assessment, management has considered a wide range of information including projections of profitability, regulatory capital requirements and funding needs. The assessment also includes consideration of reasonably possible downside economic scenarios and their potential impacts on the profitability, capital and liquidity of the Group.

 

The Group has consistently applied the following accounting policies to all periods presented in these consolidated financial statements, except if mentioned otherwise.

 

8

 

  

Notes to the consolidated financial statementsas of December 31, 2024 and December 31, 2023

In thousands of Argentine Pesos (Note 3.2)

  

3.1. Functional and presentation currency

 

The Argentine Peso is the functional and presentation currency of the Bank and its subsidiaries. All amounts are stated in thousands of Argentine pesos, unless otherwise stated.

 

Since the Argentine economy is considered a hyperinflationary economy in accordance with International Accounting Standard No. 29 “Financial Reporting in Hyperinflationary Economies” (“IAS 29”), these consolidated financial statements are stated in terms of the current measurement unit at the end of the reporting year.

 

 

3.2. Hyperinflationary accounting

 

IAS 29 requires that the financial statements of an entity whose functional currency is that of a hyperinflationary economy be stated in terms of the current measurement unit at the end of the reporting period.

 

The standard sets out a number of factors that should be considered to conclude that an economy is hyperinflationary, including a cumulative inflation rate for three consecutive years close to, or in excess of, 100%. Therefore, pursuant to IAS 29, the Argentine peso is considered a currency of a hyperinflationary economy as from July 1, 2018.

 

Such restatement should be made as if the economy had always been hyperinflationary, using a general price index that reflects the changes in the purchasing power of the currency. In order to make such restatement, the Argentine Federation of Professional Councils of Economic Sciences publishes the applicable index which is based on:

●	For items subsequent to December 2016: Consumer Price Index (“CPI”) published by the National Institute of Statistics and Census (“INDEC”); and

 

●	For items prior to December 2016: Wholesale Domestic Price Index published by the INDEC.

 

The CPI increased 117.8% and 211.41%, during 2024 and 2023, respectively.

 

Under IAS 29, assets and liabilities that are not stated in the measuring unit current at the end of the reporting period should be adjusted by applying the general price index. The adjusted value of a non-monetary item is reduced, in accordance with IFRS Accounting Standards, when it exceeds its recoverable value.

 

In applying IAS 29 to the consolidated statement of financial position, the Group has applied the following methodology and criteria:

 

●	Non-monetary assets were restated by applying the general price index. The restated amounts were reduced to their recoverable values, by applying the relevant IFRS, where appropriate.

 

●	Monetary assets were not restated.

 

●	Assets and liabilities contractually related to changes in prices, such as index-linked securities and loans, were measured on the basis of the relevant contract.

  

●	The measurement of Investments accounted for under the equity method, have been determined based on financial information of the associates and joint ventures prepared in accordance with IAS 29.

 

●	Deferred income tax assets and liabilities were recalculated on the basis of the restated amounts.

 

●

The impact of implementation of IAS 29 at the beginning of the first period of application (January 1, 2019) was recognized in equity, where all equity items, other than Retained earnings, were restated by applying the general price index, as from the date of contribution or origination. In subsequent years, all equity items were restated by applying the general price index as from the beginning of the year or the contribution date, if later.

 

In applying IAS 29 to the consolidated statements of income and cash flows, the Group has applied the following methodology and criteria:

  

●	All items of the consolidated statements of income and cash flows were restated in terms of the measuring unit current at the end of the reporting period.

 

●	The gain or loss on net monetary position is recognized in the consolidated statement of income.

  

●	Monetary gains or losses generated by cash and cash equivalents are disclosed in the statement of cash flows separately from cash flows from operating, investing, and financing activities, as a reconciling item between cash and cash equivalents at the beginning and at the end of the period.

  

The prior period comparative for the year ended December 31, 2023, information was restated in terms of the measuring unit current as of December 31, 2024, by applying the change in the consumer price index between December 31, 2023 to December 31, 2024.

 

9

 

  

Notes to the consolidated financial statementsas of December 31, 2024 and December 31, 2023

In thousands of Argentine Pesos (Note 3.2)

  

3.3. Consolidation

 

Subsidiaries

 

Subsidiaries are entities, including structured entities, controlled by the Group. The Group controls an entity if it is exposed to, or has the rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The Group reassesses whether it has control if there are changes to one or more of the elements of control. This includes circumstances in which protective rights held (e.g. those resulting from a lending relationship) become substantive and lead to the Group having power over an investee.

 

Subsidiaries are consolidated from the date on which control commences until the date on which control ceases.

 

The Group consolidates subsidiaries’ financial statements prepared at the end and for the same period of the Bank's financial statements. Such financial statements which are prepared under local GAAP, are adjusted to the same accounting policies applied by the Bank. These adjustments are subject to the Bank’s management monitoring and control procedures to confirm its accuracy. The most significant adjustments include deferred tax calculation under IAS 12, lease reporting under IFRS 16 and the determination of actuarial reserves under IFRS 17.

 

Securitization vehicles

 

Certain securitization vehicles sponsored by the Group under its securitization program are run according to predetermined criteria that are part of the initial design of the vehicles. The Group is exposed to variability of returns from the vehicles through its holding in debt securities in the vehicles. Outside the day-to-day servicing of the receivables (which is carried out by the Group under a servicing contract), key decisions are usually required only when receivables in the vehicles go into default. In assessing whether it has control, the Group considers whether it manages the key decisions that most significantly affect these vehicles’ returns. As a result, the Group has concluded that it controls some of these vehicles (please refer to Note 35).

 

Mutual funds

 

The Group acts as a fund manager to a number of mutual funds. Determining whether the Group controls such mutual funds usually focuses on the assessment of the aggregate economic interests of the Group in the fund (comprising any carried interests and expected management fees) and the virtual lack of investors’ rights to remove the fund manager.

 

This analysis considers not only the direct and indirect interests held by the Group on the fund but also the composition of the rest of the investors in order to conclude if the Group has power over the fund, in which case it is consolidated.

 

When the financial interests of the Group in a mutual fund is less than 22%, the Group concludes that it acts as an agent for the investors and, therefore, it does not consolidate such mutual fund. Otherwise, when the interests of the Group in a mutual fund exceeds 37%, the Group concludes that it has control over the fund, and it is consolidated.

 

When the Group has an interests over 22% but less than 37%, in order to conclude whether the Group controls the mutual fund, other features are taken into account such as the proportion of investors required to vote together and whether other investors are highly dispersed. (please refer to Note 35).

 

Non-controlling interests

 

Non-controlling interests are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition.

 

Changes in the Group’s interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

 

Loss of control

 

When the Group loses control over a subsidiary, it derecognizes the assets and liabilities of the subsidiary, and any related Non-controlling interests and other components of equity. Any resulting gain or loss is recognized in profit or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost.

 

Transactions eliminated on consolidation

 

Intra-group balances and transactions, and any unrealized income and expenses (except for foreign currency transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.

 

 

10

 

  

Notes to the consolidated financial statementsas of December 31, 2024 and December 31, 2023

In thousands of Argentine Pesos (Note 3.2)

 

 

3.4. Investments in Joint Ventures

 

Interests in joint ventures are accounted for under the equity method. They are initially recognized at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income (when applicable) of equity-accounted investees, until the date on which significant influence or joint control ceases.

 

3.5. Segment reporting

 

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses (including revenues and expenses relating to transactions with other components of the Group), whose operating profits or losses are regularly reviewed by the Group’s Chief Operating Decision Maker (“CODM”) to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

 

Operating segments are reported consistently with the internal reports submitted to:

 

(i)	Key management personnel, being the CODM since they are the utmost authority in charge of making operating decisions and allocating resources and assessing the performance of the operating segments; and

  

(ii)	The Board of Directors, responsible for making the Group's strategic decisions.

 

Operating segment results are directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly certain administrative expenses, loss on net monetary position, and income tax expense.

 

3.6. Foreign currency

 

Transactions in foreign currency are translated into Argentine Pesos (functional currency of all components of the Group) at the exchange rates at the transaction date.

 

Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are recognized in the consolidated statement of income.

 

3.7. Financial instruments

 

Initial recognition

 

The Group initially recognizes loans and advances, deposits, debt securities issued, and subordinated liabilities on the date on which they are originated. All other financial instruments (including regular-way purchases and sales on financial assets) are recognized on the trade date, which is the date on which the Group becomes a party to the contractual provisions of the instrument.

 

A financial asset or financial liability is measured initially at fair value plus, for items not at fair value through profit or loss, transaction costs that are directly attributable to its acquisition or issue. The fair value of a financial instrument on initial recognition is generally its transaction price.

 

In circumstances where the fair value differs from the transaction price, the Group recognizes the difference as follows:

  

●

If the fair value is evidenced by a quoted price in an active market for an identical asset or liability, or based on a valuation method that uses only data from observable markets, the difference between the fair value at initial recognition and the transaction price is recognized as profit or loss.

  

●	In other cases, the difference is deferred as a profit or loss only to the extent that there is a change in any factor (including time) that the market participants would consider when determining the price of the asset or liability.

 

The Group recognizes purchases of financial instruments with the commitment to resell at a certain price as a loan granted in the line “Reverse repurchase agreements” in the Consolidated statement of financial position. The difference between the purchase and sale prices of those instruments is recorded as interest accrued during the term of the transactions using the effective interest method.

 

 

11

 

 

  

Notes to the consolidated financial statementsas of December 31, 2024 and December 31, 2023

In thousands of Argentine Pesos (Note 3.2)

 

 

The underlying assets received for reverse repurchases transactions are considered under Off-Balance Sheet Items. In case the Group sells the security, a related liability is recognized under the caption “Short positions in securities”.

 

Financial assets

 

Classification

 

On initial recognition, the Group classifies financial assets as measured at amortized cost, at fair value through other comprehensive income (FVOCI) or at fair value through profit or loss (FVTPL), based on the objective of the Group’s business model under which the financial assets are held and the characteristics of contractual cash flows of the financial asset.

 

A financial asset is measured at amortized cost if it meets both of the following conditions:

 

­ ●	The asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and

 

­ ●	The contractual terms of the financial asset give rise to cash flows that are solely payments of principal and interest (“SPPI”) on the principal amount outstanding.

 

A financial asset is measured at FVOCI only if it meets both of the following conditions:

 

­ ●	The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and

 

­ ●	The contractual terms of the financial asset give rise to cash flows that are SPPI on the principal amount outstanding.

 

For a financial asset measured at FVOCI, gains and losses are recognized in OCI, except for the following, which are recognized in profit or loss in the same manner as for financial assets measured at amortized cost:

  

­ ●	Interest revenue using the effective interest method;

  

­ ●	Expected credit losses (“ECL”) and reversals; and

 

­ ●	Foreign exchange gains and losses.

 

When a financial asset measured at FVOCI is derecognized, the cumulative gain or loss previously recognized in OCI is reclassified from equity to profit or loss.

 

The Group does not apply the option of designating financial assets at fair value.

 

All other financial assets are classified as measured at FVTPL. Financial assets at fair value through profit or loss include:

 

●	Instruments held for trading;

 

●	Instruments whose contractual terms do not represent cash flows SPPI on principal amount outstanding;

  

●	Derivative financial instruments; and

 

●	Investments in equity instruments

 

Modifications of financial assets

 

If the terms of a financial asset are modified, then the Group evaluates whether the cash flows of the modified asset are substantially different.

 

If the cash flows are substantially different, then the contractual rights to cash flows from the original financial asset are deemed to have expired. In this case, the original financial asset is derecognized, and a new financial asset is recognized at fair value plus any eligible transaction costs.

 

If cash flows are modified when the borrower is in financial difficulties, then the objective of the modification is usually to maximize recovery of the original contractual terms rather than to originate a new asset with substantially different terms. If the Group plans to modify a financial asset in a way that would result in forgiveness of cash flows, then it first considers whether a portion of the asset should be written off before the modification takes place. This approach impacts the result of the quantitative evaluation and means that the derecognition criteria are not usually met in such cases.

 

If such a modification is carried out because of financial difficulties of the borrower, then the gain or loss is presented together with impairment losses. In other cases, it is presented as interest income calculated under the effective interest rate method.

 

 

 

12

 

 

Notes to the consolidated financial statementsas of December 31, 2024 and December 31, 2023

In thousands of Argentine Pesos (Note 3.2)

 

 

Derecognition of financial assets

 

The Group derecognizes a financial asset when the contractual rights to cash flows from the financial asset expire or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

 

The Group enters into transactions whereby it transfers assets recognized on its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets or a portion of them. In such cases, the transferred assets are not derecognized. Examples of such transactions are securities lending and sale-and-repurchase transactions, where the inflows of the sale are recognized against a financial liability (“Repurchase Transactions”) and the underlying securities are reclassified as “Financial assets pledged as collateral”.

 

In transactions where the Group neither retains nor transfers substantially all of the risks and rewards of ownership of a financial asset, and it retains control over the asset, the Group continues to recognize the asset to the extent of its continuing involvement, determined by the extent to which it is exposed to changes in the value of the transferred asset.

 

The Group writes off a financial asset, in whole or in part, when it has exhausted all practical recovery efforts and has concluded that there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include (i) ceasing enforcement activity, and (ii) situations where the Group’s recovery method is foreclosing on collateral and the value of the collateral is such that there is no reasonable expectation of recovery in full. The Group may write off financial assets which are still subject to enforcement activity.

 

Financial liabilities

 

Classification

 

The Group classifies its financial liabilities, other than derivative financial instruments, guarantees issued and loan commitments as measured at amortized cost. Derivative financial instruments are measured at fair value through profit or loss.

 

Financial guarantees are contracts pursuant to which the Group is required to make specified payments to reimburse the holder for a loss incurred due to a specified debtor's failure to honor its payment obligations in accordance with the contractual terms of a debt instrument.

 

The liability arising from financial guarantees issued is initially recognized at fair value. Such liability is subsequently measured at the higher of the loss allowance determined in accordance with IFRS 9 and the amount initially recognized less, when appropriate, the cumulative amount of income recognized in accordance with principles of IFRS 15.

 

Modifications of financial liabilities

 

The Group derecognizes a financial liability when its terms are modified, and the cash flows of the modified liability are substantially different. In this case, a new financial liability based on the modified terms is recognized at fair value. The difference between the carrying amount of the financial liability derecognized and the consideration paid is recognized in profit or loss. Consideration paid includes non-financial assets transferred, if any, and the assumption of liabilities, including the new modified financial liability.

 

If the modification of a financial liability is not accounted for as derecognition, then the amortized cost of the liability is recalculated by discounting the modified cash flows at the original effective interest rate and the resulting gain or loss is recognized in profit or loss. For floating-rate financial liabilities, the original effective interest rate used to calculate the modification gain or loss is adjusted to reflect current market terms at the time of the modification. Any costs and fees incurred are recognized as an adjustment to the carrying amount of the liability and amortized over the remaining term of the modified financial liability by re-computing the effective interest rate on the instrument.

 

Derecognition of financial liabilities

 

The Group derecognizes financial liabilities upon settlement; that is, when the financial liability has been settled or paid off, or the contract has expired.

 

Financial Assets and Financial Liabilities Offsetting

 

Financial assets and liabilities are offset by reporting the net amount in the consolidated statement of financial position only when there is a legally enforceable right to offset the recognized amounts, and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously.

 

 

 

 

 

13

 

  

Notes to the consolidated financial statementsas of December 31, 2024 and December 31, 2023

In thousands of Argentine Pesos (Note 3.2)

 

 

3.8. Impairment of financial assets

 

Expected Credit Losses

 

The Group recognizes an “Allowance for credit risks” on the following financial instruments that are not measured at FVTPL, by applying the Expected credit losses (“ECLs”) method:

 

●

Loans;

  

●	financial assets that are debt instruments;

 

●	lease receivables;

  

●	financial guarantee contracts issued; and

  

●	loan commitments issued.

 

The Group measures the ECLs from a financial instrument in a manner that reflects:

 

●	an unbiased probability-weighted amount which is determined by assessing a range of possible outcomes;

  

●	the time value of money; and

 

●	reasonable and supportable information that is available without undue cost or effort on the reporting date, about past events, current conditions and forecasts of future economic conditions.

 

Measurement of expected credit losses (ECL) - Inputs, assumptions and calculation methods

 

ECLs are measured over a 12-month period or during the instrument’s lifetime, depending on whether a significant increase in credit risk has occurred since initial recognition or if an asset is deemed credit impaired. ECLs are the discounted product of the Probability of Default (“PD”), Exposure at default (“EAD”) and Loss given default (“LGD”), defined as follows:

 

● PD represents the probability of a debtor's defaulting on a financial liability (as per the foregoing "Definition of default and credit impairment"), whether over the following 12 months or the financial asset remaining life ("Lifetime PD").

 

● EAD is based on the amounts the Group expects to be overdue at the time of the default, during the subsequent 12 months, or otherwise during the financial asset remaining life ("Lifetime EAD"). For instance, for revolving commitments, the Group includes the current drawn down balance, plus any additional amount expected to be drawn down, up to the current contractual limit at the time of default, if finally occurring.

 

● LGD represents the Group's expected loss on any given exposure at default. LGD will vary depending on the type of counterparty, nature and aging of the claim and also depending on the availability of collateral or other form of credit enhancement. LGD is stated as a percentage of loss per EAD unit and is calculated over a 12-month base period or throughout the instrument lifetime, where the 12-month LGD is the percentage of loss expected to be incurred, if default occurs within the next 12 months, while lifetime LGD is the percentage of loss expected to be incurred if default occurs during the financial instrument lifetime.

 

ECLs are determined by forecasting the PD, LGD and EAD for each future month, and for each individual exposure or collective segment. These three components are multiplied and adjusted for the survival probability (i.e., no early payment or no default has occurred on the exposure in a previous month). This formula results in an ECL for each future month, which is then discounted at the reporting date and aggregated. The discount rate used in the ECL calculation is the original effective interest rate or other similar rate.

 

Lifetime PD is developed by applying a maturity profile to the current 12-month PD. The maturity profile analyzes how defaults occur within a portfolio since initial recognition and throughout the lifetime of the borrowings. The maturity profile is based on observed historical data and is supposed to be the same across all assets within a portfolio and within a credit rating band.

 

12-month EAD and Lifetime EAD are determined on the basis of the expected payment profile, which varies according to the type of product:

 

●	For non-revolving products, EAD is based on contractual payments owed by borrower during a 12-month period or throughout Lifetime.

  

●	For revolving products, EAD is calculated considering the drawn down balance (used up limit) and adding a "credit conversion factor" to calculate the extent to which borrower's outstanding debt will increase upon default.

 

12-month LGD and Lifetime LGD are determined on the basis of factors affecting post-default recoveries, with product type and the current days in arrears band remaining constant. LGD is influenced by the entity's collection strategy, including sales and indebtedness cost.

 

 

14

 

  

Notes to the consolidated financial statementsas of December 31, 2024 and December 31, 2023

In thousands of Argentine Pesos (Note 3.2)

 

 

Under the model used for the Commercial Portfolio, the recovery rate is defined on the basis of the collateral/instrument associated with the transaction. In determining the coverage ratio associated with each collateral, recovery ratio schedules have been developed based on collateral quality.

 

If a customer identified as a "relevant exposure" under the Risk Management Policy is moved to stages 2 or 3, LGD could be calculated individually, relying on information available to the Group at the time of the analysis, which allows it to estimate the expected recovery on such exposure.

 

The Group includes forward-looking economic information in the calculation of 12-month PD and Lifetime PD.

 

Grouping of instruments for losses measurement

 

To assess the ECLs on a collective basis, the Group makes a grouping of exposures based on shared risks characteristics, such that risk exposures within the group are homogeneous.

 

The Group has identified the following categories of debtors:

 

●	Consumer portfolio: includes credit cards, consumer loans and mortgages.

 

●	Commercial portfolio: includes corporate and small and medium size entities (SMEs) customers.

 

●	Securities portfolio: includes public and private debt securities acquired in the secondary market or through primary bidding.

 

a. Consumer portfolio

 

In estimating ECLs of the consumer portfolio, instruments are grouped based on their inherent risk characteristics, and subsequently segmented considering similar credit risk characteristics, which are indicative of debtor's payment ability, according to applicable contractual conditions, in order to determine its PD and LGD parameters on a collective basis. Credit risk characteristics may include the following factors, among others:

  

●	Type of transaction,

 

●	Customer's credit scoring (rating),

 

●	Time in arrears,

 

●	Segment based on financial asset aging and/or purchase or origination terms and conditions.

 

The Group's Consumer Banking Credit team periodically monitors and reviews that financial instruments are adequately pooled.

 

b. Commercial portfolio

 

ECLs are estimated on an individual and on a collective basis. The Group determines the PD and LGD parameters for its Commercial portfolio on a collective basis, considering the customer’s risk rating.

 

For customers with relevant exposures, the assessment is made on an individual basis.

 

Each customer is assigned a PD based on that customer's Credit Rating and segment. On the other hand, the LGD parameter is related to the transaction based on the segment and collateral quality.

 

The correct segmentation of the commercial portfolio financial instruments is monitored and reviewed periodically by the Wholesale Banking Credit Risk team.

 

c. Securities portfolio

 

ECLs are estimated on an individual and on a collective basis. The Group determines the LGD parameters for its Securities portfolio on a collective basis. PDs are based on ratings from third party credit rating agencies.

 

PD is assigned to each instrument, based primarily on that security’s Credit Rating and considering segmentation variables such as denomination currency, payment currency, governing law, and whether the counterparty is in the public or private sector.

 

Stage classification

 

The Group classifies financial instruments into three categories based on changes in their credit risk since initial recognition, as summarized below:

 

 

 

15

 

 

  

Notes to the consolidated financial statementsas of December 31, 2024 and December 31, 2023

In thousands of Argentine Pesos (Note 3.2)

 

 

● Stage 1: comprises financial assets that have not experienced a significant increase in credit risk;

 

● Stage 2: includes financial assets for which a significant increase in credit risk has been identified since its initial recognition, but that are not credit-impaired; and,

 

● Stage 3: comprises financial assets with objective evidence of impairment (default).

 

The calculation of the allowances for credit risk in each of these three categories is done as follows:

 

● ECL within a 12-month period: for financial instruments in “Stage 1”, the Group will measure ECLs as the expected credit losses resulting from possible default events within the next 12 months.

 

● Lifetime ECL: for financial instruments in “Stage 2” and “Stage 3,” the Group measures the ECLs resulting from possible default events over the remaining life of the financial asset.

 

ECL measurement considers forward-looking information.

 

Purchased or originated credit-impaired (“POCI”) financial assets are financial assets which are credit impaired at initial recognition. ECLs from these financial instruments are considered “Stage 3” and measured over the assets lifetime..

 

Financial assets in “Stage 1” and “Stage 2” accrue interest at the effective interest rate on their gross book amount. Financial assets in “Stage 3” accrue interest at the effective interest rate of the carrying amount net of allowance for credit losses as from the time such assets are moved to that stage.

 

The following chart summarizes impairment criteria for financial assets other than purchased or originated credit-impaired financial assets:

 

Changes in credit quality since initial recognition
Stage 1	Stage 2	Stage 3
(initial recognition)	(significant increase in credit risk since initial recognition)	(credit impaired)
ECLs for the 12 months after the reporting date	ECLs during the financial instrument lifetime

  

Below is a description of the key judgments and assumptions the Group has relied upon for ECL measurement purposes:

 

Significant increase in credit risk

 

In determining whether a financial instrument has experienced a significant increase in credit risk since initial recognition, the Group performs several analyses depending on the portfolio (consumer, commercial or securities) and the product.

 

a.	Consumer portfolio

 

For the most representative products within the consumer portfolio —consumer loans and credit cards— a significant increase in credit risk is deemed to exist if debtor meets one or both of the following conditions:

 

●	contractual payments are over 30 days past due, based on the historical behavior of the portfolio through the analysis of the changes in transactions that have reached this stage, leading to default situations, and/or

 

●	an increase of the product expected credit loss exceeding a threshold previously set for the relevant default probabilities.

 

To establish such thresholds, the Group has implemented a methodology which consists of a statistical analysis of historical information of its consumer loans’ behavior. This methodology is based on a quantitative analysis of the historical variation of the probability of default (PD) of loans since their initial recognition, identifying those combinations of absolute and relative thresholds per product and segment representing a significant increase in the risk, even without considering days past due at the time of observation. Such thresholds have been set in line with the current PD model and the risk segmentation previously defined for these products.

 

 

16

 

 

Notes to the consolidated financial statementsas of December 31, 2024 and December 31, 2023

In thousands of Argentine Pesos (Note 3.2)

 

The following table shows the PD threshold at the initial recognition of a transaction and the related minimum increase in bps for such transaction at measurement date to be consider to have experienced a significant increase in its credit risk.

 

PD Threshold for initial recognition	Minimum increase in PD that is considered significant at the reporting date (in basis points – “bps”)
Product Credit Cards
<= 0.94%	490 bps
> 0.94% and <= 1.82%	814 bps
> 1.82% and <= 5.12%	2284 bps
> 5.12% and <= 6.73%	3002 bps
Product Consumer Loans
<= 1.5%	534 bps
> 1.5% and <= 3%	1068 bps
> 3% and <= 4.5%	1602 bps
> 4.5% and <= 6%	2135 bps
> 5% and <= 7.5%	2669 bps
Product Mortgage Loans
<= 0.1%	280 bps
> 0.1% and <= 3.1%	1143 bps
> 3.1% and <= 6.1%	2249 bps
> 6.1% and <= 9.1%	3356 bps
> 9.1% and <= 12.1%	4462 bps
> 12.1% and <= 15.1%	5568 bps
> 15.1% and <= 18.1%	6674 bps
> 18.1% and <= 21.1%	7781 bps

 

b.	Commercial portfolio

 

A significant increase in credit risk is deemed to exist primarily if debtor's contractual payments are over 30 days past due, determined on the basis of the historical behavior of the Group’s portfolio through the analysis of the changes in transactions that have reached this stage, leading to default situations.

 

For debtors with “investment grade” credit quality according to the group’s credit rating methodology, a significant increase in credit risk exists when credit rating is downgraded two or more notches causing the loss of the investment grade, even though payments are not over 30 days past due.

 

c.	Securities portfolio

 

With regard to the securities portfolio, the significant increase in risk is determined at the issuer level, considering:

 

●	A decrease in credit rating of any issuer’s instrument of at least two notches, and / or

 

●	An increase in market perception credit risks evidenced by a significant fall in market prices.

 

Definition of default and impaired credit

 

a.	Consumer portfolio