Good morning, ladies and gentlemen. Welcome to Grupo Financiero Galicia First 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 you that all attendees will only be listening to the conference during the presentation and then we will start a 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 Fervida, Head of Investor Relations. You may begin your conference.

Thank you. Thank you, everybody. Good morning. Although activity levels in February stood 2.2% below those observed in December 2025, high-frequency official indicators of March point to a constructive short-term momentum. In this regard, the manufacturing production index increased by 3.2% month-over-month on a seasonally adjusted basis, while the synthetic construction activity indicator, ISAC, rose by 4.7% month-over-month, also seasonally adjusted. In the first quarter of 2026, the primary surplus stood at 0.4% of GDP, compared to a primary surplus of 0.5% in the first quarter of 2025. The result was explained by a 22.4% year-over-year increase of revenues, whereas primary spending rose 25.9%, in both cases increasing below inflation rates. The National Consumer Price Index accumulated a 9.4% increase during the quarter. Monthly inflation rose from 1.5% in May 2025 to 3.4% in March 2026. On a year-over-year basis, inflation stood at 32.6% as of March. following a 2025 marked by increasing volatility resulting from the electoral process the spike in volatility was faded has faded with the exchange rate and interest rates showing clear signs of stabilization as of january 1st 2026 both the lower and the upper limits of the exchange rate band began to adjust on a monthly basis in line with the latest available monthly inflation data published by INDEC T-2. In March 2026, the exchange rate averaged 1,396 pesos per dollar, reflecting a 23.4% year-over-year depreciation. In March 2026, the average rate on peso-denominated private sector time deposits for up to 59 days stood at 27.9%, 1.6 percentage points below the March 2025 average. Private sector deposits in pesos averaged 108.3 trillion pesos in March, increasing by 4% during the quarter and 34.4% in the last 12 months. Time deposits rose 13.8% during the quarter and 41.7% in year-over-year terms. Peso-denominated transactional deposits decreased 6.4% during the first quarter, but increased 25.7% in year-over-year terms. Private sector dollar-denominated deposits amounted to $38.7 billion in March 2026, increasing 6.2% during the quarter and 30.4% in the last 12 months. Peso-denominated loans to private sector averaged 92.2 trillion pesos in March, showing a 5.3% quarterly increase and a 51.7% year-over-year rise. Private sector dollar-denominated loans amounted to $20.5 billion, recording a 12.5% quarterly growth and a 45.5% annual increase. Turning now to Grupo Galicia, net income for the first quarter amounted to 66.5 billion pesos, 66% lower than in the previous year, which represented 0.6% return on average assets and a 3.2% return on average shareholders' equity. This result was mainly due to profits from Banco Galicia for 47.7 billion pesos, from Galicia Asset Management for 34 billion pesos, from Galicia Seguros for 12.5 billion pesos, and from Galicia Securities for 1.5 billion pesos, partially offset by an 18.6 billion pesos loss from Naranja X. Banco Galicia's net income improved by 162.6 billion pesos compared to the fourth quarter of 2025. Although results continue to be impacted by elevated loan loss provisions, charges declined quarter on quarter in line with improved delinquency rates. Net interest income was pressured by lower intermediation volumes. However, the financial margin continued its sequential recovery. Also, seasonal factors typical of the first quarter led to lower fee income, while expenses reflected efficiency gains from the integration process. Operating income increased 153% quarter-on-quarter, driven by an 11% rise in net operating income, mainly reflecting a 25% reduction in loan-loss provisions, partially offset by lower net interest income amid reduced average intermediation volumes. Expenses declined 17% quarter-on-quarter, reflecting efficiency gains from the integration with Galicia Mass. the former HSBC. Despite interest rate volatility during January and February, the financial margin improved sequentially and closed the quarter at 16.7%, while results from government bonds showed a favorable trend toward quarter-end. Average interest in assets reached P26 trillion, 4% lower than in the previous quarter, primarily due to a 4% lower volume of loans in pesos and 5% in dollars and a 6% decrease of government securities in pesos partially offset by a 52% higher volume of government securities in dollars. In the same period, its yield decreased 260 basic points reaching 28.9%, 36.8% in the peso portfolio and 7.4% in the dollar portfolio. Intersparing liabilities decreased 5% from December 2025, amounting to 23 trillion pesos, mainly due to a 38% lower volume of other deposits in pesos and 9% in saving accounts in dollars, partially offset by a 9% higher volume of time deposits in pesos. During this period, its cost decreased 260 basic points to 11.7%. Net interest income decreased 7% when compared to the prior quarter, with interest income declined 13%, mainly driven by a 15% lower interest income from loans and other financing, while credit card income fell 28% due to seasonal lowered average volumes, and income from promissory notes decreased 19%, reflecting both lower volumes and a reduced interest rate during the quarter. In addition, income from government securities declined 8%, mainly due to lower volumes and yields in the early months of the quarter. Interest expenses declined 22% quarter-on-quarter, mainly driven by lower deposit-related costs amid reduced interest rate and average volumes. Expenses on time deposits fell 13%, while costs associated with other deposits declined 47%. In addition, interest on revertage agreements decreased due to lower average volumes, and interest expenses on negotiable obligations fell following the maturity of a corporate bond in February. Net fee income declined 6% quarter-on-quarter, mainly reflecting the seasonality typical of the first quarter, which usually records lower transaction levels than the fourth quarter. Fee income decreased 5%, primarily due to a 4% decline in great card fees, following the seasonal spending peak of the prior quarter. Collection-related fees also fell, with collection fees down 13% amid lower transaction volumes, including a 10% decrease in utility bill collection services. Net income from financial instruments increased sharply quarter-on-quarter, partially driven by the sale of certain government securities. In addition, results from government securities measured at fair value improved sequentially. These effects were partially upset by weaker performance in private sector securities, reflecting lower returns during the quarter, and by a decline in results from derivative financial instruments, mainly associated with forward transactions. Results from quotation differences of foreign currency increased 10% quarter-on-quarter. This performance was supported by overall valuation effects, partially offset by lower income from foreign currency trading, reflecting reduced transactional activity following the unusually high retail volumes recorded in the previous quarter. Provision for loan losses declined 25% quarter-on-quarter, driven by a significant improvement in early delinquency indicators in the individual segment, which fell 49% compared to the previous quarter. As a result, portfolio quality closed the quarter with NPLs at 7.7%, while credit risk stood at 9.5%. Personal expenses declined 8% quarter-on-quarter, mainly reflecting a reduction in average headcount. Administrative expenses also decreased sequentially, falling 18% compared to the previous quarter, driven by operating efficiencies and synergies achieved through the integration with Galicia-Mats. Other operating expenses declined 21% quarter-on-quarter, driven by 74% lower other expenses, 12% lower turnover tax expenses, 73% lower charges for other provisions, and a 30% decrease in other financial results. The quarter included an income tax recovery, mainly reflecting the recognition of a tax credit associated with the filing of the fiscal year 2025 tax return, driven by the impact of inflation adjustment. Other comprehensive income declined 86% quarter-on-quarter, reflecting the comparison with the prior period that recorded strong market valuation of government securities, as well as the sale of part of the portfolio during the quarter. The bank's financing to the private sector reached nearly 23 trillion pesos at the end of the quarter, down 4% in the last quarter, with peso financing decreasing 6% and dollar-denominated financing up 1%, equivalent to a 21% growth when measured in that currency. Deposits reached 24 trillion pesos, 15% lower than a quarter before, due to a 12% decrease in deposits in pesos, and an 18% decline in dollar-denominated deposits, primarily due to restatement effects, as when measured in original currency, the decrease was 6%. The bank's estimated market share of loans to the private sector was 14.4%, 75 basic points lower than at the end of the previous quarter, and the market share of deposits from the private sector was 13.9%, 274 basic points lower than in the fourth quarter of 2025. The bank's liquid assets represented 95% of transactional deposits and 56.5% of total deposits, similar levels of the previous quarter. As regards asset quality, the ratio of non-performing loans to total financing ended the quarter at 7.7 percent, recording an 80 basis points deterioration as compared to the 6.9 percent of the fourth quarter of 2025, despite the improvement in early delinquency indicators in the retail segment. At the same time, the coverage with allowances reached 91.4 percent, down from the 97.4 percent recorded in the prior quarter. As of the end of March, the bank's total regulatory capital ratio reached 25.5%, increasing 30 basic points from the end of the prior quarter. In summary, during the first quarter, financial margin partially recovered, efficiency improved, and the cost of risk declined. However, loan demand did not rebound, and asset quality and the monetary loss related to inflation had a significant impact on profitability. Nonetheless, Grupo Galicia was able to keep liquidity and solvency metrics at healthy levels, and we expect a sequential improvement in profitability and asset quality during 2026. Now, Gonzalo Fernández-Covaro, CFO of Grupo Galicia, will make some additional remarks. And I would like to mention that Hernán García, the CFO of NaranjaX, is also here with us and will be available to answer specific questions.

Thank you. Thank you, Pablo. Good morning, everyone. Well, as you know, the quarter started a bit challenging with interest rate volatility, policy tightening, and high inflation. But then the rate went down in March and continued to be stable so far. So looking ahead, we believe Argentina will continue with this phase of stability, a more predictable policy framework, and a real potential for credit growth. And as normalization continues, as you know, the financial system will play a key role in the development of the country. Talking about this specific quarter, about volume, the year started with low, long growth due to low demand on the commercial credit side, mainly in pesos. was better in dollars, but peso really very soft demand and a stricter origination policies on the consumer side that we implemented. We believe that commercial lending will pick up starting in the second quarter. In fact, we have already seen some movement in this area in dollars, but also started to see some demand in pesos. And we believe this will continue. And of course, as economy improves, consumer lending will also start to grow again as we expected. Projection for long growth for the year, we are now at between 20% and 25%. We were expecting a 25% growth at the beginning of the year. Now we've seen it a bit lower than that. And in the case of deposits, we are now seeing an evolution, an increase between 15% and 20%. We were talking about 20% before at the beginning of the year. As we said in prior course, cost of risk already had its peak in the fourth quarter of 2025, and we have started to see the credit losses charges to decrease, as you can see in the first quarter P&L, and we expect that to continue quarter after quarter. And NPL should have had the peak in the bank in the first quarter, I would say. Stability, bid reduction in the second, and then continue to go down. on the cost side we are capturing the benefit of the restructuring made last year after HSBC acquisition we expect to end the year with an 11% cost reduction year over year as you know we made a big big restructuring in headcount and also in branches talking about branches we are already at the number of branches that we had before the HSBC acquisition we maintain our ROE guidance for 2026 in the low double digits range. I would say 10-11%, between 10% and 11%. We expect to go from low to high during the year. It's true that we started a bit lower than expected in the first quarter, but mainly due to revenues. As you can see, the cost of risk and costs are coming on or better than expected. Revenues are a bit behind, mainly due to lower asset growth or loan growth and higher inflation that, as you know, has a big impact in banks P&L. But we expect that now with loans increasing as we expected and inflation is going down, we can catch up during the year to maintain the guidance. To be more efficient, in the first quarter, January and February were a bad month in terms of results, but March was a very good month. We are seeing April also good, so we expect that from now on, you know, a month's results to come good and be able to catch up going forward. In fact, we expect, like a ladder, you know, quarter after quarter to improve net income for the group. So that's what I have. So now we are open to questions.

We're going to start the question and answer session for investors and analysts. If you wish to ask a question, please click on raise hand. If your question has already been answered, you can leave the queue by clicking on a point head down. Our first question comes from Daniel Vaz with Safra.

Hi, everyone. Congrats on the results and thanks for the opportunity of making questions. I would like to double click on the loan growth and IRA trajectory that Pablo just mentioned. I guess you are slightly revising it downwards on loans as market inflation expectations have materially repriced since the last conference call. But your ROE trajectory are kind of stable at the low double-digit levels. I mean, let me try to look into your March and April months that you mentioned it was good months. How are you connecting this March and April to the inflation going forward, right? So we have a print today of the CPI. Maybe it would be good to hear your expectations on that print. And if the inflation couldn't hurt again, your NPLs and the ROE trajectory take longer than you are foreseeing right now. Thank you.

I mean, expectations for CPI for the year is between 28% and 29%. From today, I mean, the consensus is talking between 2.5% to 2.8% inflation for the month. When I said that the inflation also hurt, it was more talking about inflation accounting than the NPLs. I would say the NPLs, it's more how the salary is no catch-up with inflation, but with the tightening of origination policies, I wouldn't think that 200, 300, 400 basis points difference in the year inflation will make an effect in the NPLs. They can make in our revenues in inflation accounting, But in fact, we have a balance sheet covered, you know, against inflation. We have, you know, inflation-linked bonds, and we have also inflation-linked loans, like mortgages, for example, that cover the whole liquid position of the bank. The point is that this has a lag. So, you know, the inflation-linked bonds reprise after two months. So in the first quarter, we have, you know, high inflation unexpected, but the inflation-linked bonds didn't catch that effect because there were still two months lag. Now in April, we are capturing February inflation, which was high, and in May, we will capture March inflation, which was higher. So that will help us going forward. So that's referring to how the inflation hurt us in the first quarter, That gap or delay between the inflation link bonds and what you need to book in the P&L as a loss on inflation accounting. Talking about the rest of the year with the inflation that we are expecting, this 28-29%, we expect that it wouldn't hurt further because we see the trend of inflation going down month after month. and we don't see really that generate additional hits in credit losses. I mean, let's remember that credit losses are still at a high level. We are reducing them quarter after quarter, but they are still higher than the run rate we expect and that we want to be. But that's something that it's, you know, evokes sequentially and not as fast as we want. But yes, we'll see an improvement year quarter after quarter. And so, again, what we are seeing more in March and April has to do with now our assets that covered or that linked to inflation are producing that coverage because the delay hits away and because we will start to see increase in in the lending side also what we have been doing as as we have not uh well when we don't see the this demand in commercial lending what we are doing is also taking opportunities in investing in longer term government bonds that are having good yields you know influential league bonds and you know, variable rate bonds that are the last issuances were at good spreads. So that also, in the meantime, that will wait for the demand to catch up. We are also putting some accrual assets that are having good yields that not necessarily are lows.

Okay, thank you for the answer.

Our next question comes from Chito Labarta with Goldman Sachs.

Hi, good morning. Thanks for the call and taking my question. My question is, I guess, on the funding. Deposits are not growing, particularly in pesos. The loan-to-deposit ratio is above 100%. How do you see the outlook for funding, particularly if loans kind of pick up from here and your ability to fund that growth? Thank you.

Thank you I mean talking about deposits that we have seen a reduction first we have almost half of their deposits in dollars and in the dollar side you have the effect of the exchange that you know these numbers are presented in pesos and the pesos trend over the quarter you see a reduction that was not the case the reduction was much lower when you consider dollars to dollars. Point-to-point was only 6%. And if you see in average, it was a growth of 6% in dollar deposits. But what we also did in dollars, for example, we started to improve the efficiency of the balance sheet. As we didn't see demand, we started to reduce the pain for the institutional funding. In dollars, it's mutual funds. You know that now you have mutual funds in dollars. As we didn't need those dollars, we reduced the rate and we reduced because of that part of the institutional funding in dollars that we didn't need, but we can recap, you know, increasing the rate again when we want, but we prefer to go for the efficiency. In PESO it was the same. The main reduction was in institutional funding, you know, mainly mutual funds funding that we, as the demand was not there in the asset side, we decided to, you know, be more efficient and reduce it that in terms of transactional deposits, we have in our market share is stable. So even though you see a reduction is mainly because of the market is a seasonality market in the first quarter went down. But funding, I mean, if we go and look for the funding, considering bring our scale, our number one bank, private bank in the market, and also that we have this institutional deposit that we can go and bring back. We believe that the availability of funding will be there, and pesos are in dollars. This was kind of seasonal plus something that we created considering a better efficiency in the balance sheet management.

Okay, great. Thank you very much.

Our next question comes from Brian Flores with Citi.

Hi, Tim. Thank you for the opportunity. I have a follow-up and a question. The follow-up is just on the guidance, Gonzalo. I think you mentioned you now envision low double-digital ROE. I think the message from last quarter was explicitly 10 to 11. So I just wanted to check with you if this is marginally slightly higher. I just wanted to check that with you. And then my question is on capital, Because you're building capital, you have a very robust core equity T1 ratio. So I just wanted to ask you, given maybe the limited credit demand that you're seeing, if at some point we could see you shifting to perhaps a more aggressive stance on payouts or M&A. I know Pablo mentioned you have a slightly lower market share. just wanted to check with you if at some point it makes sense to you to defend it. I think that's it. Thank you.

Thank you Brian. I mean guidance is the same. I would say low double digits between 10 and 11 is the same than before. Talking about capital, well yeah capital is high but as you see, I mean we haven't seen the demand in the first quarter but really we believe that this should change in the commercial areas at the beginning of the beginning in the wholesale lending we started to see a lot of for example of of acquisition finance as you know there are some privatizations going around in argentina and some local companies changing hands and we are some of those deals and seeing customers come and ask for for potential transactions so So there start to be, you know, demand on the commercial lending, which is the bigger tickets and is the tickets that will make our balance sheet grow faster. Mortgages at some point should come back, you know, at some point, some kind of securitization program should be built. And I think the government should play a role there. And we believe that that should happen. So that's also another source of great growth that will come. So we believe that we still, we believe in the great growth story of Argentina, so we need to have capital for that. Considering acquisitions, I think you mentioned, I mean, we are always open to, you know, to analyze the market, and that's something that we are not close to. Of course, it needs to be something that makes sense for us and for our strategy. But for the time being, we are concentrating on the organic growth. And we believe that there is a lot of room to improve. We are going to defend our market share. When you see in the deposit, some kind of reduction in market share comes mainly from the institutional funding because the deposit, we are taking the deposit as a whole. We are not losing market share in the transactional deposits. But so it's the one that we want to defend. But we are going to defend market share. is for us it's important to be to be to be large to have the scale and the economies of scale so we are going to do that organically and if at some point something comes that that that is good and fits for our strategy of course we'll we'll analyze it also no super clear and i know you have the management from naranja x here just uh wondering if we should envision naranja x coming back to profits during 2026?

Hello, thank you. Yes, of course. I mean, in fact, if you take a look of the numbers of the first quarter of this year, even though we posted a net loss of almost 19 billion dollars, pesos, sorry, this loss represented already a 60% recovery from the the previous quarter loss, that was almost around 50 billion pesos. So this recovery was mainly driven by a decline in loan provisions and in line with the downward trend that we already seen in delinquency rates that was, in fact, observed since September last year. So, for the year as a whole, we expect the ROE to recover and maybe reaching a high single-digit levels on a full-year basis.

Super clear. Thank you.

You're welcome.

The next question comes from Ernesto Gabilondo with Bank of America.

Thank you. Hi, good morning, Gonzalo, Hernan, Pablo, and Tien, and thanks for the opportunity to ask questions. My first question will be on your macro expectations for the year. You already mentioned inflation on 28, 29. But what should we spend in terms of GDP growth, interest rates, and effects? And also, how do you see the indebtedness of families, especially after the deterioration in asset quality across the banks and fintechs? My second question will be a follow-up in asset quality. So you mentioned NPL reach its peak in this first quarter. Then you're expected to be relatively stable in the second quarter and then trending down in the second half. But we're looking to the reserve coverage ratio. It's below the 100%. So can you provide us any color and how should we think about the evolution of the reserve coverage ratio? and also linked to the first question, again, based on expected losses and maybe fintechs are showing higher deterioration, how do you see this reserve coverage ratio? And I didn't catch up the cost of risk for the year, so if you can provide us also what will be the level for the year. And my last question is if you can give us any expectations or any color on how you see memes this year. Thank you.

Yeah, sure, Ernesto. Well, first, I think it was about the macro, your question, the macroeconomics of the country. I mean, growth, we see more or less 3% GDP growth for the year. Interest rates, and in the year with a tomorrow of 22, I mean, we believe that it's in line with what we are having today. We see interest rates a bit stable during the rest of the year. Talking about margins also, we see margins in the year around 16% for the bank, which is similar to what we have in the first quarter. So we see margins really stable this year. I think then your questions come from credit losses, family indebtednesses.

Effects too.

Well, the effects for the year is like 1,600, 1,590, 1,600 pesos per dollar. So talking about families indebtedness, I mean, we still see, for example, we cut our scorecard and strict on our credit policies and that's why NPLs are improving or cost of risk is improving. We still do some champion challengers, you know, lending to lower levels and we still see that those segments are bad. They are not improving. So we didn't see an improvement in the family's income, let's say. The improvements that we have been seeing is because we are lending to better quality or higher segments, I would say. So that's how we are now And we'll continue this way Until we see that these, you know, tests that we are doing Changed, but so far we haven't seen them Of course, the expectation is that during the year You know, as inflation continues to go down And the economy grows You know, this can also touch more families And the micro economy also improves and without that happening then that situation that I just described should change and we could you know, start lending to different segments, but so far we are not seeing that I mean, talking about reserve governance, I mean, reserve governance is, you know as, in general when you grow a portfolio, I mean you build for the the normal or the portfolio that is not past due is, of course, building discussion for creating a higher reserve coverage that covers 100% of the non-performing loans. Now what's happening is that, you know, we saw a portfolio worsening, as you have been seeing, and we started to use those reserves. and that was combined with a quarter with low volume, low origination, so you don't have, it's kind of a math situation, no? As you have lower volumes, lower new lending, you are not building new reserves that originated with good credits that are, you know, building cushions for the non-performing, so that's the reality that will be changed during the year with volumes growing again and also with the quality of our portfolios that continue to improve. We saw the improvement in the first quarter and we will continue to see in the second or third. We started to cover that during the year maybe to come back to 95, 96% improving. And then on the 27 and 28, of course, continue to improve as we start seeing the level of NPLs and cost of risk that we want. During the year, we need, you know, volumes, the increasing volume to come back to normalize the situation because this is generating by the fact of these two, you know, higher, worse quality of the portfolio than a normal situation plus lower, lower new volume that, you know, subsidize and builds new results. and then cost of risk for the year we are expecting it at 8% we end as you know last quarter was like about 12%, 12.5 we are at 9.5 in the first quarter, we expect the full year to end at 8% I don't know if I have

no this is very helpful, thank you very much, just a follow up in terms of this risk of coverage ratio. So we have seen MPLs pick probably for the banks in the first quarter, but any color on the fintechs, because I believe fintechs, especially in credit cards, are showing much, much higher MPL. And I just want to check with you if you have to build provisions, as maybe in the credit bureau, all of the fintechs are showing this higher MPL, and then you as an industry have to create more provision. So you're going to double check on how do you provision this potential deterioration on the fintechs?

No, no, I mean, we, as you know, in general, what you have the obligation to change your credit or your rating is when you see the bank's debtors, then you cannot have more than two notches differences with other banks. That's a central bank policy. But with fintechs, of course, we monitor, you know, great view, et cetera, but great view is more for origination than from changing the situation of your customers or the qualification of your customers. Yes, we use it to lend new loans, but not to change or provide for the lending. Yes, we use the database with debtors of the financial system, which is something that we all banks submit to central bank. And if the other banks has the same customer in a worse situation, you also need to adjust. And we use that. But with fintechs, I would say that it's more considered for the origination of new lending rather than for providing more. Because what you do in general, the customers we have, they have with us another bank. So if the customer is doing bad, in general, he will be doing bad with everyone. So we already be catching because he's doing bad with us and doing bad with other banks. It's not common that we have a customer that is doing bad with the fintech but doing okay with the banks. So we haven't seen that. We really don't see that impacting the provisioning. Yes, the origination of new lending to those people.

Perfect. No, super helpful. And just a last question. I don't know if you can provide us any call about the potential MSCI reclassification of Argentina. When do you expect this to happen?

Well, I mean, it's difficult to answer that question. I mean, it's something that we are all expecting and would like to happen soon. But, I mean, it has to do also with, you know, effects restrictions that need to be waived. And it's not that clear when that will happen. I don't see that that will happen in the near future and then next year we have elections so it's also something that may work against taking away the effects restrictions but we don't know, so I think that's a key milestone that the country needs to do before this happening so it's difficult to believe that this will happen very, very soon.

Okay. Now, thank you very much, Gonzalo.

Thank you, Ernesto.

The next question comes from Yuri Fernandes with JP Morgan.

Hey, guys. Hi. Good morning. Hi, Gonzalo. Pablo, Etienne, everybody. I have one regarding regulation. We saw some flexibilization this year already on the reserve requirements. I guess in March and April, there was this flexibilization anything else on that I know inflation is still a little bit under pressure in Argentina so not sure if the reserve requirements much more flexibilized but what have you heard any other regulation asymmetries and pressures that were headwind for banks in the past quarters that could be solved this year just checking on this because I think that's important for margins for you And then just to follow up on asset quality, I like the quote on the almost 50% drop on early delinquents. So just trying to understand how should this reflect on the NPLs, right? Assuming this is really the peak, and I think the new NPL formation indications for both Galicia and Taraheta, they reinforce this message, how quickly early delinquents indications should be reflected in lower NPL? And I guess with lower NPLs, we should also see, you know, your coverage moving up on a base effect, right? So if you can explain just the path we should see for early delinquents and NPLs, I think that's also important for us.

Thank you, Judy. I mean, the reserve requirements, I would say that the changes that we saw didn't make a big change because they were mainly on the remunerated reserve requirements. Because remember that you have a reserve requirement that go at 0% yield in central bank and some of them that you can integrate with government bonds, which has a yield. But the reductions were mainly in the ones that you could integrate with government bonds. So from P&L perspective, it didn't change much. And from liquidity or lending capabilities, also it doesn't make a lot of changes because we banks have a lot of lending capabilities still without need to require to change in reserve requirements. Going forward, well, we always talk about that, but remember the government is also very keen in reducing inflation. So this may go against that. So we don't have a sense, something that we always talk with central bank, but so far, no news and no any anticipation of when or if this will happen this year. And any other change, we don't see any other change happening. We always have a list of things that we talked with central bank, like, for example, remunerating dollar balances in central bank or letting banks to invest in treasury bills or yielding dollar assets. That's something that we don't have. And it's a lot of dollars that are not very yielding nothing for banks. But, for example, this is one point. We have many that we also continue to discuss, but no sight of when or if they will make any change. Going back to NPS, yeah, I mean, early indicators, early roll rates are going well. Later stages are still improving, but softer or at a slower pace than the early ones. So meaning that the one that goes bad, then it has more probability to continue in the bad path. So I would say that we may see real improvements in NPLs more within six months. In the second half, I would say between third and fourth quarter to start seeing reductions in NPLs. Cost of risk, as I said before, we expect this to happen quarter after quarter in the rest of the year. But NPLs to see improvements that you can consider some significant improvement, we should be by the – we expect end of the year NPLs at 6%, around 6%. So that's more or less from 7.7 that we are now. That's the path we are seeing, you know, of how the early indicators or the early good performance should translate in better NPLs.

No, super clear. Thank you, guys. Thank you.

The next question comes from Matias Catarusi with AdCap.

Hi, everyone. How are you? I have a few questions. First, the total deposits fell 16%. You lost like 2.5 points of market share, and you said that this was because of an aggressive, expensive funding reduction. How will we see throughout the year the breach towards the 15% to 20% real growth in the year with a really negative first quarter. And do you expect going forward loans to reach 30% growth in the upcoming quarters? And is it going to be in the second half of 2026 because current rates in second quarter doesn't look that good, right? Or is it the seasonal impact of the first quarter? And then I got one more question about the mortgage debt regulatory background. But if you want to ask that one, answer that one first.

Well, I've been talking about deposits. Yeah, I mean, deposit, remember, I also talked about dollars, no? You see that the market share is pesos and dollars. We increased a lot of market share in dollars after the tax amnesty, the last tax amnesty. That were dollars that doesn't have any application. As you know, you can only lend to exporters and which very low yields. So a lot of comes from that, from paying less to mutual funds. But that was nothing that was, so it's not easy, the combination of both. And in pesos was mainly, I mean, funding from mutual funds rather than a transactional deposit. So when we see credits going up again, that is something that, as I said before, we started to see now in the second quarter in the commercial area. We recap those funds going to the market and paying back again in pesos and also in dollars if we need. I mean, talking about a great portfolio, so that's how we plan to grow again. And of course, we expect the deposits and we expect market also. I mean, market in the first quarter always has a seasonal reduction in transactional deposits. We expect that to go up first by seasonality and then our actions by seasonality should come back the loss that we saw, that the market saw in the first quarter in current accounts and savings accounts, as we see every year coming from a peak of December. that is always an amount with a lot of money in the street. Credit, I mean, I said that we see between 20 and 25, I mean, mainly in the commercial area. We have been, you know, in deals with big tickets in acquisition finance, privatizations, and there are many coming and talking to us about new things that are big tickets so that also can increase lending faster than in the SMEs or in the individuals. Some of them are in dollars, as you know, and some of them we are starting to see also peso transactions. So that's plus the rates to stabilize in the lower area for commercial, and not for individuals. And we expect, you know, and also economy continue to evolve. We expect this to help on the great growth. Great growth, we already start to see in the second quarter, but of course it will be more consolidative in the third, we would say. But in the second, we already start to see tickets and things that we are not seeing in the first quarter. Of course, that's something that is not sudden, but already we'll be by steps. In the second quarter, it's better than the first, and the third, we expect better than the second.

Okay, great. And in the loan portfolio mix, currently USD loans represent 35%, right, of loans. How do you expect this mix to evolve throughout 2026 and in the future?

I mean, from 2026, we may go maybe 60-40. I mean, dollar loans could grow a bit. In the future, I mean, if we continue with the stabilization of the inflation, and in 2028, we had a lower inflation and rates goes with that, that shouldn't change much further than that because companies should start using the local currency for funding. Of course, next year is an election year, so we need to see how the things are going to happen or to be next year. But in general, we see for the future with stabilization, still we see peso financing being more important than dollar financing. So far, we are in the middle of the transition to rate reduction. That's why companies continue to prefer dollars because of pricing matter. But as rates in pesos continue to go down, pesos should continue to be the higher weight in our portfolio.

And how do you see the mortgage debt regulatory background going forward? Is there any indication of ANSES giving the needed liquidity for the market to grow more or any other participant?

No, I mean, not so far. It's discussed that we continue to have with the banking associations and government that the need of a certification program that ANSES fund could be a source. There are now a lot of economies also, you know, with that opinion. But it's something that so far is not in the agenda and we don't have a date or something that when it could happen. We hope and expect that at some point it should because it will help the financial system but more than that, the economy, you know, because the mortgages provide a lot of support for the economy, construction, et cetera. But so far, no news, even though we continue talking and putting that on the table every time that we can.

So going forward, we won't be seeing a significant growth in the mortgage debt mix.

I mean, this year, I wouldn't expect that this year unless, you know, these changes and we have a securitization program inside. But I would say that for the rest of the year, it's hard to see it.

Okay. And from UST loans in the mix, can you walk us through which are the main components? Is it all prefinanciaciones, importaciones, or have you seen any other growing?

There are deals that I said, like acquisition financing, privatization that we are seeing now that you can see that they are going out and different type of transaction that require dollars that has higher yields than the pre-inpo or expo. So we are talking about higher yielding than the ones that we are used to see with the exporters.

Okay, thank you so much.

The next question comes from Carlos Gomez-Lopez with HSBC.

Hello, Pablo Gonzalo. Thank you for taking my question. When I look at the results, I get the impression that you took the opportunity to make some gains in the bond portfolio because this quarter was especially weak, personally. Certainly, that's normal. That's normal management. Is that the correct impression? And would you be able to quantify how much you gained by selling government securities versus other quarters? Second, I would like to ask about the cost reduction. As you say, you have reduced from what we saw in the 20th to 80% of the personnel of HSBC, the entire number of branches. Is the level of expenses that we see in this quarter the permanent one? or should we see further reaction or a rebound through the rest of the year in real terms?

I mean, talking about, yes, we rotate our portfolio and in fact we have been doing some extension of duration. So it's not that we sell them and we give up the accrual rather than, you know, change for longer duration with good yields. So we keep a good accrual or improving sometimes the accrual that we have been having because of longer durations, of course, and get the results in the quarter. I would say that in the quarter, I would say that we have like pre-tax, like 30 billion pesos more or less, which is like 20 billion after tax, more or less, something like that.

That would be the gain or the amount that you?

The gain, sorry. 30 billion. all right great tax no uh and the then the other question was cost yes we i would say that now i would say that the level of expense that we have is is the run rate we are still doing some some restructuring not because of hsbc but because of normal so we may have some things here and there on severances i would expect something big but maybe you may have a peak on one month or something. Because of that, we didn't do a lot in the first quarter. We may do something in the second quarter, but nothing significant. So maybe it's flat or something a bit higher. But with those one-off that shouldn't be repeated, in general, our cost should continue to go down with the run rate because we continue to make efficiencies.

So you think the cost, I mean, in real terms, should actually decline from here? but you don't, I mean, that also tells us that you probably don't want to rent too much.

I would say that compared with the priority, the run rate of this year, I would say that could be similar to the first quarter with some kinds of reduction, but nothing significant because it's something that we may be doing some efficiencies, but also investing in technology and other things we want to do. So I would expect more something stable during the year, which is much better than prior year.

And if I can follow up on the capital, you already asked, answered about this. But after long growth recovers, what is the level of capital that you would like to operate with on a sustainable basis? Certainly not the 25% CET one that you have today, right?

You said when we reach maturity of the market, that's what I didn't, I couldn't Yeah, yeah.

When we go back to a normal growth rate in the market, whatever that is, and whenever that is, what level of capital do you...

I would say that's around 15%.

Around 15%. Okay. Thank you so much.

The next question comes from Alonso Aron-Buru with BTG Pactual.

Hi. Good morning. Thank you. Thank you for the call. Just wanted to follow up on the long growth comments and expectations for this year. If you look at Naranja, it's now in negative territory the last 12 months, clearly more exposed to consumers. So maybe you can comment on what are the expectations for Naranja and how that can influence your long growth at the group level, right? I think your 20 to 25 expectation is more at Banco, not at the group level. So when you consolidate it to what are you expecting for the year?

Hi, Alonso. Thank you for the question. In the case of Naranjas, you mentioned during the first quarter, we've seen a reduction in the portfolio, mainly concentrated on the trade card portfolio because the personal loan portfolio keep on growing. And for the rest of the year, we are not expecting to regain aggressive rate of growth in the case of a tarjeta in the great car portfolio. and we are expecting a more stable or, I would say, low single-digit growth for the rest of the year in the case of a great car portfolio, but with a much more aggressive rate of growth in the personal portfolio. In that case, we are expecting something like 30% increase as long as we have enough room to keep on growing there because we are targeting our best segments around our users.

You imagine 30%, 3-0 in personal loan?

Yeah, 3-0 in the case of personal loan portfolio.

Okay, so that means, so just to clarify, your 20 to 25% guidance for the year, is that for Grupo or for Banco?

No, that's Banco, sorry, yeah.

Banco, okay, so consolidated, consolidated so naranja consolidated would be less than that yeah sorry naranja consolidated is will it's going to be like in the low uh single digit uh rate of growth okay okay which means a group is going to be maybe closer to 20 not 25 okay okay thank you the next question comes from Agustin Alberto Pacheco with...

Hi, can you hear me? It's Agustin Pacheco from Banco Mariga. Thanks for taking my question. I wanted to ask about Fundus FEMA. Given that many markets represent the majority of FEMA's assets under management, if inflation continues to decline and nominal rates move lower, these products could become less attractive for savers. How do you expect FEMA's asset under management and finisher engine to evolve under that scenario? And are you planning to grow more aggressively in other segments, such as fixed income, longer duration funds, dollar-denominated funds, or equity products, to offset a potential slowdown in money market funds?

Yes, thanks, I would think, yes. I mean, we know that the money market should, at some point, start to lose, you know, appealing from customers because of lower inflation. And we are working. The beauty of that is that we could offer more sophisticated, you know, funds. So far, with high inflation, it was more difficult because the demand was not there. But we are already thinking about different funds in pesos, in dollars, more sophisticated to capture a new market with more stability and that we'll be more keen to invest in different funds. That will be the change of strategy. I think you mentioned it in your question. It's okay. As the money market loses attractiveness, we will be switching to more sophisticated funds.

Got it. Thanks.

The question and answer session is over. We would like to hand the floor back to Pablo Vervida for the company's final remarks.

Okay, thank you, everybody. Any additional questions, we are always available. Have a good morning and afternoon. Thank you. Bye-bye.

Grupo Financeiro Galicia Conference is now closed. We thank you for your participation and wish you a nice day.