Company: CRESW
Filing Date: 2025-10-24
Form Type: 20-F
Source: 0001654954-25-012195
Chunk: 134

Company: CRESUD INC
Filing Date: 2025-10-24
Form: 20-F
Item: Item 3
Chunk 134
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 increase the confidence of depositors.

As of June 30, 2025, IRSA owned approximately 29.12% of the outstanding capital stock of Banco Hipotecario. Banco Hipotecario’s assets as of such date were ARS 3,533,572 million. All of Banco Hipotecario’s operations, properties and customers are located in Argentina. Accordingly, the quality of Banco Hipotecario’s loan portfolio, financial condition and results of operations depend on economic, regulatory and political conditions prevailing in Argentina. These conditions include growth rates, inflation rates, exchange rates, changes to interest rates, changes to government policies, social instability and other political, economic or international developments either taking place in, or otherwise affecting, Argentina.

In the event that depositors are unable to freely withdraw their money from banks in the future, there may be a substantial negative impact on the manner in which financial institutions, including Banco Hipotecario, conduct their business, and on their ability to operate as financial intermediaries. Loss of confidence in the international financial markets may also adversely affect the confidence of Argentine depositors in local banks.

In the case of an adverse economic situation, even if it is not related to the financial system, could trigger a massive withdrawal of capital from local banks by depositors, as an alternative to protect their assets from potential crises. Any massive withdrawal of deposits could cause liquidity issues in the financial sector and, consequently, a contraction in credit supply.

The occurrence of any of the above could have a material and adverse effect on Banco Hipotecario’s expenses and business, results of operations and financial condition.

The asset quality of financial institutions is exposed to the non-financial public sector and Central Bank’s indebtedness.

Financial institutions carry significant portfolios of bonds issued by the Argentine Government and by provincial governments as well as loans granted to these governments. According to the Banks Report published by the Central Bank, loans to the public sector represent 27.5% of the financial sector's assets as of June 2025.

In addition, financial institutions currently carry securities issued by the Central Bank in their portfolios, which generally are short-term. As of June 30, 2025, Banco Hipotecario’s total exposure to the public sector was ARS 1,426,663 million, which represented 40% of its assets as of that date, and the total exposure to securities issued by the Central Bank was USD 255,883, which represented less than 0.001% of its total assets as of June 30,